NEW LEGISLATION IMPACTS RETENTION AND PAYMENT TERMS FOR PUBLIC WORKS PROJECTS

October 2011
Number 68

Governor Brown recently signed into law Senate Bill (SB) 293, which contains numerous changes to the law on public works construction contracts, including a requirement that the public entity withhold no more than 5% of the contract price as retention.

The Public Contract Code permits public entities to retain a percentage of the contract price from progress payments to a general contractor. Such “retention” is normally held by the public entity to cover, if necessary, the cost of defects or other issues arising from the work performed by the contractor and to cover stop notices if funds are available.  If not applied to cover the cost of such issues, retention funds are released following the completion of the project. Until now, public agencies have typically withheld 10% of the contract price, in reliance on Public Contract Code section 9203. Also, Public Contract Code section 7200 provides that the amount withheld by a public entity cannot exceed the percentage specified in the contract – in other words, the public entity cannot withhold more than it has been agreed upon in the construction contract.

SB 293 enacts a new statute, Public Contract Code section 7201, which provides that for contracts entered into after January 1, 2012, a public entity cannot withhold more than 5% of progress payments as retention. However, the new statute also provides that the public agency may withhold more than 5% on specific projects where the governing body of the public entity or designee finds that the project is “substantially complex” and therefore requires a higher retention amount. The findings must be made during a properly noticed and regularly scheduled public hearing prior to the bid and must be included in the bid documents, along with the higher retention amount.

Public Contract Code section 7201 is in effect until January 1, 2016, at which time it will be deemed repealed unless a new statute is enacted before that time. SB 293 includes similar provisions relating to the 5% retention cap for state entities under section 10261 of the Public Contract Code. However, SB 293 does not address section 9203, and therefore clean-up legislation may be needed.

Because this new legislation limits the amount a public agency can withhold as retention, agencies are well-advised to carefully track and, when possible, predict potential damages and costs incurred during the course of a project. If the withheld retention is not sufficient to cover the project’s damages and costs, then the agency may be forced to withhold from progress payments (assuming the contract permits it).

SB 293 also amends section 7108.5 of the Business and Professions Code, shortening the time by which a prime contractor or subcontractor must pay subcontractors from 10 days after receipt of each progress payment down to 7 days.

If you have questions or would like additional information on issues regarding managing public works projects, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Ruth Mendyk
Shareholder and Facilities & Business Practice Group Co-Chair
Fresno Office
rmendyk@lozanosmith.com

Anne Collins
Associate
Sacramento Office
acollins@lozanosmith.com

© 2011 Lozano Smith

NEW LEGISLATION REQUIRES PROP 39 AUDITS TO BE ANNUALLY REVIEWED BY CITIZENS’ OVERSIGHT COMMITTEE

October 2011
Number 67

Senate Bill (SB) 423 requires a school district, community college district, or county office of education to submit the performance and financial audits required for its Proposition 39 (Prop. 39) general obligation bond to the agency’s citizens’ oversight committee by March 31 each year. Prop. 39 amended theCaliforniaconstitution to allow a school district, community college district, or county office of education to pass a bond for the construction, reconstruction, rehabilitation, or replacement of school facilities by 55% voter approval, so long as the proposition seeking the bond required certain specific accountability measures. Two of the accountability measures are completing an annual, independent performance and financial audit and forming a citizens’ oversight committee to review and make recommendations regarding the use of bond proceeds. This new bill amends Education Code section 15286 to clarify that the audits should be reviewed on an annual basis by the citizens’ oversight committee.

If you have any questions regarding SB 423 or bond funds, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Megan Macy
Shareholder and Facilities & Business Practice Group Co-Chair
Sacramento Office
mmacy@lozanosmith.com

Anne Collins
Associate
Sacramento Office
acollins@lozanosmith.com

© 2011 Lozano Smith

GOVERNOR SIGNS INTO LAW TWO BILLS RELATING TO PUBLIC EMPLOYEE ORGANIZATIONS

October 2011
Number 65

Governor Brown recently signed two bills relating to public sector labor laws. Senate Bill (SB) 609 limits the Public Employment Relations Board (PERB) to 180 days to decide appeals for unit certification and representation cases. Assembly Bill (AB) 646 amends the Meyers-Milias-Brown Act (MMBA) to require fact-finding before a public agency can implement its last, best and final offer.

SB 609
Under existingCalifornialabor laws, public employees have a right to organize and form bargaining units for purposes of representation and collective bargaining. These laws are administered by PERB and, among other duties, PERB rules on contested matters relating to the recognition, certification or decertification of public employee organizations. Recognition disputes can be appealed directly to the appointed PERB Board itself as a final step in the PERB administrative process.

SB 609, which Governor Brown signed on September 6, 2011, amends several public sector labor laws to limit the Board’s time to decide an appeal in a disputed representation case. Prior to the passage of SB 609, there was no time limitation for Board decisions to be made. SB 609 now gives the Board only 180 days to rule on an appeal from a PERB administrative law judge’s (ALJ) proposed decision regarding the recognition or certification of an employee organization.

The 180 days begins on the date the appeal is filed with the Board. Under the new legislation, the ALJ’s proposed decision is deemed to be the Board’s final order on the appeal if the Board fails to issue its decision within the 180 day time frame.

SB 609 affects the Educational Employment Relations Act (EERA), which applies to public school and community college employees, and the MMBA, which applies to municipal and public agency employees, and other labor acts administered by PERB.

AB 646
On October 9, 2011, the Governor signed AB 646 amending the MMBA to require fact-finding when public agencies and special districts reach impasse in negotiations. The MMBA requires public agencies and special districts to meet and confer in good faith regarding wages, hours and other terms and conditions of employment with representatives of recognized employee organizations. Under the MMBA, if the representatives of the agencies and the employee organization fail to reach an agreement, they may, but are not required to, mutually agree on the appointment of a mediator and equally share the cost.

