BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 1077|
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                                   THIRD READING 


          Bill No:  AB 1077
          Author:   Holden (D)
          Amended:  8/31/15 in Senate
          Vote:     21  

           SENATE GOVERNANCE & FIN. COMMITTEE:  6-0, 6/17/15
           AYES:  Hertzberg, Nguyen, Beall, Hernandez, Moorlach, Pavley
           NO VOTE RECORDED:  Lara

           ASSEMBLY FLOOR:  75-0, 5/22/15 - See last page for vote

           SUBJECT:   Mutual water companies: open meetings


          SOURCE:    Author


          DIGEST:  This bill amends the Mutual Water Company Open Meetings  
          Act to allow mutual water companies to use teleconferencing as a  
          means to allow eligible persons to access board meetings.




          Senate Floor Amendments of 8/31/15 allow a mutual water company  
          to provide an eligible person with access to board meetings in  
          person instead of providing teleconferencing.


          ANALYSIS:   


          Existing law:

          1)Specifies that any corporation organized for or engaged in the  








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            business of selling, distributing, supplying, or delivering  
            water for irrigation purposes or for domestic use must be  
            known as a mutual water company.

          2)Defines a "public water system" to mean a system for the  
            provision of water, for human consumption through pipes, or  
            other constructed conveyances that has 15 or more service  
            connections, or regularly serves at least 25 individuals daily  
            at least 60 days out of the year.  


          3)Establishes, pursuant to the Mutual Water Companies Open  
            Meetings Act, increased transparency requirements for mutual  
            water companies that operate a public water system, including  
            the following provisions:

             a)   Defines "eligible person" to mean any of the following:

               i)     A shareholder, or member of the mutual water  
                 company;

               ii)    A commercial, or residential renter to which the  
                 company provides drinking water;

               iii)   An elected official of a city, or county who  
                 represents people who receive drinking water directly  
                 from the company;

               iv)    Any other person deemed eligible by the company's  
                 articles or bylaws.

             b)   Allows an eligible person, upon 24 hours advance written  
               notice, to attend meetings in person;

             c)   Requires an eligible person without giving 24 hours'  
               notice to the board, to be able to attend a meeting that is  
               held via teleconference and requires the notice for the  
               meeting to specify where an eligible person may hear the  
               teleconference meeting.

             d)   Requires eligible persons to be notified at least four  
               days prior to a meeting,








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             e)   Requires the board to permit any eligible person to  
               speak at any meeting, within reasonable time limits.

             f)   Provides, with limited exceptions, that a mutual water  
               company board may not discuss, or take action on any item  
               at a meeting, unless the item was placed on the agenda  
               included in the meeting notice that was posted and  
               distributed pursuant to the Act;

             g)   Allows the board to meet in executive session, during a  
               regular meeting, or exclusively in executive session, for  
               certain purposes.

          4)Requires, pursuant to the Ralph M. Brown Act (Brown Act), that  
            all meetings of a legislative body, as defined, of a local  
            agency be open and public and all persons permitted to attend,  
            unless a closed session is authorized.

          5)Defines, for purposes of the Brown Act, local agency to mean a  
            county, city, whether general law, or chartered city and  
            county, town, school district, municipal corporation,  
            district, political subdivision, or any board, commission, or  
            agency thereof, or other local public agency.

          This bill:

          1)Revises portions of the Mutual Water Company Open Meetings Act  
            to improve the access of eligible people to mutual water  
            company board meetings in the following ways:

             a)   Specifically requires a mutual water company's board to  
               allow an eligible person, to attend a meeting in person if  
               the person has given at least 24 hours' notice of their  
               intent to personally attend the meeting.

             b)   Allows the board to use teleconferencing, to provide any  
               eligible person access to a meeting who has been denied  
               access because either: 

               i)     The eligible person did not give at least 24 hours'  
                 notice of their intent to attend in person, or 








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               ii)    The number of eligible persons who have given  
                 notice, to attend in person exceeds the capacity of the  
                 meeting room that was listed in the meeting notice.  

             c)   Defines teleconferencing to include any electronic  
               means, that allows an eligible person to hear and interact  
               with the board, such as a cell phone with a speakerphone,  
               or audio, or video conferencing over the internet.  

             d)   Requires that, if the board uses teleconferencing, it  
               must provide the meeting materials to the eligible person  
               either electronically; or physically before the meeting  
               begins.

             e)   Provides that a board cannot prohibit a person from  
               attending the meeting either in person, or by  
               teleconference.  For eligible persons that have not given  
               24 hours' notice, the board may choose whether the eligible  
               person attends the meeting in person, or via  
               teleconference, so long as that person is allowed access in  
               some form.

