BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1084|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 1084
Author: Bonilla (D)
Amended: 8/19/16 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE: 6-2, 6/29/16
AYES: Block, Hancock, Leyva, Mendoza, Monning, Pan
NOES: Huff, Vidak
NO VOTE RECORDED: Liu
ASSEMBLY FLOOR: 78-0, 1/27/16 (Consent) - See last page for
vote
SUBJECT: Charter schools: for-profit entities
SOURCE: Author
DIGEST: This bill provides that effective July 1, 2017, charter
schools shall only operate as, or be operated by, a school
district, county board of education, or University of
California.
Senate Floor Amendments of 8/19/16 remove the provisions
regarding the operation of virtual or online charter schools and
add a provision providing that charter schools shall only
operate as, or be operated by, a nonprofit public benefit
corporation, school district, county board of education, or
University of California.
ANALYSIS:
Existing law:
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Page 2
1)Establishes the Charter Schools Act of 1992 which provides for
the establishment of charter schools in California for the
purpose, among other things, to improve student learning and
expand learning experiences for pupils who are identified as
academically low achieving. A charter school may be
authorized by a school district, a county board of education,
or the State Board of Education, as specified. Except where
specifically noted otherwise, California law exempts charter
schools from many of the statutes and regulations that apply
to schools and school districts.
2)Authorizes a charter school 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.
3)Specifies that 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.
4)Specifies that 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 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, including, but not limited to, those required
by Education Code § 47604.32 and 47605(m). (Education Code §
47604)
This bill provides that effective July 1, 2017, charter schools
shall only operate as, or be operated by, a nonprofit public
benefit corporation, as specified, or a school district, county
board of education, or University of California.
Comments
Need for the bill. According to the author's office, "there
have been troubling examples of for profit online charter
schools in California that are not serving the academic needs of
their students. Some are structured as nonprofit entities, but
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contract with for-profit entities to provide all services,
including instructional services. Charter schools receive
funding from the State of California to educate their students.
It is an inherent conflict-of-interest for a charter school to
be operated as a for-profit entity or solely contract with
for-profit entities for instructional services. Taxpayer
dollars should be spent on academic services and improving the
educational experience of California students, not on paying
shareholders or enriching a company."
Appropriate use of taxpayer dollars? While current law
explicitly authorizes a charter school to operate as a nonprofit
corporation, statute is silent on whether a charter school is
permitted to operate as a for-profit corporation. Because of
the permissive nature of the Education Code and absent a clear
prohibition, several charter schools are currently operating as
for-profit corporations. The California Charter School
Association indicates there are six for-profit charter schools
in the state. California Virtual Academies (CAVA) is
California's largest provider of online public K-12 education
and a public charter school network that may exist entirely
online, serving approximately 15,000 students. Students take
classes from home, primarily communicating with teachers via
computer. CAVA's primary vendor and manager is K-12, Inc., a
for-profit corporation that operates virtual schools nationwide.
Is it an appropriate use of state taxpayer dollars for-profit
corporations to operate public schools? Specifically, does this
model provide a perverse incentive for these charter schools to
limit services for students in order to increase profits?
Similar bill vetoed. This bill is similar to AB 787 (Hernandez,
2015) from last year which would have prohibited a charter
school from operating as, or being operated by, a for-profit
corporation. AB 787 was eventually vetoed by the Governor with
the following message:
Under this bill, beginning January 1, 2017, a charter
school could not "operate as" or be "operated by" a
for-profit corporation.
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I don't believe the case has been made to eliminate
for-profit charter schools in California. Moreover,
the somewhat ambiguous terms used in this bill could
be interpreted to restrict the ability of non-profit
charter schools to continue using for-profit vendors.
It does not appear that this bill addresses the concerns raised
in the Governor's veto message.
