California experienced severe water supply shortages in 2009, which led to economic disruption across the state, incl. losses in agricultural areas in the western portion of the Central Valley ¿ areas already experiencing declines in the housing industry and the economic downturn in general. At the same time, several fish species whose habitat lie at the heart of California¿s water supply system and throughout its northern rivers are in decline and some face the possibility of extinction. This situation too has had economic implications, resulting in job and income losses in northern California. Contents of this report: (1) Intro.; (2) What is Drought?; (3) Drought in California; (4) Regulatory Restrictions Affecting Water Deliveries; (5) California Water Rights. Illus.