Representative James A. Dunnigan proposes the following substitute bill:


1     
DIVISION OF CONSUMER PROTECTION AMENDMENTS

2     
2021 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 amends and enacts provisions under the administration and enforcement of the
10     Division of Consumer Protection.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     amends the statutes that the Division of Consumer Protection administers and
15     enforces;
16          ▸     amends provisions regarding contracts for health spa services;
17          ▸     amends provisions regarding a consumer's right to rescind a health spa service
18     contract;
19          ▸     amends provisions regarding the registration of a health spa facility;
20          ▸     amends provisions related to bond, letter of credit, or certificate of deposit
21     requirements for a health spa facility;
22          ▸     amends provisions under the Utah Postsecondary Proprietary School Act; and
23          ▸     makes technical and conforming changes.
24     Money Appropriated in this Bill:
25          None
26     Other Special Clauses:
27          None
28     Utah Code Sections Affected:
29     AMENDS:
30          13-2-1, as last amended by Laws of Utah 2020, Chapter 118
31          13-23-2, as last amended by Laws of Utah 2006, Chapter 47
32          13-23-3, as last amended by Laws of Utah 2005, Chapter 18
33          13-23-4, as enacted by Laws of Utah 1987, Chapter 105
34          13-23-5, as last amended by Laws of Utah 2014, Chapter 189
35          13-23-6, as last amended by Laws of Utah 2006, Chapter 47
36          13-23-7, as last amended by Laws of Utah 2005, Chapter 18
37          13-34-105, as last amended by Laws of Utah 2018, Chapter 276
38          13-34a-102, as last amended by Laws of Utah 2017, Chapter 98
39          13-34a-204, as last amended by Laws of Utah 2017, Chapter 98
40     

41     Be it enacted by the Legislature of the state of Utah:
42          Section 1. Section 13-2-1 is amended to read:
43          13-2-1. Consumer protection division established -- Functions.
44          (1) There is established within the Department of Commerce the Division of Consumer
45     Protection.
46          (2) The division shall administer and enforce the following:
47          (a) Chapter 5, Unfair Practices Act;
48          (b) Chapter 10a, Music Licensing Practices Act;
49          (c) Chapter 11, Utah Consumer Sales Practices Act;
50          (d) Chapter 15, Business Opportunity Disclosure Act;
51          [(e) Chapter 20, New Motor Vehicle Warranties Act;]
52          (e) Chapter 20, New Motor Vehicles Warranties Act;
53          (f) Chapter 21, Credit Services Organizations Act;
54          (g) Chapter 22, Charitable Solicitations Act;
55          (h) Chapter 23, Health Spa Services Protection Act;
56          (i) Chapter 25a, Telephone and Facsimile Solicitation Act;
57          (j) Chapter 26, Telephone Fraud Prevention Act;
58          (k) Chapter 28, Prize Notices Regulation Act;
59          (l) Chapter 32a, Pawnshop and Secondhand Merchandise Transaction Information Act;
60          (m) Chapter 34, Utah Postsecondary Proprietary School Act;
61          (n) Chapter 34a, Utah Postsecondary School State Authorization Act;
62          [(o) Chapter 39, Child Protection Registry;]
63          [(p)] (o) Chapter 41, Price Controls During Emergencies Act;
64          [(q)] (p) Chapter 42, Uniform Debt-Management Services Act;
65          [(r)] (q) Chapter 49, Immigration Consultants Registration Act;
66          [(s)] (r) Chapter 51, Transportation Network Company Registration Act;
67          [(t)] (s) Chapter 52, Residential Solar Energy Disclosure Act;
68          [(u)] (t) Chapter 53, Residential, Vocational and Life Skills Program Act;
69          [(v)] (u) Chapter 54, Ticket Website Sales Act;
70          [(w)] (v) Chapter 56, Ticket Transferability Act; and
71          [(x)] (w) Chapter 57, Maintenance Funding Practices Act.
72          Section 2. Section 13-23-2 is amended to read:
73          13-23-2. Definitions.
74          As used in this chapter:
75          (1) "Business enterprise" means a sole proprietorship, partnership, association, joint
76     venture, corporation, limited liability company, or other entity used in carrying on a business.
77          [(1)] (2) "Consumer" means a purchaser of health spa services for [valuable]
78     consideration.
79          (3) "Consumer's primary location" means the health spa facility that a health spa
80     designates in a contract for health spa services as the health spa facility the consumer will
81     primarily use for health spa services.
82          [(2)] (4) "Division" means the Division of Consumer Protection.
83          [(3)] (5) (a) "Health spa" means [any person, partnership, joint venture, corporation,
84     association, or other entity that, for a charge or fee, provides as one of its primary purposes
85     services or facilities that are purported to assist patrons to improve their physical condition or
86     appearance through] a business enterprise that provides access to a facility:
87          (i) for a charge or a fee; and
88          (ii) for the development or preservation of physical fitness or well-being, through
89     exercise, weight control, or athletics.
