CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 3200

Introduced by Assembly Member Hoover

February 16, 2024

An act to amend Section 2705.5 of, to add the heading to Article 1 (commencing with Section 2716) of Chapter 2 of Part 2 of Division 1 of, and to add Article 2 (commencing with Section 2716) to Chapter 2 of Part 2 of Division 1 of, the Public Utilities Code, relating to water.


LEGISLATIVE COUNSEL'S DIGEST


AB 3200, as introduced, Hoover. Master-metered mobilehome parks and manufactured housing communities: transfer of water systems.
Existing law vests the Public Utilities Commission (commission) with regulatory authority over public utilities, including water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. Existing law exempts from the jurisdiction, control, or regulation of the commission any person or corporation, as specified, that maintains a mobilehome park or a multiple unit residential complex and provides, or will provide, water service to users through a submeter service system if each user of the submeter service system is charged at the rate which would be applicable if the user were receiving the water directly from the water corporation, or if management of the mobilehome park complies with a specified notice provision.
This bill would require the commission to authorize and establish a pilot program for specified water corporations to accept the transfer of ownership and operational responsibility of water systems in master-metered mobilehome parks or manufactured housing communities, and provide that the exemption described above does not apply to the maintenance or provision of water service by a water corporation pursuant to that pilot program, as specified. The bill would authorize the owner of a master-metered mobilehome park or manufactured housing community that provides water service to residents to transfer ownership and operational responsibility to the water corporation providing service in the area in which the park or community is located, or as the park or community owner and the serving water corporation mutually agree. The bill would impose specified duties on a water corporation and on the owner of the mobilehome park or manufactured housing community in connection with the transfer. The bill would require the commission to establish procedures for initiating and completing the transfer, as provided, including by requiring the owner of the mobilehome park or manufactured housing community to provide written notice of the intent to transfer ownership and operational responsibility of a water system in a mobilehome park or manufactured housing community to the water corporation. The bill would require the commission to authorize the water corporation to recover in its revenue requirement and rates all costs to acquire, improve, upgrade, operate, and maintain transferred mobilehome park or manufactured housing community water systems. The bill would also require the commission to adopt a standard form contract for these transfers that would be the basis for an expedited approval of the transfer. The bill would prohibit costs related to the transfer of ownership process from being passed through to the park or community residents, but would provide that those costs would be recoverable in rates. The bill would authorize the mobilehome park or manufactured housing community owner, by written notice, to stop the transfer process at any time. The bill would authorize, at any time during the transfer of ownership process, either party to apply to the commission for informal mediation and resolution of any issue, finding, determination, or delay in the transfer process. The bill would require, if the initiation of the transfer process does not result in a transfer of the park or community owner’s water system to the water corporation, all information, data, reports, studies, and proposals to be retained by the water corporation for a period of 5 years or offered to the mobilehome park or manufactured housing community owner, as specified.
Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of a commission action implementing the above-described prohibition would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) The State of California has stated its intent to encourage and facilitate efficient use of its scarce water resources through various actions, such as metering water use and providing water conservation services. To this end, the Legislature enacted a statute requiring that all water utilities individually meter their residential customers. In addition, the state has acted to ensure the safety and reliability of small water systems.
(2) Water meters are not required for master-metered mobilehome parks and manufactured housing communities under state law. The conditions specified for installing meters and implementing metering have become an impediment to expanding, and even the continued operation of, metering in these parks and communities. Many of these systems have become financially difficult to maintain due to this situation.
(3) On March 13, 2014, the Public Utilities Commission issued Decision 14-03-021 (March 13, 2014), Decision on Issues Concerning Voluntary Conversion of Electric and Natural Gas Master-Metered Service at Mobilehome Parks and Manufactured Housing Communities to Direct Service by Electric and/or Natural Gas Corporations, establishing a three-year pilot program, known as the Mobilehome Park Utility Upgrade Program, authorizing each California gas corporation or electrical corporation to convert 10 percent of master-metered gas or electric mobilehome parks and manufactured housing communities spaces within its operating territory to direct utility service. On April 24, 2020, the commission issued Decision 20-04-004 (April 16, 2020), Decision Evaluating the Mobilehome Park Pilot and Establishing a Mobilehome Park Utility Conversion Program, which established the Mobilehome Park Utility Conversion Program (MHP-UCP). The MHP-UCP is designed to continue converting mobilehome parks’ and manufactured housing communities’ utility infrastructure until the end of 2030, with the goal of converting a total of 50 percent of the spaces in each utility territory to direct gas or electrical utility service. The commission authorized the participating gas and electrical corporations to recover their actual costs in rates.
(b) (1) It is the intent of the Legislature that this act authorize the commission to authorize and establish a pilot program for the transfer of ownership and operational responsibility of water systems in master-metered mobilehome parks and manufactured housing communities to the water corporation otherwise providing water service in that area at no direct cost to the owner of the mobilehome park or manufactured housing community. This act would also authorize the water corporation to recover in rates the full costs of acquiring ownership and improving the condition of the water system.
(2) It is the intent of the Legislature that authorizing water corporations to acquire ownership and operational responsibility of water systems in master-metered mobilehome parks or manufactured housing communities is consistent with the state’s goals to improve water conservation and the efficient use of water, while also enhancing the safe delivery of water to consumers.

