BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 709


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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          709 (Gipson)


          As Amended  September 1, 2015


          Majority vote


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          |ASSEMBLY:  |47-27 |(June 3, 2015) |SENATE: |21-13 |(August 19,      |
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          Original Committee Reference:  ED.


          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 the  
               Brown 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,









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             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  
            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. 


          The Senate amendments specify that notwithstanding any other  
          law, a public records request made to a charter school that  
          meets the criteria specified in (a) and (b) 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.


          1)The charter school is located on a federally recognized  
            California Indian reservation or rancheria.


          2)The charter school is operated by a nonprofit public benefit  
            corporation that was formed on or before May 31, 2002, and is  
            currently operated by a federally recognized California Indian  
            tribe.


          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:  According to the Senate Appropriations  








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          Committee:


          1)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 would create pressure to  
            increase the K-12 Mandate Block Grant.  (Proposition 98 of  
            1988)


          2)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. 


          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  
          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  








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          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.  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 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.


          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  








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          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 Section 1090.  Government Code Section 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:  1)  
          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, 2) 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.  










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          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.


          Analysis Prepared by:                                             
                          Chelsea Kelley / ED. / (916) 319-2087  FN:  
          0002018