BILL NUMBER: AB 165	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Lara
   (Coauthor: Assembly Member John A. Pérez)

                        JANUARY 20, 2011

   An act to amend Sections 14501, 35186, and 41020 of, and to add
Article 5.5 (commencing with Section 49010) to Chapter 6 of Part 27
of Division 4 of Title 2 of, the Education Code, relating to school
fees, and declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 165, as introduced, Lara. Pupil fees.
   (1) Existing law requires the Legislature to provide for a system
of common schools by which a free school shall be kept up and
supported in each district. Existing law prohibits a pupil enrolled
in school from being required to pay a fee, deposit, or other charge
not specifically authorized by law.
   This bill would prohibit a school district, school, or other
entity working under the supervision of, or in coordination with, a
district or school from imposing a pupil fee, as defined, for
participation in educational activities, as defined, as specified.
The bill would provide that this prohibition is not to be interpreted
to prohibit an entire school, class, sports team, or club from
voluntarily participating in fundraising or to prohibit school
districts and schools from providing pupils prizes or other
recognition for voluntarily participating in fundraising activities.
The bill would specify that these provisions are declarative of
existing law and should not be interpreted to prohibit a school
district or school from imposing a fee, deposit, or other charge
otherwise allowed by law.
   (2) Existing law requires the Controller, in consultation with the
Department of Finance and the State Department of Education, to
develop a plan to review and report on financial and compliance
audits, and with representatives of other entities, to recommend the
statements and other information to be included in the audit reports
filed with the state by local educational agencies and to propose the
content of an audit guide.
   This bill would require a compliance audit to include the
verification of compliance with the prohibition against the
imposition of pupil fees for participation in educational activities
in violation of specified law.
   (3) Existing law requires a school district to use its uniform
complaint process to help identify and resolve any deficiencies
related to instructional materials, emergency or urgent facilities
conditions that pose a threat to the health and safety of pupils or
staff, teacher vacancy or misassignment, and intensive instruction
and services provided to pupils who have not passed one or both parts
of the high school exit examination after the completion of grade
12. Existing law provides certain complainants the right to file an
appeal to the Superintendent of Public Instruction, who is required
to provide a written report to the State Board of Education that
describes the basis for the complaint and, as appropriate, proposes a
remedy. A notice regarding the appropriate subjects of a complaint
is required to be posted in each classroom in each school in the
school district and a complaint regarding those deficiencies is
required to be filed with the principal of the school or his or her
designee, except as specified.
   This bill also would require a school district to use its uniform
complaint process to help identify and resolve any deficiencies
related to the imposition of pupil fees for participation in
educational activities, as those terms are defined. The bill would
also provide persons with a complaint regarding the imposition of
pupil fees the right to file an appeal to the Superintendent and
would require the Superintendent to provide the written report to the
state board and the complainant no later than 30 working days after
the appeal was received by the Superintendent. The bill would require
that a remedy proposed in the Superintendent's report regarding the
imposition of an unlawful pupil fee shall include, but not be limited
to, requiring the offending school district or school to fully
reimburse all affected pupils, parents, or guardians. The bill would
also require the classroom notice to include certain information
about the prohibition against charging pupil fees for participation
in educational activities. By imposing additional duties on school
districts, this bill would impose a state-mandated local program.
   (4) Existing law requires a county superintendent of schools to
provide for an audit of all funds under his or her jurisdiction and
requires the governing board of a local educational agency to either
provide for an audit of the books and accounts of the local
educational agency or make arrangements with the county
superintendent of schools having jurisdiction over the local
educational agency to provide for that auditing. Existing law
requires a county superintendent of schools to be responsible for
reviewing the audit exceptions contained in an audit of a local
educational agency under his or her jurisdiction related to specified
topics, and determining whether the exceptions were either corrected
or an acceptable plan of correction was developed. Existing law
requires the county office of education to review certain audit
exceptions upon submission and receipt of a final audit report.
Existing law requires the Superintendent of Public Instruction to be
responsible for ensuring that local educational agencies have either
corrected or developed plans of correction for specified audit
exceptions.
