SACRAMENTO, Calif. (AP) -- California's legislative leaders were racing to meet a Friday deadline to strike a deal on remaking the state's aging water system and appease Gov. Arnold Schwarzenegger, who has threatened to veto hundreds of bills unless they agree to a water plan.
Republican and Democratic leaders planned to spend a fourth consecutive day negotiating on how to overhaul a water storage and delivery system that is nearly half a century old.
"There's nothing more important than a water deal right now," said Senate Minority Leader Dennis Hollingsworth, R-Murrieta.
The Republican governor has warned lawmakers he would "veto a lot of their legislation" if they fail to craft a comprehensive fix to the state's water troubles.
Schwarzenegger has until midnight Sunday to sign or veto bills and has told lawmakers he wants a water deal completed by the weekend. About 700 bills are awaiting action.
Upgrading California's decades-old water system is a top priority for Schwarzenegger, who is heading into his last year in office and wants to count a water deal as part of his legacy.
Democrats and Republicans have tangled over water issues for years, pushing off decisions while conditions have worsened for farmers, water districts and wildlife. The trouble is especially acute in the Sacramento-San Joaquin Delta, the water conduit for two-thirds of the state's residents.
Federal courts and agencies have ordered severe reductions in pumping to protect the delta's collapsing ecosystem.
Senate President Pro Tem Darrell Steinberg, a Sacramento Democrat, described the talks this week as productive. He expressed hope legislative leaders could agree to a framework on Friday and that the Senate could vote on legislation next week.
"We fixed a $62 billion deficit and managed to get the votes for that, and if the leaders are in agreement and the governor is in agreement, we'll go out there and do our best to gather the requisite number of votes," Steinberg said.
Lawmakers remain apart on several issues that could jeopardize the entire package.
Disagreements remain over protection of water rights, mandatory conservation standards for cities, groundwater monitoring of private water supplies, who should make water decisions in the delta and how to pay for the infrastructure and restoration efforts requested by lawmakers.
If the leaders do compromise, their plan must win approval in the Legislature. That could be a tough sell because individual lawmakers will be pressured by water districts, environmentalists, farmers and others to protect their interests.
Assemblyman Jared Huffman, D-San Rafael, who has been involved in the water negotiations, said his colleagues will want time to go over whatever deal the governor might forge with Democratic and Republican leaders of the Assembly and Senate.
"This is too big an issue. The stakes are too high for folks to take it on faith that this is good," Huffman said after meeting with the governor. "They are going to want to understand it; they are going to want to take it back to their water districts and vet it a little bit."
A water deal that includes a bond requires a two-thirds vote in the Legislature, and thus needs at least some support from Republicans, the minority party. Bills dealing only with policy issues can pass with a simple majority vote.
Last month, Democrats presented a $12 billion package that sought to improve how water is used, delivered and stored in California. It died after Republicans complained that it failed to provide assurances that dams would be built, a key demand of the governor and GOP lawmakers.
Lawmakers in both parties also question whether the state can afford to issue billions of dollars in bonds. California already has $67 billion in outstanding bond debt. That's expected to grow by another $44 billion over the next four years, according to an Oct. 1 report released by the state treasurer's office.
Hollingsworth said lawmakers were discussing a smaller general obligation bond, perhaps between $8 billion and $10 billion.
Much of California's network of reservoirs and canals dates to the term of Gov. Pat Brown in the 1960s, leading Schwarzenegger and many others to say the system is inadequate for today's population and the millions of people to be added in the years ahead.
Three years of below-average rainfall and lighter-than-average snowfall in the Sierra Nevada, combined with the federal pumping restrictions intended to protect delta fish, have created a severe water shortage for much of the state.
Farmers have fallowed thousands of acres, while cities have imposed mandatory water rationing, raised rates or imposed surcharges on their customers.
Copyright 2009 The Associated Press.