BILL NUMBER: AB 2746 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Niello
FEBRUARY 22, 2008
An act to amend Sections 101, 146, 149, and 473.1 of, and to add
and repeal Chapter 16 (commencing with Section 9000) of Division 3
of, the Business and Professions Code, and to add Section 11105.8 to
the Vehicle Code, relating to private postsecondary education, and
making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 2746, as introduced, Niello. Private postsecondary education:
California Private Postsecondary Education Act of 2008.
(1) The former Private Postsecondary and Vocational Education
Reform Act of 1989, which became inoperative on July 1, 2007, was
administered by the Bureau for Private Postsecondary and Vocational
Education in the Department of Consumer Affairs. The act generally
effectuated legislative intent to ensure minimum standards of
instructional quality and institutional stability in private
postsecondary educational institutions.
The former act established the Private Postsecondary and
Vocational Education Administration Fund and the continuously
appropriated Student Tuition Recovery Fund. Existing law extends the
existence of these funds until July 1, 2008. The former act specified
that certain violations of its provisions were subject to civil
penalties and that certain willful violations of the act were
punishable as crimes. A provision provided for its repeal on January
1, 2008.
This bill would recast and revise the former act as the California
Private Postsecondary Education Act of 2008, which the bill would
place in the Business and Professions Code. The bill would establish
the Bureau for Private Postsecondary Education in the Department of
Consumer Affairs as a successor agency to the former bureau. The bill
would continue the existence of the Private Postsecondary and
Vocational Education Administration Fund, which the bill would rename
the Private Postsecondary Education Administration Fund, and the
continuously appropriated Student Tuition Recovery Fund, and would
also provide that certain violations of the new act would be
punishable as infractions.
The bill would provide that the California Private Postsecondary
Education Act of 2008 would be repealed on January 1, 2012.
Because this bill would establish new infractions, the bill would
impose a state-mandated local program.
(2) 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 101 of the Business and Professions Code is
amended to read:
101. The department is comprised composed
of:
(a) The Dental Board of California.
(b) The Medical Board of California.
(c) The State Board of Optometry.
(d) The California State Board of Pharmacy.
(e) The Veterinary Medical Board.
(f) The California Board of Accountancy.
(g) The California Architects Board.
(h) The Bureau of Barbering and Cosmetology.
(i) The Board for Professional Engineers and Land Surveyors.
(j) The Contractors' State License Board.
(k) The Bureau for Private Postsecondary and Vocational
Education.
() The Structural Pest Control Board.
(m) The Bureau of Home Furnishings and Thermal Insulation.
(n) The Board of Registered Nursing.
(o) The Board of Behavioral Sciences.
(p) The State Athletic Commission.
(q) The Cemetery and Funeral Bureau.
(r) The State Board of Guide Dogs for the Blind.
(s) The Bureau of Security and Investigative Services.
(t) The Court Reporters Board of California.
(u) The Board of Vocational Nursing and Psychiatric Technicians.
(v) The Landscape Architects Technical Committee.
(w) The Bureau of Electronic and Appliance Repair.
(x) The Division of Investigation.
(y) The Bureau of Automotive Repair.
(z) The State Board of Registration for Geologists and
Geophysicists.
(aa) The Respiratory Care Board of California.
(ab) The Acupuncture Board.
(ac) The Board of Psychology.
(ad) The California Board of Podiatric Medicine.
(ae) The Physical Therapy Board of California.
(af) The Arbitration Review Program.
(ag) The Committee on Dental Auxiliaries.
(ah) The Hearing Aid Dispensers Bureau.
(ai) The Physician Assistant Committee.
(aj) The Speech-Language Pathology and Audiology Board.
(ak) The California Board of Occupational Therapy.
(al) The Osteopathic Medical Board of California.
(am) The Bureau of Naturopathic Medicine.
(an) Any other boards, offices, or officers subject to its
jurisdiction by law.
SEC. 2. Section 146 of the Business and Professions Code is
amended to read:
146. (a) Notwithstanding any other provision of law, a violation
of any code section listed in subdivision (c) or (d)
is an infraction subject to the procedures described in
Sections 19.6 and 19.7 of the Penal Code when
if :
(1) A complaint or a written notice to appear in court pursuant to
Chapter 5c (commencing with Section 853.5) of Title 3 of Part 2 of
the Penal Code is filed in court charging the offense as an
infraction unless the defendant, at the time he or she is arraigned,
after being advised of his or her rights, elects to have the case
proceed as a misdemeanor, or
(2) The court, with the consent of the defendant and the
prosecution, determines that the offense is an infraction in which
event the case shall proceed as if the defendant has been arraigned
on an infraction complaint.
(b) Subdivision (a) does not apply to a violation of the code
sections listed in subdivisions subdivision
(c) and (d) if the defendant has had his or
her license, registration, or certificate previously revoked or
suspended.
(c) The following sections require registration, licensure,
certification, or other authorization in order to engage in certain
businesses or professions regulated by this code:
(1) Sections 2052 and 2054.
(2) Section 2630.
(3) Section 2903.
(4) Section 3660.
(5) Sections 3760 and 3761.
(6) Section 4080.
(7) Section 4825.
(8) Section 4935.
(9) Section 4980.
(10) Section 4996.
(11) Section 5536.
(12) Section 6704.
(13) Section 6980.10.
(14) Section 7317.
(15) Section 7502 or 7592.
(16) Section 7520.
(17) Section 7617 or 7641.
(18) Subdivision (a) of Section 7872.
(19) Section 8016.
(20) Section 8505.
(21) Section 8725.
(22) Section 9681.
(23) Section 9840.
(24) Subdivision (c) of Section 9891.24.
(25) Section 19049.
(d) Institutions that are required to register with the Bureau for
Private Postsecondary and Vocational Education pursuant to Section
94931 of the Education Code.
