    Commercial Activities in Schools: Use of Student Data is Limited
    and Additional Dissemination of Guidance Could Help Districts
    Develop Policies (20-AUG-04, GAO-04-810).

    Congress has continuing interest in commercial activities in U.S.
    public schools. These include product sales, advertising, market
    research, and the commercial use of personal data about students
    (such as names, addresses, and telephone numbers) by schools. To
    update information about commercial activities in schools,
    Congress asked us to answer the following questions: (1) Since
    2000, what statutes and regulations have states enacted and
    proposed to govern commercial activities in schools? (2) To what
    extent have districts developed policies implementing amended
    provisions of the Protection of Pupil Rights Amendment (PPRA) in
    the No Child Left Behind Act on the use of student data for
    commercial purposes? (3) What guidance has the Department of
    Education (Education) disseminated? To answer these questions, we
    researched state laws, surveyed a national sample of school
    districts, analyzed policies provided by districts, interviewed
    officials at Education, and examined its guidance. In addition,
    we updated findings from the districts we visited in 2000.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-04-810
        ACCNO:   A11819
      TITLE:     Commercial Activities in Schools: Use of Student Data is
    Limited and Additional Dissemination of Guidance Could Help
    Districts Develop Policies
         DATE:   08/20/2004
      SUBJECT:   Advertising
    	     Commercial products
    	     Data collection
    	     Federal regulations
    	     Government information dissemination
    	     Marketing
    	     Privacy law
    	     Public schools
    	     Sales promotion
    	     School districts
    	     State law
    	     Personal information

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    GAO-04-810

    United States Government Accountability Office

    GAO

                           Report to Congressional Requesters

    August 2004

    COMMERCIAL ACTIVITIES IN SCHOOLS

     Use of Student Data is Limited and Additional Dissemination of Guidance Could
                            Help Districts Develop Policies

    GAO-04-810

    Highlights of GAO-04-810, a report to congressional requesters

    Congress has continuing interest in commercial activities in U.S. public
    schools. These include product sales, advertising, market research, and
    the commercial use of personal data about students (such as names,
    addresses, and telephone numbers) by schools. To update information about
    commercial activities in schools, Congress asked us to answer the
    following questions: (1) Since 2000, what statutes and regulations have
    states enacted and proposed to govern commercial activities in schools?
    (2) To what extent have districts developed policies implementing amended
    provisions of the Protection of Pupil Rights Amendment (PPRA) in the No
    Child Left Behind Act on the use of student data for commercial purposes?
    (3) What guidance has the Department of Education (Education)
    disseminated?

    To answer these questions, we researched state laws, surveyed a national
    sample of school districts, analyzed policies provided by districts,
    interviewed officials at Education, and examined its guidance. In
    addition, we updated findings from the districts we visited in 2000.

    We recommend that Education disseminate to state school boards
    associations its guidance on the use of student data for marketing and
    selling purposes. Education agreed with our recommendation.

    www.gao.gov/cgi-bin/getrpt?GAO-04-810.

    To view the full product, including the scope and methodology, click on
    the link above. For more information, contact Marnie Shaul at (202)
    512-7215 or shaulm@gao.gov.

    August 2004

    COMMERCIAL ACTIVITIES IN SCHOOLS

    Use of Student Data is Limited and Additional Dissemination of Guidance Could
    Help Districts Develop Policies

    Since we reported on commercial activities in 2000, 13 states have
    established laws addressing commercial activities in public schools, and
    at least 25 states are considering such legislation. Of the states
    establishing new laws, 6 established laws affecting market research by
    addressing the use of student data for commercial activities. Almost all
    of the proposed bills target the sale of food and beverages. Prior to
    2000, 28 states established laws addressing commercial activities,
    particularly product sales and advertising. At that time, only 1 state
    passed a provision affecting market research.

    PPRA provisions required districts to implement policies on the
    collection, disclosure, or use of student data for marketing and selling
    purposes, and we estimate that about two-thirds of the districts in the
    nation believe they are developing or have developed such policies.
    However, of the 61 districts that sent us policies, only 19 policies
    addressed these issues. No district reported having collected student data
    for commercial purposes. Only a few reported disclosing student
    information for these purposes, and all had done so for school-related
    purposes such as graduation pictures.

    Education has undertaken several activities, such as sending guidance to
    state education agencies and school district superintendents and posting
    information on its Web page, to inform districts about the student
    information provisions of PPRA, but many districts appear not to
    understand the new requirements. Some districts told us that they relied
    on their state school boards association to develop policies for them
    because state school boards associations address federal and state laws.
    School districts in one state sent us policies that addressed commercial
    activities that had been developed by their state school boards
    association. Education was not required to disseminate guidance to
    associations of local school boards in each state and has not done so.

    District Policies Addressing the Commercial Use of Student Data (N = 61)

    Districts with policies addressing the collection, use, and disclosure of
    student data for commercial purposes

    Districts with policies addressing only the disclosure of student data for
    commercial purposes

    Districts with policies that did not address the commercial use of student
    data

    Source: GAO analysis.

    Contents

    Letter

    Results in Brief
    Background
    Since 2000, Most States Have Enacted Laws and Proposed

    Legislation That Affect Commercial Activities in Schools
    Districts Are Beginning to Implement Provisions on Student Data,
    and Few Use Student Data for Commercial Purposes
    Education Developed and Disseminated Guidance, but Many

    Districts' Policies Did Not Address Requirements
    Conclusions
    Recommendation for Executive Action
    Agency Comments

                                           1

                                          3 4

                                           9

    12

    13 14 15 15

    Appendix I Scope and Methodology 17

    Review of State Legislation 17
    Survey of School Districts 17
    Analysis of District Policies 20
    Contacts at Education 20
    Follow-up Telephone Interviews with the Seven Districts We

    Visited in 2000 21

    Appendix IIState Statutes and Regulations Addressing Commercial Activities
    in Schools

    Appendix IIILegislative Proposals Addressing Commercial Activities in
    Schools, February 2004

    Appendix IVQuestionnaire GAO Study on the Marketing and
    Selling of Student Data 41

    Appendix V Comments from the Department of Education 43

    Appendix VI GAO Contacts and Staff Acknowledgments 45

    GAO Contacts 45 Staff Acknowledgments 45

        Tables
                        Table 1: Categories of Commercial Activities            5
                   Table 2: Comparison of Selected PPRA and FERPA Provisions    8
                        Table 3: Sample and Response Rates by Strata           18
                  Table 4: Districts Contacted from Our Site Visits in 2000    21

    Abbreviations

    FERPA Family Educational Rights and Privacy Act
    NCLBA No Child Left Behind Act
    PPRA Protection of Pupil Rights Amendment

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
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    separately.

    United States Government Accountability Office Washington, DC 20548

    August 20, 2004

    The Honorable Christopher J. Dodd
    Ranking Minority Member
    Subcommittee on Children and Families
    Committee on Health, Education, Labor, and Pensions
    United States Senate

    The Honorable Richard C. Shelby
    United States Senate

    Over the past decade, public schools and businesses have been forging
    new types of relationships to help each other achieve their educational
    and business-related goals. In some of these relationships, business'
    apparent focus is on improving teaching and learning, but in others, the
    apparent focus is on developing product loyalty and increasing sales. In
    recent years, Congress and the public at large have become increasingly
    interested in the mixing of school activities with commercial enterprise.
    Some parties have wanted to limit such relationships by restricting
    product sales, advertising, market research, and the commercial use of
    personal data about students (such as names, addresses, and telephone
    numbers) by schools. However, others have promoted business
    relationships with schools as a desirable and necessary way to generate
    additional funding and resources for students.

    We first reported on product sales, direct and indirect advertising, and
    market research in schools in 2000.1 At that time, we found state laws and
    district school board policies governing commercial activities were not
    comprehensive, and in most states, local school officials were responsible
    for making decisions about commercial activities. In addition, we found
    that the visibility and profitability of commercial activities varied
    widely
    and the high schools we visited had more commercial activities than the
    middle or elementary schools.

    Since then, some changes related to these commercial activities have
    occurred. Schools are facing even greater needs for funds; the use of the

    1GAO, Public Education: Commercial Activities in Schools, GAO/HEHS-00-156
    (Washington, D.C.: Sept. 8, 2000).

