By Hamric H.B. No. 2137
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to an exception from regulation as a proprietary school.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 132.001, Education Code, is amended to
1-5 read as follows:
1-6 Sec. 132.001. DEFINITIONS. In this chapter:
1-7 (1) "Proprietary school" means any business enterprise
1-8 operated for a profit, or on a nonprofit basis, that maintains a
1-9 place of business within this state, or solicits business within
1-10 this state, and that is not specifically exempted by this chapter
1-11 and:
1-12 (A) that offers or maintains a course or courses
1-13 of instruction or study; or
1-14 (B) at which place of business such a course or
1-15 courses of instruction or study is available through classroom
1-16 instruction or by correspondence, or both, to a person for the
1-17 purpose of training or preparing the person for a field of endeavor
1-18 in a business, trade, technical, or industrial occupation, or for
1-19 avocational or personal improvement.
1-20 (2) "Owner" of a proprietary school means:
1-21 (A) in the case of a school owned by an
1-22 individual, that individual;
2-1 (B) in the case of a school owned by a
2-2 partnership, all full, silent, and limited partners;
2-3 (C) in the case of a school owned by a
2-4 corporation, the corporation, its directors, officers, and each
2-5 shareholder owning shares of issued and outstanding stock
2-6 aggregating at least 10 percent of the total of the issued and
2-7 outstanding shares.
2-8 (3) "School employee" means any person, other than an
2-9 owner, who directly or indirectly receives compensation from a
2-10 proprietary school for services rendered.
2-11 (4) "Representative" means a person employed by a
2-12 proprietary school, whether the school is located within or without
2-13 this state, to act as an agent, solicitor, broker, or independent
2-14 contractor to directly procure students for the school by
2-15 solicitation within or without this state at any place.
2-16 (5) "Agency administrator" means the agency
2-17 administrator of the Texas Employment Commission or a person,
2-18 knowledgeable in the administration of regulating proprietary
2-19 schools, designated by the agency administrator to administer this
2-20 chapter.
2-21 (6) "Notice to the proprietary school" means written
2-22 correspondence sent to the address of record for legal service
2-23 contained in the application for a certificate of approval. "Date
2-24 of Notice" means the date the notice is mailed by the commission.
2-25 (7) "Support" or "supported" means the primary source
2-26 and means by which a proprietary school derives revenue to
3-1 perpetuate its operation.
3-2 (8) "Person" means any individual, firm, partnership,
3-3 association, corporation, or other private entity or combination
3-4 thereof.
3-5 (9) "Unearned tuition" means total tuition and fees
3-6 subject to refund under Section 132.061, total tuition and fees
3-7 collected from students currently enrolled, and total tuition and
3-8 fees collected from prospective students.
3-9 (10) "Small proprietary school" means a proprietary
3-10 school that does not receive any payment from federal funds under
3-11 20 U.S.C. Section 1070 et seq. and its subsequent amendments or a
3-12 prepaid federal or state source as compensation in whole or in part
3-13 for any student tuition and fees or other charges and either:
3-14 (A) has an annual gross income from student
3-15 tuition and fees that is less than or equal to $100,000 for
3-16 programs regulated by the agency;
3-17 (B) exclusively offers programs to assist
3-18 students to prepare for an undergraduate or graduate course of
3-19 study at a college or university; or
3-20 (C) exclusively offers programs to assist
3-21 students, who have obtained, or who are in the process of
3-22 obtaining, degrees after completing an undergraduate or graduate
3-23 course of study at a college or university, to prepare for an
3-24 examination.
3-25 (11) "Commission" means the Texas Employment
3-26 Commission.
4-1 (12) "Division" means the division of education in the
4-2 commission.
