Bill Text: CA AB1341 | 2019-2020 | Regular Session | Amended
Bill Title: Private postsecondary education: California Private Postsecondary Education Act of 2009.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Engrossed - Dead) 2019-08-30 - In committee: Held under submission. [AB1341 Detail]
Download: California-2019-AB1341-Amended.html
Amended
IN
Senate
June 27, 2019 |
Assembly Bill | No. 1341 |
Introduced by Assembly Members Berman, Bauer-Kahan, Chiu, Eggman, Low, and McCarty (Coauthor: Assembly Member Gloria) |
February 22, 2019 |
LEGISLATIVE COUNSEL'S DIGEST
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 94801.5 of the Education Code is amended to read:94801.5.
(a) Effective July 1, 2017, an out-of-state private postsecondary educational institution shall register with the bureau, pay a fee pursuant to Section 94930.5, and comply with all of the following:SEC. 2.
Section 94850.2 is added to the Education Code, to read:94850.2.
“Nonprofit corporation” means an institution to which contributions have been determined by the United States Internal Revenue Service to be tax-deductible pursuant to SectionSEC. 3.
Section 94858.5 is added to the Education Code, to read:94858.5.
“Public institution of higher education” means any of the following:SEC. 4.
Section 94874.1 is added to the Education Code, to read:(a)The bureau shall not approve, verify the exemption from this chapter of, or contract for the complaint handling of an institution not previously either approved to operate by the bureau or verified by the Attorney General either as a nonprofit corporation or as a public institution of higher education until both of the following requirements occur:(1)The bureau provides the public with notice of the application or request for approval, exemption, or complaint handling. The notice shall be posted on the bureau’s internet website and included as an item listed on the agenda prepared for an advisory meeting of the bureau.(2)The Attorney General determines that the institution meets the definition of a nonprofit corporation or of a public institution of higher education. However, an institution shall not meet the definition of a nonprofit corporation if any of the following applies:(A)The Attorney General determines the institution has engaged in an activity in which the net earnings of the institution benefit any person. The Attorney General shall presume the institution has engaged in such an activity if it has engaged in a reportable incident, unless the Attorney General determines otherwise. A reportable
incident is the reporting of any item under the following categories on United States Internal Revenue Service Form 990, Return of Organization Exempt from Income Tax, or a successor form:(i)An excess benefit transaction.(ii)A transaction with a disqualified individual.(iii)A
prohibited shelter transaction.(iv)An equity-based compensation arrangement.(v)Compensation based on revenues.(B)94874.1.
(a) The bureau shall not verify the exemption from this chapter of, or contract for the complaint handling for, a nonprofit institution that operated as a for-profit institution during any period on or after January 1, 2010,
unless the Attorney General determines all of the following:
(i)
(ii)
(iii)
(C)One or more of the core functions of the institution are conducted by, under the control of, or subject to significant direction from, a person or entity that is not a public institution of higher education and is not a nonprofit corporation. For these purposes, there shall be a conclusive presumption that a person or entity exercises significant direction if one or more of its employees or owners serves as an officer, member of the board, or person holding similar authority for the institution.
(D)A substantial share of the assets of the institution are committed to a joint venture with a person or entity that is not a public institution of higher education and is not a nonprofit corporation, and the core functions of the venture are
conducted by, under the control of, or subject to significant direction from that person or entity.
(b)For the purposes of determining tax exempt status for this chapter, the bureau and the Attorney General may consider the tax exempt status of an institution of higher education as determined pursuant to Section 501(c)(3) of the Internal Revenue Code. However, that status shall not be the sole factor for determining whether an entity is a nonprofit corporation.