   This bill, commencing with the 2010-11 audit of local educational
agencies, would require the county superintendent of schools to also
include in the review of audit exceptions those audit exceptions
related to the imposition of pupil fees for participation in
educational activities in violation of specified law, and to
determine whether the exceptions are either corrected or an
acceptable plan of correction is developed. The bill would also
require the county office of education to review audit exceptions
relating to the imposition of unlawful pupil fees. The bill would
require the auditor to notify the Controller, among others, if the
auditor determines that an exception related to the imposition of
unlawful pupil fees has not been corrected, or the local educational
agency has a new audit exception related to those unlawful pupil
fees, and would require the Controller to withhold certain payments
to the local educational agency until the agency provides
reimbursement, as specified. The bill would also require the
Superintendent to ensure that local educational agencies have either
corrected or developed plans of correction for audit exceptions
related to the imposition of unlawful pupil fees. By imposing
additional duties on local educational agencies, this bill would
impose a state-mandated local program.
   (5) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.

   (6) This bill would declare that it is to take effect immediately
as an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 14501 of the Education Code is amended to read:

   14501.  (a) As used in this chapter, "financial and compliance
audit" shall be consistent with the definition provided in the
"Standards for Audits of Governmental Organizations, Programs,
Activities, and Functions" promulgated by the Comptroller General of
the United States. Financial and compliance audits conducted under
this chapter shall fulfill federal single audit requirements.
   (b) As used in this chapter, "compliance audit" means an audit
that ascertains and verifies whether or not funds provided through
apportionment, contract, or grant, either federal or state, have been
properly disbursed and expended as required by law or regulation or
both and includes the verification of each of the following:
   (1) The reporting requirements for the sufficiency of textbooks or
instructional materials, or both, as defined in Section 60119.
   (2) Teacher misassignments pursuant to Section 44258.9.
   (3) The accuracy of information reported on the School
Accountability Report Card required by Section 33126. The
requirements set forth in paragraphs (1) and (2) and this paragraph
shall be added to the audit guide requirements pursuant to
subdivision (b) of Section 14502.1. 
   (4) Compliance with Section 49011 and Section 5 of Article IX of
the California Constitution. 
  SEC. 2.  Section 35186 of the Education Code is amended to read:
   35186.  (a) A school district shall use the uniform complaint
process it has adopted as required by Chapter 5.1 (commencing with
Section 4600) of Title 5 of the California Code of Regulations, with
modifications, as necessary, to help identify and resolve any
deficiencies related to instructional materials, emergency or urgent
facilities conditions that pose a threat to the health and safety of
pupils or staff, teacher vacancy or misassignment,  and
 intensive instruction and services provided pursuant to
Section 37254 to pupils who have not passed one or both parts of the
high school exit examination after the completion of grade 12  ,
    and the imposition of pupil fees for
participation in educational activities  .
   (1) A complaint may be filed anonymously. A complainant who
identifies himself or herself is entitled to a response if he or she
indicates that a response is requested. A complaint form shall
include a space to mark to indicate whether a response is requested.
If Section 48985 is otherwise applicable, the response, if requested,
and report shall be written in English and the primary language in
which the complaint was filed. All complaints and responses are
public records.
   (2) The complaint form shall specify the location for filing a
complaint. A complainant may add as much text to explain the
complaint as he or she wishes.
   (3) Except as provided pursuant to paragraph (4), a complaint
shall be filed with the principal of the school or his or her
designee. A complaint about problems beyond the authority of the
school principal shall be forwarded in a timely manner but not to
exceed 10 working days to the appropriate school district official
for resolution.
   (4) A complaint regarding any deficiencies related to intensive
instruction and services provided pursuant to Section 37254 to pupils
who have not passed one or both parts of the high school exit
examination after the completion of grade 12 shall be submitted to
the district official designated by the district superintendent. A
complaint may be filed at the school district office, or it may be
filed at the schoolsite and shall be immediately forwarded to the
designee of the district superintendent.
   (b) The principal or the designee of the district superintendent,
as applicable, shall make all reasonable efforts to investigate any
problem within his or her authority. The principal or designee of the
district superintendent shall remedy a valid complaint within a
reasonable time period but not to exceed 30 working days from the
date the complaint was received. The principal or designee of the
district superintendent shall report to the complainant the
resolution of the complaint within 45 working days of the initial
filing. If the principal makes this report, the principal shall also
report the same information in the same timeframe to the designee of
the district superintendent.
