(a) Any public agency, including a state agency, city, county, city and county, district, or any other political subdivision of the state, may require the use of recycled water for toilet and urinal flushing in structures, except a mental hospital or other facility operated by a public agency for the treatment of persons with mental disorders, if all of the following requirements are met:

1. (1) Recycled water, for these uses, is available to the user and meets the requirements set forth in Section 13550, as determined by the state board after notice and a hearing.
2. (2) The use of recycled water does not cause any loss or diminution of any existing water right.
3. (3) The public agency has prepared an engineering report pursuant to Section 60323 of Title 22 of the California Code of Regulations that includes plumbing design, cross-connection control, and monitoring requirements for the use site, which are in compliance with criteria established pursuant to Section 13521.

(b) This section applies only to either of the following:

1. (1) New structures for which the building permit is issued on or after March 15, 1992, or, if a building permit is not required, new structures for which construction begins on or after March 15, 1992.
2. (2) Any construction pursuant to subdivision (a) for which the State Department of Public Health has, before January 1, 1992, approved the use of recycled water.

(d)

1. (1) Recycled water for toilet or urinal flushing or outdoor irrigation shall be permissible in and around food handling or processing facilities, commercial, institutional, and industrial buildings, and cafeterias, provided the recycled water does not enter the room where food handling or processing occurs.
2. (2) Closed piping conveying recycled water may pass through the room where food handling or processing occurs.
3. (3) Outdoor irrigation with recycled water at facilities that handle or process food outside is prohibited while food is being handled or processed outside.