Amended in Assembly June 18, 2014

Amended in Assembly June 5, 2014

Senate BillNo. 1247


Introduced by Senator Lieu

(Principal coauthor: Assembly Member Bonilla)

February 20, 2014


An act to amend Section 27 of the Business and Professions Code, to amend Sections 94800.5, 94801, 94802, 94804, 94808, 94809, 94809.5, 94813, 94816, 94829,begin insert 94837,end insert 94838, 94847, 94861, 94874, 94874.1, 94874.7, 94874.8, 94875, 94876, 94877, 94878, 94879, 94881, 94882, 94883, 94884, 94885, 94887, 94888, 94890, 94891, 94892, 94893, 94895, 94896, 94897, 94898, 94900.7, 94904, 94909, 94910, 94911, 94913, 94920, 94921, 94923, 94924, 94926, 94927, 94927.5, 94928, 94929, 94929.5, 94929.7, 94929.8, 94930, 94930.5, 94931.5, 94932, 94932.5, 94933, 94933.5, 94934, 94935, 94936, 94937, 94938, 94939, 94941, 94942, 94943, 94943.5, 94944, 94944.5, 94944.6, 94945, 94948, and 94950 of, to amend the heading of Article 5 (commencing with Section 94875) of Chapter 8 of Part 59 of Division 10 of Title 3 of, to add Sections 94818.5, 94874.2,begin delete 94875.5, and 94929.9 to,end deletebegin insert and 94875.5 to, to add and repeal Section 94929.9 of,end insert to repeal Sectionsbegin delete 94803,end delete 94805, 94820, and 94833 of, and to repeal and add Sectionsbegin delete 94880end deletebegin insert 94803, 94880,end insert and 94949 of, the Education Code, relating to private postsecondary education, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 1247, as amended, Lieu. Private postsecondary education: California Private Postsecondary Education Act of 2009.

Existing law, the California Private Postsecondary Education Act of 2009, provides for the regulation of private postsecondary educational institutions by the Bureau for Private Postsecondary Education in the Department of Consumer Affairs. The act exempts an institution from its provisions, if any of a list of specific criteria are met.

This bill would recast and revise various provisions of the act. The bill would establish the Board for Private Postsecondary Education as a successor agency to the bureau on July 1, 2015. The bill would remove the exemption from its provisions for an institution that is approved to participate in veterans financial aid programs pursuant to a specified federal law, and that is not an independent institution of higher education, thereby making the act applicable to the institution.

The bill would require the board, beginning July 1, 2015, to, among other things, contract with the Office of the Attorney Generalbegin insert, or other appropriate state agency,end insert to establish a process for board staff to be trained to investigate complaints filed with the board, post specified information on its Internet Web site, establish a task force to identify standards for specified educational and training programs and provide a report to the Legislature regarding those programs,begin delete andend delete adopt minimum operating standards for an institution that ensure, among other things, that an institution offering a degree is accredited and that an unaccredited institution offering a degree satisfies certain requirementsbegin insert, and establish application processing goals and timelines to ensure that an institution’s approval to operate application is promptly reviewed by the boardend insert. The bill would require the board to submit a report to the Legislature, on or before October 1, 2015, onbegin delete its efforts to streamline the process by which an institution is approved or denied by the board for an approval to operate,end deletebegin insert whether data reporting and disclosure requirements under the act may be consolidated with reporting required by other federal and state regulatory bodies,end insert to submit a report to the Legislature relating to an independent review of its staffing resources, and to contract with the Office of the Attorney General for investigative and prosecutorial services if certain conditions are satisfied.

The bill would make other technical and conforming changes.

The act establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes.

This bill would require those regulations to ensure that students are eligible for payment from the fund in specified circumstances.

Existing law repeals that act on January 1, 2015.

This bill would instead repeal that act on January 1, 2017, thus extending the operation of the act by 2 years.

By extending the operation of the Student Tuition Recovery Fund, a continuously appropriated fund, this bill would make an appropriation.

Under existing law, the act specifies conduct by regulated institutions that, if undertaken, is a crime.

Because this bill would extend the application of those criminal provisions, it would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

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

P3    1

SECTION 1.  

Section 27 of the Business and Professions Code
2 is amended to read:

3

27.  

(a) Each entity specified in subdivisions (c), (d), and (e)
4shall provide on the Internet information regarding the status of
5every license issued by that entity in accordance with the California
6Public Records Act (Chapter 3.5 (commencing with Section 6250)
7of Division 7 of Title 1 of the Government Code) and the
8Information Practices Act of 1977 (Chapter 1 (commencing with
9Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code).
10The public information to be provided on the Internet shall include
11information on suspensions and revocations of licenses issued by
12the entity and other related enforcement action, including
13accusations filed pursuant to the Administrative Procedure Act
14(Chapter 3.5 (commencing with Section 11340) of Part 1 of
15Division 3 of Title 2 of the Government Code) taken by the entity
16relative to persons, businesses, or facilities subject to licensure or
17regulation by the entity. The information may not include personal
18information, including home telephone number, date of birth, or
19social security number. Each entity shall disclose a licensee’s
20address of record. However, each entity shall allow a licensee to
21provide a post office box number or other alternate address, instead
P4    1of his or her home address, as the address of record. This section
2shall not preclude an entity from also requiring a licensee, who
3has provided a post office box number or other alternative mailing
4address as his or her address of record, to provide a physical
5business address or residence address only for the entity’s internal
6administrative use and not for disclosure as the licensee’s address
7of record or disclosure on the Internet.

8(b) In providing information on the Internet, each entity specified
9in subdivisions (c) and (d) shall comply with the Department of
10Consumer Affairs Guidelines for Access to Public Records.

11(c) Each of the following entities within the Department of
12Consumer Affairs shall comply with the requirements of this
13section:

14(1) The Board for Professional Engineers, Land Surveyors, and
15Geologists shall disclose information on its registrants and
16licensees.

17(2) The Bureau of Automotive Repair shall disclose information
18on its licensees, including auto repair dealers, smog stations, lamp
19and brake stations, smog check technicians, and smog inspection
20certification stations.

21(3) The Bureau of Electronic and Appliance Repair, Home
22Furnishings, and Thermal Insulation shall disclose information on
23its licensees and registrants, including major appliance repair
24dealers, combination dealers (electronic and appliance), electronic
25repair dealers, service contract sellers, and service contract
26administrators.

27(4) The Cemetery and Funeral Bureau shall disclose information
28on its licensees, including cemetery brokers, cemetery salespersons,
29cemetery managers, crematory managers, cemetery authorities,
30crematories, cremated remains disposers, embalmers, funeral
31establishments, and funeral directors.

32(5) The Professional Fiduciaries Bureau shall disclose
33information on its licensees.

34(6) The Contractors’ State License Board shall disclose
35information on its licensees and registrants in accordance with
36Chapter 9 (commencing with Section 7000) of Division 3. In
37addition to information related to licenses as specified in
38subdivision (a), the board shall also disclose information provided
39to the board by the Labor Commissioner pursuant to Section 98.9
40of the Labor Code.

P5    1(7) The Board for Private Postsecondary Education shall disclose
2information on private postsecondary institutions under its
3jurisdiction, including disclosure of notices to comply issued
4pursuant to Section 94935 of the Education Code.

5(8) The California Board of Accountancy shall disclose
6information on its licensees and registrants.

7(9) The California Architects Board shall disclose information
8on its licensees, including architects and landscape architects.

9(10) The State Athletic Commission shall disclose information
10on its licensees and registrants.

11(11) The State Board of Barbering and Cosmetology shall
12disclose information on its licensees.

13(12) The State Board of Guide Dogs for the Blind shall disclose
14information on its licensees and registrants.

15(13) The Acupuncture Board shall disclose information on its
16licensees.

17(14) The Board of Behavioral Sciences shall disclose
18information on its licensees, including marriage and family
19therapists, licensed clinical social workers, licensed educational
20psychologists, and licensed professional clinical counselors.

21(15) The Dental Board of California shall disclose information
22on its licensees.

23(16) The State Board of Optometry shall disclose information
24regarding certificates of registration to practice optometry,
25statements of licensure, optometric corporation registrations, branch
26office licenses, and fictitious name permits of its licensees.

27(17) The Board of Psychology shall disclose information on its
28licensees, including psychologists, psychological assistants, and
29registered psychologists.

30(d) The State Board of Chiropractic Examiners shall disclose
31information on its licensees.

32(e) The Structural Pest Control Board shall disclose information
33on its licensees, including applicators, field representatives, and
34operators in the areas of fumigation, general pest and wood
35destroying pests and organisms, and wood roof cleaning and
36treatment.

37(f) “Internet” for the purposes of this section has the meaning
38set forth in paragraph (6) of subdivision (f) of Section 17538.

39

SEC. 2.  

Section 94800.5 of the Education Code is amended to
40read:

P6    1

94800.5.  

Whenever a reference is made to the former Private
2Postsecondary Education and Student Protection Act, the former
3Private Postsecondary and Vocational Education Reform Act of
41989, or the former Chapter 7 (commencing with Section 94700)
5of Part 59 of Division 10 of Title 3 of the Education Code, as it
6read on June 30, 2007, by the provisions of any statute or
7regulation, it shall be construed as referring to the provisions of
8this chapter. Whenever a reference is made to the former Bureau
9for Private Postsecondary and Vocational Education, or the Bureau
10for Private Postsecondary Education, by the provisions of any
11statute or regulation,begin insert after July 1, 2015,end insert it shall be construed as
12referring to the Board for Private Postsecondary Education.

13

SEC. 3.  

Section 94801 of the Education Code is amended to
14read:

15

94801.  

The Legislature finds and declares all of the following:

16(a) In 2013, more than 300,000 Californians attended more than
171,100 private postsecondary schools in California.

18(b) Private postsecondary schools can complement the public
19education system and help develop a trained workforce to meet
20the demands of California businesses and the economy; however,
21concerns about the value of degrees and diplomas issued by private
22postsecondary schools, and the lack of protections for private
23postsecondary school students and consumers of those schools’
24services, have highlighted the need for strong state-level oversight
25of private postsecondary schools.

26(c) Numerous reports and studies have concluded that
27California’s previous attempts at regulatory oversight of private
28postsecondary schools have consistently failed to ensure student
29protections or provide effective oversight of private postsecondary
30schools.

31(d) It is the intent of the Legislature in establishing the Board
32for Private Postsecondary Education for two years to ensure all of
33the following:

34(1) Minimum educational quality standards and opportunities
35for success for California students attending private postsecondary
36schools in California.

37(2) Meaningful student protections through essential avenues
38of recourse for students.

39(3) A regulatory structure that provides for an appropriate level
40of oversight.

P7    1(4) A regulatory governance structure that ensures that all
2stakeholders have a voice and are heard in policymaking by the
3board.

4(5) A regulatory governance structure that provides for
5accountability and oversight by the Legislature through program
6monitoring and periodic reports.

7(6) Prevention of the deception of the public that results from
8conferring, and use of, fraudulent or substandard degrees.

9(e) The Legislature advises future policymakers to continually
10and carefully evaluate this chapter and its administration and
11enforcement. Where there are deficiencies in the law or regulatory
12oversight, the Governor and the Legislature should act quickly to
13correct them.

14

SEC. 4.  

Section 94802 of the Education Code is amended to
15read:

16

94802.  

begin insert(a)end insertbegin insertend insertAn institution that had a valid approval to operate
17on June 30, 2007, issued by the former Bureau for Private
18Postsecondary and Vocational Education pursuant to former
19Chapter 7 (commencing with Section 94700) of Part 59 of Division
2010 of Title 3 of the Education Code, as it read on June 30, 2007,
21shall maintain that approval under this chapter. For the purposes
22of this chapter, the approval to operate shall be valid for three
23calendar years after the expiration date of the approval, as it read
24on June 30, 2007.

begin insert

25(b) An institution that had a valid approval to operate on
26 December 31, 2014, issued by the Bureau for Private
27Postsecondary Education pursuant to this chapter, as it read on
28December 31, 2014, shall maintain that approval through the
29expiration date of the approval, as it read on December 31, 2014,
30unless the approval is suspended or revoked by the board.

end insert
31

SEC. 5.  

Section 94803 of the Education Code is repealed.

32begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 94803 is added to the end insertbegin insertEducation Codeend insertbegin insert, to read:end insert

begin insert
33

begin insert94803.end insert  

(a) The regulations adopted under this chapter, as it
34read on December 31, 2014, shall remain in effect until such time
35as the board amends or repeals them.

36(b) Commencing July 1, 2015, any reference in the regulations
37that refer to the authority of the Director shall be deemed to refer
38to the board or, if the board so designates, the executive officer.

end insert
P8    1

begin deleteSEC. 6.end delete
2begin insertSEC. 7.end insert  

Section 94804 of the Education Code is amended to
3read:

4

94804.  

(a) Each unresolved matter submitted to the former
5Bureau for Private Postsecondary and Vocational Education prior
6to July 1, 2007,begin insert and to the former Bureau for Private
7Postsecondary Education prior to January 1, 2015,end insert
shall be
8deemed to remain pending before the board irrespective of any
9applicable deadlines. With respect to any deadline applicable to a
10pending matter, no time shall be deemed to have elapsed from July
111, 2007, to January 1, 2010, inclusive.

