New Laws Update Nutrition Program Purchasing Rules

October 2017
Number 62

Governor Jerry Brown has signed four bills that update purchasing rules related to school food and nutrition programs and improve access to healthy food. Each of these bills will take effect January 1, 2018.

Senate Bill 544: Bill Offers Clarity on Food Contract Award Rules

Senate Bill (SB) 544 resolves an inconsistency between state and federal law regarding the award of contracts in support of child nutrition programs by clarifying that school districts can consider factors other than price in awarding these contracts. This new law provides school districts with flexibility in purchasing items and services for their child nutrition programs.

Existing state law requires school districts to award any contract involving an expenditure that is over the bid limit (currently $88,300) for the purchase of equipment, materials, supplies or services, other than construction services, to the lowest responsible bidder. As a condition of the receipt of federal funds for child nutrition programs, school districts must also comply with federal regulations that permit the consideration of factors in addition to price. The factors include contractor integrity, compliance with public policy, record of past performance and financial and technical resources. These differences between state and federal requirements have been a source of confusion for many districts.

SB 544 provides some clarity by modifying section 20111, subdivision (c) of the Public Contract Code to expressly allow school districts to follow federal regulations and to consider other factors in addition to price in awarding contracts in support of their federally-funded child nutrition programs. Under the new state law, price must be the primary consideration, but it does not have to be the only determining factor.

Senate Bill 557: Schools Permitted to Donate Uneaten Food

SB 557 will allow local educational agencies to provide “sharing tables” where faculty, staff and students can place prepackaged food items, uncut produce and unopened bags of sliced fruit and cartons of milk to be donated to a food bank or other nonprofit charitable organization. This bill exempts these foods from the current California Retail Food Code regulations, which prohibit food that is unused or returned after being served or sold and in the possession of a consumer, from being offered as food for human consumption. Food placed on sharing tables must first be offered to students during regular meal times before it can be donated. (See Ed. Code, §§ 49580 et seq. and Health & Saf. Code, § 114079.)

Senate Bill 730: State Will Monitor Compliance with “Buy American” Provision

SB 730 will require the California Department of Education to monitor whether school districts receiving a federal subsidy to provide free and reduced price meals are complying with the “Buy American” provision in the federal National School Lunch Act, which requires school food authorities to purchase, to the maximum extent possible, domestic commodities or products. This bill also requires the Department to provide requirements, resources and best practices on its website and to distribute federal guidance and regulations related to the Buy American provision. (See Ed. Code, § 49563.) This bill does not implicate the separate California Buy American Act that was found to be unconstitutional because it is preempted by federal law.

Assembly Bill 836: Schools May Dispense Juice from Vending Machines

Assembly Bill (AB) 836 authorizes the state Department of Public Health (DPH) to modify previous requirements of the California Retail Food Code that prohibit the dispensing of certain bulk foods from vending machines. Specifically, the bill requests that DPH modify this prohibition to permit juice stored in bulk containers to be dispensed from a vending machine under certain conditions. These specialty vending machines are purported to offer healthy food options to customers by making it easy and convenient to access freshly made vegetable and fruit juices. (See Health & Saf. Code, § 113936.)

For more information on these bills or on law governing school nutrition programs in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Kelly M. Rem

Partner

Alyse Pacheco

Associate

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

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Lead-Safe Schools Protection Act: The Continuing Duty to Address Lead

October 2017
Number 61

Schools, colleges and other local and state agencies have a continuing obligation to address lead in the course of new construction, modernization and maintenance projects. Various provisions of California law found in the Lead-Safe Schools Protection Act, the Health and Safety Code and Title 17 of the California Code of Regulations ban the use of materials containing lead in new construction and require that public agencies use properly trained and certified personnel to plan for and address existing materials containing lead that will be disturbed during the course of modernization and maintenance projects.

Voters’ approval of the Proposition 51 state school bond in November 2016 and of more than 200 school and community college district bond measures are contributing to a new wave of public works construction. When undertaking these projects, public agencies should remain vigilant in enforcing the ban on lead in their new construction projects and complying with current regulations to address existing materials containing lead in modernization and maintenance projects.

The Lead-Safe Schools Protection Act

Enacted in 1992, the Lead-Safe Schools Protection Act (the Act) implemented a program of prevention and protection for California public elementary and preschools and related day care facilities. The Act focuses on protecting the youngest students because lead is highly toxic and exposure is particularly dangerous for children ages six or younger.