    Internet as a marketing tool has expanded; and through the No Child Left
    Behind Act (NCLBA) of 2001, Congress has legislated new protections
    regarding the collection, disclosure, and use of student data for
    marketing or selling purposes. For decades, federal law has safeguarded
    the release of student education records and has allowed parents some
    control over the use of information about their children. For example,
    federal law has prohibited districts from releasing students' Social
    Security numbers without parental approval. However, NCLBA established new
    safeguards about the use of student data for marketing or selling
    purposes. Specifically, NCLBA amended the Protection of Pupil Rights
    Amendment (PPRA) of 1994 addressing pupil privacy by requiring school
    districts to develop a policy on the collection, disclosure, and use of
    personal data about students for commercial purposes that includes
    requirements for parental notification and permission. Finally, there has
    been growing concern about childhood obesity and whether the sale of
    beverages and food outside those offered by school breakfast and lunch
    programs might contribute to this problem.

    In view of these developments, you asked us to examine efforts by states
    to regulate a broad range of commercial activities in public schools and
    determine how districts have followed through with the PPRA provisions
    about the collection, disclosure, or use of student data for marketing and
    selling purposes. We conducted research to answer the following questions:
    (1) Since 2000, what statutes and regulations have states enacted to
    govern commercial activities in schools and what proposed legislation are
    states considering? (2) To what extent have districts developed policies
    implementing the PPRA provisions in NCLBA on the use of student data for
    commercial purposes? (3) What is the Department of Education (Education)
    doing to help districts implement the new provisions on the use of student
    data for commercial purposes?

    To answer these questions, we reviewed state laws and regulations in all
    50 states and Washington, D.C., as of May 2004. Also, we reviewed proposed
    legislation that had been introduced between January 1, 2003, and February
    2004 to obtain a snapshot description of possible future state legislative
    activities. We conducted a national sample survey of school districts to
    determine if their policies were consistent with the PPRA provisions on
    the use of student data for commercial activities and asked them to report
    on any activities in which they engaged that used student data for
    commercial purposes. We obtained an 87 percent weighted response rate. We
    also asked superintendents in the districts we surveyed to send us copies
    of their policies that govern activities involving the use of student
    information for marketing and selling purposes. We evaluated

      Results in Brief

    the extent to which these policies implemented PPRA requirements by
    examining whether they covered the collection, disclosure, and use of
    student data for commercial purposes. To discern changes in commercial
    activities in the seven school districts we visited in 2000, we
    interviewed district and school officials in those districts by telephone.
    We had selected these seven districts, located in California, Michigan,
    and New Mexico, to illustrate a range of commercial activities in states
    identified as having legal frameworks generally supportive of such
    activities as well as a range of geographic, economic, and demographic
    characteristics. Finally, we interviewed officials at Education and
    examined its guidance and initiatives on PPRA's commercial provisions. See
    appendix I for a detailed explanation of our scope and methodology. We
    conducted our work between November 2003 and August 2004 in accordance
    with generally accepted government auditing standards.

    Since our previous report in 2000, 13 states have enacted 15 statutory
    provisions and issued 3 regulatory provisions that pertain to commercial
    activities in public schools, and since January 1, 2003, we identified 25
    states in which legislators have proposed laws that address commercial
    activities. Of the 13 states establishing new laws, 6 established
    provisions addressing the collection, disclosure, or use of student
    information for marketing and selling purposes. For example, Colorado
    enacted a law prohibiting student participation in any survey without
    written parental consent. Other new provisions addressed product sales and
    advertising. Most of the proposed bills targeted food and beverage sales.
    Prior to 2000, 28 states had passed laws or regulations pertaining to
    commercial activities. Almost all of these provisions addressed direct
    advertising and product sales. At that time, only one state had passed a
    provision relating to the use of student data for commercial purposes. The
    seven districts we visited in 2000 continue to conduct a variety of
    commercial activities, particularly product sales, and three districts
    told us that they have increased the level of activities with local
    businesses. However, the types of activities in these districts have not
    substantially changed.

    Based on the responses to our survey, we estimated that about two-thirds
    of the school districts in the nation had developed or were developing
    policies addressing PPRA requirements concerning the commercial use of
    student data. However, for the 61 districts that voluntarily provided us
    policies they had developed, we concluded that only 19 of these policies
    specifically addressed the commercial uses of student data. Regardless, no
    district reported having collected student data specifically for marketing
    purposes, and those we spoke to who had released student names,

    addresses, or telephone numbers for marketing or selling purposes said
    they did so for school-related purposes, such as graduation pictures.
    Three of the seven districts we visited in 2000 reported that they had
    subsequently adopted new policies banning or restricting the use of
    student data, although none collected student data for commercial
    purposes. One of the seven released information in order for seniors to
    obtain class pictures, class rings, and graduation announcements.

    Education has taken steps to inform districts about the added student data
    safeguards included in PPRA, but many policies that districts provided to
    us did not specifically address the collection, disclosure, or use of
    student information for commercial purposes. Education has issued guidance
    advising districts that if they do not already have such a policy, they
    must develop and adopt one and notify parents. The department also
    provided districts with model notification information that districts
    could use to inform parents, posted relevant information on its Web site,
    and covered the provision in some of its training activities. However,
    only 19 of the 61 districts that responded to our request sent policies
    that did address commercial activities. District officials in several
    states reported that they relied on state school boards associations for
    help in developing policies. In addition, two districts in one state sent
    us policies that had been developed by their state school boards
    association. Although Education has disseminated its guidance to school
    districts and state education agencies, it has not disseminated this
    guidance directly to the school boards association in each state.

    We recommend that the Secretary of Education take additional action to
    assist districts in understanding that they are required to have specific
    policies in place for the collection, disclosure, and use of student
    information for marketing and selling purposes by disseminating its
    guidance to state school board associations. In commenting on a draft of
    our report, Education agreed with our recommendation.

    Background 	As we reported in 2000, commercial activities in school can
    generally be classified in four categories-product sales, direct
    advertising, indirect advertising, and market research-although each
    category encompasses a wide range of activities.2 For example, advertising
    activities could range from selling advertisements for a high school
    football game to selling

    2GAO/HEHS-00-156.

    naming rights to a school. Although this report synthesizes statutes,
    regulations, and proposed legislation addressing all four categories, our
    discussions of school district policies and Education's activities focus
    on the fourth category, market research, because of the amendments made by
    NCLBA that place requirements on districts that deal with the collection,
    disclosure, and use of student data for marketing and selling. (See table
    1.)

                      Table 1: Categories of Commercial Activities

    Commercial
    activities Examples

    Product sales  o  	Product sales benefiting a school district, school, or
    student activity, such as the sale of beverages or food within schools

    o  Cash or credit rebate programs

    o  	Fundraising activities, such as the short-term sales of gift wrap,
    cookie dough, or candy, to benefit a specific student population or club

    Direct advertising  o  	Signage and billboards in schools or school
    facilities, and on school buses and shelters

    o  	Corporate logos or brand names on school equipment, such as marquees,
    message boards, or scoreboards

    o  	Ads, corporate logos, or brand names on book covers, student
    assignment books, or posters

    o  Ads in school publications, such as newspapers or yearbooks

    o  	Media-based advertising, such as ads on Channel One or Internet sites

    o  Free samples, such as food or personal hygiene products

    Indirect advertising  o  	Corporate-sponsored educational materials,
    teacher training, contests, incentives, grants, or gifts

    Market research  o  Surveys or polls related to commercial activities

    o  	Internet surveys or polls asking for information related to commercial
    activities

    o  	Tracking students' Internet behavior and responses to questions
    calling for personal identification at one or more Web sites

    Source: GAO/HEHS-00-156.