12(1) For the purposes of this subdivision, “matter” includes, but
13is not limited to, an appeal, a complaint, a claim, an evaluation, a
14hearing, or an investigation.

15(2) For the purposes of this subdivision, “matter” does not
16include a Student Tuition Recovery Fund claim.

17(b) Student complaints submittedbegin delete from July 1, 2007, to
18December 31, 2009, inclusive,end delete
begin insert prior to January 1, 2015,end insert shall
19continue to be duly recorded and investigated by the board.

20

begin deleteSEC. 7.end delete
21begin insertSEC. 8.end insert  

Section 94805 of the Education Code is repealed.

22

begin deleteSEC. 8.end delete
23begin insertSEC. 9.end insert  

Section 94808 of the Education Code is amended to
24read:

25

94808.  

(a) Any Student Tuition Recovery Fund claims received
26by the former Bureau for Private Postsecondary and Vocational
27Educationbegin delete prior to July 1, 2007,end deletebegin insert or the Bureau for Private
28Postsecondary Education prior to January 1, 2015,end insert
that were not
29begin delete processed by the former Bureau for Private Postsecondary and
30Vocational Education and were not paid by the Department of
31Consumer Affairs from July 1, 2007, to June 30, 2008, inclusive,end delete

32begin insert processed,end insert shall be processed by the board.

begin delete

33(b) Any Student Tuition Recovery Fund claims received by the
34Department of Consumer Affairs from July 1, 2007, to December
3531, 2009, inclusive, shall be processed by the board.

36(c) Student Tuition Recovery Fund claims filed with, and
37approved by, the former Bureau for Private Postsecondary and
38Vocational Education as of June 30, 2007, if not already paid, shall
39be paid before any claims approved after that date.

40(d)

end delete

P9    1begin insert(b)end insert The student’s right to recovery from the Student Tuition
2Recovery Fund shall be based on the law that was in effect when
3the student enrolled and a fee for the fund was charged as a part
4of tuition costs, even though that law has become inoperative, been
5repealed, or otherwise expired.

6

begin deleteSEC. 9.end delete
7begin insertSEC. 10.end insert  

Section 94809 of the Education Code is amended to
8read:

9

94809.  

(a) (1) An institution that had an application for an
10approval to operate pending with the former Bureau for Private
11Postsecondary and Vocational Education on June 30, 2007,begin insert and
12submitted an application for approval to operate to the Bureau
13for Private Postsecondary Education,end insert
may continue to operate
14until a decision is made in regard to the institution regarding the
15application for approval to operate, but shall comply with, and is
16subject to, thisbegin delete chapter, and shall submit an application for an
17approval to operate to the board pursuant to this chapter within six
18months of that application becoming available.end delete
begin insert chapter.end insert

begin delete

19(2) If the board determines that the application for an approval
20to operate that was pending with the former Bureau for Private
21Postsecondary and Vocational Education on June 30, 2007, satisfies
22the requirements of the new application for an approval to operate,
23the submission of the previous application may be deemed to
24satisfy the requirements of this subdivision.

end delete

25(b) An institution that did not have a valid approval to operate
26issued by, and did not have an application for approval to operate
27pending with, the former Bureau for Private Postsecondary and
28Vocational Education on June 30, 2007, that began operationsbegin delete on
29or afterend delete
begin insert betweenend insert July 1, 2007,begin insert and January 1, 2010,end insert may continue
30to operate unless a denial of approval to operate has been issued
31and has become final, but shall comply with, and is subject to, this
32chapter.

33(c) Students seeking to enroll in institutions operating under
34subdivisions (a) and (b) shall be notified by the institution, in
35writing and prior to executing an enrollment agreement, that the
36institution’s application for approval to operate has not been
37reviewed by the board.

begin delete

38(d) An institution that is permitted to operate pursuant to
39subdivision (a) or (b) shall not use the terms “approval,”
40“approved,” “approval to operate,” or “approved to operate”
P10   1without clearly stating that the institution’s application for approval
2has not been reviewed by the board.

end delete
begin delete

3(e)

end delete

4begin insert(d)end insert (1) An institution that is denied an approval to operate
5pursuant to subdivision (a) or (b) may file an appeal pursuant to
6the procedures established in Section 94888.

7(2) An institution that has filed an appeal may continue to
8operate during the appeal process but must disclose in a written
9statement approved by the board, to the public and all current and
10prospective students, that the institution’s application for approval
11to operate was denied by the board because the board has
12determined the application did not satisfy minimum requirements
13for educational capacity, that the institution is appealing the board’s
14decision, and that the loss of the appeal may result in the
15institution’s closure.

16(3) If the board determines that the continued operation of an
17institution poses a significant risk of harm to students, the board
18shall make an emergency decision pursuant to Section 94938.

19

begin deleteSEC. 10.end delete
20begin insertSEC. 11.end insert  

Section 94809.5 of the Education Code is amended
21to read:

22

94809.5.  

Notwithstanding any other provision of law:

23(a) For any claims that a student had based on a violation of the
24Private Postsecondary and Vocational Education Reform Act of
251989 on or before June 30, 2007, the period of time from June 30,
262007, to December 31, 2009, inclusive, shall be excluded in
27determining the deadline or the statute of limitation for filing any
28claim with the board or a lawsuit based on any claim.

29(b) All claims described in subdivision (a), except claims to the
30Student Tuition Recovery Fund, including those contained in a
31lawsuit or other legal action, shall be determined or adjudicated
32based on the law that was in effect when the violations or events
33took place, even though those provisions have become inoperative,
34been repealed, or otherwise expired.

35

begin deleteSEC. 11.end delete
36begin insertSEC. 12.end insert  

Section 94813 of the Education Code is amended to
37read:

38

94813.  

“Accredited” means an institution is accredited by an
39accrediting agency recognized by the United States Department
40of Education.

P11   1

begin deleteSEC. 12.end delete
2begin insertSEC. 13.end insert  

Section 94816 of the Education Code is amended to
3read:

4

94816.  

“Applicant” means an institution that has submitted an
5application to the board for an approval to operate or for a renewal
6of an approval to operate. An applicant shall be the owner of an
7institution. Approvals to operate shall be issued to applicantsbegin insert, and
8those approvals mean that the recipient institutions are authorized
9or licensed by the board to operate in California through the
10expiration date of the approvalend insert
.

11

begin deleteSEC. 13.end delete
12begin insertSEC. 14.end insert  

Section 94818.5 is added to the Business and
13Professions Code
, to read:

14

94818.5.  

“Board” means the Board for Private Postsecondary
15Education.

16

begin deleteSEC. 14.end delete
17begin insertSEC. 15.end insert  

Section 94820 of the Education Code is repealed.

18

begin deleteSEC. 15.end delete
19begin insertSEC. 16.end insert  

Section 94829 of the Education Code is amended to
20read:

21

94829.  

“Default” means failure of a borrower and endorser, if
22any, to make an installment payment for a loan received under the
23federal student financial aid programs when due, or to meet other
24terms of the promissory note, provided that this failure persists for
25270 days if payment is due monthly or 360 days if payment is due
26less frequently. For purposes of this section, “endorser” means an
27individual who signs a promissory note and agrees to repay the
28loan in the event that the borrower does not.

29

begin deleteSEC. 16.end delete
30begin insertSEC. 17.end insert  

Section 94833 of the Education Code is repealed.

31begin insert

begin insertSEC. 18.end insert  

end insert

begin insertSection 94837 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
32read:end insert

33

94837.  

“Educational program” means a planned sequence
34composed of a single course or module, or set of related courses
35or modules, that provides the education, training, skills, and
36experience leading to the award of a recognized educational
37credential such as abegin delete degreeend deletebegin insert document of completion, degree,end insert or
38diploma.

P12   1

begin deleteSEC. 17.end delete
2begin insertSEC. 19.end insert  

Section 94838 of the Education Code is amended to
3read:

4

94838.  

“Educational program approval” means authorization
5by the board, another government agency of this state, or a federal
6government agency, to provide educational programs, and is an
7element of an approval to operate.

8

begin deleteSEC. 18.end delete
9begin insertSEC. 20.end insert  

Section 94847 of the Education Code is amended to
10read:

11

94847.  

“License and examination preparation” means
12instruction designed to assist students to prepare for an examination
13forbegin delete licensure, or offered for the sole purpose of providing
14continuing education in subjects licensees are required to take as
15a condition of continued licensure.end delete
begin insert licensure.end insert “License and
16examination preparation” does not include an educational program
17designed to instruct students in the field of the licensure
18examination.

19

begin deleteSEC. 19.end delete
20begin insertSEC. 21.end insert  

Section 94861 of the Education Code is amended to
21read:

22

94861.  

“Reporting period” means the institution’s fiscal year
23or any yearly period designated by the board to be covered in the
24institution’s annual report.

25

begin deleteSEC. 20.end delete
26begin insertSEC. 22.end insert  

Section 94874 of the Education Code is amended to
27read:

28

94874.  

Except as provided in Section 94874.2, the following
29are exempt from this chapter:

30(a) An institution that offers solely avocational or recreational
31educational programs.

32(b) An institution offering educational programs sponsored by
33a bona fide trade, business, professional, or fraternal organization,
34solely for that organization’s membership.

35(c) A postsecondary educational institution established, operated,
36and governed by the federal government or by this state or its
37political subdivisions.

38(d) An institution offering either of the following:

39(1) Test preparation for examinations required for admission to
40a postsecondary educational institution.

P13   1(2) Continuing education or license examination preparation,
2if the institution or the program is approved, certified, or sponsored
3by any of the following:

4(A) A government agency, other than the board, that licenses
5persons in a particular profession, occupation, trade, or career field.

6(B) A state-recognized professional licensing body, such as the
7State Bar of California, that licenses persons in a particular
8profession, occupation, trade, or career field.

9(C) A bona fide trade, business, or professional organization.

10(e) (1) An institution owned, controlled, and operated and
11maintained by a religious organization lawfully operating as a
12nonprofit religious corporation pursuant to Part 4 (commencing
13with Section 9110) of Division 2 of Title 1 of the Corporations
14Code, that meets all of the following requirements:

15(A) The instruction is limited to the principles of that religious
16organization, or to courses offered pursuant to Section 2789 of
17Business and Professions Code.

18(B) The diploma or degree is limited to evidence of completion
19of that education.

20(2) An institution operating under this subdivision shall offer
21degrees and diplomas only in the beliefs and practices of the
22church, religious denomination, or religious organization.

23(3) An institution operating under this subdivision shall not
24award degrees in any area of physical science.

25(4) Any degree or diploma granted under this subdivision shall
26contain on its face, in the written description of the title of the
27degree being conferred, a reference to the theological or religious
28aspect of the degree’s subject area.

29(5) A degree awarded under this subdivision shall reflect the
30nature of the degree title, such as “associate of religious studies,”
31“bachelor of religious studies,” “master of divinity,” or “doctor of
32divinity.”

33(f) An institution that does not award degrees and that solely
34provides educational programs for total charges of two thousand
35five hundred dollars ($2,500) or less when no part of the total
36charges is paid from state or federal student financial aid programs.
37The board may adjust this cost threshold based upon the California
38Consumer Price Index and post notification of the adjusted cost
39threshold on its Internet Web site, as the board determines, through
P14   1the promulgation of regulations, that the adjustment is consistent
2with the intent of this chapter.

3(g) A law school that is accredited by the Council of the Section
4of Legal Education and Admissions to the Bar of the American
5Bar Association or a law school or law study program that is
6subject to the approval, regulation, and oversight of the Committee
7of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the
8Business and Professions Code.

9(h) A nonprofit public benefit corporation that satisfies all of
10the following criteria:

11(1) Is qualified under Section 501(c)(3) of the United States
12Internal Revenue Code.

13(2) Is organized specifically to provide workforce development
14or rehabilitation services.

15(3) Is accredited by an accrediting organization for workforce
16development or rehabilitation services recognized by the
17Department of Rehabilitation.

18(i) An institution that is accredited by the Accrediting
19Commission for Senior Colleges and Universities, Western
20Association of Schools and Colleges, or the Accrediting
21Commission for Community and Junior Colleges, Western
22Association of Schools and Colleges.

23(j) An institution that satisfies all of the following criteria:

24(1) The institution has been accredited, for at least 10 years, by
25an accrediting agency that is recognized by the United States
26Department of Education.

27(2) The institution has operated continuously in this state for at
28least 25 years.

29(3) During its existence, the institution has not filed for
30bankruptcy protection pursuant to Title 11 of the United States
31Code.

32(4) The institution’s cohort default rate on guaranteed student
33loans does not exceed 10 percent for the most recent three years,
34as published by the United States Department of Education.

35(5) The institution maintains a composite score of 1.5 or greater
36on its equity, primary reserve, and net income ratios, as provided
37under Section 668.172 of Title 34 of the Code of Federal
38Regulations.

P15   1(6) The institution provides a pro rata refund of unearned
2 institutional charges to students who complete 75 percent or less
3of the period of attendance.

4(7) The institution provides to all students the right to cancel
5the enrollment agreement and obtain a refund of charges paid
6through attendance at the second class session, or the 14th day
7after enrollment, whichever is later.

8(8) The institution submits to the board copies of its most recent
9IRS Form 990, the institution’s Integrated Postsecondary Education
10Data System Report of the United States Department of Education,
11and its accumulated default rate.

