BILL NUMBER: AB 2278	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 21, 2012

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 amended, Swanson. School districts: state 
administrators.   administrators: evaluations. 
   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   , after
one complete fiscal year has elapsed following the qualifying school
district's acceptance of an emergency apportionment, to conduct an
annual advisory evaluation of  the administrator appointed by
the Superintendent.  The bill would require (A) an advisory
evaluation to focus on the administrator's effectiveness in 
 leading the school district toward fiscal recovery and improved
academic achievement, (B) advisory evaluation criteria to be agreed
upon by the governing board of   the qualifying school
district and the administrator before the advisory evaluation, and
(C) the advisory evaluation to include, among other things,
commendations in the areas of the administrator's strengths and
achievements.  The bill would also require that the 
advisory  evaluation of the administrator be submitted to the
Governor, the Legislature, the Superintendent, and the County Office
Fiscal Crisis and Management  Assistance  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   Before  applying
for an emergency apportionment in the amount identified in this
subdivision, a governing board of a school district shall discuss the
need for that apportionment at a regular or special meeting of the
governing board  of the school district  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 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 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 and paid by the qualifying school
district.
   (9) The Superintendent or the administrator may, on a short-term
basis, employ at 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,  the  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) Except as provided in paragraph (2), for the period of
time during which the Superintendent 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   (A)     After
one complete fiscal year has elapsed following the qualifying school
district's acceptance of an emergency apportionment, the 
governing board of  a   the  qualifying
school district may  annually evaluate   conduct
an annual advisory evaluation of  an administrator for the
duration of the administratorship.  An  
   (B) An advisory evaluation of an administrator shall focus on the
administrator's effectiveness in leading the school district toward
fiscal recovery and improved academic achievement. Advisory
evaluation criteria shall be agreed upon by the governing board of
the qualifying school district and the administrator before the
advisory evaluation. The advisory evaluation shall include, but not
be limited to, all of the following:  
   (i) Goals and standards consistent with Section 41327.1. 

   (ii) Commendations in the areas of the administrator's strengths
and achievements.  
   (iii) Recommendations for improving the administrator's
effectiveness in areas of concern and unsatisfactory performance.

    (C)     An advisory  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.
   (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.
   (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   a  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 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 
 an emergency apportionment  as described in subdivision
(a), the administrator determines, and so notifies the Superintendent
and the county superintendent of schools, that future compliance by
the  qualifying  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 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 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   a  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 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 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.