MMA S.B. 1826 75(R)BILL ANALYSIS HIGHER EDUCATION S.B. 1826 By: Shapleigh (McCall) 4-24-97 Committee Report (Unamended) BACKGROUND Subchapter G, Chapter 61, Education Code, was passed in 1975 to prevent the "deception of the public resulting from the conferring and use of fraudulent or substandard college and university degrees." This statute requires a postsecondary institution to obtain a certificate of authority from the Texas Higher Education Coordinating Board (THECB) before granting degrees in Texas. The statute provides for criminal penalties for violations and prohibits the use of the terms "college" or "university" by schools that have not been granted a certificate of authority or are otherwise exempt under the statute. PURPOSE S.B. 1826 would amend Subchapter G, Chapter 61, Education Code, to de-criminalize the statute, to clarify ambiguous language, to make several non-substantive changes, to clarify the status of accredited branch campuses, and would permit THECB to set application fees. RULEMAKING AUTHORITY It is the committee's opinion that this bill expressly grants additional rulemaking authority to the commissioner in SECTION 9 (Sec. 61.316) and referred to in SECTION 10 (Sec. 61.319). SECTION BY SECTION ANALYSIS SECTION 1. Amends Subdivisions (2), (5) and (9), Section 61.302, Education Code, as follows: (2)(A) Conforming amendment to change the code reference from 61.003(7) to 61.003. (5) Conforming amendment to change the reference to the Texas Higher Education Coordinating Board from its previous name. (9) Clarifies the definition of an "educational or training establishment" as an enterprise that offers a course of instruction, education or training that the establishment does not represent to be applicable to a degree. The change does not alter the current interpretation of the statute. SECTION 2. Amends Subsections (b), (d), (f) and (g), Section 61.303, Education Code, as follows: (b) Clarifies that the exemption under Subsection (a) only applies to the degree level for which an institution is accredited. (d) States that the exemption under SECTION 2 continues only as long as accreditation is maintained by a recognized accrediting agency or otherwise met the provisions of Subsection (a). (f) Specifies that a private postsecondary educational institution may not establish or operate a branch campus, extension center, or other off-campus unit except as provided by this subsection. Provides an exemption for private and independent institutions of higher education as defined in Section 61.003, Education Code. Deletes subsection (g). SECTION 3. Amends Section 61.307(b), Education Code, by deleting the statutory application fee of $75 and permitting THECB to set the fee. SECTION 4. Amends Section 61.308(a), Education Code, by changing the required time period prior to expiration of a current certificate by a private institution from 60 days to 180 days for the renewal of a certificate. SECTION 5. Amends Section 61.310, Education Code, to read as follows: Sec. 61.310. APPEAL. States that a hearing request for appeals be provided under the Administrative Procedure Act (Chapter 2001, Government Code), instead of THECB. Makes conforming changes. SECTION 6. Amends Section 61.311(a), Education Code, by clarifying that THECB may promulgate standards, rules and regulations for the administration of the entire subchapter. SECTION 7. Amends Section 61.313, Education Code, as follows: Sec. 61.313. USE OF PROTECTED TERM IN NAME OF INSTITUTION. (a) Adds several terms to the list of words and phrases that an institution may not use in referring to its name if it has not received a certificate of authority to grant degrees. Includes nonexempt private postsecondary institutions as also being prohibited from using these terms. Also, prohibits an institution from using one of these words or phrases or a term to describe an institution. (b) Requires institutions to remove any protected term in Subsection (a) from their name or title no later than September 1, 1999 if they are not exempt from this Subchapter, and have not been issued a certificate of authority to grant a degree, but are otherwise legally operating. (c) Prohibits educational or training establishments from using the protected terms in the official name or title. (d) Exempts from this section an institution of higher education or private institution of higher education as defined in Section 61.003, Education Code. (e) Exempts from this section a person, who on September 1, 1997 uses the term "college" or "university" in the official name or title of a private postsecondary educational institution that was established before September 1, 1975, and an institution covered by this subsection, is not required to remove the aforementioned terms from the institution's title or name. SECTION 8. Amends Section 61.314(a), Education Code, to require that at least three members of the advisory council be representatives of private institutions of higher education. Makes a conforming change. SECTION 9. Amends and redesignates Sections 61.316 and 61.317, Education Code, to read as follows: Sec. 61.316. ADMINISTRATIVE PENALTIES. (a) Permits the commissioner of higher education to assess an administrative penalty for violations of this Subchapter. Authorizes the commissioner to adopt rules relating to administrative penalties under this section. (b) Adds language stating that a violation for representing that credits earned or granted are applicable for credit towards a degree to be granted by another person or institution, shall be assessed as an administrative penalty, except as specified and approved by THECB. Makes conforming changes. (c) Conforms reference to protected terms. (d) Makes conforming changes. (e) Makes conforming changes. (f) Entitles an institution that is assessed an administrative penalty to written notice of the reasons and an appeal of the penalty under Chapter 2001, Government Code. SECTION 10. Adds Sections 61.318 and 61.319 to Subchapter G, Chapter 61, Education Code, to read as follows: Sec. 61.318. INJUNCTIONS. (a) Authorizes the commissioner to report information concerning a possible violation of this subchapter to the attorney general. Requires the attorney general to investigate and bring suit to any violation of this subchapter. (b) Mandates action for an injunction under this section to be brought in a district court in Travis County. Sec. 61.319. CIVIL PENALTY. (a) States that a violation of this subchapter or a rule adopted under this subchapter will be subject to civil penalty, not to exceed $1,000 a day for each violation, in addition to any other remedy. (b) Requires the attorney general to bring a civil action to collect penalties under this section. SECTION 11. (a) Effective date: September 1, 1997. (b) Provides that the change made by this Act applies only to offenses committed on or after the effective date and that an offense is committed before the effective date if any element of the offense occurs before that date. (c) Provides that an offense committed before the effective date of this Act is covered by the law in effect at the time the offense was committed and the former law is continued in effect for that purpose. SECTION 12. Emergency clause.