Amended in Senate June 3, 2014

Amended in Assembly May 29, 2013

Amended in Assembly April 29, 2013

Amended in Assembly March 12, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 913

Introduced by Assembly Member Chau

February 22, 2013

An act to add Section 47604.1 to the Education Code, begin delete and to amend Section 1091 of the Government Code, end delete relating to charter schools.

LEGISLATIVE COUNSEL’S DIGEST

AB 913, as amended, Chau. Charter schools.

(1) The Ralph M. Brown Act requires that all meetings of a legislative body, as defined, of a local agency be open and public and all persons be permitted to attend unless a closed session is authorized. The Bagley-Keene Open Meeting Act requires, with specified exceptions, that all meetings of a state body be open and public and all persons be permitted to attend.

This bill would expressly state that a charter school is subject to the Ralph M. Brown Act, unless it is operated by an entity governed by the Bagley-Keene Open Meeting Act, in which case the charter school would be subject to the Bagley-Keene Open Meeting Act.

(2) The California Public Records Act requires state and local agencies to make their records available for public inspection and to make copies available upon request and payment of a fee unless the records are exempt from disclosure.

This bill would expressly state that a charter school is subject to the California Public Records Act.

(3) Existing law prohibits certain public officials, including, but not limited to, begin delete members of governing boards of school districts and citizens’ oversight committees, from engaging in specified activities that are inconsistent or incompatible with, or inimical to, their duties as public officials, including, but not limited to, entering into a contract in which the official or the official’s family member has a financial interest, as specified end delete begin insert state, county, or district officers or employees, from being financially interested in any contract made by them in their official capacity, or by any body or board of which they are members, except as provided end insert .

This bill would expressly state that a charter school is subject to these provisions.

(4) The Political Reform Act of 1974 requires every state agency and local governmental agency to adopt a conflict-of-interest code, formulated at the most decentralized level possible, that requires designated employees of the agency to file statements of economic interest disclosing any investments, business positions, interests in real property, or sources of income that may foreseeably be affected materially by any governmental decision made or participated in by the designated employee by virtue of his or her position.

This bill would expressly state that a charter school is subject to the Political Reform Act of 1974.

(5) This bill would state various exceptions and clarifications regarding the applicability of the acts described above in paragraphs (1) to (4), begin delete inclusive. end delete begin insert inclusive, including, among others, end insert begin insert that an employee of a charter school is not disqualified from serving as a member of the governing body of the charter school because of that employment status. end insert

begin delete

(6) Existing law requires a member of the governing board of a school district to abstain from voting on personnel matters that uniquely affect a relative of the member.

end delete begin delete

This bill would provide that an employee of a charter school is not disqualified from serving as a member of the governing body of the charter school because of that employment status. The bill would require a member of the governing body of a charter school to abstain from voting on, or influencing or attempting to influence another member of that body regarding, any matter affecting his or her own employment or any personnel matter that uniquely affects a relative of the member.

end delete begin delete

The bill would provide that a person who provides a loan to a charter school due to a school fiscal emergency, or who signs a guarantor agreement relative to the lease of real property to be occupied by a charter school, is not disqualified because of that loan or guarantor agreement from also serving as a member of the governing body of the charter school or being an employee of the charter school and would require that person to abstain from voting on, or influencing or attempting to influence another member of that body regarding, all matters affecting the loan agreement or the real property lease agreement, as applicable.

end delete begin delete

(7)

end delete

begin insert (6) end insert  This bill would make these provisions operative on July 1, begin delete 2014 end delete begin insert 2015 end insert .

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.  

It is the intent of the Legislature in enacting this
act to do all of the following:

(a) Establish conflict-of-interest policies for the governing body
of charter schools that mirror existing conflict-of-interest policies
followed by the governing board of school districts.

(b) Provide transparency in the operations of the many charter
schools that are providing quality educational options for parents
and pupils and renew the faith of parents and the community that
their local charter school is acting in the best interests of pupils.

(c) Continue to provide greater autonomy to charter schools
than traditional public schools and provide greater transparency
to parents and the public with regard to the use of public funds by
the governing body of charter schools for the educational benefit
of their pupils.

(d) Establish standards and procedures consistent with the
Charter Schools Act of 1992 to avoid conflicts of interest in charter
schools.

SEC. 2.  

