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H0712..........................................................by EDUCATION PROPRIETARY SCHOOLS - Adds to, repeals and amends existing law relating to proprietary schools to revise and clarify the powers of the State Board of Education relating to maintaining registers of postsecondary educational institutions and proprietary schools approved by the board and in determining acceptance of academic credits for public postsecondary educational institutions; to revise definitions; to provide for registration of postsecondary educational institutions and assessment of an annual registration fee; to allow the State Board of Education to set by rule the annual agent's permit fee; to provide that courses of a proprietary school will not be accepted for transfer into any Idaho public postsecondary educational institution; to revise information required on an application; and to provide for enforcement of violations of the provisions of Chapter 24, Title 33, Idaho Code. 02/21 House intro - 1st rdg - to printing 02/22 Rpt prt - to Educ 03/06 Rpt out - rec d/p - to 2nd rdg 03/07 2nd rdg - to 3rd rdg 03/10 3rd rdg - PASSED - 63-0-7 AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bell, Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford, Cannon, Chadderdon, Clark, Collins, Crow, Denney, Edmunson, Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest, Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews, McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche, Sayler, Schaefer, Shepherd(2), Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Wills, Mr. Speaker NAYS -- None Absent and excused -- Bedke, Deal, Rydalch, Sali, Shepherd(8), Trail, Wood Floor Sponsor - Pence Title apvd - to Senate 03/13 Senate intro - 1st rdg - to Educ 03/15 Rpt out - rec d/p - to 2nd rdg 03/16 2nd rdg - to 3rd rdg 03/22 3rd rdg - PASSED - 35-0-0 AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett(Clark), Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis, Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce, Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams NAYS -- None Absent and excused -- None Floor Sponsor - Marley Title apvd - to House 03/23 To enrol 03/24 Rpt enrol - Sp signed 03/27 Pres signed 03/28 To Governor 03/30 Governor signed Session Law Chapter 240 Effective: 07/01/06
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature Second Regular Session - 2006IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 712 BY EDUCATION COMMITTEE 1 AN ACT 2 RELATING TO PROPRIETARY SCHOOLS; AMENDING SECTION 33-107, IDAHO CODE, TO 3 REVISE AND CLARIFY THE POWERS OF THE STATE BOARD OF EDUCATION RELATING TO 4 MAINTAINING REGISTERS OF POSTSECONDARY EDUCATIONAL INSTITUTIONS AND PRO- 5 PRIETARY SCHOOLS APPROVED BY THE BOARD, TO DETERMINE ACCEPTANCE OF ACA- 6 DEMIC CREDITS FOR PUBLIC POSTSECONDARY EDUCATIONAL INSTITUTIONS AND TO 7 MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 33-2401, IDAHO CODE, TO 8 REVISE THE DEFINITIONS OF "ACCREDITED," "AGENT," "COURSE OF STUDY," 9 "DEGREE" AND "PROPRIETARY SCHOOL," TO DEFINE "COURSE" AND "POSTSECONDARY 10 EDUCATIONAL INSTITUTION" AND TO DELETE THE DEFINITIONS OF "PERSON," 11 "PRINCIPAL," "REGISTRANT" AND "STUDENT"; REPEALING SECTION 33-2402, IDAHO 12 CODE, RELATING TO SCHOOLS AND COURSES EXEMPTED; AMENDING CHAPTER 24, TITLE 13 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 33-2402, IDAHO CODE, TO 14 PROVIDE FOR REGISTRATION OF POSTSECONDARY EDUCATIONAL INSTITUTIONS AND 15 ASSESSMENT OF AN ANNUAL REGISTRATION FEE; REPEALING SECTION 33-2403, IDAHO 16 CODE, RELATING TO FEDERAL REQUIREMENTS AND STATE POSTSECONDARY REVIEW; 17 AMENDING CHAPTER 24, TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW SEC- 18 TION 33-2403, IDAHO CODE, TO PROVIDE FOR REGISTRATION OF PROPRIETARY 19 SCHOOLS AND ASSESSMENT OF AN ANNUAL REGISTRATION FEE; REPEALING SECTION 20 33-2404, IDAHO CODE, RELATING TO REGISTRATION; AMENDING SECTION 33-2405, 21 IDAHO CODE, TO PROVIDE PROPER TERMINOLOGY, TO ALLOW THE STATE BOARD OF 22 EDUCATION TO SET BY RULE THE ANNUAL AGENT'S PERMIT FEE, TO REDESIGNATE THE 23 SECTION AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 33-2406, 24 IDAHO CODE, TO PROVIDE PROPER TERMINOLOGY, TO PROVIDE THAT COURSES OF A 25 PROPRIETARY SCHOOL WILL NOT BE ACCEPTED FOR TRANSFER INTO ANY IDAHO PUBLIC 26 POSTSECONDARY EDUCATIONAL INSTITUTION AND TO REDESIGNATE THE SECTION; 27 AMENDING SECTION 33-2407, IDAHO CODE, TO PROVIDE PROPER TERMINOLOGY, TO 28 REDESIGNATE THE SECTION AND TO MAKE A TECHNICAL CORRECTION; AMENDING SEC- 29 TION 33-2408, IDAHO CODE, TO REVISE INFORMATION REQUIRED ON AN APPLICA- 30 TION, TO PROVIDE PROPER TERMINOLOGY AND TO REDESIGNATE THE SECTION; AMEND- 31 ING SECTION 33-2409, IDAHO CODE, TO PROVIDE PROPER TERMINOLOGY AND TO 32 REDESIGNATE THE SECTION; AND