First Substitute H.B. 405

This document includes House Committee Amendments incorporated into the bill on Fri, Feb 28, 2014 at 11:50 AM by lerror. -->

Representative James A. Dunnigan proposes the following substitute bill:


             1     
POSTSECONDARY SCHOOL STATE AUTHORIZATION

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: Curtis S. Bramble

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill enacts the Utah Postsecondary School State Authorization Act.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms;
             13          .    provides that a postsecondary school may obtain state authorization for purposes of
             14      34 C.F.R. Sec. 600.9 by obtaining a certificate of postsecondary state authorization;
             15          .    allows the Division of Consumer Protection to:
             16              .    enter into an interstate reciprocity agreement; and
             17              .    make rules consistent with the provisions of this bill;
             18          .    authorizes the State Board of Regents to make rules to implement an interstate
             19      reciprocity agreement if the agreement includes institutions that are part of the state
             20      system of higher education under Section 53B-1-102 ;
             21          .    establishes qualifications for and a procedure by which a postsecondary school may
             22      obtain a certificate of postsecondary state authorization from the Division of
             23      Consumer Protection;
             24          .    provides that, under certain circumstances, the Division of Consumer Protection
             25      may deny, suspend, or revoke a certificate of postsecondary state authorization;


             26          .    provides procedures to enforce compliance with the provisions of this bill; and
             27          .    makes technical and conforming changes.
             28      Money Appropriated in this Bill:
             29          None
             30      Other Special Clauses:
             31          None
             32      Utah Code Sections Affected:
             33      AMENDS:
             34           13-2-1 , as last amended by Laws of Utah 2012, Chapter 375
             35           13-34-103 , as last amended by Laws of Utah 2011, Chapter 221
             36           13-34-105 , as last amended by Laws of Utah 2013, Chapter 124
             37           13-34-106 , as last amended by Laws of Utah 2011, Chapter 221
             38           13-34-110 , as last amended by Laws of Utah 2011, Chapter 221
             39           13-34-113 , as last amended by Laws of Utah 2011, Chapter 221
             40      ENACTS:
             41           13-34a-101 , Utah Code Annotated 1953
             42           13-34a-102 , Utah Code Annotated 1953
             43           13-34a-103 , Utah Code Annotated 1953
             44           13-34a-104 , Utah Code Annotated 1953
             45           13-34a-201 , Utah Code Annotated 1953
             46           13-34a-202 , Utah Code Annotated 1953
             47           13-34a-203 , Utah Code Annotated 1953
             48           13-34a-204 , Utah Code Annotated 1953
             49           13-34a-205 , Utah Code Annotated 1953
             50           13-34a-206 , Utah Code Annotated 1953
             51           13-34a-207 , Utah Code Annotated 1953
             52           13-34a-301 , Utah Code Annotated 1953
             53           13-34a-302 , Utah Code Annotated 1953
             54           13-34a-303 , Utah Code Annotated 1953
             55           13-34a-304 , Utah Code Annotated 1953
             56           13-34a-305 , Utah Code Annotated 1953


             57           13-34a-306 , Utah Code Annotated 1953
             58      REPEALS:
             59           13-34-107.5 , as enacted by Laws of Utah 2011, Chapter 221
             60           13-34-107.6 , as enacted by Laws of Utah 2011, Chapter 221
             61     
             62      Be it enacted by the Legislature of the state of Utah:
             63          Section 1. Section 13-2-1 is amended to read:
             64           13-2-1. Consumer protection division established -- Functions.
             65          (1) There is established within the Department of Commerce the Division of Consumer
             66      Protection.
             67          (2) The division shall administer and enforce the following:
             68          (a) Chapter 5, Unfair Practices Act;
             69          (b) Chapter 10a, Music Licensing Practices Act;
             70          (c) Chapter 11, Utah Consumer Sales Practices Act;
             71          (d) Chapter 15, Business Opportunity Disclosure Act;
             72          (e) Chapter 20, New Motor Vehicle Warranties Act;
             73          (f) Chapter 21, Credit Services Organizations Act;
             74          (g) Chapter 22, Charitable Solicitations Act;
             75          (h) Chapter 23, Health Spa Services Protection Act;
             76          (i) Chapter 25a, Telephone and Facsimile Solicitation Act;
             77          (j) Chapter 26, Telephone Fraud Prevention Act;
             78          (k) Chapter 28, Prize Notices Regulation Act;
             79          (l) Chapter 32a, Pawnshop and Secondhand Merchandise Transaction Information Act;
             80          (m) Chapter 34, Utah Postsecondary Proprietary School Act;
             81          (n) Chapter 34a, Utah Postsecondary School State Authorization Act;
             82          [(n)] (o) Chapter 41, Price Controls During Emergencies Act;
             83          [(o)] (p) Chapter 42, Uniform Debt-Management Services Act; and
             84          [(p)] (q) Chapter 49, Immigration Consultants Registration Act.
             85          Section 2. Section 13-34-103 is amended to read:
             86           13-34-103. Definitions.
             87          As used in this chapter:


