House File 678 - Introduced HOUSE FILE 678 BY COMMITTEE ON GOVERNMENT OVERSIGHT (SUCCESSOR TO HSB 226) A BILL FOR An Act relating to membership in and membership dues paid to 1 organizations representing school boards, board members, and 2 administrators, and to the responsibilities and duties of 3 such organizations, and providing penalties and remedies. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2719HV (3) 84 kh/rj

H.F. 678 Section 1. Section 279.38, Code 2011, is amended by striking 1 the section and inserting in lieu thereof the following: 2 279.38 Membership in organizations —— requirements. 3 1. As used in this section: 4 a. “Compensation” means the same as defined in section 8F.2, 5 subsection 2. 6 b. “Organization” means a local, state, regional, or 7 national organization which relates to the functions of 8 the board of directors of a school district or to the 9 administrators of a school district and to which the school 10 board pays monetary fees or annual dues in accordance with 11 subsection 2. 12 2. a. The board of directors of a school district, the 13 duly elected members of the school board, and designated 14 administrators of school districts may join and participate in 15 organizations, including but not limited to organizations such 16 as the Iowa association of school boards, the urban education 17 network, Iowa school finance information services, and the 18 school administrators of Iowa. The school board may pay out 19 of funds available to the school board reasonable monetary 20 fees or annual dues for membership of the school board, or a 21 board member or administrator, in such an organization. Such 22 an organization that receives fees or dues for membership 23 from a school board shall be considered a taxpayer-funded 24 organization. 25 b. Each school board that pays monetary fees or annual 26 dues to an organization shall annually report to the local 27 community and to the department of education the amount paid 28 in annual dues to the organization and the amount of any dues, 29 fees, or assessments of any kind paid, and revenue or dividend 30 payments received, for services received from the organization, 31 and the products or services received due to membership in 32 the organization. The information shall be submitted to the 33 department electronically in the format specified by the 34 department. 35 -1- LSB 2719HV (3) 84 kh/rj 1/ 8

H.F. 678 3. The financial condition and transactions of an 1 organization shall be audited in the same manner as school 2 corporations as provided in section 11.6. The organization 3 shall establish an audit committee to review the financial 4 condition and transactions of the organization and the report 5 of examination conducted in accordance with this subsection. 6 The auditor conducting an examination in accordance with this 7 subsection shall have full access to the audit committee 8 and to all of the organization’s records, reports, audits, 9 tax reports, and all other documents and papers issued or 10 maintained by the organization. 11 4. An organization shall do all of the following: 12 a. Publish annually on its internet site, and in a report 13 submitted annually to the department of education, the standing 14 committees on government oversight, and the general assembly, 15 all of the following: 16 (1) A listing of the school districts that pay fees or dues 17 for membership in the organization and the moneys paid by each 18 school district. 19 (2) The total revenue the organization receives from each 20 school district resulting from the payment of monetary fees or 21 annual dues, and the total net profit from the sale of products 22 and services to the school district by the organization. 23 (3) An accounting, broken down by individual employee, 24 of the total amount of moneys expended for reimbursement of 25 expenses incurred by and compensation paid to each of the ten 26 highest paid employees of the organization as evidenced by the 27 tax forms submitted by the organization to the internal revenue 28 service. 29 (4) An accounting of all moneys expended for reimbursement 30 of expenses incurred by and compensation paid to all 31 legislative representatives and lobbyists of the organization. 32 b. Submit to the general assembly and the standing committee 33 on government oversight copies of all reports the organization 34 provides to the United States department of education relating 35 -2- LSB 2719HV (3) 84 kh/rj 2/ 8

