Bill Text: CA SB1247 | 2013-2014 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Private postsecondary education: California Private
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2014-09-29 - Chaptered by Secretary of State. Chapter 840, Statutes of 2014. [SB1247 Detail]
Download: California-2013-SB1247-Amended.html
Bill Title: Private postsecondary education: California Private
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2014-09-29 - Chaptered by Secretary of State. Chapter 840, Statutes of 2014. [SB1247 Detail]
Download: California-2013-SB1247-Amended.html
BILL NUMBER: SB 1247 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 1, 2014
AMENDED IN ASSEMBLY JUNE 18, 2014
AMENDED IN ASSEMBLY JUNE 5, 2014
INTRODUCED BY Senator Lieu
(Principal coauthor: Assembly Member Bonilla)
FEBRUARY 20, 2014
An act to amend Section 27 of the Business and Professions Code,
to amend Sections 94800.5, 94801, 94802, 94804, 94808, 94809,
94809.5, 94813, 94816, 94829, 94837, 94838, 94847, 94861, 94874,
94874.1, 94874.7, 94874.8, 94875, 94876, 94877, 94878, 94879, 94881,
94882, 94883, 94884, 94885, 94887, 94888, 94890, 94891, 94892, 94893,
94895, 94896, 94897, 94898, 94900.7, 94904, 94909, 94910, 94911,
94913, 94920, 94921, 94923, 94924, 94926, 94927, 94927.5, 94928,
94929, 94929.5, 94929.7, 94929.8, 94930, 94930.5, 94931.5, 94932,
94932.5, 94933, 94933.5, 94934, 94935, 94936, 94937, 94938, 94939,
94941, 94942, 94943, 94943.5, 94944, 94944.5, 94944.6, 94945, 94948,
and 94950 of, to amend the heading of Article 5 (commencing with
Section 94875) of Chapter 8 of Part 59 of Division 10 of Title 3 of,
to add Sections 94818.5, 94874.2, and 94875.5 to, to add and repeal
Section 94929.9 of, to repeal Sections 94805, 94820, and 94833 of,
and to repeal and add Sections 94803, 94880, and 94949 of, the
Education Code, relating to private postsecondary education, and
making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1247, as amended, Lieu. Private postsecondary education:
California Private Postsecondary Education Act of 2009.
Existing law, the California Private Postsecondary Education Act
of 2009, provides for the regulation of private postsecondary
educational institutions by the Bureau for Private Postsecondary
Education in the Department of Consumer Affairs. The act exempts an
institution from its provisions, if any of a list of specific
criteria are met.
This bill would recast and revise various provisions of the act.
The bill would establish the Board for Private Postsecondary
Education as a successor agency to the bureau on July 1, 2015. The
bill would remove the exemption from its provisions for an
institution that is approved to participate in veterans financial aid
programs pursuant to a specified federal law, and that is not an
independent institution of higher education, thereby making the act
applicable to the institution.
The bill would require the board, beginning July 1, 2015, to,
among other things, contract with the Office of the Attorney General,
or other appropriate state agency, to establish a process for board
staff to be trained to investigate complaints filed with the board,
post specified information on its Internet Web site, establish a task
force to identify standards for specified educational and training
programs and provide a report to the Legislature regarding those
programs, adopt minimum operating standards for an institution that
ensure, among other things, that an institution offering a degree is
accredited and that an unaccredited institution offering a degree
satisfies certain requirements, and establish application processing
goals and timelines to ensure that an institution's approval to
operate application is promptly reviewed by the board. The bill would
require the board to submit a report to the Legislature, on or
before October 1, 2015, on whether data reporting and disclosure
requirements under the act may be consolidated with reporting
required by other federal and state regulatory bodies, to submit a
report to the Legislature relating to an independent review of its
staffing resources, and to contract with the Office of the Attorney
General for investigative and prosecutorial services if
certain conditions are satisfied. the board has reason
to believe that an institution has engaged in a pattern or practice
of violating the provisions of this act or any other applicable law.
The bill would make other technical and conforming changes.
The act establishes the Student Tuition Recovery Fund and requires
the bureau to adopt regulations governing the administration and
maintenance of the fund, including requirements relating to
assessments on students and student claims against the fund, and
establishes that the moneys in this fund are continuously
appropriated to the bureau for specified purposes.
This bill would require those regulations to ensure that students
are eligible for payment from the fund in specified circumstances.
Existing law repeals that act on January 1, 2015.
This bill would instead repeal that act on January 1, 2017, thus
extending the operation of the act by 2 years.
By extending the operation of the Student Tuition Recovery Fund, a
continuously appropriated fund, this bill would make an
appropriation.
Under existing law, the act specifies conduct by regulated
institutions that, if undertaken, is a crime.
Because this bill would extend the application of those criminal
provisions, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 27 of the Business and Professions Code is
amended to read:
27. (a) Each entity specified in subdivisions (c), (d), and (e)
shall provide on the Internet information regarding the status of
every license issued by that entity in accordance with the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code) and the Information
Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of
Title 1.8 of Part 4 of Division 3 of the Civil Code). The public
information to be provided on the Internet shall include information
on suspensions and revocations of licenses issued by the entity and
other related enforcement action, including accusations filed
pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code) taken by the entity relative to persons, businesses,
or facilities subject to licensure or regulation by the entity. The
information may not include personal information, including home
telephone number, date of birth, or social security number. Each
entity shall disclose a licensee's address of record. However, each
entity shall allow a licensee to provide a post office box number or
other alternate address, instead of his or her home address, as the
address of record. This section shall not preclude an entity from
also requiring a licensee, who has provided a post office box number
or other alternative mailing address as his or her address of record,
to provide a physical business address or residence address only for
the entity's internal administrative use and not for disclosure as
the licensee's address of record or disclosure on the Internet.
(b) In providing information on the Internet, each entity
specified in subdivisions (c) and (d) shall comply with the
Department of Consumer Affairs Guidelines for Access
to Public Records Act Guidelines .
(c) Each of the following entities within the Department of
Consumer Affairs shall comply with the requirements of this section:
(1) The Board for Professional Engineers, Land Surveyors, and
Geologists shall disclose information on its registrants and
licensees.
(2) The Bureau of Automotive Repair shall disclose information on
its licensees, including auto repair dealers, smog stations, lamp and
brake stations, smog check technicians, and smog inspection
certification stations.
(3) The Bureau of Electronic and Appliance Repair, Home
Furnishings, and Thermal Insulation shall disclose information on its
licensees and registrants, including major appliance repair dealers,
combination dealers (electronic and appliance), electronic repair
dealers, service contract sellers, and service contract
administrators.
(4) The Cemetery and Funeral Bureau shall disclose information on
its licensees, including cemetery brokers, cemetery salespersons,
cemetery managers, crematory managers, cemetery authorities,
crematories, cremated remains disposers, embalmers, funeral
establishments, and funeral directors.
(5) The Professional Fiduciaries Bureau shall disclose information
on its licensees.
(6) The Contractors' State License Board shall disclose
information on its licensees and registrants in accordance with
Chapter 9 (commencing with Section 7000) of Division 3. In addition
to information related to licenses as specified in subdivision (a),
the board shall also disclose information provided to the board by
the Labor Commissioner pursuant to Section 98.9 of the Labor Code.
(7) The Board for Private Postsecondary Education shall disclose
information on private postsecondary institutions under its
jurisdiction, including disclosure of notices to comply issued
pursuant to Section 94935 of the Education Code.
(8) The California Board of Accountancy shall disclose information
on its licensees and registrants.
(9) The California Architects Board shall disclose information on
its licensees, including architects and landscape architects.
(10) The State Athletic Commission shall disclose information on
its licensees and registrants.
(11) The State Board of Barbering and Cosmetology shall disclose
information on its licensees.
(12) The State Board of Guide Dogs for the Blind shall disclose
information on its licensees and registrants.
(13) The Acupuncture Board shall disclose information on its
licensees.
(14) The Board of Behavioral Sciences shall disclose information
on its licensees, including marriage and family therapists, licensed
clinical social workers, licensed educational psychologists, and
licensed professional clinical counselors.
(15) The Dental Board of California shall disclose information on
its licensees.
(16) The State Board of Optometry shall disclose information
regarding certificates of registration to practice optometry,
statements of licensure, optometric corporation registrations, branch
office licenses, and fictitious name permits of its licensees.
(17) The Board of Psychology shall disclose information on its
licensees, including psychologists, psychological assistants, and
registered psychologists.
(d) The State Board of Chiropractic Examiners shall disclose
information on its licensees.
(e) The Structural Pest Control Board shall disclose information
on its licensees, including applicators, field representatives, and
operators in the areas of fumigation, general pest and wood
destroying pests and organisms, and wood roof cleaning and treatment.
(f) "Internet" for the purposes of this section has the meaning
set forth in paragraph (6) of subdivision (f) of Section 17538.
SEC. 2. Section 94800.5 of the Education Code is amended to read:
94800.5. Whenever a reference is made to the former Private
Postsecondary Education and Student Protection Act, the former
Private Postsecondary and Vocational Education Reform Act of 1989, or
the former Chapter 7 (commencing with Section 94700) of Part 59 of
Division 10 of Title 3 of the Education Code, as it read on June 30,
2007, by the provisions of any statute or regulation, it shall be
construed as referring to the provisions of this chapter. Whenever a
reference is made to the former Bureau for Private Postsecondary and
Vocational Education, or the Bureau for Private Postsecondary
Education, by the provisions of any statute or regulation, after July
1, 2015, it shall be construed as referring to the Board for Private
Postsecondary Education.
SEC. 3. Section 94801 of the Education Code is amended to read:
94801. The Legislature finds and declares all of the following:
(a) In 2013, more than 300,000 Californians attended more than
1,100 private postsecondary schools in California.
(b) Private postsecondary schools can complement the public
education system and help develop a trained workforce to meet the
demands of California businesses and the economy; however, concerns
about the value of degrees and diplomas issued by private
postsecondary schools, and the lack of protections for private
postsecondary school students and consumers of those schools'
services, have highlighted the need for strong state-level oversight
of private postsecondary schools.
(c) Numerous reports and studies have concluded that California's
previous attempts at regulatory oversight of private postsecondary
schools have consistently failed to ensure student protections or
provide effective oversight of private postsecondary schools.
(d) It is the intent of the Legislature in establishing the Board
for Private Postsecondary Education for two years to ensure all of
the following:
(1) Minimum educational quality standards and opportunities for
success for California students attending private postsecondary
schools in California.
(2) Meaningful student protections through essential avenues of
recourse for students.
(3) A regulatory structure that provides for an appropriate level
of oversight.
(4) A regulatory governance structure that ensures that all
stakeholders have a voice and are heard in policymaking by the board.
(5) A regulatory governance structure that provides for
accountability and oversight by the Legislature through program
monitoring and periodic reports.
(6) Prevention of the deception of the public that results from
conferring, and use of, fraudulent or substandard degrees.
(e) The Legislature advises future policymakers to continually and
carefully evaluate this chapter and its administration and
enforcement. Where there are deficiencies in the law or regulatory
oversight, the Governor and the Legislature should act quickly to
correct them.
