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First Substitute S.B. 210

Senator Curtis S. Bramble proposes the following substitute bill:


             1     
UTAH POSTSECONDARY PROPRIETARY SCHOOL ACT

             2     
AMENDMENTS

             3     
2011 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Curtis S. Bramble

             6     
House Sponsor: Derek E. Brown

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Utah Postsecondary Proprietary School Act.
             11      Highlighted Provisions:
             12          This bill:
             13          .    modifies definitions;
             14          .    modifies institutions that are exempt from the act;
             15          .    provides for the Division of Consumer Protection to issue certificates of exemption
             16      to specified institutions and establishes a process for issuing an exemption
             17      certificate and renewals;
             18          .    modifies the division's authority with respect to complaints against institutions
             19      subject to the act;
             20          .    requires institutions to file separate registration and exempt applications for each
             21      campus that the institution operates;
             22          .    requires a proprietary school to submit a review of its continued qualification for
             23      certification;
             24          .    specifies information that a proprietary school is required to submit to demonstrate
             25      that it is financially sound;


             26          .    modifies a provision relating to division inspections of a proprietary school;
             27          .    modifies a provision relating to criminal background checks that the division may
             28      require;
             29          .    authorizes the division to establish a process for dealing with complaints concerning
             30      postsecondary educational institutions; and
             31          .    establishes a process for the division to confirm that an institution is a private
             32      nonprofit educational institution.
             33      Money Appropriated in this Bill:
             34          None
             35      Other Special Clauses:
             36          None
             37      Utah Code Sections Affected:
             38      AMENDS:
             39          13-34-103, as enacted by Laws of Utah 2002, Chapter 222
             40          13-34-105, as last amended by Laws of Utah 2010, Chapters 218 and 378
             41          13-34-106, as last amended by Laws of Utah 2005, Chapter 242
             42          13-34-107, as last amended by Laws of Utah 2010, Chapters 278 and 378
             43          13-34-108, as last amended by Laws of Utah 2005, Chapter 242
             44          13-34-110, as enacted by Laws of Utah 2002, Chapter 222
             45          13-34-113, as last amended by Laws of Utah 2008, Chapter 382
             46      ENACTS:
             47          13-34-107.5, Utah Code Annotated 1953
             48          13-34-107.6, Utah Code Annotated 1953
             49     
             50      Be it enacted by the Legislature of the state of Utah:
             51          Section 1. Section 13-34-103 is amended to read:
             52           13-34-103. Definitions.
             53          As used in this chapter:
             54          (1) "Agent" means any person who owns an interest in or is employed by a proprietary
             55      school and who:
             56          (a) enrolls or attempts to enroll a resident of this state in a proprietary school;


             57          (b) offers to award educational credentials for remuneration on behalf of a proprietary
             58      school; or
             59          (c) holds himself out to residents of this state as representing a proprietary school for
             60      any purpose.
             61          (2) "Certificate of registration" means approval of the division to operate a school or
             62      institution in compliance with this chapter and rules adopted under this chapter. The
             63      registration is not an endorsement of the school or institution by either the division or the state
             64      [of Utah].
             65          (3) "Division" means the Division of Consumer Protection.
             66          (4) "Educational credentials" means degrees, diplomas, certificates, transcripts, reports,
             67      documents, or letters of designation, marks, appellations, series of letters, numbers, or words
             68      which signify or appear to signify enrollment, attendance, progress, or satisfactory completion
             69      of the requirements or prerequisites for any educational program.
             70          (5) "Institution" means an individual, corporation, partnership, association,
             71      cooperative, or other legal entity.
             72          (6) "Offer" means to advertise, publicize, solicit, or encourage any person directly or
             73      indirectly.
             74          (7) "Operate" in this state means to [have a significant presence within]:
             75          (a) maintain a place of business in the state[, to];
             76          (b) solicit business in the state;
             77          (c) conduct significant educational activities within the state[,]; or [to]
             78          (d) offer or provide postsecondary instruction leading to a postsecondary degree or
             79      certificate to any number of Utah residents [assembled at a receiving site in Utah] from a
             80      location outside the state by correspondence or any telecommunications or electronic media
             81      technology.
             82          (8) "Ownership" means the controlling interest in a school, institution, or college. If
             83      the school, institution, or college is owned or controlled by other than a natural person,
             84      "ownership" refers to the controlling interest in the legal entity which controls the school,
             85      institution, or college.
             86          (9) "Postsecondary education" means education or educational services offered
             87      primarily to persons who have completed or terminated their secondary or high school


