Amended in Assembly May 1, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2710

Introduced by Assembly Member Muratsuchi

February 21, 2014

An act to begin delete amend Section 42127 of, and to end delete add Sections 42135 and 42143 begin delete to, end delete begin insert to end insert the Education Code, and to amend Sections 53234 and 53235.1 of the Government Code, relating to public schools.

LEGISLATIVE COUNSEL’S DIGEST

AB 2710, as amended, Muratsuchi. Public schools: begin delete finances: transparency: end delete begin insert school superintendent contracts: end insert ethics training.

(1) Existing law begin delete requires the governing board of a school district to adopt an annual budget, and requires the county superintendent of schools to examine the budget and approve, conditionally approve, or disapprove the adopted budget. Existing law requires the governing board of a school district to approve an annual statement of all receipts and expenditures of the school district for the preceding fiscal year, and to file a statement with the county superintendent of schools. end delete begin insert authorizes a county superintendent of schools for each county to be elected or appointed by the county board of education, as specified, and sets forth the qualifications and general duties of a county superintendent of schools, including superintending the schools of his or her county. Existing law also provides for the election or employment of a district superintendent of schools to, among other things, act as the chief executive officer of the governing board of the school district. end insert

This bill would begin delete require the county superintendent of schools, as part of its budget review process, to examine and comment on any proposed employment agreement and compensation package for the employment of a district superintendent of schools. The bill would end delete provide that an employment contract for a district or county superintendent of schools that is executed or renewed on or after January 1, 2015, may include a loan for the purchase of a home only if certain conditions are met, including that the employee is relocating to an area with a high cost of housing. begin insert The bill would require the governing board of a school district, before executing or renewing an employment contract between the school district and the district superintendent of schools, to review the proposed contract, including each contract term and the value of each element of compensations at a regularly scheduled meeting of the governing board, and would make the proposed employment contract void unless all elements of compensation are listed on the agenda of the meeting. end insert The bill would require a school district or county office of education that maintains an Internet Web site to post annual expenditures for its activities on its Internet Web site, including, but not limited to, the begin delete titles and salaries of end delete begin insert salary schedules for end insert certificated and classified begin delete employees, and the compensation and employment contract of the county or district superintendent of schools. end delete begin insert employees. end insert Because the bill would impose additional duties on local educational agencies, the bill would impose a state-mandated local program.

(2) Existing law requires all local agency officials to receive training in ethics, at specified intervals, if the local agency provides any type of compensation, salary, or stipend to those officials. Existing law defines “local agency” for purposes of those provisions.

This bill would include a county office of education and a school district in the definition of “local agency.” The bill would require local agency officials who serve a county office of education or school district as of January 1, 2015, to receive the ethics training before January 1, 2016, and at least every 2 years thereafter, except as specified.

(3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 42127 of the Education Code is amended
to read:

42127.  

(a) On or before July 1 of each year, the governing
board of each school district shall accomplish the following:

(1) Hold a public hearing on the budget to be adopted for the
subsequent fiscal year. The budget to be adopted shall be prepared
in accordance with Section 42126. The agenda for that hearing
shall be posted at least 72 hours before the public hearing and shall
include the location where the budget will be available for public
inspection.

(A) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, each school district budget shall project the same level of
revenue per unit of average daily attendance as it received in the
2010-11 fiscal year and shall maintain staffing and program levels
commensurate with that level.

(B) For the 2011-12 fiscal year, the school district shall not be
required to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.

(2) Adopt a budget. Not later than five days after that adoption
or by July 1, whichever occurs first, the governing board of the
school district shall file that budget with the county superintendent
of schools. The budget and supporting data shall be maintained
and made available for public review. If the governing board of
the school district does not want all or a portion of the property
tax requirement levied for the purpose of making payments for the
interest and redemption charges on indebtedness as described in
paragraph (1) or (2) of subdivision (b) of Section 1 of Article
XIII A of the California Constitution, the budget shall include a
statement of the amount or portion for which a levy shall not be
made. For the 2014-15 fiscal year and each fiscal year thereafter,
the governing board of the school district shall not adopt a budget
before the governing board of the school district adopts a local
control and accountability plan, if an existing local control and
accountability plan or annual update to a local control and
accountability plan is not effective for the budget year. The
governing board of a school district shall not adopt a budget that
does not include the expenditures necessary to implement the local
control and accountability plan or the annual update to a local
control and accountability plan that is effective during the
subsequent fiscal year.

