California Code of Regulations
Title 4 - Business Regulations
Division 15 - California School Finance Authority
Article 1.5 - Charter School Facility Grant Program
Section 10170.14 - Conflicts of Interest

Universal Citation: 4 CA Code of Regs 10170.14

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) For purposes of this section, the following definitions shall apply:

(1) "Affiliate" shall mean a shareholder, partner, member, officer or board member of, or person who directly or indirectly controls, a Corporate Entity.

(2) "Corporate Entity" shall mean any type of organization or legal entity other than an individual, including a corporation, partnership, limited liability company or unincorporated association.

(3) "Related Party" shall mean:
(A) A School Official or a spouse, domestic partner, or dependent child of a School Official; or

(B) A Corporate Entity if a School Official or a spouse, domestic partner, or child of a School Official is an Affiliate of the Corporate Entity, except that a non-profit Corporate Entity formed exclusively for the purpose of managing or providing support to the Applicant or Charter School or to a group of related charter schools, and any direct or indirect wholly-owned subsidiary of any such Corporate Entity, shall not be considered a Related Party.

(C) "School Official" shall mean a board, member, officer, or employee of an Applicant or the Charter School.

(b) Grantees must avoid actual conflicts of interest when applying for or receiving grants from the Authority.

(c) Grant funds may not be used by an Applicant or Charter School to pay for any lease or rental or service agreement with a Related Party, unless all of the following conditions are satisfied:

(1) The Related Party, and, in the case of a Corporate Entity, any School Official who is an Affiliate of the Corporate Entity, abstains from voting, or participating in the discussion of the governing board of the Charter School, regarding approval of the lease, rental agreement, or any amendment thereto;

(2) The Related Party, and, in the case of a Corporate Entity, any School Official who is an Affiliate of the Corporate Entity, abstains from voting, or participating in the discussion of the governing board of the Charter School, regarding the decision to apply for a grant to cover costs associated with the lease or rental agreement, as well as abstaining from participating in the Application for grant funds or administration of the Charter School's receipt of grant funds;

(3) The Related Party, and, in the case of a Corporate Entity, any School Official who is an Affiliate of the Corporate Entity, discloses its interest in the lease or rental agreement to the governing board of the Charter School;

(4) The amount of the lease or rent is at or below Fair Market Rent based on an Independent Appraisal paid for by the Applicant or Charter School or the governing board in approving the lease or rental agreement or amendments thereto has made a finding that the agreement is reasonable under the circumstances; and

(5) The lease or rental agreement is not signed by the Related Party, or in the case of a Corporate Entity, by any School Official who is an Affiliate of the Corporate Entity, on behalf of the Applicant or Charter School.

(d) Nothing in this section is intended to supercede Government Code Section 1090, the Political Reform Act (commencing with Government Code Section 81000), or any other conflicts of interest laws that may be applicable to the Applicant or Charter School's participation in the program.

1. New section filed 8-16-2013 as an emergency; operative 8-16-2013 (Register 2013, No. 33). A Certificate of Compliance must be transmitted to OAL by 2-12-2014 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 1-21-2014 as an emergency, including amendments; operative 1-21-2014 (Register 2014, No. 4). A Certificate of Compliance must be transmitted to OAL by 4-21-2014 or emergency language will be repealed by operation of law on the following day.
3. New section refiled 3-24-2014 as an emergency; operative 4-21-2014 (Register 2014, No. 13). A Certificate of Compliance must be transmitted to OAL by 7-21-2014 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 3-24-2014 order, including amendment of subsections (a)(3)(A)-(B) and new subsection (d), transmitted to OAL 6-25-2014 and filed 8-6-2014; amendments effective 8-6-2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 32).
5. Amendment of subsection (c) filed 4-10-2017 as an emergency; operative 4-10-2017 (Register 2017, No. 15). A Certificate of Compliance must be transmitted to OAL by 10-9-2017 or emergency language will be repealed by operation of law on the following day.
6. Certificate of Compliance as to 4-10-2017 order transmitted to OAL 7-19-2017 and filed 8-24-2017 (Register 2017, No. 34).
7. Amendment of subsections (c)(4) and (d) filed 10-18-2018; amendments operative 10-18-2018 pursuant to Government Code section 11343.4(b)(3) (Register 2018, No. 42).

Note: Authority cited: Section 47614.5, Education Code. Reference: Section 47614.5, Education Code.

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