12(9) The institution is incorporated and lawfully operates as a
13nonprofit public benefit corporation pursuant to Part 2
14(commencing with Section 5110) of Division 2 of Title 1 of the
15Corporations Code and is not managed or administered by an entity
16for profit.

17(k) Flight instruction providers or programs that provide flight
18instruction pursuant to Federal Aviation Administration regulations
19and meet both of the following criteria:

20(1) The flight instruction provider or program does not require
21students to enter into written or oral contracts of indebtedness.

22(2) The flight instruction provider or program does not require
23or accept prepayment of instruction-related costs in excess of two
24thousand five hundred dollars ($2,500).

25

begin deleteSEC. 21.end delete
26begin insertSEC. 23.end insert  

Section 94874.1 of the Education Code is amended
27to read:

28

94874.1.  

(a) Except as provided in Section 94874.2, an
29institution that is accredited by a regional accrediting agency that
30is recognized by the United States Department of Education, and
31is not an agency described in subdivision (i) of Section 94874, is
32exempt from this chapter, except Article 14 (commencing with
33Section 94923).

34(b) This section shall remain in effect only until January 1, 2016,
35and as of that date is repealed, unless a later enacted statute, that
36is enacted before January 1, 2016, deletes or extends that date.

37

begin deleteSEC. 22.end delete
38begin insertSEC. 24.end insert  

Section 94874.2 is added to the Education Code, to
39read:

P16   1

94874.2.  

An institution that is approved to participate in
2veterans’ financial aid programs pursuant to Section 21.4253 of
3Title 38 of the Code of Federal Regulations that is not an
4independent institution of higher education, as defined in
5subdivision (b) of Section 66010, may not claim an exemption
6from this chapter.

7

begin deleteSEC. 23.end delete
8begin insertSEC. 25.end insert  

Section 94874.7 of the Education Code is amended
9to read:

10

94874.7.  

The board shall establish, by regulation, a process
11pursuant to which an institution that is exempt from this chapter
12may request, and obtain, from the board verification that the
13institution is exempt. The board shall establish a reasonable fee to
14reimburse the board’s costs associated with the implementation
15of this section.

16

begin deleteSEC. 24.end delete
17begin insertSEC. 26.end insert  

Section 94874.8 of the Education Code is amended
18to read:

19

94874.8.  

(a) An institution exempt from all or part of this
20chapter pursuant to subdivision (i) or (j) of Section 94874 or
21Section 94874.1 may apply to the board for an approval to operate
22pursuant to this section, but only subject to all of the following
23provisions:

24(1) The board may approve the operation of an institution that
25is exempt from all or part of this chapter as specified above in
26accordance with the authority granted pursuant to Article 6
27(commencing with Section 94885). Upon issuing an approval to
28operate to an institution pursuant to this section, the board is
29authorized to regulate that institution through the full set of powers
30granted, and duties imposed, by this chapter, as those powers and
31duties would apply to an institution that is not exempt from this
32chapter.

33(2) Notwithstanding any other law, upon issuance of an approval
34to operate pursuant to this section, the institution is no longer
35eligible for exemption, from the provisions of this chapter pursuant
36to subdivision (i) or (j) of Section 94874 or Section 94874.1, unless
37authorized by subsequent legislation.

38(3) Upon issuance of an approval to operate pursuant to this
39section, an institution is subject to all provisions of this chapter,
40and any regulations adopted pursuant to this chapter, that apply to
P17   1an institution subject to this chapter, except as expressly provided
2in paragraph (4).

3(4) (A) With respect to the placement and salary or wage data
4required to be collected, calculated, and reported by Article 16
5(commencing with Section 94928), an institution issued an
6approval to operate pursuant to this section is not required to report
7on its first School Performance Fact Sheet any data from the period
8prior to the date of the issuance of the approval to operate that the
9institution was not required to collect and does not have available
10to it. An institution shall, however, report available data collected
11and calculated in accordance with this chapter and applicable
12regulations, regardless of the purpose for which the data was
13collected. If the required data is unavailable, the institution shall
14also disclose the unavailability of the data on all documents
15required by this chapter and regulations adopted pursuant to this
16chapter. Upon receiving an approval to operate pursuant to this
17section, an institution shall commence to collect and calculate all
18information necessary to comply with Article 16 (commencing
19with Section 94928).

20(B) An institution receiving an approval to operate pursuant to
21this section shall provide to prospective students the School
22Performance Fact Sheet, file that fact sheet with the board, and
23post it on the institution’s Internet Web site no later than the first
24August 1 after the institution is approved to operatebegin delete and no later
25than August 1 of each year thereafter.end delete
begin insert or by a date set by the board
26for institutions generally.end insert
These School Performance Fact Sheets
27shall report data for the previous two calendar years based upon
28the number of students who began the program or the number of
29graduates for each reported calendar year. If two calendar years
30have not passed since the issuance of the approval to operate by
31the August 1 deadline for the School Performance Fact Sheet,
32unless data for two years is available, the institution shall report
33the required data for the period subsequent to the date of the
34 issuance of the notice of approval.

35(b) An institution exempt from all or part of this chapter pursuant
36to subdivision (i) or (j) of Section 94874 or Section 94874.1 that
37was approved to operate by the board before the effective date of
38this section shall be deemed to have been approved pursuant to
39this section.

P18   1

begin deleteSEC. 25.end delete
2begin insertSEC. 27.end insert  

The heading of Article 5 (commencing with Section
394875) of Chapter 8 of Part 59 of Division 10 of Title 3 of the 4Education Code is amended to read:

5 

6Article 5.  Board Powers and Duties
7

 

8

begin deleteSEC. 26.end delete
9begin insertSEC. 28.end insert  

Section 94875 of the Education Code is amended to
10read:

11

94875.  

(a) The board shall regulate private postsecondary
12educational institutions through the powers granted, and duties
13imposed, by this chapter. In exercising its powers, and performing
14its duties, the protection of the public shall be the board’s highest
15priority. If protection of the public is inconsistent with other
16interests sought to be promoted, the protection of the public shall
17be paramount. The board shall consist of 11 members appointed
18as follows:

19(1) Three members, who shall have a demonstrated record of
20advocacy on behalf of consumers, one appointed by the Governor,
21one by the Senate Committee on Rules, and one by the Speaker
22of the Assembly.

23(2) Two members, who shall be current or former students of
24institutions, appointed by the Governor.

25(3) Three members, who shall be representatives of institutions,
26appointed by the Governor.

27(4) Two public members with experience or expertise in
28postsecondary education, appointed by the Governor.

29(5) One public member with knowledge or expertise in emerging
30fields of employment, appointed by the Governor.

31(b) A person who was a member of the former Advisory
32Committee to the Bureau for Private Postsecondary Education,
33established pursuant to Section 94880, as that section read on
34January 1, 2014, is eligible to be appointed to the board pursuant
35to subdivision (a).

36

begin deleteSEC. 27.end delete
37begin insertSEC. 29.end insert  

Section 94875.5 is added to the Education Code, to
38read:

39

94875.5.  

Notwithstanding any other provision of this chapter,
40the Bureau for Private Postsecondary Education shall continue in
P19   1existence and administer the provisions of this chapter until July
21, 2015. As of that date, the bureau shall cease operations, and the
3board shall assume all authority, including the powers, functions,
4and jurisdiction until then vested in the bureau. The board may
5enforce all disciplinary actions undertaken by the bureau. For the
6performance of these duties and exercise of these powers, the board
7shall have possession and control of all records, papers, offices,
8equipment, supplies, or other property, real or personal, held for
9the benefit of or use by the bureau.begin insert All regulations adopted by the
10bureau that were in effect on December 31, 2014, shall remain in
11effect until the board acts to amend or repeal those regulations.
12All licensing application forms in use on December 31, 2014, shall
13continue in use until such time as the board acts to amend those
14forms or provides for their elimination or replacement.end insert

15

begin deleteSEC. 28.end delete
16begin insertSEC. 30.end insert  

Section 94876 of the Education Code is amended to
17read:

18

94876.  

(a) The executive officer of the board shall be appointed
19by the Governor, subject to confirmation by the Senate Committee
20on Rules, and is exempt from the State Civil Service Act pursuant
21to Part 2 (commencing with Section 18500) of Division 5 of Title
222 of the Government Code.

23(b) The executive officer of the board shall exercise the powers
24and perform the duties delegated by the board.

25

begin deleteSEC. 29.end delete
26begin insertSEC. 31.end insert  

Section 94877 of the Education Code is amended to
27read:

28

94877.  

(a) The board shall adopt and shall enforce regulations
29to implement this chapter pursuant to the Administrative Procedure
30Act in Chapter 3.5 (commencing with Section 11340) of Part 1 of
31Division 3 of Title 2 of the Government Code.

32(b) The board shall develop and implement an enforcement
33program, pursuant to Article 18 (commencing with Section 94932)
34to implement this chapter. The enforcement program shall include
35a plan for investigating complaints filed with the board. The board
36shall contract with the office of the Attorney Generalbegin insert, or other
37appropriate state agency,end insert
to establish a process for the board’s
38staff to be trained to investigate complaints, including, but not
39limited to, the information, evidence, and materials needed to
40process complaints.begin insert The training shall ensure the board’s staff are
P20   1equipped to review and verify the accuracy of the data contained
2in consumer disclosures, including, but not limited to, the School
3Performance Fact Sheet.end insert

4(c) The board shall establish a program to proactively identify
5unlicensed institutions, identify material or repeated violations of
6this chapter and regulations implementing this chapter, and take
7all appropriate legal action.

8(d) The board shall, by January 1, 2016, initiate the process and
9procedures governing its approval or denial of applications for
10approval to operate in accordance with board regulations adopted
11pursuant to Section 94888, for every application pending as of
12January 1, 2015.

13

begin deleteSEC. 30.end delete
14begin insertSEC. 32.end insert  

Section 94878 of the Education Code is amended to
15read:

16

94878.  

(a) The board shall establish an Internet Web site that
17includes at least all of the following information:

18(1) An explanation of the board’s scope of authority.

19(2) (A) A directory of approved institutions, and a link, if
20feasible, to the Internet Web site of each institution.

21(B) For each institution, the directory shall be developed in a
22manner that allows the user to search by institution and shall
23include all of the following information:

24(i) The status of the institution’s approval to operate.

25(ii) The information provided by the institutions including, but
26not limited to, the annual report, as required by Section 94934,
27including the school catalog and the Student Performance Fact
28Sheet. The Student Performance Fact Sheet shall be maintained
29on the directory for at least five years after the date of its
30submission to the board.

31(iii) The disciplinary history of the institution, which shall
32include, but shall not be limited to, all of the following:

33(I) Pending formal accusations filed by the board.

34(II) Suspensions, revocations, citations, fines, infractions,
35probations, pending litigation filed by the board, and final
36judgments resulting from litigation filed by the board.

37(III) Pending or finalbegin insert civil orend insert criminal cases filedbegin delete by the Attorney
38General,end delete
begin insert in any state by a state attorney general,end insert a city attorney,
39a district attorney, or a federalbegin delete law enforcement official,end deletebegin insert regulatory
40or prosecutorial agency,end insert
of which the board has received notice.

P21   1(IV) Final administrative actions by the United State Department
2of Education, including orders requiring restitution to students.

3(V) begin deleteFinal end deletebegin insertAll end insertdisciplinary actionsbegin insert orderedend insert by an accreditation
4agency,begin insert including any order to show cause,end insert of which the board
5has received notice pursuant to Section 94934begin insert or other information
6otherwise publicly available of which the board has received
7noticeend insert
.

8(b) The board shall maintain the Internet Web site described in
9subdivision (a). The board shall ensure that the information
10specified in subdivision (a) is kept current. The board shall update
11the Internet Web site at least annually, to coincide with the
12submission of annual reports by the institutions pursuant to Section
1394934.

14(c) (1) The board shall post on its Internetbegin delete Websiteend deletebegin insert Web siteend insert a
15list of all institutions that were denied approval to operate,begin insert after
16the denial is final,end insert
and describe in clear and conspicuous language
17the reason the institution was denied approval. The board shall
18include the statement provided in paragraph (2) on its Internet Web
19site.

20(2) “The following institutions were denied approval to operate
21by the Board for Private Postsecondary Education for failing to
22satisfy the standards relating to educational quality, or consumer
23protection, or both. These unlicensed institutions are not operating
24in compliance with the law, and students are strongly discouraged
25from attending these institutions.”

26

begin deleteSEC. 31.end delete
27begin insertSEC. 33.end insert  

Section 94879 of the Education Code is amended to
28read:

29

94879.  

The board shall conduct an outreach program to
30secondary school students as well as prospective and current private
31postsecondary students, to provide them with information on how
32to best select a private postsecondary institution, how to enter into
33enrollment agreements, how to make informed decisions in the
34private postsecondary education marketplace, and how to contact
35the board for assistance. The board may accomplish the purposes
36of this section in cooperation with otherbegin delete stateend deletebegin insert federal, state,end insert or
37local entities, orbegin delete both.end deletebegin insert any combination of these entities.end insert

38

begin deleteSEC. 32.end delete
39begin insertSEC. 34.end insert  

Section 94880 of the Education Code is repealed.

P22   1

begin deleteSEC. 33.end delete
2begin insertSEC. 35.end insert  

Section 94880 is added to the Education Code, to
3read:

4

94880.  

