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Proposal submitted to the delegates representing the States of California and Nevada in reference to the development of the Colorado River
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point as may be determined upon by the Federal government, if it be a government project, or by the majority of the states party to this agreement, if by some other agency. Such permits, licenses and rights of way shall include those necessary for the construction of the dam and reservoir and appurtenant works including hydro-electric power plants and transmission lines; provided, that no dam or other works shall be built in the bed of the Colorado River at any point in the river which when constructed will back up the water of the river so as to limit or interfere with the construction of a dam selected by any of the states for the diversion of water for irrigation or domestic purposes in that state. ARTICLE VII. Any state in which reservoir sites exist in the Colorado River or its tributaries, directly or through any district or agency created in pursuance of and hereafter authorized by the laws of said state, may build dams, hydro-electric power plants and appurtenant works in such state and operate or lease the same. Where the reservoir is situated in two or more states, such dams, power plants and appurtenant works may be built, operated or leased jointly by the two or more states, or by any district or agency that may be created in pursuance of the laws of such states. Such state or states may sell or lease the power produced by such dams or power plants, and may impose taxation on such dams, power plants, transmission lines and other property incident thereto, and may collect royalties on the power produced by such dams or power plants or any of them or impose a tax on such power or provide for both such tax and royalties on such power. Where development works are constructed in two or more states, the entire hydro-electric plant, including dams, reservoirs, power houses and appurtenant works shall be considered a unit in all matters relating to the financing of construction, the operation, lease, collection of royalties and taxation, regardless of the location of the power plants with reference to state boundaries. The cost of the construction of all such development works shall be borne by the respective states, districts or agencies created in pursuance of the laws of such states, and all power and revenue from the sale or lease of power, or royalties on the same, or taxation of such power or works, shall be divided among the states in direct proportion to the present amount of fall which the river makes in each state between the dam and the elevation of the bed of the stream reached by the back water when the reservoir is filled. Where the river forms the boundary between two states, each state shall be allotted one-half of the fall which occurs in the present river bed on such 5

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