This Act is enacted for the purposes of promoting the rational development of water supply enterprises and enhancing the effective management of their operations for sufficient supply of quality water, improving the living environments of people, and promoting industrial and business development.
For matters not provided herein, other applicable laws shall govern.

The authority-in-charge of the water supply enterprises as referred to herein shall be water conservancy authority at the central level; the municipal governments at the special municipality level, and the county or city governments at the county or city level.
Where the service area of a water supply enterprise covers two or more administrative areas, the authority-in-charge shall be the upper level authority.

The following matters shall fall under the jurisdiction of central authority-in-charge:
1.The legislation of rules or regulation governing the development, operation, management and supervision of water supply enterprises.
2.The planning of national development of water supply enterprises and the supervision of its implementation.
3.The supervision and guidance of municipal, country and city water supply enterprises.
4.The planning and administration of municipal, country or city water supply enterprises that serve two or more administrative areas.
5.The districting of water service areas.
6.The guidance for matters regarding cross-area water supply and the stipulation of criteria and other related measures for stoppage of water supply and water rationing.
7.Other matters regarding national water supply.

The following matters shall fall under the jurisdiction of municipal authority-in-charge:
1. The legislation of rules or regulations governing water supply enterprises within the municipality.
2. The planning and implementation of the proposal of water supply enterprises within the municipality.
3. The administration of water supply enterprises operated by public utilities within the municipality.
4. The supervision and guidance of water supply enterprises operated by public utilities and private entities within the municipality.
5. The approval of matters regarding service areas of water supply enterprises.
6. Other matters regarding water supply enterprises designated by the municipal or central authority-in-charge.

The following matters shall fall under the jurisdiction of authority-in-charge at the country, city or bureau level:
1. The legislation of rules or regulations governing water supply enterprises within the county, city, or bureau.
2. The planning and implement of the proposal of water supply enterprises within the county, city or bureau.
3. The administration of water supply enterprises operated by public utilities within the county, city or bureau.
4. The supervision and guidance of water supply enterprises operated by public utilities within the townships or towns.
5. The supervision and guidance of water supply enterprises operated by private entities within the county, city or bureau
6. Other matters regarding water supply enterprises within the county, city or bureau.

The central and municipal authority-in-charge may establish an exclusive agency to assist in the development, administration, and supervision of water supply enterprises.

Water supply enterprises are public utilities. It should be operated by a public entity in principle but may be operated by private entities with authorized approval.

A water supply enterprise operated by the public utility shall be organized as a juristic person or an enterprise established by the government as determined by the authority-in-charge and operated as a business to facilitate its development.

The water supply enterprises operated by private entities shall be incorporated as a company limited by share according to law.

The quality of water supplied by water supply enterprises shall be clear, colorless, odorless, tasteless, having proper pH, and not containing chemical compounds, microorganisms, mineral substances, or radioactive materials exceeding the stipulated allowance level; the water quality standards shall be stipulated by the central authority-in-charge in consultation with the central environment protection authority and central public health authority.

For the purpose of protecting water sources, a water supply enterprise may apply to the central water authority pursuant to the Water Act, or may, based on factual need, request the authority-in-charge in consultation with other related administrative agencies to designate and announce a water quality and quantity protection area, and to ban or restrict the following activities that would harm the water quality or quantity pursuant to this Act or relevant laws:
1. Indiscriminate deforestation or excessive land development.
2. Alternation of river course that affects the self-cleaning ability of water.
3. Quarrying, prospecting or mining that leads to water source pollution.
4. Discharging wastewater from mines, factory, or household that exceeds the stipulated standards or the quantity stipulated by related authority.
5. Factories with high potential of pollution
6. Building landfills or incinerators, or dumping, placement, or discarding garbage, ash, rock, soil, sludge, human or animal excrement and urine, waste oil, waste chemical compound, dead animals, animal carcasses or other substances which might pollute the water sources.
7. Raising pigs or breeding livestock or domestic fowls for the purpose of profit in the catchments of upstream of important public water intakes stipulated by the environmental protection authority.
8. Breeding livestock or domestic fowls for the purpose of profit.
9. Construction or expansion of golf course.
10. Development of nuclear energy or other energies, or construction of storage or treatment facilities for radioactive waste.
11. Other activities stipulated and announced by the central authority-in-charge in consultation with other related authorities as potentially harmful to the quality or quantity of water.
The subparagraphs of the preceding paragraph do not apply to activities that are considered necessary for the living of residents or local public works and approved by the authority-in-charge.