Prior to the passage of AB 646, if the parties reached impasse, the MMBA provided that a public agency or special district could unilaterally implement its last, best and final offer. AB 646 now authorizes the employee organization to request that the matter be submitted to a fact-finding panel.

The fact-finding panel will consist of one member selected by each party as well as a “neutral” selected by agreement of the parties. The fact-finding panel is authorized to make investigations and hold hearings, and to issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence.

The new legislation prohibits a public agency or special district from implementing its last, best and final offer until at least 10 days after the fact-finder’s written findings of fact and non-binding recommended terms of settlement have been submitted to the parties, and the agency has held a public hearing regarding the impasse.

If you have any questions about these new laws or how they relate to your labor operations, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Jenell Van Bindsbergen
Associate
Fresno Office
jvanbindsbergen@lozanosmith.com

Regina Garza
Associate
Fresno Office
rgarza@lozanosmith.com

Darren Kameya
Senior Counsel
Los Angeles Office
dkameya@lozanosmith.com

© 2011 Lozano Smith

TWO NEW LAWS MAY IMPACT SOLAR PROJECTS INSTALLED ON PUBLICLY OWNED SITES

October 2011
Number 64

Governor Brown has signed two bills relating to public agency renewable energy projects. Senate Bill (SB) 136 requires the payment of the prevailing wage to workers who construct renewable energy generation and energy efficiency improvement projects on public property, even when those projects are financed and owned by private entities. SB 226 adds the installation of solar energy systems on the roof of an existing building or in an existing parking lot to the types of projects that are categorically exempt from compliance with the procedures set forth in the California Environmental Quality Act (CEQA). Both bills signal that the Legislature is aware of some of the key issues – such as prevailing wages and CEQA compliance – that arise as public agencies increasingly consider undertaking renewable energy projects.

SB 136
The California Labor Code requires public entities to require contractors to pay prevailing wages on public works projects where more than $1,000 in public funds is used to fund the project in whole or in part. The prevailing wage rate of per diem wages is determined by the director of the Department of Industrial Relations (DIR) and is required in order to ensure that a contractor is not awarded such a contract based on paying lower wage rates to employees.

Until the enactment of SB 136, it has been unclear whether a private entity must pay prevailing wages when constructing renewable energy generation and energy efficiency improvement projects, including solar photovoltaic projects, on public property for the benefit of a public agency. In 2010, the DIR issued non-precedential enforcement decisions finding that work performed pursuant to a private power purchase agreement, under which a private entity constructs and owns a renewable energy project, is not subject to prevailing wage requirements.

SB 136 adds renewable energy generation and energy efficiency improvement projects to the list of projects that require payment of prevailing wages to workers. The bill also expands the definition of “public works” to include work done under private contract for the construction or maintenance of renewable energy generating capacity when more than 50 percent of the energy generated is purchased or will be purchased by the public entity, or for energy efficiency improvements when those improvements are primarily intended to reduce energy costs that would otherwise be incurred by the state or one of its political subdivisions.

SB 226
Effective January 1, 2012, SB 226 exempts solar projects from CEQA. CEQA requires that the environmental effects of a public project be evaluated and gives the public opportunity to voice their concerns. CEQA also contains categorical exemptions for certain types of projects, meaning that those projects are not subject to CEQA’s environmental assessment requirements. SB 226 now categorically exempts the installation of solar energy systems installed on the roof of an existing building or in an existing parking lot. The exemption does not apply if the project requires certain federal permits; the removal of a tree legally required to be planted, maintained, or protected unless that tree dies and there is no requirement to replace it; or the removal of a native tree over 25 years old.

Recent years have seen an explosive trend in public agencies undertaking renewable energy projects, either through power purchase agreements financed by private entities or with the agency’s own funds. These two bills will help shape such transactions in the future.

LOZANO SMITH has extensive experience evaluating, structuring and negotiating solar electricity and other energy conservation projects for public agencies. If you have questions about your agency’s options for such projects, or for more information about available incentives, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

Written by:

Devon Lincoln
Senior Counsel
Monterey Office
dlincoln@lozanosmith.com

Rachel Gardunio
Associate
Walnut Creek Office
rgardunio@lozanosmith.com

© 2011 Lozano Smith

GOVERNOR SIGNS INTO LAW FOUR BILLS AFFECTING ELD STANDARDS, SOCIAL SCIENCE INSTRUCTION, SCHOOL LUNCH PROGRAMS, AND STUDENT TRANSPORTATION

October 2011
Number 63

Between October 4 and October 8, 2011, Governor Brown approved four bills that directly impact school districts throughout the state. Assembly Bill (AB) 124 establishes a process to update, revise and align the English Language Development standards to the common core state standards in English language arts.AB 199 encourages instruction in social sciences for grades 7 to 12 to include instruction regarding the role of Filipinos in World War II. AB 402 authorizes a school district or a county office of education to incorporate CalFresh program information in the School Lunch Program application. Finally, Senate Bill (SB) 929 requires children under eight years old to remain in booster seats, unless they are 4 feet, 9 inches tall, potentially impacting district transportation policies and practices.

AB 124: English Language Development Curriculum Standards
Current law requires the State Board of Education (SBE) to approve English Language Development (ELD) standards for students whose primary language is other than English that are comparable in rigor and specificity to the standards adopted for English language arts.

In 1999,Californiaadopted ELD standards for listening, speaking, reading and writing. On August 2, 2010, the SBE adopted common core state standards for English language arts. AB 124 amends Education Code section 60811 and adds Education Code section 60811.3 to require the State Superintendent of Public Instruction and the SBE to ensure that ELD standards are aligned with the English language arts common core state standards. AB 124 further requires the State Superintendent to convene a group of experts to assist in the process of updating and revising the ELD standards. The State Superintendent must present the updates and revisions to the SBE on or before August 31, 2012, and the SBE must adopt, reject or revise the standards by September 30, 2012. The provisions of AB 124 will be repealed as of July 1, 2013.

