BILL ANALYSIS AB 300 Page 1 Date of Hearing: April 15, 2009 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT Anna Marie Caballero, Chair AB 300 (Caballero) - As Amended: April 2, 2009 SUBJECT : Subdivisions: water supply. SUMMARY : Requires, until January 1, 2020, if a project applicant elects to include voluntary demand management measures, any city, county, or public water system preparing a water supply assessment for a development project, as defined, to reduce the anticipated water demand for the project based on the project applicant's voluntary water demand management measures. Specifically, this bill : 1)Requires, if a project applicant elects to include voluntary demand management measures, any city, county, or public water system preparing a water supply assessment for a development project, as defined, to reduce the anticipated water demand for the project based on the project applicant's voluntary water demand management measures that are permanently fixed to residential, commercial, industrial, or other real property that will reduce the subdivision's water demand beyond existing statutory, regulatory, and local-ordinance requirements. 2)Requires that the water savings projection attributable to voluntary demand management measures be contained in the written verification of the availability of a sufficient water supply that must be obtained from the applicable public water system by the subdivision applicant or local government in order to meet the requirements of existing law. 3)Requires that the water savings projection attributable to voluntary demand management measures also be verified for accuracy by the public water system, or if there is no public water system, the local agency. 4)Provides that the public water agency may collect fees necessary to provide additional analysis of voluntary demand management measurers. 5)Defines "voluntary demand management measures" to mean water use efficiency measures that are permanently fixed to AB 300 Page 2 residential, commercial, industrial, or other real property that will reduce the subdivision's water demand below the applicable statutory and regulatory requirements for water conservation, and may include, but are not limited to, all of the following: a) Smart irrigation controllers; b) Waterless urinals; c) Ultra low flow and dual flow toilets; d) Recycled water facilities; e) Rainwater capture and reuse facilities; f) Voluntary mitigation measures (as defined); or, g) Any other measure that will prevent the waste of water or promote the reasonable and efficient use and reuse of available water supplies by the subdivision or the public. 6)Specifies that voluntary mitigation measures may include, at the applicant's sole discretion, water demand mitigation measures that minimize a percentage, as determined by the applicant, of a project's impact to the public water system. 7)Specifies that the applicant may enter into an agreement with the public water system to mitigate water demand associated with a proposed subdivision by depositing funds into a "Voluntary Water Demand Mitigation Fund" 8)Defines the "Voluntary Water Demand Mitigation Fund" (Fund) as the fund used to finance water conservation and water supply augmentation measures by the public water system that mitigate an agreed upon percentage of the projected water demand impacts from the subdivision, at the discretion of the applicant. 9)Prohibits the fees paid into the Fund from exceeding an amount necessary to offset the actual or percentage of actual water demand impacts agreed upon in the agreement between the applicant and the public water system. AB 300 Page 3 10)Prohibits the fees paid into the Fund from exceeding the amount of all capacity charges and other water service fees applicable to the subdivision. 11)Provides that all applicable capacity charges and other water service fees shall be reduced to the extent possible that contributions are made to the Fund. 12)Requires the public water system to expend all monies from the Fund on water conservation measures that will reduce the projected demand associated with the subdivision. 13)Specifies that the expenditure of monies from the Fund may be made within the subdivision or elsewhere within the service area of the public water supplier, at its discretion. 14)Prohibits monies from the Fund from being used to supplant funding for water conservation programs already required under existing law or paid for by existing rates and surcharges. 15)Authorizes water savings projections to be calculated using the water savings projections adopted by the California Urban Water Conservation Council (CUWCC). 16)Specifies that if the CUWCC does not have projections for a measure, then the water supplier must base its estimate on substantial evidence in the record. 17)Specifies that if a project applicant proposes to use a new voluntary water reduction demand management measure that is not based on water savings projections adopted by the CUWCC, the city or county must impose a requirement that the applicant enter an agreement with the water supplier to implement and monitor the actual water savings over time through conditions of approval. 18)Requires the public water system to prepare a written report of the projected demand and actual water use five years after the project has been fully developed. 19)Requires copies of the report to be provided to the project applicant, the city or county that approved the subdivision map, the CUWCC, and the Department of Water Resources. AB 300 Page 4 20)Requires at the time of final inspection, a manual providing directions to the owner or occupant on the proper use of water conservation devices and systems to be placed in the dwelling. 