BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 709| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 709 Author: Gipson (D), et al. Amended: 9/1/15 in Senate Vote: 21 SENATE EDUCATION COMMITTEE: 5-2, 7/1/15 AYES: Liu, Leyva, Mendoza, Monning, Pan NOES: Runner, Vidak NO VOTE RECORDED: Block, Hancock SENATE JUDICIARY COMMITTEE: 5-1, 7/7/15 AYES: Jackson, Hertzberg, Leno, Monning, Wieckowski NOES: Moorlach NO VOTE RECORDED: Anderson SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 47-27, 6/3/15 - See last page for vote SUBJECT: Charter schools SOURCE: California School Employees Association California Teachers Association DIGEST: This bill subjects charter schools 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 (CPRA), the Political Reform Act of 1974, and the state's primary conflict-of-interest provisions-Government Code Section 1090. AB 709 Page 2 ANALYSIS: Existing law: 1)Provides, under the Charter Schools Act of 1992, 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. 2)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." 3)Requires a charter school 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 § 47601 et seq.) 4)Requires state and local agencies to conduct business in meetings that are open to the public: a) The Brown Act requires meetings of a local agency's board of directors to be open to the public. (Government Code § 54950 et seq.) b) The Bagley-Keene Open Meeting Act requires meetings of state bodies to be open to the public. (GC § 11120) c) 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. (GC § 6250 and § 6253) 1)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. (GC § 1090 et seq.) AB 709 Page 3 2)Establishes the Political Reform Act of 1974, passed by voters through Proposition 9 in June 1974, which 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.) This bill: 1)Provides that a charter school is subject to all of the following: a) The 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) CPRA. 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 Section 1000, a charter school shall be considered an agency. 1)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. 2)Provides that a public records request made to a charter AB 709 Page 4 school that is located on a federally recognized California Indian reservation or Rancheria and the nonprofit public benefit corporation that operates the charter school was formed on or before May 31, 2002, and is currently operated by a federally recognized California Indian Tribe, shall be executed by the chartering authority. In order for the chartering authority to meet the public records request, the charter school shall provide all relevant documentation to the chartering authority for the purpose of meeting the public records request. 3)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. Comments 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 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. This bill is intended to require charter schools to be more transparent and accountable to the public. 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 Section 1090 and the Political Reform Act of 1974. 1)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 AB 709 Page 5 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. 2)Public records - the purpose of 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. 3)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 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 will result in charter school board members and designated employees having to disclose their financial interests in annual statements filed with the FPPC. 4)Government Code Section 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, Government Code Section 1090 specifies that such contracts are void and cannot be enforced. AB 709 Page 6 FISCAL EFFECT: Appropriation: No Fiscal Com.:NoLocal: No According to the Senate Appropriations Committee: Mandate: Unknown, potentially significant reimbursable state mandate costs for school districts and county offices of education due to increased oversight responsibilities. If determined to be a mandate, this will create pressure to increase the K-12 Mandate Block Grant. (Proposition 98) Costs to charter schools: Unknown, potentially significant local costs to the extent charter schools do not already comply with the four areas of law. Charter schools have been determined to be ineligible to submit claims for mandate reimbursements. SUPPORT: (Verified8/28/15) California School Employees Association (co-source) California Teachers Association (co-source) Association of California School Administrators California Association of School Business Officials California Federation of Teachers California Labor Federation California School Boards Association California State PTA LIUNA Local 777 Public Advocates San Francisco Unified School District School Employers Association of California OPPOSITION: (Verified8/28/15) California Charter Schools Association Charter Schools Development Center EdVoice KIPP LA Schools Letters from individuals AB 709 Page 7 ARGUMENTS IN SUPPORT: Supporters of this 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. ARGUMENTS IN OPPOSITION: Opponents of this bill have expressed concern with subjecting charter schools to the provisions of Government Code Section 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. ASSEMBLY FLOOR: 47-27, 6/3/15 AYES: Alejo, Bloom, Bonilla, Bonta, Campos, Chau, Chiu, Chu, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Wilk, Williams, Wood, Atkins NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang, Chávez, Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper, Jones, Kim, Lackey, Levine, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth, Waldron NO VOTE RECORDED: Brown, Burke, Calderon, Cooley, Cooper, Wagner Prepared by:Lenin Del Castillo / ED. / (916) 651-4105 8/11/16 14:56:40 **** END **** AB 709 Page 8