AB 199: World War II Social Science Instruction
Existing law requires the adopted course of study for grades 7 to 12 to include instruction on World War II and the American role in the war. AB 199 amends Education Code section 51221.3 and encourages social science instruction to include an accurate history of the contributions of the Filipino American veterans in the U.S. Army in World War II. In addition, AB 199 encourages this instruction to include a component drawn from personal testimony, particularly in the form of oral or video histories of Filipinos who were involved in World War II, as well as those who contributed to the war effort at home.

AB 402: CalFresh Program and School Lunch Program Application
Current law requires school districts to provide one nutritionally adequate free or reduced-price meal during each school day to kindergarten through twelfth grade students, and to make applications for free and reduced-price meals available to students. CalFresh is another food program for low-income individuals funded through the United States Department of Agriculture.

AB 402 amends Education Code section 49558, adds Education Code section 49577.3, and adds section 18901.55 to the Welfare and Institutions Code. The bill authorizes a school district to facilitate student enrollment in the CalFresh program by agreeing to share student information provided on the School Lunch Program application with the local agency that determines CalFresh program eligibility. AB 402 specifies that the School Lunch Program application is confidential and prohibits the information from being disclosed to any governmental agency, including the federal Immigration and Naturalization Service and the Social Security Administration, or for any purpose other than enrollment in the CalFresh program. AB 402 further requires districts to enroll children in the CalFresh program upon receipt of a signed application.

SB 929: Booster Seats
Existing laws governing transportation of children in vehicles require a child that is under six years of age and weighs less than sixty pounds to be secured in a rear seat in a child passenger restraint system, also known as a booster seat. SB 929 makes changes to these existing laws by requiring any child who is under eight years of age to be secured in a booster seat; however, children who are under eight years of age who are also at least four feet, nine inches tall may be restrained by a safety belt, rather than a booster seat. SB 929 may impact school districts’ policies and practices regarding private field trip transportation for students.

If you have any questions regarding this new legislation, please contact one of our eight offices located statewide or visit our website.

Written by:

Sloan Simmons
Shareholder and Student Practice Group Co-Chair
Sacramento Office
ssimmons@lozanosmith.com

Courtenay Bravmann
Associate
Walnut Creek Office
cbravmann@lozanosmith.com

© 2011 Lozano Smith

GOVERNOR SIGNS TWO BILLS ADDRESSING STUDENT BULLYING

October 2011
Number 62

On October 9, 2011, Governor Brown signed into law Assembly Bill (AB) 9 and AB 1156, two bills aimed at preventing student bullying in schools.

AB 9
TheSafe Placeto Learn Act, codified in Education Code section 234 et seq., requires school districts to adopt a policy that prohibits discrimination and harassment based upon disability, gender, nationality, race or ethnicity, religion, sexual orientation, or association with a person or group with one or more of these actual or perceived characteristics. School districts must also adopt a process for receiving and investigating such complaints of discrimination and harassment. The policies must be publicized to students, parents, district employees and members of the public, and must be posted in all schools and offices.

AB 9 amends theSafe Placeto Learn Act, requiring school district policies prohibiting discrimination and harassment to also prohibit intimidation and bullying based upon the same actual or perceived characteristics. The process for receiving and investigating such complaints now requires school personnel who witness discrimination, harassment, intimidation or bullying based upon the characteristics listed above to take immediate steps to intervene when safe to do so. The process must also include a timeline to investigate and resolve complaints, and an appeal process. The California Department of Education will develop a model handout. The amendments are operative on July 1, 2012.

AB 1156
AB 1156 addresses bullying in three different contexts. First, the bill amends Education Code sections 32261, 32282 and 32283 to add bullying to school safety and crisis response plan training.

Second, AB 1156 amends Education Code section 48900 and the definition of bullying for the purpose of student discipline. Under AB 1156, bullying means any severe or pervasive act, including written or electronic communications, including but not limited to sexual harassment, hate violence or harassment, threats or intimidation, that causes: a student to fear harm to his or her person or property; substantial harm to a student’s physical or mental health; substantial interference with a student’s academic performance; or substantial interference with a student’s ability to participate or benefit from school services, activities, or privileges.

Finally, AB 1156 amends Education Code section 46600 regarding agreements for interdistrict attendance. If a student has been a victim of an act of bullying by a student of the school district of residence, as determined by personnel of either the school district of residence or the school district of proposed enrollment, the student victim must be given priority for interdistrict attendance under any existing interdistrict attendance agreement, or in the absence of an agreement, must “be given additional consideration for the creation of an interdistrict attendance agreement.” AB 1156 is effective July 1, 2012.

If you have any questions regarding these new bills, or any other questions regarding bullying or interdistrict transfers in general, please contact one of our eight offices located statewide or visit our website.

Written by:

Sloan Simmons
Shareholder and Student Practice Group Co-Chair
Sacramento Office
ssimmons@lozanosmith.com

Kirsten Kuitu
Associate
Fresno Office
kkuitu@lozanosmith.com

© 2011 Lozano Smith

NEW LEGISLATION ADDRESSES LABOR ISSUES RELATED TO PUBLIC WORKS PROJECTS

October 2011
Number 61

Two bills signed by Governor Brown directly affect labor issues on public works projects. Assembly Bill (AB) 587 renews existing law exempting volunteer labor from prevailing wage requirements. Senate Bill (SB) 922 authorizes public agencies to enter into project labor agreements to avoid delays and interruptions on construction projects.

AB 587
Labor Code section 1720.4 permits public agencies to use volunteer labor without paying prevailing wages. A volunteer is “an individual who performs work for civic, chartable, or humanitarian reason for a public agency . . . without promise, expectation, or receipt of any compensation for work performed.” This provision of the Labor Code was going to sunset at the end of 2011. AB 587 extends this provision for another five years, until January 1, 2017.

