Amended in Assembly June 8, 2016

Senate Bill No. 1263

Introduced by Senators Wieckowski and Pavley

February 18, 2016

An act to amend Section 116540 of, and to add Section 116527 to, the Health and Safety Code, begin insert and to add Section 106.4 to the Water Code, end insert relating to drinking water.

LEGISLATIVE COUNSEL’S DIGEST

SB 1263, as amended, Wieckowski. Public water system: permits.

(1) Existing law, the California Safe Drinking Water Act, imposes on the State Water Resources Control Board various responsibilities and duties relating to providing a dependable, safe supply of drinking water. The act prohibits a person from operating a public water system unless he or she first submits an application, including a technical report, to the state board and receives a permit, as specified. The act requires the state board, upon determination that the application is complete, to make a specified investigation, and allows the state board to impose permit conditions, requirements for system improvements, and time schedules as the state board deems necessary to ensure an affordable, reliable, and adequate supply of water at all times that is pure, wholesome, and potable. begin delete The act prohibits a public water system that was not in existence on January 1, 1998, from being granted a permit unless the system demonstrates that the water supplier possesses adequate financial, managerial, and technical capability to ensure the delivery of pure, wholesome, and potable drinking water, and requires that this prohibition apply to any change of ownership of a public water system. end delete begin insert The act provides that a person who knowingly makes a false statement or representation in a report submitted, maintained, or used for purposes of compliance with the act may be punished as a misdemeanor. end insert

This bill begin delete would, commencing January 1, 2017, prohibit an application for a permit for a new public water system from being deemed complete unless the applicant has submitted end delete begin insert would require an application for a permit for a proposed new public water system to first submit end insert a preliminary technical report to the begin delete state board, as specified, and would allow the state board to impose technical, financial, or managerial requirements on the permit. The bill would prohibit a public water system not in existence on January 1, 1998, from being granted a permit unless the public water system demonstrates that the water supplier also possesses adequate water rights to ensure the delivery of pure, wholesome, and potable drinking water, and would specify that the prohibition applies to any change in ownership of the public water system, including the consolidation of a public water system. end delete begin insert board at least 6 months before initiating construction of any water-related improvement, as defined. Because a misstatement in the report could be a crime under the provision described above, this bill would impose a state-mandated local program by expanding the scope of a crime. end insert The bill would allow the begin delete state end delete board to begin insert direct the applicant to undertake additional discussion and negotiation with certain existing public water systems the board determines have the technical, managerial, and financial capacity to provide an adequate and reliable supply of domestic water to the service area of the proposed new public water system, as specified, and would require an applicant to comply before submitting an application for a permit to operate a system and would prohibit the application from being deemed complete unless the applicant has complied. The bill would authorize the board to end insert deny the permit if the begin delete state end delete board determines that the service area of the public water system can be served by one or more currently permitted public water begin delete systems. end delete begin insert systems or that the proposed new public water system may lack the technical, managerial, or financial capacity to sustainably provide affordable, safe drinking water in the reasonably foreseeable future, as prescribed. end insert

(2) Existing law allows the state board to delegate primary responsibility for the administration and enforcement of the act within a county to a local health officer if certain criteria are met. Existing law requires that the local primacy agency be empowered with all of the authority granted to the state board over the specified public water systems.

This bill would prohibit a local primacy agency from issuing a permit begin insert to operate a public water system end insert without the concurrence of the state board. begin insert The bill would require, for a proposed public water system that would be regulated by a local primacy agency, the applicant to also submit a copy of the preliminary technical report to the state board. end insert

begin insert

(3) Existing law declares the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. Existing law requires a city or county that determines a project, as defined, is subject to the California Environmental Quality Act to identify certain water systems that may supply water for the project and to request those public water systems to prepare and approve a specified water supply assessment. Under existing law, if no public water system is identified, the city or county is required to prepare and approve the water supply assessment. Existing law provides that if, as a result of its assessment, the public water system or city or county concludes that its water supplies are, or will be, insufficient, the public water system or city or county is required to provide its plans for acquiring additional water supplies, as prescribed.

end insert begin insert

This bill would prohibit a city, including a charter city, or a county from issuing a building permit for the construction of a new residential development where a source of the water supply is water transported by a water hauler, bottled water, a water-vending machine, or a retail water facility. By imposing new duties on a city or county in connection with the issuance of a building permit, the bill would impose a state-mandated local program.

