Amended in Assembly August 18, 2014

Amended in Assembly July 1, 2014

Amended in Assembly June 18, 2014

Amended in Assembly June 5, 2014

Senate BillNo. 1247


Introduced by Senator Lieu

(Principal coauthor: Assembly Member Bonilla)

February 20, 2014


An act to amendbegin delete Section 27 of the Business and Professions Code, to amendend delete Sectionsbegin delete 94800.5,end delete 94801, 94802,begin delete 94804, 94808,end delete 94809, begin delete94809.5,end delete 94813, 94816, 94829, 94837,begin delete 94838,end delete 94847,begin delete 94861,end delete 94874, 94874.1,begin delete 94874.7, 94874.8, 94875,end delete 94876, 94877, 94878, 94879,begin delete 94881, 94882, 94883, 94884,end deletebegin insert 94880,end insert 94885,begin delete 94887,end delete 94888, 94890, 94891,begin delete 94892, 94893, 94895, 94896, 94897, 94898, 94900.7,end delete 94904, 94909, 94910,begin delete end deletebegin delete94911, 94913, 94920, 94921,end deletebegin insert 94916,end insert 94923, 94924,begin delete 94926, 94927, 94927.5,end deletebegin delete94928, 94929,end deletebegin insert 94925,end insert 94929.5,begin delete 94929.7, 94929.8, 94930,end delete 94930.5,begin delete 94931.5, 94932,end delete 94932.5,begin delete 94933, 94933.5, 94934, 94935, 94936, 94937, 94938, 94939,end delete 94941,begin delete 94942, 94943, 94943.5, 94944, 94944.5, 94944.6,end delete 94945, 94948, and 94950 of,begin delete to amend the heading of Article 5 (commencing with Section 94875) of Chapter 8 of Part 59 of Division 10 of Title 3 of,end delete to add Sectionsbegin delete 94818.5,end delete 94874.2,begin insert 94880.1, 94885.5, 94947,end insert andbegin delete 94875.5end deletebegin insert 94949.5end insert to, to add and repealbegin delete end deletebegin deleteSectionend deletebegin insert Sections 94885.1 andend insert 94929.9 of,begin delete to repeal Sections 94805, 94820, and 94833 of,end delete and to repeal and addbegin delete Sections 94803, 94880, andend deletebegin insert Sectionend insert 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.begin delete The bill would establish the Board for Private Postsecondary Education as a successor agency to the bureau on July 1, 2015.end delete The bill wouldbegin insert, beginning January 1, 2016,end insert 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 thebegin delete board, beginning July 1, 2015,end deletebegin insert bureauend insert to, among other things, contract with the Office of the Attorney General, or other appropriate state agency, to establish a process forbegin delete boardend deletebegin insert bureauend insert staff to be trained to investigate complaints filed with thebegin delete board,end deletebegin insert bureau,end insert post specified information on its Internet Web site, establish a task forcebegin insert no later than March 1, 2015,end insert 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 thebegin delete 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 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 deletebegin insert bureau.end insert

begin insert

The bill would require the Secretary of Business, Consumer Services, and Housing, in consultation with the Legislature, to appoint a Bureau for Private Postsecondary Education Monitor to carry out specified duties to improve the bureau’s operations, and would require the monitor to submit specified reports to the Legislature related to the bureau.

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.

begin insert

This bill would appropriate $130,000 from the Private Postsecondary Education Administration Fund to the bureau for the 2014-15 fiscal year for staff support to the bureau and the advisory committee, as specified.

end insert

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

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

begin delete
P3    1

SECTION 1.  

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

P4    1

27.  

(a) Each entity specified in subdivisions (c), (d), and (e)
2shall provide on the Internet information regarding the status of
3every license issued by that entity in accordance with the California
4Public Records Act (Chapter 3.5 (commencing with Section 6250)
5of Division 7 of Title 1 of the Government Code) and the
6Information Practices Act of 1977 (Chapter 1 (commencing with
7Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code).
8The public information to be provided on the Internet shall include
9information on suspensions and revocations of licenses issued by
10the entity and other related enforcement action, including
11accusations filed pursuant to the Administrative Procedure Act
12(Chapter 3.5 (commencing with Section 11340) of Part 1 of
13Division 3 of Title 2 of the Government Code) taken by the entity
14relative to persons, businesses, or facilities subject to licensure or
15regulation by the entity. The information may not include personal
16information, including home telephone number, date of birth, or
17social security number. Each entity shall disclose a licensee’s
18address of record. However, each entity shall allow a licensee to
19provide a post office box number or other alternate address, instead
20of his or her home address, as the address of record. This section
21shall not preclude an entity from also requiring a licensee, who
22has provided a post office box number or other alternative mailing
23address as his or her address of record, to provide a physical
24business address or residence address only for the entity’s internal
25administrative use and not for disclosure as the licensee’s address
26of record or disclosure on the Internet.

27(b) In providing information on the Internet, each entity specified
28in subdivisions (c) and (d) shall comply with the Department of
29Consumer Affairs to Public Records Act Guidelines.

30(c) Each of the following entities within the Department of
31Consumer Affairs shall comply with the requirements of this
32section:

33(1) The Board for Professional Engineers, Land Surveyors, and
34Geologists shall disclose information on its registrants and
35licensees.

36(2) The Bureau of Automotive Repair shall disclose information
37on its licensees, including auto repair dealers, smog stations, lamp
38and brake stations, smog check technicians, and smog inspection
39certification stations.

P5    1(3) The Bureau of Electronic and Appliance Repair, Home
2Furnishings, and Thermal Insulation shall disclose information on
3its licensees and registrants, including major appliance repair
4dealers, combination dealers (electronic and appliance), electronic
5repair dealers, service contract sellers, and service contract
6administrators.

7(4) The Cemetery and Funeral Bureau shall disclose information
8on its licensees, including cemetery brokers, cemetery salespersons,
9cemetery managers, crematory managers, cemetery authorities,
10crematories, cremated remains disposers, embalmers, funeral
11establishments, and funeral directors.

12(5) The Professional Fiduciaries Bureau shall disclose
13information on its licensees.

14(6) The Contractors’ State License Board shall disclose
15information on its licensees and registrants in accordance with
16Chapter 9 (commencing with Section 7000) of Division 3. In
17addition to information related to licenses as specified in
18subdivision (a), the board shall also disclose information provided
19to the board by the Labor Commissioner pursuant to Section 98.9
20of the Labor Code.

21(7) The Board for Private Postsecondary Education shall disclose
22information on private postsecondary institutions under its
23jurisdiction, including disclosure of notices to comply issued
24pursuant to Section 94935 of the Education Code.

25(8) The California Board of Accountancy shall disclose
26information on its licensees and registrants.

27(9) The California Architects Board shall disclose information
28on its licensees, including architects and landscape architects.

29(10) The State Athletic Commission shall disclose information
30on its licensees and registrants.

31(11) The State Board of Barbering and Cosmetology shall
32disclose information on its licensees.

33(12) The State Board of Guide Dogs for the Blind shall disclose
34information on its licensees and registrants.

35(13) The Acupuncture Board shall disclose information on its
36licensees.

37(14) The Board of Behavioral Sciences shall disclose
38information on its licensees, including marriage and family
39therapists, licensed clinical social workers, licensed educational
40psychologists, and licensed professional clinical counselors.

P6    1(15) The Dental Board of California shall disclose information
2on its licensees.

3(16) The State Board of Optometry shall disclose information
4regarding certificates of registration to practice optometry,
5statements of licensure, optometric corporation registrations, branch
6office licenses, and fictitious name permits of its licensees.

7(17) The Board of Psychology shall disclose information on its
8licensees, including psychologists, psychological assistants, and
9registered psychologists.

10(d) The State Board of Chiropractic Examiners shall disclose
11information on its licensees.

12(e) The Structural Pest Control Board shall disclose information
13on its licensees, including applicators, field representatives, and
14operators in the areas of fumigation, general pest and wood
15destroying pests and organisms, and wood roof cleaning and
16treatment.

17(f) “Internet” for the purposes of this section has the meaning
18set forth in paragraph (6) of subdivision (f) of Section 17538.

19

SEC. 2.  

Section 94800.5 of the Education Code is amended to
20read:

21

94800.5.  

Whenever a reference is made to the former Private
22Postsecondary Education and Student Protection Act, the former
23Private Postsecondary and Vocational Education Reform Act of
241989, or the former Chapter 7 (commencing with Section 94700)
25of Part 59 of Division 10 of Title 3 of the Education Code, as it
26read on June 30, 2007, by the provisions of any statute or
27regulation, it shall be construed as referring to the provisions of
28this chapter. Whenever a reference is made to the former Bureau
29for Private Postsecondary and Vocational Education, or the Bureau
30for Private Postsecondary Education, by the provisions of any
31statute or regulation, after July 1, 2015, it shall be construed as
32referring to the Board for Private Postsecondary Education.

end delete
33

begin deleteSEC. 3.end delete
34begin insertSECTION 1.end insert  

Section 94801 of the Education Code is amended
35to read:

36

94801.  

The Legislature finds and declares all of the following:

37(a) In 2013, more than 300,000 Californians attended more than
381,100 private postsecondary schools in California.

39(b) Private postsecondary schools can complement the public
40education system and help develop a trained workforce to meet
P7    1the demands of California businesses and the economy; however,
2concerns about the value of degrees and diplomas issued by private
3postsecondary schools, and the lack of protections for private
4postsecondary school students and consumers of those schools’
5services, have highlighted the need for strong state-level oversight
6of private postsecondary schools.

7(c) Numerous reports and studies have concluded that
8California’s previous attempts at regulatory oversight of private
9postsecondary schoolsbegin insert under the Department of Consumer Affairsend insert
10 have consistently failed to ensure student protections or provide
11effective oversight of private postsecondary schools.

12(d) It is the intent of the Legislature inbegin delete establishing the Board
13for Private Postsecondary Educationend delete
begin insert continuing the operation of
14this chapterend insert
for two yearsbegin insert until January 1, 2017,end insert to ensure all of
15the following:

16(1) Minimum educational quality standards and opportunities
17for success for California students attending private postsecondary
18schools in California.

19(2) Meaningful student protections through essential avenues
20of recourse for students.

21(3) A regulatory structure that provides for an appropriate level
22of oversight.

23(4) A regulatory governance structure that ensures that all
24stakeholders have a voice and are heard in policymaking by the
25begin delete boardend deletebegin insert bureauend insert.

26(5) A regulatory governance structure that provides for
27accountability and oversight by the Legislature through program
28monitoring and periodic reports.

29(6) Prevention of thebegin insert harm to students and theend insert deception of the
30public that results from begin deleteconferring, and use of, end deletefraudulent or
31substandardbegin insert educational programs andend insert degrees.

32(e) The Legislature advises future policymakers to continually
33and carefully evaluate this chapter and its administration and
34enforcement. Where there are deficiencies in the law or regulatory
35oversight, the Governor and the Legislature should act quickly to
36correct them.

37

begin deleteSEC. 4.end delete
38begin insertSEC. 2.end insert  

Section 94802 of the Education Code is amended to
39read:

P8    1

94802.  

begin delete(a)end deletebegin deleteend deleteAn institution that had a valid approval to operate
2on June 30, 2007, issued by the former Bureau for Private
3Postsecondary and Vocational Education pursuant to former
4Chapter 7 (commencing with Section 94700) of Part 59 of Division
510 of Title 3 of the Education Code, as it read on June 30, 2007,
6shall maintain that approval under this chapter. For the purposes
7of this chapter, the approval to operate shall be valid for three
8calendar years after the expiration date of the approval, as it read
9on June 30, 2007.

begin delete

10(b) An institution that had a valid approval to operate on
11 December 31, 2014, issued by the Bureau for Private Postsecondary
12Education pursuant to this chapter, as it read on December 31,
132014, shall maintain that approval through the expiration date of
14the approval, as it read on December 31, 2014, unless the approval
15is suspended or revoked by the board.

end delete
begin delete16

SEC. 5.  

Section 94803 of the Education Code is repealed.

end delete
begin delete17

SEC. 6.  

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

18

94803.  

(a) The regulations adopted under this chapter, as it
19read on December 31, 2014, shall remain in effect until such time
20as the board amends or repeals them.

21(b) Commencing July 1, 2015, any reference in the regulations
22that refer to the authority of the Director shall be deemed to refer
23to the board or, if the board so designates, the executive officer.

end delete
begin delete24

SEC. 7.  

Section 94804 of the Education Code is amended to
25read:

26

94804.  

(a) Each unresolved matter submitted to the former
27Bureau for Private Postsecondary and Vocational Education prior
28to July 1, 2007, and to the former Bureau for Private Postsecondary
29Education prior to January 1, 2015, shall be deemed to remain
30pending before the board irrespective of any applicable deadlines.
31With respect to any deadline applicable to a pending matter, no
32time shall be deemed to have elapsed from July 1, 2007, to January
331, 2010, inclusive.

34(1) For the purposes of this subdivision, “matter” includes, but
35is not limited to, an appeal, a complaint, a claim, an evaluation, a
36hearing, or an investigation.

37(2) For the purposes of this subdivision, “matter” does not
38include a Student Tuition Recovery Fund claim.

39(b) Student complaints submitted prior to January 1, 2015, shall
40continue to be duly recorded and investigated by the board.

end delete
begin deleteP9    1

SEC. 8.  

Section 94805 of the Education Code is repealed.

end delete
begin delete2

SEC. 9.  

Section 94808 of the Education Code is amended to
3read:

4

94808.  

(a) Any Student Tuition Recovery Fund claims received
5by the former Bureau for Private Postsecondary and Vocational
6Education or the Bureau for Private Postsecondary Education prior
7to January 1, 2015, that were not processed, shall be processed by
8the board.

9(b) The student’s right to recovery from the Student Tuition
10Recovery Fund shall be based on the law that was in effect when
11the student enrolled and a fee for the fund was charged as a part
12of tuition costs, even though that law has become inoperative, been
13repealed, or otherwise expired.

end delete
14

begin deleteSEC. 10.end delete
15begin insertSEC. 3.end insert  

Section 94809 of the Education Code is amended to
16read:

17

94809.  

(a) begin delete(1)end deletebegin deleteend deleteAn institution that had an application for an
18approval to operate pending with the former Bureau for Private
19Postsecondary and Vocational Education on June 30, 2007,begin delete and
20submitted an application for approval to operate to the Bureau for
21Private Postsecondary Education,end delete
may continue to operate until a
22decision is made in regard to the institution regarding the
23application for approval to operate, but shall comply with, and is
24subject to, this chapter.

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

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

37(d) (1) An institution that is denied an approval to operate
38pursuant to subdivision (a) or (b) may file an appeal pursuant to
39the procedures established in Section 94888.

P10   1(2) An institution that has filed an appeal may continue to
2operate during the appeal process but must disclose in a written
3statement approved by thebegin delete board,end deletebegin insert bureau,end insert to all current and
4prospective students, that the institution’s application for approval
5to operate was denied by thebegin delete boardend deletebegin insert bureauend insert because thebegin delete board hasend delete
6begin insert bureau end insert determined the application did not satisfy the requirements
7to operate in California, that the institution is appealing thebegin delete board’send delete
8begin insert bureau’send insert decision, and that the loss of the appeal may result in the
9institution’s closure.

10(3) If thebegin delete boardend deletebegin insert bureauend insert determines that the continued operation
11of an institution poses a significant risk of harm to students, the
12begin delete boardend deletebegin insert bureau end insertshall make an emergency decision pursuant to
13Section 94938.

begin delete
14

SEC. 11.  

Section 94809.5 of the Education Code is amended
15to read:

16

94809.5.  

Notwithstanding any other provision of law:

17(a) For any claims that a student had based on a violation of the
18Private Postsecondary and Vocational Education Reform Act of
191989 on or before June 30, 2007, the period of time from June 30,
202007, to December 31, 2009, inclusive, shall be excluded in
21determining the deadline or the statute of limitation for filing any
22claim with the board or a lawsuit based on any claim.

23(b) All claims described in subdivision (a), except claims to the
24Student Tuition Recovery Fund, including those contained in a
25lawsuit or other legal action, shall be determined or adjudicated
26based on the law that was in effect when the violations or events
27took place, even though those provisions have become inoperative,
28been repealed, or otherwise expired.

end delete
29

begin deleteSEC. 12.end delete
30begin insertSEC. 4.end insert  

Section 94813 of the Education Code is amended to
31read:

32

94813.  

“Accredited” means an institution is accredited by an
33accrediting agency recognized by the United States Department
34of Education.

35

begin deleteSEC. 13.end delete
36begin insertSEC. 5.end insert  

Section 94816 of the Education Code is amended to
37read:

38

94816.  

“Applicant” meansbegin delete an institution thatend deletebegin insert a person, as
39defined in Section 94855, whoend insert
has submitted an application to the
40board for an approval to operate or for a renewal of an approval
P11   1to operate. Anbegin delete applicant shall be the owner of an institution.
2Approvalsend delete
begin insert approvalend insert to operate shall be issuedbegin insert onlyend insert tobegin delete applicants,
3and those approvals mean that the recipient institutions are
4authorized or licensed by the board to operate in California through
5the expiration date of the approvalend delete
begin insert an applicantend insert.

begin delete6

SEC. 14.  

Section 94818.5 is added to the Business and
7Professions Code
, to read:

8

94818.5.  

“Board” means the Board for Private Postsecondary
9Education.

end delete
begin delete10

SEC. 15.  

Section 94820 of the Education Code is repealed.

end delete
11

begin deleteSEC. 16.end delete
12begin insertSEC. 6.end insert  

Section 94829 of the Education Code is amended to
13read:

14

94829.  

“Default” means failure of a borrower and endorser, if
15any, to make an installment payment for a loan received under the
16federal student financial aid programs when due, or to meet other
17terms of the promissory note, provided that this failure persists for
18270 days if payment is due monthly or 360 days if payment is due
19less frequently. For purposes of this section, “endorser” means an
20individual who signs a promissory note and agrees to repay the
21loan in the event that the borrower does not.

begin delete22

SEC. 17.  

