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<ns0:Description>
<ns0:Id>20250SB__141798AMD</ns0:Id>
<ns0:VersionNum>98</ns0:VersionNum>
<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-20</ns0:ActionDate>
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<ns0:Action>
<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-03-25</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>SB</ns0:MeasureType>
<ns0:MeasureNum>1417</ns0:MeasureNum>
<ns0:MeasureState>AMD</ns0:MeasureState>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Pérez</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_OPPOSITE">(Coauthor: Assembly Member Harabedian)</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Pérez</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Harabedian</ns0:Name>
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<ns0:Title> An act to amend Sections 14300, 14303, and 14307 of, and to add Section 14303.5 to, the Corporations Code, relating to mutual water companies.</ns0:Title>
<ns0:RelatingClause>mutual water companies</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Mutual water companies: assessments and water charges: notice.</ns0:Subject>
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<ns0:DigestText>
<html:p>Existing law authorizes any corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation purposes, and requires any corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for domestic use, to provide in its articles or bylaws that water shall be sold, distributed, supplied, or delivered only to owners of its shares and that those shares are appurtenant to certain lands, as specified. Under existing law, these corporations are known as mutual water companies.</html:p>
<html:p>This bill would prohibit a mutual water company from charging, issuing a bill, or
otherwise seeking to hold tenants of shareholders responsible for the costs of water or its delivery and would require all notices of charges for water to be sent to the shareholders at their last known address.</html:p>
<html:p>Existing law authorizes a mutual water company that is not a public utility to levy assessments upon its shares, except as provided.</html:p>
<html:p>This bill would require a mutual water company that operates a public water system and that proposes to levy an assessment or to increase the charge for water to shareholders by more than 20% to comply with specified notice and public meeting requirements at least 30 days before it seeks to collect the assessment or increase the water charge. The bill would require the mutual water company to prepare a written proposal to collect an assessment or to increase a water charge, as
specified, and to convene a public meeting regarding the proposal, as provided. The bill would require the mutual water company to send a copy of the written proposal and the notice of the public meeting to specified persons, along with other information, and to also send a copy of the written proposal and the notice of the public meeting to certain newspapers and radio stations.</html:p>
<html:p> Existing law requires a mutual water company that operates a public water system to make certain records promptly available upon written request to an eligible person, as defined, upon payment of fees covering direct costs of duplication, including, among other documents, agendas and minutes of board meetings and copies of the mutual water company’s annual budget and accounting report. Existing law defines “eligible persons” for purposes of this requirement to include, among others,
shareholders of the mutual water company, a person who is an occupant, pursuant to a lease or rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water, and an elected official of a city or county who represents people who receive drinking water directly from the mutual water company, as specified.</html:p>
<html:p>This bill would additionally require a mutual water company to make available to those eligible persons, upon request, a copy of the current list of shareholders, including all contact information, and a copy of a written proposal to levy an assessment or to increase a water charge. The bill would also include as an eligible person, for purposes of all of the above-described provisions, the chief administrative officer for each city, county, and government water agency in the
mutual water company’s service area, as specified. The bill would prohibit a mutual water company that provides the requested records in digital form from charging for any duplication costs, as provided.</html:p>
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<ns0:DigestKey>
<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>NO</ns0:FiscalCommittee>
<ns0:LocalProgram>NO</ns0:LocalProgram>
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<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>NO</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_C9676512-9E2D-4B22-BE52-AB6942FD4DC8">
<ns0:Num>SECTION 1.</ns0:Num>
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Section 14300 of the
<ns0:DocName>Corporations Code</ns0:DocName>
is amended to read:
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<ns0:Num>14300.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
A corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation purposes may provide, and a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for domestic use shall provide, in its articles or bylaws that water shall be sold, distributed, supplied, or delivered only to owners of its shares and that the shares shall
be appurtenant to certain lands when the lands are described in the certificate issued for the shares and when the certificate is so issued and a certified copy of the articles or bylaws recorded in the office of the county recorder in the county where the lands are situated the shares of stock shall become appurtenant to the lands and shall only be transferred with the lands, except after sale or forfeiture for
delinquent assessments
as provided in Section 14303. Notwithstanding this provision in its articles or bylaws, a corporation may sell water to the state, or any department or agency of the state, or to any school district, or to any public agency, or, to any other mutual water company or, during any emergency resulting from fire or other disaster involving danger to public health or safety, to any person at the same rates as to holders of shares of the corporations; and provided further, that any corporation may enter into a contract with a county fire protection district to furnish water to fire hydrants and for fire
suppression or fire prevention purposes at a flat rate per hydrant or other connection. In the event lands to which any stock is appurtenant are owned or purchased by the state, or any department or agency of the state, or any school district, or public agency, the stock shall be canceled by the secretary, but shall be reissued to any person later acquiring title to the land from the state department, agency, or school district, or public agency.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
A corporation described in subdivision (a) shall not charge, issue a bill, or otherwise seek to hold tenants of shareholders responsible for the costs of water or its delivery. All notices of charges for water shall be
sent to the shareholders at their last known address.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A corporation described in subdivision (a) shall be known as a mutual water company.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 14303 of the
<ns0:DocName>Corporations Code</ns0:DocName>
is amended to read:
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<ns0:LawSection id="id_838551E5-397C-49CF-B15B-85AB544DA517">
<ns0:Num>14303.</ns0:Num>
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<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
A corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation purposes or domestic use, and not as a public utility, may levy assessments upon its shares, whether or not fully paid, unless otherwise provided in its articles or bylaws. If any shares of the corporation that have been made appurtenant to any land as provided in this chapter become delinquent in the payment of assessments, the right to receive water or dividends
may be denied, and they may be sold and transferred without those lands as if not appurtenant
to the land, and the purchaser shall acquire the right to receive water as provided in the articles or bylaws of the corporation, or they may be forfeited to the corporation.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Before levying an assessment on its shares, a mutual water company that operates a public water system shall comply with Section 14303.5.
