By: Kubiak H.B. No. 1637
73R4696 JMM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of proprietary schools by the Texas
1-3 Department of Licensing and Regulation.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 32.11, Education Code, is amended by
1-6 amending Subdivisions (5) and (6) and adding Subdivision (10) to
1-7 read as follows:
1-8 (5) "Commissioner" <"Administrator"> means the
1-9 commissioner <State Commissioner> of licensing and regulation
1-10 <Education> or a person, knowledgeable in the administration of
1-11 regulating proprietary schools, designated by the Commissioner to
1-12 administer the provisions of this chapter.
1-13 (6) "Notice to the school" means written
1-14 correspondence sent to the address of record for legal service
1-15 contained in the application for a certificate of approval. "Date
1-16 of Notice" means the date the notice is mailed by the commissioner
1-17 <administrator>.
1-18 (10) "Department" means the Texas Department of
1-19 Licensing and Regulation.
1-20 SECTION 2. Section 32.12, Education Code, is amended to read
1-21 as follows:
1-22 Sec. 32.12. EXEMPTIONS. (a) The following schools or
1-23 educational institutions are specifically exempt from the
1-24 provisions of this chapter and are not within the definition of
2-1 "proprietary school":
2-2 (1) a school or educational institution supported by
2-3 taxation from either a local or State source;
2-4 (2) nonprofit schools owned, controlled, operated, and
2-5 conducted by bona fide religious, denominational, eleemosynary, or
2-6 similar public institutions exempt from property taxation under the
2-7 laws of this State, but such schools may choose to apply for a
2-8 certificate of approval hereunder, and upon approval and issuance,
2-9 shall be subject to the provisions of this chapter as determined by
2-10 the commissioner <administrator>;
2-11 (3) a school or training program which offers
2-12 instruction of purely avocational or recreational subjects as
2-13 determined by the commissioner <administrator>;
2-14 (4) a course or courses of instruction or study
2-15 sponsored by an employer for the training and preparation of its
2-16 own employees, and for which no tuition fee is charged to the
2-17 student;
2-18 (5) a course or courses of study or instruction
2-19 sponsored by a recognized trade, business, or professional
2-20 organization for the instruction of the members of the organization
2-21 with a closed membership;
2-22 (6) private colleges or universities which award a
2-23 recognized baccalaureate, or higher degree, and which maintain and
2-24 operate educational programs for which a majority of the credits
2-25 given are transferable to a college, junior college, or university
2-26 supported entirely or partly by taxation from either a local or
2-27 State source;
3-1 (7) a school which is otherwise regulated and approved
3-2 under and pursuant to any other law of the State, except as
3-3 provided by Subsection (c) of this section;
3-4 (8) aviation schools or instructors approved by and
3-5 under the supervision of the Federal Aviation Administration;
3-6 (9) a school which offers intensive review courses
3-7 designed to prepare students for certified public accountancy
3-8 tests, public accountancy tests, law school aptitude tests, bar
3-9 examinations, or medical college admissions tests.
3-10 (b) Schools offering a course or courses of special study or
3-11 instruction financed and/or subsidized by local, state or federal
3-12 funds or any person, firm, association, or agency other than the
3-13 student involved, on a contract basis and having a closed
3-14 enrollment may apply to the commissioner <Administrator> for
3-15 exemption of such course or courses from the provisions of this
3-16 Chapter and such course or courses may be declared exempt by the
3-17 commissioner <Administrator> where the commissioner <he> finds the
3-18 course or courses to be outside the purview of this Chapter.
3-19 (c) If a State agency that issues a license or other
3-20 authorization for the practice of an occupation elects not to
3-21 regulate or approve course hours that exceed the minimum education
3-22 requirements for the issuance of the license or other
3-23 authorization, the licensing agency shall enter into a memorandum
3-24 of understanding with the department <Central Education Agency> for
3-25 the regulation of those excess course hours under this chapter.
3-26 Any course taught under a letter of approval or other written
3-27 authorization issued by the licensing agency before the effective
4-1 date of the memorandum is authorized under State law until the
4-2 course is reviewed by the department <Central Education Agency>.
4-3 The licensing agency may terminate the memorandum of understanding
4-4 on notice to the department <Central Education Agency>.
4-5 SECTION 3. Section 32.21, Education Code, is amended to read
4-6 as follows:
4-7 Sec. 32.21. DEPARTMENT OF LICENSING AND REGULATION <CENTRAL
4-8 EDUCATION AGENCY>. (a) The Texas Department of Licensing and
4-9 Regulation <Central Education Agency> shall exercise jurisdiction
4-10 and control of the system of schools, and it shall be the duty of
4-11 the Commissioner <of Education> to carry out supervision of the
4-12 provisions of this chapter, and to enforce minimum standards for
4-13 approval of schools under the operating regulations and policies
4-14 hereinafter set forth and as may from time to time be adopted
4-15 pursuant to the provisions of this chapter.
4-16 (b) The department <Central Education Agency> shall prepare
4-17 a comparison of the cost to a student of courses of instruction or
4-18 training programs at proprietary schools to the cost to a student
4-19 of similar courses or programs at schools that are exempt from this
4-20 chapter under Section 32.12 of this code.
4-21 (c) The department <agency> may consult a recognized expert
4-22 in a field of study for assistance in determining minimum program
4-23 standards under this chapter for that field.