    In recent years, the growth of the Internet has had a large impact on
    commercial activities, particularly market research, by enabling marketers
    to elicit aggregated and personally identifiable information directly from
    large numbers of students. For example, some Web filtering systems used in
    schools that block student access to certain Web sites also allow the
    company that maintains that software to measure and analyze how children
    use the Internet by tracking which Web sites they visit and how long they
    stay there. Although this information is aggregated and does not

    identify particular children, this information, especially when used with
    demographic data, can help businesses develop advertising plans that
    target particular audiences if districts allow the installation of the
    software. Also, Web sites directly elicit the participation of students in
    market research panels by offering them cash or prizes in exchange for
    information about themselves and their preferences. This makes it possible
    for companies to engage large-scale customized panels of students to test
    out marketing strategies and provide data to develop product lines and
    product loyalty without relying on schools.

        NCLBA Amends Statutory Safeguards on the Use of Student Data for Marketing
        and Selling Purposes

    NCLBA addresses some concerns about commercial activities and student data
    by amending and expanding certain student data safeguards that were
    established in PPRA.3 Prior to NCLBA, PPRA generally prohibited requiring
    students to submit to a survey concerning certain personal issues without
    prior written parental consent. As amended, PPRA4 for the first time
    requires districts to develop and adopt new policies, in consultation with
    parents, for collecting, disclosing, and using student data for marketing
    or selling purposes.5 Districts are also required to directly notify
    parents of these policies and provide parents an opportunity to opt their
    child out of participation in such activities. Furthermore, districts are
    required to notify parents of specific activities involving the
    collection, disclosure, and use of student information for marketing or
    selling purposes and to provide parents with an opportunity to review the
    collection instruments. PPRA did not contain deadlines for districts to
    develop policies. Also, PPRA requires Education to annually inform each
    state education agency and local school districts of their new obligations
    under PPRA. Finally, PPRA continues to require Education to investigate,
    process, and adjudicate violations of the section.

    3See 20 U.S.C.S:1232h(c)(1)(E)(Supp. 2003).

    4In this report we are not addressing other amendments to PPRA, which
    established requirements for surveys unrelated to marketing and selling
    and nonemergency invasive physical examinations.

    5If a school district already had a policy in place on January 8, 2002,
    that addressed the collection, disclosure, or use of student data for
    commercial purposes, the amendments do not require the district to adopt a
    new policy. See U.S.C. S:1232h(c)(3).

        FERPA and PPRA Safeguards Address Different Student Privacy Issues

    For the past 30 years, student and parent privacy rights related to
    students' education records have been protected primarily under the Family
    Educational Rights and Privacy Act (FERPA), which was passed in 1974.
    FERPA protects the privacy of students' education records by generally
    requiring written permission from parents before records are released.
    FERPA also allows districts to classify categories of information as
    publicly releasable directory information so long as the district has
    provided public notice of what will constitute directory information items
    and has allowed parents a reasonable period of time to advise the district
    that directory information pertaining to their child cannot be released
    without consent. Under FERPA, directory information may include a
    student's name, telephone number, place and date of birth, honors and
    awards, and athletic statistics. Unlike PPRA, FERPA does not address the
    participation of students in surveys or the collection, disclosure, or use
    of student data for marketing or selling purposes. (See table 2.) As a
    result of the NCLBA amendments, Education is required to annually inform
    each state and local education agency of the educational agency's
    obligations on PPRA and FERPA.6

    6See 20 U.S.C. S:1232h(c)(5)(c)(Supp. 2003).

    Table 2: Comparison of Selected PPRA and FERPA Provisions

                                 Provisions PPRA FERPA

    Activities targeted Collection, disclosure, or use of personal student
    data for marketing or selling purposes

    Survey, analysis, or evaluation concerning political affiliations or
    beliefs; psychological problems; sexual behavior or attitudes;
    self-incriminating behavior; critical appraisal of individuals with whom
    respondents have close relationships; privileged relationships; religious
    beliefs; or income (other than that required by law to determine program
    eligibility)

    Nonemergency invasive physical examinations of children Disclosure of
    students' education records

    Inspection, review, and amendment of education records

                             Individually      All student information contained
        Definitions of       identifiable      in education records
                        information including:
                                                Each district can define a subset
                                                 of information called "directory
    personal student Name Address Telephone information" that is generally not
             data               number          considered harmful or an invasion
                                                   of privacy to release, such as
                                                 name, address, telephone number,
                                                            height and weight (if
                           Social Security     an athlete), and scholastic honors
                               numbera                    and awardsa
                            Districts must
         Notification      directly notify
                         parents of policies    Districts must notify parents of
                              regarding                the categories of
                           the collection,     information it has designated as
                          release, or use of   directory information
                             student data
                        Districts must give
                        parents an opportunity Districts are to notify parents of
                        to exclude their               students of their right to
                        child's participation     opt out of the disclosure of
                        in specific activities       directory information
                          or to prevent the
                        release of information
                          about their child
                          except for certain
                        types of educational
                        activities and for the
                        armed services

    Source: GAO analysis.

    aThere are restrictions on the use of Social Security numbers. See GAO,
    Social Security Numbers: Use Is Widespread and Protections Vary,
    GAO-04-768T (Washington, D.C.: June 15, 2004). Consequently, districts
    would not designate students' Social Security numbers as part of directory
    information.

        School District Policies Are Set at the Local Level under State Laws

    State education laws are enacted by state legislatures and administered by
    each state's department of education, which is led by the state's chief
    state school officer. The Council of Chief State School Officers
    represents states' education interests in Washington, D.C., and acts as a
    conduit of information between the federal government and the states
    regarding federal education laws. Each state department of education
    provides guidance and regulations on state education laws to each school
    district.

    School district policies are generally set by local school boards
    according to the authority granted to them by state legislatures. The
    policies are then administered by the school district's superintendent and
    other school district staff. Local school boards in each state have come
    together to form a state school boards association. They provide a variety
    of services to their members including help on keeping their local school
    board policies current. For example, a partial list of services offered by
    one school board

      Since 2000, Most States Have Enacted Laws and Proposed Legislation That Affect
      Commercial Activities in Schools

    association includes policy development services, advocacy, legislative
    updates, legal services, executive search services, conferences and
    training, and business and risk management services.

    Since 2000, 13 states have established statutes, regulations, or both that
    address one or several categories of commercial activities in schools. Six
    of these states established provisions addressing market research by
    restricting the use of student data for commercial activities and for
    surveys. Other states passed statutes or issued regulations addressing
    product sales and advertising. In addition, as of February 2004, at least
    25 states are considering proposed legislation that would affect
    commercial activities. Most of these proposals would affect product sales,
    particularly the sale of food and beverages. Prior to 2000, 28 states had
    passed provisions addressing commercial activities. At that time, most
    provisions addressed direct advertising and product sales. The seven
    districts we visited in 2000 continued to conduct a variety of commercial
    activities, particularly product sales, and three districts reported that
    they have increased the level of activities with local businesses.
    However, the types of activities in these districts have not substantially
    changed since our visit.

        State Statutes and Regulations Vary Widely in Purpose and Scope

    Since our previous report in 2000, 13 states have enacted 15 statutory
    provisions and issued 3 regulatory provisions addressing one or more types
    of commercial activities in schools. Six states passed legislation
    affecting marketing research. Three of these 6 passed laws restricting the
    disclosure or use of student data for commercial purposes, and another 3
    placed restrictions on students' participation in surveys. For example, an
    Illinois statute prohibited the disclosure of student data to businesses
    issuing credit or debit cards, and a New Mexico regulation prohibited the
    sale of student data for commercial reasons without the consent of the
    student's parent. Laws in Arizona, Arkansas, and Colorado prohibited
    student participation in surveys without the consent of their parents.
    Five states passed new provisions affecting product sales. In most cases,
    these

    laws targeted the sale of soft drinks and snack food.7 Other new
    provisions addressed direct and indirect advertising.8

    Prior to 2000, 28 states had established one or more statutes or
    regulations that affected commercial activities in schools. Twenty-five
    states established provisions addressing advertising-in 19 states,
    measures affected direct advertising and in 6, indirect advertising.
    Sixteen states established provisions addressing product sales. Only 1
    state established a measure that addressed market research. See appendix
    II for a state-bystate listing of provisions addressing commercial
    activities.