Section 47604.1 is added to the Education Code, to
read:

47604.1.  

(a) A charter school is subject to all of the following:

(1) The Ralph M. Brown Act (Chapter 9 (commencing with
Section 54950) of Part 1 of Division 2 of Title 5 of the Government
Code), except that a charter school operated by an entity governed
by the Bagley-Keene Open Meeting Act (Article 9 (commencing
with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title
2 of the Government Code) is subject to the Bagley-Keene Open
Meeting Act regardless of the authorizing entity.

(2) The California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).

(3) Article 4 (commencing with Section 1090) of Chapter 1 of
Division 4 of Title 1 of the Government Code.

(4) The Political Reform Act of 1974 (Title 9 (commencing
with Section 81000) of the Government Code). For purposes of
Section 87300 of the Government Code, a charter school shall be
considered an agency.

(b)  begin delete (1) end delete begin delete   end delete Notwithstanding Article 4 (commencing with Section
1090) of Chapter 1 of Division 4 of Title 1 of the Government
Code, an employee of a charter school is not disqualified because
of that employment status from also serving as a member of the
governing body of the charter school. A member of the governing
body of a charter school shall abstain from voting on, or influencing
or attempting to influence another member of the governing body
regarding, all matters uniquely affecting his or her own
employment.

begin delete

(2) Notwithstanding Article 4 (commencing with Section 1090)
of Chapter 1 of Division 4 of Title 1 of the Government Code, a
person who provides a loan to a charter school due to a school
fiscal emergency is not disqualified, because of that loan
agreement, from also serving as a member of the governing body
of the charter school or from being an employee of the charter
school. A member of the governing body of a charter school who
provides a loan as described in this paragraph shall abstain from
voting on, or influencing or attempting to influence another
member of the governing body regarding, all matters affecting the
loan agreement. The loan agreement shall not disqualify the
member from serving on the governing body of the charter school
or the person from being an employee of the charter school if the
governing body of the charter school, before entering into the loan
agreement, declares the existence of and describes the fiscal
emergency by adopting a resolution at a public meeting of the
governing body. The governing body of the charter school shall
disclose and approve the loan agreement, including the terms of
the loan, during a public meeting. This paragraph shall apply to a
member of the governing body or an employee of the charter school
who signs a guarantor agreement relative to a line of credit,
provided that the funds from the line of credit shall not be accessed
until a fiscal emergency is declared and described as required
pursuant to this paragraph.

(3) Notwithstanding Article 4 (commencing with Section 1090)
of Chapter 1 of Division 4 of Title 1 of the Government Code, a
person who signs a guarantor agreement relative to the lease of
real property to be occupied by a charter school is not disqualified,
because of that agreement, from also serving as a member of the
governing body of the charter school or from being an employee
of the charter school. A member of the governing body of a charter
school who is a guarantor as described in this paragraph shall
abstain from voting on, or influencing or attempting to influence
another member of the governing body regarding, all matters
affecting the real property lease agreement. The governing body
of the charter school shall disclose and approve the real property
lease agreement, including the terms of the lease and guaranty,
during a public meeting.

(c) A member of the governing body of a charter school shall
abstain from voting on, or influencing or attempting to influence
another member of the governing body regarding, personnel
matters that uniquely affect a relative of the member but may vote
on collective bargaining agreements and personnel matters that
affect a class of employees to which the relative belongs. For
purposes of this section, “relative” means an adult who is related
to the person by blood or affinity within the third degree, as
determined by the common law, or an individual in an adoptive
relationship within the third degree.

(d)

end delete

begin insert (c) end insert  A person who is disqualified by the California Constitution
or laws of the state from holding a civil office shall not serve on
the governing body of a charter school.

begin delete

(e)

end delete

begin insert (d) end insert  To the extent that the governing body of a charter school
engages in activities that are not related to the operation of the
charter school, this section does not make those unrelated activities
subject to Section 1090 of the Government Code, the Ralph M.
Brown Act, the Bagley-Keene Open Meeting Act, or the California
Public Records Act. A meeting of the governing body of a charter
school to discuss items related to the operation of the charter school
shall not include discussion of any item regarding an activity of
the governing body that is not related to the operation of the charter
school.