4-24 (d) The department <Central Education Agency> and the Texas
4-25 Higher Education Coordinating Board shall adopt a memorandum of
4-26 understanding which develops guidelines for coordinating the
4-27 regulation of proprietary schools and courses that are subject to
5-1 Sections 61.301 through 61.317 and Chapter 32 of this code. The
5-2 memorandum shall include provisions which:
5-3 (1) clearly identify the responsibilities of each
5-4 agency in regulating proprietary schools;
5-5 (2) ensure that the rules adopted by both agencies
5-6 pursuant to the memorandum of understanding are not duplicative or
5-7 in conflict; and
5-8 (3) establish procedures for ensuring that information
5-9 affecting the proprietary school regulatory activities of both
5-10 agencies is shared between the agencies.
5-11 SECTION 4. Section 32.22, Education Code, is amended to read
5-12 as follows:
5-13 Sec. 32.22. Rulemaking Authority <The State Board of
5-14 Education>. The commissioner <State Board of Education> shall
5-15 adopt policies, regulations and rules necessary for carrying out
5-16 the provisions of this chapter after consultation with the
5-17 Proprietary School Advisory Commission.
5-18 SECTION 5. Sections 32.23(a), (c), (d), and (f), Education
5-19 Code, are amended to read as follows:
5-20 (a) The Proprietary School Advisory Commission is created.
5-21 The Commission shall be composed of nine members appointed by the
5-22 commissioner <State Board of Education> for staggered terms of six
5-23 (6) years expiring on January 31 of each odd-numbered year. If one
5-24 of the commission members resigns or is otherwise unable to serve,
5-25 a new member shall be appointed by the commissioner <State Board of
5-26 Education> to fill the unexpired terms. Four members of the
5-27 Commission shall be "owners" or shall be "employees" employed in a
6-1 managerial or executive capacity by the schools as defined in
6-2 Section 32.11 of this Code and shall include at least one member
6-3 from each of the following school areas: (1) trade and technical
6-4 schools, (2) business schools and (3) correspondence schools; of
6-5 these four members, one shall be a person who owns or operates not
6-6 more than two (2) proprietary schools in Texas; one member shall be
6-7 a public school official; and four members shall be distinguished
6-8 citizens of Texas who do not have a direct connection to
6-9 vocational-technical training. <All members appointed by the State
6-10 Board of Education shall have been recommended by the Administrator
6-11 to the State Board of Education. In making his recommendations,
6-12 the Administrator shall consider any recommendations made to him by
6-13 parties interested in the composition of the Advisory Commission.>
6-14 The attorney general and the director of the Texas Guaranteed
6-15 Student Loan Corporation are ex officio members of the Advisory
6-16 Commission.
6-17 (c) The commission shall meet regularly in Austin at 10:00
6-18 a.m. on the second Tuesday of January, May, and September, and
6-19 shall conduct special meetings at the call of the chair, the
6-20 commissioner <administrator>, or upon the written petition of at
6-21 least four members of the commission.
6-22 (d) A member of the commission serves without compensation
6-23 but upon presentation of a voucher signed by the chairman of the
6-24 commission and approved by the commissioner <administrator> is
6-25 entitled to receive reimbursement for actual expenses incurred
6-26 while traveling on official commission business in accordance with
6-27 the policy and regulations of the State of Texas.
7-1 (f) The commission shall be advisory in nature. It shall
7-2 act with the advice and assistance of the commissioner
7-3 <administrator> and may hold hearings upon substantive changes in
7-4 rules, regulations and minimum standards. The advice of the
7-5 commission with respect to the policies, regulations, minimum
7-6 standards, and rules for carrying out the provisions of this
7-7 chapter, shall be forwarded <by the administrator> to the
7-8 commissioner <State Board of Education>.
7-9 SECTION 6. Section 32.24, Education Code, is amended to read
7-10 as follows:
7-11 Sec. 32.24. Duties of Commissioner <Administrator>. <(a)>
7-12 The commissioner <administrator> shall carry out the policies of
7-13 this chapter and enforce the rules and regulations adopted under
7-14 this chapter <by the State Board of Education>. The commissioner
7-15 <He> shall also certify the names of those schools meeting the
7-16 requirements for a certificate of approval.
7-17 <(b) The administrator may adopt and enforce temporary rules
7-18 and regulations pursuant to the provisions of this chapter but the
7-19 temporary rules and regulations are valid only until the next
7-20 meeting of the State Board of Education.>
7-21 SECTION 7. Section 32.25, Education Code, is amended to read
7-22 as follows:
7-23 Sec. 32.25. Memorandum of Understanding for Regulation of
7-24 Proprietary Schools. (a) The department <Central Education
7-25 Agency> shall develop, in consultation with the Texas Guaranteed
7-26 Student Loan Corporation and each state agency that regulates
7-27 proprietary schools in this state, a comprehensive strategy to
8-1 reduce default rates at the regulated proprietary schools and to
8-2 improve the overall quality of the programs operated by these
8-3 schools.
8-4 (b) The department <Central Education Agency> shall execute
8-5 a memorandum of understanding outlining the strategy with the
8-6 corporation and each state agency regulating proprietary schools
8-7 and shall adopt rules to carry out its duties under this section.
8-8 The Texas Guaranteed Student Loan Corporation shall adopt the
8-9 memorandum of understanding as procedures of the corporation, and
8-10 each agency by rule shall adopt the memorandum of understanding.
8-11 (c) The memorandum of understanding shall:
8-12 (1) require the development and monitoring of
8-13 indicators that identify schools that have excessive loan default
8-14 rates, poor program performance, or both;
8-15 (2) require the sharing of specific information
8-16 relating to the indicators between the department <Central
8-17 Education Agency> and the Texas Guaranteed Student Loan Corporation
8-18 or other agency; and
8-19 (3) require the application of specific sanctions by
8-20 the department <Central Education Agency> or by the Texas
8-21 Guaranteed Student Loan Corporation or other agency, as
8-22 appropriate, to lower the default rates, improve program
8-23 performance, or both.
