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. . particularly motivated by a desire to resolve this issue on a state-to-state basis, so as to avoid the speculative and destructive development of an interstate private "water market," between the Upper Basin and the Lower Basin, which Colorado views as illegal under the Law of the River and contrary to the interests of the Basin States. COlorado's initiative was also based upon a desire to work within, and thus affirm, the allocation and regulatory scheme established under the Law of the River. Colorado pursued the Basin-state discussions from the premise that any change in the fundamental framework of the Law of the River would only cause disruption, controversy, and delay in resolving these issues. This continues to be our position. In response to this initiative, the Seven Colorado River Basin States and Ten Colorado River Indian Tribes formed a working group to discuss mutual issues of interest on the Colorado River. The States and Tribes have discussed issues of tribal leasing, water demands in the respective states and tribes, and river system ope~ations. Parallel to these discussions, California entities have undertaken several initiatives to firm up the water supply for Metropolitan within California's basic apportionment. These programs include water conservation and land fallowing programs in the Imperial and Palo Verde Valleys. California has also worked with Arizona in developing groundwater banking programs in Arizona. Colorado has supported these initiatives, even though some accounting issues, as noted above, exist. Initiatives such as these demonstrate that solutions to Lower Basin allocation issues can be resolved in the Lower Basin, with the cooperation of all seven states and the affected tribes. Even more recently, the seven Colorado River Basin States have discussed proposals by Nevada and Arizona to establish a Lower Basin water bank, which would allow for facilitated interstate leases, sales and exchanges of water in the Lower Basin. These discussions have all been undertaken on a cooperative basis between the States. Over roughly the same period, the Bureau of Reclamation has developed regulations in the Lower Basin which address the issue of illegal uses in the Lower Colorado River, and which also purport to create mechanisms for interstate sales, leaSing and exchanges in the Lower Basin. Although a working partnership between the States, Tribes, and the Bureau of Reclamation is necessarJ, particularly for the successful development of rules and regulations governing interstate transfers, it is important to recognize that the States and Tribes are having open disc~ssions and communications toward resolving water allocation issues in the Lower Basin. These di~cussions should be allowed to continue, unhampered by 6 O()O~06