BILL NUMBER: AB 2967 CHAPTERED
BILL TEXT
CHAPTER 581
FILED WITH SECRETARY OF STATE SEPTEMBER 16, 2002
APPROVED BY GOVERNOR SEPTEMBER 14, 2002
PASSED THE ASSEMBLY AUGUST 25, 2002
PASSED THE SENATE AUGUST 22, 2002
AMENDED IN SENATE AUGUST 5, 2002
AMENDED IN SENATE JUNE 18, 2002
AMENDED IN ASSEMBLY APRIL 4, 2002
INTRODUCED BY Assembly Member Wright
FEBRUARY 25, 2002
An act to amend Sections 94931, 94945, 94950, 94952, 94955, 94957,
94965, 94975, 94980, and 94995 of, and to add Section 94960.5 to,
the Education Code, relating to private postsecondary and vocational
institutions.
LEGISLATIVE COUNSEL'S DIGEST
AB 2967, Wright. Bureau for Private Postsecondary and Vocational
Education.
(1) The existing Private Postsecondary and Vocational Education
Reform Act of 1989 sets minimum standards of instructional quality,
ethical and business practices, health and safety, and fiscal
responsibility for private postsecondary and vocational educational
institutions, as defined. The act establishes the Bureau for Private
Postsecondary and Vocational Education in the Department of Consumer
Affairs, which succeeded to the rights and functions of the former
Council for Private Postsecondary and Vocational Education. The
bureau, among other things, is required to review and investigate all
institutions, programs, and courses of instruction approved under
the act, which establishes administrative and judicial procedures for
the bureau to follow in carrying out these duties. Existing
provisions of the act require that, if action is brought against an
institution, notice of the action must be served upon the
institution, and if the institution requests a hearing, that the
hearing be held within 10 days of the bureau receiving the request.
This bill would require that the hearing be held within 30 days of
the bureau receiving the request. This bill would make additional
technical and conforming changes to delete references to the former
council.
(2) Existing law requires the bureau to assess sums from each
institution, based upon the course tuition paid over the calendar
year, according to a prescribed formula, for purposes of the Student
Tuition Recovery Fund. This assessment is calculated only for those
students who are California residents and are eligible to be
reimbursed from the fund. This assessment is not applicable if the
institution receives all of its students' total charges from
3rd-party payers, as defined. Each institution is required to
collect the amount assessed by the bureau in the form of a Student
Tuition Recovery Fund fee from its new students, and remit those fees
to the bureau in the quarter following their collection.
This bill would provide that the assessment be based upon the
assessment rate in effect when the student enrolled at the
institution. The bill would authorize an institution to waive
collection of the Student Tuition Recovery Fund fee, and to assume
the fee as a debt of the institution, which must be disclosed to the
student in the enrollment agreement. The bill would provide that the
fee shall be assessed as tuition is paid or loans are funded on
behalf of the student, based upon academic term, and that the
subsequent disenrollment at the institution shall not relieve the
institution of the obligation to pay the fee to the bureau, nor be
the basis for refund of the fee to the student. The bill would
define a "new student" as a student who signs the enrollment
agreement on or after January 1, 2002. The bill would declare that
students signing enrollment agreements prior to that date shall be
charged the Student Tuition Recovery Fund fee in effect on that date.
The bill would declare these provisions to be declaratory of
existing law.
(3) Existing law requires the bureau to investigate complaints
from any person claiming damage as a result of any act or practice by
a postsecondary or vocational educational institution or its agent,
or both, that is a violation of the act and requires the bureau to
adopt regulations that prescribe procedures for complaint handling
and complaint disclosure. The bureau is required to report evidence
of violations to the Attorney General and is authorized to commence
an action to revoke an institution's approval to operate. The bureau
is required to make an annual report to the Legislature summarizing
its activities during the previous fiscal year.
This bill would require the bureau to include, in its annual
report to the Legislature, a statistical summary of complaints filed
with the bureau, the bureau's disposition of those complaints and the
bureau's enforcement actions relative to those complaints.
(4) Under existing law, institutions may register with the bureau
to offer intensive English language programs, short-term career
training programs, short-term seminar training programs, programs
offered to assist students to prepare for a licensure examination,
and continuing education programs. To register, institutions must
file a registration form, containing specified information, with the
bureau for public disclosure. Continuing education programs are
exempt from these registration requirements.
This bill would authorize the bureau to require that registered
institutions, at least every 3 years following the initial
registration, verify all or a portion of the information required to
accompany a registration form. The bill would make additional
technical and conforming changes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 94931 of the Education Code is amended to read:
94931. (a) No private postsecondary educational institution,
except those offering degrees and approved under Article 8
(commencing with Section 94900) or offering vocational and nondegree
granting programs and approved under Article 9 (commencing with
Section 94915), or those that are exempt from this chapter, may offer
educational services or programs unless the institution has been
registered by the bureau as meeting the requirements of this section.