SB 922
SB 922 authorizes public agencies to enter into, and to require contractors to enter into, project labor agreements prior to awarding a contract for construction of a public works project to avoid delays and interruptions to construction caused by strikes, lockouts or work stoppages. In recent years, public agencies have increasingly relied on project labor agreements with contractors and labor unions to gain certainty that public construction projects will not be interrupted by labor unrest. In turn, the project labor agreements reduce the chances of cost overruns or delays as a result of such interruptions.

Project labor agreements have been the subject of some controversy and litigation. SB 922 codifies the legality of such agreements, but also places certain restrictions and requirements as to the terms. Specifically, Public Contract Code section 2500 requires that any project labor agreement include five “taxpayer protection provisions”:

(1) The agreement prohibits discrimination based on race, national origin, religion, sex, sexual orientation, political affiliation, or membership in a labor organization in hiring and dispatching workers for the project;

(2) The agreement permits all qualified contractors and subcontractors to bid for and be awarded work on the project without regard to whether they are otherwise parties to collective bargaining agreements;

(3) The agreement contains an agreed-upon protocol concerning drug testing for workers who will be employed on the project;

(4) The agreement contains guarantees against work stoppages, strikes, lockouts, and similar disruptions of the project; and

(5) The agreement provides that disputes arising from the agreement shall be resolved by a neutral arbitrator.

In short, project labor agreements on public works projects are now expressly permitted underCalifornialaw, thus eliminating some of the uncertainty and controversy surrounding them.  However, a public agency must not forget to include the above required terms in any such agreement.

If you have any questions about this new legislation or construction issues generally, please contact one of our eight offices located statewide or visit our Construction Advice and Litigation page on our website.

Written by:

Megan Macy
Shareholder and Facilities and Business Practice Group Co-Chair
Sacramento Office
mmacy@lozanosmith.com

Arne Sandberg
Senior Counsel
Walnut Creek Office
asandberg@lozanosmith.com

© 2011 Lozano Smith

NEW DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING REGULATIONS CHANGE RULES FOR FILING CLAIMS OF DISCRIMINATION

October 2011
Number 60

In 2010, the California Department of Fair Employment and Housing (DFEH) proposed procedural regulations for complaints received by the DFEH. After a series of public hearings and comments by the public, the final regulations were approved on September 7, 2011. The new regulations formalize the existing procedural steps for intake, filing, investigation, settlement and prosecution of complaints for discrimination, harassment and retaliation based upon a protected classification in the workplace or in housing. The Regulations took effect October 7, 2011 and are codified in the California Code of Regulations, title 2, sections 10000 through 10066.

The regulations require that complaints submitted to the DFEH: (1) be filed within one year from the date upon which the alleged unlawful practice occurred, unless there is an exception under the law; (2) be in writing; (3) be verified; and (4) outline the facts that give rise to the violation.

The new regulations conform to the above requirements, but also make filing a complaint easier.  Some of the changes to the process include:

  • Electronic Filing – Complaints can now be filed electronically via the DFEH website.
  • Complaining Party Not Required to Sign – The complaint no longer has to be signed by the complainant, but may be signed by the complainant’s attorney or a person designated by the complainant to sign on his or her behalf, unless filed electronically. Complaints filed electronically do not have to be signed. If someone other than the complainant signs the complaint, the complainant must still sign an oath or affidavit that the facts in the complaint are true to the best of his or her knowledge.
  • Liberal Construction – Complaints will be construed liberally. The DFEH will construe facts to support other claims of harassment, retaliation or discrimination even if such claims are not expressly stated. Consequently, a common defense used by employers to argue that the employee did not comply with the administrative requirement to provide the employer notice of the allegations may no longer be available.
  • Special Consideration for Retaliation – Retaliation will be given special consideration. If a retaliation complaint is fixed after an original complaint of discrimination or harassment, even if it is after the one year statute of limitation, the DFEH will amend the original complaint to include retaliation, thereby precluding any argument that the claim is untimely.
  • Timeliness Not a Complete Bar – The DFEH will also accept complaints where the timeliness is questionable and will subsequently determine whether the complaint is timely through the investigation process.
  • Medical Authorization – The DFEH can require a release of medical records by the complainant in order to analyze a complaint of disability discrimination, but the DFEH will not provide the records to the employer, until such time as an accusation is filed or the documents are subpoenaed.
  • Effect of Prior Waivers – The DFEH will also accept claims where a prior Waiver Agreement/ Release of All Claims has been signed and will determine if the waiver is valid.
  • Amendments Allowed – All open complaints may be amended to add, delete or change bases, allegations, facts or wording; correct a name; or add a group or class to an individual complaint.

The regulations also outline the investigation, conciliation, mediation and filing of accusations by the DFEH.

In the past it has been difficult to find and/or interpret DFEH procedures. While the new regulations are helpful in outlining DFEH procedures, the regulations also make it easier for employees to file a complaint and limit or eliminate many of the defenses commonly used by employers.

If you have any questions about these amendments or how they relate to school district operations, please contact one of our eight offices located statewide or visit our website.

Written by:

Dulcinea Grantham
Shareholder and Labor & Employment Practice Group Co-Chair
Walnut Creek Office
dgrantham@lozanosmith.com

Jenell Van Bindsbergen
Associate
Fresno Office
jvanbindsbergen@lozanosmith.com

© 2011 Lozano Smith

BILL AMENDS LAWS REGULATING CalPERS

October 2011
Number 59 

On October 3, 2011, Governor Brown signed into law Assembly Bill (AB) 1028, which updates and clarifies a number of laws governing the administration and management of the California Public Employees’ Retirement System (CalPERS). The bill touches on a range of issues, the most significant of which include the employment of retired CalPERS members by public agencies, as well as the payment of death benefits with respect to decedents lacking named beneficiaries. All changes will take effect January 1, 2012.