8-24 (d) If the department <Central Education Agency> enters a
8-25 memorandum of understanding with the Texas Guaranteed Student Loan
8-26 Corporation related to the regulation of proprietary schools, the
8-27 department <agency> may require each proprietary school governed by
9-1 this chapter to provide information to the department <agency> that
9-2 is necessary for the purposes of the memorandum of understanding.
9-3 SECTION 8. Section 32.31(a), Education Code, is amended to
9-4 read as follows:
9-5 (a) A school may not maintain, advertise, solicit for, or
9-6 conduct any course of instruction in Texas before the later of:
9-7 (1) the 30th day after the date the school applies for
9-8 a certificate of approval under this chapter; or
9-9 (2) the date the school receives a certificate of
9-10 approval from the commissioner <administrator>.
9-11 SECTION 9. Section 32.32, Education Code, is amended to read
9-12 as follows:
9-13 Sec. 32.32. Application for Certificate of Approval. Every
9-14 proprietary school desiring to operate in the State of Texas or do
9-15 business in the State shall make written application to the
9-16 department <administrator> for a certificate of approval. Such
9-17 application shall be verified, be in such form as may be prescribed
9-18 by the department <State Board of Education>, and shall furnish the
9-19 department <administrator> such information as <he> may be required
9-20 <require>.
9-21 SECTION 10. Section 32.33, Education Code, is amended to
9-22 read as follows:
9-23 Sec. 32.33. Criteria. The commissioner <administrator> may
9-24 approve the application of such proprietary school when the school
9-25 is found, upon investigation at the premises of the school, to have
9-26 met the following criteria:
9-27 (a) The courses, curriculum, and instruction are of
10-1 such quality, content, and length as may reasonably and adequately
10-2 achieve the stated objective for which the courses, curriculum or
10-3 instruction are offered.
10-4 (b) There is in the school adequate space, equipment,
10-5 instructional material and instructor personnel to provide training
10-6 of good quality.
10-7 (c) Educational and experience qualifications of
10-8 directors, administrators and instructors are adequate.
10-9 (d) The school maintains a written record of the
10-10 previous education and training of the applicant student and
10-11 clearly indicates that appropriate credit has been given by the
10-12 school for previous education and training, with the new training
10-13 period shortened where warranted through use of appropriate skills
10-14 or achievement tests and the student so notified.
10-15 (e) A copy of the course outline; schedule of tuition,
10-16 fees, refund policy, and other charges; regulations pertaining to
10-17 absence, grading policy, and rules of operation and conduct;
10-18 regulations pertaining to incomplete grades; the name, mailing
10-19 address, and telephone number of the department <Central Education
10-20 Agency> for the purpose of directing complaints to the agency; the
10-21 current rates of job placement and employment of students issued a
10-22 certificate of completion; and notification of the availability of
10-23 the cost comparison information prepared under Section 32.21(b) of
10-24 this code through the department <Central Education Agency> will be
10-25 furnished the student prior to enrollment.
10-26 (f) Except as provided by Section 32.40 of this code,
10-27 on completion of training, the student is given a certificate by
11-1 the school indicating the course and that training was
11-2 satisfactorily completed.
11-3 (g) Adequate records as prescribed by the commissioner
11-4 <administrator> are kept to show attendance and progress or grades,
11-5 and satisfactory standards relating to attendance, progress and
11-6 conduct are enforced.
11-7 (h) The school complies with all local, city, county,
11-8 municipal, state and federal regulations, such as fire, building
11-9 and sanitation codes. The commissioner <administrator> may require
11-10 such evidence of compliance as is deemed necessary.
11-11 (i) The school is financially sound and capable of
11-12 fulfilling its commitments for training.
11-13 (j) The school's administrators, directors, owners,
11-14 and instructors are of good reputation and character.
11-15 (k) The school has, maintains and publishes in its
11-16 catalogue and enrollment contract, the proper policy for the refund
11-17 of the unused portion of tuition, fees and other charges in the
11-18 event the student enrolled by the school fails to take the course
11-19 or withdraws or is discontinued therefrom at any time prior to
11-20 completion.
11-21 (l) The school does not utilize erroneous or
11-22 misleading advertising, either by actual statement, omission, or
11-23 intimation as determined by the department <State Board of
11-24 Education>.
11-25 (m) Such additional criteria as may be required by the
11-26 commissioner <State Board of Education>.
11-27 (n) The school does not use a name like or similar to
12-1 an existing tax supported school in the same area.
12-2 (o) The school furnishes to the department <Central
12-3 Education Agency> the current rates of students who receive a
12-4 certificate of completion and of job placement and employment of
12-5 students issued a certificate of completion.
12-6 (p) The school furnishes to the department <Central
12-7 Education Agency> for approval or disapproval student admission
12-8 requirements for each course or program offered by the school.
12-9 (q) The school furnishes to the department <Central
12-10 Education Agency> for approval or disapproval the course hour
12-11 lengths and curriculum content for each course offered by the
12-12 school.
12-13 (r) The school does not owe a civil penalty under
12-14 Section 32.611 of this code.
12-15 SECTION 11. Sections 32.34(a), (d), and (f), Education Code,
12-16 are amended to read as follows:
12-17 (a) The department <administrator>, upon review of an
12-18 application for a certificate of approval duly submitted in
12-19 accordance with the provisions of Section 32.32 and meeting the
12-20 requirements of Section 32.33 of this chapter, shall issue a
12-21 certificate of approval to the applicant school. The certificate
12-22 of approval shall be in a form prescribed <recommended by the
12-23 commission and approved> by the commissioner <State Board of
12-24 Education> and shall state in a clear and conspicuous manner at
12-25 least the following information:
12-26 (1) date of issuance, effective date, and term of
12-27 approval;
13-1 (2) correct name and address of the school;
13-2 (3) authority for approval and conditions of approval,
13-3 if any, referring specifically to the approved catalogue or
13-4 bulletin published by the school;
13-5 (4) signature of the commissioner <administrator> or
13-6 such person as may have been designated <by him> to administer the
13-7 provisions of this chapter; and
13-8 (5) any other fair and reasonable representations that
13-9 are consistent with this chapter and deemed necessary by the
13-10 commissioner <administrator>.
