BILL ANALYSIS Ó AB 360 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 360 (Brownley) As Amended July 12, 2011 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |50-27|(May 19, 2011) |SENATE: |25-11|(July 14, | | | | | | |2011) | ----------------------------------------------------------------- Original Committee Reference: ED. SUMMARY : Requires charter schools to comply with the same conflict of interest requirements as school districts, commencing July 1, 2012. The Senate amendments : 1)Specify that a person who provides a loan to a charter school due to a school fiscal emergency, or who leases, or signs a guarantor agreement relative to the lease of, real property to be occupied by a charter school, is not disqualified because of that loan, lease, or guarantor agreement from also serving as a member of the governing body of the charter school or being an employee of the charter school; declare these instances as remote interests for purposes of the Government Code; and, specify that a member of the governing body of a charter school who is a lessor or guarantor shall abstain from voting on, or influencing or attempting to influence another member of the governing body regarding, all matters affecting the real property lease agreement or loan. 2)Specify a member of the governing body of a charter school shall abstain from voting on, or influencing or attempting to influence another member of the governing body regarding all matters uniquely affecting his or her own employment and personnel matters that uniquely affect a member's relative. 3)Delete the provision specifying for purposes of the Political Reform Act (PRA), the jurisdiction of a charter school shall be the county or counties in which the school's facility or facilities are located; the jurisdiction for a nonclassroom based charter school that does not have a facility shall be the physical boundaries of the county or counties where at least 10% of the pupils who are enrolled in the school reside or, if at least 10% of the pupils do not reside in a single county, the county in AB 360 Page 2 which the greatest number of pupils who are enrolled in the school reside. AS PASSED BY THE ASSEMBLY , this bill was substantially similar to the version passed by the Senate. FISCAL EFFECT : This bill is keyed non-fiscal by the Legislative Counsel. COMMENTS : This bill requires charter school governing board members to comply with substantially similar conflict of interest policies by which school district governing board members currently abide. Recent news reports of charter school board members engaging in inappropriate financial mismanagement have highlighted the need for charter school conflict of interest laws to be clarified. Currently, these investigations can take many months to resolve partly due to the fact that charter school governing board members and designated employees do not consistently file an annual statement of economic interest, which makes public any potential conflicts of interest that individual may have in their official capacity. While charter schools are given more autonomy than public schools, their governing boards have authority over public funds to be used for the educational benefit of their students. Charter school governing boards should be held to the same conflict of interest standards as school district governing boards. This bill requires charter school boards to file statements of economic interest according to the Political Reform Act; specifies that charter school board members may not be financially interested in any decision made by the board; requires charter schools to comply with the California Public Records Act; and, requires charter school boards to abide by the Brown Act or the Bagley-Keene Open Meetings Act. The bill also expressly authorizes charter school employees to serve on a charter school governing board. The Brown Act: The Brown Act governs meetings conducted by local legislative bodies, such as boards of supervisors, city councils, and school boards. The Brown Act represents the Legislature's determination of how the balance should be struck between public access to meetings of multi-member public bodies and the need for confidential candor, debate, and information gathering. California Public Records Act (CPRA): The CPRA was enacted in 1968 and according to the Attorney General, in enacting the CPRA, the Legislature stated that access to information concerning the conduct AB 360 Page 3 of the public's business is a fundamental and necessary right for every person in the state. Cases interpreting the CPRA also have emphasized that its primary purpose is to give the public an opportunity to monitor the functioning of their government. Government Code Section 1090: Government Code Section 1090 states that Members of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. In a 1983 opinion the Attorney General stated, "Section 1090 of the Government Code codifies the common law prohibition and the general policy of this state against public officials having a personal interest in contracts they make in their official capacities. Mindful of the ancient adage, that 'no man can serve two masters,' the section was enacted to ensure that public officials 'making' official contracts not be distracted by personal financial gain from exercising absolute loyalty and undivided allegiance to the best interest of the entity which they serve." Political Reform Act: The Fair Political Practices Commission (FPPC) was created by the Political Reform Act of 1974, a ballot initiative passed by California voters as Proposition 9. The FPPC provides written and oral advice to public agencies and officials; conducts seminars and training sessions; develops forms, manuals and instructions; and, receives and files statements of economic interests from many state and local officials. The FPPC investigates alleged violations of the Political Reform Act, imposes penalties when appropriate, and assists state and local agencies in developing and enforcing conflict-of-interest codes. School board members are required to comply with the PRA, and in so, must file a statement of economic interest, annually. Previous legislation: AB 572 (Brownley) of 2010 was substantially similar to this bill and was vetoed by the Governor. Analysis Prepared by : Chelsea Kelley / ED. / (916) 319-2087 FN: 0001722 AB 360 Page 4