             f)   Makes several changes to the provisions allowing for  
               executive sessions, including:

               i)     Prohibits a board from meeting solely in an  
                 executive session and makes conforming changes to other  
                 provisions;

               ii)    Specifies that a board may prohibit an eligible  
                 person from attending an executive session, where matters  
                 relating to the potential acquisition, of real property,  
                 or water rights will be discussed (in addition to the  
                 circumstances allowed under current law); 

               iii)   Specifies that when a board meets in executive  
                 session to consider litigation, the litigation must be  
                 pending or potential;

               iv)    Requires the board to meet in executive session if  
                 requested by a member subject to discipline, and allows  








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                 the member to attend such a session.

          Background
          
          Local agencies are subject to stringent requirements to hold  
          open, public meetings when making decisions.  The Ralph M. Brown  
          Act, first enacted by the Legislature in 1953, is the set of  
          state laws which guarantees the public's right to attend and  
          participate in local legislative bodies' meetings.  The Brown  
          Act establishes procedures to ensure public access to  
          information maintained by local agencies and that the decisions  
          made by public agencies, are done in an open and transparent  
          fashion to retain public control over those agencies.  

          As private corporations, mutual water companies are not subject  
          to the Brown Act.  Instead, state law gives mutual water  
          companies broad authority, to specify in their articles and  
          bylaws how their meetings are conducted and who may attend.  But  
          because, some mutual water companies operate public water  
          systems that provide water to consumers, who are not  
          shareholders, the Legislature passed AB 230 (Rendon, Chapter  
          633, Statutes of 2013), to increase transparency requirements.   
          AB 230 established the Mutual Water Company Open Meeting Act,  
          which imposes requirements on the meetings of the board of  
          directors of mutual water companies that operate a public water  
          system.


          AB 230 expanded the ability of Californians, who are served by  
          mutual water companies to attend board meetings.  However, due  
          to their small size and often-remote location, many mutual water  
          companies struggle to accommodate all interested parties.  Thus,  
          despite these recent changes to state law, some residents served  
          by mutual water companies but who are not shareholders, or  
          members are concerned that they are not being provided adequate  
          access to the meetings of mutual water companies' boards.


          Comments
          
          1)Purpose of the bill.  This bill safeguards the ability of  
            Californians, served by mutual water companies to provide  








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            input on decisions that affect their water service.  This bill  
            modestly expands on the requirements established by the Mutual  
            Water Company Open Meetings Act, by enabling mutual water  
            companies to use teleconferencing, to ensure that eligible  
            people are able to attend meetings of the board.  By making  
            the use of teleconferencing permissive rather than  
            prescriptive, this bill strikes a balance between ensuring  
            that people served by mutual water companies, have access to  
            meetings without imposing burdensome requirements on small  
            mutual water companies, that don't have large meeting rooms,  
            or large budgets to procure additional space.  In addition,  
            the teleconferencing provision is flexible enough to allow for  
            measures as simple as a speakerphone, to provide access to  
            meetings that people would otherwise be excluded from those  
            meetings.  These changes further the intent of the Mutual  
            Water Company Open Meetings Act, to promote better engagement  
            between shareholders, customers and board members.

          2)Increased Burden on Private Companies.  Opponents of the bill  
            argue that this bill imposes a number of burdensome  
            requirements on mutual water companies that other private  
            companies do not have to meet.  For example, the  
            teleconferencing provisions of this bill potentially allow  
            people who are not eligible to remotely attend private board  
            meetings.  In addition, it could require great expense to  
            provide technology that provides for interaction with  
            customers, which goes beyond the interaction that even public  
            agencies are required to provide.  Finally, this bill sets up  
            mutual water companies, to violate the requirement to provide  
            meeting materials to eligible persons that attend the meeting  
            via teleconference, by only giving the companies 24 hours to  
            send out the materials.



          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:NoLocal:    No


          SUPPORT:   (Verified9/1/15)










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          Sierra Club California


          OPPOSITION:   (Verified9/1/15)


          Rubio Canon Mutual Water Company




          ASSEMBLY FLOOR:  75-0, 5/22/15
          AYES:  Achadjian, Travis Allen, Baker, Bigelow, Bloom, Bonilla,  
            Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau,  
            Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,  
            Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,  
            Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,  
            Melendez, Mullin, Nazarian, Obernolte, Patterson, Perea,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Wilk, Williams,  
            Wood, Atkins
          NO VOTE RECORDED:  Alejo, O'Donnell, Olsen, Waldron, Weber

          Prepared by:Anton Favorini-Csorba / GOV. & F. / (916) 651-4119
          9/1/15 20:29:33


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