(e)
(d) Notwithstanding any other provision of law, a
violation of any of the sections listed in subdivision (c)
or (d) , which is an infraction, is punishable by a fine of
not less than two hundred fifty dollars ($250) and not more than one
thousand dollars ($1,000). No portion of the minimum fine may be
suspended by the court unless as a condition of that suspension the
defendant is required to submit proof of a current valid license,
registration, or certificate for the profession or vocation which was
the basis for his or her conviction.
SEC. 3. Section 149 of the Business and Professions Code is
amended to read:
149. (a) If, upon investigation, an agency designated in
subdivision (e) has probable cause to believe that a person is
advertising in a telephone directory with respect to the offering or
performance of services, without being properly licensed by or
registered with the agency to offer or perform those services, the
agency may issue a citation under Section 148 containing an order of
correction that requires the violator to do both of the following:
(1) Cease the unlawful advertising.
(2) Notify the telephone company furnishing services to the
violator to disconnect the telephone service furnished to any
telephone number contained in the unlawful advertising.
(b) This action is stayed if the person to whom a citation is
issued under subdivision (a) notifies the agency in writing that he
or she intends to contest the citation. The agency shall afford an
opportunity for a hearing, as specified in Section 125.9.
(c) If the person to whom a citation and order of correction is
issued under subdivision (a) fails to comply with the order of
correction after that order is final, the agency shall inform the
Public Utilities Commission of the violation and the Public Utilities
Commission shall require the telephone corporation furnishing
services to that person to disconnect the telephone service furnished
to any telephone number contained in the unlawful advertising.
(d) The good faith compliance by a telephone corporation with an
order of the Public Utilities Commission to terminate service issued
pursuant to this section shall constitute a complete defense to any
civil or criminal action brought against the telephone corporation
arising from the termination of service.
(e) Subdivision (a) shall apply to the following boards, bureaus,
committees, commissions, or programs:
(1) The Bureau of Barbering and Cosmetology.
(2) The Funeral Directors and Embalmers Program.
(3) The Veterinary Medical Board.
(4) The Hearing Aid Dispensers Advisory Commission.
(5) The Landscape Architects Technical Committee.
(6) The California Board of Podiatric Medicine.
(7) The Respiratory Care Board of California.
(8) The Bureau of Home Furnishings and Thermal Insulation.
(9) The Bureau of Security and Investigative Services.
(10) The Bureau of Electronic and Appliance Repair.
(11) The Bureau of Automotive Repair.
(12) The Tax Preparers Program.
(13) The California Architects Board.
(14) The Speech-Language Pathology and Audiology Board.
(15) The Board for Professional Engineers and Land Surveyors.
(16) The Board of Behavioral Sciences.
(17) The State Board for Geologists and Geophysicists.
(18) The Structural Pest Control Board.
(19) The Acupuncture Board.
(20) The Board of Psychology.
(21) The California Board of Accountancy.
(22) The Bureau of Naturopathic Medicine.
(23) The Bureau for Private Postsecondary Education.
SEC. 4. Section 473.1 of the Business and Professions Code is
amended to read:
473.1. This chapter shall apply to all of the following:
(a) Every board, as defined in Section 22, that is scheduled to
become inoperative and to be repealed on a specified date as provided
by the specific act relating to the board.
(b) The Bureau for Postsecondary and Vocational Education. For
purposes of this chapter, "board" includes the bureau.
(c)
(b) The Cemetery and Funeral Bureau.
SEC. 5. Chapter 16 (commencing with Section 9000) is added to
Division 3 of the Business and Professions Code, to read:
CHAPTER 16. PRIVATE POSTSECONDARY INSTITUTIONS
Article 1. General Provisions
9000. This chapter shall be known, and may be cited, as the
California Private Postsecondary Education Act of 2008.
9001. 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 the
Education Code, as it read on June 30, 2007, by the provisions of any
statute or regulation, it is to be construed as referring to the
provisions of this chapter.
Article 2. Transition Provisions
9002. (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 shall be valid for two calendar years after the expiration
date of the approval, as it read on June 30, 2007.
(b) Applications to renew an approval to operate that had been
pending action before the former Bureau for Private Postsecondary and
Vocational Education on June 30, 2007, shall be deemed processed as
follows:
(1) Applications received prior to January 1, 2006, shall be
granted an approval to operate until 2010 to coincide with the
anniversary date of the current approval to operate date.
(2) Applications received after January 1, 2006, shall be granted
an approval to operate until 2011 to coincide with the anniversary
date of the current approval to operate.
9003. The bureau shall, by emergency regulation amend the
regulations, as they read on June 30, 2007, in Division 7.5
(commencing with Section 70000) of Title 5 of the California Code of
Regulations, to conform to this chapter no later than February 1,
2009. Notwithstanding any other provision of law, these emergency
regulations shall become permanent on July 1, 2009.
9004. The bureau shall succeed to any and all rights and claims
of the former Bureau for Private Postsecondary and Vocational
Education that may have been asserted in a judicial or administrative
action pending on July 1, 2007, and shall take any action reasonably
necessary to assert and realize those rights and claims in its own
name.
9005. For the performance of the duties and exercise of the
powers vested in the bureau, the bureau shall have possession and
control of all records, papers, offices, equipment, supplies, or
other property, real or personal, held for the benefit or use by the
former Bureau for Private Postsecondary and Vocational Education.
9006. The Private Postsecondary and Vocational Education
Administration Fund established by former Section 94932 of the
Education Code, and extended by Chapter 635 of the Statutes of 2007,
is continued in existence, and is renamed the Private Postsecondary
Education Administration Fund.
9007. The Student Tuition Recovery Fund established by former
Section 94944 of the Education Code, and extended by Chapter 635 of
the Statutes of 2007, is continued in existence.
9008. Any Student Tuition Recovery Fund claims received by the
former Bureau for Private Postsecondary and Vocational Education
prior to July 1, 2007, that were not approved and paid, shall be
processed by the bureau in accordance with this chapter.
