BILL ANALYSIS                                                                                                                                                                                                    Ó



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          ASSEMBLY THIRD READING


          AB  
          709 (Gipson)


          As Introduced  February 25, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                 |Noes                 |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Education       |5-2   |O'Donnell, McCarty,  |Chávez, Kim          |
          |                |      |Santiago, Thurmond,  |                     |
          |                |      |Weber                |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
           ------------------------------------------------------------------- 


          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 BKOMA;


             b)   The California Public Records Act (CPRA);









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             c)   Government Code Title 1, Division 4, Chapter 1, Article 4  
               (commencing with Section 1090); and,


             d)   The Political Reform Act of 1974 (PRA).  Specifies that a  
               charter school shall be considered an agency as it relates to  
               the PRA.


          2)Specifies this bill does not prohibit an employee of a charter  
            school from serving as a member of the governing body 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.  


          FISCAL EFFECT:  Unknown.  This bill is keyed non-fiscal by the  
          Legislative Counsel.


          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  








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          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  
          statements of economic interest according to the PRA; 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 BKOMA.  This bill also expressly authorizes  
          charter school employees to serve on a charter school governing  
          body.


          According to the author, this bill 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 PRA 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.








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          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 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  








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          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 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 PRA, a ballot initiative passed by  
          California voters as Proposition 9 of 1974.  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 PRA, 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.




          Analysis Prepared by:                                               
          Chelsea Kelley / ED. / (916) 319-2087  FN: 0000460









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