The Act required the former Department of Health Services (now the Department of Public Health) to conduct a sample survey of California schools to identify risk factors to predict lead contamination. Risk factors included location in relation to high-risk areas, age of facilities and likely use of lead paint, numbers of children enrolled under the age of six and results of lead screening programs. Based on the survey results, which were released in 1998, the Department estimated that nearly 96 percent of schools had some lead paint, more than 18 percent had lead in drinking water at or above the federal action level and six percent had lead levels in soil that exceeded federal standards.

Lead hazards can include lead-based paint or paint presumed to be lead-based (applied before 1978) that is deteriorated or disturbed, lead-contaminated dust or soil or any other nuisance which may result in persistent and quantifiable lead exposure. Lead activities include abatement, hazard evaluation, construction work or any activity which disturbs paint known or presumed to contain lead, or creates a lead hazard.Lead-related construction work means any construction, alteration, painting, demolition, salvage, renovation, repair or maintenance of any public building, including preparation and cleanup, which by using or disturbing materials or soil containing lead may result in significant exposure to adults or children.

Independent of the Act, provisions of the California Health and Safety Code provide that the Department or other local enforcement agency may order a public agency to abate or otherwise correct a lead hazard that exists or is being created on the public agency’s property, and may issue a cease and desist order. Failure to comply with such an order can result in a fine of up to $1,000 for the first violation, and up to $5,000 and imprisonment in county jail for up to six months for each subsequent violation, in addition to other penalties and remedies allowed by law.

Takeaways

To comply with the Act, school districts must not use materials containing lead, including paint, plumbing and solders, in the construction of any new school facility or modernization or renovation of existing school facilities. Districts must also utilize trained and state-certified contractors, inspectors and workers in any abatement action.

For more information on the Lead-Safe School Protection Act or on public agency construction in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.
Written by:

Devon B. Lincoln

Partner & Co-Chair

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Two New Laws Intended to Address Teacher Shortage

September 2017
Number 54

Governor Jerry Brown signed two bills intended to ease California’s teacher shortage. Assembly Bill (AB) 681 seeks to expedite processing of credential applications for teachers who studied in other countries, while AB 170 eliminates the requirement that an applicant for a multiple subject teaching credential possess a bachelor’s degree in a subject other than education.

Both laws take effect January 1, 2018.

AB 681 will give the Commission on Teacher Credentialing (CTC) the authority to deem other countries’ national standards for coursework, programs or degrees equivalent to those offered by a regionally accredited institution in the United States. This allows a potential employee who holds or is eligible for a credential in another country to have satisfied California’s teaching credential requirements. For some job candidates, this will shortcut the case-by-case process of foreign transcript evaluation, and quickly move them into classrooms.

The bill will require the CTC to adopt regulations that establish uniform standards and procedures for determining whether another country’s national standards are considered equivalent to California’s.

The bill will also require school districts, county offices of education and charter schools applying for visas for potential employees to report annually to the state Department of Education the number of visas applied for and the number granted to certain nonimmigrant alien job candidates.

AB 681 also modifies the requirement that county boards of education obtain a CTC certificate of clearance before issuing a temporary certificate authorizing classroom service-a relatively new requirement imposed by 2016’s AB 1918 that had unintended impacts on teachers adding new subject areas to an existing credential. AB 681 will allow teachers with a “credential, certificate or permit authorizing the performance of services in public school” to obtain a temporary certificate without first receiving a certificate of clearance from the CTC.

AB 170 eliminates the requirement that a candidate for a multiple subject teaching credential or preliminary multiple subject teaching credential must possess a baccalaureate degree in a subject other than professional education. Eliminating this requirement allows students who earn a degree in education to more quickly complete a credentialing program.

If you have any questions about AB 681 or AB 170 or teacher credentialing in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Dulcinea A. Grantham

Partner & Co-Chair

Roxana R. Khan

Associate

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Environmental Review Not Necessarily Required Prior to Approval of a Real Property Purchase Agreement

September 2017
Number 49

The Fourth District Court of Appeal has ruled that the execution of a purchase and sale agreement for real property that is contingent upon compliance with the California Environmental Quality Act (CEQA) does not trigger a public agency’s duty to prepare an environmental impact report (EIR) under CEQA.

