S.B. No. 1343
AN ACT
relating to the regulation and operation of certain career schools
and colleges.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. SUBSTANTIVE CHANGES REGARDING CAREER
SCHOOLS AND COLLEGES
SECTION 1.01. Section 132.001, Education Code, is amended
by amending Subdivisions (1) through (8), (10), and (12) and adding
Subdivision (13) to read as follows:
(1) "Career school or college" ["Proprietary school"]
means any business enterprise operated for a profit[,] or on a
nonprofit basis[,] that maintains a place of business within this
state[,] or solicits business within this state, [and] that is not
specifically exempted by this chapter, and:
(A) that offers or maintains a course or courses
of instruction or study; or
(B) at which place of business such a course or
courses of instruction or study are [is] available through
classroom instruction or by distance education [correspondence],
or both, to a person for the purpose of training or preparing the
person for a field of endeavor in a business, trade, technical, or
industrial occupation, or for avocational or personal improvement.
(2) "Owner" of a career school or college [proprietary
school] means:
(A) in the case of a career school or college
owned by an individual, that individual;
(B) in the case of a career school or college
owned by a partnership, all full, silent, and limited partners;
(C) in the case of a career school or college
owned by a corporation, the corporation, its directors, officers,
and each shareholder owning shares of issued and outstanding stock
aggregating at least 10 percent of the total of the issued and
outstanding shares;
(D) in the case of a career school or college in
which the ownership interest is held in trust, the beneficiary of
that trust; or
(E) in the case of a career school or college
owned by another legal entity, a person who owns at least 10 percent
ownership interest in the entity.
(3) "School employee" means any person, other than an
owner, who directly or indirectly receives compensation from a
career [proprietary] school or college for services rendered.
(4) "Representative" means a person employed by a
career [proprietary] school or college, whether the school or
college is located within or without this state, to act as an agent,
solicitor, broker, or independent contractor to directly procure
students for the school or college by solicitation within or
without this state at any place.
(5) "Agency administrator" means the agency
administrator of the Texas Workforce Commission or a person,
knowledgeable in the administration of regulating career
[proprietary] schools and colleges, designated by the agency
administrator to administer this chapter.
(6) "Notice to the career school or college"
[proprietary school"] means written correspondence sent to the
address of record for legal service contained in the application
for a certificate of approval. "Date of Notice" means the date the
notice is mailed by the commission.
(7) "Support" or "supported" means the primary source
and means by which a career [proprietary] school or college derives
revenue to perpetuate its operation.
(8) "Person" means any individual, firm, partnership,
association, corporation, or other private entity or combination
[thereof].
(10) "Small career school or college" [proprietary
school"] means a career [proprietary] school or college that does
not receive any payment from federal funds under 20 U.S.C. Section
1070 et seq. and its subsequent amendments or a prepaid federal or
state source as compensation in whole or in part for any student
tuition and fees or other charges and either:
(A) has an annual gross income from student
tuition and fees that is less than or equal to $100,000 for programs
regulated by the agency;
(B) exclusively offers programs to assist
students to prepare for an undergraduate or graduate course of
study at a college or university; or
(C) exclusively offers programs to assist
students, who have obtained, or who are in the process of obtaining,
degrees after completing an undergraduate or graduate course of
study at a college or university, to prepare for an examination.
(12) "Division" means the division of education of
[in] the commission.
(13) "Distance education" means a formal education
process in which:
(A) the student and instructor are separated by
physical distance; and
(B) a variety of communication technologies may
be used to deliver synchronous or asynchronous instruction to the
student.
SECTION 1.02. Subchapter A, Chapter 132, Education Code, is
amended by adding Section 132.0015 to read as follows:
Sec. 132.0015. REFERENCE TO PROPRIETARY SCHOOL. A
reference in this code or another law to a proprietary school means
a career school or college.
SECTION 1.03. Section 132.002, Education Code, is amended
by amending Subsections (a) and (d) and adding Subsections (e),
(f), and (g) to read as follows:
(a) The following schools or educational institutions may
be exempted [are specifically exempt] from this chapter by the
commission under Subsection (d) [and are not within the definition
of "proprietary school"]:
(1) a school or educational institution supported by
taxation from either a local or state source;
(2) a nonprofit school [schools] owned, controlled,
operated, and conducted by a bona fide religious, denominational,
eleemosynary, or similar public institution [institutions] exempt
from property taxation under the laws of this state[, but such
schools may choose to apply for a certificate of approval
hereunder, and upon approval and issuance, are subject to this
chapter as determined by the commission];
(3) a school or training program that offers
instruction of purely avocational or recreational subjects as
determined by the commission;
(4) a course or courses of instruction or study
sponsored by an employer for the training and preparation of its own
employees, and for which no tuition fee is charged to the student;
(5) a course or courses of study or instruction
sponsored by a recognized trade, business, or professional
organization for the instruction of the members of the organization
with a closed membership;
(6) a private college [colleges] or university
[universities] that awards [award] a recognized baccalaureate, or
higher degree, and that maintains [maintain] and operates [operate]
educational programs for which a majority of the credits given are
transferable to a college, junior college, or university supported
entirely or partly by taxation from either a local or state source;
(7) a school or course that is otherwise regulated and
approved under and pursuant to any other law or rulemaking process
of this state or approved for continuing education credit by an
organization that accredits courses for the maintenance of a
license, except as provided by Subsection (c);
(8) an aviation school [schools] or instructor
[instructors] approved by and under the supervision of the Federal
Aviation Administration;
(9) a school that offers intensive review of a
student's acquired education, training, or experience to prepare
the student for an examination, other than a high school
equivalency examination, that the student by law may not take
unless the student has completed or substantially completed a
particular degree program, or that the student is required to take
as a precondition for enrollment in or admission to a particular
degree program;
(10) a private school offering primary or secondary
education, which may include a kindergarten or prekindergarten
program, and that satisfies the compulsory attendance requirements
of Section 25.085 pursuant to Section 25.086(a)(1);
(11) a course or courses of instruction by bona fide
electrical trade associations for the purpose of preparing students
for electrical tests required for licensing and for the purpose of
providing continuing education to students for the renewal of
electrical licenses;
(12) a nonprofit arts organization that has as its
primary purpose the provision of instruction in the dramatic arts
and the communications media to persons younger than 19 years of
age;
(13) a course or training program conducted by a
nonprofit association of air conditioning and refrigeration
contractors approved by the Air Conditioning and Refrigeration
Contractors Advisory Board to provide instruction for technical,
business, or license examination preparation programs relating to
air conditioning and refrigeration contracting, as that term is
defined by Chapter 1302, Occupations Code [the Air Conditioning and
Refrigeration Contractor License Law (Article 8861, Vernon's Texas
Civil Statutes)];
(14) a course of instruction by a plumbing trade
association to prepare students for a plumbing test or program
required for licensing, certification, or endorsement or to provide
continuing education approved by the Texas State Board of Plumbing
Examiners; and
(15) a course of instruction in the use of
technological hardware or software if the course is offered to a
purchaser of the hardware or software or to the purchaser's
employee by a person who manufactures and sells, or develops and
sells, the hardware or software, and if the seller is not primarily
in the business of providing courses of instruction in the use of
the hardware or software, as determined by the commission.
