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<br />r- <br />, ' t'- <br />.f'- <br />e; <br /> <br />. <br /> <br />. <br /> <br />,~ <br /> <br />~:" corporation and thereby subject to its assessment:s and regu- <br />1. 6 <br />at~ons. <br /> <br />If the Proposed Organization were a private ditch corporation <br /> <br />to which was unable to utilize the Lateral Incorporation Law (for <br /> <br />example, because the corporation included more than one lateral), <br /> <br />then there would not appear to be a legal means t:o compel water <br /> <br />users to become stockholders and thus subject to the charges and <br /> <br />administration regulations of the company. Such relationship and <br /> <br />obligations are commonly achieved by means of vo:~untary stock <br /> <br />subscription contracts between the company and the prospective <br /> <br />stockholders. As a practical matter, however, the lack of legal <br /> <br />power to compel membership of the users in the corporation may be <br /> <br />of little moment, because, if the existing laterals have been <br /> <br />obtained by the corporation and replaced with the pipelines, the <br /> <br />water user would probably have no practical alternative, if he <br /> <br />6 <br />The use of the condemnation powers under the Lateral <br />Incorporation Law to incorporate a surface lateral and the <br />subsequent enclosure of the lateral in pipe could lead to <br />litigation. A party whose interest in the surface lateral which <br />was condemned in exchange for stock could contend that the Lateral <br />Incorporation Law was being used for an unauthorized purpose, i.e. <br />to force him into becoming a stockholder in a corporation <br />administering a different lateral than that in ~~ich his ditch <br />right was condemned. Such an end result is not contemplated by <br />the specific wording of the lateral ditch incorporation. <br /> <br />Courts have frequently held that grants of condemnation power <br />must be narrowly interpreted and uncertainties in the ambit of the <br />power must be resolved against the person asserting the right. <br />Sec, e.g., Coquina Oil Corporation v Harry Kourlis Ranch 643 P.2d <br />519 (Colo. 1982) <br /> <br />We believe that suitable amendment should be made to the <br />Lateral Incorporation Law if such law is to be u,tilized by <br />Proposed Organizations to carry out the purposes of the Salinity <br />Control Act. Please refer to Appendix A hereto attached. <br /> <br />-15- <br />