13-11 (d) At least thirty (30) days prior to expiration of a
13-12 certificate of approval, the school shall forward to the department
13-13 <administrator> an application for renewal. The department
13-14 <administrator> shall reexamine the school at the premises of the
13-15 school and either renew or cancel the school's certificate of
13-16 approval. If a school fails to file a complete application for
13-17 renewal at least thirty (30) days before the expiration date of the
13-18 certificate of approval, the school, as a condition of renewal,
13-19 must pay, in addition to the annual renewal fee, a late renewal fee
13-20 in an amount established by Texas Commission of Licensing and
13-21 Regulation <State Board of Education> rule of at least $100.
13-22 (f) The commissioner <administrator> shall visit a school to
13-23 reexamine the school for compliance with the criteria provided by
13-24 Section 32.33 of this code not later than three months after the
13-25 date a school begins operation or after a change in ownership of a
13-26 school.
13-27 SECTION 12. Section 32.35(a), Education Code, is amended to
14-1 read as follows:
14-2 (a) If the department <administrator>, upon review and
14-3 consideration of an application for certificate of approval, shall
14-4 determine the applicant to be unacceptable, the department
14-5 <administrator> shall set forth the reasons for denial, in writing,
14-6 to the applicant.
14-7 SECTION 13. Section 32.36, Education Code, is amended to
14-8 read as follows:
14-9 Sec. 32.36. Revocation of Certificate of Approval. (a) The
14-10 commissioner <Administrator> may revoke an issued certificate of
14-11 approval or place reasonable conditions upon the continued approval
14-12 represented by the certificate. Prior to revocation or imposition
14-13 of conditions upon a certificate of approval, the commissioner
14-14 <Administrator> shall notify the holder of the certificate, in
14-15 writing, of the impending action and set forth the grounds for the
14-16 action. The commissioner <Administrator> may reexamine a school
14-17 two or more times during each year in which a notice relating to
14-18 the school has been issued or conditions have been imposed on the
14-19 school under this subsection.
14-20 (b) A certificate of approval may be revoked or made
14-21 conditional if the commissioner <Administrator> has reasonable
14-22 cause to believe that the school is guilty of a violation of this
14-23 chapter or of any rules and regulations promulgated hereunder.
14-24 SECTION 14. Sections 32.37(a), (b), (c), and (e), Education
14-25 Code, are amended to read as follows:
14-26 (a) All representatives employed by a school shall register
14-27 with the department <administrator>. Application for registration
15-1 may be made at any time and shall be based on information submitted
15-2 in accordance with the provisions of Section 32.32 of this chapter.
15-3 (b) Registration of a representative shall be effective upon
15-4 receipt of notice from the department <administrator> and shall
15-5 remain in effect for a period not in excess of twelve (12) calendar
15-6 months. Renewal of representative registration shall be in
15-7 accordance with the renewal application form forwarded to the
15-8 school by the department <administrator>.
15-9 (c) Denial or revocation of registration of a representative
15-10 by the commissioner <administrator> shall be in accordance with the
15-11 provisions of this chapter applicable to denial or revocation of a
15-12 certificate of approval; provided, however, the commissioner
15-13 <administrator> may deny, suspend or revoke the registration of a
15-14 representative who has been convicted of a felony, whether within
15-15 or without the State of Texas.
15-16 (e) The commissioner <administrator> shall deny registration
15-17 of a representative who owes a civil penalty under Section 32.611
15-18 of this code.
15-19 SECTION 15. Sections 32.38(a), (c), and (e), Education Code,
15-20 are amended to read as follows:
15-21 (a) Before a certificate of approval is issued under this
15-22 chapter, a bond shall be provided by the school for the period
15-23 during which the certificate of approval is issued, and the
15-24 obligation of the bond shall be that neither a provision of this
15-25 chapter nor any rule or regulation adopted pursuant thereto shall
15-26 be violated by the school or any of its officers, agents, or
15-27 employees. The bond shall be in the penal sum of $5,000 or a
16-1 multiple of $5,000 that is not greater than $25,000. The
16-2 commissioner <administrator> shall determine the amount based on
16-3 the evidence the school submits of its projected maximum total
16-4 unearned tuition during the period of the certificate of approval.
16-5 The bond shall be a corporate surety bond issued by a company
16-6 authorized to do business in the State, conditioned that the
16-7 parties thereto shall pay all damages or expenses which the State
16-8 or any governmental subdivision thereof, or any student or
16-9 potential student may sustain resulting from a violation. The bond
16-10 shall be to the State to be used only for payment of a tuition
16-11 refund due to a student or potential student. The bond shall be
16-12 filed with the commissioner <administrator> and shall be in such
16-13 form as shall be approved by the commissioner <administrator>.
16-14 (c) In lieu of the corporate surety bond required in
16-15 Subsection (a) of this Section, the school may, in the alternative,
16-16 provide any other similar certificate or evidence of indebtedness
16-17 as may be acceptable to the commissioner <Administrator>, provided
16-18 that the Certificate or evidence of indebtedness meets all the
16-19 requirements applicable to the corporate surety bond.
16-20 (e) The commissioner <administrator>, for good cause shown,
16-21 <as recommended by the commission and approved by the State Board
16-22 of Education,> may waive and suspend the requirements set forth in
16-23 Subsections (a) and (c) of this Section with respect to schools
16-24 operating wholly or in part under a federal grant where no tuition
16-25 fee is charged to the student.
