BILL NUMBER: AB 1340	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Chau
   (Coauthor: Senator Mendoza)

                        FEBRUARY 27, 2015

   An act to add and repeal Section 37420.5 of the Government Code,
and to add and repeal Section 10051.5 of the Public Utilities Code,
relating to water utilities, and declaring the urgency thereof, to
take effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1340, as introduced, Chau. Local government: sale of water
utility property.
   Existing law provides a procedure that is generally applicable for
a city to sell its real property. Existing law also establishes
specific procedures for the sale of public utility property owned by
a municipal corporation with certain provisions applicable to the
sale of property of a water utility.
   This bill would authorize the City of Montebello to sell all or
part of its water utility pursuant to the procedures that are
generally applicable to a sale of real property by a city, if certain
requirements are met.
   This bill would make legislative findings and declarations as to
the necessity of a special statute for the City of Montebello.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 37420.5 is added to the Government Code, to
read:
   37420.5.  (a) The City of Montebello may sell all or part of its
water utility pursuant to this article as provided in Section 10051.5
of the Public Utilities Code.
   (b) This section shall remain in effect only until July 1, 2017,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2017, deletes or extends that date.
  SEC. 2.  Section 10051.5 is added to the Public Utilities Code, to
read:
   10051.5.  (a) Notwithstanding any other provision of this article,
the City of Montebello may sell all or part of its water utility
property pursuant to Article 3 (commencing with Section 37420) of
Chapter 5 of Part 2 of Division 3 of Title 4 of the Government Code,
subject and pursuant to the following additional provisions,
limitations, and requirements:
   (1) The governing body of the city shall not sell the water
utility property for less than its fair market value determined as
set forth in the Public Water System Investment and Consolidation Act
of 1997 (Chapter 2.5 (commencing with Section 2718) of Part 2 of
Division 1).
   (2) A majority of the members of the governing body of the city
must approve the sale.
   (3) The entity acquiring the water utility property shall be a
public utility, as defined in Section 216, which is presently
authorized by the commission to provide water utility service within
the corporate limits of the city pursuant to a certificate of public
convenience and necessity and the area of the one or more
certificates includes or surrounds all or part of the city's water
utility system.
   (4) As a condition of acquiring the city's water system, the
acquiring public utility shall file a revised service area map with
the commission that shows the area formerly served through the city's
water utility system as part of the acquiring public utility's
service area. The acquiring public utility shall submit the map by
filing a tier-one advice letter with the commission and, upon this
filing, shall be deemed authorized and bound to render public utility
water service to all persons in the area formerly served through the
city's water utility system on the same terms, conditions, and rates
that the commission has found to be just and reasonable for the
acquiring public utility's other customers in the city.
   (b) This section shall remain in effect only until July 1, 2017,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2017, deletes or extends that date.
  SEC. 3.  The Legislature finds and declares that a special law is
necessary and that a general law cannot be made applicable within the
meaning of Section 16 of Article IV of the California Constitution
because of the unique circumstances applicable to the City of
Montebello. The City Council of the City of Montebello believes it is
no longer in the public interest to own and operate all or part of a
water utility and desires to sell its water utility. However, the
city would be unable to do so in a timely manner because the
Legislature has enacted statutes that may conflict with one another
and with the City of Montebello's urgent financial requirements,
thereby preventing the City of Montebello from selling and the
acquiring public utility from purchasing the water utility without an
election and performance of other procedures. In order to clearly
state the law with respect to the City of Montebello, a special
statute is needed and a general statute cannot be made applicable.
  SEC. 4.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   The City of Montebello's water utility infrastructure is aging and
is experiencing numerous leaks and equipment failures. The aging and
failing water utility infrastructure impairs the safety and
reliability of the city's water utility system, including its ability
to provide water for public fire-fighting purposes. The city's water
utility serves only a small fraction of the city's residents and is
losing money despite significant recent rate increases. The city's
budget and general fund cannot make up for that revenue shortfall or
the cost of the urgently needed water supply infrastructure upgrades
and repairs of its water utility system. The City of Montebello
desires to sell all or part of the city-owned water utility to a
public utility capable of operating, managing, and upgrading the
water system while financial conditions are favorable to the city,
however, the Legislature has adopted statutes governing the sale of
municipal property which may conflict with each other and the urgent
needs of the city. In order to provide the City of Montebello with
the clear statutory authority to sell its water utility without an
election as soon as possible, it is necessary that this act take
effect immediately.