The California Environmental Quality Act

CEQA is a complicated body of law which requires public entities to consider environmental effects of their projects before approving them. This generally involves a three-step process where the agency must first determine whether a given activity is a “project” governed by CEQA. If so, the second step is to determine whether the project is exempt under either a statutory or categorical exemption, and if no exemption applies, the public agency proceeds to a third step of considering whether the project may have a significant effect on the environment. If all impacts are insignificant or can be mitigated to a level of less than significant, the agency may prepare a negative declaration. If the possibility of an unmitigated impact remains, then a more extensive EIR is required.

Background

In Bridges v. Mt. San Jacinto Community College District, the governing board of a community college district approved an agreement to purchase real property, contingent on CEQA compliance. A pair of citizens sued, alleging the district was required to prepare an EIR before executing the agreement. Both the trial court and the Court of Appeal disagreed, confirming that a public agency is not required to complete CEQA review prior to entering into an agreement to acquire real property, as long as the acquisition is contingent on completion of CEQA review. The appellate court held that CEQA requires the preparation of an EIR before the purchase of real property is final, but not before merely executing a purchase and sale agreement contingent upon CEQA compliance.

This exception to CEQA review, however, is narrowly construed. An agency cannot hide behind a contingent purchase and sale agreement to postpone preparation of an EIR. The applicable legal test is whether an agency has committed itself to a definite course of action. No definite course of action can be approved before the EIR is prepared, and a real property purchase and sale agreement contingent upon CEQA review alone is not a definite course of action. Once a definite course of action is taken by a public agency, however, CEQA requirements are triggered. For example, California’s CEQA guidelines authorize a public agency to enter into a land acquisition agreement if it has conditioned future use of the land on CEQA compliance, so long as it has not already approved the use of the site or specific facilities, which would require CEQA review. As long as an agency does not engage in any such action or agreement that would commit it to a definite course of action regarding a specific site, CEQA review is not required before executing a purchase and sale agreement for real property contingent upon CEQA review.

Tips to Avoid a Finding of a Definite Course of Action

  • Agencies should not commit any funds to a project, including loans to contractors or developers, until the preparation of an EIR is complete.
  • Agencies should avoid engaging developers in contract, or drafting detailed development plans, before an EIR is completed.
  • A governing body can pass a resolution selecting a specific site for construction and directing administration to make a purchase offer contingent on completion of the EIR process.
  • Governing bodies should not make public comments that may be construed as commitment to a project for which there is no EIR. Comments regarding hopes that a project will come to fruition or a project’s possibilities are acceptable.

If you have any questions about the Bridges decision or CEQA in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Kelly M. Rem

Partner

Jennifer Grant

Associate

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Lawmakers Extend Deadline for Proposition 39 Energy Efficiency Funding and Create New Program

July 2017
Number 42

State lawmakers have extended the deadlines to apply for and encumber money dedicated to energy efficiency projects at schools and community colleges – the program known as Proposition 39 – and have created a new program to fund such projects indefinitely.

Proposition 39 was scheduled to sunset June 30, 2018. Now, Senate Bill (SB) 110 has extended the deadline for encumbering Proposition 39 funds by one year, to June 30, 2019. At the same time, the bill creates the Clean Energy
Job Creation Program, which will administer funds for energy efficiency projects at school districts, charter schools, county offices of education and community colleges. The program opens for business at the start of the
2018-19 fiscal year.

After the bill’s passage, the California Energy Commission sent out a notice extending the deadline for submitting an energy expenditure plan to January 12, 2018. The original deadline had been August 1, 2017. Amendments to an existing energy expenditure plan that request additional funds must also be submitted by January 12, 2018.

Under SB 110, in order to take advantage of Proposition 39, agencies now have until June 30, 2019 to encumber those funds. The California Energy Commission defines “encumbrances” as “obligations in the form of purchase orders, contracts, salaries, and other commitments chargeable to an appropriation for which a part of the appropriation is reserved.”

After March 1, 2018, SB 110 reappropriates the remaining money in the existing Proposition 39 fund based on the number of school districts, charter schools and county offices of education that have not yet submitted energy expenditure plans. The bill devotes $75 million to loans or grants for school bus replacements or retrofits, prioritizing funding to agencies with the oldest school buses or those operating in disadvantaged communities. It also authorizes $100 million for low- and no-interest revolving loans for projects and technical assistance aimed at expanding clean energy generation and improving energy efficiency, prioritizing funding based on diversity in geographic and agency size, energy savings and the percentage of low-income students served.