16-26 SECTION 16. Sections 32.39(b), (c), and (e), Education Code,
16-27 are amended to read as follows:
17-1 (b) As a condition for granting certification, each school
17-2 must maintain a policy for the refund of the unused portion of
17-3 tuition, fees, and other charges in the event the student, after
17-4 expiration of the 72-hour cancellation privilege, fails to enter
17-5 the course, or withdraws, or is discontinued therefrom at any time
17-6 prior to completion, and such policy must provide:
17-7 (1) refunds for resident courses will be based on the
17-8 period of enrollment computed on the basis of course time expressed
17-9 in clock hours;
17-10 (2) the effective date of the termination for refund
17-11 purposes in residence schools will be the earliest of the
17-12 following:
17-13 (A) the last date of attendance, if the student
17-14 is terminated by the school;
17-15 (B) the date of receipt of written notice from
17-16 the student;
17-17 (C) ten school days following the last date of
17-18 attendance;
17-19 (3) if tuition is collected in advance of entrance,
17-20 and if, after expiration of the 72-hour cancellation privilege, the
17-21 student does not enter the residence school, not more than $100
17-22 shall be retained by the school;
17-23 (4) for the student who enters a residence course of
17-24 not more than 12 months in length, terminates or withdraws, the
17-25 school may retain $100 of tuition and fees and the minimum refund
17-26 of the remaining tuition will be:
17-27 (A) during the first week or one-tenth of the
18-1 course, whichever is less, 90 percent of the remaining tuition;
18-2 (B) after the first week or one-tenth of the
18-3 course, whichever is less, but within the first three weeks of the
18-4 course, 80 percent of the remaining tuition;
18-5 (C) after the first three weeks of the course,
18-6 but within the first quarter of the course, 75 percent of the
18-7 remaining tuition;
18-8 (D) during the second quarter of the course, 50
18-9 percent of the remaining tuition;
18-10 (E) during the third quarter of the course, 10
18-11 percent of the remaining tuition;
18-12 (F) during the last quarter of the course, the
18-13 student may be considered obligated for the full tuition;
18-14 (5) for residence courses more than 12 months in
18-15 length, the refund shall be applied to each 12-month period, or
18-16 part thereof separately;
18-17 (6) refunds of items of extra expense to the student,
18-18 such as instructional supplies, books, student activities,
18-19 laboratory fees, service charges, rentals, deposits, and all other
18-20 such ancillary miscellaneous charges, where these items are
18-21 separately stated and shown in the data furnished the student
18-22 before enrollment, will be made in a reasonable manner acceptable
18-23 to the commissioner <administrator>;
18-24 (7) refunds based on enrollment in residence schools
18-25 will be totally consummated within 30 days after the effective date
18-26 of termination;
18-27 (8) refunds for correspondence courses will be
19-1 computed on the basis of the number of lessons in the course;
19-2 (9) the effective date of the termination for refund
19-3 purposes in correspondence courses will be the earliest of the
19-4 following:
19-5 (A) the date of notification to the student if
19-6 the student is terminated;
19-7 (B) the date of receipt of written notice from
19-8 the student;
19-9 (C) the end of the third calendar month
19-10 following the month in which the student's last lesson assignment
19-11 was received unless notification has been received from the student
19-12 that he wishes to remain enrolled;
19-13 (10) if tuition is collected before any lessons have
19-14 been completed, and if, after expiration of the 72-hour
19-15 cancellation privilege, the student fails to begin the course, not
19-16 more than $50 shall be retained by the school;
19-17 (11) in cases of termination or withdrawal after the
19-18 student has begun the correspondence course, the school may retain
19-19 $50 of tuition and fees, and the minimum refund policy must provide
19-20 that the student will be refunded the pro rata portion of the
19-21 remaining tuition fees and other charges that the number of lessons
19-22 completed and serviced by the school bears to the total number of
19-23 lessons in the course;
19-24 (12) refunds based on enrollment in correspondence
19-25 schools will be totally consummated within 30 days after the
19-26 effective date of termination.
19-27 (c) In lieu of the refund policy herein set forth, for
20-1 programs of instruction not regularly offered to the general
20-2 public, the department <State Board of Education> may, for good
20-3 cause shown, amend, modify, substitute and/or alter the terms of
20-4 such policy due to the specialized nature and objective of the
20-5 subject school's course of instruction.
20-6 (e) If a refund is not made within the period required by
20-7 this section, the school shall pay interest on the refund for the
20-8 interval beginning with the first day following the expiration of
20-9 the refund period and ending with the day immediately preceding the
20-10 date the refund is made. If the refund is made to a lending
20-11 institution, the interest shall also be paid to that institution
20-12 and applied against the student's loan. The commissioner <of
20-13 education> annually shall establish the level of interest at a
20-14 level sufficient to provide a deterrent to the retention of student
20-15 funds. The department <Central Education Agency> may exempt a
20-16 school from the payment of the interest if the school makes a good
20-17 faith effort to refund the tuition but is unable to locate the
20-18 student. The school shall provide to the department <agency> on
20-19 request documentation of the effort to locate the student.
20-20 SECTION 17. Section 32.41, Education Code, is amended to
20-21 read as follows:
20-22 Sec. 32.41. Hearing. Should the applicant be dissatisfied
20-23 with the denial of a certificate of approval by the commissioner
20-24 <Administrator>, the applicant shall have the right to appeal the
20-25 decision of the commissioner <Administrator> and request a hearing
20-26 with the commissioner or a hearing officer appointed by the
20-27 commissioner <Administrator> within fifteen (15) days after receipt
21-1 of notice. Upon receipt of the request for a hearing, the
21-2 commissioner <Administrator> shall set a time and place for said
21-3 hearing and then send notice to the school of said time and place.
