Amended  IN  Assembly  April 18, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1253

Introduced by Assembly Member Cooley

February 17, 2017

An act to amend Sections 15278, 15280, and 15284 of of, and to add Section 15283 to, the Education Code, relating to education finance.


LEGISLATIVE COUNSEL'S DIGEST


AB 1253, as amended, Cooley. Education finance: school bonds: citizens’ oversight committees.
(1) Existing law requires the governing board of a school district or community college district to establish and appoint members to an independent citizens’ oversight committee, as specified, if a bond measure authorized pursuant to certain provisions of the California Constitution is approved by 55% of the voters. Existing law requires the citizens’ oversight committee to convene to at least ensure the bond revenues are expended only for specified purposes and not used for any teacher or administrative salaries or other school operating expenses.
This bill would require citizens’ oversight committees to conduct active and in-depth investigations concerning the expenditure of bond revenues. The bill would require citizens’ oversight committees to perform several functions that are optional under existing law, including receiving and reviewing copies of specified audit documents and plans, and performing specified inspections of school facilities and grounds. The bill would specifically require citizens’ oversight committees to review the require a county office of education, at the request of a citizens’ oversight committee, to review a school district’s employment of a professional firms for the conduct of bond issues and expenditures of the proceeds of bond issues, firm or construction contractor, as specified. By imposing new duties on county offices of education, the bill would impose a state-mandated local program.
(2) Existing law requires the governing board of a school district or community college district, without expending bond funds, to provide the citizens’ oversight committee with any necessary technical assistance, administrative assistance, and sufficient resources to publicize the conclusions of the citizens’ oversight committee.
This bill would additionally require that the governing board of a school district or community college district provide the citizens’ oversight committee with the necessary technical assistance and administrative assistance this assistance to be made promptly. The bill would also require the governing board of a school district or community college district to provide the citizens’ oversight committee with all documentation requested by the committee pursuant to the provisions described in (1) above.
To the extent that this provision would impose new duties on school districts and community college districts with previously appointed citizens’ oversight committees that are operating as of the date that this bill becomes operative, it would constitute a state-mandated local program.
(3) Existing law authorizes an action to obtain an order restraining and preventing any expenditure of funds received by a school district or community college district through the sale of bonds described above against any officer, agent, or other person acting on behalf of, that school district or community college district, by citizens who are or were liable to pay an ad valorem tax on real property within the school or community college district if it appears by the complaint or affidavits that certain conditions are present, including, among others, that the governing board of a school district or community college district has willfully failed to appoint the citizens’ oversight committee.
This bill would add to these conditions a situation in which the governing board of the school district or community college district has failed to cooperate with the citizens’ oversight committee.
(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 15278 of the Education Code is amended to read:

15278.
 (a) If a bond measure authorized pursuant to paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution and subdivision (b) of Section 18 of Article XVI of the California Constitution is approved, the governing board of the school district or community college district shall establish and appoint members to an independent citizens’ oversight committee, pursuant to Section 15282, within 60 days of the date that the governing board enters the election results on its minutes pursuant to Section 15274.
(b) The purpose of the citizens’ oversight committee shall be to conduct an active and in-depth investigation and to inform the public concerning the expenditure of bond revenues. The citizens’ oversight committee shall actively review and report on the proper expenditure of taxpayers’ money for school construction. The citizens’ oversight committee shall advise the public as to whether a school district or community college district is in compliance with the requirements of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution. The citizens’ oversight committee shall convene to provide oversight for, but not be limited to, both of the following:
(1) Ensuring that bond revenues are expended only for the purposes described in paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.
(2) Ensuring that, as prohibited by subparagraph (A) of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution, no funds are used for any teacher or administrative salaries or other school operating expenses.
(c) In furtherance of its purpose, the citizens’ oversight committee shall engage in each of the following activities:
(1) Receiving and reviewing copies of the annual, independent performance audit required by subparagraph (C) of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.
(2) Receiving and reviewing copies of the annual, independent financial audit required by subparagraph (C) of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.
(3) Inspecting school facilities and grounds to ensure that bond revenues are expended in compliance with the requirements of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.
(4) Receiving and reviewing copies of any deferred maintenance proposals or plans developed by a school district or community college district.
(5) Reviewing efforts by the school district or community college district to maximize bond revenues by implementing cost-saving measures, including, but not limited to, all of the following:
(A) Mechanisms designed to reduce the costs of professional fees.
(B) Mechanisms designed to reduce the costs of site preparation.
(C) Recommendations regarding the joint use of core facilities.
(D) Mechanisms designed to reduce costs by incorporating efficiencies in schoolsite design.
(E) Recommendations regarding the use of cost-effective and efficient reusable facility plans.

(6)With respect to school districts, reviewing the school district’s employment of professional firms for the conduct of bond issues and expenditures of proceeds of bond issues, including each of the following:

(A)The identity of each firm that submitted one or more proposals for serving as financial advisor, underwriter, bond counsel, underwriter counsel, or trustee or proposals for serving as construction contractor for the facilities to be funded from the proceeds of the bond issue.