             88      education or who are beyond the age of compulsory school attendance.
             89          (10) "Proprietary school" means any private institution, including business, modeling,
             90      paramedical, tax preparation, or trade [and] or technical [schools, which] school, other than a
             91      school exempted under this chapter, that offers postsecondary education:
             92          (a) in consideration of the payment of tuition or fees; and
             93          (b) for the attainment of educational, professional, or vocational objectives[, other than
             94      those schools exempted under this chapter].
             95          (11) "Rules" means those rules adopted by the division under the Utah Administrative
             96      Rulemaking Act necessary to enforce and administer this chapter.
             97          (12) "Utah [school or] institution" means a postsecondary educational school or
             98      institution whose headquarters or primary operations are in Utah.
             99          Section 2. Section 13-34-105 is amended to read:
             100           13-34-105. Exempted institutions.
             101          (1) This chapter does not apply to [the following institutions]:
             102          (a) a Utah institution directly supported, to a substantial degree, with funds provided
             103      by:
             104          (i) the state;
             105          (ii) a local school district; or
             106          (iii) other Utah governmental subdivision;
             107          (b) an institution that offers instruction exclusively at or below the 12th grade level;
             108          (c) a lawful enterprise that offers only professional review programs, such as C.P.A.
             109      and bar examination review and preparation courses;
             110          (d) a private, postsecondary educational institution that is owned, controlled, operated,
             111      or maintained by a bona fide church or religious denomination, which is exempted from
             112      property taxation under the laws of this state;
             113          (e) subject to Subsection (3) and Section 13-34-107.5 , a school or institution that is
             114      accredited by a regional or national accrediting agency recognized by the United States
             115      Department of Education;
             116          (f) subject to Subsection (4), a business organization, trade or professional association,
             117      fraternal society, or labor union that:
             118          (i) sponsors or conducts courses of instruction or study predominantly for bona fide


             119      employees or members; and
             120          (ii) does not, in advertising, describe itself as a school;
             121          (g) an institution that:
             122          (i) (A) exclusively offers general education courses or instruction solely remedial,
             123      avocational, nonvocational, or recreational in nature[, that]; and
             124          (B) does not[: (i)] advertise occupation objectives[;] or [(ii)] grant educational
             125      credentials; or
             126          (ii) exclusively prepares individuals to teach courses or instruction described in
             127      Subsection (1)(g)(i)(A);
             128          (h) an institution that offers only workshops or seminars:
             129          (i) lasting no longer than three calendar days; and
             130          (ii) for which academic credit is not awarded;
             131          (i) an institution that offers programs:
             132          (i) in barbering, cosmetology, real estate, or insurance; and
             133          (ii) that are regulated and approved by a state or federal governmental agency;
             134          (j) an education provider certified by the Division of Real Estate under Section
             135      61-2c-204.1 ;
             136          (k) an institution that offers aviation training if the institution:
             137          (i) (A) is approved under Federal Aviation Regulations, 14 C.F.R. Part 141; or
             138          (B) provides aviation training under Federal Aviation Regulations, 14 C.F.R. Part 61;
             139      and
             140          (ii) exclusively offers aviation training that a student fully receives within 24 hours
             141      after the student pays any tuition, fee, or other charge for the aviation training; [and]
             142          (l) an institution that provides emergency medical services training if all of the
             143      institution's instructors, course coordinators, and courses are approved by the Department of
             144      Health[.];
             145          (m) an institution that exclusively conducts nurse aide training programs that are
             146      approved by the State Office of Vocational Education and are subject to the Nurse Aide
             147      Registry; and
             148          (n) a private, nonprofit educational institution that has been in continuous operation for
             149      at least 20 years, except as provided in Subsection (5), Subsection 13-34-106 (8) and Section


