Opinion letter to Mr. Kenneth Karch

February 1, 1977 Mr. Kenneth Karch Deputy Director Department of Natural Resources 1014 Madison Street Jefferson City, Missouri 65101 Dear Hr. Karch: OPI NI ON LETTr:R NO. 16 Answer by Letter - Lindholm Fl LED /~ This is in response to a request by the former Director of the Department of Natural Resources for a l etter opinion concern- ing whether binding assurances can be given by the State of Mis- souri for repayment of nonfederal water supply costs in federal reservoirs pursuant to Chapt er 256, RSMo 1969. Based on our earlier conve r sations , I understand your ques- tion to be directed to the authority of the state to give such assurances in anticipation that it will soon be r equested to do so with r e lation to several proposed federal water projects within the state. In order to answer t his question it becomes necessar y to determine what is meant by assurances . For if by "assurances" one means merely a prognostication of futur e events by the state, which creates no liability for the state if its forecast pr oves incorrect, the answer would diffe r from that whi ch we must give if "assurances " is interpret ed to create a binding obligation, a liability, should the needs forecast in t he assurances, and the consequent r evenues from local water users to pay nonfeder a l costs, not materialize, and the state ther eby become liab le to pay these costs • Under Section 256 .300, RSMo 1969, it i s clear that the legislature intended that t he state shoul d have the authority to give "reasonabl e assurances .. in connection with f ederal proj- ects constructed under the federal laws r efer enced in Section Mr . Kenneth Karch , Deputy Dir ector 256. 290, RSl'1o 1969. Section 256. 300, pertaining to the old abolished water resources board (whose duties have been passed to the Department of Natura l Resources by Section 10.3 of t he recent Reor ganization Act, Appendix B, RSMo Supp. 1975.) , reads as follows. "The water r esources board is authorized to make reasonabl e assurance that demands for use will be made within a period of time to permit payment of costs allocated to water supply within the life of t he project, and upon rece i pt of specific appropriations from the fund may enter into contract with the appropriate federal departments for purposes of discharging nonfederal r esponsi blities relating to municipal and industrial water supply storage as permitted by applicable federal l egislation on wate r r esource proj- ects and, in so doing , shall consider the projected water needs of t he are a that can be served by t he project and shall also con- s i der the ability of future users to r eimburse any investment of funds that may be made by this state. " The fund from which this section anticipat es future appro- priations is the water development fund established under the terms of Section 256 . 290, RSMo , which reads as follows : "The general assembl y of Mi ssouri may transfer money from the general r evenue fund to the 'Missouri Water Development Fund', which is hereby created, and may appropriate money from the fund for the purposes of purchasing municipal and industrial water supply storage in public works projects as permitted by the Water Supply Act of 1958, P . L. 85-500 , 85th Congress, as amended by the Federal Water Pollution Control Act amendments of 1961, P.L. 87-88 , 87th Congress and by P.L. 534, 78th Congress (58 statutes at large, C 665) or under other applicable federal l egisla- tion , or to purchase municipal and industrial water supply storage in works constructed with federal assistance under authority of the Watershed Protection and Flood Prevention Act, P.L. 566, 83rd Congress , as amended by P .L. 1018, 84th Congress , or under other appli- cab l e federal legislation . The fund shall be a continuing fund and as such shall be exempt from the provi s ions of section 33. 080 , RSMo. " Mr. Kenneth Karch, Deputy Director A thorough search fails to reveal any cases construing the provisions of these two sections pertaining to assurances. How- ever, a careful reading of the two sections indicates that the legislature carefully separated the matter of assurances from binding contracts based on specific appropriations from the fund. It stated in Section 256.300 that assurances, apparently merely predictive, could be made without appropriation , but that con- tracts to discharge nonfederal water supply storage responsibil- ities could be made only upon receipt of appropriations from the water development fund . Similarly, Section 256.290 clearly indicates that any funds expended for purchases of water storage be by appropriation. The clear implication of t his separation is that the legislature inte nded that the assurances only be the state ' s best estimates or forecast of demands, and that the state could enter into binding contracts only pursuant to spe- cific appropriations from ru1d limited by the water development fund, and not by t he general assurances without specific project appropriations . In conclusion, it is t he opinion of this office that while the Clean Water Commission may make nonbinding assurances which merely predict future water supply needs and uses, these assur- ances cannot, under the provisions of Chapter 256, RSt-1o 1969 , bind the State of Missouri to repay nonfederal water suppl y costs connected with federal water r eservoirs. Very truly yours, JOHN ASHCROFT Attorney General - 3 -