(a) begin delete(1)end deletebegin deleteend deleteThe board shall establish a task force to
5determine standards for educational and training programs
6specializing in innovative subject matters and instructing students
7in high-demand technology fields for which there is a demonstrated
8shortage of skilled employees. The members of the task force may
9include high technology employers, students of short-term focused
10high technology training programs, and providers of high
11technology training in subjects including, but not necessarily
12limited to, programming, software development, computer science,
13and coding.

begin delete

14(2) (A)

end delete

15begin insert(b)end insertbegin insertend insertbegin insert(1)end insert The board shall provide a report to the Legislature
16regarding educational and training programs subject tobegin delete paragraph
17(1),end delete
begin insert subdivision (a),end insert and the institutions offering those programs,
18no later than January 1, 2016. The report shall include the board’s
19evaluation of all of the following:

begin delete

20(i)

end delete

21begin insert(A)end insert Whether students attending these institutions should receive
22certain disclosures prior to enrollment in a program.

begin delete

23(ii)

end delete

24begin insert(B)end insert Whether the means of reporting student outcomes and the
25content of those reports are appropriate.

begin delete

26(iii)

end delete

27begin insert(C)end insert Whether institutions that satisfy certain criteria should be
28regulated by the board and by this chapter.

begin delete

29(iv)

end delete

30begin insert(D)end insert The steps the board and the state may take to promote the
31growth of high-quality training programs in skills for high
32technology occupations.

begin delete

33(B) (i)

end delete

34begin insert(2)end insertbegin insertend insertbegin insert(A)end insert The requirement for submitting a report imposed under
35thisbegin delete paragraphend deletebegin insert subdivisionend insert is inoperative on January 1, 2019,
36pursuant to Section 10231.5 of the Government Code.

begin delete

37(ii)

end delete

38begin insert(B)end insert A report to be submitted pursuant to thisbegin delete paragraphend delete
39begin insert subdivisionend insert shall be submitted in compliance with Section 9795
40of the Government Code.

begin delete

P23   1(b) For an institution that is offering high technology training
2in programming, software development, computer science, or
3coding, and that is in the process of complying with this chapter
4through an application for approval to operate from the board, the
5board may defer processing the institution’s application until
6January 1, 2016.

end delete
7

begin deleteSEC. 34.end delete
8begin insertSEC. 36.end insert  

Section 94881 of the Education Code is amended to
9read:

10

94881.  

The board may conduct workshops to provide applicants
11and institutions information on application processes, compliance
12with this chapter, best practices for providing postsecondary
13educational programs, and other subjects concerning postsecondary
14education.

15

begin deleteSEC. 35.end delete
16begin insertSEC. 37.end insert  

Section 94882 of the Education Code is amended to
17read:

18

94882.  

The board may empanel visiting committees to assist
19in evaluating an institution’s application for an approval to operate.
20The members of visiting committees shall serve at no expense to
21the state, except that the board may reimburse the members of
22visiting committees for actual travel and per diem expenses
23incurred during the evaluation. The board may seek reimbursement
24for the travel and per diem costs from the institution that is the
25subject of an evaluation.

26

begin deleteSEC. 36.end delete
27begin insertSEC. 38.end insert  

Section 94883 of the Education Code is amended to
28read:

29

94883.  

(a) Any individual serving on a visiting committee
30who provides information to the board, or its staff, in the course
31of evaluating any institution, or who testifies in any administrative
32hearing arising under this chapter, is entitled to a defense and
33indemnification in any action arising out of the information or
34testimony provided as if he or she were a public employee.

35(b) Any defense and indemnification shall be solely with respect
36to the action pursuant to Article 4 (commencing with Section 825)
37of Chapter 1 of Part 2 of, and Part 7 (commencing with Section
38995) of Division 3.6 of Title 1 of, the Government Code.

P24   1

begin deleteSEC. 37.end delete
2begin insertSEC. 39.end insert  

Section 94884 of the Education Code is amended to
3read:

4

94884.  

The board is subject to Section 27 of the Business and
5Professions Code.

6

begin deleteSEC. 38.end delete
7begin insertSEC. 40.end insert  

Section 94885 of the Education Code is amended to
8read:

9

94885.  

The board shall adopt by regulation minimum operating
10standards for an institution that shall reasonably ensure that all of
11the following occur:

12(a) The content of each educational program can achieve its
13stated objective.

14(b) The institution maintains specific written standards for
15student admissions for each educational program and those
16standards are related to the particular educational program.

17(c) The facilities, instructional equipment, and materials are
18sufficient to enable students to achieve the educational program’s
19goals.

20(d) The institution maintains a withdrawal policy and provides
21 refunds.

22(e) The directors, administrators, and faculty are properly
23qualified.

24(f) The institution is financially sound and capable of fulfilling
25its commitments to students.

26(g) That, upon satisfactory completion of an educational
27program, the institution gives students a document signifying the
28degree or diploma awarded.

29(h) Adequate records and standard transcripts are maintained
30and are available to students.

31(i) The institution is maintained and operated in compliance
32with this chapter and all other applicable ordinances and laws.

33(j) (1) An institution offering a degree is accredited by an
34 accrediting agency recognized by the United States Department
35of Education.

36(2) An unaccredited institution offering a degree that is approved
37to operate by the bureau as of January 1, 2015, shall have until
38January 1, 2016, to obtain and provide evidence of its candidacy
39or preaccreditation status with an accrediting agency recognized
40by the United States Department of Education, and to obtain and
P25   1provide evidence of accreditation from that accrediting agency on
2or before January 1, 2017.

begin insert

3(3) The board may, upon the submission of sufficient evidence
4that an unaccredited institution is making strong progress toward
5obtaining accreditation pursuant to paragraph (2), extend the
6timeline for the institution beyond the timeline provided in
7paragraph (2).

end insert
8

begin deleteSEC. 39.end delete
9begin insertSEC. 41.end insert  

Section 94887 of the Education Code is amended to
10read:

11

94887.  

An approval to operate shall be granted only after an
12applicant has presented sufficient evidence to the board, and the
13board has independently verified the information provided by the
14applicant through site visits or other methods deemed appropriate
15by the board, that the applicant has the capacity to satisfy the
16minimum operating standards. The board shall deny an application
17for an approval to operate if the application does not satisfy those
18standards.

19

begin deleteSEC. 40.end delete
20begin insertSEC. 42.end insert  

Section 94888 of the Education Code is amended to
21read:

22

94888.  

(a) The board shall adopt by regulation both of the
23following:

24(1) The process and procedures whereby an institution seeking
25approval to operate may apply for and obtain an approval to
26operate.

27(2) The process and procedures governing the board’s approval
28and denial of applications for approval to operate, including the
29process and procedures whereby an applicant for which an
30application has been denied may appeal that denial.

31(b) The board shall, by regulation, establish begin delete a process for issuing
32a notification of a denial of an approval to operate to an institution
33that submits an application for approval to operate and for which
34that application is denied. The notification of denial shall include
35a statement of reasons for the denial.end delete
begin insert both of the following:end insert

begin insert

36(1) A process for issuing a notification of a denial of an approval
37to operate to an institution that submits an application for approval
38to operate and for which that application is denied. The notification
39of denial shall include a statement of reasons for the denial.

end insert
begin insert

P26   1(2) Application processing goals and timelines to ensure an
2institution that has submitted a complete application for approval
3to operate has that application promptly reviewed for compliance
4within 30 days of board receipt of the application, or within an
5appropriate timeline as determined by the board. The timelines
6shall ensure that an institution that has submitted a complete and
7compliant application receives approval within 30 days of the
8application being deemed compliant by the board, or within an
9appropriate timeline as determined by the board.

end insert
10

begin deleteSEC. 41.end delete
11begin insertSEC. 43.end insert  

Section 94890 of the Education Code is amended to
12read:

13

94890.  

(a) (1) The board shall grant an institution that is
14accredited an approval to operate by means of its accreditation.

15(2) The board shall adopt by regulation the process and
16procedures whereby an institution that is accredited may apply for
17and obtain an approval by means of that accreditation.

18(b) The term of an approval to operate pursuant to this section
19shall be coterminous with the term of accreditation. Upon renewal
20of the institution’s accreditation, the institution shall submit
21verification to the board, on a form provided by the board, that the
22institution’s accreditation has been renewed.

23(c) Institutions that are granted an approval to operate by means
24of the institution’s accreditation shall comply with all other
25applicable requirements in this chapter.

26

begin deleteSEC. 42.end delete
27begin insertSEC. 44.end insert  

Section 94891 of the Education Code is amended to
28read:

29

94891.  

(a) The board shall adopt by regulation the process
30and procedures whereby an institution may obtain a renewal of an
31approval to operate.

32(b) To be granted a renewal of an approval to operate, the
33institution shall demonstrate its continued capacity to meet the
34minimum operating standards.

35(c) (1) An institution that is denied renewal of an approval to
36operate may file an appeal in accordance with the procedures
37established by the board pursuant to Section 94888.

38(2) An institution that has filed an appeal of a denial of a renewal
39application may continue to operate during the appeal process, but
40must disclose in a written statement, approved by the board, to the
P27   1public and all current and prospective students, that the institution’s
2application for renewal of approval to operate was denied by the
3board because the board determined the application did not satisfy
4minimum requirements for educational capacity, that the institution
5is appealing the board’s decision, and that the loss of the appeal
6may result in the institution’s closure.

7(3) If the board determines that the continued operation of the
8institution during the appeal process poses a significant risk of
9harm to students, the board shall make an emergency decision
10pursuant to its authority provided in Section 94938.

11

begin deleteSEC. 43.end delete
12begin insertSEC. 45.end insert  

Section 94892 of the Education Code is amended to
13read:

14

94892.  

If an agency of this state other than the board or of the
15federal government provides an approval to offer an educational
16program and the institution already has a valid approval to operate
17issued by the board, that agency’s educational program approval
18may satisfy the requirements of this article without any further
19review by the board. The board may incorporate that educational
20program into the institution’s approval to operate when the board
21receives documentation signifying the conferral of the educational
22program approval by that agency.

23

begin deleteSEC. 44.end delete
24begin insertSEC. 46.end insert  

Section 94893 of the Education Code is amended to
25read:

26

94893.  

If an institution intends to make a substantive change
27to its approval to operate, the institution shall receive prior
28authorization from the board. Except as provided in subdivision
29(a) of Section 94896, if the institution makes the substantive change
30without prior board authorization, the institution’s approval to
31operate may be suspended or revoked.

32

begin deleteSEC. 45.end delete
33begin insertSEC. 47.end insert  

Section 94895 of the Education Code is amended to
34read:

35

94895.  

The board shall adopt by regulation the process and
36procedures whereby an institution shall seek authorization for
37substantive changes to an approval to operate.

38

begin deleteSEC. 46.end delete
39begin insertSEC. 48.end insert  

Section 94896 of the Education Code is amended to
40read:

P28   1

94896.  

(a) An institution that has been granted an approval to
2operate by means of accreditation shall only make a substantive
3change in accordance with the institution’s accreditation standards.

4(b) The institution shall notify the board of the substantive
5change on a form provided by the board.

6

begin deleteSEC. 47.end delete
7begin insertSEC. 49.end insert  

Section 94897 of the Education Code is amended to
8read:

9

94897.  

An institution shall not do any of the following:

10(a) Use, or allow the use of, any reproduction or facsimile of
11the Great Seal of the State of California on a diploma.

12(b) Promise or guarantee employment, or otherwise overstate
13the availability of jobs upon graduation.

14(c) Advertise concerning job availability, degree of skill, or
15length of time required to learn a trade or skill unless the
16information is accurate and not misleading.

17(d) Advertise, or indicate in promotional material, without
18including the fact that the educational programs are delivered by
19means of distance education if the educational programs are so
20delivered.

21(e) Advertise, or indicate in promotional material, that the
22institution is accredited, unless the institution has been accredited
23by an accrediting agency.

24(f) Solicit students for enrollment by causing an advertisement
25to be published in “help wanted” columns in a magazine,
26newspaper, or publication, or use “blind” advertising that fails to
27identify the institution.

28(g) Offer to compensate a student to act as an agent of the
29institution with regard to the solicitation, referral, or recruitment
30of any person for enrollment in the institution, except that an
31institution may award a token gift to a student for referring an
32individual, provided that the gift is not in the form of money, no
33more than one gift is provided annually to a student, and the gift’s
34cost is not more than one hundred dollars ($100).

35(h) Pay any consideration to a person to induce that person to
36sign an enrollment agreement for an educational program.

37(i) Use a name in any manner improperly implying any of the
38following:

P29   1(1) The institution is affiliated with any government agency,
2public or private corporation, agency, or association if it is not, in
3fact, thus affiliated.

4(2) The institution is a public institution.

5(3) The institution grants degrees, if the institution does not
6grant degrees.

7(j) In any manner make an untrue or misleading change in, or
8untrue or misleading statement related to, a test score, grade or
9record of grades, attendance record, record indicating student
10completion, placement, employment, salaries, or financial
11information, including any of the following:

12(1) A financial report filed with the board.

13(2) Information or records relating to the student’s eligibility
14for student financial aid at the institution.

15(3) Any other record or document required by this chapter or
16by the board.

17(k) Willfully falsify, destroy, or conceal any document of record
18while that document of record is required to be maintained by this
19chapter.

