Amended in Assembly July 1, 2014

Amended in Assembly June 18, 2014

Amended in Assembly June 5, 2014

Senate Bill No. 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, 94837, 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, and 94875.5 to, to add and repeal Section 94929.9 of, to repeal Sections 94805, 94820, and 94833 of, and to repeal and add Sections 94803, 94880, 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 General, or other appropriate state agency, 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, 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 requirements, and establish application processing goals and timelines to ensure that an institution’s approval to operate application is promptly reviewed by the board. The bill would require the board to submit a report to the Legislature, on or before October 1, 2015, on whether data reporting and disclosure requirements under the act may be consolidated with reporting required by other federal and state regulatory bodies, 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 begin delete certain conditions are satisfied. end delete begin insert the board has reason to believe that an institution has engaged in a pattern or practice of violating the provisions of this act or any other applicable law. end insert

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:

SECTION 1.  

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

27.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 2.  

Section 94800.5 of the Education Code is amended to
read:

94800.5.  

Whenever a reference is made to the former Private
Postsecondary Education and Student Protection Act, the former
Private Postsecondary and Vocational Education Reform Act of
1989, or the former Chapter 7 (commencing with Section 94700)
of Part 59 of Division 10 of Title 3 of the Education Code, as it
read on June 30, 2007, by the provisions of any statute or
regulation, it shall be construed as referring to the provisions of
this chapter. Whenever a reference is made to the former Bureau
for Private Postsecondary and Vocational Education, or the Bureau
for Private Postsecondary Education, by the provisions of any
statute or regulation, after July 1, 2015, it shall be construed as
referring to the Board for Private Postsecondary Education.

SEC. 3.  

Section 94801 of the Education Code is amended to
read:

94801.  

The Legislature finds and declares all of the following:

(a) In 2013, more than 300,000 Californians attended more than
1,100 private postsecondary schools in California.

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

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

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

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

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

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

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

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

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

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

SEC. 4.  

Section 94802 of the Education Code is amended to
read:

94802.  

(a) An institution that had a valid approval to operate
on June 30, 2007, issued by the former Bureau for Private
Postsecondary and Vocational Education pursuant to former
Chapter 7 (commencing with Section 94700) of Part 59 of Division
10 of Title 3 of the Education Code, as it read on June 30, 2007,
shall maintain that approval under this chapter. For the purposes
of this chapter, the approval to operate shall be valid for three
calendar years after the expiration date of the approval, as it read
on June 30, 2007.

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

SEC. 5.  

Section 94803 of the Education Code is repealed.

SEC. 6.  

Section 94803 is added to the Education Code, to read:

94803.  

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

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

SEC. 7.  

Section 94804 of the Education Code is amended to
read:

94804.  

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

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

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

(b) Student complaints submitted prior to January 1, 2015, shall
continue to be duly recorded and investigated by the board.

SEC. 8.  

Section 94805 of the Education Code is repealed.

SEC. 9.  

Section 94808 of the Education Code is amended to
read:

94808.  

(a) Any Student Tuition Recovery Fund claims received
by the former Bureau for Private Postsecondary and Vocational
Education or the Bureau for Private Postsecondary Education prior
to January 1, 2015, that were not processed, shall be processed by
the board.

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

SEC. 10.  

Section 94809 of the Education Code is amended to
read:

94809.  

(a) (1) An institution that had an application for an
approval to operate pending with the former Bureau for Private
Postsecondary and Vocational Education on June 30, 2007, and
submitted an application for approval to operate to the Bureau for
Private Postsecondary Education, may continue to operate until a
decision is made in regard to the institution regarding the
application for approval to operate, but shall comply with, and is
subject to, this chapter.

(b) An institution that did not have a valid approval to operate
issued by, and did not have an application for approval to operate
pending with, the former Bureau for Private Postsecondary and
Vocational Education on June 30, 2007, that began operations
between July 1, 2007, and January 1, 2010, may continue to operate
unless a denial of approval to operate has been issued and has
become final, but shall comply with, and is subject to, this chapter.

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

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

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

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

SEC. 11.  

Section 94809.5 of the Education Code is amended
to read:

94809.5.  

Notwithstanding any other provision of law:

(a) For any claims that a student had based on a violation of the
Private Postsecondary and Vocational Education Reform Act of
1989 on or before June 30, 2007, the period of time from June 30,
2007, to December 31, 2009, inclusive, shall be excluded in
determining the deadline or the statute of limitation for filing any
claim with the board or a lawsuit based on any claim.