4-3 SECTION 2. Section 132.002, Education Code, is amended to
4-4 read as follows:
4-5 Sec. 132.002. EXEMPTIONS. (a) The following schools or
4-6 educational institutions are specifically exempt from this chapter
4-7 and are not within the definition of "proprietary school":
4-8 (1) a school or educational institution supported by
4-9 taxation from either a local or state source;
4-10 (2) nonprofit schools owned, controlled, operated, and
4-11 conducted by bona fide religious, denominational, eleemosynary, or
4-12 similar public institutions exempt from property taxation under the
4-13 laws of this state, but such schools may choose to apply for a
4-14 certificate of approval hereunder, and upon approval and issuance,
4-15 are subject to this chapter as determined by the commission;
4-16 (3) a school or training program that offers
4-17 instruction of purely avocational or recreational subjects as
4-18 determined by the commission;
4-19 (4) a course or courses of instruction or study
4-20 sponsored by an employer for the training and preparation of its
4-21 own employees, and for which no tuition fee is charged to the
4-22 student;
4-23 (5) a course or courses of study or instruction
4-24 sponsored by a recognized trade, business, or professional
4-25 organization for the instruction of the members of the organization
4-26 with a closed membership;
5-1 (6) private colleges or universities that award a
5-2 recognized baccalaureate, or higher degree, and that maintain and
5-3 operate educational programs for which a majority of the credits
5-4 given are transferable to a college, junior college, or university
5-5 supported entirely or partly by taxation from either a local or
5-6 state source;
5-7 (7) a school or course that is otherwise regulated and
5-8 approved under and pursuant to any other law or rulemaking process
5-9 of this state or approved for continuing education credit by an
5-10 organization that accredits courses for the maintenance of a
5-11 license, except as provided by Subsection (c);
5-12 (8) aviation schools or instructors approved by and
5-13 under the supervision of the Federal Aviation Administration;
5-14 (9) a school that offers intensive review of a
5-15 student's acquired education, training, or experience to prepare
5-16 the student for an examination, other than a high school
5-17 equivalency examination, that the student by law may not take
5-18 unless the student has completed or substantially completed a
5-19 particular degree program, or that the student is required to take
5-20 as a precondition for enrollment in or admission to a particular
5-21 degree program;
5-22 (10) a private school offering primary or secondary
5-23 education, which may include a kindergarten or prekindergarten
5-24 program, and that satisfies the compulsory attendance requirements
5-25 of Section 25.085 pursuant to Section 25.086(a)(1);
5-26 (11) a course or courses of instruction by bona fide
6-1 electrical trade associations for the purpose of preparing students
6-2 for electrical tests required for licensing and for the purpose of
6-3 providing continuing education to students for the renewal of
6-4 electrical licenses;
6-5 (12) a nonprofit arts organization that has as its
6-6 primary purpose the provision of instruction in the dramatic arts
6-7 and the communications media to persons younger than 19 years of
6-8 age;
6-9 (13) a course or training program conducted by a
6-10 nonprofit association of air conditioning and refrigeration
6-11 contractors approved by the Air Conditioning and Refrigeration
6-12 Contractors Advisory Board to provide instruction for technical,
6-13 business, or license examination preparation programs relating to
6-14 air conditioning and refrigeration contracting, as that term is
6-15 defined by the Air Conditioning and Refrigeration Contractor
6-16 License Law (Article 8861, Vernon's Texas Civil Statutes);
6-17 (14) a course of instruction by a plumbing trade
6-18 association to prepare students for a plumbing test or program
6-19 required for licensing, certification, or endorsement or to provide
6-20 continuing education approved by the Texas State Board of Plumbing
6-21 Examiners; [and]
6-22 (15) a course of instruction in the use of
6-23 technological hardware or software if the course is offered to a
6-24 purchaser of the hardware or software or to the purchaser's
6-25 employee by a person who manufactures and sells, or develops and
6-26 sells, the hardware or software, and if the seller is not primarily
7-1 in the business of providing courses of instruction in the use of
7-2 the hardware or software, as determined by the commission; and
7-3 (16) a short course of instruction of forty classroom
7-4 hours or less that is completed within five calendar days and for
7-5 which the tuition or fee is less than $1,000, provided that the
7-6 course meets the following conditions:
7-7 (A) the short course of instruction is designed
7-8 to teach knowledge or skills to maintain or enhance a person's
7-9 competency or performance in a business, trade, or occupation, or