21-4 Said hearing shall be held within thirty (30) days from the receipt
21-5 of the request for a hearing. At said hearing, an applicant may
21-6 appear in person or by counsel and present evidence to the
21-7 commissioner or a hearing officer appointed by the commissioner
21-8 <Administrator> in support of the granting of the permit specified
21-9 herein. All interested persons may also appear and present oral
21-10 and documentary evidence to the commissioner or a hearing officer
21-11 appointed by the commissioner <Administrator>, concerning the
21-12 issuance of a certificate of approval to the applicant school.
21-13 Within ten (10) days after the hearing, the commissioner
21-14 <Administrator> shall send notice to the school either affirming or
21-15 revoking the denial of the certificate of approval.
21-16 SECTION 18. Sections 32.42(a), (c), and (d), Education Code,
21-17 are amended to read as follows:
21-18 (a) The commissioner's <administrator's> decision may be
21-19 appealed to a District Court in Travis County.
21-20 (c) Unless stayed by the Court upon a showing of good cause,
21-21 the commissioner's <administrator's> decision may not be superseded
21-22 during the appeal.
21-23 (d) Upon the filing of the lawsuit, citation shall be served
21-24 upon the commissioner <administrator>. Whereupon, the commissioner
21-25 <administrator> shall cause to be made a complete record of all
21-26 proceedings had before the commissioner or hearing examiner
21-27 <administrator>, and shall certify a copy of the proceedings to the
22-1 Court. Trial before the Court shall be upon the basis of the
22-2 record made before the commissioner or hearing examiner
22-3 <administrator>, and the Court shall make its decision based upon
22-4 the record. The commissioner's <administrator's> decision shall be
22-5 affirmed by the Court if the Court finds substantial evidence in
22-6 the record to justify the decision, unless the Court finds the
22-7 order to be:
22-8 (1) arbitrary and capricious, or
22-9 (2) in violation of the Constitution or laws of the
22-10 State of Texas, or
22-11 (3) in violation of rules and regulations promulgated
22-12 by the commissioner <State Board of Education> pursuant to the
22-13 provisions of the Act.
22-14 SECTION 19. Section 32.61, Education Code, is amended to
22-15 read as follows:
22-16 Sec. 32.61. Prohibitions. No person shall:
22-17 (1) operate a school without a certificate of approval
22-18 issued by the department <Administrator>;
22-19 (2) solicit prospective students without being bonded
22-20 as required by this Chapter;
22-21 (3) accept contracts or enrollment applications from a
22-22 representative who is not bonded as required by this Chapter;
22-23 (4) utilize advertising designed to mislead or deceive
22-24 prospective students;
22-25 (5) fail to notify the department <Administrator> of
22-26 the discontinuance of the operation of any school within 72 hours
22-27 of cessation of classes and make available accurate records as
23-1 required by this Chapter;
23-2 (6) fail to secure and file within 30 days an
23-3 increased bond as required by this Chapter;
23-4 (7) negotiate any promissory instrument received as
23-5 payment of tuition or other charge prior to completion of 75
23-6 percent of the course, provided that prior to such time, the
23-7 instrument may be transferred by assignment to a purchaser who
23-8 shall be subject to all the defenses available against the school
23-9 named as payee;
23-10 (8) violate any provision of this Chapter.
23-11 SECTION 20. Section 32.611, Education Code, is amended to
23-12 read as follows:
23-13 Sec. 32.611. ADMINISTRATIVE <CIVIL> PENALTY. (a) If a
23-14 person violates Section 32.61 of this code, the commissioner
23-15 <administrator> may assess an administrative <a civil> penalty
23-16 against that person as provided by this section.
23-17 (b) The commissioner <administrator> may assess the
23-18 administrative <civil> penalty in an amount not to exceed $1,000.
23-19 In determining the amount of the penalty, the commissioner
23-20 <administrator> shall consider the seriousness of the violation.
23-21 (c) If, after examination of a possible violation and the
23-22 facts relating to that possible violation, the commissioner
23-23 <administrator> concludes that a violation has occurred, the
23-24 commissioner <administrator> shall issue a preliminary report that
23-25 states the facts on which the conclusion is based, the fact that an
23-26 administrative <a civil> penalty is to be imposed, and the amount
23-27 to be assessed. Not later than the 10th day after the date on
24-1 which the commissioner <administrator> issues the preliminary
24-2 report, the commissioner <administrator> shall send a copy of the
24-3 report to the person charged with the violation, together with a
24-4 statement of the right of the person to a hearing relating to the
24-5 alleged violation and the amount of the penalty.
24-6 (d) Not later than the 20th day after the date on which the
24-7 report is sent, the person charged must either make a written
24-8 request for a hearing or remit the amount of the administrative
24-9 <civil> penalty to the commissioner <administrator>. Failure
24-10 either to request a hearing or to remit the amount of the
24-11 administrative <civil> penalty within the time provided by this
24-12 subsection results in a waiver of a right to a hearing under this
24-13 section. If the person charged requests a hearing, the hearing
24-14 shall be conducted in the same manner as a hearing on the denial of
24-15 certificate of approval under Section 32.41 of this code. If it is
24-16 determined after a hearing that the person has committed the
24-17 alleged violation, the commissioner <administrator> shall give
24-18 written notice to the person of the findings established by the
24-19 hearing and the amount of the penalty and shall enter an order
24-20 requiring the person to pay the penalty.