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

SEC. 12.  

Section 94813 of the Education Code is amended to
read:

94813.  

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

SEC. 13.  

Section 94816 of the Education Code is amended to
read:

94816.  

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

SEC. 14.  

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

94818.5.  

“Board” means the Board for Private Postsecondary
Education.

SEC. 15.  

Section 94820 of the Education Code is repealed.

SEC. 16.  

Section 94829 of the Education Code is amended to
read:

94829.  

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

SEC. 17.  

Section 94833 of the Education Code is repealed.

SEC. 18.  

Section 94837 of the Education Code is amended to
read:

94837.  

“Educational program” means a planned sequence
composed of a single course or module, or set of related courses
or modules, that provides the education, training, skills, and
experience leading to the award of a recognized educational
credential such as a document of completion, degree, or diploma.

SEC. 19.  

Section 94838 of the Education Code is amended to
read:

94838.  

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

SEC. 20.  

Section 94847 of the Education Code is amended to
read:

94847.  

“License and examination preparation” means
instruction designed to assist students to prepare for an examination
for licensure. “License and examination preparation” does not
include an educational program designed to instruct students in
the field of the licensure examination.

SEC. 21.  

Section 94861 of the Education Code is amended to
read:

94861.  

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

SEC. 22.  

Section 94874 of the Education Code is amended to
read:

94874.  

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

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

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

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

(d) An institution offering either of the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 23.  

Section 94874.1 of the Education Code is amended
to read:

94874.1.  

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

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

SEC. 24.  

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

94874.2.  

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

SEC. 25.  

Section 94874.7 of the Education Code is amended
to read:

94874.7.  

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

SEC. 26.  

Section 94874.8 of the Education Code is amended
to read:

94874.8.  

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

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

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

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

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

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

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

SEC. 27.  

The heading of Article 5 (commencing with Section
94875) of Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code is amended to read:

 

Article 5.  Board Powers and Duties

 

SEC. 28.  

Section 94875 of the Education Code is amended to
read:

94875.  

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

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

(2) Two members, who shall be current or former students of
institutions, appointed by the Governor begin insert , subject to confirmation
by the Senate Committee on Rules end insert .

(3) Three members, who shall be representatives of institutions,
appointed by the Governor begin insert , subject to confirmation by the Senate
Committee on Rules end insert .

(4) Two public members with experience or expertise in
postsecondary education, appointed by the Governor begin insert , subject to
confirmation by the Senate Committee on Rules end insert .

(5) One public member with knowledge or expertise in emerging
fields of employment, appointed by the Governor begin insert , subject to
confirmation by the Senate Committee on Rules end insert .

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

begin insert

(c) A public member appointed to the board pursuant to
subdivision (a) shall not be affiliated with an institution.

end insert begin insert

(d) A majority of the board constitutes a quorum for the
transaction of any business, for the performance of any duty, or
for the exercise of any power of the board. A vacancy in the board
does not impair the right of the remaining members to exercise all
the powers of the board.

end insert

SEC. 29.  

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

94875.5.  

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

SEC. 30.  

Section 94876 of the Education Code is amended to
read:

94876.  

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

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

begin insert

(c) The executive officer shall be selected from a list of five
candidates generated by the board.

end insert begin insert

(d) To assist the executive officer in the discharge of his or her
duties, the board shall appoint three to five deputies, as deemed
necessary by the board.

end insert

SEC. 31.  

Section 94877 of the Education Code is amended to
read:

94877.  

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

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

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

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

SEC. 32.  

Section 94878 of the Education Code is amended to
read:

94878.  

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

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

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

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

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

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

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

(I) Pending formal accusations filed by the board.

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

(III) Pending or final civil or criminal cases filed begin delete in any state
by a state attorney general, end delete begin insert by the Attorney General, end insert a city attorney,
begin insert or end insert a district attorney begin insert in this state end insert , or begin insert filed in any state by an attorney
general or end insert a federal regulatory or prosecutorial agency begin insert if the case
would be actionable under California or federal law end insert , of which the
board has received notice.

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

(V) All disciplinary actions ordered by an accreditation agency,
including any order to show cause, of which the board has received
notice pursuant to Section 94934 or other information otherwise
publicly available of which the board has received notice.

(b) The board shall maintain the Internet Web site described in
subdivision (a). The board shall ensure that the information
specified in subdivision (a) is kept current. The board shall update
the Internet Web site at least annually, to coincide with the
submission of annual reports by the institutions pursuant to Section
94934.

