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Article 4. Exemptions of California Education Code >> Division 10. >> Title 3. >> Part 59. >> Chapter 8. >> Article 4.
Except as provided in Section 94874.2, the following are
exempt from this chapter:
(a) An institution that offers solely avocational or recreational educational programs.
(b) (1) An institution offering educational programs sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organization's membership.
(2) (A) Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:
(i) It is not on the Eligible Training Provider List established and maintained by the California Workforce Investment Board but has met the requirements for placement on the list.
(ii) It is on the Eligible Training Provider List established and maintained by the California Workforce Investment Board and meets the requirements for continued listing.
(B) If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Investment Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.
(c) A postsecondary educational institution established, operated, and governed by the federal government or by this state or its political subdivisions.
(d) An institution offering either of the following:
(1) Test preparation for examinations required for admission to a postsecondary educational institution.
(2) Continuing education or license examination preparation, if the institution or the program is approved, certified, or sponsored by any of the following:
(A) A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, or career field.
(B) A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, occupation, trade, or career field.
(C) A bona fide trade, business, or professional organization.
(e) (1) An institution owned, controlled, and operated and maintained by a religious organization lawfully operating as a nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of the Corporations Code, that meets all of the following requirements:
(A) The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section 2789 of Business and Professions Code.
(B) The diploma or degree is limited to evidence of completion of that education.
(2) An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization.
(3) An institution operating under this subdivision shall not award degrees in any area of physical science.
(4) Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the title of the degree being conferred, a reference to the theological or religious aspect of the degree's subject area.
(5) A degree awarded under this subdivision shall reflect the nature of the degree title, such as "associate of religious studies," "bachelor of religious studies," "master of divinity," or "doctor of divinity."
(f) An institution that does not award degrees and that solely provides educational programs for total charges of two thousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal student financial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its Internet Web site, as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.
(g) A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association or a law school or law study program that is subject to the approval, regulation, and oversight of the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.
(h) A nonprofit public benefit corporation that satisfies all of the following criteria:
(1) Is qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(2) Is organized specifically to provide workforce development or rehabilitation services.
(3) Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by the Department of Rehabilitation.
(i) An institution that is accredited by the Accrediting Commission for Senior Colleges and Universities, Western Association of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.
(j) An institution that satisfies all of the following criteria:
(1) The institution has been accredited, for at least 10 years, by an accrediting agency that is recognized by the United States Department of Education.
(2) The institution has operated continuously in this state for at least 25 years.
(3) During its existence, the institution has not filed for bankruptcy protection pursuant to Title 11 of the United States Code.
(4) The institution's cohort default rate on guaranteed student loans does not exceed 10 percent for the most recent three years, as published by the United States Department of Education.
(5) The institution maintains a composite score of 1.5 or greater on its equity, primary reserve, and net income ratios, as provided under Section 668.172 of Title 34 of the Code of Federal Regulations.
(6) The institution provides a pro rata refund of unearned institutional charges to students who complete 75 percent or less of the period of attendance.
(7) The institution provides to all students the right to cancel the enrollment agreement and obtain a refund of charges paid through attendance at the second class session, or the 14th day after enrollment, whichever is later.
(8) The institution submits to the bureau copies of its most recent IRS Form 990, the institution's Integrated Postsecondary Education Data System Report of the United States Department of Education, and its accumulated default rate.
(9) The institution is incorporated and lawfully operates as a nonprofit public benefit corporation pursuant to Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code and is not managed or administered by an entity for profit.
(k) Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administration regulations and meet both of the following criteria:
(1) The flight instruction provider or program does not require students to enter into written or oral contracts of indebtedness.
(2) The flight instruction provider or program does not require or accept prepayment of instruction-related costs in excess of two thousand five hundred dollars ($2,500).
(a) An institution that offers solely avocational or recreational educational programs.
(b) (1) An institution offering educational programs sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organization's membership.
(2) (A) Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:
(i) It is not on the Eligible Training Provider List established and maintained by the California Workforce Investment Board but has met the requirements for placement on the list.
(ii) It is on the Eligible Training Provider List established and maintained by the California Workforce Investment Board and meets the requirements for continued listing.
(B) If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Investment Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.
(c) A postsecondary educational institution established, operated, and governed by the federal government or by this state or its political subdivisions.
(d) An institution offering either of the following:
(1) Test preparation for examinations required for admission to a postsecondary educational institution.
(2) Continuing education or license examination preparation, if the institution or the program is approved, certified, or sponsored by any of the following:
(A) A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, or career field.
(B) A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, occupation, trade, or career field.
(C) A bona fide trade, business, or professional organization.
(e) (1) An institution owned, controlled, and operated and maintained by a religious organization lawfully operating as a nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of the Corporations Code, that meets all of the following requirements:
(A) The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section 2789 of Business and Professions Code.
(B) The diploma or degree is limited to evidence of completion of that education.
(2) An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization.
(3) An institution operating under this subdivision shall not award degrees in any area of physical science.
(4) Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the title of the degree being conferred, a reference to the theological or religious aspect of the degree's subject area.
