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  • States should revise laws that now exempt water facilities from taxation by the county of origin either because the exporter is a public entity or because of provisions that make such facilities taxable only in the county where the water is used. Mechanisms to compensate communities for transfer-related losses of tax base, such as an annual payment in lieu of taxes, may be needed.7

Since publication of the NAS committee’s report in 1992, states have not made any major improvements in their laws affecting interbasin transfers. The recommendations nevertheless provide useful criteria for evaluating and developing approaches for dealing with the consequences of moving water from one watershed to another. Analyzed in this light, the greatest inadequacies of present approaches in the United States are as follows:

  • Decisions do not rely on policies or plans that have been formulated in advance to articulate clear public interest considerations for communities and the environment.

  • There are no methods for weighing the relative importance of national, regional, and local interests when water is removed from the basin of origin.

  • Although several legal devices, mostly operating indirectly, assess or regulate the effects of interbasin transfers, and some water laws include consideration of the public interest, schemes to provide comprehensive mitigation and compensation to the basin of origin have not been tried.

The states should enact legislation to deal with all of these issues. Laws presumably will apply to modifications of existing interbasin transfer facilities as well as future diversion. Other countries in arid and semiarid regions almost certainly will be confronted with the prospect of interbasin transfers. The principles expressed here can be considered for application there to the extent they fit the legal, social, and environmental situations of those countries.


California Environmental Insider. Westlands rights application threatens to ignite valley water war. August 31, 2000.

National Research Council. 1992. Water Transfers in the West: Efficiency, Equity, and the Environment. Washington, DC: National Academy Press.

National Water Commission. 1973. Water policies for the future. Final report of the commission. Subcommittee on Water Resources and Environment, Committee on Transportation and Infrastructure, U.S. House of Representatives.


National Research Council, National Academy of Sciences, Water Transfers in the West: Efficiency, Equity, and the Environment, 257–59 (1992).

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