BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1192|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: SB 1192
Author: Hill (D), et al.
Amended: 4/6/16
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 8-0, 4/11/16
AYES: Hill, Berryhill, Block, Galgiani, Hernandez, Jackson,
Mendoza, Wieckowski
NO VOTE RECORDED: Bates
SENATE EDUCATION COMMITTEE: 9-0, 4/20/16
AYES: Liu, Block, Hancock, Huff, Leyva, Mendoza, Monning, Pan,
Vidak
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
SUBJECT: Private postsecondary education: California Private
Postsecondary Education Act of 2009
SOURCE: Author
DIGEST: This bill makes various changes to the California
Private Postsecondary Education Act of 2009 (Act) intended to
improve the effectiveness of the Bureau for Private
Postsecondary Education (BPPE) and opportunities for student
success
ANALYSIS: Existing law establishes the Act until January 1,
2017, and requires the BPPE within the Department of Consumer
Affairs (DCA) to, among other things, review, investigate and
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approve private postsecondary institutions, programs and courses
of instruction pursuant to the Act and authorizes BPPE to take
formal actions against an institution/school to ensure
compliance with the Act and even seek closure of an
institution/school if determined necessary. The Act requires
unaccredited degree granting institutions to be accredited by an
accrediting agency recognized by the United States Department of
Education by 2020. The Act also provides for specified
disclosures and enrollment agreements for students, requirements
for cancellations, withdrawals and refunds, and that the BPPE
shall administer the Student Tuition Recovery Fund (STRF) to
provide refunds to students affected by the possible closure of
an institution/school. (Education Code § 94800 et seq.)
This bill:
1) Ensures that certification and registration necessary for a
student to engage in a particular profession are reflected in
the BPPE's approval of educational programs.
2) Provides BPPE the authority to give extensions on the
timeline for unaccredited degree granting institutions to
become accredited according to certain evidence.
3) Establishes an Office of Student Assistance and Relief
(Office) to serve as a primary point of contact to address
the needs of private postsecondary education students.
Specifies that the duties of the Office include but are not
limited to providing assistance to students, conducting
proactive outreach to students, administering the STRF and
overseeing the registration of institutions that do not have
a physical presence in this state and are offering distance
education to California students. Requires the Office to
establish and maintain a Web site to provide information to
students about their rights and protections available to them
as well as information about free services available to
students provided by a local nonprofit community service
organization with demonstrated experience assisting students
in areas like legal services and student loan matters.
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4) Provides recourse through the STRF to students impacted by
the abrupt closure of Corinthian Colleges, Inc. (CCI).
5) States the intent of the Legislature to require a private
postsecondary educational institution that does not maintain
a physical presence in this state and offers distance
education to California students to file a surety bond for
the benefit of students suffering economic loss. Requires
these institutions to register with BPPE.
6) Authorizes BPPE staff to issue a citation, with a fine not to
exceed $5,000, before leaving an institution when non-minor
violations of the Act are detected during an inspection.
7) Increases the penalty for operating an institution without
BPPE approval from $50,000 to $100,000.
8) Requires the Director of DCA to appoint an enforcement
monitor for a period of two years to monitor the BPPE's
enforcement efforts, with a specific concentration on the
adequacy of BPPE compliance inspections, handling and
processing of student complaints and timely application of
sanctions or discipline imposed on institutions and persons
in order to protect the public. Requires the enforcement
monitor to submit reports to the Director and Legislature and
be available to make oral reports to both if requested to do
so.
9) Makes various technical changes.
Background
According to the author, this bill, one of the author's five
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sunset bills, is necessary to make changes to the Act 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.
Bureau for Private Postsecondary Education. The BPPE is
responsible for oversight of private postsecondary educational
institutions operating with a physical presence in California.
Established by AB 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 foundation for oversight and
gave the BPPE enforcement tools to ensure schools comply with
the law.
2015-16 sunset review. Beginning in 2015, the Senate Business
and Professions Committee and the Assembly Business and
Professions Committee (Committees) conducted joint oversight
hearings to review 12 regulatory entities. The Committees
conducted two hearings in March and joined with the Senate
Committee on Education and Assembly Committee on Higher
Education to review BPPE. This bill and the accompanying sunset
bills are intended to implement legislative changes as
recommended by staff of the Committees and which are reflected
in the Background Papers prepared by Committee staff for each
agency and program reviewed this year.
In response to opportunities to strengthen the Act to ensure
students receive training necessary for employment and
licensure, this bill includes certification and registration in
the definition of licensure for purposes of BPPE approval of a
program intended to lead to licensure and adds requirements for
institutions to reflect certification or registration necessary
for a student to engage in a particular profession during the
enrollment process.
