Cal. Health and Safety Code § 116326

In administering programs to fund improvements and expansions of small community water systems, the department shall do all of the following: (a) Give priority to funding projects in disadvantaged communities. (b) Encourage the consolidation of small community water systems that serve disadvantaged communities in instances where consolidation will help the affected agencies and the state to meet all of the following goals: (1) Improvement in the quality of water delivered. (2) Improvement in the reliability of water delivery. (3) Reduction in the cost of drinking water for ratepayers. (c) Pursuant to subdivision (b), allow funding for feasibility studies performed prior to a construction project to include studies of the feasibility of consolidating two or more community water systems, at least one of which is a small community water system that serves a disadvantaged community. (d) In instances where it is shown that small community water system consolidation will further the goals of subdivision (b), give priority to funding construction projects that involve the physical restructuring of two or more community water systems, at least one of which is a small community water system that serves a disadvantaged community, into a single, consolidated system.