             150      13-34-107.6 .
             151          (2) [(a)] If available evidence suggests that an exempt institution under this section is
             152      not in compliance with the standards of registration under this chapter and applicable division
             153      rules, the division shall contact the institution and, if appropriate, the state or federal
             154      government agency to request corrective action.
             155          [(b) Subsection (2)(a) does not apply to an institution exempted under Subsection
             156      (1)(e).]
             157          (3) An institution, branch, extension, or facility operating within the state that is
             158      affiliated with an institution operating in another state shall be separately approved by the
             159      affiliate's regional or national accrediting agency to qualify for the exemption described in
             160      Subsection (1)(e).
             161          (4) For purposes of Subsection (1)(f), a business organization, trade or professional
             162      association, fraternal society, or labor union is considered to be conducting the course
             163      predominantly for bona fide employees or members if it hires a majority of the persons who:
             164          (a) successfully complete its course of instruction or study with a reasonable degree of
             165      proficiency; and
             166          (b) apply for employment with that same entity.
             167          (5) An institution subject to, or expressly exempted from any part of, this chapter is:
             168          (a) established as an educational institution within the state;
             169          (b) independent of the state system of higher education;
             170          (c) subject to compliance with the applicable provisions of this chapter; and
             171          (d) authorized to operate educational programs beyond secondary education, including
             172      programs leading to a degree or certificate.
             173          Section 3. Section 13-34-106 is amended to read:
             174           13-34-106. Responsibilities of division.
             175          The division is responsible for the administration of this chapter, and shall do the
             176      following:
             177          (1) prescribe the contents of the registration statements required by this chapter relating
             178      to the quality of education and ethical and business practices;
             179          (2) issue:
             180          (a) certification of registration upon receipt and approval of the registration statement


             181      required under Section 13-34-107 ; and
             182          (b) a certificate of exemption under Section 13-34-107.5 upon receipt and approval of
             183      an application and verification that the requirements of Subsection 13-34-105 (1)(e) and Section
             184      13-34-107.5 are met;
             185          (3) receive, investigate, and make available for public inspection the registration
             186      statements filed by proprietary schools operating or intending to operate in the state;
             187          (4) maintain and publicize a list of proprietary schools for which a registration
             188      statement is on file with the division;
             189          (5) [investigate and audit,] on the division's own initiative or in response to a complaint
             190      filed with the division, do any of the following with respect to any institution subject to, or
             191      reasonably believed by the division to be subject to, this chapter[;]:
             192          (a) investigate;
             193          (b) audit;
             194          (c) review;
             195          (d) appropriately act, including enforcing this chapter or any other law enforced by the
             196      division; and
             197          (e) refer a matter to:
             198          (i) another governmental entity; or
             199          (ii) the institution's accrediting body, if the institution is an exempt institution under
             200      Section 13-34-107.5 ;
             201          (6) negotiate and enter into interstate reciprocity agreements with other states, if in the
             202      judgment of the division, the agreements are or will help to effectuate the purposes of this
             203      chapter; [and]
             204          (7) consent to the use of educational terms in business names in accordance with
             205      Section 13-34-114 [.]; and
             206          (8) establish and maintain a process for reviewing and appropriately acting on
             207      complaints concerning postsecondary educational institutions operating in the state, including
             208      enforcing applicable state laws.
             209          Section 4. Section 13-34-107 is amended to read:
             210           13-34-107. Advertising, recruiting, or operating a proprietary school -- Required
             211      registration statement or exemption -- Certificate of registration -- Registration does not