             88          (1) "Agent" means any person who:
             89          (a) owns an interest in or is employed by a proprietary school [and who:]; and
             90          [(a)] (b) (i) enrolls or attempts to enroll a resident of this state in a proprietary school;
             91          [(b)] (ii) offers to award educational credentials for remuneration on behalf of a
             92      proprietary school; or
             93          [(c)] (iii) holds himself out to residents of this state as representing a proprietary school
             94      for any purpose.
             95          (2) (a) "Certificate of registration" means approval [of] from the division to operate a
             96      school or institution in compliance with this chapter and rules adopted under this chapter. [The
             97      registration is not]
             98          (b) "Certificate of registration" does not mean an endorsement of the school or
             99      institution by either the division or the state.
             100          (3) "Division" means the Division of Consumer Protection.
             101          (4) "Educational credentials" means degrees, diplomas, certificates, transcripts, reports,
             102      documents, or letters of designation, marks, appellations, series of letters, numbers, or words
             103      which signify or appear to signify enrollment, attendance, progress, or satisfactory completion
             104      of the requirements or prerequisites for any educational program.
             105          (5) "Institution" means an individual, corporation, partnership, association,
             106      cooperative, or other legal entity.
             107          (6) "Offer" means to advertise, publicize, solicit, or encourage any person directly or
             108      indirectly.
             109          (7) "Operate" in this state means to:
             110          (a) maintain a place of business in the state;
             111          (b) solicit business in the state;
             112          (c) conduct significant educational activities within the state; or
             113          (d) offer or provide postsecondary instruction leading to a postsecondary degree or
             114      certificate to any number of Utah residents from a location outside the state by correspondence
             115      or any telecommunications or electronic media technology.
             116          (8) "Ownership" means:
             117          (a) the controlling interest in a school, institution, or college[. If]; or
             118          (b) if an entity holds the controlling interest in the school, institution, or college [is


             119      owned or controlled by other than a natural person, "ownership" refers to], the controlling
             120      interest in the [legal] entity [which controls] that holds the controlling interest in the school,
             121      institution, or college.
             122          (9) "Postsecondary education" means education or educational services offered
             123      primarily to [persons] individuals who:
             124          (a) have completed or terminated their secondary or high school education; or [who]
             125          (b) are beyond the age of compulsory school attendance.
             126          (10) (a) "Proprietary school" means [any] a private institution, including a business,
             127      modeling, paramedical, tax preparation, or trade or technical school, [other than a school
             128      exempted under this chapter,] that offers postsecondary education:
             129          [(a)] (i) in consideration of the payment of tuition or fees; and
             130          [(b)] (ii) for the attainment of educational, professional, or vocational objectives.
             131          [(11) "Rules" means those rules adopted by the division under the Utah Administrative
             132      Rulemaking Act necessary to enforce and administer this chapter.]
             133          (b) "Proprietary school" does not include an institution that is exempt from this chapter
             134      under Section 13-34-105 .
             135          [(12)] (11) "Utah institution" means a [postsecondary educational] school or institution
             136      [whose headquarters or primary operations are in Utah.] that:
             137          (a) offers postsecondary education; and
             138          (b) is headquartered or primarily operates in Utah.
             139          Section 3. Section 13-34-105 is amended to read:
             140           13-34-105. Exempted institutions.
             141          (1) This chapter does not apply to:
             142          (a) a Utah institution directly supported, to a substantial degree, with funds provided
             143      by:
             144          (i) the state;
             145          (ii) a local school district; or
             146          (iii) other Utah governmental subdivision;
             147          (b) an institution that offers instruction exclusively at or below the 12th grade level;
             148          (c) a lawful enterprise that offers only professional review programs, [such as]
             149      including C.P.A. and bar examination review and preparation courses;


             150          (d) a private[, postsecondary educational] institution that:
             151          (i) provides postsecondary education; and
             152          (ii) is owned, controlled, operated, or maintained by a bona fide church or religious
             153      denomination, [which] that is exempted from property taxation under the laws of this state;
             154          (e) [subject to Subsection (3) and Section 13-34-107.5 ,] a school or institution that is
             155      accredited by a regional or national accrediting agency recognized by the United States
             156      Department of Education;
             157          (f) subject to Subsection (4), a business organization, trade or professional association,
             158      fraternal society, or labor union that:
             159          (i) sponsors or conducts courses of instruction or study predominantly for bona fide
             160      employees or members; and
             161          (ii) does not[, in advertising, describe itself] advertise as a school;
             162          (g) an institution that:
             163          (i) (A) exclusively offers general education courses or instruction [solely] that are
             164      remedial, avocational, nonvocational, or recreational in nature; and
             165          (B) does not advertise occupation objectives or grant educational credentials; or
             166          (ii) exclusively prepares individuals to teach courses or instruction described in
             167      Subsection (1)(g)(i)(A);
             168          (h) an institution that offers only workshops or seminars:
             169          (i) lasting no longer than three calendar days; and
             170          (ii) for which academic credit is not awarded;
             171          (i) an institution that offers programs:
             172          (i) in barbering, cosmetology, real estate, or insurance; and
             173          (ii) that are regulated and approved by a state or federal governmental agency;
             174          (j) an education provider certified by the Division of Real Estate under Section
             175      61-2c-204.1 ;
             176          (k) an institution that offers aviation training if the institution:
             177          (i) (A) is approved under Federal Aviation Regulations, 14 C.F.R. Part 141; or
             178          (B) provides aviation training under Federal Aviation Regulations, 14 C.F.R. Part 61;
             179      and
             180          (ii) exclusively offers aviation training that a student fully receives within 24 hours


