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SB-492 Midpeninsula Regional Open Space District: purchase of property: San Jose Water Company.(2017-2018)

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Date Published: 03/21/2017 04:00 AM
SB492:v98#DOCUMENT

Amended  IN  Senate  March 20, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 492


Introduced by Senators Beall and Hill
(Principal coauthor: Assembly Member Mark Stone)
(Coauthor: Senator Monning)
(Coauthors: Assembly Members Berman, Chu, Low, and Mullin)

February 16, 2017


An act to add and repeal Section 5540.2 of the Public Resources Code, relating to park and open-space districts.


LEGISLATIVE COUNSEL'S DIGEST


SB 492, as amended, Beall. Midpeninsula Regional Open Space District: purchase of property: San Jose Water Company.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water corporations, as defined. Under the Public Utilities Act, a public utility is required to seek commission approval prior to selling, leasing, assigning, mortgaging, or otherwise disposing of or encumbering any property necessary or useful in the performance of its duties to the public.
Existing law authorizes regional park and open-space districts to acquire, and to lease or dispose of, real property, and rights in real property, within or without the regional district, that are necessary to the full exercise of the regional district’s powers.
This bill would authorize the San Jose Water Company to sell lands in the Upper Guadalupe and Los Gatos Creek watershed watershed, including the Los Gatos Creek and Saratoga Creek watersheds, to the Midpeninsula Regional Open Space District, District until January 1, 2023, as specified. The
The bill would require the water company to invest the net proceeds, if any, from the sale of land authorized by the bill in water system infrastructure, plant, facilities, and properties that are necessary or useful in the performance of its duties to the public. The bill, for a period of 8 years, bill would require the investment of the net proceeds to be included among the water company’s other utility property upon which the commission authorizes the water company to earn a reasonable rate of return, as specified. The bill would repeal its provisions on January 1, 2023. The bill would provide that these requirements apply to the investment of the net proceeds from the sale for a period of 8 consecutive years, as prescribed, and would require the balance of any net proceeds and interest on the proceeds that is not invested after the 8-year period to be allocated solely to the water company ratepayers.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 5540.2 is added to the Public Resources Code, to read:

5540.2.
 (a) The Legislature finds and declares as follows:
(1) The sale of private watershed lands owned by the water company in the Upper Guadalupe and Los Gatos Creek watershed watershed, including the Los Gatos Creek and Saratoga Creek watersheds, to the district offers an abundance of benefits to the public and wildlife.
(2) The transfer of these lands will ensure that several significant land conservation priorities will be addressed through active land management by the district.
(b) For the purposes of this section:
(1) “District” means the Midpeninsula Regional Open Space District.
(2) “Water company” means the San Jose Water Company.
(c) Notwithstanding any other law, the water company may sell lands in the Upper Guadalupe and Los Gatos Creek watershed watershed, including the Los Gatos Creek and Saratoga Creek watersheds, to the district in accordance with the following conditions:
(1) The district shall commit to improve open-space trail connectivity, encourage forest management practices to promote late seral or old-growth habitat conditions, improve maintain wildland fire safety, preserve open space, and protect the downstream beneficial uses of water, including, but not limited to, critical elements of the public drinking water supply, in perpetuity.
(2) The water company shall retain all its existing water rights and a necessary easement, fee title or easement interest, in perpetuity, to make certain that the customers of the water company have access to safe and reliable drinking water. The easement fee title or easement interest shall include all facilities owned and operated by the water company, including, but not limited to, treatment plants, delivery systems, reservoirs, and main tributaries.
(d) (1) If a sale of land occurs pursuant to this section, the water company shall invest the net proceeds, if any, from the sale in water system infrastructure, plant, facilities, and properties that are necessary or useful in the performance of the water company’s duties to the public.
(2) For the purposes of tracking the net proceeds and their investment, the water company shall maintain records necessary to document the investment of the net proceeds pursuant to this section.
(3) All water utility infrastructure, plant, facilities, and properties constructed or acquired by, and used and useful to, the water company by investment pursuant to this section shall be included among the water company’s other utility property upon which the Public Utilities Commission authorizes the water company the opportunity to earn a reasonable rate of return. This paragraph
(4) This subdivision shall apply to the investment of the net proceeds from the sale of land pursuant to this section for a period of eight consecutive calendar years beginning with the calendar year immediately following the calendar year in which the water company receives the net proceeds. The balance of any net proceeds and interest on the proceeds that is not invested after the eight-year period shall be allocated solely to the water company ratepayers.

(4)

(5) The Public Utilities Commission retains continuing authority to determine the used, useful, or necessary status of any and all infrastructure improvements and investments by the water company.
(e) Section 851 of the Public Utilities Code shall not apply to the transfer of lands pursuant to this section.

(f)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.

(f) The authority for the water company to sell lands to the district pursuant to subdivision (c) is inoperative on January 1, 2023.