AB 1077: Mutual water companies: open meetings.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-10-09
Under existing law, a mutual water company is defined as a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation or domestic purposes that provides in its articles or bylaws that the water shall be sold, distributed, supplied, or delivered only to owners of its shares, as specified.
A mutual water company may be organized under the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. The Mutual Water Company Open Meeting Act authorizes an eligible person, upon 24 hours advance written notice, to attend meetings of the board of directors of a mutual water company that operates a public water system, except when the board adjourns to, or meets solely in, executive session.
This bill would prohibit a mutual water company from meeting solely in an executive session without holding a meeting. The bill would require notice of a meeting to be given to an eligible person at least 4 days prior to the meetings. The bill would require a board of directors of a mutual water company to allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. The bill would authorize the board to allow an eligible person who was denied attendance at a meeting for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting, to attend the meeting by teleconference, and would further require the board to provide to an eligible person attending a meeting by teleconference a copy of the documents to be discussed at the meeting, as specified.
Under existing law, a mutual water company is defined as a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation or domestic purposes that provides in its articles or bylaws that the water shall be sold, distributed, supplied, or delivered only to owners of its shares, as specified.
A mutual water company may be organized under the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. The Mutual Water Company Open Meeting Act authorizes an eligible person, upon 24 hours advance written notice, to attend meetings of the board of directors of a mutual water company that operates a public water system, except when the board adjourns to, or meets solely in, executive session.
This bill would prohibit a mutual water company from meeting solely in an executive session without holding a meeting. The bill would require notice of a meeting to be given to an eligible person at least 4 days prior to the meetings. The bill would require a board of directors of a mutual water company to allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. The bill would authorize the board to allow an eligible person who was denied attendance at a meeting for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting, to attend the meeting by teleconference, and would further require the board to provide to an eligible person attending a meeting by teleconference a copy of the documents to be discussed at the meeting, as specified.
Under existing law, a mutual water company is defined as a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation or domestic purposes that provides in its articles or bylaws that the water shall be sold, distributed, supplied, or delivered only to owners of its shares, as specified.
A mutual water company may be organized under the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. The Mutual Water Company Open Meeting Act authorizes an eligible person, upon 24 hours advance written notice, to attend meetings of the board of directors of a mutual water company that operates a public water system, except when the board adjourns to, or meets solely in, executive session.
This bill would prohibit a mutual water company from meeting solely in an executive session without holding a meeting. The bill would require notice of a meeting to be given to an eligible person at least 4 days prior to the meetings. The bill would require a board of directors of a mutual water company to allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. The bill would require authorize the board to allow an eligible person who was denied attendance at a meeting for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting, to attend the meeting by teleconference, and would further require the board to provide to an eligible person attending a meeting by teleconference a copy of the documents to be discussed at the meeting, as specified.
Under existing law, a mutual water company is defined as a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation or domestic purposes that provides in its articles or bylaws that the water shall be sold, distributed, supplied, or delivered only to owners of its shares, as specified.
A mutual water company may be organized under the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. The Mutual Water Company Open Meeting Act authorizes an eligible person, upon 24 hours advance written notice, to attend meetings of the board of directors of a mutual water company that operates a public water system, except when the board adjourns to, or meets solely in, executive session.
This bill would prohibit a mutual water company from meeting solely in an executive session without holding a meeting. The bill would require notice of a meeting to be given to an eligible person at least 4 days prior to the meetings. The bill would require a board of directors of a mutual water company to allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. The bill would require the board to allow an eligible person who was denied attendance at a meeting for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting, to attend the meeting by teleconference, and would further require the board to provide to an eligible person attending a meeting by teleconference a copy of the documents to be discussed at the meeting, as specified.
Under existing law, a mutual water company is defined as a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation or domestic purposes that provides in its articles or bylaws that the water shall be sold, distributed, supplied, or delivered only to owners of its shares, as specified.
A mutual water company may be organized under the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. The Mutual Water Company Open Meeting Act authorizes an eligible person, upon 24 hours advance written notice, to attend meetings of the board of directors of a mutual water company that operates a public water system, except when the board adjourns to, or meets solely in, executive session.
This bill would prohibit a mutual water company from meeting solely in an executive session without holding a meeting. The bill would require notice of a meeting to be given to an eligible person at least 4 days prior to the meetings. The bill would require a board of directors of a mutual water company to allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. The bill would require the board to allow an eligible person who was denied attendance at a meeting for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting, to attend the meeting by teleconference, and would further require the board to provide to an eligible person attending a meeting by teleconference a copy of the documents to be discussed at the meeting, as specified.
Under existing law, a mutual water company is defined as a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation or domestic purposes that provides in its articles or bylaws that the water shall be sold, distributed, supplied, or delivered only to owners of its shares, as specified.
A mutual water company may be organized under the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. The Mutual Water Company Open Meeting Act authorizes an eligible person, upon 24 hours advance written notice, to attend meetings of the board of directors of a mutual water company that operates a public water system, except when the board adjourns to, or meets solely in, executive session.
This bill would prohibit a mutual water company from meeting solely in an executive session without holding a meeting. The bill would require notice of a meeting to be given to an eligible person at least 5 business 4 days prior to the meetings. The bill would require a board of directors of a mutual water company to allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. The bill would require the board to allow an eligible person who was denied attendance at a meeting for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting, to be able to attend the meeting by technology that allows the eligible person to hear the meeting and verbally interact with the board, teleconference, and would further require the board to provide to an eligible person attending a meeting by technology teleconference a copy of the documents to be discussed at the meeting, as specified.
Under existing law, a mutual water company is defined as a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation or domestic purposes that provides in its articles or bylaws that the water shall be sold, distributed, supplied, or delivered only to owners of its shares, as specified.
A mutual water company may be organized under the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. The Mutual Water Company Open Meeting Act authorizes an eligible person, upon 24 hours advance written notice, to attend meetings of the board of directors of a mutual water company that operates a public water system, except when the board adjourns to, or meets solely in, executive session.
This bill would prohibit a mutual water company from meeting solely in an executive session without holding a meeting. The bill would require notice of a meeting to be given to an eligible person at least 5 business days prior to the meetings. The bill would require a board of directors of a mutual water company to allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. The bill would require the board to allow an eligible person who was denied attendance at a meeting for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting, to be able to attend the meeting by technology that allows the eligible person to hear the meeting and verbally interact with the board, and would further require the board to provide to an eligible person attending a meeting by technology a copy of the documents to be discussed at the meeting, as specified.
Under existing law, a mutual water company is defined as a corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation or domestic purposes that provides in its articles or bylaws that the water shall be sold, distributed, supplied, or delivered only to owners of its shares, as specified.
A mutual water company may be organized under the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. The Mutual Water Company Open Meeting Act authorizes an eligible person, upon 24 hours advance written notice, to attend meetings of the board of directors of a mutual water company that operates a public water system, except when the board adjourns to, or meets solely in, executive session.
This bill would prohibit a mutual water company from meeting solely in an executive session without holding a meeting. The bill would require a board of directors of a mutual water company to allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. The bill would require the board to allow an eligible person who was denied attendance at a meeting for failure to provide this notice to be able to attend the meeting by technology that allows the eligible person to hear the meeting and verbally interact with the board, and would further require the board to provide to an eligible person attending a meeting by technology a copy of the documents to be discussed at the meeting, as specified.
The Legislature finds and declares all of the following:
(a)Mutual water companies are nonprofit entities that seek to provide quality water service to their residential, commercial, municipal, and agricultural shareholders or members, many through small water systems and in disadvantaged communities throughout the state.
(b)Since 2013, mutual water companies have made great improvements to water quality and service reliability across California, as well as to the transparency of their operations and finances.
(c)Mutual water companies have been leaders in promoting water conservation and efficiency since the drought emergency in California began.
(d)Mutual water companies serve as the sole water provider in their service territories and act in many ways like public agencies, and they therefore should take reasonable steps to ensure their shareholders and customers have a voice in the operations of the company.
(e)Many mutual water companies have small or no meeting facilities, some of which meet in board members residences, that can safely hold only a limited number of people, and are located in remote parts of California that are difficult to access by some shareholders and customers of the mutual water company.
(f)Many small mutual water companies have limited financial means and it is important that their financial resources be put to efficient use in fulfilling their duty to provide safe and affordable water to their shareholders and members.
(g)Mutual water companies are unique, and unlike large public agencies or for-profit utilities, these nonprofit organizations are solely responsible to their shareholders and customers and not the broader public outside of their service area.
(h)Given the distinctive operational constraints faced by mutual water companies, the Legislature believes that mutual water companies should, where economically and technologically feasible, have means to provide the greatest shareholder and customer access to meetings within these constraints.
SEC. 2.Section 14305 of the Corporations Code is amended to read:14305.(a)(1)This section shall be known and may be cited as the Mutual Water Company Open Meeting Act.
(2)This section shall only apply to a mutual water company that operates a public water system.
(b)(1)(A)A board of directors of a mutual water company shall allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting.
(B)Notwithstanding any other law, the board of directors may use teleconferencing to provide any eligible person access to the meeting that otherwise would be denied attendance at a meeting of the board for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice issued pursuant to subdivision (f). The teleconferenced meeting or proceeding shall comply with this section and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company. If the board uses teleconferencing, the board shall provide to an eligible person attending a meeting by teleconference, before the meeting begins, an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting. A board of directors of a mutual water company shall not prohibit an eligible person from attending a meeting of the board either in person, so long as the eligible person has complied with the notice requirement of paragraph (A), or by teleconference except as provided by paragraph (2). A board of directors may allow an eligible person to attend the meeting personally in lieu of using teleconferencing pursuant to this paragraph.
(C)For purposes of this subdivision, the term teleconference means, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology.
(2)A board of directors of a mutual water company shall only meet in executive session during a meeting. A board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, matters relating to the formation of contracts with third parties, including matters relating to the potential acquisition of real property or water rights, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholders request, regarding the member or shareholders payment of assessments, as specified in Section 14303.
(3)The board of directors of a mutual water company shall meet in executive session, if requested by a member or shareholder who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session.
(4)An eligible person shall be entitled to attend a teleconference meeting, as specified in paragraph (3) of subdivision (o), or the portion of the teleconference meeting that is open to eligible persons, and shall be entitled to attend with or without fulfilling the notice requirement in paragraph (1). The teleconference meeting or portion of the meeting that is open to eligible persons shall be audible to the eligible person in a location specified in the notice of the meeting.
(c)Any matter discussed in executive session shall be generally noted in the minutes of the meeting at which the executive session occurred.
(d)The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of a mutual water company, conducted on or after January 1, 2014, other than an executive session, shall be available to eligible persons within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs for providing the minutes.
(e)The pro forma budget required in Section 14306 shall be available to eligible persons within 30 days of the meeting at which the budget was adopted. The budget shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs.
(f)Unless the bylaws provide for a longer period of notice, eligible persons shall be given notice of the time and place of a meeting as defined in subdivision (o), except for an emergency meeting, at least four days prior to the meeting. Notice shall be given by posting the notice in a prominent, publicly accessible place or places within the territory served by the mutual water company and by mail to any eligible person who had requested notification of board meetings by mail, at the address requested by the eligible person. Eligible persons requesting notice by mail shall pay the costs of reproduction and mailing of the notice in advance. Notice may also be given by mail, by delivery of the notice to each unit served by the mutual water company, or, with the consent of the eligible person, by electronic means. The notice shall contain the agenda for the meeting.
(g)An emergency meeting of the board may be called by the chief executive officer of the mutual water company, or by any two members of the board of directors other than the chief executive officer, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section.
(h)The board of directors of a mutual water company shall permit any eligible person to speak at any meeting of the mutual water company or the board of directors, except for any portion of a meeting that is held in executive session outside the presence of eligible persons. A reasonable time limit for all eligible persons to speak to the board of directors or before a meeting of the mutual water company shall be established by the board of directors.
(i)(1)Except as described in paragraphs (2) to (4), inclusive, the board of directors of the mutual water company shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit an eligible person who is not a member of the board from speaking on issues not on the agenda.
(2)Notwithstanding paragraph (1), a member of the board of directors, mutual water company officers, or a member of the staff of the mutual water company, may do any of the following:
(A)Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).
(B)Ask a question for clarification, make an announcement, or make a brief report on his or her own activities, whether in response to questions posed by an eligible person or based upon his or her own initiative.
(3)Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:
(A)Provide a reference to, or provide other resources for factual information to, the mutual water companys officers or staff.
(B)Request the mutual water companys officers or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct the mutual water companys officers or staff to place a matter of business on a future agenda.
(C)Direct the mutual water companys officers or staff to perform administrative tasks that are necessary to carry out this subdivision.
(4)(A)Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:
(i)Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.
(ii)Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).
(iii)The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.
(B)Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting.
(j)(1)Notwithstanding any other law, the board of directors shall not take action on any item of business outside of a meeting.
(2)(A)Notwithstanding any other provision of law, the board of directors shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in subparagraph (B).
(B)Electronic transmissions may be used as a method of conducting an emergency meeting if all members of the board, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the meeting of the board. These written consents may be transmitted electronically.
(k)(1)An eligible person may bring a civil action for declaratory or equitable relief for a violation of this section by a mutual water company for which he or she is defined as an eligible person for a judicial determination that an action taken by the board is null and void under this section.
(2)Prior to the commencement of an action pursuant to paragraph (1), the eligible person shall make a demand on the board to cure or correct the action alleged to be taken in violation of this section. The demand shall be in writing, and submitted within 90 days from the date the action was taken. The demand shall state the challenged action of the board and the nature of the alleged violation.
(3)Within 30 days of receipt of the demand, the board shall cure or correct the challenged action and inform the demanding party in writing of its actions to cure or correct, or inform the demanding party in writing of its decision not to cure or correct the challenged action.
(4)Within 15 days of receipt of the written notice of the boards decision to cure or correct or not to cure or correct, or within 15 days of the expiration of the 30-day period to cure or correct, whichever is earlier, the demanding party shall commence the action pursuant to paragraph (1). If the demanding party fails to commence the action pursuant to paragraph (1), that party shall be barred from commencing the action thereafter.
(l)A board action that is alleged to have been taken in violation of this section shall not be determined to be void if the action taken was in substantial compliance with this section.
