BILL ANALYSIS                                                                                                                                                                                                    

          |                                                                 |
          |                   Senator Fran Pavley, Chair                    |
          |                    2009-2010 Regular Session                    |
          |                                                                 |

          BILL NO: AB 300                    HEARING DATE: July 6, 2009  
          AUTHOR: Caballero                  URGENCY: No  
          VERSION: June 30, 2009             CONSULTANT: Dennis O'Connor  
          DUAL REFERRAL: No                  FISCAL: Yes  
          SUBJECT: Subdivisions: water supply.  
          In 2001, the Legislature passed and the Governor signed Senator  
          Kuehl's SB 221 (Stats. 2001, c. 642) and Senator Costa's SB 610  
          (Stats. 2001, c. 643).

          SB 221 amended the Subdivision Map Act to require, as a  
          condition of approval of a tentative map for subdivisions  
          exceeding 500 residential units, written verification from the  
          applicable public water system that a sufficient water supply  
          will be available to serve the subdivision.

          SB 610, among other things, amended the California Environmental  
          Quality Act (CEQA) and Part 2.10 of the Water Code (Water Supply  
          Planning to Support Existing and Planned Future Uses) to require  
          any city or county that determines a project is subject to CEQA,  
          to require a water supply assessment.  

          PROPOSED LAW
          This bill would:

          1.Require that the water supply assessments mandated by SB 221  
            and SB 610 be based on the anticipated water demand for the  
            project, given planned water demand reduction actions  
            contained in an adopted urban water management plan and  
            current statutory, regulatory, and local ordinance  
            requirements, reduced by the amount of voluntary demand  
            management measures.

          2.Define voluntary water demand management measures as 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.

          3.Allow voluntary mitigation measures to include water  
            conservation offsets that minimize a percentage of a project's  
            impact on the public water system, as determined by the  
            applicant and agreed upon by the public water system. The  
            applicant would be allowed to enter into a mutual 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. 

          4.Require that the water savings projection attributable to  
            voluntary demand management measures be contained in the  
            written verification and be verified for accuracy by the  
            public water system, or, if there is no public water system,  
            the local agency.  

          5.Require the projected water savings to be calculated using  
            either water efficiency program data compiled or maintained by  
            the public water system or water savings projections adopted  
            by the California Urban Water Conservation Council (CUWCC).   
            If a project applicant proposes to use a new voluntary water  
            demand management measure for which neither the CUWCC nor the  
            public water system has adopted an estimate or method to  
            calculate the projected water savings of the proposed  
            voluntary water demand management measure, the projected water  
            savings would be made based on documented methodologies or  
            calculations submitted in the record.

          6.Require, if the written verification of a sufficient water  
            supply relies on the use of voluntary demand management  
                 The written verification to be conditioned on the  
               maintenance and operation of the voluntary demand  
               management measures, or measures that are at least as water  
               efficient, as agreed to by the applicant and the public  
               water system, and the recordation as a covenant running  
               with the land.
                 The recorded covenant to include a notice of the  
               existence of the maintenance manual and the obligation of  
               the purchaser to obtain the maintenance manual from the  
                 Each purchaser, by acceptance of a deed to a lot,  
               acknowledge the obligation to comply with the voluntary  
               demand management measures for the lot as described in the  


                 The covenant and its obligations to be in effect for the  
               time period used by the public water system for determining  
               the water savings attributable to the demand management  
               measures but not exceeding 20 years.
                 The requirements under these provisions to be included  
               with the original sales documentation and shall  
               acknowledged by the purchaser. The seller shall instruct  
               the original purchaser to provide the maintenance manual to  
               any subsequent purchaser.
                 A builder, prior to the close of escrow, to give to a  
               purchaser information that shall be included in a  
               maintenance manual that informs the purchaser of the  
               existence of the home's unique water saving devices,  
               including information regarding their benefits, maintenance  
               requirements, and proper use.
                 The public water system would be allowed to enforce the  
               covenant pursuant to its existing authority.

          1.Deem that a water supply assessment, completed pursuant to the  
            requirements of SB 610, satisfies the requirement for a water  
            supply assessment under SB 221 unless the public water system  
            receives significant new information that becomes available  
            and that was not known and could not be known at the time when  
            the assessment was prepared. 

          2.Require the public water system, five years after the project  
            has been fully developed, to include in its next urban water  
            management plan a report on the monitoring and compliance of  
            voluntary water demand management measures and determine  
            whether they have resulted in the water savings necessary to  
            achieve the agreed upon water demand offsets.

          3.Sunset these provisions in 2017.

          4.Make numerous findings and declarations regarding the  
            importance of encouraging permanent water conservation  
            practices beyond those required under current law.

          According to a coalition of building and business interests,  
          "For years, homebuilders have employed systems and technologies  
          to reduce water demand in new homes, including installation of  
          ultra-low flow toilets and showerheads, weather-based landscape  
          irrigation controllers, drought tolerant plants, recycled water  
          systems, rainwater capture and reuse systems along with low  


          impact development strategies and other sustainable features.   
          However, local agencies do not always take into consideration  
          the existence and use of voluntary water savings devices.   
          Instead, current water demand projections may rely on out-dated  
          consumption models that do not reflect actual water use in  
          proposed subdivisions".

          "AB 300 ensures that homebuilders and commercial developers who  
          employ voluntary water demand measures, receive reasonable  
          credit for their savings in connection with water-demand  
          assessments and verifications done during the entitlement  
          process.  The public water agency would maintain control of the  
          water assessment and would simply be required to consider an  
          applicant's use of voluntary conservation measures in a new  
          housing or mixed use development.  AB 300 requires the voluntary  
          water demand measures employed by the builder to be permanently  
          affixed to the property."