9009. All applications, excluding Student Tuition Recovery Fund
and reapproval applications, that were pending with the former bureau
as of July 1, 2007, shall be deemed approved.
9009.5. (a) Notwithstanding any other provision of law, any claim
or cause of action in any manner based on the former Private
Postsecondary and Vocational Education Reform Act of 1989 that arose
on or before June 30, 2007, shall have been commenced on or before
June 30, 2007. Notwithstanding the inoperative status or repeal of
the act on or after July 1, 2007, any claim or cause of action in any
manner based on the act that was commenced on or before June 30,
2007, whether or not reduced to a final judgment, shall be preserved,
and any remedy that was or could have been ordered to redress a
violation of the act on or before June 30, 2007, may be ordered or
maintained thereafter. If a final judgment was obtained in an action
commenced on or after July 1, 2007, under the authority of Chapter
635 of the Statutes of 2007, the final judgment and any legal remedy
that was or could be maintained on or after July 1, 2007, under that
statute, shall be preserved and maintained thereafter.
(b) The rights, obligations, claims, causes of action, and
remedies described in subdivision (a) shall be determined by the
provisions of the former Private Postsecondary and Vocational
Education Reform Act of 1989 in effect on or before June 30, 2007,
notwithstanding the inoperative status or repeal of the former
Private Postsecondary and Vocational Education Reform Act of 1989 on
or after July 1, 2007.
Article 3. Definitions
9010. Unless the context requires otherwise, the definitions set
forth in this article govern the construction of this chapter.
9011. "Ability-to-benefit student" means a student who does not
have a certificate of graduation from a school providing secondary
education, or a recognized equivalent of that certificate.
9012. "Academic year" means a period, including a minimum of 30
weeks of instructional time, in which a full-time student attending
an institution that measures educational program length in credit
hours completes 24 semester or trimester hours or 36 quarter hours,
or an institution that measures educational program length in clock
hours completes at least 900 clock hours.
9013. "Accredited" means an institution is recognized or approved
by an accrediting agency recognized by the United States Department
of Education.
9014. "Accrediting agency" is an agency recognized by the United
States Department of Education.
9015. "Annual report" means the yearly report required to be
filed by institutions.
9016. "Applicant" means an institution that has submitted an
application to the bureau for an approval to operate or for a renewal
of an approval to operate.
9017. "Approval to operate" means the authorization to offer to
the public and to provide postsecondary educational programs, as well
as the written document issued to an institution signifying its
approval to operate.
9018. "Avocational education" means education offered for the
purpose of personal entertainment, pleasure, or enjoyment.
9019. "Branch campus" means a site other than the main campus or
a satellite location.
9020. "Bureau" means the Bureau for Private Postsecondary
Education in the Department of Consumer Affairs.
9020.5. "Certified" means having passed an examination that
attests to the quality and level of knowledge by a qualified
certification authority or organization that is not affiliated with
an institution.
9021. "Change in business organization form" means a change of a
business organization's original form, including, for example, a
situation in which a sole proprietorship becomes a partnership or
corporation, or when a business organization becomes a nonprofit
public benefit corporation or forms a nonprofit public benefit
corporation as a subsidiary to provide the educational programs for
which the business organization has an approval to operate.
9022. "Change of location" means a move or relocation more than
10 miles from the site at which the institution offers instruction.
9023. "Change of ownership" means the acquisition by a person of
more than 50 percent of an interest in or stock of a parent company.
9024. "Class day" means a day a student is scheduled to attend
class session, or for students receiving instruction through distance
education, any calendar day except Saturday, Sunday, or any holiday
enumerated in Section 6700 of the Government Code.
9025. "Class session" means part of a class day that an
institution conducts instruction in a particular subject.
9026. "Commence operations" means an institution has begun to
provide educational programs.
9027. "Continuing education" means instruction in subjects that
licensees are required to take solely for the purpose of continued
licensure, or to enhance their skills and knowledge within their
particular profession, occupation, trade, or career field.
9028. "Curriculum" means an organized set of courses or modules
of instruction that are prerequisites to the award of a degree or
diploma.
9029. "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 330 days if payment is due less
frequently.
9030. "Degree" means a recognized educational credential awarded
by an institution that signifies satisfactory completion of the
requirements of a postsecondary educational program at the associate'
s level or above.
9031. "Degree title" means the designated subject area of the
educational program that appears on the face of the document awarded
to a student.
9032. "Diploma" means a recognized educational credential, other
than a degree, awarded by an institution that signifies satisfactory
completion of the requirements of a postsecondary educational program
below the associate's level. A diploma is also known as a
certificate.
9033. "Director" means the Director of Consumer Affairs.
9034. "Distance education" means transmission of instruction to
students at a location separate from the institution.
9035. "Document of record" means any document required to be
maintained by this chapter.
9036. "Educational materials" means textbooks, supplies,
implements, tools, machinery, computers, electronic devices, or other
goods related to any education, training, or experience required for
participation in an educational program.
9037. "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, skill, and experience leading to
the award of a recognized educational credential such as a degree or
diploma.
9038. "Educational program approval" means authorization by the
bureau, another government agency of this state, or a federal
government agency, to provide educational programs, and is an element
of an approval to operate.
9039. "Enrollment" means the execution of an enrollment
agreement.
9040. "Enrollment agreement" means a written contract between a
student and institution concerning an educational program.
9041. "Faculty" means the instructional staff of an institution,
whether these persons are employees or independent contractors.
9042. "Graduate" means an individual that has been awarded a
degree or diploma.
9043. "Institution" means any private postsecondary educational
institution, including its branch campuses and satellite locations.
9044. "Institutional charges" means charges for an educational
program paid directly to an institution.
9045. "Institution manager" means an individual who is a member
of an institution's management.
9046. "Instruction" means an institution's specific, formal
arrangements in which its faculty present a part of the curriculum.
