BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1996|
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THIRD READING
Bill No: AB 1996
Author: Gordon (D)
Amended: 8/19/16 in Senate
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 8-0, 6/13/16
AYES: Hill, Bates, Block, Gaines, Galgiani, Jackson, Mendoza,
Wieckowski
NO VOTE RECORDED: Hernandez
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 78-0, 5/12/16 (Consent) - See last page for
vote
SUBJECT: Private postsecondary education: exemptions
SOURCE: Author
DIGEST: This bill provides an exemption from the California
Private Postsecondary Education Act and oversight by the Bureau
for Private Postsecondary Education (BPPE), until January 1,
2022, for an institution that meets specified criteria,
including operating as a nonprofit for at least 50 years,
maintaining its status as a nonprofit institution that is
accredited by the Accrediting Commission for Schools, Western
Association of Schools and Colleges (WASC-ACS), does not award
degrees or diplomas, and only receives state or federal student
financial aid programs for fewer than 20 percent of its
students.
AB 1996
Page 2
Senate Floor Amendments of 8/19/16 replace reference to
JobTrain, the institution the author intends to create an
exemption for, with a new exemption for an institution that
meets specified criteria.
ANALYSIS:
Existing law:
1)Establishes the California Private Postsecondary Education Act
(Act) and requires BPPE to, among other things, review,
investigate and approve private postsecondary institutions,
programs and courses of instruction and authorizes BPPE to
take formal actions against an institution/school to ensure
compliance with the Act, including seeking closure of an
institution/school if determined necessary. The Act also
provides for specified disclosures and enrollment agreements
for students, requirements for cancellations, withdrawals and
refunds, and that BPPE shall administer the Student Tuition
Recovery Fund (STRF) to provide refunds to students affected
by the possible closure of an institution/school. (Education
Code § 94800 et seq.)
2)Defines "Ability-to-benefit student" (ATB) as a student who
does not have a certificate of graduation from a school
providing secondary education, or a recognized equivalent of
that certificate. Provides that before an ATB student may
execute an enrollment agreement, the institution shall have
the student take an independently administered examination
from the list of examinations prescribed by the United States
Department of Education (USDE). Specifies that the student
may not enroll unless he or she achieves a score, as specified
by USDE, demonstrating that the student may benefit from the
education and training being offered. (EC § 94811 and EC §
94904)
3)Exempts various institutions from the Act.
This bill:
AB 1996
Page 3
1)Exempts an institution from the Act and oversight by the BPPE
until January 1, 2022, if it meets the following criteria:
a) Maintains its status as a nonprofit institution that is
accredited by WASC-ACS;
b) As of January 1, 2016, has operated continuously in
California for at least 50 years as a nonprofit entity in
accordance with Section 501(c)(3) of the federal Internal
Revenue Code and not as a private foundation as defined in
Section 509(a) of the federal Internal Revenue Code;
c) Does not award degrees or diplomas;
d) Is paid from state or federal student financial aid
programs for fewer than 20 percent of its students who
receive vocational training; and
e) Previously had an exemption and did not utilize the
pathway for exempt institutions to be regulated by BPPE.
1)Requires the Employment Development Department (EDD), in
conjunction with the California Workforce Development Board
(Board), to annually collect information from a school that
qualifies for the exemption outlined in 1) above and provide
a report to the BPPE on the following:
a) The number of students enrolled and the number that have
completed their respective training program.
b) The number of students attaining training from JobTrain,
Inc. using Workforce Innovation and Opportunity Act (WIOA)
funds.
c) Skills or competency attained through their respective
AB 1996
Page 4
program and subsequent employment placement and retention
information, including income.
1)Requires EDD to make the report available on the searchable
CalJOBS Web site, through the training and education providers
link to a school outlined in 1) above that is listed on the
Eligible Training Providers List (ETPL).
Background
The Act and Exemptions. BPPE has oversight of all of the
non-exempt, private postsecondary institutions located in
California. AB 48 (Portantino, Chapter 310, Statutes of 2009)
established the Act and contained numerous exemptions to
state-level oversight, the most notable of which is an exemption
from BPPE authority and regulation under the Act granted to
for-profit and nonprofit regionally accredited institutions.
