Print Friendly HOUSE BILL NO. 712 – Proprietary schools, law revisions
HOUSE BILL NO. 712
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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,
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
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN 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
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
43 (2) aAcquire, hold and dispose of title, rights and interests in real and
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-
13 (6) iIn addition to the powers conferred by chapter 24, title 33, Idaho
14 Code ;:
15 (a) mMaintain a register of courses and programs offered anywhere in the
16 state of Idaho by postsecondary institutions which are: (1) located out-
17 side the state of Idaho and are offering courses or programs for academic
18 credit or otherwise; or (2) located within the state of Idaho but not
19 accredited by a regional or national accrediting agency recognized by the
20 board and are offering courses for academic credit. The acceptance of aca-
21 demic or nonacademic credit, at public postsecondary institutions in
22 Idaho, is the prerogative of the state board of education; provided how-
23 ever, credit transferred into Idaho public postsecondary institutions from
24 nonaccredited postsecondary institutions can be accepted only upon posi-
25 tive review and recommendation by the individual postsecondary institu-
26 tions and with the approval of the state board of education. A
27 nonaccredited postsecondary institution is one which is not accredited by
28 a regional accrediting agency recognized by the state board or the United
29 States department of education postsecondary 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 or
34 programs in Idaho with the standards and procedures established in chapter
35 24, title 33, Idaho Code, or those standards, procedures and criteria set
36 by the board Determine 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 the
42 attorney general for appropriate action, including, but not limited to,
43 injunctive 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.
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 a school postsecondary 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 department
8 of education.
9 (2) "Agent" means any individual within the state of Idaho who solicits
10 students for courses in Idaho or 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
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.
29 The state of Idaho recognizes and confirms the authority of any board of
30 directors, board of trustees or comparable authority of an accredited school
31 to confer degrees consistent with the requirements specified by the accredit-
32 ing agency of the school.
33 (7) "Person" means any individual or other legal entity conducting
35 (8) " PrincipalPostsecondary educational institution" means any person
36 conducting courses an 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" means any postsecondary
42 or vocational or professional-technical educational school operated for a
43 profit, or on a nonprofit basis, which maintains a place of an 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 Idaho or solicits business within
47 the state of Idaho offering degrees, career or job training programs and which
48 is not specifically exempted by the provisions of this chapter and 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-
52 tificate authorizing the conduct of courses.
53 (11) "Student" means an Idaho resident enrolled in a proprietary school.
1 SECTION 3. That Section 33-2402, Idaho Code, be, and the same is hereby
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
39 SECTION 5. That Section 33-2403, Idaho Code, be, and the same is hereby
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
50 (2) The board shall prescribe by rule the procedure for registration,
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
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
44 SECTION 8. That Section 33-2405, Idaho Code, be, and the same is hereby
45 amended to read as follows:
46 33-240 54. 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 33-240 76, Idaho
51 The application for an agent's permit shall be furnished by the board and
52 shall include the following:
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 fee of 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 the principal proprietary
11 school, and a statement that the bearer is an authorized agent of the princi-
12 pal proprietary school, and may solicit and sell courses for the principal
13 proprietary school. The agent shall surrender the agent's permit to the prin-
14 cipal proprietary school upon termination of employment.
15 An agent representing more than one (1) institution proprietary school
16 shall obtain a separate agent's permit for each institution proprietary school
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 agent or of any such proprietary school. Any oral or written statement,
42 advertisement or solicitation by any principal proprietary 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 33-240 43, 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 the individual
50 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.
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, any principal or agent 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 33-240 65. 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 of Institution proprietary school) is registered
25 with the State Board of Education in accordance with Section 33-240 43,
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
28 Institution proprietary 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 33-240 76. 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 any person student 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) for those a proprietary school s with one hundred (100)
43 or more students; fifty thousand dollars ($50,000) for those a proprietary
44 school s with fifty (50) to ninety-nine (99) students; twenty-five thousand
45 dollars ($25,000) for those a proprietary school s with less than fifty (50)
46 students. Notwithstanding the above, for those a proprietary school s that 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
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
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 33-240 87. 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 any Idaho resident who is a student of a
18 proprietary school registered under the provisions of this chapter and who
19 meets either of the following conditions:
20 (a) The student was enrolled in a proprietary school prior to the that
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
33 (b) The student obtained a judgment against the institution proprietary
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
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-
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 the state board of edu-
10 cation a verified application including, but not limited to each of the fol-
12 (a) The student's name, address, telephone number and social security
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
17 (c) The amount of the prepaid tuition.
18 (d) The dates the student started and ceased attending the proprietary
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
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 and social security number student 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 a prorata pro 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.
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 33-240 98. 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 a n institution propri-
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
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
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.
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.
Name: Karen Echevarria/Marilyn Davis, Office of the State Board
STATEMENT OF PURPOSE/FISCAL NOTE H 712