AMENDING CHAPTER 24, TITLE 33, IDAHO CODE, BY 33 THE ADDITION OF A NEW SECTION 33-2409, IDAHO CODE, TO PROVIDE FOR ENFORCE- 34 MENT OF ANY VIOLATION OF THE PROVISIONS OF CHAPTER 24, TITLE 33, IDAHO 35 CODE. 36 Be It Enacted by the Legislature of the State of Idaho: 37 SECTION 1. That Section 33-107, Idaho Code, be, and the same is hereby 38 amended to read as follows: 39 33-107. GENERAL POWERS AND DUTIES OF THE STATE BOARD. The state board 40 shall have power to: 41 (1)pPerform all duties prescribed for it by the school laws of the 42 state; 43 (2)aAcquire, hold and dispose of title, rights and interests in real and 2 1 personal property; 2 (3)hHave general supervision, through its executive departments and 3 offices, of all entities of public education supported in whole or in part by 4 state funds; 5 (4)dDelegate to its executive secretary, to its executive officer, or to 6 such other administrators as the board may appoint, such powers as said offi- 7 cers require to carry out the policies, orders and directives of the board; 8 (5)tThrough its executive departments and offices;: 9 (a)eEnforce the school laws of the state, 10 (b)sStudy the educational conditions and needs of the state and recom- 11 mend to the legislature needed changes in existing laws or additional leg- 12 islation; 13 (6)iIn addition to the powers conferred by chapter 24, title 33, Idaho 14 Code;: 15 (a)mMaintain a register ofcourses and programs offered anywhere in the16state of Idaho by postsecondary institutions which are: (1) located out-17side the state of Idaho and are offering courses or programs for academic18credit or otherwise; or (2) located within the state of Idaho but not19accredited by a regional or national accrediting agency recognized by the20board and are offering courses for academic credit. The acceptance of aca-21demic or nonacademic credit, at public postsecondary institutions in22Idaho, is the prerogative of the state board of education; provided how-23ever, credit transferred into Idaho public postsecondary institutions from24nonaccredited postsecondary institutions can be accepted only upon posi-25tive review and recommendation by the individual postsecondary institu-26tions and with the approval of the state board of education. A27nonaccredited postsecondary institution is one which is not accredited by28a regional accrediting agency recognized by the state board or the United29States department of educationpostsecondary educational institutions 30 approved to provide programs and courses that lead to a degree or which 31 provide, offer and sell degrees in accordance with the procedures estab- 32 lished in chapter 24, title 33, Idaho Code, 33 (b)require compliance by institutions which desire to offer courses or34programs in Idaho with the standards and procedures established in chapter3524, title 33, Idaho Code, or those standards, procedures and criteria set36by the boardDetermine whether to accept academic credit at public post- 37 secondary educational institutions in Idaho. Academic credit shall not be 38 transferred into any Idaho public postsecondary institution from a post- 39 secondary educational institution or other entity that is not accredited 40 by an organization recognized by the board, 41 (c)violation of the provisions of this act will be referred to the42attorney general for appropriate action, including, but not limited to,43injunctive relief.Maintain a register of proprietary schools approved to 44 conduct, provide, offer or sell a course or courses of study in accordance 45 with the procedures established in chapter 24, title 33, Idaho Code; 46 (7)pPrescribe the courses and programs of study to be offered at the 47 public institutions of higher education, after consultation with the presi- 48 dents of the affected institutions; 49 (8)aApprove new courses and programs of study to be offered at community 50 colleges organized pursuant to chapter 21, title 33, Idaho Code, when the 51 courses or programs of study are academic in nature and the credits derived 52 therefrom are intended to be transferable to other state institutions of 53 higher education for credit toward a baccalaureate degree, and when the 54 courses or programs of study have been authorized by the board of trustees of 55 the community college. 3 1 SECTION 2. That Section 33-2401, Idaho Code, be, and the same is hereby 2 amended to read as follows: 3 33-2401. DEFINITIONS. For the purposes of chapter 24, title 33, Idaho 4 Code, the following words have the following meanings: 5 (1) "Accredited" means that aschoolpostsecondary educational institu- 6 tion has been recognized or approved as meeting the standards established by 7 an accrediting agency recognized by the board.or the United States department8of education.9 (2) "Agent" means any individual within the state of Idaho who solicits 10 students forcourses in Idahoor on behalf of a proprietary school. 