        Most Proposed Legislation Affecting Commercial Activities Regards Food and
        Nutrition

    Legislatures in 25 states have recently considered one or more bills that
    affect commercial activities in schools, with most having a particular
    focus on child nutrition. These bills are intended to improve child
    nutrition and reduce obesity, and to achieve this intention, place
    limitations, restrictions, or disincentives on the sale of beverages and
    food of limited nutritional value. Legislatures in 24 of the 25 states
    recently considered bills that restrict or ban the sale of beverages and
    food of limited nutritional value in schools. For example, a bill in New
    York would prohibit vending machines from selling food and drinks of
    minimal nutritional value. Additionally, legislatures in several states
    have considered bills that restrict the hours when students can buy
    products of limited nutritional value. For example, bills in Alaska and
    Ohio would restrict the sale of soft drinks during certain hours. Finally,
    pending legislation in Maryland would require schools to sell food of
    limited nutritional value at higher prices than nutritious food.

    Legislatures in seven states have recently proposed bills that focus on
    other aspects of commercial activities in schools. In three states-
    Connecticut, Minnesota, and North Carolina-bills would restrict the
    ability of schools to enter into exclusive contracts with beverage and
    food venders. In two statesNew Jersey and North
    Carolinabills would place limits on the ability of schools to
    release or collect personal information

    7For additional information on policies restricting the sale of foods that
    compete with school meal programs, see GAO, School Meal Programs:
    Competitive Foods Are Available in Many Schools; Actions Taken to Restrict
    Them Differ by State and Locality,

    GAO-04-673 (Washington, D.C.: Apr. 23, 2004).

    8Some provisions addressed more than one activity. For example, a
    provision in Virginia affected direct and indirect advertising.

    about students, such as prohibiting the release of data from the
    studenttesting program to any marketing organization without the written
    permission of the parent or guardian. Other proposed bills addressed a
    variety of issues, such as allowing schools to sell advertising and accept
    supplies bearing logos or other corporate images or requiring school
    boards to disclose the portion of proceeds from fundraising activities
    that is contributed to the school activity fund. See appendix III for a
    state-bystate listing of legislative proposals.

        Commercial Activities in the Seven Districts We Visited in 2000 Have Not
        Generally Changed

    In updating the site visit information we collected in 2000, we found only
    slight changes in commercial activities in all seven school districts. All
    districts reported they continued to engage in product sales and display
    advertising. As we found earlier, most commercial activities, particularly
    product sales and advertising, occurred in high schools. All the high
    schools we visited in 2000 still sold soft drinks, and most sold snack or
    fast food. To varying degrees, all displayed corporate advertising. High
    schools continued to report the receipt of unsolicited samples, such as
    toiletries, gum, razors, and candy, that they did not distribute to
    students. In contrast, the elementary schools we contacted did not sell
    carbonated soft drinks to students or display corporate advertising.
    Grocery and department store rebate programs continued to operate in
    almost all schools, but coupon redemption programs were largely an
    elementary school enterprise. As we found before, none of the districts
    reported using corporate-sponsored educational materials or engaging in
    market research for commercial purposes.

    Officials did report some changes in commercial activities. Three of these
    districts reported stronger ties with local businesses, and three schools
    in two districts reported they now sell healthier soft drinks. One
    district reported a new relationship with a computer firm headquartered in
    its area that provided tutors as well as cash donations to schools in the
    district. Under this relationship, company employees tutored students who
    were at risk of failing, and the company donated $20 to schools for each
    10 hours of tutoring that its employees provided. A principal in this
    district reported that many students in her school benefit substantially
    from this relationship and her school earned between $6,000 and $9,000 per
    year in donations. Another district reported it had entered into a new
    contract with a local advertising agency to raise revenue to renovate
    sport concession stands, and a third had organized a new effort to sell
    advertisements to fund construction on the district's baseball field.
    Three principals told us that vending machines in their schools now offer
    a

      Districts Are Beginning to Implement Provisions on Student Data, and Few Use
      Student Data for Commercial Purposes

    different mix of beverages-for example, more juice, milk, and water and
    fewer carbonated beverages-than they did when we visited in 2000.

    We estimate that about two-thirds of the districts in the nation were
    either developing or had developed policies addressing the new provisions
    on the use of student data for commercial purposes. However, only 19 of
    the 61 districts that provided us copies of their policies specifically
    addressed these provisions. Very few school districts reported releasing
    student data for marketing and selling, and all these releases were for
    student-related purposes. Of the seven districts we visited in 2000, three
    adopted new policies on the use of student data since our visit, and only
    one released data and that was for graduation pictures.

    Although districts reported they had developed policies, many of the
    policies they sent us did not fully address PPRA requirements. On the
    basis of the results of our surveys, we estimate about a third of
    districts were developing policies regarding the use of student data for
    commercial purposes; another third had developed policies; and about
    another third had not yet developed policies.9 However, when we analyzed
    policies that 61 districts sent to us, we found only 19 had policies that
    specifically addressed marketing and selling of student information. Of
    these, 11 policies addressed the collection, release, and use of student
    information for commercial purposes. Eight policies partially addressed
    the provisions by prohibiting the release of student data for these
    purposes. Policies in the 42 remaining districts did not address the new
    PPRA provisions. Many of these districts provided us policies concerning
    FERPA requirements.

    We telephoned all districts in our sample that reported they release data
    for commercial purposes and a subsample of districts that reported they
    had not. Of the 17 districts that released data for commercial purposes,
    all reported that they released data only for school-related purposes. For
    example, all 17 released students' names to photographers for graduation
    or class pictures. Two of these districts also released student data to
    vendors who supplied graduation announcements, class rings, and other
    graduation-related products, and another two districts released student
    information to parent-teacher organization officials who produced school

    9Because the survey is based on a sample, all estimates in this report are
    subject to sampling error. Unless otherwise noted, the 95 percent
    confidence intervals for estimates in the report are less than plus or
    minus 9 percentage points.

      Education Developed and Disseminated Guidance, but Many Districts' Policies
      Did Not Address Requirements

    directories that they sold to students' parents. Of the 16 districts that
    reported they did not release student data, one actually did release
    student data. As in the other cases, that district released it to a school
    photographer.

    Of the seven districts we visited in 2000, three adopted new policies on
    the use of student data. One of the districts we visited adopted new
    policies that incorporated PPRA provisions on the use of student data for
    commercial purposes. Two adopted policies with blanket prohibitions
    against some uses of student data for marketing and selling. In one of
    these districts, policies prohibited the release of students' data for any
    survey, marketing activity, or solicitation, and policies in the other
    banned the use of students to support any commercial activity. Officials
    in all seven districts reported that their district did not collect
    student data for marketing or selling purposes, and several expressed
    surprise or disbelief that this practice did in fact occur. However, a
    high school in one district reported that it disclosed information on
    seniors to vendors selected by the district to sell senior pictures,
    school rings, and graduation announcements.

    As required by NCLBA, Education has developed guidance and notified every
    school district superintendent and chief state school officer in the
    country of the new required student information protections and policies,
    and has charged the Family Policy Compliance Office to hear complaints on
    PPRA. Education issued guidance about the collection, disclosure, and use
    of student data for commercial purposes as part of its general guidance on
    FERPA and PPRA in 2003 and 2004. In addition, although not required by
    statute to do so, Education provided superintendents with model
    notification information that districts could use to inform parents of
    their rights, included information about PPRA in some of its training
    activities, and posted its guidance and other PPRA-related material
    prominently on its Web site. Education has charged its Family Policy
    Compliance Office to hear complaints and otherwise help districts
    implement the new student data requirements. Although the office has
    received some complaints about other provisions related to student
    privacy, as of June 2004, officials from that office reported they have
    received no complaints regarding the commercial uses of student data.

    Many districts did not appear to understand the new requirements, as shown
    by our analysis of the 61 policies sent to us by districts in our sample.
    Although we asked districts to send us their policies that addressed these
    new provisions, only 11 districts sent policies that

    Conclusions

    addressed these new provisions comprehensively, and 8 sent policies that
    covered these provisions partially. The 42 remaining districts sent
    policies that did not contain specific language addressing the collection,
    release, or use of student data for commercial purposes, although
    districts sent them to us as documentation that the districts had
    developed such policies. Most of these policies contained only general
    prohibitions about the release of student records and concerned FERPA.