Section 94833 of the Education Code is repealed.

end delete
23

begin deleteSEC. 18.end delete
24begin insertSEC. 7.end insert  

Section 94837 of the Education Code is amended to
25read:

26

94837.  

“Educational program” means a planned sequence
27composed of a single course or module, or set of related courses
28or modules, that providesbegin delete theend delete education, training, skills,begin delete and
29experience leading to the award of a recognized educational
30credential such as a document of completion, degree, or diploma.end delete

31begin insert or experience, or a combination of these.end insert

begin delete32

SEC. 19.  

Section 94838 of the Education Code is amended to
33read:

34

94838.  

“Educational program approval” means authorization
35by the board, another government agency of this state, or a federal
36government agency, to provide educational programs, and is an
37element of an approval to operate.

end delete
38

begin deleteSEC. 20.end delete
39begin insertSEC. 8.end insert  

Section 94847 of the Education Code is amended to
40read:

P12   1

94847.  

“License and examination preparation” means
2instruction designed to assist students to prepare for an examination
3for licensure. “License and examination preparation” does not
4include an educational program designed to instruct students in
5thebegin delete field of the licensure examinationend deletebegin insert skills and knowledge
6necessary to satisfy the qualifications for licensureend insert
.

begin delete7

SEC. 21.  

Section 94861 of the Education Code is amended to
8read:

9

94861.  

“Reporting period” means the institution’s fiscal year
10or any yearly period designated by the board to be covered in the
11institution’s annual report.

end delete
12

begin deleteSEC. 22.end delete
13begin insertSEC. 9.end insert  

Section 94874 of the Education Code is amended to
14read:

15

94874.  

Except as provided in Section 94874.2, the following
16are exempt from this chapter:

17(a) An institution that offers solely avocational or recreational
18educational programs.

19(b) An institution offering educational programs sponsored by
20a bona fide trade, business, professional, or fraternal organization,
21solely for that organization’s membership.

22(c) A postsecondary educational institution established, operated,
23and governed by the federal government or by this state or its
24political subdivisions.

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

26(1) Test preparation for examinations required for admission to
27a postsecondary educational institution.

28(2) Continuing education or license examination preparation,
29if the institution or the program is approved, certified, or sponsored
30by any of the following:

31(A) A government agency, other than thebegin delete boardend deletebegin insert bureauend insert, that
32licenses persons in a particular profession, occupation, trade, or
33career field.

34(B) A state-recognized professional licensing body, such as the
35State Bar of California, that licenses persons in a particular
36profession, occupation, trade, or career field.

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

38(e) (1) An institution owned, controlled, and operated and
39maintained by a religious organization lawfully operating as a
40nonprofit religious corporation pursuant to Part 4 (commencing
P13   1with Section 9110) of Division 2 of Title 1 of the Corporations
2Code, that meets all of the following requirements:

3(A) The instruction is limited to the principles of that religious
4organization, or to courses offered pursuant to Section 2789 of
5Business and Professions Code.

6(B) The diploma or degree is limited to evidence of completion
7of that education.

8(2) An institution operating under this subdivision shall offer
9degrees and diplomas only in the beliefs and practices of the
10church, religious denomination, or religious organization.

11(3) An institution operating under this subdivision shall not
12award degrees in any area of physical science.

13(4) Any degree or diploma granted under this subdivision shall
14contain on its face, in the written description of the title of the
15degree being conferred, a reference to the theological or religious
16aspect of the degree’s subject area.

17(5) A degree awarded under this subdivision shall reflect the
18nature of the degree title, such as “associate of religious studies,”
19“bachelor of religious studies,” “master of divinity,” or “doctor of
20divinity.”

21(f) An institution that does not award degrees and that solely
22provides educational programs for total charges of two thousand
23five hundred dollars ($2,500) or less when no part of the total
24charges is paid from state or federal student financial aid programs.
25Thebegin delete boardend deletebegin insert bureauend insert may adjust this cost threshold based upon the
26California Consumer Price Index and post notification of the
27adjusted cost threshold on its Internet Web site, as thebegin delete boardend deletebegin insert bureauend insert
28 determines, through the promulgation of regulations, that the
29adjustment is consistent with the intent of this chapter.

30(g) A law school that is accredited by the Council of the Section
31of Legal Education and Admissions to the Bar of the American
32Bar Association or a law school or law study program that is
33subject to the approval, regulation, and oversight of the Committee
34of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the
35Business and Professions Code.

36(h) A nonprofit public benefit corporation that satisfies all of
37the following criteria:

38(1) Is qualified under Section 501(c)(3) of the United States
39Internal Revenue Code.

P14   1(2) Is organized specifically to provide workforce development
2or rehabilitation services.

3(3) Is accredited by an accrediting organization for workforce
4development or rehabilitation services recognized by the
5Department of Rehabilitation.

6(i) An institution that is accredited by the Accrediting
7Commission for Senior Colleges and Universities, Western
8Association of Schools and Colleges, or the Accrediting
9Commission for Community and Junior Colleges, Western
10Association of Schools and Colleges.

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

12(1) The institution has been accredited, for at least 10 years, by
13an accrediting agency that is recognized by the United States
14Department of Education.

15(2) The institution has operated continuously in this state for at
16least 25 years.

17(3) During its existence, the institution has not filed for
18bankruptcy protection pursuant to Title 11 of the United States
19Code.

20(4) The institution’s cohort default rate on guaranteed student
21loans does not exceed 10 percent for the most recent three years,
22as published by the United States Department of Education.

23(5) The institution maintains a composite score of 1.5 or greater
24on its equity, primary reserve, and net income ratios, as provided
25under Section 668.172 of Title 34 of the Code of Federal
26Regulations.

27(6) The institution provides a pro rata refund of unearned
28 institutional charges to students who complete 75 percent or less
29of the period of attendance.

30(7) The institution provides to all students the right to cancel
31the enrollment agreement and obtain a refund of charges paid
32through attendance at the second class session, or the 14th day
33after enrollment, whichever is later.

34(8) The institution submits to thebegin delete boardend deletebegin insert bureauend insert copies of its
35most recent IRS Form 990, the institution’s Integrated
36Postsecondary Education Data System Report of the United States
37Department of Education, and its accumulated default rate.

38(9) The institution is incorporated and lawfully operates as a
39nonprofit public benefit corporation pursuant to Part 2
40(commencing with Section 5110) of Division 2 of Title 1 of the
P15   1Corporations Code and is not managed or administered by an entity
2for profit.

3(k) Flight instruction providers or programs that provide flight
4instruction pursuant to Federal Aviation Administration regulations
5and meet both of the following criteria:

6(1) The flight instruction provider or program does not require
7students to enter into written or oral contracts of indebtedness.

8(2) The flight instruction provider or program does not require
9or accept prepayment of instruction-related costs in excess of two
10thousand five hundred dollars ($2,500).

11

begin deleteSEC. 23.end delete
12begin insertSEC. 10.end insert  

Section 94874.1 of the Education Code is amended
13to read:

14

94874.1.  

(a) Except as provided in Section 94874.2, an
15institution that is accredited by a regional accrediting agency that
16is recognized by the United States Department of Education, and
17is not an agency described in subdivision (i) of Section 94874, is
18exempt from this chapter, except Article 14 (commencing with
19Section 94923).

20(b) This section shall remain in effect only until January 1, 2016,
21and as of that date is repealed, unless a later enacted statute, that
22is enacted before January 1, 2016, deletes or extends that date.

23

begin deleteSEC. 24.end delete
24begin insertSEC. 11.end insert  

Section 94874.2 is added to the Education Code, to
25read:

26

94874.2.  

begin deleteAn end deletebegin insertBeginning January 1, 2016, an end insertinstitution that is
27approved to participate in veterans’ financial aid programs pursuant
28to Section 21.4253 of Title 38 of the Code of Federal Regulations
29that is not an independent institution of higher education, as defined
30in subdivision (b) of Section 66010, may not claim an exemption
31from this chapter.

begin delete
32

SEC. 25.  

Section 94874.7 of the Education Code is amended
33to read:

34

94874.7.  

The board shall establish, by regulation, a process
35pursuant to which an institution that is exempt from this chapter
36may request, and obtain, from the board verification that the
37institution is exempt. The board shall establish a reasonable fee to
38reimburse the board’s costs associated with the implementation
39of this section.

P16   1

SEC. 26.  

Section 94874.8 of the Education Code is amended to
2read:

3

94874.8.  

(a) An institution exempt from all or part of this
4chapter pursuant to subdivision (i) or (j) of Section 94874 or
5Section 94874.1 may apply to the board for an approval to operate
6pursuant to this section, but only subject to all of the following
7provisions:

8(1) The board may approve the operation of an institution that
9is exempt from all or part of this chapter as specified above in
10accordance with the authority granted pursuant to Article 6
11(commencing with Section 94885). Upon issuing an approval to
12operate to an institution pursuant to this section, the board is
13authorized to regulate that institution through the full set of powers
14granted, and duties imposed, by this chapter, as those powers and
15duties would apply to an institution that is not exempt from this
16chapter.

17(2) Notwithstanding any other law, upon issuance of an approval
18to operate pursuant to this section, the institution is no longer
19eligible for exemption, from the provisions of this chapter pursuant
20to subdivision (i) or (j) of Section 94874 or Section 94874.1, unless
21authorized by subsequent legislation.

22(3) Upon issuance of an approval to operate pursuant to this
23section, an institution is subject to all provisions of this chapter,
24and any regulations adopted pursuant to this chapter, that apply to
25an institution subject to this chapter, except as expressly provided
26in paragraph (4).

27(4) (A) With respect to the placement and salary or wage data
28required to be collected, calculated, and reported by Article 16
29(commencing with Section 94928), an institution issued an
30approval to operate pursuant to this section is not required to report
31on its first School Performance Fact Sheet any data from the period
32prior to the date of the issuance of the approval to operate that the
33institution was not required to collect and does not have available
34to it. An institution shall, however, report available data collected
35and calculated in accordance with this chapter and applicable
36regulations, regardless of the purpose for which the data was
37collected. If the required data is unavailable, the institution shall
38also disclose the unavailability of the data on all documents
39required by this chapter and regulations adopted pursuant to this
40chapter. Upon receiving an approval to operate pursuant to this
P17   1section, an institution shall commence to collect and calculate all
2information necessary to comply with Article 16 (commencing
3with Section 94928).

4(B) An institution receiving an approval to operate pursuant to
5this section shall provide to prospective students the School
6Performance Fact Sheet, file that fact sheet with the board, and
7post it on the institution’s Internet Web site no later than the first
8August 1 after the institution is approved to operate or by a date
9set by the board for institutions generally. These School
10Performance Fact Sheets shall report data for the previous two
11calendar years based upon the number of students who began the
12program or the number of graduates for each reported calendar
13year. If two calendar years have not passed since the issuance of
14the approval to operate by the August 1 deadline for the School
15Performance Fact Sheet, unless data for two years is available, the
16institution shall report the required data for the period subsequent
17to the date of the issuance of the notice of approval.

18(b) An institution exempt from all or part of this chapter pursuant
19to subdivision (i) or (j) of Section 94874 or Section 94874.1 that
20was approved to operate by the board before the effective date of
21this section shall be deemed to have been approved pursuant to
22this section.

23

SEC. 27.  

The heading of Article 5 (commencing with Section
2494875) of Chapter 8 of Part 59 of Division 10 of Title 3 of the 25Education Code is amended to read:

26 

27Article 5.  Board Powers and Duties
28

 

29

SEC. 28.  

Section 94875 of the Education Code is amended to
30read:

31

94875.  

(a) The board shall regulate private postsecondary
32educational institutions through the powers granted, and duties
33imposed, by this chapter. In exercising its powers, and performing
34its duties, the protection of the public shall be the board’s highest
35priority. If protection of the public is inconsistent with other
36interests sought to be promoted, the protection of the public shall
37be paramount. The board shall consist of 11 members appointed
38as follows:

39(1) Three members, who shall have a demonstrated record of
40advocacy on behalf of consumers, one appointed by the Governor,
P18   1one by the Senate Committee on Rules, and one by the Speaker
2of the Assembly.

3(2) Two members, who shall be current or former students of
4institutions, appointed by the Governor, subject to confirmation
5by the Senate Committee on Rules.

6(3) Three members, who shall be representatives of institutions,
7appointed by the Governor, subject to confirmation by the Senate
8Committee on Rules.

9(4) Two public members with experience or expertise in
10postsecondary education, appointed by the Governor, subject to
11confirmation by the Senate Committee on Rules.

12(5) One public member with knowledge or expertise in emerging
13fields of employment, appointed by the Governor, subject to
14confirmation by the Senate Committee on Rules.

15(b) A person who was a member of the former Advisory
16Committee to the Bureau for Private Postsecondary Education,
17established pursuant to Section 94880, as that section read on
18January 1, 2014, is eligible to be appointed to the board pursuant
19to subdivision (a).

20(c) A public member appointed to the board pursuant to
21subdivision (a) shall not be affiliated with an institution.

22(d) A majority of the board constitutes a quorum for the
23transaction of any business, for the performance of any duty, or
24for the exercise of any power of the board. A vacancy in the board
25does not impair the right of the remaining members to exercise all
26the powers of the board.

27

SEC. 29.  

Section 94875.5 is added to the Education Code, to
28read:

29

94875.5.  

Notwithstanding any other provision of this chapter,
30the Bureau for Private Postsecondary Education shall continue in
31existence and administer the provisions of this chapter until July
321, 2015. As of that date, the bureau shall cease operations, and the
33board shall assume all authority, including the powers, functions,
34and jurisdiction until then vested in the bureau. The board may
35enforce all disciplinary actions undertaken by the bureau. For the
36performance of these duties and exercise of these powers, the board
37shall have possession and control of all records, papers, offices,
38equipment, supplies, or other property, real or personal, held for
39the benefit of or use by the bureau. All regulations adopted by the
40bureau that were in effect on December 31, 2014, shall remain in
P19   1effect until the board acts to amend or repeal those regulations.
2All licensing application forms in use on December 31, 2014, shall
3continue in use until such time as the board acts to amend those
4forms or provides for their elimination or replacement.

5

SEC. 30.  

Section 94876 of the Education Code is amended to
6read:

7

94876.  

(a) The executive officer of the board shall be appointed
8by the Governor, subject to confirmation by the Senate Committee
9on Rules, and is exempt from the State Civil Service Act pursuant
10to Part 2 (commencing with Section 18500) of Division 5 of Title
112 of the Government Code.

12(b) The executive officer of the board shall exercise the powers
13and perform the duties delegated by the board.

14(c) The executive officer shall be selected from a list of five
15candidates generated by the board.

16(d) To assist the executive officer in the discharge of his or her
17duties, the board shall appoint three to five deputies, as deemed
18necessary by the board.

end delete
19begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 94876 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
20read:end insert

21

94876.  

(a) The powers and duties set forth in this chapter are
22vested in the Director of Consumer Affairs, who may delegate
23them to a bureau chief, subject to the provisions of this section.
24begin insert The bureau chief shall work in collaboration with the director.
25The director is responsible for the implementation of this chapter
26and he or she shall ensure that the protection of the public is the
27bureau’s highest priority.end insert

28(b) The bureau chief shall be appointed by the Governor, subject
29to confirmation by the Senate, and is exempt from the State Civil
30Service Act pursuant to Part 2 (commencing with Section 18500)
31of Division 5 of Title 2 of the Government Code.

32(c) Each power granted to, or duty imposed upon, the bureau
33under this chapter shall be exercised and performed in the name
34of the bureau, subject to any conditions and limitations the director
35may prescribe. The bureau chief may delegate any powers or duties
36to a designee.

37(d) As may be necessary to carry out this chapter, the director,
38in accordance with the State Civil Service Act, may appoint and
39fix the compensation of personnel.

P20   1

begin deleteSEC. 31.end delete
2begin insertSEC. 13.end insert  

Section 94877 of the Education Code is amended to
3read:

4

94877.  

(a) Thebegin delete boardend deletebegin insert bureauend insert shall adopt and shall enforce
5regulations to implement this chapter pursuant to the
6Administrative Procedure Act (Chapter 3.5 (commencing with
7Section 11340) of Part 1 of Division 3 of Title 2 of the Government
8Code).

9(b) Thebegin delete boardend deletebegin insert bureauend insert shall develop and implement an
10enforcement program, pursuant to Article 18 (commencing with
11 Section 94932) to implement this chapter. The enforcement
12program shall include a plan for investigating complaints filed
13with thebegin delete boardend deletebegin insert bureauend insert. Thebegin delete boardend deletebegin insert bureau end insert shall contract with the
14office of the Attorney General, or other appropriate state agency,
15to establish a process for thebegin delete board’send deletebegin insert bureau’send insert staff to be trained
16 to investigate complaints, including, but not limited to, the
17 information, evidence, and materials needed to process complaints.
18begin delete The trainingend delete

19begin insert(c)end insertbegin insertend insertbegin insertThe bureauend insert shallbegin insert institute training toend insert ensurebegin delete the board’send deletebegin insert that
20itsend insert
staff are equipped to review and verify the accuracy of the data
21contained in consumer disclosures, including, but not limited to,
22the School Performance Fact Sheet.

begin delete

23(c)

end delete

24begin insert(d)end insert Thebegin delete boardend deletebegin insert bureauend insert shall establish a program to proactively
25identify unlicensed institutions, identify material or repeated
26violations of this chapter and regulations implementing this chapter,
27and take all appropriate legal action.

begin delete

28(d) The board shall, by January 1, 2016, initiate the process and
29procedures governing its approval or denial of applications for
30approval to operate in accordance with board regulations adopted
31pursuant to Section 94888, for every application pending as of
32January 1, 2015.

end delete
begin delete
33

SEC. 32.  