             181      after the student pays any tuition, fee, or other charge for the aviation training;
             182          (l) an institution that provides emergency medical services training if all of the
             183      institution's instructors, course coordinators, and courses are approved by the Department of
             184      Health; and
             185          (m) an institution that exclusively conducts nurse aide training programs that are
             186      approved by the State Office of Vocational Education and are subject to the Nurse Aide
             187      Registry[; and].
             188          [(n) a private, nonprofit educational institution that has been in continuous operation as
             189      a private, nonprofit educational institution for at least 20 years, except as provided in
             190      Subsection (5), Subsection 13-34-106 (8) and Section 13-34-107.6 .]
             191          (2) If available evidence suggests that an exempt institution under this section is not in
             192      compliance with the standards of registration under this chapter and applicable division rules,
             193      the division shall contact the institution and, if appropriate, the state or federal government
             194      agency to request corrective action.
             195          (3) An institution, branch, extension, or facility operating within the state that is
             196      affiliated with an institution operating in another state shall be separately approved by the
             197      affiliate's regional or national accrediting agency to qualify for the exemption described in
             198      Subsection (1)(e).
             199          (4) For purposes of Subsection (1)(f), a business organization, trade or professional
             200      association, fraternal society, or labor union is considered to be conducting the course
             201      predominantly for bona fide employees or members if it hires a majority of the persons who:
             202          (a) successfully complete its course of instruction or study with a reasonable degree of
             203      proficiency; and
             204          (b) apply for employment with that same entity.
             205          [(5) An institution subject to, or expressly exempted from any part of, this chapter is:]
             206          [(a) established as an educational institution within the state;]
             207          [(b) independent of the state system of higher education;]
             208          [(c) subject to compliance with the applicable provisions of this chapter; and]
             209          [(d) authorized to operate educational programs beyond secondary education, including
             210      programs leading to a degree or certificate.]
             211          Section 4. Section 13-34-106 is amended to read:


             212           13-34-106. Responsibilities of division.
             213          The division [is responsible for the administration of this chapter, and] shall [do the
             214      following]:
             215          (1) prescribe the contents of the registration statements required by this chapter relating
             216      to the quality of education and ethical and business practices;
             217          [(2) issue:]
             218          [(a) certification of registration upon receipt and approval of the registration statement
             219      required under Section 13-34-107 ; and]
             220          [(b) a certificate of exemption under Section 13-34-107.5 upon receipt and approval of
             221      an application and verification that the requirements of Subsection 13-34-105 (1)(e) and Section
             222      13-34-107.5 are met;]
             223          (2) upon receipt and approval of a registration statement under Section 13-34-107 ,
             224      issue a certification of registration;
             225          (3) receive, investigate, and make available for public inspection [the] a registration
             226      [statements] statement filed by a proprietary [schools] school operating or intending to operate
             227      in the state;
             228          (4) maintain and publicize a list of proprietary schools for which a registration
             229      statement is on file with the division;
             230          (5) on the division's own initiative or in response to a complaint filed with the division,
             231      do any of the following with respect to [any] an institution subject to, or reasonably believed by
             232      the division to be subject to, this chapter:
             233          (a) investigate;
             234          (b) audit;
             235          (c) review;
             236          (d) appropriately act, including enforcing this chapter or any other law enforced by the
             237      division; [and] or
             238          (e) refer a matter to[: (i)] another governmental entity; [or]
             239          [(ii) the institution's accrediting body, if the institution is an exempt institution under
             240      Section 13-34-107.5 ;]
             241          (6) negotiate and enter into an interstate reciprocity [agreements] agreement with [other
             242      states] another state, if in the judgment of the division, the [agreements are or will help to]


             243      agreement helps effectuate the purposes of this chapter;
             244          (7) consent to the use of [educational terms in business names] an educational term in
             245      a business name in accordance with Section 13-34-114 ; and
             246          (8) establish and maintain a process for reviewing and appropriately acting on
             247      complaints concerning [postsecondary educational] institutions [operating] that provide
             248      postsecondary education and operate in the state, including enforcing applicable state laws.
             249          Section 5. Section 13-34-110 is amended to read:
             250           13-34-110. Enforcement of contracts or agreements -- Rescission based on
             251      defective registration statement.
             252          (1) A proprietary school [shall be unable to] may not enforce in the courts of this state
             253      [any] a contract or agreement relating to postsecondary education services in this state unless,
             254      at the time the contract or agreement was [entered into] executed, an effective registration
             255      statement was on file with the division and made accessible to every applicant at the time of
             256      admission to the school.
             257          (2) It is a violation of this chapter if a proprietary school or [its] the proprietary school's
             258      agent:
             259          (a) fails to file an effective registration statement;
             260          (b) willfully omits from a registration statement provided under Section 13-34-107 [or
             261      an application under Section 13-34-107.5 for an exemption certificate any] a material statement
             262      of fact required by this chapter [and] or applicable regulations; or
             263          (c) includes in a registration statement any material statement of fact that [was known,
             264      or should have been known, to] the proprietary school knew or should have known to be false,
             265      deceptive, inaccurate, or misleading.
             266          (3) A student who enrolled in a proprietary school, in reliance upon the school's
             267      registration statement, may rescind the contract or agreement of enrollment and obtain a refund
             268      from the school of all tuition, fees, and other charges paid to the school if the school or its
             269      agent committed a violation under Subsection (2).
             270          (4) A violation of this chapter is also a violation of Section 13-11-4 .
             271          Section 6. Section 13-34-113 is amended to read:
             272           13-34-113. Denial, suspension, or revocation of a certificate of registration --
             273      Limitations.