    Although Education is not required to issue its guidance to state school
    boards associations, four districts in two states in our survey offered
    unsolicited information that they relied on state school boards
    associations to develop policies for their consideration and adoption. Two
    districts in a third state that sent us policies used policies developed
    by their state school boards association to address commercial activities
    in schools. However, Education did not distribute its guidance to these
    associations.

    Although state laws both limit and support commercial activities in
    schools, many state legislatures have chosen to pass laws addressing only
    specific activities such as permitting or restricting advertising on
    school buses. In addition, many states have not enacted legislation
    concerning commercial activities or have passed the authority to regulate
    these activities to local districts, thus allowing district school boards,
    superintendents, or principals to determine the nature and extent of
    commercial activities at the local level. Not only do commercial
    activitiesproduct sales, direct advertising, indirect advertising,
    and market researchencompass a broad spectrum of activities, but
    also the levels of these activities and the levels of controversy attached
    to them vary substantially. For example, few would equate selling
    advertisements for a high school football program with selling the naming
    rights to a school, although both are examples of direct advertising.
    Because of these differences, as well as philosophical differences among
    districts and communities, it is probably not surprising that states
    legislatures have taken various approaches toward the regulation of
    commercial activities.

    Perhaps because providing student information for commercial purposes may
    have serious implications, few districts do so. In fact, some school
    officials said they were skeptical that schools would allow the use of
    student data for this purpose. In the past, marketers may have approached
    schools to survey students about commercial products or services. Today,
    however, technology, particularly the proliferation and availability of
    the Internet, provides marketers with quick and inexpensive access to very

    large numbers of children without involving the cooperation of schools. As
    Internet users, children often submit information about themselves and
    their personal product preferences in exchange for cash or prizes. Because
    of the disinclination of school officials to sell student data and the
    ability of marketers to get data directly from students without involving
    schools, it may be understandable that relatively few districts as yet
    have actually adopted policies that specifically address the selling and
    marketing provisions of PPRA. On the other hand, few would argue against
    the need to protect students' personal information. Many businesses,
    particularly local businesses catering to youth markets, might still
    profit from acquiring student information from schools. Although we found
    districts did not use student data for purposes generally viewed as
    offensive, this does not mean such use would not happen in the future in
    the absence of safeguards.

    It appears that some superintendents may not be aware of the new PPRA
    requirements or have not understood Education's guidance because many
    thought their district's policies reflected the latest federal
    requirements on use of student data when, in fact, they did not. Also,
    several districts told us that they relied on state school boards
    associations to develop policies. Unlike models or guidance that reflect
    only federal law, policies developed by these groups may be most useful to
    districts because they correspond to both federal and state requirements.
    These associations are not on Education's guidance dissemination list.

    We recommend that the Secretary of Education take additional action to
    assist districts in understanding that they are required to have specific
    policies in place for the collection, disclosure, and use of student
    information for marketing and selling purposes by disseminating its
    guidance to state school boards associations.

                                   Recommendation for

      Executive Action

    Agency Comments 	We provided a draft of this report to the Department of
    Education for review and comment. Education concurred with our
    recommendation. Education's comments are reproduced in appendix V.
    Education also provided technical comments, which were incorporated as
    appropriate.

    Unless you publicly announce its contents earlier, we plan no further
    distribution until 30 days after the date of this letter. At that time, we
    will send copies of this report to the Secretary of Education, appropriate
    congressional committees, and others who are interested. We will also

    make copies available to others upon request. In addition, the report will
    be available at no charge on GAO's Web site at http://www.gao.gov. If you
    or your staff have any questions, or wish to discuss this material
    further, please call me on (202) 512-7215. Other contacts and staff
    acknowledgments are listed in appendix VI.

    Marnie S. Shaul, Director Education, Workforce, and Income Security Issues

                           Appendix I: Scope and Methodology

    To conduct our work, we reviewed state statutes, regulations, and proposed
    legislation; received mail questionnaires from 219 school districts
    selected on the basis of a national stratified probability sample design;
    conducted additional brief telephone interviews with 36 of these
    districts; analyzed policies voluntarily provided by 61 districts;
    interviewed officials at Education; and examined guidance issued by the
    department. In addition, we conducted telephone interviews with district
    and school officials in the 7 districts that we visited in 2000 for our
    previous study on commercial activities in schools to update our previous
    findings.

    To update our compilation of state statutes and regulation contained in
    our 2000 report, we researched legal databases, including Westlaw and
    Lexis, to identify laws passed between January 2000 and May 2004. To
    identify pending laws, we researched information available on databases
    maintained by state legislatures or followed links provided by these
    databases to identify bills introduced between January 2003 and February
    2004. However, there are inherent limitations in any global legal search,
    particularly when-as is the case here-different states use different terms
    or classifications to refer to commercial activities in schools.

      Review of State Legislation

    Survey of School Districts

        Sample

    We selected a national probability sample of districts, taken from school
    districts contained in the Department of Education's Common Core of Data
    (CCD) Local Education Agency (LEA) file for the 2000-2001 school year.
    After removing districts from this list that were administered by state or
    federal authorities, we identified a population of 14,553 school
    districts. In the course of our study, we learned that some special
    education and other units in this list do not have legal authority to
    establish formal policies. As a result, we estimate that our study
    population consists of 13,866 districts in the 50 states and the District
    of Columbia. The sample design for the survey consisted of a stratified
    random probability sample design: 271 districts were drawn from the three
    strata shown in table 3. The strata were designed to draw relatively large
    numbers of districts from states likely to include districts that had
    engaged in or planned to engage in one or more specific activities
    involving the collection, disclosure, or use of student information for
    the purposes of marketing or selling or

                           Appendix I: Scope and Methodology

    providing information to others for these purposes. Because we thought the
    activities of interest were low incidence activities, we wanted to
    maximize our ability to examine situations involving the use of student
    data for commercial purposes. The expected high-activity strata were
    defined as states that we identified as having laws that permitted
    commercial activities when we performed our work in 2000. As shown in
    table 4, the response rates were 76 percent, 83 percent, and 88 percent in
    the three sampling strata. The overall estimated response rate was 87
    percent.

                      Table 3: Sample and Response Rates by Strata

                      Estimated                 Number of Number of
                                                          returned
                                                          surveys from
                     population                ineligible eligible            Weighted
    Stratum                size Sample size     districts    districts
                        (number                                               response
    number  Stratum          of                                                   rate
                    districts)a (unweighted) (unweighted) (unweighted) Weight

    States with laws that
    permitted commercial
    activities (Maine and
    New Mexico) 312 80 0 61 3.900 76%b

    State with laws that
    permitted some types
    of commercial
    activities (California,
    Florida, Louisiana,
    Kansas, Maryland,
    Minnesota,
    Mississippi, Nevada,
    North Carolina, and
    Texas) 3,224 95 1 78 34.294 83%

    School districts in all
    other states 10,330 96 5 80 113.520 88%

                         Total estimated 13,866 271 6 219 87%c

    Source: GAO analysis.

    aAdjusted for ineligible units.

    bThe response rate for each stratum is calculated as the ratio of the
    weighted number of eligible returned surveys to the weighted number of all
    eligible surveys.

    cThe total response rate is calculated as the ratio of the weighted number
    of eligible returned surveys over all strata to the weighted number of all
    eligible surveys over all strata.

    Because we followed a probability procedure based on random selections,
    our sample is only one of a large number of samples that we might have
    drawn. Since each sample might have provided different estimates, we
    express our confidence in the precision of our particular sample's results
    as a 95 percent confidence interval (for example, plus or minus 9
    percentage points). This is the interval that would contain the actual

                           Appendix I: Scope and Methodology

    population value for 95 percent of the samples we could have drawn. As a
    result, we are 95 percent confident that each of the confidence intervals
    in this report will include the true values in the study population.