(B)The fees or costs proposed in each of the proposals referenced in subparagraph (A).

(C)The fees or costs proposed by the firms selected by the school district.

(D)The school district’s explanation or explanations for the selection of the firms.

(E)Reviewing the county records of firms contributing in cash or in kind to the costs of the bond election to determine whether any of the contributors were selected by the school district to serve in any of the capacities referenced in subparagraph (A).

(F)If any of the contributors to the bond election were selected by the school district to serve in any of the capacities referenced in subparagraph (A), reviewing emails, letters, and other correspondence between the superintendent, business manager, or other key officials of the school district and each of the firms proposing to serve in any of the capacities referenced in subparagraph (A) to determine whether there was an understanding by school district officials regarding the contributions, and reporting to the public regarding these occurrences.

SEC. 2.

 Section 15280 of the Education Code is amended to read:

15280.
 (a) (1) The governing board of the school district or community college district shall, without expending bond funds, promptly provide to the citizens’ oversight committee any necessary technical assistance and shall promptly provide administrative assistance in furtherance of its purpose all of the documentation requested pursuant to paragraph (6) of subdivision (c) of Section 15278 and sufficient resources to publicize the conclusions of the citizens’ oversight committee.
(2) The governing board of the school district or community college district shall provide the citizens’ oversight committee with responses to any and all findings, recommendations, and concerns addressed in the annual, independent financial and performance audits required by subparagraphs (C) and (D) of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution within three months of receiving the audits.
(b) All citizens’ oversight committee proceedings shall be open to the public public, and notice to the public shall be provided in the same manner as the proceedings of the governing board of the school district or community college district. The citizens’ oversight committee shall issue regular reports on the results of its activities. A report shall be issued at least once a year. Minutes of the proceedings of the citizens’ oversight committee and all documents received and reports issued shall be a matter of public record and be made available on an Internet Web site maintained by the governing board of the school district or community college district.

SEC. 3.

 Section 15283 is added to the Education Code, to read:

15283.
 (a) At the request of a citizens’ oversight committee established pursuant to Section 15282, a county office of education shall review a school district’s employment of a professional firm, including, but not limited to, a financial adviser, underwriter, bond counsel, underwriter counsel, or trustee, or of a construction contractor for the facilities to be funded from the proceeds of the bond issue.
(b) A review pursuant to subdivision (a) shall include all of the following:
(1) The school district’s explanation or explanations for the selection of the firm or contractor.
(2) A review of the county records to determine whether one or more of the firms or contractors contributed in cash or in kind to the costs of the bond election.
(3) A determination of whether there was an understanding by school district officials regarding the contributions and the employment of a firm or contractor.
(c) In making a determination pursuant to paragraph (3) of subdivision (b), a county office of education may review emails, letters, and other correspondence between the superintendent, business manager, or other key officials of the school district and each firm or contractor to make the determination.
(d) Upon conclusion of a review, the county office of education shall provide the information from the review to the citizens’ oversight committee that made the request.

SEC. 3.SEC. 4.

 Section 15284 of the Education Code is amended to read:

15284.
 (a) An action to obtain an order restraining and preventing any expenditure of funds received by a school district or community college district through the sale of bonds authorized by this chapter pursuant to paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution and subdivision (b) of Section 18 of Article XVI of the California Constitution may be maintained against any officer, agent, or other person acting on behalf of, of that school district or community college district, by a citizen residing in the school district or community college district who is assessed and is liable to pay an ad valorem tax on real property within the school district or community college district, or who has paid an ad valorem tax on real property within the school district or community college district within one year before the commencement of the action if it appears by the complaint or affidavits that any of the following conditions are present:
(1) An expenditure of funds received by a school district or community college district through the sale of bonds authorized by this chapter is for purposes other than those specified in paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.
(2) The expenditure is not in compliance with paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.
(3) That an expenditure in violation of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution will be made or will continue to be made during the litigation that would produce waste or great or irreparable injury.
(4) The governing board of a school district or community college district has willfully failed to appoint or cooperate with the citizens’ oversight committee in violation of the requirements of Section 15278.
(b) An action brought pursuant to this section shall take special precedence over all civil matters on the calendar of the court except those matters granted equal precedence by law.
(c) The rights, remedies, or penalties established by this section are cumulative to the rights, remedies, or penalties established under other laws, including subdivision (a) of Section 526 of the Code of Civil Procedure.
(d) If an order is obtained to restrain and prevent an expenditure of funds pursuant to subdivision (a), a court may award attorneys’ fees pursuant to Chapter 6 (commencing with Section 1021.5) of Title 14 of Part 2 of the Code of Civil Procedure.
(e) The action authorized by this section shall be known as a “School Bond Waste Prevention Action.”

SEC. 4.SEC. 5.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.