(d) Except as provided by Subsection (g), a school or
educational institution is exempt from regulation under this
chapter only if:
(1) the owner of the school or educational
institution:
(A) applies to the commission for an exemption
under this section; and
(B) provides to the commission any information
considered necessary by the commission to support the owner's
application for an exemption; and
(2) the commission declares that the school or
educational institution is exempt after finding that the school or
institution is a school or institution listed in Subsection (a).
(e) After a school or educational institution is declared
exempt by the commission under this section, the commission may
inspect the school or institution or require the owner of the school
or institution to provide any information the commission considers
necessary for the commission to ensure the school or institution's
continued compliance with the requirements of the exemption.
(f) A school or educational institution listed in
Subsection (a) may seek a certificate of approval under
[Notwithstanding the exemptions listed in Subsection (a), a dispute
resolution organization, as defined by Section 154.001, Civil
Practice and Remedies Code, may seek a certificate of approval
pursuant to] Subchapter C.
(g) An institution of higher education or a private or
independent institution of higher education, as defined by Section
61.003, that was exempt from regulation under this chapter before
September 1, 2003, remains exempt from regulation under this
chapter and is not required to comply with this section.
SECTION 1.04. Subsection (b), Section 132.051, Education
Code, is amended to read as follows:
(b) Any contract entered into with any person for a course
of instruction by or on behalf of any person operating any career
[proprietary] school or college to which a certificate of approval
has not been issued pursuant to this chapter is unenforceable in any
action brought thereon. Any note, other instrument of
indebtedness, or contract relating to payment for educational
services obtained from a career school or college that does not hold
a certificate of approval issued under this chapter is
unenforceable in any action brought on the note, instrument, or
contract.
SECTION 1.05. Section 132.055, Education Code, is amended
to read as follows:
Sec. 132.055. CRITERIA. The commission may approve the
application of such career [proprietary] school or college when the
school or college is found, upon investigation at the premises of
the school or college, to have met the following criteria:
(a) The courses, curriculum, and instruction are of
such quality, content, and length as may reasonably and adequately
achieve the stated objective for which the courses, curriculum, or
instruction is [are] offered. Before a school or college conducts a
course of instruction in court reporting, the school or college
must produce evidence that the school or college has obtained
approval for the curriculum from the Court Reporters Certification
Board.
(b) There is in the school or college adequate space,
equipment, instructional material, and instructor personnel to
provide training of good quality.
(c) Educational and experience qualifications of
directors, administrators, and instructors are adequate.
(d) The school or college maintains a written record
of the previous education and training of the applicant student and
clearly indicates that appropriate credit has been given by the
school or college for previous education and training, with the new
training period shortened where warranted through use of
appropriate skills or achievement tests and the student so
notified.
(e) A copy of the course outline; schedule of tuition,
fees, refund policy, and other charges; regulations pertaining to
absence, grading policy, and rules of operation and conduct;
regulations pertaining to incomplete grades; the name, mailing
address, and telephone number of the commission for the purpose of
directing complaints to the agency; the current rates of job
placement and employment of students issued a certificate of
completion; and notification of the availability of the cost
comparison information prepared under Section 132.021(b) through
the commission will be furnished the student prior to enrollment.
(f) Except as provided by Section 132.062, on
completion of training, the student is given a certificate by the
school or college indicating the course and that training was
satisfactorily completed.
(g) Adequate records as prescribed by the commission
are kept to show attendance and progress or grades, and
satisfactory standards relating to attendance, progress, and
conduct are enforced.
(h) The school or college complies with all local,
city, county, municipal, state, and federal regulations, such as
fire, building, and sanitation codes. The commission may require
such evidence of compliance as is deemed necessary.
(i) The school or college is financially sound and
capable of fulfilling its commitments for training.
(j) The school's or college's administrators,
directors, owners, and instructors are of good reputation and
character.
(k) The school or college has, maintains, and
publishes in its catalogue and enrollment contract the proper
policy for the refund of the unused portion of tuition, fees, and
other charges in the event the student enrolled by the school or
college fails to take the course or withdraws or is discontinued
therefrom at any time prior to completion.
(l) The school or college does not utilize erroneous
or misleading advertising, either by actual statement, omission, or
intimation as determined by the commission.
(m) Such additional criteria as may be required by the
commission.
(n) The school or college does not use a name like or
similar to an existing [tax supported] school or college unless the
commission approves the school's or college's use of the name [in
the same area].
(o) The school or college furnishes to the commission
the current rates of students who receive a certificate of
completion and of job placement and employment of students issued a
certificate of completion.
(p) The school or college furnishes to the commission
for approval or disapproval student admission requirements for each
course or program offered by the school or college.
(q) The school or college furnishes to the commission
for approval or disapproval the course hour lengths and curriculum
content for each course offered by the school or college.
(r) The school or college does not owe a penalty under
Section 132.152, 132.155, or 132.157.
SECTION 1.06. Section 132.061, Education Code, is amended
to read as follows:
Sec. 132.061. REFUND POLICY. (a) Except as provided by
Subsection (g), as a condition for granting certification each
career [proprietary] school or college must maintain a cancellation
and settlement policy that must provide a full refund of all monies
paid by a student if:
(1) the student cancels the enrollment agreement or
contract within 72 hours (until midnight of the third day excluding
Saturdays, Sundays, and legal holidays) after the enrollment
contract is signed by the prospective student; or
(2) the enrollment of the student was procured as the
result of any misrepresentation in advertising, promotional
materials of the school or college, or representations by the owner
or representatives of the school or college.
