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contracts that were involved in those cases and in the Boulder
Canyon Project Act that is involved in the instant case.
We now apply the law, as set forth and discussed above, to
the undisputed facts of this case. The participation and rights
of the partnership in which petitioners invested in Colorado
River water originated in 1983 only as a result of and in direct
proportion to the partnership’s ownership interest in Harquahala
Valley land. The 1983 allocation of water rights to HID under
the Subcontract and through HID to the partnership under Arizona
law was directly linked to and dependent upon the partnership’s
ownership of the land and on irrigation of the land in prior
years.
Ariz. Rev. Stat. Ann. sec. 48-2990, relating to water rights
and irrigation districts, and under which the partnership in 1983
received its Colorado River water rights, provides in part as
follows: "Subject to the law of priority, all water of the
district available for distribution shall be apportioned to the
lands thereof pro rata".
The water rights of the partnership were linked to the
partnership’s ownership interest in the land, to its farming
operations and activities on the land, and to its capital
investment in the land. The water rights, and particularly the
decision in 1992 to relinquish the water rights, affected the
partnership’s farming activity and the investment risks
associated with that farming activity--especially the financial
risks associated with purchasing water on the open market.
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