In response to issues remaining about concerns that unaccredited
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degree granting programs may not be able to meet current
statutory requirements for accreditation, this bill provides
BPPE the authority to give extensions on the timeline for
unaccredited degree granting institutions to become accredited
according to certain evidence provided by the institution.
In response to concerns that the BPPE has focused significant
efforts to provide outreach to schools, including new workshops
to assist with application completion and web-based tools to
allow institutions to better understand how they can be
compliant with the Act and BPPE regulations, but has not focused
similar efforts on student outreach to inform students about the
BPPE's work and available recourse for students, this bill
establishes the Office to serve as a primary point of contact to
address the needs of private postsecondary education students.
In response to concerns about the ability of students enrolled
at a California campus of Corinthian Colleges when it abruptly
closed in 2015 to make their lives whole, this bill provides
that a student who was enrolled at a California campus of CCI,
or was a California student enrolled in an online program
offered by an out-of-state campus of a CCI institution, who also
meets all of the other eligibility requirements, if the student
was enrolled as of June 20, 2014, or withdrew within 120 days of
that date or any greater period determined by BPPE, is eligible
for STRF.
In response to issues raised about unlicensed activity,
compliance inspections conducted by BPPE, the BPPE's complaint
investigations backlog and enforcement problems, this bill
authorizes BPPE staff to issue a citation, with a fine not to
exceed $5,000, before leaving an institution when non-minor
violations of the Act are detected during an inspection;
increases the penalty for operating an institution without BPPE
approval from $50,000 to $100,000 and provides for the
appointment of an enforcement monitor to monitor the BPPE's
enforcement efforts, with a specific concentration on the
adequacy of BPPE compliance inspections, handling and processing
of student complaints and timely application of sanctions or
discipline imposed on institutions and persons in order to
protect the public.
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FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
BPPE: Net increased costs of about $410,000 in the 2016-17
fiscal year and $360,000 ongoing. This estimate includes the
BPPE's anticipated need for six positions and $829,000 in
fiscal year 2016-17 and $781,000 annually thereafter. It also
includes increased revenues of about $420,000 ($300,000
attributed to the fine increase from operating without a
proper approval and about $120,000 from the new authority to
issue citations, as specified. To the extent there are
additional fines or citations issued, increased revenues would
be generated.) The Senate Appropriations Committee staff
notes that the Private Postsecondary Education Administration
Fund has a structural imbalance and is expected to become
insolvent in the 2017-18 fiscal year without accounting for
the implementation of this bill. Absent a different funding
source or creation of an additional fee, the fund could become
insolvent sooner. (Special Funds*)
Student Tuition Recovery Fund Claim Payout: Unknown payments
to students enrolled at a campus or an out-of-state online
program of a CCI. If 10 percent of estimated impacted
students applied and were approved for a claim in a given
year, costs would be $5.8 million. Actual costs would depend
upon a number of factors including the number of impacted
students making a successful claim and the amount of the claim
payouts. (Special Funds**)
Minor costs to the California Student Aid Commission, the
California Community College Chancellor's Office, and the
California Department of Veterans Affairs to fulfill the
consultation requirement with the Office of Student Assistance
and Relief, as required by this bill. It is unknown the
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additional duties, and potential cost pressures, that might
result from the required consultation. (General Fund)
* Private Postsecondary Education Administration Fund
**Student Tuition Recovery Fund
SUPPORT: (Verified5/25/16)
California Association of Private Postsecondary Schools
Center for Public Interest Law
Children's Advocacy Institute
Consumer Federation of California
East Bay Community Law Center
Housing and Economic Rights Advocates
Legal Aid Foundation of Los Angeles
Public Advocates
Public Law Center
SEIU California
University of Phoenix
Veterans Legal Clinic
OPPOSITION: (Verified5/27/16)
Professional Beauty Federation of California
ARGUMENTS IN SUPPORT: Supporters believe this bill will
strengthen the existing law and improve the BPPE's ability to
address the needs of students.
The California Association of Private Postsecondary Schools
(CAPPS) would like to see changes to this bill to increase the
fairness of fees charged by BPPE, remove the enforcement monitor
provisions, delete provisions creating the Office, remove or
modify additional citation authority, ensure due process, keep
STRF provisions in the Act as they are and delete certain fines
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in this bill for unlicensed activity. According to the
University of Phoenix, while this bill keeps much of the
existing Act intact, it does propose some significant policy
additions.
ARGUMENTS IN OPPOSITION: The Professional Beauty Federation
of California opposes this bill because it does not grant sole
oversight of barbering and cosmetology schools to the Board of
Barbering and Cosmetology.
Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104
5/28/16 16:57:34
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