(b) Except as provided by Subsection (g), as a condition for
granting certification each career [proprietary] school or college
must maintain a policy for the refund of the unused portion of
tuition, fees, and other charges in the event the student, after
expiration of the 72-hour cancellation privilege, fails to enter
the course, withdraws, or is discontinued therefrom at any time
prior to completion, and such policy must provide:
(1) refunds for resident courses and synchronous
distance education courses will be based on the period of
enrollment computed on the basis of course time expressed in clock
hours;
(2) the effective date of the termination for refund
purposes in residence schools or colleges will be the earliest of
the following:
(A) the last date of attendance, if the student
is terminated by the school or college;
(B) the date of receipt of written notice from
the student; or
(C) 10 school days following the last date of
attendance;
(3) if tuition and fees are collected in advance of
entrance, and if, after expiration of the 72-hour cancellation
privilege, the student does not enter the residence school or
college, not more than $100 shall be retained by the school or
college;
(4) for the student who enters a residence or a
synchronous distance education course of not more than 12 months in
length, terminates, or withdraws, the school or college may retain
$100 of tuition and fees and the minimum refund of the remaining
tuition and fees will be:
(A) during the first week or one-tenth of the
course, whichever is less, 90 percent of the remaining tuition and
fees;
(B) after the first week or one-tenth of the
course, whichever is less, but within the first three weeks or
one-fifth of the course, whichever is less, 80 percent of the
remaining tuition and fees;
(C) after the first three weeks or one-fifth of
the course, whichever is less, but within the first quarter of the
course, 75 percent of the remaining tuition and fees;
(D) during the second quarter of the course, 50
percent of the remaining tuition and fees;
(E) during the third quarter of the course, 10
percent of the remaining tuition and fees; or
(F) during the last quarter of the course, the
student may be considered obligated for the full tuition and fees;
(5) for residence or synchronous distance education
courses more than 12 months in length, the refund shall be applied
to each 12-month period paid, or part thereof separately, and the
student is entitled to a refund as provided by Subdivision (4);
(6) refunds of items of extra expense to the student,
such as instructional supplies, books, student activities,
laboratory fees, service charges, rentals, deposits, and all other
such ancillary miscellaneous charges, where these items are
separately stated and shown in the data furnished the student
before enrollment, will be made in a reasonable manner acceptable
to the commission;
(7) refunds based on enrollment in residence and
synchronous distance education schools or colleges will be totally
consummated within 60 days after the effective date of termination;
(8) refunds for asynchronous distance education
[correspondence] courses will be computed on the basis of the
number of lessons in the course;
(9) the effective date of the termination for refund
purposes in asynchronous distance education [correspondence]
courses will be the earliest of the following:
(A) the date of notification to the student if
the student is terminated;
(B) the date of receipt of written notice from
the student; or
(C) the end of the third calendar month following
the month in which the student's last lesson assignment was
received unless notification has been received from the student
that the student wishes to remain enrolled;
(10) if tuition and fees are collected before any
lessons have been completed, and if, after expiration of the
72-hour cancellation privilege, the student fails to begin the
course, not more than $50 shall be retained by the school or
college;
(11) in cases of termination or withdrawal after the
student has begun the asynchronous distance education
[correspondence] course, the school or college may retain $50 of
tuition and fees, and the minimum refund policy must provide that
the student will be refunded the pro rata portion of the remaining
tuition, fees, and other charges that the number of lessons
completed and serviced by the school or college bears to the total
number of lessons in the course; and
(12) refunds based on enrollment in asynchronous
distance education [correspondence] schools or colleges will be
totally consummated within 60 days after the effective date of
termination.
(c) In lieu of the refund policy herein set forth, for
programs of instruction not regularly offered to the public, the
commission may, for good cause shown, amend, modify, or substitute
the terms of a career school's or college's [proprietary school's]
policy due to the specialized nature and objective of the school's
or college's course of instruction.
(d) If a course of instruction is discontinued by the career
[proprietary] school or college and this prevents the student from
completing the course, all tuition and fees paid are then due and
refundable.
(e) If a refund is not made within the period required by
this section, the career [proprietary] school or college shall pay
a penalty. If the refund is made to a lending institution, the
penalty shall also be paid to that institution and applied against
the student's loan. The commission annually shall establish the
level of the penalty at a level sufficient to provide a deterrent to
the retention of student funds. The commission may exempt a school
or college from the payment of the penalty if the school or college
makes a good faith effort to refund the tuition, fees, and other
charges but is unable to locate the student. The school or college
shall provide to the commission on request documentation of the
effort to locate the student.
(f) A career [proprietary] school or college shall record a
grade of "incomplete" for a student who withdraws but is not
entitled to a refund under Subsection (b)(4)(F) if the student
requests the grade at the time the student withdraws and the student
withdraws for an appropriate reason unrelated to the student's
academic status. A student who receives a grade of incomplete may
re-enroll in the program during the 12-month period following the
date the student withdraws and complete those incomplete subjects
without payment of additional tuition.
(g) A program that is 40 hours or less of class time, or a
seminar or workshop, is exempt from the 72-hour rule provided by
Subsection (a). The career [proprietary] school or college shall
maintain a policy for the refund of the unused portion of tuition,
fees, and other charges in the event the student fails to enter the
course, withdraws from the course, or is discontinued from the
class at any time before completion of the course as provided by
this section. The policy must provide that:
(1) refunds are based on the period of enrollment
computed on the basis of course time expressed in clock hours;
(2) the effective date of the termination for refund
purposes is the earlier of:
(A) the last date of attendance; or
(B) the date the school or college receives
written notice from the student that the student is withdrawing
from the class; and
(3) the student will be refunded the pro rata portion
of tuition, fees, and other charges that the number of class hours
remaining in the course after the effective date of the termination
bears to the total number of class hours in the course.
SECTION 1.07. Subsections (c) through (i), Section 132.152,
Education Code, are amended to read as follows:
(c) If, after examination of a possible violation and the
facts relating to that possible violation, the commission concludes
that a violation has occurred, the commission shall issue a
preliminary report that states the facts on which the conclusion is
based, the fact that an administrative penalty is to be imposed
[recommended], and the amount of the penalty to be assessed
[recommended]. Not later than the 10th day after the date on which
the commission issues the preliminary report, the commission shall
send a copy of the report [by certified mail] to the person charged
with the violation, together with a statement of the right of the
person to a hearing relating to the alleged violation and the amount
of the penalty.
(d) Not later than the 20th day after the date on which the
[person receives the] report is sent, the person charged must
either make a written request for a hearing or remit the amount of
the administrative penalty to the commission. Failure either to
request a hearing or to remit the amount of the administrative
penalty within the time provided by this subsection results in a
waiver of a right to a hearing under this section. If the person
charged requests a hearing, the hearing shall be conducted in the
same manner as a hearing on the denial of a certificate of approval
under Section 132.101. If the hearing results in a finding that a
violation has occurred, the commission shall:
(1) provide to the person written notice of:
(A) the findings established at the hearing; and
(B) the amount of the penalty; and
(2) enter an order requiring the person to pay the
amount of the penalty [by an administrative law judge of the State
Office of Administrative Hearings. The administrative law judge
shall make findings of fact and conclusions of law and promptly
issue to the commission a proposal for a decision about the
occurrence of the violation and the amount of the proposed penalty.
Based on the findings of fact, conclusions of law, and proposal for
decision, the commission by order may:
[(1) find that a violation has occurred and impose a
penalty; or
[(2) find that a violation has not occurred].
(e) [The notice of the commission's order given to the
person under Chapter 2001, Government Code, must include a
statement of the person's right to judicial review of the order.
