The Commonwealth of Massachusetts agrees to reimburse the State of New Hampshire fifty (50) percent and the State of Vermont fifty (50) percent of the amount of taxes lost to their political subdivisions by reason of ownership by the United States of lands, rights or other property therein for the flood control dams and reservoirs at Surry Mountain in New Hampshire and at Union Village in Vermont.

The State of Connecticut agrees to reimburse the Commonwealth of Massachusetts forty (40) percent, the State of New Hampshire forty (40) percent and the State of Vermont forty (40) percent of the amount of taxes lost to their political subdivisions by reason of ownership by the United States of lands, rights or other property therein for the flood control dams and reservoirs at Tully, at Knightville and at Birch Hill in Massachusetts, at Surry Mountain in New Hampshire and at Union Village in Vermont.

The Commonwealth of Massachusetts agrees to reimburse the State of New Hampshire fifty (50) percent and the State of Vermont fifty (50) percent of the amount of taxes lost to their political subdivisions by reason of acquisition and ownership by the United States of lands, rights or other property therein for construction in the future of any flood control dam and reservoir specified in Article IV (section 1155 of this title) and also for any other flood control dam and reservoir hereafter constructed by the United States in the Connecticut River Valley.

The State of Connecticut agrees to reimburse the Commonwealth of Massachusetts forty (40) percent, the State of New Hampshire forty (40) percent and the State of Vermont forty (40) percent of the amount of taxes lost to their political subdivisions by reason of acquisition and ownership by the United States of lands, rights or other property therein for construction in the future of any flood control dam and reservoir specified in Article IV and also for any other flood control dam and reservoir hereafter constructed by the United States in the Connecticut River Valley.

Annually, not later than November first of each year, the Commission shall determine the loss of taxes resulting to political subdivisions of each signatory state by reason of acquisition and ownership therein by the United States of lands, rights or other property in connection with each flood control dam and reservoir for which provision for tax reimbursement has been made in the four paragraphs next above. Such losses of taxes as determined by the Commission shall be based on the tax rate then current in each such political subdivision and on the average assessed valuation for a period of five years prior to the acquisition by the United States of such property, provided that whenever a political subdivision wherein a flood control dam and reservoir or portion thereof is located shall have made a general revaluation of property subject to the annual municipal taxes of such subdivision, the Commission may use such revaluation for the purpose of determining the amount of taxes for which reimbursement shall be made. Using the percentage of payment agreed to in said four paragraphs, the Commission shall then compute the sum, if any, due from each signatory state to each other signatory state and shall send a notice to the Treasurer of each signatory state setting forth in detail the sums, if any, each is to pay to and to receive from each other signatory state in reimbursement of tax losses.

Each signatory state on receipt of formal notification from the Commission of the sum which it is to pay in reimbursement for tax losses shall, not later than July first of the following year, make its payment for such tax losses to the signatory state wherein such loss or losses occur, except that in case of the first annual payment for tax losses at any dam or reservoir such payment shall be made by payor states not later than July first of the year in which the next regular session of its legislature is held.

Payment by a signatory state of its share of reimbursement for taxes in accordance with formal notification received from the Commission shall be a complete and final discharge of all liability by the payor state to the payee state for each flood control dam and reservoir within the payee state for the time specified in such formal notification. Each payee signatory state shall have full responsibility for distributing or expending all such sums received, and no agency or political subdivision shall have any claim against any signatory state other than the payee state, nor against the Commission relative to tax losses covered by such payments.

Whenever a state which makes reimbursement for tax losses and a state which received such reimbursement from it shall agree, through the Commission, on a lump sum payment in lieu of annual payments and such lump sum payment has been made and received, the requirement that the Commission annually shall determine the tax losses, compute sums due from each state and send notice thereof to the treasurer of each state shall no longer apply to the aforesaid states with respect to any flood control dam and reservoir for which lump sum payment has been made and received.

The Commonwealth of Massachusetts and the State of Connecticut each agrees to pay its respective share in reimbursement, as determined by the Commission under the procedure following, for economic losses and damages occurring by reason of ownership of property by the United States for construction and operation of a flood control dam and reservoir at any site specified in Article IV, and for any other flood control dam and reservoir constructed hereafter by the United States in the Connecticut River Valley, provided, however, that no reimbursement shall be made for speculative losses and damages or losses or damages for which the United States is liable.

On receipt of information from the Chief of Engineers that request is to be made for funds for the purpose of preparing detailed plans and specifications for any flood control dam and reservoir proposed to be constructed in the Connecticut River Valley, including those specified in Article IV, the Commission shall make an estimate of the amount of taxes which would be lost to and of economic losses and damages which would occur in political subdivisions of the signatory state wherein such dam and reservoir would be located, wholly or in part, by reason of acquisition and ownership by the United States of lands, rights or other property for the construction and operation of such flood control dam and reservoir and shall decide whether the flood control benefits to be derived in the signatory states from such flood control dam and reservoir, both by itself and as a unit of a comprehensive flood control plan, justifies, in the opinion of the Commission, the assumption by signatory states of the obligation to make reimbursement for loss of taxes and for economic losses and damages. Such estimate and decision shall thereafter be reviewed by the Commission at five-year intervals until such time as the United States shall have acquired title to the site of such flood control dam or plans for its construction are abandoned. The Commission shall notify the governor, the members of the United States Senate and the members of the United States House of Representatives from each signatory state and the Chief of Engineers as to the Commission's decision and as to any change in such decision.