Section 94878 of the Education Code is amended to
34read:

35

94878.  

(a) The board shall establish an Internet Web site that
36includes at least all of the following information:

37(1) An explanation of the board’s scope of authority.

38(2) (A) A directory of approved institutions, and a link, if
39feasible, to the Internet Web site of each institution.

P21   1(B) For each institution, the directory shall be developed in a
2manner that allows the user to search by institution and shall
3include all of the following information:

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

5(ii) The information provided by the institutions including, but
6not limited to, the annual report, as required by Section 94934,
7including the school catalog and the Student Performance Fact
8Sheet. The Student Performance Fact Sheet shall be maintained
9on the directory for at least five years after the date of its
10submission to the board.

11(iii) The disciplinary history of the institution, which shall
12include, but shall not be limited to, all of the following:

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

14(II) Suspensions, revocations, citations, fines, infractions,
15probations, pending litigation filed by the board, and final
16judgments resulting from litigation filed by the board.

17(III) Pending or final civil or criminal cases filed by the Attorney
18General, a city attorney, ora district attorney in this state, or filed
19in any state by an attorney general or a federal regulatory or
20prosecutorial agency if the case would be actionable under
21California or federal law, of which the board has received notice.

22(IV) Final administrative actions by the United State Department
23of Education, including orders requiring restitution to students.

24(V) All disciplinary actions ordered by an accreditation agency,
25including any order to show cause, of which the board has received
26notice pursuant to Section 94934 or other information otherwise
27publicly available of which the board has received notice.

28(b) The board shall maintain the Internet Web site described in
29subdivision (a). The board shall ensure that the information
30specified in subdivision (a) is kept current. The board shall update
31the Internet Web site at least annually, to coincide with the
32submission of annual reports by the institutions pursuant to Section
3394934.

34(c) (1) The board shall post on its Internet Web site a list of all
35institutions that were denied approval to operate, after the denial
36is final, and describe in clear and conspicuous language the reason
37the institution was denied approval. The board shall include the
38statement provided in paragraph (2) on its Internet Web site.

39(2) “The following institutions were denied approval to operate
40by the Board for Private Postsecondary Education for failing to
P22   1satisfy the standards relating to educational quality, or consumer
2protection, or both. These unlicensed institutions are not operating
3in compliance with the law, and students are strongly discouraged
4from attending these institutions.”

end delete
5begin insert

begin insertSEC. 14.end insert  

end insert

begin insertSection 94878 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
6read:end insert

7

94878.  

(a) begin deleteOn or before June 30, 2010, the end deletebegin insertThe end insertbureau shall
8establish an Internet Web site that includes at least all of the
9following information:

10(1) An explanation of the bureau’sbegin delete transition plan for the
11reconstituted bureau and an explanation of the bureau’send delete
scope of
12authority.

13(2) (A) A directory of approved institutions, and a link, if
14feasible, to the Internet Web site of each institution.

15(B) For each institution, the directory shall be developed in a
16manner that allows the user to search by institution and shall
17include all of the following information:

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

19(ii) The information provided by thebegin delete institutionsend deletebegin insert institutions,end insert
20 including, but not limited to, the annual report, as required by
21Section 94934, including the school catalog and the School
22Performance Fact Sheet. The School Performance Fact Sheet shall
23be maintained on the directory for at least five years after the date
24of its submission to the bureau.

25(iii) If a law school satisfies the requirements of this chapter
26regarding a School Performance Fact Sheet by complying with
27the requirements of Section 94910.5, the bureau shall include the
28information provided by the institution pursuant to Section 94910.5
29on its Internet Web site and shall maintain the information in the
30same manner as required by clause (ii).

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

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

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

37(III) Pending or finalbegin insert civil orend insert criminal cases filed by the Attorney
38General, a city attorney,begin delete a district attorney, or a federal law
39enforcement official,end delete
begin insert or a district attorney in this state, or filed in
40any state by an attorney general or a federal regulatory or
P23   1prosecutorial agency if the case would be actionable under
2California or federal law,end insert
of which the bureau has received notice.

3(IV) Final administrative actions by the United State Department
4of Education, including orders requiring restitution to students.

5(V) begin deleteFinal end deletebegin insertAll end insertdisciplinary actionsbegin insert orderedend insert by an accreditation
6agency,begin insert including any order to show cause,end insert of which the bureau
7has received notice pursuant to Section 94934begin insert or other information
8otherwise publicly available of which the board has received
9noticeend insert
.

10(b) The bureau shall maintain the Internet Web site described
11in subdivision (a). The bureau shall ensure that the information
12specified in subdivision (a) is kept current. The bureau shall update
13the Internet Web site at least annually, to coincide with the
14submission of annual reports by the institutions pursuant to Section
1594934.

begin delete

16(c) In addition to maintaining the Internet Web site described
17in subdivision (a), the bureau shall provide the information
18described in paragraph (2) of subdivision (a) to the California
19Postsecondary Education Commission (CPEC), and the CPEC
20shall include that information in an Internet Web site directory of
21school performance data maintained by the CPEC. To the extent
22possible, the bureau shall provide this information consistent with
23the information collected for reporting to the Integrated
24Postsecondary Education Data System of the United States
25Department of Education, including institutional characteristics,
26completion, annual enrollment, and graduation rates.

end delete
begin insert

27(c) (1) The bureau shall post on its Internet Web site a list of
28all institutions that were denied approval to operate, after the
29denial is final, and describe in clear and conspicuous language
30the reason the institution was denied approval. The bureau shall
31include with this list the statement provided in paragraph (2) on
32its Internet Web site.

end insert
begin insert

33(2) “The following institutions were denied approval to operate
34by the Bureau for Private Postsecondary Education for failing to
35satisfy the standards relating to educational quality, or consumer
36protection, or both. These unlicensed institutions are not operating
37in compliance with the law, and students are strongly discouraged
38from attending these institutions.”

end insert
P24   1

begin deleteSEC. 33.end delete
2begin insertSEC. 15.end insert  

Section 94879 of the Education Code is amended to
3read:

4

94879.  

Thebegin delete boardend deletebegin insert bureauend insert shall conduct an outreach program
5to secondary schoolbegin delete studentsend deletebegin insert pupilsend insert as well as prospective and
6current private postsecondary students, to provide them with
7information on how to best select a private postsecondary
8institution, how to enter into enrollment agreements, how to make
9informed decisions in the private postsecondary education
10marketplace, and how to contact thebegin delete boardend deletebegin insert bureauend insert for assistance.
11Thebegin delete boardend deletebegin insert bureauend insert may accomplish the purposes of this section in
12cooperation with other federal, state, or local entities, or any
13combination of these entities.

begin delete14

SEC. 34.  

Section 94880 of the Education Code is repealed.

end delete
15begin insert

begin insertSEC. 16.end insert  

end insert

begin insertSection 94880 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
16read:end insert

17

94880.  

(a) There is within the bureau abegin delete 12-memberend deletebegin insert 1end insertbegin insert4-memberend insert
18 advisory committee. On or before July 1,begin delete 2010end deletebegin insert 2015end insert, the members
19of the committee shall be appointed as follows:

20(1) Three members, who shall have a demonstrated record of
21advocacy on behalf of consumers, of which thebegin delete Director of
22Consumer Affairsend delete
begin insert directorend insert, the Senate Committee on Rules, and
23the Speaker of the Assembly shall each appoint one member.

24(2) Two members, who shall be current or past students of
25institutions, appointed by thebegin delete Director of Consumer Affairsend delete
26begin insert directorend insert.

27(3) Three members, who shall be representatives of institutions,
28appointed by thebegin delete Director of Consumer Affairsend deletebegin insert directorend insert.

begin delete

29(4) Two members, which shall be employers that hire students,
30appointed by the Director of Consumer Affairs.

end delete
begin delete

31(5)

end delete

32begin insert(end insertbegin insert4)end insert One public member appointed by the Senate Committee on
33Rules.

begin delete

34(6)

end delete

35begin insert(end insertbegin insert5)end insert One public member appointed by the Speaker of the
36Assembly.

begin insert

37(6) Four ex-officio members as follows:

end insert
begin insert

38(A) The chair, or the designee of the chair, of the policy
39committee of the Assembly with jurisdiction over legislation
40relating to the bureau, appointed by the Speaker of the Assembly.

end insert
begin insert

P25   1(B) The chair, or the designee of the chair, of the policy
2committee of the Senate with jurisdiction over legislation relating
3to the bureau, appointed by the Senate Committee on Rules.

end insert
begin insert

4(C) One attorney employed in the consumer law section of the
5Office of the Attorney General, to be appointed by the Attorney
6General.

end insert
begin insert

7(D) A representative employed in the career and college
8transition division of the State Department of Education, to be
9appointed by the Superintendent of Public Instruction.

end insert
begin insert

10(b) (1) A public member shall not, either at the time of his or
11her appointment or during his or her tenure in office, have any
12financial interest in any organization currently or previously
13subject to regulation by the bureau, be a close family member of
14an employee, officer, or the director of any institution subject to
15regulation by the bureau, or currently have, or previously have
16had, a business relationship, in the five years preceding his or her
17appointment, with any institution subject to regulation by the
18bureau.

end insert
begin insert

19(2) A public member shall not, within the five years immediately
20preceding his or her appointment, have engaged in pursuits on
21behalf of an institution or institutional accreditor or have provided
22representation to the postsecondary educational industry or a
23profession regulated by the bureau, if he or she is employed in the
24industry or a member of the profession, respectively, and he or
25she shall not engage in those pursuits or provide that
26representation during his or her term of office.

end insert

27begin insert(c)end insert The advisory committee shallbegin insert examine the oversight functions
28and operational policies of the bureau andend insert
advise the bureau with
29respect to matters relating to private postsecondary education and
30the administration of this chapter, including annually reviewing
31the fee schedulebegin insert and the equity of the schedule relative to the way
32institutions are structuredend insert
,begin delete licensing,end deletebegin insert and the licensingend insert and
33enforcement provisions of this chapter.begin insert The advisory committee
34shall make recommendations with respect to policies, practices,
35and regulations relating to private postsecondary education, and
36shall provide any assistance as may be requested by the bureau.end insert

begin delete

37(c)

end delete

38begin insert(d)end insert The bureau shall actively seek input from, and consult with,
39the advisory committee regarding the development of regulations
40to implement this chapterbegin insert prior to the adoption, amendment, or
P26   1repeal of its regulations, and provide the advisory committee with
2sufficient time to review and comment on those regulations. The
3bureau shall take into consideration and respond to all feedback
4provided by members of the advisory committeeend insert
.

begin insert

5(e) The bureau chief shall attend all advisory committee
6meetings and shall designate staff to provide ongoing
7administrative support to the advisory committee.

end insert
begin insert

8(f) Until January 1, 2017, the director shall personally attend,
9and testify and answer questions at, each meeting of the advisory
10committee.

end insert
begin insert

11(g) The advisory committee shall have the same access to
12records within the Department of Consumer Affairs related to the
13operation and administration of this chapter as do members of
14constituent boards of the department in regard to records related
15to their functions.

end insert
begin insert

16(h) Advisory committee meetings shall be subject to the
17Bagley-Keene Open Meetings Act. Advisory committee meeting
18materials shall be posted on the Internet.

end insert
begin insert

19(i) The advisory committee shall meet at least quarterly and
20shall appoint a member of the committee to represent the committee
21for purposes of communicating with the Legislature.

end insert
begin insert

22(j) The Department of Consumer Affairs shall review, and revise
23if necessary, the department's conflicts of interest regulations to
24ensure that each advisory committee member is required to disclose
25conflicts of interest to the public.

end insert
26

begin deleteSEC. 35.end delete
27begin insertSEC. 17.end insert  

Sectionbegin delete 94880end deletebegin insert 94880.1end insert is added to the Education
28Code
, to read:

29

begin delete94880.end delete
30begin insert94880.1.end insert  

(a) begin insert(1)end insertbegin insertend insertThebegin delete boardend deletebegin insert bureauend insert shall establish a task force
31begin insert no later than March 1, 2015,end insert tobegin delete determineend deletebegin insert review end insert standards for
32educational and training programs specializing in innovative
33subject matters and instructing students in high-demand technology
34fields for which there is a demonstrated shortage of skilled
35employees. The members of the task force may include
36begin insert postsecondary education experts, owners of institutions, consumer
37advocates focused on education, end insert
high technology employers,
38students of short-term focused high technology training programs,
39and providers of high technology training in subjects including,
P27   1but not necessarily limited to, programming, software development,
2computer science, and coding.

begin insert

3(2) At least two members of the task force shall be members of
4the advisory committee. One of these members shall serve as chair
5of the task force.

end insert
begin insert

6(3) The task force shall transmit a report with its
7recommendations and findings to the advisory committee no later
8than January 1, 2016. The task force’s report shall include, but
9not necessarily be limited to, all of the following:

end insert
begin insert

10(A) Whether students attending institutions should receive
11certain disclosures prior to enrolling in an educational program
12offered by those institutions.

end insert
begin insert

13(B) Whether the means of reporting student outcomes and the
14content of those reports are appropriate.

end insert
begin insert

15(C) The steps the state may take to promote the growth of
16high-quality training programs in skills for high technology
17occupations.

end insert

18(b) begin delete(1)end deletebegin deleteend deleteThebegin delete boardend deletebegin insert advisory committee shall review and approve,
19modify, or reject the report prepared pursuant to paragraph (3)
20of subdivision (a). The bureauend insert
shall providebegin delete aend deletebegin insert the approvedend insert report
21to the Legislaturebegin delete regarding educational and training programs
22subject to subdivision (a), and the institutions offering those
23programs,end delete
no later thanbegin delete Januaryend deletebegin insert Julyend insert 1, 2016.begin delete The report shall
24include the board’s evaluation of all of the following:end delete

begin delete

25(A) Whether students attending these institutions should receive
26certain disclosures prior to enrollment in a program.

27(B) Whether the means of reporting student outcomes and the
28content of those reports are appropriate.

29(C) Whether institutions that satisfy certain criteria should be
30regulated by the board and by this chapter.

31(D) The steps the board and the state may take to promote the
32growth of high-quality training programs in skills for high
33technology occupations.

34(2) (A) The

end delete

35begin insert(c)end insertbegin insertend insertbegin insertTheend insert requirement for submitting a report imposed under this
36subdivision is inoperative on January 1,begin delete 2019,end deletebegin insert 2017,end insert pursuant to
37Section 10231.5 of the Government Code.

begin delete

38(B) A

end delete

P28   1begin insert(d)end insertbegin insertend insertbegin insertTheend insert report to be submittedbegin insert to the Legislatureend insert pursuant to
2begin delete thisend delete subdivisionbegin insert (c)end insert shall be submitted in compliance with Section
39795 of the Government Code.

begin delete4

SEC. 36.  

Section 94881 of the Education Code is amended to
5read:

6

94881.  

The board may conduct workshops to provide applicants
7and institutions information on application processes, compliance
8with this chapter, best practices for providing postsecondary
9educational programs, and other subjects concerning postsecondary
10education.

end delete
begin delete11

SEC. 37.  

Section 94882 of the Education Code is amended to
12read:

13

94882.  

The board may empanel visiting committees to assist
14in evaluating an institution’s application for an approval to operate.
15The members of visiting committees shall serve at no expense to
16the state, except that the board may reimburse the members of
17visiting committees for actual travel and per diem expenses
18incurred during the evaluation. The board may seek reimbursement
19for the travel and per diem costs from the institution that is the
20subject of an evaluation.

end delete
begin delete21

SEC. 38.  

Section 94883 of the Education Code is amended to
22read:

23

94883.  

(a) Any individual serving on a visiting committee
24who provides information to the board, or its staff, in the course
25of evaluating any institution, or who testifies in any administrative
26hearing arising under this chapter, is entitled to a defense and
27indemnification in any action arising out of the information or
28testimony provided as if he or she were a public employee.

29(b) Any defense and indemnification shall be solely with respect
30to the action pursuant to Article 4 (commencing with Section 825)
31of Chapter 1 of Part 2 of, and Part 7 (commencing with Section
32995) of Division 3.6 of Title 1 of, the Government Code.

end delete
begin delete33

SEC. 39.  

Section 94884 of the Education Code is amended to
34read:

35

94884.  

The board is subject to Section 27 of the Business and
36Professions Code.

end delete
37

begin deleteSEC. 40.end delete
38begin insertSEC. 18.end insert  

Section 94885 of the Education Code is amended to
39read:

P29   1

94885.  

begin insert(a)end insertbegin insertend insertThebegin delete boardend deletebegin insert bureauend insert shall adopt by regulation
2minimum operating standards for an institution that shall
3reasonably ensure that all of the following occur:

begin delete

4(a)

end delete

5begin insert(1)end insert The content of each educational program can achieve its
6stated objective.

begin delete

7(b)

end delete

8begin insert(2)end insert The institution maintains specific written standards for
9student admissions for each educational program and those
10standards are related to the particular educational program.

begin delete

11(c)

end delete

12begin insert(end insertbegin insert3)end insert The facilities, instructional equipment, and materials are
13sufficient to enable students to achieve the educational program’s
14goals.

begin delete

15(d)

end delete

16begin insert(end insertbegin insert4)end insert The institution maintains a withdrawal policy and provides
17 refunds.

begin delete

18(e)

end delete

19begin insert(end insertbegin insert5)end insert The directors, administrators, and faculty are properly
20qualified.

begin delete

21(f)

end delete

22begin insert(end insertbegin insert6)end insert The institution is financially sound and capable of fulfilling
23its commitments to students.

begin delete

24(g)

end delete

25begin insert(end insertbegin insert7)end insert That, upon satisfactory completion of an educational
26program, the institution gives students a document signifying the
27degree or diploma awarded.

begin delete

28(h)

end delete

29begin insert(end insertbegin insert8)end insert Adequate records and standard transcripts are maintained
30and are available to students.

begin delete

31(i)

end delete

32begin insert(end insertbegin insert9)end insert The institution is maintained and operated in compliance
33with this chapter and all other applicable ordinances and laws.

begin delete

34(j) (1)  An

35institution offering a degree is accredited by an accrediting
36agency recognized by the United States Department of Education.