SEC. 4. Section 94802 of the Education Code is amended to read:
94802. (a) An institution that had a valid approval to operate on
June 30, 2007, issued by the former Bureau for Private Postsecondary
and Vocational Education pursuant to former Chapter 7 (commencing
with Section 94700) of Part 59 of Division 10 of Title 3 of the
Education Code, as it read on June 30, 2007, shall maintain that
approval under this chapter. For the purposes of this chapter, the
approval to operate shall be valid for three calendar years after the
expiration date of the approval, as it read on June 30, 2007.
(b) An institution that had a valid approval to operate on
December 31, 2014, issued by the Bureau for Private Postsecondary
Education pursuant to this chapter, as it read on December 31, 2014,
shall maintain that approval through the expiration date of the
approval, as it read on December 31, 2014, unless the approval is
suspended or revoked by the board.
SEC. 5. Section 94803 of the Education Code is repealed.
SEC. 6. Section 94803 is added to the Education Code, to read:
94803. (a) The regulations adopted under this chapter, as it read
on December 31, 2014, shall remain in effect until such time as the
board amends or repeals them.
(b) Commencing July 1, 2015, any reference in the regulations that
refer to the authority of the Director shall be deemed to refer to
the board or, if the board so designates, the executive officer.
SEC. 7. Section 94804 of the Education Code is amended to read:
94804. (a) Each unresolved matter submitted to the former Bureau
for Private Postsecondary and Vocational Education prior to July 1,
2007, and to the former Bureau for Private Postsecondary Education
prior to January 1, 2015, shall be deemed to remain pending before
the board irrespective of any applicable deadlines. With respect to
any deadline applicable to a pending matter, no time shall be deemed
to have elapsed from July 1, 2007, to January 1, 2010, inclusive.
(1) For the purposes of this subdivision, "matter" includes, but
is not limited to, an appeal, a complaint, a claim, an evaluation, a
hearing, or an investigation.
(2) For the purposes of this subdivision, "matter" does not
include a Student Tuition Recovery Fund claim.
(b) Student complaints submitted prior to January 1, 2015, shall
continue to be duly recorded and investigated by the board.
SEC. 8. Section 94805 of the Education Code is repealed.
SEC. 9. Section 94808 of the Education Code is amended to read:
94808. (a) Any Student Tuition Recovery Fund claims received by
the former Bureau for Private Postsecondary and Vocational Education
or the Bureau for Private Postsecondary Education prior to January 1,
2015, that were not processed, shall be processed by the board.
(b) The student's right to recovery from the Student Tuition
Recovery Fund shall be based on the law that was in effect when the
student enrolled and a fee for the fund was charged as a part of
tuition costs, even though that law has become inoperative, been
repealed, or otherwise expired.
SEC. 10. Section 94809 of the Education Code is amended to read:
94809. (a) (1) An institution that had an application for an
approval to operate pending with the former Bureau for Private
Postsecondary and Vocational Education on June 30, 2007, and
submitted an application for approval to operate to the Bureau for
Private Postsecondary Education, may continue to operate until a
decision is made in regard to the institution regarding the
application for approval to operate, but shall comply with, and is
subject to, this chapter.
(b) An institution that did not have a valid approval to operate
issued by, and did not have an application for approval to operate
pending with, the former Bureau for Private Postsecondary and
Vocational Education on June 30, 2007, that began operations between
July 1, 2007, and January 1, 2010, may continue to operate unless a
denial of approval to operate has been issued and has become final,
but shall comply with, and is subject to, this chapter.
(c) Students seeking to enroll in institutions operating under
subdivisions (a) and (b) shall be notified by the institution, in
writing and prior to executing an enrollment agreement, that the
institution's application for approval to operate has not been
reviewed by the board.
(d) (1) An institution that is denied an approval to operate
pursuant to subdivision (a) or (b) may file an appeal pursuant to the
procedures established in Section 94888.
(2) An institution that has filed an appeal may continue to
operate during the appeal process but must disclose in a written
statement approved by the board, to the public and
all current and prospective students, that the institution's
application for approval to operate was denied by the board because
the board has determined the application did not satisfy
minimum requirements for educational capacity, the
requirements to operate in California, that the institution is
appealing the board's decision, and that the loss of the appeal may
result in the institution's closure.
(3) If the board determines that the continued operation of an
institution poses a significant risk of harm to students, the board
shall make an emergency decision pursuant to Section 94938.
SEC. 11. Section 94809.5 of the Education Code is amended to read:
94809.5. Notwithstanding any other provision of law:
(a) For any claims that a student had based on a violation of the
Private Postsecondary and Vocational Education Reform Act of 1989 on
or before June 30, 2007, the period of time from June 30, 2007, to
December 31, 2009, inclusive, shall be excluded in determining the
deadline or the statute of limitation for filing any claim with the
board or a lawsuit based on any claim.
(b) All claims described in subdivision (a), except claims to the
Student Tuition Recovery Fund, including those contained in a lawsuit
or other legal action, shall be determined or adjudicated based on
the law that was in effect when the violations or events took place,
even though those provisions have become inoperative, been repealed,
or otherwise expired.
SEC. 12. Section 94813 of the Education Code is amended to read:
94813. "Accredited" means an institution is accredited by an
accrediting agency recognized by the United States Department of
Education.
SEC. 13. Section 94816 of the Education Code is amended to read:
94816. "Applicant" means an institution that has submitted an
application to the board for an approval to operate or for a renewal
of an approval to operate. An applicant shall be the owner of an
institution. Approvals to operate shall be issued to applicants, and
those approvals mean that the recipient institutions are authorized
or licensed by the board to operate in California through the
expiration date of the approval.
SEC. 14. Section 94818.5 is added to the Business and Professions
Code, to read:
94818.5. "Board" means the Board for Private Postsecondary
Education.
SEC. 15. Section 94820 of the Education Code is repealed.
SEC. 16. Section 94829 of the Education Code is amended to read:
94829. "Default" means failure of a borrower and endorser, if
any, to make an installment payment for a loan received under the
federal student financial aid programs when due, or to meet other
terms of the promissory note, provided that this failure persists for
270 days if payment is due monthly or 360 days if payment is due
less frequently. For purposes of this section, "endorser" means an
individual who signs a promissory note and agrees to repay the loan
in the event that the borrower does not.
SEC. 17. Section 94833 of the Education Code is repealed.
SEC. 18. Section 94837 of the Education Code is amended to read:
94837. "Educational program" means a planned sequence composed of
a single course or module, or set of related courses or modules,
that provides the education, training, skills, and experience leading
to the award of a recognized educational credential such as a
document of completion, degree, or diploma.
SEC. 19. Section 94838 of the Education Code is amended to read:
94838. "Educational program approval" means authorization by the
board, another government agency of this state, or a federal
government agency, to provide educational programs, and is an element
of an approval to operate.
SEC. 20. Section 94847 of the Education Code is amended to read:
94847. "License and examination preparation" means instruction
designed to assist students to prepare for an examination for
licensure. "License and examination preparation" does not include an
educational program designed to instruct students in the field of the
licensure examination.
SEC. 21. Section 94861 of the Education Code is amended to read:
94861. "Reporting period" means the institution's fiscal year or
any yearly period designated by the board to be covered in the
institution's annual report.
SEC. 22. Section 94874 of the Education Code is amended to read:
94874. Except as provided in Section 94874.2, the following are
exempt from this chapter:
(a) An institution that offers solely avocational or recreational
educational programs.
(b) An institution offering educational programs sponsored by a
bona fide trade, business, professional, or fraternal organization,
solely for that organization's membership.
(c) A postsecondary educational institution established, operated,
and governed by the federal government or by this state or its
political subdivisions.
(d) An institution offering either of the following:
(1) Test preparation for examinations required for admission to a
postsecondary educational institution.
(2) Continuing education or license examination preparation, if
the institution or the program is approved, certified, or sponsored
by any of the following:
(A) A government agency, other than the board, that licenses
persons in a particular profession, occupation, trade, or career
field.
(B) A state-recognized professional licensing body, such as the
State Bar of California, that licenses persons in a particular
profession, occupation, trade, or career field.
(C) A bona fide trade, business, or professional organization.
(e) (1) An institution owned, controlled, and operated and
maintained by a religious organization lawfully operating as a
nonprofit religious corporation pursuant to Part 4 (commencing with
Section 9110) of Division 2 of Title 1 of the Corporations Code, that
meets all of the following requirements:
(A) The instruction is limited to the principles of that religious
organization, or to courses offered pursuant to Section 2789 of
Business and Professions Code.
(B) The diploma or degree is limited to evidence of completion of
that education.
(2) An institution operating under this subdivision shall offer
degrees and diplomas only in the beliefs and practices of the church,
religious denomination, or religious organization.
(3) An institution operating under this subdivision shall not
award degrees in any area of physical science.
(4) Any degree or diploma granted under this subdivision shall
contain on its face, in the written description of the title of the
degree being conferred, a reference to the theological or religious
aspect of the degree's subject area.
(5) A degree awarded under this subdivision shall reflect the
nature of the degree title, such as "associate of religious studies,"
"bachelor of religious studies," "master of divinity," or "doctor of
divinity."
(f) An institution that does not award degrees and that solely
provides educational programs for total charges of two thousand five
hundred dollars ($2,500) or less when no part of the total charges is
paid from state or federal student financial aid programs. The board
may adjust this cost threshold based upon the California Consumer
Price Index and post notification of the adjusted cost threshold on
its Internet Web site, as the board determines, through the
promulgation of regulations, that the adjustment is consistent with
the intent of this chapter.
(g) A law school that is accredited by the Council of the Section
of Legal Education and Admissions to the Bar of the American Bar
Association or a law school or law study program that is subject to
the approval, regulation, and oversight of the Committee of Bar
Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and
Professions Code.
(h) A nonprofit public benefit corporation that satisfies all of
the following criteria:
(1) Is qualified under Section 501(c)(3) of the United States
Internal Revenue Code.
(2) Is organized specifically to provide workforce development or
rehabilitation services.
(3) Is accredited by an accrediting organization for workforce
development or rehabilitation services recognized by the Department
of Rehabilitation.
(i) An institution that is accredited by the Accrediting
Commission for Senior Colleges and Universities, Western Association
of Schools and Colleges, or the Accrediting Commission for Community
and Junior Colleges, Western Association of Schools and Colleges.
(j) An institution that satisfies all of the following criteria:
(1) The institution has been accredited, for at least 10 years, by
an accrediting agency that is recognized by the United States
Department of Education.
(2) The institution has operated continuously in this state for at
least 25 years.
(3) During its existence, the institution has not filed for
bankruptcy protection pursuant to Title 11 of the United States Code.
(4) The institution's cohort default rate on guaranteed student
loans does not exceed 10 percent for the most recent three years, as
published by the United States Department of Education.
(5) The institution maintains a composite score of 1.5 or greater
on its equity, primary reserve, and net income ratios, as provided
under Section 668.172 of Title 34 of the Code of Federal Regulations.
(6) The institution provides a pro rata refund of unearned
institutional charges to students who complete 75 percent or less of
the period of attendance.
(7) The institution provides to all students the right to cancel
the enrollment agreement and obtain a refund of charges paid through
attendance at the second class session, or the 14th day after
enrollment, whichever is later.
(8) The institution submits to the board copies of its most recent
IRS Form 990, the institution's Integrated Postsecondary Education
Data System Report of the United States Department of Education, and
its accumulated default rate.