             274          (1) In accordance with Chapter 2, Division of Consumer Protection, and Title 63G,
             275      Chapter 4, Administrative Procedures Act, the division may initiate proceedings to deny,
             276      suspend, or revoke a certificate of registration to operate a proprietary school under this chapter
             277      [or an exemption certificate under Section 13-34-107.5 ] if:
             278          (a) the division finds that the order is in the public interest; and
             279          (b) (i) the registration statement[,] or renewal statement[, or application for an
             280      exemption certificate] is incomplete, false, or misleading in any respect;
             281          (ii) the division determines that the educational credential associated with the
             282      proprietary school [or accredited institution] represents the undertaking or completion of
             283      educational achievement that has not been undertaken and earned; or
             284          (iii) the proprietary school[, accredited institution,] or an individual described in
             285      Subsection 13-34-107 (2)(a)(ii)(B) has:
             286          (A) violated any provision of:
             287          (I) this chapter;
             288          (II) the rules made by the division pursuant to this chapter; or
             289          (III) a commitment made in a registration statement for a certificate of registration to
             290      operate the proprietary school [or in an application for an exemption certificate];
             291          (B) caused or allowed to occur a violation of any provision of:
             292          (I) this chapter;
             293          (II) the rules made by the division pursuant to this chapter; or
             294          (III) a commitment made in a registration statement for a certificate of registration to
             295      operate the proprietary school;
             296          (C) been enjoined by any court, or is the subject of an administrative or judicial order
             297      issued in this or another state, if the injunction or order:
             298          (I) includes a finding or admission of fraud, breach of fiduciary duty, or material
             299      misrepresentation; or
             300          (II) was based on a finding of lack of integrity, truthfulness, or mental competence;
             301          (D) been convicted of a crime involving moral turpitude;
             302          (E) obtained or attempted to obtain a certificate of registration under this chapter by
             303      misrepresentation;
             304          (F) failed to timely file with the division any report required by:


             305          (I) this chapter; or
             306          (II) rules made by the division pursuant to this chapter;
             307          (G) failed to furnish information requested by the division; or
             308          (H) failed to pay an administrative fine imposed by the division in accordance with this
             309      chapter.
             310          (2) Division staff may place reasonable limits upon a proprietary school's continued
             311      certificate of registration to operate if:
             312          (a) there are serious concerns about the proprietary school's ability to provide the
             313      training in the manner approved by the division; and
             314          (b) limitation is warranted to protect the students' interests.
             315          [(3) (a) The division may:]
             316          [(i) conduct a criminal background check on an individual described in Subsection
             317      13-34-107 (2)(a)(ii)(B); and]
             318          [(ii) require a proprietary school to provide to the division any information and to cover
             319      any costs necessary to conduct a criminal background check on an individual described in
             320      Subsection 13-34-107 (2)(a)(ii)(B)(I) through (IV), including:]
             321          [(A) a fingerprint card in a form acceptable to the division;]
             322          [(B) consent to a criminal background check by the Utah Bureau of Criminal
             323      Identification and the Federal Bureau of Investigation;]
             324          [(C) the cost of a criminal background check; and]
             325          [(D) the cost of fingerprinting.]
             326          [(b) Money paid to the division for the cost of a criminal background check is
             327      nonlapsing.]
             328          (3) (a) The division may require an individual described in Subsection
             329      13-34-107 (2)(a)(ii)(B) to:
             330          (i) submit a fingerprint card in a form acceptable to the division; and
             331          (ii) consent to a criminal background check by:
             332          (A) the Federal Bureau of Investigation;
             333          (B) the Utah Bureau of Criminal Identification; or
             334          (C) another agency of any state that performs criminal background checks.
             335          (b) The proprietary school or the individual who is subject to the background check


             336      shall pay the cost of:
             337          (i) the fingerprint card described in Subsection (3)(a)(i); and
             338          (ii) the criminal background check.
             339          Section 7. Section 13-34a-101 is enacted to read:
             340     
CHAPTER 34a. UTAH POSTSECONDARY SCHOOL

             341     
STATE AUTHORIZATION ACT

             342     
Part 1. General Provisions

             343          13-34a-101. Title.
             344          (1) This chapter is known as "Utah Postsecondary School State Authorization Act."
             345          (2) This part is known as "General Provisions."
             346          Section 8. Section 13-34a-102 is enacted to read:
             347          13-34a-102. Definitions.
             348          As used in this chapter:
             349          (1) "Accredited institution" means a postsecondary school that is accredited by an
             350      accrediting agency.
             351          (2) "Accrediting agency" means a regional or national private educational association
             352      that:
             353          (a) is recognized by the United States Department of Education;
             354          (b) develops evaluation criteria; and
             355          (c) conducts peer evaluations to assess whether a postsecondary school meets the
             356      criteria described in Subsection (2)(b).
             357          (3) "Agent" means a person who:
             358          (a) (i) owns an interest in a postsecondary school; or
             359          (ii) is employed by a postsecondary school; and
             360          (b) (i) enrolls or attempts to enroll a Utah resident in a postsecondary school;
             361          (ii) offers to award an educational credential for remuneration on behalf of a
             362      postsecondary school; or
             363          (iii) holds oneself out to Utah residents as representing a postsecondary school for any
             364      purpose.
             365          (4) "Certificate of postsecondary state authorization" means a certificate issued by the
             366      division to a postsecondary school in accordance with the provisions of this chapter.


