Nov. 3 (Bloomberg) -- California’s Senate approved a proposal asking voters to authorize $10 billion in bonds to overhaul the aging water system of the most-populous U.S. state.

The measure, which required a two-thirds vote, passed 28 to 8 in the Senate. The plan is part of a package of bills lawmakers are considering to build dams, repair a network of levees, mandate new water restrictions and provide oversight of water supply and distribution. The Assembly is scheduled to take up the bills today.

Californians have debated for decades on how to modernize and expand their water system, which depends on aqueducts, reservoirs and pipelines -- some dating from the 1930s. The issue has gained momentum after three years of drought and court-ordered supply restrictions withered the $36 billion-a- year agriculture industry.

“I don’t like adding bond debt, but if we are going to bond for anything, safe, adequate and reliable water is the kind of thing we should be bonding for,” Senator John Benoit, a Palm Springs Republican, said during a debate prior to the vote.

The bond bill puts a measure on the statewide ballot in November 2010. If approved by voters, it would add as much as $600 million a year in debt service to the state’s $60 billion of outstanding long-term general fund debt. Only half the water bonds could be sold prior to 2015.

Veto Threat

Republicans and Democrats, who control both chambers of the legislature, have been at odds over the legislation for nine months. Republican Governor Arnold Schwarzenegger tried to negotiate a compromise behind closed doors in September and threatened to veto hundreds of unrelated bills if both sides didn’t strike a deal.

One of the sticking points has been how to form a new governing body to oversee the Sacramento-San Joaquin Delta, which supplies water to two-thirds of California’s 36.7 million people. Schwarzenegger has supported a plan to build a canal to circumvent the delta to send Los Angeles more of the San Joaquin’s water.

“It’s been 30 years that the state of California has been debating water and for 30 years water has been caught up in politics and partisanship, and in the meantime we’ve let farms go fallow,” said Senator Abel Maldonado, a Santa Cruz Republican. “Our state is dying a slow death from dehydration and I say enough is enough.”

Democrats sought to mandate a 20 percent cut in water use over the next decade as well as new rules to let the state monitor private pumping of groundwater and a council to oversee restoration of the delta.

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

Last Updated: November 3, 2009 10:36 EST