(9) The institution is incorporated and lawfully operates as a
nonprofit public benefit corporation pursuant to Part 2 (commencing
with Section 5110) of Division 2 of Title 1 of the Corporations Code
and is not managed or administered by an entity for profit.
(k) Flight instruction providers or programs that provide flight
instruction pursuant to Federal Aviation Administration regulations
and meet both of the following criteria:
(1) The flight instruction provider or program does not require
students to enter into written or oral contracts of indebtedness.
(2) The flight instruction provider or program does not require or
accept prepayment of instruction-related costs in excess of two
thousand five hundred dollars ($2,500).
SEC. 23. Section 94874.1 of the Education Code is amended to read:
94874.1. (a) Except as provided in Section 94874.2, an
institution that is accredited by a regional accrediting agency that
is recognized by the United States Department of Education, and is
not an agency described in subdivision (i) of Section 94874, is
exempt from this chapter, except Article 14 (commencing with Section
94923).
(b) This section shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.
SEC. 24. Section 94874.2 is added to the Education Code, to read:
94874.2. An institution that is approved to participate in
veterans' financial aid programs pursuant to Section 21.4253 of Title
38 of the Code of Federal Regulations that is not an independent
institution of higher education, as defined in subdivision (b) of
Section 66010, may not claim an exemption from this chapter.
SEC. 25. Section 94874.7 of the Education Code is amended to read:
94874.7. The board shall establish, by regulation, a process
pursuant to which an institution that is exempt from this chapter may
request, and obtain, from the board verification that the
institution is exempt. The board shall establish a reasonable fee to
reimburse the board's costs associated with the implementation of
this section.
SEC. 26. Section 94874.8 of the Education Code is amended to read:
94874.8. (a) An institution exempt from all or part of this
chapter pursuant to subdivision (i) or (j) of Section 94874 or
Section 94874.1 may apply to the board for an approval to operate
pursuant to this section, but only subject to all of the following
provisions:
(1) The board may approve the operation of an institution that is
exempt from all or part of this chapter as specified above in
accordance with the authority granted pursuant to Article 6
(commencing with Section 94885). Upon issuing an approval to operate
to an institution pursuant to this section, the board is authorized
to regulate that institution through the full set of powers granted,
and duties imposed, by this chapter, as those powers and duties would
apply to an institution that is not exempt from this chapter.
(2) Notwithstanding any other law, upon issuance of an approval to
operate pursuant to this section, the institution is no longer
eligible for exemption, from the provisions of this chapter pursuant
to subdivision (i) or (j) of Section 94874 or Section 94874.1, unless
authorized by subsequent legislation.
(3) Upon issuance of an approval to operate pursuant to this
section, an institution is subject to all provisions of this chapter,
and any regulations adopted pursuant to this chapter, that apply to
an institution subject to this chapter, except as expressly provided
in paragraph (4).
(4) (A) With respect to the placement and salary or wage data
required to be collected, calculated, and reported by Article 16
(commencing with Section 94928), an institution issued an approval to
operate pursuant to this section is not required to report on its
first School Performance Fact Sheet any data from the period prior to
the date of the issuance of the approval to operate that the
institution was not required to collect and does not have available
to it. An institution shall, however, report available data collected
and calculated in accordance with this chapter and applicable
regulations, regardless of the purpose for which the data was
collected. If the required data is unavailable, the institution shall
also disclose the unavailability of the data on all documents
required by this chapter and regulations adopted pursuant to this
chapter. Upon receiving an approval to operate pursuant to this
section, an institution shall commence to collect and calculate all
information necessary to comply with Article 16 (commencing with
Section 94928).
(B) An institution receiving an approval to operate pursuant to
this section shall provide to prospective students the School
Performance Fact Sheet, file that fact sheet with the board, and post
it on the institution's Internet Web site no later than the first
August 1 after the institution is approved to operate or by a date
set by the board for institutions generally. These School Performance
Fact Sheets shall report data for the previous two calendar years
based upon the number of students who began the program or the number
of graduates for each reported calendar year. If two calendar years
have not passed since the issuance of the approval to operate by the
August 1 deadline for the School Performance Fact Sheet, unless data
for two years is available, the institution shall report the required
data for the period subsequent to the date of the issuance of the
notice of approval.
(b) An institution exempt from all or part of this chapter
pursuant to subdivision (i) or (j) of Section 94874 or Section
94874.1 that was approved to operate by the board before the
effective date of this section shall be deemed to have been approved
pursuant to this section.
SEC. 27. The heading of Article 5 (commencing with Section 94875)
of Chapter 8 of Part 59 of Division 10 of Title 3 of the Education
Code is amended to read:
Article 5. Board Powers and Duties
SEC. 28. Section 94875 of the Education Code is amended to read:
94875. (a) The board shall regulate private postsecondary
educational institutions through the powers granted, and duties
imposed, by this chapter. In exercising its powers, and performing
its duties, the protection of the public shall be the board's highest
priority. If protection of the public is inconsistent with other
interests sought to be promoted, the protection of the public shall
be paramount. The board shall consist of 11 members appointed as
follows:
(1) Three members, who shall have a demonstrated record of
advocacy on behalf of consumers, one appointed by the Governor, one
by the Senate Committee on Rules, and one by the Speaker of the
Assembly.
(2) Two members, who shall be current or former students of
institutions, appointed by the Governor , subject to confirmation
by the Senate Committee on Rules .
(3) Three members, who shall be representatives of institutions,
appointed by the Governor , subject to confirmation by the
Senate Committee on Rules .
(4) Two public members with experience or expertise in
postsecondary education, appointed by the Governor , subject to
confirmation by the Senate Committee on Rules .
(5) One public member with knowledge or expertise in emerging
fields of employment, appointed by the Governor , subject to
confirmation by the Senate Committee on Rules .
(b) A person who was a member of the former Advisory Committee to
the Bureau for Private Postsecondary Education, established pursuant
to Section 94880, as that section read on January 1, 2014, is
eligible to be appointed to the board pursuant to subdivision (a).
(c) A public member appointed to the board pursuant to subdivision
(a) shall not be affiliated with an institution.
(d) A majority of the board constitutes a quorum for the
transaction of any business, for the performance of any duty, or for
the exercise of any power of the board. A vacancy in the board does
not impair the right of the remaining members to exercise all the
powers of the board.
SEC. 29. Section 94875.5 is added to the Education Code, to read:
94875.5. Notwithstanding any other provision of this chapter, the
Bureau for Private Postsecondary Education shall continue in
existence and administer the provisions of this chapter until July 1,
2015. As of that date, the bureau shall cease operations, and the
board shall assume all authority, including the powers, functions,
and jurisdiction until then vested in the bureau. The board may
enforce all disciplinary actions undertaken by the bureau. For the
performance of these duties and exercise of these powers, the board
shall have possession and control of all records, papers, offices,
equipment, supplies, or other property, real or personal, held for
the benefit of or use by the bureau. All regulations adopted by the
bureau that were in effect on December 31, 2014, shall remain in
effect until the board acts to amend or repeal those regulations. All
licensing application forms in use on December 31, 2014, shall
continue in use until such time as the board acts to amend those
forms or provides for their elimination or replacement.
SEC. 30. Section 94876 of the Education Code is amended to read:
94876. (a) The executive officer of the board shall be appointed
by the Governor, subject to confirmation by the Senate Committee on
Rules, and is exempt from the State Civil Service Act pursuant to
Part 2 (commencing with Section 18500) of Division 5 of Title 2 of
the Government Code.
(b) The executive officer of the board shall exercise the powers
and perform the duties delegated by the board.
(c) The executive officer shall be selected from a list of five
candidates generated by the board.
(d) To assist the executive officer in the discharge of his or her
duties, the board shall appoint three to five deputies, as deemed
necessary by the board.
SEC. 31. Section 94877 of the Education Code is amended to read:
94877. (a) The board shall adopt and shall enforce regulations to
implement this chapter pursuant to the Administrative Procedure Act
in Chapter (Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code. Code).
(b) The board shall develop and implement an enforcement program,
pursuant to Article 18 (commencing with Section 94932) to implement
this chapter. The enforcement program shall include a plan for
investigating complaints filed with the board. The board shall
contract with the office of the Attorney General, or other
appropriate state agency, to establish a process for the board's
staff to be trained to investigate complaints, including, but not
limited to, the information, evidence, and materials needed to
process complaints. The training shall ensure the board's staff are
equipped to review and verify the accuracy of the data contained in
consumer disclosures, including, but not limited to, the School
Performance Fact Sheet.
(c) The board shall establish a program to proactively identify
unlicensed institutions, identify material or repeated violations of
this chapter and regulations implementing this chapter, and take all
appropriate legal action.
(d) The board shall, by January 1, 2016, initiate the process and
procedures governing its approval or denial of applications for
approval to operate in accordance with board regulations adopted
pursuant to Section 94888, for every application pending as of
January 1, 2015.
SEC. 32. Section 94878 of the Education Code is amended to read:
94878. (a) The board shall establish an Internet Web site that
includes at least all of the following information:
(1) An explanation of the board's scope of authority.
(2) (A) A directory of approved institutions, and a link, if
feasible, to the Internet Web site of each institution.
(B) For each institution, the directory shall be developed in a
manner that allows the user to search by institution and shall
include all of the following information:
(i) The status of the institution's approval to operate.
(ii) The information provided by the institutions including, but
not limited to, the annual report, as required by Section 94934,
including the school catalog and the Student Performance Fact Sheet.
The Student Performance Fact Sheet shall be maintained on the
directory for at least five years after the date of its submission to
the board.
(iii) The disciplinary history of the institution, which shall
include, but shall not be limited to, all of the following:
(I) Pending formal accusations filed by the board.
(II) Suspensions, revocations, citations, fines, infractions,
probations, pending litigation filed by the board, and final
judgments resulting from litigation filed by the board.
(III) Pending or final civil or criminal cases filed in
any state by a state attorney general, by the Attorney
General, a city attorney, or a district attorney
in this state , or filed in any state by an attorney
general or a federal regulatory or prosecutorial agency if
the case would be actionable under California or federal
law , of which the board has received notice.
(IV) Final administrative actions by the United State Department
of Education, including orders requiring restitution to students.
(V) All disciplinary actions ordered by an accreditation agency,
including any order to show cause, of which the board has received
notice pursuant to Section 94934 or other information otherwise
publicly available of which the board has received notice.
(b) The board shall maintain the Internet Web site described in
subdivision (a). The board shall ensure that the information
specified in subdivision (a) is kept current. The board shall update
the Internet Web site at least annually, to coincide with the
submission of annual reports by the institutions pursuant to Section
94934.
(c) (1) The board shall post on its Internet Web site a list of
all institutions that were denied approval to operate, after the
denial is final, and describe in clear and conspicuous language the
reason the institution was denied approval. The board shall include
the statement provided in paragraph (2) on its Internet Web site.
(2) "The following institutions were denied approval to operate by
the Board for Private Postsecondary Education for failing to satisfy
the standards relating to educational quality, or consumer
protection, or both. These unlicensed institutions are not operating
in compliance with the law, and students are strongly discouraged
from attending these institutions."
SEC. 33. Section 94879 of the Education Code is amended to read:
94879. The board shall conduct an outreach program to secondary
school students as well as prospective and current private
postsecondary students, to provide them with information on how to
best select a private postsecondary institution, how to enter into
enrollment agreements, how to make informed decisions in the private
postsecondary education marketplace, and how to contact the board for
assistance. The board may accomplish the purposes of this section in
cooperation with other federal, state, or local entities, or any
combination of these entities.
