SB 949: Conflicts of interest: public officers and employees: charter schools.

(1)Existing law, the Charter Schools Act of 1992, provides for the establishment and operation of charter schools and provides that a charter school may operate as, or be operated by, a nonprofit public benefit corporation.

Existing law prohibits certain public officials, including, but not limited to, state, county, or district 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, except as provided. A willful violation of these provisions is a crime.

This bill would expressly state that members of governing bodies of charter schools, the governing body of a charter school, solely with respect to the operations of a that charter school, are subject to those conflict of interest conflict-of-interest provisions, except in limited circumstances, as prescribed. The bill would further specify that, as used in those conflict of interest provisions, a member of the governing body of a charter school is considered a public officer, a charter school is considered a government entity, district, public board or commission, public agency or public district, and a member means a person who serves on a governing body of a charter school, excluding members of nonprofit public benefit corporations, as defined, not serving on the governing body of the charter school.

(2)Existing law excepts from the above conflict-of-interest provisions certain remote interests, as described, including those of officers or employees of a nonprofit entity exempt from taxation or a nonprofit corporation, except as prescribed, and those of persons receiving salary, per diem, or reimbursement for expenses from a government entity. prescribed.

This bill would also except from these remote interest provisions those of a nonprofit limited liability company and of a person receiving salary, per diem, or reimbursement for expenses from a charter school. company.

(3)Existing law also excepts from those conflict-of-interest provisions the remote interest of an owner or partner of a firm serving as an appointed member of an unelected board or commission of a contracting agency, if the owner or partner recuses himself or herself from providing any advice to the contracting agency regarding the contract between the firm and the contracting agency and from all participation in reviewing a project resulting from that contract.

This bill would expressly apply that specific remote interest exception to a nonprofit corporation or nonprofit limited liability company that governs a charter school. The bill would create another remote interest exception for a member of the governing body or board regarding collective bargaining agreements and personnel matters that affect a class of employees to which the members relative belongs, as prescribed. The bill would also create a remote interest exception for an employee of or independent contractor to a charter school, serving as a member of the governing body of the charter school by which he or she is employed or under contract with, if that employee or independent contractor abstains from voting on, or influencing or attempting to influence another member of the governing body regarding matters uniquely affecting, his or her own employment or contract.

(4)Existing law identifies other situations in which officers or employees are deemed to not be interested in a contract. These include when the officer or employees interest is: (A) as a recipient of public services generally provided by the body or board of which he or she is a member, on the same terms and conditions as if he or she were not a member of the body or board; (B) that of a landlord or tenant of the contracting party, if the contracting party is, among others, the state or any department or agency of this state; (C) that of the spouse of an officer or employee of a public agency in his or her spouses employment, as prescribed; and (D) that of a person receiving salary, per diem, or reimbursement for expenses from a government entity.

This bill would expressly apply these provisions identifying certain noninterests to charter schools. The bill would create 2 additional exceptions for the situation in which an officer or employee provides a loan to a public school, including a charter school, due to a fiscal emergency, or leases real property to be used for public school purposes. Additionally, the bill would make other specified, noninterests provisions apply to nonsalaried directors or members and noncompensated officers of nonprofit limited liability companies.

(5)Under existing law, a contract made in violation of the conflict-of-interest provisions may be avoided at the instance of any party, except the officer interested in the contract. Existing law establishes that an action under this provision may be commenced within 4 years after the plaintiff discovered, or in the exercise of reasonable care should have discovered, the violation.

This bill would require an interested person, before commencing an action under this provision, to make a written demand to cure or correct the alleged violation. The bill would authorize the demanding party, if the contract is not set aside or reformed within 30 days of the demand, to bring an action under that provision. The bill would prohibit an action from being brought for any penal sanction, including removal or disqualification from holding public office, except for a knowing and willful violation.