(b) An institution approved to offer degrees under Article 8
(commencing with Section 94900) or approved to offer vocational and
nondegree granting programs under Article 9 (commencing with Section
94915) may offer registered programs without affecting its status
under either of those articles so long as the registered program is
disclosed in its approval to operate application or the institution
completes a registration application and receives specific
authorization for the program, maintains compliance for all
registered programs in conformity with this article, and maintains a
set of student records for registered programs separate from its
approved programs. Any registered institution that offers an
educational program not specified in subdivision (c) or not otherwise
exempt from this chapter shall be approved under Article 8
(commencing with Section 94900) or Article 9 (commencing with Section
94915) and shall comply with this chapter.
(c) Except as otherwise provided in this article, this chapter
does not apply to an educational service that qualifies for
registration status and that complies with this article. The
educational services that qualify for registration status are limited
to:
(1) An educational service, as defined in Section 94733, that is
offered to provide an intensive English language program.
(2) An educational service, as defined in Section 94742.1, that is
offered to provide short-term career training.
(3) An educational service, as defined in Section 94742.2, that is
offered to provide short-term seminar training.
(4) An educational service that is offered to assist students to
prepare for an examination for licensure, except as provided in
Section 94787.
(5) An educational service that consists of continuing education
not otherwise exempt from this chapter.
(d) An institution that qualifies under any of paragraphs (1) to
(4), inclusive, of subdivision (c) shall complete a registration form
provided by the bureau, including a signed declaration by the chief
executive officer of the institution under penalty of perjury, and
provide all of the following information for public disclosure:
(1) The owner's legal name, headquarters address, and the name of
an agent for the service of process within California.
(2) All names, whether real or fictitious, under which the owner
is doing and will do business.
(3) The names and addresses of the principal officers of the
institution.
(4) A list of all California locations at which the institution
operates, its offerings, and, if previously registered, the number of
students enrolled in California during the preceding year.
(5) A copy of the registration form or agreement that enrolls the
student in the educational service that contains all of the
following:
(A) The name and address of the location where instruction will be
provided.
(B) The title of the educational program.
(C) The total amount the student is obligated to pay for the
educational service.
(D) A clear and conspicuous statement that the enrollment form or
agreement is a legally binding instrument when signed by the student
and accepted by the institution.
(E) The refund policy developed by the institution unless this
article specifies a different refund policy.
(F) Unless this article specifies that the institution is required
to participate in the Student Tuition Recovery Fund, a statement
that the institution does not participate in that fund.
(G) In 10-point boldface type or larger, the following statement:
"Any questions or problems concerning this school that have not been
satisfactorily answered or resolved by the school should be directed
to the Bureau for Private Postsecondary and Vocational Education in
the Department of Consumer Affairs (insert city, address, CA ZIP Code
number, and telephone number)."
(H) Schools approved under paragraph (1) of subdivision (c) of
Section 94931 shall also include with the statement required by
subparagraph (G) information referring the student to a consulate of
his or her country and the United States Immigration and
Naturalization Service.
(6) A brochure or catalog and a sample advertisement used to
promote the educational service.
(7) A copy of its certificate of completion.
(8) If the educational service offers short-term career training,
the institution shall comply with the requirements of Sections 94804
and 94806.
(9) If the institution assists students in obtaining financing
from a third party for the cost of the educational services at the
institution, a copy of the contract or finance agreement reflecting
that financing.
(e) The bureau shall establish the initial registration fee and
the annual fee to be paid by institutions registered under this
article. No institution shall be registered pursuant to this article
unless it has paid the appropriate fees required by the bureau.
Upon receipt of an institution's initial application for registration
for a program, the bureau may conduct a site visit pursuant to
subdivision (c) of Section 94915.
(f) For the purposes of communication with other state agencies,
any organization or individual registered to offer short-term seminar
training may state that they are "authorized" by the State of
California.
(g) (1) Except as provided by subdivision (f), any institution
registered pursuant to this article shall be restricted to stating
that their training is "registered" with the State of California and
is prohibited from using the words "approval," "approved," "approval
to operate," "approved to operate," "authorized," "licensed," or
"licensed to operate."
(2) The institution shall place the following statement in all
brochures, catalogues, enrollment agreements, and registration forms,
in a conspicuous location in at least 12-point boldfaced type:
"We are registered with the State of California. Registration
means we have met certain minimum standards imposed by the state for
registered schools on the basis of our written application to the
state. Registration does not mean we have met all of the more
extensive standards required by the state for schools that are
approved to operate or licensed or that the state has verified the
information we submitted with our registration form."
(h) The bureau may require, at least every three years following
the initial registration date, that a registered institution verify
all or part of the information required to be provided with the
registration form under subdivision (d).