Employment of Retirees

One of the more significant changes to current law tightens the rules governing the employment of retired CalPERS members. State law generally prohibits a CalPERS retiree from being employed by a contracting agency in any capacity unless he or she is first reinstated from retirement. The exceptions to this general rule are that a retiree may serve without reinstatement if he or she is appointed to a position of limited duration that requires specialized skills, or is appointed during an emergency to prevent stoppage of public business. AB 1028 amends Government Code section 21221 to further narrow these exceptions by permitting a retiree to be appointed to a vacant position only on an interim basis. During the appointment, the employer must recruit to permanently fill the position. The compensation for the interim appointment may not exceed the maximum published pay schedule for the vacant position.  Finally, AB 1028 prohibits the appointment of a retiree more than once.

AB 1028 also modifies Government Code section 21228, which addresses persons who have retired due to a disability, but who do not meet the mandatory age for retirement applicable to persons in that position. The statute authorizes such a retiree to be re-employed without reinstatement from retirement so long as the agency’s governing board finds that the retiree’s disability does not prevent the employment, and that the retiree is being reinstated to a position other than the one from which he or she retired. The amended statute now also prohibits such a retiree from being concurrently employed under other specified provisions that allow for employment after retirement.

Payment of Death Benefits

Many CalPERS retirees do not keep their beneficiary designations up to date. If the retiree does not have a designated beneficiary at the time of death, or if the beneficiary has died, CalPERS pays out the death benefits in the order provided by statute (spouse, children, parents, siblings, etc.). Often, the amount to be paid is small and may be disbursed by a public administrator without going through probate. AB 1028 modifies Government Code 21493 to authorize the payment of death benefits that do not exceed $30,000 to a public administrator once the public administrator presents to CalPERS the required certification.

In addition, in order to make Government Code section 21533.5 consistent with federal law, AB 028 mandates that survivors of a member who dies while performing qualified military service are entitled to any benefits they would have received had the member remained an active employee.

Administrative Changes

AB 1028 amends the definition of “payrate” in Government Code section 20636.1, the statute that sets out the requirements for the reporting of compensation and service for school employees. The existing definition does not include amounts deducted for participation in a tax-deferred retirement plan, in a deferred compensation plan, or in a flexible benefits program. However, it has been common practice to include these deducted amounts in the reporting of compensation. AB 1028 clarifies that these amounts should be included.

If you have any questions about these amendments or how they relate to your operations, please contact one of our eight offices located statewide or visit our website.

Written by:

Thomas Manniello
Shareholder
Monterey Office
tmanniello@lozanosmith.com

Jonathan Dale
Associate
Monterey Office
jdale@lozanosmith.com

© 2011 Lozano Smith

NEW REQUIREMENTS FOR STUDENT ATHLETES

October 2011
Number 58 

The Governor recently signed Assembly Bill (AB) 25 which adds two new requirements for student athletes related to concussions and head injuries. The bill adds section 49475 to the Education Code and is effective January 1, 2012.

This new law requires that each year, schools issue a concussion and head injury information sheet for athletes and their parents or guardians to sign and return before the athlete begins practice or competition. This requirement is not limited to contact sports or to students of a certain age. Accordingly, school districts should prepare and require a signed concussion and head injury information form for all student athletes participating in athletic programs as of January 1, 2012.

In addition, AB 25 requires that all student athletes participating in athletic programs (outside of their regular physical education courses or activities during the regular schoolday) suspected of sustaining a concussion or head injury shall be immediately removed from the activity and prohibited from returning until he or she is evaluated by a licensed health care provider. The athlete will be permitted to return only upon written clearance from the licensed health care provider.

This bill originally imposed requirements on third parties using district facilities for any purpose involving any physical or athletic activity, but that language was deleted from the original version of the bill.

LOZANO SMITH attorneys are available to assist school districts in staying current with the new legislation regarding students. If you have any questions about the concussion and head injury information sheet, these new procedures, or student matters in general, please contact one of our eight offices located statewide or visit our website.

Written by:

Ruth Mendyk
Shareholder
Fresno Office
rmendyk@lozanosmith.com

Anne Collins
Associate
Sacramento Office
acollins@lozanosmith.com

© 2011 Lozano Smith

GOVERNOR SIGNS LEGISLATION REGARDING RESIDENCY REQUIREMENTS, STUDENT RECORDS, AND SCHOOL SAFETY PLANS

October 2011
Number 57

Residency Requirements

The Governor signed two bills that address student residency requirements. Assembly Bill (AB) 207 creates Education Code section 48204.1, which requires school districts to accept a wide range of documents from parents or guardians as proof that their student meets residency requirements, including property tax payment receipts, rental property contracts, utility service contracts, pay stubs, voter registration, and declarations of residency. However, school districts may conduct reasonable investigations when it is suspected that false or unreliable information has been provided.

AB 207 also repeals Education Code section 48204.6, which currently requires school districts adjacent to international borders to accept a wide range of documents for purposes of establishing residency, and to conduct reasonable investigations to determine whether a student meets residency requirements. This provision will no longer be necessary once section 48204.1 is effective, as the new law will apply to students seeking enrollment in anyCaliforniaschool district, whether or not adjacent to an international border. 

Additionally, Senate Bill (SB) 381 extends the sunset date for Education Code section 48204(b), commonly referred to as the “Allen Bill,” from July 1, 2012, to June 30, 2017. Section 48204 allows a student to attend school in a district, through grade 12, so long as at least one of the student’s parents or legal guardians works within the district’s attendance boundaries. Under section 48204 (b) as amended, in order for a student to seek a transfer or establish residency, the student’s parent or legal guardian must be employed for at least 10 hours per school week within the boundaries of the district.

Student Records

AB 143 makes changes to Education Code sections 49061 and 49076 regarding student directory information and the release of student records.

