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  :  








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          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
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           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
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               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  








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          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  








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               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