9047. "License and examination preparation" means instruction
designed to assist students to prepare for an examination for
licensure, or offered for the sole purpose of providing continuing
education in subjects licensees are required to take as a condition
of continued licensure.
9048. "Licensure" includes any license, certificate, permit, or
similar credential that a person must hold to lawfully engage in a
profession, occupation, trade, or career field.
9049. "Main campus" means the institution's sole or primary
teaching location.
9050. "Noninstitutional charges" means charges for an educational
program paid to an entity other than an institution that are
specifically required for participation in an educational program.
9051. "Owner" means an individual in the case of a sole
proprietorship, partners in a partnership, members in a limited
liability company, or shareholders in a corporation.
9052. "Ownership" means a legal or equitable interest in an
institution, including ownership of assets or stock.
9053. "Parent company" means a partnership, limited liability
company, or corporation that owns more than 50 percent of the stock
or interest in an institution.
9054. "Period of attendance" means a semester, quarter, or
trimester for educational programs measured in credit hours and the
entire educational program if measured in clock hours.
9055. "Person" means a natural person or a business organization,
irrespective of its form.
9056. "Person in control" means a person who by his or her
position's authority or conduct directs the management of an
institution.
9057. "Postsecondary education" means a formal institutional
educational program whose curriculum is designed primarily for
students who have completed or terminated their secondary education
or are beyond the compulsory age of secondary education, including
programs whose purpose is academic, vocational, or continuing
professional education.
9058. "Private postsecondary educational institution" means a
private entity with a physical presence in this state that offers
postsecondary education to the public for an institutional charge.
9059. "Recruiter" means an employee of an institution whose
principal job responsibilities are the recruitment of students other
than on the institution's premises.
9060. "Recruitment" means actions taken by recruiters seeking
enrollment of students.
9061. "Reporting period" means the institution's fiscal year or
any yearly period designated by the bureau to be covered in the
institution's annual report.
9062. "Satellite location" means an auxiliary classroom or
teaching site within 50 miles of the branch or main location.
9063. "Satisfactory academic progress" means the qualitative and
quantitative measures an institution uses to assess a student's
academic progress, including progress towards the completion of his
or her educational program within 150 percent of the published length
of the educational program.
9064. "Shift in control" means a change in the ownership of an
institution where a person who previously did not own at least 25
percent of the stock or interest in an institution or its parent
company acquires ownership of at least 25 percent of the stock or
interest in the institution or its parent company.
9065. "Site" means a main or branch campus or satellite location.
9066. "Teach-out" means the arrangements an institution makes for
its students to complete their educational programs when the
institution ceases to operate.
9067. "Third-party payer" means an employer, government program,
or other entity that pays a student's total charges when no separate
agreement for the repayment of the charges exists between the
third-party payer and the student.
9068. "To offer to the public" means to advertise, publicize,
solicit, or recruit.
9069. "To operate" means to establish, keep, or maintain any
facility or location in this state where or from which or through
which postsecondary educational programs are provided.
9070. "Total charges" means the sum of institutional and
noninstitutional charges.
9071. "Vocational associate's degree" means an associate's degree
awarded to students in an educational program consisting of
instruction in preparation for employment in a profession,
occupation, trade, or career field.
9072. "Vocational diploma program" means a diploma awarded to
students in an educational program consisting of instruction in
preparation for employment in a profession, occupation, trade, or
career field.
9073. "Year" means a calendar year.
Article 4. Exemptions
9074. 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 continuing education where the
institution or the program is approved, certified, or sponsored by
any of the following:
(1) A government agency, other than the bureau, that licenses
persons in a particular profession, occupation, trade, or career
field.
(2) 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.
(3) A bona fide trade, business, or professional organization.
(e) (1) An institution owned, controlled, and operated and
maintained by a bona fide church, religious denomination, or
religious organization composed of multidenominational members of the
same well-recognized religion, 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 church,
religious denomination, or 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 these provisions 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,"
or "bachelor of religious studies," or "master of divinity," or
"doctor of divinity."
(6) The use of the degree titles "associate of arts" or "associate
of science," "bachelor of arts" or "bachelor of science," "master of
arts" or "master of science," or "doctor of philosophy" or "Ph.D."
shall only be awarded by institutions approved to operate under
former Article 7 (commencing with Section 94830) of Chapter 7 of Part
59 of Division 10 of Title 3 of the Education Code, as it read on
June 30, 2007, or meeting the requirements for an exemption in this
article.
(f) An institution that is accredited by a regional accrediting
body recognized by the United States Department of Education.
(g) An institution certified to offer educational programs in
flight instruction and aircraft maintenance by the Federal Aviation
Administration.
(h) An institution 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.
(i) An institution that solely offers educational programs in law
leading to a Juris Doctor (J.D.), Master of Laws (LL.M.), or Doctor
of Jurisprudence (J.S.D.) degree, or similar degrees signifying the
award of a bachelor's, master's, or doctorate in law.
(j) An institution giving instruction, or offering to give
instruction, for driving motortrucks of three or more axles that are
more than 6,000 pounds unladen weight.
(k) An institution that is a nationally accredited agency
recognized by the United States Department of Education that is in
compliance with all of the following requirements:
(1) The institution's cohort default rate on guaranteed student
loans does not exceed 15 percent for the three most recent years as
published by the United States Department of Education.
(2) The institution has operated in this state for at least 15
years.
(3) The institution submits to the bureau copies of the most
recent IRS Form 990.
(4) The institution pays fees in accordance with this chapter.
(5) The institution exclusively confers degrees upon the
completion of a course of study of two or more years.
Article 5. Bureau Powers and Duties
9075. The Bureau for Private Postsecondary Education, as
established by Section 6 of Chapter 635 of the Statutes of 2007, is
continued in existence and shall commence operations. This chapter
establishes the functions and responsibilities of the bureau, for the
purposes of Section 6 of Chapter 635 of the Statutes of 2007. The
bureau 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 bureau's highest priority.
