BILL ANALYSIS Ó
AB 1996
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GOVERNOR'S VETO
AB
1996 (Gordon)
As Enrolled September 9, 2016
2/3 vote
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|ASSEMBLY: |78-0 |(May 12, 2016) |SENATE: |39-0 |(August 23, |
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|ASSEMBLY: |79-0 |(August 31, | | | |
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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
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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;
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
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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
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.
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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
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
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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.
GOVERNOR'S VETO MESSAGE:
I am returning Assembly Bill 1996 without my signature.
This bill exempts a nonprofit institution that meets specific,
narrow criteria from the requirements of the California Private
Postsecondary Education Act.
While I understand the desire to escape from the burdens of
regulation, conferring this new, exclusive statutory exemption
on a single qualifying nonprofit lacks fairness.
Hundreds of private postsecondary providers on the state's
Eligible Provider Training List have gained the necessary
approval from the state to operate. Many have revenues under $5
million and also have nonprofit status.
Rather than supporting this one-provider exemption, I will
direct the relevant departments and agencies to work together to
consider whether further exemption from portions of the Act or
the Act itself are warranted for this class of private
postsecondary providers.
Analysis Prepared by:
Laura Metune / HIGHER ED. / (916) 319-3960 FN:
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