BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 48
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 48 (Portantino and Niello)
          As Amended  September 4, 2009
          Majority vote
           
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          |ASSEMBLY:  |70-4 |(June 2, 2009)  |SENATE: |     |(September 11, |
          |           |     |                |        |     |2009)          |
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                                                  (vote not available)

          Original Committee Reference:    HIGHER ED.  

           SUMMARY  :  Renames the Bureau for Private Postsecondary and  
          Vocational Education (Former Bureau) as the Bureau for Private  
          Postsecondary Education (Bureau) within the Department of  
          Consumer Affairs (DCA) and provides for Bureau oversight and  
          regulation of private postsecondary institutions operating in  
          California.  Specifically,  this bill  :  

          1)Requires the Bureau to disclose on its internet website  
            information on suspensions and revocations of an institution's  
            approval to operate, as well as any enforcement action,  
            including the issuance of a notice to comply, taken against an  
            institution by the Bureau.

          2)Authorizes the Bureau to take specified action to cease  
            unlawful advertising including disconnecting the telephone  
            services of an institution if the Bureau finds that the  
            institution is advertising in a telephone directory without an  
            approval to operate issued by the Bureau.

          3)Removes the Former Bureau from provisions of law requiring  
            ongoing review by the Joint Committee on Boards, Commissions,  
            and Consumer Protection.  

          4)Establishes the California Private Postsecondary Education Act  
            of 2009 (Act) and provides that any statutory or regulatory  
            reference to the Private Postsecondary and Vocational  
            Education Reform Act (Former Act) or Former Bureau shall be  
            construed as referring to the Act and Bureau. 

          5)Makes various findings and declarations regarding the  
            importance of private postsecondary institutions, previous  
            failures to regulate these institutions, the importance of  








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            Bureau oversight of private postsecondary institutions, and  
            the need for ongoing review of Bureau activities by the  
            Legislature.  

          6)Provides for a transition to the provisions of the Act,  
            including:

             a)   Any institution approved to operate by the Former Bureau  
               on June 30, 2007, shall maintain that approval for three  
               years after the expiration date of the approval;

             b)   An institution that had an application to renew an  
               approval to operate pending before the Former Bureau prior  
               to January 1, 2006, shall be granted approval until 2012,  
               and an institution that submitted an application to renew  
               an approval to operate after January 1, 2006, shall be  
               granted approval to operate until 2013; students enrolling  
               in these institutions are required to be notified in  
               writing by the institution that the institution's renewal  
               application was not reviewed by the Bureau; 

             c)   Provides that the Bureau may determine that the  
               application for approval to operate that was pending with  
               the Former Bureau satisfies the requirements of the new  
               application for an approval to operate; 

             d)   The Bureau shall adopt emergency regulations that  
               conform to the provisions of the Act, including repealing  
               provisions no longer relevant, by February 1, 2010, and  
               these regulations shall become permanent through the  
               regular rulemaking process within one year of the date of  
               enactment of the Act;

             e)   The Bureau shall have possession and control of all  
               records, supplies, and real property used by the Former  
               Bureau;

             f)   The Private Postsecondary and Vocational Education  
               Administration Fund be continued and renamed to the Private  
               Postsecondary Education Administration Fund (PPEAF);

             g)   The Student Tuition Recovery Fund (STRF) be continued  
               and provides that processing of claims pending before STRF  
               that were received prior to July 1, 2007, or any claims  
               received between July 1, 2007, and December 31, 2009.   








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               Provides that a student's right to recover from STRF shall  
               be based on the law that was in effect at the time the  
               student enrolled in the institution and paid a STRF fee;

             h)   An institution that had an application for an approval  
               to operate pending before the Former Bureau on July 1,  
               2007, and an institution that did not have a pending  
               application filed with the Former Bureau on June 30, 2007,  
               that began operations on or after July 1, 2007, may  
               continue to operate but must comply with the Act and submit  
               an application for approval to operate within six months of  
               the application becoming available; students enrolling in  
               these institutions must be notified in writing by the  
               institution during the enrollment process that the  
               institution's application for approval to operate was not  
               reviewed by the Bureau; and these institutions shall not  
               use the terms "approval," "approved," "approval to  
               operate," or "approved to operate" without clearly stating  
               that the application for approval to operate has not yet  
               been reviewed by the Bureau;

