BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 108
Senator Walters
As Amended April 21, 2009
Hearing Date: April 28, 2009
Government Code
KB:jd
SUBJECT
Charter Schools: Government Tort Claims
DESCRIPTION
This bill would provide that no joint powers authority for
risk-pooling shall refuse to admit to membership or provide
coverage to a charter school, including a charter school
organized pursuant to Education Code Section 47604, or a school
district which operates a charter school, solely on the basis
that it operates as a charter school.
BACKGROUND
A Joint Powers Authority (JPA) is a government-regulated public
entity formed by two or more public agencies, such as state,
cities, counties, and school districts. JPAs pool their assets
to promote risk management and pay claims against member
entities. The joint powers mechanism can be used for any
governmental function that a single government agency may
lawfully perform. In 2000, the Legislature enacted AB 101
(Steinberg, Chapter 14, Statutes of 2000) which provided that a
charter school, including a charter school operated by or as a
nonprofit corporation, may be considered a public agency
eligible for membership in a joint powers agreement for
risk-pooling.
In Courtney Knapp v. Palisades Charter High School (2007) 146
Cal.App.4th 708, a plaintiff visiting student sued Palisades
Charter High School, among other parties, alleging that she had
been sexually harassed, and suffered emotional distress as a
result. The trial court entered summary judgment for the
(more)
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defendants, on the ground that the student failed to comply with
and was not excused from meeting the claim presentation
requirements of the California Tort Claims Act (TCA). The trial
court's judgment was reversed on appeal. The appellate court
concluded that, as an alleged nonprofit public benefit
corporation, the charter school was not a public entity under
the TCA, and therefore could not avail itself of the
governmental immunity provisions of the TCA.
According to the sponsor of this bill, the California Charter
Schools Association, the Knapp decision has made it more
difficult for charter schools to gain access to JPAs. This bill
seeks to remedy this problem by prohibiting a JPA for school
district insurance risk pooling from denying access by a charter
school on the sole basis that it is a charter school.
CHANGES TO EXISTING LAW
Existing law , the Charter Schools Act of 1992, specifies that a
charter school is deemed to be a school district for purposes of
statutory provisions regarding appointments from the State
School Fund, allowances for transportation, and state lottery
funds and provisions of the California Constitution regarding
the calculation of the minimum amount of funding for the support
of school districts and community college districts. (Ed. Code
Sec. 47600 et seq.)
Existing law provides that a charter school may operate as, or
be operated by, a nonprofit public benefit corporation. A
chartering authority that grants a charter to be operated by, or
as, a nonprofit public benefit corporation, is exempt from
liability for the debts or obligations of the charter school, or
for claims arising from the performance of acts, errors, or
omissions by the charter school, if the authority has complied
with all oversight responsibilities required by law. (Ed. Code
Sec. 47604.)
Existing law provides that a charter school, including a charter
school organized pursuant to Education Code Section 47604, may
be considered a public agency for the purpose of being eligible
for membership in a joint powers agreement for risk-pooling.
(Gov. Code Sec. 6528.)
This bill would provide that no joint powers authority for
risk-pooling shall refuse to admit to membership or provide
coverage to a charter school, including a charter school
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organized pursuant to Education Code Section 47604, or a school
district which operates a charter school, solely on the basis
that it operates as a charter school.
COMMENT
1. Stated need for the bill
The sponsor, the California Charter Schools Association, states
that the Knapp decision has left charter schools unprotected in
many circumstances. The sponsor further states:
JPAs that provide insurance risk pooling are denying charter
schools access to the JPA. Many charter schools are forced to
seek commercial insurance which writes less comprehensive
coverage than the school district JPA provides. For example,
commercial insurers typically do not cover defense costs for
writs, injunctive relief and other claims seeking compliance
with legal proceedings or defense and indemnity for damages
caused by inverse condemnation. As amended, SB 108 would take
a step toward restoring some of that protection by prohibiting
the JPAs from denying access to a charter school.
2.Access to risk-pooling is increasingly more important
post-Knapp
As previously discussed, pursuant to the Knapp decision, charter
schools are not public entities for the purposes of the
Government Tort Claims Act. As such, charter schools do not
enjoy the broad immunities from tort liability as do other
public schools and school districts. The ability to join a JPA
for the purposes of insurance risk-pooling is consequently
extremely important for charter schools. Any damage awards
resulting from tort actions that are not covered by the charter
school's insurance policies would have to be paid out directly
from the charter school's revenue, the primary source of which
is monies received for the school's average daily attendance
(ADA). According to this bill's sponsor, this could lead to the
loss of real dollars flowing to the classroom and students.
This bill would ensure that charter schools are not denied
access to a JPA for risk-pooling simply on the basis that they
are operating as charter schools. This seems consistent with
the purpose and intent of AB 101, which established that charter
schools, despite their hybrid public/private nature, were
eligible for membership in risk-pooling JPAs.
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3.Bill moved as a work in progress to address other issues
pertaining to charter schools and tort liability
A prior version of this bill would have provided that charter
schools are "public entities" for the purposes of the California
Tort Claims Act and other specified provisions of the Government
Code. However, concerns were expressed by stakeholders that
charter schools should not be redefined as "public entities,"
and thus, be provided with broad governmental immunity from tort
liability because they are not subject to the same degree of
strict public and regulatory oversight as are other public
entities/agencies. In fact, AB 1868 (Walters) from the
2007-2008 Legislative Session, which also would have specified
that charter schools are "public entities" for the purposes of
the Tort Claims Act, was ultimately amended due to similar
concerns to direct the California Law Revision Commission to
conduct a study generally discussing the implications of
designating charter schools as public entities for the purposes
of governmental tort liability. AB 1868 was held in the Senate
Appropriations Committee and the study was never conducted.
The sponsor of this bill has indicated that it will continue to
work with stakeholders and committee staff in order to identify
additional steps that may be taken with respect to providing
increased protection for charter schools from tort liability.
Accordingly, should this bill be substantively amended at a
future date, this committee will recall the bill for further
hearing.
Support : None Known
Opposition : None Known
HISTORY
Source : California Charter Schools Association
Related Pending Legislation : None Known
Prior Legislation :
AB 1868 (Walters) See Comment 3.
AB 101 (Steinberg) See Background.
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