9076. (a) The powers and duties set forth in this chapter are
vested in the Director of Consumer Affairs, who may delegate them to
a bureau chief, subject to the provisions of this section.
(b) The bureau chief shall be appointed by the Governor, and is
exempt from the State Civil Service Act pursuant to Part 2
(commencing with Section 1850) of Division 5 of Title 2 of the
Government Code.
(c) Every power granted to, or duty imposed upon, the bureau under
this chapter shall be exercised and performed in the name of the
bureau, subject to any conditions and limitations the director may
prescribe. The bureau chief may delegate any powers or duties to a
designee.
(d) As may be necessary to carry out this chapter, the director,
in accordance with the State Civil Service Act, may appoint and fix
the compensation of personnel.
9076.5. The bureau may adopt and enforce regulations to implement
this chapter pursuant to the Administrative Procedure Act in Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code. The bureau may adopt emergency regulations
that shall become effective immediately pursuant to Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code.
9077. (a) To enable the bureau to exercise its powers and to
perform its duties, the bureau shall adopt by regulation a fee
schedule. The fee schedule shall set forth the fees that
institutions, and others subject to this chapter, shall pay.
(b) All fees collected shall be deposited in the Private
Postsecondary Education Administration Fund. These fees, along with
any accrued interest, shall be the means of funding the
implementation of this chapter.
(c) The fee schedule shall be publicly available.
(d) The bureau shall use an objective process to assess the costs
of exercising its powers and performing its duties, and shall use
this assessment as the basis for constructing the fee schedule.
9078. The bureau may maintain an Internet Web site with
information provided by institutions and verified by the bureau,
which shall include, but need not be limited to, all of the
following:
(a) Completion rates.
(b) Placement rates for educational programs represented that lead
to gainful employment in a recognized occupation.
(c) Total charges for specific educational programs.
(d) Starting salaries of graduates, if provided by an institution
during enrollment.
(e) License examination passage rates, if provided by an
institution during enrollment.
(f) Status of the institution's approval to operate.
(g) Institutional refund policies.
9079. The bureau may 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 bureau
for assistance. The bureau may accomplish the purposes of this
section in cooperation with the department.
9080. The bureau may appoint an advisory committee that shall
consist of, but not necessarily be limited to, representatives of
institutions, student representatives, and employers who hire
students.
9081. The bureau 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.
9082. The bureau 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. The members of visiting committees shall receive reimbursement
from the institution that is the subject of an evaluation for their
actual travel and per diem expenses incurred during the evaluation.
9083. (a) Any individual serving on a visiting committee who
provides information to the bureau, 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.
9084. For all complaints that have reached final disposition, the
bureau shall, upon request, make available to members of the public
the nature and disposition of complaints against an institution.
Article 6. Approval to Operate
9085. The bureau 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 facilities, instructional equipment, and materials are
sufficient to enable students to achieve the educational program's
goals.
(c) The institution maintains a withdrawal policy and provides
refunds.
(d) The directors, administrators, and instructors are properly
qualified.
(e) The institution is financially sound and capable of fulfilling
its commitments to students.
(f) That, upon satisfactory completion of an educational program,
the institution gives students a document signifying the degree or
diploma awarded.
(g) Adequate records and standard transcripts are maintained and
are available to students.
(h) The institution is maintained and operated in compliance with
applicable ordinances and laws.
9086. Except as exempted in Article 4 (commencing with Section
9074), no person shall open, conduct, or do business as a private
postsecondary educational institution in this state without obtaining
an approval to operate under this chapter.
9087. An approval to operate shall be granted only after an
applicant has presented sufficient evidence to the bureau that the
applicant has the capacity to satisfy the minimum operating
standards.
9088. The bureau shall adopt, by regulation, the process and
procedures whereby an applicant may obtain an approval to operate.
9089. An approval to operate shall be for a term of five years.
9090. (a) The bureau shall grant an institution that is
accredited an approval to operate by means of its accreditation.
(b) The term of the approval to operate shall be coterminous with
the term of accreditation.
(c) Institutions that are granted an approval to operate by means
of the institution's accreditation shall comply with all other
applicable standards in this chapter.
9091. (a) The bureau 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.
9092. If an agency of this state other than the bureau or of the
federal government provides an approval to offer an educational
program, that agency's educational program approval shall satisfy the
requirements of this article without any further review by the
bureau. The bureau shall incorporate that educational program into
the institution's approval to operate when the bureau receives
documentation signifying the conferral of the educational program
approval by that agency.
Article 7. Substantive Changes to an Approval to Operate
9093. If an institution wishes to make a substantive change to
its approval to operate, the institution shall receive prior
authorization from the bureau. If the institution makes the
substantive change without prior bureau authorization, the
institution's approval to operate may be suspended or revoked.
9094. The following changes to an approval to operate are
considered substantive changes and require prior authorization:
(a) A change in educational objectives, including an addition of a
new diploma or a degree educational program unrelated to the
approved educational programs offered by the institution.
(b) A change in ownership.
(c) A shift in control.
(d) A change in business organization form.
(e) A change of location.
(f) A change of name.
(g) A significant change in the method of instructional delivery.
(h) An addition of a separate facility more than one mile from the
main or branch campus.
9095. The bureau shall adopt, by regulation, the process and
procedures whereby an institution shall seek authorization for
substantive changes.
9096. (a) An institution that has been granted an approval to
operate by means of accreditation may make a substantive change in
accordance with the institution's accreditation standards.
(b) The institution shall notify the bureau of the substantive
change.
Article 8. Fair Business Practices
9097. 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.
(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
instruction is conducted at a physical location without including in
all advertising or promotional material the physical location of the
instruction.
(f) Advertise, or indicate in promotional material, that the
institution is accredited, unless the institution has been accredited
by an accrediting agency.
(g) 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.
(h) 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).
