AUGUSTA — After a two-hour debate Thursday night, the House voted 85-54 for the strictest version of a bill fought vigorously by paper companies, requiring them to reduce color, odor and foam discharged into Maine rivers.

But in voting close to midnight, the Senate rejected the strictest version of the bill, 20-12, and favored a version some said would make little noticeable improvement in river color.

“We have a beautiful river, yet you can’t swim in it, you can’t eat the fish,” said Rep. Roger Pouliot, D-Lewiston. “This is the people’s river. Who do we answer to, the big corporations or the people?”

But opponents said the bill was asking paper companies to bear too much cost for a benefit of only marginal value.

“This will break the camel’s back. The cost is ridiculous,” said Rep. Malachi Anderson, R-Woodland.

In a marathon day at the State House, lawmakers attacked issues from prisons to lotteries with a vengeance, trying to clear their agenda to deal with the state’s $210 million budget shortfall in the last week of the session.

The House and Senate gave initial approval to sending a $20.2 million bond issue for prison construction to voters in November, despite the objections of House Majority Whip Joseph Mayo, D-Thomaston.

The Senate refused to kill Maine’s joining Lotto America, a multistate game that Republican Gov. John R. McKernan says could raise $7 million to help offset the budget shortfall.

The Energy and Natural Resources Committee had split three ways on the river-color bill, with an eight-member majority favoring limiting Kraft pulp mills to discharges of 225 pounds of color per ton of pulp made.

Opponents said that could cost industry $202 million, but supporters said it would cost less. Three members favored a weaker limit of 275 pounds per ton, estimated to cost $115 million, while two panel members wanted no bill at all.

The majority bill has strong backing from McKernan, who was castigated by Democrats for vetoing a similar measure last year.

But paper companies say it would cost them many millions of dollars to address what is an aesthetic problem, rather than a public-health issue.

On another environmental issue, the House gave initial approval to a bill fought by industry that would require companies to gradually reduce their use of toxic substances on an 84-55 vote.

Sen. Zachary Matthews, D-Winslow, led a charge to try to kill Lotto America, whose critics contend the giant-jackpot lottery is a tax on poor people who can least afford it.

“Let’s do what’s right,” said Matthews. “Let’s cut what we have to cut, but let’s not attempt to gamble our way out of a deficit.”

But Sen. Michael Pearson, D-Enfield, Senate chairman of the Appropriations Committee that is wrestling with the budget shortfall, said, “I do not favor Lotto America, but I find it necessary.”

The Senate voted 23-11 not to kill the bill and then gave it all-but-final approval. The House had rejected it 82-62 last week.

On the prison issue, Mayo found himself a minority of one on the 13-member Corrections Committee as he tried to downplay the need for more maximum-security beds and divert part of a proposed $20.2 million bond issue to a new medium-security facility.

Mayo told reporters the Corrections Department had exaggerated both the problem of prison overcrowding and the need for maximum-security space.

Last November, Maine voters soundly rejected a McKernan-backed $35 million bond issue to triple the size of a new maximum-security prison in Warren from 100 to 300 beds.

Construction on that prison hasn’t begun yet, and Mayo said, “I think it unwise to expand something that isn’t even built yet.”

But Rep. Rita Melendy, D-Rockland, House chairman of the corrections panel, said the new bond issue struck an important compromise with groups that opposed financing strictly maximum-security beds by offering a variety of other new facilities.

Melendy said crowding at the Maine State Prison in Thomaston made it dangerous for both workers and inmates.

The House agreed with the majority recommendation on an 84-58 vote, but since bond issues need two-thirds approval to be sent to voters, Mayo held out hope for his plan. In other action:

After lengthy debate, the House approved a bill to create a state-run insurance fund to clean up oil spills from old underground tanks. The fund would be financed with a fee of 44 cents per barrel of gasoline which could add a penny a gallon to gasoline prices at the pump. But supporters said it was needed because oil-spill insurance was not available to many gas-station owners and they could be driven out of business.

A bill increasing protection for victims of domestic abuse, sponsored by Rep. Mary Cathcart, D-Orono, won final approval from the House and Senate. Cathcart said she was “relieved no one tried to take the teeth out of it.”

The measure “gives a strong message that the people of Maine will not tolerate abuse any more and our justice system will protect the victims,” she said.

The new law will redefine abuse to include sexual assaults and fear of bodily injury. It also amends judicial proceedings, allowing a plaintiff who is denied a protective order to be heard by the presiding judge.

The Senate gave final approval to repealing the homestead-exemption tax-relief program in fiscal 1992 and turning over $10 million to municipal revenue sharing. McKernan wants to postpone the program enacted last year in fiscal 1991, using the $10 million to offset the budget deficit, but he is opposed to scrapping the program altogether.