(b) The county superintendent of schools may accept changes
in any statement included in the budget, pursuant to subdivision
(a), of the amount or portion for which a property tax levy shall
not be made. The county superintendent of schools or the county
auditor shall compute the actual amounts to be levied on the
property tax rolls of the school district for purposes that exceed
apportionments to the school district pursuant to Chapter 6
(commencing with Section 95) of Part 0.5 of Division 1 of the
Revenue and Taxation Code. Each school district shall provide all
data needed by the county superintendent of schools or the county
auditor to compute the amounts. On or before August 15, the
county superintendent of schools shall transmit the amounts
computed to the county auditor who shall compute the tax rates
necessary to produce the amounts. On or before September 1, the
county auditor shall submit the rate computed to the board of
supervisors for adoption.

(c) The county superintendent of schools shall do all of the
following:

(1) Examine the adopted budget to determine whether it
complies with the standards and criteria adopted by the state board
pursuant to Section 33127 for application to final local educational
agency budgets. The county superintendent of schools shall
identify, if necessary, technical corrections that are required to be
made to bring the budget into compliance with those standards
and criteria.

(2) Determine whether the adopted budget will allow the school
district to meet its financial obligations during the fiscal year and
is consistent with a financial plan that will enable the school district
to satisfy its multiyear financial commitments. In addition to his
or her own analysis of the budget of each school district, the county
superintendent of schools shall review and consider studies, reports,
evaluations, or audits of the school district that were commissioned
by the school district, the county superintendent of schools, the
Superintendent, and state control agencies and that contain
evidence that the school district is showing fiscal distress under
the standards and criteria adopted in Section 33127 or that contain
a finding by an external reviewer that more than 3 of the 15 most
common predictors of a school district needing intervention, as
determined by the County Office Fiscal Crisis and Management
Assistance Team, are present. The county superintendent of schools
shall either conditionally approve or disapprove a budget that does
not provide adequate assurance that the school district will meet
its current and future obligations and resolve any problems
identified in studies, reports, evaluations, or audits described in
this paragraph.

(3) Determine whether the adopted budget includes the
expenditures necessary to implement the local control and
accountability plan or annual update to the local control and
accountability plan approved by the county superintendent of
schools.

(4) Review and comment on any proposed employment
agreement and compensation package for the employment of a
district superintendent of schools.

(d) (1) On or before August 15, the county superintendent of
schools shall approve, conditionally approve, or disapprove the
adopted budget for each school district. For the 2014-15 fiscal
year and each fiscal year thereafter, the county superintendent of
schools shall disapprove a budget if the county superintendent of
schools determines that the budget does not include the
expenditures necessary to implement a local control and
accountability plan or an annual update to the local control and
accountability plan approved by the county superintendent of
schools. If a school district does not submit a budget to the county
superintendent of schools, the county superintendent of schools
shall develop, at school district expense, a budget for that school
district by September 15 and transmit that budget to the governing
board of the school district. The budget prepared by the county
superintendent of schools shall be deemed adopted, unless the
county superintendent of schools approves any modifications made
by the governing board of the school district. The approved budget
shall be used as a guide for the school district’s priorities. The
Superintendent shall review and certify the budget approved by
the county. If, pursuant to the review conducted pursuant to
subdivision (c), the county superintendent of schools determines
that the adopted budget for a school district does not satisfy
paragraph (1), (2), or (3) of that subdivision, he or she shall
conditionally approve or disapprove the budget and, not later than
August 15, transmit to the governing board of the school district,
in writing, his or her recommendations regarding revision of the
budget and the reasons for those recommendations, including, but
not limited to, the amounts of any budget adjustments needed
before he or she can approve that budget. The county
superintendent of schools may assign a fiscal adviser to assist the
school district to develop a budget in compliance with those
revisions. In addition, the county superintendent of schools may
appoint a committee to examine and comment on the
superintendent’s review and recommendations, subject to the
requirement that the committee report its findings to the county
superintendent of schools no later than August 20. For the 2011-12
fiscal year, notwithstanding any of the standards and criteria
adopted by the state board pursuant to Section 33127, the county
superintendent of schools, as a condition on approval of a school
district budget, shall not require a school district to project a lower
level of revenue per unit of average daily attendance than it
received in the 2010-11 fiscal year nor require the school district
to demonstrate that it is able to meet its financial obligations for
the two subsequent fiscal years.

