BILL NUMBER: AB 2278	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Swanson

                        FEBRUARY 24, 2012

   An act to amend Section 41326 of the Education Code, relating to
school districts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2278, as introduced, Swanson. School districts: state
administrators.
   Existing law authorizes the governing board of a school district
to request an emergency apportionment through the Superintendent of
Public Instruction if the governing board of a school district
determines during a fiscal year that its revenues are less than the
amount necessary to meet its current year expenditure obligations.
Existing law provides that if a school district accepts an emergency
apportionment that exceeds an amount equal to 200% of the amount of
the reserve recommended for that school district, as specified, the
Superintendent must, among other things, assume all the legal rights,
duties, and powers of the governing board of the qualifying school
district, as defined, and, in consultation with the county
superintendent of schools, appoint an administrator to act on the
Superintendent's behalf. Existing law also provides that the
governing board of a qualifying school district has no rights,
duties, or powers for the period of time the Superintendent exercises
the authority given to the Superintendent as a result of an
emergency apportionment that exceeds an amount equal to 200% of the
amount of the reserve recommended for the school district.
   This bill would authorize the governing board of a qualifying
school district to annually evaluate the administrator appointed by
the Superintendent. The bill would also require that the evaluation
of the administrator be submitted to the Governor, the Legislature,
the Superintendent, and the County Office Fiscal Crisis and
Management Team.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  Section 41326 of the Education Code is amended to read:

   41326.  (a) Notwithstanding any other provision of this code, the
acceptance by a school district of an apportionment made pursuant to
Section 41320 that exceeds an amount equal to 200 percent of the
amount of the reserve recommended for that school  district
under the standards and criteria adopted pursuant to Section 33127
constitutes the agreement by the  school  district to the
conditions set forth in this article. Prior to applying for an
emergency apportionment in the amount identified in this subdivision,
a  governing board of a  school district  governing
board  shall discuss the need for that apportionment at a
regular or special meeting of the governing board and, at that
meeting, shall receive testimony regarding the apportionment from
parents, exclusive representatives of employees of the  school
 district, and other members of the community. For purposes of
this article, "qualifying school district" means a school district
that accepts a loan as described in this subdivision.
   (b) The Superintendent shall assume all the legal rights, duties,
and powers of the governing board of a qualifying school district.
The Superintendent, in consultation with the county superintendent of
schools, shall appoint an administrator to act on his or her behalf
in exercising the authority described in this subdivision in
accordance with all of the following:
   (1) The administrator shall serve under the direction and
supervision of the Superintendent until terminated by the
Superintendent at his or her discretion. The Superintendent shall
consult with the county superintendent of schools before terminating
the administrator.
   (2) The administrator shall have recognized expertise in
management and finance.
   (3) To facilitate the appointment of the administrator and the
employment of any necessary staff, for the purposes of this section,
the Superintendent  of Public Instruction  is exempt
from the requirements of Article 6 (commencing with Section 999) of
Chapter 6 of Division 4 of the Military and Veterans Code and Part 2
(commencing with Section 10100) of Division 2 of the Public Contract
Code.
   (4) Notwithstanding any other law, the Superintendent may appoint
an employee of the state or the office of the county superintendent
of schools to act as administrator for up to the duration of the
administratorship. During the tenure of his or her appointment, the
administrator, if he or she is an employee of the state or the office
of the county superintendent of schools, is an employee of the 
qualifying  school district, but shall remain in the same
retirement system under the same plan that has been provided by his
or her employment with the state or the office of the county
superintendent of schools. Upon the expiration or termination of the
appointment, the employee shall have the right to return to his or
her former position, or to a position at substantially the same level
as that position, with the state or the office of the county
superintendent of schools. The time served in the appointment shall
be counted for all purposes as if the administrator had served that
time in his or her former position with the state or the office of
the county superintendent of schools.
   (5) Except for an individual appointed as an administrator by the
Superintendent  of Public Instruction  pursuant to
paragraph (4), the administrator shall be a member of the State
Teachers' Retirement System, if qualified, for the period of service
as administrator, unless he or she elects in writing not to become a
member. A person who is a member or retirant of the State Teachers'
Retirement System at the time of appointment shall continue to be a
member or retirant of the system for the duration of the appointment.
If the administrator chooses to become a member or is already a
member, the administrator shall be placed on the payroll of the 
qualifying  school district for the purposes of providing
appropriate contributions to the system. The Superintendent may also
require the administrator to be placed on the payroll of the 
qualifying  school district for purposes of remuneration, other
benefits, and payroll deductions.
