BILL ANALYSIS
SB 330
Page 1
Date of Hearing: June 16, 2010
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Joe Coto, Chair
SB 330 (Yee) - As Amended: June 7, 2010
SENATE VOTE : 37-1
SUBJECT : Public records: auxiliary organizations.
SUMMARY : Requires auxiliary organizations of the California
State University, the California Community Colleges, or the
University of California to comply with the California Public
Records Act (Act or CPRA) but would not require these entities
to disclose information obtained in the process of soliciting
potential donors that has actual or potential independent
economic value because it is not generally known to the public
or because the individuals can obtain economic value from its
disclosure or use. Specifically, this bill :
1)Requires auxiliary organizations of the University of
California, the California State University, or the California
Community Colleges, as well as entities that operate campus
facilities such as bookstores, sports complexes, arenas,
theaters, student centers, parking programs, or similar
activities to comply with the public records disclose
requirements of the Act.
2)Provides that nothing in this bill shall be construed to
require disclosure of the names of a person who volunteers his
or her services or donates to an auxiliary, as specified, if
that person requests anonymity. This exemption does not apply
if a donor, in a quid pro quo arrangement, receives anything
that has a value of $500 or greater in exchange for the
services or donation. This exemption does not apply if a
volunteer or donor is a member of the governing board of an
auxiliary. This exemption does not apply if a donor or
volunteer engages in direct communication for the purpose of
influencing the administrative or academic action within the
California Community Colleges, the California State
University, or the University of California.
3)Specifies that this measure does not require the university
and college-affiliated auxiliaries to disclose information
obtained in the process of soliciting potential donors that
SB 330
Page 2
has actual or potential independent economic value because it
is not generally known to the public or because individuals
can obtain economic value from its disclosure or use.
4)Expresses the Legislature's intent to reject the court's
interpretation of state law regarding the application of CPRA
to auxiliary bodies such as those described in California
State University, Fresno Assn., Inc. v. Superior Court (2001)
90 Cal.App.4th 810 (CSU Fresno v. Superior Court).
5)Specify that it is not the intent of the Legislature to
designate specified organizations as state agencies by
subjecting these organizations to the requirements of the
CPRA.
6)Clarifies that the following are not subject to disclosure:
a) Proprietary information,
b) Trade secrets,
c) Privileged information,
d) Information that is protected from disclosure by several
other provisions of law, such as preliminary notes,
information concerning pending litigation, personnel files,
medical records, etc.
EXISTING LAW :
1)Existing law, the CPRA governs the disclosure of information
collected and maintained by public agencies. Generally, all
public records are accessible to the public upon request,
unless the record requested is exempt from public disclosure.
There are 30 general categories of documents or information
that are exempt from disclosure, essentially due to the
character of the information, and unless it is shown that the
public's interest in disclosure outweighs the public's
interest in non-disclosure of the information, the exempt
information may be withheld by the public agency with custody
of the information.
2)Provides that the person whose request for a public record
under the CPRA is denied may file an action in superior court
for an order requiring disclosure. The test for a
determination of whether a record may be withheld from public
access is whether the public's interest in disclosure is
outweighed by the public's interest in withholding disclosure
of the record.
SB 330
Page 3
3)Existing law, Article 1, Section 3 of the California
Constitution declares the people's right to transparency in
government. ("The people have the right of access to
information concerning the conduct of the people's business,
and therefore, the meetings of public bodies and the writings
of public officials and agencies shall be open to public
scrutiny...").
4)Defines state agency, for purposes of the CPRA, to include
every state officer, department, division, bureau, board, and
commission or other state body or agency, except for the
Legislature and the Judiciary. The California State
University, the University of California, and the California
Community Colleges are considered to be state agencies for
this purpose.
5)Authorizes the University of California, the California State
University, and the California Community Colleges to form
auxiliary organizations for the various purposes related to
their educational mission.
6)Defines "local agency" for purposes of the CPRA, to include a
county; city, whether general law or chartered; city and
county; school district; municipal corporation; district;
political subdivision; or any board or commission or agency
thereof; other local public agency; or entities that are
legislative bodies of a local agency as defined.
