BILL ANALYSIS Ó SB 752 Page 1 Date of Hearing: August 14, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair SB 752 (Roth) - As Amended: August 7, 2013 Policy Committee: Housing and Community Development Vote: 7-0 Judiciary 10-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill establishes the Commercial and Industrial Common Interest Development (CID) Act to govern the regulation of commercial and industrial CIDs within the Davis Stirling Common Interest Development Act. This bill carries over the relevant provisions of the Davis Stirling Act to the Commercial and Industrial Common Interest Development Act. FISCAL EFFECT Minor and absorbable costs for the Secretary of State. The costs, however, will depend on the volume of filings. If there is an unexpected increase in filings, the Secretary of State is authorized to charge a $30 fee for filings and those proceeds could be used to defray the costs. COMMENTS 1)Purpose . The sponsor of this bill, the California Law Revision Commission (CLRC), reviewed the legislative history of the Davis Stirling Act and determined that the intent of the Legislature was to apply only certain provisions of the Davis Stirling Act to commercial and industrial CIDs. The sponsor states the history of the Davis Stirling Act supports the view that the Legislature viewed commercial and industrial CID owners as more sophisticated and better able to protect their interests than residential owners. Shortly after its 1985 enactment, the Davis Stirling Act was amended to exempt commercial and industrial CIDs from certain provisions of the Davis Stirling Act that were seen as unnecessarily burdensome SB 752 Page 2 and costly. The sponsor contends, as the Davis Stirling Act was amended over the years and expanded to triple its original size, the distinction between residential and commercial and industrial CIDs was not maintained. The California Law Revision Commission, after conducting public hearings, recommends the issue be addressed by enacting a separate statute that would govern only non-residential CIDs, and would not contain the regulatory provisions of the Davis-Stirling Act not applicable to those CIDs. SB 752 implements that recommendation, which the commission believes is an important change to reduce unnecessary regulations on businesses without compromising residential protections. 2)Support . The California Business Properties Association argues the Davis-Stirling Act has grown dramatically since its 1985 enactment. However, most of its new provisions were added to address problems faced by homeowners, without separate analysis of whether the new provisions should also apply to businesses. They contend this has resulted in unnecessary regulations applying to non-residential CIDs. 3)Background . CIDs are characterized by a separate ownership of dwelling space coupled with shared interest in a common area. They are restricted by covenants and conditions that limit the use of common area and the separate ownership interests and the management of common property and enforcement of restrictions by a homeowners association. The Davis Stirling Act is the state law that authorizes the creation of CIDs and defines and regulates their activities. CIDs can be either residential, commercial or industrial. This bill would create a separate statutory framework for commercial and industrial CIDs and apply only limited general provisions of the Davis Stirling Act. 4)Previous legislation. a) AB 805 (Torres) Chapter 180, Statutes of 2012, reorganized and recodified the Davis-Stirling Act and made minor substantive changes. b) AB 806 (Torres) Chapter 181, Statutes of 2012, is a technical companion bill to AB 805 that made conforming changes in other codes. SB 752 Page 3 5)There is no registered opposition to this bill. Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081