AB 143 changes the definition of “directory information” in section 49061 to include a student’s email address, and exclude a student’s place of birth.

Currently, district attorneys and probation officers may access student records to investigate criminal conduct, ward of the court determinations, and probation violations. AB 143 amends Education Code section 49076 to authorize attorneys who represent minor students to access student records for these same purposes. The bill also deems probation officers, district attorneys, and students’ attorneys “local officials” for purposes of federal law—specifically, 34 C.F.R. section 99.31(a)(5)(i) under the Family Educational Rights and Privacy Act (FERPA)— regarding the release of student records. Records obtained pursuant to these provisions are subject to specified evidentiary rules in juvenile court proceedings. Additionally, public officials who receive student records will now be required to certify in writing to school districts that the information they receive will not be disclosed to another party without the prior written consent of the student’s parent or other holder of the student’s educational rights, subject to specific exemptions under federal and state law.

AB 143 also authorizes the release of student records to those not normally permitted access, if the records are redacted to exclude personally identifiable information.

Comprehensive SchoolSafety Plans

Under current law, schoolsite councils at school districts or county offices of education are responsible for developing comprehensive school safety plans. Under Education Code section 32281, as amended by AB 680, a school district or county office of education may develop the parts of a comprehensive school safety plan that address tactical responses to violent crimes resulting in death or serious injury at school in consultation with law enforcement and union representatives, without the schoolsite council’s involvement. These portions of the school safety plan may be exempted from public disclosure. Additionally, governing boards may meet in closed session with law enforcement officials to approve the tactical response plans.

The four bills described above go into effect on January 1, 2012. If you have questions or would like additional information on these changes to the law, or any other issues regarding residency requirements, student records, or school safety plans, please contact one of our eight offices located statewide or visit our website.

Written by:

Sloan Simmons
Shareholder and Student Practice Group Co-Chair
Sacramento Office
ssimmons@lozanosmith.com

Travis Lindsey
Associate
Sacramento Office
tlindsey@lozanosmith.com

© 2011 Lozano Smith

ASSEMBLY BILL 189 CHANGES CATEGORICAL FLEXIBILITY AND ADULT SCHOOL FEES

October 2011
Number 56

Governor Brown recently signed Assembly Bill (AB) 189, which increases the public hearing requirements before a school district or county office of education may use specified categorical funding for any educational purpose. In addition, AB 189 allows a local educational agency to charge a fee for adult school English and citizenship classes until July 1, 2015.

The 2009-2010 state budget included a provision that gave school districts and county offices of education the flexibility to use funds apportioned for certain categorical programs for any educational purpose (often called “Tier 3 categorical flexibility”). This flexibility was set to expire at the end of the 2012-2013 fiscal year. Earlier this year, the legislature extended the sunset date from 2013 to 2015 when it enacted Senate Bill (SB) 70, as part of the 2011 state budget package. However, due to concerns that Tier 3 categorical flexibility was resulting in the elimination of adult schools and other categorical programs, the legislature subsequently enacted AB 189 to impose additional public hearing requirements before these funds can be used for other purposes.

Existing law requires the governing board to hold a regularly scheduled public hearing where it shall take testimony from the public, and to conduct a public discussion prior to approving or disapproving an alternate use of Tier 3 categorical funds. AB 189 amends Education Code section 42605 and requires that this public hearing be held prior to, and independent from, a meeting where the governing board adopts a budget. In addition, if any program is proposed to be eliminated as a result of the exercise of categorical flexibility, that program is to be specifically identified in the notice of agenda of the public hearing or hearings.

In addition, a school district or county office of education is currently prohibited from charging a fee for adult school English and citizenship classes. In order to help prevent these classes from being eliminated due to categorical flexibility, AB 189 amends Education Code section 52612 to allow school districts and county offices of education to charge a fee for these classes until July 1, 2015. This represents a significant change to the operation of adult schools.

Both of these changes will be effective January 1, 2012. If you have any questions regarding categorical flexibility or adult school issues, please contact one of our eight offices located statewide or visit our website.

Written by:

Ruth Mendyk
Shareholder
Fresno Office
rmendyk@lozanosmith.com

Michael Dunne
Paralegal
Fresno Office
mdunne@lozanosmith.com

© 2011 Lozano Smith

NEW LAWS EASE PROOF OF IMMUNIZATION AND COURSE CREDIT REQUIREMENTS FOR FOSTER YOUTH TRANSFERRING TO NEW SCHOOLS

October 2011
Number 55

The Governor recently signed into law two new bills impacting the education of foster youth inCalifornia. Assembly Bill (AB) 709 will allow foster children, when enrolling in new schools, to enroll in and attend school immediately even if they are unable to produce medical records, including proof of immunization history, at the time of enrollment. Senate Bill (SB) 578 places new duties on school districts to accept coursework for transferring foster youth. 

AB 709

AB 709 is intended to remove unnecessary barriers and delays in enrolling students who are in foster care. Under current law, foster children have the right to remain at their schools of origin and to attend feeder schools as they transition between grade levels. Foster children may waive this right if a determination is made by their assigned foster child liaison, in consultation with the foster child and the person holding the educational decisionmaking rights for the foster child, that the transfer is in the child’s best interests.  Once this determination is made, the foster child must be enrolled immediately in another public school in the attendance area in which the foster child resides.

AB 709 takes effect January 1, 2012, adds section 120341 to the Health and Safety Code, and amends Education Code section 48853.5. AB 709 will allow foster children, when transferring into a new school, to immediately enroll in the new school without proof of immunizations. School districts are still obligated after enrolling foster children, however, to obtain the immunization records for these students or to ensure that they are immunized.

