20250AB__171296AMD INTRODUCED 2026-02-04 AMENDED_ASSEMBLY 2026-03-09 AMENDED_ASSEMBLY 2026-03-16 AMENDED_ASSEMBLY 2026-04-06 2025 AB AMD Introduced by Assembly Member Pacheco LEAD_AUTHOR ASSEMBLY Pacheco

An act to add and repeal

Section 37420.5 of the Government Code, relating to local government. local government City of Santa Fe Springs: sale of water utility property. Existing law authorizes the furnishing of utility services by publicly owned public utilities, including municipal corporations, that are subject to control by their governing bodies. Existing law authorizes any municipal corporation to acquire, construct, own, operate, or lease any public utility, as defined, and authorizes a municipal corporation to sell or dispose of any public utility it owns.

Existing law establishes procedures whereby a municipal corporation may lease, sell, or transfer that portion of a water utility used for furnishing water service outside or inside the boundaries of the municipal corporation, including, in the case of sale or transfer of the public utility located inside the municipal boundaries, the determination that the public utility is not necessary for supplying water to its own inhabitants or that its inhabitants will be provided with equal or better service by the acquiring entity, if the sale or transfer is approved by a majority of all voters voting on the issue in an election, and the acquiring entity discloses specified information before the election.

This bill would authorize the City of Santa Fe Springs, until January 1, 2032, to sell its public utility for furnishing water service for the purpose of consolidating its public water system with another public water system pursuant to specified procedures if certain requirements are met. The bill would require the city to consider oral and written protests, as provided, and would prohibit the city from selling the public utility for one year if 50% of interested persons, as defined, protest the sale.

This bill would make legislative findings and declarations as to the necessity of a special statute for the City of Santa Fe Springs. MAJORITY NO YES NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION

Section 37420.5 is added to the Government Code , to read: 37420.5. (

a) Notwithstanding

Article 2 (commencing with

Section 10051) of

Chapter of Division of the Public Utilities Code, the City of Santa Fe Springs may sell its public utility for furnishing water service pursuant to this

article for the purpose of consolidating its public water system with another public water system if its legislative body determines that it is not in the public interest to own and operate the public utility for furnishing water service, subject to all of the following requirements:

(1) The legislative body of the city shall not sell the water utility property for less than its fair market value, as defined in

Section 1263.320 of the Code of Civil Procedure.

(2) The legislative body of the city shall not sell the water utility property without obtaining a four-fifths vote of the city’s legislative body.

(3) The city’s existing water supply is contaminated, impaired, or otherwise presents a risk to public health, and the city lacks the technical, managerial, or financial capacity to provide for necessary treatment or replacement, or the cost of continued operation, maintenance, or treatment by the city would impose an unreasonable financial burden on ratepayers, as demonstrated by an independent financial analysis applying financial industry standards in adherence to

Section of

Article XIII D of the California Constitution, commonly referred to as Proposition 218.

(4) The receiving water system’s service area borders the service area of the subsumed water system. (4)</xhtml:p>"?> (5 ) Consolidation of the water systems shall be economically feasible for the ratepayers of the subsumed water system. Ratepayers of the subsumed water system shall be notified of the applicable rate that will be in effect during the first year after consolidation has been completed.

Any rate increases following the sale of a public utility for furnishing water service shall be phased in over time. (5)</xhtml:p>"?> (6 ) Consolidation of the water systems shall ensure continued water service to all existing customers without interruption or degradation in service quality. (6)</xhtml:p>"?> (7 ) (

A) The legislative body of the city shall not sell its public utility for furnishing water service unless it considers oral and written protests at its second regularly scheduled meeting following the adoption of a resolution pursuant to

Section and publication pursuant to subparagraph (B). In addition to the requirements of

Section 37422, the resolution shall allow days for hearing protests to the sale and shall state the city’s intended use of the sale proceeds. Notice of the sale may be given by including notice in the agency’s regular billing statement. One written protest per parcel, filed by an owner or tenant of the parcel, shall be counted in calculating a protest. The city shall maintain all written protests for a minimum of two years following the date of the hearing to consider written protests. (

B) Notwithstanding

Section 37423, the resolution shall be published at least once in a daily newspaper published and circulated in the city or, if there is none, the legislative body shall designate a newspaper published in the county. It shall also be posted for not less than days in at least three conspicuous places in the city. (C) (

i) Notwithstanding

Section 37425, if the legislative body of the city finds that protests have been filed by at least percent of interested persons, the legislative body of the city shall call an election pursuant to

Section 37427. If an election is called pursuant to this paragraph, the legislative body of the city shall not sell the public utility for furnishing water service unless the sale is approved by a majority of the city’s registered voters voting on the issue. (ii) If percent or more of interested persons protest the sale of the public utility, the city shall not take further steps for the sale of the public utility. The city, after one year has passed, may sell the public utility if the requirements of this

section are met, including adoption of a new resolution pursuant to subparagraph (A). (iii) For purposes of this paragraph, “interested person” means a person who is a resident of the city proposing to sell its public utility pursuant to this

section and a person who is not a resident of the city but who is a ratepayer of the public utility proposed to be sold pursuant to this section. (7)</xhtml:p>"?> (8 ) The legislative body of the city has adopted a resolution, at a regularly scheduled meeting, that paragraphs (1) to ( 7), inclusive, have been met. (

b) This

section shall remain in effect only until January 1, 2032, and as of that date is repealed.

SEC. 2. The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of

Section of

Article IV of the California Constitution because of the unique circumstances in the City of Santa Fe Springs.