11 (3) "Agent's permit" means a nontransferable written document issued to 12 an agent by the board. 13 (4) "Board" means the state board of education. 14 (5) "Course" means instruction imparted in a series of lessons or class 15 meetings to meet an educational objective. 16 (6) "Course or courses of study" means either a single course or a set of 17 related courses for which a student enrolls, either for academic credit or 18 otherwise. 19 (67) "Degree" means any academic, vocational, professional-technical or 20 honorary title or designation, mark, appellation, series of letters, numbers 21 or words such as, but not limited to, "bachelor's," "master's," "doctorate," 22 or "fellow," which signifies, purports, or is generally taken to signify sat- 23 isfactory completion of the requirements of an academic, vocational, 24 professional-technical, educational or professional program of study beyond 25 the secondary school level or for a recognized title conferred for meritorious 26 recognition and an associate of arts or associate of science degree awarded by 27 a community college or other public or private postsecondary educational 28 institution or other entity which may be used for any purpose whatsoever. 29The state of Idaho recognizes and confirms the authority of any board of30directors, board of trustees or comparable authority of an accredited school31to confer degrees consistent with the requirements specified by the accredit-32ing agency of the school.33(7) "Person" means any individual or other legal entity conducting34courses.35 (8) "PrincipalPostsecondary educational institution" meansany person36conducting coursesan individual, or educational, business or other entity, 37 whether legally constituted or otherwise, which maintains a presence within, 38 or which operates or purports to operate, from a location within the state of 39 Idaho, and which provides courses or programs that lead to a degree, or which 40 provides, offers or sells degrees. 41 (9) "Proprietary school"referred to as "school"meansany postsecondary42or vocational or professional-technical educational school operated for a43profit, or on a nonprofit basis, which maintains a place ofan individual, or 44 educational, business or other entity, whether legally constituted or other- 45 wise, which maintains a presence within, or which operates or purports to 46 operate, from a location within the state of Idahoor solicits business within47the state of Idaho offering degrees, career or job training programs and which48is not specifically exempted by the provisions of this chapterand which con- 49 ducts, provides, offers or sells a course or courses of study, but which does 50 not provide, offer or sell degrees. 51(10) "Registrant" means a person or principal who has been issued a cer-52tificate authorizing the conduct of courses.53(11) "Student" means an Idaho resident enrolled in a proprietary school.4 1 SECTION 3. That Section 33-2402, Idaho Code, be, and the same is hereby 2 repealed. 3 SECTION 4. That Chapter 24, Title 33, Idaho Code, be, and the same is 4 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 5 ignated as Section 33-2402, Idaho Code, and to read as follows: 6 33-2402. REGISTRATION OF POSTSECONDARY EDUCATIONAL INSTITUTIONS. 7 (1) Unless exempted as provided herein, each postsecondary educational insti- 8 tution which maintains a presence within the state of Idaho, or which operates 9 or purports to operate from a location within the state of Idaho, shall regis- 10 ter annually with and hold a valid certificate of registration issued by the 11 board. A public postsecondary educational institution or agency supported pri- 12 marily by taxation from either the state of Idaho or a local source in Idaho 13 shall not be required to register under this section. The board may exempt a 14 nonprofit postsecondary educational institution from the registration require- 15 ment in accordance with standards and criteria established in rule by the 16 board. The board may permit a postsecondary educational institution required 17 to register under this section to instead register as a proprietary school 18 under section 33-2403, Idaho Code, in accordance with standards and criteria 19 established in rule by the board. 20 (2) The board shall prescribe by rule the procedure for registration, 21 which shall include, but is not limited to, a description of each degree, 22 course or program, for academic credit or otherwise, that a postsecondary edu- 23 cational institution intends to conduct, provide, offer or sell. Such rule 24 shall also prescribe the standards and criteria to be utilized by the board 25 for recognition of accreditation organizations. 