Pub. Util. Code, § 2721

(a) For purposes of this section, the following terms have the following meanings:

(1) “Consolidate” means to join two or more small community water systems, state small water systems, or affected residences not served by a small community water system or state small water system into a single consolidated water system.

(2) “Small community water system” has the same meaning as set forth in Section 116275 of the Health and Safety Code.

(3) “State small water system” has the same meaning as set forth in Section 116275 of the Health and Safety Code.

(b) (1) A water or sewer system corporation may file an application and obtain approval from the commission through an order authorizing that water or sewer system corporation to consolidate with a small community water system or state small water system identified as failing or at risk of failing by the State Water Resources Control Board.

(2) The commission shall approve or deny an application filed pursuant to paragraph (1) within 12 months of its filing, unless the commission makes a written determination that the deadline cannot be met, including findings as to the reason, and issues an order extending the deadline by up to four months. The commission may grant additional extensions of four months or less consistent with this paragraph.

(3) A water or sewer system corporation shall submit a fee of ten thousand dollars ($10,000) when filing an application for authority to complete a consolidation made pursuant to paragraph (1).

(4) All moneys collected pursuant to paragraph (3) shall be deposited into the Consolidation For Safe Drinking Water Fund, established pursuant to Section 2722.

(c) (1) (A) For a consolidation valued at five million dollars ($5,000,000) or less, a water or sewer system corporation may file an advice letter and obtain approval from the commission through a resolution authorizing that water or sewer system corporation to consolidate with a small community water system or state small water system identified as failing or at risk of failing by the State Water Resources Control Board.

(B) If an advice letter filed pursuant to this paragraph is uncontested, approval may be given by the executive director or the director of the division of the commission having regulatory jurisdiction over the water or sewer system corporation.

(C) Absent incomplete documentation, the commission shall approve or deny the advice letter within 180 days of its filing by the applicant water or sewer system corporation, if the advice letter is not contested, unless the executive director makes a written determination that the deadline cannot be met, including findings as to the reason, and issues a response extending the deadline by up to 60 days. The executive director may grant additional extensions of 60 days or less consistent with this subparagraph.

(2) For a consolidation valued at five million dollars ($5,000,000) or less, the commission may designate a different procedure if it determines that the consolidation warrants a more comprehensive review than the advice letter procedure described in paragraph (1) provides.

(d) For purposes of a consolidation pursuant to either subdivision (b) or (c), the commission shall prioritize cases in which a water or sewer system corporation consolidates with a small community water system or state small water system that is subject to a citation issued pursuant to Section 116650 of the Health and Safety Code or a compliance order issued pursuant to Section 116655 of the Health and Safety Code for failure to meet primary or secondary drinking water standards, as defined in Section 116275 of the Health and Safety Code.

(e) A water or sewer system corporation seeking to consolidate with a small community water system or state small water system pursuant to this section shall give adequate public notice and provide adequate opportunities for public participation, as determined by the commission.

(f) This section does not require a small community water system or state small water system that is not subject to the jurisdiction, control, and regulation of the commission to obtain authorization from the commission before consolidating with a small community water system or state small water system.