24-21 (e) Not later than the 30th day after the date on which the
24-22 notice is received, the person charged must pay the administrative
24-23 <civil> penalty in full or, if the person wishes to contest either
24-24 the amount of the penalty or the fact of the violation, remit the
24-25 assessed amount to the commissioner <administrator> for deposit in
24-26 an escrow account. If, after judicial review, it is determined
24-27 that no violation occurred or that the amount of the penalty should
25-1 be reduced, the commissioner <administrator> shall remit the
25-2 appropriate amount to the person charged with the violation not
25-3 later than the 30th day after the date on which the judicial
25-4 determination becomes final.
25-5 (f) Failure to remit the amount of the administrative
25-6 <civil> penalty to the board within the time provided by Subsection
25-7 (e) of this section results in a waiver of all legal rights to
25-8 contest the violation or the amount of the penalty.
25-9 (g) An administrative <A civil> penalty owed under this
25-10 section plus reasonable attorney fees and court costs may be
25-11 recovered in a civil action brought by the attorney general at the
25-12 request of the commissioner <administrator>. Administrative
25-13 <Civil> penalties recovered shall be deposited in the General
25-14 Revenue Fund. Attorney fees and court costs shall be appropriated
25-15 to the attorney general.
25-16 SECTION 21. Section 32.612, Education Code, is amended to
25-17 read as follows:
25-18 Sec. 32.612. Competitive Bidding; Advertising. The
25-19 commissioner <State Board of Education> may not adopt rules to
25-20 restrict competitive bidding or advertising by a proprietary school
25-21 except to prohibit false, misleading, or deceptive competitive
25-22 bidding or advertising practices. Those rules may not restrict:
25-23 (1) the use of an advertising medium;
25-24 (2) the size or duration of an advertisement; or
25-25 (3) advertisement under a trade name.
25-26 SECTION 22. Section 32.62(a), Education Code, is amended to
25-27 read as follows:
26-1 (a) Whenever the commissioner <Administrator> has probable
26-2 cause to believe that any school has committed any acts that would
26-3 be in violation of this Chapter, the commissioner <Administrator>
26-4 shall have the duty to make application to a court of competent
26-5 jurisdiction for an injunction restraining the commission of such
26-6 acts.
26-7 SECTION 23. Section 32.63(b), Education Code, is amended to
26-8 read as follows:
26-9 (b) The attorney general, at the request of the department
26-10 <Central Education Agency>, may bring a civil action to collect a
26-11 civil penalty under this section.
26-12 SECTION 24. Section 32.64, Education Code, is amended to
26-13 read as follows:
26-14 Sec. 32.64. Sanctions. (a) If the commissioner <Central
26-15 Education Agency> has reasonable cause to believe that a
26-16 proprietary school has violated this chapter or a rule adopted
26-17 under this chapter, the commissioner <agency> may:
26-18 (1) order a peer review of the school; or
26-19 (2) suspend the admission of students to the school.
26-20 (b) A peer review ordered under this section shall be
26-21 conducted by a peer review team composed of knowledgeable persons
26-22 selected by the department <agency>. The department <agency> shall
26-23 attempt to provide a balance on each team between members assigned
26-24 to the team who are from this state and those who are from other
26-25 states. The team shall provide the department <agency> with an
26-26 objective assessment of the content of the school's curriculum and
26-27 its application. The costs of providing a peer review team shall
27-1 be paid by the school.
27-2 SECTION 25. Sections 32.71(a)-(f), Education Code, are
27-3 amended to read as follows:
27-4 (a) Certificate and registration fees, except those charged
27-5 pursuant to Subsection (d) of this section, shall be collected by
27-6 the department <Administrator> and deposited with the State
27-7 Treasurer. Each fee shall be in an amount set by the Texas
27-8 Commission of Licensing and Regulation <Administrator and approved
27-9 by the State Board of Education> in an amount not to exceed 150
27-10 percent of each fee in the following schedule:
27-11 (1) the initial fee for a school is $2,000;
27-12 (2) the first annual renewal fee and each subsequent
27-13 renewal fee for a school is determined by applying a percentage,
27-14 not to exceed 0.3 percent, to the gross tuition and fees, excluding
27-15 refunds as provided by Section 32.39 of this code, of the school;
27-16 (3) the initial registration fee for a representative
27-17 is $60;
27-18 (4) the annual renewal fee for a representative is
27-19 $30;
27-20 (5) the fee for a change of a name of a school or
27-21 owner is $100;
27-22 (6) the fee for a change of an address of a school is
27-23 $180;
27-24 (7) the fee for a change in the name or address of a
27-25 representative or a change in the name or address of a school that
27-26 causes the reissuance of a representative permit is $10;
27-27 (8) the application fee for an additional course is
28-1 $150, except for seminar and workshop courses, for which the fee is
28-2 $25;
28-3 (9) the application fee for a director, administrative
28-4 staff member, or instructor is $15;
28-5 (10) the application fee for the authority to grant
28-6 degrees is $2,000;
28-7 (11) the application fee for an additional degree
28-8 course is $250; and
28-9 (12) the fee for an inspection required by rule of the
28-10 commissioner <State Board of Education> of classroom facilities
28-11 that are separate from the main campus is $250.
28-12 (b) The commissioner <of education> shall periodically
28-13 review and recommend adjustments in the level of fees to the <State
28-14 Board of Education and the> legislature.
28-15 (c) For purposes of this section, the gross amount of annual
28-16 student fees and tuition for a proprietary school is the amount
28-17 determined by the Texas Commission of Licensing and Regulation
28-18 <State Board of Education> based on any report submitted by the
28-19 school to the department <Central Education Agency> or other
28-20 information obtained by the department <agency>.