             i)   Any matter, except a STRF claim, submitted to the Former  
               Bureau prior to July 1, 2007, shall remain pending, and  
               with respect to deadlines, no time shall be deemed elapsed  
               from July 1, 2007 through January 1, 2010.  Provides that  
               student complaints received from July 1, 2007 through  
               December 31, 2008, shall continue to be duly recorded and  
               investigated by the Bureau; and,  

             j)   For any claim or cause of action that arose prior to  
               June 30, 2007, notwithstanding the inoperative status or  
               repeal of the Former Act, final judgments and/or legal  
               remedies available under the Former Act will be continued.

          7)Provides that the Bureau shall adopt a process whereby an  
            institution exempt under this article may request and obtain  
            verification of their exempt status and allows the Bureau to  
            charge a fee to the institution to cover any costs associated  
            with the Bureau verifying the exemption.  Exempts from the  
            requirements of the Act and from the oversight of the Bureau:

             a)   Institutions offering solely vocational or recreational  
               educational programs;

             b)   Institutions offering programs sponsored by trade,  








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               business, professional, or fraternal organizations solely  
               for that organization's members;

             c)   Institutions operated by the federal or state government  
               or their subdivisions;

             d)   Institutions offering test preparation for examinations  
               required for admission to postsecondary institutions and  
               continuing education or license and examination preparation  
               where the institution or program is certified or sponsored  
               by a government agency licensing persons in a particular  
               field, a state-recognized professional licensing body, or a  
               trade, business, or professional organization;

             e)   Institutions owned, controlled, and operated and  
               maintained by a non-profit religious organization that meet  
               several other outlined requirements;

             f)   Institutions that provide solely educational programs  
               for total charges of $2500 or less, and do not offer  
               degrees, with no part of the charges paid by state or  
               federal student financial aid programs.  Allows the Bureau  
               to adjust this cost threshold based upon the California  
               Consumer Price Index;

             g)   Law schools that are accredited by the Council of the  
               Section of Legal Education and Admissions to the Bar of the  
               American Bar Association or a law school or law study  
               program that is subject to the approval, regulation, and  
               oversight of the Committee of Bar Examiners;

             h)   Nonprofit public benefit corporations that are organized  
               specifically to provide workforce development or  
               rehabilitation services and accredited by an accrediting  
               organization for workforce development or rehabilitation  
               services recognized by the Department of Rehabilitation;

             i)   Nonprofit institutions that have been accredited for at  
               least 10 years, that have operated in the state for at  
               least 25 years continuously, and that meet several other  
               outlined conditions;  

             j)   Institutions accredited by the Accrediting Commission  
               for Senior Colleges and Universities or the Accrediting  
               Commission for Community and Junior Colleges and  








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               Universities of the Western Association of Schools and  
               Colleges (WASC); and,
          
             aa)  Until January 1, 2016, all other institutions that are  
               accredited by a non-WASC Regional Accrediting Agency,  
               except that these institutions are required to participate  
               in the STRF.

          8)Provides the Bureau with powers and duties, including:

             a)   Provides the Director of DCA (Director) with the powers  
               set forth in the Act; allows the Director to delegate the  
               duties to a bureau chief, appointed by the Governor,  
               subject to Senate Confirmation, and exempt from the State  
               Civil Service Act; provides that the bureau chief may  
               delegate any powers and duties to a designee; and provides  
               that the Director may, in accordance with the State Civil  
               Service Act, appoint and fix compensation of personnel;

             b)   Requires the Bureau to, in accordance with the  
               Administrative Procedures Act, adopt regulations by January  
               1, 2010 necessary to implement the Act in accordance with  
               existing law; requires the Bureau to develop and implement  
               an enforcement program to implement the Act, including a  
               plan for investigating complaints filed with the Bureau;  
               and requires the Bureau to develop a program to proactively  
               identify unlicensed institutions, identify material or  
               repeated violations of this chapter and regulations, and  
               take all appropriate legal action;

             c)   Requires the Bureau to maintain a Web site, to be kept  
               current, with information provided by the institutions and  
               establishes that the website shall include a searchable  
               directory of all approved institutions, the status of the  
               institution's approval to operate, the information provided  
               by the institution in the annual report and the Student  
               Performance Fact Sheet, and specified information regarding  
               pending and finalized disciplinary actions taken against  
               the institution, and an explanation of the Bureau's  
               transition plan and scope of authority; 

             d)   Requires the Bureau to provide all of the aforementioned  
               information to the California Postsecondary Education  
               Commission;









