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As the sun rose over Sacramento Wednesday morning, Democrats and Republicans came together to reach a major deal on water, including sweeping changes in water policy and an $11 billion bond that must be approved by voters.

The package includes new rules for water conservation — with most localities being asked to reduce water use by 20 percent over the next 10 years — and a new system of governance for the Sacramento/San Joaquin River Delta.

The deal was approved after an all-night session, an increasingly familar scene in the world of the California Legislature. The major breakthrough came Tuesday night after leaders agreed to add $1 billion into the bond package at the request of the Los Angeles delegation. In return, Republicans won a major concession as Democrats agreed to sever an enforcement bill from the water package that cracked down on illegal diversions of water, boosted fines and increased the power of the state water boards — provisions long demanded by environmentalists.

The water-rights enforcement bill had been linked to the reform package of several other bills dealing with conservation, groundwater monitoring and governance of the Sacramento-San Joaquin River delta.

Senate Leader Darrell Steinberg, D-Sacramento, agreed to the change amid fears that opposition to the measure could sink the entire water package,

The change led to concern that environmentalist lawmakers might abandon their support for other pieces of the water deal. Ensuring the bill’s passage had been a tool to ensure some more liberal Democrats supported other parts of the water policy and bond package. But in the end,the bill was radically altered, changing the water rights language and scaling back the fee structure for illegal diversions of water. The changes were enough to get the bill approved along with the rest of the water package.

Over the protests of environmentalists, connections between the policy proposals were severed from the omnibus proposal following a closed-door meeting of legislative leaders and an array of water interests. The move marked a political victory for farm- belt lawmakers and Bay Area water districts that fought the tougher provisions.

The action, called “de-linking” in the Capitol, means the water-rights bill can be rejected on the floors of both houses without disturbing the other pieces of the larger, still-developing water plan. Identical versions of the bill await action in the 7th Special Session – AB 11 7x by Speaker Karen Bass, D-Los Angeles, in the Assembly and Steimberg’s SB 5, 7x in the Senate.

Assembly Republican Leader Sam Blakeslee of San Luis Obispo opposed the water-rights bill, in part because of the tough enforcement provisions that sharply increased the authority of state water boards, according to Capitol sources in both parties familiar with the negotiations. Blakeslee was not immediately available to comment.

The bill also included fines of $5,000 or more per day for illegal diversions and allowed the water boards to initiate their own investigations rather than act on complaints. One provision allowed fines pegged to the “market value” of water, which environmentalists said could result indaily penalties far exceeding $5,000.

Part of the water-reform package is a multibillion-dollar bond that is aimed at the statewide ballot next year. The Senate on Monday approved a $9.9 billion plan, but on Wednesday, that price tag grew to $11 billion because of the addition of $1 billion sought by Los Angeles for conservation and monitoring.

The additional money for Los Angeles was only part of the scramble throughout the day Tuesday, as a variety of water interests sought funding for pet projects. But leaders in both houses feared that adding to the water bond’s size could jeopardize its passage in the Legislature or its ability to win voter approval.

The water policy proposals are not linked to the bond and do not authorize the construction of a delta canal that would move more water south to the Central Valley and Southern California. But supporters of the package, including the influential Westlands Water District and the Metropolitan Water District of Southern California, say the package “paves the way” for the canal.

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