Question
Please clarify for me the requirements of Brown Act compliance for a private nonprofit. We are members of an electric cooperative. As members of the cooperative we are each eligible to be board members. The elected directors make determinations on how operating capital is expended and invested. There has recently been allegations of fraud and theft among leading employees and directors of the board and the Attorney for the group is claiming they are not required to follow the Brown Act.
Answer
Whether or not the cooperative is subject to the Brown Act depends on whether it is technically a “legislative body,” which is defined as:
(1) A board, commission, committee, or other multimember body that governs a private corporation, limited liability company, or other entity that either:
(A) Is created by the elected legislative body in order to exercise authority that may lawfully be delegated by the elected governing body to a private corporation, limited liability company, or other entity.
(B) Receives funds from a local agency and the membership of whose governing body includes a member of the legislative body of the local agency appointed to that governing body as a full voting member by the legislative body of the local agency.
Gov’t Code section 54952(c)(1).
If an elected legislative body, i.e., the board of supervisors or city council, created the nonprofit, then it is subject to the Brown Act. Alternatively, the nonprofit could be subject to the Brown Act if it receives funds from a “local agency,” i.e., the county, city, etc., AND it includes one member of that legislative body (i.e., a member of the board of supervisors or city council) who was appointed to the nonprofit’s governing body as a “full voting member.”
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