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             e)   Requires the Bureau to conduct outreach to secondary and  
               postsecondary school students about how to make informed  
               decisions when selecting an institution and allows the  
               Bureau to conduct workshops to assist institutions in  
               complying with the provisions of the Act;
          
             f)   Establishes a 12-member advisory committee to be  
               comprised of consumer advocates, past or current students  
               of institutions, representatives of institutions,  
               employers, and public members.  Provides for appointments  
               to the advisory committee from the Senate Committee on  
               Rules, Speaker of the Assembly, and Director.  Requires the  
               Bureau to actively seek input from, and consult with, the  
               advisory committee regarding the development of regulations  
               to implement this chapter; and,
          
             g)   Allows the Bureau to empanel visiting committees to  
               assist in evaluating institutional applications, requires  
               visiting committee members to serve at no expense to the  
               state, establishes that the Bureau may facilitate  
               reimbursements from an institution under evaluation to  
               cover travel and per diem, and entitles visiting committee  
               members to defense and indemnification.

          9)Provides that, except for any institutions exempt from the  
            Act, all private postsecondary institutions operating in  
            California must have the approval of the Bureau and requires  
            the Bureau, by January 1, 2011, to establish minimum operating  
            standards for institutions.  Establishes that approvals to  
            operate shall be for five-year terms.  Establishes a process  
            for the Bureau to issue institutional approvals to operate,  
            and to renew approvals to operate.

          10)Requires prior authorization from the Bureau for institutions  
            wishing to make substantive changes, such as a change in  
            ownership or educational objectives, among other outlined  
            changes.  Provides that the institution's approval may be  
            suspended or revoked for failing to obtain prior approval.   
            Requires the Bureau to adopt regulations by January 1, 2011,  
            establishing a process for reviewing requests for  
            authorization to make substantive changes.  Provides that an  
            institution granted approval to operate by means of its  
            accreditation shall make substantive changes in accordance  
            with accreditation standards and shall notify the Bureau of  
            the changes.








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          11)Establishes fair business practices, which:

             a)   Prohibits institutions from:  using the seal of the  
               state on a diploma, promising employment or otherwise  
               overstating the availability of jobs in the local economy  
               upon graduation, presenting or advertising specified  
               information including inaccurate information, failing to  
               include distance education information in advertisements,  
               inaccurately advertising approval or accreditation status,  
               using "help wanted" ads to solicit students, compensating  
               or providing gifts to students for recruitment activities,   
               making untrue or misleading statements, willfully  
               falsifying or destroying documents, improperly implying  
               approval or licensure or failing to completely disclose  
               what approval or licensure means, directing an individual  
               to violate the Act or persuading a student not to file a  
               complaint, compensating an employee by bonus or commission  
               for recruitment or student assistance except as specified,  
               and requiring prospective students to provide personal  
               contact information before being granted access to  
               educational program information via the institution's  
               internet website, among other outlined prohibited  
               practices;

             b)   Prohibits institutions from merging classes unless  
               students receive the same amount of instruction; prohibits  
               institutions from, after a student has enrolled, making  
               unscheduled suspensions of classes unless caused by  
               circumstances beyond institutional control; and prohibits,  
               during the period of attendance, changing the day or time  
               of the class unless certain other requirements are met;  
               prohibits institutions from moving the location of classes  
               more than 25 miles without meeting certain requirements;  
               and prohibits converting the means of delivery of  
               instruction;

             c)   Provides that, for career fields that require licensure  
               by the state, institutions offering educational programs  
               must have approval to conduct that educational program;  
               and,

             d)   Allows institutions, when offering courses with a term  
               of four months or less, to require payment of all tuition  
               and fees on the first day of instruction; prohibits an  








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               institution from requiring more than one term (up to four  
               months) of advance payment at a time until 50% of  
               coursework has been completed; provides exemptions from the  
               aforementioned requirements for the purposes of federal and  
               state financial aid payments; and allows, under certain  
               conditions, students to choose to pay all fees and tuition  
               upon enrollment.  Requires that institutions providing  
               private loan funding ensure that a student is not obligated  
               for indebtedness that exceeds the total cost of the current  
               term of enrollment.

