BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 787|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: AB 787
Author: Roger Hernández (D), et al.
Amended: 8/18/15 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE: 6-3, 7/15/15
AYES: Block, Hancock, Leyva, Mendoza, Monning, Pan
NOES: Liu, Runner, Vidak
ASSEMBLY FLOOR: 46-28, 6/4/15 - See last page for vote
SUBJECT: Charter schools: operation: nonprofit public
benefit corporations
SOURCE: California Federation of Teachers
California Labor Federation
California School Employees Association
California Teachers Association
DIGEST: This bill prohibits a charter school from operating as,
or being operated by, a for-profit corporation.
ANALYSIS:
Existing law:
1)Authorizes a charter school to elect to operate as, or be
operated by, a nonprofit public benefit corporation, formed
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and organized pursuant to the Nonprofit Public Benefit
Corporation Law.
2)Specifies that the governing board of a school district that
grants a charter for the establishment of a charter school
shall be entitled to a single representative on the board of
directors of the nonprofit public benefit corporation.
3)Specifies that an authority that grants a charter to a charter
school to be operated by, or as, a nonprofit public benefit
corporation is not liable for the debts or obligations of the
charter school, or for claims arising from the performance of
acts, errors, or omissions by the charter school, if the
authority has complied with all oversight responsibilities
required by law, including, but not limited to, those required
by Education Code Sections 47604.32 and 47605(m). (Education
Code § 47604)
This bill prohibits charter schools from being operated by a
for-profit corporation beginning on January 1, 2017.
Comments
Need for the bill. According to the author's office, "the
for-profit model is unsustainable for the long-term development
of California's public education system. As a for-profit
corporation their first priority is their shareholders, not
children or the public. These schools often direct funds out of
state to their national entities, and this structure takes
taxpayer dollars out of state and away from the classroom. In
the 21st century, online education will only continue to grow.
It is crucial that we protect all of our public school students,
whether their classroom is physical or virtual."
Appropriate use of taxpayer dollars? While current law
explicitly authorizes a charter school to operate as a nonprofit
corporation, statute is silent on whether a charter school is
permitted to operate as a for-profit corporation. Because of
the permissive nature of the Education Code and absent a clear
prohibition, several charter schools are currently operating as
for-profit corporations. The California Charter School
Association indicates there are six for-profit charter schools
in California. According to the author's office, "California
Virtual Academies (CAVA) is California's largest provider of
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online public K-12 education and a public charter school network
that exists entirely online. Students take classes from home,
communicating with teachers via computer. CAVAs primary vendor
and manager is K12, Inc., a for-profit corporation." The
author's office further indicates that "K12, Inc. is the largest
for-profit operator of virtual schools nationwide and paid
almost $11 million to its top six executives in 2011-12, while
the average CAVA teacher salary was $36,150, about half the
average teacher pay in California." Does this model provide a
perverse incentive for these charter schools to limit services
for students in order to increase profits?
Impact on students. Notwithstanding the issues regarding the
appropriateness of using taxpayer dollars for charter schools
operating as a for-profit corporation, it does not appear that
this bill contemplates what would happen to students attending
these schools if this bill were to become law. Presumably, the
operating entities could restructure or reorganize themselves as
nonprofit corporations to comply. To the extent that these
entities are unable to do so, the charter schools may be
required to shut down. Additionally, some students have unique
learning needs which could present logistical challenges in
finding the appropriate placement in a new school.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified8/17/15)
California Federation of Teachers (co-source)
California Labor Federation (co-source)
California School Employees Association (co-source)
California Teachers Association (co-source)
American Federation of State, County and Municipal Employees
Association of California School Administrators
California Professional Firefighters
California State PTA
Service Employees International Union
OPPOSITION: (Verified8/17/15)
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California Charter Schools Association
California Parents for Public Virtual Education
Charter Schools Development Center
EdVoice
K-12, Inc.
ARGUMENTS IN SUPPORT: Supporters of this bill indicate that
prohibiting charter schools from being run by for-profit
corporations would protect California taxpayers by ensuring
their money is not being taken out of the state and away from
classrooms.
ARGUMENTS IN OPPOSITION: Opponents of this bill argue that
whether or not the school is "for-profit" should not be the
driver, and rather, we should be looking at what the program has
done to help students attain academic proficiency in an
alternative setting. They indicate this bill prohibits
successful arrangements with online programs that have provided
students with successful options.
ASSEMBLY FLOOR: 46-28, 6/4/15
AYES: Alejo, Bonilla, Bonta, Burke, Calderon, Campos, Chiu,
Chu, Cooper, Dababneh, Dodd, Eggman, Frazier, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez,
Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk,
Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
Thurmond, Ting, Weber, Williams, Wood, Atkins
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,
Chávez, Cooley, Beth Gaines, Gallagher, Grove, Hadley, Harper,
Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes,
Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner,
Waldron, Wilk
NO VOTE RECORDED: Bloom, Brown, Chau, Dahle, Daly, Perea
Prepared by:Lenin Del Castillo / ED. / (916) 651-4105
8/19/15 20:26:59
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