(i) Sections 94812 and 94818, Sections 94822 to 94825, inclusive,
and Sections 94829 to 94838, inclusive, and Sections 94841 and 94846
shall apply to any institution registered pursuant to this article.
(j) Article 1 (commencing with Section 94700), Article 2
(commencing with Section 94710), Article 3 (commencing with Section
94750), Article 3.5 (commencing with Section 94760), Article 4
(commencing with Section 94770), and Article 13 (commencing with
Section 94950) shall apply to any institution registered pursuant to
this article.
SEC. 2. Section 94945 of the Education Code is amended to read:
94945. (a) The bureau shall assess each institution, except for
an institution that receives all of its students' total charges, as
defined in subdivision (k) of Section 94852, from third-party payers.
A third-party payer, for the purposes of this section, means an
employer, government program, or other payer that pays a student's
total charges directly to the institution when no separate agreement
for the repayment of that payment exists between the third-party
payer and the student. A student who receives third-party payer
benefits for his or her institutional charges is not eligible for
benefits from the Student Tuition Recovery Fund.
(1) (A) The amount assessed each institution shall be calculated
only for those students who are California residents and who are
eligible to be reimbursed from the fund. It shall be based on the
actual amount charged each of these students for total tuition cost,
regardless of the portion that is prepaid, and shall be assessed as
tuition is paid or loans are funded on behalf of the student, based
upon academic term. The amount of the assessment on an institution
shall be determined in accordance with paragraphs (2) and (3).
(B) Each institution shall collect the amount assessed by the
bureau in the form of a Student Tuition Recovery Fund fee from its
new students, and remit these fees to the bureau during the quarter
immediately following the quarter in which the fees were collected
from the students, or from loans funded on behalf of the students,
except that an institution may waive collection of the Student
Tuition Recovery Fund fee and assume the fee as a debt of the
institution. The student's subsequent disenrollment at the
institution shall not relieve the institution of the obligation to
pay the fee to the bureau, nor be the basis for refund of the fee to
the student. An institution may not charge a fee of any kind for the
collection of the Student Tuition Recovery Fund fee. An institution
may refuse to enroll a student who has not paid, or made provisions
to pay, the appropriate Student Tuition Recovery Fund fee.
(C) For the purposes of this section, a "new student" means a
student that signs their enrollment agreement on or after January 1,
2002. Those students who sign their enrollment agreement prior to
January 1, 2002, are not "new students" for purposes of this section,
and shall be assessed the Student Tuition Recovery Fund fee in
effect prior to January 1, 2002, except that an institution may waive
collection of the Student Tuition Recovery Fund fee in effect prior
to January 1, 2002. Institutions electing to waive collection of the
Student Tuition Recovery Fund fee shall disclose this fact to the
student in the enrollment agreement, along with the amount of the fee
paid on the student's behalf to the bureau.
(2) The amount collected from a new student by an institution
shall be calculated on the basis of the course tuition paid over the
current calendar year, based upon the assessment rate in effect when
the student enrolled at the institution, without regard to the length
of time the student's program of instruction lasts. For purposes of
annualized payment, a new student enrolled in a course of
instruction that is longer than one calendar year in duration shall
pay fees for the Student Tuition Recovery Fund based on the amount of
tuition collected during the current calendar year.
(3) The assessment made pursuant to this section shall be made in
accordance with both of the following:
(A) Each new student shall pay a Student Tuition Recovery Fund
assessment for the period of January 1, 2002, to December 31, 2002,
inclusive, at the rate of three dollars ($3) per thousand dollars of
tuition paid, rounded to the nearest thousand dollars.
(B) Commencing January 1, 2003, Student Tuition Recovery Fund fees
shall be collected from new students at the rate of two dollars and
fifty cents ($2.50) per thousand dollars of tuition charged, rounded
to the nearest thousand dollars. For new students signing enrollment
agreements between January 1, 2002 and December 31, 2002, inclusive,
the assessment rate of three dollars ($3) per thousand dollars of
tuition paid, rounded to the nearest thousand dollars, as provided in
subparagraph (A) of this paragraph, shall remain the assessment rate
for the duration of the student's enrollment agreement.
(4) The bureau may levy additional reasonable special assessments
on an institution under this section only if these assessments are
required to ensure that sufficient funds are available to satisfy the
anticipated costs of paying student claims pursuant to Section
94944.
(5) (A) The bureau may not levy a special assessment unless the
balance in any account in the Student Tuition Recovery Fund falls
below two hundred fifty thousand dollars ($250,000), as certified by
the Secretary of the State and Consumer Services Agency.
(B) A special assessment is a surcharge, collected by each
institution from newly enrolled students, of up to 100 percent of
that institution's regular assessment for four consecutive quarters.
