SECTION 1.   Section 16 of Chapter 21 of the General Laws, as appearing in the 2006 official edition, is hereby amended by striking the  phrase following the words "appropriate local authority" in its entirety and replacing with the following phrase:- in any city, town or water district from requiring any person engaged in the digging or drilling of private wells, or any person operating such wells, to obtain a site permit and abide by other restrictions on the operation of such wells in accordance with terms and conditions which ensure health, safety and protection of the public water supply, wetlands, waterways and aquatic life, and said city or town may charge said person a reasonable fee for said site permit as determined by the city or town.

SECTION 2.   Section 39J ofCchapter 40 of the General Laws, as appearing in 2006 official edition, is hereby amended by inserting after the words "all related costs of police and fire protection," in line 15, the following words:- “all costs or measures to ensure the long-term sustainability of the water supply,”.

SECTION 3.   Chapter 40 of the General Laws, as appearing in the 2006 official edition, is hereby amended by inserting after section 39L the following new section: Section 39M

Section 39M. Establishment of Sustainable Water Resource Fund.

Notwithstanding any general or special law to the contrary, a city, town, board of water commissioners, officers performing like duties, or water district having a water supply or water distribution system may collect a reasonable fee to be used exclusively to remedy and offset the impacts of water withdrawals and other activities that deplete streamflow or impair recharge to ground waters, and to sustain the quantity, quality and ecological integrity of waters of the commonwealth. Such measures for water return or preventing water loss include without limitation, local recharge of stormwater and wastewater, reuse of water, removal of infiltration and inflow, and water savings achieved by retrofitting existing development with low impact development methods or water-saving devices. The fee, which may be based on retaining within the basin or saving at least two gallons for every gallon of new water demand, shall be assessed in a fair and equitable manner, and separate uniform fees may be established for residential and commercial uses. All such fees shall be deposited in a separate account classified as a "Sustainable Water Resource Fund." This Fund shall not be used for any purpose not provided in this section.

SECTION 4.   Section 39K of Chapter 40 of the General Laws, as appearing in the 2006 official edition, is hereby amended by striking subsection (a) in its entirety and replacing it with the following:

Section 39K. (a) Any city or town which accepts the provisions of this section either by a majority vote of the city or town council, or by majority vote at an annual town meeting, may establish a drinking water protection district to include all or part of said city or town, or in conjunction with at least one other city or town sharing a common drinking water resource, including but not limited to an aquifer, a recharge area or a watershed. Said drinking water protection district shall be for the purposes of water conservation, resource management and protection, and resource planning of drinking water supplies in said district including, but not limited to, public wells, private wells, and reservoirs, watersheds and aquifers which may be located in more than one such city or town.

The drinking water protection commission shall be composed of two members from each municipality in said drinking water protection district to be appointed by the mayor of a city or the board of selectmen of a town for a term of three years.

Each city or town in said drinking water protection district shall adopt a pricing system which charges all users of public or private water supplies within said city, town or water supply district for protection of water resources. Said pricing system shall not impose a charge in excess of ten percent of the annual cost of water as charged by metered service or fixed rate. If service is without meters or if the water supply is private, a flat fee may be charged; provided, however, that such flat fee shall not exceed ten percent of the average annualized residential or commercial metered use whichever is applicable in such city or town; and provided, further, that in a city or town without a public water system a flat fee to be established by a majority vote of an annual town meeting, town council or city council, whichever is applicable shall be charged.

Such charges or fees collected under the provisions of this section shall be forwarded to the drinking water protection commission which shall deposit the same in the Drinking Water Protection Fund established under subsection (b).

SECTION 5.   Section 39K of said Chapter 40 of the General Laws, as appearing in the 2006 official edition, is further amended by adding, in subsection (c) following line 178, the following:- (9) restrict the siting, establishment and/or operation of private wells located within the drinking water protection district where any such well may adversely affect any public water supplier’s ability to provide sufficient water supply to meet the essential potable or fire protection needs of its service population.