SB 126 Requires Charter Schools to Comply with Transparency and Conflict of Interest Laws

03.06.2019

On March 5, 2019, Governor Gavin Newsom signed Senate Bill 126, requiring charter schools to comply with the same public records, open meeting, and conflict of interest laws as school districts and county offices of education. SB 126 adds section 47604.1 to the California Education Code.

Background

Charter schools and authorizing agencies have long disagreed over whether charter schools and their governing bodies are subject to the same transparency laws and prohibitions against conflicts of interest as apply to school districts and county offices of education. On December 26, 2018, the California Office of the Attorney General issued a non-binding opinion unequivocally concluding that charter schools and their governing bodies are subject to the Ralph M. Brown Act, the California Public Records Act, Government Code section 1090, and the Political Reform Act of 1974. SB 126 moved quickly through the legislative process, and was first heard by the Senate Education Committee on February 19, 2019. This newly signed law settles the debate regarding the applicability of these laws to charter schools and their governing bodies.

Education Code Section 47604.1 / Senate Bill 126

New Education Code section 47604.1 provides that charter schools and entities managing charter schools (defined as a nonprofit public benefit corporation that operates a charter school) are subject to the Ralph M. Brown Act (or the Bagley-Keene Open Meeting Act). It also prescribes specific rules regarding meeting locations and meeting content.

Additionally, Education Code section 47604.1 clarifies that the California Public Records Act applies to both charter schools and entities managing charter schools.

Finally, the new law subjects charter schools and entities managing charter schools to both Government Code section 1090 and the Political Reform Act of 1974. This means that charter school officials may not be financially interested in any contract made by them in their official capacity. They must also comply with all conflict prohibitions and reporting requirements of the Political Reform Act and must adopt a conflict of interest code. Unlike employees of school districts and county offices of education, a charter school employee may serve as a member of the charter school’s governing board; however, the employee must abstain from voting on, influencing, or attempting to influence another member of the governing board regarding any matters uniquely affecting the member’s employment with the charter school.

When signing this new legislation on Tuesday, Governor Newsom was joined by representatives from the California Teachers Association, the California School Employees Association, and the California Charter Schools Association, reflecting the education community’s strong support behind this bill. Assemblyman Patrick O’Donnell (D-Long Beach) stated, “This bill seeks to ensure that the use of our precious few public school dollars are subject to transparency, common ethical practices and good government law that is applied to other governmental operations.”

Impact on Charter Schools and Authorizing Agencies

This law, explicitly requiring California charter schools to comply with the Ralph M. Brown Act, the Public Records Act, and the conflict of interest prohibitions in the Political Reform Act and Government Code section 1090, is consistent with our firm’s longstanding opinion and advice that these laws requiring transparency and accountability apply to charter schools.

This newly signed law will have a significant impact on the operations of many current and proposed charter schools. As potential and current authorizing agencies, school districts and county boards of education must hold charter schools accountable for compliance with these laws. Authorizers must review the charters’ governance provisions and corporate documents for statements of compliance with transparency and conflict of interest laws. Additionally, authorizers should carefully review the provisions of Education Code section 47604.1 governing the location and conduct of charter school governing board meetings. Most importantly, authorizers should include questions or concerns related to compliance with section 47604.1 as part of their regular and required oversight of authorized charter schools.

SB 126 is not characterized as urgency legislation. Therefore, despite its passage early in the legislative session, it does not take effect until January 1, 2020. We nonetheless recommend that charter schools and their managing entities immediately comply (or continue complying) with these provisions in reliance on the Attorney General’s opinion and the Legislature’s clear mandate.

Compliance with these laws can be technical and complex and may require changes of practice for existing charter schools. Many charter schools and charter managing entities may not fully understand the complexities of these laws, and thus could inadvertently violate their requirements. This new law creates additional challenges for charter authorizing and oversight agencies. If you have any questions regarding these matters, or if we can assist in your review and consideration of a charter’s proposal, renewal, or operations, please do not hesitate to contact us.