SEC. 2.

 Section 2705.5 of the Public Utilities Code is amended to read:

2705.5.
 Any (a) A person or corporation, and their lessees, receivers, or trustees appointed by any court, that maintains a mobilehome park or a multiple unit residential complex and provides, or will provide, water service to users through a submeter service system is not a public utility and is not subject to the jurisdiction, control, or regulation of the commission if each user of the submeter service system is charged at the rate which that would be applicable if the user were receiving the water directly from the water corporation, or if management of the mobilehome park complies with subdivision (c) of Section 798.40 of the Civil Code.
(b) This section does not apply to the maintenance or provision of water service by a water corporation pursuant to Article 2 (commencing with Section 2716).

SEC. 3.

 The heading of Article 1 (commencing with Section 2701) is added to Chapter 2 of Part 2 of Division 1 of the Public Utilities Code, to read:
Article  1. General Provisions

SEC. 4.

 Article 2 (commencing with Section 2716) is added to Chapter 2 of Part 2 of Division 1 of the Public Utilities Code, to read:
Article  2. Master-Metered Mobilehome Parks and Manufactured Housing Communities: Transfer of Water Systems to Water Corporations

2716.
 As used in this article, the following definitions apply:
(a) “Customary expected load” means the historic level of uninterrupted service demanded by the dwelling units in a mobilehome park or manufactured housing community.
(b) “Manufactured housing community” has the meaning as set forth in Section 18210.7 of the Health and Safety Code.
(c) “Mobilehome” has the same meaning as set forth in Section 798.3 of the Civil Code.
(d) “Mobilehome park” is an area of land where two or more mobilehome sites are rented, or held out for rent, to accommodate mobilehomes used for human habitation.
(e) “Water corporation” has the same meaning as set forth in Section 241.

2716.1.
 (a) The commission shall authorize and establish a pilot program for class A and class B water corporations to accept the transfer of ownership and operational responsibility of water systems in master-metered mobilehome parks or manufactured housing communities.
(b) The pilot program shall have terms and conditions similar to the terms and conditions of the program administered by the commission for the transfer of gas systems to gas corporations, as defined in Section 222, and electrical systems to electrical corporations, as defined in Section 218.
(c) The commission shall establish procedures for initiating and completing that transfer, including all of the following requirements:
(1) The owner of a master-metered mobilehome park or manufactured housing community shall provide a written notice of intent to transfer ownership and operational responsibility of a water system in the mobilehome park or manufactured housing community to the water corporation.
(2) Each class A and class B water corporation shall accept the transfer of ownership and operational responsibility of at least 10 percent of the master-metered spaces of the water systems it serves.
(3) After the owner of the master-metered mobilehome park or manufactured housing community submits a written notice of the intent to transfer ownership and operational responsibility of a water system in the mobilehome park or manufactured housing community to the water corporation, and until the transfer is completed, both of the following requirements shall apply:
(A) The owner of the mobilehome park or manufactured housing community is responsible for the continued maintenance of, and preservation of the integrity of, the water system of the park or community, and for the safe and reliable operation of the water system of the park or community in accordance with applicable laws.
(B) The owner of the mobilehome park or manufactured housing community is liable for any injury or damage resulting from the owner’s operation of the master-metered water system.
(4) After the transfer is completed, the water corporation shall assume responsibility for the operation of the water system and provision of service to residents of the mobilehome park or manufactured housing community and shall assume liability for any future injury or damage resulting from the operation of the water system, except with respect to defects known to the owner of the park or community and not disclosed to the water corporation during the transfer process.