                                Survey Errors Procedures

    The practical difficulties of conducting any survey introduce nonsampling
    errors. For example, errors could be made in keying questionnaire data,
    some people may be more likely than others to respond, or questions may be
    misinterpreted. To minimize data-handling errors, data entry and programs
    were independently verified. To reduce the possibility of misinterpreting
    questions, we pretested the questionnaire in four districts. The full
    questionnaire is reproduced in appendix IV. We took additional steps to
    check answers for a subsample of respondents because of concerns about
    misinterpretation. We were concerned about possible misinterpretation of a
    question about implementing the law (question 1) because we discovered
    during our pretest that there was confusion between a narrow and
    (probably) little used portion of a student privacy law (PPRA) regarding
    selling and marketing of student data and a more familiar older law
    (FERPA) concerning student records. We were also concerned that there
    could be an underreporting of commercial activities because our question
    did not specify the activities ("During school year 2003-2004, did your
    LEA, or any school in your LEA, engage or plan to engage in one or more
    activity regarding the collection, disclosure, or use of student
    information for the purposes of marketing or selling or providing the
    information to others for these purposes?") and because very few schools
    reported using student information for commercial purposes. Further, our
    pretesting indicated a potential problem with respondents suggesting they
    would be hesitant to report commercial activities. Moreover, because 86
    percent of our respondents answered "no" to question 2, a higher rate than
    expected, there was some question in our minds whether our respondents who
    answered no had really considered all the possible ways in which student
    information could be used for commercial purposes when formulating their
    answers.

    We attempted to verify the answers to our question about commercial
    practices by telephoning 36 districts, the 20 districts that reported
    using student data for commercial purposes, and the 16 randomly selected
    districts from among the districts that reported not using student data
    for commercial purposes. Three of the 20 districts originally reporting
    the use of student data were found not to be using the data for commercial
    purposes because they were supplying the data to military organizations or
    for scholarships, allowed uses. For the 16 sampled districts reporting not
    using students' data for commercial purposes, we asked the

                           Appendix I: Scope and Methodology

    superintendent or other knowledgeable person in the district detailed
    questions about 20 possible commercial activities. We asked whether the
    school provides student addresses or phone numbers for specific activities
    (student pictures, letter jackets, any types of school uniforms,
    yearbooks, class rings, tuxedo rentals for prom, corsages for prom,
    musical instrument rentals, caps and gowns for commencement, preparation
    for Scholastic Aptitude Test or other tests, any other type of tutoring,
    transportation for school field trips, or travel for other trips such as
    spring break or ski trips), or to outside organizations for students to
    serve on an Internet or study panel, answer questionnaires, test or try
    out a product, or receive mailings from or talk with representatives of
    outside organizations who are selling services or products. One of these
    16 districts was found to be using the data for commercial purposes in
    connection with photographers for school pictures. As a result of these
    telephone calls, we corrected the three incorrect records but did not make
    further adjustments for districts that were not contacted.

    We attempted to verify the answers about the development of policies by
    examining policies that were voluntarily submitted by districts in our
    sample. Sixty-one districts complied with our request to submit a copy of
    their policy. We analyzed these policies to determine if they specifically
    referred to marketing or commercial activities.1 We found 11 districts
    submitted policies that addressed these provisions and an additional 8
    submitted policies that partially addressed the provisions in that they
    prohibited the release of student data for commercial purposes but did not
    address the collection or use of such data. Therefore, our questionnaire
    gathered relevant data about districts' perceptions of the extent to which
    they thought they were implementing the provision, rather than the extent
    to which these policies actually did so. This probably reflects confusion
    in interpreting the provision or lack of awareness of its existence.

    We interviewed officials at Education's Family Policy Compliance Office
    and the Office of the General Counsel. We examined in detail the guidance

      Analysis of District Policies

    Contacts at Education

    1Because of the self-selected nature of these 61 districts, we do not
    consider them a probability sample and therefore results from this
    analysis should not be generalized to the study population.

                           Appendix I: Scope and Methodology

      Follow-up Telephone Interviews with the Seven Districts We Visited in 2000

    issued by the department to assist schools in implementing PPRA provisions
    on use of student data for marketing and selling purposes.

    We conducted telephone interviews with district and school officials in
    the seven districts we visited to collect information for Public
    Education: Commercial Activities in Schools (GAO-00-156), a report we
    issued in 2000, to discern changes in commercial activities in these
    districts. (See table 5.) We selected these districts because they engaged
    in a variety of commercial activities, served diverse populations-ranging
    from large numbers of poor students to children from affluent families-and
    varied in terms of geography and urbanicity. In updating that information
    for this report, we interviewed district-level officials, including
    superintendents and business managers, and elementary, middle school, and
    high school principals.

               Table 4: Districts Contacted from Our Site Visits in 2000

    State District

    California 	Long Beach Unified School District Oxnard School District
    (elementary and middle school) Oxnard Union High School District

    Michigan 	Grand Rapids Public Schools Ludington Area Schools

    New Mexico	Albuquerque Public Schools Los Alamos Public Schools

                                  Source: GAO-00-156.

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
    Schools

    This appendix lists state statutory and regulatory provisions relating to
    commercial activities as of May 2004. Shaded entries were enacted since
    2000. This updated table identifies 15 new statutes and 3 new regulations
    and also includes state laws pertaining to the sale of competitive food in
    schools. In addition, the table includes several laws that were not
    identified in our previous report.

                                      Advertising

               Statutory/
               regulatory         Product                            Marketing or
        State   provision          sales          Direct Indirect market research
    Alabama  Statute     Prohibits requiring
                          students to participate
                           in school fundraising
    Alaska   Statute

    Arizona Statute 	Permits advertising on school buses under certain
    restrictions

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
                                        Schools

                                      Advertising

    Statutory/

    regulatory Product Marketing or State provision sales Direct Indirect
    market research

    California Statute 	Restricts the type of individual food items sold at
    elementary schools to those that comply with certain fat and sugar content
    restrictions

    Restricts the type of beverages sold at middle and junior high schools
    during the school day to water, milk, fruitbased drinks, and electrolyte
    replacement beverages meeting certain restrictions

    Restricts the type of beverages sold at elementary schools during the
    school day to water, milk, 100 percent fruit juice, and unsweetened
    fruitbased drinks containing at least 50 percent fruit juice

    Restricts school boards and schools from contracting for carbonated
    beverages and nonnutritious foods

    Prohibits teachers, dentists, or optometrists from soliciting students on
    school grounds Prohibits schools Prohibits states and from contracting for
    local boards from electronic products adopting basic or services that
    instructional disseminate materials that advertising to provide students
    unless unnecessary certain notice exposure to brand requirements are
    names, products, or followed company logos

    Prohibits advertising of tobacco products on any outdoor billboard within
    1,000 feet of any public (or private) school

    Colorado Regulation Prohibits the        Student editors
                           operation
                           of competitive food  determine
                           service beginning    advertising content
                           one-
                           half hour before and of school-sponsored
                           ending one-half hour publications
                           after the school's
                           breakfast and lunch
                           period

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
                                        Schools

                                      Advertising

    Statutory/

    regulatory Product Marketing or State provision sales Direct Indirect
    market research

    Connecticut Regulation 	Prohibits sale of coffee, soft drinks, tea, and
    candy one-half hour before, during, or after lunch or breakfast

    Florida Regulation 	Foods of minimal nutritional value can only be sold in
    secondary schools for 1 hour after lunch

    Statute Permits school boards  Permits school
               to establish                 boards to
               fundraising                  establish
               policies               policies
                                      regarding
                                      advertising

    Georgia Regulation 	Prohibits sale of foods of minimal nutritional value
    in elementary schools until after lunch and in other schools during
    mealtime in the dining, serving, and kitchen areas

                                     Hawaii Statute

    Permits schools to have vending machines and concessions if operated by
    the blind or individuals with visual handicaps

    Prohibits the sale of cigarettes from a lunch wagon engaging in any sales
    activity within 1,000 feet of any elementary or secondary school grounds

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
                                        Schools

                                      Advertising

    Statutory/

    regulatory Product Marketing or State provision sales Direct Indirect
    market research

    Illinois

    Regulation 	Elementary schools participating in the National School Lunch
    Program are prohibited from selling competitive food during breakfast and
    lunch periods

    Statute Prohibits           Prohibits certain
               solicitation of
               students by certain private businesses
               private businesses  or vocational
               or
               vocational schools  schools from
               unless approved by
               the                 advertising for
               superintendent      student enrollees
                                   unless approved by
                                   the superintendent