SB 578

SB 578 is intended to help students in foster care maintain credit towards graduation and prevent them from falling behind with each change in school placement. Effective January 1, 2012, SB 578 will require school districts and county offices of education (COE) to award partial and complete class credit for successfully completed coursework to students in foster care who transfer from another public school, a juvenile court school or a nonpublic, nonsectarian school or agency. Full or partial credit for satisfactorily completed coursework for transferring foster youth must be granted even if the student did not complete the entire course. A school district or COE must apply credits accepted from the former school to the same or equivalent course offered by the district or COE. For example, if students earn core curriculum class credit at their former schools, they would be given core curriculum class credit at the new school. According to the Senate Committee on Education’s Bill Analysis, prior to SB 578, there was nothing in the law that required schools to apply course credits towards core curriculum and graduation requirements, and often the transferred classes were treated as elective credits instead. This often resulted in foster youth lagging behind their peers and losing months of academic progress when they transferred to new schools.

SB 578 also provides that districts and COEs cannot require foster youth to retake courses that were satisfactorily completed in their entirety at other schools. If the coursework was only partially completed, students may not be required to retake the completed portion of the courses unless the school district, in consultation with the holder of the students’ educational rights, determines that these students are reasonably able to complete the course requirements in time for high school graduation. Further, when awarding credit for partially completed coursework in a particular course, foster youth must be enrolled in the same or equivalent course, if applicable, at their new schools to allow them to complete the courses.

Finally, SB 578 prohibits school districts or COEs from preventing foster youth from taking or retaking courses to meet the eligibility requirements for admission to the CaliforniaStateUniversityor the Universityof California.

For questions about this legislation or the educational rights of foster youth in general, please contact one of our eight offices located statewide or visit our website.

Written by:

Sloan Simmons
Shareholder and Student Practice Group Co-Chair
Sacramento Office
ssimmons@lozanosmith.com

Mary Gates
Paralegal
Monterey Office
mgates@lozanosmith.com

© 2011 Lozano Smith

GOVERNOR VETOES PROPOSED EDUCATION BILLS REGARDING CHANGES TO THE OPEN ENROLLMENT ACT AND THE LAW ON STUDENT FEES

October 2011
Number 54

Over the weekend, Governor Brown vetoed two bills relating to K-12 students. Assembly Bill (AB) 47 would have modified the law under the Open Enrollment Act, which controls the right to student transfers under specific conditions. AB 165 would have provided some clarity regarding permissible student fees, charges, donations and fundraising as well as established a number of procedures and standards in this area.

Veto of AB 47

AB 47 sought to cure a number of complaints regarding the Open Enrollment Act (Education Code sections 48350 et seq.), which became effective April 12, 2010. First, AB 47 would have excluded from the list of 1,000 “open enrollment” or “Romero Bill” schools those schoolsites with an Academic Performance Index (API) of 700 or above, as well as schools with prior year API growth of 50 points or more. These changes were aimed at relieving the frustration of school districts with very high performing schools that have been identified as “low performing schools” under the Open Enrollment Act. Second, AB 47 would have made charter schools eligible for inclusion on the open enrollment list of 1,000 schools. Current law excludes charter schools from the list, regardless of the schools’ API scores. AB 47 also would have excluded special education programs operated by county offices of education and state special schools. Finally, the bill would have expressly prohibited a school district of enrollment from rejecting the transfer of special education or English learner applicants selected through the district’s random lottery process.

As a result of the Governor’s veto, none of the above proposed changes will go into effect. The Governor’s veto message stated the proposed changes “go too far and would undermine the intent of the original law.” The Governor highlighted the State Board of Education’s waiver process under which high performing schools may be exempted from inclusion on the Open Enrollment Act list of 1,000 schools, and encouraged use of this process as a means to exempt schools with strong records of student performance from the list. (Please see 2010 Lozano Smith Alert No. 14 for more on the waiver process.) 

Veto of AB 165

AB 165 was at least in part, if not primarily, the result of pending student fees litigation initiated in Los Angeles County Superior Court by the American Civil Liberties Union (ACLU) and a proposed settlement agreed upon between the parties. (Please see Client News Brief No. 60, December 2010 for more on the proposed settlement.) The bill was purportedly drafted to affirm existing law, includingCalifornia’s constitutional free school guarantee, regarding permissible and impermissible student fees, charges, donations and fundraising. The bill also would have instituted three new procedural mechanisms and requirements regarding student fees, including: (1) extending Uniform Complaint Process (UCP) procedures to include complaints regarding student fees; (2) requiring school districts and charter schools to determine annually whether unlawful student fees are or were being charged, announce in an open board meeting any unlawful fees identified, and reimburse all improper fees; and (3) adding student fees as a subject in the annual audit process for each school district, with potential penalties calling for county offices of education to withhold funds from school districts based upon audit exceptions relating to improper student fees.

The Governor’s veto message stated that AB 165 went too far, as it imposed new complaint, hearing and audit procedures for all 1,042Californiaschool districts and over 1,200 charter schools, even where there might be no evidence of improper fees. With the veto of AB 165, the three proposed procedural and corrective schemes will not apply to student fees. However, also as a result of the Governor’s veto, the ACLU’s pending student fees litigation will likely proceed and may result in significant legal ramifications in this area. Parties to that litigation include the State Superintendent of Public Instruction, the California Department of Education, and the State Board of Education. Without the structure and procedures proposed in AB 165, and absent a clear result in the ACLU student fees litigation, the growing trend of lawsuits against K-12 educational institutions regarding student fees is likely to continue.

LOZANO SMITH can assist with all issues related to the Open Enrollment Act, including the waiver process, as well as school fees and charges, including conducting trainings for staff and performing a legal audit to determine whether district practices regarding the charging of fees, solicitation of donations, and fundraising comply with existing law.

If you have any questions regarding the veto of these bills or would like assistance with reviewing your district’s student transfer policies or in conducting an audit of your district’s student fees policies and practices, please contact one of our eight offices located statewide or consult our website. 