(m)The fact that the board of directors of a mutual water company takes subsequent action to cure or correct an action taken pursuant to this section shall not be construed as, or admissible as evidence of, a violation of this section.
(n)An eligible person who prevails in a civil action to enforce his or her rights pursuant to this section shall be entitled to reasonable attorneys fees and court costs. A prevailing mutual water company shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.
(o)As used in this section:
(1)Eligible person means a person who is any of the following:
(A)A shareholder or member of the mutual water company.
(B)A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water.
(C)An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis.
(D)Any other person eligible to participate in the mutual water companys meetings under provisions of the companys articles or bylaws.
(2)Item of business means any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, officer of the mutual water company, or committee of the board comprising less than a majority of the directors.
(3)Meeting means either of the following:
(A)A 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 that is within the authority of the board.
(B)A teleconference in which a majority of the members of the board, in different locations, are connected by electronic means, through audio or video or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of this title. The notice of the teleconference meeting shall identify at least one physical location so that members of the mutual water company may attend and at least one member of the board of directors or a person designated by the board shall be present at that location. Participation by board members in a teleconference meeting constitutes presence at that meeting as long as all board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the board.
(4)Mutual water company means a mutual water company, as defined in Section 14300, that operates a public water system, as defined in Section 14300.5.
The Legislature finds and declares all of the following:
(a)Mutual water companies are nonprofit entities that seek to provide quality water service to their residential, commercial, municipal, and agricultural shareholders or members, many through small water systems and in disadvantaged communities throughout the state.
(b)Since 2013, mutual water companies have made great improvements to water quality and service reliability across California, as well as to the transparency of their operations and finances.
(c)Mutual water companies have been leaders in promoting water conservation and efficiency since the drought emergency in California began.
(d)Mutual water companies serve as the sole water provider in their service territories and act in many ways like public agencies, and they therefore should take reasonable steps to ensure their shareholders and customers have a voice in the operations of the company.
(e)Many mutual water companies have small or no meeting facilities, some of which meet in board members residences, that can safely hold only a limited number of people, and are located in remote parts of California that are difficult to access by some shareholders and customers of the mutual water company.
(f)Many small mutual water companies have limited financial means and it is important that their financial resources be put to efficient use in fulfilling their duty to provide safe and affordable water to their shareholders and members.
(g)Mutual water companies are unique, and unlike large public agencies or for-profit utilities, these nonprofit organizations are solely responsible to their shareholders and customers and not the broader public outside of their service area.
(h)Given the distinctive operational constraints faced by mutual water companies, the Legislature believes that mutual water companies should, where economically and technologically feasible, have means to provide the greatest shareholder and customer access to meetings within these constraints.
SEC. 2.Section 14305 of the Corporations Code is amended to read:14305.(a)(1)This section shall be known and may be cited as the Mutual Water Company Open Meeting Act.
(2)This section shall only apply to a mutual water company that operates a public water system.
(b)(1)(A)A board of directors of a mutual water company shall allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting.
(B)Notwithstanding any other law, the board of directors may use teleconferencing to provide any eligible person access to the meeting that otherwise would be denied attendance at a meeting of the board for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice issued pursuant to subdivision (f). The teleconferenced meeting or proceeding shall comply with this section and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company. If the board uses teleconferencing, the board shall provide to an eligible person attending a meeting by teleconference, before the meeting begins, an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting. A board of directors of a mutual water company shall not prohibit an eligible person from attending a meeting of the board either in person, so long as the eligible person has complied with the notice requirement of paragraph (A), or by teleconference except as provided by paragraph (2). A board of directors may allow an eligible person to attend the meeting personally in lieu of using teleconferencing pursuant to this paragraph.
(C)For purposes of this subdivision, the term teleconference means, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology.
(2)A board of directors of a mutual water company shall only meet in executive session during a meeting. A board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, matters relating to the formation of contracts with third parties, including matters relating to the potential acquisition of real property or water rights, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholders request, regarding the member or shareholders payment of assessments, as specified in Section 14303.
(3)The board of directors of a mutual water company shall meet in executive session, if requested by a member or shareholder who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session.
(4)An eligible person shall be entitled to attend a teleconference meeting, as specified in paragraph (3) of subdivision (o), or the portion of the teleconference meeting that is open to eligible persons, and shall be entitled to attend with or without fulfilling the notice requirement in paragraph (1). The teleconference meeting or portion of the meeting that is open to eligible persons shall be audible to the eligible person in a location specified in the notice of the meeting.
(c)Any matter discussed in executive session shall be generally noted in the minutes of the meeting at which the executive session occurred.
(d)The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of a mutual water company, conducted on or after January 1, 2014, other than an executive session, shall be available to eligible persons within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs for providing the minutes.
(e)The pro forma budget required in Section 14306 shall be available to eligible persons within 30 days of the meeting at which the budget was adopted. The budget shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs.
(f)Unless the bylaws provide for a longer period of notice, eligible persons shall be given notice of the time and place of a meeting as defined in subdivision (o), except for an emergency meeting, at least four days prior to the meeting. Notice shall be given by posting the notice in a prominent, publicly accessible place or places within the territory served by the mutual water company and by mail to any eligible person who had requested notification of board meetings by mail, at the address requested by the eligible person. Eligible persons requesting notice by mail shall pay the costs of reproduction and mailing of the notice in advance. Notice may also be given by mail, by delivery of the notice to each unit served by the mutual water company, or, with the consent of the eligible person, by electronic means. The notice shall contain the agenda for the meeting.
(g)An emergency meeting of the board may be called by the chief executive officer of the mutual water company, or by any two members of the board of directors other than the chief executive officer, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section.
(h)The board of directors of a mutual water company shall permit any eligible person to speak at any meeting of the mutual water company or the board of directors, except for any portion of a meeting that is held in executive session outside the presence of eligible persons. A reasonable time limit for all eligible persons to speak to the board of directors or before a meeting of the mutual water company shall be established by the board of directors.
(i)(1)Except as described in paragraphs (2) to (4), inclusive, the board of directors of the mutual water company shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit an eligible person who is not a member of the board from speaking on issues not on the agenda.
(2)Notwithstanding paragraph (1), a member of the board of directors, mutual water company officers, or a member of the staff of the mutual water company, may do any of the following:
(A)Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).
(B)Ask a question for clarification, make an announcement, or make a brief report on his or her own activities, whether in response to questions posed by an eligible person or based upon his or her own initiative.
(3)Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:
(A)Provide a reference to, or provide other resources for factual information to, the mutual water companys officers or staff.
(B)Request the mutual water companys officers or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct the mutual water companys officers or staff to place a matter of business on a future agenda.
(C)Direct the mutual water companys officers or staff to perform administrative tasks that are necessary to carry out this subdivision.
(4)(A)Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:
(i)Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.
(ii)Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).
(iii)The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.
(B)Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting.
(j)(1)Notwithstanding any other law, the board of directors shall not take action on any item of business outside of a meeting.
(2)(A)Notwithstanding any other provision of law, the board of directors shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in subparagraph (B).
(B)Electronic transmissions may be used as a method of conducting an emergency meeting if all members of the board, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the meeting of the board. These written consents may be transmitted electronically.
(k)(1)An eligible person may bring a civil action for declaratory or equitable relief for a violation of this section by a mutual water company for which he or she is defined as an eligible person for a judicial determination that an action taken by the board is null and void under this section.
(2)Prior to the commencement of an action pursuant to paragraph (1), the eligible person shall make a demand on the board to cure or correct the action alleged to be taken in violation of this section. The demand shall be in writing, and submitted within 90 days from the date the action was taken. The demand shall state the challenged action of the board and the nature of the alleged violation.
(3)Within 30 days of receipt of the demand, the board shall cure or correct the challenged action and inform the demanding party in writing of its actions to cure or correct, or inform the demanding party in writing of its decision not to cure or correct the challenged action.
(4)Within 15 days of receipt of the written notice of the boards decision to cure or correct or not to cure or correct, or within 15 days of the expiration of the 30-day period to cure or correct, whichever is earlier, the demanding party shall commence the action pursuant to paragraph (1). If the demanding party fails to commence the action pursuant to paragraph (1), that party shall be barred from commencing the action thereafter.
(l)A board action that is alleged to have been taken in violation of this section shall not be determined to be void if the action taken was in substantial compliance with this section.
(m)The fact that the board of directors of a mutual water company takes subsequent action to cure or correct an action taken pursuant to this section shall not be construed as, or admissible as evidence of, a violation of this section.
(n)An eligible person who prevails in a civil action to enforce his or her rights pursuant to this section shall be entitled to reasonable attorneys fees and court costs. A prevailing mutual water company shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.
(o)As used in this section:
(1)Eligible person means a person who is any of the following:
(A)A shareholder or member of the mutual water company.
(B)A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water.
(C)An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis.
(D)Any other person eligible to participate in the mutual water companys meetings under provisions of the companys articles or bylaws.
(2)Item of business means any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, officer of the mutual water company, or committee of the board comprising less than a majority of the directors.
(3)Meeting means either of the following:
(A)A 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 that is within the authority of the board.
(B)A teleconference in which a majority of the members of the board, in different locations, are connected by electronic means, through audio or video or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of this title. The notice of the teleconference meeting shall identify at least one physical location so that members of the mutual water company may attend and at least one member of the board of directors or a person designated by the board shall be present at that location. Participation by board members in a teleconference meeting constitutes presence at that meeting as long as all board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the board.
(4)Mutual water company means a mutual water company, as defined in Section 14300, that operates a public water system, as defined in Section 14300.5.
The Legislature finds and declares all of the following:
(a)Mutual water companies are nonprofit entities that seek to provide quality water service to their residential, commercial, municipal, and agricultural shareholders or members, many through small water systems and in disadvantaged communities throughout the state.
(b)Since 2013, mutual water companies have made great improvements to water quality and service reliability across California, as well as to the transparency of their operations and finances.
(c)Mutual water companies have been leaders in promoting water conservation and efficiency since the drought emergency in California began.
(d)Mutual water companies serve as the sole water provider in their service territories and act in many ways like public agencies, and they therefore should take reasonable steps to ensure their shareholders and customers have a voice in the operations of the company.
(e)Many mutual water companies have small or no meeting facilities, some of which meet in board members residences, that can safely hold only a limited number of people, and are located in remote parts of California that are difficult to access by some shareholders and customers of the mutual water company.
(f)Many small mutual water companies have limited financial means and it is important that their financial resources be put to efficient use in fulfilling their duty to provide safe and affordable water to their shareholders and members.
(g)Mutual water companies are unique, and unlike large public agencies or for-profit utilities, these nonprofit organizations are solely responsible to their shareholders and customers and not the broader public outside of their service area.
(h)Given the distinctive operational constraints faced by mutual water companies, the Legislature believes that mutual water companies should, where economically and technologically feasible, have means to provide the greatest shareholder and customer access to meetings within these constraints.
SEC. 2.Section 14305 of the Corporations Code is amended to read:14305.(a)(1)This section shall be known and may be cited as the Mutual Water Company Open Meeting Act.
(2)This section shall only apply to a mutual water company that operates a public water system.
(b)(1)(A)A board of directors of a mutual water company shall allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. Notwithstanding
(B)Notwithstanding any other law, the board of directors may use teleconferencing to provide any eligible person access to the meeting that otherwise would be denied attendance at a meeting of the board for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice issued pursuant to subdivision (f). The teleconferenced meeting or proceeding shall comply with this section and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company. If the board uses teleconferencing, the board shall provide to an eligible person attending a meeting by teleconference, before the meeting begins, an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting. A board of directors of a mutual water company shall not prohibit an eligible person from attending a meeting of the board either in person person, so long as the eligible person has complied with the notice requirement of paragraph (A), or by teleconference except as provided by paragraph (2). A board of directors may allow an eligible person to attend the meeting personally in lieu of using teleconferencing pursuant to this paragraph.
(B)
(C)For purposes of this subdivision, the term teleconference means, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology.
(2)A board of directors of a mutual water company shall only meet in executive session during a meeting. A board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, matters relating to the formation of contracts with third parties, including matters relating to the potential acquisition of real property or water rights, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholders request, regarding the member or shareholders payment of assessments, as specified in Section 14303.
(3)The board of directors of a mutual water company shall meet in executive session, if requested by a member or shareholder who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session.
(4)An eligible person shall be entitled to attend a teleconference meeting, as specified in paragraph (3) of subdivision (o), or the portion of the teleconference meeting that is open to eligible persons, and shall be entitled to attend with or without fulfilling the notice requirement in paragraph (1). The teleconference meeting or portion of the meeting that is open to eligible persons shall be audible to the eligible person in a location specified in the notice of the meeting.
(c)Any matter discussed in executive session shall be generally noted in the minutes of the meeting at which the executive session occurred.
(d)The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of a mutual water company, conducted on or after January 1, 2014, other than an executive session, shall be available to eligible persons within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs for providing the minutes.
(e)The pro forma budget required in Section 14306 shall be available to eligible persons within 30 days of the meeting at which the budget was adopted. The budget shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs.
(f)Unless the bylaws provide for a longer period of notice, eligible persons shall be given notice of the time and place of a meeting as defined in subdivision (o), except for an emergency meeting, at least four days prior to the meeting. Notice shall be given by posting the notice in a prominent, publicly accessible place or places within the territory served by the mutual water company and by mail to any eligible person who had requested notification of board meetings by mail, at the address requested by the eligible person. Eligible persons requesting notice by mail shall pay the costs of reproduction and mailing of the notice in advance. Notice may also be given by mail, by delivery of the notice to each unit served by the mutual water company, or, with the consent of the eligible person, by electronic means. The notice shall contain the agenda for the meeting.
(g)An emergency meeting of the board may be called by the chief executive officer of the mutual water company, or by any two members of the board of directors other than the chief executive officer, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section.
(h)The board of directors of a mutual water company shall permit any eligible person to speak at any meeting of the mutual water company or the board of directors, except for any portion of a meeting that is held in executive session outside the presence of eligible persons. A reasonable time limit for all eligible persons to speak to the board of directors or before a meeting of the mutual water company shall be established by the board of directors.
(i)(1)Except as described in paragraphs (2) to (4), inclusive, the board of directors of the mutual water company shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit an eligible person who is not a member of the board from speaking on issues not on the agenda.