The affected student shall pay the surcharge simultaneously with his
or her regular quarterly payment to the Student Tuition Recovery
Fund.
(C) The bureau shall provide at least 90 days' notice of an
impending special assessment to each affected institution. This
notice shall also be posted on the bureau's Internet Web site.
(D) The bureau may apply any special assessment payments that it
receives from an institution as a credit toward that institution's
current or future obligations to the Student Tuition Recovery Fund.
(6) The assessments shall be paid into the Student Tuition
Recovery Fund and credited to the appropriate account in the fund,
and the deposits shall be allocated, except as otherwise provided for
in this chapter, solely for the payment of valid claims to students.
Unless additional reasonable assessments are required, no
assessments for the degree-granting postsecondary educational
institution account shall be levied during any fiscal year if, as of
June 30 of the prior fiscal year, the balance in that account of the
fund exceeds one million five hundred thousand dollars ($1,500,000).
Unless additional reasonable assessments are required, no
assessments for the vocational educational institution account shall
be levied during any fiscal year if, as of June 30 of the prior
fiscal year, the balance in that account exceeds four million five
hundred thousand dollars ($4,500,000). However, regardless of the
balance in the fund, assessments shall be made on any newly approved
institution. Notwithstanding Section 13340 of the Government Code,
the moneys so deposited in the fund are continuously appropriated to
the bureau for the purpose of paying claims to students pursuant to
Section 94944.
(b) The bureau may deduct from the fund the reasonable costs of
administration of the tuition recovery program authorized by Section
94944 and this section. The maximum amount of administrative costs
that may be deducted from the fund, in a fiscal year, shall not
exceed one hundred thousand dollars ($100,000) from the
degree-granting postsecondary educational institution account and
three hundred thousand dollars ($300,000) from the vocational
educational institution account, plus the interest earned on money in
the fund that is credited to the fund. Prior to the bureau's
expenditure of any amount in excess of one hundred thousand dollars
($100,000) from the fund for administration of the tuition recovery
program, the bureau shall develop a plan itemizing that expenditure.
The plan shall be subject to the approval of the Department of
Finance. Institutions, except for schools of cosmetology licensed
pursuant to Article 8 (commencing with Section 7362) of Chapter 10 of
Division 3 of the Business and Professions Code and institutions
that offer vocational or job training programs, that meet the student
tuition indemnification requirements of a California state agency,
that secure a policy of surety or insurance from an admitted insurer
protecting their students against loss of paid tuition, or that
demonstrate to the bureau that an acceptable alternative method of
protecting their students against loss of prepaid tuition has been
established, shall be exempted from this section.
(c) Reasonable costs in addition to those permitted under
subdivision (b) may be deducted from the fund for any of the
following purposes:
(1) To make and maintain copies of student records from
institutions that close.
(2) To reimburse the bureau or a third party serving as the
custodian of records.
(d) In the event of a closure by any approved institution under
this chapter, any assessments that have been made against those
institutions, but have not been paid into the fund, shall be
recovered. Any payments from the fund made to students on behalf of
any institution shall be recovered from that institution.
(e) In addition to civil remedies, the bureau may order an
institution to pay previously unpaid assessments or to reimburse the
bureau for any payments made from the fund in connection with the
institution. Before any order is made pursuant to this section, the
bureau shall provide written notice to the institution and notice of
the institution's right to request a hearing within 30 days of the
service of the notice. If a hearing is not requested within 30 days
of the service of the notice, the bureau may order payment. If a
hearing is requested, Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code shall apply,
and the bureau shall have all powers prescribed in that chapter.
Within 30 days after the effective date of the issuance of the order,
the bureau may enforce the order in the same manner 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.
(f) In addition to any other action that the bureau may take under
this chapter, the bureau may suspend or revoke an institution's
approval to operate because of the institution's failure to pay
assessments when due or failure to pay reimbursement for any payments
made from the fund within 30 days of the bureau's demand for
payment.
(g) The moneys deposited in the fund shall be exempt from
execution and shall not be the subject of litigation or liability on
the part of creditors of those institutions or students.
SEC. 3. Section 94950 of the Education Code is amended to read:
94950. (a) The procedures set forth in Section 94965 or,
alternatively, in Section 94975, govern the following types of
administrative actions:
(1) Denial of an application for an approval or renewal of an
approval.
(2) Suspension or revocation of an existing approval.
(3) Appeals of conditional approvals.
(b) In lieu of the procedures set forth in Section 94965 or 94975,
an institution may voluntarily elect to utilize the procedures set
forth in Section 94980 if it appeals a conditional approval by the
bureau.
(c) The procedures set forth in Section 94970 govern emergency
suspensions of an institution's approval to operate initiated by the
bureau.
(d) Sections 94952 and 94955 authorize the bureau and the
Attorney General to seek various forms of judicial relief in order to
enforce this chapter.