90          [(i) aerobic conditioning;]
91          [(ii) strength training;]
92          [(iii) fitness training; or]
93          [(iv) other exercise.]
94          [(b) "Health spa" includes any establishment designated:]
95          [(i) as a "health spa";]
96          [(ii) as a "spa";]
97          [(iii) as an "exercise gym";]
98          [(iv) as a "health studio";]
99          [(v) as a "health club";]
100          [(vi) as a "personal training facility"; or]
101          [(vii) with any other similar terms.]
102          [(c)] (b) "Health spa" does not include:
103          (i) [any facility operated by] a licensed physician who operates a facility at which the
104     physician engages in the practice of medicine;
105          (ii) [any facility operated by] a hospital, intermediate care facility, or skilled nursing
106     care facility;
107          (iii) [any] a public or private school, college, or university;
108          [(iv) any facility owned or operated by the state or its political subdivisions;]
109          [(v) any facility owned or operated by the United States or its political subdivisions; or]
110          [(vi) instruction offered by an individual if:]
111          (iv) the state or a political subdivision of the state;
112          (v) the United States or a political subdivision of the United States;
113          (vi) a person offering instruction if the person does not:
114          (A) [the individual offering the instruction does not] utilize [another individual as] an
115     employee or independent contractor; [and] or
116          (B) [a patron is not granted] grant a consumer the use of a facility containing exercise
117     equipment[.];
118          [(4) "Health spa services" means any service provided by a health spa, including
119     athletic facilities, equipment, and instruction.]
120          (vii) a business enterprise, the primary operation of which is to teach self-defense or a
121     martial art, including kickboxing, judo, or karate;
122          (viii) a business enterprise, the primary operation of which is to teach or allow an
123     individual to develop a specific skill rather than develop or preserve physical fitness, including
124     gymnastics, tennis, rock climbing, or a winter sport;
125          (ix) a business enterprise, the primary operation of which is to teach or allow an
126     individual to practice yoga or Pilates;
127          (x) a private employer who owns and operates a facility exclusively for the benefit of
128     the employer's employees, retirees, or family members, if the operation of the facility:
129          (A) is only incidental to the overall function and purpose of the employer's business;
130     and
131          (B) is offered on a nonprofit basis;
132          (xi) an individual providing professional services within the scope of the individual's
133     license with the Division of Occupational and Professional Licensing;
134          (xii) a country club;
135          (xiii) a nonprofit religious, ethnic, or community organization;
136          (xiv) a residential weight reduction center;
137          (xv) a business enterprise that only offers virtual services;
138          (xvi) a business enterprise that only offers a credit for a service that a separate business
139     enterprise offers;
140          (xvii) the owner of a lodging establishment, as defined in Section 29-2-102, if the
141     owner only provides access to the lodging establishment's facility to:
142          (A) a guest, as defined in Section 29-2-102; or
143          (B) an operator or employee of the lodging establishment;
144          (xviii) an association, declarant, owner, lessor, or developer of a residential housing
145     complex, planned community, or development, if at least 80% of the individuals accessing the
146     facility reside in the housing complex, planned community, or development; or
147          (xix) a person offering a personal training service exclusively as an employee or
148     independent contractor of a health spa.
149          (6) "Health spa facility" means a facility to which a business entity provides access:
150          (a) for a charge or a fee; and
151          (b) for the development or preservation of physical fitness or well-being, through
152     exercise, weight control, or athletics.
153          (7) (a) "Health spa service" means instruction, a service, a privilege, or a right that a
154     health spa offers for sale.
155          (b) "Health spa service" includes a personal training service.
156          (8) "Personal training service" means the personalized instruction, training,
157     supervision, or monitoring of an individual's physical fitness or well-being, through exercise,
158     weight control, or athletics.
159          Section 3. Section 13-23-3 is amended to read:
160          13-23-3. Contracts for health spa services.
161          (1) (a) [Any] A contract for the [sale of health spa services] purchase of a health spa
162     service shall be in writing.
163          (b) The written contract described in Subsection (1)(a) shall constitute the entire
164     agreement between the consumer and the health spa.
165          (2) (a) The health spa shall provide the consumer with a fully completed copy of the
166     contract required by Subsection (1):
167          (i) at the time of [its] the contract's execution[.]; and
168          (ii) at any time, upon the consumer's request.
169          (b) The copy described in Subsection (2)(a) shall show:
170          [(a)] (i) the date of the transaction;
171          [(b)] (ii) the name and address of the health spa; [and]
172          [(c)] (iii) the name, address, and telephone number of the consumer[.]; and
173          (iv) the consumer's primary location.