          12)Requires an institution to maintain specified student and  
            educational program records for not less than five years.   
            Provides that the recordkeeping requirements do not apply to  
            accredited institutions so long as the institution is required  
            to abide by similar recordkeeping requirements under the  
            accreditation.
          
          13)Establishes various requirements for enrollment agreements,  
            and catalogs Student Performance Fact Sheet disclosures to  
            students, which:

             a)   Provides that students enroll solely by signing an  
               enrollment agreement; and outlines the conditions that must  
               be met for it to be enforceable;

             b)   Prohibits students from waiving any terms or receipts of  
               any disclosure;

             c)   Requires an "ability to benefit student" (defined as a  
               student without a certificate of graduation from a school  
               providing secondary education) to take a United States  
               Department of Education (USDE) prescribed examination and  
               achieve a USDE specified score showing the student may  
               benefit from the training offered before executing an  
               enrollment agreement;  

             d)   Requires institutions offering programs in professions  
               that require licensure to provide a potential enrollee with  
               a written copy of the requirements for state licensure,  
               prohibits execution of an enrollment agreement with a  
               student known to be ineligible for licensure unless the  
               student's stated objective is other than licensure, and  
               establishes limitations and disclosure requirements if an  
               institution discusses internships or student job  








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               availability during the enrollment process;

             e)   Requires an enrollment agreement to be written in easily  
               understood language, entitles a student to a clear  
               explanation of the agreement in his/her primary language,  
               as specified, and requires the agreement and related  
               disclosures be in the same language used in recruitment;

             f)   Prohibits an enrollment agreement from requiring a  
               student to invoke internal institutional dispute procedures  
               before enforcing any contractual or other legal rights or  
               remedies;

             g)   Requires information or statements required to be  
               included in the catalog, School Performance Fact Sheet, or  
               enrollment agreement to be printed in at least the same  
               size font as the majority of the text in that document;

             h)   Requires an institution to provide a school catalog to a  
               student prior to enrollment that includes, at minimum 15  
               specified categories of information and disclosures;

             i)   Requires an institution to provide a prospective student  
               a School Performance Fact Sheet containing completion  
               rates, placement rates, license examination passage rates,  
               if applicable, and salary and wage information, if the  
               school makes any express or implied claims related to  
               preparing students for a particular career, occupation,  
               vocation, trade, job or job title; and,

             j)   Requires an enrollment agreement to include at minimum,  
               10 specified categories of information and disclosures.

          14)Requires an institution extending credit or lending money for  
            educational costs to a student, to place a notice in the  
            lending documents informing the student that they may assert  
            against the holder of the promissory note all of the claims  
            and defense that could be asserted against the institution up  
            to the amount already paid under the promissory note; provides  
            that such a lending note is not enforceable unless the  
            institution held an approval to operate at the time of  
            execution; and provides that institutional loans to students  
            must comply with the Federal Truth in Lending Act.

          15)Establishes specified requirements for student cancellations,  








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            withdrawals, and refunds.

          16)Provides that the Bureau shall adopt regulations governing  
            the administration and maintenance of STRF, including  
            requirements related to assessments on students and student  
            claims against STRF; provides that STRF monies are continually  
            appropriated to the Bureau; and provides that STRF may not  
            exceed $25 million at any time.  Provides that DCA may  
            disperse claims after the sunset of the Bureau until all  
            claims or paid or until the fund becomes insolvent.

          17)Establishes specified requirements for institutional closures  
            and teach-outs.
           
