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California Government Code Section 65589.7

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(a) The housing element adopted by the legislative body
and any amendments made to that element shall be immediately
delivered to all public agencies or private entities that provide
water or sewer services for municipal and industrial uses, including
residential, within the territory of the legislative body. Each
public agency or private entity providing water or sewer services
shall grant a priority for the provision of these services to
proposed developments that include housing units affordable to lower
income households.

   (b) A public agency or private entity providing water or sewer
services shall adopt written policies and procedures, not later than
July 1, 2006, and at least once every five years thereafter, with
specific objective standards for provision of services in conformance
with this section. For private water and sewer companies regulated
by the Public Utilities Commission, the commission shall adopt
written policies and procedures for use by those companies in a
manner consistent with this section. The policies and procedures
shall take into account all of the following:
   (1) Regulations and restrictions adopted pursuant to Chapter 3
(commencing with Section 350) of Division 1 of the Water Code,
relating to water shortage emergencies.
   (2) The availability of water supplies as determined by the public
agency or private entity pursuant to an urban water management plan
adopted pursuant to Part 2.6 (commencing with Section 10610) of
Division 6 of the Water Code.
   (3) Plans, documents, and information relied upon by the public
agency or private entity that is not an "urban water supplier," as
defined in Section 10617 of the Water Code, or that provides sewer
service, that provide a reasonable basis for making service
determinations.
   (c) A public agency or private entity that provides water or sewer
services shall not deny or condition the approval of an application
for services to, or reduce the amount of services applied for by, a
proposed development that includes housing units affordable to lower
income households unless the public agency or private entity makes
specific written findings that the denial, condition, or reduction is
necessary due to the existence of one or more of the following:
   (1) The public agency or private entity providing water service
does not have "sufficient water supply," as defined in paragraph (2)
of subdivision (a) of Section 66473.7, or is operating under a water
shortage emergency as defined in Section 350 of the Water Code, or
does not have sufficient water treatment or distribution capacity, to
serve the needs of the proposed development, as demonstrated by a
written engineering analysis and report.
   (2) The public agency or private entity providing water service is
subject to a compliance order issued by the State Department of
Health Services that prohibits new water connections.
   (3) The public agency or private entity providing sewer service
does not have sufficient treatment or collection capacity, as
demonstrated by a written engineering analysis and report on the
condition of the treatment or collection works, to serve the needs of
the proposed development.
   (4) The public agency or private entity providing sewer service is
under an order issued by a regional water quality control board that
prohibits new sewer connections.
   (5) The applicant has failed to agree to reasonable terms and
conditions relating to the provision of service generally applicable
to development projects seeking service from the public agency or
private entity, including, but not limited to, the requirements of
local, state, or federal laws and regulations or payment of a fee or
charge imposed pursuant to Section 66013.
   (d) The following definitions apply for purposes of this section:

   (1) "Proposed developments that include housing units affordable
to lower income households" means that dwelling units shall be sold
or rented to lower income households, as defined in Section 50079.5
of the Health and Safety Code, at an affordable housing cost, as
defined in Section 50052.5 of the Health and Safety Code, or an
affordable rent, as defined in Section 50053 of the Health and Safety
Code.
   (2) "Water or sewer services" means supplying service through a
pipe or other constructed conveyance for a residential purpose, and
does not include the sale of water for human consumption by a water
supplier to another water supplier for resale. As used in this
section, "water service" provided by a public agency or private
entity applies only to water supplied from public water systems
subject to Chapter 4 (commencing with Section 116275) of Part 12 of
Division 104 of the Health and Safety Code.
   (e) This section is intended to neither enlarge nor diminish the
existing authority of a city, county, or city and county in adopting
a housing element. Failure to deliver a housing element adopted by
the legislative body or amendments made to that element, to a public
agency or private entity providing water or sewer services shall
neither invalidate any action or approval of a development project
nor exempt a public agency or private entity from the obligations
under this section. The special districts which provide water or
sewer services related to development, as defined in subdivision (e)
of Section 56426, are included within this section.
   (f) The Legislature finds and declares that this section shall be
applicable to all cities and counties, including charter cities,
because the Legislature finds that the lack of affordable housing is
a matter of vital statewide importance.

Last modified: January 12, 2009