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F. Secretarial Implementation Agreement - The Secretarial Implementation Agreement (SIA) is one of the many documents that must be executed in parallel with the QSA for the QSA to become effective. The SIA is the document to be signed by the four water agencies and the Secretary that will establish the framework within which the Secretary will undertake water delivery and water accounting adjustments so as to implement the water transfer terms ofthe QSA. The SIA addresses such matters as changing the point of diversion for the liD-San Diego transfer water from Imperial Dam to Lake Havasu (the site of the MWD intake). The SIA also addresses matters related to the transfer of the conserved All American Canal water and changes in accounting for the 1988 IID-MWD conserved water. A matter of importance to lID is that the SIA addresses some critical water rights protection issues deemed necessary by lID in light of the land fallowing that must take place during the first fifteen years of the QSA (so as to maintain salinity levels at the Salton Sea in accordance with the new state law). Similar to what is provided for in SB 482 (enacted by the state legislature last summer and expected to be reenacted this year to facilitate implementation of the restructured QSA) the SIA provides that lID will not be at risk in losing or otherwise jeopardizing its water rights by engaging in land fallowing and providing mitigation water to the Sea. These important provisions of the SIA were finalized in late December among the four water agencies and officials at the Department of the Interior. However, as a result of the failure to have an effective QSA by the December 31, 2002 deadline the Department of the Interior sent a letter to the water agencies (on January 16th) suggesting that some of these agreed-to provisions might now be withdrawn by Interior. Such action would seriously jeopardize the current effort to develop and implement a restructured QSA in 2003, which will be dependent on execution of a SIA in the form agreed to by the parties in late December of 2002. G. 2003 water year cutback imposed on lID - On December 27th water agencies in California, Arizona, and Nevada received letters from the Department of the Interior regarding allowed water uses in 2003. IID was the only agency that received a cutback in its water supply from Interior. All other agencies in the three states received what they ordered, or received more than what they expected to receive (for example, MWD). The letter sent to lID informed lID that Interior would impose a different result in regard to lID's 2003 water order depending on whether the QSA was executed by December 31, 2002 (if the QSA was executed IID's water order for 3.1 mafwould be honored, but if the QSA was not executed liD would be limited to 2,858,900 af for 2003, and the water taken from liD would be shifted to MWD and Coachella). Interior's actions were based essentially upon two points of foundation: I) the use of certain federal regulations contained in 43 CFR Part 417 designed to address annual water uses by individual Indian and non-Indian water users in the lower basin; and 2) Interior's interpretation of the terms of the Supreme Court's 1979 supplemental decree in the case of Arizona v. California. Although not set forth in the 1979 decree, Interior extrapolated a per acre water duty allegedly stemming from lID's adjudicated Present Perfected water right dating back to 1901, and then applied that water duty to IID' s entire Colorado River entitlement. Even though the Part 417 regulations provide for a process of notice, opportunity for response, and appeal, Interior chose to short-cut that process by making its decision at the 5