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 [email protected].

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

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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
[email protected] Kathleen D. White, Analyst-in-Charge (202) 512-8512 or
[email protected]

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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