BILL ANALYSIS
AB 572
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Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
AB 572 (Brownley) - As Amended: April 13, 2009
SUBJECT : Charter schools: governing boards.
SUMMARY : Requires charter schools to adopt and comply with a
conflict of interest policy that requires its governing board
members to abide by substantially similar conflict of interest
requirements as local education agency (LEA) governing board
members. Specifically, this bill :
1)Requires the governing board of a charter school to adopt and
comply with a conflict-of-interest policy and requires the
policy to include, but is not necessarily limited to, the
requirement that members of the governing board of the charter
school abide by Article 4 (commencing with Section 1090) of
Chapter 1 of Division 4 of Title 1 of the Government Code and
Chapter 7 (commencing with Section 87100) of Title 9 of the
Government Code within the Political Reform Act.
2)Requires the governing board of a charter school to comply
with the Ralph M. Brown Act; and, requires the governing board
of a charter school operated by a state agency to comply with
the Bagley-Keene Open Meeting Act.
3)Requires a charter school to comply with the California Public
Records Act.
4)Specifies that a member of the governing board of a charter
school shall abstain from voting on all matters affecting his
or her own employment and shall abstain from voting on
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; and, specifies for purposes of this
section, "relative" means an adult who is related to the
person by blood or affinity within the third degree, as
determined by the common law, or an individual in an adoptive
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relationship within the third degree.
5)Specifies that a person shall be disqualified from serving on
the governing board of a charter school if the person is
disqualified by the California Constitution or laws of the
state from holding a civil office.
6)Declares Legislative intent to provide transparency in the
operations of the many charter schools that are providing
quality educational options for parents and pupils and renew
the faith of parents and the community that their local
charter school is acting in the best interests of pupils by
establishing conflict-of-interest policies for charter school
governing boards that mirror existing conflict-of-interest
policies followed by school district governing boards.
EXISTING LAW pertaining to charter schools:
1)Provides no specific requirement for charter school governing
board conflict of interest policies.
2)Deems charter schools as school districts for the purposes of
receiving state education funds.
EXISTING LAW pertaining to school districts:
1)Specifies that Members of the Legislature, state, county,
district, and city officers or employees shall not be
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)
2)Specifies that an employee of a school district (or local
agency) may not be sworn into office as an elected or
appointed member of that school district's (or local agency's)
governing board unless and until he/she resigns as an
employee. (Education Code 35107)
3)Requires members of school district governing boards and
designated employees of the school district to file statements
of financial interest according to the Political Reform Act.
(Government Code 87100 et. seq.)
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4)Requires a county, city, whether general law or chartered,
city and county, town, school district, municipal corporation,
district, political subdivision, or any board, commission or
agency thereof, or other local public agency to comply with
the Brown Act. (Government Code 54950 et. seq.)
5)Requires a county; city; city and county; school district;
municipal corporation; district; political subdivision; or any
board, commission or agency thereof; other local public
agency; or a board, commission, committee, or other
multimember body that governs a private corporation, limited
liability company, or other entity that either is created by
the elected legislative body in order to exercise authority
that may lawfully be delegated by the elected governing body
to a private corporation, limited liability company, or other
entity; or, receives funds from a local agency and the
membership of whose governing body includes a member of the
legislative body of the local agency appointed to that
governing body as a full voting member by the legislative body
of the local agency to comply with the California Public
Records Act. (Government Code 6250 et. seq.)
FISCAL EFFECT : Unknown
COMMENTS : This bill requires charter school governing board
members to comply with substantially similar conflict of
interest policies by which school district governing board
members currently abide. 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. While charter schools are given
more autonomy than public schools, their governing boards have
authority over public funds to be used for the educational
benefit of their students. Charter school governing boards
should be held to the same standards as school district
governing boards.
This bill requires charter school boards to file statements of
economic interest according to the Political Reform Act;
specifies that charter school board members may not be
financially interested in any decision made by the board;
requires charter schools to comply with the California Public
Records Act; and, requires charter school boards to abide by the
Brown Act or the Bagley-Keene Open Meetings Act.
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The Brown Act . The Brown Act governs meetings conducted by
local legislative bodies, such as boards of supervisors, city
councils and school boards. The Brown Act represents the
Legislature's determination of how the balance should be struck
between public access to meetings of multi-member public bodies
and the need for confidential candor, debate, and information
gathering. The Brown Act requires meetings of the board to be
publicly noticed 72 hours before their meetings, among other
requirements.
California Public Records Act (CPRA) . The CPRA was enacted in
1968 and according to the Attorney General, in enacting the
CRPA, the Legislature stated that access to information
concerning the conduct of the public's business is a fundamental
and necessary right for every person in the state. Cases
interpreting the CRPA also have emphasized that its primary
purpose is to give the public an opportunity to monitor the
functioning of their government. The greater and more
unfettered the public official's power, the greater the public's
interest in monitoring the governmental action. The fundamental
precept of CPRA is that governmental records shall be disclosed
to the public, upon request, unless there is a specific reason
not to do so. Most of the reasons for withholding disclosure of
a record are set forth in specific exemptions contained in the
CPRA. Several CPRA exemptions are based on a recognition of the
individual's right to privacy. If a record contains exempt
information, the agency generally must segregate or redact the
exempt information and disclose the remainder of the record.