Written by:

Thomas Manniello
Shareholder and Student Practice Group Co-Chair
MontereyOffice
tmanniello@lozanosmith.com

Sloan Simmons
Shareholder and Student Practice Group Co-Chair
SacramentoOffice
ssimmons@lozanosmith.com

©2011 Lozano Smith

NEW LABOR COMPLIANCE REQUIREMENTS SET TO TAKE EFFECT IN 2012

October 2011
Number 53

On September 30, 2011, Governor Brown signed into law Assembly Bill 436 (AB 436), which was enacted to address certain concerns about the labor compliance monitoring program established last year by the Department of Industrial Relations (DIR). As a result of this new bill, school districts, community college districts and other public agencies undertaking construction projects using state bond proceeds will again be subject to new labor compliance requirements, which may include monitoring by, and the payment of a fee to, the DIR. These changes are expected to take effect early next year.

Previously, in 2009 the Legislature enacted Senate Bill X2 9 (SBX2 9), which mandated significant changes to how Labor Compliance Program (LCP) services are provided for school and community college construction projects. (Please see Client News Brief No. 16, March 2009.) Those changes were to go into effect when implementing regulations were adopted by the DIR. In the summer of 2010, the DIR adopted the regulations provided for by SBX2 9. Those regulations established a Compliance Monitoring Unit (CMU) within the DIR and provided for the collection of a mandatory fee to be imposed on all construction projects financed by any state-issued bond, in addition to certain design-build projects. (Please see Client News Brief No. 28, July 2010.) Those new regulations went into effect on August 1, 2010. Shortly after that, however, concerns were raised by state bond counsel and others as to the imposition of the fee, which resulted in the DIR adopting emergency regulations suspending the operation of the CMU and the collection of the fee. (Please see 2010 Lozano Smith Alert No. 13 and Lozano Smith Alert No. 16.) Those emergency regulations were subsequently extended twice, but are set to expire on November 1, 2011. (Please see 2011 Lozano Smith Alert No. 8 and Lozano Smith Alert No. 21.)

AB 436 was enacted following discussions between the DIR, the Department of Finance and other agencies as to how to address the concerns about the CMU fee provided by the 2010 regulations. The primary changes made by AB 436 are (1) to change the effective date of the CMU program and fee from August 1, 2010 to January 1, 2012, or later, and (2), instead of a flat rate fee set by the DIR (which the 2010 regulations had set at ¼ of one percent of the bond proceeds), a charge will be assessed by the DIR, in consultation with the Department of Finance, to reimburse the DIR for its “reasonable and directly related costs,” not to exceed ¼ of one percent of the state bond proceeds used for the project. This new fee, and the monitoring activities of the CMU, will take effect on January 1, 2012, or on the effective date of the new implementing regulations being prepared by the DIR, whichever occurs later.

The DIR is currently finalizing the new regulations, which will repeal and replace portions of the 2010 regulations to conform to AB 436. The new regulations are expected to be submitted to the Office of Administrative Law (OAL) on or before the end of October. If the OAL approves the new regulations, they are expected to take effect on January 1, 2012. Construction projects where the contract was awarded prior to the effective date of the new regulations will not be subject to the new requirements. Agencies which have approved in-house LCP programs should still be able to continue using those programs. Other, limited exemptions may also apply in certain circumstances.

It is expected that additional details will be provided by the DIR/CMU prior to the effective date of the new regulations, including more information on how the fee will be determined and assessed, as well as specifics regarding the monitoring services to be conducted by the CMU. Lozano Smith will continue to monitor these developments and will provide further information when it is available.

In the meantime, if you have any questions regarding labor compliance requirements or construction matters in general, please contact one of our eight offices located statewide or consult our website.

Written by:

Ruth Mendyk
Shareholder and Facilities & Business Practice Group Co-Chair
Fresno Office
rmendyk@lozanosmith.com

Michael Dunne
Paralegal
Fresno Office
mdunne@lozanosmith.com

© 2011 Lozano Smith

CALIFORNIA SOLAR INCENTIVE PROGRAM EXPANDED

October 2011
Number 52

Dispelling concerns that state incentives for public agency solar electricity projects might evaporate, the governor has signed legislation increasing the amount the California Public Utilities Commission (CPUC) can allocate to that purpose. Senate Bill (SB) 585, signed by Governor Brown on September 22, 2011 at an elementary school inFowlerUnifiedSchool District, increases the size of the California Solar Initiative (CSI) by $200 million. Created in 2007, CSI is a state program that offers financial incentives to commercial, residential, nonprofit and government solar energy projects. For public agencies, CSI offers a performance-based incentive that reimburses a significant portion of the agency’s costs of installing solar photovoltaic facilities over the first five years after such a project’s completion.

CSI is funded by charges on the ratepayers ofCalifornia’s three investor-owned utilities. The law sets a cap on the total size of the program, available incentive amounts for the different classes of eligible payees. As Lozano Smith reported last year in our Client News Brief No. 63, December 2010, the CPUC briefly suspended CSI payments for non-residential applicants in July 2010 because the cap was within reach. With the enactment of SB 585, the CPUC will be able to apply additional funds to the payment of incentives for public agency projects.

Indeed, the availability of CSI funds has been one of the primary factors driving a recent surge in such public agency solar photovoltaic projects statewide, and in recent months public agencies have expressed concern that incentive funds may not be available for projects still in the planning stages. With the increase in the size of CSI, public agencies considering solar photovoltaic projects can expect that the incentive will remain available in the near term.

Lozano Smith attorneys have substantial experience evaluating, structuring and negotiating solar electricity and other energy conservation projects for public agencies. If you have questions about your agency’s options for such projects, or for more information about available incentives, please contact one of our eight offices located statewide or consult our website. 

Written by:

DevonLincoln
Senior Counsel
MontereyOffice
dlincoln@lozanosmith.com

© 2011 Lozano Smith