The local authority-in-charge may, after consulting the appropriate government agencies, notify the owner or user of existing buildings or land in the water quality and quantity protection area mentioned in the foregoing article that are deemed harmful to the quality or quantity of water, to remove, improve or change the current use within a specified period. The water supply enterprise shall compensate the aforesaid owner or user for loss incurred thereof.
Where the parties cannot reach an agreement on the amount of compensation, the authority-in-charge will decide.

The land value increment tax, gift tax and estate tax imposed on land located in a water quality and quantity protection area that is designated as a water sources district under the urban planning procedure shall be reduced or exempted based on the extent of restriction placed on the use of land.
The districts and criteria that are applicable to reduction or exemption pursuant to Paragraph 1 hereof shall be stipulated by the central authority-in-charge together with the Ministry of Finance, the Ministry of the Interior, and the Council of Indigenous Peoples, and approved by the Executive Yuan.

Drawing surface water or ground water in water quality and quantity protection area shall pay the central authority-in-charge catchment conservation and compensation fees, unless the water is supplied in a non-profit manner for domestic use or public use in the protection area. If the water is supplied for industrial use or public use by a public utility, said public utility may add a 5% to 15% surcharge to its water bills after obtaining approval from the central authority-in-charge; if the water is supplied for agricultural use, the central authority-in-charge and the central agriculture authority should prepare budget for subsidy, and together stipulate the objects and manner of subsidy.
The central authority-in-charge shall, in consultation with relevant government agencies, prescribe the items, calculation, and rates of aforesaid catchment conservation and compensation fees, as well as manner of collection, payment formalities, payment period, actions in case of non-payment or under-payment, method for computing yield, and other provisions by the source of water and the purpose of use respectively.
The catchment conservation and compensation fees in the first paragraph hereof may be placed under water resources related funds managed by the central authority-in-charge and used exclusively on water resources conservation and environmental conservation infrastructure projects, public welfare of residents in water quality and quantity protection area, and compensation for landowners whose land use is restricted. Activities that may draw on the catchment conservation and compensation fees include:
1. Management and maintenance of facilities for water resources conservation, drainage, eco-tourism, and other hydraulic facilities;
2. Resident employment counseling, advisory service for local businesses relating to water resources conservation for public interest, education grant and scholarship, health care, electricity fees, water fee compensation for domestic use and non-profit purpose, and water resources conservation relevant local public construction such public welfare activities;
3. Compensation for landowners or related right holders whose land is subject to restricted use due to delimitation of water quality and quantity protection area;
4. Subsidy for taxation in areas of indigenous peoples;
5. Reserve fund for emergency use;
6. Expenditure relating to the collection of catchment conservation and compensation fees;
7. Necessary activities relating to the use of catchment conservation and compensation fees;and
8. Other matters relating to public interest of residents, water resources education, research and conservation.
The compensation in subparagraph 3 of the preceding paragraph shall be dispensed in consideration of the current status of land use, use area and degree of restriction with an administrative contract entered between the authority-in-charge and the landowner or related right holder. The compensation shall give precedence to the owners or right holders of private land, and the criteria for dispensing the compensation and specimen of the administrative contract shall be prescribed by the central authority-in-charge together with the Council of Indigenous Peoples and relevant government agencies. The administrative contract shall specify purposes of land use by the landowner or related right holder and penalty clauses for breach of contract.
The account management board of water quality and quantity protection area shall distribute funds for the purposes as set forth in subparagraph 1 to 5, 7 and 8 of the preceding paragraph to all townships (towns, cities, districts) proportionally over the land areas and population of residences. However, the funds shall give precedence to townships where the indigenous peoples live in.
Households in water quality and quantity protection area are entitled to receive 50% reduction of their water bills, provided the water is for domestic use and non-profit purpose. The amount of reduction thereof will be covered by the catchment conservation and compensation fees. The simple water supply facilities shall be applied as soon as possible to areas of indigenous peoples in the conservation zone without running water supply system.
For a township (town, city, district) office crossing over two conservation zones, the management board of each conservation zone shall use the catchment conservation and compensation fees upon agreement after negotiation and review.