             367          (5) "Division" means the Division of Consumer Protection.
             368          (6) "Educational credential" means a degree, diploma, certificate, transcript, report,
             369      document, letter of designation, mark, or series of letters, numbers, or words that represent
             370      enrollment, attendance, or satisfactory completion of the requirements or prerequisites of an
             371      educational program.
             372          (7) "Intentional violation" means a violation of a provision of this chapter that occurs
             373      or continues after the division, the attorney general, a county attorney, or a district attorney
             374      gives the violator written notice, delivered by certified mail, that the violator is or has been in
             375      violation of the provision.
             376          (8) "Operate" means to:
             377          (a) maintain a place of business in the state;
             378          (b) conduct significant educational activities within the state; or
             379          (c) provide postsecondary education to a Utah resident that:
             380          (i) is intended to lead to a postsecondary degree or certificate; and
             381          (ii) is provided from a location outside the state by correspondence or
             382      telecommunications or electronic media technology.
             383          (9) "Operating history" means a report, written evaluation, publication, or other
             384      documentation regarding:
             385          (a) the current accreditation status of a postsecondary school with an accrediting
             386      agency; and
             387          (b) an action taken by an accrediting agency that:
             388          (i) places a postsecondary school on probation;
             389          (ii) imposes disciplinary action against a postsecondary school; or
             390          (iii) requires a postsecondary school to take corrective action.
             391          (10) "Ownership" means:
             392          (a) the controlling interest in a postsecondary school; or
             393          (b) if an entity holds the controlling interest in the postsecondary school, the
             394      controlling interest in the entity that holds the controlling interest in the postsecondary school.
             395          (11) "Postsecondary education" means education or educational services offered
             396      primarily to individuals who:
             397          (a) have completed or terminated their secondary or high school education; or


             398          (b) are beyond the age of compulsory school attendance.
             399          (12) (a) "Postsecondary school" means a person that provides or offers educational
             400      services to individuals who:
             401          (i) have completed or terminated secondary or high school education; or
             402          (ii) are beyond the age of compulsory school attendance.
             403          (b) "Postsecondary school" does not include an institution that is part of the state
             404      system of higher education under Section 53B-1-102 .
             405          (13) "Private postsecondary school" means a postsecondary school that is not a public
             406      postsecondary school.
             407          (14) "Public postsecondary school" means a postsecondary school:
             408          (a) established by a state or other governmental entity; and
             409          (b) substantially supported with government funds.
             410          Section 9. Section 13-34a-103 is enacted to read:
             411          13-34a-103. Duties of the division.
             412          (1) The division shall administer and enforce the provisions of this chapter.
             413          (2) In administering this chapter, the division shall:
             414          (a) receive and review completed registration forms in accordance with the provisions
             415      of this chapter;
             416          (b) develop, maintain, and make available to the public a list of postsecondary schools
             417      that have a current, valid certificate of postsecondary state authorization;
             418          (c) adopt a fee schedule in accordance with Section 63J-1-504 to cover the cost of
             419      processing a registration form and issuing a certificate of postsecondary state authorization; and
             420          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
             421      consistent with this chapter, make rules governing:
             422          (i) the content and form of a registration form;
             423          (ii) the filing and review procedures relating to a registration form submitted under this
             424      chapter;
             425          (iii) the filing and review of complaints filed with the division under this chapter;
             426          (iv) the denial, suspension, or revocation of a certificate of postsecondary school state
             427      authorization; and
             428          (v) enforcement of the provisions of this chapter.


             429          Section 10. Section 13-34a-104 is enacted to read:
             430          13-34a-104. Authority to execute interstate reciprocity agreement -- Rulemaking.
             431          (1) The division may execute an interstate reciprocity agreement that:
             432          (a) is for purposes of state authorization under 34 C.F.R. Sec. 600.9; and
             433          (b) is for the benefit of:
             434          (i) postsecondary schools in the state; or
             435          (ii) (A) postsecondary schools in the state; and
             436          (B) institutions that are part of the state system of higher education under Section
             437      53B-1-102 .
             438          (2) If the division executes an interstate reciprocity agreement described in Subsection
             439      (1):
             440          (a) except as provided by division rule, the provisions of this chapter do not apply to a
             441      postsecondary school that obtains state authorization under the reciprocity agreement; and
             442          (b) the division may, in accordance with Title 63G, Chapter 3, Utah Administrative
             443      Rulemaking Act, make rules relating to:
             444          (i) the standards for granting a postsecondary school state authorization under a
             445      reciprocity agreement;
             446          (ii) any filing, document, or fee required for a postsecondary school to obtain
             447      authorization under a reciprocity agreement; and
             448          (iii) penalties if a postsecondary school fails to comply with the rules that the division
             449      makes under this Subsection (2).
             450          (3) If the division executes an interstate reciprocity agreement described in Subsection
             451      (1) that includes institutions that are part of the state system of higher education under Section
             452      53B-1-102 , the State Board of Regents may H. [ , in accordance with Title 63G, Chapter 3, Utah
             453      Administrative Rulemaking Act,
] .H
make rules that:
             454          (a) implement the reciprocity agreement; and
             455          (b) relate to institutions that are part of the state system of higher education under
             456      Section 53B-1-102 .
             457          Section 11. Section 13-34a-201 is enacted to read:
             458     
Part 2. State Authorization Procedures

             459          13-34a-201. Title.