37(2) An unaccredited institution offering a degree that is approved
38to operate by the bureau as of January 1, 2015, shall have until
39January 1, 2016, to obtain and provide evidence of its candidacy
40or preaccreditation status with an accrediting agency recognized
P30   1by the United States Department of Education, and to obtain and
2provide evidence of accreditation from that accrediting agency on
3or before January 1, 2017.

4(3) The board may, upon the submission of sufficient evidence
5that an unaccredited institution is making strong progress toward
6obtaining accreditation pursuant to paragraph (2), extend the
7timeline for the institution beyond the timeline provided in
8paragraph (2).

end delete
begin insert

9(b) Except as provided in Section 94855.1, an institution offering
10a degree must satisfy one of the following requirements:

end insert
begin insert

11(i) Accreditation by an accrediting agency recognized by the
12United States Department of Education, with the scope of that
13accreditation covering the offering of at least one degree program
14by the institution.

end insert
begin insert

15(ii) An accreditation plan, approved by the bureau, for the
16institution to become fully accredited within five years of the
17bureau’s issuance of a provisional approval to operate to the
18institution. The provisional approval to operate to an unaccredited
19degree-offering institution shall be in compliance with Section
2094885.5.

end insert
21begin insert

begin insertSEC. 19.end insert  

end insert

begin insertSection 94885.1 is added to the end insertbegin insertEducation Codeend insertbegin insert, to
22read:end insert

begin insert
23

begin insert94885.1.end insert  

(a) An institution that is not accredited by an
24accrediting agency recognized by the United States Department
25of Education and offering at least one degree program, and that
26has obtained an approval to operate from the bureau on or before
27January 1, 2015, shall be required to satisfy at least one of the
28following no later than July 1, 2015:

29(1) Accreditation by an accrediting agency recognized by the
30United States Department of Education, with the scope of that
31accreditation covering the offering of at least one degree program
32by the institution.

33(2) Compliance with subdivision (b).

34(b) The bureau shall identify institutions that are subject to
35subdivision (a) and notify those institutions by February 1, 2015
36of the accreditation requirements pursuant to this section and that
37the institution is required provide the following information to the
38bureau if the institution plans to continue to offer a degree program
39after July 1, 2015:

P31   1(1) An accreditation plan that, at a minimum, identifies an
2accrediting agency recognized by the United States Department
3of Education from which the institution will seek accreditation,
4with the scope of that accreditation covering the offering of at
5least one degree program, and outlines the process by which the
6institution will achieve accreditation candidacy or
7pre-accreditation by July 1, 2017, and full accreditation by July
81, 2020.

9(2) Evidence of having achieved accreditation candidacy or
10pre-accreditation by July 1, 2017.

11(3) Evidence of having obtained full accreditation by July 1,
122020.

13(4) Any additional documentation the bureau deems necessary.

14(c) An institution that satisfies the requirements of subdivision
15(b) shall comply with all of the following:

16(1) Notify students seeking to enroll in the institution, in writing,
17prior to the execution of the student’s enrollment agreement, that
18the institution’s approval to offer a degree program is contingent
19upon the institution being subsequently accredited.

20(2) A visiting committee, empaneled by the bureau pursuant to
21Section 94882, shall review the institution by January 1, 2017,
22and determine if the institution is likely to achieve full accreditation
23by July 1, 2020. If the visiting committee finds the institution
24deficient in its accreditation plan, the bureau may prohibit the
25institution from enrolling new students in its degree program or
26programs, and require the execution of a teach-out plan for its
27enrolled students.

28(d) Any institution that fails to comply with the requirements of
29this section by the dates provided, as required, shall have its
30approval to operate automatically suspended on the applicable
31date. The bureau shall issue an order suspending the institution
32and that suspension shall not be lifted until the institution complies
33with the requirements of this section. A suspended institution shall
34not enroll new students in any of its degree programs, and shall
35execute a teach-out plan for its enrolled students.

36(e) This section shall remain in effect until January 1, 2021,
37and as of that date is repealed, unless a later enacted statute, that
38is enacted before January 1, 2021, deletes or extends that date.

end insert
39begin insert

begin insertSEC. 20.end insert  

end insert

begin insertSection 94885.5 is added to the end insertbegin insertEducation Codeend insertbegin insert, to
40read:end insert

begin insert
P32   1

begin insert94885.5.end insert  

(a) If an institution that has not been accredited by
2an accrediting agency recognized by the United States Department
3of Education seeks to offer one or more degree programs, the
4institution shall satisfy the following requirements in order to be
5issued a provisional approval to operate from the bureau:

6(1) The institution may not offer more than two degree programs
7during the term of its provisional approval to operate.

8(2) The institution shall submit an accreditation plan, approved
9by the bureau, for the institution to become fully accredited within
10five years of issuance of its provisional approval to operate. The
11plan shall include, at a minimum, identification of an accreditation
12agency recognized by the United States Department of Education,
13from which the institution plans to seek accreditation, and outline
14the process by which the institution will achieve accreditation
15candidacy or pre-accreditation within two years, and full
16accreditation within five years, of issuance of its provisional
17approval.

18(3) The institution shall submit to the bureau all additional
19documentation the bureau deems necessary to determine if the
20institution will become fully accredited within five years of issuance
21of its provisional approval to operate.

22(b) If an institution is granted a provisional approval to operate
23pursuant to subdivision (a), the following is required:

24(1) Students seeking to enroll in that institution shall be notified
25in writing by the institution, prior to the execution of the student’s
26enrollment agreement, that the institution’s approval to operate
27is contingent upon it being subsequently accredited.

28(2) Within the first two years of issuance of the provisional
29approval, a visiting committee, empaneled by the bureau pursuant
30to Section 94882, shall review the institution's application for
31approval and its accreditation plan, and make a recommendation
32to the bureau regarding the institution’s progress to achieving full
33accreditation.

34(3) The institution shall provide evidence of accreditation
35candidacy or preaccreditation within two years of issuance of its
36provisional approval, and evidence of accreditation within five
37years of issuance of its provisional approval, with the scope of
38that accreditation covering the offering of at least one degree
39program.

P33   1(c) An institution required to comply with this section that fails
2to do so by the dates provided, as required, shall have its
3provisional approval to operate automatically suspended on the
4applicable date. The bureau shall issue an order suspending the
5institution and that suspension shall not be lifted until the
6institution complies with the requirements of this section. A
7suspended institution shall not enroll new students in any of its
8degree programs and shall execute a teach-out plan for its enrolled
9students.

10(d) An institution issued a provisional approval under this
11section is required to comply with all other laws and regulations.

12(e) The bureau shall adopt emergency regulations for purposes
13of implementing this section. The adoption of these regulations
14shall be deemed to be an emergency and necessary for the
15immediate preservation of the public peace, health and safety, or
16general welfare for purposes of Sections 11346.1 and 11349.6 of
17the Government Code. These emergency regulations shall become
18law through the regular rulemaking process within one year of
19the enactment of this section.

end insert
begin delete20

SEC. 41.  

Section 94887 of the Education Code is amended to
21read:

22

94887.  

An approval to operate shall be granted only after an
23applicant has presented sufficient evidence to the board, and the
24board has independently verified the information provided by the
25applicant through site visits or other methods deemed appropriate
26by the board, that the applicant has the capacity to satisfy the
27minimum operating standards. The board shall deny an application
28for an approval to operate if the application does not satisfy those
29standards.

end delete
30

begin deleteSEC. 42.end delete
31begin insertSEC. 21.end insert  

Section 94888 of the Education Code is amended to
32read:

33

94888.  

(a) Thebegin delete boardend deletebegin insert bureauend insert shall adopt by regulation both
34of the following:

35(1) The process and procedures whereby an institution seeking
36approval to operate may apply for and obtain an approval to
37operate.

38(2) The process and procedures governing thebegin delete board’send deletebegin insert bureau’send insert
39 approval and denial of applications for approval to operate,
P34   1including the process and procedures whereby an applicant for
2which an application has been denied may appeal that denial.

3(b) Thebegin delete boardend deletebegin insert bureauend insert shall, by regulation, establish both of the
4following:

5(1) A process for issuing a notification of a denial of an approval
6to operate to an institution that submits an application for approval
7to operate and for which that application is denied. The notification
8of denial shall include a statement of reasons for the denial.

9(2) Application processing goals and timelines to ensure an
10institution that has submitted a complete application for approval
11to operate has that application promptly reviewed for compliance
12within 30 days ofbegin delete boardend deletebegin insert bureauend insert receipt of the application, or within
13an appropriate timeline as determined by thebegin delete boardend deletebegin insert bureauend insert. The
14timelines shall ensure that an institution that has submitted a
15complete and compliant application receives approval within 30
16days of the application being deemed compliant by thebegin delete board,end delete
17begin insert bureau,end insert or within an appropriate timeline as determined by the
18begin delete boardend deletebegin insert bureauend insert.

19

begin deleteSEC. 43.end delete
20begin insertSEC. 22.end insert  

Section 94890 of the Education Code is amended to
21read:

22

94890.  

(a) (1) Thebegin delete boardend deletebegin insert bureauend insert shall grant an institution that
23is accredited an approval to operate by means of its accreditation.

24(2) Thebegin delete boardend deletebegin insert bureauend insert shall adopt by regulation the process and
25procedures whereby an institution that is accredited may apply for
26and obtain an approval by means of that accreditation.begin insert The bureau
27shall establish application processing goals and timelines to ensure
28that an institution that has submitted a complete application for
29approval to operate by means of its accreditation has that
30application promptly reviewed for compliance within 30 days of
31the bureau’s receipt of the application or within an appropriate
32timeline as determined by the bureau. The timelines shall ensure
33that an institution that has submitted a complete and compliant
34application receives approval within 30 days of the application
35being deemed compliant by the bureau, or within an appropriate
36timeline as determined by the bureau.end insert

37(b) The term of an approval to operate pursuant to this section
38shall be coterminous with the term of accreditation. Upon renewal
39of the institution’s accreditation, the institution shall submit
P35   1verification to thebegin delete boardend deletebegin insert bureauend insert, on a form provided by thebegin delete boardend delete
2begin insert bureauend insert, that the institution’s accreditation has been renewed.

3(c) Institutions that are granted an approval to operate by means
4of the institution’s accreditation shall comply with all other
5applicable requirements in this chapter.

6

begin deleteSEC. 44.end delete
7begin insertSEC. 23.end insert  

Section 94891 of the Education Code is amended to
8read:

9

94891.  

(a) Thebegin delete boardend deletebegin insert bureauend insert shall adopt by regulation the
10process and procedures whereby an institution may obtain a
11renewal of an approval to operate.

12(b) To be granted a renewal of an approval to operate, the
13institution shall demonstrate its continued capacity to meet the
14minimum operating standards.

15(c) (1) An institution that is denied renewal of an approval to
16operate may file an appeal in accordance with the procedures
17established by thebegin delete boardend deletebegin insert bureauend insert pursuant to Section 94888.

18(2) An institution that has filed an appeal of a denial of a renewal
19application may continue to operate during the appeal process, but
20must disclose in a written statement, approved by thebegin delete board,end delete
21begin insert bureau,end insert to all current and prospective students, that the institution’s
22application for renewal of approval to operate was denied by the
23begin delete boardend deletebegin insert bureauend insert because thebegin delete boardend deletebegin insert bureauend insert determined the application
24did not satisfy the requirements to operate in California, that the
25institution is appealing thebegin delete board’send deletebegin insert bureau’s end insert decision, and that
26the loss of the appeal may result in the institution’s closure.

27(3) If thebegin delete boardend deletebegin insert bureauend insert determines that the continued operation
28of the institution during the appeal process poses a significant risk
29of harm to students, thebegin delete boardend deletebegin insert bureauend insert shall make an emergency
30decision pursuant to its authority provided in Section 94938.

begin delete
31

SEC. 45.  

Section 94892 of the Education Code is amended to
32read:

33

94892.  

If an agency of this state other than the board or of the
34federal government provides an approval to offer an educational
35program and the institution already has a valid approval to operate
36issued by the board, that agency’s educational program approval
37may satisfy the requirements of this article without any further
38review by the board. The board may incorporate that educational
39program into the institution’s approval to operate when the board
P36   1receives documentation signifying the conferral of the educational
2program approval by that agency.

3

SEC. 46.  

Section 94893 of the Education Code is amended to
4read:

5

94893.  

If an institution intends to make a substantive change
6to its approval to operate, the institution shall receive prior
7authorization from the board. Except as provided in subdivision
8(a) of Section 94896, if the institution makes the substantive change
9without prior board authorization, the institution’s approval to
10operate may be suspended or revoked.

11

SEC. 47.  

Section 94895 of the Education Code is amended to
12read:

13

94895.  

The board shall adopt by regulation the process and
14procedures whereby an institution shall seek authorization for
15substantive changes to an approval to operate.

16

SEC. 48.  

Section 94896 of the Education Code is amended to
17read:

18

94896.  

(a) An institution that has been granted an approval to
19operate by means of accreditation shall only make a substantive
20change in accordance with the institution’s accreditation standards.

21(b) The institution shall notify the board of the substantive
22change on a form provided by the board.

23

SEC. 49.  

Section 94897 of the Education Code is amended to
24read:

25

94897.  

An institution shall not do any of the following:

26(a) Use, or allow the use of, any reproduction or facsimile of
27the Great Seal of the State of California on a diploma.

28(b) Promise or guarantee employment, or otherwise overstate
29the availability of jobs upon graduation.

30(c) Advertise concerning job availability, degree of skill, or
31length of time required to learn a trade or skill unless the
32information is accurate and not misleading.

33(d) Advertise, or indicate in promotional material, without
34including the fact that the educational programs are delivered by
35means of distance education if the educational programs are so
36delivered.

37(e) Advertise, or indicate in promotional material, that the
38institution is accredited, unless the institution has been accredited
39by an accrediting agency.

P37   1(f) Solicit students for enrollment by causing an advertisement
2to be published in “help wanted” columns in a magazine,
3newspaper, or publication, or use “blind” advertising that fails to
4identify the institution.

5(g) Offer to compensate a student to act as an agent of the
6institution with regard to the solicitation, referral, or recruitment
7of any person for enrollment in the institution, except that an
8institution may award a token gift to a student for referring an
9individual, provided that the gift is not in the form of money, no
10more than one gift is provided annually to a student, and the gift’s
11cost is not more than one hundred dollars ($100).

12(h) Pay any consideration to a person to induce that person to
13sign an enrollment agreement for an educational program.

14(i) Use a name in any manner improperly implying any of the
15following:

16(1) The institution is affiliated with any government agency,
17public or private corporation, agency, or association if it is not, in
18fact, thus affiliated.

19(2) The institution is a public institution.

20(3) The institution grants degrees, if the institution does not
21grant degrees.

22(j) In any manner make an untrue or misleading change in, or
23untrue or misleading statement related to, a test score, grade or
24record of grades, attendance record, record indicating student
25completion, placement, employment, salaries, or financial
26information, including any of the following:

27(1) A financial report filed with the board.

28(2) Information or records relating to the student’s eligibility
29for student financial aid at the institution.

30(3) Any other record or document required by this chapter or
31by the board.

32(k) Willfully falsify, destroy, or conceal any document of record
33while that document of record is required to be maintained by this
34chapter.

35(l) Use the terms “approval,” “approved,” “approval to operate,”
36or “approved to operate” without stating clearly and conspicuously
37that approval to operate means compliance with state standards as
38set forth in this chapter. If the board has granted an institution
39approval to operate, the institution may indicate that the institution
P38   1is “authorized,” “licensed,” or “licensed to operate,” but may not
2state or imply either of the following:

3(1) The institution or its educational programs are endorsed or
4recommended by the state or by the board.

5(2) The approval to operate indicates that the institution exceeds
6minimum state standards as set forth in this chapter.

7(m) Direct any individual to perform an act that violates this
8chapter, to refrain from reporting unlawful conduct to the board
9or another government agency, or to engage in any unfair act to
10persuade a student not to complain to the board or another
11government agency.

12(n) Compensate an employee involved in recruitment,
13enrollment, admissions, student attendance, or sales of educational
14materials to students on the basis of a commission, commission
15draw, bonus, quota, or other similar method related to the
16recruitment, enrollment, admissions, student attendance, or sales
17of educational materials to students, except as provided in
18paragraph (1) or (2):

19(1) If the educational program is scheduled to be completed in
2090 days or less, the institution shall pay compensation related to
21a particular student only if that student completes the educational
22program.

23(2) For institutions participating in the federal student financial
24aid programs, this subdivision shall not prevent the payment of
25compensation to those involved in recruitment, admissions, or the
26award of financial aid if those payments are in conformity with
27federal regulations governing an institution’s participation in the
28federal student financial aid programs.

29(o) Require a prospective student to provide personal contact
30information in order to obtain, from the institution’s Internet Web
31site, educational program information that is required to be
32contained in the school catalog or any information required
33pursuant to the consumer information requirements of Title IV of
34the federal Higher Education Act of 1965, and any amendments
35thereto.

36(p) Offer an associate, baccalaureate, master’s, or doctoral
37degree without disclosing to prospective students prior to
38enrollment whether the institution or the degree program is
39unaccredited and any known limitation of the degree, including,
40but not limited to, all of the following:

P39   1(1) Whether a graduate of the degree program will be eligible
2to sit for the applicable licensure exam in California and other
3states.

4(2) A statement that reads: “A degree program that is
5 unaccredited or a degree from an unaccredited institution is not
6recognized for some employment positions, including, but not
7limited to, positions with the State of California.”

