Bill Text: CA SB489 | 2013-2014 | Regular Session | Amended
Bill Title: Water corporations: sewer system corporations: appointment of receiver.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-02-03 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB489 Detail]
Download: California-2013-SB489-Amended.html
BILL NUMBER: SB 489 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 2, 2013
INTRODUCED BY Senator Fuller
FEBRUARY 21, 2013
An act to amend Section 564 of the Code of Civil Procedure, and to
amend Section 855 of the Public Utilities Code, relating to water
and sewer system corporations.
LEGISLATIVE COUNSEL'S DIGEST
SB 489, as amended, Fuller. Water corporations: sewer system
corporations: appointment of receiver.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including water corporations and
sewer system corporations. Whenever the commission determines that a
water corporation or sewer system corporation is unable or unwilling
to adequately serve its ratepayers or has actually or effectively
been abandoned by its owners or is unresponsive to the rules or
orders of the commission, existing law authorizes the commission to
petition the superior court for the county within which the
corporation has its principal office or place of business for the
appointment of a receiver to assume possession of the corporation's
property and to operate its system upon such terms and conditions as
the court prescribes.
This bill would instead additionally
authorize the court appointment of a receiver if the water or
sewer system corporation has failed to provide safe and adequate
service, as confirmed by the commission, and would, as an alternative
to the appointment of a receiver, authorize the commission to
appoint a receiver to assume possession of the corporation's
property and to operate its system upon such terms and conditions as
the commission prescribes. The bill would make other conforming
changes. another water or sewer system corporation, or
other qualified entity, to serve as an interim operator of the water
or sewer system. The bill would require the commission to issue
decisions and orders that it deems necessary and proper to permit the
interim operator to abate any danger to the public health and safety
and to provide adequate service to the customers of the water or
sewer system corporation. The bill would provide that the in
terim operator shall have the powers of a receiver and require
that the interim owner assist the commission in its search for a
responsible owner or operator to purchase the water or sewer system,
the sale of which would be subject to the commission's approval.
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 564 of the Code of Civil Procedure is amended
to read:
564. (a) A receiver may be appointed, in the manner provided in
this chapter, by the court in which an action or proceeding is
pending in any case in which the court is empowered by law to appoint
a receiver.
(b) A receiver may be appointed by the court in which an action or
proceeding is pending, or by a judge of that court, in the following
cases:
(1) In an action by a vendor to vacate a fraudulent purchase of
property, or by a creditor to subject any property or fund to the
creditor's claim, or between partners or others jointly owning or
interested in any property or fund, on the application of the
plaintiff, or of any party whose right to or interest in the property
or fund, or the proceeds of the property or fund, is probable, and
where it is shown that the property or fund is in danger of being
lost, removed, or materially injured.
(2) In an action by a secured lender for the foreclosure of a deed
of trust or mortgage and sale of property upon which there is a lien
under a deed of trust or mortgage, where it appears that the
property is in danger of being lost, removed, or materially injured,
or that the condition of the deed of trust or mortgage has not been
performed, and that the property is probably insufficient to
discharge the deed of trust or mortgage debt.
(3) After judgment, to carry the judgment into effect.
(4) After judgment, to dispose of the property according to the
judgment, or to preserve it during the pendency of an appeal, or
pursuant to the Enforcement of Judgments Law (Title 9 (commencing
with Section 680.010)), or after sale of real property pursuant to a
decree of foreclosure, during the redemption period, to collect,
expend, and disburse rents as directed by the court or otherwise
provided by law.
(5) Where a corporation has been dissolved, as provided in Section
565.
(6) Where a corporation is insolvent, or in imminent danger of
insolvency, or has forfeited its corporate rights.
(7) In an action of unlawful detainer.
(8) At the request of the Public Utilities Commission pursuant to
subdivision (a) of Section 855 or Section 5259.5 of the
Public Utilities Code.
(9) In all other cases where necessary to preserve the property or
rights of any party.
(10) At the request of the Office of Statewide Health Planning and
Development, or the Attorney General, pursuant to Section 129173 of
the Health and Safety Code.
(11) In an action by a secured lender for specific performance of
an assignment of rents provision in a deed of trust, mortgage, or
separate assignment document. The appointment may be continued after
entry of a judgment for specific performance if appropriate to
protect, operate, or maintain real property encumbered by a deed of
trust or mortgage or to collect rents therefrom while a pending
nonjudicial foreclosure under power of sale in a deed of trust or
mortgage is being completed.
(12) In a case brought by an assignee under an assignment of
leases, rents, issues, or profits pursuant to subdivision (g) of
Section 2938 of the Civil Code.
