BILL NUMBER: AB 2279	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Swanson

                        FEBRUARY 24, 2012

   An act to amend Section 41320.1 of the Education Code, relating to
school districts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2279, as introduced, Swanson. School districts: emergency
apportionments: trustees.
   Existing law authorizes the governing board of a school district
to request an emergency apportionment through the Superintendent of
Public Instruction if the governing board of a school district
determines during a fiscal year that its revenues are less than the
amount necessary to meet its current year expenditure obligations.
Existing law provides that if a school district accepts an emergency
apportionment the Superintendent shall, among other things, appoint a
trustee who has recognized expertise in management and finance, and
may employ, on a short-term basis, any staff necessary to assist the
trustee. Existing law also provides that the trustee, and any
necessary staff, shall serve until the emergency apportionment loan
is repaid, the school district has adequate fiscal systems and
controls in place, and the Superintendent has determined that the
school district's future compliance with an approved fiscal plan is
probable.
   This bill would instead provide that the trustee, and any
necessary staff, shall serve until the emergency apportionment loan
is repaid, the school district has adequate fiscal systems and
controls in place, or the Superintendent has determined that the
school district's future compliance with an approved fiscal plan is
probable. The bill would also make a conforming change and several
technical, nonsubstantive changes.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 41320.1 of the Education Code is amended to
read:
   41320.1.  Acceptance by the  school  district of the
apportionments made pursuant to Section 41320 constitutes the
agreement by the  school  district to all of the following
conditions:
   (a) The Superintendent  of Public Instruction
shall appoint a trustee who has recognized expertise in management
and finance and may employ, on a short-term basis, any staff
necessary to assist the trustee, including, but not limited to,
certified public accountants, as follows:
   (1) The expenses incurred by the trustee and any necessary staff
shall be borne by the  school  district.
   (2) The Superintendent shall establish the terms and conditions of
the employment, including the remuneration of the trustee. The
trustee shall serve at the pleasure of, and report directly to, the
Superintendent.
   (3) The trustee, and any necessary staff, shall serve until the
loan authorized by this section is repaid, the  school 
district has adequate fiscal systems and controls in place, 
and   or  the Superintendent has determined that
the  school  district's future compliance with the fiscal
plan approved for the  school  district under Section 41320
is probable. The Superintendent shall notify the county
superintendent of schools, the Legislature, the Department of
Finance, and the Controller no less than 60 days  prior to
  before  the time that the Superintendent expects
 one of  these conditions to be met.
   (4) Before the  school  district repays the loan,
including interest, the recipient of the loan shall select an auditor
from a list established by the Superintendent and the Controller to
conduct an audit of its fiscal systems. If the fiscal systems are
deemed to be inadequate, the Superintendent may retain the trustee
until the deficiencies are corrected. The cost of this audit and any
additional cost of the trustee shall be borne by the  school
 district.
   (5) Notwithstanding any other law, all reports submitted to the
trustee are public records.
   (6) To facilitate the appointment of the trustee and the
employment of any necessary staff, for  the 
purposes of this section, the Superintendent is exempt from the
requirements of Article 6 (commencing with Section 999) of Chapter 6
of Division 4 of the Military and Veterans Code and Part 2
(commencing with Section 10100) of Division 2 of the Public Contract
Code.
   (7) Notwithstanding any other law, the Superintendent may appoint
an employee of the department to act as trustee for up to the
duration of the trusteeship. The salary and benefits of that employee
shall be established by the Superintendent and paid by the school
district. During the time of appointment, the employee is an employee
of the school district, but shall remain in the same retirement
system under the same plan as if the employee had remained in the
department. Upon the expiration or termination of the appointment,
the employee shall have the right to return to his or her former
position, or to a position at substantially the same level as that
position, with the department. The time served in the appointment
shall be counted for all purposes as if the employee had served that
time in his or her former position with the department.
   (b) The trustee appointed by the Superintendent shall monitor and
review the operation of the  school  district. During the
period of his or her service, the trustee may stay or rescind any
action of the local  district  governing board 
of the school district  that, in the judgment of the trustee,
may affect the financial condition of the  school  district.
The Superintendent may establish timelines and prescribe formats for
reports and other materials to be used by the trustee to monitor and
review the operations of the  school  district. The trustee
shall approve or reject all reports and other materials required
from the  school  district as a condition of receiving the
apportionment. The Superintendent, upon the recommendation of the
trustee, may reduce any apportionment to the  school 
district in an amount up to two hundred dollars ($200) per day for
each late or unacceptable report or other material required under
this part, and shall report to the Legislature any failure of the
 school  district to comply with the requirements of this
section. If the Superintendent determines, at any time, that the
fiscal plan approved for the  school  district under Section
41320 is unsatisfactory, he or she may modify the plan as necessary,
and the  school  district shall comply with the plan as
modified.
   (c) At the request of the Superintendent, the Controller shall
transfer to the department, from an apportionment to which the 
school  district would otherwise have been entitled pursuant to
Section 42238, the amount necessary to pay the expenses incurred by
the trustee and associated costs incurred by the county
superintendent of schools.
   (d) For the fiscal year in which the apportionments are disbursed
and each year thereafter, the Controller, or his or her designee,
shall cause an audit to be conducted of the books and accounts of the
 school  district, in lieu of the audit required by Section
41020. At the Controller's discretion, the audit may be conducted by
the Controller, his or her designee, or an auditor selected by the
 school  district and approved by the Controller. The costs
of these audits shall be borne by the  school  district.
These audits shall be required until the Controller determines, in
consultation with the Superintendent, that the  school 
district is financially solvent, but in no event earlier than one
year following the implementation of the plan or later than the time
the apportionment made is repaid, including interest. In addition,
the Controller shall conduct quality control reviews pursuant to
subdivision (c) of Section 14504.2.
   (e) For all purposes of errors and omissions liability insurance
policies, the trustee appointed pursuant to this section is an
employee of the local  education   educational
 agency to which he or she is assigned. For the purpose of
workers' compensation benefits, the trustee is an employee of the
local  education   educational  agency to
which he or she is assigned, except that a trustee appointed pursuant
to paragraph (7) of subdivision (a) is an employee of the department
for that purpose.
   (f) Except for an individual appointed by the Superintendent as
trustee pursuant to paragraph (7) of subdivision (a), the
state-appointed trustee is a member of the State Teachers' Retirement
System, if qualified, for the period of service as trustee, unless
the trustee elects in writing not to become a member. A person who is
a member or retirant of the State Teachers' Retirement System at the
time of appointment shall continue to be a member or retirant of the
system for the duration of the appointment. If the trustee chooses
to become a member or is already a member, the trustee shall be
placed on the payroll of the school district for the purposes of
providing appropriate contributions to the system. The Superintendent
may also require that any individual appointed as trustee pursuant
to paragraph (7) of subdivision (a) be placed on the payroll of the
school district for purposes of remuneration, other benefits, and
payroll deductions. For the purpose of workers' compensation
benefits, the state-appointed trustee is deemed an employee of the
local  education   educational  agency to
which he or she is assigned, except that a trustee who is appointed
pursuant to paragraph (7) of subdivision (a) is an employee of the
department for that purpose.