Student Fee Legislation (AB 165) Highlights the Need for Districts to Examine Practices Now
The implementation of the settlement of the ACLU’s student fee lawsuit has taken many unusual turns. The previous settlement is no longer in place, but the litigation has been put on hold pending the legislative process. AB 165, the legislation initially designed to implement the settlement, and which will still be the foundation for a resolution of the litigation if it is enacted, was the product of much legislative wrangling.  It now sits on the Governor’s desk, having passed in both houses of the legislature, and it will likely be enacted. Amendments to AB 165 since it was originally introduced have been extensive, but have not significantly changed the basic two-component structure: 1) Codification of the existing “free school guarantee” in statute, rather than the current myriad of judicial decisions, a state regulation, Attorney General opinions, and administrative guidance documents; and 2) Creation of oversight and enforcement mechanisms to encourage Constitutional compliance in the future.
We believe the landscape regarding student fees has changed permanently, regardless of the fate of AB 165 and the ACLU lawsuit—public awareness of the “free school guarantee” is so widespread that more vigilant compliance by school districts will be needed regardless of the outcome of the legislative and judicial process.  Many districts have already implemented extensive changes to ensure compliance.  The ACLU is still actively addressing fee issues arising at the beginning of this school year.  Because the landscape has changed permanently, and because of the likely passage of the legislation, districts are well-served by taking steps to ensure compliance and address specific requirements in AB 165.  The parameters of the “free school guarantee” and AB 165 will be reviewed in detail in a series of free AALRR Breakfast Briefings on the subject.  Click here to register.  A summary of AB 165 follows. 
Legislative Provisions to Clarify Permissible and Impermissible Fees
This component of AB 165, from the signing of the original settlement to the current version and at all points in between, is explicitly not intended to change the rules districts must follow in collecting money from students or from other individuals/entities who have collected on behalf of a school or district program.  It is designed to reflect existing parameters of the Constitutional “free school guarantee” as dictated by binding precedent. 
AB 165 would add the following prohibition to the Education Code, in language similar to the long-standing regulation of the State Board of Education: “A pupil enrolled in a public school shall not be required to pay a pupil fee for participation in an educational activity.”  This provision, as with current law, prohibits mandatory fees for participation in educational activities regardless of who or what entity is collecting the fee.  The bill defines an “educational activity” as “an activity offered by a school, school district, charter school, or county office of education that constitutes an integral fundamental part of elementary and secondary education, including, but not limited to, curricular and extracurricular activities.”  It also defines a “pupil fee,” and includes a variety of examples of prohibited fees and charges taken from existing precedent.  AB 165 would explicitly provide that it is “declarative of existing law and shall not be interpreted to prohibit the imposition of a fee, deposit, or other charge otherwise allowed by law.”
The legislation continues to contain language reinforcing the authority to engage in voluntary fundraising, and to give rewards and recognition to those who excel in that endeavor.
Accountability and Oversight Provisions
This component, coined in one legislative hearing as the “three levels of accountability,” would impose new requirements on districts, county offices and charter schools.  As one might expect, most of the opposition to AB 165 was related to this aspect of the legislation, specifically the cost of implementation and, to a lesser degree, the assertion that the multiple levels of accountability were unnecessary.  The bill sent to the Governor’s desk ultimately included all three levels.
Annual Review and Certification
AB 165 requires district or county superintendents and governing bodies of charter schools to annually determine whether an unlawful pupil fee has been or is being charged in the current fiscal year.  Other than in the current 2011-12 school year, this determination must be made by the end of the eighth week after the first day of school for that year.  It requires a finding of unlawful fees to be presented at a public hearing of the governing board, and full reimbursement to all affected parties within ten weeks of the beginning of the school year in which the determination is made.  For the 2011-12 school year, after the AB 165 effective date of January  1, 2012, determinations must be made by March 1, 2012 and any required reimbursements must be paid by March 15, 2012.
This and other reimbursement provisions highlight that the ultimate responsibility for “free school guarantee” compliance rests with the district, even if the district did not actually receive the money collected.
Uniform Complaint Procedure
As it did from the beginning, AB 165 adds the charging of impermissible pupil fees to the existing Uniform Complaint Procedure process, and adds the fee prohibition to the already required classroom notice implemented in the Williams settlement.  Uniform complaints can be filed anonymously, consistent with existing law. 
Annual Audit Process
The most controversial and hard-fought aspect of AB 165 was the provisions incorporating the student fee issue into the annual compliance audit.  The legislation: 1) requires that emergency regulations be adopted by the CDE to implement new audit requirements; 2) specifies that a fee-related audit exception is not deemed corrected until full reimbursement has been made, with interest; and 3) requires the Superintendent of Public Instruction to withhold one percent of the administrative costs in the subsequent year if the auditor finds that a prior violation has not been corrected or there is a new audit exception that is not corrected.
The primary controversy regarding this provision relates to the scope of the audit.  The sponsors of AB 165 assert that the compliance audit will essentially review the two other accountability mechanisms, ensure that they were followed, and ensure that findings of unlawful fees have, in fact, been remedied.  This interpretation is consistent with interaction shortly after the introduction of AB 165.
If AB 165 does not pass the issue of student fees will remain at the forefront, if for no other reason than it would guarantee the continuation of the ACLU lawsuit, which could end up involving specific school districts.  District, county offices and charter schools are therefore well-served by putting processes in place now that will address the specific requirements of AB 165 should it pass, and will more generally eliminate or at least reduce student fee issues with or without AB 165 in place.
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