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<br />,..., <br />., . <br /> <br />C\1 <br />0) <br /> <br />Cl <br /> <br />-', <br />....-. <br /> <br />Company, and the enforcement of such assessments, is both validly <br /> <br />adopted and exercised pursuant to the Company's Bylaws. We make <br /> <br />only one suggestion in this regard, and that is to amend state <br /> <br />statutes to include the power to collect delinquent assessments <br /> <br />directly from a shareholder, in addition to having the right to <br /> <br />cause the forfeiture of stock for nonpayment of assessments. <br /> <br />We also raise, <br /> <br />in the context of revenue-generating <br /> <br />abilities, four concerns regarding the Salinity Control Act which <br /> <br />are not strictly related to the authority of the Company to <br /> <br />assess shares -- yet involve concerns of a fiscal nature which <br /> <br />need ultimately be addressed. <br /> <br />First, section 1592 (b) (2) of the <br /> <br />Salinity Control Act provides reimbursement to non-Federal <br /> <br />entities for operation and maintenance of improved laterals " <br /> <br />.to the extent the costs exceed the expenses that would have <br /> <br />been incurred by them in the thorough and time,ly operation and <br /> <br />maintenance of their canal and lateral systems absent the <br /> <br />construction of a unit, <br /> <br />" <br /> <br />The Company does not now own or <br /> <br />operate any lateral canals. <br /> <br />The Company not only has no <br /> <br />historical cost data, but has spent no funds on lateral ditch <br /> <br />operations and maintenance. <br /> <br />The concern is how the Salinity <br /> <br />Control Act will be interpreted in light of these facts, i. e. , <br /> <br />will historic costs be determined from individual lateral users <br /> <br />and thereafter deducted from reimbursement to the Company? If <br /> <br />so, the differential now borne by lateral ditch users will be <br /> <br />transferred to all shareholders <br /> <br />a result .that may not be <br /> <br />acceptable to the Board or shareholders, especially considering <br /> <br />14 <br />