Act No. 36 on Water Resources, 1994 (Galli).

The reform of Italy's highly fragmentated water supply and sewerage services industry is the main thrust of the statute. The Act provides for the phased consolidation of the existing systems, and for the establishment of new systems, on the basis of "optimal" areas of operation at basin, sub-basin or group of basins level, to be determined by the Regional Governments concerned, acting individually or, if an "optimal" area -or a relevant basin- concerns two or more Regions, jointly (art. 8). The municipal and the provincial levels of government retain joint primary responsibility for the service, but the actual provision can be entrusted to an independent undertaker, under the terms of the relevant agreement (arts. 9 and 11.1). The instrument of the agreement, in particular, must make provision for such matters as, among others, the economic efficiency of the undertaking, required standards of service, criteria for the levying and collection of water rates and charges, and the duration of the agreement, which may not exceed thirty years (art. 11.2). A water supply and sewerage company is permitted to engage in other business, so long as such other business is "compatible" with a company's primary obligation to provide water supply and sewerage services (art. 12.4). It can also issue bonds, available only to its customers (art. 23.1). The fixing of water rates and sewerage charges is the joint responsibility of central and local government. The central government establishes the benchmark level of rates nation-wide, for local governments to use as reference in fixing actual rates leviable by each company. In so doing, the central government must give due consideration to such factors as cost, among others, full recovery of investment and operating costs being mandatory. Domestic users are to be granted preferential rates (art. 13). Water rates shall include a sewerage levy, calculated on the basis of the volumes of water supplied or, in the case of industrial supplies, on the basis of the quantity and quality of the wastewater discharged (art. 14). Collection of the water rates is the company's responsibility (art. 15). A seven-member Committee of three elected government officials and four experts supervise the water industry and protect the consumers' interests. The Committee is assisted by a full-time secretariat, and by an "Observatory" of water services with data collection, storage and retrieval functions. Data thus collected is available to the public (arts. 21 and 22, respectively). In addition, the Act transfers ownership of all surface and undergroundwater resources to the State (art. 1.1), with the exception of rainwater collected in tanks for agricultural or domestic use (art. 28.3). Existing users of newly-declared public waters are given three years to apply for the recognition of their rights (art. 34).
The Act further lays down policy with regard to, among other matters, water resource management, water saving and conservation (art. 5), minimum flow requirements in surface streams (art. 3.3), and the re-use of wastewater (art. 6); it increases the charges payable in respect of the abstraction or use of raw water (art. 18); and it gives domestic consumption and irrigation water use first and second priority, respectively, in times of drought or shortage of water in general (art. 28.1).