26 (3) The board may deny the registration of a postsecondary educational 27 institution that does not meet accreditation requirements or other standards 28 and criteria established in rule by the board. The administrative procedure 29 act, chapter 52, title 67, Idaho Code, shall apply to any denial of registra- 30 tion under this section. 31 (4) The board shall assess an annual registration fee on each post- 32 secondary educational institution required to be registered under this section 33 based on the respective degrees, courses or programs that each such post- 34 secondary educational institution intends to conduct, provide, offer or sell, 35 not to exceed one hundred dollars ($100) for each degree, course or program. 36 Such annual registration fee shall be collected by the board and shall be ded- 37 icated for use by the board in connection with its responsibilities under this 38 chapter. 39 SECTION 5. That Section 33-2403, Idaho Code, be, and the same is hereby 40 repealed. 41 SECTION 6. That Chapter 24, Title 33, Idaho Code, be, and the same is 42 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 43 ignated as Section 33-2403, Idaho Code, and to read as follows: 44 33-2403. REGISTRATION OF PROPRIETARY SCHOOLS. (1) Unless exempted as 45 provided in subsection (4) of this section, each proprietary school which 46 maintains a presence within the state of Idaho, or which operates or purports 47 to operate from a location within the state of Idaho, shall register annually 48 with and hold a valid certificate of registration issued by the board or its 49 designee. 50 (2) The board shall prescribe by rule the procedure for registration, 5 1 which shall include, but is not limited to, a description of each course or 2 program, for academic credit or otherwise, that a proprietary school intends 3 to conduct, provide, offer or sell. 4 (3) The board may deny the registration of a proprietary school that does 5 not meet the standards or criteria established in rule by the board. The 6 administrative procedure act, chapter 52, title 67, Idaho Code, shall apply to 7 any denial of registration under this section. 8 (4) The following individuals or entities are specifically exempt from 9 the registration provisions required by this section: 10 (a) An individual or entity that offers instruction or training solely 11 avocational or recreational in nature, as determined by the board. 12 (b) An individual or entity that offers courses recognized by the board 13 which comply in whole or in part with the compulsory education law. 14 (c) An individual or entity that offers a course or courses of study 15 sponsored by an employer for the training and preparation of its own 16 employees, and for which no tuition fee is charged to the student. 17 (d) An individual or entity which is otherwise regulated, licensed or 18 registered with another state agency pursuant to title 54, Idaho Code. 19 (e) Aviation school or instructors approved by and under the supervision 20 of the federal aviation administration. 21 (f) An individual or entity that offers intensive review courses designed 22 to prepare students for certified public accountancy tests, public accoun- 23 tancy tests, law school aptitude tests, bar examinations or medical col- 24 lege admissions tests, or similar instruction for test preparation. 25 (g) An individual or entity offering only workshops or seminars lasting 26 no longer than three (3) calendar days. 27 (h) A parochial or denominational institution providing instruction or 28 training relating solely to religion and for which degrees are not 29 granted. 30 (i) An individual or entity that offers postsecondary credit through a 31 consortium of public and private colleges and universities under the aus- 32 pices of the western governors. 33 (5) The board shall assess an annual registration fee on each proprietary 34 school required to be registered under this section. Such annual registration 35 fee shall be composed of a fixed portion in an amount not to exceed one hun- 36 dred dollars ($100) for each proprietary school, and a variable portion based 37 on the respective course or courses of study that each such proprietary school 38 intends to conduct, provide, offer or sell, not to exceed one hundred dollars 39 ($100) for each course or courses of study. Such annual registration fee shall 40 be collected by the board and shall be dedicated for use by the board in con- 41 nection with its responsibilities under this chapter. 42 SECTION 7. That Section 33-2404, Idaho Code, be, and the same is hereby 43 repealed. 