SECTIONS 14300-14303 - California Statutes

CORPORATIONS CODE

SECTION 14300-14303

14300. Any corporation organized for or engaged in the business of
selling, distributing, supplying or delivering water for irrigation
purposes may provide, and any 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 same are described in the certificate issued
therefor; 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 therewith, except after sale or forfeiture for delinquent
assessments thereon as provided in Section 14303. Notwithstanding
this provision in its articles or bylaws, any such corporation may
sell water to the state, or any department or agency thereof, 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 thereof, 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.

14301. A corporation, including a nonprofit corporation organized
for or engaged in the business of developing, distributing,
supplying, or delivering water for irrigation or domestic use, or
both, may provide in its articles, or may amend its articles to
provide, that its only purpose shall be to develop, distribute,
supply, or deliver water for irrigation or domestic use, or both, to
its members or shareholders, at actual cost plus necessary expenses.
The amendment of the articles may be accomplished by:
(a) The passage by a three-fourths vote of the members of the
board of directors of the corporation of a resolution adopting as the
purpose of the corporation the purpose set forth in this section.
(b) The signing, verification, and filing of a certificate setting
forth the resolution and the manner of its adoption.
The corporation shall not distribute any gains, profits, or
dividends to its members or shareholders except upon the dissolution
of the corporation.

14302. Whenever the owner of real property to which water stock by
the terms of the certificate thereof is appurtenant at the time of
conveyance, by properly executed conveyance, transfers to another the
real property with the appurtenances belonging to the property, or
whenever title to the property passes by execution sale, or by
foreclosure or probate proceedings, the secretary of the water
company that issued the stock shall, upon exhibition to him or her of
a deed of the land duly recorded, or the necessary court order duly
recorded, issue to the grantee named in the conveyance a new
certificate of stock for the number of shares appurtenant to the land
as shown by the books and records of the company. The secretary of
the water company shall enter the name of the grantee upon the books
of the company as the owner of the shares of stock and shall cancel
on the books the number of former shares of stock so appurtenant to
the land in the name of the grantor or of any previous owner of the
land, or of any other person.

14303. 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 thereon may be denied, and they
may be sold and transferred without those lands as if not appurtenant
thereto, 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.