8(3) That a student enrolled in an unaccredited institution is not
9eligible for federal financial aid programs.

10

SEC. 50.  

Section 94898 of the Education Code is amended to
11read:

12

94898.  

(a) An institution shall not merge classes unless all of
13the students have received the same amount of instruction. This
14subdivision does not prevent the placement of students, who are
15enrolled in different educational programs, in the same class if that
16class is part of each of the educational programs and the placement
17in a merged class will not impair the students’ learning of the
18subject matter of the class.

19(b) After a student has enrolled in an educational program, the
20institution shall not do either of the following:

21(1) Make any unscheduled suspension of any class unless caused
22by circumstances beyond the institution’s control.

23(2) Change the day or time during the period of attendance in
24which any class is offered to a day when the student is not
25scheduled to attend the institution or to a time that is outside of
26the range of time that the student is scheduled to attend the
27institution on the day for which the change is proposed unless at
28least 90 percent of the students who are enrolled consent to the
29change and the institution offers full refunds to the students who
30do not consent to the change. For the purpose of this paragraph,
31“range of time” means the period beginning with the time at which
32the student’s first scheduled class session for the day is set to start
33and ending with the time the student’s last scheduled class session
34for that day is set to finish.

35(c) If an institution enrolls a student in an educational program
36that is conducted at a specific site at the time of enrollment, the
37institution shall not convert the educational program to another
38method of delivery, such as by means of distance education. This
39subdivision does not apply to an educational program that also
40includes a distance education component, if the student is notified
P40   1during the enrollment process, in writing, that the program contains
2a distance education component.

3(d) An institution shall not move the location of class instruction
4more than 25 miles from the location of instruction at the time of
5enrollment unless any of the following occur:

6(1) The institution discloses in writing to each student before
7enrollment in the educational program that the location of
8instruction will change after the educational program begins and
9the address of the new location.

10(2) The institution applies for, and the board grants, approval
11to change the location. The board shall grant the application within
1260 days if the board, after notice to affected students and an
13opportunity for them to be heard as prescribed by the board,
14concludes that the change in location would not be unfair or unduly
15burdensome to students. The board may grant approval to change
16the location subject to reasonable conditions, such as requiring the
17institution to provide transportation, transportation costs, or refunds
18to adversely affected students.

19(3) The institution offers a full refund to students enrolled in
20the educational program who do not voluntarily consent to the
21change.

22(4) An unforeseeable and unavoidable circumstance outside of
23the control of the institution requires the change in the location of
24instruction.

25

SEC. 51.  

Section 94900.7 of the Education Code is amended
26to read:

27

94900.7.  

The recordkeeping requirements of this article shall
28not apply to an institution that is accredited, if the recordkeeping
29requirements of the accrediting organization are substantially
30similar to the recordkeeping requirements of this article, as
31determined by the board.

end delete
32

begin deleteSEC. 52.end delete
33begin insertSEC. 24.end insert  

Section 94904 of the Education Code is amended to
34read:

35

94904.  

(a) Before an ability-to-benefit student may execute
36an enrollment agreement, the institution shall have the student take
37an independently administered examination from the list of
38examinations prescribed as of July 1, 2012, by the United States
39Department of Education pursuant to Section 484(d) of the federal
40Higher Education Act of 1965 (20 U.S.C. Sec. 1070a et seq.). The
P41   1student shall not enroll unless the student achieves a score, as
2specified by the United States Department of Education,
3demonstrating that the student may benefit from the education and
4training being offered.

5(b) If the United States Department of Education does not have
6a list of relevant examinations that pertain to the intended
7occupational training, thebegin delete boardend deletebegin insert bureauend insert may publish its own list
8of acceptable examinations and required passing scores.

9

begin deleteSEC. 53.end delete
10begin insertSEC. 25.end insert  

Section 94909 of the Education Code is amended to
11read:

12

94909.  

(a) begin deletePrior end deletebegin insertExcept as provided in subdivision (d), priorend insert
13 to enrollment, an institution shall provide a prospective student,
14either in writing or electronically, with a school catalog containing,
15at a minimum, all of the following:

16(1) The name, address, telephone number, and, if applicable,
17Internet Web site address of the institution.

18(2) Except as specified in Article 2 (commencing with Section
1994802), a statement that the institution is a private institution and
20that it is approved to operate by the board.

21(3) The following statements:

22(A) “Any questions a student may have regarding this catalog
23that have not been satisfactorily answered by the institution may
24be directed to the Board for Private Postsecondary Education at
25(address), Sacramento, CA (ZIP Code), (Internet Web site address),
26(telephone and fax numbers).”

27(B) “As a prospective student, you are encouraged to review
28this catalog prior to signing an enrollment agreement. You are also
29encouraged to review the School Performance Fact Sheet, which
30must be provided to you prior to signing an enrollment agreement.”

31(C) “A student or any member of the public may file a complaint
32about this institution with the Board for Private Postsecondary
33Education by calling (toll-free telephone number) or by completing
34a complaint form, which can be obtained on the board’s Internet
35Web site (Internet Web site address).”

36(4) The address or addresses where class sessions will be held.

37(5) A description of the programs offered and a description of
38the instruction provided in each of the courses offered by the
39institution, the requirements for completion of each program,
40including required courses, any final tests or examinations, any
P42   1required internships or externships, and the total number of credit
2hours, clock hours, or other increments required for completion.

3(6) If the educational program is designed to lead to positions
4in a profession, occupation, trade, or career field requiring licensure
5in this state, a notice to that effect and a list of the requirements
6for eligibility for licensure.

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

8(8) A detailed description of institutional policies in the
9following areas:

10(A) Admissions policies, including the institution’s policies
11regarding the acceptance of credits earned at other institutions or
12through challenge examinations and achievement tests, admissions
13requirements for ability-to-benefit students, and a list describing
14any transfer or articulation agreements between the institution and
15any other college or university that provides for the transfer of
16credits earned in the program of instruction. If the institution has
17not entered into an articulation or transfer agreement with any
18other college or university, the institution shall disclose that fact.

19(B) Cancellation, withdrawal, and refund policies, including an
20explanation that the student has the right to cancel the enrollment
21agreement and obtain a refund of charges paid through attendance
22at the first class session, or the seventh day after enrollment,
23whichever is later. The text shall also include a description of the
24procedures that a student is required to follow to cancel the
25enrollment agreement or withdraw from the institution and obtain
26a refund consistent with the requirements of Article 13
27(commencing with Section 94919).

28(C) Probation and dismissal policies.

29(D) Attendance policies.

30(E) Leave-of-absence policies.

31(9) The schedule of total charges for a period of attendance and
32an estimated schedule of total charges for the entire educational
33program.

34(10) A statement reporting whether the institution participates
35in federal and state financial aid programs, and if so, all consumer
36information that is required to be disclosed to the student pursuant
37 to the applicable federal and state financial aid programs.

38(11) A statement specifying that, if a student obtains a loan to
39pay for an educational program, the student will have the
40responsibility to repay the full amount of the loan plus interest,
P43   1less the amount of any refund, and that, if the student has received
2federal student financial aid funds, the student is entitled to a refund
3of the moneys not paid from federal student financial aid program
4funds.

5(12) A statement specifying whether the institution has a pending
6petition in bankruptcy, is operating as a debtor in possession, has
7filed a petition within the preceding five years, or has had a petition
8in bankruptcy filed against it within the preceding five years that
9resulted in reorganization under Chapter 11 of the United States
10Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).

11(13) If the institution provides placement services, a description
12of the nature and extent of the placement services.

13(14) A description of the student’s rights and responsibilities
14with respect to the Student Tuition Recovery Fund. This statement
15shall specify that it is a state requirement that a student who pays
16his or her tuition is required to pay a state-imposed assessment for
17the Student Tuition Recovery Fund. This statement shall also
18describe the purpose and operation of the Student Tuition Recovery
19Fund and the requirements for filing a claim against the Student
20Tuition Recovery Fund.

21(15) The following statement:

22

23“NOTICE CONCERNING TRANSFERABILITY OF
24CREDITS AND CREDENTIALS EARNED AT OUR
25INSTITUTION


26The transferability of credits you earn at (name of institution)
27is at the complete discretion of an institution to which you
28may seek to transfer. Acceptance of the (degree, diploma, or
29certificate) you earn in (name of educational program) is also
30at the complete discretion of the institution to which you may
31seek to transfer. If the (credits or degree, diploma, or
32certificate) that you earn at this institution are not accepted at
33the institution to which you seek to transfer, you may be
34required to repeat some or all of your coursework at that
35institution. For this reason you should make certain that your
36 attendance at this institution will meet your educational goals.
37This may include contacting an institution to which you may
38seek to transfer after attending (name of institution) to
39determine if your (credits or degree, diploma, or certificate)
40will transfer.”

P44   1

2(16) A statement specifying whether the institution, or any of
3its degree programs, are accredited by an accrediting agency
4recognized by the United States Department of Education. If the
5institution is unaccredited and offers an associate, baccalaureate,
6master’s, or doctoral degree, or is accredited and offers an
7unaccredited program for an associate, baccalaureate, master’s, or
8doctoral degree, the statement shall disclose the known limitations
9of the degree program, including, but not limited to, all of the
10following:

11(A) Whether a graduate of the degree program will be eligible
12to sit for the applicable licensure exam in California and other
13states.

14(B) A degree program that is unaccredited or a degree from an
15unaccredited institution is not recognized for some employment
16positions, including, but not limited to, positions with the State of
17California.

18(C) That a student enrolled in an unaccredited institution is not
19eligible for federal financial aid programs.

20(b) If the institution has a general student brochure, the
21institution shall provide that brochure to the prospective student
22prior to enrollment. In addition, if the institution has a
23program-specific student brochure for the program in which the
24prospective student seeks to enroll, the institution shall provide
25the program-specific student brochure to the prospective student
26prior to enrollment.

27(c) An institution shall provide the school catalog to any person
28upon request. In addition, if the institution has student brochures,
29the institution shall disclose the requested brochures to any
30interested person upon request.

begin insert

31(d) An accredited institution is not required to provide a School
32Performance Fact Sheet to a prospective student who is not a
33California resident, not residing in California at the time of his
34or her enrollment, and enrolling in an accredited distance learning
35degree program offered by the institution, if the institution complies
36with all federal laws, the applicable laws of the state where the
37student is located, and other appropriate laws, including, but not
38limited to, consumer protection and student disclosure
39requirements.

end insert
P45   1

begin deleteSEC. 54.end delete
2begin insertSEC. 26.end insert  

Section 94910 of the Education Code is amended to
3read:

4

94910.  

begin deletePrior end deletebegin insertExcept as provided in subdivision (d) of Section
594909 and Section 94910.5, priorend insert
to enrollment, an institution
6shall provide a prospective student with a School Performance
7Fact Sheet containing, at a minimum, the following information,
8as it relates to the educational program:

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

11(b) Placement rates for each educational program, as calculated
12pursuant to Article 16 (commencing with Section 94928), if the
13educational program is designed to lead to, or the institution makes
14any express or implied claim related to preparing students for, a
15recognized career, occupation, vocation, job, or job title.

16(c) License examination passage rates for programs leading to
17employment for which passage of a state licensing examination is
18required, as calculated pursuant to Article 16 (commencing with
19Section 94928).

20(d) Salary or wage information, as calculated pursuant to Article
2116 (commencing with Section 94928).

22(e) If a program is too new to provide data for any of the
23categories listed in this subdivision, the institution shall state on
24its fact sheet: “This program is new. Therefore, the number of
25students who graduate, the number of students who are placed, or
26the starting salary you can earn after finishing the educational
27program are unknown at this time. Information regarding general
28salary and placement statistics may be available from government
29sources or from the institution, but is not equivalent to actual
30performance data.”

31(f) All of the following:

32(1) A description of the manner in which the figures described
33in subdivisions (a) to (d), inclusive, are calculated or a statement
34informing the reader of where he or she may obtain a description
35of the manner in which the figures described in subdivisions (a)
36to (d), inclusive, are calculated.

37(2) A statement informing the reader of where he or she may
38obtain from the institution a list of the employment positions
39determined to be within the field for which a student received
P46   1education and training for the calculation of job placement rates
2as required by subdivision (b).

3(3) A statement informing the reader of where he or she may
4obtain from the institution a list of the objective sources of
5information used to substantiate the salary disclosure as required
6by subdivision (d).

7(g) The following statements:

8(1) “This fact sheet is filed with the Board for Private
9Postsecondary Education. Regardless of any information you may
10have relating to completion rates, placement rates, starting salaries,
11or license exam passage rates, this fact sheet contains the
12information as calculated pursuant to state law.”

13(2) “Any questions a student may have regarding this fact sheet
14that have not been satisfactorily answered by the institution may
15be directed to the Board for Private Postsecondary Education at
16(address), Sacramento, CA (ZIP Code), (Internet Web site address),
17(telephone and fax numbers).”

18(h) If the institution participates in federal financial aid
19programs, the most recent three-year cohort default rate reported
20by the United States Department of Education for the institution
21and the percentage of enrolled students receiving federal student
22loans.

begin insert

23(i) Data and information disclosed pursuant to subdivisions (a)
24to (d), inclusive, is not required to include students who satisfy the
25qualifications specified in subdivision (d) of Section 94909, but
26an institution shall disclose whether the data, information, or both
27provided in its fact sheet excludes students pursuant to this
28subdivision. An institution shall not actively use data specific to
29the fact sheet in its recruitment materials or other recruitment
30efforts of students who are not California residents and do not
31reside in California at the time of their enrollment.

end insert
begin delete
32

SEC. 55.  

Section 94911 of the Education Code is amended to
33read:

34

94911.  

An enrollment agreement shall include, at a minimum,
35all of the following:

36(a) The name of the institution and the name of the educational
37program, including the total number of credit hours, clock hours,
38or other increment required to complete the educational program.

39(b) A schedule of total charges, including a list of any charges
40that are nonrefundable and the student’s obligations to the Student
P47   1Tuition Recovery Fund, clearly identified as nonrefundable
2charges.

3(c) In underlined capital letters on the same page of the
4enrollment agreement in which the student’s signature is required,
5 the total charges for the current period of attendance, the estimated
6 total charges for the entire educational program, and the total
7charges the student is obligated to pay upon enrollment.

8(d) A clear and conspicuous statement that the enrollment
9agreement is legally binding when signed by the student and
10accepted by the institution.

11(e) (1) A disclosure with a clear and conspicuous caption,
12“STUDENT’S RIGHT TO CANCEL,” under which it is explained
13that the student has the right to cancel the enrollment agreement
14and obtain a refund of charges paid through attendance at the first
15class session, or the seventh day after enrollment, whichever is
16later.

17(2) The disclosure shall contain the institution’s refund policy
18and a statement that, if the student has received federal student
19financial aid funds, the student is entitled to a refund of moneys
20not paid from federal student financial aid program funds.

21(3) The text shall also include a description of the procedures
22that a student is required to follow to cancel the enrollment
23agreement or withdraw from the institution and obtain a refund.

24(f) A statement specifying that, if the student obtains a loan to
25pay for an educational program, the student will have the
26responsibility to repay the full amount of the loan plus interest,
27less the amount of any refund.

28(g) A statement specifying that, if the student is eligible for a
29loan guaranteed by the federal or state government and the student
30defaults on the loan, both of the following may occur:

31(1) The federal or state government or a loan guarantee agency
32may take action against the student, including applying any income
33tax refund to which the person is entitled to reduce the balance
34owed on the loan.

35(2) The student may not be eligible for any other federal student
36financial aid at another institution or other government assistance
37until the loan is repaid.

38(h) The transferability disclosure that is required to be included
39in the school catalog, as specified in paragraph (15) of subdivision
40(a) of Section 94909.

P48   1(i) (1) The following statement: “Prior to signing this enrollment
2agreement, you must be given a catalog or brochure and a School
3Performance Fact Sheet, which you are encouraged to review prior
4to signing this agreement. These documents contain important
5policies and performance data for this institution. This institution
6is required to have you sign and date the information included in
7 the School Performance Fact Sheet relating to completion rates,
8placement rates, license examination passage rates, salaries or
9wages, and the most recent three-year cohort default rate, if
10applicable, prior to signing this agreement.”

11(2) Immediately following the statement required by paragraph
12(1), a line for the student to initial, including the following
13statement: “I certify that I have received the catalog, School
14Performance Fact Sheet, and information regarding completion
15rates, placement rates, license examination passage rates, salary
16or wage information, and the most recent three-year cohort default
17rate, if applicable, included in the School Performance Fact Sheet,
18and have signed, initialed, and dated the information provided in
19the School Performance Fact Sheet.”

20(j) The following statements:

21

22(1) “Any questions a student may have regarding this
23enrollment agreement that have not been satisfactorily
24answered by the institution may be directed to the Board for
25Private Postsecondary Education at (address), Sacramento,
26CA (ZIP Code), (Internet Web site address), (telephone and
27fax numbers).”

28

29(2) “A student or any member of the public may file a complaint
30about this institution with the Board for Private Postsecondary
31Education by calling (toll-free telephone number) or by completing
32a complaint form, which can be obtained on the board’s Internet
33Web site (Internet Web site address).”

34

35(k) The following statement above the space for the student’s
36signature:

37

38“I understand that this is a legally binding contract. My
39signature below certifies that I have read, understood, and
40agreed to my rights and responsibilities, and that the
P49   1institution’s cancellation and refund policies have been clearly
2explained to me.”
3

4

SEC. 56.  

Section 94913 of the Education Code is amended to
5read:

6

94913.  

(a) An institution that maintains an Internet Web site
7shall provide on that Internet Web site all of the following:

8(1) The school catalog.

9(2) A School Performance Fact Sheet for each educational
10program offered by the institution.

11(3) Student brochures offered by the institution.

12(4) A link to the board’s Internet Web site.

13(5) The institution’s most recent annual report submitted to the
14board.