             212      constitute endorsement.
             213          (1) (a) Unless an institution complies with Subsection (1)(b), the institution may not do
             214      any of the following in this state:
             215          (i) advertise a proprietary school;
             216          (ii) recruit students for a proprietary school; or
             217          (iii) operate a proprietary school.
             218          (b) An institution may not engage in an activity described in Subsection (1)(a) unless
             219      the institution:
             220          (i) (A) files with the division a registration statement relating to the proprietary school
             221      that is in compliance with:
             222          (I) applicable rules made by the division; and
             223          (II) the requirements set forth in this chapter; and
             224          (B) obtains a certificate of registration; or
             225          (ii) establishes an exemption with the division.
             226          (c) (i) Except as provided in Subsection (1)(c)(ii), an institution that files a registration
             227      statement under this section shall file a separate registration statement and pay a separate fee
             228      for each physical campus that the institution operates as a proprietary school.
             229          (ii) An institution that registered with the division before May 10, 2011 is not required
             230      to comply with Subsection (1)(c)(i) until the institution's next regular renewal date.
             231          (2) (a) The registration statement or exemption described in Subsection (1) shall be:
             232          (i) verified by the oath or affirmation of the owner or a responsible officer of the
             233      proprietary school filing the registration statement or exemption; and
             234          (ii) include a certification as to whether any of the following has violated laws, federal
             235      regulations, or state rules as determined in a criminal, civil, or administrative proceeding:
             236          (A) the proprietary school; or
             237          (B) any of the following with respect to the proprietary school:
             238          (I) an owner;
             239          (II) an officer;
             240          (III) a director;
             241          (IV) an administrator;
             242          (V) a faculty member;


             243          (VI) a staff member; or
             244          (VII) an agent.
             245          (b) The proprietary school shall:
             246          (i) make available, upon request, a copy of the registration statement, showing the date
             247      upon which it was filed; and
             248          (ii) display the certificate of registration obtained from the division in a conspicuous
             249      place on the proprietary school's premises.
             250          (3) (a) A registration statement and the accompanying certificate of registration are not
             251      transferable.
             252          (b) In the event of a change in ownership or in the governing body of the proprietary
             253      school, the new owner or governing body, within 30 days after the change, shall file a new
             254      registration statement.
             255          (4) (a) Except as provided in Subsection (3)(b), a registration statement or a renewal
             256      statement and the accompanying certificate of registration are effective for a period of two
             257      years after the date of filing and issuance.
             258          (b) No later than one year after the issuance or renewal of a certificate of registration to
             259      a proprietary school, the proprietary school shall:
             260          (i) submit a review of the proprietary school's continued qualification for a certificate
             261      of registration, on a form approved by the division; and
             262          (ii) pay a fee established under this section and Section 63J-1-504 .
             263          (5) (a) The division shall establish a graduated fee structure for the filing of registration
             264      statements by various classifications of institutions pursuant to Section 63J-1-504 .
             265          (b) Fees are not refundable.
             266          (c) Fees shall be deposited in the Commerce Service Account created by Section
             267      13-1-2 .
             268          (6) (a) Each proprietary school shall:
             269          (i) demonstrate fiscal responsibility at the time the proprietary school files its
             270      registration statement as prescribed by rules of the division; and
             271          (ii) as provided in Subsection (6)(b), provide evidence to the division that the
             272      proprietary school:
             273          (A) is financially sound; and


             274          (B) can reasonably fulfill commitments to and obligations the proprietary school has
             275      incurred with students and creditors.
             276          [(b) A proprietary school applying for an initial certificate of registration to operate
             277      shall prepare and submit financial statements and supporting documentation as requested by
             278      the division.]
             279          [(c) A proprietary school applying for renewal of a certificate of registration to operate
             280      or renewal under new ownership shall provide audited financial statements.]
             281          (b) The evidence that a propriety school is required to provide under Subsection
             282      (6)(a)(ii) includes:
             283          (i) for a proprietary school that has not operated long enough to complete a fiscal year:
             284          (A) pro forma financial statements until the information described in Subsection
             285      (6)(b)(ii) is available; and
             286          (B) a commercial credit report for the proprietary school and a consumer credit report
             287      for each individual with an ownership interest in the proprietary school; and
             288          (ii) for a proprietary school that has completed a fiscal year or as soon as a proprietary
             289      school completes its first fiscal year:
             290          (A) a current financial statement, with all applicable footnotes, for the most recent
             291      fiscal year, including a balance sheet, a statement of income, a statement of retained earnings,
             292      and a statement of cash flow; and
             293          (B) a certified fiscal audit of the proprietary school's financial statement, performed by
             294      a certified or licensed public accountant, or a commercial credit report for the proprietary
             295      school and a consumer credit report for each individual with an ownership interest in the
             296      proprietary school.
             297          (c) In evaluating a proprietary school's fiscal responsibility under this Subsection (6),
             298      the division may consider:
             299          (i) any judgment, tax lien, collection action, bankruptcy schedule, or history of late
             300      payments to creditors;
             301          (ii) documentation showing the resolution of any matter listed in Subsection (6)(c)(i);
             302          (iii) the proprietary school's explanation for any of the matters listed in Subsection
             303      (6)(c)(i);
             304          (iv) any guarantee agreement provided for the proprietary school; and


