Office of the Secretary

For Immediate Release: October 28, 1999

Contact: Noel Gerson 202/208-6291

Department of Interior Publishes Final Water Banking Rule

Secretary of the Interior Bruce Babbitt announced today the publication of a final rule that establishes a new framework to allow the voluntary movement of Colorado River water among the lower basin states of Arizona, California and Nevada.

"This rule represents an historic step toward water management of the Colorado River in the 21^st Century," said Secretary Babbitt. "We now have a framework in place to facilitate the movement of water among the three lower basin states. By developing voluntary arrangements under the authority of this new rule, states that are facing significant water needs, such as Nevada, have an important new tool for assuring adequate water supplies for their futures."

In announcing the new rule, the Secretary thanked Senator Harry Reid for his strong, persistent leadership on this important matter. "Senator Reid, working in tandem with his home state's water leaders, has played an instrumental role in encouraging the Department to develop and finalize this important rule. I salute Senator Reid for the determination that he has shown throughout this process to bring market-based principles to the Colorado River, thereby providing a new avenue to satisfy Nevada's water needs."

Secretary Babbitt also commended leaders in the State of Arizona for creating the innovative Arizona Water Bank, through which unused Colorado River water can be stored in underground aquifers for future use. By way of example, the rule would allow an entity in Nevada to pay the cost of storing water in Arizona or California. At some future date, the Nevada entity could request access to the water, via the Colorado River. This innovative arrangement will be facilitated by the water master of the Colorado River, the Secretary of the Interior, so long as an interstate agreement has been entered into with the Secretary, and so long as the other requirements and protections that are outlined in the final rule have been satisfied. The availability of this mechanism provides new flexibility to Arizona, Nevada and California.

Arizona, California and Nevada are apportioned a total of 7.5 million acre feet of Colorado River water annually under the 1922 Colorado River Compact. The water was further apportioned among these states by the 1928 Boulder Canyon Project Act, which allocated 300,000 acre feet annually to Nevada, 2.8 million acre feet annually to Arizona, and 4.4 million acre feet annually to California. Because the demand for Colorado River water in the Lower Basin is exceeding supplies in a normal year, the Department, the states, and other interested parties have been exploring more flexible, innovative approaches for voluntarily addressing water supply needs. This final rule reflects the most promising of these new approaches.

"Water remains one of the most precious commodities in the Western United States," said Sneator Reid, the Senate's Assistnat Minority Leader. "Innovative solutions like water banking are key to meeting the needs of Nevada and other lower basin states for the 21^st century and beyond. This rule will help create a marketplace that communities can look to as a potential source for water to meet their growth and economic development needs. I commend Secretary Babbitt and all the state and local leaders who helped lay the groundwork to make water banking a viable concept."

The final rule that is being announced today does not change the existing body of laws under which the Colorado River is operated and managed, nor does it change in any way a state's individual Colorado River apportionment. The rule also does not address intrastate water storage and distribution, nor does it affect any Colorado River water entitlement holder's right to use its full entitlement.

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