BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1996


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          1996 (Gordon)


          As Amended  August 19, 2016


          Majority vote


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          Original Committee Reference:  HIGHER ED.


          SUMMARY:  Provides an exemption from the California Private  
          Postsecondary Education Act (Act), including exemption from  
          oversight and student protections provided by the Bureau for  
          Private Postsecondary Education (Bureau), for an institution  
          that meets specified requirements.


          The Senate amendments:


          1)Strike language that would have provided an exemption solely  
            to JobTrain, Inc. and instead expand the exemption to include  
            any institution that meets all of the following requirements:


             a)   The institution maintains its status as a nonprofit  
               institution accredited by the Accrediting Commission for  
               Schools, Western Association of Schools and Colleges;








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             b)   As of January 1, 2016, it has operated continuously in  
               California for at least 50 years as a nonprofit entity, as  
               defined.


             c)   It does not award degrees or diplomas and it is paid  
               from state or federal student financial aid programs for  
               fewer than 20% of its students who receive vocational  
               training; and,


             d)   It did not previously seek approval from the Bureau  
               through the pathway that exists in current law.


          2)Require the Employment Development Department (EDD), in  
            conjunction with the California Workforce Development Board to  
            annually collect and report to the Bureau on all of the  
            following, for an institution that claims an exemption  
            pursuant to the aforementioned requirements:


             a)   The number of students enrolled in the institution., and  
               the number that have completed their respective training  
               program offered by the institution; 


             b)   The number of students attaining training from the  
               institution, using funds made available pursuant to the  
               federal Workforce Innovation and Opportunity Act of 2014;  
               and, 


             c)   The skills or competency attained through their  
               respective program offered by the institution, and  
               subsequent employment placement and retention information,  
               including income.


          EXISTING LAW:  Establishes the Bureau for Private Postsecondary  








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          Education (BPPE), under the California Private Postsecondary  
          Education Act (Act), until January 1, 2017; and, provides for  
          the oversight and regulation of private postsecondary  
          educational institutions (institutions) to ensure protection of  
          the public and students.  (Education Code Section 94800 et seq.)


          FISCAL EFFECT:  Negligible fiscal impact determined by the  
          Senate Appropriations Committee, pursuant to Senate Rule 28.8.


          COMMENTS:  Background.  BPPE is responsible for oversight of  
          private postsecondary educational institutions operating with a  
          physical presence in California.  Established by AB 48  
          ((Portantino), Chapter 310, Statutes of 2009) after numerous  
          legislative attempts to remedy the laws and structure governing  
          regulation of private postsecondary institutions, the bill took  
          effect January 1, 2010, to make many substantive changes that  
          created a foundation for oversight and gave the BPPE enforcement  
          tools to ensure schools comply with the law.  


          AB 48 contained numerous exemptions to state-level oversight,  
          including for avocational or recreational programs, educational  
          programs offered for members of a business or professional  
          association, preapprenticeship programs offered by specific  
          types of organizations, test preparation providers, religious  
          institutions, low-cost programs that do not receive public  
          funds, Western Association of Schools and Colleges  
          (WASC)-accredited institutions, specified nationally accredited  
          nonprofit institutions, and flight schools.  


          An exempt institution is not regulated by the BPPE.  Students  
          enrolled in exempt institutions are not protected by the Act,  
          including the Student Tuition Recovery Fund (STRF) which  
          provides reimbursement to students for BPPE-regulated  
          institutions that violate the law or close abruptly.  For  
          example, Heald College, which was owned by Corinthian Colleges,  
          Inc. (CCI), enjoyed an exemption from BPPE oversight due to its  
          WASC-accreditation.  When initially granted exemption, Heald  
          College was a non-profit institution.  It was subsequently  








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          purchased by CCI, and the accreditation-based exemption was not  
          affected by the change in ownership.  When Heald closed abruptly  
          and filed bankruptcy in 2015, students enrolled in the  
          institution were not eligible to make tuition recovery claims  
          against the STRF.    


          Purpose of this bill.  According to the author, JobTrain is a  
          50-year old nonprofit training and career development support  
          center serving low income individuals in the Bay Area.  JobTrain  
          offers middle income job pathways for people who are often  
          working two to three minimum wage jobs and who cannot afford to  
          personally pay for college or other training.  According to the  
          author, JobTrain had been previously granted an exemption from  
          oversight by BPPE based on its accreditation from the  
          Accrediting Commission for Schools, (WASC).  JobTrain was  
          notified by BPPE that its exemption expired on December 31,  
          2015.  According to the author, in order to remain eligible to  
          receive public funding under the Workforce Investment and  
          Opportunity Act (WIOA) the institution must remain on the  
          Eligible Training Provider List (ETPL).  To be placed on the  
          ETPL, an institution must either have an exemption or approval  
          from the BPPE. 


          Analysis Prepared by:                                             
                          Laura Metune / HIGHER ED. / (916) 319-3960  FN:  
          0004765