BILL ANALYSIS
APPROPRIATIONS COMMITTEE FISCAL SUMMARY
AB 71 (Wright)
Hearing Date: 7/17/97 Amended:
7/16/97
Consultant: Bob Franzoia Policy Vote: B & P 8-0
(7/8/97)
Ed 8-1 (6/18/7)
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BILL SUMMARY: AB 71 would extend the sunset of the Private
Postsecondary and Vocational Education Reform Act of 1989 to
January 1, 2005, and makes numerous substantial and technical
amendments to the Act. These changes include:
(1) Creating a Bureau for Private Postsecondary and Vocational
Education in the Department of Consumer Affairs, operative January
1, 1998, as the successor to the Council for Private Postsecondary
and Vocational Education.
(2) Providing that the duty of administration and enforcement is
vested with the Director of Consumer Affairs, who may assign those
duties to a program administrator appointed by the Governor and
subject to confirmation by the Senate.
(3) Requiring that the director shall appoint an advisory
committee of unspecified size to advise the bureau on
administration, licensing, and enforcement functions.
(4) Requiring the bureau to establish an initial registration fee
and an annual fee to be paid by institutions subject to
registration under the bill.
(5) Extending to any person serving on a special committee of the
bureau, a visiting team, or any other peer review body of the
bureau the same defenses and immunities to any action arising out
of information or testimony to the bureau that the person would
have as a public employee.
(6) Making it a crime for any person or business entity to
willfully violate specified provisions governing refunds to
students and requiring each institution to provide prospective
students with information concerning the institutionos general
performance standards.
(7) Authorizing any party aggrieved by the bureauos final decision
to seek judicial review.
(8) Exempting from the act those institutions that exclusively
offer intensive English language programs, as well as (a)
providing for standards and evaluation procedures for institutions
offering license examination preparation services, (b) revising
the method for calculating student tuition refunds, (c) reenacting
and revising various provisions governing student protections, and
(d) revising the act to provide for notices and alternative
dispute resolutions, as specified.
(9) Requiring that the bureau is subject to the sunset review
process conducted by the Joint Legislative Sunset Review Committee
and requiring the bureau to submit an annual report to the
Legislature and to the California Postsecondary Education
Commission, summarizing its activities during the previous fiscal
year.
(10) Continuing in existence the Private Postsecondary and
Vocational Education Administration Fund and the Student Tuition
Recovery Fund consisting of specified accounts.
(11) Specifying that its provisions shall become operative only if
SB 819 (Calderon), or any other bill, of the 1997-98 Regular
Session extends the operative date of the Private Postsecondary
and Vocational Education Reform Act of 1989 until at least
December 31, 1997, and is enacted and takes effect on or before
July 18, 1997.
(12) Stating that the provisions of the bill are severable.
Fiscal Impact (in thousands)
Major Provisions 1997-98 1998-99 1999-2000 Fund
Transfer of regulatory Minor, probably absorbable costs*
Special**
functions/sunset(All costs of the bill are to be offset by revenues from
extension various fees and penalties.)
* The bill requires the bureau to reduce application fees and annual fees,
that are in effect on 12/31/97 by 5, 10, or 15 percent based on an
institutionos annual gross revenues.
**Private Postsecondary and Vocational Education Administration Fund
STAFF COMMENTS: The bill would make the funds in the Private
Postsecondary and Vocational Education Administration Fund subject
to appropriation in the annual Budget Act. The Student Tuition
Recovery Fund, which is used for the payment of valid claims to
students, would be continuously appropriated. The bill provides
that the various fees shall provide for adequate resources and
shall be proportional to the size of the institutions. The bureau
shall annually present a proposed budget and fee schedule, penalty
fees assessed for delinquent payments and additions and deletions
to the fee categories to the Department of Finance and the Joint
Legislative Budget Committee for their review and approval as part
of the annual budget process.
The bill provides that a minimum of 50 percent of the funds
appropriated to the bureau shall be used to (1) enforce the act
and the bureauos regulations, (2) ensure that independent onsite
evaluations and inspections and audits are conducted and that
students have access to information concerning their rights to
contract cancellation, withdrawal, refunds, and remedies, and (3)
mediate student complaints to achieve balanced outcomes for
students and institutions.
STAFF NOTES that the bill defines oCouncilo to mean the Bureau for
Private Postsecondary and Vocational Education. The bill provides
that fees may be increased, as specified, by a majority vote of
the council. This provision is unclear since the bureau does not
have a voting procedure. STAFF RECOMMENDS the bill be amended to
delete the reference to a majority vote. (The bill provides that
any fee increases above a maximum level shall be changed through
legislation.)