             460          This part is known as "State Authorization Procedures."
             461          Section 12. Section 13-34a-202 is enacted to read:
             462          13-34a-202. State authorization -- Certificate of postsecondary state
             463      authorization.
             464          (1) A postsecondary school that operates in the state obtains state authorization for
             465      purposes of 34 C.F.R. Sec. 600.9 if the postsecondary school obtains a certificate of
             466      postsecondary state authorization under this chapter.
             467          (2) A postsecondary school may obtain state authorization in a manner different from
             468      the manner described in Subsection (1) if the alternative manner is accepted by the United
             469      States Department of Education.
             470          (3) (a) A certificate of postsecondary state authorization is not an endorsement or
             471      approval of a postsecondary school by the division or the state.
             472          (b) A postsecondary school may not represent that a certificate of postsecondary state
             473      authorization is an endorsement or approval by the division or the state.
             474          Section 13. Section 13-34a-203 is enacted to read:
             475          13-34a-203. Nonprofit postsecondary school -- Procedure to obtain certificate of
             476      postsecondary state authorization.
             477          (1) The division shall, in accordance with the provisions of this section, issue a
             478      certificate of postsecondary state authorization to a postsecondary school that:
             479          (a) is a nonprofit postsecondary school; and
             480          (b) has operated as a nonprofit for at least 20 years.
             481          (2) To obtain a certificate of postsecondary state authorization under this section, a
             482      postsecondary school shall:
             483          (a) submit a completed registration form to the division that:
             484          (i) for a nonprofit, private postsecondary school, includes:
             485          (A) a copy of the private postsecondary school's articles of incorporation;
             486          (B) documentation from the United States Internal Revenue Service that demonstrates
             487      that the private postsecondary school has nonprofit status, and that the private postsecondary
             488      school has had nonprofit status for at least 20 consecutive years from the day on which the
             489      private postsecondary school submits the completed registration form; and
             490          (C) satisfactory documentation that the private postsecondary school has complied with


             491      the complaint process requirements described in Section 13-34a-206 ; or
             492          (ii) for a nonprofit, public postsecondary school, includes:
             493          (A) documentation sufficient to demonstrate that the public postsecondary school has
             494      operated as a nonprofit for at least 20 consecutive years from the day on which the public
             495      postsecondary school submits the completed registration form; and
             496          (B) satisfactory documentation that the public postsecondary school has complied with
             497      the complaint process requirements described in Section 13-34a-206 ; and
             498          (b) pay a nonrefundable fee, established by the division, in accordance with Subsection
             499      13-34a-103 (2)(c) to pay for the cost of processing the registration form and issuing the
             500      certificate of postsecondary state authorization.
             501          (3) The division shall develop and make available to the public:
             502          (a) a registration form for nonprofit, private postsecondary schools, as described in
             503      Subsection (2)(a)(i); and
             504          (b) a registration form for nonprofit, public postsecondary schools, as described in
             505      Subsection (2)(a)(ii).
             506          (4) The division shall deposit money that the division receives under Subsection (2)(b)
             507      into the Commerce Service Account, created in Section 13-1-2 .
             508          (5) If there is a change in circumstance that may affect a postsecondary school's status
             509      under this section, the postsecondary school shall notify the division in writing of the change
             510      within 30 days after the day on which the change occurs.
             511          (6) A certificate of postsecondary state authorization issued under this section:
             512          (a) establishes a postsecondary school by name as an educational institution, as
             513      described in 34 C.F.R. Sec. 600.9(a)(1)(i);
             514          (b) makes a postsecondary school independent of the state system of higher education;
             515      and
             516          (c) authorizes a postsecondary school to operate educational programs in the state that
             517      are beyond secondary education, including programs that lead to a degree or certificate.
             518          Section 14. Section 13-34a-204 is enacted to read:
             519          13-34a-204. Postsecondary school -- Procedure to obtain certificate of
             520      postsecondary state authorization.
             521          (1) The division shall, in accordance with the provisions of this section, issue a


             522      certificate of postsecondary state authorization to a postsecondary school.
             523          (2) To obtain a certificate of postsecondary state authorization under this section, a
             524      postsecondary school shall:
             525          (a) submit a completed registration form to the division that includes:
             526          (i) proof of current accreditation from the postsecondary school's accrediting agency;
             527          (ii) proof that the postsecondary school is fiscally responsible and can reasonably fulfill
             528      the postsecondary school's financial obligations, including:
             529          (A) a copy of an audit of the postsecondary school's financial statements, with all
             530      applicable footnotes, including a balance sheet, an income statement, a statement of retained
             531      earnings, and a statement of cash flow, that was performed by a certified public accountant;
             532          (B) at the postsecondary school's election, a copy of an audit of the postsecondary
             533      school's parent company's financial statements, with all applicable footnotes, including a
             534      balance sheet, an income statement, a statement of retained earnings, and a statement of cash
             535      flow, that was performed by a certified public accountant; and
             536          (C) a copy of all other financial documentation that the postsecondary school provided
             537      to the postsecondary school's accrediting agency since the postsecondary school's last
             538      registration with the division under this chapter or within the 12 months before the day on
             539      which the postsecondary school submits a completed registration form under this section,
             540      whichever is longer;
             541          (iii) proof of good standing in the state where the postsecondary school is organized;
             542          (iv) the postsecondary school's operating history with the postsecondary school's
             543      accrediting agency since the postsecondary school's last registration with the division under this
             544      chapter or within the 12 months before the day on which the postsecondary school submits a
             545      completed registration form under this section, whichever is longer;
             546          (v) the number of Utah residents who enrolled in the postsecondary school since the
             547      postsecondary school's last registration with the division under this chapter or within the 12
             548      months before the day on which the postsecondary school submits a completed registration
             549      form under this section, whichever is longer;
             550          (vi) satisfactory documentation that the postsecondary school has complied with the
             551      complaint process requirements described in Section 13-34a-206 ;
             552          (vii) (A) the number of complaints that a Utah resident has filed against the


