Today's Law As Amended


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AB-1341 Private postsecondary education: California Private Postsecondary Education Act of 2009.(2019-2020)



As Amends the Law Today


SECTION 1.

 Section 94801.5 of the Education Code is amended to read:

94801.5.
 (a) Effective July 1, 2017, an out-of-state private postsecondary educational institution shall register with the bureau, pay a fee pursuant to Section 94930.5, and comply with all of the following:
(1) The institution shall provide the bureau with all of the following information:
(A) Evidence of accreditation.
(B) Evidence that the institution is approved to operate in the state where the institution maintains its main administrative location.
(C) The agent for service of process consistent with Section 94943.5.
(D) A copy of the institution’s catalog and sample enrollment agreement.
(2) The institution shall comply with the requirements of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and regulations adopted by the bureau related to the fund, for its students residing in California.
(3) The institution shall provide disclosures pursuant to the requirements for the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and regulations adopted by the bureau related to the fund, for its students residing in California.
(b) This section does not apply to nonpublic a  higher education institutions institution  that grant grants  undergraduate degrees, graduate degrees, or both, and that are  is either  formed as a  nonprofit corporations corporation  and are is  accredited by an agency recognized by the United States Department of Education. Education, or is a public institution of higher education. 
(c) An institution described in subdivision (a) that fails to comply with this section is not authorized to operate in this state.
(d) A registration with the bureau pursuant to this section shall be valid for two years.
(e) The bureau shall develop, through emergency regulations, a registration form. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process by January 1, 2018.
(f) This section shall remain in effect only until July 1, 2022, and as of January 1, 2023, is repealed.

SEC. 2.

 Section 94850.2 is added to the Education Code, to read:

94850.2.
 “Nonprofit corporation” means an institution to which contributions have been determined by the United States Internal Revenue Service to be tax-deductible pursuant to Section 501(c)(3) of Title 26 of the Internal Revenue Code, subject to the limitations described in Section 94874.1.

SEC. 3.

 Section 94858.5 is added to the Education Code, to read:

94858.5.
 “Public institution of higher education” means any of the following:
(a) An institution that meets the definition of subdivision (a) of Section 66010, including a district or campus of the California Community Colleges.
(b) An institution operated by the United States government, a state, as defined in Section 3306(j)(1) of Title 26 of the United States Code, a local government, as defined in Section 1393(a)(5) of Title 26 of the United States Code, or Indian tribal government, as defined in Section 7701(a)(40) of Title 26 of the United States Code.
(c) An institution that is an instrumentality of a state or local government if it meets all of the following:
(1) The institution’s employees are government employees.
(2) The institution’s liabilities are payable to the same degree as if they were liabilities of the state or local government, in the state or local government jurisdiction where the institution is formed.
(3) The institution is subject to the same financial oversight and open public records laws as the state or local government, in the state or local government jurisdiction where the institution is formed.

SEC. 4.

 Section 94874.1 is added to the Education Code, to read:

94874.1.
 (a) The bureau shall not verify the exemption from this chapter of, or contract for the complaint handling for, a nonprofit institution that operated as a for-profit institution during any period on or after January 1, 2010, unless the Attorney General determines all of the following:
(1) The institution acquired the institution’s assets for no more than the value of the assets.
(2) The institution has not executed agreements for goods or services exceeding the value of the goods or services.
(3) All core functions of the institution are conducted by, under the control of, or subject to significant direction by the institution, rather than a person or entity that a public institution of higher education or a nonprofit corporation.
(4) The institution has not committed a substantial share of the institution’s assets to a joint venture with a person or entity, unless the joint venture is with an entity that is a public institution of higher education or nonprofit corporation, and all core functions of the venture are conducted by, under the control of, or subject to significant direction from that entity.
(b) “Value,” which includes the value of any ongoing relationship, including any contract, agreement, lease, or other arrangement between the acquiring institution and the acquired institution or asset, as described in Section 180.905 of Title 2 of the Code of Federal Regulations, as it read on January 1, 2020, or between the procuring institution and the procured goods or services, shall be demonstrated through one of the following:
(1) A third-party appraisal based on comparable assets acquired by, or goods or services procured by, nonprofit corporations.
(2) Independent financing of the acquisition or procurement based upon the asset acquired or goods or services procured.
(3) Full and open competition, as defined in Section 2.101(b) of Title 48 of the Code of Federal Regulations, as it read on January 1, 2020, in the acquisition of the assets or procurement of the goods or services.
SEC. 5.
 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.