end insert begin insert

(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for specified reasons.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert The Legislature finds and declares all of the
following: end insert

begin insert

(a) There are over 7,500 public water systems in California.
The vast majority of these systems provide a reliable supply of safe
drinking water. However, there are hundreds of smaller public
water systems that consistently fail to provide a reliable supply of
safe drinking water to their customers. Many failing public water
systems were created without the necessary technical, managerial,
or financial capacity to be sustainable in the long term in view of
water supply uncertainties. These uncertainties can be created by
effects on water quality and quantity, global climate change,
migration of groundwater contamination, the establishment of new
drinking water standards, and other factors that are known to
significantly erode a system’s capacity.

end insert begin insert

(b) Failing public water systems disproportionately affect
disadvantaged communities who are least able to afford to address
the conditions that led to the failure.

end insert begin insert

(c) The proliferation of new, unsustainable public water systems
also may undermine the state’s human right to water policy.

end insert begin insert

(d) Therefore, it is the policy of the state to discourage the
establishment of new, unsustainable public water systems when
there is a feasible alternative.

end insert

begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

Section 116527 is added to the Health and Safety Code,
to read:

begin delete

116527.  

(a) Commencing January 1, 2017, an application for
a permit for a new public water system under this chapter shall
not be deemed complete unless the applicant has complied with
the requirements of this section.

(b) The applicant shall submit a preliminary technical report to
the state board six months before submission of an application for
a building permit for any improvement in the service area of a
proposed new public water system or six months before initiating
construction of any facility or component of a new public water
system, whichever is earliest. This report shall include all of the
following:

end delete

begin insert

begin insert 116527. end insert   

end insert begin insert

(a) As used in this section, “water-related
improvement” includes, but is not limited to, a water pipe, a water
pump, or drinking water infrastructure.

end insert begin insert

(b) (1) Before a person submits an application for a permit for
a proposed new public water system, the person shall first submit
a preliminary technical report to the state board at least six months
before initiating construction of any water-related improvement.

end insert begin insert

(2) In order to assist in expediting the permitting process, a
person that is considering submitting an application for a permit
for a proposed new public water system is encouraged, but is not
required, within seven days of an application for a building permit
for any water-related improvement to submit the preliminary
technical report to the city or county.

end insert begin insert

(3) For a proposed public water system that would be regulated
by a local primacy agency, the applicant shall also submit a copy
of the preliminary technical report to the state board.

end insert begin insert

(c) The preliminary technical report shall include all of the
following:

end insert

(1) The name of each public water system for which any service
area boundary is within three begin delete miles end delete begin insert miles, as measured through
existing public right of ways, end insert of any boundary of the applicant’s
proposed public water system’s service area.

(2) A discussion of the feasibility of each of the adjacent public
water systems begin insert identified pursuant to paragraph (1) end insert annexing,
connecting, or otherwise supplying domestic water to the begin delete service
area of the end delete applicant’s begin insert new end insert proposed public water begin delete system. end delete begin insert system’s
service area. The applicant shall consult with an adjacent public
water system in preparing the report and shall include in the report
any information provided by an adjacent public water system
regarding the feasibility of annexing, connecting, or otherwise
supplying domestic water to that service area. end insert

begin insert

(3) A discussion of all actions taken by the applicant to secure
a supply of domestic water from an existing public water system
for the proposed new public water system’s service area.

end insert begin delete

(3)

end delete

begin insert (4) end insert  All begin delete proposed end delete sources of domestic water supply for the
proposed new public water system.

begin delete

(4)

end delete

begin insert (5) end insert  The estimated cost to construct, operate, and maintain the
proposed new public water system, including long-term operation
and maintenance costs and a begin delete proposed end delete begin insert potential end insert rate structure.

begin delete

(5)

end delete

begin insert (6) end insert  A comparison of the begin delete cost end delete begin insert costs end insert associated with the
construction, operation and maintenance, and long-term
sustainability of the proposed new public water system to begin insert the end insert costs
associated with begin delete the annexation, consolidation, end delete begin insert providing water to
the proposed new public water system’s service area through
annexation by, consolidation with, end insert or connection to an existing
public water system.

begin delete

(6) A discussion of all actions taken by the applicant to secure
a supply of domestic water from an existing public water system
for the service area of the proposed new public water system.

end delete

(7) A discussion of all actions taken by the applicant to pursue
a contract for managerial or operational oversight from an existing
public water system.

