BILL ANALYSIS AB 301 Page 1 Date of Hearing: March 24, 2009 ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS Wesley Chesbro, Chair AB 301 (Fuentes) - As Introduced: February 17, 2009 SUBJECT : Vended water. SUMMARY : Requires applicants for a license as a water-bottling plant or as a private water source to provide information on the volume and source of the water to the State Department of Public Health (DPH) and requires DPH to annually make this information available to the public. Specifically, this bill : 1) Requires each applicant for a license as a water-bottling plant or a private water source to provide DPH, upon submission of the application, the following information: a. The total volume of water bottled or sold either for wholesale or retail use, including the best estimate of this information for new applicants; and b. Whether the source of the water bottled or sold is a public or private water agency or an artesian well, lake, river, spring, or well; and c. The county in which the source of the water is located and whether this source is privately or publicly owned and operated. 2) Requires DPH to annually compile the above information for each licensee and make the compiled information available to the public. 3) Requires DPH to ensure that the compilation of information does not include duplicative data, especially relating to applicants applying for both a water-bottling plant license and a private water source license. 4) Requires that water from a private water source that is sold or delivered to a water-bottling plant is reported separately from water sold or delivered for other uses. EXISTING FEDERAL LAW : AB 301 Page 2 1)Authorizes the Food and Drug Administration (FDA), under the Federal Food, Drug, and Cosmetics Act, to regulate bottled water products that are in interstate commerce. 2)Authorizes the United States Environmental Protection Agency (US EPA), under the Safe Drinking Water Act (SDWA), to set national health-based standards for drinking water to protect against both naturally-occurring and anthropogenic contaminants. 3)Requires, when US EPA sets a new standard for a contaminant in drinking water, that the FDA must establish a new standard for the same contaminant in bottled water or find that US EPA's new standard is not applicable to bottled water. AB 301 Page 3 EXISTING STATE LAW : 1)Authorizes DPH to licence and regulate manufacturers of bottled water and vended water. 2)Requires all water-bottlers (regardless of whether located in-state, out-of-state, or in a foreign country) and private source operators to apply annually to obtain a license to bottle, collect, treat, hold, distribute, haul, vend, or sell water in California. 3)Requires, as a condition of licensure, water-bottling plants to annually prepare a bottled water report, including disclosure of the source of the bottled water, and to make the report available to each customer. 4)Requires water bottlers whose corporate name or trademark contains the words "spring," "well," "artesian well," or "natural," to label each bottle with the source of the water if the source of the water is different from the source stated in the corporate name or trademark. 5)Requires private water sources that sell water at retail to display the fact that the water is obtained from an approved public water supply or licensed private water source. FISCAL EFFECT : Likely minor costs to DPH to compile licensee information and make it available to the public. To the extent that revenue generated by bottled-water licenses is not adequate to cover these costs, the costs could be covered by a General Fund (GF) appropriation (GF or Food Safety Fund.) COMMENTS : AB 2275 (Fuentes, 2008). This bill is substantially similar to AB 2275 (Fuentes) of the 2007 -2008 legislative session, excluding minor technical code clean-up language in AB 2275. AB 2275 passed the Assembly ESTM Committee by a vote of 6 - 0 and was vetoed by the Governor with the following message: "The historic delay in passing the 2008-2009 State Budget has forced me to prioritize the bills sent to my desk at the end of the year's legislative session. Given the delay, I am only signing bills that are the highest AB 301 Page 4 priority for California. This bill does not meet that standard and I cannot sign it at this time." Purpose . According to the author's office, credible and transparent information would help both community members and decision-makers understand the impacts of proposed and existing bottled-water facilities in California. Licensed water-bottlers are not currently required to report or make available to the public the volume of water extracted or bottled, as the DPH licensing program focuses on public health, not public resources, issues. What is bottled water and where does it come from? According to DPH, bottled water and vended water begin with tap water (public drinking water) or water from a licensed private water source that meets all regulatory requirements. The water then undergoes further treatment to enhance the quality (taste, smell, clarity, etc.), usually by undergoing one or more filtration or disinfection processes. Approximately 85% of the bottled water sold in California is from a "private" water source; the remaining 15% comes from "municipal" or tap water. According to DPH (then Department of Health Services) data compiled by the Pacific Institute, DPH licensed an estimated 181 bottling plants to sell water in California in 2006. Of these plants, 112 are located within California. The total volume of bottled water sold in California by licensed bottlers (excluding vendors) is around 1.3 billion gallons per year. In-state bottlers provide an estimated 60% of the water licensed for sale in California. Potential impacts of extracting water for bottling . According to the Pacific Institute, bottling plants can deplete local groundwater aquifers and associated surface water resources. If the rate of groundwater extraction exceeds the rate of natural replenishment, then groundwater levels decline, posing serious problems for those dependent of wells for their water supply. Continued depletion of groundwater can cause some aquifers to collapse, resulting in permanent loss of the aquifer and land subsidence. In addition, groundwater provides water for local streams, particularly in the summer. As groundwater levels decline, water in local streams can also decline or even run dry. Bottling plants are located in 33 counties in California, with AB 301 Page 5 most plants concentrated in Southern California. Because the impact of groundwater extraction depends on site-specific characteristics of the aquifer, one cannot infer which regions are most heavily impacted. However, because plants are located throughout the state and impacts tend to be localized; many California residents could be impacted by the extraction of water for bottling. Moving water through water transfers vs. through water bottlers : A water transfer is a reallocation of water among water users, which provides flexibility in the allocation and use of water in California. Water transfers undergo public scrutiny and the involvement of federal, state and local agencies. Bottled water does not have to go through the same public examination process. Is extracting and bottling water for sale potentially outside of California an appropriate use of California's scarce water resources? Clarifying reporting requirements: The committee suggests amendments to clarify that, as a condition of licensure, applicants must provide the volume of water bottled and sold in the previous reporting year and new applicants must make their best estimate of water they expect to bottle and sell in the following reporting year. Related legislation: 1) AB 2275 (Fuentes, 2008). Nearly identical legislation to AB 301 (Fuentes, 2009), requires applicants for a license as a water-bottling plant or as a private water source to provide information on the volume and source of the water to DPH and required DPH to make this information available to the public. Vetoed by the Governor. 2) AB 2186 (Salas, 2008). Required each water-vending machine, retail water facility, and private water source that sells water at retail to display the identity of the source from which the water was last obtained prior to being bottled. Died in Assembly ESTM Committee without a hearing. 3) AB 1521 (Salas, 2007). Required each container of bottled water sold in this state to include on its label the identity of the source from which the water was last obtained prior to being bottled, in compliance with AB 301 Page 6 applicable federal regulations. Required, as a condition of licensure, that a water-bottling plant annually prepare and submit to DPH a consumer confidence report. Vetoed by the Governor. 4) SB 220 (Corbett) Chapter 575, Statutes of 2007. Enhanced the Department of Public Health's regulatory process governing water dispensed from water vending machines and the labeling requirements for bottled water. REGISTERED SUPPORT / OPPOSITION : Support Food & Water Watch (sponsor) Alliance for Democracy American Federation of State, County and Municipal Employees (AFSME) Amigos de Los Rios California Coastkeeper Alliance Clean Water Action East Bay Municipal Utility District (EBMUD) Movement Generation Justice and Ecology Project McCloud Watershed Council Planning and Conservation League San Diego Bay Council Santa Clarita Organization for Planning and the Environment (SCOPE) Santa Monica Baykeeper Southern California Watershed Alliance Tree People Urban Semillas Opposition None received. Analysis Prepared by : Shannon McKinney / E.S. & T.M. / (916) 319-3965