Enrolled August 23, 2019 Passed IN Senate August 19, 2019 Passed IN Assembly August 22, 2019 Amended IN Senate June 19, 2019 Amended IN Assembly April 11, 2019 Amended IN Assembly March 21, 2019 CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Assembly Bill No. 689Introduced by Assembly Member McCarty(Coauthor: Senator Pan)February 15, 2019 An act to add and repeal Section 12773 of the Public Utilities Code, relating to the Municipal Utility District Act. LEGISLATIVE COUNSEL'S DIGESTAB 689, McCarty. Municipal Utility District Act: nonstock security.The Municipal Utility District Act authorizes the formation of a municipal utility district and authorizes a district to acquire, construct, own, operate, control, or use works for supplying the inhabitants of the district and public agencies with light, water, power, heat, transportation, telephone service, or other means of communication, or means for the collection, treatment, or disposition of garbage, sewage, or refuse matter.This bill would authorize the Sacramento Municipal Utility District to operate a pilot project, until January 1, 2025, to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that (1) no separate funding is expended solely for the nonstock security and (2) the value of each nonstock security acquisition, at the time of the acquisition, does not exceed 3% of the districts annual revenue in the fiscal year the district makes the acquisition. The bill would authorize the governing board of the district to sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so. The bill would limit the pilot program to 3 acquisitions and would require that any profit or gain earned by the acquisitions be used to benefit the districts ratepayers.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 12773 is added to the Public Utilities Code, to read:12773. (a) For purposes of this section, security has the same meaning as defined in Section 25019 of the Corporations Code.(b) The Sacramento Municipal Utility District is authorized to operate a pilot project to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that no separate funding is expended solely for the nonstock security. The board of directors of the district may sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so.(c) Before exercising the authority described in subdivision (b), the districts board of directors shall do all of the following:(1) Make the following findings:(A) The acquisition furthers the purposes of the district, pursuant to the Municipal Utility District Act.(B) The acquisition is in the interest of the districts ratepayers and the public.(2) Establish a policy governing acquisitions that shall include, but not be limited to, the following:(A) Procedures for preventing conflicts of interest and violations of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code.(B) Procedures for determining how much of an acquisition to accept in lieu of, or in addition to, other forms of remuneration, in order to ensure the district secures a reasonable return on any intellectual property or other resources it provides the private entity.(C) Procedures governing the approval process for accepting any acquisitions.(D) Procedures that ensure acquisition of a nonstock security does not unduly influence the amount paid for the associated goods and services.(3) Post the policy described in paragraph (2) on the districts internet website.(4) Adopt a resolution at a regular meeting of the board stating the intent of the board to exercise the authority described in subdivision (b).(d) The authority described in subdivision (b) shall be limited to a total of three acquisitions. Any profit or other gain earned by these acquisitions shall be used to benefit the districts ratepayers.(e) The value, at the time of acquisition, of any single nonstock security acquired pursuant to the authority described in subdivision (b) shall be limited to no more that 3 percent of the districts annual revenue in the fiscal year the district makes the acquisition.(f) This section shall remain in effect only until January 1, 2025, 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 16 of Article IV of the California Constitution because of the unique needs of the Sacramento Municipal Utility District regarding nonstock security interests in private entities with which the district partners to further its purposes.
Enrolled August 23, 2019 Passed IN Senate August 19, 2019 Passed IN Assembly August 22, 2019 Amended IN Senate June 19, 2019 Amended IN Assembly April 11, 2019 Amended IN Assembly March 21, 2019 CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Assembly Bill No. 689Introduced by Assembly Member McCarty(Coauthor: Senator Pan)February 15, 2019 An act to add and repeal Section 12773 of the Public Utilities Code, relating to the Municipal Utility District Act. LEGISLATIVE COUNSEL'S DIGESTAB 689, McCarty. Municipal Utility District Act: nonstock security.The Municipal Utility District Act authorizes the formation of a municipal utility district and authorizes a district to acquire, construct, own, operate, control, or use works for supplying the inhabitants of the district and public agencies with light, water, power, heat, transportation, telephone service, or other means of communication, or means for the collection, treatment, or disposition of garbage, sewage, or refuse matter.This bill would authorize the Sacramento Municipal Utility District to operate a pilot project, until January 1, 2025, to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that (1) no separate funding is expended solely for the nonstock security and (2) the value of each nonstock security acquisition, at the time of the acquisition, does not exceed 3% of the districts annual revenue in the fiscal year the district makes the acquisition. The bill would authorize the governing board of the district to sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so. The bill would limit the pilot program to 3 acquisitions and would require that any profit or gain earned by the acquisitions be used to benefit the districts ratepayers.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO
Enrolled August 23, 2019 Passed IN Senate August 19, 2019 Passed IN Assembly August 22, 2019 Amended IN Senate June 19, 2019 Amended IN Assembly April 11, 2019 Amended IN Assembly March 21, 2019
Enrolled August 23, 2019
Passed IN Senate August 19, 2019
Passed IN Assembly August 22, 2019
Amended IN Senate June 19, 2019
Amended IN Assembly April 11, 2019
Amended IN Assembly March 21, 2019
CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION
Assembly Bill
No. 689
Introduced by Assembly Member McCarty(Coauthor: Senator Pan)February 15, 2019
Introduced by Assembly Member McCarty(Coauthor: Senator Pan)
February 15, 2019
An act to add and repeal Section 12773 of the Public Utilities Code, relating to the Municipal Utility District Act.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 689, McCarty. Municipal Utility District Act: nonstock security.