(2)Notwithstanding paragraph (1), a member of the board of directors, mutual water company officers, or a member of the staff of the mutual water company, may do any of the following:
(A)Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).
(B)Ask a question for clarification, make an announcement, or make a brief report on his or her own activities, whether in response to questions posed by an eligible person or based upon his or her own initiative.
(3)Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:
(A)Provide a reference to, or provide other resources for factual information to, the mutual water companys officers or staff.
(B)Request the mutual water companys officers or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct the mutual water companys officers or staff to place a matter of business on a future agenda.
(C)Direct the mutual water companys officers or staff to perform administrative tasks that are necessary to carry out this subdivision.
(4)(A)Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:
(i)Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.
(ii)Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).
(iii)The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.
(B)Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting.
(j)(1)Notwithstanding any other law, the board of directors shall not take action on any item of business outside of a meeting.
(2)(A)Notwithstanding any other provision of law, the board of directors shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in subparagraph (B).
(B)Electronic transmissions may be used as a method of conducting an emergency meeting if all members of the board, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the meeting of the board. These written consents may be transmitted electronically.
(k)(1)An eligible person may bring a civil action for declaratory or equitable relief for a violation of this section by a mutual water company for which he or she is defined as an eligible person for a judicial determination that an action taken by the board is null and void under this section.
(2)Prior to the commencement of an action pursuant to paragraph (1), the eligible person shall make a demand on the board to cure or correct the action alleged to be taken in violation of this section. The demand shall be in writing, and submitted within 90 days from the date the action was taken. The demand shall state the challenged action of the board and the nature of the alleged violation.
(3)Within 30 days of receipt of the demand, the board shall cure or correct the challenged action and inform the demanding party in writing of its actions to cure or correct, or inform the demanding party in writing of its decision not to cure or correct the challenged action.
(4)Within 15 days of receipt of the written notice of the boards decision to cure or correct or not to cure or correct, or within 15 days of the expiration of the 30-day period to cure or correct, whichever is earlier, the demanding party shall commence the action pursuant to paragraph (1). If the demanding party fails to commence the action pursuant to paragraph (1), that party shall be barred from commencing the action thereafter.
(l)A board action that is alleged to have been taken in violation of this section shall not be determined to be void if the action taken was in substantial compliance with this section.
(m)The fact that the board of directors of a mutual water company takes subsequent action to cure or correct an action taken pursuant to this section shall not be construed as, or admissible as evidence of, a violation of this section.
(n)An eligible person who prevails in a civil action to enforce his or her rights pursuant to this section shall be entitled to reasonable attorneys fees and court costs. A prevailing mutual water company shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.
(o)As used in this section:
(1)Eligible person means a person who is any of the following:
(A)A shareholder or member of the mutual water company.
(B)A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water.
(C)An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis.
(D)Any other person eligible to participate in the mutual water companys meetings under provisions of the companys articles or bylaws.
(2)Item of business means any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, officer of the mutual water company, or committee of the board comprising less than a majority of the directors.
(3)Meeting means either of the following:
(A)A 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 that is within the authority of the board.
(B)A teleconference in which a majority of the members of the board, in different locations, are connected by electronic means, through audio or video or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of this title. The notice of the teleconference meeting shall identify at least one physical location so that members of the mutual water company may attend and at least one member of the board of directors or a person designated by the board shall be present at that location. Participation by board members in a teleconference meeting constitutes presence at that meeting as long as all board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the board.
(4)Mutual water company means a mutual water company, as defined in Section 14300, that operates a public water system, as defined in Section 14300.5.
The Legislature finds and declares all of the following:
(a)Mutual water companies are nonprofit entities that seek to provide quality water service to their residential, commercial, municipal, and agricultural shareholders or members, many through small water systems and in disadvantaged communities throughout the state.
(b)Since 2013, mutual water companies have made great improvements to water quality and service reliability across California, as well as to the transparency of their operations and finances.
(c)Mutual water companies have been leaders in promoting water conservation and efficiency since the drought emergency in California began.
(d)Mutual water companies serve as the sole water provider in their service territories and act in many ways like public agencies, and they therefore should take reasonable steps to ensure their shareholders and customers have a voice in the operations of the company.
(e)Many mutual water companies have small or no meeting facilities, some of which meet in board members residences, that can safely hold only a limited number of people, and are located in remote parts of California that are difficult to access by some shareholders and customers of the mutual water company.
(f)Many small mutual water companies have limited financial means and it is important that their financial resources be put to efficient use in fulfilling their duty to provide safe and affordable water to their shareholders and members.
(g)Mutual water companies are unique, and unlike large public agencies or for-profit utilities, these nonprofit organizations are solely responsible to their shareholders and customers and not the broader public outside of their service area.
(h)Given the distinctive operational constraints faced by mutual water companies, the Legislature believes that mutual water companies should, where economically and technologically feasible, have means to provide the greatest shareholder and customer access to meetings within these constraints.
SEC. 2.Section 14305 of the Corporations Code is amended to read:14305.(a)(1)This section shall be known and may be cited as the Mutual Water Company Open Meeting Act.
(2)This section shall only apply to a mutual water company that operates a public water system.
(b)(1)(A)A board of directors of a mutual water company shall allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. Notwithstanding any other law, the board of directors may use teleconferencing for the benefit of to provide any eligible person access to the meeting that otherwise would be denied attendance at a meeting of the board for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice issued pursuant to subdivision (f). The teleconferenced meeting or proceeding shall comply with this section and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company. If the board uses teleconferencing, the board shall provide to an eligible person attending a meeting by teleconference, before the meeting begins, an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting. A board of directors of a mutual water company shall not prohibit an eligible person from attending a meeting of the board either in person or by technology in compliance with this paragraph. teleconference except as provided by paragraph (2).
(B)For purposes of this subdivision, the term teleconference means, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology.
(2)A board of directors of a mutual water company shall only meet in executive session during a meeting. A board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, matters relating to the formation of contracts with third parties, including matters relating to the potential acquisition of real property or water rights, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholders request, regarding the member or shareholders payment of assessments, as specified in Section 14303.
(3)The board of directors of a mutual water company shall meet in executive session, if requested by a member or shareholder who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session.
(4)An eligible person shall be entitled to attend a teleconference meeting, as specified in paragraph (3) of subdivision (o), or the portion of the teleconference meeting that is open to eligible persons, and shall be entitled to attend with or without fulfilling the notice requirement in paragraph (1). The teleconference meeting or portion of the meeting that is open to eligible persons shall be audible to the eligible person in a location specified in the notice of the meeting.
(c)Any matter discussed in executive session shall be generally noted in the minutes of the meeting at which the executive session occurred.
(d)The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of a mutual water company, conducted on or after January 1, 2014, other than an executive session, shall be available to eligible persons within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs for providing the minutes.
(e)The pro forma budget required in Section 14306 shall be available to eligible persons within 30 days of the meeting at which the budget was adopted. The budget shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs.
(f)Unless the bylaws provide for a longer period of notice, eligible persons shall be given notice of the time and place of a meeting as defined in subdivision (o), except for an emergency meeting, at least four days prior to the meeting. Notice shall be given by posting the notice in a prominent, publicly accessible place or places within the territory served by the mutual water company and by mail to any eligible person who had requested notification of board meetings by mail, at the address requested by the eligible person. Eligible persons requesting notice by mail shall pay the costs of reproduction and mailing of the notice in advance. Notice may also be given by mail, by delivery of the notice to each unit served by the mutual water company, or, with the consent of the eligible person, by electronic means. The notice shall contain the agenda for the meeting.
(g)An emergency meeting of the board may be called by the chief executive officer of the mutual water company, or by any two members of the board of directors other than the chief executive officer, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section.
(h)The board of directors of a mutual water company shall permit any eligible person to speak at any meeting of the mutual water company or the board of directors, except for any portion of a meeting that is held in executive session outside the presence of eligible persons. A reasonable time limit for all eligible persons to speak to the board of directors or before a meeting of the mutual water company shall be established by the board of directors.
(i)(1)Except as described in paragraphs (2) to (4), inclusive, the board of directors of the mutual water company shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit an eligible person who is not a member of the board from speaking on issues not on the agenda.
(2)Notwithstanding paragraph (1), a member of the board of directors, mutual water company officers, or a member of the staff of the mutual water company, may do any of the following:
(A)Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).
(B)Ask a question for clarification, make an announcement, or make a brief report on his or her own activities, whether in response to questions posed by an eligible person or based upon his or her own initiative.
(3)Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:
(A)Provide a reference to, or provide other resources for factual information to, the mutual water companys officers or staff.
(B)Request the mutual water companys officers or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct the mutual water companys officers or staff to place a matter of business on a future agenda.
(C)Direct the mutual water companys officers or staff to perform administrative tasks that are necessary to carry out this subdivision.
(4)(A)Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:
(i)Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.
(ii)Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).
(iii)The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.
(B)Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting.
(j)(1)Notwithstanding any other law, the board of directors shall not take action on any item of business outside of a meeting.
(2)(A)Notwithstanding any other provision of law, the board of directors shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in subparagraph (B).
(B)Electronic transmissions may be used as a method of conducting an emergency meeting if all members of the board, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the meeting of the board. These written consents may be transmitted electronically.
(k)(1)An eligible person may bring a civil action for declaratory or equitable relief for a violation of this section by a mutual water company for which he or she is defined as an eligible person for a judicial determination that an action taken by the board is null and void under this section.
(2)Prior to the commencement of an action pursuant to paragraph (1), the eligible person shall make a demand on the board to cure or correct the action alleged to be taken in violation of this section. The demand shall be in writing, and submitted within 90 days from the date the action was taken. The demand shall state the challenged action of the board and the nature of the alleged violation.
(3)Within 30 days of receipt of the demand, the board shall cure or correct the challenged action and inform the demanding party in writing of its actions to cure or correct, or inform the demanding party in writing of its decision not to cure or correct the challenged action.
(4)Within 15 days of receipt of the written notice of the boards decision to cure or correct or not to cure or correct, or within 15 days of the expiration of the 30-day period to cure or correct, whichever is earlier, the demanding party shall commence the action pursuant to paragraph (1). If the demanding party fails to commence the action pursuant to paragraph (1), that party shall be barred from commencing the action thereafter.
(l)A board action that is alleged to have been taken in violation of this section shall not be determined to be void if the action taken was in substantial compliance with this section.
(m)The fact that the board of directors of a mutual water company takes subsequent action to cure or correct an action taken pursuant to this section shall not be construed as, or admissible as evidence of, a violation of this section.
(n)An eligible person who prevails in a civil action to enforce his or her rights pursuant to this section shall be entitled to reasonable attorneys fees and court costs. A prevailing mutual water company shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.
(o)As used in this section:
(1)Eligible person means a person who is any of the following:
(A)A shareholder or member of the mutual water company.
(B)A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water.
(C)An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis.
(D)Any other person eligible to participate in the mutual water companys meetings under provisions of the companys articles or bylaws.
(2)Item of business means any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, officer of the mutual water company, or committee of the board comprising less than a majority of the directors.
(3)Meeting means either of the following:
(A)A 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 that is within the authority of the board.
(B)A teleconference in which a majority of the members of the board, in different locations, are connected by electronic means, through audio or video or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of this title. The notice of the teleconference meeting shall identify at least one physical location so that members of the mutual water company may attend and at least one member of the board of directors or a person designated by the board shall be present at that location. Participation by board members in a teleconference meeting constitutes presence at that meeting as long as all board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the board.
(4)Mutual water company means a mutual water company, as defined in Section 14300, that operates a public water system, as defined in Section 14300.5.
The Legislature finds and declares all of the following:
(a)Mutual water companies are nonprofit entities that seek to provide quality water service to their residential, commercial, municipal municipal, and agricultural shareholders or members, many through small water systems and in disadvantaged communities throughout the state.
(b)Since 2013, mutual water companies have made great improvements to water quality and service reliability across California, as well as to the transparency of their operations and finances.
(c)Mutual water companies have been leaders in promoting water conservation and efficiency since the drought emergency in California began.
(d)Mutual water companies serve as the sole water provider in their service territories and act in many ways like public agencies, and they therefore should take reasonable steps to ensure their shareholders and customers have a voice in the operations of the company.
(e)Many mutual water companies have small or no meeting facilities, some of which meet in board members residences, that can safely hold only a limited number of people, and are located in remote parts of California that are difficult to access by some shareholders and customers of the mutual water company.
(f)Many small mutual water companies have limited financial means and it is important that their financial resources be put to efficient use in fulfilling their duty to provide safe and affordable water to their shareholders and members.
(g)Mutual water companies are unique, and unlike large public agencies or for-profit utilities, these nonprofit organizations are solely responsible to their shareholders and customers and not the broader public outside of their service area.
(h)Given the distinctive operational constraints faced by mutual water companies, the Legislature believes that mutual water companies should, where economically and technologically feasible, have means to provide the greatest shareholder and customer access to meetings within these constraints.
SEC. 2.Section 14305 of the Corporations Code is amended to read:14305.(a)(1)This section shall be known and may be cited as the Mutual Water Company Open Meeting Act.
(2)This section shall only apply to a mutual water company that operates a public water system.
(b)(1)(A)A board of directors of a mutual water company shall allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. Notwithstanding any other law, the board of directors may use teleconferencing for the benefit of any eligible person denied attendance at a meeting of the board for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice issued pursuant to subdivision (f). The teleconferenced meeting or proceeding shall comply with this section and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company. If the board uses teleconferencing, the board shall provide to an eligible person attending a meeting by teleconference, before the meeting begins, an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting, or within 24 hours after the conclusion of the meeting if it is not feasible for the board of directors to provide photocopied or electronically scanned copies before the meeting begins. meeting. A board of directors of a mutual water company shall not prohibit an eligible person from attending a meeting of the board either in person or by technology in compliance with this paragraph.
(B)Any eligible person who attends a meeting by teleconference as provided in this subdivision shall identify themselves and any other persons present with them who are able to hear the board meeting as soon as practicable after they have joined the meeting. Any eligible person attending a meeting by teleconference shall ensure that no one who is not an eligible person is able to hear or participate in that meeting, and shall comply with any time limits for speaking established pursuant to subdivision (h). If it is subsequently discovered that someone who is not an eligible person listened to the board meeting with the knowledge of the eligible person, that eligible person shall forfeit his or her right to participate in future board meetings by teleconference upon the board finding a violation following a disciplinary hearing.