Government Code 1090 . Government Code 1090 states that members
of the Legislature, state, county, district, judicial district,
and city officers or employees shall not be financially
interested in any contract made by them in their official
capacity, or by any body or board of which they are members. 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
capacities. Mindful of the ancient adage, that 'no man can
serve two masters,' the section was enacted to ensure that
public officials 'making' official contracts not be distracted
by personal financial gain from exercising absolute loyalty and
undivided allegiance to the best interest of the entity which
they serve."
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Political Reform Act . The Fair Political Practices Commission
(FPPC) was created by the Political Reform Act of 1974, a ballot
initiative passed by California voters as Proposition 9. The
FPPC provides written and oral advice to public agencies and
officials; conducts seminars and training sessions; develops
forms, manuals and instructions; and receives and files
statements of economic interests from many state and local
officials. The FPPC investigates alleged violations of the
Political Reform Act, imposes penalties when appropriate, and
assists state and local agencies in developing and enforcing
conflict-of-interest codes. The FPPC regulates campaign
financing and spending; financial conflicts of interest;
lobbyist registration and reporting; post-governmental
employment; mass mailings at public expense; and, gifts and
honoraria given to public officials and candidates. School
board members are required to comply with the Political Reform
Act, and in so, must file a statement of economic interest,
annually.
Supporters of the bill, including the California School Boards
Association, the Association of California School
Administrators, the California Association of School Business
Officials, the California State PTA, the California Federation
of Teachers, Orange County Department of Education, San
Francisco Unified School District, and Antioch Unified School
District argue, this measure will strengthen efforts to end
financial abuse of public funds in charter schools, provide
transparency into the operations of the many charter schools
that are providing quality educational options for parents and
students, and renew the faith of parents and the community that
their local charter school is acting in the best interest of
students.
The California Teachers Association supports the bill and
argues, "CTA believes that all authorizing entities, including
school districts, county offices of education and the state
board of education, should be free of conflicts of interest in
the approval of charter schools. CTA believes that all charter
school governing boards also should be free of conflicts of
interest in the operation of charter schools and that the Ralph
M. Brown Act (open meetings law) and the Public Records Act
should apply to the operation of these schools. There is a role
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for charter schools in California's education system. That role
should be performed to at least the same high standards of
integrity, transparency and openness required of traditional
public schools."
The California Charter Schools Association (CCSA) opposes the
bill and argues, "CCSA supports applying appropriate conflict of
interest provisions to charter schools, including transparency
and recusal by board members with a financial interest in a
board decision. In fact, most charter schools are nonprofit
corporations and must abide by the Corporations Code that
includes conflict of interest provisions. We believe that AB
572's directive that charter schools comply with Government Code
Section 87100 et seq applies an inappropriate conflict of
interest scheme to charter schools. We are open to crafting a
conflict of interest law that is specific to charter schools."
Corporations Code . Statute governing corporations requires not
more than 49% of persons serving on the board of any corporation
to be "interested persons." "Interested persons" is defined as
either of the following: a) any person currently compensated by
the corporation for services rendered to it within the previous
12 months (excluding any reasonable compensation paid to a
director); or, b) any relative, as specified, of any such
person. Advocates of charter schools contend they should abide
by conflict of interest provisions related to corporations not
local education agencies due to the fact that some charter
schools are operated by non-profit corporations. The committee
should consider whether it is appropriate to have public funded
charter schools abide by the corporations code rather than the
government code with regard to conflict of interest policies.
Committee Amendment : Staff recommends the bill be amended to
clarify that charter schools shall comply with the Political
Reform Act.
Previous legislation : AB 2115 (Mullin) from 2008 required
charter schools to adopt and comply with a conflict of interest
policy that requires its governing board members to abide by the
same conflict of interest requirements as local education agency
(LEA) governing board members. According to the Assembly
Appropriations Committee, AB 2115 had, unknown, minor absorbable
state reimbursable mandated costs, likely less than $100,000, to
the 585 charter schools in the state to adopt conflict of
interest policies and abide by the Brown Act, as specified. The
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bill was vetoed by the Governor with the following message:
"Not only would this bill create state mandated costs
for charter schools to comply with its provisions, the
measure runs counter to the intent of charter schools,
which were created to be free from many of the laws
governing schools districts."
AB 1197 (Wiggins) of 2004, specified that individuals who govern
charter schools shall file statements of economic interest under
the Political Reform Act. The bill failed passage on the Senate
Floor.
REGISTERED SUPPORT / OPPOSITION :
Support
Antioch Unified School District
Association of California School Administrators (ACSA)
California Association of School Business Officials (CASBO)
California Federation of Teachers (CFT)
California School Boards Association (CSBA)
California State PTA
California Teachers Association (CTA)
Orange County Department of Education
Palos Verdes Unified School District
Public Advocates
Saddleback Valley Unified School District
San Bernardino County Office of Education
San Diego County Office of Education
San Francisco Unified School District
Santa Clara County Office of Education
St. Helena Unified School District
Opposition
California Charter Schools Association
An Individual
Analysis Prepared by : Chelsea Kelley / ED. / (916) 319-2087