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AB-1751 Water and sewer system corporations: consolidation of service.(2019-2020)

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Date Published: 07/05/2019 10:00 AM
AB1751:v94#DOCUMENT

Amended  IN  Senate  July 05, 2019
Amended  IN  Senate  June 26, 2019
Amended  IN  Senate  June 10, 2019
Amended  IN  Assembly  May 01, 2019
Amended  IN  Assembly  March 21, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1751

Introduced by Assembly Member Chiu

February 22, 2019

An act to add Chapter 2.7 (commencing with Section 2721) to Part 2 of Division 1 of the Public Utilities Code, relating to public utilities.


LEGISLATIVE COUNSEL'S DIGEST


AB 1751, as amended, Chiu. Water and sewer system corporations: consolidation of service.
The Public Utilities Act prohibits, with certain exemptions, any public utility from selling, leasing, assigning, mortgaging, or otherwise disposing of or encumbering specified property necessary or useful in the performance of the public utility’s duties to the public without first, for qualified transactions valued above $5,000,000, securing an order from the Public Utilities Commission authorizing it to do so or, for qualified transactions valued at $5,000,000 or less, filing an advice letter and obtaining approval from the commission.
Existing law, the California Safe Drinking Water Act, provides for the operation of public water systems and imposes on the State Water Resources Control Board related responsibilities and duties. Existing law authorizes the state board to order consolidation of public water systems where a public water system or state small water system serving a disadvantaged community consistently fails to provide an adequate supply of safe drinking water, as provided.
This bill, the Consolidation for Safe Drinking Water Act of 2019, would authorize a water or sewer system corporation to file an application and obtain approval from the commission through an order authorizing the water or sewer system corporation to consolidate with a public water system or state small water system that has fewer than 3,300 service connections and serves a disadvantaged community, or to implement rates for the subsumed water system. The bill would require the commission to approve or deny the application within 8 months, except as provided.
Unless the commission designates a different procedure because it determines a consolidation warrants a more comprehensive review, the bill would authorize a water or sewer system corporation to instead file an advice letter and obtain approval from the commission through a resolution authorizing the water or sewer system corporation to consolidate with a public water system or state small water system that has fewer than 3,300 service connections and serves a disadvantaged community, or to implement rates for the subsumed water system. The bill would authorize the executive director of the commission or the director of the division of the commission having regulatory jurisdiction over the water or sewer system corporation to approve an uncontested advice letter and would require the commission to approve or deny the advice letter within 120 days, except as provided.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 (a) This act shall be known, and may be cited, as the Consolidation for Safe Drinking Water Act of 2019.
(b) The Legislature finds and declares all of the following:
(1) Several public water systems and state small water systems in the state remain out of compliance with water quality standards established for various contaminants.
(2) Operation of public water systems presents opportunities for scale economies that could be used to implement available technologies to comply with applicable water quality standards.
(3) Facilitating the consolidation of public water systems and state small water systems that consistently fail to provide an adequate supply of safe drinking water would help to achieve these scale economies to provide benefits to the residents of California.
(c) It is the intent of the Legislature to promote timely consolidation of water systems to provide an adequate supply of safe drinking water for all residents of California.

SEC. 2.

 Chapter 2.7 (commencing with Section 2721) is added to Part 2 of Division 1 of the Public Utilities Code, to read:
CHAPTER  2.7. Consolidation for Safe Drinking Water Act of 2019

2721.
 (a) For purposes of this section, the following terms have the following meanings:
(1) “Consolidate” means to join two or more public water systems, state small water systems, or affected residences not served by a public water system into a single public water system.
(2) “Disadvantaged community” has the same meaning as set forth in Section 79505.5 of the Water Code.
(3) “Public water system” has the same meaning as set forth in Section 116275 of the Health and Safety Code.
(4) “State small water system” has the same meaning as set forth in Section 116275 of the Health and Safety Code.
(5) “Subsumed water system” means a public water system or state small water system that has fewer than 3,300 service connections, serves a disadvantaged community, and is consolidated into a water or sewer system corporation.
(b) (1) A water or sewer system corporation may file an application and obtain approval from the commission through an order authorizing that water or sewer system corporation to consolidate with a public water system or state small water system that has fewer than 3,300 service connections and serves a disadvantaged community, or to implement rates for the subsumed water system.
(2) The commission shall approve or deny an application filed pursuant to paragraph (1) within eight months of its filing, unless an administrative law judge of the commission makes a written determination that the deadline cannot be met, including findings as to the reason, and issues a letter extending the deadline by up to eight months. An administrative law judge may grant additional extensions of eight months or less consistent with the provisions of this paragraph.
(c) (1) (A) Notwithstanding Sections 851 and 854, a water or sewer system corporation may file an advice letter and obtain approval from the commission through a resolution authorizing that water or sewer system corporation to consolidate with a public water system or state small water system that has fewer than 3,300 service connections and serves a disadvantaged community, or to implement rates for the subsumed water system.
(B) If an advice letter filed pursuant to this subdivision is uncontested, approval may be given by the executive director or the director of the division of the commission having regulatory jurisdiction over the water or sewer system corporation.
(C) Absent incomplete documentation, the commission shall approve or deny the advice letter within 120 days of its filing by the applicant water or sewer system corporation unless the executive director makes a written determination that the deadline cannot be met, including findings as to the reason, and issues a response extending the deadline by up to 120 days. The executive director may grant additional extensions of 120 days or less consistent with the provisions of this subparagraph.
(2) For any consolidation that meets the criteria described in subparagraph (A) of paragraph (1), the commission may designate a different procedure if it determines that the consolidation warrants a more comprehensive review than the advice letter procedure provides.
(d) For purposes of a consolidation pursuant to either subdivision (b) or (c), the commission shall prioritize cases where either of the following occur:
(1)A cases in which a water or sewer system corporation consolidates with a public water system or state small water system that is subject to a citation issued pursuant to Section 116650 of the Health and Safety Code or a compliance order issued pursuant to Section 116655 of the Health and Safety Code for failure to meet primary or secondary drinking water standards, as defined in Section 116275 of the Health and Safety Code.

(2)A water or sewer system corporation consolidates with a public water system or state small water system, the sale or transfer of which has been previously approved pursuant to subdivision (c) of Section 10061.

(e) A water or sewer system corporation seeking to consolidate with a public water system or state small water system pursuant to this section shall give adequate public notice and provide adequate opportunities for public participation, as determined by the commission.
(f) Nothing in this section shall be construed to require a public water system or state small water system that is not subject to the jurisdiction, control, and regulation of the commission to obtain authorization from the commission before consolidating with a public water system or state small water system.