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The report provides for an appropriate allocation of costs between the base California Aqueduct and the incremental enlargement for the Pacific Southwest Water Plan. 5. Exchange or Replacement of Water One of the features of the Pacific Southwest Water Plan is the substitution of water through exchange or replacement to compensate for taking water from present sources of supply of existing projects so as to provide supplemental water supplies for water-deficient areas. Such exchanges of water would be accomplished pursuant to a legislative provision authorizing the Secretary to require such exchanges as a condition of contracts for the supply of supplemental waters. No exchange or replacement of water would be permitted to injure a present valid user. 6. Agreements Relative to Hooker Dam The report has proposed authorization of Hooker Dam on the assumption that any necessary agreements will be entered into. The United States would be a necessary party to any agreements and would not support, however, any agreements that did not protect the rights of all existing users to Gila River water. 7. Canal Lining California has recommended that lining of canals in the Imperial and Coachella Valleys should be placed in Phase I, or the immediate-authorization program. There can be no question that lining of these canals is one of the most economical means of increasing the effective water supply of the Pacific Southwest. It is estimated that 500,000 acre-feet of water could be conserved annually by this means. Water now diverted through these canals is diverted under contracts with the Secretary of the Interior. It is part of the share of Colorado River water allocated for use in California and enjoys a relatively high priority as against other uses from the Colorado River in California. The priorities contained in the contracts are those agreed to by all California contractors for use of Colorado River water under the so-called "Seven Party Priority Agreement," dated August 18, 1931. 31Epson Perfection 4870 Photo, 400 dpi, 8 bit, 13,717,504 byte