Any remaining money from Proposition 39 will be used to provide competitive grants to school districts, charter schools and county offices of education for energy efficiency and generation projects, with 10 percent going to education agencies with 1,000 or fewer students, 10 percent going to agencies with between 1,001 and 2,000 students and the rest going to larger education agencies.

Under the new Clean Energy Job Creation Program beginning in 2018-19, 11 percent of available funds will be allocated to the Chancellor of the California Community Colleges for distribution to community college districts for energy efficiency projects, and the California Energy Commission will distribute the rest to school districts, charter schools and county offices of education.

Projects will be selected based on in-state job creation and energy benefits. Priority for grants made through the new program will be given based on the number of students eligible for free and reduced-price meals, geographic diversity, school type and local area workforce needs. Funding will be available as appropriated in the annual budget act. Both the reallocated funds and money provided to local education agencies under the new program must be encumbered within nine months of allocation to those agencies.

Lozano Smith will provide additional details about the new program as they emerge. If you have any questions about SB 110, Proposition 39 or energy efficiency projects in general, please contact the author of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

California Travel Ban Does Not Apply to Local Agencies

July 2017
Number 41

A California law that bars state agencies from funding travel, and from requiring employees to travel, to states that permit discrimination on the basis of sexual orientation, gender identity or gender expression – and Attorney General Xavier Becerra’s recent expansion of the list of states covered by the ban – have raised questions regarding whether the law applies to cities, counties, school districts and community college districts.

While there is no definitive legal guidance on the issue, the law expressly applies to state agencies, departments, boards, authorities and commissions, including the University of California and the California State University system. As “state agencies,” it appears the law also applies to the California Community Colleges Chancellor’s Office and the California Department of Education. AB 1887 does not state that it applies to cities, counties, school districts or community college districts, nor do these entities appear to be state agencies under the law.

The acting general counsel of the California Community Colleges Chancellor’s Office agrees: In a June 29 legal update, he said that while the restrictions apply to the chancellor’s office itself, community college districts are local education agencies that are not covered by the ban. Still, the letter cautioned local community college districts that the chancellor’s office may not be able to approve a request for state-funded travel to any of the states covered by the ban.

Effective January 1, 2017, Government Code section 11139.8 (enacted by Assembly Bill (AB) 1887) prohibits California state agencies, departments, boards, authorities and commissions from requiring any state employees, officers or members to travel to other states that permit discrimination on the basis of sexual orientation, gender identity, or gender expression and also, from approving a request for state-funded or state-sponsored travel to a state that has passed such a law.

AB 1887 prohibits travel to any state that has enacted a law after June 26, 2015 that voids or repeals existing state or local protections against discrimination on the basis of sexual orientation, gender identity or gender expression or permits discrimination against same-sex couples or their families on those bases.

The original list of states covered by the ban included Kansas, Mississippi, North Carolina and Tennessee. On June 22, Becerra added Alabama, Kentucky, South Dakota and Texas to the list after those states approved laws that permit such discrimination.

Exceptions to the travel restrictions include:

  • Enforcement of California law, including auditing and revenue collection;
  • Litigation;
  • To meet contractual obligations incurred before January 1, 2017;
  • To comply with requests by the federal government to appear before committees;
  • To participate in meetings or training required by a grant or required to maintain grant funding;
  • To complete job-required training necessary to maintain licensure or similar standards required for holding a position, in the event that comparable training cannot be obtained in California or a different state not subject to the travel prohibition; and
  • For the protection of public health, welfare or safety, as determined by the affected agency, department, board, authority, commission or legislative office.

If local government agencies intend to use state grant money for travel to any of the states covered by the ban, they should check to determine if the travel restrictions are included as a condition of the grant. In addition,
local agencies may have adopted their own policies that mirror AB 1887.

Additional information about AB 1887 and the states the travel ban applies to is available on the Attorney General’s website. For more information on AB 1887, please contact the authors of this Client News Brief or an attorney at one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Stephanie M. White

Associate

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

State’s Top Court Rules that Contractors Can be Prosecuted for Conflict of Interest

July 2017
Number 40

The California Supreme Court has ruled that an independent contractor can be criminally liable for a conflict of interest under California Government Code section 1090, expanding the universe of penalties a contractor can face for violating the statute and reversing a prior appellate court ruling that exempted contractors from criminal liability for such conflicts.