Water resources related funds shall set up an account for each water quality and quantity protection area with a management board established for managing and utilizing the funds in the account. The account management board shall be composed of representatives from relevant central authorities, local authorities in the water quality and quantity protection area as well as its supply areas, people’s representative bodies, local residents and reputable citizens. The guidelines for the establishment of account management team shall be prescribed by the water resources funds management committee.
The local resident representatives on the account management board for water quality and quantity protection area involving the areas of indigenous peoples shall comprise a number of indigenous people according to their percentage of population in the protection area; the water resources conservation and compensation fees collected shall also be spent on the areas of indigenous peoples by proportion.
The local construction fees levied to assist the water sources districts prior to the promulgation of the revised Act on June 30, 2004 shall continue to be levied as a surcharge to the water bill before the collection of water resources conservation and compensation fees; the Measure for Assisting Local Construction in Taipei Water Sources Districts shall continue to apply.
After the collection of water resources conservation and compensation fees, the local constructions fees originally levied to assist the water sources districts under the Act will be placed under the management account for the water sources district.

Water quality and quantity protection area that fit in one of the following description shall return assigned water resources conservation and compensation fees to the central authority-in-charge of water-related funds. These are made available by the central authority-in-charge to designated county, city, or municipalities government authority-in-charge of the water quality and quantity protection area to co-ordinate matters handled water resources conservation:
1. Allocation of annual funding to regional office for a period of over five years to a dormant account.
2. Through the agreement of the account management board account funds may be returned.
Under the agreement of the account management board, water resources conservation in water quality and quantity protection area and compensation fees may be used in part in villages of the within the administrative area. This is only limited to public constructions for water resource conservation.

The central authority-in-charge may, in view of the distribution of water sources, constructions and social-economic conditions, draw up areas for the purpose of water supply.
The drawn water service areas pursuant to Paragraph 1 hereof may be revised or altered by the central authority-in-charge based on factual needs.

The central authority-in-charge may provide guidance to the consolidation of two or more water supply enterprises in one water service area. If no agreement on the consolidation plan can be reached, the central authority-in-charge may order the consolidation by administrative decree.

Deleted

The term “tap water” as referred to herein shall mean sanitary public water supplied through pipes or other facilities.

The term “water supply enterprise” as referred to herein shall mean a business that operates a water supply business pursuant to this Act.

The term “simple water supply enterprise” as referred to herein shall mean an organization, group or business entity that develops its own water source or lawfully obtains water right, and sets up and manages on its own a simple water supply and treatment system to meet water supply needs.

The term ”person-in-charge of a water supply enterprise” as referred to herein shall mean the persons as defined in relevant regulations for a publicly operated water supply enterprise; or the persons as defined in Company Law for a privately operated water supply enterprise.

The term “exclusive operation right” as referred to herein shall mean the right to operate a water supply enterprise in a specific water service area with the approval of the authority-in-charge.

The term ”water supply equipment” as referred to herein shall mean equipment for water collection, storage, diversion, treatment, conveyance, and distribution.

The term “self-use supply water equipment” as referred to herein shall mean water supply equipment exclusively for own use and yielding more than 30 cubic meters of water per day.
The term “yield” mentioned in Paragraph 1 hereof shall mean the capacity of equipment to output water.

The term “users” as referred to herein shall mean persons who use water in accordance with the operating rules of the water supply enterprises.

The term ”service equipment” as referred to herein shall mean equipment installed by users for receiving the supply of water, including intake pipes, water meters, connection pipes, switches, bypasses, pipes connecting to sanity ware, water hydrant, valves, and pump facilities.
The term “pump facilities” as referred to in the preceding paragraph shall mean pump equipment, water basin (service reservoir), control room, connection pipes, switches and water hydrants, which are termed collectively user’s pump and water-receiving facilities installed by users from the outlet side of main water meter up to the building for connecting to water supply when the water supply enterprise is unable to supply water pursuant to Article 61 of this Act.