20(l) Use the terms “approval,” “approved,” “approval to operate,”
21or “approved to operate” without stating clearly and conspicuously
22that approval to operate means compliance with state standards as
23set forth in this chapter. If the board has granted an institution
24approval to operate, the institution may indicate that the institution
25isbegin delete “licensed”end deletebegin insert “authorized,” “licensed,”end insert or “licensed to operate,”
26but may not state or imply either of the following:

27(1) The institution or its educational programs are endorsed or
28recommended by the state or by the board.

29(2) The approval to operate indicates that the institution exceeds
30minimum state standards as set forth in this chapter.

31(m) Direct any individual to perform an act that violates this
32chapter, to refrain from reporting unlawful conduct to the board
33or another government agency, or to engage in any unfair act to
34persuade a student not to complain to the board or another
35government agency.

36(n) Compensate an employee involved in recruitment,
37enrollment, admissions, student attendance, or sales of educational
38materials to students on the basis of a commission, commission
39draw, bonus, quota, or other similar method related to the
40recruitment, enrollment, admissions, student attendance, or sales
P30   1of educational materials to students, except as provided in
2paragraph (1) or (2):

3(1) If the educational program is scheduled to be completed in
490 days or less, the institution shall pay compensation related to
5a particular student only if that student completes the educational
6program.

7(2) For institutions participating in the federal student financial
8aid programs, this subdivision shall not prevent the payment of
9compensation to those involved in recruitment, admissions, or the
10award of financial aid if those payments are in conformity with
11federal regulations governing an institution’s participation in the
12federal student financial aid programs.

13(o) Require a prospective student to provide personal contact
14information in order to obtain, from the institution’s Internet Web
15site, educational program information that is required to be
16contained in the school catalog or any information required
17pursuant to the consumer information requirements of Title IV of
18the federal Higher Education Act of 1965, and any amendments
19thereto.

20(p) Offer an associate, baccalaureate, master’s, or doctoral
21degree without disclosing to prospective students prior to
22enrollment whether the institution or the degree program is
23unaccredited and any known limitation of the degree, including,
24but not limited to, all of the following:

25(1) Whether a graduate of the degree program will be eligible
26to sit for the applicable licensure exam in California and other
27states.

28(2) A statement that reads: “A degree program that is
29 unaccredited or a degree from an unaccredited institution is not
30recognized for some employment positions, including, but not
31limited to, positions with the State of California.”

32(3) That a student enrolled in an unaccredited institution is not
33eligible for federal financial aid programs.

34

begin deleteSEC. 48.end delete
35begin insertSEC. 50.end insert  

Section 94898 of the Education Code is amended to
36read:

37

94898.  

(a) An institution shall not merge classes unless all of
38the students have received the same amount of instruction. This
39subdivision does not prevent the placement of students, who are
40enrolled in different educational programs, in the same class if that
P31   1class is part of each of the educational programs and the placement
2in a merged class will not impair the students’ learning of the
3subject matter of the class.

4(b) After a student has enrolled in an educational program, the
5institution shall not do either of the following:

6(1) Make any unscheduled suspension of any class unless caused
7by circumstances beyond the institution’s control.

8(2) Change the day or time during the period of attendance in
9which any class is offered to a day when the student is not
10scheduled to attend the institution or to a time that is outside of
11the range of time that the student is scheduled to attend the
12institution on the day for which the change is proposed unless at
13least 90 percent of the students who are enrolled consent to the
14change and the institution offers full refunds to the students who
15do not consent to the change. For the purpose of this paragraph,
16“range of time” means the period beginning with the time at which
17the student’s first scheduled class session for the day is set to start
18and ending with the time the student’s last scheduled class session
19for that day is set to finish.

20(c) If an institution enrolls a student in an educational program
21that is conducted at a specific site at the time of enrollment, the
22institution shall not convert the educational program to another
23method of delivery, such as by means of distance education. This
24subdivision does not apply to an educational program that also
25includes a distance education component, if the student is notified
26during the enrollment process, in writing, that the program contains
27a distance education component.

28(d) An institution shall not move the location of class instruction
29more than 25 miles from the location of instruction at the time of
30enrollment unless any of the following occur:

31(1) The institution discloses in writing to each student before
32enrollment in the educational program that the location of
33instruction will change after the educational program begins and
34the address of the new location.

35(2) The institution applies for, and the board grants, approval
36to change the location. The board shall grant the application within
3760 days if the board, after notice to affected students and an
38opportunity for them to be heard as prescribed by the board,
39concludes that the change in location would not be unfair or unduly
40burdensome to students. The board may grant approval to change
P32   1the location subject to reasonable conditions, such as requiring the
2institution to provide transportation, transportation costs, or refunds
3to adversely affected students.

4(3) The institution offers a full refund to students enrolled in
5the educational program who do not voluntarily consent to the
6change.

7(4) An unforeseeable and unavoidable circumstance outside of
8the control of the institution requires the change in the location of
9instruction.

10

begin deleteSEC. 49.end delete
11begin insertSEC. 51.end insert  

Section 94900.7 of the Education Code is amended
12to read:

13

94900.7.  

The recordkeeping requirements of this article shall
14not apply to an institution that is accredited, if the recordkeeping
15requirements of the accrediting organization are substantially
16similar to the recordkeeping requirements of this article, as
17determined by the board.

18

begin deleteSEC. 50.end delete
19begin insertSEC. 52.end insert  

Section 94904 of the Education Code is amended to
20read:

21

94904.  

(a) Before an ability-to-benefit student may execute
22an enrollment agreement, the institution shall have the student take
23an independently administered examination from the list of
24examinations prescribedbegin insert as of July 1, 2012,end insert by the United States
25Department of Education pursuant to Section 484(d) of the federal
26Higher Education Act of 1965 (20 U.S.C. Sec. 1070a etbegin delete seq.) as
27it is, from time to time, amended.end delete
begin insert seq.).end insert The student shall not enroll
28unless the student achieves a score, as specified by the United
29States Department of Education, demonstrating that the student
30may benefit from the education and training being offered.

31(b) If the United States Department of Education does not have
32a list of relevant examinations that pertain to the intended
33occupational training, the board may publish its own list of
34acceptable examinationsbegin insert and required passing scoresend insert.

35

begin deleteSEC. 51.end delete
36begin insertSEC. 53.end insert  

Section 94909 of the Education Code is amended to
37read:

38

94909.  

(a) Prior to enrollment, an institution shall provide a
39prospective student, either in writing or electronically, with a
40school catalog containing, at a minimum, all of the following:

P33   1(1) The name, address, telephone number, and, if applicable,
2Internet Web site address of the institution.

3(2) Except as specified in Article 2 (commencing with Section
494802), a statement that the institution is a private institution and
5that it is approved to operate by the board.

6(3) The following statements:

7(A) “Any questions a student may have regarding this catalog
8that have not been satisfactorily answered by the institution may
9be directed to the Board for Private Postsecondary Education at
10(address), Sacramento, CA (ZIP Code), (Internet Web site address),
11(telephone and fax numbers).”

12(B) “As a prospective student, you are encouraged to review
13this catalog prior to signing an enrollment agreement. You are also
14encouraged to review the School Performance Fact Sheet, which
15must be provided to you prior to signing an enrollment agreement.”

16(C) “A student or any member of the public may file a complaint
17about this institution with the Board for Private Postsecondary
18Education by calling (toll-free telephone number) or by completing
19a complaint form, which can be obtained on the board’s Internet
20Web site (Internet Web site address).”

21(4) The address or addresses where class sessions will be held.

22(5) A description of the programs offered and a description of
23the instruction provided in each of the courses offered by the
24institution, the requirements for completion of each program,
25including required courses, any final tests or examinations, any
26required internships or externships, and the total number of credit
27hours, clock hours, or other increments required for completion.

28(6) If the educational program is designed to lead to positions
29in a profession, occupation, trade, or career field requiring licensure
30in this state, a notice to that effect and a list of the requirements
31for eligibility for licensure.

32(7) Information regarding the faculty and their qualifications.

33(8) A detailed description of institutional policies in the
34following areas:

35(A) Admissions policies, including the institution’s policies
36regarding the acceptance of credits earned at other institutions or
37through challenge examinations and achievement tests, admissions
38requirements for ability-to-benefit students, and a list describing
39any transfer or articulation agreements between the institution and
40any other college or university that provides for the transfer of
P34   1credits earned in the program of instruction. If the institution has
2not entered into an articulation or transfer agreement with any
3other college or university, the institution shall disclose that fact.

4(B) Cancellation, withdrawal, and refund policies, including an
5explanation that the student has the right to cancel the enrollment
6agreement and obtain a refund of charges paid through attendance
7at the first class session, or the seventh day after enrollment,
8whichever is later. The text shall also include a description of the
9procedures that a student is required to follow to cancel the
10enrollment agreement or withdraw from the institution and obtain
11a refund consistent with the requirements of Article 13
12(commencing with Section 94919).

13(C) Probation and dismissal policies.

14(D) Attendance policies.

15(E) Leave-of-absence policies.

16(9) The schedule of total charges for a period of attendance and
17an estimated schedule of total charges for the entire educational
18program.

19(10) A statement reporting whether the institution participates
20in federal and state financial aid programs, and if so, all consumer
21information that is required to be disclosed to the student pursuant
22 to the applicable federal and state financial aid programs.

23(11) A statement specifying that, if a student obtains a loan to
24pay for an educational program, the student will have the
25responsibility to repay the full amount of the loan plus interest,
26less the amount of any refund, and that, if the student has received
27federal student financial aid funds, the student is entitled to a refund
28of the moneys not paid from federal student financial aid program
29funds.

30(12) A statement specifying whether the institution has a pending
31petition in bankruptcy, is operating as a debtor in possession, has
32filed a petition within the preceding five years, or has had a petition
33in bankruptcy filed against it within the preceding five years that
34resulted in reorganization under Chapter 11 of the United States
35Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).

36(13) If the institution provides placement services, a description
37of the nature and extent of the placement services.

38(14) A description of the student’s rights and responsibilities
39with respect to the Student Tuition Recovery Fund. This statement
40shall specify that it is a state requirement that a student who pays
P35   1his or her tuition is required to pay a state-imposed assessment for
2the Student Tuition Recovery Fund. This statement shall also
3describe the purpose and operation of the Student Tuition Recovery
4Fund and the requirements for filing a claim against the Student
5Tuition Recovery Fund.

6(15) The following statement:

7

8“NOTICE CONCERNING TRANSFERABILITY OF
9CREDITS AND CREDENTIALS EARNED AT OUR
10INSTITUTION


11The transferability of credits you earn at (name of institution)
12is at the complete discretion of an institution to which you
13may seek to transfer. Acceptance of the (degree, diploma, or
14certificate) you earn in (name of educational program) is also
15at the complete discretion of the institution to which you may
16seek to transfer. If the (credits or degree, diploma, or
17certificate) that you earn at this institution are not accepted at
18the institution to which you seek to transfer, you may be
19required to repeat some or all of your coursework at that
20institution. For this reason you should make certain that your
21attendance at this institution will meet your educational goals.
22This may include contacting an institution to which you may
23seek to transfer after attending (name of institution) to
24determine if your (credits or degree, diploma or certificate)
25will transfer.”

26

27(16) A statement specifying whether the institution, or any of
28its degree programs, are accredited by an accrediting agency
29recognized by the United States Department of Education. If the
30institution is unaccredited and offers an associate, baccalaureate,
31master’s, or doctoral degree, or is accredited and offers an
32unaccredited program for an associate, baccalaureate, master’s, or
33doctoral degree, the statement shall disclose the known limitations
34of the degree program, including, but not limited to, all of the
35following:

36(A) Whether a graduate of the degree program will be eligible
37to sit for the applicable licensure exam in California and other
38states.

39(B) A degree program that is unaccredited or a degree from an
40unaccredited institution is not recognized for some employment
P36   1positions, including, but not limited to, positions with the State of
2California.

3(C) That a student enrolled in an unaccredited institution is not
4eligible for federal financial aid programs.

5(b) If the institution has a general student brochure, the
6institution shall provide that brochure to the prospective student
7prior to enrollment. In addition, if the institution has a
8program-specific student brochure for the program in which the
9prospective student seeks to enroll, the institution shall provide
10the program-specific student brochure to the prospective student
11prior to enrollment.

12(c) An institution shall provide the school catalog to any person
13upon request. In addition, if the institution has student brochures,
14the institution shall disclose the requested brochures to any
15interested person upon request.

16

begin deleteSEC. 52.end delete
17begin insertSEC. 54.end insert  

Section 94910 of the Education Code is amended to
18read:

19

94910.  

Prior to enrollment, an institution shall provide a
20prospective student with a School Performance Fact Sheet
21containing, at a minimum, the following information, as it relates
22to the educational program:

23(a) Completion rates, as calculated pursuant to Article 16
24(commencing with Section 94928).

25(b) Placement rates for each educational program, as calculated
26pursuant to Article 16 (commencing with Section 94928), if the
27educational program is designed to lead to, or the institution makes
28any express or implied claim related to preparing students for, a
29recognized career, occupation, vocation, job, or job title.

30(c) License examination passage rates for programs leading to
31employment for which passage of a state licensing examination is
32required, as calculated pursuant to Article 16 (commencing with
33Section 94928).

34(d) Salary or wage information, as calculated pursuant to Article
3516 (commencing with Section 94928).

