BILL ANALYSIS Ó
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|Hearing Date:April 28, 2014 |Bill No:SB |
| |1247 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Ted W. Lieu, Chair
Bill No: SB 1247Author:Lieu
As Introduced: February 20, 2014 Fiscal: Yes
SUBJECT: Private postsecondary education: California Private
Postsecondary Education Act of 2009.
SUMMARY: Extends the operation of the Bureau for Private
Postsecondary Education (BPPE) until January 1, 2019.
Existing law: Establishes the California Private Postsecondary
Education Act of 2009. (Education Code (EC) § 94700 et seq.)
This bill: Extends the operation of BPPE until January 1, 2019.
FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by Legislative
Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the Author . This bill is one
of six "sunset bills" the Author is sponsoring this session.
According to the Author, this bill is necessary to extend the
sunset date of BPPE in order to ensure continued oversight of
private postsecondary institutions that supports quality,
innovative programs which are approved in a timely manner, while
also making sure a robust government structure prevents predatory
practices and promotes student success.
2. Oversight Hearings and Sunset Review of Licensing Boards and
Programs. In 2014, the Senate Business and Professions Committee
and the Assembly Business, Professions and Consumer Protection
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Committee (Committees) conducted joint oversight hearings to review
9 regulatory entities: Bureau of Automotive Repair; Bureau of Home
Furnishings and Thermal Insulation; Bureau for Private
Postsecondary Education (BPPE); California Massage Therapy
Certification program; California Board of Acupuncture; California
Tax Preparers Program; Dental Hygiene Committee of California;
Professional Fiduciaries Bureau; and Structural Pest Control Board.
This Committee also reviewed the performance and effectiveness of
the Community Interest Development Manager's Certification Program.
The Committees began their review of the aforementioned licensing
agencies in March and conducted two days of hearings and then more
recently held a hearing on the BPPE. This bill, and the
accompanying sunset bills, are intended to implement legislative
changes as recommended by staff of the Committee's and which are
reflected in the Background Papers prepared by Committee staff for
each agency and program reviewed by the Committees for this year.
3. Background on the Bureau for Private Postsecondary Education
(BPPE). BPPE is responsible for oversight of private postsecondary
educational institutions operating with a physical presence in
California. Established by Assembly Bill 48 (Portantino, Chapter
310, Statutes of 2009), after numerous legislative attempts to
remedy the laws and structure governing regulation of private
postsecondary institutions, the bill took effect January 1, 2010,
to make many substantive changes that created a new, solid
foundation for oversight and gave the new BPPE an array of
enforcement tools to ensure schools comply with the law.
The state's program for regulation of private postsecondary and
vocational education institutions has historically been plagued by
problems. During the late 1980's, the state developed a reputation
as the "diploma mill capital of the world." During this period,
the State Department of Education regulated the private
postsecondary education industry. SB 190 (Morgan) created the
Private Postsecondary and Vocational Education Reform Act of 1989
(Reform Act) to overhaul the state's regulatory program and
transferred oversight responsibility for the program to the
20-member Private Postsecondary and Vocational Council (Council).
Concurrently, the Maxine Waters School Reform and Student
Protection Act (Waters Act) was enacted. The provisions of the
Reform Act and the Waters Act were merged, but doing so created a
fragmented structural framework for regulation of private
postsecondary and vocational education institutions with numerous
duplicative and conflicting statutory provisions which would plague
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California's oversight of these institutions. In the years
following enactment of the Reform Act, concerns were expressed
about the Council's implementation of the Act. In 1997, AB 71
(Wright) was enacted to create the former Bureau for Private
Postsecondary and Vocational Education (BPPVE) within the
Department of Consumer Affairs (DCA), transferred responsibility
for administration of the Reform Act to BPPVE and extended the
Reform Act's sunset date to January 1, 2005.
In 2004, the Joint Committee on Boards, Commissions and Consumer
Protection (Joint Committee) held a special hearing regarding BPPVE
and recommended that the Reform Act be revised to make it
intelligible and enforceable and that the Administration and the
DCA should consider restoring, at least temporarily, the Bureau's
staffing resources to clear out existing backlogs. The Legislature
enacted SB 1544 (Figueroa, Chapter 740, Statutes of 2004), which
required the appointment of an Enforcement Monitor (Monitor) to
provide an in-depth and impartial examination of BPPVE's
operations. The Monitor's report, presented to the Joint Committee
on December 7, 2005, outlined a "twenty-year record of repeatedly
identified, fundamental problems in every one of the Bureau's key
operations." The Report found that BPPVE both inadequately
protected consumers and impeded the expansion of quality
postsecondary and vocational educational opportunities. The law
and BPPVE were allowed to Sunset on January 1, 2008.
