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LOS ANGELES-One of the most sweeping and hotly contested anti-sprawl measures in California history could be signed into law as early as this week by Governor Gray Davis

The measure was approved late last week, as the 2001 state Legislative session came to a frenzied midnight close that found lawmakers voting on hundreds of issues—some of which they had barely studied. Davis has indicated that he will sign the bill, which would require builders whose projects would include more than 500 homes to first show that there would be enough water for their development’s residents.

Yet, the plan goes far beyond residential real estate. Large hotel projects would be subject to the new water-related requirements, as would new businesses that want to erect a headquarters complex or industrial facility that would employ more than 1,000 workers.

The measure was authored by Sheila Kuehl (D-Santa Monica). It is backed by the California Farm Bureau, as well as many environmental groups.

Most large developers and building associations oppose the bill. They say it could stifle new housing development and thereby worsen the state’s housing-affordability crisis.

Some key economists have also weighed-in against the plan. They claim that extending the new water guidelines to commercial projects with 1,000 or more employees will discourage California-based companies from expanding here, and also prompt Fortune 500 companies looking to establish a larger West Coast presence to instead build their projects in neighboring states without such water concerns.

Gov. Davis is expected to sign the bill into law, in part because he wants to avoid creating a water shortage as bad as the energy shortage that currently grips the state.

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