             553      postsecondary school since the postsecondary school's last registration with the division under
             554      this chapter or within the 12 months before the day on which the postsecondary school submits
             555      a completed registration form under this section, whichever is longer; and
             556          (B) upon request, includes copies of the complaints described in Subsection
             557      (2)(a)(vii)(A);
             558          (viii) a disclosure that states whether the postsecondary school or an owner, officer,
             559      director, or administrator of the postsecondary school has been:
             560          (A) convicted of a crime;
             561          (B) subject to an order issued by a court; or
             562          (C) subject to an order issued by an administrative agency that imposed disciplinary
             563      action; and
             564          (ix) a notarized personal verification by the owner or a responsible officer of the
             565      postsecondary school that the information provided under Subsection (2)(a) is complete and
             566      accurate; and
             567          (b) pay a nonrefundable fee, established by the division, in accordance with Subsection
             568      13-34a-103 (2)(c) to pay for the cost of processing the registration form and issuing the
             569      certificate of postsecondary state authorization.
             570          (3) The division shall develop and make available to the public a registration form
             571      described in Subsection (2)(a).
             572          (4) The division shall deposit money that the division receives under Subsection (2)(b)
             573      into the Commerce Service Account, created in Section 13-1-2 .
             574          (5) If a postsecondary school maintains more than one physical campus in the state, the
             575      postsecondary school shall file a separate registration form for each physical campus in the
             576      state.
             577          (6) (a) A certificate of postsecondary state authorization issued under this section is not
             578      transferrable.
             579          (b) (i) If a postsecondary school's ownership or governing body changes after the
             580      postsecondary school obtains a certificate of postsecondary state authorization under this
             581      section, the postsecondary school shall submit a new completed registration form in accordance
             582      with Subsection (2) within 60 days after the day on which the change in ownership or
             583      governing body occurs.


             584          (ii) If a postsecondary school fails to timely comply with the requirements described in
             585      Subsection (6)(b)(i), the postsecondary school's certificate of postsecondary state authorization
             586      immediately and automatically expires.
             587          (c) If there is a change in circumstance that may affect a postsecondary school's status
             588      under this section, the postsecondary school shall notify the division in writing of the change
             589      within 30 days after the day on which the change occurs.
             590          (7) A certificate of postsecondary state authorization issued under this section expires
             591      one year after the day on which the certificate of postsecondary state authorization is issued.
             592          Section 15. Section 13-34a-205 is enacted to read:
             593          13-34a-205. Background checks.
             594          (1) The division may require an owner, officer, director, administrator, faculty member,
             595      staff member, or other agent of a postsecondary school that applies for or holds a certificate of
             596      postsecondary state authorization to:
             597          (a) submit a fingerprint card in a form acceptable to the division; and
             598          (b) consent to a criminal background check by:
             599          (i) the Federal Bureau of Investigation;
             600          (ii) the Utah Bureau of Criminal Identification; or
             601          (iii) another agency of any state that performs criminal background checks.
             602          (2) The postsecondary school or the postsecondary school's owner, officer, director,
             603      administrator, faculty member, staff member, or other agent who is subject to the background
             604      check shall pay the cost of:
             605          (a) the fingerprint card described in Subsection (1)(a); and
             606          (b) the criminal background check.
             607          Section 16. Section 13-34a-206 is enacted to read:
             608          13-34a-206. Complaints -- Information for students and prospective students.
             609          (1) A postsecondary school shall provide each student or prospective student written
             610      information regarding how to file a complaint against the postsecondary school with the
             611      division, the postsecondary school's accrediting agency, and the postsecondary school's
             612      approval or licensing entity.
             613          (2) To satisfy the requirements described in Subsection (1), a postsecondary school
             614      may place a conspicuous link on the postsecondary school's website that links to:


             615          (a) the contact information of each entity described in Subsection (1); or
             616          (b) a third party's website that states the contact information for each entity described
             617      in Subsection (1).
             618          (3) The division shall establish a process for reviewing and responding to complaints
             619      that the division receives under this chapter.
             620          Section 17. Section 13-34a-207 is enacted to read:
             621          13-34a-207. Discontinuance of operations.
             622          (1) If a postsecondary school ceases to operate, at least 30 days before the day on
             623      which the postsecondary school ceases to operate, the postsecondary school shall give the
             624      division written notice that includes:
             625          (a) the date on which the postsecondary school will cease to operate; and
             626          (b) for an accredited institution, a written certification, signed by the postsecondary
             627      school's owner or officer, that the postsecondary school has complied with the postsecondary
             628      school's accrediting agency's closure requirements.
             629          (2) After a postsecondary school submits a written notice described in Subsection (1),
             630      the postsecondary school may not recruit or enroll new students in the state.
             631          Section 18. Section 13-34a-301 is enacted to read:
             632     
Part 3. Enforcement