begin delete

(f)

end delete

begin insert (e) end insert  The governing body of a charter school may meet within
the physical boundaries of the county or counties in which one or
more of the school’s facilities are located provided that proper
notices pursuant to the Ralph M. Brown Act or the Bagley-Keene
Open Meeting Act are posted within the physical boundaries of
each of the counties in which any of the school’s facilities are
located. A charter school also may meet in a county contiguous to
the county where one or more of the school’s facilities are located
if at least 10 percent of the pupils who are enrolled in the school
reside in that contiguous county. A nonclassroom-based charter
school that does not have a facility may meet within the boundaries
of the county in which the greatest number of pupils who are
enrolled in the school reside. This subdivision shall not limit the
authority of the governing body to meet outside these boundaries
to the extent authorized by Section 54954 of the Government Code,
provided that the meeting place is in compliance with Section
54961 of the Government Code.

begin delete

(g) The governing body of a charter school may hold closed
sessions to consider a matter regarding pupil discipline as described
in Section 48912.

end delete begin delete

(h)

end delete

begin insert (f) end insert  A statement of economic interest that is filed by a designated
person at a charter school after the required deadline pursuant to
the Political Reform Act of 1974 shall not be the sole basis for
revocation of a charter pursuant to Section 47607.

begin delete

(i)

end delete

begin insert (g) end insert  For purposes of this section, “facility” means a charter school
campus, resource center, meeting space, or satellite facility.

begin delete

(j)

end delete

begin insert (h) end insert  Notwithstanding any other law, this section shall not apply
to actions taken before the operative date of this section.

begin delete

(k)

end delete

begin insert (i) end insert  This section shall become operative on July 1, begin delete 2014. end delete begin insert 2015. end insert

begin delete

SEC. 3.  

Section 1091 of the Government Code is amended to
read:

1091.  

(a) An officer shall not be deemed to be interested in a
contract entered into by a body or board of which the officer is a
member within the meaning of this article if the officer has only
a remote interest in the contract and if the fact of that interest is
disclosed to the body or board of which the officer is a member
and noted in its official records, and thereafter the body or board
authorizes, approves, or ratifies the contract in good faith by a vote
of its membership sufficient for the purpose without counting the
vote or votes of the officer or member with the remote interest.

(b) As used in this article, “remote interest” means any of the
following:

(1) That of an officer or employee of a nonprofit entity exempt
from taxation pursuant to Section 501(c)(3) of the Internal Revenue
Code (26 U.S.C. Sec. 501(c)(3)) or a nonprofit corporation, except
as provided in paragraph (8) of subdivision (a) of Section 1091.5.

(2) (A) That of an employee or agent of the contracting party,
if the contracting party has 10 or more other employees and if the
officer was an employee or agent of that contracting party for at
least three years before the officer initially accepted his or her
office and the officer owns less than 3 percent of the shares of
stock of the contracting party; and the employee or agent is not an
officer or director of the contracting party and did not directly
participate in formulating the bid of the contracting party.

(B) For purposes of this paragraph, time of employment with
the contracting party by the officer shall be counted in computing
the three-year period specified in this paragraph even though the
contracting party has been converted from one form of business
organization to a different form of business organization within
three years of the initial taking of office by the officer. Time of
employment in that case shall be counted only if, after the transfer
or change in organization, the real or ultimate ownership of the
contracting party is the same or substantially similar to that which
existed before the transfer or change in organization. For purposes
of this paragraph, stockholders, bondholders, partners, or other
persons holding an interest in the contracting party are regarded
as having the “real or ultimate ownership” of the contracting party.

(3) That of an employee or agent of the contracting party, if all
of the following conditions are met:

(A) The agency of which the person is an officer is a local public
agency located in a county with a population of less than 4,000,000.

(B) The contract is competitively bid and is not for personal
services.

(C) The employee or agent is not in a primary management
capacity with the contracting party, is not an officer or director of
the contracting party, and holds no ownership interest in the
contracting party.

(D) The contracting party has 10 or more other employees.

(E) The employee or agent did not directly participate in
formulating the bid of the contracting party.

(F) The contracting party is the lowest responsible bidder.

(4) That of a parent in the earnings of his or her minor child for
personal services.

(5) That of a landlord or tenant of the contracting party.

