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During the early 1900's, the seven states of the Colorado River Basin: Arizona, California, Nevada, New Mexico, Wyoming, Colorado, and Utah negotiated for shares of Colorado River water. In 1922, representatives from the seven states and the United States government created the Colorado River Compact, which divided the states into lower and upper basins and gave each basin 7.5 million acre-feet of water to apportion. Arizona, California, and Nevada were sectioned into the lower basin, and were instructed to divide their 7.5 million acre-foot allotment among themselves.
Arizona was in dispute over its share of the river, however, and was the last state to approve the Compact in 1944. Today in the Lower Basin, Arizona has rights to 2.8 million acre feet of Colorado River water per year, California is entitled to 4.4 million acre feet per year and Nevada has annual allocation of 300,000 acre feet. One acre foot of water equals 325,851 gallons, the amount used by a family of four in one year.
In 1946, the Central Arizona Project Association was formed to educate Arizonans about the need for CAP and to lobby Congress to authorize its construction. It took the next 22 years to do so, and in 1968, President Lyndon B. Johnson signed a bill approving construction of CAP. The bill provided for the Bureau of Reclamation of the Department of the Interior to fund and construct CAP and for another entity to repay the federal government for certain costs of construction when the system was complete.
In 1971, the Central Arizona Water Conservation District was created to provide a means for Arizona to repay the federal government for the reimbursable costs of construction and to manage and operate CAP. Construction began at Lake Havasu in 1973 and was completed twenty years later south of Tucson. The entire project cost over $4 billion to construct.