BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-14 Regular Session
BILL NO: SB 1317
AUTHOR: Huff
AMENDED: April 7, 2014
FISCAL COMM: Yes HEARING DATE: April 30, 2014
URGENCY: No CONSULTANT:Lenin Del Castillo
SUBJECT : Charter Schools.
SUMMARY
This bill requires that charter schools be subject to a variety
of the same open meeting, conflict of interest and disclosure
laws as school districts, including the Ralph M. Brown Act
(Brown Act), the California Public Records Act, and the
Political Reform Act of 1974. This bill also provides that a
charter school is considered a local government and school
district for purposes of state mandate reimbursement and the
ability to seek a waiver of provisions of the Education Code
from the State Board of Education.
BACKGROUND
Existing law, the Charter Schools Act of 1992, provides for the
establishment of charter schools in California for the purpose,
among other things, of improving student learning and expanding
learning experiences for pupils who are identified as
academically low achieving. Existing law declares that charter
schools are part of the public school system as defined in
Article IX of the California Constitution and are "under the
exclusive control of the officers of the public schools." A
charter school is required to comply with statutes governing
charter schools and all of the provisions set forth in its
charter, but is otherwise exempt from most laws governing school
districts except where specifically noted. (Education Code �
47601 et. seq.)
Existing law requires state and local agencies to conduct
business in meetings that are open to the public:
The Brown Act requires meetings of a local agency's
board of directors to be open to the public. (Government
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Code � 54950 et. seq.)
The Bagley-Keene Open Meeting Act requires meetings of
state bodies to be open to the public. (Government Code �
11120)
The California Public Records Act (CPRA) declares that the
public has a right to access information that concerns the
people's business and provides that public records shall be
available for inspection, except as provided by an express
provision of law.
(Government Code � 6250 and � 6253)
Existing law prohibits members of the Legislature, state,
county, district, judicial district, and city officers or
employees from being financially interested in any contract made
by them in their official capacity, or by any body or board of
which they are members.
(Government Code � 1090 et seq.)
The Political Reform Act of 1974 (Act), established by the
voters through Proposition 9 in June 1974, requires public
officials to carry out their duties in an unbiased manner, free
from influence by outside interests, and to follow regulations
during elections, as defined. The Act also requires government
agencies to adopt a conflict of interest code that requires
designated employees of the agency to file an annual statement
of economic interest disclosing any investments, business
positions, interests in real property, or sources of income that
may be affected materially by a decision made, or participated
in, by the designated employee by virtue of his or her position.
(Government Code � 81000 et seq.)
ANALYSIS
This bill :
1) With respect to the operation of a charter school, provides
that the governing body of a charter school is subject to
all of the following:
a) The Ralph M. Brown Act, except that a charter
school operated by
an entity governed by the Bagley-Keene Open Meeting
Act is subject to the Bagley-Keene Open Meeting Act
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regardless of the authorizing entity.
b) The California Public Records Act.
c) Provisions of the Government Code that prohibit
government officers or
employees from being financially interested in
contracts or purchases made by them in their official
capacity, unless the charter school is operated as, or
is operated by, a nonprofit public benefit
corporation.
d) The Political Reform Act of 1974. For purposes
of Government Code � 81000, the bill provides that a
charter school is considered an agency and the Fair
Political Practices Commission is the charter school's
code reviewing body.
e) Prohibits a member of the governing body of a
charter school from providing a loan to the charter
school or sign a guarantor agreement relative to a
line of credit for the charter school unless all of
the following are satisfied:
i) The governing body of the charter
school adopts a resolution at a public meeting
declaring and describing the need for the loan or
the line of credit.
ii) The governing body of the charter
school discloses and approves the loan agreement
or line of credit, including the terms of the
loan or the line of credit, during a public
meeting.
iii) The member of the governing body of the
charter school abstains from voting on, or
influencing or attempting to influence another
member of the governing body regarding, all
matters affecting the loan agreement or the line
of credit.
f) Prohibits a member of the governing body of a
charter school from leasing real property or signing a
guarantor agreement relative to a lease of real
property to be occupied by a charter school unless:
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i) The governing body of the charter
school discloses and approves the real property
lease agreement, including the terms of the lease
and the guaranty, if applicable, during a public
meeting.
ii) The member of the governing body of the
charter school who is a lessor or guarantor of
the real property to be occupied by the charter
school abstains from voting on, or influencing or
attempting to influence another member of the
governing body of the charter school regarding,
all matters affecting the real property lease
agreement.
g) Provides that a violation of (e) or (f) described
above constitutes grounds for charter revocation.
h) Requires a member of the governing body of a
charter school to abstain from voting on, or
influencing or attempting to influence another member
of the governing body of the charter school regarding,
personnel matters that uniquely affect a relative of
the member but may vote on collective bargaining
agreements and personnel matters that affect a class
of employees to which the relative belongs, as
specified.
i) Prohibits a person who is disqualified by the
California Constitution from holding a civil office
from serving on the governing body of a charter
school.
j) Specifies that the governing board of a charter
school is not subject to open meeting laws or the
Public Records Act when conducting activities
unrelated to the school's operation and prohibits the
discussion of unrelated activities in meetings held to
discuss operation of the charter school.
aa) Authorizes the governing body of a charter school
to meet within the physical boundaries of the state if
all of the following are specified:
i) Proper notices, as specified, are
posted at all charter school facilities.
