The proposal, presented by Gov. Jerry Brown and legislative leaders, aims to clean up drinking water, improve conservation and make irrigation systems more efficient.
It also contains money to replenish groundwater supplies, and for state and local agencies to clear brush in drought-stricken areas that pose a high fire risk.
"We really don't know how bad the drought is going to be," Brown told reporters Wednesday.
Mike Wade, executive director of the California Farm Water Coalition, said it was "great" that the bill would help those most affected by the drought. But he lamented that it does not address the thornier issues of water storage and the Delta.
"We have to come to grips with that or face that we're going to fallow a lot more farmland and put a lot of people out of work," Wade said.
Assembly Republican Leader Connie Conway of Tulare and Assemblyman Frank Bigelow (R-O'Neals) issued a joint statement dismissing the proposal as a "drop in the bucket."