7)Defines "state agency" for purposes of the CPRA, to include
every state office, officer, department, division, bureau,
board, and commission or other state body or agency, but does
not include those agencies named in Article IV (the
Legislative branch) or Article VI (Judicial branch) of the
California Constitution. Under existing law, the CPRA applies
to the California State University and to the University of
California. (Gov. Code Sec. 6252(f).)
8)Existing case law holds that a non-governmental association,
which was a nonprofit auxiliary corporation affiliated with a
state university, and which operated a multi-purpose arena
being built on campus was not a "state agency" for purposes of
the CPRA, and thus could not be compelled under the CPRA to
disclose requested information.
SB 330
Page 4
FISCAL EFFECT : Unknown.
COMMENTS :
Background : SB 330 is a follow-up measure to SB 218 (Yee of
2009), that was vetoed by the Governor. The Governor's veto
message reads, in part: "While I am a firm believer in providing
openness and transparency when it involves public entities and
public funding, this bill inappropriately defines private
auxiliary organizations as a state or local public agency for
purposes of the California Public Records Act (CPRA).
Subjecting the altruistic activities of private donors and
volunteers to the CPRA will have a chilling effect on their
support and service, if they believe their personal privacy
could be compromised. Hindering private giving of time and
resources becomes a detriment to our higher education
institutions. Enacting this bill would result in a loss of
private donations and volunteer activities supporting California
public institutions of higher education, at a time when the
University of California, California State University, and
Community College campuses are facing significant reductions in
state funding during this difficult fiscal situation."
Responding to the Governor's message, SB 330 includes: 1)
language to protect information obtained by a community college,
CSU, or UC auxiliary while soliciting potential donors; 2)
language that makes clear that these entities are not considered
state agencies in order to protect their ability to continue to
receive grant funding; 3) exempts from disclosure under the Act
the name of an auxiliary organization donor or volunteer who
requests anonymity, unless the donor or volunteer receives, in a
quid pro quo arrangement, anything with a value of $500 or more
for the service or donation; 4) the bill does contain two
instances where a donor would not be able to claim anonymity: a)
if they are a member of the governing board of the auxiliary
organization; and b) if a donor attempts to influence
administrative or academic action within one of the systems.
According to the sources, this bill is a response to several
situations that have arisen on campuses of the California State
University. The first situation involves the factual background
for the decision in CSU Fresno Assn. , supra. In that case, the
Fresno Bee's CPRA request for information was made in October,
1999. In the second scenario, in 2008, a non-profit
corporation, University Enterprises, Inc (UEI), which operates
SB 330
Page 5
the student bookstore at CSU Sacramento, relied on the CSU
Fresno Assn. decision to deny a CPRA request made by a student
attempting to obtain textbook pricing information from
UEI. The student, a member of the student association's
bookstore advisory committee, sought the information contained
in the contracts between UEI and the book vendors to determine
whether UEI was complying with the College Textbook Transparency
Act (AB 1548, Solorio, Chapter 574, Statutes of 2007). AB 1548
requires colleges and universities to disclose specified
information about textbook sales on their campuses, thus acting
as a check on the ever-rising prices college students pay for
their textbooks.
In December 2009, the Attorney General initiated an audit of the
operations of nonprofit organizations affiliated with the
California State University, in response to reports of improper
use of funds raised by the auxiliary organizations. Some of the
items mentioned in the news report of the Attorney General's
audit included loans from the organization to CSU executives,
and identified expenses of executives paid out of funds raised
by these organizations.
In between the 2001 CSU Fresno decision and the 2008 CPRA
request, the people of California passed Proposition 59 by an
overwhelming 83 percent vote in 2004. Proposition 59 guarantees
the constitutional right of the public to access public
records, favoring transparency, open disclosure, and the narrow
reading of exemptions from public disclosure provided by
statute. Proposition 59 is enshrined in the California
Constitution as Article 1, Section 3.
Auxiliaries : Existing law authorizes the University of
California, the California State University, and the California
Community Colleges to form auxiliary organizations for the
various purposes related to their educational mission.
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: (1) auditing and financial reporting procedures with
oversight by a certified public accountant; (2) expenditures
that are in accordance with policies delineated by the governing
SB 330
Page 6
body; (3) meetings of boards and committees that are open to the
public; and (4) conformity of operational procedures with
regulations established by the governing body.
