Congress has limited the use of Army Corps of Engineers dams and reservoirs for municipal and industrial (M&I) water supply. Growing M&I demands have raised interest in--and concern about--changing current law and reservoir operations to give Corps facilities a greater role in M&I water storage. A reallocation of storage to M&I use from a currently authorized purpose (e.g., hydropower or navigation) changes the types of benefits produced by a facility and the stakeholders served. While Congress has specifically authorized 91 Corps multi-purpose facilities for M&I supply, it also has delegated to the Secretary of the Army constrained authority to reallocate storage to M&I water supply. In the Water Supply Act of 1958 (1958 WSA; P.L. 85-500), Congress provided that storage at Corps facilities could be allocated to M&I water supply without congressional approval if this reallocation did not seriously harm authorized project purposes or involve major structural or operational changes. Whether the Corps has regularly exceeded its discretion to reallocate is a concern raised in response to a July 2009 federal court order that found the Corps exceeded its discretion at Lake Lanier (GA). In order to guide its implementation of the discretionary authority to reallocate, the agency developed guidance on what may constitute a major change or serious harm to an authorized purpose. Since 1977 that guidance has included quantitative limits on reallocations conducted without congressional authorization. Issues for Congress include whether the Corps' interpretation of its discretionary authority is consistent with congressional intent and whether current law and policy are appropriate for current demands and constraints on water resources. CRS analysis of available data indicates that the Corps generally has not exceeded agency-established quantitative limits, with two exceptions in addition to Lake Lanier. One of the exceptions, Cowanesque Lake (PA), was made with the consent of Congress but conducted under the 1958 WSA authority. The other exception was a 1985 reallocation from hydropower to M&I use at Lake Texoma (TX/OK). The Corps found that a reallocation at Lake Texoma would neither require significant modification of the project, nor seriously harm authorized purposes (as the result of compensation being provided for lost hydropower). The Corps concluded that it could make the reallocation without congressional approval using its discretionary authority, in spite of the reallocation exceeding the agency-established quantitative limit. Whether this or other Corps reallocations and operational changes performed without congressional authorization (including those that have fallen within agency-established quantitative guidelines) have seriously harmed other project purposes or constituted a major operational change cannot be independently determined by available data, and is beyond the scope of the analysis herein.