BILL ANALYSIS                                                                                                                                                                                                    



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          ASSEMBLY THIRD READING
          AB 300 (Caballero)
          As Amended April 20, 2009
          Majority vote 

           LOCAL GOVERNMENT    7-0         WATER, PARKS & WILDLIFE    11-0 
           
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          |Ayes:|Caballero, Knight,        |Ayes:|Huffman, Fuller,          |
          |     |Arambula, Davis, Duvall,  |     |Anderson,                 |
          |     |Krekorian, Skinner        |     |Tom Berryhill,            |
          |     |                          |     |Blumenfield, Caballero,   |
          |     |                          |     |Fletcher, Krekorian,      |
          |     |                          |     |Bonnie Lowenthal, John A. |
          |     |                          |     |Perez, Salas              |
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           APPROPRIATIONS      15-0                                        
           
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          |Ayes:|De Leon, Nielsen,         |     |                          |
          |     |Ammiano,                  |     |                          |
          |     |Charles Calderon, Davis,  |     |                          |
          |     |Duvall, Fuentes, Hall,    |     |                          |
          |     |Harkey, John A. Perez,    |     |                          |
          |     |Price, Skinner, Solorio,  |     |                          |
          |     |Audra Strickland,         |     |                          |
          |     |Torlakson                 |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
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           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  








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            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 and approved by:  a) the public water system; or, if  
            there is no public water system; b) the local agency.

          4)Provides that the public water agency may collect fees  
            necessary to provide additional analysis of voluntary demand  
            management measures.

          5)Defines "voluntary demand management measures" to mean water  
            use efficiency measures that are permanently fixed to  
            residential, commercial, industrial, or other real property  
            that will reduce the subdivision's water demand below the  
            applicable statutory, regulatory, and local-ordinance  
            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.








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          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" (Fund).

          8)Defines the 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.

          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  








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            Water Conservation Council (CUWCC).
          16)Specifies that if 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 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, CUWCC, and the Department of Water Resources.

          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  








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            Environmental Quality Act, the project must comply with the  
            provisions of law that evaluate the sufficiency of water  
            supplies.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, there are minor, absorbable costs to the Department  
          of Water Resources.

           COMMENTS  :  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 management  
          measures.

          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.

          According to the sponsor, 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  








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          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.  

          The author believes that this bill 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, this bill 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 water  
          conservation strategies and discourage ineffective ones.  Most  
          importantly, by creating an incentive based conservation  
          program, this bill will achieve reductions in water consumption  
          without any additional cost to state or local governments.

          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."

          This measure is very similar to AB 2219 (Parra) of 2008 that was  
          held in the Senate Natural Resources and Water Committee.
           
          Analysis Prepared by  :    Katie Kolitsos / L. GOV. / (916)  
          319-3958                                                








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