SEC. 34. Section 94880 of the Education Code is repealed.
SEC. 35. Section 94880 is added to the Education Code, to read:
94880. (a) The board shall establish a task force to determine
standards for educational and training programs specializing in
innovative subject matters and instructing students in high-demand
technology fields for which there is a demonstrated shortage of
skilled employees. The members of the task force may include high
technology employers, students of short-term focused high technology
training programs, and providers of high technology training in
subjects including, but not necessarily limited to, programming,
software development, computer science, and coding.
(b) (1) The board shall provide a report to the Legislature
regarding educational and training programs subject to subdivision
(a), and the institutions offering those programs, no later than
January 1, 2016. The report shall include the board's evaluation of
all of the following:
(A) Whether students attending these institutions should receive
certain disclosures prior to enrollment in a program.
(B) Whether the means of reporting student outcomes and the
content of those reports are appropriate.
(C) Whether institutions that satisfy certain criteria should be
regulated by the board and by this chapter.
(D) The steps the board and the state may take to promote the
growth of high-quality training programs in skills for high
technology occupations.
(2) (A) The requirement for submitting a report imposed under this
subdivision is inoperative on January 1, 2019, pursuant to Section
10231.5 of the Government Code.
(B) A report to be submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government Code.
SEC. 36. Section 94881 of the Education Code is amended to read:
94881. The board may conduct workshops to provide applicants and
institutions information on application processes, compliance with
this chapter, best practices for providing postsecondary educational
programs, and other subjects concerning postsecondary education.
SEC. 37. Section 94882 of the Education Code is amended to read:
94882. The board may empanel visiting committees to assist in
evaluating an institution's application for an approval to operate.
The members of visiting committees shall serve at no expense to the
state, except that the board may reimburse the members of visiting
committees for actual travel and per diem expenses incurred during
the evaluation. The board may seek reimbursement for the travel and
per diem costs from the institution that is the subject of an
evaluation.
SEC. 38. Section 94883 of the Education Code is amended to read:
94883. (a) Any individual serving on a visiting committee who
provides information to the board, or its staff, in the course of
evaluating any institution, or who testifies in any administrative
hearing arising under this chapter, is entitled to a defense and
indemnification in any action arising out of the information or
testimony provided as if he or she were a public employee.
(b) Any defense and indemnification shall be solely with respect
to the action pursuant to Article 4 (commencing with Section 825) of
Chapter 1 of Part 2 of, and Part 7 (commencing with Section 995) of
Division 3.6 of Title 1 of, the Government Code.
SEC. 39. Section 94884 of the Education Code is amended to read:
94884. The board is subject to Section 27 of the Business and
Professions Code.
SEC. 40. Section 94885 of the Education Code is amended to read:
94885. The board shall adopt by regulation minimum operating
standards for an institution that shall reasonably ensure that all of
the following occur:
(a) The content of each educational program can achieve its stated
objective.
(b) The institution maintains specific written standards for
student admissions for each educational program and those standards
are related to the particular educational program.
(c) The facilities, instructional equipment, and materials are
sufficient to enable students to achieve the educational program's
goals.
(d) The institution maintains a withdrawal policy and provides
refunds.
(e) The directors, administrators, and faculty are properly
qualified.
(f) The institution is financially sound and capable of fulfilling
its commitments to students.
(g) That, upon satisfactory completion of an educational program,
the institution gives students a document signifying the degree or
diploma awarded.
(h) Adequate records and standard transcripts are maintained and
are available to students.
(i) The institution is maintained and operated in compliance with
this chapter and all other applicable ordinances and laws.
(j) (1) An institution offering a degree is accredited by an
accrediting agency recognized by the United States Department of
Education.
(2) An unaccredited institution offering a degree that is approved
to operate by the bureau as of January 1, 2015, shall have until
January 1, 2016, to obtain and provide evidence of its candidacy or
preaccreditation status with an accrediting agency recognized by the
United States Department of Education, and to obtain and provide
evidence of accreditation from that accrediting agency on or before
January 1, 2017.
(3) The board may, upon the submission of sufficient evidence that
an unaccredited institution is making strong progress toward
obtaining accreditation pursuant to paragraph (2), extend the
timeline for the institution beyond the timeline provided in
paragraph (2).
SEC. 41. Section 94887 of the Education Code is amended to read:
94887. An approval to operate shall be granted only after an
applicant has presented sufficient evidence to the board, and the
board has independently verified the information provided by the
applicant through site visits or other methods deemed appropriate by
the board, that the applicant has the capacity to satisfy the minimum
operating standards. The board shall deny an application for an
approval to operate if the application does not satisfy those
standards.
SEC. 42. Section 94888 of the Education Code is amended to read:
94888. (a) The board shall adopt by regulation both of the
following:
(1) The process and procedures whereby an institution seeking
approval to operate may apply for and obtain an approval to operate.
(2) The process and procedures governing the board's approval and
denial of applications for approval to operate, including the process
and procedures whereby an applicant for which an application has
been denied may appeal that denial.
(b) The board shall, by regulation, establish both of the
following:
(1) A process for issuing a notification of a denial of an
approval to operate to an institution that submits an application for
approval to operate and for which that application is denied. The
notification of denial shall include a statement of reasons for the
denial.
(2) Application processing goals and timelines to ensure an
institution that has submitted a complete application for approval to
operate has that application promptly reviewed for compliance within
30 days of board receipt of the application, or within an
appropriate timeline as determined by the board. The timelines shall
ensure that an institution that has submitted a complete and
compliant application receives approval within 30 days of the
application being deemed compliant by the board, or within an
appropriate timeline as determined by the board.
SEC. 43. Section 94890 of the Education Code is amended to read:
94890. (a) (1) The board shall grant an institution that is
accredited an approval to operate by means of its accreditation.
(2) The board shall adopt by regulation the process and procedures
whereby an institution that is accredited may apply for and obtain
an approval by means of that accreditation.
(b) The term of an approval to operate pursuant to this section
shall be coterminous with the term of accreditation. Upon renewal of
the institution's accreditation, the institution shall submit
verification to the board, on a form provided by the board, that the
institution's accreditation has been renewed.
(c) Institutions that are granted an approval to operate by means
of the institution's accreditation shall comply with all other
applicable requirements in this chapter.
SEC. 44. Section 94891 of the Education Code is amended to read:
94891. (a) The board shall adopt by regulation the process and
procedures whereby an institution may obtain a renewal of an approval
to operate.
(b) To be granted a renewal of an approval to operate, the
institution shall demonstrate its continued capacity to meet the
minimum operating standards.
(c) (1) An institution that is denied renewal of an approval to
operate may file an appeal in accordance with the procedures
established by the board pursuant to Section 94888.
(2) An institution that has filed an appeal of a denial of a
renewal application may continue to operate during the appeal
process, but must disclose in a written statement, approved by the
board, to the public and all current and
prospective students, that the institution's application for renewal
of approval to operate was denied by the board because the board
determined the application did not satisfy minimum
requirements for educational capacity, the
requirements to operate in California, that the institution is
appealing the board's decision, and that the loss of the appeal may
result in the institution's closure.
(3) If the board determines that the continued operation of the
institution during the appeal process poses a significant risk of
harm to students, the board shall make an emergency decision pursuant
to its authority provided in Section 94938.
SEC. 45. Section 94892 of the Education Code is amended to read:
94892. If an agency of this state other than the board or of the
federal government provides an approval to offer an educational
program and the institution already has a valid approval to operate
issued by the board, that agency's educational program approval may
satisfy the requirements of this article without any further review
by the board. The board may incorporate that educational program into
the institution's approval to operate when the board receives
documentation signifying the conferral of the educational program
approval by that agency.
SEC. 46. Section 94893 of the Education Code is amended to read:
94893. If an institution intends to make a substantive change to
its approval to operate, the institution shall receive prior
authorization from the board. Except as provided in subdivision (a)
of Section 94896, if the institution makes the substantive change
without prior board authorization, the institution's approval to
operate may be suspended or revoked.
SEC. 47. Section 94895 of the Education Code is amended to read:
94895. The board shall adopt by regulation the process and
procedures whereby an institution shall seek authorization for
substantive changes to an approval to operate.
SEC. 48. Section 94896 of the Education Code is amended to read:
94896. (a) An institution that has been granted an approval to
operate by means of accreditation shall only make a substantive
change in accordance with the institution's accreditation standards.
(b) The institution shall notify the board of the substantive
change on a form provided by the board.
SEC. 49. Section 94897 of the Education Code is amended to read:
94897. An institution shall not do any of the following:
(a) Use, or allow the use of, any reproduction or facsimile of the
Great Seal of the State of California on a diploma.
(b) Promise or guarantee employment, or otherwise overstate the
availability of jobs upon graduation.
(c) Advertise concerning job availability, degree of skill, or
length of time required to learn a trade or skill unless the
information is accurate and not misleading.
(d) Advertise, or indicate in promotional material, without
including the fact that the educational programs are delivered by
means of distance education if the educational programs are so
delivered.
(e) Advertise, or indicate in promotional material, that the
institution is accredited, unless the institution has been accredited
by an accrediting agency.
(f) Solicit students for enrollment by causing an advertisement to
be published in "help wanted" columns in a magazine, newspaper, or
publication, or use "blind" advertising that fails to identify the
institution.
(g) Offer to compensate a student to act as an agent of the
institution with regard to the solicitation, referral, or recruitment
of any person for enrollment in the institution, except that an
institution may award a token gift to a student for referring an
individual, provided that the gift is not in the form of money, no
more than one gift is provided annually to a student, and the gift's
cost is not more than one hundred dollars ($100).
(h) Pay any consideration to a person to induce that person to
sign an enrollment agreement for an educational program.
(i) Use a name in any manner improperly implying any of the
following:
(1) The institution is affiliated with any government agency,
public or private corporation, agency, or association if it is not,
in fact, thus affiliated.
(2) The institution is a public institution.
(3) The institution grants degrees, if the institution does not
grant degrees.
(j) In any manner make an untrue or misleading change in, or
untrue or misleading statement related to, a test score, grade or
record of grades, attendance record, record indicating student
completion, placement, employment, salaries, or financial
information, including any of the following:
(1) A financial report filed with the board.
(2) Information or records relating to the student's eligibility
for student financial aid at the institution.
(3) Any other record or document required by this chapter or by
the board.
(k) Willfully falsify, destroy, or conceal any document of record
while that document of record is required to be maintained by this
chapter.
(l) Use the terms "approval," "approved," "approval to operate,"
or "approved to operate" without stating clearly and conspicuously
that approval to operate means compliance with state standards as set
forth in this chapter. If the board has granted an institution
approval to operate, the institution may indicate that the
institution is "authorized,
" "licensed," or "licensed to operate," but may not state or
imply either of the following:
(1) The institution or its educational programs are endorsed or
recommended by the state or by the board.
(2) The approval to operate indicates that the institution exceeds
minimum state standards as set forth in this chapter.
(m) Direct any individual to perform an act that violates this
chapter, to refrain from reporting unlawful conduct to the board or
another government agency, or to engage in any unfair act to persuade
a student not to complain to the board or another government agency.