2716.2.
 (a) The owner of a master-metered mobilehome park or manufactured housing community that has ownership and operational responsibility over its water system may transfer that ownership and operational responsibility to the water corporation providing service to the area in which the park or community is located, or as the park or community owner and that water corporation mutually agree, if the owner has provided written notice of intent to transfer ownership and operational responsibility of the water system to that water corporation.
(b) Regardless of whether the transfer results in a transfer of ownership to the serving water corporation, costs related to the transfer of ownership, including costs related to transfer procedures and costs related to construction, shall not be passed through to the residents of the mobilehome park or manufactured housing community, but shall be recoverable in rates from ratepayers.

2716.3.
 Upon receiving a written notice of intent to transfer ownership and operational responsibility of a water system in a mobilehome park or manufactured housing community pursuant to paragraph (1) of subdivision (c) of Section 2716, the water corporation shall, within 90 days, do all of the following:
(a) Meet with the owner of the mobilehome park or manufactured housing community to discuss the procedures involved in a transfer of ownership and operational responsibility of the water system.
(b) Perform a preliminary review of the water system.
(c) Inspect documentation provided by the owner of the mobilehome park or manufactured housing community regarding the construction, operation, and condition of the water system.
(d) Advise the owner of the mobilehome park or manufactured housing community concerning the general condition of the water system, and provide the owner with a preliminary opinion concerning the extent of construction work or other work necessary to transfer ownership and operational responsibility of the water system to the water corporation.
(e) Determine whether the water system can be accepted by the water corporation in its current condition or whether further construction work or other work is necessary to bring the water system up to an acceptable standard.

2716.4.
 (a) Upon receipt of authorization to proceed with a transfer of ownership and operational responsibility of a water system from the owner of the mobilehome park or manufactured housing community, the water corporation shall, within 90 days, do both of the following:
(1) Develop an engineering plan for bringing the water system up to the standard described in Section 2716.5, incorporating all relevant documentation, including plans, drawings, engineering studies, and other documentation provided by the owner of the mobilehome park or manufactured housing community, and considering incorporation of all portions of the water system found to be used, useful, and compatible.
(2) (A) Present a proposal for the transfer to the water corporation of ownership and operational responsibility of the water system.
(B) The proposal shall include all of the following:
(i) A description of construction and equipment replacement work, if any, to be accomplished at the expense of the owner of the mobilehome park or manufactured housing community.
(ii) Requirements for any additional provisions or rights for the construction or maintenance of the water system at the mobilehome park or manufactured housing community, including easements and rights-of-way acceptable to the water corporation.
(iii) Specific requirements with respect to the presence of used and useful materials or equipment that are nonstandard, including, but not limited to, inventory requirements, specialized equipment requirements, or specialized personnel or training.
(iv) Specific requirements with respect to the presence of exceptional construction conditions or operation and maintenance conditions.
(b) The water corporation shall be responsible for all construction and equipment replacement work, if any.
(c) (1) Within 90 days of receipt of the proposal for the transfer of ownership and operational responsibility of the water system, the owner of the mobilehome park or manufactured housing community may do any of the following:
(A) Present objections to the water corporation in writing. If the parties are unable to resolve any objections, the owner of the mobilehome park or manufactured housing community may request the commission to provide mediation.
(B) Decline to proceed, without prejudice to their right to present a new written notice to the water corporation at a future date.
(C) Accept the proposal and contract with the water corporation for completion of the construction work and equipment replacement, if any, or the transfer of ownership and operational responsibility of the water system, or both.
(2) The commission shall establish procedures for the transfer of ownership and operational responsibility of a water system, including procedures for the actions described in paragraph (1).
(d) A new facility provided by the water corporation to extend distribution or service facilities from the water corporation’s water system to previously undeveloped locations within the mobilehome park or manufactured housing community shall be provided in accordance with line extension rules and service extension rules contained in water corporation tariffs filed with the commission, including free extensions, allowances, and advances subject to refund.
(e) Upon completion of construction work and equipment replacement, if any, receipt of appropriate inspection approval from the water corporation and authorities having jurisdiction for the inspections, and completion of all financial transactions among the parties, the owner of the mobilehome park or manufactured housing community shall transfer, and the water corporation shall acquire, ownership and operational responsibility for, the water system.
(f) Upon receipt of the proposal described in paragraph (2) of subdivision (a), the owner of the mobilehome park or manufactured housing community shall notify the residents concerning the pendency of a transfer process request and the laws governing the transfer process.

