(a) The state board may exempt a public water system from a maximum contaminant level or treatment technique requirement if it finds all the following:

1. (1) The public water system was in operation, or had applied for a permit to operate, on the effective date of the maximum contaminant level or treatment technique requirement.

2. (2) Due to compelling factors, which may include either of the following factors, the public water system is unable to comply with the maximum contaminant level or treatment technique requirement or to implement measures to develop an alternative water supply:

   1. (A) Economic factors.
   2. (B) The entire service area of the public water system consists of a disadvantaged community, as defined under Section 1452(d) of the federal Safe Drinking Water Act (42 U.S.C. Sec. 300g-5), and meets the affordability criteria established by the department, after review and public hearing.
3. (3) The granting of the exemption will not result in an unreasonable risk to health.
4. (4) Management or restructuring changes, or both, cannot reasonably be made that will result in compliance with this chapter or, if compliance cannot be achieved, improve the quality of the drinking water.

(b) If the state board grants a public water system an exemption for a primary drinking water standard under subdivision (a), the state board shall prescribe, at the time the exemption is granted, a schedule for both of the following:

1. (1) Compliance by the public water system with each contaminant level or treatment technique requirement for which the exemption was granted.
2. (2) Implementation by the public water system of interim control measures the state board may require for each contaminant or treatment technique requirement for which the exemption was granted.

(d) The final date for compliance with any schedule issued pursuant to this section may be extended by the state board for a period not to exceed three years from the date of the granting of the exemption if the state board finds all of the following:

1. (1) The system cannot meet the standard without capital improvements that cannot be completed before the date established pursuant to Section 1412(b)(1) of the federal Safe Drinking Water Act (42 U.S.C. 300g-(b)(1)).
2. (2) In the case of a system that needs financial assistance for the necessary improvements, the system has entered into an agreement to obtain the financial assistance or the system has entered into an enforceable agreement to become part of a regional public water system.
3. (3) The system is taking all practicable steps to meet the standard.

(h) Unless the state board has already granted an exemption pursuant to subdivision (a), the state board may exempt a public water system from compliance with a maximum contaminant level or treatment technique requirement for up to two years if the state board finds, and continues to find, that a plan submitted by the water system may reasonably be expected to bring the water system into compliance by any of the following means:

1. (1) The physical consolidation of the system with one or more other systems.
2. (2) The consolidation of significant management and administrative functions of the system with one or more other systems.
3. (3) The transfer of ownership of the system.