Water deal eludes Calif lawmakers at session's end

SACRAMENTO, Calif. (AP) - California lawmakers on Friday agreed to reduce the state prison population by 16,000 inmates and appeared ready to pass the nation's most ambitious renewable-energy standards but fell short of their top goal - upgrading the state's decades-old water system.

The flurry of activity on the last day of the regular legislative session produced a few notable accomplishments, including a cut to the corrections department that was the final piece of the state budget agreement reached earlier this summer. Lawmakers also were poised to restore about $16 million to domestic violence shelters after Gov. Arnold Schwarzenegger caused an uproar by eliminating all funding.

The most contentious issue and the one with the most far-reaching consequences was to rebuild California's aging system of storing and moving water while protecting the environment.

With piles of task force reports and months of committee hearings behind them, lawmakers were unable to craft a water package with bipartisan support. Because any water deal will require billions in new spending, it will need a two-thirds vote - and at least some Republican support - get out of the Legislature.

The Democratic leaders of the Assembly and Senate said they would ask Gov. Arnold Schwarzenegger to call a special session so the water negotiations could continue.

"Any time you have Westlands Water District and the Natural Resources Defense Council united, you know you are close and that's what we had here. That's how far we had come," said Assembly Speaker Karen Bass, D-Los Angeles, referring to one of California's major agricultural irrigation districts and a leading environmental group.

The Democrats offered a package that would include $12 billion in bonds, half of which they said would go toward reservoirs, underground water storage and restoring the Sacramento-San Joaquin Delta, the heart of California's water-delivery system.

Senate President Pro Tem Darrell Steinberg rebuffed criticism that Democrats were trying to jam through half-baked legislation on one of the state's most pressing issues at the last minute.

"Given the contentious nature of water in California, will buying more time make it easier or harder to get something this important done?" the Sacramento Democrat said.

In a statement after the water proposal fizzled, Steinberg said he remained confident the Legislature could still pass a comprehensive water package.

According to a draft of the water bills, the bonds would be divided over two elections - one next year and one in 2014. About $3 billion would be dedicated to increasing water storage, but the money would be awarded by a commission based on a competition between potential projects.

GOP lawmakers say that's a loophole that would prevent additional dams from being built. They worry the commission would favor underground storage.

Republicans also oppose splitting the bonds over two election cycles, saying voters should have a chance to vote on a single package intended to solve the state's water problems for years to come. They also criticized a Democratic proposal to create a new bureaucracy that would oversee how farmers could use the water they receive from the delta.

Sen. Dave Cogdill of Modesto, one of the Republicans' lead negotiators, called the Democratic package unacceptable.

"The proposals that the majority were putting up for a vote would have not added a single drop of new water in our state," he said in a statement. "Republicans agree our fragile delta needs to be fixed, but we have been clear that environmental protection should not come at the price of economic destruction."

Republican lawmakers and Schwarzenegger have been adamant that any water legislation include dedicated funding for new dams and create a process by which the state will consider building a canal to route fresh water around the environmentally sensitive delta.

It wasn't clear whether the Democratic plan being circulated Friday met the governor's criteria or whether he would agree to the calls for a special session. He already has called special sessions on education and tax reform.

Another of Schwarzenegger's priorities is a bill requiring California utilities to generate 33 percent of their power from renewable energy sources by 2020. He and some Republican lawmakers have criticized Democrats' attempts to restrict the amount of alternative power that utilities can receive from outside the state, saying it will lead to higher energy costs for California consumers.

Democrats are seeking to protect unionized jobs in California, but utilities say they need the flexibility to seek wind, solar and geothermal sources from throughout the West.

"We want to prove to the world that we can be green and also be prosperous," Schwarzenegger told reporters after a news conference in the Capitol.

The companion bills that would establish the standard were making their way through the Legislature late Friday and appeared headed to the governor's desk. It was not clear whether the governor would support the package if it included caps on the amount of out-of-state power utilities could import.

Lawmakers also finished business left over from negotiations earlier this summer to close a $26 billion budget deficit. Part of that deal called for cutting $1.2 billion from the corrections system's budget, but the Senate and Assembly disagreed over how to do that.

The Assembly's version won because too many lawmakers were nervous about lending their support to a plan that would have released or diverted from prison some 27,000 inmates.

On Friday, the Senate approved the Assembly version, which will reduce the prison population by 16,000 inmates in the current fiscal year. It does so by changing parole supervision to focus on only the most violent offenders, expanding early release credits for inmates enrolled in rehabilitation programs and reducing some property crimes from felonies to misdemeanors.

Rachel Cameron, a spokeswoman for Schwarzenegger, said the governor will sign the prison bill.

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Associated Press Writers Judy Lin and Juliet Williams contributed to this report.