174          (3) (a) A contract described in Subsection (1):
175          (i) may not have a term in excess of 36 months[, but the contract may provide that the
176     consumer may exercise an option to renew the term after its expiration.]; and
177          (ii) may include an automatic renewal provision, if notice of the automatic renewal
178     provision is provided to the consumer no sooner than 60 days before, and no later than 30 days
179     before, the day on which the contract automatically renews.
180          (b) Except for a lifetime membership sold [prior to] before May 1, 1995, a health spa
181     may not offer a lifetime membership.
182          (4) [The] A contract described in Subsection (1) or an attachment to [it] the contract
183     shall clearly state [any rules] each rule of the health spa that [apply] applies to:
184          (a) the consumer's use of [its] the health spa's facilities and services; and
185          (b) cancellation and refund policies of the health spa.
186          (5) [The] A contract described in Subsection (1) shall specify which equipment or
187     facility of the health spa:
188          (a) is omitted from the contract's coverage; or
189          (b) may be changed at the health spa's discretion.
190          (6) [The] A contract described in Subsection (1) shall clearly [state that the consumer
191     has a three-day period after the day on which the contract is executed to rescind the contract.]:
192          (a) state the consumer's rescission rights under Section 13-23-4; and
193          (b) provide an email address and a mailing address where the consumer can send the
194     health spa a notice of intent to rescind the contract.
195          (7) A health spa may not assign a contract for a health spa service unless the health spa:
196          (a) provides the consumer the option to cancel the contract; and
197          (b) receives approval from the consumer to assign the contract.
198          (8) Before a health spa changes a consumer's primary location, the health spa shall
199     provide the consumer the option to:
200          (a) cancel the contract for health spa services; or
201          (b) (i) continue the contract at the new location; and
202          (ii) designate the newly located health spa facility as the consumer's primary location.
203          Section 4. Section 13-23-4 is amended to read:
204          13-23-4. Rescission.
205          [(1) A consumer may rescind a contract for the purchase of health spa services if he
206     enters into the contract and gives value at a time when the health spa is not fully operational
207     and available for use, and if the health spa does not become fully operational and available for
208     use within 60 days after the date of the contract.]
209          [(2) A consumer's right to rescind his contract under this section continues for three
210     business days after the health spa becomes fully operational and available for use.]
211          (1) A consumer may rescind a contract for the purchase of a health spa service by
212     emailing or mailing written notice of the consumer's intent to rescind:
213          (a) to the email address or mailing address the health spa provided in the contract, as
214     described in Subsection 13-23-4(6)(b); and
215          (b) (i) before midnight of the third business day after the day on which the consumer
216     and health spa execute the contract, as recorded by timestamp or postmark; or
217          (ii) if a consumer and health spa execute the contract when the consumer's primary
218     location is not fully operational and available for use, before midnight of the third business day
219     after the day on which the consumer's primary location becomes fully operational and available
220     for use, as recorded by timestamp or postmark.
221          [(3)] (2) (a) A consumer who rescinds [his] a contract under this section is entitled to a
222     refund of [any payments he has] every payment the consumer made, less the reasonable value
223     of any health spa [services he] service the consumer actually received [or $25, whichever is
224     less].
225          (b) The preparation and processing of the contract [and other documents are not
226     considered to be health spa services that are deductible under this subsection] or another
227     document is not a health spa service that is deductible under Subsection (2)(a) from any
228     refundable amount.
229          (c) In an enforcement action that the division initiates, a health spa has the burden of
230     proving that any value the health spa retains under Subsection (2)(a) is reasonable.
231          [(4)] (3) (a) [Any] The rescission of a contract under this section is effective upon the
232     health spa's receipt of written notice of the consumer's intent to rescind the contract. [The
233     notice may be delivered by hand or mailed by certified mail postmarked no later than midnight
234     of the third day after the health spa becomes fully operational and available for use.]
235          Section 5. Section 13-23-5 is amended to read:
236          13-23-5. Registration -- Bond, letter of credit, or certificate of deposit required --
237     Penalties.
238          (1) (a) (i) [It is unlawful for any health spa facility to operate] A health spa may not
239     operate a health spa facility in this state unless the [facility is registered] health spa registers the
240     health spa facility with the division in accordance with this section.
241          (ii) Registration of a health spa facility under this chapter is effective for one year. [If
242     the health spa facility renews its registration, the registration shall be renewed at least 30 days
243     prior to its expiration.]
244          [(iii) The division shall provide by rule for the form, content, application process, and
245     renewal process of the registration.]
246          (iii) To renew a health spa facility registration under this section, the health spa shall
247     submit a registration renewal application to the division at least 30 days before the day on
248     which the health spa facility's registration expires.
249          (iv) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
250     the division may establish:
251          (A) the initial health spa facility registration process, including the content of any
252     forms;
253          (B) the health spa facility registration renewal process, including the content of any
254     forms; and
255          (C) a surety exemption process, including the content of any forms.
256          (b) Each health spa registering a health spa facility in this state shall designate a
257     registered agent for receiving service of process.