On receipt of information from the Chief of Engineers that any flood control dam and reservoir is to be constructed, reconstructed, altered or used for any purpose in addition to flood control, including those flood control dams and reservoirs heretofore constructed and those specified in Article IV, the Commission shall make a separate estimate of the amount of taxes which would be lost to and of economic losses and damages which would occur in political subdivisions of the signatory state wherein such dam and reservoir would be located, wholly or in part, by reason of acquisition and ownership by the United States of lands, rights or other property for the construction and operation of such dam and reservoir in excess of the estimated amount of taxes which would be lost and of the economic losses and damages which would occur if the dam were constructed and operated for flood control only and the Commission shall decide the extent to which, in its opinion, the signatory states would be justified in making reimbursement for loss of taxes and for economic losses and damages in addition to reimbursement for such dam and reservoir if constructed and used for flood control only. Such estimate and decision shall thereafter be reviewed by the Commission at five-year intervals until such time as such dam and reservoir shall be so constructed, reconstructed, altered or used or plans for such construction, reconstruction, alteration or use are abandoned. The Commission shall notify the governor, the members of the U.S. Senate and the members of the U.S. House of Representatives from each signatory state as to the Commission's decision and as to any change in such decision.

Within thirty days after acquisition by the United States of the site of any flood control dam the Commission shall proceed to make a final determination of economic losses and damages occasioned by such dam and reservoir. The Commission shall not include in such determination either speculative losses and damages or losses and damages for which the United States is liable.

The Commission shall compute the share the Commonwealth of Massachusetts and the State of Connecticut shall each pay to the state wherein such dam and reservoir is located by multiplying the percentage of flood and damages, as previously determined, by the percentage of flood control benefits which the Commonwealth of Massachusetts and the State of Connecticut each receives, in the allocation by states, of the flood control benefits resulting from the dam and reservoir.

The Commission shall send a notice to the Treasurer of the Commonwealth of Massachusetts and to the Treasurer of the State of Connecticut setting forth in detail the sum, if any, each is to pay to the state wherein such dam and reservoir is located in reimbursement for economic losses and damages and shall also send such notice to the Treasurer of the state wherein such dam and reservoir is located.

The Commonwealth of Massachusetts and the State of Connecticut on receipt of such formal notification by the Commission shall  each pay its share of such economic losses or damages to the signatory states wherein such losses or damages occur. Full payment by either state of the sum specified in such formal notification from the Commission as to the amount of economic losses and damages for which such state is to make reimbursement shall be a complete and final discharge of all liability by the payor state to the payee state for economic losses and damages for each flood control dam and reservoir within the payee state designated in such formal notification. Each payee signatory state shall have full responsibility for distributing or expending all such sums received and no agency, political subdivision, private person, partnership, firm, association or corporation shall have any claim against any signatory state other than the payee state, nor against the Commission relative to such economic losses and damages.

A signatory state may, in agreement with the Commission and the Chief of Engineers, acquire title or option to acquire title to any or all lands, rights or other property required for any flood control dam and reservoir within its boundaries and transfer such titles or options to the United States. Whenever the fair cost to said signatory state for such titles or options, as determined by the Commission, is greater than the amount received therefor from the United States, the Commonwealth of Massachusetts and the State of Connecticut shall each pay its share of such excess cost to said signatory state, such share to be determined by the Commission in accordance with procedure herein contained for determining reimbursement for economic losses and damages.

Whenever the Commission shall not agree, within a reasonable time or within sixty days after a formal request from the governor of any signatory state, concerning reimbursement for loss of taxes or for economic losses and damages at any flood control dam and reservoir heretofore or hereafter constructed by the United States in the Connecticut River Valley, or concerning the extent, if any, to which reimbursement shall be made for additional loss of taxes and for additional economic losses and damages caused by construction, reconstruction, alteration or use of any such dam for purposes other than flood control, the governor of each signatory state shall designate a person from his state as a member of a Board of Arbitration, hereinafter called the Board, and the members so designated shall choose one additional member who shall be Chair of such Board. Whenever the members appointed by the governors to such Board shall not agree within sixty days on such additional member of the Board, the governors of such signatory states shall jointly designate the additional member. The Board shall by majority vote decide the question referred to it and shall do so in accordance with the provisions of this compact concerning such reimbursement. The decision of the Board on each question referred to it concerning reimbursement for loss of taxes and for economic losses and damages shall be binding on the Commission and on each signatory state, notwithstanding any other provision of this compact.