36(e) If a program is too new to provide data for any of the
37categories listed in this subdivision, the institution shall state on
38its fact sheet: “This program is new. Therefore, the number of
39students who graduate, the number of students who are placed, or
40the starting salary you can earn after finishing the educational
P37   1program are unknown at this time. Information regarding general
2salary and placement statistics may be available from government
3sources or from the institution, but is not equivalent to actual
4performance data.”

5(f) All of the following:

6(1) A description of the manner in which the figures described
7in subdivisions (a) to (d), inclusive, are calculated or a statement
8informing the reader of where he or she may obtain a description
9of the manner in which the figures described in subdivisions (a)
10to (d), inclusive, are calculated.

11(2) A statement informing the reader of where he or she may
12obtain from the institution a list of the employment positions
13determined to be within the field for which a student received
14education and training for the calculation of job placement rates
15as required by subdivision (b).

16(3) A statement informing the reader of where he or she may
17obtain from the institution a list of the objective sources of
18information used to substantiate the salary disclosure as required
19by subdivision (d).

20(g) The following statements:

21(1) “This fact sheet is filed with the Board for Private
22Postsecondary Education. Regardless of any information you may
23have relating to completion rates, placement rates, starting salaries,
24or license exam passage rates, this fact sheet contains the
25information as calculated pursuant to state law.”

26(2) “Any questions a student may have regarding this fact sheet
27that have not been satisfactorily answered by the institution may
28be directed to the Board for Private Postsecondary Education at
29(address), Sacramento, CA (ZIP Code), (Internet Web site address),
30(telephone and fax numbers).”

31(h) If the institution participates in federal financial aid
32programs, the most recent three-year cohort default rate reported
33by the United States Department of Education for the institution
34and the percentage of enrolled students receiving federal student
35loans.

36

begin deleteSEC. 53.end delete
37begin insertSEC. 55.end insert  

Section 94911 of the Education Code is amended to
38read:

39

94911.  

An enrollment agreement shall include, at a minimum,
40all of the following:

P38   1(a) The name of the institution and the name of the educational
2program, including the total number of credit hours, clock hours,
3or other increment required to complete the educational program.

4(b) A schedule of total charges, including a list of any charges
5that are nonrefundable and the student’s obligations to the Student
6Tuition Recovery Fund, clearly identified as nonrefundable
7charges.

8(c) In underlined capital letters on the same page of the
9enrollment agreement in which the student’s signature is required,
10the total charges for the current period of attendance, the estimated
11 total charges for the entire educational program, and the total
12charges the student is obligated to pay upon enrollment.

13(d) A clear and conspicuous statement that the enrollment
14agreement is legally binding when signed by the student and
15accepted by the institution.

16(e) (1) A disclosure with a clear and conspicuous caption,
17“STUDENT’S RIGHT TO CANCEL,” under which it is explained
18that the student has the right to cancel the enrollment agreement
19and obtain a refund of charges paid through attendance at the first
20class session, or the seventh day after enrollment, whichever is
21later.

22(2) The disclosure shall contain the institution’s refund policy
23and a statement that, if the student has received federal student
24financial aid funds, the student is entitled to a refund of moneys
25not paid from federal student financial aid program funds.

26(3) The text shall also include a description of the procedures
27that a student is required to follow to cancel the enrollment
28agreement or withdraw from the institution and obtain a refund.

29(f) A statement specifying that, if the student obtains a loan to
30pay for an educational program, the student will have the
31responsibility to repay the full amount of the loan plus interest,
32less the amount of any refund.

33(g) A statement specifying that, if the student is eligible for a
34loan guaranteed by the federal or state government and the student
35defaults on the loan, both of the following may occur:

36(1) The federal or state government or a loan guarantee agency
37may take action against the student, including applying any income
38tax refund to which the person is entitled to reduce the balance
39owed on the loan.

P39   1(2) The student may not be eligible for any other federal student
2financial aid at another institution or other government assistance
3until the loan is repaid.

4(h) The transferability disclosure that is required to be included
5in the school catalog, as specified in paragraph (15) of subdivision
6(a) of Section 94909.

7(i) (1) The following statement: “Prior to signing this enrollment
8agreement, you must be given a catalog or brochure and a School
9Performance Fact Sheet, which you are encouraged to review prior
10to signing this agreement. These documents contain important
11policies and performance data for this institution. This institution
12is required to have you sign and date the information included in
13 the School Performance Fact Sheet relating to completion rates,
14placement rates, license examination passage rates, salaries or
15wages, and the most recent three-year cohort default rate, if
16applicable, prior to signing this agreement.”

17(2) Immediately following the statement required by paragraph
18(1), a line for the student to initial, including the following
19statement: “I certify that I have received the catalog, School
20Performance Fact Sheet, and information regarding completion
21rates, placement rates, license examination passage rates, salary
22or wage information, and the most recent three-year cohort default
23rate, if applicable, included in the School Performance Fact Sheet,
24and have signed, initialed, and dated the information provided in
25the School Performance Fact Sheet.”

26(j) The following statements:

27

28(1) “Any questions a student may have regarding this
29enrollment agreement that have not been satisfactorily
30answered by the institution may be directed to the Board for
31Private Postsecondary Education at (address), Sacramento,
32CA (ZIP Code), (Internet Web site address), (telephone and
33fax numbers).”

34

35(2) “A student or any member of the public may file a complaint
36about this institution with the Board for Private Postsecondary
37Education by calling (toll-free telephone number) or by completing
38a complaint form, which can be obtained on the board’s Internet
39Web site (Internet Web site address).”

40

P40   1(k) The following statement above the space for the student’s
2signature:

3

4“I understand that this is a legally binding contract. My
5signature below certifies that I have read, understood, and
6agreed to my rights and responsibilities, and that the
7institution’s cancellation and refund policies have been clearly
8explained to me.”

9

10

begin deleteSEC. 54.end delete
11begin insertSEC. 56.end insert  

Section 94913 of the Education Code is amended to
12read:

13

94913.  

(a) An institution that maintains an Internet Web site
14shall provide on that Internet Web site all of the following:

15(1) The school catalog.

16(2) A School Performance Fact Sheet for each educational
17program offered by the institution.

18(3) Student brochures offered by the institution.

19(4) A link to the board’s Internet Web site.

20(5) The institution’s most recent annual report submitted to the
21board.

22(b) An institution shall include information concerning where
23students may access the board’s Internet Web site anywhere the
24institution identifies itself as being approved by the board.

25

begin deleteSEC. 55.end delete
26begin insertSEC. 57.end insert  

Section 94920 of the Education Code is amended to
27read:

28

94920.  

An institution that does not participate in the federal
29student financial aid programs shall do all of the following:

30(a) The institution shall advise each student that a notice of
31cancellation shall be in writing, and that a withdrawal may be
32effectuated by the student’s written notice or by the student’s
33conduct, including, but not necessarily limited to, a student’s lack
34of attendance.

35(b) Institutions shall refund 100 percent of the amount paid for
36institutional charges, less a reasonable deposit or application fee
37not to exceed two hundred fifty dollars ($250), if notice of
38cancellation is made through attendance at the first class session,
39or the seventh day after enrollment, whichever is later.

P41   1(c) The board may adopt by regulation a different method of
2calculation for instruction delivered by other means, including,
3but not necessarily limited to, distance education.

4(d) The institution shall have a refund policy for the return of
5unearned institutional charges if the student cancels an enrollment
6agreement or withdraws during a period of attendance. The refund
7policy for students who have completed 60 percent or less of the
8period of attendance shall be a pro rata refund.

9(e) The institution shall pay or credit refunds within 45 days of
10a student’s cancellation or withdrawal.

11

begin deleteSEC. 56.end delete
12begin insertSEC. 58.end insert  

Section 94921 of the Education Code is amended to
13read:

14

94921.  

An institution offering an educational program for
15which the refund calculations set forth in this article cannot be
16utilized because of the unique way in which the educational
17program is structured, may petition the board for an alternative
18method of calculating tuition refunds.

19

begin deleteSEC. 57.end delete
20begin insertSEC. 59.end insert  

Section 94923 of the Education Code is amended to
21read:

22

94923.  

(a) Thebegin delete boardend deletebegin insert Student Tuition Recovery Fund relieves
23or mitigates economic loss suffered by a student while enrolled in
24an educational program at a nonexempt institution under Article
254 (commencing with Section 94874), as a result of the institution’s
26violation of law.end insert

27begin insert(b)end insertbegin insertend insertbegin insertThe boardend insert shall adopt by regulation procedures governing
28the administration and maintenance of the Student Tuition
29Recovery Fund, including requirements relating to assessments
30on students and student claims against the Student Tuition
31Recovery Fund.begin insert The regulations shall provide for awards to
32students who suffer economic loss.end insert

33The regulations shall ensure that the following students, and any
34other students deemed appropriate, are eligible for payment from
35the Student Tuition Recovery Fund:

36(1) In the event of a school closure, a student who attended the
37institution within 120 days of the closurebegin insert, or within a different
38period prior to the closure as determined by the boardend insert
.

39(2) Students to whom an institution has been ordered to pay
40refunds by the board but has failed to do so.

P42   1(3) Students who have been awarded restitution, refunds or
2monetary awards by an arbitrator or court,begin insert based on a violation of
3law,end insert
but who have been unable to collect the award from the
4institution.begin insert The board shall review the judgment to verify a
5violation of law, and shall ensure the amount of the award does
6not exceed the student’s economic loss.end insert

7(4) Students whose programs have been discontinued at the
8campus they attend before they are able to complete the program.

begin delete

9(b)

end delete

10begin insert(c)end insert Students who suffered losses due to an institution’s violation
11of this actbegin insert, as determined by the board,end insert shall be eligible for
12payment from the Student Tuition Recovery Fund.

begin insert

13(d) The board may seek repayment to the Student Tuition
14Recovery Fund from an institution found in violation of the law
15for which a student claim was paid.

end insert
begin insert

16(e) For purposes of this article, “economic loss” means
17pecuniary loss, which is the sum of the student’s tuition, cost of
18equipment and materials required for the educational program as
19defined in Section 94837, and interest on any student loan used to
20pay for such charges, collection costs, and penalties. Economic
21loss shall also include the amount the institution collected and
22failed to pay to third parties on behalf of the student for license
23fees or any other purpose. Economic loss does not include Student
24Tuition Recovery Fund assessments, room and board, supplies,
25transportation, application fees, or nonpecuniary damages such
26as inconvenience, aggravation, emotional distress, or punitive
27damages.

end insert
28

begin deleteSEC. 58.end delete
29begin insertSEC. 60.end insert  

Section 94924 of the Education Code is amended to
30read:

31

94924.  

All assessments collected pursuant to this article shall
32be credited to the Student Tuition Recovery Fund, along with any
33accrued interest, for the purpose of this article. Notwithstanding
34Section 13340 of the Government Code, the moneys in the Student
35Tuition Recovery Fund are continuously appropriated to the board,
36without regard to fiscal year, for the purposes of this article.

37

begin deleteSEC. 59.end delete
38begin insertSEC. 61.end insert  

Section 94926 of the Education Code is amended to
39read:

P43   1

94926.  

At least 30 days prior to closing, an institution shall
2notify the board in writing of its intention to close. The notice shall
3be accompanied by a closure plan, which shall include, but not
4necessarily be limited to, all of the following:

5(a) A plan for providing teach-outs of educational programs,
6including any agreements with any other postsecondary educational
7institutions to provide teach-outs.

8(b) If no teach-out plan is contemplated, or for students who do
9not wish to participate in a teach-out, arrangements for making
10refunds within 45 days from the date of closure, or for institutions
11that participate in federal student financial aid programs
12arrangements for making refunds and returning federal student
13financial aid program funds.

14(c) If the institution is a participant in federal student financial
15aid programs, it shall provide students information concerning
16these programs and institutional closures.

17(d) A plan for the disposition of student records.

18

begin deleteSEC. 60.end delete
19begin insertSEC. 62.end insert  

Section 94927 of the Education Code is amended to
20read:

21

94927.  

An institution shall be considered in default of the
22enrollment agreement when an educational program is discontinued
23or canceled or the institution closes prior to completion of the
24educational program. When an institution is in default, student
25institutional charges may be refunded on a pro rata basis if the
26board determines that the school has made provision for students
27enrolled at the time of default to complete a comparable educational
28program at another institution at no additional charge to the
29students beyond the amount of the total charges in the original
30enrollment agreement. If the institution does not make that
31provision, a total refund of all institutional charges shall be made
32to students.

33

begin deleteSEC. 61.end delete
34begin insertSEC. 63.end insert  

Section 94927.5 of the Education Code is amended
35to read:

36

94927.5.  

(a) Prior to closing, an institution shall provide the
37board with the following:

38(1) Pertinent student records, including transcripts, as determined
39by the board, pursuant to regulations adopted by the board.

P44   1(2) If the institution is an accredited institution, a plan for the
2retention of records and transcripts, approved by the institution’s
3accrediting agency, that provides information as to how a student
4may obtain a transcript or any other information about the student’s
5coursework and degrees completed.

6(b) Subdivision (a) applies to all private postsecondary
7institutions, including institutions that are otherwise exempt from
8this chapter pursuant to Article 4 (commencing with Section
994874).

10

begin deleteSEC. 62.end delete
11begin insertSEC. 64.end insert  

Section 94928 of the Education Code is amended to
12read:

13

94928.  

