Republicans, Democrats and Gov. Arnold Schwarzenegger are trying to reach agreement on water legislation aimed at protecting the fragile Sacramento-San Joaquin Delta while boosting water supplies. Here is a look at the latest proposal and some of the issues that stand in the way of a long-sought deal.

FINANCING

THE PROPOSAL: The proposal borrows $9.4 billion to pay for dams, underground water banking, water recycling, Delta restoration and regional projects. Voters must approve the bond, which would cost the state about $600 million a year in debt service at its peak.

THE STICKING POINTS: Democrats and Republicans have offered competing bonds. Neither earmarks money for dams, requiring them to compete with other projects for money. The Democratic version includes more Delta protection money. The GOP bond has more for regional projects. Unions fear the borrowing would take money from other programs and are likely to oppose the bond if it makes the ballot.

DELTA OVERSIGHT

THE PROPOSAL: The proposal creates a seven-member council charged with adopting a long-range management plan for the environmentally troubled estuary by 2012. The plan would include strategies to boost the reliability of water exports while protecting the ecosystem.

THE STICKING POINTS: More than 200 agencies now have a role in the Delta, the state's water hub. Democrats say the council will bring more order to Delta planning. Republicans are concerned about adding another layer of government.

CANAL

THE PROPOSAL: The proposal does not authorize a long-envisioned canal to move water around the Delta southward. But the Delta council would incorporate the canal into its plans – if it meets environmental standards.

THE STICKING POINTS: Several large water agencies that favor the canal and promise to pay for it have signed off on the plan. Key environmentalists also are on board, saying the council will provide checks and balances to canal planning. Delta residents fear the plan will pave the way for a canal.

CONSERVATION

THE PROPOSAL: The proposal calls for a statewide per-capita urban water use reduction of 20 percent by 2020, but not every water district would have to meet that threshold. Agencies that don't meet targets would be ineligible for state grants and loans. Farm water suppliers would not face targets but would have to submit efficiency plans.

THE STICKING POINTS: The state's water supply is not growing, but its population is. Environmentalists say conservation is the cheapest and best water management strategy. Republicans want assurances that agencies won't be sued if they don't meet targets, but environmentalists say the GOP is trying to undermine laws protecting against water waste.

GROUNDWATER MONITORING

THE PROPOSAL: The proposal requires agencies to report water levels in underground basins. Agencies that don't comply could lose grants.

THE STICKING POINTS: Democrats say the state needs the information to better manage water supplies. Republicans favor a voluntary program with more local control.

WATER RIGHTS

THE PROPOSAL: The proposal gives state water regulators more powers to police illegal water diversions. Adds 25 enforcement agents and increases penalties.

THE STICKING POINTS: This is one of the biggest open issues. Republicans worry about the water board gaining too much power. Democrats counter that the powers are needed to capture more water savings.

– E.J. Schultz/Bee Capitol Bureau