This report discusses public school legal liability in the Acquired Immune Deficiency Syndrome (AIDS) controversy with regard to the right of privacy of AIDS victims who are students and employees and the concern of risk of contagion to other students and employees and the public's right to know what is going on in their schools. Several steps that can protect local districts from tort claims and ideas for respecting the privacy rights of carriers in a manner that accords them optimal legal and medical protections are given. A sex education curriculum with a heavy emphasis on the prevention of AIDS and other sexually transmitted diseases at the lowest grade possible as part of any health and hygiene program is advocated, along with extending handicap discrimination protections to AIDS victims. Pointing out the disease's increasing danger to staff and students alike and the urgency of public school information activities and reform regarding AIDS and AIDS victims, this report identifies its target populations, among whom are 8,000 children. Significant court cases are reviewed and used in support of these positions. (JAM)