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<br />reasonable beneficial use of entitlements, (3) reduction in entitlements due to <br /> <br />nonuse, and (4) water conservation. Action on the Bureau's regulations was <br /> <br />suspended in 1994 while Arizona, California and Nevada sought to reach agreement <br /> <br />on a regional solution to their water supply problems, which has not yet come to <br /> <br />fruition. <br /> <br />(1). The All-American Canal Lining Project <br />Federal construction of the All-American Canal ("AAC") was authorized by the <br /> <br />BCP A to deliver Colorado River water to the Imperial and Coachella Valleys in <br /> <br />California. Legislation proposed by MWD was enacted by Congress in 1988 <br /> <br />authorizing the Secretary to conserve and reallocate extensive seepage losses from <br /> <br />the AAC. The California contractors would pay for canal lining or a new canal and <br /> <br />would receive the conserved water by operation of the BCP A water delivery contract <br /> <br />priorities. California enacted legislation in 1998 funding the conservation work on <br /> <br />both the AAC and its Coachella Branch. Current plans are for MWD to receive <br /> <br />77,700 AF of the conserved water from both lining projects and 16,000 AF would be <br /> <br />used to facilitate the San Luis Rey Indian water rights settlement in San Diego <br /> <br />County. However, Mexican farmers claim to have established rights to use ofthe <br /> <br />historic seepage waters from the AAC reaching adjacent groundwater basins in <br /> <br />Mexico. The United States maintains that such seepage is surface water to which the <br /> <br />30 <br />