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 organizations representing school boards, board members, and administrators, and to the responsibilities and duties of such organizations, and providing penalties and remedies.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 279.38, Code 2011, is amended by striking the section and inserting in lieu thereof the following:
   279.38  Membership in organizations —— requirements.
   1.  As used in this section:
   a.  “Compensation” means the same as defined in section 8F.2, subsection 2.
   b.  “Organization” means a local, state, regional, or national organization which relates to the functions of the board of directors of a school district or to the administrators of a school district and to which the school board pays monetary fees or annual dues in accordance with subsection 2.
   2.
  a.  The board of directors of a school district, the duly elected members of the school board, and designated administrators of school districts may join and participate in organizations, including but not limited to organizations such as the Iowa association of school boards, the urban education network, Iowa school finance information services, and the school administrators of Iowa. The school board may pay out of funds available to the school board reasonable monetary fees or annual dues for membership of the school board, or a board member or administrator, in such an organization. Such an organization that receives fees or dues for membership from a school board shall be considered a taxpayer-funded organization.
   b.  Each school board that pays monetary fees or annual dues to an organization shall annually report to the local community and to the department of education the amount paid in annual dues to the organization and the amount of any dues, fees, or assessments of any kind paid, and revenue or dividend payments received, for services received from the organization, and the products or services received due to membership in the organization. The information shall be submitted to the department electronically in the format specified by the department.

   3.  The financial condition and transactions of an organization shall be audited in the same manner as school corporations as provided in section 11.6. The organization shall establish an audit committee to review the financial condition and transactions of the organization and the report of examination conducted in accordance with this subsection. The auditor conducting an examination in accordance with this subsection shall have full access to the audit committee and to all of the organization’s records, reports, audits, tax reports, and all other documents and papers issued or maintained by the organization.
   4.  An organization shall do all of the following:
   a.  Publish annually on its internet site, and in a report submitted annually to the department of education, the standing committees on government oversight, and the general assembly, all of the following:
   (1)  A listing of the school districts that pay fees or dues for membership in the organization and the moneys paid by each school district.
   (2)  The total revenue the organization receives from each school district resulting from the payment of monetary fees or annual dues, and the total net profit from the sale of products and services to the school district by the organization.
   (3)  An accounting, broken down by individual employee, of the total amount of moneys expended for reimbursement of expenses incurred by and compensation paid to each of the ten highest paid employees of the organization as evidenced by the tax forms submitted by the organization to the internal revenue service.
   (4)  An accounting of all moneys expended for reimbursement of expenses incurred by and compensation paid to all legislative representatives and lobbyists of the organization.
   b.  Submit to the general assembly and the standing committee on government oversight copies of all reports the organization provides to the United States department of education relating to federal grants and grant amounts that the organization administers or distributes to school districts. 
   c.  Provide education and training to the organization’s board members in the fiduciary duties and legal responsibilities of members.
   5.  An organization shall not pay to an employee, officer, a member of the organization’s governing board, or to a legislative representative or lobbyist of the organization, a commission, bonus, or other consideration of any type which is in addition to compensation paid and published and reported as required by subsection 4.
   6.
  a.  A person who serves as the head of an organization or otherwise serves in a supervisory capacity within the organization shall not require an employee of the organization to inform the person that the employee made a disclosure of information permitted by this subsection and shall not prohibit an employee of the organization from disclosing any information to a member of the governing board or to any public official, a law enforcement agency, a state agency, the auditor of state or an auditor conducting an examination of the organization in accordance with section 11.6, the office of the attorney general, the office of citizens’ aide, or to a committee of the general assembly if the employee reasonably believes the information evidences a violation of law or rule, mismanagement, a gross abuse of funds, an abuse of authority, or a substantial and specific danger to public health or safety. However, an employee may be required to inform the person that the employee made a disclosure of information permitted by this subsection if the employee represented that the disclosure was the official position of the employee’s immediate supervisor or employer.
   b.  A person shall not discharge an employee from or take or fail to take action regarding an employee’s appointment or proposed appointment to, promotion or proposed promotion to, or any advantage in, a position administered by, or subject to approval of, the person or the organization’s governing board as a reprisal for a failure by that employee to inform the person that the employee made a disclosure of information permitted by this subsection, or for a disclosure of any information by that employee authorized under paragraph“a”if the employee reasonably believes the information evidences a violation of law or rule, mismanagement, a gross abuse of funds, an abuse of authority, or a substantial and specific danger to public health or safety. However, an employee may be required to inform the person that the employee made a disclosure of information permitted by this subsection if the employee represented that the disclosure was the official position of the employee’s immediate supervisor or employer.
   c.  Paragraphs“a” and“b” do not apply if the disclosure of the information is prohibited by statute.
   d.  A person who violates paragraph“a” or“b” commits a simple misdemeanor.
   e.  Paragraph“b” may be enforced through a civil action.
   (1)  A person who violates paragraph“b” is liable to an aggrieved employee for affirmative relief including reinstatement, with or without back pay, or any other equitable relief the court deems appropriate, including attorney fees and costs.
   (2)  When a person commits, is committing, or proposes to commit an act in violation of paragraph “b”, an injunction may be granted through an action in district court to prohibit the person from continuing such acts. The action for injunctive relief may be brought by an aggrieved employee or the attorney general.
   f.  A person shall not discharge an employee from or take or fail to take action regarding an employee’s appointment or proposed appointment to, promotion or proposed promotion to, or any advantage in, a position administered by, or subject to approval of, the person or the organization’s governing board as a reprisal for the employee’s declining to participate in contributions or donations to charities or community organizations.
   g.  The person and the organization’s governing board shall provide procedures for notifying the organization’s new employees of the provisions of this subsection and shall periodically conduct promotional campaigns to provide similar information to the organization’s employees. The information shall include the toll-free telephone number of the citizens’ aide.
   7.
  a.  Except as otherwise provided in paragraph “b”, all meetings of the governing board of the organization shall comply with the requirements of chapter 21 and all records of the governing board and the organization shall be maintained in accordance with chapter 22.
   b.  The governing board of the organization may keep the following records confidential and the governing board may hold a closed session meeting to discuss the following matters:
   (1)  Personal information in confidential personnel records maintained by the governing board of the organization. 
   (2)  Information related to legal matters including discussions or consultations with an attorney. Attorney billing records are not confidential records except for such records that are subject to the attorney-client privilege.
   (3)  Pricing, product, service, business strategy, or marketing information which if released, would give an advantage to competitors, vendors, or other parties and that serve no public purpose.
   Sec. 2.  REPEAL.  Section 279.38A, Code 2011, is repealed.
EXPLANATION
   This bill strikes Code section 279.38 and repeals Code section 279.38A, but combines much of the language of these two Code sections to modify the statutory requirements of organizations to which school boards, school board members, and school district administrators may join and pay monetary fees or dues for membership. School boards, board members, and school administrators may join and participate in local, state, regional, and national organizations which directly relate to the administrator or school board functions of the school district. Such organizations include but are not limited to the Iowa association of school boards, the urban education network, Iowa school finance information services, and the school administrators of Iowa. Such an organization shall be considered a taxpayer-funded organization.
   Each board that pays membership dues must annually report the local community and to the department of education the amount the board pays in annual dues to the organization and the amount of any fees paid, and revenue or dividend payments received, for services received from the organization, and the products or services received due to membership in the organization. The bill requires that the information be submitted to the department electronically in the format specified by the department.
   The financial condition and transactions of the organizations shall be audited in the same manner as school districts. Under the bill, the organization must establish an audit committee to review the financial condition and transactions of the organization and the audit report. The auditor conducting the examination shall have full access to the audit committee and to all of the organization’s records, reports, audits, tax reports, and all other documents and papers issued or maintained by the organization.
   Such organizations must publish annually, in a report submitted annually to the department of education, the standing committees on government oversight, and the general assembly, a listing of the school districts and the dues paid by each school district; the total revenue the organization receives from each school district resulting from the payment of membership fees; the total net profit from the sale of products and services to the school district by the organization; the total amount of the annual compensation and expenses paid to the organization’s 10 highest paid employees, broken down by individual employee; and an accounting of all moneys expended for reimbursement of expenses and compensation paid to legislative representatives and lobbyists of the organization.
   Under the bill, the organization must also provide education and training to its board members regarding their fiduciary duties and legal responsibilities.
   The organization is prohibited from paying a commission, bonus, or other consideration to an employee, officer, board member, or to a legislative representative or lobbyist of the organization.
   The bill prohibits the head of the organization from requiring an employee to inform the person that the employee disclosed information, and prohibits the person taking adverse employment action against an employee of the organization who discloses information about the organization to a board member, any public official, a law enforcement agency, a state agency, the auditor of state or an auditor conducting an examination in accordance with Code section 11.6, the office of the attorney general, the office of citizens’ aide, or to a committee of the general assembly if the employee reasonably believes the information evidences a violation of law or rule, mismanagement, a gross abuse of funds, an abuse of authority, or a substantial or specific danger to public health or safety. The provisions do not apply if the disclosure of information is prohibited by statute. A person who violates the prohibitions commits a simple misdemeanor and may be liable to an aggrieved employee for affirmative relief. The prohibition against adverse action may be enforced through a civil action, and the employee may bring an action for injunctive relief by the district court. Adverse action against an employee for declining to participate in contributions or donations is also prohibited. The person and the organization must provide employee notification procedures relating to these prohibitions and remedies and must conduct related promotional campaigns.
   The organization’s governing boards meetings are subject to Code chapter 21 and the governing board and the organization’s records must be maintained in compliance with Code chapter 22.