             633          13-34a-301. Title.
             634          This part is known as "Enforcement."
             635          Section 19. Section 13-34a-302 is enacted to read:
             636          13-34a-302. Denial, suspension, or revocation of certificate of postsecondary state
             637      authorization.
             638          (1) In accordance with Chapter 2, Division of Consumer Protection, and Title 63G,
             639      Chapter 4, Administrative Procedures Act, the division may deny, suspend, or revoke a
             640      certificate of postsecondary state authorization if:
             641          (a) for a certificate of postsecondary state authorization issued under Section
             642      13-34a-203 , the postsecondary school:
             643          (i) fails to comply with a requirement described in Section 13-34a-203 ;
             644          (ii) omits a material fact from the postsecondary school's completed registration form;
             645      or


             646          (iii) includes a material fact in the postsecondary school's completed registration form
             647      that is incomplete, false, inaccurate, or misleading; or
             648          (b) for a certificate of postsecondary state authorization issued under Section
             649      13-34a-204 :
             650          (i) the denial, suspension, or revocation is in the public interest; and
             651          (ii) the postsecondary school:
             652          (A) fails to meet a requirement described in Section 13-34a-204 ;
             653          (B) submits a registration form or any supporting documentation that is incomplete,
             654      false, inaccurate, or misleading;
             655          (C) grants an educational credential to an individual that the individual did not earn;
             656          (D) violates a provision of this chapter or a rule made under this chapter;
             657          (E) is the subject of an order issued by a court or an administrative agency that includes
             658      a finding or admission of fraud, breach of fiduciary duty, or misrepresentation, or behavior that
             659      lacked moral integrity, truthfulness, or mental competence;
             660          (F) has been convicted of a crime of moral turpitude;
             661          (G) fails to give the division information that the division requests in connection with a
             662      certificate of postsecondary state authorization; or
             663          (H) fails to timely pay a fine imposed under this chapter.
             664          (2) For a postsecondary school that obtains a certificate of postsecondary state
             665      authorization under Section 13-34a-204 , the division may place reasonable requirements on the
             666      postsecondary school if:
             667          (a) the requirement protects student interests; and
             668          (b) the postsecondary school engaged in any of the behavior described in Subsection
             669      (1)(b)(ii).
             670          Section 20. Section 13-34a-303 is enacted to read:
             671          13-34a-303. Right to rescind.
             672          If a postsecondary school's certificate of postsecondary state authorization is revoked
             673      under Subsection 13-34a-302 (2), a student who enrolled in the postsecondary school in reliance
             674      upon the postsecondary school's possession of a valid certificate of postsecondary state
             675      authorization may rescind any enrollment agreement and obtain a full refund from the
             676      postsecondary school for any tuition, fees, or other charges that the student paid to the


             677      postsecondary school.
             678          Section 21. Section 13-34a-304 is enacted to read:
             679          13-34a-304. Violations.
             680          A postsecondary school violates this chapter if:
             681          (1) the postsecondary school fails to comply with a provision of this chapter or a rule
             682      made under this chapter; or
             683          (2) for a postsecondary school that submits a registration form under section
             684      13-34a-204 , the postsecondary school:
             685          (a) intentionally omits a material fact from the postsecondary school's registration
             686      form; or
             687          (b) includes a material fact in the postsecondary school's registration form that the
             688      postsecondary school knows or should have known is false, deceptive, inaccurate, or
             689      misleading.
             690          Section 22. Section 13-34a-305 is enacted to read:
             691          13-34a-305. Enforcement.
             692          (1) The division may, in accordance with Chapter 2, Division of Consumer Protection,
             693      and Title 63G, Chapter 4, Administrative Procedures Act:
             694          (a) investigate a postsecondary school, in response to a complaint or on the division's
             695      own initiative, to verify compliance with the provisions of this chapter; or
             696          (b) initiate an adjudicative proceeding to enforce compliance with the provisions of
             697      this chapter.
             698          (2) (a) The division may refer an alleged violation of a provision of this chapter to the
             699      attorney general, a county attorney, or a district attorney.
             700          (b) The attorney general, county attorney, or district attorney shall investigate the
             701      alleged violation, and, following the investigation, may file a civil or criminal action in district
             702      court to:
             703          (i) enjoin the defendant from further violation of the chapter; and
             704          (ii) impose the applicable penalties described in Section 13-34a-306 .
             705          (3) Nothing in this chapter prevents a postsecondary school from performing an
             706      internal investigation.
             707          Section 23. Section 13-34a-306 is enacted to read:


             708          13-34a-306. Penalties.
             709          (1) In an adjudicative proceeding under Subsection 13-34a-305 (1) or in a district court
             710      action under Subsection 13-34a-305 (2), the division or the district court may impose a fine of
             711      up to:
             712          (a) $1,000 for each violation of this chapter that is not an intentional violation; and
             713          (b) $5,000 for each intentional violation.
             714          (2) The division shall deposit any money the division receives under Subsection (1)
             715      into the Consumer Protection Education and Training Fund, created in Section 13-2-8 .
             716          (3) A violation of a provision of this chapter is a violation of Section 13-11-4 .
             717          (4) An intentional violation is a class B misdemeanor.
             718          Section 24. Repealer.
             719          This bill repeals:
             720          Section 13-34-107.5 , Exemption certificate -- Application and renewal process.
             721          Section 13-34-107.6 , Confirmation of private nonprofit educational institution --
             722      Effect of confirmation -- Fees.


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