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ii) A teleconference location is available
in at least one charter school facility within
the physical boundaries of each county in which
any of the charter school's facilities are
located.
iii) The meeting location complies with the
open, public, and accessibility requirements, as
specified.
bb) Provides that a charter school may meet in a
county contiguous to the county where one or more of
the school's facilities are located if at least 10
percent of the pupils who are enrolled in the school
reside in that contiguous county. A
nonclassroom-based charter school that does not have a
facility may meet within the boundaries of the county
in which the greatest number of pupils who are
enrolled in the school reside, as specified.
cc) Provides that the Ralph M. Brown Act and the
Bagley-Keene Open Meeting Act shall not apply to
committees of the charter school, unless a committee
is comprised of a majority of the members of the
governing body of the charter school.
dd) Authorizes the governing body of a charter school
to hold closed sessions to consider matters regarding
pupil discipline.
ee) Provides that a statement of economic interest
that is filed by a designated person at a charter
school after the required deadline pursuant to the
Political Reform Act of 1974 shall not be the sole
basis for revocation of a charter.
ff) Requires a charter school, within twenty days
upon a request for a copy of records, as specified, to
determine whether the request seeks copies of
disclosable public records in possession of the
charter school and promptly notify the person making
the request of the that determination.
gg) Provides that a charter school may require
payment of actual costs from the person making the
request before producing the records.
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hh) Provides that the governing board of a school
district, county board of education, or the State
Board shall not impose any requirements that are
inconsistent with, or in addition to, the bill's
provisions, as specified.
ii) Provides that the bill's provisions shall not
apply to actions taken before the operative date of
these provisions.
jj) Provides that the provisions of this bill, as
specified, shall become operative on July 1, 2015.
aaa) Provides that a charter school is considered a
local government and school district for purposes of
state mandate reimbursement and the ability to seek a
waiver of provisions of the Education Code from the
State Board of Education.
STAFF COMMENTS
1) Need for the bill : This bill would require governing body
members of charter schools to comply with similar open
meeting, conflict of interest, and disclosure policies that
school district governing board members currently are
required to follow. Recent news reports of charter school
board members engaging in inappropriate financial
mismanagement have highlighted the need for charter school
conflict of interest laws to be clarified. Currently,
investigations into these matters can take many months to
resolve, partly due to the fact that charter school
governing board members and designated employees do not
consistently file an annual statement of economic interest,
making it difficult to discern any potential conflicts of
interest that individual board members may have. While the
state gives public charter schools significant autonomy in
order to encourage innovation, many argue that because
charter school governing boards have authority over public
funds to be used for the educational benefit of their
students, they should be held to the same conflict of
interest standards as the governing boards of other public
schools.
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2) Public accountability laws . County boards of education and
school district governing boards are required to conduct
public meetings and make information available to the
public, upon request. Members of these boards are also
subject to conflict of interest statutes contained in
Government Code � 1090 and the Political Reform Act of
1974.
a) Open meeting laws - entitles the public to have
access to meetings of multi-member public bodies. The
Brown Act and the Bagley-Keene Act recognize the need
to balance the public's right to open government with
the need for boards, on occasion to have closed
session discussions in certain matters such as
personnel or litigation. By making charter schools
subject to open meeting laws, charter school boards
would need to provide advance notice of meetings and
conduct their meetings in public.
b) Public records - The purpose of the California
Public Records Act (CPRA) is to give the public an
opportunity to monitor the functioning of their local
and state government. The fundamental precept of CPRA
is that governmental records are to be disclosed to
the public when requested, unless there is a specific
reason not to do so. The CPRA allows for certain
exemptions, such as matters relating to individual
privacy. Under CPRA, agencies must segregate or
redact exempt information and disclose the remainder
of the record. Under the provisions of this bill,
charter schools would need to respond to requests for
information that is not private in nature.
c) Political Reform Act . The Political Reform Act
of 1974 established the Fair Political Practices
Commission (FPPC) to administer its requirements and
receive annual conflict of interest statements.
According to the FPPC, the CPRA is designed to assure
that public officials perform their duties impartially
without bias because of personal financial interests
or the interests of financial supporters; and that
public officials disclose income and assets that could
be affected by official actions and to assure that
public officials disqualify themselves from
participating in decisions when they have conflicts of
interest. This bill would result in charter school
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board members and designated employees having to
disclose their financial interests in annual
statements filed with the FPPC.
3) Government Code � 1090 is the state's central conflict of
interest Act. It applies to public officials from members
of the Legislature to local officials and employees,
including those of school districts. In a 1983 opinion,
the Attorney General stated, "Section 1090 of the
Government Code codifies the common law prohibition and the
general policy of this state against public officials
having a personal interest in contracts they make in their
official capacity." In addition to prohibiting public
officials from having personal financial interest in a
contract made in an official capacity, this Act specifies
that such contracts are void and cannot be enforced. Some
have expressed concern with subjecting charter schools to
the provisions of Government Code � 1090 because it could
make it more difficult for philanthropic board members to
provide financial assistance or low-interest loans or make
facilities available to charter schools, which often
happens during the start-up phase of a charter school.