258          (c) [The] A health spa's registered agent shall be reasonably available from 8 a.m. until
259     5 p.m. during normal working days.
260          [(c)] (d) The division shall charge and collect a fee for registration and registration
261     renewal under guidelines provided in Section 63J-1-504.
262          [(d) If an applicant fails to file a registration application or renewal by the due date, or
263     files an incomplete registration application or renewal, the applicant shall pay a fee of $25 for
264     each month or part of a month after the date on which the registration application or renewal
265     were due to be filed, in addition to the registration fee described in Subsection (1)(c).]
266          (e) If a health spa fails to submit a complete registration renewal application before the
267     day on which a health spa facility's registration expires, the health spa shall pay a fee of $25 for
268     each month or part of a month that passes:
269          (i) after the day on which the registration expires; and
270          (ii) before the day on which the health spa submits a complete registration renewal
271     application.
272          (f) The fee described in Subsection (1)(e) is in addition to the registration renewal fee
273     described in Subsection (1)(d).
274          [(e)] (g) A health spa registering or renewing a registration shall provide the division a
275     copy of the liability insurance policy that:
276          (i) covers the health spa; and
277          (ii) is in effect at the time of the registration or registration renewal.
278          (h) If information in an application to register or renew the registration of a health spa
279     facility materially changes or becomes incorrect or incomplete, the applicant shall, within 30
280     days after the day on which the information changes or becomes incorrect or incomplete,
281     correct the application or submit the correct information to the division in a manner that the
282     division establishes by rule made in accordance with Title 63G, Chapter 3, Utah
283     Administrative Rulemaking Act.
284          (2) (a) [Each] Except as provided in Section 13-23-6, for each health spa facility a
285     health spa operates, the health spa shall obtain and maintain:
286          (i) a performance bond issued by a surety authorized to transact surety business in this
287     state;
288          (ii) an irrevocable letter of credit issued by a financial institution authorized to do
289     business in this state; or
290          (iii) a certificate of deposit.
291          (b) The bond, letter of credit, or certificate of deposit described in Subsection (2)(a)
292     shall be payable to the division for the benefit of [any] a consumer who incurs damages as the
293     result of the health spa:
294          [(i) the health spa's violation of this chapter; or]
295          (i) violating this chapter; or
296          (ii) [the health spa's] going out of business [or relocating and failing to offer an
297     alternate location within five miles.].
298          (c) (i) [The] After each consumer has fully recovered damages, the division may
299     recover from the bond, letter of credit, or certificate of deposit described in Subsection (2)(a)
300     the costs of collecting and distributing funds under this section, in an amount up to 10% of the
301     face value of the bond, letter of credit, or certificate of deposit [but only if the consumers have
302     fully recovered their damages first].
303          (ii) The total liability of the issuer of the bond, letter of credit, or certificate of deposit
304     described in this Subsection (2) may not exceed the amount of the bond, letter of credit, or
305     certificate of deposit.
306          (iii) [The] A health spa shall maintain a bond, letter of credit, or certificate of deposit
307     described in this Subsection (2) in force for one year after [it] the day on which the health spa
308     notifies the division in writing that [it] the health spa has ceased all activities regulated [by]
309     under this chapter at the health spa facility.
310          [(d) A health spa providing services at more than one location shall comply with the
311     requirements of Subsection (2)(a) for each separate location.]
312          [(e)] (d) (i) The division may impose a fine against a health spa that fails to comply
313     with the requirements of this Subsection (2)[(a)] of up to $100 per day that the health spa
314     remains out of compliance.
315          (ii) [All penalties received shall be deposited] The division shall deposit each fine the
316     division collects under this Subsection (2)(d) into the Consumer Protection Education and
317     Training Fund created in Section 13-2-8.
318          (3) (a) [The] In accordance with the schedule established in Subsection (3)(b), a health
319     spa shall base the minimum principal amount of the bond, letter of credit, or certificate of
320     [credit] deposit required under Subsection (2) [shall be based] on:
321          (i) the number of unexpired contracts for a health spa [services to which the health spa
322     is a party, in accordance with the following schedule:] service, at the time the health spa
323     submits the health spa facility registration or registration renewal application, that designate the
324     health spa facility as the consumer's primary location; or
325          (ii) if at the time the health spa submits the health spa facility registration application
326     the health spa has not executed a contract for a health spa service that designates the health spa
327     facility as a consumer's primary location, the number of contracts for a health spa service
328     designating the health spa facility as a consumer's primary location that the health spa
329     reasonably expects to execute during the health spa facility's first year of registration.
