Bill Text: CA SB1112 | 2015-2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Utilities: water and sewer system corporations: transactions.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2016-09-25 - Chaptered by Secretary of State. Chapter 631, Statutes of 2016. [SB1112 Detail]

Download: California-2015-SB1112-Introduced.html

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BILL NUMBER: SB 1112	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Cannella

                        FEBRUARY 17, 2016

   An act to add Section 853.2 to the Public Utilities Code, relating
to utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1112, as introduced, Cannella. Utilities: water and sewer
systems corporations: transactions.
   The Public Utilities Act prohibits, with certain exemptions, any
public utility other than a common carrier by railroad, from selling,
leasing, assigning, mortgaging, or otherwise disposing of or
encumbering the whole or any part of specified property necessary or
useful in the performance of the public utility's duties to the
public, among other things, without first having either secured an
order from the Public Utilities Commission authorizing it to do so
for qualified transactions valued above $5,000,000, or for qualified
transactions valued at $5,000,000 or less, having filed an advice
letter and obtained approval from the commission authorizing it to do
so. Under existing law, every sale, lease, assignment, mortgage,
disposition, encumbrance, merger, or consolidation made other than in
accordance with the advice letter and approval from the commission
authorizing it is void.
   Existing law requires the commission, before authorizing the
merger, acquisition, or change in control of an electric, gas, or
telephone utility when one of the parties has revenues in excess of a
specified amount, to consider, among other things, whether the
proposal provides short-term and long-term economic benefits to
ratepayers, and equitably allocates the short-term and long-term
forecasted economic benefits of the proposed merger, acquisition, or
control, as determined by the commission, between shareholders and
ratepayers, where the commission has ratemaking authority. Under
existing law, any merger, acquisition, or change in control without
that prior authorization is void.
   This bill would require a water or sewer system corporation with
less than 2,000 service connections to receive the commission's
approval before entering into specified transactions valued at
$5,000,000. The bill would provide that if a water or sewer system
corporation fails to receive the commission's approval, the
transaction is voidable by the commission until the commission either
retroactively approves or conditionally approves the transaction.
The bill would authorize the commission to delegate this approval
authority to a specified division director.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 853.2 is added to the Public Utilities Code, to
read:
   853.2.  Notwithstanding Sections 851 and 854, for a water or sewer
system corporation with less than 2,000 service connections, the
following shall apply:
   (a) (1) A water or sewer system corporation shall receive the
commission's approval before entering into a transaction that would
otherwise be subject to Section 851 or 854 and that is valued at five
million dollars ($5,000,000) or less.
   (2) If a water or sewer system corporation fails to receive the
commission's approval pursuant to paragraph (1), the transaction is
voidable by the commission until the commission does either of the
following:
   (A) Retroactively approves the transaction upon a determination
that the transaction is in the best interests of both the corporation
and its ratepayers.
   (B) Conditionally approves the transaction, subject to the
fulfillment of specified conditions that would ensure that the
transaction is in the best interests of both the corporation and its
ratepayers.
   (b) The commission may delegate the authority to make the
determinations described in subdivision (a) to the director of the
division that investigates water and sewer system service quality
issues and analyzes and processes utility rate change requests.