15(b) An institution shall include information concerning where
16students may access the board’s Internet Web site anywhere the
17institution identifies itself as being approved by the board.

18

SEC. 57.  

Section 94920 of the Education Code is amended to
19read:

20

94920.  

An institution that does not participate in the federal
21student financial aid programs shall do all of the following:

22(a) The institution shall advise each student that a notice of
23cancellation shall be in writing, and that a withdrawal may be
24effectuated by the student’s written notice or by the student’s
25conduct, including, but not necessarily limited to, a student’s lack
26of attendance.

27(b) Institutions shall refund 100 percent of the amount paid for
28institutional charges, less a reasonable deposit or application fee
29not to exceed two hundred fifty dollars ($250), if notice of
30cancellation is made through attendance at the first class session,
31or the seventh day after enrollment, whichever is later.

32(c) The board may adopt by regulation a different method of
33calculation for instruction delivered by other means, including,
34but not necessarily limited to, distance education.

35(d) The institution shall have a refund policy for the return of
36unearned institutional charges if the student cancels an enrollment
37agreement or withdraws during a period of attendance. The refund
38policy for students who have completed 60 percent or less of the
39period of attendance shall be a pro rata refund.

P50   1(e) The institution shall pay or credit refunds within 45 days of
2a student’s cancellation or withdrawal.

end delete
begin delete3

SEC. 58.  

Section 94921 of the Education Code is amended to
4read:

5

94921.  

An institution offering an educational program for
6which the refund calculations set forth in this article cannot be
7utilized because of the unique way in which the educational
8program is structured, may petition the board for an alternative
9method of calculating tuition refunds.

end delete
10begin insert

begin insertSEC. 27.end insert  

end insert

begin insertSection 94916 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
11read:end insert

12

94916.  

An institution extending credit or lending money to an
13individual for institutional and noninstitutional charges for an
14educational program shall cause any note, instrument, or other
15evidence of indebtedness taken in connection with that extension
16of credit or loan to be conspicuously marked on its face in at least
1712-point type with the following notice:

18

begin delete

19“NOTICE

20YOU MAY ASSERT AGAINST THE HOLDER OF THE
21PROMISSORY NOTE YOU SIGNED IN ORDER TO
22FINANCE THE COST OF THE EDUCATIONAL
23PROGRAM ALL OF THE CLAIMS AND DEFENSES THAT
24YOU COULD ASSERT AGAINST THIS INSTITUTION,
25UP TO THE AMOUNT YOU HAVE ALREADY PAID
26UNDER THE PROMISSORY NOTE.”

end delete
begin insert

27“Notice

end insert
begin insert

28You may assert against the holder of the promissory note you
29signed in order to finance the cost of the educational program all
30of the claims and defenses that you could assert against this
31institution, up to the amount you have already paid under the
32promissory note.”

end insert

33

34

begin deleteSEC. 59.end delete
35begin insertSEC. 28.end insert  

Section 94923 of the Education Code is amended to
36read:

37

94923.  

(a) The Student Tuition Recovery Fund relieves or
38mitigates economic loss suffered by a student while enrolled in an
39educational programbegin insert, as defined in Section 94837,end insert atbegin delete a nonexemptend delete
40begin insert anend insert institutionbegin delete underend deletebegin insert not exempt from this article pursuant toend insert Article
P51   14 (commencing with Section 94874),begin delete as a result of the institution’s
2violation of lawend delete
begin insert who, at the time of his or her enrollment, was a
3California resident or was enrolled in a California residency
4program,end insert
begin insert prepaid tuition,end insertbegin insert and suffered economic lossend insert.

5(b) Thebegin delete boardend deletebegin insert bureauend insert shall adopt by regulation procedures
6governing the administration and maintenance of the Student
7Tuition Recovery Fund, including requirements relating to
8assessments on students and student claims against the Student
9Tuition Recovery Fund. The regulations shall provide for awards
10 to students who suffer economic loss.

11The regulations shall ensure that the following students, and any
12other students deemed appropriate, are eligible for payment from
13the Student Tuition Recovery Fund:

begin delete

14(1) In the event of a school closure, a student who attended the
15institution

end delete
begin insert

16(1) Any student who was enrolled at an institution, at a location
17of the institution, or in an educational program offered by the
18institution, at the time that institution, location, or program was
19closed or discontinued, as applicable, who did not choose to
20participate in a teach-out plan approved by the bureau or did not
21complete a chosen teach-out plan approved by the bureau.

end insert

22begin insert(2)end insertbegin insertend insertbegin insertAny student who was enrolled at an institution or a location
23of the institutionend insert
withinbegin delete 120 days ofend deletebegin insert the 120-day period beforeend insert the
24begin delete closure, or within a different period prior to the closure as
25determined by the boardend delete
begin insert closure of the institution or location of
26the institution, or who was enrolled in an educational program
27within the 120-day period before the program was discontinued,
28if the bureau determines there was a significant decline in the
29quality or value of that educational program during that time
30periodend insert
.

begin delete

31(2)

end delete
begin insert

32(3) Any student who was enrolled at an institution or a location
33of the institution more than 120 days before the closure of the
34institution or location of the institution, in an educational program
35offered by the institution as to which the bureau determines there
36was a significant decline in the quality or value of the program
37more than 120 days before closure.

end insert

38begin insert(4)end insert A student to whom an institution has been ordered to pay a
39refund by thebegin delete boardend deletebegin insert bureauend insert but has failed to dobegin delete so, unless the
P52   1student chose to participate in a teach-out plan approved by the
2boardend delete
begin insert soend insert.

begin insert

3(5) A student to whom an institution has failed to pay or
4reimburse loan proceeds under a federal student loan program as
5required by law, or has failed to pay or reimburse proceeds
6received by the institution in excess of tuition and other costs.

end insert
begin delete

7(3) Students who have

end delete

8begin insert (6)end insertbegin insertend insertbegin insertA student who hasend insert been awarded restitution,begin delete refundsend deletebegin insert a
9refundend insert
, orbegin insert other end insert monetarybegin delete awardsend deletebegin insert awardend insert by an arbitrator or court,
10based on a violation ofbegin delete law,end deletebegin insert this chapter by an institution or
11representative of an institution,end insert
but whobegin delete haveend deletebegin insert hasend insert been unable to
12collect thebegin delete award from the institution.end deletebegin insert award from the institution.end insert
13 Thebegin delete boardend deletebegin insert bureauend insert shall review thebegin insert award orend insert judgmentbegin delete to verify a
14violation of law,end delete
and shall ensure the amountbegin delete of the awardend deletebegin insert to be
15paid from the fundend insert
does not exceed the student’s economic loss.

begin delete

16(4) Students whose programs have been discontinued at the
17campus they attend before they are able to complete the program.

end delete
begin delete end deletebegin delete

18(c) Students who suffered losses due to an institution’s violation
19of this act, as determined by the board, shall be eligible for payment
20from the Student Tuition Recovery Fund.

end delete
begin insert

21(c) Any student who is required to pay a Student Tuition
22Recovery Fund assessment who pays tuition equal to or greater
23than the required assessment shall be deemed to have paid the
24required assessment, whether or not his or her enrollment
25agreement specifies collection of the required assessment, and
26whether or not the institution identifies any money collected from
27the student as a Student Tuition Recovery Fund assessment.

end insert
begin insert

28(d) The bureau shall establish regulations ensuring, as
29permissible under California law, that a student who suffers
30educational opportunity losses, whose charges are paid by a
31third-party payer, is eligible for educational credits under the
32fund.

end insert
begin delete

33(d)

end delete

34begin insert(e)end insert Thebegin delete boardend deletebegin insert bureauend insert may seek repayment to the Student Tuition
35Recovery Fund from an institution found in violation of the law
36for which a student claim was paid.begin insert An institution shall not be
37eligible to renew its approval to operate with the bureau if the
38repayment is not made to the bureau as requested.end insert

begin delete

39(e) For purposes of this article, “economic loss” means

end delete

P53   1begin insert (f)end insertbegin insertend insertbegin insertThe bureau shall, by regulation, define “economic loss.”
2The regulation shall ensure that the definition of “economic loss”
3includes, but is not necessarilyend insert
begin insert limited to,end insert pecuniary loss, which
4is the sum of the student’s tuition,begin insert all other institutional charges
5as defined in Section 94844, theend insert
cost of equipment and materials
6required for the educational program as defined in Section 94837,
7begin delete andend delete interest on any student loan used to pay for such charges,
8collection costs,begin delete andend delete penaltiesbegin insert, and any license or examination
9fees the student paid to the institution but is unable to recoverend insert
.
10Economic loss shall also include the amount the institution
11collected and failed to pay to third parties on behalf of the student
12for license fees or any other purpose. Economic loss does not
13include Student Tuition Recovery Fund assessments,begin insert unless the
14 student is entitled to a full refund under Section 94919 or 94920,end insert

15 room and board, supplies, transportation, application fees, or
16nonpecuniary damages such as inconvenience, aggravation,
17emotional distress, or punitive damages.begin insert Economic loss does not
18include legal fees, attorney fees, court costs, or arbitration fees.
19Nothing in this subdivision shall prevent the bureau from further
20defining economic loss to include loss of educational opportunity.end insert

21

begin deleteSEC. 60.end delete
22begin insertSEC. 29.end insert  

Section 94924 of the Education Code is amended to
23read:

24

94924.  

begin insert(a)end insertbegin insertend insertbegin insertThe bureau shall determine the amount of Student
25Tuition Recovery Fund assessments to be collected for eachend insert

26begin insert student.end insert

27begin insert(end insertbegin insertb)end insertbegin insertend insertAll assessments collected pursuant to this article shall be
28credited to the Student Tuition Recovery Fund, along with any
29accrued interest, for the purpose of this article. Notwithstanding
30Section 13340 of the Government Code, the moneys in the Student
31Tuition Recovery Fund are continuously appropriated to thebegin delete boardend delete
32begin insert bureauend insert, without regard to fiscal year, for the purposes of this
33article.

begin insert

34(c) Except when an institution provides a full refund pursuant
35to Section 94919 or Section 94920, the Student Tuition Recovery
36Fund assessment is nonrefundable.

end insert
37begin insert

begin insertSEC. 30.end insert  

end insert

begin insertSection 94925 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
38read:end insert

P54   1

94925.  

begin insert(a)end insertbegin insertend insertThe amount in the Student Tuition Recovery Fund
2shall not exceed twenty-five million dollars ($25,000,000) at any
3time.

begin insert

4(b) If the bureau has temporarily stopped collecting the Student
5Tuition Recovery Fund assessments because the fund has
6approached the twenty-five million dollar limit in subdivision (a),
7the bureau shall resume collecting Student Tuition Recovery Fund
8assessments when the fund falls below twenty million dollars
9($20,000,000).

end insert
begin insert

10(c) An otherwise eligible student who enrolled during a period
11 when institutions were not required to collect Student Tuition
12Recovery Fund assessments is eligible for Student Tuition Recovery
13Fund payments despite not having paid any Student Tuition
14Recovery Fund assessment.

end insert
begin delete
15

SEC. 61.  

Section 94926 of the Education Code is amended to
16read:

17

94926.  

At least 30 days prior to closing, an institution shall
18notify the board in writing of its intention to close. The notice shall
19be accompanied by a closure plan, which shall include, but not
20necessarily be limited to, all of the following:

21(a) A plan for providing teach-outs of educational programs,
22including any agreements with any other postsecondary educational
23institutions to provide teach-outs.

24(b) If no teach-out plan is contemplated, or for students who do
25not wish to participate in a teach-out, arrangements for making
26refunds within 45 days from the date of closure, or for institutions
27that participate in federal student financial aid programs
28arrangements for making refunds and returning federal student
29financial aid program funds.

30(c) If the institution is a participant in federal student financial
31aid programs, it shall provide students information concerning
32these programs and institutional closures.

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

34

SEC. 62.  

Section 94927 of the Education Code is amended to
35read:

36

94927.  

An institution shall be considered in default of the
37enrollment agreement when an educational program is discontinued
38or canceled or the institution closes prior to completion of the
39educational program. When an institution is in default, student
40institutional charges may be refunded on a pro rata basis if the
P55   1board determines that the school has made provision for students
2enrolled at the time of default to complete a comparable educational
3program at another institution at no additional charge to the
4students beyond the amount of the total charges in the original
5enrollment agreement. If the institution does not make that
6provision, a total refund of all institutional charges shall be made
7to students.

8

SEC. 63.  

Section 94927.5 of the Education Code is amended
9to read:

10

94927.5.  

(a) Prior to closing, an institution shall provide the
11board with the following:

12(1) Pertinent student records, including transcripts, as determined
13by the board, pursuant to regulations adopted by the board.

14(2) If the institution is an accredited institution, a plan for the
15retention of records and transcripts, approved by the institution’s
16accrediting agency, that provides information as to how a student
17may obtain a transcript or any other information about the student’s
18coursework and degrees completed.

19(b) Subdivision (a) applies to all private postsecondary
20institutions, including institutions that are otherwise exempt from
21this chapter pursuant to Article 4 (commencing with Section
2294874).

23

SEC. 64.  

Section 94928 of the Education Code is amended to
24read:

25

94928.  

As used in this article, the following terms have the
26following meanings:

27(a) “Cohort population” means the number of students that
28began a program on a cohort start date.

29(b) “Cohort start date” means the first class day after the
30cancellation period during which a cohort of students attends class
31for a specific program.

32(c) “Graduates” means the number of students who complete a
33program within 100 percent of the published program length. An
34institution may separately state completion information for students
35completing the program within 150 percent of the original
36contracted time, but that information may not replace completion
37information for students completing within the original scheduled
38time. Completion information shall be separately stated for each
39campus or branch of the institution.

P56   1(d) “Graduates available for employment” means the number
2of graduates minus the number of graduates unavailable for
3employment.

4(e) (1) “Graduates employed in the field” means graduates who
5are gainfully employed in a single position for which the institution
6represents the program prepares its graduates within six months
7after a student completes the applicable educational program. For
8occupations for which the state requires passing an examination,
9the period of employment shall begin within six months of the
10announcement of the examination results for the first examination
11available after a student completes an applicable educational
12program.

13(2) The board shall define by July 1, 2014, specific measures
14and standards for determining whether a student is gainfully
15employed in a full-time or part-time position for which the
16institution represents the program prepares its graduates, including
17self-employment or conducting freelance work, and may set the
18standards for the hours per week and duration of employment and
19utilize any job classification methodology the board determines
20appropriate for this purpose, including, but not limited to, the
21United States Department of Labor’s Standard Occupational
22Classification codes.

23(3) This subdivision does not prohibit the board from authorizing
24an institution to aggregate single positions held by a graduate for
25purposes of meeting the hours per week standards established by
26the board.

27(f) “Graduates unavailable for employment” means graduates
28who, after graduation, die, become incarcerated, are called to active
29military duty, are international students that leave the United States
30or do not have a visa allowing employment in the United States,
31or are continuing their education at an accredited or board-approved
32postsecondary institution.

33(g) “Students available for graduation” means the cohort
34population minus the number of students unavailable for
35graduation.

36(h) “Students unavailable for graduation” means students who
37have died, been incarcerated, or called to active military duty.

38

SEC. 65.  

Section 94929 of the Education Code is amended to
39read:

P57   1

94929.  

(a) An institution shall annually report to the board,
2as part of the annual report, and publish in its School Performance
3Fact Sheet, the completion rate for each program. Except as
4provided in subdivision (b), the completion rate shall be calculated
5by dividing the number of graduates by the number of students
6available for graduation.

7(b) In lieu of calculating graduation data pursuant to subdivision
8(a), an institution may report graduation data reported to, and
9calculated by, the Integrated Postsecondary Education Data System
10of the United States Department of Education.

11

SEC. 66.  

Section 94929.5 of the Education Code is amended
12to read:

13

94929.5.  

(a) An institution shall annually report to the board,
14as part of the annual report, and shall publish in its School
15Performance Fact Sheet, all of the following:

16(1) The job placement rate, calculated by dividing the number
17of graduates employed in the field by the number of graduates
18available for employment for each program that is either (1)
19designed, or advertised, to lead to a particular career, or (2)
20advertised or promoted with any claim regarding job placement.

21(2) The license examination passage rates for the immediately
22preceding two years for programs leading to employment for which
23passage of a state licensing examination is required, calculated by
24dividing the number of graduates who pass the examination by the
25number of graduates who take the licensing examination the first
26time that the examination is available after completion of the
27educational program. The institution shall use state agency
28licensing data to calculate license examination passage rates. If
29those data are unavailable, the institution shall calculate the license
30examination passage rate in a manner consistent with regulations
31adopted by the board.

32(3) Salary and wage information, consisting of the total number
33of graduates employed in the field and the annual wages or salaries
34of those graduates stated in increments of five thousand dollars
35($5,000).

36(4) If applicable, the most recent official three-year cohort
37default rate reported by the United States Department of Education
38for the institution and the percentage of enrolled students receiving
39federal student loans.

P58   1(b) Nothing in this section shall limit the board’s authority to
2collect information from an institution to comply with this section
3and ensure, by regulation and other lawful means, that the
4information required by this section, and the manner in which it
5is collected and reported, is all of the following:

6(1) Useful to students.

7(2) Useful to policymakers.

8(3) Based upon the most credible and verifiable data available.

9(4) Does not impose undue compliance burdens on an institution.

10

SEC. 67.  

Section 94929.7 of the Education Code is amended
11to read:

12

94929.7.  

(a) The information used to substantiate the rates
13and information calculated pursuant to Sections 94929 and 94929.5
14shall do both of the following:

15(1) Be documented and maintained by the institution for five
16years from the date of the publication of the rates and information.

17(2) Be retained in an electronic format and made available to
18the board upon request.

19(b) An institution shall provide a list of employment positions
20used to determine the number of graduates employed in the field
21for purposes of calculating job placement rates pursuant to this
22article.