330          (b)
331      Principal Amount of
Bond, Letter of Credit,
or Certificate of Deposit		Number of Contracts
332      $5,000100 or fewer
333      $10,000101 to 250
334      $15,000[500 or fewer] 251 to 500
335      35,000501 to 1,500
336      50,0001,501 to 3,000
337      75,0003,001 or more
338          [(b)] (c) A health spa that is not exempt under Section 13-23-6 shall comply with
339     [Subsection] Subsections (3)(a) and (b) with respect to all of the health spa's unexpired
340     contracts for a health spa [services] service, regardless of whether a portion of those contracts
341     satisfies the criteria in Section 13-23-6.
342          (4) [Each] A health spa shall [obtain the bond, letter of credit, or certificate of deposit
343     and] furnish a [certified] copy of the current bond, letter of credit, or certificate of deposit to
344     the division [prior to] before selling, offering or attempting to sell, soliciting the sale of, or
345     becoming a party to any contract to provide a health spa [services] service. [A health spa is
346     considered to be in compliance with this section only if the proof provided to the division
347     shows that the bond, letter of credit, or certificate of credit is current.]
348          (5) [Each] A health spa shall:
349          (a) maintain accurate records of:
350          (i) the bond, letter of credit, or certificate of [credit] deposit; and
351          (ii) of [any payments] each payment made, due, or to become due to the issuer; and
352          (b) open the records described in Subsection (5)(a) to inspection by the division at any
353     time during normal business hours.
354          [(6) If a health spa changes ownership, ceases operation, discontinues facilities, or
355     relocates and fails to offer an alternate location within five miles within 30 days after its
356     closing, the health spa is subject to the requirements of this section as if it were a new health
357     spa coming into being at the time the health spa changed ownership.]
358          (6) (a) A health spa with a health spa facility registered under this section shall submit
359     a new initial registration for the health spa facility, if the health spa:
360          (i) changes ownership;
361          (ii) permanently ceases and then again commences operation at the health spa facility;
362     or
363          (iii) relocates the health spa facility.
364          (b) The former owner of a health spa may not release, cancel, or terminate the owner's
365     liability under any bond, letter of credit, or certificate of deposit previously filed with the
366     division, unless:
367          [(a)] (i) the new owner has filed a new bond, letter of credit, or certificate of deposit for
368     the benefit of consumers covered under the previous owner's bond, letter of credit, or certificate
369     of deposit; or
370          [(b)] (ii) the former owner has refunded all unearned payments to consumers.
371          (7) If a health spa permanently ceases operation or relocates [and fails to offer an
372     alternative location within five miles] a health spa facility, the health spa shall provide the
373     division [with 45 days prior] notice at least 45 days before the day on which health spa
374     permanently ceases operation or relocates the health spa facility.
375          Section 6. Section 13-23-6 is amended to read:
376          13-23-6. Exemptions from bond, letter of credit, or certificate of deposit
377     requirement.
378          (1) A health spa [that offers no paid-in-full membership, but only memberships paid
379     for by installment contracts] is exempt from [the application of] Subsections 13-23-5(2)
380     through (5) [if:] for a health spa facility, if the health spa only offers access to a health spa
381     service at the health spa facility through:
382          (a) the purchase of an individual class or session;
383          (b) the purchase of a package:
384          (i) with a defined number of classes or sessions; and
385          (ii) for which the health spa may not hold more than $150 worth of a consumer's
386     unused credit;
387          (c) the purchase of a monthly membership or pass, payment for which the health spa
388     does not collect from a consumer more than two months in advance;
389          (d) an installment contract that:
390          (i) provides for the consumer to make all payments due under the contract, including a
391     down payment, an enrollment fee, a membership fee, or any other payment to the health spa, in
392     equal monthly installments spread over the entire term of the contract; and
393          (ii) contains the following clause: "If this health spa ceases operations at or relocates
394     the consumer's primary location, no further payments under this contract shall be due to
395     anyone, including any assignee of the contract or purchaser of any note associated with or
396     contained in this contract, unless the consumer has been presented with the option to cancel the
397     contract and has agreed to the assignment or sale of the consumer's contract"; or
398          (e) a combination of health spa services described in Subsections (1)(a) through (d).
399          (2) A health spa that claims exemption from Subsections 13-23-5(2) through (5) bears
400     the burden of proving to the division that the health spa meets the exemption criteria described
401     in Subsection (1).
402          [(1) each contract contains the following clause: "If this health spa ceases operation
403     and fails to offer an alternate location within five miles, no further payments under this contract
404     shall be due to anyone, including any purchaser of any note associated with or contained in this
405     contract.";]
406          [(2) all payments due under each contract, including down payments, enrollment fees,
407     membership fees, or any other payments to the health spa, are in equal monthly installments
408     spread over the entire term of the contract; and]
409          [(3) the term of each contract is clearly stated and is not capable of being extended.]
410          Section 7. Section 13-23-7 is amended to read:
411          13-23-7. Enforcement -- Costs and attorney's fees -- Penalties.
412          (1) (a) The division may, on behalf of [any] a consumer or on [its] the division's own
413     behalf, file an action for injunctive relief, damages, or both to enforce this chapter.
