COPY

Honorable A. C. Saott, Jr., Seoretary Z’razor River Conrrrvation and Reolamation

Distrlot Powor Committee Temple, Texas Dear Dr. Soott: 0plnion “NO. 0-3170 Be: Contract for sale 0relsotrlolty byBrazoa 

### River Convservation andReolamatlox! Distrlot to the Brazos River Xleotrlc Trtinsmieeion Cooperative, Inc. You have eubmltted for our ooneideration a draft of the propoard oontract for sale of electricity by tha Brazos River Conservation and Reolamation Distriot to the Brazoa River Xleotrfo Transmission Cooperative, Ino., oopy of whloh ie attached hereto. Youhave requested our opinion onthe following questions pertaining to this contract:

“$, Doe8 the Brazcjs River Conservation and Reclamation District have the power to enter into this contract? “2. Are the terms of the oontlact violative or the oonrtltutlon or lawa of.the State of Texas? n3. Whenthe oontraot is axeouted, will it be avalid binding obligation aocordlng to Its terms?m The Brazoe Rivrr Conservation and Beolamation Diatriot was created and it8 powers defined byActs 1929, 4lst Leg., 2nd C.S.) spec. L., p. 22, oh. 13, aEamended. Thr oonstltutionellty of thmact oreatlng the dlatrlot ha8 been ertat$lrhrd by the Supreme Court of T&as in Brazes River Conservation and Reolamatlon Dirtrlot v. MoCraw, 125 Tax. 506, 91 S.W. (2d) 665. Section 3 or thr Aot prescribee ths powers and purposes of the district and subsection (1) thereof provides:

I

### Hononblr A.C. 

### soott, yr., PI&@t

*For the oontrol, rtorlng andrmployment of flood, storm and unappropriated flow water8 in the drvelspmant and dirtributlon of bydro-rleotrlo wg where euoh UBOmaybe roonomloally. coordlna l with other 

### and numdor usea. and subordinated to the uae.adeclared by*law to br iuperlor.* (em

### ptwla ourr) An rtatrd ln our opinion No. O-2619: WIt’lr famlllar law that thr grant of power to a corporation, l

lther 

### prlvatr or publlo, to do ap00iri0 thlnge. or r0r apeoirio purpom8, oarrler with it by lmplloation the further powr to do any and all things whatroever reasonably nroersary to the aocom?lisb.ment of the ziajor 

### purponrnenumerated.* It is our’opinion that tha powrr to sol1 l leotrio powor is a

### neoeseary oorollary to tbm

### wwer expressly granted for *the devrlopmsnt and dlrtrlbution of hydro-eleotrio powar,w and consequently, that the district has authority and power to enter into the proposed oontract for salr of 

### l leotrlolty to the Brazoa River Elaotrlo Transmigsion Cooparatlva, fno.

‘80have given carerul oonsldrratlon to the attached draft of Oontract, and are of the opinion that the same is valid under the Constitution and law8 of Tara and that when exeouted It will constltuts a binding obligation as between the part188 ttsrsto aooordlng to its terua.

To.1have further asked that ‘10consider the proposed amendment&o the oontract as provldad bythe resolution of the Board of Direotors of the dlstrlot dated February 17, 1941, which amendment made:

*That in the event theru 18located wlthln thr BrazO8 Rfvrr Dlrtriot any national drirnsm prOJeOt the Brazos River Consorvatlon andReolamation Dirtrlot rworva8 the right to furnlrh eleotrlo onorgy to maid national derrnse projeot in tha event the 

### Brazer RlvOr Xl&r18 Tranamlsaion Cooporatlvo, 

### Ino., does not rurnirh 8lootrio energy to raid project In ample quantltirr and amounts.’
wefind no vlca la this amendment.

,Honomblr A. C. soott, Jr., Pago b
Although not wIthin tho aoope of three queatlona aubmlttod to ua, n offer thr following 

### l uggoatlons and obarrvatlona rolatlng to tho drart of oontraot aubraittrd to ua.

ThOl ooond paragraph of aeotlon 2reada aa tollowa: VeginnIng onthe date ot inltlel dollrary and thrOUghOut the tam 0i thI8 OOntfaOt, the Dlatrlot ahall umkoavallablo to the F ’urohaaor, the output oi it8 entire l

leotrlo gonerating oapaolty at Poeaum KIngdOmDamand 18 Bat forth In Sootion lo.* Sootlon 10 of thr oontraot la rntltlad Valvor of Dorault,* SootIon 11 Ia~antltlrd *AvaIlabllIty,W wherefor’n WI laauao that tho refeMnoo to *Section lOa In the above quoted paragraph of SaotIon 2 ahould bo ohangrd to **read**aSaotIon 11.”

Waundrkand thr intent of the partI. with rrrrrenoa to thr abova quotad paragraph of Sootlon 2to be that tho dlatrlot ahall be free to aell, to other uaora, an3. lxoa~apower, ovar and above that whloh tha Purohaarr ran uaa. Poaslblr ambiguity maybr avoided by adding an exprosa olauso to that effeot.

Thr last aentenor of tha first paragraph of Srotlon 22, reads: *Aa provided in seotion 4 hareof, this total awnof money may be adjusted artrr Yanuary 1, 1945.” It apparently should read, Veotlon 5hereof.”

Both Seotions 5and 22 of the oontract rerer to a redetcnrilnetlon in January, 1945, of the annual oonslderatlon of $203,925 provided In thlr oontraot; auoh reoonalderatlon to be “on a baaia of amortizing $4,000,000 over 50years on a 

### l lnklng fund baa1a.a Tho oontraot a-ppoara nowhera to mantl;; ;~t~terrst rato upon whIoh auoh a oomputatlon la to be made. IntentIon of tha partlea that tho preaont Interrat rate or thr **outHanblng** obligationa oi tho Diatrlrt Ia to be used? In the event tho dIrtrIot should rorlnanoo it8 proaontly outstanding bond8 or ahould Iaaue additional bond8 brarlng adifferent rate of Lntaroat, whloh ratr ahall be uaod to detormIno the aallowlnoe roramortization?,; .:/ -_

.’ woraiao thebe queatlona morelp beaauae thoy aoem to ua.~:toIndicate amblgutira In thr oontraot whioh may **be** easily nPaeAIed at thIa the, but whloh might poaalbly give riaa to o~a%ly litigation In thr tutura.

/

‘i ,’ I

.Honorablr A. C. Soott, Jr., Pagr 4

weare returning to you herewith the draft or the oontract which you left with us. Tours very truly ATIORNEY

GENSRALOFTYXAS

. ‘.%L:db Enoloauira BY a/ Walter R. KochAaslatantAPPROVED

PgB21, 1941 a/ Gerald C. Mann AT.ORNEY

GENERAL

OFTEXAS AFPROVIED: CPIMCNCOKMITTEE BY BWB Chairman