(C)
(B)For purposes of this subdivision, the term teleconference means, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology.
(2)A board of directors of a mutual water company shall only meet in executive session during a meeting. A board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, matters relating to the formation of contracts with third parties, including matters relating to the potential acquisition of real property or water rights, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholders request, regarding the member or shareholders payment of assessments, as specified in Section 14303.
(3)The board of directors of a mutual water company shall meet in executive session, if requested by a member or shareholder who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session.
(4)An eligible person shall be allowed entitled to attend a teleconference meeting, as specified in paragraph (3) of subdivision (o), or the portion of the teleconference meeting that is open to eligible persons, and shall be entitled to attend with or without fulfilling the notice requirement in paragraph (1). The teleconference meeting or portion of the meeting that is open to eligible persons shall be audible to the eligible person in a location specified in the notice of the meeting.
(c)Any matter discussed in executive session shall be generally noted in the minutes of the meeting at which the executive session occurred.
(d)The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of a mutual water company, conducted on or after January 1, 2014, other than an executive session, shall be available to eligible persons within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs for providing the minutes.
(e)The pro forma budget required in Section 14306 shall be available to eligible persons within 30 days of the meeting at which the budget was adopted. The budget shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs.
(f)Unless the bylaws provide for a longer period of notice, eligible persons shall be given notice of the time and place of a meeting as defined in subdivision (o), except for an emergency meeting meeting, at least four days prior to the meeting. Notice shall be given by posting the notice in a prominent, publicly accessible place or places within the territory served by the mutual water company and by mail to any eligible person who had requested notification of board meetings by mail, at the address requested by the eligible person. Eligible persons requesting notice by mail shall pay the costs of reproduction and mailing of the notice in advance. Notice may also be given by mail, by delivery of the notice to each unit served by the mutual water company company, or, with the consent of the eligible person, by electronic means. The notice shall contain the agenda for the meeting.
(g)An emergency meeting of the board may be called by the chief executive officer of the mutual water company, or by any two members of the board of directors other than the chief executive officer, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section.
(h)The board of directors of a mutual water company shall permit any eligible person to speak at any meeting of the mutual water company or the board of directors, except for any portion of a meeting that is held in executive session outside the presence of eligible persons. A reasonable time limit for all eligible persons to speak to the board of directors or before a meeting of the mutual water company shall be established by the board of directors.
(i)(1)Except as described in paragraphs (2) to (4), inclusive, the board of directors of the mutual water company shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit an eligible person who is not a member of the board from speaking on issues not on the agenda.
(2)Notwithstanding paragraph (1), a member of the board of directors, mutual water company officers, or a member of the staff of the mutual water company, may do any of the following:
(A)Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).
(B)Ask a question for clarification, make an announcement, or make a brief report on his or her own activities, whether in response to questions posed by an eligible person or based upon his or her own initiative.
(3)Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:
(A)Provide a reference to, or provide other resources for factual information to, the mutual water companys officers or staff.
(B)Request the mutual water companys officers or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct the mutual water companys officers or staff to place a matter of business on a future agenda.
(C)Direct the mutual water companys officers or staff to perform administrative tasks that are necessary to carry out this subdivision.
(4)(A)Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:
(i)Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.
(ii)Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).
(iii)The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.
(B)Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting.
(j)(1)Notwithstanding any other law, the board of directors shall not take action on any item of business outside of a meeting.
(2)(A)Notwithstanding any other provision of law, the board of directors shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in subparagraph (B).
(B)Electronic transmissions may be used as a method of conducting an emergency meeting if all members of the board, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the meeting of the board. These written consents may be transmitted electronically.
(k)(1)An eligible person may bring a civil action for declaratory or equitable relief for a violation of this section by a mutual water company for which he or she is defined as an eligible person for a judicial determination that an action taken by the board is null and void under this section.
(2)Prior to the commencement of an action pursuant to paragraph (1), the eligible person shall make a demand on the board to cure or correct the action alleged to be taken in violation of this section. The demand shall be in writing, and submitted within 90 days from the date the action was taken. The demand shall state the challenged action of the board and the nature of the alleged violation.
(3)Within 30 days of receipt of the demand, the board shall cure or correct the challenged action and inform the demanding party in writing of its actions to cure or correct, or inform the demanding party in writing of its decision not to cure or correct the challenged action.
(4)Within 15 days of receipt of the written notice of the boards decision to cure or correct or not to cure or correct, or within 15 days of the expiration of the 30-day period to cure or correct, whichever is earlier, the demanding party shall commence the action pursuant to paragraph (1). If the demanding party fails to commence the action pursuant to paragraph (1), that party shall be barred from commencing the action thereafter.
(l)A board action that is alleged to have been taken in violation of this section shall not be determined to be void if the action taken was in substantial compliance with this section.
(m)The fact that the board of directors of a mutual water company takes subsequent action to cure or correct an action taken pursuant to this section shall not be construed as, or admissible as evidence of, a violation of this section.
(n)An eligible person who prevails in a civil action to enforce his or her rights pursuant to this section shall be entitled to reasonable attorneys fees and court costs. A prevailing mutual water company shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.
(o)As used in this section:
(1)Eligible person means a person who is any of the following:
(A)A shareholder or member of the mutual water company.
(B)A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water.
(C)An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis.
(D)Any other person eligible to participate in the mutual water companys meetings under provisions of the companys articles or bylaws.
(2)Item of business means any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, officer of the mutual water company, or committee of the board comprising less than a majority of the directors.
(3)Meeting means either of the following:
(A)A 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 that is within the authority of the board.
(B)A teleconference in which a majority of the members of the board, in different locations, are connected by electronic means, through audio or video or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of this title. The notice of the teleconference meeting shall identify at least one physical location so that members of the mutual water company may attend and at least one member of the board of directors or a person designated by the board shall be present at that location. Participation by board members in a teleconference meeting constitutes presence at that meeting as long as all board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the board. Nothing in this subparagraph requires the notice of a meeting to disclose the use of teleconferencing if the use of teleconferencing is approved by the board pursuant to paragraph (1) of subdivision (b).
(4)Mutual water company means a mutual water company, as defined in Section 14300, that operates a public water system, as defined in Section 14300.5.
The Legislature finds and declares all of the following:
(a)Mutual water companies are nonprofit entities that seek to provide quality water service to their residential, commercial, municipal and agricultural shareholders or members, many through small water systems and in disadvantaged communities throughout the state.
(b)Since 2013, mutual water companies have made great improvements to water quality and service reliability across California, as well as to the transparency of their operations and finances.
(c)Mutual water companies have been leaders in promoting water conservation and efficiency since the drought emergency in California began.
(d)Mutual water companies serve as the sole water provider in their service territories and act in many ways like public agencies, and they therefore should take reasonable steps to ensure their shareholders and customers have a voice in the operations of the company.
(e)Many mutual water companies have small or no meeting facilities, some of which meet in board members residences, that can safely hold only a limited number of people, and are located in remote parts of California that are difficult to access by some shareholders and customers of the mutual water company.
(f)Many small mutual water companies have limited financial means and it is important that their financial resources be put to efficient use in fulfilling their duty to provide safe and affordable water to their shareholders and members.
(g)Mutual water companies are unique, and unlike large public agencies or for-profit utilities, these nonprofit organizations are solely responsible to their shareholders and customers and not the broader public outside of their service area.
(h)Given the distinctive operational constraints faced by mutual water companies, the Legislature believes that mutual water companies should, where economically and technologically feasible, have means to provide the greatest shareholder and customer access to meetings within these constraints.
SECTION 1.SEC. 2.Section 14305 of the Corporations Code is amended to read:14305.(a)(1)This section shall be known and may be cited as the Mutual Water Company Open Meeting Act.
(2)This section shall only apply to a mutual water company that operates a public water system.
(b)(1)(A)A board of directors of a mutual water company shall allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. An Notwithstanding any other law, the board of directors may use teleconferencing for the benefit of any eligible person denied attendance at a meeting of the board for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice issued pursuant to subdivision (f), shall be able to attend the meeting by technology that allows the eligible person to hear the meeting and verbally interact with the board, including, but not limited to, a telephone or computer. The board (f). The teleconferenced meeting or proceeding shall comply with this section and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company. If the board uses teleconferencing, the board shall provide to an eligible person attending a meeting by technology, teleconference, before the meeting begins, a an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting, or within 24 hours after the conclusion of the meeting if it is not feasible for the board of directors to provide photocopied or electronically scanned copies before the meeting begins. A board of directors of a mutual water company shall not prohibit an eligible person from attending a meeting of the board either in person or by technology in compliance with this paragraph.
(B)Any eligible person who attends a meeting by teleconference as provided in this subdivision shall identify themselves and any other persons present with them who are able to hear the board meeting as soon as practicable after they have joined the meeting. Any eligible person attending a meeting by teleconference shall ensure that no one who is not an eligible person is able to hear or participate in that meeting, and shall comply with any time limits for speaking established pursuant to subdivision (h). If it is subsequently discovered that someone who is not an eligible person listened to the board meeting with the knowledge of the eligible person, that eligible person shall forfeit his or her right to participate in future board meetings by teleconference upon the board finding a violation following a disciplinary hearing.
(C)For purposes of this subdivision, the term teleconference means, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology.
(2)A board of directors of a mutual water company shall only meet in executive session during a meeting. A board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, matters relating to the formation of contracts with third parties, including matters relating to the potential acquisition of real property or water rights, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholders request, regarding the member or shareholders payment of assessments, as specified in Section 14303.
(3)The board of directors of a mutual water company shall meet in executive session, if requested by a member or shareholder who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session.
(4)An eligible person shall be allowed to attend a teleconference meeting, as specified in paragraph (3) of subdivision (o), or the portion of the teleconference meeting that is open to eligible persons, without fulfilling the notice requirement in paragraph (1). The teleconference meeting or portion of the meeting that is open to eligible persons shall be audible to the eligible person in a location specified in the notice of the meeting.
(c)Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting. meeting at which the executive session occurred.
(d)The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of a mutual water company, conducted on or after January 1, 2014, other than an executive session, shall be available to eligible persons within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs for providing the minutes.
(e)The pro forma budget required in Section 14306 shall be available to eligible persons within 30 days of the meeting at which the budget was adopted. The budget shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs.
(f)Unless the bylaws provide for a longer period of notice, eligible persons shall be given notice of the time and place of a meeting as defined in subdivision (o), except for an emergency meeting,, meeting at least five business four days prior to the meeting. Notice shall be given by posting the notice in a prominent, publicly accessible place or places within the territory served by the mutual water company and by mail to any eligible person who had requested notification of board meetings by mail, at the address requested by the eligible person. Eligible persons requesting notice by mail shall pay the costs of reproduction and mailing of the notice in advance. Notice may also be given by mail, by delivery of the notice to each unit served by the mutual water company or, with the consent of the eligible person, by electronic means. The notice shall contain the agenda for the meeting.
(g)An emergency meeting of the board may be called by the chief executive officer of the mutual water company, or by any two members of the board of directors other than the chief executive officer, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section.
(h)The board of directors of a mutual water company shall permit any eligible person to speak at any meeting of the mutual water company or the board of directors, except for an any portion of a meeting that is held in executive session outside the presence of eligible persons. A reasonable time limit for all eligible persons to speak to the board of directors or before a meeting of the mutual water company shall be established by the board of directors.
(i)(1)Except as described in paragraphs (2) to (4), inclusive, the board of directors of the mutual water company shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit an eligible person who is not a member of the board from speaking on issues not on the agenda.
(2)Notwithstanding paragraph (1), a member of the board of directors, mutual water company officers, or a member of the staff of the mutual water company, may do any of the following:
(A)Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).
(B)Ask a question for clarification, make a brief an announcement, or make a brief report on his or her own activities, whether in response to questions posed by an eligible person or based upon his or her own initiative.
(3)Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:
(A)Provide a reference to, or provide other resources for factual information to, the mutual water companys officers or staff.
(B)Request the mutual water companys officers or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct the mutual water companys officers or staff to place a matter of business on a future agenda.
(C)Direct the mutual water companys officers or staff to perform administrative tasks that are necessary to carry out this subdivision.
(4)(A)Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:
(i)Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.
(ii)Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).
(iii)The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.
(B)Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting.
(j)(1)Notwithstanding any other law, the board of directors shall not take action on any item of business outside of a meeting.
(2)(A)Notwithstanding any other provision of law, the board of directors shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in subparagraph (B).
(B)Electronic transmissions may be used as a method of conducting an emergency meeting if all members of the board, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the meeting of the board. These written consents may be transmitted electronically.
(k)(1)An eligible person may bring a civil action for declaratory or equitable relief for a violation of this section by a mutual water company for which he or she is defined as an eligible person for a judicial determination that an action taken by the board is null and void under this section.
(2)Prior to the commencement of an action pursuant to paragraph (1), the eligible person shall make a demand on the board to cure or correct the action alleged to be taken in violation of this section. The demand shall be in writing, and submitted within 90 days from the date the action was taken. The demand shall state the challenged action of the board and the nature of the alleged violation.
(3)Within 30 days of receipt of the demand, the board shall cure or correct the challenged action and inform the demanding party in writing of its actions to cure or correct, or inform the demanding party in writing of its decision not to cure or correct the challenged action.
(4)Within 15 days of receipt of the written notice of the boards decision to cure or correct or not to cure or correct, or within 15 days of the expiration of the 30-day period to cure or correct, whichever is earlier, the demanding party shall commence the action pursuant to paragraph (1). If the demanding party fails to commence the action pursuant to paragraph (1), that party shall be barred from commencing the action thereafter.
(l)A board action that is alleged to have been taken in violation of this section shall not be determined to be void if the action taken was in substantial compliance with this section.
(m)The fact that the board of directors of a mutual water company takes subsequent action to cure or correct an action taken pursuant to this section shall not be construed as, or admissible as evidence of, a violation of this section.
(n)An eligible person who prevails in a civil action to enforce his or her rights pursuant to this section shall be entitled to reasonable attorneys fees and court costs. A prevailing mutual water company shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.
(o)As used in this section:
(1)Eligible person means a person who is any of the following:
(A)A shareholder or member of the mutual water company.
