BILL ANALYSIS Ó SB 8 Page 1 Date of Hearing: July 6, 2011 ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION Isadore Hall, Chair SB 8 (Yee) - As Amended: June 23, 2011 SENATE VOTE : 38-1 SUBJECT : Public records: auxiliary organizations and UC campus foundations. SUMMARY : Requires records maintained by an auxiliary organization of the California State University (CSU), California Community Colleges (CCC), and CCC districts and a campus foundation of the University of California (UC) be available to the public consistent with the California Public Records Act (CPRA), excepting specified donor information. Specifically, this bill : 1) Finds that CSU and CCC auxiliaries and UC foundations are legally separate entities that are essential and integral to the missions of CSU, CCC, and UC, respectively. 2) Requires records, as defined, maintained by a CSU or CCC auxiliary organization or UC campus foundation to be made available to the public and requires the entities to follow specified timelines and procedures for responding to public records requests, consistent with CPRA. 3) Exempts from disclosure the following records maintained by a CSU or CCC auxiliary or UC campus foundation: a) Existing CPRA exemptions as set forth in Government Code § 6254-6255, inclusive; b) Information that would disclose the identity of a donor, prospective donor, or volunteer; c) Personal financial information and gift and estate planning information of a prospective donor or volunteer; d) Personal information related to a donor's private trusts or a donor's private annuities administered by an auxiliary or campus foundation; SB 8 Page 2 e) Information related to fundraising plans, fundraising research, and solicitation strategies to the extent these activities are not already protected under existing law, as specified; and, f) The identity of students and alumni to the extent that this information is already protected, excluding a part-time or full-time employee of the auxiliary or campus foundation or a student who participates in a legislative body of a student body organization, as defined. 4) Stipulates that these provisions do not exempt disclosure of the following information: a) The amount and date of a donation; b) Any donor-designated use or purpose of a donation and any other donor-designated restrictions on the use of a donation; c) The identity of a donor who, in any fiscal year, makes a gift or gifts, in a quid pro quo arrangement, where either the value of the benefit received is greater than $2,500, adjusted for inflation as specified, or the benefit would be impermissible under existing law; d) Self-dealing transactions as set forth in existing law, as specified; and, e) Any instance in which a volunteer or donor of a gift is awarded, within five years of the date of the service or gift, a contract from the auxiliary or campus foundation that was not subject to competitive bidding. 5) States trade secrets, as defined shall not be subject to disclosure. This information shall be redacted from auxiliary organization records before disclosure. 6) Authorizes proceedings for injunctive or declarative relief to enforce the right to inspect or receive a copy of a record maintained by an auxiliary or campus foundation, including the awarding of attorney's fees, consistent with the authority provided in CPRA. SB 8 Page 3 7) Provides that when an auxiliary or campus foundation discloses a record that is exempt from this bill, this disclosure shall constitute a waiver for the exemptions specified in this bill, excluding the following information: a) Disclosures made to a donor or prospective donor with regard to that donor's donation or prospective donation to an auxiliary organization; b) Disclosures made to a volunteer or prospective volunteer with respect to that volunteer's services being provided to the auxiliary organization; c) Disclosures made through other legal proceedings or as otherwise required by law; d) Disclosures within the scope of a disclosure required by law that limits disclosure of specified writings to certain purposes; e) Disclosures to an auditor conducting an audit, as defined; or f) Disclosures to a bank or similar financial institution, as specified. 8) Provides that these provisions do not apply to any records subject to a request made pursuant to CPRA. 9) Defines a UC campus foundation as the following corporations organized under the laws of the State of California: University of California, Berkeley Foundation, UC Davis Foundation, The University of California, Irvine Foundation, The UCLA Foundation, University of California, Merced Foundation, UC Riverside Foundation, UC San Diego Foundation, University of California, San Francisco Foundation, UC Santa Barbara Foundation, UC Santa Cruz Foundation, and any other foundation authorized by the Regents of the University of California. EXISTING LAW : 1) The California Public Records Act (CPRA) governs the disclosure of information collected and maintained by public agencies. Generally, all public records are accessible to the public upon request, unless the record requested is exempt from SB 8 Page 4 public disclosure. There are 30 general categories of documents or information that are exempt from disclosure, essentially due to the character of the information. Unless it is shown that the public's interest in disclosure outweighs the public's interest in non-disclosure of the information, the exempt information may be withheld by the public agency that has custody of the information. 2) Defines state agency, for purposes of the CPRA, to include every state officer, department, division, bureau, board, and commission or other state body or agency, except for the Legislature and the Judiciary. The California State University, the University of California, and the California Community Colleges are considered to be state agencies for this purpose. 3) Authorizes the University of California, the California State University, and the California Community Colleges to form auxiliary organizations for the various purposes related to their educational mission. FISCAL EFFECT : Unknown. This bill has been tagged non-fiscal by Legislative Counsel. COMMENTS : Purpose of the bill : According to the author, the public has been unable to hold auxiliaries and foundations accountable for their activities, yet these quasi-governmental entities provide the same types of essential services to students and the public that the colleges and universities provide. Moreover, these entities use public resources to perform their activities, e.g., university office space, equipment, personnel, etc. Auxiliaries and campus foundations : CSU and CCC auxiliary organizations and UC campus foundations are formed to further the educational missions of their institutions. Examples include alumni groups, student associations, faculty organizations, and groups that bear the name of the particular college or university or campus. These groups operate as nonprofit public benefit corporations chartered under the California Nonprofit Public Benefit Corporation Law and must meet certain standards of operation such as: (1) auditing and financial reporting procedures with oversight by a certified public accountant; (2) expenditures that are in accordance