Bill Text: CA AB2279 | 2011-2012 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: School districts: emergency apportionments: trustees.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2012-09-21 - Chaptered by Secretary of State - Chapter 429, Statutes of 2012. [AB2279 Detail]
Download: California-2011-AB2279-Amended.html
Bill Title: School districts: emergency apportionments: trustees.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2012-09-21 - Chaptered by Secretary of State - Chapter 429, Statutes of 2012. [AB2279 Detail]
Download: California-2011-AB2279-Amended.html
BILL NUMBER: AB 2279 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 2, 2012
INTRODUCED BY Assembly Member Swanson
FEBRUARY 24, 2012
An act to amend Section Sections
41320.1 and 41326 of the Education Code, relating to
school districts.
LEGISLATIVE COUNSEL'S DIGEST
AB 2279, as amended, 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. Existing law authorizes the trustee, during the period
of his or her service, to stay or rescind any action of the local
governing board of the school district that, in the judgment of the
trustee, may affect the financial condition of the school district.
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
and the Superintendent has determined that the school
district's future compliance with an approved fiscal plan is probable
, but in no event, for less than 3 years . The bill would
also make a conforming change and several technical,
nonsubstantive changes. authorize the county
superintendent of schools, after the trustee's period of service and
until the loan is repaid, to stay or rescind an action of the
governing board of the school district that, in his or her judgment,
may affect the financial condition of the school district.
Existing law authorizes the Superintendent, within 5 years after
an appointed trustee is removed, to reassume, either directly or
through an administrator, all of the legal rights, duties, and powers
of the governing board of the school district if the school district
violates any provision of specified recovery plans approved by the
Superintendent.
This bill would instead authorize the Superintendent, within 5
years after an appointed trustee is removed or the loan is repaid,
whichever occurs later, to reassume, either directly or through an
administrator, all of the legal rights, duties, and powers of the
governing board of the school district if the school district
violates any provision of specified recovery plans approved by the
Superintendent.
This bill would also make numerous 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 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 , or and 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 , but in no event, for less than
three years . The Superintendent shall notify the county
superintendent of schools, the Legislature, the Department of
Finance, and the Controller no less than 60 days 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 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
an action of the local
governing board of the school district that, in the judgment of the
trustee, may affect the financial condition of the school district.
After the trustee's period of service, and until the
loan is repaid, the county superintendent of schools may stay or
rescind an action of the governing board of the school district that,
in his or her judgment, 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
an 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 a 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 every 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 educational agency to which he or
she is assigned. For the purpose purposes
of workers' compensation benefits, the trustee is an employee
of the local 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
an 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 purposes
of workers' compensation benefits, the state-appointed trustee
is deemed an employee of the local 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.
SEC. 2. Section 41326 of the Education
Code is amended to read:
41326. (a) Notwithstanding any other provision of this code, the
acceptance by a school district of an apportionment made pursuant to
Section 41320 that exceeds an amount equal to 200 percent of the
amount of the reserve recommended for that school district
under the standards and criteria adopted pursuant to Section 33127
constitutes the agreement by the school district to the
conditions set forth in this article. Prior to
Before applying for an emergency apportionment in the
amount identified in this subdivision, a school district
the governing board of a school district
shall discuss the need for that apportionment at a regular or
special meeting of the governing board of the school district
and, at that meeting, shall receive testimony regarding the
apportionment from parents, exclusive representatives of employees of
the school district, and other members of the community.
For purposes of this article, "qualifying school district" means a
school district that accepts a loan as described in this subdivision.
(b) The Superintendent shall assume all the legal rights, duties,
and powers of the governing board of a qualifying school district.
The Superintendent, in consultation with the county superintendent of
schools, shall appoint an administrator to act on his or her behalf
in exercising the authority described in this subdivision in
accordance with all of the following:
(1) The administrator shall serve under the direction and
supervision of the Superintendent until terminated by the
Superintendent at his or her discretion. The Superintendent shall
consult with the county superintendent of schools before terminating
the administrator.
(2) The administrator shall have recognized expertise in
management and finance.
(3) To facilitate the appointment of the administrator and the
employment of any necessary staff, for
the purposes of this section, the Superintendent
of Public Instruction 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.