(B)A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water.
(C)An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis.
(D)Any other person eligible to participate in the mutual water companys meetings under provisions of the companys articles or bylaws.
(2)Item of business means any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, officer of the mutual water company, or committee of the board comprising less than a majority of the directors.
(3)Meeting means either of the following:
(A)A 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 that is within the authority of the board.
(B)A teleconference in which a majority of the members of the board, in different locations, are connected by electronic means, through audio or video or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of this title. The notice of the teleconference meeting shall identify at least one physical location so that members of the mutual water company may attend and at least one member of the board of directors or a person designated by the board shall be present at that location. Participation by board members in a teleconference meeting constitutes presence at that meeting as long as all board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the board. Nothing in this subparagraph requires the notice of a meeting to disclose the use of teleconferencing if the use of teleconferencing is approved by the board pursuant to paragraph (1) of subdivision (b).
(4)Mutual water company means a mutual water company, as defined in Section 14300, that operates a public water system, as defined in Section 14300.5.
(a)(1)This section shall be known and may be cited as the Mutual Water Company Open Meeting Act.
(2)This section shall only apply to a mutual water company that operates a public water system.
(b)(1)A board of directors of a mutual water company shall allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting. An eligible person denied attendance at a meeting of the board for failure to provide this notice, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice issued pursuant to subdivision (f), shall be able to attend the meeting by technology that allows the eligible person to hear the meeting and verbally interact with the board, including, but not limited to, a telephone or computer. The board shall provide to an eligible person attending a meeting by technology, before the meeting begins, a copy of all documents to be discussed at the meeting. A board of directors of a mutual water company shall not prohibit an eligible person from attending a meeting of the board either in person or by technology in compliance with this paragraph.
(2)A board of directors of a mutual water company shall only meet in executive session during a meeting. A board may prohibit an eligible person from attending an executive session to consider litigation, matters relating to the formation of contracts with third parties, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholders request, regarding the member or shareholders payment of assessments, as specified in Section 14303.
(3)The board of directors of a mutual water company shall meet in executive session, if requested by a member or shareholder who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session.
(4)An eligible person shall be allowed to attend a teleconference meeting, as specified in paragraph (3) of subdivision (o), or the portion of the teleconference meeting that is open to eligible persons, without fulfilling the notice requirement in paragraph (1). The teleconference meeting or portion of the meeting that is open to eligible persons shall be audible to the eligible person in a location specified in the notice of the meeting.
(c)Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting.
(d)The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of a mutual water company, conducted on or after January 1, 2014, other than an executive session, shall be available to eligible persons within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs for providing the minutes.
(e)The pro forma budget required in Section 14306 shall be available to eligible persons within 30 days of the meeting at which the budget was adopted. The budget shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs.
(f)Unless the bylaws provide for a longer period of notice, eligible persons shall be given notice of the time and place of a meeting as defined in subdivision (o), except for an emergency meeting,, at least four five business days prior to the meeting. Notice shall be given by posting the notice in a prominent, publicly accessible place or places within the territory served by the mutual water company and by mail to any eligible person who had requested notification of board meetings by mail, at the address requested by the eligible person. Eligible persons requesting notice by mail shall pay the costs of reproduction and mailing of the notice in advance. Notice may also be given by mail, by delivery of the notice to each unit served by the mutual water company or, with the consent of the eligible person, by electronic means. The notice shall contain the agenda for the meeting.
(g)An emergency meeting of the board may be called by the chief executive officer of the mutual water company, or by any two members of the board of directors other than the chief executive officer, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section.
(h)The board of directors of a mutual water company shall permit any eligible person to speak at any meeting of the mutual water company or the board of directors, except for an executive session outside the presence of eligible persons. A reasonable time limit for all eligible persons to speak to the board of directors or before a meeting of the mutual water company shall be established by the board of directors.
(i)(1)Except as described in paragraphs (2) to (4), inclusive, the board of directors of the mutual water company shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit an eligible person who is not a member of the board from speaking on issues not on the agenda.
(2)Notwithstanding paragraph (1), a member of the board of directors, mutual water company officers, or a member of the staff of the mutual water company, may do any of the following:
(A)Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).
(B)Ask a question for clarification, make a brief announcement, or make a brief report on his or her own activities, whether in response to questions posed by an eligible person or based upon his or her own initiative.
(3)Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:
(A)Provide a reference to, or provide other resources for factual information to, the mutual water companys officers or staff.
(B)Request the mutual water companys officers or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct the mutual water companys officers or staff to place a matter of business on a future agenda.
(C)Direct the mutual water companys officers or staff to perform administrative tasks that are necessary to carry out this subdivision.
(4)(A)Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:
(i)Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.
(ii)Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).
(iii)The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.
(B)Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting.
(j)(1)Notwithstanding any other law, the board of directors shall not take action on any item of business outside of a meeting.
(2)(A)Notwithstanding any other provision of law, the board of directors shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in subparagraph (B).
(B)Electronic transmissions may be used as a method of conducting an emergency meeting if all members of the board, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the meeting of the board. These written consents may be transmitted electronically.
(k)(1)An eligible person may bring a civil action for declaratory or equitable relief for a violation of this section by a mutual water company for which he or she is defined as an eligible person for a judicial determination that an action taken by the board is null and void under this section.
(2)Prior to the commencement of an action pursuant to paragraph (1), the eligible person shall make a demand on the board to cure or correct the action alleged to be taken in violation of this section. The demand shall be in writing, and submitted within 90 days from the date the action was taken. The demand shall state the challenged action of the board and the nature of the alleged violation.
(3)Within 30 days of receipt of the demand, the board shall cure or correct the challenged action and inform the demanding party in writing of its actions to cure or correct, or inform the demanding party in writing of its decision not to cure or correct the challenged action.
(4)Within 15 days of receipt of the written notice of the boards decision to cure or correct or not to cure or correct, or within 15 days of the expiration of the 30-day period to cure or correct, whichever is earlier, the demanding party shall commence the action pursuant to paragraph (1). If the demanding party fails to commence the action pursuant to paragraph (1), that party shall be barred from commencing the action thereafter.
(l)A board action that is alleged to have been taken in violation of this section shall not be determined to be void if the action taken was in substantial compliance with this section.
(m)The fact that the board of directors of a mutual water company takes subsequent action to cure or correct an action taken pursuant to this section shall not be construed as, or admissible as evidence of, a violation of this section.
(n)An eligible person who prevails in a civil action to enforce his or her rights pursuant to this section shall be entitled to reasonable attorneys fees and court costs. A prevailing mutual water company shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.
(o)As used in this section:
(1)Eligible person means a person who is any of the following:
(A)A shareholder or member of the mutual water company.
(B)A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water.
(C)An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis.
(D)Any other person eligible to participate in the mutual water companys meetings under provisions of the companys articles or bylaws.
(2)Item of business means any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, officer of the mutual water company, or committee of the board comprising less than a majority of the directors.
(3)Meeting means either of the following:
(A)A 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 that is within the authority of the board.
(B)A teleconference in which a majority of the members of the board, in different locations, are connected by electronic means, through audio or video or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of this title. The notice of the teleconference meeting shall identify at least one physical location so that members of the mutual water company may attend and at least one member of the board of directors or a person designated by the board shall be present at that location. Participation by board members in a teleconference meeting constitutes presence at that meeting as long as all board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the board.
(4)Mutual water company means a mutual water company, as defined in Section 14300, that operates a public water system, as defined in Section 14300.5.
(a)(1)This section shall be known and may be cited as the Mutual Water Company Open Meeting Act.
(2)This section shall only apply to a mutual water company that operates a public water system.
(b)Any eligible person, upon (1)A board of directors of a mutual water company shall allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice, may of his or her intent to personally attend meetings of the board the meeting. An eligible person denied attendance at a meeting of the board for failure to provide this notice shall be able to attend the meeting by technology that allows the eligible person to hear the meeting and verbally interact with the board, including, but not limited to, a telephone or computer. The board shall provide to an eligible person attending a meeting by technology, before the meeting begins, a copy of all documents to be discussed at the meeting. A board of directors of a mutual water company shall not prohibit an eligible person from attending a meeting of the board either in person or by technology in compliance with this paragraph.
(2)A board of directors of a mutual water company, except when the board adjourns to, or meets solely in, company shall only meet in executive session during a meeting. A board may prohibit an eligible person from attending an executive session to consider litigation, matters relating to the formation of contracts with third parties, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholders request, regarding the member or shareholders payment of assessments, as specified in Section 14303. The
(3)The board of directors of the a mutual water company shall meet in executive session, if requested by a member or shareholder who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session. As specified in paragraph (3) of subdivision (o), an
(4)An eligible person shall be entitled allowed to attend a teleconference meeting, as specified in paragraph (3) of subdivision (o), or the portion of a the teleconference meeting that is open to eligible persons, and that persons, without fulfilling the notice requirement in paragraph (1). The teleconference meeting or portion of the meeting that is open to eligible persons shall be audible to the eligible persons person in a location specified in the notice of the meeting.
(c)Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to eligible persons. meeting.
(d)The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of a mutual water company, conducted on or after January 1, 2014, other than an executive session, shall be available to eligible persons within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs for providing the minutes.
(e)The pro forma budget required in Section 14306 shall be available to eligible persons within 30 days of the meeting at which the budget was adopted. The budget shall be provided to any eligible person upon request and upon reimbursement of the mutual water companys costs.
(f)Unless the bylaws provide for a longer period of notice, eligible persons shall be given notice of the time and place of a meeting as defined in subdivision (o), except for an emergency meeting or a meeting that will be held solely in executive session,, at least four days prior to the meeting. Except for an emergency meeting, eligible persons shall be given notice of the time and place of a meeting that will be held solely in executive session at least two days prior to the meeting. Notice shall be given by posting the notice in a prominent, publicly accessible place or places within the territory served by the mutual water company and by mail to any eligible person who had requested notification of board meetings by mail, at the address requested by the eligible person. Eligible persons requesting notice by mail shall pay the costs of reproduction and mailing of the notice in advance. Notice may also be given by mail, by delivery of the notice to each unit served by the mutual water company or, with the consent of the eligible person, by electronic means. The notice shall contain the agenda for the meeting.
(g)An emergency meeting of the board may be called by the chief executive officer of the mutual water company, or by any two members of the board of directors other than the chief executive officer, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section.
(h)The board of directors of a mutual water company shall permit any eligible person to speak at any meeting of the mutual water company or the board of directors, except for meetings of the board held in an executive session. session outside the presence of eligible persons. A reasonable time limit for all eligible persons to speak to the board of directors or before a meeting of the mutual water company shall be established by the board of directors.
(i)(1)Except as described in paragraphs (2) to (4), inclusive, the board of directors of the mutual water company may shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit an eligible person who is not a member of the board from speaking on issues not on the agenda.
(2)Notwithstanding paragraph (1), a member of the board of directors, mutual water company officers, or a member of the staff of the mutual water company, may do any of the following:
(A)Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).
(B)Ask a question for clarification, make a brief announcement, or make a brief report on his or her own activities, whether in response to questions posed by an eligible person or based upon his or her own initiative.
(3)Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:
(A)Provide a reference to, or provide other resources for factual information to, the mutual water companys officers or staff.
(B)Request the mutual water companys officers or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct the mutual water companys officers or staff to place a matter of business on a future agenda.
(C)Direct the mutual water companys officers or staff to perform administrative tasks that are necessary to carry out this subdivision.
(4)(A)Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:
(i)Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.
(ii)Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).
(iii)The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.
(B)Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting.
(j)(1)Notwithstanding any other law, the board of directors shall not take action on any item of business outside of a meeting.
(2)(A)Notwithstanding any other provision of law, the board of directors shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in subparagraph (B).
(B)Electronic transmissions may be used as a method of conducting an emergency meeting if all members of the board, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the meeting of the board. These written consents may be transmitted electronically.
(k)(1)An eligible person may bring a civil action for declaratory or equitable relief for a violation of this section by a mutual water company for which he or she is defined as an eligible person for a judicial determination that an action taken by the board is null and void under this section.
(2)Prior to the commencement of an action pursuant to paragraph (1), the eligible person shall make a demand on the board to cure or correct the action alleged to be taken in violation of this section. The demand shall be in writing, and submitted within 90 days from the date the action was taken. The demand shall state the challenged action of the board and the nature of the alleged violation.
(3)Within 30 days of receipt of the demand, the board shall cure or correct the challenged action and inform the demanding party in writing of its actions to cure or correct, or inform the demanding party in writing of its decision not to cure or correct the challenged action.
(4)Within 15 days of receipt of the written notice of the boards decision to cure or correct or not to cure or correct, or within 15 days of the expiration of the 30-day period to cure or correct, whichever is earlier, the demanding party shall commence the action pursuant to paragraph (1). If the demanding party fails to commence the action pursuant to paragraph (1), that party shall be barred from commencing the action thereafter.
(l)A board action that is alleged to have been taken in violation of this section shall not be determined to be void if the action taken was in substantial compliance with this section.
(m)The fact that the board of directors of a mutual water company takes subsequent action to cure or correct an action taken pursuant to this section shall not be construed as, or admissible as evidence of, a violation of this section.
(n)An eligible person who prevails in a civil action to enforce his or her rights pursuant to this section shall be entitled to reasonable attorneys fees and court costs. A prevailing mutual water company shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.
(o)As used in this section:
(1)Eligible person means a person who is any of the following:
(A)A shareholder or member of the mutual water company.
(B)A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water.
(C)An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis.
(D)Any other person eligible to participate in the mutual water companys meetings under provisions of the companys articles or bylaws.
(2)Item of business means any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, officer of the mutual water company, or committee of the board comprising less than a majority of the directors.
(3)Meeting means either of the following:
(A)A 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 that is within the authority of the board.
(B)A teleconference in which a majority of the members of the board, in different locations, are connected by electronic means, through audio or video or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of this title. Except for a meeting that will be held solely in executive session, the The notice of the teleconference meeting shall identify at least one physical location so that members of the mutual water company may attend and at least one member of the board of directors or a person designated by the board shall be present at that location. Participation by board members in a teleconference meeting constitutes presence at that meeting as long as all board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the board.
