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<br />...', .. <br /> <br />collaborative and cooperative efforts are preferable to the use of regulatory <br />strictures, which is the alternative means of determining beneficial use, and which I, <br />as well as the state, have authority to implement if necessary. Once such a baseline <br />is determined, marketing opportunities will be one step closer to reality. <br /> <br />2. Second, I am instructing the Bureau of Reclamation to initiate a rulemaking <br />process to develop water management regulations for the Lower Basin. As you <br />know, the Bureau began such an effort several years ago, but deferred further work <br />to allow a consensus to develop among the states on approaches to interstate <br />marketing and banking. Those efforts were unsuccessful. This time, the regulations <br />will focus on: intrastate marketing; and interstate marketing within the Lower Basin . <br />based on state-approved, willing buyer/willing seller transactions. The regulations <br />may be expanded if the public scoping process identifies other water management <br />activities that c0uld be incorporated in them, without generating significant <br />controversy or delay. <br /> <br />I want to take special note of an Arizona initiative. It has put in place a <br />groundwater banking program that will enable it to store Colorado River water <br />off stream for future use. This program, when operated in conjunction with the <br />Arizona Groundwater Law that was enacted during my tenure as Governor, will <br />help protect Arizona against possible Colorado River shortages it may have to bear. <br />The Arizona program includes an interstate component which would permit Nevada <br />and California to store Colorado River water to help meet future needs in those <br />states. Nevada believes the Arizona plan offers real potential for it to meet its future <br />water needs, at least for a considerable time. I view this as a positive approach and <br />I propose to issue regulations that will authorize programs of this kind. <br /> <br />3. Another obstacle to marketing is the unclarity of the relative rights of <br />various agricultural agencies in California under the Seven Party Agreement of <br />August 18, 1931, and under a subsequent 1934 agreement between the Imperial <br />Irrigation Distri<:t and the Coachella Valley Water District. Clarification of <br />agricultural rights subject to the Seven Party Agreement, and settlement of the long- <br />festering dispute between Coachella and lID, are also likely to be crucial to <br />effectuating transfers in California from agricultural to urban users. Such transfers <br />would be a key component of the plan sought by the other six basin states, by which <br />California can limit its Colorado River water use. Such a plan will need to include a <br />clear and more definitive interpretation of water entitlements among the California <br /> <br />5 <br /> <br />i <br />