             305          (v) any history of a prior entity that:
             306          (A) is owned or operated by any individual with an ownership interest in the
             307      proprietary school; and
             308          (B) has failed to maintain fiscal responsibility.
             309          (d) The division may require evidence of financial status at other times when it is in the
             310      best interest of students to require such information.
             311          (7) (a) A proprietary school applying for an initial certificate of registration or seeking
             312      renewal shall provide in a form approved by the division:
             313          (i) a surety bond;
             314          (ii) a certificate of deposit; or
             315          (iii) an irrevocable letter of credit.
             316          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             317      division may make rules providing for:
             318          (i) the amount of the bond, certificate, or letter of credit required under Subsection
             319      (7)(a), not to exceed in amount the anticipated tuition and fees to be received by the proprietary
             320      school during a school year;
             321          (ii) the execution of the bond, certificate, or letter of credit;
             322          (iii) cancellation of the bond, certificate, or letter of credit during or at the end of the
             323      registration term; and
             324          (iv) any other matters related to providing the bond, certificate, or letter of credit
             325      required under Subsection (7)(a).
             326          (c) The bond, certificate, or letter of credit shall be used as a protection against loss of
             327      advanced tuition, book fees, supply fees, or equipment fees:
             328          (i) collected by the proprietary school from a student or a student's parent, guardian, or
             329      sponsor prior to the completion of the program or courses for which it was collected; or
             330          (ii) for which the student is liable.
             331          (8) (a) Except as provided in Section 13-34-113 , the division may not refuse
             332      acceptance of a registration statement that is:
             333          (i) tendered for filing and, based on a preliminary review, appears to be in compliance
             334      with Subsections (1), (2), and (6); and
             335          (ii) accompanied by:


             336          (A) the required fee; and
             337          (B) one of the following required by Subsection (7):
             338          (I) surety bond;
             339          (II) certificate of deposit; or
             340          (III) irrevocable letter of credit.
             341          (b) A certificate of registration is effective upon the date of issuance.
             342          (c) The responsibility of compliance is upon the proprietary school and not upon the
             343      division.
             344          (d) (i) If it appears to the division that a registration statement on file may not be in
             345      compliance with this chapter, the division may advise the proprietary school as to the apparent
             346      deficiencies.
             347          (ii) After a proprietary school has been notified of a deficiency under Subsection
             348      (8)(d)(i), a new or amended statement may be presented for filing by the proprietary school,
             349      accompanied by:
             350          (A) the required fee; and
             351          (B) one of the following required by Subsection (7):
             352          (I) surety bond;
             353          (II) certificate of deposit; or
             354          (III) irrevocable letter of credit.
             355          (9) The following does not constitute and may not be represented by any person to
             356      constitute, an endorsement or approval of the proprietary school by either the division or the
             357      state:
             358          (a) an acceptance of:
             359          (i) a registration statement;
             360          (ii) a renewal statement; or
             361          (iii) an amended registration statement; and
             362          (b) issuance of a certificate of registration.
             363          Section 5. Section 13-34-107.5 is enacted to read:
             364          13-34-107.5. Exemption certificate -- Application and renewal process.
             365          (1) As used in this section:
             366          (a) "Exemption certificate" means an accredited institution certificate of exemption that