(c) (1) The board shall post on its Internet Web site a list of all
institutions that were denied approval to operate, after the denial
is final, and describe in clear and conspicuous language the reason
the institution was denied approval. The board shall include the
statement provided in paragraph (2) on its Internet Web site.

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

SEC. 33.  

Section 94879 of the Education Code is amended to
read:

94879.  

The board shall conduct an outreach program to
secondary school students as well as prospective and current private
postsecondary students, to provide them with information on how
to best select a private postsecondary institution, how to enter into
enrollment agreements, how to make informed decisions in the
private postsecondary education marketplace, and how to contact
the board for assistance. The board may accomplish the purposes
of this section in cooperation with other federal, state, or local
entities, or any combination of these entities.

SEC. 34.  

Section 94880 of the Education Code is repealed.

SEC. 35.  

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

94880.  

(a) The board shall establish a task force to determine
standards for educational and training programs specializing in
innovative subject matters and instructing students in high-demand
technology fields for which there is a demonstrated shortage of
skilled employees. The members of the task force may include
high technology employers, students of short-term focused high
technology training programs, and providers of high technology
training in subjects including, but not necessarily limited to,
programming, software development, computer science, and
coding.

(b) (1) The board shall provide a report to the Legislature
regarding educational and training programs subject to subdivision
(a), and the institutions offering those programs, no later than
January 1, 2016. The report shall include the board’s evaluation
of all of the following:

(A) Whether students attending these institutions should receive
certain disclosures prior to enrollment in a program.

(B) Whether the means of reporting student outcomes and the
content of those reports are appropriate.

(C) Whether institutions that satisfy certain criteria should be
regulated by the board and by this chapter.

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

(2) (A) The requirement for submitting a report imposed under
this subdivision is inoperative on January 1, 2019, pursuant to
Section 10231.5 of the Government Code.

(B) A report to be submitted pursuant to this subdivision shall
be submitted in compliance with Section 9795 of the Government
Code.

SEC. 36.  

Section 94881 of the Education Code is amended to
read:

94881.  

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

SEC. 37.  

Section 94882 of the Education Code is amended to
read:

94882.  

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

SEC. 38.  

Section 94883 of the Education Code is amended to
read:

94883.  

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

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

SEC. 39.  

Section 94884 of the Education Code is amended to
read:

94884.  

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

SEC. 40.  

Section 94885 of the Education Code is amended to
read:

94885.  

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 41.  

Section 94887 of the Education Code is amended to
read:

94887.  

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

SEC. 42.  

Section 94888 of the Education Code is amended to
read:

94888.  

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

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

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

(b) The board shall, by regulation, establish both of the
following:

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

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

SEC. 43.  

Section 94890 of the Education Code is amended to
read:

94890.  

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

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

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

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

SEC. 44.  

Section 94891 of the Education Code is amended to
read:

94891.  

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

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

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

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

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

SEC. 45.  

Section 94892 of the Education Code is amended to
read:

94892.  

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

SEC. 46.  

Section 94893 of the Education Code is amended to
read:

94893.  

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

SEC. 47.  

Section 94895 of the Education Code is amended to
read:

94895.  

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

SEC. 48.  

Section 94896 of the Education Code is amended to
read:

94896.  

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

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

SEC. 49.  

Section 94897 of the Education Code is amended to
read:

94897.  

An institution shall not do any of the following:

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

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

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

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

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

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

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

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

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

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

(2) The institution is a public institution.

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

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

(1) A financial report filed with the board.

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

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

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

(l) Use the terms “approval,” “approved,” “approval to operate,”
or “approved to operate” without stating clearly and conspicuously
that approval to operate means compliance with state standards as
set forth in this chapter. If the board has granted an institution
approval to operate, the institution may indicate that the institution
is “authorized,” “licensed,” or “licensed to operate,” but may not
state or imply either of the following:

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

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

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

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

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

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

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

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

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

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

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

SEC. 50.  

Section 94898 of the Education Code is amended to
read:

94898.  

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

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

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

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

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

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

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

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

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

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

SEC. 51.  

Section 94900.7 of the Education Code is amended
to read:

94900.7.  

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

SEC. 52.  

Section 94904 of the Education Code is amended to
read:

94904.  

(a) Before an ability-to-benefit student may execute
an enrollment agreement, the institution shall have the student take
an independently administered examination from the list of
examinations prescribed as of July 1, 2012, by the United States
Department of Education pursuant to Section 484(d) of the federal
Higher Education Act of 1965 (20 U.S.C. Sec. 1070a et seq.). The
student shall not enroll unless the student achieves a score, as
specified by the United States Department of Education,
demonstrating that the student may benefit from the education and
training being offered.