2716.5.
 (a) The water system shall satisfy all of the following criteria:
(1) It is capable of providing its end users with a safe and reliable source of water service.
(2) It meets the requirements of the commission’s general orders, and is compatible with, and, in the case of new construction, meets the water corporation's design and construction standards insofar as they relate to safety and reliability. The owner of the mobilehome park or manufactured housing community and water corporation may waive these requirements by mutual agreement and, when necessary, with commission approval.
(3) It is capable of serving the customary expected load in the mobilehome park or manufactured housing community determined in accordance with the status of then current delivery to residents, studies of comparable mobilehome parks or manufactured housing communities, industry standards, and the water corporation’s rules approved by the commission.
(b) Compliance with the criteria described in subdivision (a) does not require particular system architecture or replacement of used and useful equipment, plants, or facilities. Equipment, plants, or facilities that are part of the water system shall be considered compatible unless their presence in the water system would cause substantial increases to the frequency or duration of outages in the case of a failure or emergency, or they have no remaining useful life. Equipment, plants, or facilities that require special training for the water corporation’s employees, or require the water corporation to maintain inventories of nonstandard equipment, may be considered compatible.

2716.6.
 The owner of the mobilehome park or manufactured housing community may, by written notice, stop the transfer process at any time.

2716.7.
 The commission shall authorize a water corporation to recover in its revenue requirement and rates all costs to acquire, improve, upgrade, operate, and maintain a water system of a mobilehome park or manufactured housing community transferred to the water corporation pursuant to this article.

2716.8.
 The commission shall adopt a standard form for a contract to transfer water systems in mobilehome parks and manufactured housing communities that shall be the basis for expedited approval of the transfers. The contract shall be consistent with this article, any order, decision, rule, direction, demand, or requirement of the commission, and water corporation policies, as approved by the commission.

2716.9.
 (a) Within 60 days of delivery to the owner of a mobilehome park or manufactured housing community of an itemized bill, the owner shall reimburse the water corporation for all costs incurred through the date notice is delivered.
(b) At any time during the transfer of ownership and operational responsibility of a water system, either the owner of the mobilehome park or manufactured housing community or the water corporation may apply to the commission for informal mediation and resolution of any issue, finding, determination, or delay in the transfer process.
(c) If the initiation of the transfer process does not result in a transfer of ownership and operational responsibility of the water system to the water corporation, all information, data, reports, studies, and proposals shall be retained by the water corporation for a period of five years or offered to the mobilehome park or manufactured housing community owner. Before disposal of the information, data, reports, studies, and proposals, the water corporation shall offer them to the owner of the mobilehome park or manufactured housing community, except that the water corporation shall not be required to provide proprietary information to the mobilehome park or manufactured housing community owner.

2716.10.
 Section 2705.5 does not apply to a class A or class B water corporation that transferred ownership and operational responsibility of a water system in a master-metered mobilehome park or manufactured housing community pursuant to this article.

SEC. 5.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.