No. 40658 (New Rule): Rule R765-431. State Authorization Reciprocity Agreement Rule

(New Rule)

DAR File No.: 40658
Filed: 08/11/2016 10:10:51 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule establishes application procedures, regulations, and policy for higher education institutions that wish to join the State Authorization Reciprocity Agreement.

Summary of the rule or change:

This rule establishes definitions, application procedures, surety requirements, eligibility requirements, and complaint procedures for higher education institutions that wish to join the State Authorization Reciprocity Agreements. The reciprocity agreement allows participating member institutions to avoid licensing and costs of compliance from each state in which it provides educational activities.

Statutory or constitutional authorization for this rule:

• Section 53B-16-109

Anticipated cost or savings to:

the state budget:

This program is self-funding through fees, depending on the size of the institution that wishes to apply. The reciprocity agreement is entirely voluntary for public and private institutions of higher education. Fees collected cover the administrative costs only.

local governments:

This has no impact on local government. The reciprocity agreement is only available for accredited institutions of higher education (both private and public), which, in my understanding, do not qualify as local governments. Local governments do not participate in or are impacted by an institution's voluntary participation in these agreements.

small businesses:

Presently, there are approximately 18 for-profit colleges operating in Utah. Some of them may qualify as small businesses. They all have the same requirement to comply with Utah's consumer protection laws but are not otherwise governed by the state system of higher education. This rule will not change that. However, small private institutions of higher education that wish to engage in online education in other states may join the State Authorization Reciprocity Agreement. To do that, they will have to also comply with the consumer protection laws of those states as well, which could incur the cost of licensing and/or compliance. Those costs are difficult to quantify for purposes of this rule because they would depend on the size the of the college and the state in which the college wishes to engage in educational activities. Those same colleges, however, can voluntarily join in the reciprocity agreement, which will allow the institution to avoid the costs associated with compliance in other states. Those that voluntarily choose to join the consortium will incur an annual fee. The fee will be based on the size of the institution but will likely be $2,000 for small institutions.

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

There are no other impacts. Institutions of higher education that wish to participate must meet the same consumer protection requirements as they normally would when engaging in educational activities in Utah or any other state.

Compliance costs for affected persons:

Participation in the reciprocity agreement is voluntary. Institutions of higher education who wish to participate must meet the same consumer protection requirements as they normally would when engaging in educational activities in Utah or any other state. Therefore, there is no compliance cost associated with this rule.

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

Because participation is voluntary, public and private institutions may choose not to join the consortium and thereby avoid the application fees. However, all institutions bear the cost of licensing and compliance with consumer protection laws in each state they provide educational activities. Entities that enter into the SARA agreements will likely save costs because they do not need to go through the cost and administrative burden of licensing in each individual state they provide educational activities, including online education.

Dave Buhler, Commissioner

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

Regents (Board Of)
Administration
BOARD OF REGENTS BUILDING, THE GATEWAY
60 SOUTH 400 WEST
SALT LAKE CITY, UT 84101-1284

Direct questions regarding this rule to:

• Geoff Landward at the above address, by phone at 801-321-7136, by FAX at , 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:

10/03/2016

This rule may become effective on:

10/10/2016

Authorized by:

Dave Buhler, Commissioner of Higher Education

RULE TEXT

R765. Regents (Board of), Administration.

R765-431. State Authorization Reciprocity Agreement Rule.

R765-431-1. Purpose.

To administer a state authorization reciprocity agreement as authorized by Section 53B-16-109.

 

R765-431-2. Definitions.

In addition to the definitions set forth in Section 53B-16-109(1), the following definitions shall apply to this Rule.

(1) "OCHE" shall mean the Office of the Commissioner of Higher Education.

(2) "NC-SARA" shall mean the National Council for State Authorization Reciprocity Agreements.

(3) "SARA" shall mean the State Authorization Reciprocity Agreement overseen by NC-SARA and administered by four regional higher education compacts, including WICHE.

(4) "SARA portal agency" shall mean the single agency designated by each SARA member state to serve as the interstate point of contact for SARA questions, complaints, and other communications.

(5) "WICHE" shall mean the Western Interstate Commission for Higher Education.

 

R765-431-3. Applications for Institutional Participation in SARA.

(1) Institutions desiring to participate in SARA shall submit to OCHE the following:

(a) A completed Application and Approval Form for Institutional Participation in SARA that is approved by NC-SARA;

(b) Payment of the fee established by OCHE for administering SARA; and

(c) The following documents verifying the statements made in the application:

(i) Evidence supporting Institution's statement that its principal campus or central administrative unit is located in Utah and that it is authorized to operate in Utah;

(ii) Evidence supporting Institution's statement that it is a degree-granting institution that is accredited by an accrediting body recognized by the U.S. Secretary of Education;

(iii) Evidence showing (1) students are informed, before completing the enrollment process for an online course or program, of the student consumer complaint processes available to them, and (2) the student complaint processes are clearly defined and can be used electronically;

(iv) Evidence showing students are informed, before completing the enrollment process for an online course or program that customarily leads to professional licensure, whether or not the course or program meets licensure requirements in the state where the student resides or, if unknown, students are provided the contact information for the appropriate state licensing board(s); and

(v) For non-public Institutions, evidence of Institution's financial responsibility index score from the Department of Education that is 1.5 or above, or if its score is between 1.0 and 1.5, evidence that Institution has obtained the surety required in R765-431-4. Non-public Institutions with a score below 1.0 will not be eligible to participate in SARA.