414          (b) In addition to any relief granted, the division is entitled to an award for reasonable
415     attorney's fees, court costs, and reasonable investigative expenses.
416          (2) (a) A person who willfully violates [any] a provision of this chapter, either by
417     failing to comply with any requirement or by doing any act prohibited in this chapter, is guilty
418     of a class B misdemeanor.
419          (b) Each day [the] a violation described in Subsection (2)(a) is committed or permitted
420     to continue constitutes a separate punishable offense.
421          [(b)] (c) In the case of a second offense, the person is guilty of a class A misdemeanor.
422          [(c)] (d) In the case of [three or more offenses] a third or subsequent offense, the
423     person is guilty of a third degree felony.
424          (3) (a) In addition to any other penalty available under this chapter, a person who
425     violates this chapter is subject to:
426          (i) a cease and desist order; and
427          (ii) an administrative fine of up to $2,500 for each separate violation that is not a
428     violation described in Subsection 13-23-5(2)[(e)](d) up to $10,000 for any series of violations
429     arising out of the same operative facts.
430          (b) [All] The division shall deposit all administrative fines collected under this chapter
431     [shall be deposited in] into the Consumer Protection Education and Training Fund created in
432     Section 13-2-8.
433          Section 8. Section 13-34-105 is amended to read:
434          13-34-105. Exempted institutions.
435          (1) The following institutions are exempt from the provisions of this chapter, if the
436     institution establishes an exemption with the division in accordance with Subsection
437     13-34-107(1)(b)(ii):
438          (a) a Utah institution directly supported, to a substantial degree, with funds provided
439     by:
440          (i) the state;
441          (ii) a local school district; or
442          (iii) any other Utah governmental subdivision;
443          (b) a lawful enterprise that offers only professional review programs, including C.P.A.
444     and bar examination review and preparation courses;
445          (c) a private institution that:
446          (i) provides postsecondary education; and
447          (ii) is owned, controlled, operated, or maintained by a bona fide church or religious
448     denomination, that is exempted from property taxation under the laws of this state;
449          (d) an institution that is accredited by [a regional or national] an accrediting agency
450     recognized by the United States Department of Education;
451          (e) subject to Subsection (4), a business organization, trade or professional association,
452     fraternal society, or labor union that:
453          (i) sponsors or conducts courses of instruction or study predominantly for bona fide
454     employees or members; and
455          (ii) does not advertise as a school;
456          (f) an institution that, with regard to postsecondary education, exclusively offers one or
457     more of the following :
458          (i) general education:
459          (A) that is remedial, avocational, nonvocational, or recreational in nature; and
460          (B) for which the institution does not advertise occupation objectives or grant a degree,
461     diploma, or other educational credential commensurate with a degree or diploma ;
462          (ii) preparation for individuals to teach courses or instruction described in Subsection
463     (1)(f)(i)(A);
464          (iii) courses in English as a second language;
465          (iv) instruction at or below the 12th grade level;
466          (v) nurse aide training programs that are approved by:
467          (A) the Bureau of Health Facility Licensing and Certification; or
468          (B) an entity authorized by the Bureau of Health Facility Licensing and Certification to
469     approve nurse aide certification programs; [or]
470          (vi) content:
471          (A) that is exclusively available on the Internet;
472          (B) for which the institution charges $1,000 or less in a 12-month period; and
473          (C) for which the institution does not grant educational credentials other than a
474     certificate that indicates completion and that does not represent achievement or proficiency;
475          (vii) instruction to advance personal development or general professional skills:
476          (A) that is not independently sufficient to be a program of training for employment or a
477     specific field; and
478          (B) for which the institution does not grant a degree, diploma, or other educational
479     credential commensurate with a degree or diploma; or
480          (viii) instruction designed to prepare an individual to run for political office, for which
481     the institution does not grant a degree, diploma, or other educational credential commensurate
482     with a degree or diploma;
483          (g) an institution that offers only workshops or seminars:
484          (i) lasting no longer than three calendar days; and
485          (ii) for which academic credit is not awarded;
486          (h) an institution that offers programs:
487          (i) in barbering, cosmetology, real estate, or insurance; and
488          (ii) that are regulated and approved by a state or federal governmental agency;
489          (i) an education provider certified by the Division of Real Estate under Section
490     61-2c-204.1;
491          (j) an institution that offers aviation training if the institution:
492          (i) (A) is approved under Federal Aviation Regulations, 14 C.F.R. Part 141; or
493          (B) provides aviation training under Federal Aviation Regulations, 14 C.F.R. Part 61;
494     and
495          (ii) does not collect tuition, fees, membership dues, or other payment more than 24
496     hours before the student receives the aviation training; and
497          (k) an institution that provides emergency medical services training if all of the
498     institution's instructors, course coordinators, and courses are approved by the Department of
499     Health.
500          (2) An institution that no longer qualifies for an exemption that the institution
501     established with the division under Subsection 13-34-107(1)(b)(ii) shall comply with the other
502     provisions of Section 13-34-107.
