Modifies reclaimed water provisions by: (1) Redefining several definitions relating to reclaimed water systems;

(2) Authorizing use for surface percolation if certain criteria are met;

(3) Establishing a lead agency to carry out all provisions of the reclaimed water code;

(4) Authorizing the use of certain fees;

(5) Entering and inspecting permitted properties; and

(6) Authorizing monetary penalties and/or imprisonment in the county jail for violations of the reclaimed water code.