44 SECTION 8. That Section 33-2405, Idaho Code, be, and the same is hereby 45 amended to read as follows: 46 33-24054. AGENT'S PERMIT. No individual may act as an agent of a propri- 47 etary school required to be registered under the provisions of this chapter 48 unless that individual holds a valid agent's permit issued by the board and 49 maintains at all times a surety bond as described in section 33-24076, Idaho 50 Code. 51 The application for an agent's permit shall be furnished by the board and 52 shall include the following: 6 1 (1) A statement signed by the applicant that he or she has read the pro- 2 visions of this chapter and the rules promulgated pursuant thereto. 3 (2) An annual feeof twenty-five dollars ($25.00)for each permit not to 4 exceed fifty dollars ($50.00). The board shall set by rule the amount of such 5 annual agent's permit fee. 6 All agent's permits shall be renewed annually upon reapplication and 7 proper qualifications on the first day of July. If courses are solicited or 8 sold by more than one (1) agent, a separate permit is required for each agent. 9 The agent's permit shall consist of a pocket card and shall bear the name 10 and address of the agent, the name and address of theprincipalproprietary 11 school, and a statement that the bearer is an authorized agent of theprinci-12palproprietary school, and may solicit and sell courses for theprincipal13 proprietary school. The agent shall surrender the agent's permit to theprin-14cipalproprietary school upon termination of employment. 15 An agent representing more than one (1)institutionproprietary school 16 shall obtain a separate agent's permit for eachinstitutionproprietary school 17 represented. 18 No individual shall be issued an agent's permit if he or she has been pre- 19 viously found in any judicial or administrative proceeding to have violated 20 this chapter. 21 An agent's permit shall be valid for the state's fiscal year in which it 22 is issued, unless sooner revoked or suspended by the board for fraud or mis- 23 representation in connection with the solicitation for the sale of any course 24 of study, for any violation of the provisions of this chapter or rules promul- 25 gated pursuant to this chapter, or for the existence of any condition in 26 respect to the agent or the proprietary school he or she represents, which if 27 in existence at the time the agent's permit was issued, would have been 28 grounds for denial for the agent's permit. 29 The agent shall carry the agent's permit with him or her for identifica- 30 tion purposes when engaged in the solicitation for the sale and the selling of 31 courses of study away from the premises of the proprietary school, and shall 32 produce the agent's permit for inspection upon request. 33 The administrative procedure act, chapter 52, title 67, Idaho Code, shall 34 apply to any denial of an agent's permit or proceeding to revoke or suspend an 35 agent's permit of the board conducted pursuant to this section. 36 The issuance of an agent's permit pursuant to this section shall not be 37 interpreted as, and it shall be unlawful for any individual holding any 38 agent's permit to expressly or impliedly represent by any means whatever, that 39 the board has made any evaluation, recognition, accreditation or endorsement 40 of any proprietary school or of any course of study being offered for sale by 41 the agentorof any such proprietary school. Any oral or written statement, 42 advertisement or solicitation by anyprincipalproprietary school or agent 43 which refers to the board shall state: 44 "(Name of school) is registered with the State Board of Education in 45 accordance with Section 33-24043, Idaho Code." 46 It shall be unlawful for any agent holding an agent's permit under the 47 provisions of this section to expressly or impliedly represent, by any means 48 whatsoever, that the issuance of the agent's permit constitutes an assurance 49 by the board that any course of study being offered for sale by theindividual50 agent or proprietary school will provide and require of the student a course 51 of education or training necessary to reach a professional, education, or 52 vocational objective, or will result in employment or personal earning for the 53 student, or that the board has made any evaluation, recognition, accredita- 54 tion, or endorsement of any course of study being offered for sale by the 55 agent or proprietary school. 7 1 No agent shall make any untrue or misleading statement or engage in sales, 2 collection, credit, or other practices of any type that are illegal, false, 3 deceptive, misleading or unfair. 4 The board shall maintain records for five (5) years of each application 5 for an agent's permit, each bond, and each issuance, denial, termination, sus- 6 pension and revocation of an agent's permit. 7 The board or a student may bring an action pursuant to the Idaho rules of 8 civil procedure for an agent's violation of the provisions of this chapter or 9 any rule promulgated pursuant to this chapter, or any fraud or misrepresenta- 10 tion. The court shall determine which party is the "prevailing party" and the 11 prevailing party shall be entitled to the recovery of damages, reasonable 12 attorney's fees and costs both at trial and on appeal. 