The exemptions in the Act, and attempts to create additional
exemptions, have been an ongoing source of consideration for the
Legislature. It was not until a hearing in the Senate that AB
48 was amended to include a "good schools" exemption in the Act
to allow institutions that meet similar criteria to those
proposed in this bill (including length of operation under one
owner and nonprofit status) to avoid regulation under BPPE, as
institutions pushing for this exemption argued that a similar
recognition had been included in all legislation related to
private postsecondary institution regulation since 1991 and
should be continued.
During the discussion surrounding SB 1247 (Lieu, Chapter 840,
Statutes of 2014) in 2014, legislation that reauthorized the Act
and proposed a number of student focused reforms to BPPE
operations, the author submitted a letter to the Senate Journal
requesting that the Legislature strike a new exemption that was
amended into the bill. That exemption is very similar to the
one proposed in this bill in that it outlined criteria for an
institution to qualify for an exemption, designed to capture one
institution. At the time, the author asked that all exemptions
provided for in the Act be thoroughly examined by the
Legislature to determine the merits of their continuation. SB
1192 (Hill), 2016 legislation stemming from oversight sunset
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review of BPPE, proposes to eliminate the "good schools"
exemption, as the exemption appears to have run its course,
given that all but two schools that ever claimed this exemption
are now regulated by BPPE as a means of maintaining eligibility
for federal financial aid and public money.
Licensing requirements exist to protect the public from
potentially harmful services rendered by unqualified businesses
and individuals. The intent of licensure is not to punish good
actors, nor to impose punitive requirements on businesses and
individuals, but rather to establish a baseline measure of
quality and competency and corresponding enforcement provisions
for consequences of violating the regulatory framework.
Exemptions in the Act may serve as an artificial measure of
quality and in some cases, while the intention may have been to
ensure that the BPPE's workload is focused on those schools that
require attention, may not benefit students or provide
accountability for public monies utilized at these institutions.
WIOA and California's Eligible Training Provider List (ETPL).
The federal WIOA, formerly known as the federal Workforce
Investment Act (WIA) of 1998, provides for workforce investment
activities, including activities in which states may participate
and also contains various programs for job and employment
investment, including work incentive programs. The new federal
WIOA aims to modernize our workforce development system by
bringing together and enhancing several key employment,
education and training programs.
Following passage of the federal WIA in 1998, the state
established the California Workforce Investment Board, now the
Board and charged the Board with the responsibility for
developing a unified, strategic planning process to coordinate
various education, training, and employment programs into an
integrated workforce development system that supports economic
development. Local chief elected officials in a local workforce
development area were required to form, pursuant to specified
guidelines, a Local Workforce Investment Board (Local WIB) to
plan and oversee the workforce investment system at the local
level. Under WIA, funds were distributed to the states based on
formulas that consider unemployment rates and other economic and
demographic factors. WIA required that 85 percent of federal
funds go to the Local WIBs, with the remainder allocated for
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Page 6
state discretionary purposes. Local WIBs created one or more
One-Stop Career Centers (One-Stops) in the local workforce area,
which provide access to career information, counseling, funding
for education, training and supportive services. Job training
programs include classroom training, customized training, and
on-the-job training (also known as incumbent worker training).
Training funds are often distributed through vouchers to job
seekers to enroll in eligible training programs. Local WIBs
determine which training programs are eligible to receive the
vouchers.
California's ETPL lists qualified employment training providers
for purposes of public employment monies. Training providers
who are eligible to receive Individual Training Accounts (ITAs)
through WIOA are listed on the ETPL. EDD is responsible for
accepting information on training providers from local boards,
compiling a single statewide list of eligible training providers
and disseminating the statewide ETPL to local boards for
distribution to their One-Stops, effectively directing training
resources into programs intended to lead to employment in
high-demand, high-priority jobs and occupations that provide
economic security, particularly those facing a shortage of
skilled workers. The subsequent eligibility criteria is required
to use performance and outcome measures to determine whether a
provider is qualified to remain on the list.