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<ns0:Num>SEC. 3.</ns0:Num>
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Section 14303.5 is added to the
<ns0:DocName>Corporations Code</ns0:DocName>
, to read:
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<ns0:LawSection id="id_1CC90859-E70C-4508-A793-87CADFE2E030">
<ns0:Num>14303.5.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
A mutual water company that operates a public water system and that proposes to levy an assessment under Section 14303, or to increase the charge for water to shareholders by more than 20 percent, shall comply with this section at least 30 days before it seeks to collect the assessment or increase the water charge.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The mutual water company shall prepare a written proposal to collect an assessment or to increase the water charge that specifies the amount of the assessment or the increase of the water charge to each shareholder, explains the basis, necessity for, and use of the assessment or water charge increase, and identifies the board members that voted for the proposal.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The company shall convene a public meeting regarding the proposal in a city or county building in a facility that can accommodate at least 100 participants. The facility shall be located in or within five miles of the company’s service area or the facility shall serve a county government that includes the company’s service area.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The company shall provide or send a copy of the written proposal and notice of the public meeting at least 45 days before the public meeting to both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
All eligible persons, as defined in Section 14307.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
All general circulation newspapers and radio stations serving the county in which the mutual water company operates.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The notice to eligible persons who are shareholders as required
by paragraph (1) of subdivision (d) shall also include the following language:
</html:p>
<html:p>“You own a share of [name of mutual water company] entitling you to vote for the company’s board of directors, which made the decision to propose this assessment or water charge increase. You also have rights pursuant to state law to participate in the meetings of the board of directors and receive all information regarding the operation of the company and its water system.”</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
The notice to eligible persons, other than shareholders, as required by paragraph (1) of subdivision (d), shall include the following language:
</html:p>
<html:p>“You or your constituents receive drinking water from [name of mutual water company], which has proposed to levy an assessment on its shareholders or increase a water charge by more than 20 percent. You have a right to participate in the public meeting on this
proposal and obtain copies of company documents, including all of the following:</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Agendas and minutes of board meetings.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
An annual budget.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
An accounting report.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Any records reporting the results of a water quality test.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
An annual report.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
The current list of shareholders, including all contact information available to the corporation.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
The written proposal to levy an assessment or to increase a water charge.”
</html:p>
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<ns0:Num>SEC. 4.</ns0:Num>
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Section 14307 of the
<ns0:DocName>Corporations Code</ns0:DocName>
is amended to read:
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<ns0:Num>14307.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Unless its governing documents impose more stringent standards, a mutual water company that operates a public water system shall make the following records promptly available upon written request to an eligible person upon payment of fees covering direct costs of duplication:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Agendas and minutes of board meetings conducted on or after January 1, 2014.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A copy of an annual budget adopted pursuant to subdivision (a) of Section 14306.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A copy of an accounting report prepared pursuant to subdivision (b) of Section 14306.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A copy of
any records reporting the results of a water quality test.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
A copy of an annual report that has been distributed to the mutual water company’s shareholder or members.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
A copy of the current list of shareholders, including all contact information available to the mutual water company.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
A copy of a written proposal to levy an assessment or to increase a water charge, as provided in Section 14303.5.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Any request for records pursuant to this subdivision shall be limited to the three calendar years preceding the written request for the records.
Notwithstanding paragraph (1), if the mutual water company provides the requested records in digital form, it shall not charge for any duplication costs or impose other fees for access to the records.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For the purposes of this section, “eligible person” means a person who is any of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
A shareholder or member of the mutual water company.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The chief administrative officer for each city, county, and government water agency in, or whose boundaries fall within five miles of, the mutual water company’s service area.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Any other person eligible to obtain copies of the records listed in subdivision (a) under provisions of the
mutual water company’s articles or bylaws.
</html:p>
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