[(f)] Not later than the 30th day after the date the person
receives the order entered by the commission under Subsection (d)
[commission's order is final under Section 2001.144, Government
Code], the person shall:
(1) pay the amount of the penalty;
(2) remit [pay] the amount of the penalty to the
commission for deposit in an escrow account and file a petition for
judicial review contesting the occurrence of the violation, the
amount of the penalty, or both the occurrence of the violation and
the amount of the penalty; or
(3) without paying the amount of the penalty, file a
petition for judicial review contesting the occurrence of the
violation, the amount of the penalty, or both the occurrence of the
violation and the amount of the penalty and file with the court a
sworn affidavit stating that the person is financially unable to
pay the amount of the penalty.
(f) The commission's order is subject to judicial review in
the same manner as an appeal of a decision to deny a certificate of
approval under Section 132.102.
(g) If on review the court does not sustain the occurrence
of the violation or finds that the amount of the penalty should be
reduced, the commission shall remit the appropriate amount to the
person charged with the violation not later than the 30th day after
the date the court's judgment becomes final [Within the period
prescribed by Subsection (f), a person who acts under Subsection
(f)(3) may:
[(1) stay enforcement of the penalty by:
[(A) paying the amount of the penalty to the
court for placement in an escrow account; or
[(B) giving to the court a supersedeas bond
approved by the court that is in the amount of the penalty and that
is effective until all judicial review of the commission's order is
final; or
[(2) request the court to stay enforcement of the
penalty by:
[(A) filing with the court a sworn affidavit of
the person stating that the person is financially unable to pay the
amount of the penalty and is financially unable to give the
supersedeas bond; and
[(B) giving a copy of the affidavit to the
commission by certified mail].
(h) If the court sustains the occurrence of the violation:
(1) the court:
(A) shall order the person to pay the amount of
the penalty; and
(B) may award to the commission the attorney's
fees and court costs incurred by the commission in defending the
action; and
(2) the commission shall remit the amount of the
penalty to the comptroller for deposit in the general revenue fund
[The commission may file with the court a contest to an affidavit
received under Subsection (g)(2) not later than the fifth day after
the date the commission receives the copy. The court shall hold a
hearing on the facts alleged in the affidavit as soon as practicable
and shall stay the enforcement of the penalty on finding that the
alleged facts are true. The person who files an affidavit has the
burden of proving that the person is financially unable to pay the
amount of the penalty and to give a supersedeas bond].
(i) If the person does not pay the amount of the penalty
after the commission's order becomes final for all purposes [and
the enforcement of the penalty is not stayed], the commission may
refer the matter to the attorney general for collection of the
amount of the penalty.
SECTION 1.08. Subchapter I, Chapter 132, Education Code, is
amended by adding Section 132.2415 to read as follows:
Sec. 132.2415. TUITION TRUST ACCOUNT. (a) The Texas
Workforce Commission depository bonds guaranty trust account is
renamed the career school or college tuition trust account. The
career school or college tuition trust account is the account
designated to receive all amounts related to the protection of
career school or college tuition. The balance of the trust account
may not exceed $1 million.
(b) The commission may collect annually a fee from each
career school or college to be deposited to the credit of the career
school or college tuition trust account. The total amount of the
fees collected in a year shall be set by the commission in the
amount estimated as necessary to pay the liabilities of the trust
account during that year, not to exceed 0.2 percent of the gross
amount of tuition and fees charged by career schools and colleges in
that year, excluding amounts refunded under Section 132.061.
(c) If, at the end of a fiscal year, the commission
determines that the commission has collected fees under this
chapter in excess of the amount necessary to defray the expense of
administering this chapter, the commission may transfer any portion
of the excess amount to the career school or college tuition trust
account.
(d) From money in the career school or college tuition trust
account, the commission shall attempt to provide a full refund to
each student of a closed career school or college of the amount owed
to the student as determined under Section 132.061. The commission
may provide a partial refund to a student only if the commission
determines that the amount in the trust account is insufficient to
provide a full refund to the student. The commission shall consider
the following factors in determining the amount of a partial refund
to be paid to a student:
(1) the amount of money in the trust account;
(2) the cost and number of claims against the trust
account resulting from closure of the school or college;
(3) the average cost of a claim paid from the trust
account in the past; and
(4) the availability of other licensed career schools
or colleges at which the student may complete the student's
training.
SECTION 1.09. Section 132.242, Education Code, is amended
to read as follows:
Sec. 132.242. CLOSED SCHOOL OR COLLEGE. (a) If a career
[proprietary] school or college closes, the commission shall
attempt to arrange for students of the closed school or college to
attend another career [proprietary] school or college.
(b) The expense incurred by a career [proprietary] school or
college in providing a teachout that is directly related to
educating a student placed in the school or college under this
section, including the applicable tuition for the period for which
the student has paid tuition, shall be paid from the career
[proprietary] school or college tuition trust account [protection
fund].
(c) If the student cannot be placed in another career
[proprietary] school or college, the student's tuition and fees
shall be refunded under Section 132.061(d).
(d) If a student does not accept a place that is available
and reasonable in another career [proprietary] school or college,
the student's tuition and fees shall be refunded under the refund
policy maintained by the closing career [proprietary] school or
college under Section 132.061[(b)].
(e) For each closed career school or college, refunds shall
be paid from the career school or college [If the amount of the
closed proprietary school's bond under Section 132.060 is less than
the amount required for student refunds under Subsections (c) and
(d), the refunds shall be paid from the proprietary school] tuition
trust account [protection fund] in an amount not to exceed $150,000
[$50,000].
(f) If another career [proprietary] school or college
assumes responsibility for the closed career school's or college's
[proprietary school's] students with no significant changes in the
quality of training, the student is not entitled to a refund under
Subsection (c) or (d).
(g) Attorney's fees, court costs, or damages may not be paid
from the career [proprietary] school or college tuition trust
account [protection fund].
SECTION 1.10. The following laws are repealed:
(1) Subsections (j) through (m), Section 132.152,
Education Code; and
(2) Sections 132.060 and 132.241, Education Code.
SECTION 1.11. The change in law made by this article to
Subsection (b), Section 132.051, Education Code, applies only to a
note or other instrument issued, or a contract entered into, on or
after the effective date of this Act. A note or other instrument
issued, or a contract entered into, before the effective date of
this Act is governed by the law in effect on the date the note or
other instrument was issued or the contract was entered into, and
the former law is continued in effect for that purpose.
SECTION 1.12. The change in law made by this article to
Section 132.055, Education Code, applies only to an application for
a certificate of approval filed with the Texas Workforce Commission
on or after the effective date of this Act. An application for a
certificate of approval filed before the effective date of this Act
is governed by the law in effect on the date the application was
filed, and the former law is continued in effect for that purpose.