   (c) A complainant not satisfied with the resolution of the
principal or the designee of the district superintendent has the
right to describe the complaint to the governing board of the school
district at a regularly scheduled hearing of the governing board. As
to complaints involving a condition of a facility that poses an
emergency or urgent threat, as defined in paragraph (1) of
subdivision (c) of Section 17592.72,  or complaints involving the
imposition of pupil fees for participation in educational
activities,  a complainant who is not satisfied with the
resolution proffered by the principal or the designee of the district
superintendent has the right to file an appeal to the
Superintendent, who shall provide a written report to the state board
 and the complainant no later than 30 working days after the
date the appeal was received by the Superintendent  describing
the basis for the complaint and, as appropriate, a proposed remedy
for the issue described in the complaint.  If the report finds
that a school district or school has unlawfully imposed a pupil fee
for participation in educational activities,   the
Superintendent's remedy shall include, but not necessarily be limited
to, requiring the school district or school to fully reimburse all
affected pupils, parents, or guardians with interest,   as
calculated in subparagraph (D) of paragraph (1) of subdivision (m) of
Section 41020. 
   (d) A school district shall report summarized data on the nature
and resolution of all complaints on a quarterly basis to the county
superintendent of schools and the governing board of the school
district. The summaries shall be publicly reported on a quarterly
basis at a regularly scheduled meeting of the governing board of the
school district. The report shall include the number of complaints by
general subject area with the number of resolved and unresolved
complaints. The complaints and written responses shall be available
as public records.
   (e) The procedure required pursuant to this section is intended to
address all of the following:
   (1) A complaint related to instructional materials as follows:
   (A) A pupil, including an English learner, does not have
standards-aligned textbooks or instructional materials or
state-adopted or district-adopted textbooks or other required
instructional material to use in class.
   (B) A pupil does not have access to instructional materials to use
at home or after school.
   (C) Textbooks or instructional materials are in poor or unusable
condition, have missing pages, or are unreadable due to damage.
   (2) A complaint related to teacher vacancy or misassignment as
follows:
   (A) A semester begins and a teacher vacancy exists.
   (B) A teacher who lacks credentials or training to teach English
learners is assigned to teach a class with more than 20-percent
English learner pupils in the class. This subparagraph does not
relieve a school district from complying with state or federal law
regarding teachers of English learners.
   (C) A teacher is assigned to teach a class for which the teacher
lacks subject matter competency.
   (3) A complaint related to the condition of facilities that pose
an emergency or urgent threat to the health or safety of pupils or
staff as defined in paragraph (1) of subdivision (c) of Section
17592.72 and any other emergency conditions the school district
determines appropriate and the requirements established pursuant to
subdivision (a) of Section 35292.5.
   (4) A complaint related to the provision of intensive instruction
and services pursuant to paragraphs (4) and (5) of subdivision (d) of
Section 37254. 
   (5) A complaint related to the imposition of pupil fees for
participation in educational activities. 
   (f) In order to identify appropriate subjects of complaint, a
notice shall be posted in each classroom in each school in the school
district notifying parents, guardians, pupils, and teachers of the
following:
   (1) There should be sufficient textbooks and instructional
materials. For there to be sufficient textbooks and instructional
materials each pupil, including English learners, must have a
textbook or instructional materials, or both, to use in class and to
take home.
   (2) School facilities must be clean, safe, and maintained in good
repair.
   (3) There should be no teacher vacancies or misassignments as
defined in paragraphs (2) and (3) of subdivision (h). 
   (4) Pupils shall not be charged fees, including security deposits,
or be required to purchase materials or equipment, to participate in
a class or an extracurricular activity.  
   (4) 
    (5)  Pupils who have not passed the high school exit
examination by the end of grade 12 are entitled to receive intensive
instruction and services for up to two consecutive academic years
after completion of grade 12 or until the pupil has passed both parts
of the high school exit examination, whichever comes first, pursuant
to paragraphs (4) and (5) of subdivision (d) of Section 37254. The
information in this paragraph, which is to be included in the notice
required pursuant to this subdivision, shall only be included in
notices posted in classrooms in schools with grades 10 to 12,
inclusive. 