The Local WIBs are responsible for reviewing and verifying
applications submitted by training providers, determining if the
applicant meets the criteria for initial eligibility and
forwarding the information to EDD for training providers and
programs that meet the criteria. The EDD also has the authority
to remove training providers for nonperformance.
A private postsecondary education institution must either have
approval from BPPE or be exempt from the Act in order to be
placed on the ETPL. One school in the Author's district,
JobTrain had been listed on the ETPL since 2001 and had been
granted an exemption by BPPE, thus not subject to BPPE
oversight, until JobTrain was informed that their exemption
expired on December 31, 2015.
According to the author, the loss of eligibility for an
exemption from BPPE means that JobTrain cannot be on the ETPL.
The author asserts that this, in effect, means that individuals
AB 1996
Page 7
who receive funding WIOA cannot be referred to JobTrain and
cannot take advantage of their successful vocational training
programs. According to the author, an exemption is necessary
and required for JobTrain to again be on the ETPL and serve
those most in need of vocational training.
The author believes that this bill would allow those most in
need to access and take advantage of JobTrain's "proven
vocational training programs" and calls the exemption proposed
in this bill justifiable, since appropriate oversight is being
provided by other entities and there is minimal financial risk
to public funds and to the students. The author believes that
BPPE's regulations would pose an undue constraint on JobTrain
pursuing its mission of charitable education, particularly
because dozens of ATB students, high school dropouts, would fail
to qualify. The Author notes that JobTrain has found that most
who fail the ATB test are still able to pass the school's
courses and become gainfully employed in their desired
occupations.
Institutions on the ETPL receive public monies. As the Author
asserts above, "JobTrain has served a range of individuals who
had ITA funding, from 27 to 57 participants annually." Many
other training providers on the ETPL, also serving individuals
with ITA funding, are approved by BPPE. Through the Legislative
process, policy committees suggested that perhaps JobTrain could
be exempt from the ATB requirement in the Act, rather than the
Act in its entirety, a recommendation also outlined below in an
opposition letter from the Department of Consumer Affairs.
Comments
Student advocates concerned about this bill state that any
exemption from state oversight weakens the regulatory structure
and risks harm to the students enrolled in the program.
Loopholes such as the one in this bill, they argue, create
opportunities for unscrupulous institutions to exploit loopholes
and harm students. These organizations, Public Advocates,
University of San Diego Center for Public Interest Law,
University of San Diego Children's Advocacy Institute and
University of San Diego Veterans Legal Clinic argue that
individual school exemptions place the Legislature in the
position of a fact-finding regulator, judging which and how much
each school should be regulated.
AB 1996
Page 8
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified8/22/16)
Acrobat Outsourcing
California State Council of Laborers
Cańada College
Community Legal Services in East Palo Alto
East Palo Alto City Councilmember Ruben Abrica
J&J Air Conditioning
JobTrain, Inc.
NOVA Workforce Board
San Mateo County Board of Supervisors President Warren Slocum
Sequoia Adult School
11 Individuals
OPPOSITION: (Verified8/22/16)
Department of Consumer Affairs
ARGUMENTS IN SUPPORT: Supporters of this bill cite the need for
job training access for low income individuals. They argue that
JobTrain is one of the few organizations in the area offering
training programs for high demand careers accessible to people
with barriers to employment. Supporters state that the bill is
necessary so that JobTrain can remain on the ETPL for eligible
courses offered. Students who receive ITA support under WIOA
will then be referred to JobTrain. Without this, the options
for low-income individuals to access vocational training will be
even more limited.
AB 1996
Page 9
ARGUMENTS IN OPPOSITION: The Department of Consumer Affairs
(DCA) does not believe that JobTrain should be provided an
exemption from the Act and writes that providing an exemption
for a specified institution sets a precedent for future
legislation to grant individual institutional exemptions. DCA
notes that providing an exemption will leave a vulnerable group
of students without any BPPE protections. DCA suggests an
alternative to exempting JobTrain entirely by instead just
exempting JobTrain from the ATB test requirements under the Act,
so that consumers could continue to receive the protections
provided by state oversight of JobTrain.
ASSEMBLY FLOOR: 78-0, 5/12/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon,
Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper,
Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Burke, Jones-Sawyer
Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104
8/22/16 22:41:12
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