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

SEC. 53.  

Section 94909 of the Education Code is amended to
read:

94909.  

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

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

(2) Except as specified in Article 2 (commencing with Section
94802), a statement that the institution is a private institution and
that it is approved to operate by the board.

(3) The following statements:

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

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

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

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

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

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

(7) Information regarding the faculty and their qualifications.

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

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

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

(C) Probation and dismissal policies.

(D) Attendance policies.

(E) Leave-of-absence policies.

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

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

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

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

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

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

(15) The following statement:

 

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

 
The transferability of credits you earn at (name of institution)
is at the complete discretion of an institution to which you
may seek to transfer. Acceptance of the (degree, diploma, or
certificate) you earn in (name of educational program) is also
at the complete discretion of the institution to which you may
seek to transfer. If the (credits or degree, diploma, or
certificate) that you earn at this institution are not accepted at
the institution to which you seek to transfer, you may be
required to repeat some or all of your coursework at that
institution. For this reason you should make certain that your
attendance at this institution will meet your educational goals.
This may include contacting an institution to which you may
seek to transfer after attending (name of institution) to
determine if your (credits or degree, diploma begin insert , end insert or certificate)
will transfer.”

 

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

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

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

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

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

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

SEC. 54.  

Section 94910 of the Education Code is amended to
read:

94910.  

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

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

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

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

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

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

(f) All of the following:

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

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

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

(g) The following statements:

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

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

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

SEC. 55.  

Section 94911 of the Education Code is amended to
read:

94911.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(j) The following statements:

 

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

 

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

 

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

 

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

 

SEC. 56.  

Section 94913 of the Education Code is amended to
read:

94913.  

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

(1) The school catalog.

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

(3) Student brochures offered by the institution.

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

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

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

SEC. 57.  

Section 94920 of the Education Code is amended to
read:

94920.  

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

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

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

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

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

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

SEC. 58.  

Section 94921 of the Education Code is amended to
read:

94921.  

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

SEC. 59.  

Section 94923 of the Education Code is amended to
read:

94923.  

(a) The Student Tuition Recovery Fund relieves or
mitigates economic loss suffered by a student while enrolled in an
educational program at a nonexempt institution under Article 4
(commencing with Section 94874), as a result of the institution’s
violation of law.

(b) The board shall adopt by regulation procedures governing
the administration and maintenance of the Student Tuition
Recovery Fund, including requirements relating to assessments
on students and student claims against the Student Tuition
Recovery Fund. The regulations shall provide for awards to
students who suffer economic loss.

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

(1) In the event of a school closure, a student who attended the
institution within 120 days of the closure, or within a different
period prior to the closure as determined by the board.

(2)  begin delete Students end delete begin insert A student end insert to whom an institution has been ordered
to pay begin delete refunds end delete begin insert a refund end insert by the board but has failed to do so begin insert , unless
the student chose to participate in a teach-out plan approved by
the board end insert .

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

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

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

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

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

SEC. 60.  

Section 94924 of the Education Code is amended to
read:

94924.  

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

SEC. 61.  

Section 94926 of the Education Code is amended to
read:

94926.  

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

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

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

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

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

SEC. 62.  

Section 94927 of the Education Code is amended to
read:

94927.  

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

SEC. 63.  

Section 94927.5 of the Education Code is amended
to read:

94927.5.  

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

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

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

(b) Subdivision (a) applies to all private postsecondary
institutions, including institutions that are otherwise exempt from
this chapter pursuant to Article 4 (commencing with Section
94874).

SEC. 64.  

Section 94928 of the Education Code is amended to
read:

94928.  

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

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

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

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

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

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

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

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

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

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

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

SEC. 65.  

Section 94929 of the Education Code is amended to
read:

94929.  

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

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

SEC. 66.  

Section 94929.5 of the Education Code is amended
to read:

94929.5.  

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

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

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

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

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

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

(1) Useful to students.

(2) Useful to policymakers.

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

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

SEC. 67.  

Section 94929.7 of the Education Code is amended
to read:

94929.7.  

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

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

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

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

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

SEC. 68.  

Section 94929.8 of the Education Code is amended
to read:

94929.8.  

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

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

SEC. 69.  

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

94929.9.  

