BILL ANALYSIS Ó
AB 240
Page 1
ASSEMBLY THIRD READING
AB 240 (Rendon)
As Introduced February 5, 2013
Majority vote
LOCAL GOVERNMENT 9-0
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|Ayes:|Achadjian, Levine, Alejo, | | |
| |Bradford, Gordon, | | |
| |Melendez, Mullin, | | |
| |Waldron, Atkins | | |
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SUMMARY : Allows mutual water companies to record a notice of a
lien against a shareholder's property if specified conditions
are met, and requires board members to repeat specified training
courses every six years. Specifically, this bill :
1)Permits 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, if the shareholder was
given at least 20 days' notice of the lien.
2)Requires board members to repeat, every six years, a training
course required in existing law regarding the duties of board
members of mutual water companies.
3)States 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.
EXISTING LAW :
1)Specifies that any corporation organized for or engaged in the
business of selling, distributing, supplying, or delivering
water for irrigation purposes or for domestic use must be
known as a mutual water company.
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2)Requires each mutual water company operating as a public water
system to, no later than December 31, 2012, submit to the
Secretary of State and the local agency formation commission
(LAFCO) a map depicting the boundaries of the property that
the corporation serves.
3)Requires a mutual water company that operates a public water
system, if the LAFCO or a county department requests
information, to, within 45 days of the request, provide all
reasonably available, nonconfidential information and explain,
in writing, why any requested information is not reasonably
available.
4)Requires a mutual water company that operates a public water
system to maintain a financial reserve fund to be used for
repairs and replacements to its water productions,
transmission and distribution facilities at a level sufficient
for continuous operation of facilities in compliance with the
federal Safe Drinking Water Act.
5)Authorizes the LAFCO to approve with or without amendment,
wholly, partially, or conditionally or disapprove the
annexation of territory served by a mutual water company
operate a public water system, to a city or special district.
6)Authorizes the LAFCO, in conducting a service review, to
include a review of whether the agencies under review,
including any public water system, are in compliance with
California Safe Drinking Water Act (SDWA).
7)Authorizes the LAFCO to request information, as part of a
service review, from identified public or private entities
that provide wholesale or retail supply of drinking water,
including mutual water companies and private utilities.
8)Requires each board member of a mutual water company operated
as a public water system to, within six months of taking
office, complete a four-hour course, as specified.
9)Authorizes fines pursuant to the SDWA to be imposed on
directors of a mutual water company if the mutual water
company has received notice of a violation as specified.
FISCAL EFFECT : None
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COMMENTS : This bill permits 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
related to services provided by the company to the shareholder's
property, and only in the event that that shareholder was given
at least 20 days' notice. The bill also requires board members
of a mutual water company to repeat a specified training course
every six years regarding the duties of board members of mutual
water companies. Lastly, the bill declares the intent of the
Legislature to encourage collaboration among mutual water
companies that operate public water systems in the City of
Maywood, in order to create a public agency that can consolidate
drinking water services. This bill is author-sponsored.
According to the author, this bill will give mutual water
companies an additional tool to protect their financial
interests without shutting off the water to those who use it.
For example, in the City of Maywood, many people who receive
water from mutual water companies are tenants. The author notes
that the primary tool of mutual water companies for those who do
not pay their bill is to assess the shares of stock, which cuts
off the right to receive water, which hurts tenants more than it
affects property owners who own the shares of stock.
Existing law requires board members of mutual water companies
that operate public water systems to complete a two-hour course
offered by a qualified trainer regarding the duties of board
members of mutual water companies. This training is required to
be completed within six months of taking office. According to
the author, because mutual water company directors are often
elected every year, the provisions of current law may require
the training to occur each year. The author argues that putting
a requirement for training to occur every six years will allow
mutual water companies to focus their resources on their water
service and not on training of directors.
Recent legislation (AB 54 (Solorio), Chapter 512, Statutes of
2011) added additional requirements on mutual water companies,
authorized LAFCOs to include mutual water companies in their
municipal service reviews, and provided the California
Department of Public Health more guidance regarding issuing Safe
Drinking Water Revolving Fund money.
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According to Union de Vecinos, in support, "The people of
Maywood have suffered from poor quality water from their taps
for several years. Maywood water often comes out of the tap as
brown, smelly liquid that tastes bad. The groundwater coming
out of wells and imported surface water have various primary and
secondary contaminants, including manganese, perchlorate, and
arsenic?the people and business in the City of Maywood received
their drinking water from three separate mutual water companies,
which are private companies controlled by landowners."
The 2011-12 State Budget appropriated $7.5 million in state bond
funds for improving water quality in the cities of Maywood and
Santa Ana, conditioned on a public agency assuming
responsibility for operation of the water systems from the
mutual water companies. The City of Santa Ana has completed its
improvements, expending approximately $1.5 million and leaving
approximately $6 million for Maywood to improve its water
quality. This bill states 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. The
Legislature may wish to ask the author to discuss the status of
these efforts in the City of Maywood.
Support arguments: This bill takes some initial steps to
address the problems with mutual water companies that deliver
poor drinking water quality to the residents of Maywood.
Opposition arguments: None on file.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0000232