BILL ANALYSIS Ó
AB 913
Page 1
GOVERNOR'S VETO
AB 913 (Chau)
As Amended June 25, 2014
2/3 vote
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|ASSEMBLY: |53-23|(May 30, 2013) |SENATE: |23-12|(August 27, |
| | | | | |2014) |
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|ASSEMBLY: |55-24|(August 28, | | | |
| | |2014) | | | |
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Original Committee Reference: L. GOV.
SUMMARY : Subjects charter schools to the state's existing open
meetings, conflict-of-interest and disclosure laws and makes a
number of other changes to the permissible activities of charter
school governing boards, councils, and advisory committees.
The Senate amendments :
1)Specify the charter school's conflict-of-interest code
reviewing body.
2)Delete language referencing "guarantor agreements relative to
the lease of real property to be occupied by a charter
school," and replace it with language referencing "guarantor
agreements relative to a line of credit for a charter school."
3)Require the governing body of a charter school to disclose and
approve a loan agreement or line of credit agreement during a
public meeting, including an assurance that the terms of the
loan agreement or line of credit agreement will be at zero
interest or at an interest rate that results in returns that
shall not exceed the cost to enter the loan agreement or line
of credit agreement.
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4)Delete language that defined specified loan and lease
provisions as "remote interests" for purposes of Government
Code (GC) Section 1090 exemptions (conflict-of-interest laws),
as specified.
5)Delete language that prohibits a member of the governing body
of a charter school 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 allows a vote on collective bargaining
agreements and personnel matters that affect a class of
employees to which the relative belongs.
6)Allow the governing body of a charter school to meet within
the physical boundaries of the charter school's chartering
authority.
7)Delete language allowing the governing body of a charter
school to hold closed sessions to consider a matter regarding
pupil discipline, as specified.
8)Change the operative date of the bill from July 1, 2014, to
July 1, 2015.
9)Make a number of technical and conforming changes.
AS PASSED BY THE ASSEMBLY , this bill:
1)Expressed the intent of the Legislature to establish
conflict-of-interest policies for the governing body of
charter schools that mirror existing conflict-of-interest
policies followed by the governing boards of school districts,
provide transparency in the operations of charter schools and
in the use of public funds by the governing body of charter
schools for the educational benefit of their pupils, and
establish standards and procedures consistent with the Charter
Schools Act of 1992 to avoid conflicts of interest in charter
schools.
2)Provided that a charter school is subject to all of the
following:
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a) The Ralph M. Brown Act (Brown Act) except that a charter
school operated by an entity governed by the Bagley-Keene
Open Meeting Act (Bagley-Keene Act) is subject to the
Bagley-Keene Act regardless of the authorizing entity;
b) The California Public Records Act (CPRA);
c) Provisions of law that prohibit government officers or
employees from being financially interested in contracts or
purchases made by them in their official capacity (commonly
referred to as GC Section 1090); and,
d) The Political Reform Act of 1974 (Political Reform Act),
including a requirement to promulgate a Conflict of
Interest Code.
3)Provided that an employee of a charter school is not
disqualified because of that employment from also serving as a
member of the governing body of the charter school, and that 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.
4)Provided that 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.
5)Prohibited a member of the governing body of a charter school
who provides a loan as described above 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.
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6)Required the governing body of the charter school to disclose
and approve the loan agreement described above, including the
terms of the loan, during a public meeting. This bill's loan
agreement provisions 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 bill.
7)Provided that 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.
8)Prohibited a member of the governing body of a charter school
who is a guarantor as described above 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.
9)Defined the loan and lease provisions described above as
"remote interests" for purposes of GC Section 1090 exemptions,
as specified.
10)Prohibited a member of the governing body of a charter school
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
allows a vote on collective bargaining agreements and
personnel matters that affect a class of employees to which
the relative belongs.
11)Defined "relative" to mean 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
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relationship within the third degree.
12)Prohibited a person from serving on the governing body of a
charter school if the person is disqualified by the California
Constitution or laws of the state from holding a civil office.
13)Specified that, 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 bill does not make
those unrelated activities subject to GC Section 1090, the
Brown Act, the Bagley-Keene Act, or the Political Reform Act.
14)Prohibited a meeting of the governing body of a charter
school that is held to discuss items related to the operation
of the charter school from including discussion of any item
regarding an activity of the governing body that is not
related to the operation of the charter school.
15)Authorized the governing body of a charter school to 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 Brown Act or the
Bagley-Keene 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% of the pupils who are
enrolled in the school reside in that contiguous county.
16)Allowed a nonclassroom-based charter school that does not
have a facility to meet within the boundaries of the county in
which the greatest number of pupils who are enrolled in the
school reside.
17)Provided that this bill's meeting location requirements shall
not limit the authority of the governing body to meet outside
the bill's specified boundaries to the extent authorized by
the Brown Act, as specified.
18)Allowed the governing body of a charter school to hold closed
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sessions to consider a matter regarding pupil discipline
pursuant to current law.
19)Provided that 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 shall not be the
sole basis for revocation of a charter pursuant to current
law.
20)Defined "facility" to mean a charter school campus, resource
center, meeting space, or satellite facility.
21)Specified that this bill's provisions shall not apply to
actions taken before this bill's operative date.
22)Provided an operative date of July 1, 2014.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, which is the only committee that has provided a
fiscal analysis of this bill, General Fund/Proposition 98 of
1988 (GF/98) cost pressure, likely less than $100,000, to
charter schools to comply with the requirements of this bill.