(n) Compensate an employee involved in recruitment, enrollment,
admissions, student attendance, or sales of educational materials to
students on the basis of a commission, commission draw, bonus, quota,
or other similar method related to the recruitment, enrollment,
admissions, student attendance, or sales of educational materials to
students, except as provided in paragraph (1) or (2):
(1) If the educational program is scheduled to be completed in 90
days or less, the institution shall pay compensation related to a
particular student only if that student completes the educational
program.
(2) For institutions participating in the federal student
financial aid programs, this subdivision shall not prevent the
payment of compensation to those involved in recruitment, admissions,
or the award of financial aid if those payments are in conformity
with federal regulations governing an institution's participation in
the federal student financial aid programs.
(o) Require a prospective student to provide personal contact
information in order to obtain, from the institution's Internet Web
site, educational program information that is required to be
contained in the school catalog or any information required pursuant
to the consumer information requirements of Title IV of the federal
Higher Education Act of 1965, and any amendments thereto.
(p) Offer an associate, baccalaureate, master's, or doctoral
degree without disclosing to prospective students prior to enrollment
whether the institution or the degree program is unaccredited and
any known limitation of the degree, including, but not limited to,
all of the following:
(1) Whether a graduate of the degree program will be eligible to
sit for the applicable licensure exam in California and other states.
(2) A statement that reads: "A degree program that is unaccredited
or a degree from an unaccredited institution is not recognized for
some employment positions, including, but not limited to, positions
with the State of California."
(3) That a student enrolled in an unaccredited institution is not
eligible for federal financial aid programs.
SEC. 50. Section 94898 of the Education Code is amended to read:
94898. (a) An institution shall not merge classes unless all of
the students have received the same amount of instruction. This
subdivision does not prevent the placement of students, who are
enrolled in different educational programs, in the same class if that
class is part of each of the educational programs and the placement
in a merged class will not impair the students' learning of the
subject matter of the class.
(b) After a student has enrolled in an educational program, the
institution shall not do either of the following:
(1) Make any unscheduled suspension of any class unless caused by
circumstances beyond the institution's control.
(2) Change the day or time during the period of attendance in
which any class is offered to a day when the student is not scheduled
to attend the institution or to a time that is outside of the range
of time that the student is scheduled to attend the institution on
the day for which the change is proposed unless at least 90 percent
of the students who are enrolled consent to the change and the
institution offers full refunds to the students who do not consent to
the change. For the purpose of this paragraph, "range of time" means
the period beginning with the time at which the student's first
scheduled class session for the day is set to start and ending with
the time the student's last scheduled class session for that day is
set to finish.
(c) If an institution enrolls a student in an educational program
that is conducted at a specific site at the time of enrollment, the
institution shall not convert the educational program to another
method of delivery, such as by means of distance education. This
subdivision does not apply to an educational program that also
includes a distance education component, if the student is notified
during the enrollment process, in writing, that the program contains
a distance education component.
(d) An institution shall not move the location of class
instruction more than 25 miles from the location of instruction at
the time of enrollment unless any of the following occur:
(1) The institution discloses in writing to each student before
enrollment in the educational program that the location of
instruction will change after the educational program begins and the
address of the new location.
(2) The institution applies for, and the board grants, approval to
change the location. The board shall grant the application within 60
days if the board, after notice to affected students and an
opportunity for them to be heard as prescribed by the board,
concludes that the change in location would not be unfair or unduly
burdensome to students. The board may grant approval to change the
location subject to reasonable conditions, such as requiring the
institution to provide transportation, transportation costs, or
refunds to adversely affected students.
(3) The institution offers a full refund to students enrolled in
the educational program who do not voluntarily consent to the change.
(4) An unforeseeable and unavoidable circumstance outside of the
control of the institution requires the change in the location of
instruction.
SEC. 51. Section 94900.7 of the Education Code is amended to read:
94900.7. The recordkeeping requirements of this article shall not
apply to an institution that is accredited, if the recordkeeping
requirements of the accrediting organization are substantially
similar to the recordkeeping requirements of this article, as
determined by the board.
SEC. 52. Section 94904 of the Education Code is amended to read:
94904. (a) Before an ability-to-benefit student may execute an
enrollment agreement, the institution shall have the student take an
independently administered examination from the list of examinations
prescribed as of July 1, 2012, by the United States Department of
Education pursuant to Section 484(d) of the federal Higher Education
Act of 1965 (20 U.S.C. Sec. 1070a et seq.). The student shall not
enroll unless the student achieves a score, as specified by the
United States Department of Education, demonstrating that the student
may benefit from the education and training being offered.
(b) If the United States Department of Education does not have a
list of relevant examinations that pertain to the intended
occupational training, the board may publish its own list of
acceptable examinations and required passing scores.
SEC. 53. Section 94909 of the Education Code is amended to read:
94909. (a) Prior to enrollment, an institution shall provide a
prospective student, either in writing or electronically, with a
school catalog containing, at a minimum, all of the following:
(1) The name, address, telephone number, and, if applicable,
Internet Web site address of the institution.
(2) Except as specified in Article 2 (commencing with Section
94802), a statement that the institution is a private institution and
that it is approved to operate by the board.
(3) The following statements:
(A) "Any questions a student may have regarding this catalog that
have not been satisfactorily answered by the institution may be
directed to the Board for Private Postsecondary Education at
(address), Sacramento, CA (ZIP Code), (Internet Web site address),
(telephone and fax numbers)."
(B) "As a prospective student, you are encouraged to review this
catalog prior to signing an enrollment agreement. You are also
encouraged to review the School Performance Fact Sheet, which must be
provided to you prior to signing an enrollment agreement."
(C) "A student or any member of the public may file a complaint
about this institution with the Board for Private Postsecondary
Education by calling (toll-free telephone number) or by completing a
complaint form, which can be obtained on the board's Internet Web
site (Internet Web site address)."
(4) The address or addresses where class sessions will be held.
(5) A description of the programs offered and a description of the
instruction provided in each of the courses offered by the
institution, the requirements for completion of each program,
including required courses, any final tests or examinations, any
required internships or externships, and the total number of credit
hours, clock hours, or other increments required for completion.
(6) If the educational program is designed to lead to positions in
a profession, occupation, trade, or career field requiring licensure
in this state, a notice to that effect and a list of the
requirements for eligibility for licensure.
(7) Information regarding the faculty and their qualifications.
(8) A detailed description of institutional policies in the
following areas:
(A) Admissions policies, including the institution's policies
regarding the acceptance of credits earned at other institutions or
through challenge examinations and achievement tests, admissions
requirements for ability-to-benefit students, and a list describing
any transfer or articulation agreements between the institution and
any other college or university that provides for the transfer of
credits earned in the program of instruction. If the institution has
not entered into an articulation or transfer agreement with any other
college or university, the institution shall disclose that fact.
(B) Cancellation, withdrawal, and refund policies, including an
explanation that the student has the right to cancel the enrollment
agreement and obtain a refund of charges paid through attendance at
the first class session, or the seventh day after enrollment,
whichever is later. The text shall also include a description of the
procedures that a student is required to follow to cancel the
enrollment agreement or withdraw from the institution and obtain a
refund consistent with the requirements of Article 13 (commencing
with Section 94919).
(C) Probation and dismissal policies.
(D) Attendance policies.
(E) Leave-of-absence policies.
(9) The schedule of total charges for a period of attendance and
an estimated schedule of total charges for the entire educational
program.
(10) A statement reporting whether the institution participates in
federal and state financial aid programs, and if so, all consumer
information that is required to be disclosed to the student pursuant
to the applicable federal and state financial aid programs.
(11) A statement specifying that, if a student obtains a loan to
pay for an educational program, the student will have the
responsibility to repay the full amount of the loan plus interest,
less the amount of any refund, and that, if the student has received
federal student financial aid funds, the student is entitled to a
refund of the moneys not paid from federal student financial aid
program funds.
(12) A statement specifying whether the institution has a pending
petition in bankruptcy, is operating as a debtor in possession, has
filed a petition within the preceding five years, or has had a
petition in bankruptcy filed against it within the preceding five
years that resulted in reorganization under Chapter 11 of the United
States Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).
(13) If the institution provides placement services, a description
of the nature and extent of the placement services.
(14) A description of the student's rights and responsibilities
with respect to the Student Tuition Recovery Fund. This statement
shall specify that it is a state requirement that a student who pays
his or her tuition is required to pay a state-imposed assessment for
the Student Tuition Recovery Fund. This statement shall also describe
the purpose and operation of the Student Tuition Recovery Fund and
the requirements for filing a claim against the Student Tuition
Recovery Fund.
(15) The following statement:
"NOTICE CONCERNING TRANSFERABILITY OF CREDITS AND CREDENTIALS EARNED
AT OUR INSTITUTION
The transferability of credits you earn at (name of institution) is
at the complete discretion of an institution to which you may seek
to transfer. Acceptance of the (degree, diploma, or certificate) you
earn in (name of educational program) is also at the complete
discretion of the institution to which you may seek to transfer. If
the (credits or degree, diploma, or certificate) that you earn at
this institution are not accepted at the institution to which you
seek to transfer, you may be required to repeat some or all of your
coursework at that institution. For this reason you should make
certain that your attendance at this institution will meet your
educational goals. This may include contacting an institution to
which you may seek to transfer after attending (name of institution)
to determine if your (credits or degree, diploma , or
certificate) will transfer."
(16) A statement specifying whether the institution, or any of its
degree programs, are accredited by an accrediting agency recognized
by the United States Department of Education. If the institution is
unaccredited and offers an associate, baccalaureate, master's, or
doctoral degree, or is accredited and offers an unaccredited program
for an associate, baccalaureate, master's, or doctoral degree, the
statement shall disclose the known limitations of the degree program,
including, but not limited to, all of the following:
(A) Whether a graduate of the degree program will be eligible to
sit for the applicable licensure exam in California and other states.
(B) A degree program that is unaccredited or a degree from an
unaccredited institution is not recognized for some employment
positions, including, but not limited to, positions with the State of
California.
(C) That a student enrolled in an unaccredited institution is not
eligible for federal financial aid programs.
(b) If the institution has a general student brochure, the
institution shall provide that brochure to the prospective student
prior to enrollment. In addition, if the institution has a
program-specific student brochure for the program in which the
prospective student seeks to enroll, the institution shall provide
the program-specific student brochure to the prospective student
prior to enrollment.
(c) An institution shall provide the school catalog to any person
upon request. In addition, if the institution has student brochures,
the institution shall disclose the requested brochures to any
interested person upon request.
SEC. 54. Section 94910 of the Education Code is amended to read:
94910. Prior to enrollment, an institution shall provide a
prospective student with a School Performance Fact Sheet containing,
at a minimum, the following information, as it relates to the
educational program:
(a) Completion rates, as calculated pursuant to Article 16
(commencing with Section 94928).
(b) Placement rates for each educational program, as calculated
pursuant to Article 16 (commencing with Section 94928), if the
educational program is designed to lead to, or the institution makes
any express or implied claim related to preparing students for, a
recognized career, occupation, vocation, job, or job title.
(c) License examination passage rates for programs leading to
employment for which passage of a state licensing examination is
required, as calculated pursuant to Article 16 (commencing with
Section 94928).
(d) Salary or wage information, as calculated pursuant to Article
16 (commencing with Section 94928).
