An extensive study was conducted to determine whether California's Public Library Services Act had succeeded in its goal of improving and extending library service through the establishment and funding of library systems. The comprehensive study involved field interviews at all 20 systems; a review of system documents; a survey of reference services; and an intensive data collection effort to record activity, cost, and selected performance data related to system programs. It was concluded that public library systems in California have demonstrated a limited but constructive value under adverse circumstances. The systems have met substantial public needs for resource sharing, but inadequate funding has prevented optimal service. The funding formula used was not well-suited to library system programs or to the objectives of the Act. After an exploration of alternative methods of providing interlibrary services, it was recommended that a top level consortium of the strongest libraries in the state be created to meet requests that cannot be filled elsewhere. Two possibilities--continuation of the present system structure or designation of regional intermediate libraries--were proposed to provide an intermediate level resource. A new formula for funding interlibrary activities would be keyed to demand for services. (Author/PF)