(a) The board shall report to the Legislature, on or
before October 1, 2015, on whether data reporting and disclosure
requirements under the act may be appropriately consolidated with
reporting required by other regulatory bodies, including, but not
limited to, the United States Department of Education, the Student
Aid Commission, or accrediting agencies. It is the intent of the
Legislature that the same or similar data as is required to be
reported to the board pursuant to this article shall be reported to
students in a clear and conspicuous manner.

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

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

SEC. 70.  

Section 94930 of the Education Code is amended to
read:

94930.  

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

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

SEC. 71.  

Section 94930.5 of the Education Code is amended
to read:

94930.5.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 72.  

Section 94931.5 of the Education Code is amended
to read:

94931.5.  

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

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

SEC. 73.  

Section 94932 of the Education Code is amended to
read:

94932.  

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

SEC. 74.  

Section 94932.5 of the Education Code is amended
to read:

94932.5.  

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

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

SEC. 75.  

Section 94933 of the Education Code is amended to
read:

94933.  

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

SEC. 76.  

Section 94933.5 of the Education Code is amended
to read:

94933.5.  

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

SEC. 77.  

Section 94934 of the Education Code is amended to
read:

94934.  

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

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

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

(3) The degree levels and diplomas offered.

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

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

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

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

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

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

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

SEC. 78.  

Section 94935 of the Education Code is amended to
read:

94935.  

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

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

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

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

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

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

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

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

SEC. 79.  

Section 94936 of the Education Code is amended to
read:

94936.  

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

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

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

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

(A) The nature and seriousness of the violation.

(B) The persistence of the violation.

(C) The good faith of the institution.

(D) The history of previous violations.

(E) The purposes of this chapter.

(F) The potential harm to students.

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

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

(3) If a hearing is requested, the board shall select an informal
hearing pursuant to Article 10 (commencing with Section
11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the
Government Code or a formal hearing pursuant to Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title
2 of the Government Code.

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

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

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

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

SEC. 80.  

Section 94937 of the Education Code is amended to
read:

94937.  

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

(1) Obtaining an approval to operate by fraud.

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

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

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

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

SEC. 81.  

Section 94938 of the Education Code is amended to
read:

94938.  

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

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

SEC. 82.  

Section 94939 of the Education Code is amended to
read:

94939.  

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

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

SEC. 83.  

Section 94941 of the Education Code is amended to
read:

94941.  

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

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

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

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

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

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

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

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

SEC. 84.  

Section 94942 of the Education Code is amended to
read:

94942.  

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

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

SEC. 85.  

Section 94943 of the Education Code is amended to
read:

94943.  

The following violations of this chapter are public
offenses:

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

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

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

SEC. 86.  

Section 94943.5 of the Education Code is amended
to read:

94943.5.  

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

SEC. 87.  

Section 94944 of the Education Code is amended to
read:

94944.  

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

SEC. 88.  

Section 94944.5 of the Education Code is amended
to read:

94944.5.  

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

SEC. 89.  

Section 94944.6 of the Education Code is amended
to read:

94944.6.  

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

SEC. 90.  

Section 94945 of the Education Code is amended to
read:

94945.  

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

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

begin delete

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

end delete begin insert

(c) If the board has reason to believe that an institution has
engaged in a pattern or practice of violating the provisions of this
chapter or any other applicable law that involves multiple students
or other claimants, the board shall contract with the Attorney
General for investigative and prosecutorial services, as necessary.

end insert

SEC. 91.  

Section 94948 of the Education Code is amended to
read:

94948.  

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

SEC. 92.  

Section 94949 of the Education Code is repealed.

SEC. 93.  

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

94949.  

(a) The board shall provide to the Legislature a copy
of an independent review of its staffing resources, along with an
overview of how the board intends to ensure its staff are
sufficiently qualified for purposes of implementing the provisions
of this chapter, the estimated costs of meeting staffing and other
requirements to implement this chapter, and the estimated fee
revenue generated by the fee structure as outlined in Section
94930.5, as of January 1, 2015, within 30 days of the completion
of the independent review, but no later than March 15, 2015.

begin insert

(b) The overview pursuant to subdivision (a) shall also include
an examination of the annual fee structure, including whether the
total fees paid by an institution should be subject to a maximum
and whether there are more equitable ways to assess annual fees
to an institution.

end insert begin delete

(b)

end delete

begin insert (c) end insert  (1) A report to be submitted pursuant to subdivision (a)
shall be submitted in compliance with Section 9795 of the
Government Code.

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

SEC. 94.  

Section 94950 of the Education Code is amended to
read:

94950.  

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

SEC. 95.  

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