The Municipal Utility District Act authorizes the formation of a municipal utility district and authorizes a district to acquire, construct, own, operate, control, or use works for supplying the inhabitants of the district and public agencies with light, water, power, heat, transportation, telephone service, or other means of communication, or means for the collection, treatment, or disposition of garbage, sewage, or refuse matter.This bill would authorize the Sacramento Municipal Utility District to operate a pilot project, until January 1, 2025, to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that (1) no separate funding is expended solely for the nonstock security and (2) the value of each nonstock security acquisition, at the time of the acquisition, does not exceed 3% of the districts annual revenue in the fiscal year the district makes the acquisition. The bill would authorize the governing board of the district to sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so. The bill would limit the pilot program to 3 acquisitions and would require that any profit or gain earned by the acquisitions be used to benefit the districts ratepayers.
The Municipal Utility District Act authorizes the formation of a municipal utility district and authorizes a district to acquire, construct, own, operate, control, or use works for supplying the inhabitants of the district and public agencies with light, water, power, heat, transportation, telephone service, or other means of communication, or means for the collection, treatment, or disposition of garbage, sewage, or refuse matter.
This bill would authorize the Sacramento Municipal Utility District to operate a pilot project, until January 1, 2025, to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that (1) no separate funding is expended solely for the nonstock security and (2) the value of each nonstock security acquisition, at the time of the acquisition, does not exceed 3% of the districts annual revenue in the fiscal year the district makes the acquisition. The bill would authorize the governing board of the district to sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so. The bill would limit the pilot program to 3 acquisitions and would require that any profit or gain earned by the acquisitions be used to benefit the districts ratepayers.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 12773 is added to the Public Utilities Code, to read:12773. (a) For purposes of this section, security has the same meaning as defined in Section 25019 of the Corporations Code.(b) The Sacramento Municipal Utility District is authorized to operate a pilot project to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that no separate funding is expended solely for the nonstock security. The board of directors of the district may sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so.(c) Before exercising the authority described in subdivision (b), the districts board of directors shall do all of the following:(1) Make the following findings:(A) The acquisition furthers the purposes of the district, pursuant to the Municipal Utility District Act.(B) The acquisition is in the interest of the districts ratepayers and the public.(2) Establish a policy governing acquisitions that shall include, but not be limited to, the following:(A) Procedures for preventing conflicts of interest and violations of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code.(B) Procedures for determining how much of an acquisition to accept in lieu of, or in addition to, other forms of remuneration, in order to ensure the district secures a reasonable return on any intellectual property or other resources it provides the private entity.(C) Procedures governing the approval process for accepting any acquisitions.(D) Procedures that ensure acquisition of a nonstock security does not unduly influence the amount paid for the associated goods and services.(3) Post the policy described in paragraph (2) on the districts internet website.(4) Adopt a resolution at a regular meeting of the board stating the intent of the board to exercise the authority described in subdivision (b).(d) The authority described in subdivision (b) shall be limited to a total of three acquisitions. Any profit or other gain earned by these acquisitions shall be used to benefit the districts ratepayers.(e) The value, at the time of acquisition, of any single nonstock security acquired pursuant to the authority described in subdivision (b) shall be limited to no more that 3 percent of the districts annual revenue in the fiscal year the district makes the acquisition.(f) This section shall remain in effect only until January 1, 2025, 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 16 of Article IV of the California Constitution because of the unique needs of the Sacramento Municipal Utility District regarding nonstock security interests in private entities with which the district partners to further its purposes.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 12773 is added to the Public Utilities Code, to read:12773. (a) For purposes of this section, security has the same meaning as defined in Section 25019 of the Corporations Code.(b) The Sacramento Municipal Utility District is authorized to operate a pilot project to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that no separate funding is expended solely for the nonstock security. The board of directors of the district may sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so.(c) Before exercising the authority described in subdivision (b), the districts board of directors shall do all of the following:(1) Make the following findings:(A) The acquisition furthers the purposes of the district, pursuant to the Municipal Utility District Act.(B) The acquisition is in the interest of the districts ratepayers and the public.