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--- STAFF ANALYSIS OF ASSEMBLY BILL 301 (Fuentes) Page 2 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 STAFF ANALYSIS OF ASSEMBLY BILL 301 (Fuentes) Page 3 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 STAFF ANALYSIS OF ASSEMBLY BILL 301 (Fuentes) Page 4 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 STAFF ANALYSIS OF ASSEMBLY BILL 301 (Fuentes) Page 5 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. STAFF ANALYSIS OF ASSEMBLY BILL 301 (Fuentes) Page 6 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 STAFF ANALYSIS OF ASSEMBLY BILL 301 (Fuentes) Page 7 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 -- END --