   (5) 
    (6)  The location at which to obtain a form to file a
complaint in case of a shortage. Posting a notice downloadable from
the Internet Web site of the department shall satisfy this
requirement.
   (g) A local educational agency shall establish local policies and
procedures, post notices, and implement this section on or before
January 1, 2005.
   (h) For purposes of this section, the following definitions apply:

   (1) "Educational activity" has the same meaning as specified in
subdivision (a) of Section 49010.  
   (1) 
    (2)  "Good repair" has the same meaning as specified in
subdivision (d) of Section 17002. 
   (2) 
    (3)  "Misassignment" means the placement of a
certificated employee in a teaching or services position for which
the employee does not hold a legally recognized certificate or
credential or the placement of a certificated employee in a teaching
or services position that the employee is not otherwise authorized by
statute to hold. 
   (4) "Pupil fees" has the same meaning as specified in subdivision
(b) of Section 49010.  
   (3) 
    (5)  "Teacher vacancy" means a position to which a
single designated certificated employee has not been assigned at the
beginning of the year for an entire year or, if the position is for a
one-semester course, a position to which a single designated
certificated employee has not been assigned at the beginning of a
semester for an entire semester.
  SEC. 3.  Section 41020 of the Education Code is amended to read:
   41020.  (a) It is the intent of the Legislature to encourage sound
fiscal management practices among local educational agencies for the
most efficient and effective use of public funds for the education
of children in California by strengthening fiscal accountability at
the district, county, and state levels.
   (b) (1) Not later than the first day of May of each fiscal year,
each county superintendent of schools shall provide for an audit of
all funds under his or her jurisdiction and control and the governing
board of each local educational agency shall either provide for an
audit of the books and accounts of the local educational agency,
including an audit of income and expenditures by source of funds, or
make arrangements with the county superintendent of schools having
jurisdiction over the local educational agency to provide for that
auditing.
   (2) A contract to perform the audit of a local educational agency
that has a disapproved budget or has received a negative
certification on any budget or interim financial report during the
current fiscal year or either of the two preceding fiscal years, or
for which the county superintendent of schools has otherwise
determined that a lack of going concern exists, is not valid unless
approved by the responsible county superintendent of schools and the
governing board.
   (3) If the governing board of a local educational agency has not
provided for an audit of the books and accounts of the local
educational agency by April 1, the county superintendent of schools
having jurisdiction over the local educational agency shall provide
for the audit of each local educational agency.
   (4) An audit conducted pursuant to this section shall comply fully
with the Government Auditing Standards issued by the Comptroller
General of the United States.
   (5) For purposes of this section, "local educational agency" does
not include community colleges.
   (c) Each audit conducted in accordance with this section shall
include all funds of the local educational agency, including the
student body and cafeteria funds and accounts and any other funds
under the control or jurisdiction of the local educational agency.
Each audit shall also include an audit of pupil attendance
procedures.
   (d) All audit reports for each fiscal year shall be developed and
reported using a format established by the Controller after
consultation with the Superintendent and the Director of Finance.
   (e) (1) The cost of the audits provided for by the county
superintendent of schools shall be paid from the county school
service fund and the county superintendent of schools shall transfer
the pro rata share of the cost chargeable to each district from
district funds.
   (2) The cost of the audit provided for by a governing board shall
be paid from local educational agency funds. The audit of the funds
under the jurisdiction and control of the county superintendent of
schools shall be paid from the county school service fund.
   (f) (1) The audits shall be made by a certified public accountant
or a public accountant, licensed by the California Board of
Accountancy, and selected by the local educational agency, as
applicable, from a directory of certified public accountants and
public accountants deemed by the Controller as qualified to conduct
audits of local educational agencies, which shall be published by the
Controller not later than December 31 of each year.
   (2) Commencing with the 2003-04 fiscal year and except as provided
in subdivision (d) of Section 41320.1, it is unlawful for a public
accounting firm to provide audit services to a local educational
agency if the lead audit partner, or coordinating audit partner,
having primary responsibility for the audit, or the audit partner
responsible for reviewing the audit, has performed audit services for
that local educational agency in each of the six previous fiscal
years. The Education Audits Appeal Panel may waive this requirement
if the panel finds that no otherwise eligible auditor is available to
perform the audit.