AB 48 established a new BPPE with the authority to regulate private
postsecondary institutions and enforce the provisions of the new
California Private Postsecondary Education Act (Act) and responded
to the major problems with the former laws governing the industry
in California. The Act requires all unaccredited colleges in
California to be approved by BPPE, and all nationally accredited
colleges to comply with numerous student protections. It also
establishes prohibitions on false advertising and inappropriate
recruiting. The Act requires disclosure of critical information to
students such as program outlines, graduation and job placement
rates, and license examination information, and ensures colleges
justify those figures. The Act also guarantees students can
complete their educational objectives if their institution closes
its doors while providing BPPE with enforcement powers necessary to
protect consumers. The Act directs BPPE to:
Create a structure that provides an appropriate level of
oversight, including approval of private postsecondary
educational institutions and programs;
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Establish minimum operating standards for California
private postsecondary educational institutions to ensure
quality education for students;
Provide students a meaningful opportunity to have their
complaints resolved;
Ensure that private postsecondary educational
institutions offer accurate information to prospective
students on school and student performance, thereby promoting
competition between institutions that rewards educational
quality and employment success; and,
Ensure that all stakeholders have a voice and are heard
in the operations and rulemaking process of BPPE.
BPPE also actively investigates and combats unlicensed activity,
administers the Student Tuition Recovery Fund (STRF), and conducts
outreach and education activities for private postsecondary
educational institutions and students within the state.
1. Extension of the Sunset Date for BPPE. At a time when California's
public institutions have reduced enrollments due to major budget
cuts, private postsecondary education institutions are in a
position to play a role in providing access and education for
otherwise underserved students. As the number of students served
by private postsecondary institutions has increased, so has the
focus on fraudulent practices and low academic standards. There
have been numerous high-profile federal investigations into the
practices of for-profit institutions in recent years. Among the
most notable are the United States Government Accountability Office
(GAO) series of investigations raising concerns regarding the
amount of federal student aid dollars directed to for-profit
institutions, the misleading and deceptive recruitment practices at
certain institutions, and substandard academic performance
expectations in some for-profit programs. The challenge for the
Legislature is to ensure the continuance of an oversight structure
that supports innovative programs while also preventing predatory
practices, which this bill aims to do by extending the operative
date for the Act.
2. Related Legislation This Session. SB 1242 (Lieu) of 2014 amends
the Automotive Repair Act and updates the sunset provisions for the
Bureau of Automotive Repair. ( Status : This bill will also be heard
before this Committee during today's hearing.)
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SB 1243 (Lieu) of 2014 extends until January 1, 2017, the term of
the Veterinary Medical Board, which provides for the licensing and
registration of veterinarians and registered veterinary technicians
and the regulation of the practice of veterinary medicine by the
Veterinary Medical Board. The bill also extends the terms of the
executive officer of the Veterinary Medical Board. This bill also
extends to January 1, 2019, the law regulating the practice of
common interest development managers, and the law establishing the
California Tax Education Council, which provides for the Council to
register and regulate tax preparers. This bill also subjects the
Board and programs to be reviewed by the appropriate policy
committees of the Legislature. ( Status: This bill will also be
heard before this Committee during today's hearing.)
SB 1244 (Lieu) of 2014 extends until January 1, 2019 the term of
the Structural Pest Control Board which provides for the licensing
and regulation of individuals and business involved in the
structural pest control industry in California. The bill also
extends the term of the Board's executive officer and subjects the
Board to be reviewed by the appropriate policy committees of the
Legislature. ( Status: This bill will also be heard before this
Committee during today's hearing.)
SB 1245 (Lieu) of 2014 extends until January 1, 2019 the term of
the Dental Hygiene Committee of California which provides for the
licensing and regulation of dental hygienists. The bill also
extends the term of the Committee's executive officer and subjects
the Committee to be reviewed by the appropriate policy committees
of the Legislature.
( Status: This bill will also be heard before this Committee during
today's hearing.)
