BILL ANALYSIS Ó AB 787 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 787 (Roger Hernández) As Amended August 18, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |46-28 |(June 4, 2015) |SENATE: |22-15 |(September 8, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: ED. SUMMARY: Prohibits a charter school from operating as, or being operated by, a for-profit corporation. The Senate amendments specify that the provisions of the bill shall take effect on January 1, 2017. EXISTING LAW authorizes charter schools to elect to operate as, or be operated by, a nonprofit public benefit corporation, formed and organized pursuant to the Nonprofit Public Benefit Corporation Law. Specifies 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. Specifies 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 AB 787 Page 2 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. (Education Code Section 47604) FISCAL EFFECT: Unknown. This bill has been keyed non-fiscal by the Legislative Counsel. COMMENTS: This bill prohibits charter schools from being operated by a for-profit corporation. According to the California Charter School Association, there are currently six for-profit charter schools operating in California. Current law authorizes charter schools to operate as a non-profit corporation, but the Education Code is silent regarding whether charter schools are permitted to operate as a for-profit corporations. Due to the permissive nature of the Education Code, it appears that charter schools are operating as for-profit corporations. Is it appropriate for state tax payer dollars to be appropriated directly to for-profit corporations to operate public schools? If a public school is run as a for-profit corporation, is there a perverse incentive to limit services to students in order to increase corporate profits? Analysis Prepared by:Chelsea Kelley / ED. / (916) 319-2087 FN: 0002097