begin insert

(8) An analysis of whether a new proposed public water system’s
total projected water supplies available during normal, single dry,
or multiple dry water years during a 20-year projection will meet
the project water demand for the service area.

end insert begin insert

(d) (1) If documents prepared to comply with Division 13
(commencing with Section 21000) of the Public Resources Code
or any other application for public agency approval concerning
providing drinking water to the new proposed public water
system’s service area include the information required by
subdivision (c), the applicant may submit those documents to the
state board in lieu of the preliminary technical report and the
documents shall be considered the functional equivalent of the
preliminary technical report.

end insert begin insert

(2) If documents prepared to comply with Division 13
(commencing with Section 21000) of the Public Resources Code
or any other application for public agency approval concerning
providing drinking water to the new proposed public water
system’s service area include some, but not all, of the information
required by subdivision (c), the applicant shall submit those
documents and the preliminary technical report to the state board
and together those documents and the preliminary technical report
shall be considered the functional equivalent of the preliminary
technical report requirements of this section. A preliminary
technical report submitted pursuant to this paragraph shall only
be required to include information that is not otherwise addressed
by the other submitted documents.

end insert begin delete

(c)

end delete

begin insert (e) end insert  Upon review of a preliminary technical report submitted
pursuant to this section, the state board may do all of the following
actions:

(1)  begin delete Direct end delete begin insert If the applicant has not already sought annexation
or an extension of services agreement from the local agency
formation commission, direct end insert the applicant to undertake additional
discussion and negotiation with any existing public water system
begin insert meeting the requirements of paragraph (1) of subdivision (c) that end insert
the state board determines has the technical, managerial, and
financial capacity to provide an adequate and reliable supply of
domestic water to the service area of the proposed new public
water system. begin insert The state board shall not direct the applicant to
undertake additional discussion and negotiation if documentation
submitted to the state board demonstrates that additional
discussion and negotiation is unlikely to be successful, including,
but not limited to, documentation that a local agency formation
commission has already denied the application for an extension
or annexation. end insert

(2) Direct the applicant to report on the results of discussion
and negotiations conducted pursuant to paragraph (1) to the state
board.

(3) Establish a time schedule for the applicant’s performance
of directives issued pursuant to this subdivision.

begin delete

(d)

end delete

begin insert (f) end insert begin insert   end insert begin insert (1) end insert begin insert   end insert  An applicant shall comply with the state board’s
directives begin insert as assigned in and consistent with subdivision (e) end insert before
submitting an application for a permit under this chapter.

begin insert

(2)  An application for a permit for a new public water system
under this chapter shall not be deemed complete unless the
applicant has complied with the requirements of this section.

end insert begin delete

(e)

end delete

begin insert (g) end insert  The state board’s review of a preliminary technical report
pursuant to this section shall not be deemed approval of a project
or approval of begin delete any end delete begin insert a end insert permit application submitted under this
chapter.

begin insert

(h) The requirements of this section do not apply to an
application for a permit for a new public water system that was
deemed complete prior to January 1, 2017, pursuant to the
statutory permit application requirements effective at the date of
the permit submittal.

end insert begin insert

(i) (1) The requirements of this section do not apply to a service
area where an applicant certifies in writing to the state board that
the applicant will not rely on the establishment of a new public
water system for its water supply. The state board shall
acknowledge receipt of the applicant’s certification in a timely
manner.

end insert begin insert

(2) An applicant who certifies that the service area will not rely
on the establishment of a new public water system and later seeks
a permit for a new public water system shall comply with the
provisions of this section and shall assume all risk of delay or
rejection related to the permit application.

end insert begin insert

(j) (1) The provisions of this subdivision apply to a proposed
new public water system that achieves either or both of the
following:

end insert begin insert

(A) Consolidates two or more existing public water systems,
existing state small water systems, or other existing water systems,
which results in the creation of a new public water system.

end insert begin insert

(B) Provides water service in lieu of individual domestic wells.

end insert begin insert

(2) At least six months before the construction of any
water-related improvements, an applicant for a new public water
system that meets the criteria in paragraph (1) shall provide a
written notice to the state board that does both of the following:

end insert begin insert

(A) Clearly describes the proposed new public water system
and how it meets the criteria in paragraph (1).

end insert begin insert

(B) Requests an exemption from the requirements of this section.