(2)  Notwithstanding any other provision of this article, for the
2014-15 fiscal year and each fiscal year thereafter, the budget
shall not be adopted or approved by the county superintendent of
schools before a local control and accountability plan or update to
an existing local control and accountability plan for the budget
year is approved.

(e) On or before September 8, the governing board of the school
district shall revise the adopted budget to reflect changes in
projected income or expenditures subsequent to July 1, and to
include any response to the recommendations of the county
superintendent of schools, shall adopt the revised budget, and shall
file the revised budget with the county superintendent of schools.
Before revising the budget, the governing board of the school
district shall hold a public hearing regarding the proposed revisions,
to be conducted in accordance with Section 42103. In addition, if
the adopted budget is disapproved pursuant to subdivision (d), the
governing board of the school district and the county
superintendent of schools shall review the disapproval and the
recommendations of the county superintendent of schools regarding
revision of the budget at the public hearing. The revised budget
and supporting data shall be maintained and made available for
public review.

(1) For the 2011-12 fiscal year, notwithstanding any of the
standards and criteria adopted by the state board pursuant to Section
33127, each school district budget shall project the same level of
revenue per unit of average daily attendance as it received in the
2010-11 fiscal year and shall maintain staffing and program levels
commensurate with that level.

(2) For the 2011-12 fiscal year, the school district shall not be
required to demonstrate that it is able to meet its financial
obligations for the two subsequent fiscal years.

(f) On or before September 22, the county superintendent of
schools shall provide a list to the Superintendent identifying all
school districts for which budgets may be disapproved.

(g) (1) The county superintendent of schools shall examine the
revised budget to determine whether it (1) complies with the
standards and criteria adopted by the state board pursuant to Section
33127 for application to final local educational agency budgets,
(2) allows the school district to meet its financial obligations during
the fiscal year, (3) satisfies all conditions established by the county
superintendent of schools in the case of a conditionally approved
budget, and (4) is consistent with a financial plan that will enable
the school district to satisfy its multiyear financial commitments,
and, not later than October 8, shall approve or disapprove the
revised budget. If the county superintendent of schools disapproves
the budget, he or she shall call for the formation of a budget review
committee pursuant to Section 42127.1, unless the governing board
of the school district and the county superintendent of schools
agree to waive the requirement that a budget review committee be
formed and the department approves the waiver after determining
that a budget review committee is not necessary. Upon the grant
of a waiver, the county superintendent of schools immediately has
the authority and responsibility provided in Section 42127.3. Upon
approving a waiver of the budget review committee, the department
shall ensure that a balanced budget is adopted for the school district
by November 30. If no budget is adopted by November 30, the
Superintendent may adopt a budget for the school district. The
Superintendent shall report to the Legislature and the Director of
Finance by December 10 if any school district, including a school
district that has received a waiver of the budget review committee
process, does not have an adopted budget by November 30. This
report shall include the reasons why a budget has not been adopted
by the deadline, the steps being taken to finalize budget adoption,
the date the adopted budget is anticipated, and whether the
Superintendent has or will exercise his or her authority to adopt a
budget for the school district. For the 2011-12 fiscal year,
notwithstanding any of the standards and criteria adopted by the
state board pursuant to Section 33127, the county superintendent
of schools, as a condition on approval of a school district budget,
shall not require a school district to project a lower level of revenue
per unit of average daily attendance than it received in the 2010-11
fiscal year nor require the school district to demonstrate that it is
able to meet its financial obligations for the two subsequent fiscal
years.

(2) Notwithstanding any other law, for the 2014-15 fiscal year
and each fiscal year thereafter, if the county superintendent of
schools disapproves the budget for the sole reason that the county
superintendent of schools has not approved a local control and
accountability plan or an annual update to the local control and
accountability plan filed by the school district pursuant to Section
52061, the county superintendent of schools shall not call for the
formation of a budget review committee pursuant to Section
42127.1.

