SUTTER COUNTY (CBS13) – Sutter County has been ordered to reduce arsenic levels in its drinking water or face some steep penalties from the Environmental Protection Agency.

The county’s water works district is required to develop and comply with the federal government’s Safe Drinking Water Act. If the county doesn’t comply, it could be fined more than $32,000 for each violation.

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The county’s water system serves about 350 residents.

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This warning comes just a week after Governor Gavin Newsom signed a law that will spend $130 million to clean up the state’s drinking water.

Despite its status as the world’s fifth largest economy, California has struggled to provide the basic service of clean tap water to more than 1 million of its residents. The problem is most acute in the Central Valley, the heart of the state’s $20 billion agriculture industry, where large farms have polluted water sources for mostly rural communities.

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The problem is so severe the state has a grant program to provide bottled water to some communities. As of June, the state was providing bottled water to about 18,000 Californians in 51 communities at a cost of about $4 million, said George Kostyrko of the State Water Resources Control Board. The state does not track the total number of bottles it hands out.