(e) If a program is too new to provide data for any of the
categories listed in this subdivision, the institution shall state on
its fact sheet: "This program is new. Therefore, the number of
students who graduate, the number of students who are placed, or the
starting salary you can earn after finishing the educational program
are unknown at this time. Information regarding general salary and
placement statistics may be available from government sources or from
the institution, but is not equivalent to actual performance data."
(f) All of the following:
(1) A description of the manner in which the figures described in
subdivisions (a) to (d), inclusive, are calculated or a statement
informing the reader of where he or she may obtain a description of
the manner in which the figures described in subdivisions (a) to (d),
inclusive, are calculated.
(2) A statement informing the reader of where he or she may obtain
from the institution a list of the employment positions determined
to be within the field for which a student received education and
training for the calculation of job placement rates as required by
subdivision (b).
(3) A statement informing the reader of where he or she may obtain
from the institution a list of the objective sources of information
used to substantiate the salary disclosure as required by subdivision
(d).
(g) The following statements:
(1) "This fact sheet is filed with the Board for Private
Postsecondary Education. Regardless of any information you may have
relating to completion rates, placement rates, starting salaries, or
license exam passage rates, this fact sheet contains the information
as calculated pursuant to state law."
(2) "Any questions a student may have regarding this fact sheet
that have not been satisfactorily answered by the institution may be
directed to the Board for Private Postsecondary Education at
(address), Sacramento, CA (ZIP Code), (Internet Web site address),
(telephone and fax numbers)."
(h) If the institution participates in federal financial aid
programs, the most recent three-year cohort default rate reported by
the United States Department of Education for the institution and the
percentage of enrolled students receiving federal student loans.
SEC. 55. Section 94911 of the Education Code is amended to read:
94911. An enrollment agreement shall include, at a minimum, all
of the following:
(a) The name of the institution and the name of the educational
program, including the total number of credit hours, clock hours, or
other increment required to complete the educational program.
(b) A schedule of total charges, including a list of any charges
that are nonrefundable and the student's obligations to the Student
Tuition Recovery Fund, clearly identified as nonrefundable charges.
(c) In underlined capital letters on the same page of the
enrollment agreement in which the student's signature is required,
the total charges for the current period of attendance, the estimated
total charges for the entire educational program, and the total
charges the student is obligated to pay upon enrollment.
(d) A clear and conspicuous statement that the enrollment
agreement is legally binding when signed by the student and accepted
by the institution.
(e) (1) A disclosure with a clear and conspicuous caption,
"STUDENT'S RIGHT TO CANCEL," under which it is explained that the
student has the right to cancel the enrollment agreement and obtain a
refund of charges paid through attendance at the first class
session, or the seventh day after enrollment, whichever is later.
(2) The disclosure shall contain the institution's refund policy
and a statement that, if the student has received federal student
financial aid funds, the student is entitled to a refund of moneys
not paid from federal student financial aid program funds.
(3) The text shall also include a description of the procedures
that a student is required to follow to cancel the enrollment
agreement or withdraw from the institution and obtain a refund.
(f) A statement specifying that, if the student obtains a loan to
pay for an educational program, the student will have the
responsibility to repay the full amount of the loan plus interest,
less the amount of any refund.
(g) A statement specifying that, if the student is eligible for a
loan guaranteed by the federal or state government and the student
defaults on the loan, both of the following may occur:
(1) The federal or state government or a loan guarantee agency may
take action against the student, including applying any income tax
refund to which the person is entitled to reduce the balance owed on
the loan.
(2) The student may not be eligible for any other federal student
financial aid at another institution or other government assistance
until the loan is repaid.
(h) The transferability disclosure that is required to be included
in the school catalog, as specified in paragraph (15) of subdivision
(a) of Section 94909.
(i) (1) The following statement: "Prior to signing this enrollment
agreement, you must be given a catalog or brochure and a School
Performance Fact Sheet, which you are encouraged to review prior to
signing this agreement. These documents contain important policies
and performance data for this institution. This institution is
required to have you sign and date the information included in the
School Performance Fact Sheet relating to completion rates, placement
rates, license examination passage rates, salaries or wages, and the
most recent three-year cohort default rate, if applicable, prior to
signing this agreement."
(2) Immediately following the statement required by paragraph (1),
a line for the student to initial, including the following
statement: "I certify that I have received the catalog, School
Performance Fact Sheet, and information regarding completion rates,
placement rates, license examination passage rates, salary or wage
information, and the most recent three-year cohort default rate, if
applicable, included in the School Performance Fact Sheet, and have
signed, initialed, and dated the information provided in the School
Performance Fact Sheet."
(j) The following statements:
(1) "Any questions a student may have regarding this enrollment
agreement that have not been satisfactorily answered by the
institution may be directed to the Board for Private Postsecondary
Education at (address), Sacramento, CA (ZIP Code), (Internet Web site
address), (telephone and fax numbers)."
(2) "A student or any member of the public may file a complaint
about this institution with the Board for Private Postsecondary
Education by calling (toll-free telephone number) or by completing a
complaint form, which can be obtained on the board's Internet Web
site (Internet Web site address)."
(k) The following statement above the space for the student's
signature:
"I understand that this is a legally binding contract. My signature
below certifies that I have read, understood, and agreed to my rights
and responsibilities, and that the institution's cancellation and
refund policies have been clearly explained to me."
SEC. 56. Section 94913 of the Education Code is amended to read:
94913. (a) An institution that maintains an Internet Web site
shall provide on that Internet Web site all of the following:
(1) The school catalog.
(2) A School Performance Fact Sheet for each educational program
offered by the institution.
(3) Student brochures offered by the institution.
(4) A link to the board's Internet Web site.
(5) The institution's most recent annual report submitted to the
board.
(b) An institution shall include information concerning where
students may access the board's Internet Web site anywhere the
institution identifies itself as being approved by the board.
SEC. 57. Section 94920 of the Education Code is amended to read:
94920. An institution that does not participate in the federal
student financial aid programs shall do all of the following:
(a) The institution shall advise each student that a notice of
cancellation shall be in writing, and that a withdrawal may be
effectuated by the student's written notice or by the student's
conduct, including, but not necessarily limited to, a student's lack
of attendance.
(b) Institutions shall refund 100 percent of the amount paid for
institutional charges, less a reasonable deposit or application fee
not to exceed two hundred fifty dollars ($250), if notice of
cancellation is made through attendance at the first class session,
or the seventh day after enrollment, whichever is later.
(c) The board may adopt by regulation a different method of
calculation for instruction delivered by other means, including, but
not necessarily limited to, distance education.
(d) The institution shall have a refund policy for the return of
unearned institutional charges if the student cancels an enrollment
agreement or withdraws during a period of attendance. The refund
policy for students who have completed 60 percent or less of the
period of attendance shall be a pro rata refund.
(e) The institution shall pay or credit refunds within 45 days of
a student's cancellation or withdrawal.
SEC. 58. Section 94921 of the Education Code is amended to read:
94921. An institution offering an educational program for which
the refund calculations set forth in this article cannot be utilized
because of the unique way in which the educational program is
structured, may petition the board for an alternative method of
calculating tuition refunds.
SEC. 59. Section 94923 of the Education Code is amended to read:
94923. (a) The Student Tuition Recovery Fund relieves or
mitigates economic loss suffered by a student while enrolled in an
educational program at a nonexempt institution under Article 4
(commencing with Section 94874), as a result of the institution's
violation of law.
(b) The board shall adopt by regulation procedures governing the
administration and maintenance of the Student Tuition Recovery Fund,
including requirements relating to assessments on students and
student claims against the Student Tuition Recovery Fund. The
regulations shall provide for awards to students who suffer economic
loss.
The regulations shall ensure that the following students, and any
other students deemed appropriate, are eligible for payment from the
Student Tuition Recovery Fund:
(1) In the event of a school closure, a student who attended the
institution within 120 days of the closure, or within a different
period prior to the
closure as determined by the board.
(2) Students A student to whom an
institution has been ordered to pay refunds a
refund by the board but has failed to do so , unless the
student chose to participate in a teach-out plan approved by the
board .
(3) Students who have been awarded restitution, refunds ,
or monetary awards by an arbitrator or court, based on a
violation of law, but who have been unable to collect the award from
the institution. The board shall review the judgment to verify a
violation of law, and shall ensure the amount of the award does not
exceed the student's economic loss.
(4) Students whose programs have been discontinued at the campus
they attend before they are able to complete the program.
(c) Students who suffered losses due to an institution's violation
of this act, as determined by the board, shall be eligible for
payment from the Student Tuition Recovery Fund.
(d) The board may seek repayment to the Student Tuition Recovery
Fund from an institution found in violation of the law for which a
student claim was paid.
(e) For purposes of this article, "economic loss" means pecuniary
loss, which is the sum of the student's tuition, cost of equipment
and materials required for the educational program as defined in
Section 94837, and interest on any student loan used to pay for such
charges, collection costs, and penalties. Economic loss shall also
include the amount the institution collected and failed to pay to
third parties on behalf of the student for license fees or any other
purpose. Economic loss does not include Student Tuition Recovery Fund
assessments, room and board, supplies, transportation, application
fees, or nonpecuniary damages such as inconvenience, aggravation,
emotional distress, or punitive damages.
SEC. 60. Section 94924 of the Education Code is amended to read:
94924. All assessments collected pursuant to this article shall
be credited to the Student Tuition Recovery Fund, along with any
accrued interest, for the purpose of this article. Notwithstanding
Section 13340 of the Government Code, the moneys in the Student
Tuition Recovery Fund are continuously appropriated to the board,
without regard to fiscal year, for the purposes of this article.
SEC. 61. Section 94926 of the Education Code is amended to read:
94926. At least 30 days prior to closing, an institution shall
notify the board in writing of its intention to close. The notice
shall be accompanied by a closure plan, which shall include, but not
necessarily be limited to, all of the following:
(a) A plan for providing teach-outs of educational programs,
including any agreements with any other postsecondary educational
institutions to provide teach-outs.
(b) If no teach-out plan is contemplated, or for students who do
not wish to participate in a teach-out, arrangements for making
refunds within 45 days from the date of closure, or for institutions
that participate in federal student financial aid programs
arrangements for making refunds and returning federal student
financial aid program funds.
(c) If the institution is a participant in federal student
financial aid programs, it shall provide students information
concerning these programs and institutional closures.
(d) A plan for the disposition of student records.
SEC. 62. Section 94927 of the Education Code is amended to read:
94927. An institution shall be considered in default of the
enrollment agreement when an educational program is discontinued or
canceled or the institution closes prior to completion of the
educational program. When an institution is in default, student
institutional charges may be refunded on a pro rata basis if the
board determines that the school has made provision for students
enrolled at the time of default to complete a comparable educational
program at another institution at no additional charge to the
students beyond the amount of the total charges in the original
enrollment agreement. If the institution does not make that
provision, a total refund of all institutional charges shall be made
to students.
SEC. 63. Section 94927.5 of the Education Code is amended to read:
94927.5. (a) Prior to closing, an institution shall provide the
board with the following:
(1) Pertinent student records, including transcripts, as
determined by the board, pursuant to regulations adopted by the
board.
(2) If the institution is an accredited institution, a plan for
the retention of records and transcripts, approved by the institution'
s accrediting agency, that provides information as to how a student
may obtain a transcript or any other information about the student's
coursework and degrees completed.
