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ever, their application to water transfers has yet to be tested before the State Board or the courts. Public water districts are key players in water supply. Local districts are authorized by law to transfer and sell water for use outside their service area and in certain situations may be able to block out-of-district transfers. There are about 1,000 local water districts, irrigation districts and water agencies within the state, and they control a large percentage of the water resources including most of the water supplied by the SWP and GVP The water agencies purchase water from DWR or the Bureau, and/or develop their own supply. Many local districts have resisted water TVPES OF TRANSFERS According to DWR's 1993 report Water Transfers in California: Translating Concept into Reality, there generally are three types of water available for transfer. "New water" is transferable water that was not previously available and accessing it creates an increase in supply. Examples include water that was formerly not diverted but flowed to the ocean or water conserved from a reduction in agricultural drainage that would have been lost in a salt sink. "Real water" is water for transfer that is not derived at the expense of any other lawful user. Examples include net water available from not planting and irrigating a crop and water stored in a reservoir that would not have been released but for the transfer. Real water is not necessarily new water, but new water, by definition, must be real. "Paper water" is water proposed for transfer that does not create an increase in water supply. An example is the sale of water the seller is legally entitled to use under a water service contract - a right that exists on paper - but one not histori- cally used. Transferred water which otherwise would have been return flow would constitute as a sale of paper water because the water being bought is really coming from another user other than the seller. The methods by which to obtain water for transfer are numerous and can include fallowing land, chang- ing crops, substituting groundwater for transferred surface water, and releasing stored water. Water also can be made available through conservation marketing because of fears of loss of local control and decline in farming activity and farm.related employment. District officials also argue that water available for use elsewhere should first be offered to another user within the district. In addition to water rights laws, water quality laws may also affect the transferability of water. The State Board has the authority to modify water rights permits to satisfy water quality standards and to protect public trust needs. A permit modification could reduce the amount of water allotted to the permittee and, subsequently, the amount of water available for transfer. _~:~_..:c.... ,~-"'- rRftW' ......_.-" practices. One of the most difficult issues is deter. mining how much water should be available for trans- fer because the quantity of water actually consumed by a crop is generally less than the amount diverted. The amount of water consumed by a crop depends upon the crop, the site, and farming practices. The water not consumed eventually may return to a stream or river, percolate underground or be used on neighboring land. A grower may decide to not plant his field - fallow his land - and sell the water to a willing buyer. Fallowing frees up water previously consumed for irrigation and allows it to be used in another area for agriculture, municipal and industrial, or environmental purposes such as wildlife refuges COllselTlltio!l measures ill the SaCral1ll'llto Val/('y may nol create new waterfor e.rpon because much (~l the irrigated area oVl'rlies a usahle ground water basin, and parI of Ihe drainage waleI' supplies dowllstrea11/ users. 7