The new policy was discussed during a school board meeting Thursday evening, but a vote on the matter will take place at a later date.
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If adopted, the policy would require schools to notify parents in writing within three school days.
Parents would also be notified if their child asks to be called by a different name other than their legal name, or if they use pronouns that don't align with their birth gender.
People on both sides of the issue spoke out during Thursday's meeting, including one parent who said notifying parents could lead to a child being kicked out of the house, abused or even suicide.
"The people most affected by this policy are telling you it's bad. Are you listening to them? And do you even care?" he said.
"How is lying to parents, who are the greatest advocates for their children, beneficial?," one woman said.
Murrieta Valley Unified School District will notify parents if their child identifies as transgender
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The Chino Valley and Murrieta Valley school districts have already adopted similar policies. The state attorney general's office is investigating the Chino Valley school board for recently adopting the similar policy.