23(c) The board shall identify the specific information that an
24institution is required to document and maintain to substantiate
25rates and information pursuant to this section.

end delete
26begin insert

begin insertSEC. 31.end insert  

end insert

begin insertSection 94929.5 of the end insertbegin insertEducation Codeend insertbegin insert is amended
27to read:end insert

28

94929.5.  

(a) An institution shall annually report to the bureau,
29as part of the annual report, and shall publish in its School
30Performance Fact Sheet, all of the following:

31(1) The job placement rate, calculated by dividing the number
32of graduates employed in the field by the number of graduates
33available for employment for each program that is either (1)
34designed, or advertised, to lead to a particular career, or (2)
35advertised or promoted with any claim regarding job placement.

36(2) The license examination passage rates for the immediately
37preceding two years for programs leading to employment for which
38passage of a state licensing examination is required, calculated by
39dividing the number of graduates who pass the examination by the
40number of graduates who take the licensing examination the first
P59   1time that the examination is available after completion of the
2educational program. The institution shall use state agency
3licensing data to calculate license examination passage rates. If
4those data are unavailable, the institution shall calculate the license
5examination passage rate in a manner consistent with regulations
6adopted by the bureau.

7(3) Salary and wage information, consisting of the total number
8of graduates employed in the field and the annual wages or salaries
9of those graduates stated in increments of five thousand dollars
10($5,000).

11(4) If applicable, the most recent official three-year cohort
12default rate reported by the United States Department of Education
13for the institution and the percentage of enrolled students receiving
14federal student loans.

15(b) Nothing in this section shall limit the bureau’s authority to
16collect information from an institution to comply with this section
17and ensure, by regulation and other lawful means, that the
18information required by this section, and the manner in which it
19is collected and reported, is all of the following:

20(1) Useful to students.

21(2) Useful to policymakers.

22(3) Based upon the most credible and verifiable data available.

23(4) Does not impose undue compliance burdens on an institution.

begin insert

24(c) Data and information disclosed pursuant to paragraphs (1)
25 to (3), inclusive, of subdivision (a) is not required to include
26students who satisfy the qualifications specified in subdivision (d)
27of Section 94909, but an institution shall disclose on its fact sheet
28and to the bureau whether its data, information, or both, excludes
29any students pursuant to this subdivision.

end insert
begin delete30

SEC. 68.  

Section 94929.8 of the Education Code is amended
31to read:

32

94929.8.  

(a) The board shall establish, by regulation as
33specified in Section 94877, a uniform method for institutions to
34obtain statistically valid, current, and representative data to comply
35with this article.

36(b) A violation of the regulations adopted pursuant to
37subdivision (a) is a material violation of this chapter.

end delete
38

begin deleteSEC. 69.end delete
39begin insertSEC. 32.end insert  

Section 94929.9 is added to the Education Code, to
40read:

P60   1

94929.9.  

(a) Thebegin delete board shall report to the Legislature, on or
2before October 1, 2015, on whether data reporting and disclosure
3requirements under the act may be appropriately consolidated with
4reporting required by other regulatory bodies, including, but not
5limited to, the United States Department of Education, the Student
6Aid Commission, or accrediting agencies. It is the intent of the
7Legislature that the same or similar data as is required to be
8reported to the board pursuant to this article shall be reported to
9students in a clear and conspicuous mannerend delete
begin insert bureau shall consider
10the graduate salary and other outcome data and reporting
11requirements that are utilized by the United States Department of
12Education, the Student Aid Commission, accrediting agencies, and
13student advocate associations. The bureau shall consider the
14reporting requirements of public postsecondary institutions in
15California to evaluate the feasibility of adopting these reporting
16requirements for private postsecondary institutions. The bureau
17shall make recommendations to the Legislature, on or before
18December 31, 2016, on how reporting requirements under this
19chapter should be altered to ensure accurate, useful, and consistent
20reporting by private postsecondary institutions to the bureau and
21studentsend insert
.

begin insert

22(b) The bureau is authorized to enter into a personal services
23contract with an appropriate independent contractor to assist in
24the evaluation required by subdivision (a). In this connection, the
25Legislature finds, pursuant to Section 19130 of the Government
26Code, that this is a new state function.

end insert
begin delete

27(b)

end delete

28begin insert(c)end insert (1) A report to be submitted to the Legislature pursuant to
29subdivision (a) shall be submitted in compliance with Section 9795
30of the Government Code.

31(2) Pursuant to Section 10231.5 of the Government Code, this
32section is repealed January 1,begin delete 2019.end deletebegin insert 2017.end insert

begin delete
33

SEC. 70.  

Section 94930 of the Education Code is amended to
34read:

35

94930.  

(a) All fees collected pursuant to this article, including
36any interest on those fees, shall be deposited in the Private
37Postsecondary Education Administration Fund, and shall be
38available, upon appropriation by the Legislature, for expenditure
39by the board for the administration of this chapter.

P61   1(b) If the board determines by regulation that the adjustment of
2the fees established by this article is consistent with the intent of
3this chapter, the board may adjust the fees. However, the board
4shall not maintain a reserve balance in the Private Postsecondary
5Education Administration Fund in an amount that is greater than
6the amount necessary to fund six months of authorized operating
7expenses of the board in any fiscal year.

end delete
8

begin deleteSEC. 71.end delete
9begin insertSEC. 33.end insert  

Section 94930.5 of the Education Code is amended
10to read:

11

94930.5.  

Subject to Section 94930, an institution shall remit
12to thebegin delete boardend deletebegin insert bureauend insert for deposit in the Private Postsecondary
13Education Administration Fund the following fees, in accordance
14with the following schedule:

15(a) The following fees shall be remitted by an institution
16submitting an application for an approval to operate, if applicable:

17(1) Application fee for an approval to operate: five thousand
18dollars ($5,000).

19(2) Application fee for the approval to operate a new branch of
20the institution: three thousand dollars ($3,000).

21(3) Application fee for an approval to operate by means of
22accreditation: seven hundred fifty dollars ($750).

23(b) The following fees shall be remitted by an institution seeking
24a renewal of its approval to operate, if applicable:

25(1) Renewal fee for the main campus of the institution: three
26thousand five hundred dollars ($3,500).

27(2) Renewal fee for a branch of the institution: three thousand
28dollars ($3,000).

29(3) Renewal fee for an institution that is approved to operate by
30means of accreditation: five hundred dollars ($500).

31(c) The following fees shall apply to an institution seeking
32authorization of a substantive change to its approval to operate, if
33applicable:

34(1) Processing fee for authorization of a substantive change to
35an approval to operate: five hundred dollars ($500).

36(2) Processing fee in connection with a substantive change to
37an approval to operate by means of accreditation: two hundred
38fifty dollars ($250).

P62   1(d) (1) In addition to any fees paid to thebegin delete boardend deletebegin insert bureauend insert pursuant
2to subdivisions (a) to (c), inclusive, each institution that is approved
3to operate pursuant to this chapter shall remit both of the following:

4(A) An annual institutional fee, in an amount equal to
5three-quarters of 1 percent of the institution’s annual revenues
6derived from students in California, but not exceeding a total of
7twenty-five thousand dollars ($25,000) annually.

8(B) An annual branch fee of one thousand dollars ($1,000) for
9each branch or campus of the institution operating in California.

10(2) The amount of the annual fees pursuant to paragraph (1)
11shall be proportional to thebegin delete board’send deletebegin insert bureau’send insert cost of regulating the
12institution under this chapter.

begin delete13

SEC. 72.  

Section 94931.5 of the Education Code is amended
14to read:

15

94931.5.  

(a) The board may propose modifications to the fee
16schedule in Section 94930.5 to the Governor and the Legislature
17to add or delete categories of fees related to work performed by
18the board and propose to the Governor and the Legislature the
19maximum amount to be charged for each fee category added to
20the fee schedule. The fee schedule shall provide adequate resources
21for the board to effectively implement this chapter.

22(b) The board shall annually publish a schedule of the current
23fees to be charged pursuant to this article and shall make this
24schedule available to the public.

end delete
begin delete25

SEC. 73.  

Section 94932 of the Education Code is amended to
26read:

27

94932.  

The board shall determine an institution’s compliance
28with the requirements of this chapter. The board shall have the
29power to require reports that institutions shall file with the board
30in addition to the annual report, to send staff to an institution’s
31sites, and to require documents and responses from an institution
32to monitor compliance. When the board has reason to believe that
33an institution may be out of compliance, it shall conduct an
34investigation of the institution. If the board determines, after
35completing an investigation, that an institution has violated any
36applicable law or regulation, the board shall take appropriate action
37pursuant to this article.

end delete
38

begin deleteSEC. 74.end delete
39begin insertSEC. 34.end insert  

Section 94932.5 of the Education Code is amended
40to read:

P63   1

94932.5.  

(a) As part of its compliance program, thebegin delete boardend delete
2begin insert bureauend insert shall perform announced and unannounced inspections of
3institutions at least every five years.

4(b) On or before January 1,begin delete 2016,end deletebegin insert 2017,end insert thebegin delete boardend deletebegin insert bureauend insert shall
5adopt regulations setting forth policies and practices to ensure that
6student protections are the highest priority of inspections and that
7inspections are conducted based on risk and potential harm to
8students. The regulations shall also set forth policies and practices
9for providing notice to students enrolled at an institution of the
10results of each inspection of the institution.

begin delete
11

SEC. 75.  

Section 94933 of the Education Code is amended to
12read:

13

94933.  

The board shall provide an institution with the
14opportunity to remedy noncompliance, impose fines, place the
15institution on probation, or suspend or revoke the institution’s
16approval to operate, in accordance with this article, as it deems
17appropriate based on the severity of an institution’s violations of
18this chapter, and the harm caused to students.

19

SEC. 76.  

Section 94933.5 of the Education Code is amended
20to read:

21

94933.5.  

As much as is practicable, the board shall seek to
22resolve instances of noncompliance, including the use of alternative
23dispute resolution procedures in Article 5 (commencing with
24Section 11420.10) of Chapter 4.5 of Part 1 of Division 3 of Title
252 of the Government Code.

26

SEC. 77.  

Section 94934 of the Education Code is amended to
27read:

28

94934.  

(a) As part of the compliance program, an institution
29shall submit an annual report to the board, under penalty of perjury,
30signed by a responsible corporate officer, by July 1 of each year,
31or another date designated by the board, and it shall include the
32following information for educational programs offered in the
33reporting period:

34(1) The total number of students enrolled by level of degree or
35for a diploma.

36(2) The number of degrees, by level, and diplomas awarded.

37(3) The degree levels and diplomas offered.

38(4) The Student Performance Fact Sheet, as required pursuant
39 to Section 94910.

40(5) The school catalog, as required pursuant to Section 94909.

P64   1(6) The total charges for each educational program by period
2of attendance.

3(7) A statement indicating whether the institution is, or is not,
4current in remitting Student Tuition Recovery Fund assessments.

5(8) A statement indicating whether an accrediting agency has
6taken any final disciplinary action against the institution.

7(9) Additional information deemed by the board to be reasonably
8required to ascertain compliance with this chapter.

9(b) The board shall prescribe the annual report’s format and
10method of delivery.

11

SEC. 78.  

Section 94935 of the Education Code is amended to
12read:

13

94935.  

(a) Board staff who, during an inspection of an
14institution, detect a violation of this chapter, or regulations adopted
15pursuant to this chapter, that is a minor violation as determined by
16the board, pursuant to regulations, shall issue a notice to comply
17before leaving the institution. The board shall establish a voluntary
18informal appeal process, by regulation, within one year of the
19enactment of this chapter.

20(b) An institution that receives a notice to comply shall have no
21more than 30 days from the date of inspection to remedy the
22noncompliance.

23(c) Upon achieving compliance, the institution shall sign and
24return the notice to comply to the board.

25(d) A single notice to comply shall be issued listing separately
26all the minor violations cited during the inspection.

27(e) A notice to comply shall not be issued for any minor
28violation that is corrected immediately in the presence of the board
29staff. Immediate compliance may be noted in the inspection report,
30but the institution shall not be subject to any further action by the
31board.

32(f) A notice to comply shall be the only means the board shall
33use to cite a minor violation discovered during an inspection. The
34board shall not take any other enforcement action specified in this
35chapter against an institution that has received a notice to comply
36if the institution remedies the violation within 30 days from the
37date of the inspection.

38(g) If an institution that receives a notice to comply pursuant to
39subdivision (a) disagrees with one or more of the alleged minor
40violations listed in the notice to comply, an institution shall send
P65   1the board a written notice of disagreement. The agency may take
2administrative enforcement action to seek compliance with the
3requirements of the notice to comply.

4(h) If an institution fails to comply with a notice to comply
5within the prescribed time, the board shall take appropriate
6administrative enforcement action.

7

SEC. 79.  

Section 94936 of the Education Code is amended to
8read:

9

94936.  

(a) As a consequence of an investigation, and upon a
10finding that the institution has committed a violation of this chapter
11or that the institution has failed to comply with a notice to comply
12pursuant to Section 94935, the board shall issue a citation to an
13institution for violation of this chapter, or regulations adopted
14pursuant to this chapter.

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

16(1) An order of abatement that may require an institution to
17demonstrate how future compliance with this chapter or regulations
18adopted pursuant to this chapter will be accomplished.

19(2) Notwithstanding Section 125.9 of the Business and
20Professions Code, an administrative fine not to exceed five
21thousand dollars ($5,000) for each violation. The board shall base
22its assessment of the administrative fine on:

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

24(B) The persistence of the violation.

25(C) The good faith of the institution.

26(D) The history of previous violations.

27(E) The purposes of this chapter.

28(F) The potential harm to students.

29(c) (1) The citation shall be in writing and describe the nature
30of the violation and the specific provision of law or regulation that
31is alleged to have been violated.

32(2) The citation shall inform the institution of its right to request
33a hearing in writing within 30 days from service of the citation.

34(3) If a hearing is requested, the board shall select an informal
35hearing pursuant to Article 10 (commencing with Section
3611445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the
37Government Code or a formal hearing pursuant to Chapter 5
38(commencing with Section 11500) of Part 1 of Division 3 of Title
392 of the Government Code.

P66   1(4) If a hearing is not requested, payment of the administrative
2fine is due 30 days from the date of service, and shall not constitute
3an admission of the violation charged.

4(5) If a hearing is conducted and payment of an administrative
5fine is ordered, the administrative fine is due 30 days from when
6the final order is entered.

7(6) The board may enforce the administrative fine as if it were
8a money judgment pursuant to Title 9 (commencing with Section
9680.010) of Part 2 of the Code of Civil Procedure.

10(d) All administrative fines shall be deposited in the Private
11Postsecondary Education Administration Fund.

12

SEC. 80.  

Section 94937 of the Education Code is amended to
13read:

14

94937.  

(a) As a consequence of an investigation, and upon a
15finding that an institution has committed a violation, the board
16may place an institution on probation or may suspend or revoke
17an institution’s approval to operate for:

18(1) Obtaining an approval to operate by fraud.

19(2) A material violation or repeated violations of this chapter
20or regulations adopted pursuant to this chapter that have resulted
21in harm to students. For purposes of this paragraph, “material
22violation” includes, but is not limited to, misrepresentation, fraud
23in the inducement of a contract, and false or misleading claims or
24advertising, upon which a student reasonably relied in executing
25an enrollment agreement and that resulted in harm to the student.

26(b) The board shall adopt regulations governing probation and
27suspension of an approval to operate.

28(c) The board may seek reimbursement pursuant to Section
29125.3 of the Business and Professions Code.

30(d) An institution shall not be required to pay the cost of
31investigation to more than one agency.

32

SEC. 81.  

Section 94938 of the Education Code is amended to
33read:

34

94938.  

(a) If the board determines that it needs to make an
35emergency decision to protect students, prevent misrepresentation
36to the public, or prevent the loss of public funds or moneys paid
37by students, it may do so pursuant to Article 13 (commencing with
38Section 11460.10) of Chapter 4.5 of Part 1 of Division 3 of Title
392 of the Government Code.

P67   1(b) The board shall adopt regulations to give this section effect
2pursuant to Section 11460.20 of the Government Code.

3

SEC. 82.  

Section 94939 of the Education Code is amended to
4read:

5

94939.  

(a) The board may bring an action for equitable relief
6for any violation of this chapter. The equitable relief may include
7restitution, a temporary restraining order, the appointment of a
8receiver, and a preliminary or permanent injunction. The action
9may be brought in the county in which the defendant resides or in
10which any violation has occurred or may occur.

11(b) The remedies provided in this section supplement, and do
12not supplant, the remedies and penalties under other provisions of
13law.

end delete
14

begin deleteSEC. 83.end delete
15begin insertSEC. 35.end insert  

Section 94941 of the Education Code is amended to
16read:

17

94941.  

(a) An individual who has cause to believe that an
18institution has violated this chapter, or regulations adopted pursuant
19to this chapter, may file a complaint with thebegin delete boardend deletebegin insert bureauend insert against
20the institution. The complaint shall set forth the alleged violation,
21and shall contain any other information as may be required by the
22begin delete boardend deletebegin insert bureauend insert.

begin delete

23(b) Taking into account the nature and seriousness of the alleged
24violation, the board shall take action to ascertain the facts and to
25verify the complaint. The action may include interviewing
26institution management, conducting an investigation, holding an
27informal hearing, or other appropriate investigative activity.

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

30(d) If the board finds that an institution’s violation of this chapter
31has caused damage or loss to a student or group of students, the
32board shall order the institution to provide appropriate restitution
33to that student or group of students.

34(e) The board shall establish a timeline by which complaints
35filed pursuant to this section shall be processed and establish
36procedures to prioritize complaints as follows:

37(1) “Urgent complaints” represent complaints regarding an
38immediate danger to the public health, safety, or welfare, and the
39board shall give these complaints the highest priority.

P68   1(2) “High-priority complaints” include complaints that could
2potentially pose a danger, but pose no immediate danger, to the
3public health, safety, or welfare. The board shall give high-priority
4complaints less priority than urgent complaints but more priority
5than routine complaints.