          18)Requires each institution to annually report to the Bureau  
            and to annually publish specific data, such as completion  
            rates and job placement rates, in its School Performance Fact  
            Sheet. 

          19)Establishes a specified fee schedule and provides that all  
            fees collected are to be, upon appropriation by the  
            Legislature, used for Bureau expenditure to cover the cost of  
            administering the Act.  Provides that the Bureau may change  
            fee amounts under specified circumstances.  Provides for late  
            payment penalties to be assessed against institutions failing  
            to submit fee payments within the Bureau-specified timeline.
                        
          20)Establishes processes and penalties in regards to compliance  
            with and enforcement of the Act, including:

             a)   Establishes that the Bureau shall determine any  
               institution's compliance with the Act, and that the Bureau  
               shall have the authority to require additional reports be  
               filed by an institution, to send staff for institutional  
               site visits, and to require documents and responses from  
               any institution in order to monitor compliance.  Provides  
               that when the Bureau has reason to believe that an  
               institution is out of compliance, it shall conduct an  
               investigation of that institution, and if the Bureau finds  
               the institution has violated any applicable law or  
               regulation, requires the Bureau to take appropriate action;

             b)   Provides that, as part of its compliance program, the  
               Bureau shall perform announced and unannounced inspections  
               of institutions at least every two years. Provides that on  








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               or before January 1, 2011, the Bureau shall adopt  
               regulations setting forth policies and practices to ensure  
               that institutions are subject to an equal number of  
               announced and unannounced inspections for each two-year  
               period. The regulations shall also set forth policies and  
               practices for providing notice to students enrolled at an  
               institution of the results of each inspection of the  
               institution;

             c)   Provides that the Bureau shall impose penalties,  
               including mandating a specified timetable for remedying  
               noncompliance, imposing fines, placing the institution on  
               probation, or suspending or revoking approval, as deemed  
               appropriate by the Bureau and depending on the severity of  
               the violation;

             d)   Requires an institution to submit an annual report by  
               July 1 to the Bureau, in a format prescribed by the Bureau,  
               that includes: the total number of students enrolled,  
               degrees awarded, degrees offered, educational program  
               completion rates, and the total charges for each  
               educational program, including a statement indicating  
               whether the institution is current in remitting STRF  
               assessments, along with any other information deemed  
               necessary by the Bureau;

             e)   Requires Bureau staff who detect a minor violation of  
               the Act during inspection, to issue a notice to comply  
               before leaving the institution; establishes a process for  
               the issuance of a notice to comply, and requires the Bureau  
               to take administrative enforcement action against an  
               institution that fails to correct the issues raised in a  
               notice to comply within 30 days; 


             f)   Requires, as a consequence of an investigation and upon  
               a finding that the institution has committed a violation,  
               the Bureau to issue a citation for noncompliance of the Act  
               or regulations found during an investigation, and provides  
               that the citation may contain an order of abatement that  
               may require the demonstration of future compliance, and/or  
               an administrative fine not to exceed $10,000 per violation.  
                Provides specific criteria for the Bureau to consider when  
               assessing the amount of administrative fines.  Provides  
               that the citation shall be in writing and shall contain  








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               specified information regarding the violation and the  
               institution's right to a hearing within 30 days.  Provides  
               that an administrative fine is due either 30 days from  
               citation or 30 days from the final judgment following a  
               hearing.  Provides that all administrative fines are to be  
               deposited into PPEAF;

             g)   Allows the Bureau to place an institution on probation  
               or suspend or revoke an institution's approval to operate  
               for fraud or for material or repeated violations of the Act  
               that have caused harm to students.  Defines "material  
               violation" to include, but not be limited to,  
               misrepresentation, fraud in the inducement of a contract,  
               and false or misleading claims or advertising, upon which a  
               student reasonably relied in executing an enrollment  
               agreement and that resulted in harm to the student.    
               Provides that the Bureau shall adopt regulations governing  
               probation and suspension of an approval to operate and that  
               the Bureau may seek reimbursement from an institution, but  
               provides that an institution shall not be responsible for  
               paying the cost of an investigation to more than one  
               agency;

