BILL ANALYSIS Ó
AB 709
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON EDUCATION
Patrick O'Donnell, Chair
AB 709
(Gipson) - As Introduced February 25, 2015
SUBJECT: Charter schools
SUMMARY: Requires charter schools to comply with the same
conflict of interest requirements as school districts.
Specifically, this bill:
1)Declares charter schools are subject to all of the following:
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 (BKOMA) is subject to that
Act;
b) The California Public Records Act (CPRA);
c) Article 4 (commencing with Section 1090) of Chapter 1 of
Division 4 of Title 1 of the Government Code; and,
d) The Political Reform Act of 1974 (PRA). Specifies that
a charter school shall be considered an agency as it
relates to this Act.
2)Specifies this measure does not prohibit an employee of a
charter school from serving as a member of the governing body
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of that charter school; and, specifies such a member of the
governing body of a charter school shall abstain from voting
on all matters affecting his or her own employment.
EXISTING LAW pertaining to charter schools:
1)Provides no specific requirement for charter school governing
board conflict of interest policies.
2)Deems charter schools as school districts for the purposes of
receiving state education funds.
EXISTING LAW pertaining to school districts:
1)Specifies that Members of the Legislature, state, county,
district, and city officers or employees shall not be
financially interested in any contract made by them in their
official capacity, or by any body or board of which they are
members. (Government Code 1090)
2)Specifies that an employee of a school district (or local
agency) may not be sworn into office as an elected or
appointed member of that school district's (or local agency's)
governing board unless and until he/she resigns as an
employee. (Education Code 35107)
3)Requires members of school district governing boards and
designated employees of the school district to file statements
of financial interest according to the Political Reform Act.
(Government Code 87100 et. seq.)
4)Requires a county, city, whether general law or chartered,
city and county, town, school district, municipal corporation,
district, political subdivision, or any board, commission or
agency thereof, or other local public agency to comply with
the Brown Act. (Government Code 54950 et. seq.)
5)Requires a county; city; city and county; school district;
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municipal corporation; district; political subdivision; or any
board, commission or agency thereof; other local public
agency; or a board, commission, committee, or other
multimember body that governs a private corporation, limited
liability company, or other entity that either is created by
the elected legislative body in order to exercise authority
that may lawfully be delegated by the elected governing body
to a private corporation, limited liability company, or other
entity; or, receives funds from a local agency and the
membership of whose governing body includes a member of the
legislative body of the local agency appointed to that
governing body as a full voting member by the legislative body
of the local agency to comply with the California Public
Records Act. (Government Code 6250 et. seq.)
FISCAL EFFECT: This bill is keyed non-fiscal.
COMMENTS: This bill requires charter school governing body
members to comply with substantially similar conflict of
interest policies by which school district governing board
members currently abide. Recent news reports of charter school
governing body members engaging in inappropriate financial
mismanagement have highlighted the need for charter school
conflict of interest laws to be clarified. Currently, these
investigations can take many months to resolve partly due to the
fact that charter school governing body members and designated
employees do not consistently file an annual statement of
economic interest, which makes public any potential conflicts of
interest that individual may have in their official capacity.
While charter schools are given more autonomy than public
schools, their governing bodies have authority over public funds
to be used for the educational benefit of their students.
Charter school governing bodies should be held to the same
conflict of interest standards as school district governing
boards.
This bill requires charter school governing bodies to file
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statements of economic interest according to the Political
Reform Act; specifies that charter school governing body members
may not be financially interested in any decision made by the
governing body; requires charter schools to comply with the
California Public Records Act; and, requires charter school
governing bodies to abide by the Brown Act or the Bagley-Keene
Open Meetings Act. The bill also expressly authorizes charter
school employees to serve on a charter school governing body.
According to the author, AB 709 seeks to clarify current law and
explicitly require California's charter schools to be more
transparent and accountable to the public. Specifically, this
bill will require that charter school meetings are open to the
public and allow for public records requests. In addition, this
bill seeks to provide that charter schools comply with conflict
of interest provisions of the Political Reform Act and prohibits
officers or employees from engaging in contracts where they have
a financial interest.
The Brown Act. The Brown Act governs meetings conducted by
local legislative bodies, such as boards of supervisors, city
councils and school boards. The Brown Act represents the
Legislature's determination of how the balance should be struck
between public access to meetings of multi-member public bodies
and the need for confidential candor, debate, and information
gathering. The Brown Act requires meetings of the board to be
publicly noticed 72 hours before their meetings, among other
requirements.
California Public Records Act (CPRA). The CPRA was enacted in
1968 and according to the Attorney General, in enacting the
CRPA, the Legislature stated that access to information
concerning the conduct of the public's business is a fundamental
and necessary right for every person in the state. Cases
interpreting the CRPA also have emphasized that its primary
purpose is to give the public an opportunity to monitor the
functioning of their government. The greater and more
unfettered the public official's power, the greater the public's
interest in monitoring the governmental action. The fundamental
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precept of CPRA is that governmental records shall be disclosed
to the public, upon request, unless there is a specific reason
not to do so. Most of the reasons for withholding disclosure of
a record are set forth in specific exemptions contained in the
CPRA. Several CPRA exemptions are based on a recognition of the
individual's right to privacy. If a record contains exempt
information, the agency generally must segregate or redact the
exempt information and disclose the remainder of the record.
