mechanisms by which they may address groundwater basin dilemmas. However, the state does not require groundwater pumpers to adopt one of the alternatives. As a consequence, a number of basins that were once in overdraft are now actively managed, and a number of basins that are experiencing critical problems are not managed at all.

Whereas California is at one end of the spectrum in helping pumpers to devise their own solutions to groundwater dilemmas, Arizona is at the other. The State of Arizona, through its active management areas, directly manages the state's most overdrafted basins. The 1980 Arizona Groundwater Management Act created the Arizona Department of Water Resources and directed it to define and quantify groundwater rights based on type of use. Agricultural, mining and industrial, and water utility rights have been defined and allocated. Agricultural rights, and mining and industrial rights have been allocated strictly on the basis of historical use. For instance, for each acre-foot of water a mine pumped on average each year for the five years prior to 1980, the mine was granted a property right. Groundwater pumpers are required to report their groundwater pumping annually. The Arizona Department of Water Resources monitors and enforces groundwater rights.

Groundwater rights were allocated with little immediate consideration given to limiting the overdraft of basins. Groundwater overdraft and subsidence problems will be addressed over time through the retirement of groundwater rights, the gradual phasing-out of agriculture, the importation of surface water supplies through the Central Arizona Project, and increasingly strict water conservation requirements.

Most states fall along the continuum defined by California and Arizona. For instance, Colorado, which relies on a system of state water courts, water masters, and individual rights holders to define and enforce surface and groundwater rights, comes closest to California. Nevada, on the other hand, has adopted an Arizona-like groundwater management approach. No matter which approach, or combination of approaches, a state has adopted to address groundwater aquifer dilemmas, all states have attempted to define rights of use, while subjecting these rights to consideration of the public's interest.

State programs that define exclusive use rights in groundwater share several similarities with IFQs, for example:

  •  Both involve limits on harvesting the resource flow.
  •  Both involve an initial allocation of use rights or quota based on historical harvesting activities.
  •  Both involve a market process for transferring use rights or quota. In the California adjudicated basins, water rights are freely transferable among pumpers in a basin. In Arizona, groundwater use rights may be transferred among pumpers in a use class, or across uses.
  •  Both involve restrictions on transferability of "use rights" or "quota."


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