(6) That of an attorney of the contracting party or that of an
owner, officer, employee, or agent of a firm that renders, or has
rendered, service to the contracting party in the capacity of
stockbroker, insurance agent, insurance broker, real estate agent,
or real estate broker, if these individuals have not received and
will not receive remuneration, consideration, or a commission as
a result of the contract and if these individuals have an ownership
interest of 10 percent or more in the law practice or firm, stock
brokerage firm, insurance firm, or real estate firm.

(7) That of a member of a nonprofit corporation formed under
the Food and Agricultural Code or a nonprofit corporation formed
under the Corporations Code for the sole purpose of engaging in
the merchandising of agricultural products or the supplying of
water.

(8) That of a supplier of goods or services when those goods or
services have been supplied to the contracting party by the officer
for at least five years before his or her election or appointment to
office.

(9) That of a person subject to the provisions of Section 1090
in any contract or agreement entered into pursuant to the provisions
of the California Land Conservation Act of 1965 (Chapter 7
(commencing with Section 51200) of Part 1 of Division 1 of Title
5).

(10) Except as provided in subdivision (b) of Section 1091.5,
that of a director of, or a person having an ownership interest of,
10 percent or more in a bank, bank holding company, or savings
and loan association with which a party to the contract has a
relationship of borrower or depositor, debtor or creditor.

(11) That of an engineer, geologist, or architect employed by a
consulting engineering or architectural firm. This paragraph applies
only to an employee of a consulting firm who does not serve in a
primary management capacity, and shall not apply to an officer or
director of a consulting firm.

(12) That of an elected officer otherwise subject to Section 1090,
in any housing assistance payment contract entered into pursuant
to Section 8 of the United States Housing Act of 1937 (42 U.S.C.
Sec. 1437f) as amended, provided that the housing assistance
payment contract was in existence before Section 1090 became
applicable to the officer and will be renewed or extended only as
to the existing tenant, or, in a jurisdiction in which the rental
vacancy rate is less than 5 percent, as to new tenants in a unit
previously under a Section 8 contract. This section applies to any
person who became a public official on or after November 1, 1986.

(13) That of a person receiving salary, per diem, or
reimbursement for expenses from a government entity.

(14) That of a person owning less than 3 percent of the shares
of a contracting party that is a for-profit corporation, provided that
the ownership of the shares derived from the person’s employment
with that corporation.

(15) That of a party to litigation involving the body or board of
which the officer is a member in connection with an agreement in
which all of the following apply:

(A) The agreement is entered into as part of a settlement of
litigation in which the body or board is represented by legal
counsel.

(B) After a review of the merits of the agreement and other
relevant facts and circumstances, a court of competent jurisdiction
finds that the agreement serves the public interest.

(C) The interested member has recused himself or herself from
all participation, direct or indirect, in the making of the agreement
on behalf of the body or board.

(16) That of a person who is an officer or employee of an
investor-owned utility that is regulated by the Public Utilities
Commission with respect to a contract between the investor-owned
utility and a state, county, district, judicial district, or city body or
board of which the person is a member, if the contract requires the
investor-owned utility to provide energy efficiency rebates or other
type of program to encourage energy efficiency that benefits the
public when all of the following apply:

(A) The contract is funded by utility consumers pursuant to
regulations of the Public Utilities Commission.

(B) The contract provides no individual benefit to the person
that is not also provided to the public, and the investor-owned
utility receives no direct financial profit from the contract.

(C) The person has recused himself or herself from all
participation in making the contract on behalf of the state, county,
district, judicial district, or city body or board of which he or she
is a member.

(D) The contract implements a program authorized by the Public
Utilities Commission.

(17) That of an employee, or member of the governing body,
of a charter school operating pursuant to Part 26.8 (commencing
with Section 47600) of Division 4 of Title 2 of the Education Code
in a loan agreement with the charter school if the conditions in
paragraph (2) of subdivision (b) of Section 47604.1 of the
Education Code are met, or in a guarantor agreement relative to
the lease of real property to be occupied by the charter school if
the conditions in paragraph (3) of subdivision (b) of Section
47604.1 of the Education Code are met.

(c) This section is not applicable to any officer interested in a
contract who influences or attempts to influence another member
of the body or board of which he or she is a member to enter into
the contract.

(d) The willful failure of an officer to disclose the fact of his or
her interest in a contract pursuant to this section is punishable as
provided in Section 1097. That violation does not void the contract
unless the contracting party had knowledge of the fact of the remote
interest of the officer at the time the contract was executed.

end delete