Purpose of the bill : The author writes, ensuring adequate
transparency and oversight of all funding sources is critically
important, especially during tough budget times. According to a
2007 report by the non-partisan State Auditor, who was tasked
with determining executive compensation levels of CSU
executives, "... because of the large number of auxiliaries and
potential outside sources of income, we cannot be certain that
we identified all additional compensation [given CSU
executives]." This occurred despite assurances by the CSU that
its auxiliaries are held to "strict accountability and
transparency standards." According to the California State
University's own budget documents, 20 percent of their funding
comes from auxiliary organizations. This translates to $1.34
billion dollars that, according to the State Auditor, lacks
adequate accountability.
The author states, that placing state college and university
auxiliaries under the authority of the California Public Records
Act will safeguard the use of taxpayer funds and provide much
needed accountability and oversight to state policymakers.
Arguments In Support : The California Faculty Association,
co-source, states that this bill would "provide the same
transparency and public accountability - 'a fundamental and
necessary right of every person in the state' - for college
auxiliaries that the CPRA now requires of the CSU, UC and
community colleges." The California Taxpayers' Association, in
support, further notes that, "[b]y some estimates, [auxiliary]
organizations provide as much as 20 percent of the funding for
these postsecondary institutions that also receive general fund
moneys. If any of this funding is going toward
administrative excess, while student fees are rising, the public
should have a right to be informed about it."
The American Federation of State, County, and Municipal
Employees (AFSCME) writes, "the people of California have a
right to know how their taxpayer funds are being spent by state
agencies. It is the job of the Legislature to provide
accountability and oversight to agencies that display misuse of
taxpayer funds and seek solutions to close loopholes of
corruption within such organizations. This legislation is
SB 330
Page 7
especially pertinent considering the state of California's
budget. In a time of economic crisis, the state must be extra
watchful of where taxpayer dollars are flowing in order to
ensure the people of California receive the services they need."
Arguments in Opposition : The California State University (CSU),
in opposition, states that this bill is duplicative and
unnecessary because "[a]ll auxiliaries are accountable and
transparent to the public under current state and federal laws
[and that] SB 330 will not make more information available that
isn't already available and or protected by law." CSU also
contends that this bill would lead to increased costs and
reduced revenues to the University. Specifically, CSU maintains
that this bill "would result in drops in non-state revenues for
programs and services for two reasons: (1) revenues redirected
to respond to PRA requests and related legal costs; and, (2)
reduction in our fundraising from individuals and corporate in
response to the lack of clarity with regard to the privacy
rights of such individuals under the bill and current statute."
The University of California (UC) states, "the University's
Foundations, like most institutionally related foundations, are
private nonprofit organizations (Internal Revenue Code Section
(501) (c)(3)). The Foundations were established to raise
private financial support for our individual campuses while
ensuring that donor's requests are honored and properly managed.
SB 330 will set the precedent of expanding the PRA to include
private nonprofit organizations- specifically, the University's
Foundations and possibly Alumni Associations and other volunteer
organizations. The UC sees no difference in the role of our
Foundations and that of the Parent/Teacher/Student Association
(PTSA) or the California Parks Foundation. Most every public
and private college or university in this nation has separate
fund raising organizations and this bill will put California's
public university system at a distinct disadvantage from other
institutions of higher education. Consequently, donors may
choose to contribute to or serve on Foundations for institutions
who can guarantee their confidentiality instead of putting their
privacy at risk under the provisions of SB 330."
UC further writes, although recent amendments have attempted to
protect the privacy of charitable donors, they don't go far
enough in providing assurance that anonymous donors would have
their privacy protected.
SB 330
Page 8
Prior Legislation : SB 218 (Yee) of 2009, passed the Senate 33-1
and the Assembly 76-0 was vetoed by the Governor. The bill
which was similar to this bill would have included in the
California Public Records Act (CPRA) auxiliary organizations of
the University of California (UC), the California State
University (CSU), and the California Community Colleges (CCC),
except as specified.
Double-Referral. This measure is double-referred to the
Assembly Committee on Higher Education.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
(AFSCME)
California Faculty Association
California Newspaper Publishers Association
California Taxpayers Association
California Teachers Association
Opposition
Andrew E. Katz, Esq.
Seymour Consulting Group
Catherine H. Podell
The California State University
University of California
University of California, Berkeley
University of California, Berkeley Foundation
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531