(4)Mutual water company means a mutual water company, as defined in Section 14300, that operates a public water system, as defined in Section 14300.5.
|
Date
|
Status
|
|---|---|
| Sep 2, 2015 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 2411.). |
| Jun 22, 2015 | Read second time and amended. Re-referred to Com. on APPR. |
| Jun 23, 2015 | Ordered to second reading. |
| Jun 23, 2015 | Withdrawn from committee. |
| Jun 24, 2015 | Read second time. Ordered to third reading. |
| Aug 31, 2015 | Read third time and amended. Ordered to second reading. |
| Sep 1, 2015 | Read second time. Ordered to third reading. |
| Sep 2, 2015 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 4 pursuant to Assembly Rule 77. |
| Sep 2, 2015 | Read third time. Passed. Ordered to the Assembly. |
| Jun 19, 2015 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 6. Noes 0.) (June 17). |
| Sep 3, 2015 | Assembly Rule 77 suspended. |
| Sep 3, 2015 | Assembly Rule 77 suspended. (Page 2859.) |
| Sep 3, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 80. Noes 0. Page 2862.). |
| Sep 3, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 80. Noes 0.). |
| Sep 16, 2015 | Enrolled and presented to the Governor at 4 p.m. |
| Oct 9, 2015 | Approved by the Governor. |
| Oct 9, 2015 | Chaptered by Secretary of State - Chapter 669, Statutes of 2015. |
| Feb 27, 2015 | Introduced. To print. |
| Jun 4, 2015 | Referred to Com. on GOV. & F. |
| May 22, 2015 | Read third time. Passed. Ordered to the Senate. (Ayes 75. Noes 0. Page 1553.) |
| May 22, 2015 | Read third time. Passed. Ordered to the Senate. |
| May 22, 2015 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 19, 2015 | Read second time. Ordered to third reading. |
| May 18, 2015 | Read second time and amended. Ordered returned to second reading. |
| May 14, 2015 | From committee: Amend, and do pass as amended. (Ayes 9. Noes 0.) (May 13). |
| Apr 29, 2015 | Re-referred to Com. on L. GOV. |
| Apr 28, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended. |
| Apr 16, 2015 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Apr 8, 2015 | Re-referred to Com. on L. GOV. |
| Apr 7, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended. |
| Mar 19, 2015 | Referred to Com. on L. GOV. |
| Mar 2, 2015 | Read first time. |
| Mar 1, 2015 | From printer. May be heard in committee March 31. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 3, 2015 | AB 1077 HOLDEN Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 2, 2015 | Assembly 3rd Reading AB1077 Holden By Hertzberg | Senate Floor |
Passed |
|
| Jun 17, 2015 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Governance and Finance |
Passed |
|
| May 22, 2015 | AB 1077 HOLDEN Assembly Third Reading | Assembly Floor |
Passed |
|
| May 13, 2015 | Do pass as amended. | Assembly Standing Committee on Local Government |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Rubio Canon Mutual Water Company | ** Against | Sep 2, 2015 |
| Sierra Club California | ** Support | Sep 2, 2015 |
AB 1077
Page 4
CONCURRENCE IN SENATE AMENDMENTS
AB 1077
(Holden)
As Amended August 31, 2015
Majority vote
ASSEMBLY: |
75-0 |
(May 22, 2015) |
SENATE: |
40-0 |
(September 2, 2015) |
Original Committee Reference: L. GOV.
SUMMARY: Makes a number of changes to the Mutual Water Company Open Meeting Act.
The Senate amendments are technical and clarifying.
AS PASSED BY THE ASSEMBLY, this bill:
Revised and recast the Mutual Water Company Open Meeting Act (Act) as follows:
Required a Board of Directors (Board) of a mutual water company to allow an eligible person to personally attend a meeting of the Board, if the eligible person gave the Board at least 24 hours advance written notice of his or her intent to personally attend the meeting;
Allowed the Board to use teleconferencing for the benefit of any eligible person denied attendance at a meeting of the Board for failure to provide the notice specified above, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice of the meeting;
Required a teleconferenced meeting or proceeding to comply with the Act and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company;
Required, if the Board uses teleconferencing, the Board to provide to an eligible person attending a meeting by teleconference, before the meeting begins, an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting;
Prohibited a mutual water company Board from prohibiting an eligible person from attending a meeting of the Board either in person or by technology, as specified;
Defined "teleconference" to mean, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the Board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology;
Required a Board to only meet in executive session during a meeting, and makes conforming changes;
Specified that a Board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, or matters relating to the potential acquisition of real property or water rights;
Specified that an eligible person shall be entitled to attend a teleconferenced meeting with or without fulfilling the notice requirements specified in a) above; and,
Specified that a Board shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice of the meeting that was posted and distributed pursuant to the Act.
Made additional clarifying and technical changes.
Made a number of findings and declarations regarding mutual water companies.
FISCAL EFFECT: None
COMMENTS:
Bill Summary. This bill makes numerous changes to the Act, the major provisions of which are as follows:
Allows a mutual water company Board to use teleconferencing to provide any eligible person access to a Board meeting who otherwise would be denied attendance in person because the person failed to provide 24 hours advance written notice, or because the number of eligible persons who provided notice of attendance exceeds the room capacity of the meeting;
Requires a Board to provide an eligible person attending a meeting by teleconference an electronic copy or photocopy of all documents to be discussed at the meeting (excluding documents related to an executive session) before the meeting begins;
Requires a Board to meet in executive session only during a meeting (removes the ability of a Board to meet in executive session only, separate from of a meeting that eligible persons may attend);
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; and,
Specifies that an eligible person shall be allowed to access a Board meeting via teleconference with or without fulfilling the 24-hour notice requirements of the Act.
This bill is sponsored by the author.
Author's Statement. According to the author, "The existing Mutual Water Company Open Meetings Act permits water company shareholders and their tenants to attend meetings after providing notice. However, in the two years since the passage of AB 240 some water companies have struggled to comply with the Act. Greater interest in attending these public meetings has burdened mutual water companies small staffs, exceeded the capacity of some meeting facilities, and, in some cases, the water company's service territory is too large and remote for all shareholders to conveniently attend meetings.
"Assembly Bill 1077 will provide mutual water companies the ability to use teleconferencing tools, currently provided to local agencies, to provide better access to meetings. Whether a meeting is inaccessible to a shareholder because of distance or capacity of the mutual water companies facilities, teleconferencing will enable all shareholders to have their voice heard and provide enhanced opportunities for consumer participation in these companies operations."
Background. Public water systems that deliver domestic water generally fall into three categories:
Local agencies (cities and special districts). Local Agency Formation Commissions (LAFCOs) control the cities and special districts' boundaries and local officials are responsible to their voters for their water rates;
Investor-owned public utilities. The California Public Utilities Commission (PUC) controls the companies' service areas and their water rates; or,
Mutual water companies. These private entities, formed under statutes governing corporations, respond to their shareholders, usually the landowners who receive water service. Neither LAFCOs nor the PUC regulate mutual water companies.
The State Department of Public Health and some county health departments monitor the quality of drinking water delivered to most households, regardless of the type of public water system that delivers the water.
Most mutual water companies are organized pursuant to the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. Shareholders in a mutual water company hold a right to purchase water from the company. Stock in a company is usually linked to the ownership of a parcel served by the company and transfers with the land when the parcel is sold to successive owners. This type of corporate structure allows landowners to establish, essentially, a customer-owned water provider to serve their properties.
Governance of a mutual water company is generally limited to shareholders, or members, of the company. While the details of any particular company's governing structure are determined by its articles and bylaws, most mutual water companies allow only shareholders and members to vote on organizational matters and serve on the company's governing board.
Recent Legislative History. In response to concerns that some mutual water companies lacked capital to pay for needed water quality improvements and the managerial capacity to operate successful public water systems, the Legislature passed AB 54 (Solorio), Chapter 512, Statutes of 2011. AB 54 established training requirements for mutual water company's board members regarding the duties of board members, made mutual water companies liable for specified fines and penalties for violating the California Safe Drinking Water Act, and expanded LAFCOs' authority to review matters related to mutual water companies.
More recently, AB 240 (Rendon), Chapter 633, Statutes of 2013, increased transparency requirements for mutual water companies by establishing the Act. AB 240 also allowed mutual water companies to impose liens to collect unpaid charges. While the requirements of AB 240 opened the meetings of mutual water companies to "eligible persons," these requirements are far more limited than the requirements of the Brown Act.
Related Legislation. AB 656 (Cristina Garcia) of the current legislative session, allows a mutual water company and a public agency to form a joint powers authority (JPA) for the purpose of risk-pooling, as specified.
AB 617 (Perea) of the current legislative session, pending in the Senate, modifies portions of last year's Sustainable Groundwater Management Act, including, among other things, provisions that allow mutual water companies to join Groundwater Sustainability Agencies formed by one or more public agencies pursuant to a JPA, and to exercise all of the Groundwater Sustainability Agencies powers provided by the Sustainable Groundwater Management Act.
Arguments in Support. Sierra Club California, in support, states, "Despite the Open Meeting Act, mutual water companies are continuing to find ways to prevent citizens from attending meetings. To counter this, AB 1077 expands the open meeting requirements for mutual water companies in simple ways, like webcasts. This is a non-burdensome way to ensure that people can see the discussions surrounding items such as the rates they pay for water."
Arguments in Opposition. Rubio Canon Mutual Water Company, in opposition, states, "(AB 1077) imposes on privately-held companies requirements that no other private corporations in California must face (to with: potentially allowing non-shareholders and non-eligible persons to remotely attend private Board meetings)... and will burden small water companies with more regulation, expense and legal exposure for no apparent reason."
Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958 FN: 0001906
AB 1077
Page 6
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 1077
Amended: 8/31/15 in Senate
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
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.
Existing law:
Specifies that any corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation purposes or for domestic use must be known as a mutual water company.
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.
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:
Defines "eligible person" to mean any of the following:
A shareholder, or member of the mutual water company;
A commercial, or residential renter to which the company provides drinking water;
An elected official of a city, or county who represents people who receive drinking water directly from the company;
Any other person deemed eligible by the company’s articles or bylaws.
Allows an eligible person, upon 24 hours advance written notice, to attend meetings in person;
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.
Requires eligible persons to be notified at least four days prior to a meeting,
Requires the board to permit any eligible person to speak at any meeting, within reasonable time limits.
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;
Allows the board to meet in executive session, during a regular meeting, or exclusively in executive session, for certain purposes.
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.
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:
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:
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.
Allows the board to use teleconferencing, to provide any eligible person access to a meeting who has been denied access because either:
The eligible person did not give at least 24 hours’ notice of their intent to attend in person, or
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.
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.
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.
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.
Makes several changes to the provisions allowing for executive sessions, including:
Prohibits a board from meeting solely in an executive session and makes conforming changes to other provisions;
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);
Specifies that when a board meets in executive session to consider litigation, the litigation must be pending or potential;
Requires the board to meet in executive session if requested by a member subject to discipline, and allows 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
Purpose of the bill. This bill safeguards the ability of Californians, served by mutual water companies to provide 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.
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.: No Local: No
Sierra Club California
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
**** END ****
AB 1077
Page 6
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 1077
Amended: 6/22/15 in Senate
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
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.
Existing law:
Specifies that any corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation purposes or for domestic use must be known as a mutual water company.
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.
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:
Defines "eligible person" to mean any of the following:
A shareholder or member of the mutual water company;
A commercial or residential renter to which the company provides drinking water;
An elected official of a city or county who represents people who receive drinking water directly from the company;
Any other person deemed eligible by the company’s articles or bylaws.
Allows an eligible person, upon 24 hours advance written notice, to attend meetings in person;
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;
Requires eligible persons to be notified at least four days prior to a meeting;
Requires the board to permit any eligible person to speak at any meeting, within reasonable time limits;
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;
Allows the board to meet in executive session, during a regular meeting or exclusively in executive session, for certain purposes.
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.
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:
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:
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.
Allows the board to use teleconferencing to provide any eligible person access to a meeting who has been denied access because either:
The eligible person did not give at least 24 hours’ notice of their intent to attend in person, or
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.
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.
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.
Provides that a board cannot prohibit a person from attending the meeting either in person or by teleconference.
Makes several changes to the provisions allowing for executive sessions, including:
Prohibits a board from meeting solely in an executive session and makes conforming changes to other provisions;
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);
Specifies that when a board meets in executive session to consider litigation, the litigation must be pending or potential;
Requires the board to meet in executive session if requested by a member subject to discipline, and allows 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
Purpose of the bill. This bill safeguards the ability of Californians served by mutual water companies to provide 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.
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.: No Local: No
Sierra Club California
OPPOSITION: (Verified 6/24/15)
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
6/25/15 9:08:40
**** END ****
AB 1077 (Holden) 5/18/15 Page 5 of 5
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
Bill No: |
AB 1077 |
Hearing Date: |
6/17/15 |
Author: |
Holden |
Tax Levy: |
No |
Version: |
5/18/15 |
Fiscal: |
No |
Consultant: |
Favorini-Csorba |
||
MUTUAL WATER COMPANIES: OPEN MEETINGS
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.
Background and Existing Law
Public water systems that deliver domestic water generally fall into three categories: local agencies (such as cities and special districts), investor-owned public utilities, and mutual water companies—corporations that exist for the purpose of providing water to their shareholders, which are usually landowners that receive water service.
Nearly all Californians get their domestic water from local agencies (about 80 percent) or investor-owned public utilities (16 percent). However, about 1.3 million Californians (3 percent) receive their water from one of about 1,200 mutual water companies in the state. These companies can range in size from as small as 15 connections (households)--often in rural areas—to thousands of connections in urban areas.
Most mutual water companies are organized pursuant to the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. Shareholders in a mutual water company hold a right to purchase water from the company. Stock in a company is usually linked to the ownership of a parcel served by the company and transfers with the land when the parcel is sold to successive owners. This type of corporate structure allows landowners to establish what is essentially a customer-owned water provider to serve their properties.
Governance of a mutual water company is generally limited to shareholders, or members, of the company. While the details of any particular company’s governing structure are determined by its articles and bylaws, most mutual water companies allow only shareholders and members to vote on organizational matters and serve on the company’s governing board.
The State Department of Public Health and some county health departments regulate the quality of drinking water delivered by all public water systems. However, other aspects of public water systems’ operations—including their boundaries and rates—are regulated differently depending on the type of water system, as follows:
Local Agency Formation Commissions (LAFCOs) control the cities and special districts’ boundaries and local officials are responsible to their voters for their water rates.