6(3) “Routine complaints” are complaints that do not pose any
7significant risk of harm to the public health, safety, or welfare.

end delete
begin insert

8(b) To ensure that the bureau’s resources are maximized for
9the protection of the public, the bureau, in consultation with the
10advisory committee, shall establish priorities for its inspections
11and other investigative and enforcement resources to ensure that
12institutions representing the greatest threat of harm to the greatest
13number of students are identified and disciplined by the bureau
14or referred to the Attorney General.

end insert
begin insert

15(c) In developing its priorities for inspection, investigation, and
16enforcement regarding institutions, the bureau shall consider as
17posing heightened risks the characteristics of the following
18institutions:

end insert
begin insert

19(1) An institution that receives significant public resources,
20including an institution that receives more than 70 percent of its
21revenues from federal financial aid, state financial aid, financial
22aid for veterans, and other public student aid funds.

end insert
begin insert

23(2) An institution with a large number of students defaulting on
24their federal loans, including an institution with a three-year cohort
25default rate above 15.5 percent.

end insert
begin insert

26(3) An institution with reported placement rates, completion
27rates, or licensure rates in an educational program that are far
28higher or lower than comparable educational institutions or
29programs.

end insert
begin insert

30(4) An institution that experiences a dramatic increase in
31enrollment, recently expanded educational programs or campuses,
32or recently consolidated campuses.

end insert
begin insert

33(5) An institution that offers only nonremedial educational
34program courses in English, but enrolls students with limited or
35no English language proficiency.

end insert
begin insert

36(6) An institution that has experienced a recent change of
37ownership or control, or a change in the business organization of
38the institution.

end insert
begin insert

39(7) An institution with audited financial statements that do not
40satisfy the bureau’s requirements for financial stability.

end insert
begin insert

P69   1(8) An institution that has recently been the subject of an
2investigation, judgment, or regulatory action by, or a settlement
3with, a governmental agency.

end insert
begin insert

4(9) An institution that experiences institutional or programmatic
5accreditation restriction by an accreditor, government restriction
6of, or injunction against, its approval to operate, or placement on
7cash-reimbursement or heightened monitoring status by the United
8States Department of Education.

end insert
begin insert

9(d) The bureau shall indicate in an annual report, to be made
10publicly available on its Internet Web site, the number of temporary
11restraining orders, interim suspension orders, and disciplinary
12actions taken by the bureau, disaggregated by each priority
13category established pursuant to subdivision (b).

end insert
begin insert

14(e) The bureau shall, in consultation with the advisory
15committee, adopt regulations to establish categories of complaints
16or cases that are to be handled on a priority basis. The priority
17complaints or cases shall include, but not be limited to, those
18alleging unlawful, unfair or fraudulent business acts or practices,
19including unfair, deceptive, untrue, or misleading statements,
20including all statements made or required to be made pursuant to
21the requirements of this chapter, related to any of the following:

end insert
begin insert

22(1) Degrees, educational programs, or internships offered, the
23appropriateness of available equipment for a program, or the
24qualifications or experience of instructors.

end insert
begin insert

25(2) Job placement, graduation, time to complete an educational
26program, or educational program or graduation requirements.

end insert
begin insert

27(3) Loan eligibility, terms, whether the loan is federal or private,
28or default or forbearance rates.

end insert
begin insert

29(4) Passage rates on licensing or certification examinations or
30whether an institution’s degrees or educational programs provide
31students with the necessary qualifications to take these exams and
32qualify for professional licenses or certifications.

end insert
begin insert

33(5) Cost of an educational program, including fees and other
34nontuition charges.

end insert
begin insert

35(6) Affiliation with or endorsement by any government agency,
36or by any organization or agency related to the armed forces,
37including, but not limited to, groups representing veterans.

end insert
begin insert

38(7) Terms of withdrawal and refunds from an institution.

end insert
begin insert

39(8) Payment of bonuses, commissions, or other incentives offered
40by an institution to its employees or contractors.

end insert
begin delete
P70   1

SEC. 84.  

Section 94942 of the Education Code is amended to
2read:

3

94942.  

(a) The board shall establish a toll-free telephone
4number staffed by a board employee by which a student or a
5member of the public may file a complaint under this chapter.

6(b) The board shall make a complaint form available on its
7Internet Web site. The board shall permit students and members
8of the public to file a complaint under this chapter through the
9board’s Internet Web site.

10

SEC. 85.  

Section 94943 of the Education Code is amended to
11read:

12

94943.  

The following violations of this chapter are public
13offenses:

14(a) Knowingly operating a private postsecondary institution
15without an approval to operate is an infraction subject to the
16procedures described in Sections 19.6 and 19.7 of the Penal Code.

17(b) Knowingly providing false information to the board on an
18application for an approval to operate is an infraction subject to
19the procedures described in Sections 19.6 and 19.7 of the Penal
20Code.

21(c) Knowingly submitting, to the board, false information that
22is required to be reported pursuant to Article 16 (commencing with
23Section 94928) is an infraction subject to the procedures described
24in Sections 19.6 and 19.7 of the Penal Code.

25

SEC. 86.  

Section 94943.5 of the Education Code is amended
26to read:

27

94943.5.  

An institution shall designate and maintain an agent
28for service of process within this state, and provide the name,
29address, and telephone number of the agent to the board. The board
30shall furnish the agent’s name, address, and telephone number to
31a person upon request.

32

SEC. 87.  

Section 94944 of the Education Code is amended to
33read:

34

94944.  

Notwithstanding any other provision of law, the board
35shall cite any person, and that person shall be subject to a fine not
36to exceed fifty thousand dollars ($50,000), for operating an
37institution without proper approval to operate issued by the board
38pursuant to this chapter.

39

SEC. 88.  

Section 94944.5 of the Education Code is amended
40to read:

P71   1

94944.5.  

Each institution subject to this chapter shall be deemed
2to have authorized its accrediting agency to provide the board, the
3Attorney General, any district attorney, city attorney, or the Student
4Aid Commission, within 30 days of written notice, copies of all
5documents and other material concerning the institution that are
6maintained by the accrediting agency.

7

SEC. 89.  

Section 94944.6 of the Education Code is amended
8to read:

9

94944.6.  

Within 30 days of receiving a written notice from the
10board, the Attorney General, district attorney, city attorney, or the
11Student Aid Commission pursuant to Section 94944.5, an
12accrediting agency shall provide the requesting entity with all
13documents or other material concerning an institution accredited
14by that agency that are designated specifically or by category in
15the written notice.

end delete
16

begin deleteSEC. 90.end delete
17begin insertSEC. 36.end insert  

Section 94945 of the Education Code is amended to
18read:

19

94945.  

(a) This chapter does not limit or preclude the
20enforcement of rights or remedies under any other applicable statute
21or law.

22(b) This chapter does not limit or preclude the Attorney General,
23a district attorney, or a city attorney from taking any action
24otherwise authorized under any other applicable statute or law.

25(c) If thebegin delete boardend deletebegin insert bureauend insert has reason to believe that an institution
26has engaged in a pattern or practice of violating the provisions of
27this chapter or any other applicable law that involves multiple
28students or other claimants, thebegin delete boardend deletebegin insert bureauend insert shall contract with
29the Attorney General for investigative and prosecutorial services,
30as necessary.

31begin insert

begin insertSEC. 37.end insert  

end insert

begin insertSection 94947 is added to the end insertbegin insertEducation Codeend insertbegin insert, to
32read:end insert

begin insert
33

begin insert94947.end insert  

(a) Notwithstanding section 94874.2, an institution
34described in subdivision (i) of Section 94874 that satisfies all of
35the following requirements may claim an exemption from this
36chapter.

37(1) The institution has been accredited by an accrediting agency
38recognized by the United States Department of Education for at
39least 10 years, and has not been placed on probation or on a
P72   1greater level than standard monitoring, or sanctioned, by its
2accrediting agency.

3(2) The institution is headquartered in California and has
4operated continuously in this state for at least 25 years.

5(3) The institution is privately held and prior to its current
6exemption, the institution was granted an approval to operate by
7the Bureau for Private Postsecondary Education, or its predecessor
8agency and has experienced no change of ownership since the
9institution was last approved.

10(4) During its existence, the institution has not filed for
11bankruptcy protection.

12(5) The institution maintains an equity ratio composite score
13of at least 1.5 based on the current financial stability test.

14(6) At least 15 percent of the institution's revenues are derived
15from sources other than financial aid. For purposes of this
16requirement, financial aid includes all forms of state or federal
17student assistance, including, but not limited to, financial aid
18provided to veterans and financial aid through the Cal Grant
19Program.

20(7) The institution's cohort default rate does not exceed 13
21percent for the most recent three years, as published by the United
22States Department of Education.

23(8) The institution has a graduation rate that exceeds 60 percent,
24as reported to the Integrated Postsecondary Education Data
25System.

26(9) The institution has not been subject to any legal or
27regulatory actions by a state attorney general for a violation of
28consumer protection laws that resulted in monetary settlement,
29fines, or other documented violations.

30(10) The institution provides a pro rata refund of unearned
31institutional charges to students who complete 75 percent or less
32of the period of attendance.

33(11) The institution provides to all students the right to cancel
34the enrollment agreement and obtain a refund of charges paid
35through attendance at the second class session, or the 14th day
36after enrollment, whichever is later.

37(12) The institution complies with all other reasonable criteria,
38necessary to ensure educational quality and protection of veterans,
39established by the California State Approving Agency for Veterans
40Education.

P73   1(13) The institution verifies its exemption pursuant to Section
294874.1.

3(b) An institution exempt from this chapter pursuant to this
4section may apply to the bureau for an approval to operate
5pursuant to section 94874.8

6(c) It is the intent of the Legislature that if the exemption
7provided in this section is declared by a court to be invalid for any
8reason, the requirements of this chapter shall apply to an institution
9that would otherwise be subject to receive this exemption.

end insert
10

begin deleteSEC. 91.end delete
11begin insertSEC. 38.end insert  

Section 94948 of the Education Code is amended to
12read:

13

94948.  

In addition to any other reporting requirements under
14this chapter, thebegin delete boardend deletebegin insert directorend insert shall providebegin delete regularend deletebegin insert writtenend insert updates
15to the Legislaturebegin delete by participatingend deletebegin insert every six months and shall
16participateend insert
inbegin delete annualend deletebegin insert allend insert oversight hearings conducted by the
17appropriate policy committees and budget subcommittees of the
18Senate and Assembly. The updates shall describe thebegin delete board’send delete
19begin insert bureau’s end insert progress inbegin delete adopting andend deletebegin insert protecting consumers andend insert
20 enforcingbegin delete regulations andend delete the provisions of this chapter.

21

begin deleteSEC. 92.end delete
22begin insertSEC. 39.end insert  

Section 94949 of the Education Code is repealed.

23

begin deleteSEC. 93.end delete
24begin insertSEC. 40.end insert  

Section 94949 is added to the Education Code, to
25read:

26

94949.  

(a) Thebegin delete boardend deletebegin insert directorend insert shall provide to the Legislature
27a copy of an independent review ofbegin delete itsend deletebegin insert the bureau’send insert staffing
28begin delete resources, along with anend deletebegin insert resources needs and requirements no
29later than March 15, 2015. The director shall include with this
30report an end insert
overview of how thebegin delete boardend deletebegin insert directorend insert intends to ensurebegin delete itsend delete
31begin insert that the bureau’send insert staff are sufficiently qualified for purposes of
32implementing the provisions of this chapter,begin insert andend insert the estimated
33costs of meeting staffing and other requirements to implement this
34begin delete chapter, and the estimated fee revenue generated by the fee
35structure as outlined in Section 94930.5, as of January 1, 2015,
36within 30 days of the completion of the independent review, but
37no later than March 15, 2015end delete
begin insert chapter based on findings of the
38independent reviewend insert
.begin insert The director shall include a brief evaluation
39of whether the current fee structure is appropriate to satisfy those
40staffing and other requirements.end insert

begin delete

P74   1(b) The overview pursuant to subdivision (a) shall also include
2an examination of the annual fee structure, including whether the
3total fees paid by an institution should be subject to a maximum
4and whether there are more equitable ways to assess annual fees
5to an institution.

6(c)

end delete

7begin insert(b)end insert (1) A report to be submitted pursuant to subdivision (a)
8shall be submitted in compliance with Section 9795 of the
9Government Code.

10(2) Pursuant to Section 10231.5 of the Government Code, this
11section is repealed on January 1,begin delete 2019.end deletebegin insert 2017.end insert

12begin insert

begin insertSEC. 41.end insert  

end insert

begin insertSection 94949.5 is added to the end insertbegin insertEducation Codeend insertbegin insert, to
13read:end insert

begin insert
14

begin insert94949.5.end insert  

(a) The Legislature finds and declares all of the
15following:

16(1) Two bureaus have operated under the Department of
17Consumer Affairs to regulate private postsecondary education,
18one bureau from 1998 to 2007, inclusive, and one bureau since
192010. Numerous audits, analyses conducted by state agencies and
20private entities, legislative investigations and public comment have
21concluded that California oversight of private postsecondary
22educational institutions has not adequately served the interests of
23the public.

24(2) The bureau collects substantial amounts of money annually
25from institutions licensed under this chapter but lacks appropriate
26spending authority and staffing to effectively implement this
27chapter.

28(3) California students and the economy benefit from
29government oversight and regulations that result in access to
30quality postsecondary education.

31(4) Transparency in the bureau’s functions, operations,
32priorities, and organization will better assist the Legislature in
33ensuring that the Department of Consumer Affairs and the bureau
34are provided with the direction and resources necessary to
35implement this chapter.

36(b) The Secretary of Business, Consumer Services, and Housing,
37in consultation with the Legislature, shall appoint a Bureau for
38Private Postsecondary Education Monitor from a pool of qualified
39candidates by January 1, 2016. The secretary may retain a person
40for this position by a personal services contract. In this connection,
P75   1the Legislature finds, pursuant to Section 19130 of the Government
2Code, that this is a new state function.

3(c) The Secretary shall advertise the availability of this position.
4The requirements for this position shall include experience in
5private postsecondary education, familiarity with state laws, rules,
6and procedures pertaining to the bureau, familiarity with relevant
7administrative law and procedure, administrative complaint
8prioritization, processing, and investigation, and familiarity with
9the Department of Consumer Affairs and its powers and
10procedures. To assume this position, a candidate shall have a
11record of student or consumer, or student and consumer,
12representation or advocacy, and have no current investment in,
13or be receiving personal remuneration from, any institution subject
14to the bureau’s regulations.

15(d) (1) The monitor shall perform independent fact gathering
16and data analysis functions by assessing the bureau’s operations,
17including its approvals to operate, applicant review, and complaint
18and enforcement processes and procedures, with the primary goals
19of improving the bureau’s overall efficiency, effectiveness, and
20compliance with state laws, particularly as relates to the bureau’s
21approval to operate, complaint, and enforcement processes.

22(2) The monitor’s duties shall include, but not necessarily be
23limited to, evaluating relevant state laws, regulations, budgetary
24actions, and processes to identify revisions that would improve
25state regulation of private postsecondary institutions and student
26and public protection.

27(3) The monitor shall be provided findings from representatives
28of the Bureau of State Audits, representatives of the Department
29of Consumer Affair’s Internal Audit Office, and findings from other
30organizations performing evaluations of the bureau. To the extent
31feasible, the monitor shall utilize, but not duplicate, information
32and recommendations provided by audits and reviews previously
33conducted by the Department of Consumer Affairs, the bureau,
34the Legislative Analyst's Office, and the Bureau of State Audits,
35independent staffing resource reviews, and other relevant
36information.

37(4) The monitor shall exercise no authority over the bureau’s
38management or staff; however, the bureau and its staff shall
39cooperate with the monitor, and shall provide all data, information,
40and files as requested by the monitor to perform his or her duties.

P76   1(5) The director shall assist the monitor in the performance of
2his or her duties, and the monitor shall have the same investigative
3authority related to the bureau as the director.

4(e) The monitor shall submit an initial written report of his or
5her findings and conclusions to the Legislature no later than July
61, 2016, and shall be available to make oral reports to Legislative
7committees if requested to do so. The monitor may also provide
8additional information to the Legislature at his or her discretion
9or at the request of the Legislature. The monitor’s reports shall
10be made available to the public and posted on the bureau’s Internet
11Web site. The monitor shall make every effort to provide the
12Department of Consumer Affairs and the bureau with an
13opportunity to reply to any facts, finding, issues, or conclusions
14in his or her reports with which the department or the bureau may
15disagree.

16(f) The bureau shall reimburse the Business, Consumer Services
17and Housing Agency for all of the costs associated with the
18employment of the monitor.

end insert
19

begin deleteSEC. 94.end delete
20begin insertSEC. 42.end insert  

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

22

94950.  

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

26begin insert

begin insertSEC. 43.end insert  

end insert

begin insertThe sum of one hundred thirty thousand dollars
27($130,000) is hereby appropriated from the Private Postsecondary
28Education Administration Fund to the Bureau for Private
29Postsecondary Education, for the 2014-15 fiscal year, to be
30combined with any other available funds, for purposes of
31establishing one permanent attorney position at the bureau to
32assist the bureau in its regulatory activities, and one permanent
33analyst position at the bureau to provide support to the advisory
34committee.end insert

35

begin deleteSEC. 95.end delete
36begin insertSEC. 44.end insert  

No reimbursement is required by this act pursuant to
37Section 6 of Article XIII B of the California Constitution because
38the only costs that may be incurred by a local agency or school
39district will be incurred because this act creates a new crime or
40infraction, eliminates a crime or infraction, or changes the penalty
P77   1for a crime or infraction, within the meaning of Section 17556 of
2the Government Code, or changes the definition of a crime within
3the meaning of Section 6 of Article XIII B of the California
4Constitution.



O

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