BILL ANALYSIS Ó SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT Senator Jerry Hill, Chair 2015 - 2016 Regular Bill No: AB 2609 Hearing Date: June 13, 2016 ----------------------------------------------------------------- |Author: |Chau | |----------+------------------------------------------------------| |Version: |May 10, 2016 | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Bill Gage | |: | | ----------------------------------------------------------------- Subject: Advertising: educational conferences SUMMARY: Requires for-profit educational conference organizations, as defined, that provide solicitation materials directly to a school for purposes of distribution to a student, to include specified disclosures in those materials and to provide the materials in a sealed envelope addressed to the parent or guardian of the student and to provide the disclosures on separate documents addressed to the school and to any employee thereof who is asked to distribute materials to a student. Existing law: 1)Pursuant to the federal Family Educational Rights and Privacy Act (FERPA), protects the privacy of student education records and specifies that it applies to all schools that receive funds under an applicable program of the U.S. Department of Education. FERPA requires that schools, with certain exceptions, obtain a parent or guardian's written consent prior to the disclosure of personally identifiable information from a child's education records. (20 U.S.C. § 1232g; 34 CFR Part 99) 2)Defines an "educational travel organization" (ETO) as a person, partnership, corporation, or other entity who offers educational travel programs for students residing, in the State of California, and included an educational program as a AB 2609 (Chau) Page 2 of ? component, and defines a "student traveler" as a person who is enrolled in K-12 at a time an educational travel program is arranged with an ETO. (Business and Professions Code (BPC) § 17552) 3) Establishes guidelines for an ETO and requires that a written contract for educational travel include, among other things, disclosure of the ETO's name, address, phone number or other method of 24-hour telecommunications, statement on whether or not the ETO maintains insurance that covers any injury sustained by a student traveler, any additional costs to students, staff qualifications required by the ETO for staff who will accompany students, and specifies that it is a violation to make misleading statements or substantial representations in conducting an educational travel program. (BPC § 17553 - 17556.5) 4) Pursuant to the Student Online Personal Information Protection Act (SOPIPA), prohibits an operator of a website, online service, online application, or mobile application from knowingly engaging in targeted advertising to students or their parents or legal guardians, using covered information to amass a profile about a K-12 student, selling a student's information, or disclosing covered information, unless otherwise specified. (BPC § 22584(b)) This bill: 1)Defines an "educational conference" to mean a conference, forum, camp, or other similar event, intended to develop the leadership, career or college readiness of a student, or provide some other form of educational benefit, when participation in the event is represented as being limited to students receiving an award, invitation or nomination to participate in the event. 2)Defines an "educational conference organization" (ECO) to mean AB 2609 (Chau) Page 3 of ? a person, partnership, corporation, or other entity that operates in a for-profit manner and that plans and advertises educational conferences to students residing in California. 3)Defines a "student" to mean a person who is enrolled in elementary or secondary school, grade kindergarten through grade 12, at the time an educational conference is arranged with an ECO. 4)Requires an ECO that provides materials related to an educational conference directly to a school or employee for purposes of distribution to a student to comply with all of the following: a) Provide materials in a sealed envelope or other packaging addressed to the parent or legal guardian of the student. b) Include with the materials all of the following disclosures, in clear and conspicuous language: i) That the materials constitute a solicitation for the sale of a product. ii) The legal form of the organization making the solicitation, including the for-profit status of the organization. iii) The legal owner, if any, of the organization making the solicitation. AB 2609 (Chau) Page 4 of ? iv) The specific eligibility criteria required for participation in the solicited educational conference or conferences, if any. v) An itemized list of the costs to participate in the educational conference and the total price of participating in the educational conference, including estimated expenses not included in the price of the educational conference. vi) That attendance at an educational conference may not affect a student's chances of being admitted to college, and that a parent or guardian should contact the student's school counselor for more information. vii) Whether or not a nomination from a teacher or school administrator is required to participate in the educational conference, or if an individual may be self-nominated or nominated by a parent or guardian. viii) The total amount, if any, of funding or other support, including employment or grants for school supplies, the organization has provided to the student's school or the school's employees during the last three years before the date of the solicitation. ix) A phone number, email address, or website that a parent or guardian may use to contact a relevant government agency for purposes of filing a complaint related to the solicitation or the educational conference itself. AB 2609 (Chau) Page 5 of ? 1)Requires the ECO to provide the disclosures described above on separate documents addressed to the school and to any employee thereof who is asked to distribute materials to a student. 