(h) On or before October 8, the county superintendent of schools
shall submit a report to the Superintendent identifying all school
districts for which budgets have been disapproved or budget review
committees waived. The report shall include a copy of the written
response transmitted to each of those school districts pursuant to
paragraph (1) of subdivision (d).

(i) Notwithstanding any other provision of this section, the
budget review for a school district shall be governed by paragraphs
(1), (2), and (3), rather than by subdivisions (e) and (g), if the
governing board of the school district so elects and notifies the
county superintendent of schools in writing of that decision, not
later than October 31 of the immediately preceding calendar year.
On or before July 1, the governing board of a school district for
which the budget review is governed by this subdivision, rather
than by subdivisions (e) and (g), shall conduct a public hearing
regarding its proposed budget in accordance with Section 42103.

(1) If the adopted budget of a school district is disapproved
pursuant to subdivision (d), on or before September 8, the
governing board of the school district, in conjunction with the
county superintendent of schools, shall review the superintendent’s
recommendations at a regular meeting of the governing board of
the school district and respond to those recommendations. The
response shall include any revisions to the adopted budget and
other proposed actions to be taken, if any, as a result of those
recommendations.

(2) On or before September 22, the county superintendent of
schools shall provide a list to the Superintendent identifying all
school districts for which a budget may be tentatively disapproved.

(3) Not later than October 8, after receiving the response
required under paragraph (1), the county superintendent of schools
shall review that response and either approve or disapprove the
budget. Except as provided in paragraph (2) of subdivision (g), if
the county superintendent of schools disapproves the budget, he
or she shall call for the formation of a budget review committee
pursuant to Section 42127.1, unless the governing board of the
school district and the county superintendent of schools agree to
waive the requirement that a budget review committee be formed
and the department approves the waiver after determining that a
budget review committee is not necessary. Upon the grant of a
waiver, the county superintendent has the authority and
responsibility provided to a budget review committee in Section
42127.3. Upon approving a waiver of the budget review committee,
the department shall ensure that a balanced budget is adopted for
the school district by November 30. The Superintendent shall
report to the Legislature and the Director of Finance by December
10 if any school district, including a school district that has received
a waiver of the budget review committee process, does not have
an adopted budget by November 30. This report shall include the
reasons why a budget has not been adopted by the deadline, the
steps being taken to finalize budget adoption, and the date the
adopted budget is anticipated. For the 2011-12 fiscal year,
notwithstanding any of the standards and criteria adopted by the
state board pursuant to Section 33127, the county superintendent
of schools, as a condition on approval of a school district budget,
shall not require a school district to project a lower level of revenue
per unit of average daily attendance than it received in the 2010-11
fiscal year nor require the school district to demonstrate that it is
able to meet its financial obligations for the two subsequent fiscal
years.

(4) Not later than 45 days after the Governor signs the annual
Budget Act, the school district shall make available for public
review any revisions in revenues and expenditures that it has made
to its budget to reflect the funding made available by that Budget
Act.

(j) Any school district for which the county board of education
serves as the governing board of the school district is not subject
to subdivisions (c) to (h), inclusive, but is governed instead by the
budget procedures set forth in Section 1622.

end delete

begin delete SEC. 2. end delete
begin insert SECTION 1. end insert   

Section 42135 is added to the Education Code,
to read:

42135.  

begin insert (a) end insert begin insert   end insert An employment contract executed or renewed on
or after January 1, 2015, between a local educational agency and
a district or county superintendent of schools may include a loan
for the purchase of a home only if both of the following conditions
are satisfied:

begin delete

(a)

end delete

begin insert (1) end insert  The employee is relocating to an area with a high cost of
housing, and the school board makes a public finding to that effect.

begin delete

(b)

end delete

begin insert (2) end insert  The loan agreement contains a provision that, if employment
is terminated by either the employer or the employee, the unpaid
balance of the loan may be recovered by the local educational
agency within a reasonable period of time.

begin insert

(b) Before executing or renewing an employment contract
between a school district and a district superintendent of schools,
the governing board of the school district shall review the proposed
contract, including each contract term and the value of each
element of compensation, at a regularly scheduled meeting of the
governing board. Each compensation term and its value shall be
listed in the agenda for the meeting in accordance with Chapter
9 (commencing with Section 54950) of Part 1 of Division 2 of Title
5 of the Government Code. The portion of the meeting that is open
to the public shall include public discussion and comment on each
element of the proposed contract. If all elements of compensation
in the proposed contract are not listed in the agenda, as specified
in this subdivision, the employment contract shall be void.

end insert begin insert

(c) The Legislature encourages the governing board of the
school district to make a public finding that the employment
contract, including each element of compensation, is reasonable
in comparison to similar school districts in the state.

end insert

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

Section 42143 is added to the Education Code, to read:

42143.  