(i) Pay any consideration to a person to induce that person to
sign an enrollment agreement for an educational program.
(j) Use a name in any manner improperly implying either 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.
(k) 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 or placement, or financial information, including any of
the following:
(1) A financial report filed with bureau.
(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 bureau.
(l) Willfully falsify, destroy, or conceal any document of record
while that document of record is required to be maintained by this
chapter.
(m) 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 bureau has granted an institution
approval to operate, the institution may indicate that the
institution is "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 bureau.
(2) The approval to operate indicates that the institution exceeds
minimum state standards as set forth in this chapter.
(n) Direct any individual to perform an act that violates this
chapter, to refrain from reporting unlawful conduct to the bureau or
another government agency, or to engage in any unfair act to persuade
a student not to complain to the bureau or another government
agency.
(o) 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.
9098. (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 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.
(d) An institution shall not move the location of class
instruction more than 10 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 bureau grants, approval
to change the location. The bureau shall grant the application within
60 days if the bureau, after notice to affected students and an
opportunity for them to be heard as prescribed by the bureau,
concludes that the change in location would not be unfair or unduly
burdensome to students. The bureau 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.
9099. If an institution offers an educational program in a
profession, occupation, trade, or career field that requires
licensure in this state, the institution shall have an educational
program approval to conduct that educational program, if applicable.
9099.5. (a) Institutions that offer short-term programs designed
to be completed in one term or four months, whichever is less, may
require payment of all tuition and fees on the first day of
instruction.
(b) For those programs designed to be four months or longer, an
institution shall not require more than one term or four months of
advance payment of tuition at a time. When 50 percent of the program
has been offered, the institution may require full payment.
(c) The limitations in this section shall not apply to federal and
state financial aid payments received by an institution.
(d) At the student's option, an institution may accept payment in
full for tuition and fees after the student has been accepted and
enrolled and the date for commencement of classes is disclosed on the
enrollment agreement.
Article 9. Recruiters
9100. An institution's recruiters shall be employees.
9101. (a) An institution shall issue identification to each
recruiter identifying the recruiter and the institution.
(b) The recruiter shall have the issued identification with him or
her while recruiting.
Article 10. Enrollment Agreements and Disclosures
9102. A student shall enroll solely by means of executing an
enrollment agreement. The enrollment agreement shall be signed by the
student and by an authorized employee of the institution.
9103. (a) An institution shall provide to students, prior to
enrollment, a catalog or brochure containing, at a minimum, the
following information:
(1) The institution's admissions policies, including the
institution's policies regarding the acceptance of credits earned at
other institutions or through challenge examinations and achievement
tests.
(2) A description of the instruction provided in the educational
program in which the student is interested, including the length of
the educational program, and all of the professions, occupations,
trades, or career fields, if any, to which the educational program is
represented to lead.
(3) The number of credit hours, clock hours, or other increments
required for completion of the educational program.
(4) The institution's attendance, leave-of-absence, cancellation,
withdrawal, and refund policies.
(5) The faculty and their qualifications.
(6) The schedule of total charges necessary for a period of
attendance or the entire educational program.
(7) A statement reporting whether the institution participates in
federal and state financial aid programs, and if so, a statement
concerning student eligibility.
(8) A description of a student's rights and responsibilities under
the Student Tuition Recovery Fund.
(9) If an institution provides placement services, a description
of the nature and extent of the placement services.
(b) An enrollment agreement signed by a student is not enforceable
unless the student has first received the institution's catalog or
brochure containing the information required by this section.
9104. 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 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.), as it is, from time to time, amended. The
student may 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.
9105. (a) During the enrollment process, an institution offering
educational programs designed to lead to positions in a profession,
occupation, trade, or career field requiring licensure shall exercise
reasonable care to determine that the student will not be ineligible
to obtain licensure in the profession, occupation, trade, or career
field at the time of the student's graduation for reasons such as
age, apparent physical characteristic, or relevant past criminal
conviction. The institution shall not execute an enrollment agreement
with that student unless the student's stated objective is other
than licensure.
(b) During the admission or enrollment process, an institution
shall not offer job placement assistance or discuss salaries. After a
student has completed more than 60 percent of a program, the
institution may offer job placement assistance.
9106. The enrollment agreement shall include all of the following
required terms:
(a) On the first page of the enrollment agreement, in at least
12-point, boldface type, the following statement:
"Any questions a student may have regarding this enrollment agreement
that have not been satisfactorily answered by the institution may be
directed to the Bureau for Private Postsecondary Education at
(address), Sacramento, CA (ZIP Code), (Internet Web site address),
(telephone and fax numbers)."
(b) The name and description of the educational program, including
the total number of credit hours, clock hours, or other increment
required to complete the educational program.
(c) The name and address of the institution and the address where
class sessions shall be held.
(d) A schedule of total charges, including a list of any charges
that are nonrefundable, clearly identified as nonrefundable charges.
(e) In underlined capital letters on the same page of the
enrollment agreement in which the student's signature is required,
the total charges that the student is obligated, upon enrollment, to
pay for a period of attendance or the entire educational program.
(f) A statement that the student is responsible for paying the
state assessment amount for the Student Tuition Recovery Fund.
(g) A clear and conspicuous statement that the enrollment
agreement is legally binding when signed by the student and accepted
by the institution.
(h) The following statement in at least 12-point, boldface type
above the space for the student's signature:
"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."
9107. The following disclosures shall be made in writing before
execution of the enrollment agreement:
(a) A "School Performance Fact Sheet" that discloses the following
information:
(1) Completion rates, as
calculated pursuant to Article 16 (commencing with Section 9131), if
the institution makes a claim to students regarding completion rates.
(2) Placement rates, as calculated pursuant to Article 16
(commencing with Section 9131), if the institution makes a claim to
students regarding placement rates.
(3) Starting salaries, if the institution makes a claim to
students regarding starting salaries.
