Sacramento Report

The second year of a legislative session starts quickly. The so-called "House of Origin" deadline requires that any legislation introduced during the first year of the two-year session clear its house of origin by the last day in January of the second year. For our purposes, that means that Assembly bills introduced during 2005 must have reached the Senate by the end of January and similar Senate bills had to pass to the Assembly or, by rule, those measures would die.

SB 540 (Kehoe) was the only legislation that moved last month of interest to apartment owners. As originally drafted last year, the bill would have prohibited a landlord from banning the display of noncommercial signs, posters, flags, or banners subject to some size, quantity and materials limitations. After meeting with representatives from apartment and realtor interests - and learning of the significant substantive issues the bill presented - Senator Kehoe agreed to postpone consideration of the measure during 2005.

Kehoe returned this year with a more focused proposal. As amended on January 23rd of this year, the bill would allow tenants to display campaign signs relating to an election or legislative vote from 90 days prior until 15 days following the relevant election or vote. The legislation would restrict tenants to signs no more than nine square feet in size. By narrowing the bill to political signs only and limiting both the size and the duration of the posting the bill now would place a much less onerous burden on apartment owners.

Despite the improvements in the bill the Apartment Association, California Southern Cities along with the California Association of Realtors and other organizations representing apartment owners opposed the bill when the Senate Judiciary Committee considered the measure during its January 17th hearing. (One note on timing. Although the bill wasn't formally amended until one week after the committee hearing Senator Kehoe had apprised interested parties of her intended amendments several days before the hearing. Despite the dates appearing not to correspond, the debate during the January 17th hearing concerned the January 23rd version of the bill.) The opposition made three primary arguments: (1) the bill could conflict with various local ordinances as well as private community agreements; (2) the bill placed no limit on the number of signs a tenant could display; and (3) the bill did not provide for reasonable restrictions on the method of display.

SB 540 passed out of the Senate along an essentially party line vote. The Judiciary Committee approved the bill by a 4-1 vote (four of the five Democrats voting "AYE" with the fifth not present while one Republican voted "NO" with the second on the committee not present). The full Senate passed the bill by a 25-12 vote. On the Senate floor twenty-three of the twenty-five Democrats cast AYE votes with the remaining two absent. Of the fourteen Republicans, twelve voted NO but two did vote AYE. The Senate currently has one vacancy. The measure now moves to the Assembly where it will next be heard in the Assembly Judiciary Committee likely this May. Senator Kehoe expressed an interest after the Senate committee hearing in attempting to work out a compromise. Meetings to that end likely will occur during the next several months.

The debate on SB 540 has been somewhat off point. Supporters cast the bill as an enhancement of free speech rights. That is a legally incorrect argument. While both the United States and the California constitutions provide a right for free speech that right protects against government regulation of speech and not restrictions that landowners place on private property. The federal right is enforceable only against so-called "state actors." The California right to free speech, which can be found in Article 1, Section II of the state constitution, provides a broader speech protection than the federal constitution. In interpreting this section, California courts have ruled that the state right to free speech protects against privately-placed restrictions when the property regulated is "freely and openly accessible to the public." State courts have struck down speech restrictions in privately-owned shopping malls, holding that the public character of the property makes it akin to the public square. California courts, however, have declined specifically in the Golden Gateway case to extend free-speech protections to privately-owned apartment complexes. Under current law, California tenants do not enjoy a constitutional right to free speech in the rental complex. The scope of speech rights and the public status of apartment complexes turn on court interpretations of the state constitution that this legislation could not affect. SB 540 poses the related but distinct policy question of whether the Legislature should extend statutory protections for speech.

THE LEGISLATIVE YEAR AHEAD

February 24th marks the deadline for new legislation to be introduced for consideration this year. Predictions as to 2006 legislation that will affect property owners are premature at this point but odds are that a new version of last year's SB 51 (Kuehl) will be seen in 2006. That legislation, stopped on the Assembly Floor during the final week of session last September, would have continued the requirement that landlords give a 60-day notice of termination on a periodic tenancy when tenants have resided at the dwelling for one year or more. New legislation regulating recycling at apartment complexes is supposedly in the works as well. A future edition of this report will detail all the bill introductions of interest to association members.
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