    Kansas Statute 	Permits student editors to determine advertising content
    in student publications

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
                                        Schools

                                      Advertising

    Statutory/

    regulatory Product Marketing or State provision sales Direct Indirect
    market research

    Kentucky Regulation 	Prohibits selling any food outside the National
    School Breakfast or Lunch program until one-half hour after lunch period

    Maine Statute 	Permits school districts to fundraise for their benefit

    Maryland Statute 	Permits advertising on school bus shelters under certain
    restrictions Massachusetts

    Regulation 	Prohibits outdoor advertising of cigarettes within 1,000-foot
    radius of any school

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
                                        Schools

                                      Advertising

                       Statutory/
                       regulatory  Product                           Marketing or
          State       provision     sales    Direct   Indirect    market research
        Minnesota      Statute

    Prohibits school boards from contracting for computer or related equipment
    that requires advertising to be disseminated to students unless parents
    are given the opportunity to opt their child out of exposure to the
    advertising

    A school board may contract with advertisers or others to sell naming
    rights and advertising rights to its school facilities

    Permits advertising on school buses under certain restrictions

    Mississippi Regulation 	Prohibits selling any food item for 1 hour before
    a school meal

    Statute 	Permits commercial advertising on protective textbook covers

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
                                        Schools

                                      Advertising

    Statutory/

    regulatory Product Marketing or State provision sales Direct Indirect
    market research

    Nevada Statute 	Permits advertising on and in school buses

    New Hampshire Statute 	Permits advertising on school bus shelters

    Regulation 	Prohibits advertising on school bus exterior except for
    manufacturer's logo

    New Jersey Regulation 	Prohibits selling food items of minimal nutritional
    value before the end of the last school lunch period Prohibits advertising
    on the interior or exterior of buses except for manufacturer's or vendor's
    trade name

    Permits advertising on school bus stop shelters subject to governmental
    approval

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
                                        Schools

                                      Advertising

    Statutory/

    regulatory Product Marketing or State provision sales Direct Indirect
    market research

    New Mexico   Statute/                 Commercial
                    regulation     advertising permitted inside and
                                                 on sides of school
                                               buses

    New York  Statute   Generally prohibits
                         selling soft drinks and
                         candy during school
                         day until the last
                           scheduled meal period

    Regulation 	Generally prohibits commercial promotional activities on
    school premises except where commercial entity sponsors a school activity
    which does not involve promoting the sponsor's product or service

    North Carolina       Statute                  Permits school
                                                    boards to adopt
                                                      instructional
                                               materials containing
                                                 commercial
                                                advertising so long
                                                   as the materials
                                                      relate to the
                                                 academic curricula

    Regulation 	Prohibits the individual, Requires local or "a la carte," sale
    of school boards to foods of minimum assure that students nutritional
    value and are not regularly limits the sale of required to observe,
    individual food items listen to, or read until after the commercial
    established lunch hour advertising has ended

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
                                        Schools

                                      Advertising

    Statutory/

    regulatory Product Marketing or State provision sales Direct Indirect
    market research

    North Dakota Statute 	Requires school boards to approve fundraising
    involving students

    Rhode Island Statute Prohibits school     Prohibits the
                            officials from      distribution to
                            soliciting
                            any pupil in any      students of
                            public
                            school, generally      commercial
                            prohibits the sale  materials unless
                                    of
                            commercial goods or  approved by the
                                services in       local school
                                 schools,
                            and requires school committee
                            committee to issue
                            rules related to
                                fundraising
                                activities

    Tennessee        Regulation              Permits commercial
                                                    advertising on
                                                  school buses, in
                                                   accordance with
                                                policy established
                                                   by local school
                                                   board

    Statute 	Requires districts to develop a policy setting forth the rights
    of parents and students and guidelines for teachers and principals with
    respect to the administration of surveys, analyses, or evaluations of
    students Statute/ Permits advertising

    Texas               Regulation                                    Permits
                                                                    commercially
                                                                  sponsored high
                                                                 school athletic
                                                                        programs

    regulation 	on the exterior of a school bus, provided that it does not
    distract from the effectiveness of required safety warning equipment

    Appendix II: State Statutes and Regulations Addressing Commercial Activities in
                                        Schools

                                      Advertising

    Statutory/

    regulatory Product Marketing or State provision sales Direct Indirect
    market research

    Virginia

                                        Statute

    Permits school boards to contract with commercial institutions for a
    telephone service or credit card that, without endorsing the product,
    bears the name of the school board, and provides a portion or percentage
    of the revenues to a fund established for a public school purpose

    Regulation 	All foods sold in school from 6:00 a.m. until after the
    breakfast period must be of sound nutritional value

                                West Virginia Regulation

                                 Source: GAO analysis.

    Appendix III: Legislative Proposals Addressing Commercial Activities in Schools,
    February 2004

    This appendix lists proposals addressing commercial activities in schools
    that have been introduced by some state legislatures between January 2003
    and February 2004. The data are taken from the Web sites maintained by
    state legislatures. Many of these sites are revised only periodically, and
    information on some is limited to the current legislative session.
    Therefore this information should be viewed as a rough snapshot, rather
    than a comprehensive analysis.

                                      Advertising

    Marketing and market State Product sales Direct Indirect research

    Alabama  o  	Would allow students to choose any photographer for yearbook
    pictures

    o  	Would prohibit schools from preventing a picture taken by that
    photographer from appearing in a yearbook if the picture meets the
    specifications of the yearbook staff

    Alaska  o  	Would prohibit the sale of soft drinks from 8 a.m. through 5
    p.m. in public schools

                                     Connecticut  o

    o

    o

    Would set up a pilot program in which participating schools would be
    barred from allowing the sale of chewing gum and other specified foods and
    beverages

    Would require public hearings prior to the completion of contracts between
    food vendors and public schools

    Would call for a pilot school food nutrition program to test restricting
    beverages sold to schoolchildren to fruit juices, water, or milk and offer
    fruits and nonfried vegetables for sale at lower prices than other fooda

    Appendix III: Legislative Proposals Addressing Commercial Activities in
    Schools, February 2004

                                      Advertising

    Marketing and market State Product sales Direct Indirect research

    Georgia  o  	Would prohibit the sale of soft drinks to students and
    consumption of soft drinks by students in school buildings and on school
    grounds, except in the school cafeteria, before and during school hours

    Hawaii  o  	Would require vending machines in public schools to dispense
    only water, milk, and 100 percent fruit juice

    o  	Would establish nutrition standards for beverages sold to students in
    public schools

    o  	Would require food and drink items in public school vending machines
    to comply with board of education standards

    o  	Would provide minimum standards for vending machine food and drink
    items

    o  	Would allow schools to sell advertising to companies and other
    organizations, including selling advertising space at sports competitions
    and other space on school campuses

    o  	Would allow schools to accept donated supplies and equipment bearing
    logos, trademarks, labels, or any other image or mark representing a
    commercial or noncommercial organization

                                      Illinois  o

    o

    o

    o

    Would require revenue from vending machines that are not within the
    cafeteria to be used exclusively for physical education and nutrition
    education

    Would prohibit soft drinks and candy from being dispensed to students by
    school vending machines.