(c) A receiver may be appointed, in the manner provided in this
chapter, including, but not limited to, Section 566, by the superior
court in an action brought by a secured lender to enforce the rights
provided in Section 2929.5 of the Civil Code, to enable the secured
lender to enter and inspect the real property security for the
purpose of determining the existence, location, nature, and magnitude
of any past or present release or threatened release of any
hazardous substance into, onto, beneath, or from the real property
security. The secured lender shall not abuse the right of entry and
inspection or use it to harass the borrower or tenant of the
property. Except in case of an emergency, when the borrower or tenant
of the property has abandoned the premises, or if it is
impracticable to do so, the secured lender shall give the borrower or
tenant of the property reasonable notice of the secured lender's
intent to enter and shall enter only during the borrower's or tenant'
s normal business hours. Twenty-four hours' notice shall be presumed
to be reasonable notice in the absence of evidence to the contrary.
(d) Any action by a secured lender to appoint a receiver pursuant
to this section shall not constitute an action within the meaning of
subdivision (a) of Section 726.
(e) For purposes of this section:
(1) "Borrower" means the trustor under a deed of trust, or a
mortgagor under a mortgage, where the deed of trust or mortgage
encumbers real property security and secures the performance of the
trustor or mortgagor under a loan, extension of credit, guaranty, or
other obligation. The term includes any successor in interest of the
trustor or mortgagor to the real property security before the deed of
trust or mortgage has been discharged, reconveyed, or foreclosed
upon.
(2) "Hazardous substance" means any of the following:
(A) Any "hazardous substance" as defined in subdivision (h) of
Section 25281 of the Health and Safety Code.
(B) Any "waste" as defined in subdivision (d) of Section 13050 of
the Water Code.
(C) Petroleum including crude oil or any fraction thereof, natural
gas, natural gas liquids, liquefied natural gas, or synthetic gas
usable for fuel, or any mixture thereof.
(3) "Real property security" means any real property and
improvements, other than a separate interest and any related interest
in the common area of a residential common interest development, as
the terms "separate interest," "common area," and "common interest
development" are defined in Section 4095, 4100, and 4185 of the Civil
Code, or real property consisting of one acre or less that contains
1 to 15 dwelling units.
(4) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping, or disposing into the environment, including continuing
migration, of hazardous substances into, onto, or through soil,
surface water, or groundwater.
(5) "Secured lender" means the beneficiary under a deed of trust
against the real property security, or the mortgagee under a mortgage
against the real property security, and any successor in interest of
the beneficiary or mortgagee to the deed of trust or mortgage.
SEC. 2. Section 855 of the Public Utilities Code is amended to
read:
855. (a) Whenever the commission
determines, after notice and evidentiary hearing
pursuant to an order to show cause , that any water or sewer
system corporation is unable or , is
unwilling to adequately serve its ratepayers or
, or has failed to provide safe and adequate service,
as confirmed by the commission, or that the water or sewer system
corporation has been actually or effectively abandoned by its
owners, or is unresponsive to the , or fails
to comply with, those rules or orders of the commission
relating to an action taken by the water or sewer system corporation
that compromises its ability to provide safe and adequate service
, the commission may appoint petition
the superior court for the county within which the
corporation has its principal office or place of business for the
appointment of a receiver to assume possession of its property
and to operate its system upon the terms and conditions that the
commission court shall prescribe. The
commission court may require, as a
condition to the appointment of the receiver, that a sufficient bond
be given by the receiver and conditioned upon compliance with the
orders of the court and the commission, and the protection
of all property rights involved. The commission
court shall provide for disposition of the facilities and
system in like manner as any other receivership proceeding in this
state. The court shall presume that any finding, conclusion, or
determination in a final decision or order of the commission pursuant
to this section is true and correct. Pursuant to subdivision (a) of
Section 1759, the superior court does not have authority to modify
any action or determination by the commission as to the ability of
the owner or operator to continue to operate the water or sewer
system and provide safe and reliable service.
(b) The commission may, as an alternative to the appointment of a
receiver pursuant to subdivision (a), enter into an agreement with
another water or sewer system corporation, or other qualified entity,
to serve as an interim operator of the water or sewer system. The
commission shall issue those decisions and orders that it deems
necessary and proper to permit the interim operator to abate any
danger to the public health and safety and to provide adequate
service to the customers of the water or sewer system corporation.
The interim operator shall have the powers of a receiver and shall
assist the commission in its search for a responsible owner or
operator to purchase the system, the sale of which is subject to the
commission's approval. Before any sale is consummated, the commission
may authorize the interim operator to obtain an independent
appraisal of the water or sewer system corporation. The transfer of a
water or sewer system corporation pursuant to this subdivision shall
only occur when the commission has determined that the owner cannot
operate the system in accordance with the rules and regulations of
the commission.