However, one can argue that since charter schools are
considered to be public schools and receive public funds,
they have a fiduciary duty to taxpayers with regards to the
use of those funds and should be subject to the same
conflict of interest and disclosure requirements as school
districts. It appears that the bill proposes compromise
language to strike a balance between the two arguments and
also creates a provision whereby any violation would
constitute grounds for charter revocation.
4) Education Mandates Block Grant . According to the
Legislative Analyst Office, as another way to address some
of the problems with the traditional mandate reimbursement
system, the state two years ago created two block grants
for education mandates. One block grant is for school
districts, county offices of education, and charter
schools. The other block grant is for community colleges.
Instead of submitting detailed claims on an ongoing basis
listing how much time and money was spent on each mandated
activity, local education agencies (LEAs) can choose to
receive funding for all mandated activities included in the
block grants. Except for new mandates not yet included in
the state budget, all active education mandates currently
are included in the block grants. Due to concerns
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regarding the state's constitutional obligation to
reimburse LEAs for mandated costs, the state retained the
existing mandates claiming process for LEAs not opting into
the block grants.
The 2013-14 Budget Act includes block grant funding of $217
million for schools and $33 million for community colleges.
Block grant funding is allocated to participating LEAs on
a per-student basis, as measured by average daily
attendance for schools and full-time equivalent students
(FTES) for community colleges. The rate varies by type of
LEA and, for schools, by grade span. The difference in
rates is because different mandates apply to different LEAs
and because one mandate for schools (Graduation
Requirements) is exceptionally costly and only applies to
high schools. School districts receive $28 per student in
grades K-8 and $56 per student in grades 9-12 while charter
schools receive $14 per student in grades K-8 and $42 per
student in grades 9-12. Even though charter schools are
not eligible to submit mandate claims, the state included
them in the block grant given some mandates apply to them.
County offices of education (COE) receive $28 per student
in grades K-8 and $56 per student in grades 9-12 and an
extra $1 per student for all students located within the
county, in recognition of the fact that some mandates
entail broader oversight responsibilities performed by the
COE.
This bill would provides that charter schools are
considered local governments and school districts for
purposes of state mandate reimbursement. As this bill
deals with open meetings, conflict of interest, and
disclosure policies, it would be more appropriate to have a
separate budgetary discussion on this proposal. Therefore,
staff recommends the bill be amended to remove the
subsections (a) and (b) of Section 47604.2 in SEC. 2.
5) Waiver authority . Under current law, school districts, on
behalf of one or more of its schools or programs after a
public hearing on the matter, may request the State Board
of Education to waive all or part of any section of the
Education code or any regulation adopted by the State Board
of Education that implements a provision of law, with
certain exceptions. Charter schools previously had similar
waiver authority where they submitted waivers to their
charter authorizer, who were then required to hold a public
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hearing prior to submitting the waivers to the State Board
of Education. That waiver authority became inoperative on
January 1, 2007. This bill would provide charter schools
the same ability as school districts to seek waivers before
the State Board of Education. Again, as this bill deals
with open meetings, conflict of interest, and disclosure
policies, staff recommends the bill be amended to remove
the provision contained in subsection (c) of Section
47604.2 in SEC. 2.
6) Related and prior legislation .
AB 913 (Chau) is substantially similar to this bill and
would subject charter schools to a variety of the same open
meetings, conflict of interest, and disclosure laws. AB
913 is pending before this Committee.
AB 360 (Brownley, 2011), similar to this bill, required
charter schools to comply with the same conflict of
interest requirements as school district governing board
members. AB 360 died on the Assembly inactive file on
concurrence.
AB 572 (Brownley, 2010), also similar to this bill, would
have required charter schools to comply with the Brown Act,
the California Public Records Act, and the Political Reform
Act. AB 572 was passed by the Senate Education Committee
and subsequently vetoed by Governor Schwarzenegger with the
following veto message:
"Charter school educators have proven that poverty is
not destiny for students that attend public schools in
California. Repeatedly, charter schools with high
proportions of disadvantaged students are among the
highest performing public schools in California. Any
attempt to regulate charter schools with incoherent
and inconsistent cross-references to other statutes is
simply misguided. Parents do not need renewed faith
in charter schools as suggested in this bill. On the
contrary, tens of thousands of parents in California
have children on waiting lists to attend a public
charter school. Legislation expressing findings and
intent to provide "greater autonomy to charter
schools" may be well intended at first glance. A
careful reading of the bill reveals that the proposed
changes apply new and contradictory requirements,
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which would put hundreds of schools immediately out of
compliance, making it obvious that it is simply
another veiled attempt to discourage competition and
stifle efforts to aid the expansion of charter
schools."
SUPPORT
California Charter Schools Association (sponsor)
OPPOSITION
California Teachers Association