As used in this article, the following terms have the
14following meanings:

15(a) “Cohort population” means the number of students that
16began a program on a cohort start date.

17(b) “Cohort start date” means the first class day after the
18cancellation period during which a cohort of students attends class
19for a specific program.

20(c) “Graduates” means the number of students who complete a
21program within 100 percent of the published program length. An
22institution may separately state completion information for students
23completing the program within 150 percent of the original
24contracted time, but that information may not replace completion
25information for students completing within the original scheduled
26time. Completion information shall be separately stated for each
27campus or branch of the institution.

28(d) “Graduates available for employment” means the number
29of graduates minus the number of graduates unavailable for
30employment.

31(e) (1) “Graduates employed in the field” means graduates who
32are gainfully employed in a single position for which the institution
33represents the program prepares its graduates within six months
34after a student completes the applicable educational program. For
35occupations for which the state requires passing an examination,
36the period of employment shall begin within six months of the
37announcement of the examination results for the first examination
38available after a student completes an applicable educational
39program.

P45   1(2) The board shall define by July 1, 2014, specific measures
2and standards for determining whether a student is gainfully
3employed in a full-time or part-time position for which the
4institution represents the program prepares its graduates, including
5self-employment or conducting freelance work, and may set the
6standards for the hours per week and duration of employment and
7utilize any job classification methodology the board determines
8appropriate for this purpose, including, but not limited to, the
9United States Department of Labor’s Standard Occupational
10Classification codes.

11(3) This subdivision does not prohibit the board from authorizing
12an institution to aggregate single positions held by a graduate for
13purposes of meeting the hours per week standards established by
14the board.

15(f) “Graduates unavailable for employment” means graduates
16who, after graduation, die, become incarcerated, are called to active
17military duty, are international students that leave the United States
18or do not have a visa allowing employment in the United States,
19or are continuing their education at an accredited or board-approved
20postsecondary institution.

21(g) “Students available for graduation” means the cohort
22population minus the number of students unavailable for
23graduation.

24(h) “Students unavailable for graduation” means students who
25have died, been incarcerated, or called to active military duty.

26

begin deleteSEC. 63.end delete
27begin insertSEC. 65.end insert  

Section 94929 of the Education Code is amended to
28read:

29

94929.  

(a) An institution shall annually report to the board,
30as part of the annual report, and publish in its School Performance
31Fact Sheet, the completion rate for each program. Except as
32provided in subdivision (b), the completion rate shall be calculated
33by dividing the number of graduates by the number of students
34available for graduation.

35(b) In lieu of calculating graduation data pursuant to subdivision
36(a), an institution may report graduation data reported to, and
37calculated by, the Integrated Postsecondary Education Data System
38of the United States Department of Education.

P46   1

begin deleteSEC. 64.end delete
2begin insertSEC. 66.end insert  

Section 94929.5 of the Education Code is amended
3to read:

4

94929.5.  

(a) An institution shall annually report to the board,
5as part of the annual report, and shall publish in its School
6Performance Fact Sheet, all of the following:

7(1) The job placement rate, calculated by dividing the number
8of graduates employed in the field by the number of graduates
9available for employment for each program that is either (1)
10designed, or advertised, to lead to a particular career, or (2)
11advertised or promoted with any claim regarding job placement.

12(2) The license examination passage rates for the immediately
13preceding two years for programs leading to employment for which
14passage of a state licensing examination is required, calculated by
15dividing the number of graduates who pass the examination by the
16number of graduates who take the licensing examination the first
17time that the examination is available after completion of the
18educational program. The institution shall use state agency
19licensing data to calculate license examination passage rates. If
20those data are unavailable, the institution shall calculate the license
21examination passage rate in a manner consistent with regulations
22adopted by the board.

23(3) Salary and wage information, consisting of the total number
24of graduates employed in the field and the annual wages or salaries
25of those graduates stated in increments of five thousand dollars
26($5,000).

27(4) If applicable, the most recent official three-year cohort
28default rate reported by the United States Department of Education
29for the institution and the percentage of enrolled students receiving
30federal student loans.

31(b) Nothing in this section shall limit the board’s authority to
32collect information from an institution to comply with this section
33and ensure, by regulation and other lawful means, that the
34information required by this section, and the manner in which it
35is collected and reported, is all of the following:

36(1) Useful to students.

37(2) Useful to policymakers.

38(3) Based upon the most credible and verifiable data available.

39(4) Does not impose undue compliance burdens on an institution.

P47   1

begin deleteSEC. 65.end delete
2begin insertSEC. 67.end insert  

Section 94929.7 of the Education Code is amended
3to read:

4

94929.7.  

(a) The information used to substantiate the rates
5and information calculated pursuant to Sections 94929 and 94929.5
6shall do both of the following:

7(1) Be documented and maintained by the institution for five
8years from the date of the publication of the rates and information.

9(2) Be retained in an electronic format and made available to
10the board upon request.

11(b) An institution shall provide a list of employment positions
12used to determine the number of graduates employed in the field
13for purposes of calculating job placement rates pursuant to this
14article.

15(c) The board shall identify the specific information that an
16institution is required to document and maintain to substantiate
17rates and information pursuant to this section.

18

begin deleteSEC. 66.end delete
19begin insertSEC. 68.end insert  

Section 94929.8 of the Education Code is amended
20to read:

21

94929.8.  

(a) The board shall establish, by regulation as
22specified in Section 94877, a uniform method for institutions to
23obtain statistically valid, current, and representative data to comply
24with this article.

25(b) A violation of the regulations adopted pursuant to
26subdivision (a) is a material violation of this chapter.

27

begin deleteSEC. 67.end delete
28begin insertSEC. 69.end insert  

Section 94929.9 is added to the Education Code, to
29read:

30

94929.9.  

(a) The board shall report to the Legislature, on or
31before October 1, 2015, onbegin delete efforts to streamline the board’s
32approval to operate process for institutions while ensuringend delete
begin insert whether
33data reporting and disclosure requirements under the act may be
34appropriately consolidated with reporting required by other
35regulatory bodies, including, but not limited to, the United States
36Department of Education, the Student Aid Commission, or
37accrediting agencies. It is the intent of the Legislatureend insert
that the
38same or similar databegin delete information,end delete as is required to be reported to
39the board pursuant to thisbegin delete article, is beingend deletebegin insert article shall beend insert reported
40to students in a clear and conspicuous manner.

P48   1(b) (1) A report to be submitted to the Legislature pursuant to
2subdivision (a) shall be submitted in compliance with Section 9795
3of the Government Code.

4(2) Pursuant to Section 10231.5 of the Government Code, this
5section is repealed January 1, 2019.

6

begin deleteSEC. 68.end delete
7begin insertSEC. 70.end insert  

Section 94930 of the Education Code is amended to
8read:

9

94930.  

(a) All fees collected pursuant to this article, including
10any interest on those fees, shall be deposited in the Private
11Postsecondary Education Administration Fund, and shall be
12available, upon appropriation by the Legislature, for expenditure
13by the board for the administration of this chapter.

14(b) If the board determines by regulation that the adjustment of
15the fees established by this article is consistent with the intent of
16this chapter, the board may adjust the fees. However, the board
17shall not maintain a reserve balance in the Private Postsecondary
18Education Administration Fund in an amount that is greater than
19the amount necessary to fund six months of authorized operating
20expenses of the board in any fiscal year.

21

begin deleteSEC. 69.end delete
22begin insertSEC. 71.end insert  

Section 94930.5 of the Education Code is amended
23to read:

24

94930.5.  

Subject to Section 94930, an institution shall remit
25to the board for deposit in the Private Postsecondary Education
26Administration Fund the following fees, in accordance with the
27following schedule:

28(a) The following fees shall be remitted by an institution
29submitting an application for an approval to operate, if applicable:

30(1) Application fee for an approval to operate: five thousand
31dollars ($5,000).

32(2) Application fee for the approval to operate a new branch of
33the institution: three thousand dollars ($3,000).

34(3) Application fee for an approval to operate by means of
35accreditation: seven hundred fifty dollars ($750).

36(b) The following fees shall be remitted by an institution seeking
37a renewal of its approval to operate, if applicable:

38(1) Renewal fee for the main campus of the institution: three
39thousand five hundred dollars ($3,500).

P49   1(2) Renewal fee for a branch of the institution: three thousand
2dollars ($3,000).

3(3) Renewal fee for an institution that is approved to operate by
4means of accreditation: five hundred dollars ($500).

5(c) The following fees shall apply to an institution seeking
6authorization of a substantive change to its approval to operate, if
7applicable:

8(1) Processing fee for authorization of a substantive change to
9an approval to operate: five hundred dollars ($500).

10(2) Processing fee in connection with a substantive change to
11an approval to operate by means of accreditation: two hundred
12fifty dollars ($250).

13(d) (1) In addition to any fees paid to the board pursuant to
14subdivisions (a) to (c), inclusive, each institution that is approved
15to operate pursuant to this chapter shall remit both of the following:

16(A) An annual institutional fee, in an amount equal to
17three-quarters of 1 percent of the institution’s annual revenues
18derived from students in California, but not exceeding a total of
19twenty-five thousand dollars ($25,000) annually.

20(B) An annual branch fee of one thousand dollars ($1,000) for
21each branch or campus of the institution operating in California.

22(2) The amount of the annual fees pursuant to paragraph (1)
23shall be proportional to the board’s cost of regulating the institution
24under this chapter.

25

begin deleteSEC. 70.end delete
26begin insertSEC. 72.end insert  

Section 94931.5 of the Education Code is amended
27to read:

28

94931.5.  

(a) The board may propose modifications to the fee
29schedule in Section 94930.5 to the Governor and the Legislature
30to add or delete categories of fees related to work performed by
31the board and propose to the Governor and the Legislature the
32maximum amount to be charged for each fee category added to
33the fee schedule. The fee schedule shall provide adequate resources
34for the board to effectively implement this chapter.

35(b) The board shall annually publish a schedule of the current
36fees to be charged pursuant to this article and shall make this
37schedule available to the public.

38

begin deleteSEC. 71.end delete
39begin insertSEC. 73.end insert  

Section 94932 of the Education Code is amended to
40read:

P50   1

94932.  

The board shall determine an institution’s compliance
2with the requirements of this chapter. The board shall have the
3power to require reports that institutions shall file with the board
4in addition to the annual report, to send staff to an institution’s
5sites, and to require documents and responses from an institution
6to monitor compliance. When the board has reason to believe that
7an institution may be out of compliance, it shall conduct an
8investigation of the institution. If the board determines, after
9completing an investigation, that an institution has violated any
10applicable law or regulation, the board shall take appropriate action
11pursuant to this article.

12

begin deleteSEC. 72.end delete
13begin insertSEC. 74.end insert  

Section 94932.5 of the Education Code is amended
14to read:

15

94932.5.  

(a) As part of its compliance program, the board shall
16perform announced and unannounced inspections of institutions
17at least every five years.

18(b) On or before January 1, 2016, the board shall adopt
19regulations setting forth policies and practices to ensure that student
20protections are the highest priority of inspections and that
21inspections are conducted based on risk and potential harm to
22students. The regulations shall also set forth policies and practices
23for providing notice to students enrolled at an institution of the
24results of each inspection of the institution.

25

begin deleteSEC. 73.end delete
26begin insertSEC. 75.end insert  

Section 94933 of the Education Code is amended to
27read:

28

94933.  

The board shall provide an institution with the
29opportunity to remedy noncompliance, impose fines, place the
30institution on probation, or suspend or revoke the institution’s
31approval to operate, in accordance with this article, as it deems
32appropriate based on the severity of an institution’s violations of
33this chapter, and the harm caused to students.

34

begin deleteSEC. 74.end delete
35begin insertSEC. 76.end insert  

Section 94933.5 of the Education Code is amended
36to read:

37

94933.5.  

As much as is practicable, the board shall seek to
38resolve instances of noncompliance, including the use of alternative
39dispute resolution procedures in Article 5 (commencing with
P51   1Section 11420.10) of Chapter 4.5 of Part 1 of Division 3 of Title
22 of the Government Code.

3

begin deleteSEC. 75.end delete
4begin insertSEC. 77.end insert  

Section 94934 of the Education Code is amended to
5read:

6

94934.  

(a) As part of the compliance program, an institution
7shall submit an annual report to the board, under penalty of perjury,
8signed by a responsible corporate officer, by July 1 of each year,
9or another date designated by the board, and it shall include the
10following information for educational programs offered in the
11reporting period:

12(1) The total number of students enrolled by level of degree or
13for a diploma.

14(2) The number of degrees, by level, and diplomas awarded.

15(3) The degree levels and diplomas offered.

16(4) The Student Performance Fact Sheet, as required pursuant
17 to Section 94910.

18(5) The school catalog, as required pursuant to Section 94909.

19(6) The total charges for each educational program by period
20of attendance.

21(7) A statement indicating whether the institution is, or is not,
22current in remitting Student Tuition Recovery Fund assessments.

23(8) A statement indicating whether an accrediting agency has
24taken any final disciplinary action against the institution.

25(9) Additional information deemed by the board to be reasonably
26required to ascertain compliance with this chapter.

27(b) The board shall prescribe the annual report’s format and
28method of delivery.

29

begin deleteSEC. 76.end delete
30begin insertSEC. 78.end insert  

Section 94935 of the Education Code is amended to
31read:

32

94935.  