(4) Notwithstanding any other law, the Superintendent may appoint
an employee of the state or the office of the county superintendent
of schools to act as administrator for up to the duration of the
administratorship. During the tenure of his or her appointment, the
administrator, if he or she is an employee of the state or the office
of the county superintendent of schools, is an employee of the
school district, but shall remain in the same retirement system under
the same plan that has been provided by his or her employment with
the state or the office of the county superintendent of schools. 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
state or the office of the county superintendent of schools. The time
served in the appointment shall be counted for all purposes as if
the administrator had served that time in his or her former position
with the state or the office of the county superintendent of schools.
(5) Except for an individual appointed as an administrator by the
Superintendent of Public Instruction pursuant to
paragraph (4), the administrator shall be a member of the State
Teachers' Retirement System, if qualified, for the period of service
as administrator, unless he or she 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 administrator chooses to become a member or is already a
member, the administrator 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 the administrator to be placed on the payroll of the school
district for purposes of remuneration, other benefits, and payroll
deductions.
(6) For the purposes of workers' compensation
benefits, the administrator is an employee of the qualifying
school district, except that an administrator appointed
pursuant to paragraph (4) may be deemed an employee of the state or
office of the county superintendent of schools, as applicable.
(7) The qualifying school district shall add the
administrator as a covered employee of the school district for all
purposes of errors and omissions liability insurance policies.
(8) The salary and benefits of the administrator shall be
established by the Superintendent of Public Instruction
and paid by the qualifying school district.
(9) The Superintendent or the administrator may, on a short-term
basis, employ at school district expense any
staff necessary to assist the administrator, including, but
not limited to, a certified public accountant.
(10) The administrator may do all of the following:
(A) Implement substantial changes in the fiscal policies and
practices of the school district, including, if necessary,
the filing of a petition under Chapter 9 (commencing with Section
901) of Title 11 of the United States Code for the adjustment of
indebtedness.
(B) Revise the educational program of the school
district to reflect realistic income projections and pupil
performance relative to state standards.
(C) Encourage all members of the school community to accept a fair
share of the burden of the fiscal recovery of the school
district.
(D) Consult, for the purposes described in this
subdivision, with the governing board of the school district, the
exclusive representatives of the employees of the school
district, parents, and the community.
(E) Consult with, and seek recommendations from, the
Superintendent, county superintendent of schools, and the County
Office Fiscal Crisis and Management Assistance Team authorized
pursuant to subdivision (c) of Section 42127.8 for the
purposes described in this article.
(F) With the approval of the Superintendent, enter into agreements
on behalf of the school district and, subject to any
contractual obligation of the school district, change
any existing school district rules,
regulations, policies, or practices as necessary for the effective
implementation of the recovery plans referred to in Sections 41327
and 41327.1.
(c) (1) For the period of time during which the Superintendent
of Public Instruction exercises the authority
described in subdivision (b), the governing board of the qualifying
school district shall serve as an advisory body reporting to the
state-appointed administrator, and has no rights, duties, or powers,
and is not entitled to any stipend, benefits, or other compensation
from the school district.
(2) Upon the appointment of an administrator pursuant to this
section, the district superintendent of schools is no longer an
employee of the school district.
(3) A determination of the severance compensation for the district
superintendent of schools shall be made pursuant to
subdivision (j).
(d) Notwithstanding Section 35031 or any other law, the
administrator may, after according the employee reasonable notice and
the opportunity for a hearing, terminate the employment of any
deputy, associate, assistant superintendent of schools, or any other
school district level administrator who is employed by a
school district under a contract of employment signed or renewed
after January 1, 1992, if the employee fails to document, to the
satisfaction of the administrator, that prior to
before the date of the acceptance of the apportionment he
or she either advised the governing board of the school
district, or his or her superior, that actions contemplated or taken
by the governing board of the school district could result
in the fiscal insolvency of the school district, or took
other appropriate action to avert that fiscal insolvency.
(e) The authority of the Superintendent, and the administrator,
under this section shall continue until all of the following occur:
(1) (A) After one complete fiscal year has elapsed following the
school district's acceptance of a loan as described in
subdivision (a), the administrator determines, and so notifies the
Superintendent and the county superintendent of schools, that future
compliance by the school district with the recovery plans approved
pursuant to paragraph (2) is probable.
