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