BILL ANALYSIS
SB 218
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Date of Hearing: August 19, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 218 (Yee) - As Amended: August 17, 2009
Policy Committee: Higher
EducationVote: 8-0
Governmental Organization 18-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill incorporates auxiliary organizations of the University
of California (UC), the California State University (CSU), and
the California Community Colleges (CCC) within the requirements
of the California Public Records Act (CPRA). Specifically, this
bill:
1)Expands the definition of "state agency" for purposes of
compliance with the CPRA to include UC and CSU auxiliary
organizations, and expands the definition of "local agency" to
include CCC auxiliaries.
2)Exempts from (1) those auxiliaries that only operate a
commercial service for the benefit of a UC, CSU, or CCC campus
and any entity in which a UC, CSU, or CCC official
participates as a director as part of their official position.
3)Stipulates that the CPRA shall not be construed to require
disclosing the names of individuals who donate to a UC, CSU,
or CCC auxiliary and request anonymity, except when a donor,
in a quid pro quo arrangement, receives something of more than
nominal value in exchange for the donation.
4)Stipulates that auxiliaries are not required to disclose trade
secrets or other records specifically exempted or prohibited
from disclosure by state and federal law.
5)Defines what constitutes a UC auxiliary, comparable to
existing statutory definitions for CSU and CCC auxiliaries
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6)Expresses the Legislature's intent to reject the court's
interpretation of state law regarding the application of CPRA
to auxiliary bodies, such as that described in California
State University, Fresno Assn., Inc. v. Superior Court (2001)
90 Cal.App.4th 810 (CSU Fresno v. Superior Court).
FISCAL EFFECT
1)No direct state costs. UC and CSU believe that their General
Counsels' offices currently spend about 10% of their time
assisting with CPRA requests. The segments believe these
offices will incur significant additional costs assisting
their auxiliaries in responding to such requests, and
potential legal costs when requestors challenge decisions not
to provide information sought from auxiliaries. These costs
would be covered by reimbursements of non-state funds by the
respective auxiliaries.
2)UC and CSU also contend the bill will lead to multi-million
dollar revenue losses due to reduced donations from anonymous
donors specifically and diminished donations to the
auxiliaries in general. (These again would be non-state
revenue losses.) As a result, UC argues that there could be
cost pressure to backfill with General Fund some services that
auxiliaries provide to campuses. Such a scenario is
speculative.
3)The CCC indicates that community college auxiliaries have
complied with CPRA requests for many years.
COMMENTS
1)Background . In the late 1990s, CSU Fresno built a
multipurpose arena on its campus funded primarily by private
donations and operated by the CSU Fresno Association, a
nonprofit corporation that operates all of the campus's
commercial enterprises, including the bookstore, food
services, housing, and the student union. In exchange for
generous gifts to the campus's foundation (a separate
nonprofit corporation whose purpose is to manage all aspects
of the financial activities for grants, trust accounts,
investments, endowments, scholarships, gifts, loans, and
donations and to provide assistance to faculty and staff with
their grants and contracts), some donors obtained luxury
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suites in the arena for a specified number of years pursuant
to licensing agreements between the donors and the CSU Fresno
Association.
The Fresno Bee made a CPRA request for the licensing
agreements and other documents in an attempt to learn the
identity of the donors and investigate whether the donors
received favorable treatment from any of the entities
involved.
The CSU Fresno Association and the campus foundation denied
the request for information, claiming that they were not state
agencies as defined in CPRA and therefore not subject to its
disclosure requirements.
The Fresno Bee filed a superior court action to compel
disclosure, and the trial court ordered disclosure. The
appellate court reversed the trial court's decision (CSU
Fresno v. Superior Court), concluding that CPRA was not
written broadly enough to include either entity in the
definition. The court based its conclusions on CPRA as it
existed at that time and its comparisons of the CSU Fresno
Association to those groups in other states and the federal
government labeled "agencies" under their own versions of CPRA
or the Freedom of Information Act. The court further stated:
We are fully cognizant of the fact that our conclusion
seems to be in direct conflict with the express purposes of
the CPRA-"to safeguard the accountability of government to
the public". The Legislature's decision to narrowly define
the applicability of the CPRA, balanced against its
sweeping goal to safeguard the public, leaves us scratching
our judicial heads and asking, "What was the Legislature
thinking?" In many ways the Association can be
characterized as a "state-controlled" corporation that
should be subject to the CPRA. However, courts "do not sit
as super-legislatures to determine the wisdom, desirability
or propriety of statutes enacted by the Legislature." The
rewriting of a statute is a legislative, rather than a
judicial function, a practice in which we will not engage.
2)Purpose . This bill-cosponsored by the California Faculty
Association (CFA) and the California Newspaper Publishers
Association (CNPA)-expressly includes auxiliary organizations
in the CPRA by
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(a) defining UC's auxiliary organizations in the Education
Code to correspond to the statutory definitions of CSU's
and CCC's auxiliary organizations;
(b) adding auxiliary organizations to the definition of a
"state agency" and "local agency" for purposes of CPRA;
and
(c) stating the intent of the Legislature to reject the
court's interpretation of state law (CSU Fresno v. Superior
Court) regarding the application of CPRA to auxiliary
bodies.
3)Auxiliary organizations are formed to further the educational
missions of their institution. Examples include alumni
groups, student associations, faculty organizations, and
groups that bear the name of the particular college or
university or campus. These groups operate as nonprofit
public benefit corporations chartered under the California
Nonprofit Public Benefit Corporation Law and must meet certain
standards of operation such as:
(a) oversight of auditing and financial reporting
procedures by a certified public accountant;
(b) ensuring expenditures are in accordance with policies
delineated by the governing body;
(c) ensuring meetings of boards and committees are open to
the public; and
(d) conforming operational procedures with regulations
established by the governing body.
4)In support , the CFA states that auxiliaries raise significant
amounts of money that are used to support these public
institutions, yet the public cannot access the auxiliaries'
records under CPRA.
5)Opposition . In addition to the fiscal concerns discussed
above, UC believes the exemption for anonymous donors is
insufficient to cover donor-advised funds or charitable or
family trusts.
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The sponsors argue that the language is broad enough to
address such instances.
UC also believes that subjecting volunteer-driven
organizations, such as alumni associations or example, to CPRA
requirements will negatively impact volunteers' willingness to
participate in these activities: CSU argues that the bill is
unnecessary, as "auxiliaries are accountable and transparent
to the public under current state and federal laws."
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081