SB1291 - Mutual water companies.

Amended IN Senate March 24, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 1291 Introduced by Senator Gonzalez February 20, 2026 An act to amend Section 116680 of the Health and Safety Code, relating to drinking water. Sections 14305, 14306, and 14307 of, and to add Section 14308 to, the Corporations Code, and to add Section 116351 to the Health and Safety Code, relating to water. LEGISLATIVE COUNSEL'S DIGEST SB 1291, as amended, Gonzalez. Drinking water: consolidation. Mutual water companies. Under existing law, a mutual water company is defined as a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation or domestic purposes that provides in its articles or bylaws that the water shall be sold, distributed, supplied, or delivered only to owners of its shares, as specified. The Mutual Water Company Open Meeting Act requires a board of directors of a mutual water company that operates a public water system to allow an eligible person, as defined, to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours’ advance written notice of their intent to personally attend the meeting. Existing law authorizes the board to allow an eligible person who was denied attendance at a meeting for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting, to attend the meeting by teleconference. Existing law requires the board to provide to an eligible person attending a meeting by teleconference a copy of the documents to be discussed at the meeting, except as specified. This bill would eliminate the 24-hour notice requirement for an eligible person to personally attend a meeting. The bill would authorize the board of directors of a mutual water company with less than 50 connections to use teleconferencing to provide any eligible person access to the meeting and would require a board of directors of a mutual water company with 50 or more connections to use teleconferencing to provide any eligible person access to the meeting. Existing law requires the board of a mutual water company that operates a public water system to adopt an annual budget, as specified, and also requires the board to contract with a public accountant, as specified, to conduct an annual review of the financial records and reports of the mutual water company. Existing law requires the minutes of a board meeting, as specified, the annual budget, the accounting report, and other specified documents to be provided to an eligible person upon request and upon reimbursement of the mutual water company’s costs for providing the document. This bill would require those documents to be provided to an eligible person upon request in an electronic form or in a hard copy. The bill would authorize a mutual water company to require an eligible person who requests a hard copy of those documents to pay a fee for the direct costs of duplication, but would prohibit a mutual water company from charging a fee for providing those documents electronically. The bill would require the mutual water company to display on the mutual water company’s internet website detailed information on how an eligible person can request those documents, as specified. Existing law requires eligible persons to be given notice of the time and place of a meeting of the board of directors at least 4 days prior to the meeting, except as specified. This bill would also require the notice of the meeting to be posted on the mutual water company’s internet website, as specified, and would require notice of the meeting and the agenda to be distributed by electronic means to specified eligible persons 4 days prior to the meeting. Existing law defines eligible persons for purposes of these provisions to include various persons, including 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. This bill would also include within that definition, a federal or state official who represents people who receive drinking water directly from the mutual water company on a retail basis, and would include a representative of any of those elected officials. Existing law requires every public water system, as a condition of its operating permit, to annually prepare a consumer confidence report and mail or deliver a copy of that report to each customer, except as specified. This bill would require a mutual water company to make a downloadable electronic copy of its consumer confidence report available to the public on its internet website. The bill would also require the mutual water company to make a good faith effort to notify a consumer who is served by the public water system, but who is not a bill-paying customer of the report using a mix of methods appropriate to the particular public water system, as specified. The bill would require a mutual water company to annually send a summary to the State Water Resources Control Board summarizing its efforts to provide notice of the report to those consumers and would also require the mutual water company to post that summary on its internet website, as provided. The California Safe Drinking Water Act provides for the operation of public water systems and imposes on the State Water Resources Control Board various responsibilities and duties relating to the regulation of drinking water to protect public health. This bill would require the board to, on or before December 31, 2027, complete an assessment of mutual water companies that operate a public water system, with a focus on those serving disadvantaged and low-income communities. The bill would require the assessment to include, among other things, an assessment of compliance history with state drinking water standards by a representative sample of mutual water companies serving disadvantaged and low-income communities. The bill would also require the board to, among other things, host public hearings in disadvantaged and low-income communities served by mutual water companies to receive community input to inform the assessment, as provided. The bill would require mutual water companies to cooperate with the board in completing the assessment and to reasonably attempt to furnish all information and feedback requested by the board, as provided. The bill would require the board to post the assessment on its internet website and to provide the assessment to the Legislature. 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 various responsibilities and duties. The act authorizes the state board to order consolidation with, or extension of service from, a receiving water system if a public water system or state small water system serving a disadvantaged community consistently fails to provide an adequate supply of safe drinking water or if a disadvantaged community is substantially reliant on domestic wells that consistently fail to provide an adequate supply of safe drinking water. Existing law makes related findings and declarations. This bill would make a nonsubstantive change to those findings and declarations. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 14305 of the Corporations Code is amended to read: 14305. (a) (1) This section shall be known known, and may be cited cited, as the Mutual Water Company Open Meeting Act. (2) This section shall only apply to a mutual water company that operates a public water system. (b) (1) (A) A board of directors of a mutual water company shall allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. board. (B) Notwithstanding any other law, the board of directors of a mutual water company with less than 50 connections may use teleconferencing to provide any eligible person access to the meeting that otherwise would be denied attendance at a meeting of the board for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice issued pursuant to subdivision (f). The meeting. A board of directors of a mutual water company with 50 or more connections shall use teleconferencing to provide any eligible person access to the meeting. A teleconferenced meeting or proceeding shall comply with this section and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company. If the board uses teleconferencing, Upon request, the board shall provide to an eligible person attending a meeting by teleconference, before the meeting begins, an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting. If the eligible person requests a photocopy of the documents, the board may require the eligible person to pay a fee to cover the direct costs of duplication. The board shall not charge a fee for providing an electronic copy of the documents. A board of directors of a mutual water company shall not prohibit an eligible person from attending a meeting of the board either in person, so long as the eligible person has complied with the notice requirement of paragraph (A), person or by teleconference except as provided by paragraph (2). A board of directors may allow an eligible person to attend the meeting personally in lieu of using teleconferencing pursuant to this paragraph. (C) For purposes of this subdivision, the term “teleconference” means, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology. (2) A board of directors of a mutual water company shall only meet in executive session during a meeting. A board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, matters relating to the formation of contracts with third parties, including matters relating to the potential acquisition of real property or water rights, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholder’s request, regarding the member or shareholder’s payment of assessments, as specified in Section 14303. (3) The board of directors of a mutual water company shall meet in executive session, if requested by a member or shareholder who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session. (4) An eligible person shall be entitled to attend a teleconference meeting, as specified in paragraph (3) of subdivision (o), or the portion of the teleconference meeting that is open to eligible persons, and shall be entitled to attend with or without fulfilling the notice requirement in paragraph (1). persons. The teleconference meeting or portion of the meeting that is open to eligible persons shall be audible to the eligible person in a location specified in the notice of the meeting. (c) Any matter discussed in executive session shall be generally noted in the minutes of the meeting at which the executive session occurred. (d) The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of a mutual water company, conducted on or after January 1, 2014, other than an executive session, shall be available to eligible persons within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be provided to any eligible person upon request and upon reimbursement of the mutual water company’s costs for providing the minutes. in an electronic form or in a hard copy pursuant to Section 14307. (e) The pro forma annual budget required in Section 14306 shall be available to eligible persons within 30 days of the meeting at which the budget was adopted. The budget shall be provided to any eligible person upon request and upon reimbursement of the mutual water company’s costs. in an electronic form or in a hard copy pursuant to Section 14307. (f) (1) Unless the bylaws provide for a longer period of notice, eligible persons shall be given notice of the time and place of a meeting as defined in subdivision (o), except for an emergency meeting, at least four days prior to the meeting. Notice shall be given by posting the notice on the mutual water company’s internet website in a clear manner and in an easily navigable location, and by posting the notice in a prominent, publicly accessible place or places within the territory served by the mutual water company and company. Notice shall also be given by mail or electronic means to any eligible person who had requested notification of board meetings by mail, meetings, at the address or email address requested by the eligible person. Eligible The board may require eligible persons requesting notice by mail shall to pay the direct costs of reproduction and mailing of the notice in advance. The board shall not charge a fee for providing the notice by electronic means. Notice may also be given by mail, by delivery of the notice to each unit served by the mutual water company, or, with the consent of the eligible person, by electronic means. The notice shall contain the agenda for the meeting. (2) Detailed information on how an eligible person can request to receive notification of board meetings and agendas prior to the meetings shall be displayed on the mutual water company’s internet website in a clear manner and in an easily navigable location. (3) The notice and agenda described in paragraph (1) shall be distributed by electronic means to eligible persons defined in subparagraph (C) of paragraph (1) of subdivision (o), four days prior to the meeting. (g) An emergency meeting of the board may be called by the chief executive officer of the mutual water company, or by any two members of the board of directors other than the chief executive officer, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section. (h) The board of directors of a mutual water company shall [Text truncated for display. 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