No. 38869 (New Rule): Rule R152-34a. Utah Postsecondary School State Authorization Act Rules

(New Rule)

DAR File No.: 38869
Filed: 09/16/2014 11:11:42 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is: 1) to comply with rulemaking requirements stated in Title 13, Chapter 34a, which was enacted during the 2014 General Legislative Session by H.B. 405; 2) to create an application process by which a postsecondary school may apply for a certificate of state authorization; 3) to establish a process by which a person may submit a complaint about a postsecondary school that has obtained a certificate of state authorization; and 4) to establish standards for the conduct and operation of a postsecondary school that has obtained a certificate of state authorization.

Summary of the rule or change:

In Section R152-34a-102, the term "accredited" is defined. In Section R152-34a-201, in order to apply for a certificate of state authorization, a postsecondary school shall submit to the Division a completed application form; its accreditation statement, including in specified circumstances, audited financial statements; a list of course offerings; a tuition schedule and statement of total program costs(s); a refund policy; and a statement agreeing to operate in compliance with the governing statute and the rules promulgated thereunder. In Section R152-34a-206, a person who wishes to file a complaint against a postsecondary school that operates under a certificate of state authorization may complete the Division's complaint form or submit a signed letter and other specified information. In Section R152-34a-302, a postsecondary school that operates under a certificate of state authorization shall comply with stated affirmative duties and ensure that it does not engage in prohibited conduct as specified.

State statutory or constitutional authorization for this rule:

• Subsection 13-2-5(1)
• Section 13-34a-103

Anticipated cost or savings to:

the state budget:

The Division has the budget and staff in place to review applications from, and complaints regarding, postsecondary schools, and to take enforcement actions as needed. No fiscal impact to the state budget is anticipated.

local governments:

Local governments are not required to comply with or enforce the rules governing postsecondary schools. No fiscal impact to local government is anticipated.

small businesses:

A small business that requires a certificate of state authorization will incur a fee and other costs related to obtaining and providing the information and documents required by the Division in order to evaluate whether the applicant qualifies for the certificate. If granted a certificate, a small business will incur costs to comply with the stated standards of conduct including, for example, the requirement to retain student records for at least 60 years.

persons other than small businesses, businesses, or local governmental entities:

This rule governs businesses operating as postsecondary schools. It does not affect other persons. No fiscal impact to other persons is anticipated.

Compliance costs for affected persons:

Affected persons will incur a fee and other costs related to obtaining and providing the information and documents required by the Division in order to evaluate whether the applicant qualifies for the certificate. If granted a certificate, the business will incur costs to comply with the stated standards of conduct including, for example, the requirement to retain student records for at least 60 years.

Comments by the department head on the fiscal impact the rule may have on businesses:

Currently, the fee to apply for a certificate of state authorization to operate as a postsecondary school may range from $1,500 to $2,500. This fee was contemplated by the Legislature in determining to implement state authorization of postsecondary schools. In addition, as stated in the rule analysis, businesses will have operational costs associated with their compliance obligations. These costs will vary and cannot be estimated.

Francine A. Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Commerce
Consumer Protection
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Jennie Jonsson at the above address, by phone at 801-530-6706, by FAX at 801-526-4387, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

11/14/2014

This rule may become effective on:

11/21/2014

Authorized by:

Daniel O'Bannon, Director

RULE TEXT

R152. Commerce, Consumer Protection.

R152-34a. Utah Postsecondary School State Authorization Act Rules.

R152-34a-101. Authority and Purpose.

(1) These rules are promulgated under the authority of Section 13-2-5(1) and Section 13-34a-103.

(2) These rules are promulgated to:

(a) administer and enforce the Utah Postsecondary School State Authorization Act; and

(b) provide standards by which persons subject to the Utah Postsecondary School State Authorization Act shall operate.

 

R152-34a-102. Definition.

"Accredited" means public recognition by a national or regional accrediting agency, as defined in Section 13-34a-102(2).

 

R152-34a-201. Application Process.