   (6) For the purposes of workers' compensation benefits, the
administrator is an employee of the qualifying  school
district, except that an administrator appointed pursuant to
paragraph (4) may be deemed an employee of the state or office of the
county superintendent of schools, as applicable.
   (7) The qualifying  school  district shall add the
administrator as a covered employee of the  qualifying 
school district for all purposes of errors and omissions liability
insurance policies.
   (8) The salary and benefits of the administrator shall be
established by the Superintendent  of Public Instruction
 and paid by the qualifying school district.
   (9) The Superintendent or the administrator may, on a short-term
basis, employ at  district expense   the expense
of the qualifying school district  any staff necessary to
assist the administrator, including, but not limited to, a certified
public accountant.
   (10) The administrator may do all of the following:
   (A) Implement substantial changes in the fiscal policies and
practices of the  qualifying school  district, including, if
necessary, the filing of a petition under Chapter 9 (commencing with
Section 901) of Title 11 of the United States Code for the
adjustment of indebtedness.
   (B) Revise the educational program of the  qualifying school
 district to reflect realistic income projections and pupil
performance relative to state standards.
   (C) Encourage all members of the school community to accept a fair
share of the burden of the fiscal recovery of the  qualifying
school  district.
   (D) Consult, for the purposes described in this subdivision, with
the governing board of the  qualifying  school district, the
exclusive representatives of the employees of the  qualifying
school  district, parents, and the community.
   (E) Consult with, and seek recommendations from, the
Superintendent, county superintendent of schools, and the County
Office Fiscal Crisis and Management Assistance Team authorized
pursuant to subdivision (c) of Section 42127.8 for the purposes
described in this article.
   (F) With the approval of the Superintendent, enter into agreements
on behalf of the  qualifying school  district and, subject
to any contractual obligation of the  qualifying school 
district, change any existing  school  district rules,
regulations, policies, or practices as necessary for the effective
implementation of the recovery plans referred to in Sections 41327
and 41327.1.
   (c) (1)  For   Except as provided in
paragraph (2)   , for  the period of time during which
the Superintendent  of Public Instruction  exercises
the authority described in subdivision (b), the governing board of
the qualifying school district shall serve as an advisory body
reporting to the state-appointed administrator, and has no rights,
duties, or powers, and is not entitled to any stipend, benefits, or
other compensation from the  qualifying school  district.

   (2) The governing board of a qualifying school district may
annually evaluate an administrator for the duration of the
administratorship. An evaluation of an administrator conducted by the
governing board of a qualifying school district shall be submitted
to the Governor, the Legislature, the Superintendent, and the County
Office Fiscal Crisis and Management Assistance Team.  
   (2) 
    (3)  Upon the appointment of an administrator pursuant
to this section, the district superintendent of schools is no longer
an employee of the  qualifying school  district. 
   (3) 
    (4)  A determination of the severance compensation for
the district superintendent  of schools  shall be made
pursuant to subdivision (j).
   (d) Notwithstanding Section 35031 or any other law, the
administrator may, after according the employee reasonable notice and
the opportunity for a hearing, terminate the employment of any
deputy, associate, assistant superintendent of schools, or any other
 school  district level administrator who is employed by a
 qualifying  school district under a contract of employment
signed or renewed after January 1, 1992, if the employee fails to
document, to the satisfaction of the administrator, that 
prior to   before  the date of the acceptance of
the apportionment he or she either advised the governing board of the
 qualifying school  district, or his or her superior, that
actions contemplated or taken by the governing board  of the
qualifying school district  could result in the fiscal
insolvency of the  qualifying school  district, or took
other appropriate action to avert that fiscal insolvency.
   (e) The authority of the Superintendent, and the administrator,
under this section shall continue until all of the following occur:
   (1) (A) After one complete fiscal year has elapsed following the
 qualifying school  district's acceptance of a loan as
described in subdivision (a), the administrator determines, and so
notifies the Superintendent and the county superintendent of schools,
that future compliance by the school district with the recovery
plans approved pursuant to paragraph (2) is probable.
   (B) The Superintendent may return power to the governing board
 of a qualifying school district  for any area listed in
subdivision (a) of Section 41327.1 if performance under the recovery
plan for that area has been demonstrated to the satisfaction of the
Superintendent.