(4) License examination passage rates if the institution makes a
claim to students regarding the license examination passage rates of
its graduates.
(5) 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."
(b) A disclosure on transfer of credit in at least 12-point type
that reads:
"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. 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."
(c) (1) A disclosure with a clear and conspicuous caption, "BUYER'
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
fifth day after enrollment, whichever is later.
(2) The disclosure shall contain the institution's refund policy,
together with examples of the application of the 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,
including the title and address of the institution manager to whom
the notice shall be sent or delivered.
(d) A statement, provided by the bureau, specifying 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.
(e) 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.
(f) 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.
(g) A statement specifying that the institution is not a public
institution.
(h) A statement specifying whether the institution has a pending
petition in bankruptcy or has had a petition in bankruptcy filed
against it.
9108. Each disclosure in Section 9107 shall be individually
acknowledged by a student's initials or signature, or on a single
form acknowledging receipt of the individually identified
disclosures.
9109. A student may not waive any required term, or receipt of
any disclosure, required by this article.
9110. An enrollment agreement shall be written in language that
is easily understood. If English is not a student's primary language,
and the student is unable to understand the terms and conditions of
the enrollment agreement, the student shall have the right to obtain
a clear explanation of the terms and conditions and all cancellation
and refund policies in his or her primary language.
9111. If the recruitment leading to enrollment was conducted in a
language other than English, the enrollment agreement, disclosures,
and statements shall be in that language.
9112. An enrollment agreement shall become operative when the
student attends the first class session.
9113. An enrollment agreement shall not contain a provision that
requires a student to invoke an internal institutional dispute
procedure before enforcing any contractual or other legal rights or
remedies. This does not preclude inclusion of a term in the
enrollment agreement requiring binding arbitration as authorized
under the Federal Arbitration Act pursuant to Title 9 of the United
States Code or other alternative dispute resolution procedures.
9114. An enrollment agreement is not enforceable unless, at the
time of execution of the enrollment agreement, the institution held
an approval to operate.
9115. When a student's total charges are paid by a third-party
payer, the institution shall provide the student with a form
containing all of the following information in lieu of an enrollment
agreement:
(a) The name and address of the institution and the address where
class sessions will be held.
(b) The name and description of the educational program, including
the total number of credit hours, clock hours, or other increment
required to complete the educational program.
(c) A clear statement that the student is not eligible for
protection and recovery from the Student Tuition Recovery Fund.
Article 11. Consumer Loans to Students
9116. An institution extending credit or lending money to an
individual for institutional and noninstitutional charges for an
educational program shall cause any note, instrument, or other
evidence of indebtedness taken in connection with that extension of
credit or loan to be conspicuously marked on its face in at least
12-point type with the following notice:
"NOTICE"
"YOU MAY ASSERT AGAINST THE HOLDER OF THE PROMISSORY NOTE YOU SIGNED
IN ORDER TO FINANCE THE COST OF INSTRUCTION ALL OF THE CLAIMS AND
DEFENSES THAT YOU COULD ASSERT AGAINST THIS INSTITUTION, UP TO THE
AMOUNT YOU HAVE ALREADY PAID UNDER THE PROMISSORY NOTE."
9117. A note, instrument, or other evidence of indebtedness
relating to payment for an educational program is not enforceable by
an institution unless, at the time of execution of the note,
instrument, or other evidence of indebtedness, the institution held
an approval to operate.
9118. In making consumer loans to students, an institution shall
also comply with the requirements of the Federal Truth in Lending Act
pursuant to Title 15 of the United States Code.
Article 12. Cancellations, Withdrawals, and Refunds
9119. (a) An institution that participates in the federal student
financial aid programs complies with this article by complying with
applicable regulations of the federal student financial aid programs
under Title IV of the Higher Education Act of 1965.
(b) 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.
(c) The institution shall also provide a pro rata refund of
nonfederal student financial aid program moneys paid for
institutional charges to students who have completed 60 percent or
less of the period of attendance.
9120. 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 class day after enrollment, whichever is later.
(c) The bureau 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.
9121. 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 bureau for an alternative method of
calculating tuition refunds.
9122. A student may not waive any provision of this article.
Article 13. Student Tuition Recovery Fund
9123. The bureau 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.
9124. 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 bureau,
without regard to fiscal year, for the purposes of this article.
9125. The amount in the Student Tuition Recovery Fund shall not
exceed twenty-five million dollars ($25,000,000) at any time.
Article 14. Orderly Institutional Closure and Teach-outs
9126. At least 30 days prior to closing, the institution shall
notify the bureau 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 participant 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.
9127. 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
bureau 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 student
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.
Article 15. Completion and Placement Requirements
9128. An institution subject to this chapter shall report
annually to the bureau, and disclose to students the number and
percentage of students who began the institution's program and
successfully completed the entire program for the preceding calendar
year. The rate shall be calculated by determining the percentage of
students enrolled in the program who were originally scheduled, at
the time of enrollment, to complete the program in that calendar year
and who successfully completed the program. This information shall
be documented and maintained by the institution with all facts needed
to substantiate the information. An institution may include
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.
9129. If an institution's accreditation agency has quantitative
student completion and placement requirements in its accreditation
standards, an institution is in compliance with this article by
complying with the accreditation standards.
9130. An institution shall use the data derived from the
regulatory standards or the accreditation standards in the Student
Performance Fact Sheet.
Article 16. Compliance, Enforcement, Process, and Penalties
9131. The bureau shall determine an institution's compliance with
the requirements of this chapter. The bureau shall have the power to
require annual and other reports that institutions shall file with
the bureau, to send staff to an institution's sites, and to require
documents and responses from an institution to monitor compliance.
When the bureau has reason to believe that an institution may be out
of compliance, it may conduct an investigation of the institution.
9131.5. As part of its compliance program, the bureau may perform
random, unannounced inspections of institutions.