(2) Establish a policy governing acquisitions that shall include, but not be limited to, the following:(A) Procedures for preventing conflicts of interest and violations of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code.(B) Procedures for determining how much of an acquisition to accept in lieu of, or in addition to, other forms of remuneration, in order to ensure the district secures a reasonable return on any intellectual property or other resources it provides the private entity.(C) Procedures governing the approval process for accepting any acquisitions.(D) Procedures that ensure acquisition of a nonstock security does not unduly influence the amount paid for the associated goods and services.(3) Post the policy described in paragraph (2) on the districts internet website.(4) Adopt a resolution at a regular meeting of the board stating the intent of the board to exercise the authority described in subdivision (b).(d) The authority described in subdivision (b) shall be limited to a total of three acquisitions. Any profit or other gain earned by these acquisitions shall be used to benefit the districts ratepayers.(e) The value, at the time of acquisition, of any single nonstock security acquired pursuant to the authority described in subdivision (b) shall be limited to no more that 3 percent of the districts annual revenue in the fiscal year the district makes the acquisition.(f) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.
SECTION 1. Section 12773 is added to the Public Utilities Code, to read:
### SECTION 1.
12773. (a) For purposes of this section, security has the same meaning as defined in Section 25019 of the Corporations Code.(b) The Sacramento Municipal Utility District is authorized to operate a pilot project to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that no separate funding is expended solely for the nonstock security. The board of directors of the district may sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so.(c) Before exercising the authority described in subdivision (b), the districts board of directors shall do all of the following:(1) Make the following findings:(A) The acquisition furthers the purposes of the district, pursuant to the Municipal Utility District Act.(B) The acquisition is in the interest of the districts ratepayers and the public.(2) Establish a policy governing acquisitions that shall include, but not be limited to, the following:(A) Procedures for preventing conflicts of interest and violations of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code.(B) Procedures for determining how much of an acquisition to accept in lieu of, or in addition to, other forms of remuneration, in order to ensure the district secures a reasonable return on any intellectual property or other resources it provides the private entity.(C) Procedures governing the approval process for accepting any acquisitions.(D) Procedures that ensure acquisition of a nonstock security does not unduly influence the amount paid for the associated goods and services.(3) Post the policy described in paragraph (2) on the districts internet website.(4) Adopt a resolution at a regular meeting of the board stating the intent of the board to exercise the authority described in subdivision (b).(d) The authority described in subdivision (b) shall be limited to a total of three acquisitions. Any profit or other gain earned by these acquisitions shall be used to benefit the districts ratepayers.(e) The value, at the time of acquisition, of any single nonstock security acquired pursuant to the authority described in subdivision (b) shall be limited to no more that 3 percent of the districts annual revenue in the fiscal year the district makes the acquisition.(f) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.
12773. (a) For purposes of this section, security has the same meaning as defined in Section 25019 of the Corporations Code.(b) The Sacramento Municipal Utility District is authorized to operate a pilot project to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that no separate funding is expended solely for the nonstock security. The board of directors of the district may sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so.(c) Before exercising the authority described in subdivision (b), the districts board of directors shall do all of the following:(1) Make the following findings:(A) The acquisition furthers the purposes of the district, pursuant to the Municipal Utility District Act.(B) The acquisition is in the interest of the districts ratepayers and the public.(2) Establish a policy governing acquisitions that shall include, but not be limited to, the following:(A) Procedures for preventing conflicts of interest and violations of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code.(B) Procedures for determining how much of an acquisition to accept in lieu of, or in addition to, other forms of remuneration, in order to ensure the district secures a reasonable return on any intellectual property or other resources it provides the private entity.(C) Procedures governing the approval process for accepting any acquisitions.(D) Procedures that ensure acquisition of a nonstock security does not unduly influence the amount paid for the associated goods and services.(3) Post the policy described in paragraph (2) on the districts internet website.(4) Adopt a resolution at a regular meeting of the board stating the intent of the board to exercise the authority described in subdivision (b).(d) The authority described in subdivision (b) shall be limited to a total of three acquisitions. Any profit or other gain earned by these acquisitions shall be used to benefit the districts ratepayers.(e) The value, at the time of acquisition, of any single nonstock security acquired pursuant to the authority described in subdivision (b) shall be limited to no more that 3 percent of the districts annual revenue in the fiscal year the district makes the acquisition.(f) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.