The California Public Utilities Commission (PUC) controls investor-owned utilities’ service areas and their water rates.
Shareholders control the actions of mutual water companies. Neither LAFCOs nor the PUC regulate mutual water companies.
Furthermore, 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 240 (Rendon, 2013) to increase transparency requirements. AB 240 established the Mutual Water Company Open Meeting Act (the Act), which imposes requirements on the meetings of the board of directors of mutual water companies that operate a public water system. Among other requirements, the Act:
Defines "eligible person" to mean any of the following:
A shareholder or member of the mutual water company;
A commercial or residential renter to which the company provides drinking water;
An elected official of a city or county who represents people who receive drinking water directly from the company;
Any other person deemed eligible by the company’s articles or bylaws.
Allows an eligible person, upon 24 hours advance written notice, to attend meetings in person;
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;
Requires eligible persons to be notified at least four days prior to a meeting;
Requires the Board to permit any eligible person to speak at any meeting, within reasonable time limits;
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;
The Act includes two exceptions to the open meeting requirements above. First, the Act allows the board of a mutual water company to meet in a closed “executive session” to consider certain specified matters, including litigation, discipline of a member, contracting with third parties, or personnel matters. Eligible people are not entitled to attend executive sessions unless otherwise allow by the articles or bylaws of the mutual water company. These closed sessions may occur at a meeting of the board that is otherwise open to eligible people or at a meeting that is solely in executive session. Only two days’ notice is required for meetings solely in executive session. Any matter discussed in executive session must be generally noted in the minutes of the immediately following meeting that is open to eligible persons. Second, the Act further allows the Board to hold an emergency meeting without being required to give notice if there are circumstances that could not have been reasonably foreseen and that require immediate action.
AB 240 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.
Proposed Law
Assembly Bill 1077 revises portions of the Mutual Water Company Open Meetings Act to improve the access of eligible people to mutual water company board meetings in several ways. First, AB 1077 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.
Second, AB 1077 allows the board to use teleconferencing for the benefit of any eligible person who has been denied access to a meeting because either: (1) the eligible person did not give at least 24 hours’ notice of their intent to attend in person, or (2) 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. The bill 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. If the board uses teleconferencing, it must provide the meeting materials to the eligible person either electronically or physically before the meeting begins. AB 1077 also provides that a board cannot prohibit a person from attending the meeting either in person or by technology.
Third, AB 1077 makes several changes to the provisions allowing for executive sessions. Specifically, it:
Prohibits a board from meeting solely in an executive session and makes conforming changes to other provisions;
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);
Specifies that, when a board meets in executive session to consider litigation, the litigation must be pending or potential;
Requires the board to meet in executive session if requested by a member subject to discipline, and allows the member to attend such a session.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill. AB 1077 safeguards the ability of Californians served by mutual water companies to provide input on decisions that affect their water service. AB 1077 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, AB 1077 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 AB 1077 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 AB 1077 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, AB 1077 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.
3. It isn’t easy being Brown. The Brown Act includes many requirements intended to provide for open, responsive service provision by local government that have been accumulated over decades of experience. For example, the Brown Act requires local agencies’ legislative bodies to report the votes of individual officials for closed meetings and meetings conducted by teleconference. These provisions enable the public to be aware of how individual boards members vote when the vote is not taken in the public’s presence. While the requirements of AB 240 opened the meetings of mutual water companies to "eligible persons," its requirements are far more limited than the requirements of the Brown Act. Given that water service is a fundamental necessity and that customers of other types of public water systems have broad access to meetings and other avenues to affect the governance of their water provider (such as the ability to formally protest and forestall rate increases), the Committee may wish to consider amendments that go further than the changes AB 1077. Such amendments could include either:
Inserting cross references to the Brown Act that ensure that all of the requirements that apply to local agencies also apply to mutual water companies that operate a public water system, or;
Inserting the Brown Act requirements applicable to teleconferencing into the Mutual Water Company Open Meetings Act.
4. Let’s be clear. Some provisions of AB 1077 are ambiguous. Specifically, it is not clear what the meaning of allowing teleconferencing to be used “for the benefit of” eligible persons that otherwise could be barred from attending meetings. In addition, the prohibition on preventing an eligible person attending “by technology in compliance with this paragraph” is also unclear. The Committee may wish to consider the following clarifying amendments in order to make clear that teleconferencing should only be used to improve, the ability of eligible persons to attend a meeting, and that all eligible people must be allowed to attend meetings either in person or by teleconference.
On page 3, line 27, strike out “for the benefit of any eligible person” and insert “to provide any eligible person access to the meeting that otherwise would be”
On page 4, lines 4 and 5, strike out “technology in compliance with this paragraph” and insert “teleconference except as provided by section 14305(b) (2)”.
Assembly Actions
Assembly Local Government Committee: 9-0
Assembly Floor: 75-5
Support and Opposition
(6/11/15)
Support: Sierra Club California.
Opposition: Rubio Cañon Land and Water Association.
-- END --
AB 1077
Page 6
ASSEMBLY THIRD READING
AB 1077
(Holden)
As Amended May 18, 2015
Majority vote
Committee |
Votes |
Ayes |
Noes |
Local Government |
9-0 |
Maienschein, Gonzalez, Alejo, Chiu, Cooley, Gordon, Holden, Linder, Waldron |
|
SUMMARY: Makes a number of changes to the Mutual Water Company Open Meeting Act. Specifically, this bill:
Revises and recasts the Mutual Water Company Open Meeting Act (Act) as follows:
Requires a Board of Directors (Board) of a mutual water company to allow an eligible person to personally attend a meeting of the Board, if the eligible person gave the Board at least 24 hours advance written notice of his or her intent to personally attend the meeting;
Allows the Board to use teleconferencing for the benefit of any eligible person denied attendance at a meeting of the Board for failure to provide the notice specified above, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice of the meeting;
Requires a teleconferenced meeting or proceeding to comply with the Act and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company;
Requires, if the Board uses teleconferencing, the Board to provide to an eligible person attending a meeting by teleconference, before the meeting begins, an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting;
Prohibits a mutual water company Board from prohibiting an eligible person from attending a meeting of the Board either in person or by technology, as specified;
Defines "teleconference" to mean, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the Board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology;
Requires a Board to only meet in executive session during a meeting, and makes conforming changes;
Specifies that a Board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, or matters relating to the potential acquisition of real property or water rights;
Specifies that an eligible person shall be entitled to attend a teleconferenced meeting with or without fulfilling the notice requirements specified in a), above; and,
Specifies that a Board shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice of the meeting that was posted and distributed pursuant to the Act.
Makes additional clarifying and technical changes.
Makes a number of findings and declarations regarding mutual water companies.
EXISTING LAW:
Specifies that any corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation purposes or for domestic use must be known as a mutual water company.
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. A public water system includes the following:
Any collection, treatment, storage, and distribution facilities under control of the operator of the system that are used primarily in connection with the system;
Any collection or pretreatment storage facilities not under the control of the operator that are used primarily in connection with the system; and,
Any water system that treats water on behalf of one or more public water systems for the purpose of rendering it safe for human consumption.
Establishes, pursuant to the Act, increased transparency requirements for mutual water companies that operate a public water system, including the following provisions:
Allows any eligible person, upon 24 hours advance written notice, to attend meetings of the Board, except when the Board adjourns to, or meets solely in, executive session to consider litigation, matters relating to the formation of contracts with third parties, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholder's request, regarding the member or shareholder’s payment of assessments, as specified;
Requires an eligible person to be entitled to attend a teleconference meeting or the portion of a teleconference meeting that is open to eligible persons, and that meeting or portion of the meeting shall be audible to the eligible persons in a location specified in the notice of the meeting;
Requires any matter discussed in executive session to be generally noted in the minutes of the immediately following meeting that is open to eligible persons;
Requires, unless the bylaws provide for a longer period of notice, eligible persons to be given notice of the time and place of a meeting, as specified, except for an emergency meeting or a meeting that will be held solely in executive session, at least four days prior to the meeting;
Requires, except for an emergency meeting, eligible persons to be given notice of the time and place of a meeting that will be held solely in executive session at least two days prior to the meeting;
Requires the Board to permit any eligible person to speak at any meeting of the mutual water company or the Board, except for meetings of the Board held in executive session. A reasonable time limit for all eligible persons to speak to the Board or before a meeting of the mutual water company shall be established by the Board;
Provides, with limited exceptions, that a mutual water company Board may not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the meeting notice that was posted and distributed pursuant to the Act;
Includes in the definition of "meeting" a teleconference in which a majority of the members of the Board, in different locations, are connected by electronic means, through audio or video or both;
Requires a teleconference meeting to be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of the Corporations Code;
Requires, except for a meeting that will be held solely in executive session, the notice of a teleconference meeting to identify at least one physical location so that members of the mutual water company may attend and at least one member of the Board or a person designated by the Board shall be present at that location;
Provides that participation by Board members in a teleconference meeting constitutes presence at that meeting as long as all Board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the Board; and,
Defines "eligible person" to mean any of the following:
A shareholder or member of the mutual water company;
A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water;
An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis; or,
Any other person eligible to participate in the mutual water company’s meetings under provisions of the company's articles or bylaws.
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.
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.
FISCAL EFFECT: None
COMMENTS:
Bill Summary. This bill makes numerous changes to the Act, the major provisions of which are as follows:
Allows a mutual water company Board to use teleconferencing for the benefit of any eligible person who has been denied attendance at a Board meeting because the person failed to provide 24 hours advance written notice, or because the number of eligible persons who provided notice of attendance exceeds the room capacity of the meeting;
Requires the Board to provide an eligible person attending a meeting by teleconference an electronic copy or photocopy of all documents to be discussed at the meeting (excluding documents related to an executive session) before the meeting begins;
Requires a Board to meet in executive session only during a meeting (removes the ability of a Board to meet in executive session only, separate from of a meeting that eligible persons may attend);
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; and,
Specifies that an eligible person shall be allowed to attend a teleconference meeting with or without fulfilling the 24-hour notice requirements of the Act.
This bill is sponsored by the author.
Author's Statement. According to the author, "The existing Mutual Water Company Open Meetings Act permits water company shareholders and their tenants to attend meetings after providing notice. However, in the two years since the passage of AB 240 some water companies have struggled to comply with the Act. Greater interest in attending these public meetings has burdened mutual water companies small staffs, exceeded the capacity of some meeting facilities, and, in some cases, the water company's service territory is too large and remote for all shareholders to conveniently attend meetings.
"Assembly Bill 1077 will provide mutual water companies the ability to use teleconferencing tools, currently provided to local agencies, to provide better access to meetings. Whether a meeting is inaccessible to a shareholder because of distance or capacity of the mutual water companies facilities, teleconferencing will enable all shareholders to have their voice heard and provide enhanced opportunities for consumer participation in these companies operations."
Background. Public water systems that deliver domestic water generally fall into three categories:
Local agencies (cities and special districts). Local Agency Formation Commissions (LAFCOs) control the cities and special districts' boundaries and local officials are responsible to their voters for their water rates;
Investor-owned public utilities. The California Public Utilities Commission (PUC) controls the companies' service areas and their water rates; or,
Mutual water companies. These private entities, formed under statutes governing corporations, respond to their shareholders, usually the landowners who receive water service. Neither LAFCOs nor the PUC regulate mutual water companies.
The State Department of Public Health and some county health departments monitor the quality of drinking water delivered to most households, regardless of the type of public water system that delivers the water.
Most mutual water companies are organized pursuant to the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. Shareholders in a mutual water company hold a right to purchase water from the company. Stock in a company is usually linked to the ownership of a parcel served by the company and transfers with the land when the parcel is sold to successive owners. This type of corporate structure allows landowners to establish, essentially, a customer-owned water provider to serve their properties.
Governance of a mutual water company is generally limited to shareholders, or members, of the company. While the details of any particular company's governing structure are determined by its articles and bylaws, most mutual water companies allow only shareholders and members to vote on organizational matters and serve on the company's governing board.
Recent Legislative History. In response to concerns that some mutual water companies lacked capital to pay for needed water quality improvements and the managerial capacity to operate successful public water systems, the Legislature passed AB 54 (Solorio), Chapter 512, Statutes of 2011. AB 54 established training requirements for mutual water company's board members regarding the duties of board members, made mutual water companies liable for specified fines and penalties for violating the California Safe Drinking Water Act, and expanded LAFCOs’ authority to review matters related to mutual water companies.
More recently, AB 240 (Rendon), Chapter 633, Statutes of 2013, increased transparency requirements for mutual water companies by establishing the Act. The bill also allowed mutual water companies to impose liens to collect unpaid charges. While the requirements of AB 240 opened the meetings of mutual water companies to "eligible persons," these requirements are far more limited than the requirements of the Brown Act.
Related Legislation. AB 656 (Cristina Garcia) of the current legislative session, allows a mutual water company and a public agency to form a joint powers authority (JPA) to provide insurance, to be co-insured, and to provide risk-pooling and technical support, continuing education, safety engineering, and operational and managerial advisory assistance to members of the JPA for the purpose of reducing potential risk liabilities. AB 656 passed the Assembly Local Government Committee on a 9-0 vote on April 29 and is pending in the Assembly Appropriations Committee.
AB 617 (Perea) of the current legislative session, modifies portions of last year's Sustainable Groundwater Management Act, including, among other things, provisions that allow mutual water companies to join Groundwater Sustainability Agencies formed by one or more public agencies pursuant to a JPA, and to exercise all of the Groundwater Sustainability Agencies powers provided by Sustainable Groundwater Management Act. AB 617 is pending in the Assembly Appropriations Committee.
Arguments in Support. Sierra Club California, in support, states, "Despite the Open Meeting Act, mutual water companies are continuing to find ways to prevent citizens from attending meetings. To counter this, AB 1077 expands the open meeting requirements for mutual water companies in simple ways, like webcasts. This is a non-burdensome way to ensure that people can see the discussions surrounding items such as the rates they pay for water."
Arguments in Opposition. None on file.
Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958 FN: 0000444
AB 1077
Page 8
Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Brian Maienschein, Chair
AB 1077
(Holden) – As Amended April 28, 2015
SUBJECT: Mutual water companies: open meetings.