             h)   Provides that if the Bureau determines the need to make  
               an emergency decision to protect students, prevent  
               misrepresentation to the public, or prevent the loss of  
               public funds or monies paid by students, it may do so  
               pursuant to an outlined process and in accordance with  
               Bureau-adopted regulations;

             i)   Provides that the Bureau may bring an action for  
               equitable relief for violations of the Act, including  
               restitution, a temporary restraining order, the appointment  
               of a receiver, and a preliminary or permanent injunction,  
               and that the action may be brought in the county in which  
               the defendant resides or in the county in which any  
               violation has occurred or may occur; and provides that  
               these remedies supplement and do not supplant any other  
               remedies and penalties provided under law;

             j)   Provides any individual who believes an institution has  
               violated the Act or subsequent regulations may file a  
               complaint with the Bureau and that the Bureau shall take  
               action to verify the complaint, and provides the Bureau  
               with authority to take appropriate administrative  








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               enforcement action upon discovering the facts in regards to  
               the complaint;

             aa)  Provides that if the Bureau finds that an institution's  
               violation of the Act or subsequent regulations has caused  
               damage or loss to a student or group of students, the  
               Bureau may order the institution to pay appropriate refunds  
               or restitution to that student or group of students; 

             bb)  Requires the Bureau to establish a toll-free telephone  
               number staffed by a Bureau employee by which a student or  
               member of the public may file a complaint under the Act.   
               Provides that the Bureau shall make a complaint form  
               available on its Internet Web site and that the Bureau  
               shall permit members of the public to file a complaint  
               under the Act through the Bureau's Internet Web site;

             cc)  Establishes that knowingly operating an institution  
               without approval or knowingly providing false information  
               to the Bureau shall be considered infractions and are  
               public offenses;

             dd)  Requires an institution to maintain an agent for service  
               of process within the state and provide the agent's name  
               and contact information to the Bureau; makes the  
               aforementioned information available to the public upon  
               request;

             ee)  Provides that the Bureau may not subject any person to a  
               fine exceeding $50,000 for operating an institution without  
               Bureau approval;

             ff)  Provides that each institution subject to the Act shall  
               be deemed to have authorized the Bureau or accrediting  
               agency to provide the Attorney General (AG), district  
               attorney, or city attorney copies of all documents and  
               other materials concerning the institution.  Requires an  
               accrediting agency to provide such materials free of charge  
               within 30 days of receiving written notice to share  
               documents; and, 

             gg)  Provides that nothing in the Act shall preclude the  
               enforcement of rights or remedies under any other  
               applicable statute, or limit or preclude the AG, a district  
               attorney, or a city attorney from taking any action  








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               otherwise authorized under any other applicable statute or  
               law. 

          21)Provides for severability of the Act, in that, if any  
            provisions in this Act are held as invalid, that invalidity  
            shall not affect other provisions, so long as those provisions  
            do not require the invalid provisions in order to be applied.

          22)Requires the Legislative Analyst's Office, by October 1,  
            2013, report to the Legislature and the Governor on the  
            appropriateness of the exemptions provided by the bill. 

          23)Requires the Bureau to contract with the Bureau of State  
            Audits (BSA), by August 1, 2013, to conduct a performance  
            audit to evaluate the effectiveness and efficiency of the  
            Bureau operations.  The BSA is required to report the results  
            of the audit to the Legislature and the Governor.   
            Appropriates $270,000 from the PPEAF to the BSA for the costs  
            of the audit.



          24)Repeals the Act on January 1, 2016, unless a later statute is  
            enacted to extend this date.

          25)Appropriates $580,000 from the Former Act to the Bureau for  
            the purpose of funding five education administrator positions,  
            and provides that these positions shall be included in the  
            annual budget for the Bureau.

           The Senate amendments  add findings and declarations; expand the  
          number of institutions that are exempt from Bureau oversight;  
          make the Bureau Chief subject to Senate confirmation; expand the  
          information that is to be reported on the Bureau's Web site;  
          strengthen the role of the advisory committee and provide for  
          Legislative appointments to the advisory committee; establish  
          specified institutional fee amounts in the fee schedule; expand  
          Bureau enforcement authority; increase the number of disclosures  
          that institutions are required to provide to students; and other  
          technical and non-technical clarifying changes.
           
