AB 2457: Sacramento Municipal Utility District: 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, electricity, heat, transportation, telephone service, or other means of communication, or means for the collection, treatment, or disposition of garbage, sewage, or refuse matter.

Existing law authorizes 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, if (1) no separate funding is expended solely for the nonstock security, and (2) the value of the 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. Existing law authorizes 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. Existing law limits the pilot program to 3 acquisitions and requires that any profit or gain earned by the acquisitions be used to benefit the districts ratepayers.

This bill would increase the acquisition limit to 6 acquisitions. The bill would repeal the program on January 1, 2035, rather than January 1, 2025. The bill would authorize the board of directors of the district to also hold nonstock security in a corporation or other private entity as full or partial consideration for providing that entity services or access to district facilities.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Sacramento Municipal Utility District.