(e) Section 94960 governs actions based on student complaints.
(f) Section 94985 authorizes civil remedies for individual
students in addition to those available under other provisions of
law.
(g) Procedures established pursuant to regulations adopted by the
bureau shall govern the following types of administrative appeals:
(1) Probationary actions.
(2) Decisions by the bureau denying an institution's claim for an
exemption or exclusion from this chapter or any provision thereof.
SEC. 4. Section 94952 of the Education Code is amended to read:
94952. (a) The Attorney General, or any district attorney, or
city attorney, may make investigations as may be necessary to carry
out this chapter, including, but not necessarily limited to,
investigations of complaints. The bureau may jointly bring actions
as necessary to enforce this chapter, including, but not necessarily
limited to, civil actions for injunctive relief. In actions brought
pursuant to this subdivision, the bureau shall be represented by the
Attorney General.
(b) The Attorney General shall represent the bureau in the
following administrative proceedings arising under this chapter:
(1) Suspension or revocation of an institution's approval.
(2) Denial of an institution's application for approval.
(3) An appeal of a conditional approval to operate issued
following a review of an institution's application for approval.
(c) Nothing in this section or this chapter shall preclude the
Attorney General, or any district attorney or city attorney, from any
of the following:
(1) Bringing any action on behalf of the people as he or she is
empowered by law to bring, including, but not necessarily limited to,
actions based upon alleged violations of Chapter 5 (commencing with
Section 17200) of Part 2, and Chapter 1 (commencing with Section
17500) of Part 3, of Division 7 of the Business and Professions Code.
(2) Conducting investigations necessary to determine whether there
have been violations of law specified in paragraph (1).
(3) Conducting any investigations that he or she is authorized to
conduct, including, but not necessarily limited to, investigations
authorized under Section 11180 of the Government Code.
(4) In the case of the Attorney General, delegating his or her
representation authority under subdivision (b) to staff attorneys of
the bureau.
(5) Entering into an agreement or understanding with the bureau
with respect to representation in any judicial or administrative
proceeding not expressly enumerated herein.
SEC. 5. Section 94955 of the Education Code is amended to read:
94955. (a) The bureau 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.
(c) In actions brought pursuant to this section, the bureau shall
be represented by the Attorney General.
SEC. 6. Section 94957 of the Education Code is amended to read:
94957. (a) In addition to or in lieu of any other remedy or
penalty, the bureau may issue a citation to an institution for
committing any violation of this chapter or regulation adopted under
this chapter.
(b) The citation may contain an order of abatement or the
assessment of an administrative fine. The administrative fine may
not exceed two thousand five hundred dollars ($2,500) for each
violation. The bureau shall base its assessment of the
administrative fine on the nature and seriousness of the violation,
the persistence of the violation, the good faith of the institution,
the history of previous violations, and the purposes of this chapter.
(c) The citation shall be in writing and shall describe the nature
of the violation and the specific provision of law determined to
have been violated. The citation shall inform the institution of its
right to request a hearing in writing within 15 days of the date
that the citation was issued. If a hearing is not requested, payment
of the administrative fine shall not constitute an admission of the
violation charged. If a hearing is requested, the bureau shall
provide a hearing as described in Section 94965, 94975, or 94980.
Payment of the administrative fine is due 15 days after the citation
was issued if a hearing is not requested, or when a final order is
entered if a hearing is requested. The bureau may enforce the
administrative fine as if it were a money judgment pursuant to Title
9 (commencing with Section 680.10) of Part 2 of the Code of Civil
Procedure.
(d) All administrative fines shall be deposited in the Private
Postsecondary and Vocational Education Administration Fund.
SEC. 7. Section 94960.5 is added to the Education Code, to read:
94960.5. The bureau shall include in its annual report to the
Legislature made pursuant to Section 94995, a statistical summary of
complaints filed pursuant to Section 94960, that includes, but is not
necessarily limited to, all of the following:
(a) The number of complaints filed.
(b) The nature of the complaint, by appropriate categories.
(c) The disposition of the complaints.
(d) The actions taken by the bureau, under subdivision (c) of
Section 94960, to enforce a prevailing complaint.
SEC. 8. Section 94965 of the Education Code is amended to read:
94965. (a) Proceedings in connection with the denial of an
application to operate, the grant of a conditional approval to
operate, or the revocation of an approval to operate shall be
conducted in accordance with Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code, and
the bureau shall have all of the powers granted in that chapter.
Any action by the bureau to place an institution on probation shall
be subject to appeal, and the bureau shall establish procedures that
provide the institution with adequate notice and an opportunity to
be heard and to present evidence as to why the action recommended by
staff or by a visiting committee shall not be taken.
