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

President Bush on Friday signed into law a sweeping water reclamation bill that provides dozens of major facilities for 17 western states and overhauls the distribution of federal water throughout California.

The decision dealt a blow to California farmers and Gov. Pete Wilson, who met Bush on the presidential campaign trail in Nashville, Tenn., Friday to urge a veto.

Favored by most urban water districts and environmental groups in the state, the controversial water package promises to loosen agriculture’s dominant grip on the massive Central Valley Project, which supplies about 20% of California’s developed water.

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

Bush’s signature culminates a long battle by Rep. George Miller (D-Martinez), chairman of the House Interior Committee, to redistribute portions of Central Valley Project water from farmland to 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 Sen. John 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.”

California Assembly Minority Leader Bill Jones (R-Fresno), who accompanied Wilson on his presidential visit, said it was “unfortunate” that the President had signed what Jones called a “bad bill.”

“This can have a major impact on agriculture, which is California’s number one industry,” Jones said. “We’re obviously disappointed he chose to sign it.”

The President’s approval is particularly good news for water-thirsty Southern California urban communities. The bill permits 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 authorizes water projects in 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 20 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 were behind the President’s decision to sign the bill.

“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.”

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

Wilson and Jones met with Bush in his hotel suite at 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 bitterly disappointed Jason Peltier, who as executive director of the Central Valley Project Water Assn. represents 80 water districts from Redding to Bakersfield, predicted that the measure would have disastrous consequences for agriculture and Southern California.

The California House delegation voted against the measure 24 to 20 this month when the House overwhelmingly adopted it, 260 to 144.

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

The federally owned Central Valley Project, 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 pump 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 agriculture-rich Central Valley 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.

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.

“It marks the beginning of a new era,” said Patricia Schifferle, a representative of Share the Water Coalition in San Francisco. “Water is the lifeblood of California. This is a monumental step forward in putting some balance back.”

For urban water users in Southern California, the bill offers relief as the state braces for a seventh year of drought conditions. The bill allows the purchase of Central Valley Project water from farmers to alleviate urban water shortages. Such transfers are prohibited under current 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 a 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.” If reelected, Goldstein said, the President intends to introduce legislation next year that would address fish and wildlife concerns in California without taking water away from agriculture.

Times staff writer Virginia Ellis in Sacramento contributed to this story.