13 Additionally, anyprincipal oragent who violates the provisions of this 14 section is also guilty of a misdemeanor punishable by imprisonment in the 15 county jail not exceeding six (6) months, or by a fine not exceeding five 16 thousand dollars ($5,000), or both. 17 SECTION 9. That Section 33-2406, Idaho Code, be, and the same is hereby 18 amended to read as follows: 19 33-24065. PURCHASE STATEMENT. At the time of depositing any moneys to 20 purchase the product of any proprietary school, the proprietary school shall 21 require the student to execute the following statement on an appropriate form 22 which shall be maintained on record by the proprietary school in the individ- 23 ual student's file: 24 "I understand that (Name ofInstitutionproprietary school) is registered 25 with the State Board of Education in accordance with Section 33-24043, 26 Idaho Code. I also understand that the State Board of Education has not 27 accredited or endorsed any course of study being offered by (Name of 28Institutionproprietary school), and that these courses will not be 29 accepted for transfer into any Idaho public postsecondary institution." 30 SECTION 10. That Section 33-2407, Idaho Code, be, and the same is hereby 31 amended to read as follows: 32 33-24076. SURETY BOND. A surety bond issued by an insurer duly authorized 33 to do business in this state in favor of the state of Idaho for the indemnifi- 34 cation of anypersonstudent for any loss suffered as a result of the occur- 35 rence, during the period of coverage, of any fraud or misrepresentation used 36 in connection with the solicitation for the sale or the sale of any course of 37 study, or as a result of any violation of this chapter or the rules promul- 38 gated pursuant to this chapter shall be required of an agent. The term of the 39 bond shall extend over the period of the permit. The bond shall be supplied by 40 the proprietary school. 41 The bond shall provide for liability in the penal sum of one hundred thou- 42 sand dollars ($100,000) forthosea proprietary schoolswith one hundred (100) 43 or more students; fifty thousand dollars ($50,000) forthosea proprietary 44 schoolswith fifty (50) to ninety-nine (99) students; twenty-five thousand 45 dollars ($25,000) forthosea proprietary schoolswith less than fifty (50) 46 students. Notwithstanding the above, forthosea proprietary schoolsthat sub- 47 mits evidence acceptable to the board that the total unearned tuition of the 48 proprietary school will not exceed ten thousand dollars ($10,000) at any given 49 time during the period of registration, a bond in the penal sum of ten thou- 50 sand dollars ($10,000) may be provided, regardless of the number of students. 51 The board may submit a demand upon the surety on the bond on behalf of a 8 1 student or students when it is reasonably believed that a loss has occurred 2 due to fraud or misrepresentation used in connection with the solicitation for 3 the sale or the sale of any course of study, or as a result of any violation 4 of the provisions of this chapter or the rules promulgated pursuant to this 5 chapter. 6 Neither the principal nor surety on the bond may terminate the coverage of 7 the bond, except upon giving one hundred twenty (120) days' prior written 8 notice to the board, and contemporaneously surrendering all agents' permits. 9 Each proprietary school shall certify, at the time of registration, the 10 number of students presently enrolled at the proprietary school and shall make 11 available, upon request of the board, proof of enrollment numbers. 12 SECTION 11. That Section 33-2408, Idaho Code, be, and the same is hereby 13 amended to read as follows: 14 33-24087. STUDENT TUITION RECOVERY ACCOUNT -- CONDITIONS FOR RECOVERY. 15 (1) There is hereby created in the state treasury the student tuition recovery 16 account to be administered by the board for the purpose of relieving or miti- 17 gating pecuniary losses suffered by anyIdaho resident who is astudent of a 18 proprietary school registered undertheprovisions of this chapter and who 19 meets either of the following conditions: 20 (a) The student was enrolled in a proprietary school prior tothethat 21 school's closure, had prepaid tuition, and suffered loss as a result of: 22 (i) The closure of the proprietary school; or 23 (ii) The proprietary school's breach or anticipatory breach of the 24 agreement for the course of study. 25 For the purpose of this section, "closure" includes closure of a branch or 26 satellite campus, the termination of either the correspondence or residence 27 portion of a home study or correspondence course, and the termination of a 28 course of study for some or all of the students enrolled in the course before 29 the time the students have satisfactorily completed the program, or before a 30 student who has been continuously enrolled in a course of study had been per- 31 mitted to complete all the educational services and classes that comprise the 32 course. 