end insert begin insert

(3) The state board shall promptly acknowledge receipt of a
written notice described in paragraph (2). The state board shall
have 30 days from the acknowledgment of receipt of the written
notice to issue a written notice to the applicant that compliance
with the requirements of this section is necessary and that an
application for a permit of a new public water system under this
chapter is not complete until the applicant has complied with the
requirements of this section. A determination by the state board
that compliance with the requirements of this section is necessary
shall be final and is not subject to review. A determination by the
state board pursuant to this subdivision is not considered a project
subject to Division 13 (commencing with Section 21000) of the
Public Resources Code.

end insert begin insert

(4) If the state board receives a written notice from a project
applicant that satisfies the requirements of paragraph (2), the
project described in the notice is deemed exempt from the
requirements of this section on the 35th day following the date of
the state board’s acknowledgment of receipt of the written notice,
unless the state board has issued a notice to comply pursuant to
paragraph (3).

end insert

begin delete SEC. 2. end delete

begin insert SEC. 3. end insert   

Section 116540 of the Health and Safety Code is
amended to read:

116540.  

(a) Following completion of the investigation and
satisfaction of the requirements of paragraphs (1) and (2), the state
board shall issue or deny the permit. The state board may impose
permit conditions, requirements for system improvements,
technical, financial, or managerial requirements, and time schedules
as it deems necessary to ensure a reliable and adequate supply of
water at all times that is pure, wholesome, potable, and does not
endanger the health of consumers.

(1) A public water system that was not in existence on January
1, 1998, shall not be granted a permit unless the public water
system demonstrates to the state board that the water supplier
possesses adequate begin delete water rights, as well as end delete financial, managerial,
and technical capability to ensure the delivery of pure, wholesome,
and potable drinking water. This section shall also apply to any
change of ownership of a public water begin delete system, including the
consolidation of a public water end delete system.

(2) A permit under this chapter shall not be issued to an
association organized under Title 3 (commencing with Section
18000) of the Corporations Code. This section shall not apply to
unincorporated associations that, as of December 31, 1990, are
holders of a permit issued under this chapter.

(b) Notwithstanding Section 116330, a local primacy agency
shall not issue a permit under this begin delete chapter end delete begin insert article end insert without the
concurrence of the state board.

begin delete

(c) If the state board determines that the service area of the
public water system addressed by an application under this article
can be served by one or more currently permitted public water
systems, the state board may deny the permit.

end delete begin insert

(c) In considering whether to approve a proposed new public
water system, the state board shall consider the sustainability of
the proposed new public water system and its water supply in the
reasonably foreseeable future, in view of global climate change,
potential migration of groundwater contamination and other
potential treatment needs, and other factors that can significantly
erode a system’s capacity.

end insert begin insert

(d) The state board may deny the permit if it determines either
of the following:

end insert begin insert

(1) That it is feasible for the service area of the proposed new
public water system addressed by an application under this chapter
to be served by one or more currently permitted public water
systems.

end insert begin insert

(2) That the proposed new public water system may lack the
technical, managerial, or financial capacity to sustainably provide
affordable, safe drinking water in the reasonably foreseeable future
based on its assessment of the preliminary technical report
submitted pursuant to Section 116527, the permit application,
relevant substantial evidence, or the factors considered pursuant
to subdivision (c).

end insert begin insert

(e) An applicant may appeal decisions and actions of the deputy
director taken pursuant to this section to the state board.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 106.4 is added to the end insert begin insert Water Code end insert begin insert , to read: end insert

begin insert

begin insert 106.4. end insert   

(a) For the purposes of this section:

(1) “Bottled water” has the same meaning as defined in Section
111070 of the Health and Safety Code.

(2) “Residential development” has the same meaning as defined
in Section 65008 of the Government Code.

(3) “Retail water facility” has the same meaning as defined in
Section 111070 of the Health and Safety Code.

(4) “Water-vending machine” has the same meaning as defined
in Section 111070 of the Health and Safety Code.

(5) “Water hauler” has the same meaning as defined in Section
111070 of the Health and Safety Code.

(b) A city, including a charter city, or a county shall not issue
a building permit for the construction of a new residential
development where a source of water supply is water transported
by a water hauler, bottled water, a water-vending machine, or a
retail water facility.

(c) The Legislature finds and declares that this section addresses
a matter of statewide concern and not a municipal affair, as that
term is used in Section 5 of Article XI of the California
Constitution.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
a local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act or because costs that may be
incurred by a local agency or school district will be incurred
because this act creates a new crime or infraction, eliminates a
crime or infraction, or changes the penalty for a crime or
infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIII B of the California Constitution.

end insert