          Opponents support the intent of AB 300 to encourage water  
          efficient development by allowing water-savings resulting from  
          "voluntary" water conservation measures to be credited in a  
          water supply assessment and water supply verification for that  
          development.  However, they have serious concerns about specific  
          aspects of the bill.

          A coalition of environmental organizations is concerned that,  
          "In its current version, AB 300 would thwart the effective  
          enforcement of these promised extraordinary water savings.   
          Relying on a deed restriction that only requires the homeowner  
          to read a maintenance manual about in-home conservation measures  
          and the homeowner's knowledge of this deed restriction is not an  
          effective tool for achieving compliance with these promises.   
          Relying on the water utility to police neighborhoods, looking  
          for landscaping on individual homes that may exceed the allotted  
          water demand is not at all realistic, results in government  
          intrusion into the home, and is extremely expensive to the  
          utility.  This approach would also adversely impact all the  
          other ratepayers who would share in paying for the additional  
          enforcement staff required to police the new subdivisions."

          East Bay Municipal Utility District (EBMUD) asserts, "The most  
          effective compliance strategy for ensuring that promised water  
          savings will be maintained over the course of changes in  
          property ownership is through the Covenants, Conditions, and  
          Restrictions (CC&Rs).  CC&Rs establish the "rules of conduct" in  
          the development, and enforcement of the CC&Rs by the [Homeowner  


          Association (HOA)] is established practice.  Since most new  
          500-unit residential subdivisions include an HOA, the use of  
          CC&Rs provides a reliable and efficient means for enforcement.   
          HOAs are locally managed by the homeowners within the new  
          subdivision.  They are located in the neighborhood, closest to  
          the properties, and are in the best position to verify that  
          homeowners are abiding by their promises concerning property  
          landscaping and water usage.  Homeowners within a common  
          interest development already understand their obligation to  
          conform to the CC&Rs, and have a reasonable expectation that the  
          HOA will enforce the rules for the collective benefit of the  

           Designing for Conservation.   Many water conservation  
          technologies are relatively inexpensive to install when a  
          structure is being constructed, but are expensive to install as  
          a retrofit.  If builders get credit for voluntarily installing  
          water conservation devices, they're more likely to design their  
          projects to include them.  

           Ensuring Permanent is Permanent.   All parties agree that it is  
          critical that the voluntary water demand measures employed by  
          the builder be permanent.  The key issue in dispute is what is  
          the best way to ensure that actually occurs?  The author and  
          sponsors assert the best method is to record a covenant that  
          runs with the title that would prevent any future owner from  
          removing or disabling the water conservation features.  The  
          opponents counter that the best way is to incorporate the  
          restrictions in the CC&Rs and to use HOAs as the first line of  

           HOAs.   Homeowner Associations have their fans and their critics.  
           Fans note that HOAs provide people with shared neighborhood  
          values an opportunity to enforce regulations to achieve a  
          community reflecting those values.  While an HOA inherently  
          restricts the rights that would otherwise exist for its members  
          based on city and county statutes, those very restrictions are  
          often the reason people decide to move into such neighborhoods.   

          Critics counter that many HOAs have excessively restrictive  
          rules and regulations on how homeowners are allowed to conduct  
          themselves and use their property.  Due to their nature as a  


          non-governmental entity, HOA boards of directors are not bound  
          by constitutional restrictions on governments, meetings are not  
          open to the general public, etc, even though in many cases they  
          are a de-facto level of government. 

           Commitment In Local Government Committee.   This bill was heard  
          in the Senate Local Government Committee on 6/17/09.  At that  
          hearing, the author presented a number of author's amendments.   
          The author also stated that while she agreed in concept to  
          amending the bill to include "CC&R/Enforcement" language, final  
          details were still being negotiated.  Upon questioning by  
          members of the Committee, the author clarified that she was not  
          taking any CC&R enforcement language in our Committee, but was  
          committing to do so in the next policy committee.

          The expectation of the Chair of the Local Government Committee  
          is that the author would amend the bill in the Senate Natural  
          Resources to enforce compliance with AB 300 through CC&Rs.   
          According to the Chair, the only possible exception to taking  
          amendments that include the use of enforceable CC&Rs would be if  
          all of the parties involved in negotiating the language agree to  
          some other enforcement provisions to amend into the bill.

          While the author has amended the bill after the bill left the  
          Local Government Committee, the amendments do not enforce  
          compliance with the provisions of the bill through CC&Rs.   
          Moreover, many of the parties involved in negotiating the  
          language disagree with the enforcement provisions amended into  
          the bill.

          SUGGESTED AMENDMENT:  Direct staff, in collaboration with staff  
          of the Local Government Committee, to draft and process  
          amendments to delete recent amendments that required the  
          maintenance and operation of the voluntary demand management  
          measures as a covenant running with the land and replace with  
          language to enforce compliance with AB 300 through CC&Rs.

          California Building Industry Association
          California Chamber of Commerce
          California Business Properties Association
          California Alliance for Jobs
          California Apartment Association
          California Association of Realtors
          California Manufacturing and Technology Association
          American Council of Engineering Companies California


          Associated General Contractors
          Western Electrical Contractors Association, Inc.

          Clean Water Action
          Defenders of Wildlife
          East Bay Municipal Utility District
          Environment California
          Executive Council of Homeowners
          Food and Water Watch
          Heal the Bay
          Planning and Conservation League
          Sierra Club
          Urban Semillas

          California Association of Realtors (if amended to include HOA  
          enforcement provisions)
          Executive Council of Homeowners (if amended to include HOA  
          enforcement provisions)