BILL ANALYSIS                                                                                                                                                                                                    






                                 SENATE HEALTH
                               COMMITTEE ANALYSIS
                        Senator Elaine K Alquist, Chair


          BILL NO:       AB 301                                       
          A
          AUTHOR:        Fuentes                                      
          B
          AMENDED:       April 1, 2009                               
          HEARING DATE:  June 10, 2009                                
          3
          CONSULTANT:                                                 
          0
          Orr/                                                        
          1
                                        

                                     SUBJECT
                                         
                                  Vended water

                                     SUMMARY  

          Requires applicants for licenses to bottle water in  
          California report the volume of the water, the source, and  
          the county of the source to the Department of Public  
          Health. Requires the Department to compile this information  
          and make it available to the public.


                             CHANGES TO EXISTING LAW  

          Existing federal law:
          Existing federal law authorizes the Federal Food and Drug  
          Administration to regulate standards for bottled water  
          products in interstate commerce, under the Federal Food,  
          Drug and Cosmetic Act.

          Existing federal law authorizes the United States  
          Environmental Protection Agency to regulate standards for  
          tap water, under the Safe Drinking Water Act. 
          
          Existing state law:
          Establishes the Department of Public Health, Food and Drug  
          Branch, which is responsible for licensing and regulating  
                                                         Continued---



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          manufacturers of bottled water and providers of vended  
          water.  

          The Sherman Food, Drug, and Cosmetics Law prescribes  
          various quality and labeling standards for bottled water  
          and vended water, and limits the levels of certain  
          contaminants that may be contained in those water products.  


          Requires a water-bottling plant to annually prepare a  
          bottled water report, including information about the  
          source of the bottled water, i.e. a spring, drilled well,  
          or municipal water supply, as a condition of licensure.  
          Existing law requires that the report include a brief  
          description of the treatment process used for producing the  
          bottled water. 

          Requires the department to charge and collect a fee for  
          each license application submitted, in an amount reasonably  
          necessary to produce sufficient revenue for the  
          department's enforcement efforts, and in accordance with a  
          prescribed fee schedule.   

          This bill:
          Requires those applicants who apply for a license as a  
          water bottling plant or a private water source in the  
          state, to provide to the Department of Public Health: 

               1) The total volume of water bottled or sold for  
               wholesale or retail use during a specified time period  
               preceding the application submission, or an estimate  
               of the total volume of water the applicant expects to  
               bottle or sell during the period of licensure,

               2) Whether the source of the water was a public or  
               private water agency, or artesian well, lake, river,  
               or spring, and,

               3) The county where the source of water is located.

          Requires the department to annually compile a listing of  
          this information and make it available to the public.  
          Requires that the department ensure the report does not  
          contain duplicative data as to applicants who apply for  
          both a water-bottling plant license and a private water  




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          source license. Stipulates that water from a private water  
          source that is sold or delivered to a water bottling plant  
          shall be reported separately from water sold or delivered  
          for other uses from that same water source. 


                                  FISCAL IMPACT  

          Assembly Appropriations Committee estimates that this bill  
          will cost the Department around $70,000 in the first year,  
          and $40,000 each subsequent year to compile licensee  
          information and make it available to the public.  Any costs  
          not covered by the fees the department collects will  
          presumably become General Fund expenses.  


                            BACKGROUND AND DISCUSSION  

          The author contends that information regarding how bottling  
          or vending operations affect groundwater aquifers or  
          surface water supplies is generally not available, and  
          reporting of this information is not currently required. In  
          a time of ongoing state drought and calls for water  
          rationing, the author believes that it is important that we  
          know how much of our state's resource is bottled and  
          shipped each year. 

          Bottled and vended water
          According to the Department of Public Health, bottled water  
          is water sold or distributed to consumers in sealed  
          containers for drinking, culinary, or other purposes  
          involving a likelihood of being ingested by humans. Bottled  
          water must be bottled only at a licensed water bottling  
          plant. Vended water is water dispensed by a water vending  
          machine, retail water facility (or store), water from a  
          private water source, or water delivered by a water hauler  
          for drinking, culinary, or other purposes involving a  
          likelihood of being ingested by humans. Vended water does  
          not include bottled water.
          
          Water shortage
          The governor proclaimed a Water Shortage State of Emergency  
          in February of 2009, claiming that the state is in its  
          "third consecutive year of drought," where he described  
          that "the rainfall and snowpack deficits in each year of  




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          the current drought have put California further and further  
          behind in meeting its essential water needs." The drought  
          is also affecting our agriculture industry. According to  
          the governor, "the lack of water has forced California  
          farmers to abandon or leave unplanted more than 100,000  
          acres of agricultural land" which could cost Californians  
          jobs and increase food prices.   Continued unchecked  
          depletion of the potable water supply could also pose a  
          threat to our emergency preparedness efforts, which could  
          make residents even more vulnerable during a disaster.

          Related legislation: 
          AB 2275 (Fuentes) 2008 is substantially similar to AB 301,  
          and would have required each applicant for a license as a  
          water-bottling plant or a private water source to provide  
          to the department specified information and would require  
          the department to annually compile a listing of this  
          information and make it available to the public, as  
          provided. Vetoed by the governor, with a generic veto  
          message he uniformly applied to several bills that reached  
          his desk in 2008.