   (3) It is the intent of the Legislature that, notwithstanding
paragraph (2), the rotation within public accounting firms conform to
provisions of the federal Sarbanes-Oxley Act of 2002 (P.L. 107-204;
15 U.S.C. Sec. 7201 et seq.), and upon release of the report required
by the act of the Comptroller General of the United States
addressing the mandatory rotation of registered public accounting
firms, the Legislature intends to reconsider the provisions of
paragraph (2). In determining which certified public accountants and
public accountants shall be included in the directory, the Controller
shall use the following criteria:
   (A) The certified public accountants or public accountants shall
be in good standing as certified by the Board of Accountancy.
   (B) The certified public accountants or public accountants, as a
result of a quality control review conducted by the Controller
pursuant to Section 14504.2, shall not have been found to have
conducted an audit in a manner constituting noncompliance with
subdivision (a) of Section 14503.
   (g) (1) The auditor's report shall include each of the following:
   (A) A statement that the audit was conducted pursuant to standards
and procedures developed in accordance with Chapter 3 (commencing
with Section 14500) of Part 9 of Division 1 of Title 1.
   (B) A summary of audit exceptions and management improvement
recommendations.
   (C) Each audit of a local educational agency shall include an
evaluation by the auditor on whether there is substantial doubt about
the ability of the local educational agency to continue as a going
concern for a reasonable period of time. This evaluation shall be
based on the Statement of Auditing Standards (SAS) No. 59, as issued
by the AICPA regarding disclosure requirements relating to the
ability of the entity to continue as a going concern.
   (2) To the extent possible, a description of correction or plan of
correction shall be incorporated in the audit report, describing the
specific actions that are planned to be taken, or that have been
taken, to correct the problem identified by the auditor. The
descriptions of specific actions to be taken or that have been taken
shall not solely consist of general comments such as "will implement,"
"accepted the recommendation," or "will discuss at a later date."
   (h) Not later than December 15, a report of each local educational
agency audit for the preceding fiscal year shall be filed with the
county superintendent of schools of the county in which the local
educational agency is located, the department, and the Controller.
The Superintendent shall make any adjustments necessary in future
apportionments of all state funds, to correct any audit exceptions
revealed by those audit reports.
   (i) (1) Commencing with the 2002-03 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall be responsible
for reviewing the audit exceptions contained in an audit of a local
educational agency under his or her jurisdiction related to
attendance, inventory of equipment, internal control, and any
miscellaneous items, and determining whether the exceptions have been
either corrected or an acceptable plan of correction has been
developed.
   (2) Commencing with the 2004-05 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall include in the
review of audit exceptions performed pursuant to this subdivision
those audit exceptions related to use of instructional materials
program funds, teacher misassignments pursuant to Section 44258.9,
information reported on the school accountability report card
required pursuant to Section 33126 and shall determine whether the
exceptions are either corrected or an acceptable plan of correction
has been developed. 
   (3) Commencing with the 2010-11 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall include in the
review of audit exceptions performed pursuant to this subdivision
those audit exceptions related to the imposition of pupil fees for
participation in educational activities in violation of Section 49011
and Section 5 of Article IX of the California Constitution and shall
determine whether the exceptions are either corrected or an
acceptable plan of correction has been developed. 
   (j) Upon submission of the final audit report to the governing
board of each local educational agency and subsequent receipt of the
audit by the county superintendent of schools having jurisdiction
over the local educational agency, the county office of education
shall do all of the following:
   (1) Review audit exceptions related to attendance, inventory of
equipment, internal control, and other miscellaneous exceptions.
Attendance exceptions or issues shall include, but not be limited to,
those related to revenue limits, adult education, and independent
study. 
   (2) Review audit exceptions related to the imposition of pupil
fees for participation in educational activities in violation of
Section 49011 and Section 5 of Article IX of the California
Constitution.  
   (2) 
   (3)  If a description of the correction or plan of
correction has not been provided as part of the audit required by
this section, then the county superintendent of schools shall notify
the local educational agency and request the governing board of the
local educational agency to provide to the county superintendent of
schools a description of the corrections or plan of correction by
March 15. 