H.F. 678 to federal grants and grant amounts that the organization 1 administers or distributes to school districts. 2 c. Provide education and training to the organization’s 3 board members in the fiduciary duties and legal 4 responsibilities of members. 5 5. An organization shall not pay to an employee, officer, 6 a member of the organization’s governing board, or to a 7 legislative representative or lobbyist of the organization, a 8 commission, bonus, or other consideration of any type which is 9 in addition to compensation paid and published and reported as 10 required by subsection 4. 11 6. a. A person who serves as the head of an organization 12 or otherwise serves in a supervisory capacity within the 13 organization shall not require an employee of the organization 14 to inform the person that the employee made a disclosure 15 of information permitted by this subsection and shall not 16 prohibit an employee of the organization from disclosing any 17 information to a member of the governing board or to any 18 public official, a law enforcement agency, a state agency, the 19 auditor of state or an auditor conducting an examination of 20 the organization in accordance with section 11.6, the office 21 of the attorney general, the office of citizens’ aide, or to a 22 committee of the general assembly if the employee reasonably 23 believes the information evidences a violation of law or rule, 24 mismanagement, a gross abuse of funds, an abuse of authority, 25 or a substantial and specific danger to public health or 26 safety. However, an employee may be required to inform the 27 person that the employee made a disclosure of information 28 permitted by this subsection if the employee represented that 29 the disclosure was the official position of the employee’s 30 immediate supervisor or employer. 31 b. A person shall not discharge an employee from or take 32 or fail to take action regarding an employee’s appointment or 33 proposed appointment to, promotion or proposed promotion to, 34 or any advantage in, a position administered by, or subject 35 -3- LSB 2719HV (3) 84 kh/rj 3/ 8

H.F. 678 to approval of, the person or the organization’s governing 1 board as a reprisal for a failure by that employee to inform 2 the person that the employee made a disclosure of information 3 permitted by this subsection, or for a disclosure of any 4 information by that employee authorized under paragraph “a” 5 if the employee reasonably believes the information evidences 6 a violation of law or rule, mismanagement, a gross abuse of 7 funds, an abuse of authority, or a substantial and specific 8 danger to public health or safety. However, an employee may 9 be required to inform the person that the employee made a 10 disclosure of information permitted by this subsection if the 11 employee represented that the disclosure was the official 12 position of the employee’s immediate supervisor or employer. 13 c. Paragraphs “a” and “b” do not apply if the disclosure of 14 the information is prohibited by statute. 15 d. A person who violates paragraph “a” or “b” commits a 16 simple misdemeanor. 17 e. Paragraph “b” may be enforced through a civil action. 18 (1) A person who violates paragraph “b” is liable to 19 an aggrieved employee for affirmative relief including 20 reinstatement, with or without back pay, or any other equitable 21 relief the court deems appropriate, including attorney fees and 22 costs. 23 (2) When a person commits, is committing, or proposes to 24 commit an act in violation of paragraph “b” , an injunction may 25 be granted through an action in district court to prohibit the 26 person from continuing such acts. The action for injunctive 27 relief may be brought by an aggrieved employee or the attorney 28 general. 29 f. A person shall not discharge an employee from or take 30 or fail to take action regarding an employee’s appointment or 31 proposed appointment to, promotion or proposed promotion to, 32 or any advantage in, a position administered by, or subject 33 to approval of, the person or the organization’s governing 34 board as a reprisal for the employee’s declining to participate 35 -4- LSB 2719HV (3) 84 kh/rj 4/ 8

H.F. 678 in contributions or donations to charities or community 1 organizations. 2 g. The person and the organization’s governing board 3 shall provide procedures for notifying the organization’s 4 new employees of the provisions of this subsection and shall 5 periodically conduct promotional campaigns to provide similar 6 information to the organization’s employees. The information 7 shall include the toll-free telephone number of the citizens’ 8 aide. 9 7. a. Except as otherwise provided in paragraph “b” , all 10 meetings of the governing board of the organization shall 11 comply with the requirements of chapter 21 and all records of 12 the governing board and the organization shall be maintained 13 in accordance with chapter 22. 14 b. The governing board of the organization may keep the 15 following records confidential and the governing board may hold 16 a closed session meeting to discuss the following matters: 17 (1) Personal information in confidential personnel records 18 maintained by the governing board of the organization. 19 (2) Information related to legal matters including 20 discussions or consultations with an attorney. Attorney 21 billing records are not confidential records except for such 22 records that are subject to the attorney-client privilege. 23 (3) Pricing, product, service, business strategy, or 24 marketing information which if released, would give an 25 advantage to competitors, vendors, or other parties and that 26 serve no public purpose. 27 Sec. 2. REPEAL. Section 279.38A, Code 2011, is repealed. 28 EXPLANATION 29 This bill strikes Code section 279.38 and repeals Code 30 section 279.38A, but combines much of the language of these 31 two Code sections to modify the statutory requirements of 32 organizations to which school boards, school board members, 33 and school district administrators may join and pay monetary 34 fees or dues for membership. School boards, board members, and 35 -5- LSB 2719HV (3) 84 kh/rj 5/ 8