503          (3) An institution, branch, extension, or facility operating within the state that is
504     affiliated with an institution operating in another state shall be separately approved by the
505     affiliate's [regional or national] accrediting agency to qualify for the exemption described in
506     Subsection (1)(d).
507          (4) For purposes of Subsection (1)(e), a business organization, trade or professional
508     association, fraternal society, or labor union is considered to be conducting the course
509     predominantly for bona fide employees or members if the entity hires a majority of the
510     individuals who:
511          (a) successfully complete the course of instruction or study with a reasonable degree of
512     proficiency; and
513          (b) apply for employment with that same entity.
514          (5) If the United States Department of Education no longer recognizes an institution's
515     accrediting agency, the institution remains exempt under Subsection (1)(d):
516          (a) during any grace period provided by the United States Department of Education for
517     obtaining new accreditation, if the institution demonstrates to the division that the institution is
518     within the grace period; or
519          (b) if the institution demonstrates to the division that the United States Department of
520     Education otherwise considers the institution to have recognized accreditation.
521          Section 9. Section 13-34a-102 is amended to read:
522          13-34a-102. Definitions.
523          As used in this chapter:
524          (1) "Accredited institution" means a postsecondary school that is accredited by an
525     accrediting agency.
526          (2) "Accrediting agency" means a [regional or national] private educational association
527     that:
528          (a) is recognized by the United States Department of Education;
529          (b) develops evaluation criteria; and
530          (c) conducts peer evaluations to assess whether a postsecondary school meets the
531     criteria described in Subsection (2)(b).
532          (3) "Agent" means a person who:
533          (a) (i) owns an interest in a postsecondary school; or
534          (ii) is employed by a postsecondary school; and
535          (b) (i) enrolls or attempts to enroll a Utah resident in a postsecondary school;
536          (ii) offers to award an educational credential for remuneration on behalf of a
537     postsecondary school; or
538          (iii) holds oneself out to Utah residents as representing a postsecondary school for any
539     purpose.
540          (4) "Certificate of postsecondary state authorization" means a certificate issued by the
541     division to a postsecondary school in accordance with the provisions of this chapter.
542          (5) "Division" means the Division of Consumer Protection.
543          (6) "Educational credential" means a degree, diploma, certificate, transcript, report,
544     document, letter of designation, mark, or series of letters, numbers, or words that represent
545     enrollment, attendance, or satisfactory completion of the requirements or prerequisites of an
546     educational program.
547          (7) "Intentional violation" means a violation of a provision of this chapter that occurs
548     or continues after the division, the attorney general, a county attorney, or a district attorney
549     gives the violator written notice, delivered by certified mail, that the violator is or has been in
550     violation of the provision.
551          (8) "Operate" means to:
552          (a) maintain a place of business in the state;
553          (b) conduct significant educational activities within the state; or
554          (c) provide postsecondary education to a Utah resident that:
555          (i) is intended to lead to a postsecondary degree or certificate; and
556          (ii) is provided from a location outside the state by correspondence or
557     telecommunications or electronic media technology.
558          (9) "Operating history" means a report, written evaluation, publication, or other
559     documentation regarding:
560          (a) the current accreditation status of a postsecondary school with an accrediting
561     agency; and
562          (b) an action taken by an accrediting agency that:
563          (i) places the postsecondary school on probation;
564          (ii) imposes disciplinary action against the postsecondary school;
565          (iii) requires the postsecondary school to take corrective action; or
566          (iv) provides the postsecondary school with a warning or directive to show cause.
567          (10) "Ownership" means:
568          (a) the controlling interest in a postsecondary school; or
569          (b) if an entity holds the controlling interest in the postsecondary school, the
570     controlling interest in the entity that holds the controlling interest in the postsecondary school.
571          (11) "Postsecondary education" means education or educational services offered
572     primarily to individuals who:
573          (a) have completed or terminated their secondary or high school education; or
574          (b) are beyond the age of compulsory school attendance.
575          (12) (a) "Postsecondary school" means a person that provides or offers educational
576     services to individuals who:
577          (i) have completed or terminated secondary or high school education; or
578          (ii) are beyond the age of compulsory school attendance.
579          (b) "Postsecondary school" does not include an institution that is part of the state
580     system of higher education under Section 53B-1-102.
581          (13) "Private postsecondary school" means a postsecondary school that is not a public
582     postsecondary school.
583          (14) "Public postsecondary school" means a postsecondary school:
584          (a) established by a state or other governmental entity; and
585          (b) substantially supported with government funds.
586          Section 10. Section 13-34a-204 is amended to read:
587          13-34a-204. Postsecondary school -- Procedure to obtain certificate of
588     postsecondary state authorization.