21) Provides that these provisions automatically terminate on January 1, 2020. EXISTING LAW : 1)Prohibits approval of a tentative map, or a parcel map for which a tentative map was not required, or a development agreement for a subdivision of property of more than 500 dwelling units, except as specified, including the design of the subdivision or the type of improvement, unless the legislative body of a city or county or the designated advisory agency provides written verification from the applicable public water system that a sufficient water supply is available or, in addition, a specified finding is made by the local agency that sufficient water supplies are, or will be, available prior to completion of the project. 2)Provides that whenever a city or county determines that a project, as defined, is subject to the California Environmental Quality Act (CEQA), the project must comply with the provisions of law that evaluate the sufficiency of water supplies. FISCAL EFFECT : Unknown COMMENTS : 1)The Subdivision Map Act prohibits approval of a tentative map for a subdivision of property of more than 500 dwelling units, unless the legislative body of a city or county provides written verification from the applicable public water system that a sufficient water supply is available or, in addition, a specified finding is made by the local agency that sufficient water supplies are, or will be, available prior to completion of the project. This requirement was placed into law by SB 221 (Kuehl), Chapter 642, Statutes of 2001. This bill requires the public water system, or the local agency if there is no public water system, to verify the subdivider's water savings projections attributable to voluntary demand AB 300 Page 5 management measures. 2)Existing law further provides that whenever a city or county determines that a development project is subject to CEQA, the project must comply with the provisions of law that evaluate the sufficiency of water supplies. This requirement was placed into law by SB 610 (Costa), Chapter 643, Statutes of 2001. This bill requires a city, county, or public water system that is evaluating the sufficiency of water supplies for a project to reduce the anticipated water demand for the project based on the water service provider's voluntary water demand management measures. 3)According to the sponsors, the California Building Industry Association homebuilders, for years, have been employing systems and technologies to save water, but they have not regularly received adequate credit from water agencies during the entitlement process. Under current law, California homebuilders who propose large scale development projects must complete an analysis during the entitlement process which substantiates that adequate water supplies exist to support the project. However, when local water agencies analyze the projected water demand for a proposed housing development they do not always take into consideration the existence and use of voluntary water saving devices, and therefore, subject homebuilders to inaccurate water demand assessments. Instead, current water demand projections often rely on out-dated consumption models that do not reflect actual water use in proposed subdivisions. As California's water situation worsens, it has become increasingly difficult to ensure reliable water supplies for new housing. 4)The author believes that AB 300 will encourage innovative approaches to reduce water consumption in new homes by accounting for voluntary water conservation measures when a local agency quantifies a project's water demand. The bill would establish a voluntary program to allow homebuilders to introduce new information about water saving strategies they are employing in an effort to get a more accurate report on water use. In doing so, AB 300 will assist water agencies and the state in documenting the potential water savings from new water use efficiency projects and programs in a manner that will promote successful AB 300 Page 6 water conservation strategies and discourage ineffective ones. Most importantly, by creating an incentive based conservation program, AB 300 will achieve reductions in water consumption without any additional cost to state or local governments. 5)In its "Support, if amended" letter, the Association of California Water Agencies (ACWA) states that they have been working closely with the author on amendments but would like to continue to work on a few more areas including "limiting the bill's provisions to one stage in the process." ACWA believes that there is a redundancy created by requiring the water supplier to assess water savings in both the water supply assessment stage and water verification stage. ACWA also reports that they would like to "continue discussing how to ensure that the voluntary measures which are part of the property are lasting. Because a water supplier will be counting on the water savings attributable to the devices installed on the property, ACWA believes there has to be a mechanism that notifies the property owner of their duty to [keep] the device on the property." 6)This measure is very similar to AB 2219 (Parra, 2008) that was held in the Senate Natural Resources and Water Committee. 7)TECHNICAL AMENDMENTS : a) On page 6 line 9 after "applicable" strike "statutory" insert: "statutory, regulatory, and local ordinance" b) On page 6 line 10 strike "regulatory" c) On page 18 line 32 after "current" strike "statutory and regulatory" insert: "statutory, regulatory, and local ordinance" d) Add in language specifying that the public water agency has to approve or disapprove the water savings projections. 8)This bill is double-referred to the Committee on Water, Parks AB 300 Page 7 and Wildlife. REGISTERED SUPPORT / OPPOSITION : Support CA Building Industry Association [SPONSOR] American Council of Engineering Companies CA Associated General Contractors Association of CA Water Agencies (if amended) CA Alliance for Jobs CA Apartment Association CA Association of Realtors CA Business Properties Association CA Chamber of Commerce CA Manufacturing and Technology Association Concerns Sierra Club of CA Opposition East Bay Municipal Utility District (unless amended) Analysis Prepared by : Katie Kolitsos / L. GOV. / (916) 319-3958