SECTION 1.13. The changes in law made by this article to
Subsection (b), Section 132.061, Education Code, apply only to the
refund policy of a career school or college to which a certificate
of approval is granted or renewed by the Texas Workforce Commission
on or after the effective date of this Act.
SECTION 1.14. The changes in law made by this article to
Section 132.152, Education Code, apply only to an alleged violation
of Section 132.151, Education Code, that occurs on or after the
effective date of this Act. An alleged violation that occurs before
the effective date of this Act is governed by the law in effect on
the date the alleged violation occurred, and the former law is
continued in effect for that purpose.
SECTION 1.15. On or after the effective date of this
article, any amount remaining in or payable to the credit of the
tuition protection fund under Section 132.241, Education Code, as
that section existed before repeal by this Act, shall be
transferred to the credit of the career school or college tuition
trust account established under Section 132.2415, Education Code,
as added by this article.
ARTICLE 2. CONFORMING AMENDMENTS REGARDING
CAREER SCHOOLS AND COLLEGES
SECTION 2.01. Subsection (b), Section 52.32, Education
Code, is amended to read as follows:
(b) If a loan applicant is enrolled at a career
[proprietary] school or college in a degree program that is
approved by the board, the applicant is not required to provide
evidence that the applicant [he] is unable to obtain a guaranteed
student loan from a commercial lender under Subsection (a)(2) of
this section.
SECTION 2.02. Subdivision (5), Section 53.02, Education
Code, is amended to read as follows:
(5) "Institution of higher education" means (i) any
institution of higher education as defined by Subdivision (8) of
Section 61.003 of this code, or (ii) a degree-granting college or
university corporation accredited by the Texas Education Agency or
by a recognized accrediting agency, as defined by Subdivision (13)
of Section 61.003 of this code, or (iii) a postsecondary career
[proprietary] school or college accredited by the Association of
Independent Colleges and Schools, the National Association of Trade
and Technical Schools, or the National Accrediting Commission of
Cosmetology Arts and Sciences.
SECTION 2.03. Section 54.6001, Education Code, is amended
to read as follows:
Sec. 54.6001. PUBLIC PURPOSE. An educated population being
necessary to the social development and economic health of this
state, the legislature finds and declares it to be an urgent public
necessity to assist young Texans in obtaining a higher education.
Because the state's population is rapidly growing and is diverse,
the state is required to use all of the higher education facilities
and resources within the state, both public and private, to provide
a wide variety of educational environments and instructional
options and to preserve the partnership between the state and
private or independent institutions of higher education and between
the state and career [proprietary] schools and colleges, as defined
by Section 132.001, that offer a two-year associate degree as
approved by the Texas Higher Education Coordinating Board.
Therefore, the prepaid higher education tuition program is
established to help Texas students attend the institution that best
meets their individual needs.
SECTION 2.04. Subdivision (9), Section 54.601, Education
Code, is amended to read as follows:
(9) "Career school or college" ["Proprietary school"]
means a career [proprietary] school or college, as defined by
Section 132.001, that offers a two-year associate degree as
approved by the Texas Higher Education Coordinating Board.
SECTION 2.05. Subsection (a), Section 54.605, Education
Code, is amended to read as follows:
(a) A prepaid tuition contract remains in effect after the
program is terminated if, when the program is terminated, the
beneficiary:
(1) has been accepted by or is enrolled in an
institution of higher education, a private or independent
institution of higher education, or a career [proprietary] school
or college; or
(2) is projected to graduate from high school not
later than the third anniversary of the date the program is
terminated.
SECTION 2.06. Subsection (b), Section 54.618, Education
Code, is amended to read as follows:
(b) The board may:
(1) adopt an official seal;
(2) adopt rules to implement this subchapter;
(3) sue and be sued;
(4) enter into contracts and other necessary
instruments;
(5) enter into agreements or other transactions with
the United States, state agencies, including institutions of higher
education, private or independent institutions of higher
education, career [proprietary] schools and colleges, and local
governments;
(6) appear in its own behalf before governmental
agencies;
(7) contract for necessary goods and services and
engage the services of private consultants, actuaries, trustees,
records administrators, managers, legal counsel, and auditors for
administrative or technical assistance;
(8) solicit and accept gifts, grants, loans, and other
aid from any source or participate in any other way in any
government program to carry out this subchapter;
(9) impose administrative fees;
(10) contract with a person to market the program;
(11) purchase liability insurance covering the board
and employees and agents of the board; and
(12) establish other policies, procedures, and
eligibility criteria to implement this subchapter.
SECTION 2.07. Subsection (h), Section 54.619, Education
Code, is amended to read as follows:
(h) Notwithstanding other provisions of this subchapter,
any contract benefits purchased under this subchapter may be
applied to the payment of tuition and required fees at a career
[proprietary] school or college as if the [proprietary] school or
college were an institution of higher education or private or
independent institution of higher education. On the purchaser's
request, the board shall apply, in accordance with Section 54.628,
any existing amount of prepaid tuition contract benefits to the
payment of tuition and required fees at a career [proprietary]
school or college. The board is not responsible for the payment of
tuition and required fees at the career [proprietary] school or
college in excess of that amount. The board may adopt rules as
necessary to implement this subsection.
SECTION 2.08. The heading to Chapter 132, Education Code,
is amended to read as follows:
CHAPTER 132. CAREER [PROPRIETARY] SCHOOLS AND COLLEGES
SECTION 2.09. Subsections (a) and (b), Section 132.021,
Education Code, are amended to read as follows:
(a) The commission shall exercise jurisdiction and control
of the system of career [proprietary] schools and colleges, and the
commission shall carry out supervision of the provisions of this
chapter, and enforce minimum standards for approval of career
[proprietary] schools and colleges under the operating regulations
and policies hereinafter set forth and as may be adopted pursuant to
this chapter.
(b) The commission shall prepare a comparison of the cost to
a student of courses of instruction or training programs at career
[proprietary] schools and colleges to the cost to a student of
similar courses or programs at schools that are exempt from this
chapter under Section 132.002.
SECTION 2.10. Section 132.022, Education Code, is amended
to read as follows:
Sec. 132.022. DUTIES OF COMMISSION. The commission shall
carry out the policies of this chapter and enforce the rules adopted
under this chapter. The commission shall also certify the names of
those career [proprietary] schools and colleges meeting the
requirements for a certificate of approval.
SECTION 2.11. Section 132.023, Education Code, is amended
to read as follows:
Sec. 132.023. MEMORANDUM OF UNDERSTANDING FOR REGULATION OF
CAREER [PROPRIETARY] SCHOOLS AND COLLEGES. (a) The commission
shall develop, in consultation with the Texas Guaranteed Student
Loan Corporation and each state agency that regulates career
[proprietary] schools and colleges in this state, a comprehensive
strategy to reduce default rates at the regulated career
[proprietary] schools and colleges and to improve the overall
quality of the programs operated by these schools and colleges.
