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1631 CHAPTER 5 LEGAL . The organic act, under which The Metropoiitan Water District of Southern California was incorporated December 6, 1928, was amended during the period covered by this report, in two palticulars (Stats. 1939, page 1778, chapter 445). The amendatory statute was approved by the Governor June 6, 1939, and became effective September 19, 1939. It added two new sections, numbered 8.1 and 14.1. Section 8.1 was adopted to correct a technical difficulty in the levying and collecting of District taxes on unsecured personai property and to remedy a defect in the tax structure relative to refunds of taxes paid by unsecured personal property owners in a city, which subsequently eiects to pay all or a portion of such taxes out of municipal funds. Section 14.1 authorizes the hoard of directors of a metropolitan water district, by ordinance, to establish a retirement system for officers and employees of such district. This amendment was adopted to confer authority upon the board of directors to establish a retire- ment system. The amendment is merely permissive. As outlined in the history and first annual report of the District, covering the period from its incorporation on December 6, 1928 to June 30, 1938, legal problems of major importance were presented to the courts, resulting in far-reaching decisions "establishing the status of the District as a municipal corporation, clarifying its powers, and defining the scope of the Boulder Canyon project undertaken by the United States, with which the District's project is interrelated." No comparable legal deveiopment occurred during the last two years bllt the District was confronted with many iegal and iegislative problems of importance and the activities in connec- tion therewith are summarized briefly in the following pages. Contmctors' Suits An action brought by Wenzel & Henoch Construction Company, contractor on the San Jacinto tunnel, based on alleged breach of [98 ] I I , J II , .