             367      complies with:
             368          (i) applicable rules made by the division under Title 63G, Chapter 3, Utah
             369      Administrative Rulemaking Act; and
             370          (ii) this section.
             371          (b) "Exempt institution" means an institution that is exempt from this chapter under
             372      Subsection 13-34-105 (1)(e) but required under 34 C.F.R. 600.9 to be legally authorized by a
             373      state.
             374          (2) (a) An institution wishing to be acknowledged as an exempt institution shall:
             375          (i) file with the division an application for an exemption certificate; and
             376          (ii) pay the division a fee established by the division.
             377          (b) An institution filing an application for an exemption certificate shall file a separate
             378      application and pay a separate fee for each physical campus that the institution operates.
             379          (3) An application under Subsection (2) shall:
             380          (a) be on a form approved by the division;
             381          (b) include proof of current accreditation from a regional or national accrediting agency
             382      recognized by the United States Department of Education;
             383          (c) include an identical copy of each financial statement the institution provides to its
             384      accrediting agency;
             385          (d) be verified by the oath or affirmation of the owner or a responsible officer of the
             386      institution filing the application; and
             387          (e) include a certification as to whether the institution or an owner, officer, director, or
             388      administrator of the institution has violated a law, federal regulation, or state rule as determined
             389      in a criminal, civil, or administrative proceeding.
             390          (4) (a) An exemption certificate is not transferrable.
             391          (b) If there is a change, as defined by the United States Department of Education, in the
             392      ownership or the governing body of an institution that, before the change, is an exempt
             393      institution, the institution shall file a new application under Subsection (2) within 30 days after
             394      the change.
             395          (5) (a) Except as provided in Subsections (4)(b) and (5)(b), an exemption certificate is
             396      effective for two years after its issuance.
             397          (b) For an exemption certificate that the division issues pursuant to an application the


             398      division receives during 2011, the division may extend the period for which the exemption
             399      certificate is effective by up to 11 months in order to ensure that renewal dates are
             400      appropriately staggered to allow the division to manage resources and work load.
             401          (6) No later than one year after the division's issuance or renewal of an exemption
             402      certificate to an institution, the institution shall:
             403          (a) submit a review, on a form approved by the division, of the institution's continued
             404      qualification for an exemption certificate; and
             405          (b) pay a fee that the division establishes under this section and Section 63J-1-504 .
             406          (7) (a) The division shall, as provided in Section 63J-1-504 , establish a graduated fee
             407      structure for the filing of an application for an exemption certificate under this section based on
             408      various classifications of institutions seeking to be an exempt institution.
             409          (b) A fee paid under this section is not refundable.
             410          (c) Fees paid under this section shall be deposited in the Commerce Service Account
             411      created in Section 13-1-2 .
             412          (8) Except as provided in Section 13-34-113 , the division may not refuse acceptance of
             413      an application under Subsection (2) that:
             414          (a) is tendered for filing and, based on the division's preliminary review, appears to
             415      comply with this section; and
             416          (b) is accompanied by the required fee.
             417          (9) (a) An exemption certificate is effective on the date it is issued.
             418          (b) The responsibility for compliance with the requirements for issuance of an
             419      exemption certificate is upon the institution and not upon the division.
             420          (10) (a) If it appears to the division that an institution is not in compliance with
             421      requirements to qualify for an exemption certificate, the division may advise the institution as
             422      to the apparent deficiencies.
             423          (b) After receiving notification from the division under Subsection (10)(a), an
             424      institution may file a new or amended application for an exemption certificate, accompanied by
             425      the required fee.
             426          (11) A person may not represent that the division's acceptance of any application for an
             427      exemption certificate under this section or the division's issuance of an exemption certificate
             428      constitutes an endorsement or approval of the institution by the division or the state.