33 (b) The student obtained a judgment against theinstitutionproprietary 34 school for any violation of the provisions of this chapter or rules pro- 35 mulgated pursuant to this chapter, and the student certifies that the 36 judgment cannot be collected after diligent collection efforts. 37 (2) Payments from the account to any student shall be subject to rules 38 and conditions as the board shall prescribe. 39 (a) The proprietary school shall provide to the board at the time of the 40 proprietary school's closure the names and addresses of persons who were 41 students of the proprietary school within sixty (60) days prior to its 42 closure, and shall notify these students within thirty (30) days prior to 43 the proprietary school's closure, of their rights under the student 44 tuition recovery account and how to apply for payment. 45 (b) If the proprietary school fails to comply with the provisions of this 46 section, the board shall attempt to obtain the names and addresses of 47 these students and shall notify them, within ninety (90) days of the pro- 48 prietary school's closure, of their rights under the student tuition 49 recovery account and how to apply for payment. The board may require the 50 proprietary school to reimburse the board for all reasonable costs and 51 expenses incurred in notifying students. 52 (c) The board shall develop a form fully explaining a student's rights, 53 which shall be used by the proprietary school or the board to comply with 9 1 the notice requirement. The form shall include or be accompanied by a 2 claim application form and an explanation of how to complete the applica- 3 tion. 4 (d) Students filing for payment from the student tuition account as a 5 result of the closure of a proprietary school must submit the claim within 6 one (1) year from the proprietary school's or board's service of notice on 7 the student or within two (2) years of the closure of the proprietary 8 school, whichever is earlier. 9 (3) Students entitled to payment shall file with thestateboardof edu-10cationa verified application including, but not limited to each of the fol- 11 lowing: 12 (a) The student's name, address, telephone number and social security 13 number. 14 (b) If any portion of the tuition was paid from the proceeds of a loan, 15 the name of the lender and any state or federal agency that guaranteed the 16 loan. 17 (c) The amount of the prepaid tuition. 18 (d) The dates the student started and ceased attending the proprietary 19 school. 20 (e) A description of the reasons the student ceased attending the propri- 21 etary school. 22 (f) If the student ceased attending because of a breach or anticipatory 23 breach, a statement describing in detail the nature of the economic loss 24 incurred. 25 (4) Students entitled to payment based on a judgment shall file with the 26 board a verified application indicating the student's name, address, telephone 27 number andsocial security numberstudent identification, the amount of the 28 judgment obtained against the proprietary school, a statement that the judg- 29 ment cannot be collected, and a description of the efforts attempted to 30 enforce the judgment. The application shall be accompanied by a certified copy 31 of the judgment and any other documents indicating the student's efforts made 32 to enforce the judgment. The application shall be filed with the board within 33 two (2) years after the date upon which the judgment became final. 34 (5) If the board pays the claim, the amount of the payment shall be the 35 total amount of the student's economic loss, although the amount of the pay- 36 ment shall in no event exceed the amount of the student's tuition and cost of 37 equipment and materials related to the course of study plus interest on all 38 student loans used to pay tuition, equipment and materials. Upon payment of 39 the claim, the board shall be subrogated to all of the student's rights 40 against the proprietary school to the extent of the amount of the payment. If 41 the board receives several claims from students, the payment of which cannot 42 be totally covered by the student tuition recovery account, the claims shall 43 receive aproratapro rata share of the account. 44 (6) If the board denies a claim, the board shall notify the student of 45 the denial and of the student's right to request a hearing within thirty (30) 46 days. The hearing shall be held pursuant to the administrative procedure act, 47 chapter 52, title 67, Idaho Code. If a hearing is not requested the board's 48 decision shall be final. 