Clarification is necessary. Similar to the concern raised in
the Governor's veto message, can the terms regarding this bill's
requirement for charters to only be operated by, or operated as,
a non-profit entity be interpreted to limit their ability to
contract with a for-profit entity, even for day-to-day
operations such as payroll, human resources or janitorial
services? Would this requirement also extend to contracts in
place for other instructional related operations such as the
provision of assessments, instructional materials, classroom
learning tools, professional development, or more importantly,
services required as part of a special education student's
individualized education plan?
Impact on students. Notwithstanding the issues regarding the
appropriateness of using taxpayer dollars for charter schools
operating as for-profit corporations, what would happen to
students attending these schools if this bill were to become
law? Presumably, the operating entities could restructure or
reorganize themselves as nonprofit corporations to comply. If
not, would a charter school need to shut down its operations?
Additionally, as this bill would become operative commencing
with the 2017-18 school year, it is not clear if this allows for
a sufficient transition period for students that are displaced
to find placement in a new school, particularly students that
are disabled or have unique learning needs.
Currently, there are for-profit virtual charter schools which
identify special education or at-risk children and youth as
their target student populations. These include students in the
juvenile justice system and students who are at risk of dropping
out. Virtual charter schools may also be a more viable option
among non-traditional students, including exceptional athletes,
actors, and high-mobility students, such as children from
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military families. On the other hand, there are charter schools
and school districts that currently contract with for-profit
entities to offer online curriculum for advanced courses that
they are unable to provide. Could this bill potentially lead to
a disruption in the educational services provided to these
students? Could it also limit local discretion and prohibit
arrangements with online programs that have provided students
with successful options?
Local control and accountability plan (LCAP) process.
Implementing Local Control Funding Formula statutes include the
requirement that all school districts and county offices of
education complete and provide an annual update to their LCAPs.
While the various statutes governing charter school
authorizations only reference the annual update section of the
LCAP, the regulations adopted by the State Board of Education in
2015 regarding the LCAP template reflect the requirement that
all local educational agencies, including charter schools,
complete an LCAP each year. Further, the 2016-17 budget
includes a provision specifying that charter schools must
complete an LCAP.
Current statute requires an LCAP to include both of the
following, a description of the annual goals (for all students
and each subgroup of students) to be achieved for each of the
state priorities and for any additional local priorities
identified by the governing board, and a description of the
specific actions the school district will take during each year
of the LCAP to achieve these goals, including the enumeration of
any specific actions necessary for that year to correct any
deficiencies in regard to the state priorities. To the extent
there are concerns from parents, students, or the local
community regarding the delivery of instruction or the outcomes
of students attending a particular online charter school, does
the LCAP process provide an effective means to promote change?
Responsibility for charter authorizers. As part of the process
for considering petitions for the establishment or renewal of a
charter school, a description of the educational program of the
school is required. This should include the mode of instruction
and whether it is online, blended, or classroom-based. Statute
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provides that a school district shall grant a charter if it is
satisfied that granting the charter is consistent with sound
educational practice, and specifies that the districts shall not
deny the petition unless it makes specific findings, including a
finding that the charter school present as unsound educational
program or that the petitioners are demonstrably unlikely to
successfully implement the program.
As part of the charter petition renewal process, the authorizer
is required to consider increases in pupil academic achievement
for all groups of pupils served by the charter school as the
most important factor in determining whether to grant a charter
renewal. To the extent there are concerns regarding the use of
online instruction provided by a for-profit entity, does the
existing petition process allow the opportunity for charter
authorizers to sufficiently address these concerns?
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified8/24/16)
California Charter Schools Association
California Teachers Association
OPPOSITION: (Verified8/19/16)
California School Employees Association
ASSEMBLY FLOOR: 78-0, 1/27/16
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, 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, Jones-Sawyer, Kim, Lackey, Levine, Linder,
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Lopez, Low, Maienschein, Mayes, McCarty, Medina, Melendez,
Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Mathis
Prepared by:Lenin DelCastillo / ED. / (916) 651-4105
8/24/16 10:01:31
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