Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 509

Introduced by Assembly Member Perea

February 23, 2015

An act to amend Section begin delete 94874.7 end delete begin insert 94874 end insert of the Education Code, relating to private postsecondary education.

LEGISLATIVE COUNSEL’S DIGEST

AB 509, as amended, Perea. California Private Postsecondary Education Act of 2009: exemptions.

Existing law, the California Private Postsecondary Education Act of 2009, provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. begin delete The act requires the bureau to establish, by regulation, a process pursuant to which an institution that is exempt from the act may request and obtain from the bureau verification that the institution is exempt. end delete begin insert The act exempts an institution from its provisions, if any of a list of specific criteria are met. end insert

This bill would begin delete make nonsubstantive changes to the provision requiring the bureau to establish that verification process end delete begin insert exempt from the provisions of the act a bona fide organization, association, or council that offers preapprenticeship training programs on behalf of one or more apprenticeship programs that are approved by the Division of Apprenticeship Standards end insert .

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

begin insert

begin insert SECTION end insert begin insert 1. end insert   

end insert

begin insert Section 94874 of the end insert begin insert Education Code end insert begin insert is amended
to read: end insert

94874.  

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

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

(b)  begin insert (1) end insert begin insert   end insert An institution offering educational programs sponsored
by a bona fide trade, business, professional, or fraternal
organization, solely for that organization’s membership.

begin insert

(2) A bona fide organization, association, or council that offers
preapprenticeship training programs, on behalf of one or more
Division of Apprenticeship Standards-approved apprenticeship
programs.

end insert

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

(d) An institution offering either of the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

begin delete

SECTION 1.  

Section 94874.7 of the Education Code is
amended to read:

94874.7.  

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

end delete