Bush OKs Water Policy Overhaul : Decision: President, in blow to Gov. Wilson and Sen. Seymour, signs bill loosening California farmers’ grip on federal water. Environmental, urban needs will benefit.

President Bush on Friday signed into law sweeping legislation that overhauls the distribution of federal water in California while providing dozens of major projects for 16 other western states.

The decision came as a blow to California farming communities, Sen. John Seymour and Gov. Pete Wilson, who met with Bush on Friday on the presidential campaign trail in Nashville, Tenn., to urge a veto.

The controversial water package, favored by most urban water districts and environmental groups throughout the state, is expected to loosen agriculture’s 50-year grip on the vast Central Valley Project, which supplies about 20% of California’s developed water.

In going against the recommendations of two Cabinet members, Bush played a key political card by awarding more than $2 billion worth of major water projects targeted for several key western states where the presidential race remains a tossup.

“I am signing (the legislation) so that the establishment of water markets in California and the bill’s numerous beneficial water projects can move forward without further delay,” said Bush, who approved the measure aboard Air Force One en route to a television appearance in Racine, Wis. “On balance, these projects will better enable the citizens in our western states to manage one of their most precious resources.”

The action culminates a long battle by Rep. George Miller (D-Martinez), chairman of the House Interior Committee, to wrest large portions of Central Valley Project water away from farmlands to benefit the environment and urban areas. Miller teamed with Sen. Bill Bradley (D-N.J.) to push the omnibus water package through Congress this year, despite the strenuous objections of Seymour (R-Calif.) and Central Valley Democrats.

“After two decades of struggling against tremendous odds, our campaign to reform California water policy on behalf of the environment and taxpayers has succeeded,” Miller said. “If the water wars aren’t exactly over, today we enjoy the first truce in decades.”

But Wilson and Seymour vowed to carry on the fight to preserve subsidized federal water for irrigators in the state’s agriculture-rich Central Valley.

“This bill does nothing to end the conflict that has paralyzed decision making on California water for decades,” Wilson said. “It pits one side against another to the detriment of all Californians.”

Seymour predicted that passage of the bill would “only trigger a flood of lawsuits that will tie up true water reform in the courts for years.”

The President’s approval represents good news for Southern California by allowing urban water agencies for the first time to purchase Central Valley Project water from willing farmers.

“It is the commencement of a new era of water use in California,” said Carl Boronkay, general manager of the Metropolitan Water District of Southern California. “It brings a rational basis to a water allocation system that has developed from the historic past and is contrary to the state’s interests.”

Bush was under heavy political pressure to sign the bill from western Republicans who wanted their pet projects in the package approved. Retiring Sen. Jake Garn (R-Utah) had worked for years to see completion of the Central Utah Project, one of the last giant federal water projects under construction. The bill authorizes $922 million for the Utah facility.

The legislation also contains water projects for four western states that are considered tossups in Tuesday’s election--and critical to Bush if he is to have any hope of defeating Arkansas Gov. Bill Clinton. They are Arizona, Colorado, Montana and New Mexico, and together they represent 24 electoral votes.

George Tibbitts, a national affairs director for the California Farm Bureau, said politics--and not the merits--of the Central Valley Project portion of the legislation was behind the President’s decision.

“We appreciated the predicament the President was put in,” Tibbitts said. “We know he was sympathetic with our plight in California, but the political dynamics ended up working against us. The President had his back to the wall.”

In addition, a coalition of California business and environmental interests joined to lobby the White House for passage.

The only state chief executive to oppose the bill was Wilson, who also serves as campaign chairman of Bush’s reelection effort in California, where the President is running far behind Clinton in the polls.

Wilson and Assembly Minority Leader Bill Jones (R-Fresno) met with Bush at the Opryland Hotel in Nashville for 30 minutes Friday morning.

“The governor outlined several reasons why signing the bill would not be in California’s best interests,” said Wilson spokesman Dan Schnur. These included destroying the state’s agriculture industry, depriving urban users of much-needed water supplies in drought years at the expense of the environment, and impeding the state’s efforts to assume control of the Central Valley Project, Schnur said.

A disappointed Jason Peltier, who as executive director of the Central Valley Project Water Assn. represents 80 water districts from Redding to Bakersfield, vowed that the state’s water wars are not over. He said farmers will continue to resist attempts to implement any aspects of the law that would adversely affect agriculture.

“We will not give up water,” Peltier said. “We won’t accept exorbitant prices increases. We won’t live with any of that. We’ll fight it all and we know how to fight.”

As one indication of the bitter divisiveness over the water bill, the California House delegation narrowly voted against the measure this month while it was being overwhelmingly adopted, 260 to 144.

The bill was promoted by urban, environmental, fishing and business interests throughout the state.

The federally owned Central Valley Project, first authorized by President Franklin D. Roosevelt in 1935, extends nearly 500 miles from the Shasta Dam in the north to the fertile plains along the Kern River in Bakersfield. The sophisticated network of rivers, dams, reservoirs, canals and power plants pumps Sierra-fed water to irrigate about 3 million acres of farmland.

Decades of irrigation practices have proved devastating to fish and wildlife populations, while supplying the Central Valley farms with cheap and plentiful water over the past half-century.

The bill makes the restoration of threatened fish and wildlife species a priority of the Central Valley project, which for decades has served the interests of irrigators and urban users in the Central Valley. This is accomplished by setting aside 800,000 acre-feet of water for the environment and establishing an annual $50-million restoration fund financed by fees on Central Valley Project water and power sales. No such guaranteed water delivery or environmental fees are provided under current law.

Under the bill, farmers will no longer receive automatic renewal of 40-year contracts at heavily subsidized prices. Instead, fixed rates are replaced with a three-tier pricing system that encourages conservation.

“For western water policy, this bill is the equivalent of the falling of the Berlin Wall,” said Barry Nelson, director of Save the San Francisco Bay Assn. “This is the start of a new era. It means a healthier environment and a healthier economy for California.”

For water users in Southern California, the bill offers the potential for significant relief as the state braces for a seventh year of drought conditions. The bill allows the transfer of Central Valley Project water from farmers to urban agencies to alleviate water shortages. Such transfers are now prohibited under law.

“It’s as if overnight a new reservoir was created,” said Boronkay, of the MWD. “There is water we can draw on through water purchases. It will take the cooperation and goodwill of others, but I think it will work if given a chance. Farmers will be pleased with it as well as environmentalists and urban water users.”

Initially, it appeared doubtful that Bush would sign the bill when it was passed by the Senate on Oct. 8 and sent to the White House. Two members of his Cabinet, Interior Secretary Manuel Lujan Jr. and Agriculture Secretary Edward R. Madigan, recommended a veto.

Interior spokesman Steve Goldstein said that Bush still has concerns about the legislation, but enough changes were made to the Miller-Bradley version to make it “palatable.”

Times staff writer Virginia Ellis in Sacramento and James Gerstenzang in Wisconsin contributed to this story.