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  








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            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.









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           5)There is no registered opposition to this bill.   

           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081