Senate Panel Kills Bill to Ease Sales of Water : Supplies: Measure would have let farmers deal directly with urban centers, especially during drought. The governor is accused of interference by the proposal’s author.

An Assembly bill aimed at giving farmers greater freedom to sell surplus water to thirsty city dwellers during droughts was rejected by the Senate Agriculture and Water Committee on Tuesday, triggering angry criticism of Gov. Pete Wilson by the bill’s author.

The committee agreed, however, to reconsider the proposal, by Assemblyman Richard Katz (D-Sylmar), during the 1992 legislative session.

Introduced in response to worsening drought conditions, the bill is supported by major urban water users in Northern and Southern California and by leading environmental protection organizations. It is opposed chiefly by water districts in agricultural areas, whose powers would be diminished, and by other farming interests.

It is regarded by some water analysts as an opening wedge to crack the historical North versus South struggle over the allocation of water in California. Theoretically at least, this would occur by the joining of northern and southern metropolitan centers and environmentalists against San Joaquin Valley agribusiness interests.

Basically, the legislation would enable individual growers to sell surplus water to metropolitan centers, especially during periods of drought. It would have the effect of removing the ability of regional water districts to block such sales.

The measure failed 5 to 4, two votes short of approval. Afterward, Katz accused Wilson of lobbying against the bill although the governor has said he supports the idea of water marketing and had administratively established a water bank to deal with the drought.

“There is no question but that the governor’s opposition caused this bill to go down,” Katz charged. “If there are shortages of water next year, the governor has to blame himself because he did not help create the market system (to alleviate shortages).”

Franz Wisner, deputy press secretary to Wilson, said the governor “still has several questions concerning this bill. Rather than voice opposition to it now, he just wants more time to discuss these questions with Mr. Katz.”

Wisner refused to detail Wilson’s questions, but last month the governor was reported by aides to be distressed over provisions that would remove the districts’ power to veto water sales. At the same time, top Administration officials are known to be trying to fashion a water policy as part of an attempt to develop a statewide growth management strategy.