             429          Section 6. Section 13-34-107.6 is enacted to read:
             430          13-34-107.6. Confirmation of private nonprofit educational institution -- Effect of
             431      confirmation -- Fees.
             432          (1) Upon the request of an institution proving to the reasonable satisfaction of the
             433      division that the institution is an institution described in Subsection 13-34-105 (1)(n), the
             434      division shall issue a written finding and confirmation to the institution confirming that it is an
             435      institution described in Subsection 13-34-105 (1)(n).
             436          (2) A written finding and confirmation under Subsection (1) has the effect of
             437      establishing the institution by name as an educational institution by the state by action issued
             438      by a state agency, as contemplated in 34 C.F.R. Section 600.9(a)(1)(i)(a).
             439          (3) (a) The division shall establish a fee, not to exceed $1,500.00, for processing a
             440      request and issuing a written finding and confirmation as provided in Subsection (1).
             441          (b) Fees paid under this section shall be deposited in the Commerce Service Account
             442      created in Section 13-1-2 .
             443          (c) A fee paid under this section is not refundable.
             444          Section 7. Section 13-34-108 is amended to read:
             445           13-34-108. Information required to be available -- Documents to be fair and
             446      accurate -- Fair and ethical practices.
             447          (1) It is a violation of this chapter for any institution or proprietary school, which is
             448      required to file a registration statement under this chapter, to offer postsecondary education in
             449      this state unless:
             450          (a) the institution or proprietary school makes available:
             451          (i) in writing;
             452          (ii) to all applicants;
             453          (iii) prior to:
             454          (A) enrollment of the applicant; or
             455          (B) the receipt of any tuition by the institution or proprietary school; and
             456          (iv) information that includes the following:
             457          (A) the proprietary school name, which shall be representative of the programs offered
             458      at the proprietary school;
             459          (B) the address of the proprietary school;


             460          (C) the location of the proprietary school;
             461          (D) the facilities, faculty, training equipment, and instructional programs of the
             462      proprietary school;
             463          (E) enrollment qualifications;
             464          (F) accurate information regarding the relationship of the program of the institution or
             465      proprietary school to state licensure requirements for practicing a related occupation and
             466      profession in Utah;
             467          (G) tuition, fees, and other charges and expenses;
             468          (H) financial assistance, cancellation, and tuition refund policies, including the posting
             469      of:
             470          (I) a surety bond;
             471          (II) a certificate of credit; or
             472          (III) an irrevocable letter of credit;
             473          (I) length of programs;
             474          (J) graduation requirements;
             475          (K) subject to Subsection (2), for each of the immediately preceding three years:
             476          (I) graduation rates; and
             477          (II) employment rates; and
             478          (L) awarding of appropriate educational credentials to indicate satisfactory course
             479      completions;
             480          (b) all recruiting documents, advertising, solicitations, publicity releases, and other
             481      public statements regarding the proprietary school are fair and accurate;
             482          (c) all agents or sales representatives of the proprietary school are required by the
             483      proprietary school to comply with ethical practices prescribed by the division; and
             484          (d) the institution or proprietary school makes available to the division for inspection
             485      during normal business hours, whether or not the inspection is scheduled or announced, all
             486      records relevant to:
             487          (i) the operation of the institution or proprietary school; and
             488          (ii) the efforts of the institution or proprietary school to comply with this chapter.
             489          (2) (a) Beginning on May 2, 2005, an institution or proprietary school shall collect and
             490      maintain the information necessary to comply with Subsection (1)(a)(iv)(K).


