BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON EDUCATION
                              Senator Carol Liu, Chair
                                2015 - 2016  Regular 

          Bill No:              AB 709              
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          |Author:    |Gipson                                               |
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          |Version:   |June 1, 2015                                Hearing  |
          |           |Date:      July 1, 2015                              |
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          |Urgency:   |No                     |Fiscal:      |No             |
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          |Consultant:|Lenin Del Castillo                                   |
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          Subject:  Charter schools

          NOTE:  This bill has been referred to the Committees on  
                Education, Judiciary and Appropriations.  A "do pass"  
                motion should include referral to the Committee on  
                Judiciary.

            SUMMARY
          
          This bill requires that charter schools be subject to a variety  
          of the same open meeting, conflict-of-interest and disclosure  
          laws as traditional school districts, including the Ralph M.  
          Brown Act (Brown Act), the California Public Records Act, the  
          Political Reform Act of 1974, and the state's primary  
          conflict-of-interest provisions-Government Code § 1090.  

            BACKGROUND
          
          Existing law, the Charter Schools Act of 1992, provides for the  
          establishment of charter schools in California for the purpose,  
          among other things, of improving student learning and expanding  
          learning experiences for pupils who are identified as  
          academically low achieving.  Existing law declares that charter  
          schools are part of the public school system as defined in  
          Article IX of 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.  (Education Code §  







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          47601 et seq.)  

          Existing law requires state and local agencies to conduct  
          business in meetings that are open to the public:  

          1)The Brown Act requires meetings of a local agency's board of  
            directors to be open to the public.  (Government Code § 54950  
            et seq.)  

          2)The Bagley-Keene Open Meeting Act requires meetings of state  
            bodies to be open to the public.  (GC § 11120)

          The California Public Records Act 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. 
          (GC § 6250 and § 6253)  

          Existing law 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 anybody or board of  
          which they are members. 
          (Government Code § 1090 et seq.)

          The Political Reform Act of 1974, established by the voters  
          through Proposition 9 in June 1974, requires public officials to  
          carry out their duties in an unbiased manner, free from  
          influence by outside interests, and to follow regulations during  
          elections, as defined.  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.  (GC § 81000 et seq.)

            ANALYSIS
          
          This bill:

          1)Provides that a charter school is subject to all of the  
            following:








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             a)   The Ralph M. Brown Act, except that a charter school  
               operated by 
               an entity governed by the Bagley-Keene Open Meeting Act is  
               subject to that Act regardless of the authorizing entity.    
                

             b)   The California Public Records Act.

             c)   Provisions of the Government Code that prohibit  
               government officers or employees from being financially  
               interested in contracts or purchases made by them in their  
               official capacity.

             d)   The Political Reform Act of 1974.  For purposes of  
               Government Code § 81000, a charter school shall be  
               considered an agency.

            Provides that 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 and that such a member shall abstain from voting on, or  
            influencing or attempting to influence another member of the  
            governing body concerning, all matters uniquely affecting his  
            or her own employment.

          1)Specifies the intent of the Legislature to do both of the  
            following:

             a)   Ensure that charter school governance is transparent.

             b)   Ensure that monitoring and oversight of charter schools  
               is conducted to protect the public interest.




          STAFF COMMENTS
          
       1)Need for the bill.  According to the author's office, though  
            charter schools are publicly funded, they were established  
            with the intent to operate separately from the current school  
            structure as a way of allowing for more creativity in  
            developing solutions to historic challenges in typical  








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            educational settings.  However, there are several provisions  
            of law that specifically relate to good governance and  
            transparency where charter schools should be required to  
            comply.  The bill is intended to require charter schools to be  
            more transparent and accountable to the public.

