BILL NUMBER: AB 240	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Rendon

                        FEBRUARY 5, 2013

   An act to add Section 14304 to the Corporations Code, to amend
Section 116755 of the Health and Safety Code, and to add Section
10531.5 to the Water Code, relating to mutual water companies.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 240, as introduced, Rendon. Mutual water companies.
   Under existing law, a mutual water company is defined as a
corporation organized for or engaged in the business of selling,
distributing, supplying, or delivering water for irrigation or
domestic purposes that provides in its articles or bylaws that the
water shall be sold, distributed, supplied, or delivered only to
owners of its shares, as specified.
   (1) Existing law requires each board member of a mutual water
company that operates a public water system to complete a training
course regarding the duties of board members of mutual water
companies, as specified.
   This bill would require a board member to repeat this training
course every 6 years.
   (2) Existing law permits a mutual water company that is not a
public utility to levy assessments upon its shares, unless otherwise
provided in its articles or bylaws.
   This bill would also permit the board of directors of a mutual
water company, if authorized by its articles or bylaws, to record a
notice of lien against a shareholder's property if the shareholder
has not timely paid any rate, charge, or assessment arising from, or
related to, water services provided by the mutual water company to
the shareholder's property and if the shareholder was given at least
20 days' notice of the lien.
   (3) Existing law declares that water is a valuable natural
resource in California and should be managed to ensure the
availability of sufficient supplies to meet the state's agricultural,
domestic, industrial, and environmental needs. Existing law declares
that local agencies can realize efficiencies by coordinating and
integrating their assets and seeking mutual solutions to water
management issues.
   This bill would declare the intent of the Legislature to encourage
collaboration among mutual water companies that operate public water
systems in the City of Maywood to create a public agency that can
consolidate drinking water services for the people and business of
that city.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  Section 14304 is added to the Corporations Code, to
read:
   14304.  If a shareholder of a mutual water company has not timely
paid any rate, charge, or assessment arising from, or related to,
water service provided by the mutual water company to the shareholder'
s property, and if authorized by its articles or bylaws, then after
providing at least 20 days' written notice to the shareholder, the
board of directors of the mutual water company may authorize the
recording of a notice of lien against that shareholder's property to
secure the collection of the rates, charges, and assessments owed to
the mutual water company by the shareholder.
  SEC. 2.  Section 116755 of the Health and Safety Code is amended to
read:
   116755.  (a) Each board member of a mutual water company that
operates a public water system, as defined in Section 116275, shall,
within six months of taking office, or by December 31, 2012, if that
member was serving on the board on December 31, 2011, complete a
two-hour course offered by a qualified trainer regarding the duties
of board members of mutual water companies, including, but not
limited to, the duty of a corporate director to avoid contractual
conflicts of interest and fiduciary duties, the duties of public
water systems to provide clean drinking water that complies with the
federal Safe Drinking Water Act (42 U.S.C. Sec. 300f et seq.) and
this chapter, and long-term management of a public water system 
. A board member of a mutual water   company shall repeat
this training every six years  . For the purposes of this
subdivision, a trainer may be qualified in any of the following ways:

   (1) Membership in the California State Bar.
   (2) Accreditation by the International Association of Continuing
Education and Training (IACET) ANSI/IACET 1-2007.
   (3) Sponsorship by either the Rural Community Assistance
Corporation or the California Rural Water Association.
   (b) A mutual water company formed pursuant to Part 7 (commencing
with Section 14300) of Division 3 of Title 1 of the Corporations Code
shall be liable for the payment of any fines, penalties, costs,
expenses, and other amounts that may be imposed upon the mutual water
company pursuant to this chapter. The mutual water company may levy
an assessment, pursuant to Section 14303 of the Corporations Code, to
pay these fines, penalties, costs, expenses, and other amounts so
imposed. If the amount of outstanding fines, penalties, costs,
expenses and other amounts imposed pursuant to this chapter exceed 5
percent of the annual budget of the mutual water company, then the
mutual water company shall levy an assessment, pursuant to Section
14303 of the Corporations Code, to pay those fines, penalties, costs,
expenses, and other amounts so imposed.
  SEC. 3.  Section 10531.5 is added to the Water Code, to read:
   10531.5.  It is the intent of the Legislature to encourage
collaboration among mutual water companies that operate public water
systems in the City of Maywood to create a public agency that can
consolidate drinking water services for the people and businesses of
that city.