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<br />". <br /> <br />_.._----~".---------,. . <br />.---.-~-~:------ <br /> <br />PART Ol"iE: THE PUBLIC INTEREST IN CONTEXT <br /> <br />When asked why California, which has enacted the most legislation to remove <br />obstacles to the reallocation of water, had experienced so little market activity, a senior <br />Department of Water Resources official in 1988 responded, "Owens Valley." The Owens <br />Valley experience illustrates the environmental and economic impacts on rural <br />communities that can result from transfers of water to municipal use. Los Angeles <br />purchased 95 percent of the valley's irrigated land and the corresponding surface water <br />rights by the mid-1930s. The city eventually retired 55,000 acres offarmJand, reducing <br />irrigated acreage from 75,000 acres to 20,000 acres, in order to transfer water to meet <br />urban growth in Southern California. In response to a state Water Resources Control <br />Board directive in the mid-1960s to develop its water rights fully or lose them, Los Angeles <br />added a conveyance facility, retired an additional 8,000 acres of farmland, and increased <br />surface water diversions and groundwater pumping,1 <br /> <br />Inyo County, site of much of the Owens Valley, filed suit against Los Angeles in <br />1972, alleging, in part, that the loss of wetlands and other vegetation associated with the <br />city's groundwater pumping violated the state's Environmental Quality Act. An appellate <br />court decision the following y~ar cut LA's groundwater pumping in half and required the <br />preparation of an environmental impact report as a condition for full reinstatement. Two <br />environmental impact reports--one completed in 1977 and the other in 1981-were found by <br />the court to be inadequate.2 <br /> <br />Inyo County subsequently sought to limit Los Angeles' groundwater pumping <br />through the adoption of a local ordinance. A trial court ruled the action unconstitutional in <br />1983. The court decision prompted the formation ofthe InyojLos Angeles Standing <br />Committee in 1984 to design a groundwater management plan that would protect the <br />valley's environment and provide Los Angeles with sufficient water.3 The negotiation <br /> <br />3 <br />