The Court’s decision in People v. Superior Court (Sahlolbei) (June 26, 2017, No. S232639) ___ Cal.5th ___ only applies to independent contractors who have been entrusted with entering into transactions on behalf of the public agency. But due to an expansion of government and public contracting in which regular employees and even consultants can have control over the public purse, the decision has broad implications for all California public agencies.

Section 1090 prohibits public officers and employees from making contracts in which they have a financial interest when acting in their official capacities. Generally, any contract made in violation of section 1090 is void and cannot be enforced. Criminal penalties for a willful violation include a fine of up to $1,000 or imprisonment, and a lifetime ban on holding public office.

Hossain Sahlolbei worked as a surgeon at a Riverside County hospital and served on the hospital’s executive committee, both in an independent contractor capacity. Sahlolbei negotiated a $36,000 per month contract with an anesthesiologist at the committee’s behest plus $10,000 for moving expenses. He then pressured the hospital to hire the anesthesiologist for $48,000 a month, with $40,000 for moving expenses. Sahlolbei instructed the anesthesiologist to deposit his paychecks into Sahlolbei’s bank account, and the surgeon paid the anesthesiologist $36,000 a month and pocketed the rest. He was later charged with violating section 1090.

In reversing the appellate court’s judgment dismissing the charge, the Supreme Court held that independent contractors are not categorically excluded from prosecution under section 1090 and that an independent contractor who has been retained or appointed by a public agency and whose actual duties include engaging in or advising on public contracting is charged with acting on the agency’s behalf. This makes such contractors fully subject to the statute. The Supreme Court found that Sahlolbei violated section 1090 because there was evidence that hospital leadership asked him to assist in identifying doctors to recruit to the hospital, which he actually did and directly profited from.

As the Supreme Court provided in a hypothetical, a stationery supplier that sells paper to a public agency would ordinarily not be liable under section 1090 if it advised the agency to buy pens from its subsidiary, because the
supplier was not engaging in a transaction on the agency’s behalf. However, a person who was initially hired by an agency as an officer or employee with contracting responsibilities and then rehired as an independent contractor to perform the same duties would be subject to section 1090.

The Court also expressly reversed the Second District Court of Appeal decision in People v. Christiansen (2013) 216 Cal.App.4th 1181 (Christiansen), reasoning that the Legislature intended for section 1090 to apply to certain contractors in both the civil and criminal liability contexts. In Christiansen, a school district’s planning and facilities director, who served the district as an independent contractor, was prosecuted for violating section 1090 after she advised the school district to hire her consulting company for facilities management services, among other self-dealings. The appellate court held that prior courts’ expansion of the statutory term “employees” to apply to independent contractors made them civilly but not criminally liable under section 1090. The Supreme Court disagreed with that conclusion.

Since Christiansen, California courts have applied civil liability under section 1090 to independent contractors in a series of “lease-leaseback” cases involving companies that provided “preconstruction” consulting services to school districts that later hired them as lease-leaseback contractors. (See 2017 Client News Brief No. 32,
2016 Client News Brief No. 29 and 2015 Client News Brief No. 30.) The Supreme Court decision in Sahlolbei raises the possibility that such contractors can now be either or both civilly and criminally liable under section 1090.

The Supreme Court limited its decision by refusing to express a view on whether an independent contractor can be held criminally liable under section 1090 for conduct that occurred during the time frame between the decisions in Christiansen and Sahlolbei.

Public agencies should be aware that independent contractors, including consultants, cannot “change hats” to obscure their participation in public contracting. In reviewing any transaction between an independent contractor and a public agency for a conflict, the focus should be on the substance, not the form, of the transaction. Transactions in which a public agency hires a consultant to perform work about which the consultant previously advised the public agency as well as those in which a public agency hires a former employee as a consultant when both roles include similar work are particularly prone to conflicts of interest and should be carefully evaluated for legality prior to any engagement.

If you have any questions about this decision or conflict of interest law in general, please contact the authors of this Client News Brief or an attorney at one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Iain J. MacMillan

Associate

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.