Gov. Sonny Perdue signed the Water Conservation and Drought Relief Act of 2008 Tuesday to expedite the building of reservoirs.

"After facing one of the worst droughts in our state's history, we are taking the necessary steps to ensure an adequate water supply that meets future needs," Perdue said in a statement.

The law creates a new state arm called the Water Supply Division and gives it one purpose: build reservoirs.

That will be accomplished by the state acting alone or in partnership with local governments. The division will get $40 million in initial funding. Another $30 million in loans will be available for local governments in the next budget cycle that starts July 1. One recently built reservoir in Cherokee County cost more than $100 million.

To save money, the law requires the new division to use current state employees for staff and hire engineering firms and other outside contractors to do most of the work.

The law also extends the sales tax holiday scheduled for Oct. 2-5 to include water-efficient products that cost $1,500 or less. Buyers will not have to pay the state sales tax on dish washers, clothes washers, refrigerators and other household products that carry the U.S. Environmental Protection Agency's WaterSense label.

Proponents of the law, including House Speaker Glenn Richardson who championed its passage, say it is a needed step toward protecting the state from future droughts.

Opponents, including the Georgia Water Coalition of environmental and civic groups, say the law puts the cart before the horse, fast-tracking new reservoirs before the three-year statewide water plan can determine how much water can be safely taken out of the state's waterways, how much and where water is needed and will be needed in the future.

Opponents also say the law favors new reservoirs — which fill in wetlands and block streams — over water conservation.