   (3) 
    (4)  Review the description of correction or plan of
correction and determine its adequacy. If the description of the
correction or plan of correction is not adequate, the county
superintendent of schools shall require the local educational agency
to resubmit that portion of its response that is inadequate.
   (k) Each county superintendent of schools shall certify to the
Superintendent and the Controller, not later than May 15, that his or
her staff has reviewed all audits of local educational agencies
under his or her jurisdiction for the prior fiscal year, that all
exceptions that the county superintendent was required to review were
reviewed, and that all of those exceptions, except as otherwise
noted in the certification, have been corrected by the local
educational agency or that an acceptable plan of correction has been
submitted to the county superintendent of schools. In addition, the
county superintendent shall identify, by local educational agency,
any attendance-related audit exception or exceptions involving state
funds, and require the local educational agency to which the audit
exceptions were directed to submit appropriate reporting forms for
processing by the Superintendent.
   (  l  )  (1)    In the audit of a local
educational agency for a subsequent year, the auditor shall review
the correction or plan or plans of correction submitted by the local
educational agency to determine if the exceptions have been resolved.
If not, the auditor shall immediately notify the appropriate county
office of education and the department and restate the exception in
the audit report. After receiving that notification, the department
shall either consult with the local educational agency to resolve the
exception or require the county superintendent of schools to follow
up with the local educational agency. 
   (2) If, in the audit of a local educational agency for a
subsequent year, the auditor determines that an exception related to
the imposition of pupil fees for participation in educational
activities in violation of Section 49011 and Section 5 of Article IX
of the California Constitution has not been corrected, or that the
local educational agency has a new audit exception related to the
imposition of pupil fees for participation in educational activities
in violation of Section 49011 and Section 5 of Article IX of the
California Constitution, the auditor shall immediately notify the
appropriate county office of education, the Controller, the
Superintendent, and the Director of Finance. Upon receiving this
notification, the Controller shall withhold 1 percent of the amount
authorized for administrative costs, which are expenditures coded to
general administrative functions (codes 7000 to 7999, inclusive)
pursuant to Procedure 325 of Section 300 of the California School
Accounting Manual, from the next principal apportionment to the local
educational agency, until the agency reimburses all pupil fees
collected in violation of Section 49011 and Section 5 of Article IX
of the California Constitution, with applicable interest, as provided
for in subparagraph (D) of paragraph (1) of subdivision (m). 
   (m) (1) The Superintendent shall be responsible for ensuring that
local educational agencies have either corrected or developed plans
of correction for any one or more of the following:
   (A) All federal and state compliance audit exceptions identified
in the audit.
   (B) Any exceptions that the county superintendent certifies as of
May 15 have not been corrected.
   (C) Any repeat audit exceptions that are not assigned to a county
superintendent to correct. 
   (D) All audit exceptions related to the imposition of pupil fees
for participation in educational activities in violation of Section
49011 and Section 5 of Article IX of the California Constitution. An
audit exception related to the imposition of these pupil fees shall
not be deemed corrected until the local educational agency has, as a
minimum, fully reimbursed all affected parents, guardians, and
pupils, with interest. The amount of the interest shall be calculated
based on the date the unlawful fee was collected and the applicable
interest rate applied to the actual cash held in the local
educational agency's bank account. 
   (2) In addition, the Superintendent shall be responsible for
ensuring that county superintendents of schools and each county board
of education that serves as the governing board of a local
educational agency either correct all audit exceptions identified in
the audits of county superintendents of schools and of the local
educational agencies for which the county boards of education serve
as the governing boards or develop acceptable plans of correction for
those exceptions.
   (3) The Superintendent shall report annually to the Controller on
his or her actions to ensure that school districts, county
superintendents of schools, and each county board of education that
serves as the governing board of a school district have either
corrected or developed plans of correction for any of the exceptions
noted pursuant to paragraph (1).
   (n) To facilitate correction of the exceptions identified by the
audits issued pursuant to this section, commencing with 2002-03
audits pursuant to this section, the Controller shall require
auditors to categorize audit exceptions in each audit report in a
manner that will make it clear to both the county superintendent of
schools and the Superintendent which
         exceptions they are responsible for ensuring the correction
of by a local educational agency. In addition, the Controller
annually shall select a sampling of county superintendents of schools
and perform a followup of the audit resolution process of those
county superintendents of schools and report the results of that
followup to the Superintendent and the county superintendents of
schools that were reviewed.