9132. The bureau may provide the institution with the opportunity
to remedy noncompliance, impose fines, place the institution on
probation, or suspend or revoke the institution's approval to operate
as it deems appropriate to the severity of an institution's
violations of this chapter, and the harm caused to students.
9133. As much as is practicable, the bureau shall seek to resolve
instances of noncompliance, including the use of alternative dispute
resolution procedures in Chapter 4.5 (commencing with Section
11420.10) of Part 1 of Division 3 of Title 2 of the Government Code.
9134. (a) As part of the compliance program, an institution shall
submit an annual report to the bureau, under penalty of perjury, by
July 1 of each year, or another date designated by the bureau, 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) Educational program completion rates.
(5) Educational program placement rates.
(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) Additional information deemed by the bureau to be reasonably
required to ascertain compliance with this chapter.
(b) The bureau shall prescribe the annual report's format and
method of delivery.
9135. (a) Bureau staff who, during an inspection of an
institution, detect a minor violation of this chapter, or regulations
adopted pursuant to this chapter, shall issue a notice to comply
before leaving the institution. The bureau shall establish an
informal appeal process through regulation, which shall not be
subject to the provisions of the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing
with Section 11370), Chapter 4.5 (commencing with Section 11400), and
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code). Unless a writ of mandate is filed,
a citation issued, or a disciplinary proceeding instituted, a notice
to comply shall not be considered a public record, and shall not be
disclosed pursuant to a request under the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of
Title 1 of the Government Code).
(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 bureau.
(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 bureau staff.
Immediate compliance may be noted in the inspection report, but the
institution shall not be subject to any further action by the bureau.
(f) A notice to comply shall be the only means the bureau shall
use to cite a minor violation discovered during an inspection. The
bureau shall not take any other enforcement action specified in this
chapter against an institution that has received a notice to comply
if the institution complies with this section.
(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 bureau 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 bureau may take administrative
enforcement action.
(i) A minor violation is a deviation from the requirements of this
chapter, or regulations adopted pursuant to this chapter, that, in
the determination of the bureau, has not or reasonably will not
result in immediate harm to students and is not either:
(1) Committed knowingly, willfully, or intentionally.
(2) A repeated violation or a violation committed by a
recalcitrant violator that has engaged in a pattern of neglect or
disregard for the requirements of this chapter.
9136. (a) As a consequence of an investigation, the bureau may
issue a citation to an institution for violation of this chapter, or
regulations adopted pursuant to this chapter.
(b) The citation may contain either 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) An administrative fine not to exceed five thousand dollars
($5,000) for each violation. The bureau 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.
(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 bureau shall select an informal
hearing pursuant to Chapter 4.5 (commencing with Section 11445.10)
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 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 Education Administration Fund.
9137. (a) As a consequence of an investigation, the bureau 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) Material or repeated violations of this chapter or regulations
adopted pursuant to this chapter that have resulted in harm to
students.
(b) The bureau shall adopt regulations governing probation and
suspension of an approval to operate.
(c) The bureau may seek reimbursement for the costs of an
investigation pursuant to Section 125.3.
(d) An institution shall not be required to pay the cost of
investigation to more than one agency.
9138. (a) If the bureau 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 Chapter 4.5 (commencing with
Section 11460.10) of Part 1 of Division 3 of Title 2 of the
Government Code.
(b) The bureau shall adopt regulations to give this subdivision
effect pursuant to Section 11460.20 of the Government Code.
9139. (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.
9140. As consequence of an adverse administrative action against
an institution, the institution may request a hearing pursuant to
Chapter 4.5 (commencing with Section 11445.10) or Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code.
9141. (a) A student who claims damage or loss as a result of an
institution's violation of this chapter, or of regulations adopted
pursuant to this chapter, may file a complaint with the bureau
against the institution. The complaint shall set forth the alleged
violation, and shall contain any other information as may be required
by the bureau.
(b) Taking into account the nature and seriousness of the alleged
violation, the bureau 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 bureau may take appropriate
administrative enforcement action.
9142. (a) A student or graduate may bring an action for a
material violation of this chapter that he or she alleges is the
proximate cause of an injury in fact. Upon prevailing in such an
action, the student is entitled to relief pursuant to Section 3333 of
the Civil Code.
(b) The remedies provided in this section supplement, and do not
supplant, the remedies and penalties under other provisions of law.
9143. 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 bureau 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.
9144. 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 bureau. The bureau shall
furnish the agent's name, address, and telephone number to a person
upon request.
9145. Notwithstanding any other provision of law, the bureau
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 bureau
pursuant to this chapter.
Article 17. Severability
9146. The provisions of this chapter are severable. If any
provision of this chapter or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
Article 18. Termination
9147. This chapter shall remain in effect until January 1, 2012,
and as of that date is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2012, deletes or extends
the date on which it becomes repealed.
SEC. 6. Section 11105.8 is added to the Vehicle Code, to read:
11105.8. A person may not own or operate an institution, or give
instruction, for the driving of motortrucks of three or more axles
that are more than 6,000 pounds unladen weight unless all of the
following conditions are met:
(a) The institution has been approved by the Department of Motor
Vehicles.
(b) The institution, at the time of application and thereafter,
maintains both of the following:
(1) Proof of compliance with liability insurance requirements that
are the same as those established by the Department of Motor
Vehicles for a driving institution owner, pursuant to Section 11103,
unless the Department of Motor Vehicles deems it necessary to
establish a higher level of insurance coverage.
(2) A satisfactory safety rating by
the Department of the California Highway Patrol is established
pursuant to Division 14.8 (commencing with Section 34500).
(c) The institution, at all times, shall maintain the vehicles
used in driving training in safe mechanical condition. The
institution shall keep all records concerning the maintenance of the
vehicles.
(d) The driving instructions meet the requirements set forth in
Section 11104.
(e) Any other terms and conditions required by the Department of
Motor Vehicles to protect the public safety or to meet the
requirements of this chapter.
SEC. 7. 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.