589          (1) The division shall, in accordance with the provisions of this section, issue a
590     certificate of postsecondary state authorization to a postsecondary school.
591          (2) To obtain a certificate of postsecondary state authorization under this section, a
592     postsecondary school shall:
593          (a) submit a completed registration form to the division that includes:
594          (i) proof of current accreditation from the postsecondary school's accrediting agency;
595          (ii) proof that the postsecondary school is fiscally responsible and can reasonably fulfill
596     the postsecondary school's financial obligations, including:
597          (A) a copy of an audit of the postsecondary school's financial statements, with all
598     applicable footnotes, including a balance sheet, an income statement, a statement of retained
599     earnings, and a statement of cash flow, that was performed by a certified public accountant;
600          (B) at the postsecondary school's election, a copy of an audit of the postsecondary
601     school's parent company's financial statements, with all applicable footnotes, including a
602     balance sheet, an income statement, a statement of retained earnings, and a statement of cash
603     flow, that was performed by a certified public accountant; and
604          (C) a copy of all other financial documentation that the postsecondary school provided
605     to the postsecondary school's accrediting agency since the postsecondary school's last
606     registration with the division under this chapter or within the 12 months before the day on
607     which the postsecondary school submits a completed registration form under this section,
608     whichever is longer;
609          (iii) proof of good standing in the state where the postsecondary school is organized;
610          (iv) the postsecondary school's operating history with the postsecondary school's
611     accrediting agency since the postsecondary school's last registration with the division under this
612     chapter or within the 12 months before the day on which the postsecondary school submits a
613     completed registration form under this section, whichever is longer;
614          (v) the number of Utah residents who enrolled in the postsecondary school since the
615     postsecondary school's last registration with the division under this chapter or within the 12
616     months before the day on which the postsecondary school submits a completed registration
617     form under this section, whichever is longer;
618          (vi) satisfactory documentation that the postsecondary school has complied with the
619     complaint process requirements described in Section 13-34a-206;
620          (vii) (A) the number of complaints that a Utah resident has filed against the
621     postsecondary school since the postsecondary school's last registration with the division under
622     this chapter or within the 12 months before the day on which the postsecondary school submits
623     a completed registration form under this section, whichever is longer; and
624          (B) upon request, [includes] copies of the complaints described in Subsection
625     (2)(a)(vii)(A);
626          (viii) a disclosure that states whether the postsecondary school or an owner, officer,
627     director, or administrator of the postsecondary school has been:
628          (A) convicted of a crime;
629          (B) subject to an order issued by a court; or
630          (C) subject to an order issued by an administrative agency that imposed disciplinary
631     action; and
632          (ix) a [notarized] personal verification by the owner or a responsible officer of the
633     postsecondary school that the information provided under this Subsection (2)(a) is complete
634     and accurate; and
635          (b) pay a nonrefundable fee, established by the division, in accordance with Subsection
636     13-34a-103(2)(c) to pay for the cost of processing the registration form and issuing the
637     certificate of postsecondary state authorization.
638          (3) If a postsecondary school's accreditor loses its recognition by the United States
639     Department of Education, the postsecondary school may satisfy the requirement of Subsection
640     (2)(a)(i) by demonstrating to the division that the postsecondary school is within a grace period
641     provided by the United States Department of Education for obtaining new accreditation or is
642     otherwise considered by the United States Department of Education to have recognized
643     accreditation.
644          (4) The division shall develop and make available to the public a registration form
645     described in Subsection (2)(a).
646          (5) The division shall deposit money that the division receives under Subsection (2)(b)
647     into the Commerce Service Account, created in Section 13-1-2.
648          (6) If a postsecondary school maintains more than one physical campus in the state, the
649     postsecondary school shall file a separate registration form for each physical campus in the
650     state.
651          (7) (a) A certificate of postsecondary state authorization issued under this section is not
652     transferrable.
653          (b) (i) If a postsecondary school's ownership or governing body changes after the
654     postsecondary school obtains a certificate of postsecondary state authorization under this
655     section, the postsecondary school shall submit a new completed registration form in accordance
656     with Subsection (2) within 60 days after the day on which the change in ownership or
657     governing body occurs.
658          (ii) If a postsecondary school fails to timely comply with the requirements described in
659     Subsection (7)(b)(i), the postsecondary school's certificate of postsecondary state authorization
660     immediately and automatically expires.
661          (c) If there is a change in circumstance that may affect a postsecondary school's status
662     under this section, the postsecondary school shall notify the division in writing of the change
663     within 30 days after the day on which the change occurs.
664          (8) (a) A certificate of postsecondary state authorization issued under this section
665     expires one year after the day on which the certificate of postsecondary state authorization is
666     issued.
667          (b) Notwithstanding Subsection (8)(a), the division may extend the period for which
668     the [exemption] certificate of postsecondary state authorization is effective so that expiration
669     dates are staggered throughout the year.