(a) If a school district or county office of education
maintains an Internet Web site, it shall post the annual expenditures
for its activities in a clear, visible, and searchable format that
includes, but is not limited to, the following:

(1) The cost of instruction.

(2) The begin delete titles and salaries of end delete begin insert salary schedule for end insert certificated
employees.

(3) The begin delete titles and salaries of end delete begin insert salary schedule for end insert classified
employees.

begin delete

(4) The compensation and employment contract of the county
superintendent of schools or the district superintendent of schools,
as applicable.

end delete begin delete

(5)

end delete

begin insert (4) end insert  The total amount of expenditures.

begin delete

(6)

end delete

begin insert (5) end insert  The expenditure per unit of average daily attendance, and a
comparison of that number to the statewide average for all school
districts.

(b) The school district or county office of education shall
annually update the information required pursuant to this section,
and shall include a link on its Internet Web site to the school
district’s or county office of education’s profile on Ed-Data.

begin delete SEC. 4. end delete
begin insert SEC. 3. end insert   

Section 53234 of the Government Code is amended
to read:

53234.  

For purposes of this article, the following terms have
the following meanings:

(a) “Legislative body” has the same meaning as specified in
Section 54952.

(b) “Local agency” means a city, county, city and county, charter
city, charter county, charter city and county, county office of
education, school district, or special district.

(c) “Local agency official” means the following:

(1) Any member of a local agency legislative body or any
elected local agency official who receives any type of
compensation, salary, or stipend or reimbursement for actual and
necessary expenses incurred in the performance of official duties.

(2) Any employee designated by a local agency governing body
to receive the training specified under this article.

(d) “Ethics laws” include, but are not limited to, the following:

(1) Laws relating to personal financial gain by public servants,
including, but not limited to, laws prohibiting bribery and
conflict-of-interest laws.

(2) Laws relating to claiming perquisites of office, including,
but not limited to, gift and travel restrictions, prohibitions against
the use of public resources for personal or political purposes,
prohibitions against gifts of public funds, mass mailing restrictions,
and prohibitions against acceptance of free or discounted
transportation by transportation companies.

(3) Government transparency laws, including, but not limited
to, financial interest disclosure requirements and open government
laws.

(4) Laws relating to fair processes, including, but not limited
to, common law bias prohibitions, due process requirements,
incompatible offices, competitive bidding requirements for public
contracts, and disqualification from participating in decisions
affecting family members.

begin delete SEC. 5. end delete
begin insert SEC. 4. end insert   

Section 53235.1 of the Government Code is amended
to read:

53235.1.  

(a) Each local agency official in local agency service
as of January 1, 2006, except for officials whose term of office
ends before January 9, 2007, shall receive the training required by
subdivision (a) of Section 53235 before January 1, 2007.
Thereafter, each local agency official shall receive the training
required by subdivision (a) of Section 53235 at least once every
two years.

(b) Each local agency official who commences service with a
local agency on or after January 1, 2006, shall receive the training
required by subdivision (a) of Section 53235 no later than one year
from the first day of service with the local agency. Thereafter, each
local agency official shall receive the training required by
subdivision (a) of Section 53235 at least once every two years.

(c) For county offices of education or school districts, each local
agency official in service as of January 1, 2015, except for officials
whose term of office ends before January 1, 2016, shall receive
the training required pursuant to subdivision (a) of Section 53235
before January 1, 2016. Thereafter, each local agency official shall
receive the training required by subdivision (a) of Section 53235
at least once every two years.

(d) A local agency official who serves more than one local
agency shall satisfy the requirements of this article once every two
years without regard to the number of local agencies with which
he or she serves.

begin delete SEC. 6. end delete
begin insert SEC. 5. end insert   

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.