There were 1,062 charter schools in 2012-13. Charter schools
participating in the K-12 Mandate Block Grant (93% of the 1,062)
receive reimbursement for the Brown Act/Bagley-Keene Act
mandate. If the CPRA is added to the block grant, participating
charter schools will receive reimbursement for this activity as
well.
COMMENTS :
1)Purpose of this bill. This bill requires charter schools to
comply with the Brown Act or the Bagley-Keene Act, the CPRA,
existing conflict-of-interest laws that prohibit specified
government officers or employees from having a financial
interest in contracts made by them in their official capacity,
and the Political Reform Act. This bill also prohibits
charter school board members who are employees of the charter
school from using their official position to influence matters
uniquely affecting his or her own employment with the charter
school, and specifies rules and procedures board members must
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follow if they extend a loan to, or sign a guarantor agreement
relative to a line of credit for, a charter school. This bill
also outlines allowable meeting locations for charter school
governing bodies. This bill is co-sponsored by the California
School Boards Association and the California Teachers
Association.
2)Author's statement. According to the author's office, "Both
traditional public school governing boards and charter school
boards manage billions of state taxpayer dollars to run
educational programs for children. With both types of boards
being responsible for public dollars, it makes sense that the
basic transparency statutes apply to both. It is not
appropriate for boards that govern state dollars to be
financially interested in the decisions made by the board?
(T)he lack of clarity in state law regarding rules governing
conflict of interest for charter school board members has
prompted some charter operators to pay themselves for services
and (to argue that) conflict of interest restrictions do not
apply to them. Charter schools must operate with integrity
and transparency in order to assure the public about (their)
fiscal responsibility and most importantly to avoid any waste,
mismanagement, and even criminal abuse of tax dollars intended
for education purposes. AB 913 plays a critical part in
clarifying that charter schools need to adopt and comply with
conflict of interest policies similar to traditional public
schools boards."
3)Background. The Charter Schools Act of 1992 provides for the
establishment of charter schools in California for the purpose
of improving student learning and expanding learning
experiences for pupils who are identified as academically low
achieving, among other purposes. Existing law declares that
charter schools are part of the public school system as
defined in the California Constitution and are "under the
exclusive control of the officers of the public schools." A
charter school is required to comply with statutes governing
charter schools and all of the provisions set forth in its
charter, but is otherwise exempt from most laws governing
school districts except where specifically noted.
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Existing law requires state and local agencies to conduct
business in meetings that are open to the public. The Brown
Act requires meetings of a local agency's board of directors
to be open to the public. The Bagley-Keene Act requires
meetings of state bodies to be open to the public. The CPRA
declares that the public has a right to access information
that concerns the people's business and provides that public
records shall be available for inspection, except as provided
by an express provision of law.
Existing law (GC Section 1090) prohibits members of the
Legislature, state, county, district, judicial district, and
city 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.
The Political Reform Act requires public officials to carry
out their duties in an unbiased manner, free from influence by
outside interests, and to follow regulations during elections.
The Political Reform Act also requires government agencies to
adopt a conflict of interest code that requires designated
employees of the agency to file an annual statement of
economic interest disclosing any investments, business
positions, interests in real property, or sources of income
that may be affected materially by a decision made, or
participated in, by the designated employee by virtue of his
or her position.
4)Previous legislation. This bill is nearly identical to AB 360
(Brownley) of 2011, which died on concurrence on the Assembly
Floor. This bill is also similar to AB 572 (Brownley) of
2010, which would have required charter schools to comply with
the Brown Act, the California Public Records Act, and the
Political Reform Act. AB 572 was vetoed.
5)Arguments in support. The California School Boards
Association (CSBA), cosponsor of this measure, states, "AB 913
will protect funding for public education by applying to
charter schools the requirements that have proven to be
effective in minimizing conflict of interest in traditional
public schools. Transactions between charter school board
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members and their schools would be prohibited, with limited
exceptions, and charter school board members could not attempt
to influence a decision in which they have a financial
interest.
"CSBA believes that charter schools are, fundamentally, public
school entities. Their boards have the same responsibility as
local elected school board members to uphold the public trust
and to ensure that the public's money is used appropriately.
This includes ensuring that charter board members do not
profit from their positions?
"Considering the billions of dollars of Proposition 98 funds
that are spent annually by charter schools, it only makes
sense that their governing boards have some already
agreed-upon level of transparency to their students, parents,
employees, and authorizers."
6)Arguments in opposition. The California Charter Schools
Association Advocates (CCSAA), in opposition, notes, "AB 913
imposes Government Code 1090 on charter schools, which would
fundamentally preclude a charter school's leaders from
engaging in any of the financial matters involving the charter
school?
"Charter schools have far less flexibility to secure financial
resources to acquire appropriate facilities and to weather
fiscal challenges. They cannot tax; they cannot place bond
measures on the local ballot; they often cannot secure
financing. Charter schools turn to board members and senior
employees, who are passionately committed to the success of
the school, for financial support that the charter cannot
access on its own.
"CCSAA agrees that there should be limitations on board members
and senior employees in order to better ensure fiscal
integrity when it comes to financial actions. However, AB 913
categorically shuts down nearly every avenue for financial
assistance."
GOVERNOR'S VETO MESSAGE :
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"Starting a charter school requires the strong commitment of
dedicated individuals willing to serve on a governing board.
While I support transparency, this bill goes further than simply
addressing issues of potential conflicts of interest and goes
too far in prescribing how these boards must operate."
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958
FN: 0005678