2006 Legislation
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HOUSE BILL NO. 712 – Proprietary schools, law revisions

HOUSE BILL NO. 712

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Bill Status



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

Bill Text


                                                                        
                                                                        
  ]]]]              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
 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 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.
                                                                        
                                           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 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
 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.
 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
 34    courses.
 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.
                                                                        
                                           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 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
 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  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 33-24043, 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 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.
                                                                        
                                           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, 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        33-24065.  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 of Institution proprietary 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
 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        33-24076.  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 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 schools with one hundred (100)
 43    or  more  students;  fifty  thousand dollars ($50,000) for those a proprietary
 44    schools with fifty (50) to ninety-nine  (99)  students;  twenty-five  thousand
 45    dollars  ($25,000)  for  those a proprietary schools with less than fifty (50)
 46    students. Notwithstanding the above, for those a proprietary schools 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
                                                                        
                                           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 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
 32    course.
 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
                                                                        
                                           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 the state board of edu-
 10    cation a 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  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.
                                                                        
                                           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 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
 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 / Fiscal Impact



                       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