(b) Subdivision (a) applies to all private postsecondary
institutions, including institutions that are otherwise exempt from
this chapter pursuant to Article 4 (commencing with Section 94874).
SEC. 64. Section 94928 of the Education Code is amended to read:
94928. As used in this article, the following terms have the
following meanings:
(a) "Cohort population" means the number of students that began a
program on a cohort start date.
(b) "Cohort start date" means the first class day after the
cancellation period during which a cohort of students attends class
for a specific program.
(c) "Graduates" means the number of students who complete a
program within 100 percent of the published program length. An
institution may separately state completion information for students
completing the program within 150 percent of the original contracted
time, but that information may not replace completion information for
students completing within the original scheduled time. Completion
information shall be separately stated for each campus or branch of
the institution.
(d) "Graduates available for employment" means the number of
graduates minus the number of graduates unavailable for employment.
(e) (1) "Graduates employed in the field" means graduates who are
gainfully employed in a single position for which the institution
represents the program prepares its graduates within six months after
a student completes the applicable educational program. For
occupations for which the state requires passing an examination, the
period of employment shall begin within six months of the
announcement of the examination results for the first examination
available after a student completes an applicable educational
program.
(2) The board shall define by July 1, 2014, specific measures and
standards for determining whether a student is gainfully employed in
a full-time or part-time position for which the institution
represents the program prepares its graduates, including
self-employment or conducting freelance work, and may set the
standards for the hours per week and duration of employment and
utilize any job classification methodology the board determines
appropriate for this purpose, including, but not limited to, the
United States Department of Labor's Standard Occupational
Classification codes.
(3) This subdivision does not prohibit the board from authorizing
an institution to aggregate single positions held by a graduate for
purposes of meeting the hours per week standards established by the
board.
(f) "Graduates unavailable for employment" means graduates who,
after graduation, die, become incarcerated, are called to active
military duty, are international students that leave the United
States or do not have a visa allowing employment in the United
States, or are continuing their education at an accredited or
board-approved postsecondary institution.
(g) "Students available for graduation" means the cohort
population minus the number of students unavailable for graduation.
(h) "Students unavailable for graduation" means students who have
died, been incarcerated, or called to active military duty.
SEC. 65. Section 94929 of the Education Code is amended to read:
94929. (a) An institution shall annually report to the board, as
part of the annual report, and publish in its School Performance Fact
Sheet, the completion rate for each program. Except as provided in
subdivision (b), the completion rate shall be calculated by dividing
the number of graduates by the number of students available for
graduation.
(b) In lieu of calculating graduation data pursuant to subdivision
(a), an institution may report graduation data reported to, and
calculated by, the Integrated Postsecondary Education Data System of
the United States Department of Education.
SEC. 66. Section 94929.5 of the Education Code is amended to read:
94929.5. (a) An institution shall annually report to the board,
as part of the annual report, and shall publish in its School
Performance Fact Sheet, all of the following:
(1) The job placement rate, calculated by dividing the number of
graduates employed in the field by the number of graduates available
for employment for each program that is either (1) designed, or
advertised, to lead to a particular career, or (2) advertised or
promoted with any claim regarding job placement.
(2) The license examination passage rates for the immediately
preceding two years for programs leading to employment for which
passage of a state licensing examination is required, calculated by
dividing the number of graduates who pass the examination by the
number of graduates who take the licensing examination the first time
that the examination is available after completion of the
educational program. The institution shall use state agency licensing
data to calculate license examination passage rates. If those data
are unavailable, the institution shall calculate the license
examination passage rate in a manner consistent with regulations
adopted by the board.
(3) Salary and wage information, consisting of the total number of
graduates employed in the field and the annual wages or salaries of
those graduates stated in increments of five thousand dollars
($5,000).
(4) If applicable, the most recent official three-year cohort
default rate reported by the United States Department of Education
for the institution and the percentage of enrolled students receiving
federal student loans.
(b) Nothing in this section shall limit the board's authority to
collect information from an institution to comply with this section
and ensure, by regulation and other lawful means, that the
information required by this section, and the manner in which it is
collected and reported, is all of the following:
(1) Useful to students.
(2) Useful to policymakers.
(3) Based upon the most credible and verifiable data available.
(4) Does not impose undue compliance burdens on an institution.
SEC. 67. Section 94929.7 of the Education Code is amended to read:
94929.7. (a) The information used to substantiate the rates and
information calculated pursuant to Sections 94929 and 94929.5 shall
do both of the following:
(1) Be documented and maintained by the institution for five years
from the date of the publication of the rates and information.
(2) Be retained in an electronic format and made available to the
board upon request.
(b) An institution shall provide a list of employment positions
used to determine the number of graduates employed in the field for
purposes of calculating job placement rates pursuant to this article.
(c) The board shall identify the specific information that an
institution is required to document and maintain to substantiate
rates and information pursuant to this section.
SEC. 68. Section 94929.8 of the Education Code is amended to read:
94929.8. (a) The board shall establish, by regulation as
specified in Section 94877, a uniform method for institutions to
obtain statistically valid, current, and representative data to
comply with this article.
(b) A violation of the regulations adopted pursuant to subdivision
(a) is a material violation of this chapter.
SEC. 69. Section 94929.9 is added to the Education Code, to read:
94929.9. (a) The board shall report to the Legislature, on or
before October 1, 2015, on whether data reporting and disclosure
requirements under the act may be appropriately consolidated with
reporting required by other regulatory bodies, including, but not
limited to, the United States Department of Education, the Student
Aid Commission, or accrediting agencies. It is the intent of the
Legislature that the same or similar data as is required to be
reported to the board pursuant to this article shall be reported to
students in a clear and conspicuous manner.
(b) (1) A report to be submitted to the Legislature pursuant to
subdivision (a) shall be submitted in compliance with Section 9795 of
the Government Code.
(2) Pursuant to Section 10231.5 of the Government Code, this
section is repealed January 1, 2019.
SEC. 70. Section 94930 of the Education Code is amended to read:
94930. (a) All fees collected pursuant to this article, including
any interest on those fees, shall be deposited in the Private
Postsecondary Education Administration Fund, and shall be available,
upon appropriation by the Legislature, for expenditure by the board
for the administration of this chapter.
(b) If the board determines by regulation that the adjustment of
the fees established by this article is consistent with the intent of
this chapter, the board may adjust the fees. However, the board
shall not maintain a reserve balance in the Private Postsecondary
Education Administration Fund in an amount that is greater than the
amount necessary to fund six months of authorized operating expenses
of the board in any fiscal year.
SEC. 71. Section 94930.5 of the Education Code is amended to read:
94930.5. Subject to Section 94930, an institution shall remit to
the board for deposit in the Private Postsecondary Education
Administration Fund the following fees, in accordance with the
following schedule:
(a) The following fees shall be remitted by an institution
submitting an application for an approval to operate, if applicable:
(1) Application fee for an approval to operate: five thousand
dollars ($5,000).
(2) Application fee for the approval to operate a new branch of
the institution: three thousand dollars ($3,000).
(3) Application fee for an approval to operate by means of
accreditation: seven hundred fifty dollars ($750).
(b) The following fees shall be remitted by an institution seeking
a renewal of its approval to operate, if applicable:
(1) Renewal fee for the main campus of the institution: three
thousand five hundred dollars ($3,500).
(2) Renewal fee for a branch of the institution: three thousand
dollars ($3,000).
(3) Renewal fee for an institution that is approved to operate by
means of accreditation: five hundred dollars ($500).
(c) The following fees shall apply to an institution seeking
authorization of a substantive change to its approval to operate, if
applicable:
(1) Processing fee for authorization of a substantive change to an
approval to operate: five hundred dollars ($500).
(2) Processing fee in connection with a substantive change to an
approval to operate by means of accreditation: two hundred fifty
dollars ($250).
(d) (1) In addition to any fees paid to the board pursuant to
subdivisions (a) to (c), inclusive, each institution that is approved
to operate pursuant to this chapter shall remit both of the
following:
(A) An annual institutional fee, in an amount equal to
three-quarters of 1 percent of the institution's annual revenues
derived from students in California, but not exceeding a total of
twenty-five thousand dollars ($25,000) annually.
(B) An annual branch fee of one thousand dollars ($1,000) for each
branch or campus of the institution operating in California.
(2) The amount of the annual fees pursuant to paragraph (1) shall
be proportional to the board's cost of regulating the institution
under this chapter.
SEC. 72. Section 94931.5 of the Education Code is amended to read:
94931.5. (a) The board may propose modifications to the fee
schedule in Section 94930.5 to the Governor and the Legislature to
add or delete categories of fees related to work performed by the
board and propose to the Governor and the Legislature the maximum
amount to be charged for each fee category added to the fee schedule.
The fee schedule shall provide adequate resources for the board to
effectively implement this chapter.
(b) The board shall annually publish a schedule of the current
fees to be charged pursuant to this article and shall make this
schedule available to the public.
SEC. 73. Section 94932 of the Education Code is amended to read:
94932. The board shall determine an institution's compliance with
the requirements of this chapter. The board shall have the power to
require reports that institutions shall file with the board in
addition to the annual report, to send staff to an institution's
sites, and to require documents and responses from an institution to
monitor compliance. When the board has reason to believe that an
institution may be out of compliance, it shall conduct an
investigation of the institution. If the board determines, after
completing an investigation, that an institution has violated any
applicable law or regulation, the board shall take appropriate action
pursuant to this article.
SEC. 74. Section 94932.5 of the Education Code is amended to read:
94932.5. (a) As part of its compliance program, the board shall
perform announced and unannounced inspections of institutions at
least every five years.
(b) On or before January 1, 2016, the board shall adopt
regulations setting forth policies and practices to ensure that
student protections are the highest priority of inspections and that
inspections are conducted based on risk and potential harm to
students. The regulations shall also set forth policies and practices
for providing notice to students enrolled at an institution of the
results of each inspection of the institution.
SEC. 75. Section 94933 of the Education Code is amended to read:
94933. The board shall provide an institution with the
opportunity to remedy noncompliance, impose fines, place the
institution on probation, or suspend or revoke the institution's
approval to operate, in accordance with this article, as it deems
appropriate based on the severity of an institution's violations of
this chapter, and the harm caused to students.
SEC. 76. Section 94933.5 of the Education Code is amended to read:
94933.5. As much as is practicable, the board shall seek to
resolve instances of noncompliance, including the use of alternative
dispute resolution procedures in Article 5 (commencing with Section
11420.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the
Government Code.
SEC. 77. Section 94934 of the Education Code is amended to read:
94934. (a) As part of the compliance program, an institution
shall submit an annual report to the board, under penalty of perjury,
signed by a responsible corporate officer, by July 1 of each year,
or another date designated by the board, and it shall include the
following information for educational programs offered in the
reporting period:
(1) The total number of students enrolled by level of degree or
for a diploma.
(2) The number of degrees, by level, and diplomas awarded.
(3) The degree levels and diplomas offered.
(4) The Student Performance Fact Sheet, as required pursuant to
Section 94910.
(5) The school catalog, as required pursuant to Section 94909.
(6) The total charges for each educational program by period of
attendance.
(7) A statement indicating whether the institution is, or is not,
current in remitting Student Tuition Recovery Fund assessments.
(8) A statement indicating whether an accrediting agency has taken
any final disciplinary action against the institution.
(9) Additional information deemed by the board to be reasonably
required to ascertain compliance with this chapter.
(b) The board shall prescribe the annual report's format and
method of delivery.
SEC. 78. Section 94935 of the Education Code is amended to read:
94935. (a) Board staff who, during an inspection of an
institution, detect a violation of this chapter, or regulations
adopted pursuant to this chapter, that is a minor violation as
determined by the board, pursuant to regulations, shall issue a
notice to comply before leaving the institution. The board shall
establish a voluntary informal appeal process, by regulation, within
one year of the enactment of this chapter.
(b) An institution that receives a notice to comply shall have no
more than 30 days from the date of inspection to remedy the
noncompliance.
(c) Upon achieving compliance, the institution shall sign and
return the notice to comply to the board.
(d) A single notice to comply shall be issued listing separately
all the minor violations cited during the inspection.
(e) A notice to comply shall not be issued for any minor violation
that is corrected immediately in the presence of the board staff.
Immediate compliance may be noted in the inspection report, but the
institution shall not be subject to any further action by the board.
(f) A notice to comply shall be the only means the board shall use
to cite a minor violation discovered during an inspection. The board
shall not take any other enforcement action specified in this
chapter against an institution that has received a notice to comply
if the institution remedies the violation within 30 days from the
date of the inspection.
(g) If an institution that receives a notice to comply pursuant to
subdivision (a) disagrees with one or more of the alleged minor
violations listed in the notice to comply, an institution shall send
the board a written notice of disagreement. The agency may take
administrative enforcement action to seek compliance with the
requirements of the notice to comply.
(h) If an institution fails to comply with a notice to comply
within the prescribed time, the board shall take appropriate
administrative enforcement action.
SEC. 79. Section 94936 of the Education Code is amended to read:
94936. (a) As a consequence of an investigation, and upon a
finding that the institution has committed a violation of this
chapter or that the institution has failed to comply with a notice to
comply pursuant to Section 94935, the board shall issue a citation
to an institution for violation of this chapter, or regulations
adopted pursuant to this chapter.
(b) The citation may contain either or both of the following:
(1) An order of abatement that may require an institution to
demonstrate how future compliance with this chapter or regulations
adopted pursuant to this chapter will be accomplished.
(2) Notwithstanding Section 125.9 of the Business and Professions
Code, an administrative fine not to exceed five thousand dollars
($5,000) for each violation. The board shall base its assessment of
the administrative fine on:
(A) The nature and seriousness of the violation.
(B) The persistence of the violation.
(C) The good faith of the institution.
(D) The history of previous violations.
(E) The purposes of this chapter.
(F) The potential harm to students.
(c) (1) The citation shall be in writing and describe the nature
of the violation and the specific provision of law or regulation that
is alleged to have been violated.
(2) The citation shall inform the institution of its right to
request a hearing in writing within 30 days from service of the
citation.
(3) If a hearing is requested, the board shall select an informal
hearing pursuant to Article 10 (commencing with Section 11445.10) of
Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code
or a formal hearing pursuant to Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(4) If a hearing is not requested, payment of the administrative
fine is due 30 days from the date of service, and shall not
constitute an admission of the violation charged.
(5) If a hearing is conducted and payment of an administrative
fine is ordered, the administrative fine is due 30 days from when the
final order is entered.
(6) The board may enforce the administrative fine as if it were a
money judgment pursuant to Title 9 (commencing with Section 680.010)
of Part 2 of the Code of Civil Procedure.
(d) All administrative fines shall be deposited in the Private
Postsecondary Education Administration Fund.
SEC. 80. Section 94937 of the Education Code is amended to read:
94937. (a) As a consequence of an investigation, and upon a
finding that an institution has committed a violation, the board may
place an institution on probation or may suspend or revoke an
institution's approval to operate for:
(1) Obtaining an approval to operate by fraud.
(2) A material violation or repeated violations of this chapter or
regulations adopted pursuant to this chapter that have resulted in
harm to students. For purposes of this paragraph, "material violation"
includes, but is not limited to, misrepresentation, fraud in the
inducement of a contract, and false or misleading claims or
advertising, upon which a student reasonably relied in executing an
enrollment agreement and that resulted in harm to the student.
(b) The board shall adopt regulations governing probation and
suspension of an approval to operate.
(c) The board may seek reimbursement pursuant to Section 125.3 of
the Business and Professions Code.
(d) An institution shall not be required to pay the cost of
investigation to more than one agency.
SEC. 81. Section 94938 of the Education Code is amended to read:
94938. (a) If the board determines that it needs to make an
emergency decision to protect students, prevent misrepresentation to
the public, or prevent the loss of public funds or moneys paid by
students, it may do so pursuant to Article 13 (commencing with
Section 11460.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2
of the Government Code.
(b) The board shall adopt regulations to give this section effect
pursuant to Section 11460.20 of the Government Code.
SEC. 82. Section 94939 of the Education Code is amended to read:
94939. (a) The board may bring an action for equitable relief for
any violation of this chapter. The equitable relief may include
restitution, a temporary restraining order, the appointment of a
receiver, and a preliminary or permanent injunction. The action may
be brought in the county in which the defendant resides or in which
any violation has occurred or may occur.
(b) The remedies provided in this
section supplement, and do not supplant, the remedies and penalties
under other provisions of law.
SEC. 83. Section 94941 of the Education Code is amended to read:
94941. (a) An individual who has cause to believe that an
institution has violated this chapter, or regulations adopted
pursuant to this chapter, may file a complaint with the board against
the institution. The complaint shall set forth the alleged
violation, and shall contain any other information as may be required
by the board.
(b) Taking into account the nature and seriousness of the alleged
violation, the board shall take action to ascertain the facts and to
verify the complaint. The action may include interviewing institution
management, conducting an investigation, holding an informal
hearing, or other appropriate investigative activity.
(c) Upon the facts discovered, the board shall take appropriate
administrative enforcement action.
(d) If the board finds that an institution's violation of this
chapter has caused damage or loss to a student or group of students,
the board shall order the institution to provide appropriate
restitution to that student or group of students.
(e) The board shall establish a timeline by which complaints filed
pursuant to this section shall be processed and establish procedures
to prioritize complaints as follows:
(1) "Urgent complaints" represent complaints regarding an
immediate danger to the public health, safety, or welfare, and the
board shall give these complaints the highest priority.
(2) "High-priority complaints" include complaints that could
potentially pose a danger, but pose no immediate danger, to the
public health, safety, or welfare. The board shall give high-priority
complaints less priority than urgent complaints but more priority
than routine complaints.
(3) "Routine complaints" are complaints that do not pose any
significant risk of harm to the public health, safety, or welfare.
SEC. 84. Section 94942 of the Education Code is amended to read:
94942. (a) The board shall establish a toll-free telephone number
staffed by a board employee by which a student or a member of the
public may file a complaint under this chapter.
(b) The board shall make a complaint form available on its
Internet Web site. The board shall permit students and members of the
public to file a complaint under this chapter through the board's
Internet Web site.
SEC. 85. Section 94943 of the Education Code is amended to read:
94943. The following violations of this chapter are public
offenses:
(a) Knowingly operating a private postsecondary institution
without an approval to operate is an infraction subject to the
procedures described in Sections 19.6 and 19.7 of the Penal Code.
(b) Knowingly providing false information to the board on an
application for an approval to operate is an infraction subject to
the procedures described in Sections 19.6 and 19.7 of the Penal Code.
(c) Knowingly submitting, to the board, false information that is
required to be reported pursuant to Article 16 (commencing with
Section 94928) is an infraction subject to the procedures described
in Sections 19.6 and 19.7 of the Penal Code.
SEC. 86. Section 94943.5 of the Education Code is amended to read:
94943.5. An institution shall designate and maintain an agent for
service of process within this state, and provide the name, address,
and telephone number of the agent to the board. The board shall
furnish the agent's name, address, and telephone number to a person
upon request.
SEC. 87. Section 94944 of the Education Code is amended to read:
94944. Notwithstanding any other provision of law, the board
shall cite any person, and that person shall be subject to a fine not
to exceed fifty thousand dollars ($50,000), for operating an
institution without proper approval to operate issued by the board
pursuant to this chapter.
SEC. 88. Section 94944.5 of the Education Code is amended to read:
94944.5. Each institution subject to this chapter shall be deemed
to have authorized its accrediting agency to provide the board, the
Attorney General, any district attorney, city attorney, or the
Student Aid Commission, within 30 days of written notice, copies of
all documents and other material concerning the institution that are
maintained by the accrediting agency.
SEC. 89. Section 94944.6 of the Education Code is amended to read:
94944.6. Within 30 days of receiving a written notice from the
board, the Attorney General, district attorney, city attorney, or the
Student Aid Commission pursuant to Section 94944.5, an accrediting
agency shall provide the requesting entity with all documents or
other material concerning an institution accredited by that agency
that are designated specifically or by category in the written
notice.
SEC. 90. Section 94945 of the Education Code is amended to read:
94945. (a) This chapter does not limit or preclude the
enforcement of rights or remedies under any other applicable statute
or law.
(b) This chapter does not limit or preclude the Attorney General,
a district attorney, or a city attorney from taking any action
otherwise authorized under any other applicable statute or law.
(c) If the board has reason to believe that an institution's
noncompliance with the provisions of this chapter or any other
applicable law significantly transcends the interests of the
individual complainant, or the board has determined that the
complexity of the case requires additional expertise and resources,
the board shall contract with the Attorney General for investigative
and prosecutorial services.
(c) If the board has reason to believe that an institution has
engaged in a pattern or practice of violating the provisions of this
chapter or any other applicable law that involves multiple students
or other claimants, the board shall contract with the Attorney
General for investigative and prosecutorial services, as necessary.
SEC. 91. Section 94948 of the Education Code is amended to read:
94948. In addition to any other reporting requirements under this
chapter, the board shall provide regular updates to the Legislature
by participating in annual oversight hearings conducted by the
appropriate policy committees and budget subcommittees of the Senate
and Assembly. The updates shall describe the board's progress in
adopting and enforcing regulations and the provisions of this
chapter.
SEC. 92. Section 94949 of the Education Code is repealed.
SEC. 93. Section 94949 is added to the Education Code, to read:
94949. (a) The board shall provide to the Legislature a copy of
an independent review of its staffing resources, along with an
overview of how the board intends to ensure its staff are
sufficiently qualified for purposes of implementing the provisions of
this chapter, the estimated costs of meeting staffing and other
requirements to implement this chapter, and the estimated fee revenue
generated by the fee structure as outlined in Section 94930.5, as of
January 1, 2015, within 30 days of the completion of the independent
review, but no later than March 15, 2015.
(b) The overview pursuant to subdivision (a) shall also include an
examination of the annual fee structure, including whether the total
fees paid by an institution should be subject to a maximum and
whether there are more equitable ways to assess annual fees to an
institution.
(b)
(c) (1) A report to be submitted pursuant to
subdivision (a) shall be submitted in compliance with Section 9795 of
the Government Code.
(2) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on January 1, 2019.
SEC. 94. Section 94950 of the Education Code is amended to read:
94950. This chapter shall remain in effect only until January 1,
2017, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2017, deletes or extends
that date.
SEC. 95. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
