BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 563|
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UNFINISHED BUSINESS
Bill No: SB 563
Author: Senate Transportation and Housing Committee
Amended: 7/5/11
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE : 8-1, 5/3/11
AYES: DeSaulnier, Gaines, Huff, Kehoe, Lowenthal, Pavley,
Rubio, Simitian
NOES: Harman
SENATE FLOOR : 37-1, 5/31/11
AYES: Alquist, Anderson, Blakeslee, Calderon, Cannella,
Corbett, Correa, De Le�n, DeSaulnier, Dutton, Evans,
Fuller, Gaines, Hancock, Hernandez, Huff, Kehoe, La
Malfa, Leno, Lieu, Liu, Lowenthal, Negrete McLeod,
Padilla, Pavley, Price, Rubio, Runner, Simitian,
Steinberg, Strickland, Vargas, Walters, Wolk, Wright,
Wyland, Yee
NOES: Harman
NO VOTE RECORDED: Berryhill, Emmerson
ASSEMBLY FLOOR : 71-3, 7/7/11 - See last page for vote
SUBJECT : Common interest developments: meetings
SOURCE : Author
DIGEST : This bill generally prohibits a common interest
development (CID) board from conducting meetings via
electronic transmission, including e-mail, except as
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specified, clarifies that executive sessions are meetings,
reduces the notice period for CID board meetings held
solely in executive session, and provides standards for
teleconference CID board meetings.
Assembly Amendments clarify that written consent to conduct
an emergency meeting may be transmitted electronically.
ANALYSIS : A CID is a form of real estate in which each
homeowner has an exclusive interest in a unit or lot and a
shared or undivided interest in common area property.
Condominiums, planned unit developments, stock
cooperatives, community apartments, and many resident-owned
mobilehome parks all fall under the umbrella of common
interest developments. CIDs are governed by a homeowners'
association with an elected board of directors. The
Davis-Stirling Common Interest Development Act within the
Civil Code provides the legal framework under which common
interest developments are established and operate.
One section of the Davis-Stirling Common Interest
Development Act is known as the CID Open Meeting Act (Act),
which defines a meeting as "any congregation of a majority
of the members of the board at the same time and place to
hear, discuss, or deliberate upon any item of business
scheduled to be heard by the board, except those matters
that may be discussed in executive session." The Act
contains all of the following requirements for CID
meetings:
1. Unless the time and place of a meeting are fixed in the
bylaws or in the case of an emergency meeting, the
association must notify members at least four days in
advance of the time and place for a meeting, and the
notice must include the agenda for the meeting. An
emergency meeting is allowed when "circumstances that
could not have been reasonably foreseen require
immediate attention and possible action by the board,
and which of necessity make it impracticable to provide
notice."
2. The association must allow any member to attend
meetings, except when the board adjourns to executive
session. Executive sessions are allowed to consider
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litigation, contracts, member discipline, personnel
matters, and member payment plans.
3. The association must allow members to speak at any
meeting.
Many CID associations are incorporated and therefore also
governed by the Nonprofit Mutual Benefit Corporation Law
within the Corporations Code. This law contains a
provision allowing the boards of such corporations to take
an action without a meeting if all members of the board
consent in writing to that action.
This bill generally prohibits a CID board from conducting
meetings via electronic transmission, including e-mail,
clarifies that executive sessions are meetings, reduces the
notice period for CID board meetings held solely in
executive session, and provides standards for
teleconference CID board meetings. Specifically, this
bill:
1. Defines "item of business" as "any action within the
authority of the board, except those actions that the
board has validly delegated to any other person or
persons, managing agent, officer of the association, or
committee of the board comprising less than a majority
of directors."
2. Redefines "meeting" as follows:
A. To include any item of business that is within the
authority of the board, as opposed to items scheduled
to be heard by the board.
B. To include executive sessions.
C. To include a teleconference, provided that the
notice for a non-executive session meeting specifies
at least one physical location where members may
attend and where at least one board member will be
present. In addition, all board members
participating in the meeting must be able to hear one
another and members of the association speaking on
matters before the board.
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3. Precludes meetings via electronic transmission,
including e-mail, except to conduct an emergency
meeting, which requires the unanimous written consent of
all the members of the board. Allows written consent to
conduct an emergency meeting to be transmitted
electronically.
4. Requires associations to provide members with notice of
the time and place of all meetings, even if the meetings
times and places are fixed in the bylaws.
5. Reduces the required notice for meetings held solely in
executive session from four days to two.
6. Allows an association to provide notices of meetings via
e-mail with the consent of the member.
7. Clarifies that board must allow a member of the
association to attend and speak at that portion of a
teleconference meeting that is open to members.
8. Provides that the agendas of executive sessions are
association records accessible to members.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/7/11)
California Alliance for Consumer Protection
California Alliance for Retired Americans
Californians Aware
Center for California Homeowner Association Law
Executive Council of Homeowners
OPPOSITION : (Verified 7/7/11)
Association for Common Sense CID Laws
California Association of Community Managers
Community Associations Institute
Golden Rain Foundation of Laguna Woods
Sun City Roseville
Woodbridge Village Association
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ARGUMENTS IN SUPPORT : According to the author, staff on
the Senate Transportation and Housing Committee has
received a number of complaints that CIDs have used the
provisions of the Corporations Code to conduct regular
board meetings via e-mail and without the participation of
members of the association. In order to ensure open
meetings and the ability for members to participate, this
bill clarifies that no CID, whether incorporated or
unincorporated, may conduct meetings via e-mail except in
emergency situations. This bill also clarifies that a CID
board member may participate in a meeting by telephone or
video conference if at least one board member is present at
a physical location where members may attend and speak and
if the connection allows all participants in the meeting to
hear and be heard. This bill improves the transparency of
CID board actions and ensures that members can participate
in decisions that affect their lives and property.
ARGUMENTS IN OPPOSITION : Opponents argue that providing
notice for executive sessions will add to costs and only
lead to member frustration when members realize that they
are not able to attend the executive session meeting. In
addition, opponents object to eliminating the opportunity
for CID boards to take action on items via e-mail outside
of a meeting. They argue that volunteer board members do
not necessarily have the time to convene to act on
relatively minor issues and that routine matters cannot
always wait for four days to satisfy the notice period.
ASSEMBLY FLOOR : 71-3, 07/07/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Conway, Cook, Dickinson, Feuer,
Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Garrick,
Gatto, Gordon, Hagman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Bonnie Lowenthal, Ma, Mansoor, Mendoza,
Miller, Mitchell, Monning, Morrell, Nestande, Nielsen,
Norby, Olsen, Pan, Perea, V. Manuel P�rez, Portantino,
Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. P�rez
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NOES: Donnelly, Grove, Halderman
NO VOTE RECORDED: Chesbro, Davis, Eng, Galgiani, Gorell,
Logue
JJA:kc 7/8/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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