SUMMARY: Makes a number of changes to the Mutual Water Company Open Meeting Act. Specifically, this bill:
Revises and recasts the Mutual Water Company Open Meeting Act (Act) as follows:
Requires a Board of Directors (Board) of a mutual water company to allow an eligible person to personally attend a meeting of the Board, if the eligible person gave the Board at least 24 hours advance written notice of his or her intent to personally attend the meeting;
Allows the Board to use teleconferencing for the benefit of any eligible person denied attendance at a meeting of the Board for failure to provide the notice specified above, or because the number of eligible persons having already provided notice of attendance exceeds the room capacity of the place of the meeting described in the notice of the meeting;
Requires a teleconferenced meeting or proceeding to comply with the Act and all other applicable provisions of law relating to a specific type of meeting or proceeding conducted by a mutual water company;
Requires, if the Board uses teleconferencing, the Board to provide to an eligible person attending a meeting by teleconference, before the meeting begins, an electronic copy or photocopy of all documents not related to an executive session to be discussed at the meeting, or within 24 hours after the conclusion of the meeting if it is not feasible for the Board to provide photocopied or electronically scanned copies before the meeting begins;
Prohibits a mutual water company Board from prohibiting an eligible person from attending a meeting of the Board either in person or by technology, as specified;
Requires any eligible person who attends a meeting by teleconference as specified above to identify themselves and any other persons present with them who are able to hear the Board meeting as soon as practicable after they have joined the meeting;
Requires any eligible person attending a meeting by teleconference to ensure that no one who is not an eligible person is able to hear or participate in that meeting, and to comply with any time limits for speaking established pursuant to the Act;
Requires an eligible person to forfeit his or her right to participate in future Board meetings by teleconference if it is discovered that someone who is not an eligible person listened to the Board meeting with the knowledge of the eligible person, upon the Board finding a violation following a disciplinary hearing;
Defines “teleconference” to mean, to the extent it is technologically feasible, any electronic means, that includes either audio or video or both, that allows an eligible person to hear a meeting and verbally interact with the Board, including, but not limited to, a telephone, cellular telephone with speaker phone technology, or computer, or a device using internet-based video or audio conference technology;
Requires a Board to only meet in executive session during a meeting, and makes conforming changes;
Specifies that a Board may prohibit an eligible person from attending an executive session to consider pending or potential litigation, or matters relating to the potential acquisition of real property or water rights;
Specifies that an eligible person shall be allowed to attend a teleconferenced meeting without fulfilling the notice requirements specified in a), above;
Specifies that a Board shall not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice of the meeting that was posted and distributed pursuant to the Act; and,
Provides that nothing in the Act pertaining to a teleconference of a majority of the Board requires the notice of a meeting to disclose the use of teleconferencing if the use of teleconferencing is approved by the Board pursuant to a) through i), above.
Makes additional clarifying and technical changes.
Makes a number of findings and declarations regarding mutual water companies.
EXISTING LAW:
Specifies that any corporation organized for or engaged in the business of selling, distributing, supplying, or delivering water for irrigation purposes or for domestic use must be known as a mutual water company.
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. A public water system includes the following:
Any collection, treatment, storage, and distribution facilities under control of the operator of the system that are used primarily in connection with the system;
Any collection or pretreatment storage facilities not under the control of the operator that are used primarily in connection with the system; and,
Any water system that treats water on behalf of one or more public water systems for the purpose of rendering it safe for human consumption.
Establishes, pursuant to the Act, increased transparency requirements for mutual water companies that operate a public water system, including the following provisions:
Allows any eligible person, upon 24 hours advance written notice, to attend meetings of the Board, except when the Board adjourns to, or meets solely in, executive session to consider litigation, matters relating to the formation of contracts with third parties, member or shareholder discipline, personnel matters, or to meet with a member or shareholder, upon the member or shareholder’s request, regarding the member or shareholder’s payment of assessments, as specified;
Requires an eligible person to be entitled to attend a teleconference meeting or the portion of a teleconference meeting that is open to eligible persons, and that meeting or portion of the meeting shall be audible to the eligible persons in a location specified in the notice of the meeting;
Requires any matter discussed in executive session to be generally noted in the minutes of the immediately following meeting that is open to eligible persons;
Requires, unless the bylaws provide for a longer period of notice, eligible persons to be given notice of the time and place of a meeting, as specified, except for an emergency meeting or a meeting that will be held solely in executive session, at least four days prior to the meeting;
Requires, except for an emergency meeting, eligible persons to be given notice of the time and place of a meeting that will be held solely in executive session at least two days prior to the meeting;
Requires the Board to permit any eligible person to speak at any meeting of the mutual water company or the Board, except for meetings of the Board held in executive session. A reasonable time limit for all eligible persons to speak to the Board or before a meeting of the mutual water company shall be established by the Board;
Provides, with limited exceptions, that a mutual water company Board may not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the meeting notice that was posted and distributed pursuant to the Act;
Includes in the definition of "meeting" a teleconference in which a majority of the members of the Board, in different locations, are connected by electronic means, through audio or video or both;
Requires a teleconference meeting to be conducted in a manner that protects the rights of members of the mutual water company and otherwise complies with the requirements of the Corporations Code;
Requires, except for a meeting that will be held solely in executive session, the notice of a teleconference meeting to identify at least one physical location so that members of the mutual water company may attend and at least one member of the Board or a person designated by the Board shall be present at that location;
Provides that participation by Board members in a teleconference meeting constitutes presence at that meeting as long as all Board members participating in the meeting are able to hear one another and members of the mutual water company speaking on matters before the Board; and,
Defines "eligible person" to mean any of the following:
A shareholder or member of the mutual water company;
A person who is an occupant, pursuant to a lease or a rental agreement, of commercial space or a dwelling unit to which the mutual water company sells, distributes, supplies, or delivers drinking water;
An elected official of a city or county who represents people who receive drinking water directly from the mutual water company on a retail basis; or,
Any other person eligible to participate in the mutual water company’s meetings under provisions of the company’s articles or bylaws.
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.
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.
FISCAL EFFECT: None
COMMENTS:
Bill Summary. This bill makes numerous changes to the Act, the major provisions of which are as follows:
Removes a requirement that eligible persons be entitled to attend a teleconference meeting or portion of a teleconference meeting open to eligible persons, and a requirement that the teleconference meeting shall be audible to eligible persons in a location specified in the notice of the meeting. Instead, this bill allows a mutual water company Board to use teleconferencing for the benefit of any eligible person who has been denied attendance at a Board meeting because the person failed to provide 24 hours advance written notice, or because the number of eligible persons who provided notice of attendance exceeds the room capacity of the meeting;
Requires the Board to provide an eligible person attending a meeting by teleconference an electronic copy or photocopy of all documents to be discussed at the meeting (excluding documents related to an executive session) before the meeting begins, or within 24 hours after the conclusion of the meeting if it is not feasible for the Board to provide copies before the meeting begins;
Requires any eligible person who attends a meeting by teleconference to identify themselves and any other persons present with them who are able to hear the Board meeting as soon as practicable after they have joined the meeting;
Requires any eligible person attending a meeting by teleconference to ensure that no one who is not an eligible person is able to hear or participate in that meeting, and to comply with any time limits for speaking established pursuant to the Act;
Requires an eligible person to forfeit his or her right to participate in future Board meetings by teleconference if it is discovered that someone who is not an eligible person listened to the Board meeting with the knowledge of the eligible person and the Board finds a violation following a disciplinary hearing;
Requires a Board to meet in executive session only during a meeting (removes the ability of a Board to meet in executive session only, separate from of a meeting that eligible persons may attend);
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;
Specifies that an eligible person shall be allowed to attend a teleconference meeting without fulfilling the 24-hour notice requirements of the Act; and,
Provides that nothing in the Act pertaining to a teleconference of a Board majority requires the notice of a meeting to disclose the use of teleconferencing, if the use of teleconferencing is approved by the Board pursuant to the Act.
This bill is sponsored by the author.
Author's Statement. According to the author, "The existing Mutual Water Company Open Meetings Act permits water company shareholders and their tenants to attend meetings after providing notice. However, in the two years since the passage of AB 240 some water companies have struggled to comply with the Act. Greater interest in attending these public meetings has burdened mutual water companies small staffs, exceeded the capacity of some meeting facilities, and, in some cases, the water company’s service territory is too large and remote for all shareholders to conveniently attend meetings.
"Assembly Bill 1077 will provide mutual water companies the ability to use teleconferencing tools, currently provided to local agencies, to provide better access to meetings. Whether a meeting is inaccessible to a shareholder because of distance or capacity of the mutual water companies facilities, teleconferencing will enable all shareholders to have their voice heard and provide enhanced opportunities for consumer participation in these companies operations."
Background. Public water systems that deliver domestic water generally fall into three categories:
Local agencies (cities and special districts). Local Agency Formation Commissions (LAFCOs) control the cities and special districts’ boundaries and local officials are responsible to their voters for their water rates;
Investor-owned public utilities. The California Public Utilities Commission (PUC) controls the companies’ service areas and their water rates; or,
Mutual water companies. These private entities, formed under statutes governing corporations, respond to their shareholders, usually the landowners who receive water service. Neither LAFCOs nor the PUC regulate mutual water companies.
The State Department of Public Health and some county health departments monitor the quality of drinking water delivered to most households, regardless of the type of public water system that delivers the water.
Most mutual water companies are organized pursuant to the General Corporation Law or the Nonprofit Mutual Benefit Corporation Law. Shareholders in a mutual water company hold a right to purchase water from the company. Stock in a company is usually linked to the ownership of a parcel served by the company and transfers with the land when the parcel is sold to successive owners. This type of corporate structure allows landowners to establish, essentially, a customer-owned water provider to serve their properties.
Governance of a mutual water company is generally limited to
shareholders, or members,
of the company. While the details of
any particular company’s governing structure are determined by its
articles and bylaws, most mutual water companies allow only
shareholders and members to vote on organizational matters and serve
on the company’s governing board.
Recent Legislative History. In response to concerns that some mutual water companies lacked capital to pay for needed water quality improvements and the managerial capacity to operate successful public water systems, the Legislature passed AB 54 (Solorio), Chapter 512, Statutes 2011. AB 54 established training requirements for mutual water company's board members regarding the duties of board members, made mutual water companies liable for specified fines and penalties for violating the California Safe Drinking Water Act, and expanded LAFCOs’ authority to review matters related to mutual water companies.
More recently, AB 240 (Rendon), Chapter 633, Statutes of 2013, increased transparency requirements for mutual water companies by establishing the Act. The bill also allowed mutual water companies to impose liens to collect unpaid charges. While the requirements of AB 240 opened the meetings of mutual water companies to "eligible persons," these requirements are far more limited than the requirements of the Brown Act.
Policy Considerations. The Committee may wish to consider the following:
This bill removes a requirement that eligible persons be entitled to attend a teleconference meeting or portion of a teleconference meeting open to eligible persons. This bill also contains a provision stating that nothing in the Act pertaining to a teleconference of a Board majority requires the notice of a meeting to disclose the use of teleconferencing, if the use of teleconferencing is approved by the Board pursuant to the Act. There is no requirement in the Act for the Board to formally "approve" the use of teleconferencing. Furthermore, allowing a Board to use teleconferencing without including that information in the notice of the meeting and without a duty to allow eligible persons to participate seems counter to the Act's goals of increasing transparency
in the meetings of mutual water companies. The Committee may wish to consider restoring language that gives eligible persons the right to attend teleconference meetings (whether or not they provide proper notice) and striking language that allows a Board to teleconference without notice.
This bill requires a mutual water company Board to provide an eligible person who attends a meeting by teleconference a copy of all documents to be discussed at the meeting before the meeting begins, or within 24 hours after the conclusion of the meeting if it is not feasible for the Board to provide copies before the meeting begins. Providing copies of documents that will be discussed at a meeting a day later defeats the purpose of open, informed participation. Leaving this decision up to the discretion of the Board because it determined it wasn't "feasible" is questionable. The Committee may wish to consider striking this language from the bill.
This bill imposes a number of new requirements on eligible persons who attend meetings via teleconference. It requires eligible persons to identify themselves and any other persons present with them who are able to hear the Board meeting as soon as practicable after they have joined the meeting; and, it requires any eligible person to ensure that no one who is not an eligible person is able to hear or participate in that meeting. If it is discovered that someone who is not an eligible person listened to the Board meeting with the knowledge of the eligible person and the Board finds a violation following a disciplinary hearing, the eligible person must forfeit his or her right to participate in future Board meetings by teleconference. Mutual water companies are private corporations, not judicial bodies. These requirements for eligible persons and the authority granted to mutual water companies to conduct "disciplinary hearings" raise due process issues. The Committee may wish to consider striking this language from the bill.
Related Legislation. AB 656 (Cristina Garcia) allows a mutual water company and a public agency to form a joint powers authority (JPA) to provide insurance, to be co-insured, and to provide risk-pooling and technical support, continuing education, safety engineering, and operational and managerial advisory assistance to members of the JPA for the purpose of reducing potential risk liabilities. AB 656 passed this Committee on a 9-0 vote on April 29 and is pending in the Assembly Appropriations Committee.
AB 617 (Perea) modifies portions of last year's Sustainable Groundwater Management Act (SGMA), including, among other things, provisions that allow mutual water companies to join Groundwater Sustainability Agencies (GSA) formed by one or more public agencies pursuant to a JPA, and to exercise all of the GSA powers provided by SGMA. AB 617 is pending in the Assembly Appropriations Committee.
Arguments in Support. Sierra Club California, in support, states, "Despite the Open Meeting Act, mutual water companies are continuing to find ways to prevent citizens from attending meetings. To counter this, AB 1077 expands the open meeting requirements for mutual water companies in simple ways, like webcasts. This is a non-burdensome way to ensure that people can see the discussions surrounding items such as the rates they pay for water."
Arguments in Opposition. None on file.
REGISTERED SUPPORT / OPPOSITION:
Support
Sierra Club California
Opposition
None on file
Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958
Discussed in Hearing
39SEC
Assembly Floor
3MIN
Senate Floor
1MIN
Assembly Floor
2MIN
Assembly Standing Committee on Local Government
Bill Author
Bill Co-Author(s):