Cal. Health and Safety Code § 116601

(a) Community water systems serving fewer than 10,000 people or 3,300 service connections and nontransient noncommunity water systems that serve K–12 schools shall demonstrate compliance with the minimum technical, managerial, and financial standards adopted pursuant to Section 116600 within timelines adopted by the state board. The timelines adopted by the state board shall not require compliance with the minimum technical, managerial, and financial standards sooner than two years after the adoption of the standards. The board may grant an extension for compliance with the technical, managerial, and financial standards for good cause when an explanation of the need for an extension is included in a compliance plan submitted by a water system and is approved by the state board. (b) Notwithstanding subdivision (a), new community water systems serving fewer than 10,000 persons or 3,300 service connections and nontransient noncommunity water systems that serve K–12 schools shall demonstrate, as part of a permit application, compliance with the minimum technical, managerial, and financial standards adopted pursuant to Section 116600. (c) The state board may require a community water system serving fewer than 10,000 people or 3,300 service connections and a nontransient noncommunity water system that serves K–12 schools subject to the minimum standards adopted pursuant to Section 116600 to show proof that it has the technical, managerial, and financial capacity to comply with the standards, including, but not limited to, annual reporting of information necessary and appropriate to monitor its current capacity status. (d) Nothing in this article shall be construed as limiting the state board’s authority under other laws, including the authority to order consolidation pursuant to Section 116682 or to request a technical report under Section 116530.