12773. (a) For purposes of this section, security has the same meaning as defined in Section 25019 of the Corporations Code.(b) The Sacramento Municipal Utility District is authorized to operate a pilot project to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that no separate funding is expended solely for the nonstock security. The board of directors of the district may sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so.(c) Before exercising the authority described in subdivision (b), the districts board of directors shall do all of the following:(1) Make the following findings:(A) The acquisition furthers the purposes of the district, pursuant to the Municipal Utility District Act.(B) The acquisition is in the interest of the districts ratepayers and the public.(2) Establish a policy governing acquisitions that shall include, but not be limited to, the following:(A) Procedures for preventing conflicts of interest and violations of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code.(B) Procedures for determining how much of an acquisition to accept in lieu of, or in addition to, other forms of remuneration, in order to ensure the district secures a reasonable return on any intellectual property or other resources it provides the private entity.(C) Procedures governing the approval process for accepting any acquisitions.(D) Procedures that ensure acquisition of a nonstock security does not unduly influence the amount paid for the associated goods and services.(3) Post the policy described in paragraph (2) on the districts internet website.(4) Adopt a resolution at a regular meeting of the board stating the intent of the board to exercise the authority described in subdivision (b).(d) The authority described in subdivision (b) shall be limited to a total of three acquisitions. Any profit or other gain earned by these acquisitions shall be used to benefit the districts ratepayers.(e) The value, at the time of acquisition, of any single nonstock security acquired pursuant to the authority described in subdivision (b) shall be limited to no more that 3 percent of the districts annual revenue in the fiscal year the district makes the acquisition.(f) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.
12773. (a) For purposes of this section, security has the same meaning as defined in Section 25019 of the Corporations Code.
(b) The Sacramento Municipal Utility District is authorized to operate a pilot project to allow the board of directors of the district to hold nonstock security in a corporation or other private entity if acquired as part of a procurement of goods or services from that entity, provided that no separate funding is expended solely for the nonstock security. The board of directors of the district may sell or otherwise dispose of the nonstock security when, in its judgment, it is in the best interests of the district to do so.
(c) Before exercising the authority described in subdivision (b), the districts board of directors shall do all of the following:
(1) Make the following findings:
(A) The acquisition furthers the purposes of the district, pursuant to the Municipal Utility District Act.
(B) The acquisition is in the interest of the districts ratepayers and the public.
(2) Establish a policy governing acquisitions that shall include, but not be limited to, the following:
(A) Procedures for preventing conflicts of interest and violations of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code.
(B) Procedures for determining how much of an acquisition to accept in lieu of, or in addition to, other forms of remuneration, in order to ensure the district secures a reasonable return on any intellectual property or other resources it provides the private entity.
(C) Procedures governing the approval process for accepting any acquisitions.
(D) Procedures that ensure acquisition of a nonstock security does not unduly influence the amount paid for the associated goods and services.
(3) Post the policy described in paragraph (2) on the districts internet website.
(4) Adopt a resolution at a regular meeting of the board stating the intent of the board to exercise the authority described in subdivision (b).
(d) The authority described in subdivision (b) shall be limited to a total of three acquisitions. Any profit or other gain earned by these acquisitions shall be used to benefit the districts ratepayers.
(e) The value, at the time of acquisition, of any single nonstock security acquired pursuant to the authority described in subdivision (b) shall be limited to no more that 3 percent of the districts annual revenue in the fiscal year the district makes the acquisition.
(f) This section shall remain in effect only until January 1, 2025, 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 16 of Article IV of the California Constitution because of the unique needs of the Sacramento Municipal Utility District regarding nonstock security interests in private entities with which the district partners to further its purposes.
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 16 of Article IV of the California Constitution because of the unique needs of the Sacramento Municipal Utility District regarding nonstock security interests in private entities with which the district partners to further its purposes.
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 16 of Article IV of the California Constitution because of the unique needs of the Sacramento Municipal Utility District regarding nonstock security interests in private entities with which the district partners to further its purposes.
### SEC. 2.