(b) The commission shall execute a memorandum of
understanding outlining the strategy with the corporation and each
state agency regulating career [proprietary] schools and colleges
and shall adopt rules to carry out the commission's [its] duties
under this section. The Texas Guaranteed Student Loan Corporation
shall adopt the memorandum of understanding as procedures of the
corporation, and each agency by rule shall adopt the memorandum of
understanding.
(c) The memorandum of understanding shall:
(1) require the development and monitoring of
indicators that identify career [proprietary] schools and colleges
that have excessive loan default rates, poor program performance,
or both;
(2) require the sharing of specific information
relating to the indicators between the commission and the Texas
Guaranteed Student Loan Corporation or other agency; and
(3) require the application of specific sanctions by
the commission or by the Texas Guaranteed Student Loan Corporation
or other agency, as appropriate, to lower the default rates,
improve program performance, or both.
(d) If the commission enters into a memorandum of
understanding with the Texas Guaranteed Student Loan Corporation
related to the regulation of career [proprietary] schools and
colleges, the commission may require each career [proprietary]
school or college governed by this chapter to provide information
to the commission that is necessary for the purposes of the
memorandum of understanding.
SECTION 2.12. Subsection (a), Section 132.051, Education
Code, is amended to read as follows:
(a) A career [proprietary] school or college may not
maintain, advertise, solicit for, or conduct any course of
instruction in this state before the later of:
(1) the 30th day after the date the school or college
applies for a certificate of approval under this chapter; or
(2) the date the school or college receives a
certificate of approval from the commission.
SECTION 2.13. Section 132.052, Education Code, is amended
to read as follows:
Sec. 132.052. APPLICATION FOR CERTIFICATE OF APPROVAL.
Every career [proprietary] school or college desiring to operate in
this state or do business in this state shall make written
application to the commission for a certificate of approval. Such
application shall be verified, be in such form as may be prescribed
by the commission, and shall furnish the commission such
information as the commission may require.
SECTION 2.14. Section 132.053, Education Code, is amended
to read as follows:
Sec. 132.053. STATUTORY WAIVER AUTHORITY. (a) The
commission may establish rules that waive, alter, suspend, or
replace any of the following provisions governing small career
[proprietary] schools and colleges:
(1) the fee schedule authorized under Section 132.201,
provided that fees under a fee schedule established by rule may not
be less than the reasonable administrative cost for regulation or
more than the amount that a small career [proprietary] school or
college would otherwise pay if it were not classified as a small
career [proprietary] school or college;
(2) participation in the career [proprietary] school
or college tuition trust account [protection fund] required by
Section 132.2415 [132.241];
(3) the refund policy provisions of Section 132.061;
(4) [the bonding requirements of Section 132.060;
[(5)] the examination of a school or college for
compliance under Section 132.056(f);
(5) [(6)] the reporting requirements of Section
132.055(o); and
(6) [(7)] the term for which a certificate of approval
is issued under Section 132.056(b), provided that a rule adopted
under this section may not provide for a term that exceeds three
years or is less than one year.
(b) A rule proposed under this section may be adopted only
if it will reduce the regulatory burden for small career
[proprietary] schools and colleges and will adequately safeguard
the interests of the students of small career [proprietary] schools
and colleges to receive either the education for which they have
contracted or an appropriate refund.
SECTION 2.15. Section 132.054, Education Code, is amended
to read as follows:
Sec. 132.054. SMALL SCHOOL OR COLLEGE EXEMPTION. The
commission may exempt small career [proprietary] schools and
colleges from any requirement of this chapter to reduce the cost to
small schools and colleges of receiving a certificate of approval.
SECTION 2.16. Section 132.056, Education Code, is amended
to read as follows:
Sec. 132.056. ISSUANCE OF CERTIFICATE OF APPROVAL; RENEWAL.
(a) The commission, upon review of an application for a
certificate of approval duly submitted in accordance with Section
132.052 and meeting the requirements of Section 132.055, shall
issue a certificate of approval to the applicant career
[proprietary] school or college. The certificate of approval shall
be in a form prescribed by the commission and shall state in a clear
and conspicuous manner at least the following information:
(1) date of issuance, effective date, and term of
approval;
(2) correct name and address of the school or college;
(3) authority for approval and conditions of approval,
if any, referring specifically to the approved catalogue or
bulletin published by the school or college;
(4) signature of the agency administrator; and
(5) any other fair and reasonable representations that
are consistent with this chapter and deemed necessary by the
commission.
(b) The term for which a certificate of approval shall be
issued may not exceed one year.
(c) The certificate of approval shall be issued to the owner
of the applicant career [proprietary] school or college and is
nontransferable. In the event of a change in ownership of the
school or college, a new owner must, at least 30 days prior to the
change in ownership, apply for a new certificate of approval.
(d) At least 30 days prior to expiration of a certificate of
approval, the career [proprietary] school or college shall forward
to the commission an application for renewal. The commission shall
reexamine the premises of the school or college as frequently as the
commission considers necessary and renew, revoke, or deny renewal
of the school's or college's [school's] certificate of approval. If
a school or college fails to file a complete application for renewal
at least 30 days before the expiration date of the certificate of
approval, the school or college, as a condition of renewal, must
pay, in addition to the annual renewal fee, a late renewal fee in an
amount established by commission rule of at least $100.
(e) A career [proprietary] school or college not yet in
operation when its application for a certificate of approval is
filed may not begin operation until receipt of the certificate of
approval.
(f) The commission shall visit a career [proprietary]
school or college to reexamine the school or college for compliance
with the criteria provided by Section 132.055 not later than three
months after the date the [a] school or college begins operation or
after a change in ownership of the [a] school or college.
SECTION 2.17. Section 132.058, Education Code, is amended
to read as follows:
Sec. 132.058. REVOCATION OF CERTIFICATE OF APPROVAL.
(a) The commission may revoke an issued certificate of approval or
place reasonable conditions upon the continued approval
represented by the certificate. Prior to revocation or imposition
of conditions upon a certificate of approval, the commission shall
notify the holder of the certificate, in writing, of the impending
action and set forth the grounds for the action. The commission may
reexamine a career [proprietary] school or college two or more
times during each year in which a notice relating to the school or
college has been issued or conditions have been imposed on the
school or college under this subsection.
(b) A certificate of approval may be revoked or made
conditional if the commission has reasonable cause to believe that
the career [proprietary] school or college is guilty of a violation
of this chapter or of any rules adopted under this chapter.
SECTION 2.18. Subsections (a), (b), and (d), Section
132.059, Education Code, are amended to read as follows:
(a) All representatives employed by a career [proprietary]
school or college shall register with the commission. Application
for registration may be made at any time and shall be based on
information submitted in accordance with the provisions of Section
132.052.