(a) Board staff who, during an inspection of an
33institution, detect a violation of this chapter, or regulations adopted
34pursuant to this chapter, that is a minor violation as determined by
35the board, pursuant to regulations, shall issue a notice to comply
36before leaving the institution. The board shall establish a voluntary
37informal appeal process, by regulation, within one year of the
38enactment of this chapter.

P52   1(b) An institution that receives a notice to comply shall have no
2more than 30 days from the date of inspection to remedy the
3noncompliance.

4(c) Upon achieving compliance, the institution shall sign and
5return the notice to comply to the board.

6(d) A single notice to comply shall be issued listing separately
7all the minor violations cited during the inspection.

8(e) A notice to comply shall not be issued for any minor
9violation that is corrected immediately in the presence of the board
10staff. Immediate compliance may be noted in the inspection report,
11but the institution shall not be subject to any further action by the
12board.

13(f) A notice to comply shall be the only means the board shall
14use to cite a minor violation discovered during an inspection. The
15board shall not take any other enforcement action specified in this
16chapter against an institution that has received a notice to comply
17if the institution remedies the violation within 30 days from the
18date of the inspection.

19(g) If an institution that receives a notice to comply pursuant to
20subdivision (a) disagrees with one or more of the alleged minor
21violations listed in the notice to comply, an institution shall send
22the board a written notice of disagreement. The agency may take
23administrative enforcement action to seek compliance with the
24requirements of the notice to comply.

25(h) If an institution fails to comply with a notice to comply
26within the prescribed time, the board shall take appropriate
27administrative enforcement action.

28

begin deleteSEC. 77.end delete
29begin insertSEC. 79.end insert  

Section 94936 of the Education Code is amended to
30read:

31

94936.  

(a) As a consequence of an investigation, and upon a
32finding that the institution has committed a violation of this chapter
33or that the institution has failed to comply with a notice to comply
34pursuant to Section 94935, the board shall issue a citation to an
35institution for violation of this chapter, or regulations adopted
36pursuant to this chapter.

37(b) The citation may contain either or both of the following:

38(1) An order of abatement that may require an institution to
39demonstrate how future compliance with this chapter or regulations
40adopted pursuant to this chapter will be accomplished.

P53   1(2) Notwithstanding Section 125.9 of the Business and
2Professions Code, an administrative fine not to exceed five
3thousand dollars ($5,000) for each violation. The board shall base
4its assessment of the administrative fine on:

5(A) The nature and seriousness of the violation.

6(B) The persistence of the violation.

7(C) The good faith of the institution.

8(D) The history of previous violations.

9(E) The purposes of this chapter.

10(F) The potential harm to students.

11(c) (1) The citation shall be in writing and describe the nature
12of the violation and the specific provision of law or regulation that
13is alleged to have been violated.

14(2) The citation shall inform the institution of its right to request
15a hearing in writing within 30 days from service of the citation.

16(3) If a hearing is requested, the board shall select an informal
17hearing pursuant to Article 10 (commencing with Section
1811445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the
19Government Code or a formal hearing pursuant to Chapter 5
20(commencing with Section 11500) of Part 1 of Division 3 of Title
212 of the Government Code.

22(4) If a hearing is not requested, payment of the administrative
23fine is due 30 days from the date of service, and shall not constitute
24an admission of the violation charged.

25(5) If a hearing is conducted and payment of an administrative
26fine is ordered, the administrative fine is due 30 days from when
27the final order is entered.

28(6) The board may enforce the administrative fine as if it were
29a money judgment pursuant to Title 9 (commencing with Section
30680.010) of Part 2 of the Code of Civil Procedure.

31(d) All administrative fines shall be deposited in the Private
32Postsecondary Education Administration Fund.

33

begin deleteSEC. 78.end delete
34begin insertSEC. 80.end insert  

Section 94937 of the Education Code is amended to
35read:

36

94937.  

(a) As a consequence of an investigation, and upon a
37finding that an institution has committed a violation, the board
38may place an institution on probation or may suspend or revoke
39an institution’s approval to operate for:

40(1) Obtaining an approval to operate by fraud.

P54   1(2) A material violation or repeated violations of this chapter
2or regulations adopted pursuant to this chapter that have resulted
3in harm to students. For purposes of this paragraph, “material
4violation” includes, but is not limited to, misrepresentation, fraud
5in the inducement of a contract, and false or misleading claims or
6advertising, upon which a student reasonably relied in executing
7an enrollment agreement and that resulted in harm to the student.

8(b) The board shall adopt regulations governing probation and
9suspension of an approval to operate.

10(c) The board may seek reimbursement pursuant to Section
11125.3 of the Business and Professions Code.

12(d) An institution shall not be required to pay the cost of
13investigation to more than one agency.

14

begin deleteSEC. 79.end delete
15begin insertSEC. 81.end insert  

Section 94938 of the Education Code is amended to
16read:

17

94938.  

(a) If the board determines that it needs to make an
18emergency decision to protect students, prevent misrepresentation
19to the public, or prevent the loss of public funds or moneys paid
20by students, it may do so pursuant to Article 13 (commencing with
21Section 11460.10) of Chapter 4.5 of Part 1 of Division 3 of Title
222 of the Government Code.

23(b) The board shall adopt regulations to give this section effect
24pursuant to Section 11460.20 of the Government Code.

25

begin deleteSEC. 80.end delete
26begin insertSEC. 82.end insert  

Section 94939 of the Education Code is amended to
27read:

28

94939.  

(a) The board may bring an action for equitable relief
29for any violation of this chapter. The equitable relief may include
30restitution, a temporary restraining order, the appointment of a
31receiver, and a preliminary or permanent injunction. The action
32may be brought in the county in which the defendant resides or in
33which any violation has occurred or may occur.

34(b) The remedies provided in this section supplement, and do
35not supplant, the remedies and penalties under other provisions of
36law.

37

begin deleteSEC. 81.end delete
38begin insertSEC. 83.end insert  

Section 94941 of the Education Code is amended to
39read:

P55   1

94941.  

(a) An individual who has cause to believe that an
2institution has violated this chapter, or regulations adopted pursuant
3to this chapter, may file a complaint with the board against the
4institution. The complaint shall set forth the alleged violation, and
5shall contain any other information as may be required by the
6board.

7(b) Taking into account the nature and seriousness of the alleged
8violation, the board shall take action to ascertain the facts and to
9verify the complaint. The action may include interviewing
10institution management, conducting an investigation, holding an
11informal hearing, or other appropriate investigative activity.

12(c) Upon the facts discovered, the board shall take appropriate
13 administrative enforcement action.

14(d) If the board finds that an institution’s violation of this chapter
15has caused damage or loss to a student or group of students, the
16board shall order the institution to provide appropriate restitution
17to that student or group of students.

18(e) The board shall establish a timeline by which complaints
19filed pursuant to this section shall be processed and establish
20procedures to prioritize complaints as follows:

21(1) “Urgent complaints” represent complaints regarding an
22immediate danger to the public health, safety, or welfare, and the
23board shall give these complaints the highest priority.

24(2) “High-priority complaints” include complaints that could
25potentially pose a danger, but pose no immediate danger, to the
26public health, safety, or welfare. The board shall give high-priority
27complaints less priority than urgent complaints but more priority
28than routine complaints.

29(3) “Routine complaints” are complaints that do not pose any
30significant risk of harm to the public health, safety, or welfare.

31

begin deleteSEC. 82.end delete
32begin insertSEC. 84.end insert  

Section 94942 of the Education Code is amended to
33read:

34

94942.  

(a) The board shall establish a toll-free telephone
35number staffed by a board employee by which a student or a
36member of the public may file a complaint under this chapter.

37(b) The board shall make a complaint form available on its
38Internet Web site. The board shall permit students and members
39of the public to file a complaint under this chapter through the
40board’s Internet Web site.

P56   1

begin deleteSEC. 83.end delete
2begin insertSEC. 85.end insert  

Section 94943 of the Education Code is amended to
3read:

4

94943.  

The following violations of this chapter are public
5offenses:

6(a) Knowingly operating a private postsecondary institution
7without an approval to operate is an infraction subject to the
8procedures described in Sections 19.6 and 19.7 of the Penal Code.

9(b) Knowingly providing false information to the board on an
10application for an approval to operate is an infraction subject to
11the procedures described in Sections 19.6 and 19.7 of the Penal
12Code.

13(c) Knowingly submitting, to the board, false information that
14is required to be reported pursuant to Article 16 (commencing with
15Section 94928) is an infraction subject to the procedures described
16in Sections 19.6 and 19.7 of the Penal Code.

17

begin deleteSEC. 84.end delete
18begin insertSEC. 86.end insert  

Section 94943.5 of the Education Code is amended
19to read:

20

94943.5.  

An institution shall designate and maintain an agent
21for service of process within this state, and provide the name,
22address, and telephone number of the agent to the board. The board
23shall furnish the agent’s name, address, and telephone number to
24a person upon request.

25

begin deleteSEC. 85.end delete
26begin insertSEC. 87.end insert  

Section 94944 of the Education Code is amended to
27read:

28

94944.  

Notwithstanding any other provision of law, the board
29shall cite any person, and that person shall be subject to a fine not
30to exceed fifty thousand dollars ($50,000), for operating an
31institution without proper approval to operate issued by the board
32pursuant to this chapter.

33

begin deleteSEC. 86.end delete
34begin insertSEC. 88.end insert  

Section 94944.5 of the Education Code is amended
35to read:

36

94944.5.  

Each institution subject to this chapter shall be deemed
37to have authorized its accrediting agency to provide the board, the
38Attorney General, any district attorney, city attorney, or the Student
39Aid Commission, within 30 days of written notice, copies of all
P57   1documents and other material concerning the institution that are
2maintained by the accrediting agency.

3

begin deleteSEC. 87.end delete
4begin insertSEC. 89.end insert  

Section 94944.6 of the Education Code is amended
5to read:

6

94944.6.  

Within 30 days of receiving a written notice from the
7board, the Attorney General, district attorney, city attorney, or the
8Student Aid Commission pursuant to Section 94944.5, an
9accrediting agency shall provide the requesting entity with all
10documents or other material concerning an institution accredited
11by that agency that are designated specifically or by category in
12the written notice.

13

begin deleteSEC. 88.end delete
14begin insertSEC. 90.end insert  

Section 94945 of the Education Code is amended to
15read:

16

94945.  

(a) This chapter does not limit or preclude the
17enforcement of rights or remedies under any other applicable statute
18or law.

19(b) This chapter does not limit or preclude the Attorney General,
20a district attorney, or a city attorney from taking any action
21otherwise authorized under any other applicable statute or law.

22(c) If the board has reason to believe that an institution’s
23noncompliance with the provisions of this chapter or any other
24applicable law significantly transcends the interests of the
25individual complainant, or the board has determined that the
26complexity of the case requires additional expertise and resources,
27the board shall contract with the Attorney General for investigative
28and prosecutorial services.

29

begin deleteSEC. 89.end delete
30begin insertSEC. 91.end insert  

Section 94948 of the Education Code is amended to
31read:

32

94948.  

In addition to any other reporting requirements under
33this chapter, the board shall provide regular updates to the
34Legislature by participating in annual oversight hearings conducted
35by the appropriate policy committees and budget subcommittees
36of the Senate and Assembly. The updates shall describe the board’s
37progress in adopting and enforcing regulations and the provisions
38of this chapter.

39

begin deleteSEC. 90.end delete
40begin insertSEC. 92.end insert  

Section 94949 of the Education Code is repealed.

P58   1

begin deleteSEC. 91.end delete
2begin insertSEC. 93.end insert  

Section 94949 is added to the Education Code, to
3read:

4

94949.  

(a) The board shallbegin delete contract for an independent review
5of its staffing resources, andend delete
providebegin insert toend insert the Legislature a copy of
6begin delete this reviewend deletebegin insert an independent review of its staffing resources,end insert along
7with an overview of how the board intends to ensure its staff are
8sufficiently qualified for purposes of implementing the provisions
9of this chapter,begin insert the estimated costs of meeting staffing and other
10requirements to implement this chapter, and the estimated fee
11revenue generated by the fee structure as outlined in Section
1294930.5, as of January 1, 2015,end insert
within 30 days of the completion
13of the independent reviewbegin insert, but no later than March 15, 2015end insert.

14(b) (1) A report to be submitted pursuant to subdivision (a)
15shall be submitted in compliance with Section 9795 of the
16Government Code.

17(2) Pursuant to Section 10231.5 of the Government Code, this
18section is repealed on January 1, 2019.

19

begin deleteSEC. 92.end delete
20begin insertSEC. 94.end insert  

Section 94950 of the Education Code is amended to
21read:

22

94950.  

This chapter shall remain in effect only until January
231, 2017, and as of that date is repealed, unless a later enacted
24statute, that is enacted before January 1, 2017, deletes or extends
25that date.

26

begin deleteSEC. 93.end delete
27begin insertSEC. 95.end insert  

No reimbursement is required by this act pursuant to
28Section 6 of Article XIII B of the California Constitution because
29the only costs that may be incurred by a local agency or school
30district will be incurred because this act creates a new crime or
31infraction, eliminates a crime or infraction, or changes the penalty
32for a crime or infraction, within the meaning of Section 17556 of
33the Government Code, or changes the definition of a crime within
34the meaning of Section 6 of Article XIII B of the California
35Constitution.



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