          EXISTING LAW  relating to the regulation of private postsecondary  
          education is inoperative.  Recently inoperative statute  
          expressed the intent of the Legislature to provide for the  
          protection and interests of students and institutions that have  








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          matters pending under the Former Act, which became inoperative  
          on July 1, 2007; provided for the continuation of all matters  
          pending before the Former Bureau on July 1, 2007, until July 1,  
          2008; and allowed, until July 1, 2008, limited state oversight  
          of private postsecondary schools by the DCA.  The statutes  
          became inoperative on July 1, 2008.

           AS PASSED BY THE ASSEMBLY,  this bill was substantially similar  
          to the version passed by the Senate.

           FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee:

          Fiscal Impact (in thousands)

           Major Provisions           2009-10               2010-11              
           2011-12       Fund
           Bureau operations        $5,385       $8,411             $8,411   
                Special*
          - Fee revenue**          ($5,038)     ($10,076)           
          ($10,076)
          Appropriation            $580                                    
          Special*
          Reporting requirements                                           
          $220-$270    Special*
                                                                  
          * PPEAF
          ** The Bureau shall establish a reasonable fee to reimburse the  
          bureau's costs associated with implementation of the act.  Costs  
          and revenues based on DCA projections.
           
          COMMENTS  :   Purpose of this bill  :  According to information from  
          DCA, there are approximately 1,500 private postsecondary  
          institutions that had been approved by the Former Bureau to  
          operate in California.  This includes approximately 1,200  
          vocational training schools and 300 branch satellites, as well  
          as, approximately 300 degree-granting institutions with an  
          estimated student enrollment of approximately 400,000.  The  
          Former Bureau also registered approximately 700 private  
          institutions providing short-term career/seminar training,  
          continuing education, intensive English language programs, and  
          license exam preparation courses.  The author intends for this  
          bill to establish the Bureau's authority to regulate private  
          postsecondary institutions and enforce the provisions of the  
          Act. 








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          Overview of previous private postsecondary regulatory attempts  :   
          During the late 1980s, when regulation of the private  
          postsecondary education industry was carried out by a division  
          within the State Department of Education, the state developed a  
          reputation as the "diploma mill capital of the world."  As a  
          result of concerns over the integrity and value of the degrees  
          issued by these institutions, the Former Act was enacted to  
          overhaul the state's regulatory program, transferring oversight  
          responsibility for the program to a 20-member Council.   
          Concurrently, the Maxine Waters School Reform and Student  
          Protection Act (Waters Act) was enacted.  The regulatory  
          framework established by the merging of the Waters Act and the  
          Former Act led to duplicative and conflicting statutory  
          provisions, plaguing California's oversight of these  
          institutions with problems that continued through the sunset of  
          the law on January 1, 2007.  

          In 2004, in response to the persistent problems with the Former  
          Bureau, the Legislature enacted SB 1544 (Figueroa), Chapter 740,  
          Statutes of 2004, which required the appointment of an  
          Enforcement Monitor (Monitor) to provide an in-depth and  
          impartial examination of the Former Bureau's operations.  The  
          Monitor's report, presented to the Joint Committee on Boards,  
          Commissions and Consumer Protection on December 7, 2005,  
          outlined a "twenty-year record of repeatedly identified,  
          fundamental problems in every one of the Bureau's key  
          operations."  The report found that the Former Bureau both  
          inadequately protected consumers and impeded the expansion of  
          quality postsecondary and vocational educational opportunities.   


          The concerns and recommendations raised by the Monitor were  
          generally consistent with concerns raised by the California  
          Postsecondary Education Commission in 1995, an independent  
          report from Price Waterhouse in 1997, a BSA report in 2000, and  
          the DCA's own internal investigation in 2002.  The Former  
          Bureau, by the time of its sunset, had not addressed many of its  
          fundamental problems with oversight and enforcement; however, as  
          the Monitor's report identifies, many of the root causes of  
          enforcement and oversight failures can be traced back to  
          deficiencies within the Former Act.  


           Analysis Prepared by :    Laura Metune / HIGHER ED. / (916)  








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          319-3960


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