   (o) County superintendents of schools shall adjust subsequent
local property tax requirements to correct audit exceptions relating
to local educational agency tax rates and tax revenues.
   (p) If a governing board or county superintendent of schools fails
or is unable to make satisfactory arrangements for the audit
pursuant to this section, the Controller shall make arrangements for
the audit and the cost of the audit shall be paid from local
educational agency funds or the county school service fund, as the
case may be.
   (q) Audits of regional occupational centers and programs are
subject to the provisions of this section.
   (r) This section does not authorize examination of, or reports on,
the curriculum used or provided for in any local educational agency.

   (s) Notwithstanding any other provision of law, a nonauditing,
management, or other consulting service to be provided to a local
educational agency by a certified public accounting firm while the
certified public accounting firm is performing an audit of the agency
pursuant to this section must be in accord with Government
Accounting Standards, Amendment No. 3, as published by the United
States General Accounting Office.
  SEC. 4.  Article 5.5 (commencing with Section 49010) is added to
Chapter 6 of Part 27 of Division 4 of Title 2 of the Education Code,
to read:

      Article 5.5.  Pupil Fees


   49010.  For purposes of this article, the following terms have the
following meanings:
   (a) "Educational activity" means an activity that constitutes an
integral fundamental part of elementary and secondary education, or
that amounts to a necessary element of a school activity, including,
but not limited to, curricular and extracurricular activities.
   (b) "Pupil fee" means a fee, deposit, or other charge imposed on
pupils, or a pupil's parents or guardians, in violation of Section
49011 and Section 5 of Article IX of the California Constitution,
which require educational activities to be provided free of charge to
all pupils without regard to their families' ability or willingness
to pay fees or request special waivers, as provided for in Hartzell
v. Connell (1984) 35 Cal.3d 899. A pupil fee includes, but is not
limited to, all of the following:
   (1) A fee charged to a pupil as a condition for registering for
school or classes, or as a condition for participation in a class or
an extracurricular activity, regardless of whether the class or
activity is elective or compulsory, or is for credit.
   (2) A security deposit, or other payment, that a pupil is required
to make to obtain a lock, locker, book, class apparatus, musical
instrument, uniform, or other materials or equipment.
   (3) A purchase that a pupil is required to make to obtain
materials, supplies, equipment, or uniforms associated with an
educational activity.
   49011.  (a) A school district, school, or other entity working
under the supervision of, or in coordination with, a district or
school shall not impose a pupil fee for participation in educational
activities.
   (b) All of the following requirements apply to the prohibition
identified in subdivision (a):
   (1) All supplies, materials, and equipment needed to participate
in educational activities shall be provided to pupils free of charge.

   (2) A waiver process shall not render an otherwise impermissible
pupil fee permissible.
   (3) School districts and schools shall not establish a two-tier
educational system by requiring a minimal educational standard and
also offering a second, higher educational standard that pupils may
only obtain through payment of a fee or purchase of additional
supplies that the school district or school does not provide.
   (4) A school district or school shall not offer course credit or
privileges related to educational activities in exchange for money or
donations of goods or services from a pupil or a pupil's parents or
guardians, and a school district or school shall not remove course
credit or privileges related to educational activities, or otherwise
discriminate against a pupil, because the pupil or the pupil's
parents or guardians did not or will not provide money or donations
of goods or services to the school district or school.
   (c) This article shall not be interpreted to prohibit an entire
school, class, sports team, or club from voluntarily participating in
fundraising or to prohibit school districts and schools from
providing pupils prizes or other recognition for voluntarily
participating in fundraising activities.
   (d) This article is declarative of existing law and shall not be
interpreted to prohibit a school district or school from imposing a
fee, deposit, or other charge otherwise allowed by law.
  SEC. 5.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.
  SEC. 6.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to comply with a settlement agreement that requires a
good faith effort to obtain the enactment of legislation that
prevents and remedies the imposition of unlawful pupil fees as soon
as possible, it is necessary for this act to take effect immediately.