          AB 2186 (Salas) 2008 would have 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.  The bill was set to be heard in Assembly  
          Environmental Safety and Toxic Materials Committee, but the  
          hearing was canceled by the author. 

          AB 1521 (Salas) 2007 would have 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  
          applicable federal regulations.  Required, as a condition  
          of licensure, that a water-bottling plant annually prepare  
          and submit to the department a consumer confidence report.  
          Vetoed by the governor. 
                        
          SB 220 (Corbett) Chapter 575, Statutes of 2007 requires a  
          water-bottling plant to annually prepare a bottled water  
          report, including information about the source of the  
          bottled water, i.e. a spring, drilled well, or municipal  
          water supply, as a condition of licensure. The report must  
          also include a brief description of the treatment process  




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          used for producing the bottled water. This bill also  
          enhanced the Department of Public Health's regulatory  
          process governing water dispensed from water vending  
          machines and the labeling requirements for bottled water. 

          AB 2644 (Montanez) 2006 would have increased the annual  
          license fee for a water-vending machine to $40, and would  
          require water-vending machines to be cleaned
          and serviced at least once every 31 days. The bill would  
          have required that maintenance and complaint records be  
          kept for a minimum of two years and be made available to  
          the department upon request. Held on suspense in the Senate  
          Appropriations Committee.

          SB 1772 (Ashburn) 2006 would have required the Department  
          of Health Services to ensure that samples of water-vending  
          machines are inspected annually and would set forth the  
          inspection criteria. This bill would have increased the  
          license fee per vending machine from $10.25 to $25,  
          adjusted annually. Held in the Assembly Environmental  
          Safety and Toxic Materials committee without hearing. 

          SB 1302 (Alarcon) 2004  would have required the Department  
          of Health Services to conduct annual random inspections of  
          water-vending machines and retail water vendors through  
          visual inspections and the collection and testing of water  
          samples. The bill would require the department to make all  
          information collected in the random inspections available  
          to the public. The bill would also require the department  
          to conduct a consumer education program. The bill would  
          require the department to assess a fee sufficient to pay  
          the costs of the random inspections and the education  
          program. Held on suspense in the Assembly Appropriations  
          Committee.

          SB 1589 (Denham) 2004 would have required that bottled  
          water may not exceed 10 parts per billion of total  
          triahalomethanes or 5 parts per billion of lead, unless the  
          department establishes a lower level by regulation, and  
          vended water may not exceed 10 parts per billion of total  
          triahalomethanes, on average, or 5 parts per billion of  
          lead for public drinking water. Set to be heard in the  
          Senate Health and Human Services Committee, but was  
          cancelled by the author. 





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          AB 83 (Corbett) 2003 would have transferred the provisions  
          relating to the licensure and regulation of persons engaged  
          in the bottled water activities from the Sherman Food,  
          Drug, and Cosmetic Law to the California Safe Drinking  
          Water Act. It would have required specified information on  
          labeling and in advertising bottled water products. The  
          bill would have required bottled water licensees to comply  
          with provisions similar to those imposed on public water  
          systems regarding emergency notification plans, consumer  
          confidence reports, and inspections. This bill would have  
          also revised the annual license fee schedule. Failed  
          passage on the Senate Floor. 

          Arguments in support
          Supporters contend that credible and transparent  
          information would help both the public and decision makers  
          to understand more accurately the impacts of proposed  
          bottled-water facilities in California. Without this  
          information, local communities and decision makers may not  
          know exactly how much of their local water supply is sold  
          and transported out of the local area. 

          Arguments in opposition
          The Department of Public Health does not believe that this  
          bill will provide any improvement in public health  
          protection to California consumers.  The department feels  
          that the information they already collect regarding the  
          identity of source water from bottlers is sufficient to  
          ensure quality. The department also believes the  
          information they are being asked to collect may be  
          considered proprietary, because it can act as an indicator  
          of a company's financial health. 
                                         



                                 PRIOR ACTIONS

           Assembly Floor:                      49-27
          Assembly Appropriations:             11-4
          Assembly Environmental safety and Toxic Materials: 19-0
                                         

                                    COMMENTS
           




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          1.  Potential General Fund impact
            According to the Assembly Appropriations Committee, to  
            the extent revenue generated by bottled-water licenses is  
            not adequate to cover these costs, they would have to be  
            covered by a General Fund appropriation. The author may  
            wish to work with the department to determine a way to  
            mitigate the fiscal impact to the General Fund.


                                    POSITIONS  
          Support:  AFSCME 
                 Alliance for Democracy 
                 Amigos de los Rios 
                 Breast Cancer Fund 
                 CA Coastkeeper Alliance 
                 Center on Policy Initiatives 
                 Clean Water Action CA 
                 Concerned Citizen's Coalition of Stockton 
                 Concerned McCloud Citizens 
                 East Bay Municipal Utility District 
                 Ella Baker Center for Human Rights 
                 Environmental Working Group  
                 Friends of Los Angeles River 
                 McCloud Watershed Council 
                 Movement Generation 
                 Planning and Conservation League
                 San Diego Area Municipal Employees Union
                 San Diego Bay Council
                 Santa Clarita Organization for Planning and the  
          Environment 
                 Santa Monica Baykeeper 
                 Southern California Watershed Alliance
                 Tree People, Tuolomne River Trust
                 Urban Semillas
                 Wildcoast
                 One individual

          Oppose:  Department of Public Health

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