   (2) The Superintendent has approved all of the recovery plans
referred to in subdivision (a) of Section 41327 and the County Office
Fiscal Crisis and Management Assistance Team completes the
improvement plans specified in Section 41327.1 and has completed a
minimum of two reports identifying the  qualifying school 
district's progress in implementing the improvement plans.
   (3) The administrator certifies that all necessary collective
bargaining agreements have been negotiated and ratified, and that the
agreements are consistent with the terms of the recovery plans.
   (4) The  qualifying school  district has completed all
reports required by the Superintendent and the administrator.
   (5) The Superintendent determines that future compliance by the
 qualifying  school district with the recovery plans
approved pursuant to paragraph (2) is probable.
   (f) When the conditions stated in subdivision (e) have been met,
and at least 60 days after the Superintendent  of Public
Instruction  has notified the Legislature, the Department of
Finance, the Controller, and the county superintendent of schools
that he or she expects the conditions prescribed pursuant to this
section to be met, the  governing board of the qualifying 
school district  governing board  shall regain all
of its legal rights, duties, and powers, except for the powers held
by the trustee provided for pursuant to Article 2 (commencing with
Section 41320). The Superintendent shall appoint a trustee under
Section 41320.1 to monitor and review the operations of the 
qualifying school  district until the conditions of subdivision
(b) of that section have been met.
   (g) Notwithstanding subdivision (f), if the  qualifying school
 district violates any provision of the recovery plans approved
by the Superintendent pursuant to this article within five years
after the trustee appointed pursuant to Section 41320.1 is removed,
the Superintendent may reassume, either directly or through an
administrator appointed in accordance with this section, all of the
legal rights, duties, and powers of the governing board of the 
qualifying school  district. The Superintendent shall return to
the  governing board of the qualifying  school district
 governing board  all of its legal rights, duties,
and powers reassumed under this subdivision when he or she determines
that future compliance with the approved recovery plans is probable,
or after a period of one year, whichever occurs later.
   (h) Article 2 (commencing with Section 41320) shall apply except
as otherwise specified in this article.
   (i) It is the intent of the Legislature that the legislative
budget subcommittees annually conduct a review of each qualifying
school district that includes an evaluation of the financial
condition of the  qualifying school  district, the impact of
the recovery plans upon the  qualifying school  district's
educational program, and the efforts made by the state-appointed
administrator to obtain input from the community and the governing
board of the  qualifying school  district.
   (j) (1) The district superintendent  of schools  is
entitled to a due process hearing for purposes of determining final
compensation. The final compensation of the district superintendent
 of schools  shall be between zero and six times his or her
monthly salary. The outcome of the due process hearing shall be
reported to the Superintendent  of Public Instruction
 and the public. The information provided to the public
shall explain the rationale for the compensation.
   (2) This subdivision applies only to a contract for employment
negotiated on or after June 21, 2004.
   (k) (1) When the Superintendent assumes control over a school
district pursuant to subdivision (b), he or she shall, in
consultation with the County Office Fiscal Crisis and Management
Assistance Team, review the fiscal oversight of the  qualifying
school  district by the county superintendent of schools. The
Superintendent may consult with other fiscal experts, including other
county superintendents of schools and regional fiscal teams, in
conducting this review.
   (2) Within three months of assuming control over a qualifying 
school  district, the Superintendent shall report his or her
findings to the Legislature and shall provide a copy of that report
to the Department of Finance. This report shall include findings as
to fiscal oversight actions that were or were not taken and may
include recommendations as to an appropriate legislative response to
improve fiscal oversight.
   (3) If after performing the duties described in paragraphs (1) and
(2), the Superintendent determines that the county superintendent of
schools failed to carry out his or her responsibilities for fiscal
oversight as required by this code, the Superintendent may exercise
the authority of the county superintendent of schools who has
oversight responsibilities for a qualifying school district. If the
Superintendent finds, based on the report required in paragraph (2),
that the county superintendent of schools failed to appropriately
take into account particular types of indicators of financial
distress, or failed to take appropriate remedial actions in the
qualifying  school  district, the Superintendent shall
further investigate whether the county superintendent of schools
failed to take into account those indicators, or similarly failed to
take appropriate actions in other  school  districts with
negative or qualified certifications, and shall provide an additional
report on the fiscal oversight practices of the county
superintendent  of schools  to the appropriate policy and
fiscal committees of each house of the Legislature and the Department
of Finance.