operation and maintenance charge. We don't think Congress intends
to continue regulation if the only costs remaining are annual operation
and maintenance costs. If so, S. 14 should be revised to make it clear
that regulation ceases if the district's only remaining contractual
obligation is to pay annual operation and maintenance costs. We also
believe, however, as noted in the preceding paragraph, that it may be
the intent of Congress to cease regulation only if all construction and
capital type costs, regardless of whether they be construction charges
under the main repayment contract or loan repayments under other
contracts such as rehabilitation and betterment contracts, distribution
and drainage contracts or the like, have been repaid. If so, the legis-
lation should be clear on that point as well.
 As you know, this Department has opposed previous legislative pro-
posals which would automatically exempt districts from acreage
limitations and residency upon repayment. We are concerned par-
ticularly about payment over the full term of contracts and about
provisions which would allow early "buyout" from acreage limitations,
since these would avoid achieving program purposes, such as initial
breakup of excess lands and providing new opportunities for small
farmers; also such provisions would inure only to the benefit of the
few wealthy districts, who could afford "buyout", and would dis-
criminate against the less wealthy majority of districts who could not
afford it. We also question the inclusion of the residency requirement
in the exemption. We believe it is very important, if some sort of pay-
out exemption is provided, to tailer the provision so inequitable
district exemptions, and an inequitable bias in favor of wealthy dis-
tricts, do not result.
 Finally, as your Committee approaches markup of S. 14, we urge
your attention to adopting reasonable limitations on acreage, on leas-
ing, on corporate, non-resident, and investor-type ownerships, and
such other reasonable controls so that the program can achieve its
purposes and does not present the opportunity to develop into a
special Federal subsidy for a privileged and wealthy few among the
nation's farmers. We would be pleased to talk to you, your colleagues,
and your staff at any time about these issues.
 Sincerely,
 CECIL D. ANDRUS,
 Secretary.