(b) Registration of a representative is effective upon
receipt of notice from the commission and remains in effect for a
period not in excess of 12 calendar months. Renewal of
representative registration shall be in accordance with the renewal
application form forwarded to the career [proprietary] school or
college by the commission.
(d) Career [Proprietary] schools and colleges domiciled or
having their principal place of business outside of this state that
engage representatives to canvass, solicit, or contract with any
person within this state, are subject to the requirements for
registration of representatives.
SECTION 2.19. Section 132.062, Education Code, is amended
to read as follows:
Sec. 132.062. WITHHOLDING RECORDS. A career [proprietary]
school or college may withhold a student's transcript or
certificate of completion of training until the student has
fulfilled the student's financial obligation to the school or
college.
SECTION 2.20. Section 132.063, Education Code, is amended
to read as follows:
Sec. 132.063. APPROVED DEGREES. A career [proprietary]
school or college may offer a degree approved by the Texas Higher
Education Coordinating Board.
SECTION 2.21. Section 132.064, Education Code, is amended
to read as follows:
Sec. 132.064. NONQUALIFICATION AS SMALL CAREER
[PROPRIETARY] SCHOOL AND COLLEGE. (a) A career [proprietary]
school or college operating as a small career [proprietary] school
or college but that has an annual gross income from tuition and fees
that exceeds $100,000 (other than a test preparation school
described by Section 132.001(10)(B) or (C)) that intends to receive
a payment from federal funds under 20 U.S.C. Section 1070 et seq. or
intends to receive prepayment of tuition, fees, or other charges
from federal or state funds shall send written notice to the
commission. The notice must be sent not later than the following
date, as applicable:
(1) the 60th day after the date on which annual gross
income is determined to exceed the maximum;
(2) the day before receiving a payment of federal
funds under 20 U.S.C. Section 1070 et seq.; or
(3) the day before enrolling a student who will prepay
tuition, a fee, or another charge in whole or in part from federal
or state funds.
(b) A career [proprietary] school or college that no longer
qualifies as a small career [proprietary] school or college shall
apply for an initial certificate of approval as a career
[proprietary] school or college within 30 days after the date the
school has notified the commission that it no longer qualifies as a
small career [proprietary] school or college. The commission may
apply or prorate any fees paid by the school or college as a small
career [proprietary] school or college.
(c) A career [proprietary] school or college that no longer
qualifies as a small career [proprietary] school or college shall
submit to the commission an amount of money equal to the difference
between the fee for the small career [proprietary] school or
college certificate of approval submitted by the school or college
and the fee that the school or college would be required to submit
after its qualifications as a small career [proprietary] school or
college cease.
(d) The authority of a career [proprietary] school or
college to operate under a small career [proprietary] school or
college certificate of approval terminates on the final
determination of issuance or denial of an initial certificate of
approval. If a school or college fails to file a complete
application within the period required by Subsection (b), the
school or college, as a condition of issuance, must pay a late fee
in an amount established by commission rule of at least $100.
SECTION 2.22. Section 132.151, Education Code, is amended
to read as follows:
Sec. 132.151. PROHIBITIONS. A person may not:
(1) operate a career [proprietary] school or college
without a certificate of approval issued by the commission;
(2) solicit prospective students for or on behalf of a
career [proprietary] school or college without being registered as
a representative of the career [proprietary] school or college as
required by this chapter;
(3) accept contracts or enrollment applications from a
representative who is not bonded as required by this chapter;
(4) utilize advertising designed to mislead or deceive
prospective students;
(5) fail to notify the commission of the
discontinuance of the operation of any career [proprietary] school
or college within 72 hours of cessation of classes and make
available accurate records as required by this chapter;
(6) fail to secure and file within 30 days an increased
bond as required by this chapter;
(7) negotiate any promissory instrument received as
payment of tuition or other charge prior to completion of 75 percent
of the course, provided that prior to such time, the instrument may
be transferred by assignment to a purchaser who shall be subject to
all the defenses available against the career [proprietary] school
or college named as payee; or
(8) violate any provision of this chapter.
SECTION 2.23. Section 132.153, Education Code, is amended
to read as follows:
Sec. 132.153. COMPETITIVE BIDDING; ADVERTISING. The
commission may not adopt rules to restrict competitive bidding or
advertising by a career [proprietary] school or college except to
prohibit false, misleading, or deceptive competitive bidding or
advertising practices. Those rules may not restrict:
(1) the use of an advertising medium;
(2) the size or duration of an advertisement; or
(3) advertisement under a trade name.
SECTION 2.24. Subsection (a), Section 132.154, Education
Code, is amended to read as follows:
(a) Whenever the commission has probable cause to believe
that any career [proprietary] school or college has committed any
acts that would be in violation of this chapter, the commission
shall apply for an injunction restraining the commission of such
acts.
SECTION 2.25. Section 132.156, Education Code, is amended
to read as follows:
Sec. 132.156. SANCTIONS. (a) If the commission has
reasonable cause to believe that a career [proprietary] school or
college has violated this chapter or a rule adopted under this
chapter, the commission may:
(1) order a peer review of the school or college; or
(2) suspend the admission of students to the school or
college.
(b) A peer review ordered under this section shall be
conducted by a peer review team composed of knowledgeable persons
selected by the commission. The commission shall attempt to
provide a balance on each team between members assigned to the team
who are from this state and those who are from other states. The
team shall provide the commission with an objective assessment of
the content of the career school's or college's [proprietary
school's] curriculum and its application. The costs of providing a
peer review team shall be paid by the school or college.
SECTION 2.26. Subsections (a) through (d), Section 132.157,
Education Code, are amended to read as follows:
(a) If a career [proprietary] school or college fails to
timely comply with the requirements of Section 132.064, in addition
to any other penalties authorized by law, the commission may assess
a penalty in an amount not greater than two times the amount that
the school or college would have paid in fees and other charges if
the school or college had complied with the requirements of Section
132.064 or may assess a penalty in the amount of the tuition or fee
charge to any students whose tuition or fees were contracted to be
funded by a prepaid federal or state source.
(b) If the commission finds that the career [proprietary]
school or college acted intentionally, the commission may, in
addition to any other remedy available under law, assess a penalty
against the owner in an amount not greater than four times the
amount of the fees and charges that the school or college should
have paid or four times the amount of the student tuition that was
contracted to be funded from a prepaid federal or state source.
(c) The failure to notify the commission within four months
after the career school's or college's [proprietary school's]
earnings exceed that of a small career [proprietary] school or
college gives rise to a rebuttable presumption of intent for
purposes of assessment of a penalty.
(d) The failure to notify the commission within 10 days
after a career [proprietary] school or college has enrolled a
student whose tuition or fees are paid in whole or in part from a
prepaid federal or state source gives rise to a rebuttable
presumption of intent for purposes of assessment of a penalty.