H.F. 678 school administrators may join and participate in local, state, 1 regional, and national organizations which directly relate 2 to the administrator or school board functions of the school 3 district. Such organizations include but are not limited to 4 the Iowa association of school boards, the urban education 5 network, Iowa school finance information services, and the 6 school administrators of Iowa. Such an organization shall be 7 considered a taxpayer-funded organization. 8 Each board that pays membership dues must annually report 9 the local community and to the department of education the 10 amount the board pays in annual dues to the organization and 11 the amount of any fees paid, and revenue or dividend payments 12 received, for services received from the organization, and 13 the products or services received due to membership in the 14 organization. The bill requires that the information be 15 submitted to the department electronically in the format 16 specified by the department. 17 The financial condition and transactions of the 18 organizations shall be audited in the same manner as school 19 districts. Under the bill, the organization must establish 20 an audit committee to review the financial condition and 21 transactions of the organization and the audit report. The 22 auditor conducting the examination shall have full access to 23 the audit committee and to all of the organization’s records, 24 reports, audits, tax reports, and all other documents and 25 papers issued or maintained by the organization. 26 Such organizations must publish annually, in a report 27 submitted annually to the department of education, the standing 28 committees on government oversight, and the general assembly, 29 a listing of the school districts and the dues paid by each 30 school district; the total revenue the organization receives 31 from each school district resulting from the payment of 32 membership fees; the total net profit from the sale of products 33 and services to the school district by the organization; 34 the total amount of the annual compensation and expenses 35 -6- LSB 2719HV (3) 84 kh/rj 6/ 8

H.F. 678 paid to the organization’s 10 highest paid employees, broken 1 down by individual employee; and an accounting of all moneys 2 expended for reimbursement of expenses and compensation paid to 3 legislative representatives and lobbyists of the organization. 4 Under the bill, the organization must also provide education 5 and training to its board members regarding their fiduciary 6 duties and legal responsibilities. 7 The organization is prohibited from paying a commission, 8 bonus, or other consideration to an employee, officer, board 9 member, or to a legislative representative or lobbyist of the 10 organization. 11 The bill prohibits the head of the organization from 12 requiring an employee to inform the person that the employee 13 disclosed information, and prohibits the person taking adverse 14 employment action against an employee of the organization 15 who discloses information about the organization to a board 16 member, any public official, a law enforcement agency, a state 17 agency, the auditor of state or an auditor conducting an 18 examination in accordance with Code section 11.6, the office 19 of the attorney general, the office of citizens’ aide, or to a 20 committee of the general assembly if the employee reasonably 21 believes the information evidences a violation of law or rule, 22 mismanagement, a gross abuse of funds, an abuse of authority, 23 or a substantial or specific danger to public health or safety. 24 The provisions do not apply if the disclosure of information is 25 prohibited by statute. A person who violates the prohibitions 26 commits a simple misdemeanor and may be liable to an aggrieved 27 employee for affirmative relief. The prohibition against 28 adverse action may be enforced through a civil action, and 29 the employee may bring an action for injunctive relief by 30 the district court. Adverse action against an employee for 31 declining to participate in contributions or donations is also 32 prohibited. The person and the organization must provide 33 employee notification procedures relating to these prohibitions 34 and remedies and must conduct related promotional campaigns. 35 -7- LSB 2719HV (3) 84 kh/rj 7/ 8