(b) Upon taking any action to suspend or revoke an institution's
approval to operate, or to deny an application for renewal of an
approval to operate, the bureau shall provide written notice to the
Student Aid Commission, the United States Department of Education,
and to any appropriate accrediting association.
SEC. 9. Section 94975 of the Education Code is amended to read:
94975. (a) This section establishes the procedure for notice and
hearing required under this chapter and, except as provided in
Section 94970, may be used in lieu of other notice or hearing
requirements provided in this chapter.
(b) If notice of administrative action is required by this
chapter, the bureau shall serve notice stating the following:
(1) The action, including the penalties and administrative
sanctions sought.
(2) The grounds for the action with sufficient particularity to
give notice of the transactions, occurrences, violations, or other
matters on which the action is based.
(3) The right to a hearing and the time period within which the
party subject to the notice may request a hearing in writing. The
time period shall not be less than 15 days after service of the
notice unless a longer period is provided by statute.
(4) The right to be present at the hearing, to be
represented by counsel, to cross-examine witnesses, and to present
evidence.
(5) That, if the party subject to the notice does not request a
hearing in writing within the time period expressed in the notice, he
or she will waive or forfeit his or her right to an administrative
hearing and the action will become final.
(c) If a party subject to a notice provided pursuant to
subdivision (b) requests a hearing in writing within the time period
specified in subparagraph (3) of paragraph (b), then within 30 days
of receiving this request, the bureau shall schedule a hearing. The
hearing shall be held in a location determined pursuant to Section
11508 of the Government Code. The bureau shall serve reasonable
notice of the time and place for the hearing at least 10 days before
the hearing. The bureau may continue the date of the hearing upon a
showing of good cause.
(d) (1) Any party, including the bureau, may submit a written
request to any other party before the hearing to obtain the names and
addresses of any person who has personal knowledge, or who the party
receiving the request claims to have personal knowledge, of any of
the transactions, occurrences, violations, or other matters that are
the basis of the administrative action. In addition, the requesting
party shall have the right to inspect and copy any written statement
made by that person and any writing, as defined by Section 250 of the
Evidence Code, or thing that is in the custody, or under the
control, of the party receiving the request and that is relevant and
not privileged. This subdivision shall constitute the exclusive
method for prehearing discovery. However, nothing in this paragraph
shall affect the bureau's authority, at any time, to investigate,
inspect, monitor, or obtain and copy information under any provision
of this chapter.
(2) The written request described in paragraph (1) shall be made
before the hearing and within 30 days of the service of the notice
described in subdivision (b). Each recipient of a request shall
comply with the request within 15 days of its service by providing
the names and addresses requested and by producing at a reasonable
time at the bureau's office, or other mutually agreed reasonable
place, the requested writings and things. The bureau may extend the
time for response upon a showing of good cause.
(3) Except as provided in this paragraph, no party may introduce
the testimony or statement of any person or any writing or thing into
evidence at the hearing if that party failed to provide the name and
address of the person or to produce the writing or thing for
inspection and copying as provided by this subdivision. A party may
introduce the testimony, statement, writing, or thing that was not
identified or produced as required herein only if there is no
objection or if the party establishes that the person, writing, or
thing was unknown at the time when the response was made to the
written request, the party could not have informed other parties
within a reasonable time after learning of the existence of the
person, writing, or thing, and no party would be prejudiced by the
introduction of the evidence.
(e) Before the hearing has commenced, the bureau shall issue
subpoenas at the written request of any party for the attendance of
witnesses or the production of documents or other things in the
custody or under the control of the person subject to the subpoena.
Subpoenas issued pursuant to this section are subject to Section
11510 of the Government Code.
(f) (1) The bureau shall designate an impartial hearing officer
to conduct the hearing. The hearing officer may administer oaths and
affirmations, regulate the course of the hearing, question
witnesses, and otherwise investigate the issues, take official notice
according to the procedure provided in Division 4 (commencing with
Section 450) of the Evidence Code of any technical or educational
matter in the bureau's special field of expertise and of any matter
that may be judicially noticed, set the time and place for continued
hearings, fix the time for the filing of briefs and other documents,
direct any party to appear and confer to consider the simplification
of issues by consent, and prepare a statement of decision.
(2) Neither a hearing officer nor any person who has a direct or
indirect interest in the outcome of the hearing shall communicate
directly or indirectly with each other regarding any issue involved
in the hearing while the proceeding is pending without notice and
opportunity for all parties to participate in the communication. A
hearing officer who receives any ex parte communication shall
immediately disclose the communication to the bureau and all other
parties. The bureau may disqualify the hearing officer if necessary
to eliminate the effect of the ex parte communication. If the
bureau finds that any party willfully violated, or caused the
violation of, this paragraph, the bureau shall enter that party's
default and impose the administrative sanction set forth in the
notice provided pursuant to subdivision (b).
