Early California settlers knew that a stable water supply was one of the most important components of any new settlement. They also found that water was often a scarce commodity in the West. Battles over available water resources were not uncommon among competing users, and, as a result, water law in California is one of the most detailed and complex bodies of jurisprudence in the United States. Recent legislation marks the beginning of yet another chapter of water law in California. The new legislation reflects the historical tension between two competing forces: the need for new housing as California's population grows, and the scarcity of adequate water supplies in many of the places where new communities are springing up (no pun intended).
On January 1, 2002, California Senate Bill 221 took effect, amending the California Water Code and redefining the relationship in California between water use planning and residential subdivision approval. Bill 221 prohibits applicable local governmental entities from approving a tentative map for certain residential subdivisions without first obtaining written verification that a "sufficient water supply" exists for the project.
Bill 221 is not the first attempt by California's legislature to link subdivision approval to proof of adequate water supply. In 1995, California Senate Bill 901 was enacted requiring municipalities to identify the water systems that will supply each new development project, and to request that water suppliers assess whether adequate water supply exists to support the proposed project. Bill 221, however, represents a further (and potentially more demanding) step toward achieving the goal identified by Bill 901: preventing growth in California from overstepping the physical limits of the water supply.
The Framework of Bill 221
What developments are affected by the new law? Bill 221 applies to "subdivisions" which are defined as proposed residential developments of more than 500 dwelling units. Additionally, for smaller public water systems (those with less than 5,000 service connections), any proposed residential development that would increase the number of connections serviced by the system by 10% or more also constitutes a subdivision subject to Bill 221.
Bill 221 requires that the legislative body of a city or county which is empowered to approve, disapprove or conditionally approve a subdivision map must condition such approval upon proof of sufficient water supply. The term "sufficient water supply" is defined in Bill 221 as the total water supplies available during normal, single-dry and multiple-dry years within a 20-year projection that will meet the projected demand associated with the proposed subdivision. The definition of sufficient water supply also includes the requirement that sufficient water encompass not only the proposed subdivision, but also existing and planned future uses, including, but not limited to, agricultural and industrial uses.
Proof of sufficient water supply may be requested by the subdivision applicant (presumably, the developer) or the local agency, at the local agency's discretion. This proof must be provided by the applicable public water system, which is required to provide written verification within 90 days of the request. In Bill 221, the term "public water system" is defined as a system for provision of piped water to 3,000 or more service connections. Certain collection and treatment facilities also qualify as public water systems. A public water system is responsible for verifying the sufficient water supply of a subdivision. If a public water system fails to provide the written verification within 90 days of the request, the local agency or any other interested party may seek a writ of mandamus to compel compliance by the public water system. The local agency may make its own finding if a public water system fails to provide a written verification.
If a public water system concludes that a sufficient water supply does not exist for a proposed project, then the local agency may make its own finding to the contrary. The local agency's conclusion may rely on water supplies that are not currently available, but will be by the time of the project's completion. Further, the local agency's finding must be on the record and supported by substantial evidence, but there are no predetermined criteria for the local agency to satisfy in support of its finding.
Types of Proof
Bill 221 gives examples of the types of "substantial evidence" to be used in support of the mandatory written verification: (1) the public water system's most recently adopted urban water management plan; (2) a water supply assessment completed in compliance with Bill 901; and (3) certain other types of information.
Bill 221 also allows a written verification of adequate water supply to be based on water sources not yet in effect. In this context, each of the following four factors must be considered to the extent applicable:
- Written contracts "or other proof of valid rights to the identified water supply" containing specific terms and conditions under which the future water supply will become available.
- If the applicable governing body has adopted a specific capital outlay program for "financing the delivery of a sufficient water supply," such program must be provided in support of the verification.
- Securing applicable federal, state and local permits.
- Securing required regulatory approvals.
Finally, Bill 221 contemplates the use of groundwater to satisfy the sufficient water supply requirement. If groundwater is part of the analysis, the public water system must evaluate the extent of its right (or that of the landowner) to extract such groundwater.
Bill 221 contains three exemptions: one for urbanized areas, one for low-income housing and one for the County of San Diego.
Urbanized Areas. Bill 221 does not apply to "any residential project proposed for a site that is within an urbanized area" if the site has been previously developed for urban uses, or if the site is surrounded by properties which are, or previously have been, developed for urban uses. This exemption, which did not appear in the original version of the Bill, was apparently added to alleviate concern by California's counties and cities that the lack of adequate water supplies in urban areas could conflict with the obligation of local governments to provide adequate low-income housing.
Low-Income Housing. Bill 221 also states that "housing projects that are exclusively for very low and low-income households" are exempt from Bill 221. This likely represents a compromise on the part of the bill's supporters to reflect cities' and counties' obligations to provide low-income housing, even in the absence of proof of adequate water supplies over the next 20 years.
San Diego County. In 1988, the voters of San Diego County passed Proposition C. Proposition C mandates the development of a regional growth management plan, and contains water use planning requirements which may potentially serve the same goals as Bill 221. Accordingly, Bill 221 states that San Diego County "shall be deemed to comply" if specific goals of Proposition C's regional growth management strategy have been achieved.
The foregoing is intended as a general discussion of the provisions of Bill 221. It remains to be seen what impact Bill 221 will have on residential development in California. Will this new law result in better planning of residential growth based on available resources, or simply move new growth to areas where water supplies are plentiful? Either way, it reinforces the old adage: "What is past is prologue." Like California's early settlers, local governments, residential subdivision developers, lenders and, perhaps, the home-buying public must confront the dilemma of how to reconcile scarce natural resources with the need for new homes. The battle over water in the West is far from over.
Erik Kremer is a Partner in the San Diego office and may be contacted via e-mail at firstname.lastname@example.org or by phone at (858) 509-4021.
David Hepler is an associate in the San Diego office and may be contacted via e-mail at email@example.com or by phone at (619) 544-3118.
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