BILL NUMBER: AB 1996 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 15, 2016
INTRODUCED BY Assembly Member Gordon
FEBRUARY 16, 2016
An act to amend Section 94874 of the Education Code, relating to
private postsecondary education.
LEGISLATIVE COUNSEL'S DIGEST
AB 1996, as amended, Gordon. Private postsecondary education:
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. The act exempts
an institution from its provisions if any of a list of specific
criteria are met.
This bill would specify that a nonprofit institution that is
accredited by the Accrediting Commission for Schools, Western
Association of Schools and Colleges, does not award degrees or
diplomas, and is paid from state or federal student financial aid
programs for fewer than 20 percent of its students who receive
vocational training is also exempted from the act. The
bill would also make nonsubstantive changes in the provision
that relates to exemptions from the act.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 94874 of the Education Code is amended to read:
94874. Except as provided in Section 94874.2, all of the
following are exempt from this chapter:
(a) An institution that offers solely avocational or recreational
educational programs.
(b) (1) An institution offering educational programs sponsored by
a bona fide trade, business, professional, or fraternal organization,
solely for that organization's membership.
(2) (A) Except as provided in subparagraph (B), a bona fide
organization, association, or council that offers preapprenticeship
training programs, on behalf of one or more Division of
Apprenticeship Standards-approved labor-management apprenticeship
programs that satisfies one of the following conditions:
(i) It is not on the Eligible Training Provider List established
and maintained by the California Workforce Investment Board, but has
met the requirements for placement on the list.
(ii) It is on the Eligible Training Provider List established and
maintained by the California Workforce Investment Board, and meets
the requirements for continued listing.
(B) If an organization, association, or council has been removed
from the Eligible Training Provider List established and maintained
by the California Workforce Investment Board for failure to meet
performance standards, it is not exempt until it meets all applicable
performance standards.
(c) A postsecondary educational institution established, operated,
and governed by the federal government or by this state or its
political subdivisions.
(d) An institution solely 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
the 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)
(j) A nonprofit institution that is accredited by the Accrediting
Commission for Schools, Western Association of Schools and Colleges,
and does not award degrees or diplomas, and is paid from state or
federal student financial aid programs for fewer than 20 percent of
its students who receive vocational training.
(k) 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)
(l) 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).