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... o fJ i12 3 f) -2- MODIFICATION OF EXISTING CONTRACTS Sootion 3 provides for modifio~tian of oxisting contracts with a repayment period of loss than 40 yoars. (Since tho Aot of May 25, 1926, a 4O-year period for ropayment has beon rocognized as proper). Modific~tion is to bo initiatod by an application of a district or water users organization Tfiich dosires a longer dofinito period of repayment of unaccruod balanoos of construction chargos. Undor Soction 3, tho unaccruod balances may be spread in definito fixod amounts over a longer poriod not exceeding tho basic period of 40 years exclusive of the fivo moratoria yoars. In no ovent shall the unexpired part of any such longer period exceed double the number of remaining years in which the unaccrued charges would beceme due and payable under tho existing obligations. For example, if an existing obligation is to pay construotion charges, ronounting in all to ~100, on the basis of a 20-year period with equal annual installments, tho charges e~ch year aro $5; On the basis of a 40- year period. the chargos eaoh year would bo $2.501 If under tho existing obligation. the un~ccrued charges, including these deferred under moratoria acts. were $25, and if the ramainder of the original repaymont period as extendod by moratoria woro five years. then under Section 3 the longor definite period for payment ef tho t,25 balance could not exceed ten years, Another illustration is: Take a prejeet with a 2O-year contract which has mo.de five annual payments nnd has had five years' moratoria.. The five years for .Vhich payments wore made would be deducted from tho total, loaving 15 payments to bo mado, Doubling those would provide for 30 annual payman ts . SLIDING SCALE ilEP,'"YIIIENT PIAN Section 4 provides a comprohensivo alternativo plan for o.nnual va.riatiens of payments of eonstruetien chargos in responso to variations in the water usors' ~bility to p~y, a so-called "norm~l nnd porcentages" or sliding scale plan based on crep returns. Undor a eontract entered into pursuant to Soction 4. tho unaecruod construction charges an the lands te be covered by the new centract weuld be merged in a total and genoral repaymont obligation of tho organization making tho contract, Existing eontracts providing for construction ch~rges would be mergod and the total charges coverod by a new contraot would be arrangod in stallments en a sehedulo determ med by the Secretary of the Intorior to be an equi tab Ie and pr~ctieable conselidation of tho existing obligations. (The annual payments would be varied under the "normal nnd percentagos" plan). Detennimtion of this schedule might involve, in same e~sos, rum appropri~te rearrangement of charges. If. for exronple. a district received a moratoria as to 50 per cent of the 1936 chargos and received similar relief for 1937, the' two doferments might be cembined in tho schodulo established under Sectian 4, mo.king up a full installment for one of the years on tho sehedulo. coo P RErURN V:l.RLi.TI ONS :J' FECT REP:. YIIffillT S In detGrmining the schedule of instnlments for unaccruod construction charges payablo under crop return eontracts entered into pursuant to the 50- called Fnct Finders ~ct of 1924, an amount of gross crop returns would be fixed and utilized. Fer exnmplo if $45 wcro tho unaccruod b~lanco per acre under such contract, and if t30 per ncro were fixed as thc gross crop roturns per acre for the purpose of the determine. tion, thon 5% of $30 of :iP1.50 per ~cro would be tho annunl instalment. It would be scheduled ovor n period of 30 years. Each year the instnlment of $1.50 would be increasod or docroasod undor the "normnl and percentages" plan,