(B) The Superintendent may return power to the governing board
of the school district for any area listed in subdivision
(a) of Section 41327.1 if performance under the recovery plan for
that area has been demonstrated to the satisfaction of the
Superintendent.
(2) The Superintendent has approved all of the recovery plans
referred to in subdivision (a) of Section 41327 and the County Office
Fiscal Crisis and Management Assistance Team completes the
improvement plans specified in Section 41327.1 and has completed a
minimum of two reports identifying the school district's
progress in implementing the improvement plans.
(3) The administrator certifies that all necessary collective
bargaining agreements have been negotiated and ratified, and that the
agreements are consistent with the terms of the recovery plans.
(4) The school district has completed all reports
required by the Superintendent and the administrator.
(5) The Superintendent determines that future compliance by the
school district with the recovery plans approved pursuant to
paragraph (2) is probable.
(f) When the conditions stated in subdivision (e) have been met,
and at least 60 days after the Superintendent of Public
Instruction has notified the Legislature, the Department of
Finance, the Controller, and the county superintendent of schools
that he or she expects the conditions prescribed pursuant to this
section to be met, the school district governing
board of the school district shall regain all of its legal
rights, duties, and powers, except for the powers held by the
trustee provided for pursuant to Article 2 (commencing with Section
41320). The Superintendent shall appoint a trustee under Section
41320.1 to monitor and review the operations of the school
district until the conditions of subdivision (b) of that section
have been met.
(g) Notwithstanding subdivision (f), if the school
district violates any a provision of
the recovery plans approved by the Superintendent pursuant to this
article within five years after the trustee appointed pursuant to
Section 41320.1 is removed or after the loan is repaid,
whichever occurs later , the Superintendent may reassume,
either directly or through an administrator appointed in accordance
with this section, all of the legal rights, duties, and powers of the
governing board of the school district. The
Superintendent shall return to the school district
governing board of the school district all of its legal
rights, duties, and powers reassumed under this subdivision when he
or she determines that future compliance with the approved recovery
plans is probable, or after a period of one year, whichever occurs
later.
(h) Article 2 (commencing with Section 41320) shall apply except
as otherwise specified in this article.
(i) It is the intent of the Legislature that the legislative
budget subcommittees annually conduct a review of each qualifying
school district that includes an evaluation of the financial
condition of the school district, the impact of the
recovery plans upon the school district's educational
program, and the efforts made by the state-appointed administrator to
obtain input from the community and the governing board of the
school district.
(j) (1) The district superintendent of schools is
entitled to a due process hearing for purposes of determining final
compensation. The final compensation of the district superintendent
of schools shall be between zero and six times his or her
monthly salary. The outcome of the due process hearing shall be
reported to the Superintendent of Public Instruction
and the public. The information provided to the public
shall explain the rationale for the compensation.
(2) This subdivision applies only to a contract for employment
negotiated on or after June 21, 2004.
(k) (1) When the Superintendent assumes control over a school
district pursuant to subdivision (b), he or she shall, in
consultation with the County Office Fiscal Crisis and Management
Assistance Team, review the fiscal oversight of the school
district by the county superintendent of schools. The Superintendent
may consult with other fiscal experts, including other county
superintendents of schools and regional fiscal teams, in conducting
this review.
(2) Within three months of assuming control over a qualifying
school district, the Superintendent shall report his or her
findings to the Legislature and shall provide a copy of that report
to the Department of Finance. This report shall include findings as
to fiscal oversight actions that were or were not taken and may
include recommendations as to an appropriate legislative response to
improve fiscal oversight.
(3) If after performing the duties described in paragraphs (1) and
(2), the Superintendent determines that the county superintendent of
schools failed to carry out his or her responsibilities for fiscal
oversight as required by this code, the Superintendent may exercise
the authority of the county superintendent of schools who has
oversight responsibilities for a qualifying school district. If the
Superintendent finds, based on the report required in paragraph (2),
that the county superintendent of schools failed to appropriately
take into account particular types of indicators of financial
distress, or failed to take appropriate remedial actions in the
qualifying school district, the Superintendent shall
further investigate whether the county superintendent of schools
failed to take into account those indicators, or similarly failed to
take appropriate actions in other school districts with
negative or qualified certifications, and shall provide an additional
report on the fiscal oversight practices of the county
superintendent of schools to the appropriate policy and
fiscal committees of each house of the Legislature and the Department
of Finance.
