House OKs Changes in Water Policy : Agriculture: Bill tightens a ban on subsidies for large farms in the West. The measure now goes to Senate.

The House on Thursday overwhelmingly passed a long-contested reform of agricultural water policies that would tighten an existing ban on subsidized water for large farms in California and other Western states. The vote was 360 to 24.

House passage had been assured since early May, when the House Interior Committee approved a compromise between Chairman George Miller (D-Martinez), a longtime proponent of the reform, and Rep. Richard H. Lehman (D-Sanger), who represents the Central Valley farming region.

The bill is designed to strengthen a 1982 restriction barring farms of 960 acres or more from receiving government-subsidized water. Supporters say large agribusiness operations that effectively control many thousands of acres have been able to get around the limit by splitting their holdings into partnerships and trusts consisting of smaller farms.

Under the bill’s key compromise, smaller farmers who work together or share equipment still can receive subsidized water even if their combined holdings exceed 960 acres, as long as their business relationship is “arm’s length” and not a subterfuge to evade the ban.

The legislation, which also includes funding for several large dams and water development projects in Utah, Wyoming, New Mexico, Texas and other Western states, has not yet been taken up by the Senate.

Miller said the measure would “stop abuse of taxpayers’ money, and continue to help small farms” in the West. “It gets rid of transparent farms,” he said, referring to the phantom plots created by large farming concerns. “It gets rid of schemes and devices.”

The bill won the support of many Republican senators from the West, in part because it contained funds for projects in their states and because the compromise eliminated a threat to family farms that share resources in arid, drought-stricken regions.

Lehman, while supporting the deal he had struck with Miller, warned that the final version of the bill could still impose hardships on extended families that share facilities and equipment. Under federal tax regulations, he said, families would have to meet a tougher standard of proof that their farming relationship was at arm’s length than unrelated small farmers would need to demonstrate.

“Most farmers live well within the spirit of the law,” said Rep. Calvin M. Dooley (D-Fresno), who noted that most farms in his district were closer to 100 acres than to 960 acres. “We are trying to ensure that families can continue to farm together.”

Meanwhile, the House approved a proposal by Rep. Frank R. Riggs (R-Occidental) to protect Indian tribal fishing in the Trinity River district in Northern California by guaranteeing a specified level of water flow.

The provision, which passed 300 to 95, drew sharp opposition from Rep. Wally Herger (R-Roseville), who said it could damage the huge Sacramento River watershed to the south. Lehman also opposed the measure.

WATER DELIVERIES: Water agencies will ask the state to increase deliveries. A34