BILL NUMBER: SB 1112	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 27, 2016

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 amended, 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 
    This  bill would provide that if a water or sewer system
corporation  with less than 2,000 service connections 
fails to receive the commission's  approval,  
approval before entering into any of the specified transactions
valued at $5,000,000 or less,  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
  For  a water or sewer system corporation with
less than 2,000 service connections, the following shall 
apply:   apply to transactions valued at five million
dollars ($5,000,000) or less, notwithstanding Sections 851 and 854:

   (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. 
854. 
   (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.