Government Code 1090. Government Code 1090 states that members
of the Legislature, state, county, district, judicial district,
and city officers or employees shall not be financially
interested in any contract made by them in their official
capacity, or by any body or board of which they are members. In
a 1983 opinion the Attorney General stated, "Section 1090 of the
Government Code codifies the common law prohibition and the
general policy of this state against public officials having a
personal interest in contracts they make in their official
capacities. Mindful of the ancient adage, that 'no man can
serve two masters,' the section was enacted to ensure that
public officials 'making' official contracts not be distracted
by personal financial gain from exercising absolute loyalty and
undivided allegiance to the best interest of the entity which
they serve."
Corporations Code. Statute governing corporations (including
charter schools operated by non-profit or for-profit
corporations) requires not more than 49% of persons serving on
the board of any corporation to be "interested persons."
"Interested persons" is defined as either of the following: a)
any person currently compensated by the corporation for services
rendered to it within the previous 12 months (excluding any
reasonable compensation paid to a director); or, b) any
relative, as specified, of any such person. Advocates of
charter schools contend they should abide by conflict of
interest provisions related to corporations not local education
agencies due to the fact that some charter schools are operated
by non-profit corporations. The committee should consider
whether it is appropriate to have public taxpayer funded charter
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schools abide by the corporations code rather than the
government code with regard to conflict of interest policies.
Political Reform Act. The Fair Political Practices Commission
(FPPC) was created by the Political Reform Act of 1974, a ballot
initiative passed by California voters as Proposition 9. The
FPPC provides written and oral advice to public agencies and
officials; conducts seminars and training sessions; develops
forms, manuals and instructions; and receives and files
statements of economic interests from many state and local
officials. The FPPC investigates alleged violations of the
Political Reform Act, imposes penalties when appropriate, and
assists state and local agencies in developing and enforcing
conflict-of-interest codes. The FPPC regulates campaign
financing and spending; financial conflicts of interest;
lobbyist registration and reporting; post-governmental
employment; mass mailings at public expense; and, gifts and
honoraria given to public officials and candidates. School
board members are required to comply with the PRA, and in so,
must file a statement of economic interest, annually.
Similar Measures in Recent Years: Measures similar to this have
been introduced a few times in recent years. Recent measures
contained more exemptions and specific requirements for charter
schools. For example, previous measures allowed board members
to provide emergency loans, lease property to the school and
sign as a guarantor to a lease agreement, in specified
instances. Previous measures also specified where charter school
governing body meetings could physically take place in relation
to the school and authorized a charter school governing board to
hold closed sessions to consider pupil discipline. Further,
previous measures specified that a late statement of economic
interest filed by a governing body member could not be the sole
basis for revocation of a charter. The committee should
consider whether this bill should contain this same level of
specificity.
Previous Legislation: AB 913 (Chau) from 2014, would have
required charter schools to comply with the same conflict of
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interest requirements as school districts, commencing July 1,
2014. The bill was vetoed by the Governor with the following
message:
"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."
AB 360 (Brownley) from 2011, which died on the Assembly inactive
file on concurrence, would have required charter schools to
comply with the same conflict of interest requirements as school
districts.
AB 572 (Brownley) from 2010 required, commencing July 1, 2011,
charter schools to comply with the same conflict of interest
requirements as school districts by specifying that charter
schools are subject to the Brown Act, the CPRA; Article 4
(commencing with Section 1090) of Chapter 1 of Division 4 of
Title 1 of the Government Code; and, the PRA. The bill was
vetoed by the Governor with the following message:
"Charter school educators have proven that poverty is not
destiny for students that attend public schools in
California. Repeatedly, charter schools with high
proportions of disadvantaged students are among the highest
performing public schools in California. Any attempt to
regulate charter schools with incoherent and inconsistent
cross-references to other statutes is simply misguided.
Parents do not need renewed faith in charter schools as
suggested in this bill. On the contrary, tens of thousands
of parents in California have children on waiting lists to
attend a public charter school. Legislation expressing
findings and intent to provide "greater autonomy to charter
schools" may be well intended at first glance. A careful
reading of the bill reveals that the proposed changes apply
new and contradictory requirements, which would put
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hundreds of schools immediately out of compliance, making
it obvious that it is simply another veiled attempt to
discourage competition and stifle efforts to aid the
expansion of charter schools."
AB 2115 (Mullin) from 2008 required charter schools to adopt and
comply with a conflict of interest policy that requires its
governing board members to abide by the same conflict of
interest requirements as local education agency (LEA) governing
board members. The bill was vetoed by the Governor with the
following message:
"Not only would this bill create state mandated costs
for charter schools to comply with its provisions, the
measure runs counter to the intent of charter schools,
which were created to be free from many of the laws
governing schools districts."
AB 1197 (Wiggins) of 2004, specified that individuals who govern
charter schools shall file statements of economic interest under
the PRA. The bill failed passage on the Senate Floor.
REGISTERED SUPPORT / OPPOSITION:
Support
California Association of School Business Officials
California School Boards Association
California School Employees Association
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California State PTA
California Teachers Association
San Francisco Unified School District
Opposition
California Center for Parent Empowerment
California Charter Schools Association Advocates
EdVoice
Analysis Prepared by:Chelsea Kelley / ED. / (916) 319-2087