2)Makes legislative findings and declarations pertaining to the importance of protecting students from false or misleading advertising, promoting high-quality educational conference experiences, and encouraging public confidence in youth leadership conferences by establishing appropriate marketing restrictions and disclosure requirements on for-profit educational conference solicitations. FISCAL EFFECT: According to the Assembly Committee on Appropriations analysis dated May 18, 2016, this bill will result in minor, non-reimbursable local costs due to the creation of a misdemeanor, offset to some extent by potential fine revenue. COMMENTS: 1. Purpose. This measure is sponsored by the Author. According to the Author, this bill is intended to better protect students from questionable marketing practices for educational conferences by prohibiting for-profit ECOs from distributing solicitation materials for educational conferences directly to students at school, and by requiring certain disclosures to be included with the solicitation, and for those materials to be provided to the parent or legal guardian of the student and to the school and to any employee who is asked to distribute materials to a student. Currently, as indicated by Author, some for-profit event planning companies are using schools and teachers to deliver marketing materials for expensive conferences directly to K-12 students, often without their parents' knowledge or consent. AB 2609 (Chau) Page 6 of ? As stated by the Author, "By their own description, these solicitations may appear to be an exclusive 'nomination' to attend a prestigious youth leadership conference, when in fact they are simply a sales pitch for a conference that anyone could attend and can costs hundreds or even thousands of dollars. These solicitations are addressed directly to the student rather than to the parent, and are delivered by a trusted source; the student's teacher. "These for-profit companies identify potential leads by asking teachers to "nominate" students, although the criteria can be vague, subjective or nonexistent. Once delivered, potentially with some public fanfare at school, "nominated" students may mistakenly believe that they have won an award or other competitive honor. "However, according to a 2009 New York Times article about the practice, there are no hard and fast criteria for nominators, and teachers simply use their own discretion when identifying potential applicants. In some cases, these teachers are also eligible to request 'grants' to pay for classroom supplies from the same companies seeking student nominees - although the teachers themselves may not be aware that the nomination process is simply a means to generate a sale." The Author further notes that while these ECOs may provide a worthwhile enrichment experience for some children who participate, the misleading and manipulative nature of a solicitation that appears to be an honor, and the fact that the pitch is directly and publicly aimed at the student and communicated through a teacher, raises serious questions of student privacy and consumer protection. "Young students are particularly vulnerable to manipulative solicitations that appear to be a competitive award or honor because of their perceived value in applying for college, because a respected teacher delivered the materials or perhaps because the 'nomination' was announced publicly before the student's peers. As argued by the Author, current law is not adequate to protect kids from directly receiving solicitations from for profit event-planning organizations. California's Student Online Personal Information Act (SOPIPA) only restricts targeted AB 2609 (Chau) Page 7 of ? advertising by operators of websites designed and marketed for K-12 purposes. Similarly, the Federal Educational Rights and Privacy Act (FERPA) broadly protects the privacy of student education records, but does not apply to "directory information," which can include the student's name. 2.Background. The Educational Conference Industry. Educational conferences go by a variety of different names: youth leadership camps, experiential learning programs, and prestige conferences, but what they all have in common is that they provide school-aged children who are seeking extra-curricular activities for personal enrichment, civic engagement or even an advantage with future college admissions. However, these programs vary widely from one another in their marketing, admissions criteria, selection processes, and costs to participate. Perhaps the most well-known example of an educational conference provider is the American Legion's Boys and Girls State, which was founded in 1935 to allow students to study the operation of local, county and state government by participating in activities such as legislative sessions or court proceedings during their annual conferences. Legion Posts select high school juniors based on recommended guidelines that include interviews to evaluate merit and ability in order to attend their program. In most cases, individual expenses are paid by a sponsoring post, a local business or another community-based organization. Rotary International also offers several programs for youth such as the Rotary Youth Leadership Awards, which is a leadership development program that hosts events that include presentations, activities, and workshops that cover a variety of topics. Participants are nominated by their local Rotary clubs, which often cover all expenses. Both the American Legion and Rotary programs are organized as non-profits. There are also programs offered by for-profit companies, such as the Junior National Young Leaders Conference, the National Youth Leadership Forum, or the Global Young Leaders Conference. These programs solicit their participants through a "nomination" process that relies on teachers to AB 2609 (Chau) Page 8 of ? identify potential participants from among their own students, and can cost hundreds or even thousands of dollars to participate. Consumer Protection Concerns about ECOs and their Nomination Process. According to a New York Times article in April of 2009, "Congratulations! You are Nominated. It's an Honor (It's a Sales Pitch)", students are receiving conference solicitations that "looked and sounded more like an Academy Award than a sales pitch. In fancy script, on weighty card stock adorned by a giant gold seal . . .