SB 1246 (Lieu) of 2014 extends until January 1, 2019 the term of
the Acupuncture Board which provides for the licensing and
regulation of doctors of acupuncture under the Acupuncture
Licensure Act and subjects the Board to be reviewed by the
appropriate policy committees of the Legislature. ( Status: This
bill will also be heard before the BP&ED Committee during today's
hearing.)
SB 1069 (Torres) of 2014 requires BPPE to adopt regulations to make
students who utilize a Cal Grant, a Pell Grant, or both, eligible
to apply for payment from the STRF. ( Status: This bill will also
be heard before this Committee during today's hearing.)
AB 330 (Chau) of 2013 requires postsecondary educational
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institutions to provide their net price calculators and average
student debt per graduate to the California Student Aid Commission
(CSAC) as a condition of eligibility for the Cal Grant Program,
requires CSAC to provide this information on its website in a
searchable database, and requires a for-profit institution to
include this information in its School Performance Fact Sheet.
( Status: This bill is pending in the Senate Committee on
Education.)
AB 634 (Gomez) of 2013 requires BPPE to clarify the definition of
"avocational education" through regulations. ( Status: The bill is
pending in this Committee.)
AB 834 (Williams) of 2013 authorizes a law school accredited by the
American Bar Association, and owned by an institution operating
under BPPE to satisfy the current disclosure requirements of the
School Performance Fact Sheet by instead doing the following:
complying with ABA disclosure requirements; reporting to the
National Association for Law Placement; and making completion, Bar
passage, placement, and salary and wage data available to
prospective students prior to enrollment through the application
process administered by the Law School Admission Council. ( Status:
This bill is pending in the Senate Committee on Education.)
3. Prior Related Legislation. AB 2296 (Block, Chapter 585, Statutes
of 2012) expanded the disclosure requirements for institutions
under the Bureau related to unaccredited programs; expanded
disclosure requirements for all regulated institutions, established
more stringent criteria for determining gainful employment and
calculating job placement rates and increased institutional
documentation and reporting requirements around completion rates,
job placement/license exam passage rates, and salary/wage
information for graduates.
SB 498 (Liu) of 2011 would have abolished the Bureau and
transferred the Bureau's powers and duties under the Act to the
California Postsecondary Education Commission.
( Status: The bill was held by the Senate Committee on Business,
Professions and Economic Development.)
SB 619 (Fuller, Chapter 309, Statutes of 2011) exempted from Bureau
regulation flight instructors or flight schools that do not require
the upfront payment of tuition or fees, and that do not require
students to enter into a contract of indebtedness in order to
receive training.
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SB 675 (Wright) of 2011 would have required that private
postsecondary institutions subject to the Act administer a test of
English language proficiency to a nonnative speaker of English, as
defined, prior to enrolling the student. ( Status: The bill failed
passage in the Senate Committee on Business, Professions and
Economic Development.)
AB 611 (Gordon, Chapter 103, Statutes of 2011) set forth certain
disclosure requirements pertaining to accreditation status,
licensure, and related limitations for unaccredited doctoral
programs.
AB 773 (Block) of 2011 would have allowed the Bureau to revoke an
exemption of an institution which was exempt based on
accreditation, but still required to comply with the Student
Tuition Recovery Fund requirements, if it determined that the
institution had not in fact complied with those requirements.
( Status: The bill was never heard in a policy committee.)
AB 797 (Conway) of 2011 would have exempted schools of cosmetology,
as defined, from the Act. ( Status: The bill was held in Assembly
Committee on Higher Education.)
AB 1013 (Assembly Committee on Higher Education, Chapter 167,
Statutes of 2011) made clarifying changes to the Act and related
Bureau oversight.
AB 1889 (Portantino) of 2010 contained provisions regarding
doctoral degrees offered by unaccredited institutions, the
calculation of placement rates, and Bureau employment requirements.
( Status: The bill was vetoed by the Governor due to concerns over
Bureau employment requirements.)
AB 2393 (Ammiano) of 2010 altered the definition of "graduates
employed in the field" for apprenticeship and nursing programs.
( Status: The bill was vetoed by the Governor, who indicated that
it put the state on the same path to overly confusing statutes and
guidelines that existed prior to the new Act.)
AB 48 (Portantino, Chapter 310, Statutes of 2009) established the
California Private Postsecondary Education Act of 2009.
SUPPORT AND OPPOSITION:
Support:
American Career College/West Coast University
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California Association of Private Postsecondary Schools (CAPPS)
Opposition:
None on file as of April 23, 2014.
Consultant:Sarah Mason