       2)Public accountability laws.  County boards of education and  
            school district governing boards are required to conduct  
            public meetings and make information available to the public,  
            upon request.  Members of these boards are also subject to  
            conflict-of-interest statutes contained in Government Code §  
            1090 and the Political Reform Act of 1974.  

          a)   Open meeting laws - entitles the public to have access to  
               meetings of multi-member public bodies.  The Brown Act and  
               the Bagley-Keene Act recognize the need to balance the  
               public's right to open government with the need for boards,  
               on occasion to have closed session discussions in certain  
               matters such as personnel or litigation.  By making charter  
               schools subject to open meeting laws, charter school boards  
               would need to provide advance notice of meetings and  
               conduct their meetings in public.  

          b)   Public records - the purpose of the California Public  
               Records Act (CPRA) is to give the public an opportunity to  
               monitor the functioning of their local and state  
               government.  The fundamental precept of CPRA is that  
               governmental records are to be disclosed to the public when  
               requested, unless there is a specific reason not to do so.   
               The CPRA allows for certain exemptions, such as matters  
               relating to individual privacy.  Under CPRA, agencies must  
               segregate or redact exempt information and disclose the  
               remainder of the record.  Under the provisions of this  
               bill, charter schools would need to respond to requests for  
               information that is not private in nature.  

          c)   The Political Reform Act of 1974 established the Fair  
               Political Practices Commission (FPPC) to administer its  
               requirements and receive annual conflict-of-interest  
               statements.  According to the FPPC, the CPRA is designed to  
               assure that public officials perform their duties  
               impartially without bias because of personal financial  
               interests or the interests of financial supporters; and  
               that public officials disclose income and assets that could  








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               be affected by official actions and to assure that public  
               officials disqualify themselves from participating in  
               decisions when they have conflicts-of-interest.  This bill  
               would result in charter school board members and designated  
               employees having to disclose their financial interests in  
               annual statements filed with the FPPC.  

          d)   Government Code § 1090 is the state's central  
               conflict-of-interest Act.  It applies to public officials  
               from members of the Legislature to local officials and  
               employees, including those of school districts.  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 capacity."  In addition to prohibiting public  
               officials from having personal financial interest in a  
               contract made in an official capacity, this Act specifies  
               that such contracts are void and cannot be enforced.   
               Opponents of the bill have expressed concern with  
               subjecting charter schools to the provisions of Government  
               Code § 1090 because it could make it more difficult for  
               philanthropic board members to provide financial assistance  
               or low-interest loans or make facilities available to  
               charter schools, which may happen during the start-up phase  
               of a charter school.  However, supporters of the bill argue  
               that since charter schools are considered to be public  
               schools and receive public funds, they have a fiduciary  
               duty to taxpayers with regards to the use of those funds  
               and should be subject to the same conflict-of-interest and  
               disclosure requirements as traditional school districts.   

       3)No substantive changes from previous similar legislation.  As  
            referenced below under Comment No. 5, the Governor vetoed a  
            nearly identical measure in 2014-AB 913 (Chau).  This measure  
            does not include any substantive changes that seek to address  
            the Governor's veto message which the Committee may wish to  
            consider as part of its review.   

       4)Fiscal impact.  Staff notes that Legislative Counsel has  
            identified this bill as non-fiscal.  However, the Senate Rules  
            Committee has referred the bill to the Senate Appropriations  
            Committee, at their request, as well as to the Judiciary  
            Committee.  








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       5)Related and prior legislation.  

            SB 1317 (Huff, 2014) proposed to require that charter schools  
            be subject to a variety of the same open meeting,  
            conflict-of-interest and disclosure laws as school districts,  
            including the Ralph M. Brown Act (Brown Act), the California  
            Public Records Act, and the Political Reform Act of 1974.   
            This bill failed passage in the Senate Appropriations  
            Committee.

            AB 913 (Chau, 2014) was substantially similar to this bill and  
            proposed to subject charter schools to a variety of the same  
            open meetings, conflict-of-interest, and disclosure laws.  AB  
            913 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, 2011), similar to this bill, required  
            charter schools to comply with the same conflict-of-interest  
            requirements as school district governing board members.  AB  
            360 died on the Assembly inactive file on concurrence.   

            AB 572 (Brownley, 2010), also similar to this bill, 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 by Governor Schwarzenegger 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  








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                    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 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."  

            SUPPORT
          
          Association of California School Administrators
          California Association of School Business Officials
          California Federation of Teachers
          California Labor Federation
          California School Boards Association
          California School Employees Association (co-sponsor)
          California State PTA
          California Teachers Association (co-sponsor)
          Charter Schools Development Center
          LIUNA Local 777
          Public Advocates
          San Francisco Unified School District
          School Employers Association of California

            OPPOSITION
           
           California Charter Schools Association
          Charter Schools Development Center
          EdVoice
          KIPP LA Schools
          Letters from individuals

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