The Irrigation Districts were formed by State and Federal law beginning in 1916 because the U.S. Government needed security to fund and build the Flathead Irrigation Power Project (FIPP). The Irrigation Districts were given authority to collect operation and maintenance (O&M) fees placed on Lake, Sanders and Missoula tax bills. The three Districts, Mission, Jocko and Flathead had the authority to petition the land owners and put their land as security to the United States for the Project. This was the first lean on land, and 60% of the landowners signed; construction on the Project continued. This became known as the first repayment contract between the U.S. Government, the U.S. Department of Interior and the Mission, Jocko and Flathead Irrigation Districts. 

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In 1916 all Tribal land construction fees were forgiven. 

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As the Irrigation Project grew, a new repayment contract had to be drawn up in 1926.  Mission and Flathead renewed contracts to cover increased project acreage, Jocko followed suit in 1932. At this point the Flathead Irrigation Power Project was nearly completed, with a pumping plant on the Flathead River to aid in irrigation water storage in low snow pack and moisture years; this was in operation by 1940.

In 1948 the final repayment contract was signed and approved by Congress, the President of the United States and the Flathead and Jocko Districts. The Mission District initially had some concerns which were resolved, and Mission signed in 1951. The Flathead Irrigation Power Project was completed in 1958.

The final repayment contract of 1948 had been written for 50 years, and in 2004 final payments were made and plans for the irrigators to operate and maintain FIPP were set in place.  Despite this, the leans on all project lands remain to this day.

In the second week of August of every year, the three Districts send the next year's O&M assessment and administration cost to the three county's tax offices to meet State law. Flathead Irrigation Power Project covers about 127,000 acres with several thousand more acres in non assessment and service from the Project.