SECTION 2.27. Subsections (a), (c) through (f), (h), and
(i), Section 132.201, Education Code, are amended to read as
follows:
(a) Certificate and registration fees, except those charged
pursuant to Subsection (d), shall be collected by the commission.
Each fee shall be in an amount set by the commission in an amount not
to exceed 150 percent of each fee in the following schedule:
(1) the initial fee for a career [proprietary] school
or college:
(A) for a certificate of approval is $2,000; or
(B) for a small career [proprietary] school or
college certificate of approval is $1,000;
(2) the first renewal fee and each subsequent renewal
fee for a career [proprietary] school or college is the greater of:
(A) an amount that is determined by applying a
percentage, not to exceed 0.3 percent, to the gross tuition and
fees, excluding refunds as provided by Section 132.061, of the
school or college; or
(B) $500;
(3) the initial registration fee for a representative
is $60;
(4) the annual renewal fee for a representative is
$30;
(5) the fee for a change of a name of a career
[proprietary] school or college or owner is $100;
(6) the fee for a change of an address of a career
[proprietary] school or college is $180;
(7) the fee for a change in the name or address of a
representative or a change in the name or address of a career
[proprietary] school or college that causes the reissuance of a
representative permit is $10;
(8) the application fee for an additional course is
$150, except for seminar and workshop courses, for which the fee is
$25;
(9) the application fee for a director, administrative
staff member, or instructor is $15;
(10) the application fee for the authority to grant
degrees is $2,000;
(11) the application fee for an additional degree
course is $250; and
(12) the fee for an inspection required by commission
rule of classroom facilities that are separate from the main campus
is $250.
(c) For purposes of this section, the gross amount of annual
student fees and tuition for a career [proprietary] school or
college is the amount determined by the commission based on any
report submitted by the school or college to the commission or other
information obtained by the commission.
(d) In connection with the regulation of any career
[proprietary] school or college or course through a memorandum of
understanding pursuant to Section 132.002(c), the commission shall
set an application and annual renewal fee, not to exceed $2,000.
The fee shall be an amount reasonably calculated to cover the
administrative costs associated with assuming the additional
regulation.
(e) The fee for an investigation at a career [proprietary]
school or college to resolve a complaint filed against the school or
college is $600. The fee may be charged only if:
(1) the complaint could not have been resolved by
telephone or written correspondence only;
(2) a representative of the commission visits the
school or college as a part of the complaint resolution process; and
(3) the school or college is found to be at fault.
(f) The commission may allow payment of any fee authorized
under this section or under Section 132.2415 [132.241] that exceeds
$1,000 to be paid by installment. The commission shall provide for
appropriate interest charges and late penalties in addition to any
other remedy that is provided for by law for the late payment of a
fee installment authorized under this section. The commission may
assess a reasonable service charge or interest to be paid by a
career [proprietary] school or college that pays a fee by
installment in an amount not to exceed 10 percent annually of the
fee that is to be paid by installment.
(h) The commission may apply or prorate a fee paid by a small
career [proprietary] school or college that has complied with the
notification requirements of Section 132.064 toward an initial
certificate as a career [proprietary] school or college in the
event that a career [proprietary] school or college has ceased to
qualify as a small career [proprietary] school or college during a
certification period.
(i) The commission may charge each career [proprietary]
school or college a fee for the cost of a service that collects,
analyzes, and reports student-level data in order to assess the
outcome of students who attend career [proprietary] schools and
colleges. The total amount of the fees charged under this
subsection must not exceed the cost of the service to the
commission.
SECTION 2.28. Subsection (b), Section 52.013, Government
Code, is amended to read as follows:
(b) The board may:
(1) appoint any necessary or proper subcommittee;
(2) hire necessary employees;
(3) pay all reasonable expenses from available funds;
(4) approve curriculum for court reporter career
[proprietary] schools and colleges as provided by Section 132.055,
Education Code;
(5) approve court reporter programs in technical
institutes and public community colleges for purposes of
certification under Section 61.051, Education Code; and
(6) approve continuing professional education courses
for persons certified as court reporters.
SECTION 2.29. Subdivision (3), Section 305.002, Labor Code,
is amended to read as follows:
(3) "Eligible institution" means a career
[proprietary] school or college in this state that:
(A) holds a certificate of approval under Chapter
132, Education Code; and
(B) is approved by the commission under Section
305.023 for its students to participate in the grant program
established under this chapter.
SECTION 2.30. Section 305.023, Labor Code, is amended to
read as follows:
Sec. 305.023. APPROVAL OF INSTITUTIONS. The commission
shall approve a career [proprietary] school or college for its
students to participate in the grant program established under this
chapter if the school or college:
(1) has been accredited for not less than five years by
an accrediting agency recognized by the United States Department of
Education and maintains that accreditation;
(2) has held a certificate of approval under Chapter
132, Education Code, for at least five years; and
(3) offers one or more qualified education programs.
SECTION 2.31. Section E, Article 2.23A, Texas Non-Profit
Corporation Act (Article 1396-2.23A, Vernon's Texas Civil
Statutes), is amended to read as follows:
E. This article does not apply to:
(1) a corporation that solicits funds only from its
members;
(2) a corporation which does not intend to solicit and
receive and does not actually raise or receive contributions from
sources other than its own membership in excess of $10,000 during a
fiscal year;
(3) a career [proprietary] school or college that has
received a certificate of approval from the Texas Workforce
Commission [State Commissioner of Education], a public institution
of higher education and foundations chartered for the benefit of
such institutions or any component part thereof, a private or
independent institution of higher education as defined by Section
61.003, Education Code, a postsecondary educational institution
with a certificate of authority to grant a degree issued by the
Texas Higher Education Coordinating Board, [Texas College and
University System,] or an elementary or secondary school;
(4) religious institutions which shall be limited to
churches, ecclesiastical or denominational organizations, or other
established physical places for worship at which religious services
are the primary activity and such activities are regularly
conducted;
(5) a trade association or professional society whose
income is principally derived from membership dues and assessments,
sales, or services;
(6) any insurer licensed and regulated by the Texas
Department [State Board] of Insurance;
(7) an organization whose charitable activities
relate to public concern in the conservation and protection of
wildlife, fisheries, and allied natural resources;
(8) an alumni association of a public or private
institution of higher education in this state, provided that such
association is recognized and acknowledged by the institution as
its official alumni association.
ARTICLE 3. EFFECTIVE DATE
SECTION 3.01. This Act takes effect September 1, 2003.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1343 passed the Senate on
May 6, 2003, by the following vote: Yeas 31, Nays 0; and that the
Senate concurred in House amendment on May 30, 2003, by a viva-voce
vote.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1343 passed the House, with
amendment, on May 28, 2003, by a non-record vote.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor