Bill Text: CA SB1449 | 2023-2024 | Regular Session | Amended

California Senate Bill 1449 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: California Private Postsecondary Education Act of 2009: complaint processing contracts.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Engrossed - Dead) 2024-08-15 - August 15 hearing: Held in committee and under submission. [SB1449 Detail]

Download: California-2023-SB1449-Amended.html

Amended IN Senate April 17, 2024

Amended IN Senate March 20, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 1449

Introduced by Senator Newman
(Coauthor: Senator Durazo)

February 16, 2024

An act to amend Section ~~94874.9~~ 94874 of the Education Code, relating to postsecondary education.

LEGISLATIVE COUNSEL'S DIGEST

SB 1449, as amended, Newman. California Private Postsecondary Education Act of 2009: complaint processing contracts.

The California Private Postsecondary Education Act of 2009 provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. The act authorizes an independent institution of higher education that is exempt from the act to execute a contract with the bureau for the bureau to review and, as appropriate, act on complaints concerning the institution, and requires the executed contract to, among other things, require the institution to cooperate with the bureau to resolve complaints received. The act is repealed on January 1, 2027.

This bill would also authorize an independent law school that (1) is incorporated in the state as a nonprofit corporation, (2) qualifies for tax-exempt status under federal law, and (3) is accredited by the American Bar Association, as specified, 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 to execute a contract with the bureau as described ~~above.~~ above, if certain requirements are met.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 94874 of the Education Code is amended to read:

94874.

Except as provided in Sections 94874.2, 94874.7, and 94927.5, the following are exempt from this chapter:

(a) An institution that offers solely avocational or recreational educational programs.

(b) (1) An institution only offering educational programs to members of a bona fide trade, business, professional, or fraternal organization that is separate and distinct from the institution and that sponsors the educational programs. An institution that sponsors an educational program directly or through an affiliated division or corporate entity of the institution and that requires student membership for purposes of those educational programs does not qualify under this exemption.

(2) (A) Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:

(i) It is not on the Eligible Training Provider List established and maintained by the California Workforce Development Board but has met the requirements for placement on the list.

(ii) It is on the Eligible Training Provider List established and maintained by the California Workforce Development Board and meets the requirements for continued listing.

(B) If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Development Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.

(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 bureau, 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.

(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 the 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 bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its internet website as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.

(g) (1) 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.

(2) A law school that meets the requirements to be exempt from this chapter pursuant to this subdivision that executed a contract with the bureau pursuant to Section 94874.9 between 2018 and 2023 may execute a contract with the bureau pursuant to Section 94874.9.

(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) 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).

(k) (1) An institution owned, controlled, operated, and maintained by a community-based organization, as defined in Section 7801 of Title 20 of the United States Code, as that section exists on March 1, 2017, that satisfies all of the following criteria:

(A) The institution has programs on or is applying for some or all of their programs to be on the Eligible Training Provider List established and maintained by the California Workforce Development Board.

(B) The institution is registered as a nonprofit entity qualified under Section 501(c)(3) of the federal Internal Revenue Code.

(D) The institution does not offer educational programs designed to lead directly or specifically to positions in a profession, occupation, trade, or career field requiring licensure, if bureau approval is required for the student to be eligible to sit for licensure.

(E) The institution would not otherwise be subject to oversight of the bureau under this chapter if it did not receive funding under the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.). For purposes of this requirement, funds received through the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.) do not count towards the total referenced in subdivision (f) or any other fee charge limitation condition for an exemption from this chapter.

(F) The institution can provide a letter from the local workforce development board that demonstrates the institution has met the initial criteria of that board.

(2) An institution granted an exemption pursuant to paragraph (1) shall comply with all of the following requirements:

(A) The institution shall provide to the Employment Development Department all required tracking information and data necessary to comply with performance reporting requirements under the federal Workforce Innovation and Opportunity Act, codified in Chapter 32 (commencing with Section 3101) of Title 29 of the United States Code, for programs on the Eligible Training Provider List.

(B) The institution shall comply with the Eligible Training Provider List policy developed by the California Workforce Development Board.

(C) The institution shall not charge a student who is a recipient of funding under the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.) any institutional charges, as defined in Section 94844, for attending and participating in the program.

SECTION 1.Section 94874.9 of the Education Code is amended to read:
94874.9.
(a)An independent institution of higher education, as defined in Section 66010, that is exempt from this chapter pursuant to subdivision (i) of Section 94874, or an independent law school that is incorporated in the state pursuant to the Nonprofit Corporation Law (Division 2 (commencing with Section 5000) of Title 1 of the Corporations Code), qualifies for tax-exempt status under the Internal Revenue Code of 1986 (Title 26 of the United States Code), and is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association, shall comply with all applicable state and federal laws, including laws relating to fraud, abuse, and false advertising.
(b)An institution described in subdivision (a) may execute a contract with the bureau for the bureau to review and, as appropriate, act on complaints concerning the institution, in accordance with Section 600.9 of Title 34 of the Code of Federal Regulations.
(c)The execution of a contract by the bureau with an institution pursuant to subdivision (b) shall constitute establishment by the state of that institution to offer programs beyond secondary education, including programs leading to a degree or certificate, in accordance with Section 600.9 of Title 34 of the Code of Federal Regulations.
~~(d)The bureau shall use a standard form contract for purposes of this section.~~
~~(e)A contract executed pursuant to this section shall, at a minimum, do all of the following:~~
~~(1)Require an institution to do all of the following:~~
~~(A)Cooperate with the bureau to resolve complaints received pursuant to this section.~~
(B)Provide the following disclosure notice in all written and internet-based documentation in which the institution’s complaint process is described, including the student catalog, student handbook, and the institution’s internet website:

“An individual may contact the Bureau for Private Postsecondary Education for review of a complaint. The bureau may be contacted at (address), Sacramento, CA (ZIP Code), (internet website address), (telephone and fax numbers).”

~~(C)Designate a person at the institution to act as a liaison to the bureau.~~
~~(D)Pay one thousand seventy-six dollars ($1,076) each year for costs incurred by the bureau to perform activities pursuant to the contract, unless another amount is determined by the bureau.~~
(2)(A)Authorize the bureau, for any complaint it receives, including any complaints related to the institution’s policies or procedures, or both, as determined by the bureau, to refer the complaint to the institution, an accrediting agency, or another appropriate entity for resolution.
~~(B)The bureau shall notify the complainant and the institution of a referral.~~
~~(C)This paragraph does not relieve the bureau of its responsibility to ensure that a complaint it has referred for purposes of resolution is resolved by the receiving entity.~~
(f)The bureau may terminate a contract executed pursuant to this section if an institution is no longer an independent institution of higher education, as defined in Section 66010, or fails to comply with the provisions of the contract.
(g)All moneys collected by the bureau that relate to a contract executed pursuant to this section, including payments collected in accordance with subparagraph (D) of paragraph (1) of subdivision (e), shall be deposited in the Private Postsecondary Education Administration Fund.
~~(h)The bureau shall maintain, on its internet website, both of the following:~~
~~(1)The provisions of the standard form contract used for purposes of this section.~~
~~(2)A list of institutions with which the bureau has executed a contract pursuant to this section.~~
(i)On or before February 1, 2017, and each year thereafter, the bureau shall report to the Director of Finance and, in conformity with Section 9795 of the Government Code, to the Legislature regarding implementation of this section. The report shall include all of the following information:
~~(1)A list of institutions with which the bureau has executed a contract pursuant to this section.~~
~~(2)The total number of complaints received by the bureau relating to institutions listed in paragraph (1).~~
~~(3)The general nature of those complaints.~~
~~(4)The total number of those complaints referred to another entity, disaggregated by the entity to which each complaint was referred.~~
~~(5)The total number of complaints resolved, disaggregated by the entity that resolved each complaint.~~
~~(6)The total number of complaints pending, disaggregated by the entity to which each complaint was referred.~~
(j)Notwithstanding any other law, the Department of General Services, at the request of the bureau, may exempt contracts executed pursuant to this section from any laws, rules, resolutions, or procedures that are otherwise applicable to public contracts that the Department of General Services administers.