28-21 (d) In connection with the regulation of any school or
28-22 course through a memorandum of understanding pursuant to Section
28-23 32.12(c) of this code, the Texas Commission of Licensing and
28-24 Regulation <Administrator> shall set an application and annual
28-25 renewal fee, not to exceed $2,000. The fee shall be <approved by
28-26 the State Board of Education to be> an amount reasonably calculated
28-27 to cover the administrative costs associated with assuming the
29-1 additional regulation.
29-2 (e) The fee for an investigation at a school to resolve a
29-3 complaint filed against the school is $400. The fee may be charged
29-4 only if:
29-5 (1) the complaint could not have been resolved by
29-6 telephone or written correspondence only;
29-7 (2) a representative of the department <Central
29-8 Education Agency> visits the school as a part of the complaint
29-9 resolution process; and
29-10 (3) the school is found to be at fault.
29-11 (f) The Texas Commission of Licensing and Regulation
29-12 <Administrator, with the approval of the State Board of Education,>
29-13 may increase any fee authorized under this section at a rate not to
29-14 exceed the increase in the National Consumer Price Index For All
29-15 Urban Consumers. The calculation of the index in effect on
29-16 September 1, 1989, shall be the base for calculating the rate at
29-17 which fees may increase. Fee increases under this subsection do
29-18 not have to be made annually.
29-19 SECTION 26. Section 32.81, Education Code, is amended to
29-20 read as follows:
29-21 Sec. 32.81. Funding. (a) The cost of administration of
29-22 this Chapter shall be included in the State budget allowance for
29-23 the department <State Board of Education>.
29-24 (b) Fees collected by the department <Administrator> and
29-25 deposited with the State Treasurer shall be used to help defray the
29-26 cost and expense of administering the provisions of this Chapter.
29-27 SECTION 27. Section 32.91, Education Code, is amended to
30-1 read as follows:
30-2 Sec. 32.91. Tuition Protection Fund. (a) At the time that
30-3 each school pays its annual renewal fee, in the years provided by
30-4 Subsection (c) of this section, the department <State Board of
30-5 Education> shall also collect a fee from the school for deposit to
30-6 the credit of a special fund in the state treasury to be called the
30-7 proprietary school tuition protection fund.
30-8 (b) The amount of the fee is determined by applying a
30-9 percentage to each school's annual renewal fee. The percentage is
30-10 the rate as determined by the department <board> that, when applied
30-11 to the total of all renewal fees, will result in the collection of
30-12 $250,000 for deposit in the fund in the first two years that the
30-13 fee is collected.
30-14 (c) Beginning on January 1, 1990, the department <board>
30-15 shall collect the fee for two years. If on January 1, 1993, or any
30-16 subsequent year the amount in the fund is less than $200,000, the
30-17 department <board> shall collect a fee during that year by applying
30-18 a percentage to each school's annual renewal fee at a rate that
30-19 will bring the balance of the fund to $250,000.
30-20 (d) The state treasurer shall invest the fund in the same
30-21 manner as other state funds. Sufficient funds from the tuition
30-22 protection fund shall be appropriated to the department <Central
30-23 Education Agency administration> for the purpose outlined in this
30-24 section.
30-25 SECTION 28. Section 32.92(a), Education Code, is amended to
30-26 read as follows:
30-27 (a) If a proprietary school closes, the department <Central
31-1 Education Agency> shall attempt to arrange for students of the
31-2 closed school to attend another proprietary school.
31-3 SECTION 29. This Act takes effect January 1, 1994.
31-4 SECTION 30. (a) The administration and regulation of
31-5 proprietary schools under Chapter 32, Education Code, is
31-6 transferred to the Texas Department of Licensing and Regulation on
31-7 the effective date of this Act.
31-8 (b) All property and records in the custody of the Central
31-9 Education Agency relating to the administration or regulation of
31-10 proprietary schools under Chapter 32, Education Code, shall be
31-11 transferred to the Texas Department of Licensing and Regulation on
31-12 the effective date of this Act.
31-13 (c) Any unspent appropriations to the Central Education
31-14 Agency for the administration or regulation of proprietary schools
31-15 under Chapter 32, Education Code, are transferred to the Texas
31-16 Department of Licensing and Regulation on the effective date of
31-17 this Act. The comptroller shall determine the amount subject to
31-18 the transfer.
31-19 (d) The rules, regulations, policies, procedures, and
31-20 standards of the State Board of Education relating to the
31-21 administration or regulation of proprietary schools under Chapter
31-22 32, Education Code, are continued in effect as if adopted by the
31-23 commissioner of licensing and regulation or by the Texas Commission
31-24 of Licensing and Regulation until superseded by an action taken by
31-25 the commissioner or commission on or after the effective date of
31-26 this Act.
31-27 (e) A memorandum of understanding or other agreement between
32-1 the Central Education Agency and any other entity relating to the
32-2 administration and regulation of proprietary schools in effect on
32-3 the effective date of this Act remains in effect on or after that
32-4 date. The Texas Department of Licensing and Regulation shall
32-5 assume the rights, powers, and duties of the Central Education
32-6 Agency under the memorandum of understanding or other agreement on
32-7 that date.
32-8 (f) A member of the Proprietary Schools Advisory Commission
32-9 who was appointed by the State Board of Education and who serves on
32-10 the commission immediately before the effective date of this Act is
32-11 entitled to continue to serve until the expiration of the term for
32-12 which the member was appointed. As the terms of those members
32-13 expire or as their positions on the commission become vacant, the
32-14 commissioner of licensing and regulation shall appoint members to
32-15 the commission.
32-16 SECTION 31. The importance of this legislation and the
32-17 crowded condition of the calendars in both houses create an
32-18 emergency and an imperative public necessity that the
32-19 constitutional rule requiring bills to be read on three several
32-20 days in each house be suspended, and this rule is hereby suspended.