(2) Institutions desiring to continue participating in SARA after one year of the initial application shall submit to OCHE annually thereafter the following:

(a) A completed Renewal Application for Institutional Participation in SARA that is approved by NC-SARA within 30 days of receipt of notice for opportunity to renew from NC-SARA;

(b) Payment of the fee established by OCHE for administering SARA; and

(c) The following documents verifying the statements made in the application:

(i) Evidence that Institution's principal campus or central administrative unit remains located in Utah and that Institution continues to be authorized to operate in Utah;

(ii) Evidence that Institution retains its accreditation by an accrediting body recognized by the U.S. Secretary of Education; and

(iii) For non-public Institutions, evidence of Institution's financial responsibility index score from the Department of Education.

(3) OCHE shall notify the Institution no later than 30 days after receipt of the initial or renewal application of its decision to approve, deny, or return the application for further information.

(4) If an Institution's initial or renewal application is denied, OCHE shall provide to the applicant a written reason for the denial.

(5) If any information contained in the initial or renewal application becomes incorrect or incomplete while it is in effect, the Institution shall, within 30 days after the information becomes incorrect or incomplete, correct the application or file the complete information as required by OCHE.

 

R765-431-4. Surety Requirements for Institutions with a Low Financial Responsibility Index Score.

(1) An Institution with a financial responsibility index score from the Department of Education between 1.0 and 1.5 shall satisfy the requirement that it is sufficiently financially stable to participate in SARA by submitting with its application a surety in the form of a bond, certificate of deposit, or irrevocable letter of credit.

(2) The amount of the surety shall be:

(a) $187,500 for Institutions expecting to enroll more than 100 separate individual students (non-duplicated enrollments) during the year it is applying to participate in SARA;

(b) $125,000 for Institutions expecting to enroll between 50 and 99 separate individual students during the year it is applying to participate in SARA;

(c) $62,500 for Institutions expecting to enroll less than 50 separate individual students during the year it is applying to participate in SARA; and

(d) $12,500 for an Institution that is able to establish that its gross tuition income from any source during the year it is applying to participate in SARA will be less than $25,000.

(3) The obligation of the surety will be that the Institution, its officers, agents, and employees will:

(a) faithfully perform the terms and conditions of its application to participate in SARA; and

(b) conform to the standards and requirements required for participation in SARA.

(4) The bond, certificate of deposit, or letter of credit shall be in a form approved by OCHE and issued by a company authorized to do such business in Utah.

(5) The bond, certificate of deposit, or letter of credit shall be payable to OCHE to be used to satisfy any costs, losses, or damages resulting from the Institution's failure to meet any of its obligations as a participant in SARA.

(6) The surety company may not be relieved of liability on the surety unless it gives the Institution and OCHE 90 calendar days' notice by certified mail of the company's intent to cancel the surety.

(7) If at any time the company that issued the surety cancels or discontinues the coverage, the Institution's eligibility to participate is SARA is automatically revoked as a matter of law on the effective date of the cancellation or discontinuance of surety coverage unless a replacement surety is obtained on or before the cancellation date of the original coverage and provided to OCHE.

 

R765-431-5. Revocation of Eligibility to Participate in SARA.

(1) An Institution's eligibility to participate in SARA may be revoked by OCHE upon its finding that:

(a) the Institution's application contains material representations which are incomplete, improper, or incorrect;

(b) the Institution failed to perform as represented in its applications;

(c) the Institution violated any of the policies and procedures of OCHE as they relate to SARA;

(d) the Institution violated any of the policies and procedures of NC-SARA or any of the four regional compacts administering SARA;

(e) the Institution failed to maintain an adequate financial responsibility index score from the Department of Education;

(f) the Institution has engaged in any dishonest or fraudulent activity; or

(g) the Institution failed to comply with any laws in this state or another state that affect its ability to continue doing business in Utah.

(2) The revocation of the eligibility of an Institution shall be made in accordance with the procedures set forth in UT Admin. R765-134. A hearing is not required.

 

R765-431-6. Request for Review.

(1) Institutions shall have the right to submit to OCHE a Request for Review regarding a decision to deny the Institution's application or to revoke the Institution's eligibility to participate in SARA.

(2) Requests for Review shall be postmarked within 10 days of date of notification of the adverse decision.

(3) Requests for Review will be reviewed and decided by a review committee appointed by the Commissioner of Higher Education.

(4) At the time the Request for Review is made, the Institution shall provide evidence to the review committee that the adverse decision was made in error.

(5) The decision of the review committee shall be made in accordance with the procedures set forth in UT Admin. R765-134. A hearing is not required.

(6) The decision of the review committee shall be the final institutional action. An Institution may request judicial review of the review committee's decision in accordance with UT Admin. R765-134.

(7) The Institution may also request that WICHE review an adverse decision to see whether the SARA policies and standards were upheld during the review process.

 

R765-431-7. Consumer Complaints.

(1) Filing Complaints. Before filing a complaint with OCHE against an Institution, an individual must first work through the Institution's complaint process. To file a complaint against an Institution, an individual shall submit to OCHE:

(a) a completed complaint form as provided by OCHE; or

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

(i) all documentary evidence relating to the facts of the complaint;

(ii) evidence of the Institution's resolution of the complaint; and

(iii) contact information for the complainant.

(2) Complaint Resolution. OCHE may refer the complaints it receives to one or more of the following entities for resolution as it deems appropriate:

(a) the Institution complained against;

(b) the SARA portal agency in the home state of a non-Utah Institution complained against; and

(c) the Utah Division of Consumer Protection or other law enforcement agency.

(3) Action to Revoke Based on Consumer Complaint. OCHE may take action, in accordance with UT Admin. R765-431-5, to revoke an Institution's eligibility to participate in SARA based on a consumer complaint that is received within two years of the incident complained of.

 

KEY: State Authorization Reciprocity Agreement ( SARA), NC-SARA

Date of Enactment or Last Substantive Amendment: 2016

Authorizing, and Implemented or Interpreted Law: 53B-16-109

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