The legislation, believed to be unprecedented nationally, comes as water supplies are shrinking, Californians are questioning potential rationing while new homes continue to spring up and lawmakers are in gridlock over building more reservoirs.

“The idea is to create a framework by which California can continue to accommodate the need for growth while staying within the inherent limits of our water supply,” said Assemblyman Paul Krekorian, D-Burbank, who is carrying the measure.

An intense lobbying campaign is under way leading up to the floor vote, with builders and business interests marshalling forces to block the bill and environmentalists mounting an aggressive campaign to push the measure along to the Senate. Water agencies are divided.

“It's going to be tough – very tough,” Krekorian said.

Gov. Arnold Schwarzenegger has not taken a position on the bill.

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“It's a paradigm shift in how people are thinking about water,” said Debbie Davis of the Environmental Justice Coalition.

Krekorian's measure would require developers to prove their projects have no net gain in water use or pay into a fund to finance conservation projects elsewhere, such as fixing leaky pipes, cleaning up groundwater and recycling.

The fee would be capped at 1 percent of the cost of a house, roughly $3,000 on a $300,000 home, or less than $10 a month over the life of a 30-year mortgage, supporters counter.

To Krekorian, that's a small price to guarantee water for homes. Without the bill, he said, projects could be blocked under existing law that allows water agencies to declare that there is not enough supply to meet the increase in demand. Or ratepayers and taxpayers would continue to subsidize growth, he said.

Builders say that more fees would be another drag on their slumping industry. The California Chamber of Commerce is pitching in to help kill the legislation.

“AB 2153 further exacerbates a suffering economy and dismal housing market by imposing an untold tax on new home buyers,” opponents wrote. Business interests argue that new homes and buildings are water-efficient.

The measure contains some exemptions: Projects that replace existing building would be exempt if they use less water. Affordable housing would not be subject to the law.

Meanwhile, the bill requires that at least 40 percent builder-financed conservation would have to be achieved in economically disadvantaged neighborhoods.

“This is a middle path,” Krekorian said. “This is not an anti-growth measure.”

Opponents are not swayed.

“Accounting for every drop of water goes too far,” said Assemblyman Doug La Malfa, R-Willows, who worries that making developers responsible for even more conservation will “be used as an excuse” to abandon planning for new reservoirs for the entire state.

The San Diego County Water Authority on Thursday voted to oppose the legislation.

Director Keith Lewinger said the bill has failings, such as being implemented through the legally complex California Environmental Quality Act, over-reliance on mitigation in disadvantaged communities and not stipulating that required conservation take place within the water district where projects are proposed.

Nevertheless, Lewinger, general manager of the Fallbrook Public Utility District, said over-arching supply issues remain as California grows.

“Does the public support the general concept of subsidizing the development of future water supplies for future development? What I'm hearing from my customers is, no, they don't,” he said.