Community College and University Auxiliary Organizations Must Make Their Records Open to the Public

By Aaron O'Donnell, Partner
Sharon Ormond, Senior Associate
Cerritos Office
and Cathie Fields, Senior Associate
Irvine Office

Effective January 1, 2012, SB 8 amends the higher-education provisions of the Education Code (72690 et seq.; 89913 et seq.; and 92950 et seq.) to require auxiliary organizations of the California Community Colleges, the California State University, and the University of California to comply with disclosure provisions essentially similar to the California Public Records Act, subject to certain exemptions unique to auxiliary organizations.

SB 8 requires records maintained by a CCC, CSU, or UC auxiliary organization to be made available to the public and requires the organization to follow the specified timelines and procedures for responding to public records requests similar to those of the PRA.

Within 10 days of receiving a written request for records, the auxiliary organization must determine whether the request seeks records that are subject to disclosure, notify the requester in writing of the determination and the reasons therefor, and provide an estimated date and time when the records will be made available.  If the request for records is denied, in whole or in part, the requester shall be informed of the names and titles or positions of each person responsible for the denial.  The 10-day deadline may be extended by a maximum of 14 additional days in some circumstances.

SB 8 incorporates existing PRA exemptions, which are numerous, and additionally exempts from disclosure the following records maintained by a foundation:

• Information that would disclose the identity of a donor, prospective donor, or volunteer;
• Personal financial information and gift and estate planning information of a prospective donor or volunteer;
• Personal information related to a donor's private trusts or annuities administered by an auxiliary or campus foundation;
• Information related to fundraising plans, fundraising research, and solicitation strategies, as specified;
• The identity of students and alumni to the extent the information is already protected, excluding employees of the organization or a student who participates in a legislative body of a student body organization; and
• Trade secrets.

These provisions do not exempt disclosure of certain information, including the amount and date of a donation; donor-designated uses of or restrictions on a donation; the identity of donors who, in any fiscal year, receive a benefit valued at greater than $2,500 or impermissible under existing law; certain self-dealing transactions under existing law; and instances in which a volunteer or donor is awarded, within five years of the date of the service or gift, a contract from the foundation that was not subject to competitive bidding.  

As under the PRA, when a foundation discloses a record that is exempt, the disclosure constitutes a waiver of the exemptions, except for: disclosures made to a donor regarding that donor's own donation or prospective donation; to a volunteer regarding that volunteer's services to the foundation; disclosures required or limited by law, disclosures to an auditor conducting an audit, as defined; or specified disclosures to a bank or financial institution. 

A contract entered into after the effective date of SB 8 that would prevent the disclosure of information required to be disclosed under the bill is void and unenforceable.  Like the PRA, SB 8 authorizes proceedings for injunctive or declarative relief to enforce the right to inspect or receive a copy of a foundation record, including the awarding of attorney's fees.  The provisions of SB 8 do not apply to any records subject to a request made pursuant to the PRA. 

Impact on Community Colleges and Public Universities

Effective January 1, 2012, college and university foundations must disclose their records, unless the records would be exempt under the PRA or meet one of the exemptions described above.  Even the inadvertent disclosure of an exempt record will result in a waiver of the exemption.  Expensive litigation may result if records are not timely and properly disclosed upon request.

For Community College auxiliary organizations in particular, this bill is one of two passed in the most recent Legislative session that may require significant operational changes.  AB 501, discussed in our post of October 11, 2011, amends the Educational Employment Relations Act effective January 1, 2012, to apply to community college auxiliary organizations as employers.

SB 8 does not amend the PRA, or otherwise change the legal status of auxiliary organizations.  However, the change in the law does highlight the distinction between auxiliary organizations established as such, and other entities organized to support public colleges and universities that may not have the legal status of auxiliary organizations.  Not all campus foundations are “auxiliary organizations” as defined in the statute however, and it is therefore important for these organizations to assess whether they have this legal status in order to determine whether they are subject to SB 8.  Importantly, even for foundations that are not auxiliary organizations, other disclosure obligations may apply by virtue of their status as nonprofits, and depending on circumstances pursuant to other laws, including for example open meeting laws and even the PRA.

These new requirements represent a significant change in the public responsibilities of auxiliary organizations.  We anticipate strong public interest in making use of the disclosure requirements.  SB 8 was supported by a broad range of organizations that advocate increasing “transparency” in the operation of public agencies.

Compliance with these requirements, and understanding the various exemptions, will require interpretation of a complex array of statutes, in both the Education Code and the PRA, and an understanding of case law and legislative history.  Foundations and the educational institutions with which they are affiliated should seek advice from legal counsel when responding to requests under the new provisions.