(g) (1) Each party at the hearing shall be afforded an opportunity
to present evidence, respond to evidence presented by other parties,
cross-examine, and present written argument or, if permitted by the
hearing officer, oral argument on the issues involved in the hearing.
The bureau may call any party as a witness who may be examined as
if under cross-examination.
(2) Each party may appear through its representative or through
legal counsel.
(3) The technical rules relating to evidence and witnesses shall
not apply. However, only relevant evidence is admissible.
(4) Oral evidence shall be taken only upon oath or affirmation.
The hearing shall be conducted in the English language. The
proponent of any testimony to be offered by a witness who is not
proficient in English shall provide, at the proponent's cost, an
interpreter proficient in English and the language in which the
witness will testify.
(5) The hearing shall be recorded by tape recording or other
phonographic means unless all parties agree to another method of
recording the proceedings.
(6) (A) At any time 10 or more days before the hearing, any party
may serve on the other parties a copy of any declaration that the
party proposes to introduce in evidence.
(B) The declaration shall be accompanied by a notice indicating
the date of service of the notice and stating that the declarations
will be offered into evidence, the declarants will not be called as
witnesses, and there will be no right of cross-examination unless the
party receiving the notice requests the right to cross-examine, in
writing, within seven days of the service of the declarations and
notice.
(C) If no request for cross-examination is served within seven
days of the service of the declarations and notice described in
subparagraph (B), the right to cross-examination is deemed waived and
the declaration shall have the same effect as if the declarant
testified orally. Notwithstanding this paragraph, a declaration may
be admitted as hearsay evidence without cross-examination.
(7) Disposition of any issues involved in the hearing may be made
by stipulation or settlement.
(8) If a party fails to appear at a hearing, that party's default
shall be taken and the party shall be deemed to have waived the
hearing and agreed to the administrative action and the grounds for
that action described in the notice given pursuant to subdivision
(b). The bureau shall serve the party with an order of default
including the administrative action ordered. The order shall be
effective upon service or at any other time designated by the
bureau. The bureau may relieve a party from an order of default if
the party applies for relief within 15 days after the service of an
order of default and establishes good cause for relief. An
application for relief from default shall not stay the effective date
of the order unless expressly provided by the bureau.
(h) (1) At any time before the matter is submitted for decision,
the bureau may amend the notice provided pursuant to subdivision (b)
to set forth any further grounds for the originally noticed
administrative action or any additional administrative action and the
grounds therefor. The statement of the further grounds for the
originally noticed administrative action, or of the grounds for any
additional administrative action, shall be made with sufficient
particularity to give notice of the transactions, occurrences,
violations, or other matters on which the action or additional action
is based. The amended notice shall be served on all parties. All
parties affected by the amended notice shall be given reasonable
opportunity to respond to the amended notice as provided in this
section.
(2) The bureau may amend the notice after the case is submitted
for decision. The bureau shall serve each party with notice of the
intended amendment, and shall provide the party with an opportunity
to show that the party will be prejudiced by the amendment unless the
case is reopened to permit the party to introduce additional
evidence. If prejudice is shown, the bureau shall reopen the case
to permit the introduction of additional evidence.
(i) (1) Within 30 days after the conclusion of the hearing or at
another time established by the bureau, the hearing officer shall
submit a written statement of decision setting forth a recommendation
for a final decision and explaining the factual and legal basis for
the decision as to each of the grounds for the administrative action
set forth in the notice or amended notice. The bureau shall serve
the hearing officer's statement of decision on each party and its
counsel within 10 days of its submission by the hearing officer.
(2) The director shall make the final decision which shall be
based exclusively on evidence introduced at the hearing. The final
decision shall be supported by substantial evidence in the record.
The director also shall issue a statement of decision explaining the
factual and legal basis for the final decision as to each of the
grounds for the administrative action set forth in the notice or
amended notice. The director shall issue an order based on its
decision which shall be effective upon service or at any other time
designated by the director. The director, or his or her agent,
shall serve a copy of the final decision and order, within 10 days of
their issuance, on each party and its counsel.
(3) The bureau shall serve a certified copy of the complete
record of the hearing, or any part thereof designated by a party,
within 30 days after receiving the party's written request and
payment of the cost of preparing the requested portions of the
record. The complete record shall include all notices and orders
issued by the bureau, a transcript of the hearing, the exhibits
admitted or rejected, the written evidence and any other papers in
the case, the hearing officer's statement of decision, and the final
decision and order.
(j) The bureau shall serve all notices and other documents that
are required to be served by this section on each party by personal
delivery, by certified mail, return receipt requested, or by any
other means designated by the bureau.
(k) (1) Any party aggrieved by the director's final decision and
order may seek judicial review by filing a petition for a writ of
mandate pursuant to Section 1085 of the Code of Civil Procedure
within 30 days of the issuance of the final decision and order. If
review is not sought within that period, the party's right to review
shall be deemed waived.
