(a) A security interest in water supply property is valid, is enforceable against the pledgor and third parties, is subject to the rights of any third party holding a security interest in the water supply property perfected in the manner described in this section, and attaches when all of the following occur: (1) The commission has issued the financing order authorizing the water supply charges included in the water supply property. (2) Value has been given by the pledgees of the water supply property. (3) The pledgor has signed a security agreement that includes an indenture or financing agreement relating to the issuance of the water rater relief bonds covering the water supply property. (b) A valid and enforceable security interest in water supply property is perfected when it has attached and when a financing statement has been filed in accordance with Chapter 5 (commencing with Section 9501) of Division 9 of the Commercial Code, naming the pledgor of the water supply property as âdebtorâ and identifying the water supply property. Any description of the water supply property shall be sufficient if it refers to the financing order creating the water supply property. A copy of the financing statement shall be filed with the commission by the qualifying water utility that is the pledgor or transferor of the water supply property, and the commission may require the qualifying water utility to make other filings with respect to the security interest in accordance with procedures it may establish, provided that the filings do not affect the perfection of the security interest. (c) A perfected security interest in water supply property is a continuously perfected security interest in all revenues and proceeds arising with respect to the water supply property, whether or not the revenues or proceeds have accrued. Conflicting security interests shall rank according to priority in time of perfection. Water supply property shall constitute property for all purposes, including for contracts securing water rate relief bonds, whether or not the revenues and proceeds arising with respect to the water supply property have accrued. (d) Subject to the terms of the security agreement covering the water supply property and the rights of any third party holding a security interest in the water supply property perfected in the manner described in this section, the validity and relative priority of a security interest created under this section is not defeated or adversely affected by the commingling of revenues arising with respect to the water supply property with other funds of the qualifying water utility that is the pledgor or transferor of the water supply property, or by any security interest in a deposit account of that qualifying water utility perfected under Division 9 (commencing with Section 9101) of the Commercial Code into which the revenues are deposited. Subject to the terms of the security agreement, upon compliance with the requirements of subdivision (b) of Section 9312 of the Commercial Code, the pledgees of the water supply property shall have a perfected security interest in all cash and deposit accounts of the qualifying water utility in which revenues arising with respect to the water supply property have been commingled with other funds, but the perfected security interest shall be limited to an amount not greater than the amount of the revenues with respect to the water supply property received by the qualifying water utility within 12 months before either of the following: (1) A default under the security agreement. (2) The institution of insolvency proceedings by or against the qualifying water utility, less payments from the revenues to the pledgees during that 12-month period. (e) If a default occurs under the security agreement covering the water supply property, the pledgees of the water supply property, subject to the terms of the security agreement, shall have all rights and remedies of a secured party upon
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