             491          (b) Prior to May 2, 2008, if an institution or proprietary school has the information
             492      described in Subsection (1)(a)(iv)(K) for a time period of three years or less, the institution or
             493      proprietary school shall provide the information for the time period the institution or
             494      proprietary school has the information.
             495          Section 8. Section 13-34-110 is amended to read:
             496           13-34-110. Enforcement of contracts or agreements -- Rescission based on
             497      defective registration statement.
             498          (1) A proprietary school shall be unable to enforce in the courts of this state any
             499      contract or agreement relating to postsecondary education services in this state unless, at the
             500      time the contract or agreement was entered into, an effective registration statement was on file
             501      with the division and made accessible to every applicant at the time of admission to the school.
             502          (2) It is a violation of this chapter if a proprietary school or its agent:
             503          (a) fails to file an effective registration statement;
             504          (b) willfully omits from a registration statement provided under Section 13-34-107 or
             505      an application under Section 13-34-107.5 for an exemption certificate any material statement of
             506      fact required by this chapter and applicable regulations; or
             507          (c) includes in a registration statement any material statement of fact that was known,
             508      or should have been known, to the proprietary school to be false, deceptive, inaccurate, or
             509      misleading.
             510          (3) A student who enrolled in a proprietary school, in reliance upon the school's
             511      registration statement, may rescind the contract or agreement of enrollment and obtain a refund
             512      from the school of all tuition, fees, and other charges paid to the school if the school or its
             513      agent committed a violation under Subsection (2).
             514          (4) A violation of this chapter is also a violation of Section 13-11-4 .
             515          Section 9. Section 13-34-113 is amended to read:
             516           13-34-113. Denial, suspension, or revocation of a certificate of registration or
             517      exemption certificate -- Limitations.
             518          (1) In accordance with Chapter 2, Division of Consumer Protection, and Title 63G,
             519      Chapter 4, Administrative Procedures Act, the division may initiate proceedings to deny,
             520      suspend, or revoke a certificate of registration to operate a proprietary school under this chapter
             521      or an exemption certificate under Section 13-34-107.5 if:


             522          (a) the division finds that the order is in the public interest; and
             523          (b) (i) the registration statement [or], renewal statement, or application for an
             524      exemption certificate is incomplete, false, or misleading in any respect;
             525          (ii) the division determines that the educational credential associated with the
             526      proprietary school or accredited institution represents the undertaking or completion of
             527      educational achievement that has not been undertaken and earned; or
             528          (iii) the proprietary school [or], accredited institution, or an individual described in
             529      Subsection 13-34-107 (2)(a)(ii)(B) has:
             530          (A) violated any provision of:
             531          (I) this chapter;
             532          (II) the rules made by the division pursuant to this chapter; or
             533          (III) a commitment made in a registration statement for a certificate of registration to
             534      operate the proprietary school or in an application for an exemption certificate;
             535          (B) caused or allowed to occur a violation of any provision of:
             536          (I) this chapter;
             537          (II) the rules made by the division pursuant to this chapter; or
             538          (III) a commitment made in a registration statement for a certificate of registration to
             539      operate the proprietary school;
             540          (C) been enjoined by any court, or is the subject of an administrative or judicial order
             541      issued in this or another state, if the injunction or order:
             542          (I) includes a finding or admission of fraud, breach of fiduciary duty, or material
             543      misrepresentation; or
             544          (II) was based on a finding of lack of integrity, truthfulness, or mental competence;
             545          (D) been convicted of a crime involving moral turpitude;
             546          (E) obtained or attempted to obtain a certificate of registration under this chapter by
             547      misrepresentation;
             548          (F) failed to timely file with the division any report required by:
             549          (I) this chapter; or
             550          (II) rules made by the division pursuant to this chapter;
             551          (G) failed to furnish information requested by the division; or
             552          (H) failed to pay an administrative fine imposed by the division in accordance with this


             553      chapter.
             554          (2) Division staff may place reasonable limits upon a proprietary school's continued
             555      certificate of registration to operate if:
             556          (a) there are serious concerns about the proprietary school's ability to provide the
             557      training in the manner approved by the division; and
             558          (b) limitation is warranted to protect the students' interests.
             559          (3) (a) The division may:
             560          [(a)] (i) conduct a criminal background check on an individual described in Subsection
             561      13-34-107 (2)(a)(ii)(B); and
             562          [(b)] (ii) require a proprietary school to provide to the division any information and to
             563      cover any costs necessary to conduct a criminal background check on an individual described
             564      in Subsection 13-34-107 (2)(a)(ii)(B)[.](I) through (IV), including:
             565          (A) a fingerprint card in a form acceptable to the division;
             566          (B) consent to a criminal background check by the Utah Bureau of Criminal
             567      Identification and the Federal Bureau of Investigation;
             568          (C) the cost of a criminal background check; and
             569          (D) the cost of fingerprinting.
             570          (b) Money paid to the division for the cost of a criminal background check is
             571      nonlapsing.


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