(2) The aggrieved party shall present the complete record of the
hearing or all portions of the record necessary for the court's
review of the director's final decision and order. The court shall
deny the petition for a writ of mandate if the record submitted by
the party is incomplete. The court shall not consider any matter not
contained in the record. The director's findings of fact and legal
conclusions supporting the final decision shall be conclusive if
supported by substantial evidence on the record considered as a
whole.
(3) The final order shall not be stayed or enjoined during review
except upon the court's grant of an order on a party's application
after due notice to the director and the Attorney General. The
order shall be granted only if the party establishes the substantial
likelihood that it will prevail on the merits and posts a bond
sufficient to protect fully the interests of the students, the
bureau, and the fund, from any loss.
(l) The bureau may adopt regulations establishing alternative
means of providing notice and an opportunity to be heard in
circumstances in which a full hearing is not required by law.
(m) For the purposes of this section, "good cause" shall require
sufficient ground or reason for the determination to be made by the
bureau.
SEC. 10. Section 94980 of the Education Code is amended to read:
94980. (a) If the bureau, through the director, denies an
institution's application for approval, grants a conditional
approval, or initiates a proceeding to suspend or revoke an
institution's approval to operate, the institution may request a
hearing pursuant to this section in lieu of the hearing procedure
designated by the bureau under Section 94965 or 94975.
(b) At the time the bureau provides notice to an institution of
its right to a hearing under Section 94965 or 94975 in connection
with the denial of an application for approval to operate, the
issuance of a conditional approval to operate, or a proposed
suspension or revocation of approval to operate, the bureau also
shall provide notice of the provisions of this section.
(c) Within 15 days after service of the notice described in
subdivision (b), the institution may request in writing a hearing
under this section in lieu of the hearing procedure in Section 94965
or 94975. The request shall acknowledge that, by electing to proceed
under this section, the institution is knowingly waiving all rights
under the hearing procedure otherwise provided by the bureau.
(d) After receiving the institution's request for a hearing under
this section, the bureau shall provide the institution or its
representative with copies of all the documents, testimony in
declaration form, and written arguments on which the bureau relies
to support its proposed administrative action.
(e) The institution shall have 30 days from the service of the
bureau's written evidence and arguments to submit all the documents,
testimony in declaration form, and written arguments on which the
institution relies in opposition to the bureau's proposed
administrative action.
(f) Neither the bureau nor the institution has any right to
discovery or to compel the production of documents or the testimony
of witnesses by subpoena.
(g) The director shall review all of the documents, declarations,
and arguments, and shall render a proposed decision in writing, based
solely on the written evidence and arguments that set forth the
proposed administrative action and the factual and legal bases for
it.
(h) The bureau shall serve the institution with a written decision
setting forth the administrative action taken and the legal and
factual bases for it. The decision shall become final within 30 days
unless another time is specified by the bureau.
(i) The bureau shall serve a certified copy of the complete
record, or any part thereof designated by an institution, within 30
days after receiving the institution's written request and payment of
the cost of preparing the requested record or portions thereof. The
complete record shall consist of all notices and orders of the
bureau, the documents, declarations, and written argument submitted,
a transcript of any oral argument, and the final decision and order.
(j) Any party aggrieved by the bureau's final decision and order
may seek judicial review as provided in, and subject to, the
requirements of subdivision (k) of Section 94975.
(k) All documents required by this section to be served by the
bureau shall be served on the institution, its counsel, or authorized
representative by any means authorized for service pursuant to
Chapter 5 (commencing with Section 1010) of Title 14 of Part 2 of the
Code of Civil Procedure.
SEC. 11. Section 94995 of the Education Code is amended to read:
94995. (a) Notwithstanding Section 7550.5 of the Government Code,
on or before January 31 of each calendar year, the bureau shall
submit a written report to the Legislature and to the California
Postsecondary Education Commission, summarizing its activities during
the previous fiscal year.
(b) Annual reports prepared pursuant to this section shall
include, but shall not necessarily be limited to, all of the
following:
(1) Timely information relating to the enforcement activities of
the bureau pursuant to this chapter.
(2) Statistics providing a composite picture of the private
postsecondary educational community, including data on how many
schools, as classified by subject matter, and how many students there
are within the scope of the activities of the bureau.
(c) Any reports submitted by the bureau to the Joint Legislative
Sunset Review Committee pursuant to Division 1.2 (commencing with
Section 473) of the Business and Professions Code during any calendar
year shall satisfy the reporting requirements of this section for
that year.
SEC. 12. The Legislature finds and declares that the amendments to
Section 94945 of the Education Code made by Section 2 of this act do
not constitute a change in, but are declaratory of, existing law.