[it] promised a 'lifetime advantage' and 'valuable addition' to her resume. It used words like 'elite,' distinguished,' 'select.'" Students who receive these offers may be led to believe that attendance at these conferences is a highly selective honor because of statements in the solicitation materials that call nominees "the nation's most highly acclaimed students" and "most promising young leaders of tomorrow." However, according to the article, "there are no hard and fast criteria for nominators. . . .The nomination form asks for nothing beyond the student's name, address, school year and sex." The New York Times cites Jeff Sherrill, an associate director with the National Association of Secondary School Principals, who says that in his view, a leadership conference is no more or less likely to enhance college applications than, say, soccer camp. "It doesn't fall into the same category as being selected by your county where there was truly some type of assessment and selection process. Honors typically don't come with a price tag," he says. The article goes on to say that "[l]eadership companies marketing to teenagers spend handsomely on mailing lists (the College Board is one source), but the biggest pipeline to customers is teachers and program alumni. Mailings usually name the person making the nomination and include a list of past participants from the student's school." Eligibility criteria may also be vague, or even non-existent. For example, the website of one ECO (Envision EMI) suggests that educators nominate students who "show special academic promise, aspirations, and leadership potential, can meet the AB 2609 (Chau) Page 9 of ? challenges of the program's rigorous curriculum, and will be mature and confident contributors to group and program activities." However, no quantifiable criteria, such as grade point average, are provided, and the nomination process (requiring the student's name and address) can be completed online. Furthermore, a nominator need not even be the student's teacher: Envision EMI allows any "teacher, educator or mentor who is interested in giving students an experiential learning opportunity outside the classroom is eligible to nominate." Once a nomination is made, marketing materials designed to look like award letters will be delivered to the student's school, addressed directly to the student, or to the address provided in the nomination. The cost of for-profit conferences is also raised as an issue. The Times article describes one program (Envision EMI's week-long Congressional Youth Leadership Council (CYLC)) that can costs upwards of $2,200, with airfare and meals not included, which students are encouraged to pay for through community fundraising: "Needy students are typically sent a brochure with fund-raising ideas and success stories of other students who have tapped friends, family and community to help pay their way...." In 2006, 1.7% of the revenues for Envision's CYLC program went to grants and scholarships. FERPA and Access to Directory Information. Although there are several federal and state laws in place designed to protect student privacy, certain exceptions exist that allow a student's information to be released to outside organizations. For instance, FERPA permits schools to disclose "directory information," defined as information that is generally not considered harmful or an invasion of privacy if released, without written consent to a third party, which can include companies that manufacture class rings or publish yearbooks. Because ECOs are only accessing directory information when asking teachers to nominate students, a FERPA violation does not arise. 3. Arguments in Support. The California Teachers Association (CTA) is in support of this measure and indicates that currently, some for-profit event planning companies are delivering their marketing materials for expensive conferences directly through public schools. By their own AB 2609 (Chau) Page 10 of ? description, these solicitations may appear to be an exclusive nomination to attend a prestigious youth leadership conference, when in fact they are simply a sales pitch for a conference that can cost thousands of dollars. These solicitations are delivered by a trusted source; the student's teacher. The CTA argues that teachers must know if the packet they are asked to pass out to their class constitutes an advertisement or an award. This measure will require disclosure to the school and to any employee thereof asked to distribute materials to the student. It will clear up any confusion for the teacher about whether the student is receiving a competitive honor or whether it is in fact a solicitation for a commercial purpose. The Common Sense Kids Action (CSKA) is also in support of this measure and believe that it will protect school-aged children from directly receiving potentially misleading solicitations from for-profit companies to attend so-called "prestige conferences." As argued by CSKA, these solicitations are sometimes designed to appear to be an exclusive nomination to attend a prestigious youth leadership conference when in fact they are simply a sales pitch for a conference that can cost hundreds or even thousands of dollars. Some of these camps or conferences may provide a worthwhile enrichment experience for some children who participate, but regardless, the misleading and manipulative nature of a solicitation that makes it appear to be an honor raises serious questions about student privacy and consumer protection. NOTE : Double-referral to Senate Committee on Judiciary, second. SUPPORT AND OPPOSITION: Support: California Teachers Association Common Sense Kids Action Opposition: None on file as of June 7, 2016. AB 2609 (Chau) Page 11 of ? -- END --