7-10 to teach recreational or avocational subjects, as opposed to a
7-11 course of instruction that is, or is represented to be, part of a
7-12 curriculum designed to teach fundamental skills or knowledge to
7-13 enable the student to enter a stated occupation;
7-14 (B) no credits or units are awarded for
7-15 completion of a short course of instruction toward completion of a
7-16 course of instruction of more than forty classroom hours;
7-17 (C) the person offering the short course of
7-18 instruction makes available a written description of the content of
7-19 the short course of instruction to registrants at least fourteen
7-20 days prior to the start of the short course of instruction;
7-21 (D) if a named instructor is identified or
7-22 instructor qualifications are described in any advertising,
7-23 publicity, or solicitation for the short course of instruction, and
7-24 the actual instructor or instructor qualifications are different
7-25 than those so identified or described, the person offering the
7-26 short course of instruction shall:
8-1 (i) offer in writing a refund of the
8-2 tuition or fee for the short course of instruction to any
8-3 registrant who, prior to the start of the course, notifies the
8-4 person offering the course that the registrant elects not to attend
8-5 and requests a refund. If the person offering the course maintains
8-6 a general refund policy that provides for a full refund of tuition
8-7 or fees at any time before the start of the course, then the
8-8 general refund policy shall be deemed to satisfy this requirement,
8-9 provided that the general refund policy is made known to
8-10 registrants or potential registrants prior to the start of the
8-11 course;
8-12 (ii) retain records sufficient to identify
8-13 differences between advertised instructors and instructor
8-14 qualifications and actual instructors and instructor qualifications
8-15 in accordance with subsection (F) of this section;
8-16 (E) the person offering the short course of
8-17 instruction retains a record of attendance, fees and tuition paid
8-18 by registrants, and refunds for the short course of instruction in
8-19 accordance with subsection (F) of this section;
8-20 (F) the person offering the short course of
8-21 instruction retains the records required by subsections (D) and (E)
8-22 of this section for a record retention period of three (3) years
8-23 after the end of the short course of instruction. If the person
8-24 claiming an exemption for a short course of instruction fails, upon
8-25 request of the commission made within the record retention period,
8-26 to produce the records required by subsections (D) and (E) of this
9-1 section, the failure to produce such records shall give rise to a
9-2 rebuttable presumption that the person offering the short course of
9-3 instruction is within the definition of "proprietary school" and is
9-4 not exempt from this chapter.
9-5 (17) if a person offers exclusively courses of
9-6 instruction that are exempt under paragraph (a) of this section
9-7 from the definition of "proprietary school," then that person is
9-8 also exempt from the definition of "proprietary school."
9-9 (b) Schools offering a course or courses of special study or
9-10 instruction financed or subsidized by local, state, or federal
9-11 funds or by any person, firm, association, or agency other than the
9-12 student involved, on a contract basis and having a closed
9-13 enrollment, may apply to the commission for exemption of such
9-14 course or courses from this chapter and such course or courses may
9-15 be declared exempt by the commission where the commission finds the
9-16 course or courses to be outside the purview of this chapter.
9-17 (c) If a state agency that issues a license or other
9-18 authorization for the practice of an occupation elects not to
9-19 regulate or approve course hours that exceed the minimum education
9-20 requirements for the issuance of the license or other
9-21 authorization, the licensing agency shall enter into a memorandum
9-22 of understanding with the commission for the regulation of those
9-23 excess course hours under this chapter. Any course taught under a
9-24 letter of approval or other written authorization issued by the
9-25 licensing agency before the effective date of the memorandum is
9-26 authorized under state law until the course is reviewed by the
10-1 commission. The licensing agency may terminate the memorandum of
10-2 understanding on notice to the commission.
10-3 (d) Notwithstanding the exemptions listed in Subsection (a),
10-4 a dispute resolution organization, as defined by Section 154.001,
10-5 Civil Practice and Remedies Code, may seek a certificate of
10-6 approval pursuant to Subchapter C.
10-7 SECTION 3. This Act takes effect immediately if it receives
10-8 a vote of two-thirds of all the members elected to each house, as
10-9 provided by Section 39, Article III, Texas Constitution. If this
10-10 Act does not receive the vote necessary for immediate effect, this
10-11 Act takes effect September 1, 2001.