with policies delineated by the governing body; (3) meetings of SB 8 Page 5 boards and committees that are open to the public; and (4) conformity of operational procedures with regulations established by the governing body. UC auxiliaries differ from those at CSU and CCC; they engage in commercial-type activities, such as parking operations and certain athletics department operations, which are not separate, independent entities. As such, these "auxiliary enterprises" are already subject to CPRA. Background : A 2001 court decision, CSU Fresno Association v. Superior Court, found that CPRA applies only to state agencies and would need to be specifically applied to campus auxiliary organizations in statute. In the past decade, there have been numerous attempts to obtain records from CSU auxiliary organizations that have been denied and several legislative attempts to directly apply CPRA to auxiliaries and campus foundations (SB 218, Yee, 2010 and SB 330, Yee, 2009) that either died in the legislative process or were vetoed over concerns about the appropriateness of subjecting private organizations to CPRA and jeopardizing these entities' ability to raise funds. New approach in 2011 : SB 8 is the result of negotiations between the author, the sponsors (the California Newspaper Publishers Association and the California Faculty Association), UC, CSU, and CCC. This new approach does not subject auxiliaries and campus foundations to CPRA; instead, this bill recreates and applies CPRA provisions to these entities in the Education Code. This bill also exempts donor information unique to these entities from disclosure, except under specified circumstances. CPRA : CPRA presumes that all records held by government are accessible to the public unless expressly made exempt from disclosure. It gives members of the public two main rights: the right to inspect records free of charge and the right to obtain a copy of records after paying for the direct costs of duplication or a statutory fee. The law gives agencies time periods for responding to a request; once a request is made, the agency must either produce the records in a reasonable amount of time, as specified, or justify its decision to withhold the record by showing that the record is exempt under an express provision of law or that the public interest in disclosure of the record is clearly outweighed by the public interest in SB 8 Page 6 nondisclosure. There are 30 general categories of documents or information that are exempt from disclosure, essentially due to the character of the information. CPRA allows a member of the public to sue to enforce the law and provides that a prevailing plaintiff can recover attorney fees and costs of bringing the suit. Donor exemptions : As noted above, UC and CSU opposed previous legislation due to concerns about the possible "chilling effect" on donor and volunteer contributions. This bill exempts from disclosure information that would disclose the identity of a donor, prospective donor, or volunteer, except for the following: 1)The amount and date of a donation; 2) Any donor-designated use or purpose of a donation and any other donor-designated restrictions on the use of a donation; 3) Self-dealing transactions as set forth in existing law, as specified; 4) Any instance in which a volunteer or donor of a gift is awarded, within five years of the date of the service or gift, a contract from the auxiliary or campus foundation that was not subject to competitive bidding; and, 5) he identity of a donor who, in any fiscal year, makes a gift or gifts, in a quid pro quo arrangement, where either the value of the benefit received is greater than $2,500, adjusted for inflation as specified, or the benefit would be impermissible under existing law. This provision is designed to exclude season ticketholders for athletic events, who often must donate a specified amount (usually $10,000 to $12,500) above the cost of their tickets in order to receive preferred seats. Since the IRS values these contributions at 20% of the value of the donation, $2,500 was selected to ensure that this bill did not capture these donors who participate in well-publicized fundraising campaigns. SB 8 differs slightly from CPRA in that it adds information supplied as part of an audit or to a financial institution to the list of items that do not constitute a waiver from the exemptions specified in this bill. In support : The University of California (UC) writes in support, "this bill as amended, recognizes the need for donor privacy and the unique role that UC Campus Foundations play in supporting the educational, research, and public service mission of the UC. SB 8 now establishes a responsible process for requests by the public that will be codified in the Education Code, which UC believes is the appropriate location for SB 8 Page 7 provisions covering education related non-profit organizations. While the bill is not perfect and may not include every provision that we believe could avoid possibly unintended consequences, we are satisfied that our Foundations can, in good faith, adjust to the new provisions and continue to provide the type of transparency that is appropriate without jeopardizing donor privacy." The California State University (CSU) states, this bill contains language which is critical to our ability to raise revenues and not put us at a disadvantage with other nonprofits and private colleges and universities. This bill also maintains the state's long-term commitment to protecting the personal privacy of individuals, donors, volunteers, and vendor partnerships. Prior legislation : SB 330 (Yee), 2009-2010 Legislative Session, passed the Senate 22-10 and the Assembly 71-0 was vetoed by the Governor. Would have required auxiliary organizations of the University of California (UC), the California State University (CSU), and the California Community Colleges (CCC) to comply with the CPRA except in specified instances. SB 218 (Yee) of 2009-2010 Legislative Session, passed the Senate 33-1 and the Assembly 76-0 was vetoed by the Governor. This bill would have included in the CPRA auxiliary organizations of the University of California (UC), the California State University (CSU), and the California Community Colleges (CCC), except as specified. REGISTERED SUPPORT / OPPOSITION : Support Academic Professionals of California American Federation of State, County and Municipal Employees California Broadcasters Association California Faculty Association California Federation of Teachers California Newspaper Publishers Association California Nurses Association California State Pipe Trades Council California State University California State University Employees' Union California Taxpayers Association California Teachers Association SB 8 Page 8 Californians Aware Coalition of California Utility Employees Eric Mar, San Francisco District 1 Supervisor International Brotherhood of Electrical Workers International Union of Elevator Constructors Pacific Media Workers Guild SEIU United Service Workers West University of California University of California Student Association Utility Workers Union of America Western States Council of Sheet Metal Workers Opposition None on file Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531