49 (7) It is the intent of the legislature that, when a student is enrolled 50 in a proprietary school that closes prior to the completion of the student's 51 program, the student shall have the option for a teach-out at another propri- 52 etary school with a comparable course of study. The board shall seek to pro- 53 mote teach-out opportunities whenever possible, with the student to be 54 informed by the board that he or she has the option of either payment from the 55 account or a teach-out which shall be funded from the account. 10 1 (8) No liability accrues to the state of Idaho from claims made against 2 the student tuition recovery account. 3 SECTION 12. That Section 33-2409, Idaho Code, be, and the same is hereby 4 amended to read as follows: 5 33-24098. ASSESSMENT FOR STUDENT TUITION RECOVERY ACCOUNT. The board 6 shall assess each registered proprietary school which collects any moneys in 7 advance of rendering services, an amount equal to one-tenth of one percent 8 (.1%) of the total course cost for each student enrolled. The assessment per 9 student shall not be less than one dollar ($1.00), and not more than four dol- 10 lars ($4.00). In addition, for each student who prepays an institutionpropri- 11 etary school an amount in excess of four thousand dollars ($4,000), the board 12 shall assess the proprietary school one-half of one percent (.5%) of the pre- 13 paid amount which exceeds four thousand dollars ($4,000). The board shall pro- 14 mulgate rules regarding collection and administration of the student tuition 15 account. 16 At any time that the balance is in excess of fifty thousand dollars 17 ($50,000), the board shall suspend collection, except as provided in the event 18 of a newly registered proprietary school or the transfer of ownership of a 19 proprietary school as provided in this section, until such time as the balance 20 is again below fifty thousand dollars ($50,000). 21 Newly registered proprietary schools shall, regardless of the balance in 22 the account, contribute the assessment set forth in this section for two (2) 23 consecutive years. 24 If fifty-one percent (51%) or more of the ownership interest in a propri- 25 etary school is conveyed through sale or other means into different ownership, 26 the new owner shall commence contributions under the provisions applying to a 27 new applicant. 28 No more than ten percent (10%) per fiscal year shall be used for the 29 administration of the tuition recovery program. The interest earned on money 30 in the account shall be credited to the account. 31 In the event of a closure of a proprietary school registered under the 32 provisions of this chapter, any assessments which have been made against those 33 proprietary schools, but have not been paid into the account, shall be recov- 34 ered to the extent feasible, or any payments from the student tuition recovery 35 account made to students on behalf of any proprietary school may be recovered 36 from that proprietary school by appropriate action taken by the board. The 37 moneys so deposited in the student tuition recovery account shall be exempt 38 from execution and shall not be the subject of litigation or liability on the 39 part of creditors of those proprietary schools or students. 40 SECTION 13. That Chapter 24, Title 33, Idaho Code, be, and the same is 41 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 42 ignated as Section 33-2409, Idaho Code, and to read as follows: 43 33-2409. ENFORCEMENT. Any violation of the provisions of this chapter 44 shall be referred to the attorney general by the board for appropriate action 45 including, but not limited to, injunctive relief.
STATEMENT OF PURPOSE RS 15997C1 The course/program registration process in Title 33, Chapters 1 and 24, Idaho Code, needs to be revised to more clearly define the process for registering private non-profit and for profit post secondary institutions that are offering academic credit in Idaho and the process for registering proprietary schools. The revisions will enhance the Idaho State Board of Education's ability to more carefully scrutinize institutions that are operating from a location in Idaho. Idaho is one of a few states in the nation that does not have a rigorous registration process. The registration process protects the integrity of academic credit among institutions and helps to avoid the proliferation of degrees that are granted by paying a fee and not taking classes and still obtaining degrees. FISCAL NOTE Initially staff at the Idaho State Board of Education/Department of Education will be able to process requests. In future years, 1 additional professional position and a part-time clerical position may need to be added. Contact Name: Karen Echevarria/Marilyn Davis, Office of the State Board of Education Phone: 332-1567/332-1563 STATEMENT OF PURPOSE/FISCAL NOTE H 712