BILL NUMBER: AB 2279 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 20, 2012
AMENDED IN SENATE AUGUST 6, 2012
AMENDED IN SENATE JULY 2, 2012
AMENDED IN ASSEMBLY MAY 2, 2012
INTRODUCED BY Assembly Member Swanson
FEBRUARY 24, 2012
An act to amend Sections 41320.1 and 41326 of the Education Code,
relating to school districts.
LEGISLATIVE COUNSEL'S DIGEST
AB 2279, as amended, Swanson. School districts: emergency
apportionments: trustees.
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
the school district determines during a fiscal year that
its revenues are less than the amount necessary to meet its current
year expenditure obligations. Existing Under
existing law provides that , if a
school district accepts an emergency apportionment , the
Superintendent shall is required ,
among other things, to appoint a trustee who has
recognized expertise in management and finance, and may employ, on a
short-term basis, any staff necessary to assist the trustee. Existing
law also provides that requires the
trustee , and any necessary staff , shall
to serve until the emergency apportionment
loan is repaid, the school district has adequate
fiscal systems and controls in place, and the Superintendent
has determined determines that the school
district's future compliance with an approved fiscal plan is
probable. Existing law authorizes the trustee, during the period of
his or her service, to stay or rescind any action of the
local governing board of the school district that, in the
judgment of the trustee, may affect the financial condition of the
school district.
This bill would instead provide that
require the trustee , and necessary staff
, shall to serve until the school
district has adequate fiscal systems and controls in place, the
Superintendent has determined determines
that the school district's future compliance with an approved
fiscal plan is probable, and the Superintendent decides to terminate
the trustee's appointment, but in no event, for less than 3 years.
The bill would authorize the county superintendent of schools
that who has jurisdiction over the
school district, after the trustee's period of service and until the
loan is repaid, to stay or rescind an action of the governing board
of the school district that, in his or her judgment, may affect the
financial condition of the school district. The bill would require
the county superintendent of schools to notify the Superintendent, as
specified, within 5 business days of staying or rescinding an action
of the governing board of the school district. If the Superintendent
receives this notice from the county superintendent of schools, the
bill would require the Superintendent to report to the Legislature,
on or before December 30 of every year, whether the school district
is complying with the fiscal plan approved for the school district.
Existing law authorizes the Superintendent, within 5 years after
an appointed trustee is removed, to reassume, either directly or
through an administrator, all of the legal rights, duties, and powers
of the governing board of the school district if the school district
violates any provision of specified recovery plans approved by the
Superintendent.
This bill would instead authorize the Superintendent, within 5
years after an appointed trustee is removed or the emergency
apportionment is repaid, whichever occurs later, to reassume, either
directly or through an administrator, all of the legal rights,
duties, and powers of the governing board of the school district if
the school district violates any provision of specified recovery
plans approved by the Superintendent.
The bill also would authorize the governing board of a qualifying
school district, after one complete fiscal year has elapsed following
the qualifying school district's acceptance of an emergency
apportionment, to conduct an annual advisory evaluation, as
specified, of the administrator appointed by the Superintendent. The
bill would require the evaluation criteria to be agreed upon by the
governing board of the qualifying school district and the
administrator. The bill would require the advisory evaluation of the
administrator to be submitted to the Governor, the Legislature, the
Superintendent, and the County Office Fiscal Crisis and Management
Assistance Team.
This
The bill would also make numerous
nonsubstantive changes.
This
The bill would incorporate additional changes in
Section 41326 of the Education Code, proposed by AB 2278
2662 , to be operative only if AB 2278
2662 and this bill are both chaptered and become
effective January 1, 2013, and this bill is chaptered last.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 41320.1 of the Education Code is amended to
read:
41320.1. Acceptance by the school district of the apportionments
made pursuant to Section 41320 constitutes the agreement by the
school district to all of the following conditions:
(a) The Superintendent shall appoint a trustee who has recognized
expertise in management and finance and may employ, on a short-term
basis, staff necessary to assist the trustee, including, but not
limited to, certified public accountants, as follows:
(1) The expenses incurred by the trustee and necessary staff shall
be borne by the school district.
(2) The Superintendent shall establish the terms and conditions of
the employment, including the remuneration of the trustee. The
trustee shall serve at the pleasure of, and report directly to, the
Superintendent.
(3) The trustee, and necessary staff, shall serve until the school
district has adequate fiscal systems and controls in place, the
Superintendent has determined that the school district's future
compliance with the fiscal plan approved for the school district
under Section 41320 is probable, and the Superintendent decides to
terminate the trustee's appointment, but in no event, for less than
three years. The Superintendent shall notify the county
superintendent of schools, the Legislature, the Department of
Finance, and the Controller no less than 60 days before the time that
the Superintendent expects these conditions to be met.
(4) Before the school district repays the loan, including
interest, the recipient of the loan shall select an auditor from a
list established by the Superintendent and the Controller to conduct
an audit of its fiscal systems. If the fiscal systems are deemed to
be inadequate, the Superintendent may retain the trustee until the
deficiencies are corrected. The cost of this audit and any additional
cost of the trustee shall be borne by the school district.
(5) Notwithstanding any other law, all reports submitted to the
trustee are public records.
(6) To facilitate the appointment of the trustee and the
employment of necessary staff, for 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.
(7) Notwithstanding any other law, the Superintendent may appoint
an employee of the department to act as trustee for up to the
duration of the trusteeship. The salary and benefits of that employee
shall be established by the Superintendent and paid by the school
district. During the time of appointment, the employee is an employee
of the school district, but shall remain in the same retirement
system under the same plan as if the employee had remained in the
department. 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 department. The time served in the appointment
shall be counted for all purposes as if the employee had served that
time in his or her former position with the department.
(b) (1) The trustee appointed by the Superintendent shall monitor
and review the operation of the school district. During the period of
his or her service, the trustee may stay or rescind an action of the
governing board of the school district that, in the judgment of the
trustee, may affect the financial condition of the school district.
(2) After the trustee's period of service, and until the loan is
repaid, the county superintendent of schools that has jurisdiction
over the school district may stay or rescind an action of the
governing board of the school district that, in his or her judgment,
may affect the financial condition of the school district. The county
superintendent of schools shall notify the Superintendent, within
five business days, if he or she stays or rescinds an action of the
governing board of the school district. The notice shall include, but
not be limited to, both of the following:
(A) A description of the governing board of the school district's
intended action and its financial implications.
(B) The rationale and findings that support the county
superintendent of school's decision to stay or rescind the action of
the governing board of the school district.
(3) If the Superintendent is notified by the county superintendent
of schools pursuant to paragraph (2), the Superintendent shall
report to the Legislature, on or before December 30 of every year,
whether the school district is complying with the fiscal plan
approved for the school district.
(4) The Superintendent may establish timelines and prescribe
formats for reports and other materials to be used by the trustee to
monitor and review the operations of the school district. The trustee
shall approve or reject all reports and other materials required
from the school district as a condition of receiving the
apportionment. The Superintendent, upon the recommendation of the
trustee, may reduce an apportionment to the school district in an
amount up to two hundred dollars ($200) per day for each late or
unacceptable report or other material required under this part, and
shall report to the Legislature a failure of the school district to
comply with the requirements of this section. If the Superintendent
determines, at any time, that the fiscal plan approved for the school
district under Section 41320 is unsatisfactory, he or she may modify
the plan as necessary, and the school district shall comply with the
plan as modified.
(c) At the request of the Superintendent, the Controller shall
transfer to the department, from an apportionment to which the school
district would otherwise have been entitled pursuant to Section
42238, the amount necessary to pay the expenses incurred by the
trustee and associated costs incurred by the county superintendent of
schools.
(d) For the fiscal year in which the apportionments are disbursed
and every year thereafter, the Controller, or his or her designee,
shall cause an audit to be conducted of the books and accounts of the
school district, in lieu of the audit required by Section 41020. At
the Controller's discretion, the audit may be conducted by the
Controller, his or her designee, or an auditor selected by the school
district and approved by the Controller. The costs of these audits
shall be borne by the school district. These audits shall be required
until the Controller determines, in consultation with the
Superintendent, that the school district is financially solvent, but
in no event earlier than one year following the implementation of the
plan or later than the time the apportionment made is repaid,
including interest. In addition, the Controller shall conduct quality
control reviews pursuant to subdivision (c) of Section 14504.2.
(e) For purposes of errors and omissions liability insurance
policies, the trustee appointed pursuant to this section is an
employee of the local educational agency to which he or she is
assigned. For purposes of workers' compensation benefits, the trustee
is an employee of the local educational agency to which he or she is
assigned, except that a trustee appointed pursuant to paragraph (7)
of subdivision (a) is an employee of the department for that purpose.
(f) Except for an individual appointed by the Superintendent as
trustee pursuant to paragraph (7) of subdivision (a), the
state-appointed trustee is a member of the State Teachers' Retirement
System, if qualified, for the period of service as trustee, unless
the trustee 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 trustee chooses
to become a member or is already a member, the trustee shall be
placed on the payroll of the school district for purposes of
providing appropriate contributions to the system. The Superintendent
may also require that an individual appointed as trustee pursuant to
paragraph (7) of subdivision (a) be placed on the payroll of the
school district for purposes of remuneration, other benefits, and
payroll deductions. For purposes of workers' compensation benefits,
the state-appointed trustee is deemed an employee of the local
educational agency to which he or she is assigned, except that a
trustee who is appointed pursuant to paragraph (7) of subdivision (a)
is an employee of the department for that purpose.
SEC. 2. 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. Before applying for an emergency apportionment in the
amount identified in this subdivision, the 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 necessary staff, for 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 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 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 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 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 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 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) (A) After one complete fiscal year has elapsed following the
qualifying school district's acceptance of an emergency
apportionment, the governing board of the qualifying school district
may conduct an annual advisory evaluation of an administrator for the
duration of the administratorship.
(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.
(2)
(3) Upon the appointment of an administrator pursuant
to this section, the district superintendent of schools
is no longer an employee of the 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 a deputy,
associate, assistant superintendent of schools ,
or 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 emergency 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 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 school
district with the recovery plans approved pursuant to paragraph (2)
is probable.
(B) The Superintendent may return power to the governing board of
the qualifying school district for an 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 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 or
after the emergency apportionment is repaid, whichever occurs later,
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 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.
SEC. 2.5. 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. Before applying for an emergency apportionment in the
amount identified in this subdivision, a the
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 necessary staff, for 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 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 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 employ
, on a short-term basis , employ, and
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
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) (A) After one complete fiscal year has elapsed following the
qualifying school district's acceptance of an emergency
apportionment, the governing board of the qualifying school district
may conduct an annual advisory evaluation of an administrator for the
duration of the administratorship.
(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
affected employee reasonable notice and the opportunity for a
hearing, may terminate the employment of a deputy,
associate, assistant superintendent of schools ,
or 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 emergency 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 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 an 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 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 or after the
emergency apportionment is repaid, whichever occurs later, or
the improvement plans specified in Section 41327.1 during the period
of the trustee's appointment, 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.
SEC. 3. Section 2.5 of this bill incorporates amendments to
Section 41326 of the Education Code proposed by both this bill and
Assembly Bill 2278 2662 . It shall only
become operative if (1) both bills are enacted and become effective
on or before January 1, 2013, (2) each bill amends Section 41326 of
the Education Code, and (3) this bill is enacted after Assembly Bill
2278 2662 , in which case Section 2 of
this bill shall not become operative.