(1) To obtain a certificate of postsecondary state authorization, an applicant shall:

(a) submit to the division a completed application form, as provided by the division;

(b) attach to the application:

(i)(A) a copy of the school's accreditation statement; and

(B) if the applicant does not meet the criteria stated in Section 13-34a-203, audited financial statements pursuant to this Subsection (2);

(ii) a list of all current course offerings;

(iii) a copy of the school's tuition schedule and total program cost(s); and

(iv) a copy of the school's refund policy;

(c) comply in all respects with Section 13-34a-203 or Section 13-34a-204 as applicable;

(d) sign and notarize a statement that the owner of the school or similar controlling individual:

(i) has read and understood Section 13-34a et seq and these rules; and

(ii) agrees to operate in full compliance with Section 13-34a et seq and these rules; and

(e) pay the nonrefundable application fee.

(2) A school that is required to submit audited financial statements pursuant to this Subsection (1)(b)(i)(B) shall submit:

(a) the audited financial statements that were completed or provided to an accrediting agency in conjunction with the school's most recent accreditation review; and

(b) audited financial statements for the most recent fiscal year.

(3)(a) A postsecondary school that submits an application for a certificate of authorization under this Subsection R152-34a-201 is not required to apply concurrently with the division for registration as a postsecondary proprietary school under Section 13-34 et seq.

(b) For the purpose of Section 13-34-107(1)(b)(ii), a certificate of state authorization issued under this Subsection R152-34a-3 establishes an exemption to the registration requirement that otherwise applies to a person operating as a postsecondary proprietary school.

 

R152-34a-206. Complaint Process.

To file a complaint under Section 13-34a et seq against a postsecondary school that holds a certificate from the division, a person shall submit to the division:

(1) a completed complaint form as provided by the division; or

(2) a letter, signed by the complainant, and including:

(a) all documentary evidence related to the complaint; and

(b) contact information for the complainant.

 

R152-34a-302. Grounds for Investigation and Enforcement - Requirements Upon Termination of Certificate of Authorization.

(1) A postsecondary school that holds a certificate of authorization shall:

(a) as to an entity granted a certificate under Section 13-34a-204, maintain financial capability pursuant to Section 13-34a-204(2)(a);

(b) disclose to each student, in writing, the school's tuition schedule, total program cost, and refund policy before requiring a student to make any payment to the school;

(c) if cited or investigated by the division, provide:

(i) copies of all advertised claims;

(ii) copies of any documents signed by or on behalf of the complainant and other interested person(s), as identified by the division;

(iii) all academic records of the complainant and other student(s), as identified by the division and permitted under any applicable confidentiality law or agreement; and

(iv) all other records requested by the division;

(d)(i) maintain each student's transcript(s) for a period of at least 60 years from the date of the student's last attendance:

(A) in either paper or electronic form; and

(B) at a physical location within the continental United States; and

(ii) provide a student's transcript(s):

(A) within 20 days of a request from the student or the division; and

(B)(I) without charge, if the request is from the division; or

(II) with or without a reasonable charge, if the request is from a student;

(e) if terminating operations, within the 30-day period following the date of termination:

(i) surrender to the division the school's current state certificate of authorization; and

(ii) identify:

(A) the name and contact information of the individual who will maintain custody of student records pursuant to this Subsection (1)(d); and

(B) the physical location where student transcripts will be maintained in compliance with this Subsection (1)(d); and

(f) notify the division within 10 business days of:

(i) any change in information on record with division; and

(ii) any action taken against the school by an accrediting body or a regulatory agency, including a state or the federal government.

(2) A postsecondary school that holds a certificate of state authorization may not:

(a) promulgate to the public a fraudulent or misleading statement relating to a program or service offered; or

(b) withhold information or documents requested by the division in an investigation.

(3) Pursuant to Section Subsection 13-34a-103(2)(iv), the violation of a rule in this Subsection R152-34a-302 may be sanctioned by denial, suspension, or revocation of a certificate of the postsecondary school state authorization.

 

KEY: postsecondary schools, certificate of state authorization, application requirements, consumer protection

Date of Enactment or Last Substantive Amendment: 2014

Authorizing, and Implemented or Interpreted Law: 13-2-5(1); 13-34a-103

 

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