    Would require school boards to prohibit the sale of candy, soda pop, and
    chips at school or on school grounds

    Would set requirements for beverages and foods sold in

    Appendix III: Legislative Proposals Addressing Commercial Activities in
    Schools, February 2004

                                      Advertising

    Marketing and market State Product sales Direct Indirect research

    school vending machines and requires the State Board of Education to
    prepare and distribute a list of products that meet the standards

                                      Kentucky  o

    o

    Would prohibit sales during the day through vending machines, school
    stores, canteens, or fundraisers of chewing gum, water ices, foods that
    contain more than 40 percent added sugar by weight, and foods that contain
    more than 6 grams of fat per serving (except seeds and nuts)

    Would prohibit an elementary school from selling soda waters during a
    school day; would require that at least 75 percent of the beverages sold
    in middle and high schools be healthy beverages, and would prohibit the
    sale of any beverage to students in competition with the School Breakfast
    Program and the National School Lunch Program

    Maine  o  	Would ban chewing gum, candy bars, food, or drinks that contain
    35 percent or more sugar or other sweeteners; juices that are less than
    100 percent real fruit juice; and foods with greater than 8 grams of fat
    per serving. Would ban soft drinks from elementary and middle schools and
    soft drinks containing caffeine from high schools

    Appendix III: Legislative Proposals Addressing Commercial Activities in
    Schools, February 2004

                                      Advertising

    Marketing and market State Product sales Direct Indirect research

                                      Maryland  o

    o

    o

    o

    Would require county boards of education to develop and adopt specific
    policies relating to vending machines in public schools and requiring each
    school to install and use timing devices on every vending machine

    Would require that 50 percent of all food and drink options available in
    vending machines be nutritious food and the price of foods of minimal
    nutritional value sold in vending machines to be at least 25 percent
    higher than the price of nutritious food

    Would prohibit the sale of any beverages between the hours of 12:01 a.m.
    and the end of the last lunch period in public schools except water, fruit
    juices with at least 50 percent fruit juice, isotonic beverages that
    replenish electrolytes and do not contain more than 42 grams of added
    sweetener per 20 ounce serving, or milk

    Would prohibit the sale of food (except for school lunches) between the
    same hours if more than 35 percent of the total calories per package are
    from fat, more than 10 percent of the total calories per package are from
    saturated fat, or more than 35 percent of the total calories per package
    are from sugar (except for fruits and vegetables)

    Appendix III: Legislative Proposals Addressing Commercial Activities in
    Schools, February 2004

                                      Advertising

    Marketing and market State Product sales Direct Indirect research

    Massachusetts  o  	Would prohibit vending machines containing soda or soft
    drinks in pubic school buildings or charter schools

    Michigan  o  	Would require the number of milk vending machines to be at
    least equal to the number of soda vending machines in school buildings

    o  	Would require the department of education to promulgate rules
    providing healthy eating in schools that will apply to school meals,
    vending machines, and other food sales and ban the sale of chewing gum,
    candy bars, foods and drink containing more than 35 percent sugar, food or
    drink containing more than 8 grams of fat per serving, juice that is less
    than 100 percent real juice, and soft drinks in elementary and middle
    schools

                                      Minnesota  o

    o

    o

    Would ban contracts that allow the exclusive sale of a particular beverage
    brand, that prohibit the sale of a competing brand, include sales
    incentives, or limit the ability of schools to control the number and
    location of vending machines

    Would prohibit the sale of nutritious beverages at a price per unit volume
    higher than the price per unit volume of non-nutritional beverages

    Would require schools that sell packaged beverages to encourage students
    to drink milk and other nutritional beverages

    Appendix III: Legislative Proposals Addressing Commercial Activities in
    Schools, February 2004

                                      Advertising

    Marketing and market State Product sales Direct Indirect research

    New Jersey  o  	Would prohibit the sale at public elementary or middle
    schools during the school breakfast or lunch period any soft drink or
    juice product that is less than 100 percent fruit or vegetable juice,
    candy bars, hard candy or chewing gum, or any other food or drink that has
    more than 35 percent sugar or other sweeteners, or has more than 8 grams
    of fat

    o  	Would require schools to receive written informed consent from parents
    or guardians and provide a document for reviewing before permitting
    students to participate in surveys, assessments, or evaluations that
    reveal certain types of personal information

    o  	Would permit students to participate in a voluntary survey if the
    district sends prior written notification to student's parents

    New Mexico  o  	Would prohibit the sale of foods of minimal nutritional
    value in the food service areas during school lunch periods

    o  	Would prohibit beverages other than water and 100 percent fruit or
    vegetable juices from being accessible to elementary school students
    during the school day

    o  	Would require all vending machines located on school grounds to
    feature graphics of only 100 percent fruit or vegetable juices, water or
    educational programs

    New York  o  	Would prohibit vending machines from selling certain foods
    and drinks, such as foods of minimal nutritional value on public school
    grounds or public school property

    North Carolina  o  Would call for a moratorium  o  Would prohibit the
    release of on soft drink contracts in data from the student-testing
    schools program to any marketing organization without the express written
    permission of the parent or guardian

    o  	Would require schools to obtain written consent of the

    Appendix III: Legislative Proposals Addressing Commercial Activities in
    Schools, February 2004

                                      Advertising

    Marketing and market State Product sales Direct Indirect research

    student's parent or the adult student before administering surveys or
    evaluations that collect certain personal information, and would require
    local school boards and their employees to the anonymity and
    confidentiality of students' responses to such instruments

                                        Ohio  o

    o

    o

    o

    Would restrict beverages sold to students in grades kindergarten through 4
    to milk and other specified beverages

    Would restrict beverages sold to students in grade 5 to 12 from one-half
    hour before school to one-half hour after the end of the school day

    Would permit the sale of other beverages that do not meet nutritional
    standards if students are selling them as a fundraiser

    Would restrict food sold to students in grades kindergarten to 4 to food
    meeting certain minimal nutritional standards

    Oklahoma  o  	Would require the board of education to bar access to
    vending machines that contain food or soft drinks of low nutritional value
    by students in grades K-5 and limits access by students in grades 6-12

    South Carolina  o  	Would ban the sale of foods and drinks that do not
    comply with federal standards

    o  	Would restrict the sale of foods to students outside of school meals
    to whole grain products and other specified foods and beverages

    Appendix III: Legislative Proposals Addressing Commercial Activities in
    Schools, February 2004

                                      Advertising

    Marketing and market State Product sales Direct Indirect research

    Tennessee  o  	Would restrict the sale of food items from sources other
    than the school cafeteria

    o  	Would require that drinks sold in elementary and secondary schools be
    limited to water, milk, 100 percent fruit juice, or a minimum of 10
    percent fruit-based drinks, and electrolyte replacement beverages

    o  	Would prohibit the sale of soft drinks in middle and high schools
    until 1 hour after the last lunch period

                                        Texas  o

    o

    o

    o

    Would ban the sale of competitive foods and beverages in elementary
    schools

    Would restrict the sale of competitive foods at middle schools, junior
    high schools, and high schools to certain times of day, and would require
    food items to meet certain nutritional standards

    Would ban the sale at elementary schools of any food or beverage not
    offered for sale as part of the regular school meal program

    Would impose nutritional requirements on food offered for sale in
    secondary schools

    Utah  o  	Would restrict products sold in vending machines in elementary
    schools to only those meeting federal nutritional standards

    Appendix III: Legislative Proposals Addressing Commercial Activities in
    Schools, February 2004

                                      Advertising

    Marketing and market State Product sales Direct Indirect research

    Vermont  o  	Would prohibit the sale on school grounds from the time
    schools open until the end of the last school lunch period of any beverage
    for which any of the first two ingredients listed on the label are water
    and any type of sweetener

    Virginia  o  	Would require the board of education to establish rules
    regarding vending machines in middle and high schools

    o  	Would ban schools from contracting for allowing or continuing to use
    vending machines selling soft drinks or solid foods having empty calories,
    high fat, high sodium, or high caffeine

    Washington  o  	Would establish minimum nutritional standards for
    competitive foods sold in schools

    o  	Would limit the types of beverages that may be sold to pupils

    o  	Would ban the sale of foods with minimal nutrition value on school
    campuses during regular schools hours

    Source: GAO analysis of state legislature Web sites, February 2004.

    aThis provision was approved June 8, 2004, and became effective July 1,
    2004.

    Appendix IV: Questionnaire: GAO Study on the Marketing and Selling of Student
    Data

     Appendix IV: Questionnaire: GAO Study on the Marketing and Selling of Student
                                          Data

    Appendix V: Comments from the Department of Education

    Appendix VI: GAO Contacts and Staff Acknowledgments

    GAO Contacts 	Eleanor L. Johnson, Assistant Director (202) 512-7902 or
    johnsone@gao.gov Kathleen D. White, Analyst-in-Charge (202) 512-8512 or
    whitek@gao.gov

    Staff In addition to those names above, the following people made
    significant contributions to this report: Susan Bernstein, Carolyn
    Blocker, RichardAcknowledgments Burkard, Jim Fields, Behn Kelly, James
    Rebbe, and Jay Smale.

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