(5) A degree awarded under this subdivision shall reflect the nature of the degree title, such as "associate of religious studies," "bachelor of religious studies," "master of divinity," or "doctor of divinity."
(f) An institution that does not award degrees and that solely provides educational programs for total charges of two thousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal student financial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its Internet Web site, as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.
(g) A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association or a law school or law study program that is subject to the approval, regulation, and oversight of the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.
(h) A nonprofit public benefit corporation that satisfies all of the following criteria:
(1) Is qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(2) Is organized specifically to provide workforce development or rehabilitation services.
(3) Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by the Department of Rehabilitation.
(i) An institution that is accredited by the Accrediting Commission for Senior Colleges and Universities, Western Association of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.
(j) An institution that satisfies all of the following criteria:
(1) The institution has been accredited, for at least 10 years, by an accrediting agency that is recognized by the United States Department of Education.
(2) The institution has operated continuously in this state for at least 25 years.
(3) During its existence, the institution has not filed for bankruptcy protection pursuant to Title 11 of the United States Code.
(4) The institution's cohort default rate on guaranteed student loans does not exceed 10 percent for the most recent three years, as published by the United States Department of Education.
(5) The institution maintains a composite score of 1.5 or greater on its equity, primary reserve, and net income ratios, as provided under Section 668.172 of Title 34 of the Code of Federal Regulations.
(6) The institution provides a pro rata refund of unearned institutional charges to students who complete 75 percent or less of the period of attendance.
(7) The institution provides to all students the right to cancel the enrollment agreement and obtain a refund of charges paid through attendance at the second class session, or the 14th day after enrollment, whichever is later.
(8) The institution submits to the bureau copies of its most recent IRS Form 990, the institution's Integrated Postsecondary Education Data System Report of the United States Department of Education, and its accumulated default rate.
(9) The institution is incorporated and lawfully operates as a nonprofit public benefit corporation pursuant to Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code and is not managed or administered by an entity for profit.
(k) Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administration regulations and meet both of the following criteria:
(1) The flight instruction provider or program does not require students to enter into written or oral contracts of indebtedness.
(2) The flight instruction provider or program does not require or accept prepayment of instruction-related costs in excess of two thousand five hundred dollars ($2,500).
Beginning January 1, 2016, an institution that is approved
to participate in veterans' financial aid programs pursuant to
Section 21.4253 of Title 38 of the Code of Federal Regulations that
is not an independent institution of higher education, as defined in
subdivision (b) of Section 66010, may not claim an exemption from
this chapter.
Notwithstanding Sections 94874 and 94874.1, an institution
that is otherwise exempt from this chapter shall comply with the
requirements of Section 94927.5.
The bureau shall establish, by regulation, a process
pursuant to which an institution that is exempt from this chapter may
request, and obtain, from the bureau verification that the
institution is exempt. The bureau shall establish a reasonable fee to
reimburse the bureau's costs associated with the implementation of
this section.
(a) An institution exempt from all or part of this chapter
pursuant to subdivision (i) or (j) of Section 94874 or Section
94874.1 may apply to the bureau for an approval to operate pursuant
to this section, but only subject to all of the following provisions:
(1) The bureau may approve the operation of an institution that is exempt from all or part of this chapter as specified above in accordance with the authority granted pursuant to Article 6 (commencing with Section 94885). Upon issuing an approval to operate to an institution pursuant to this section, the bureau is authorized to regulate that institution through the full set of powers granted, and duties imposed, by this chapter, as those powers and duties would apply to an institution that is not exempt from this chapter.
(2) Notwithstanding any other law, upon issuance of an approval to operate pursuant to this section, the institution is no longer eligible for exemption, from the provisions of this chapter pursuant to subdivision (i) or (j) of Section 94874 or Section 94874.1, unless authorized by subsequent legislation.
(3) Upon issuance of an approval to operate pursuant to this section, an institution is subject to all provisions of this chapter, and any regulations adopted pursuant to this chapter, that apply to an institution subject to this chapter, except as expressly provided in paragraph (4).
(4) (A) With respect to the placement and salary or wage data required to be collected, calculated, and reported by Article 16 (commencing with Section 94928), an institution issued an approval to operate pursuant to this section is not required to report on its first School Performance Fact Sheet any data from the period prior to the date of the issuance of the approval to operate that the institution was not required to collect and does not have available to it. An institution shall, however, report available data collected and calculated in accordance with this chapter and applicable regulations, regardless of the purpose for which the data was collected. If the required data is unavailable, the institution shall also disclose the unavailability of the data on all documents required by this chapter and regulations adopted pursuant to this chapter. Upon receiving an approval to operate pursuant to this section, an institution shall commence to collect and calculate all information necessary to comply with Article 16 (commencing with Section 94928).
(B) An institution receiving an approval to operate pursuant to this section shall provide to prospective students the School Performance Fact Sheet, file that fact sheet with the bureau, and post it on the institution's Internet Web site no later than the first August 1 after the institution is approved to operate and no later than August 1 of each year thereafter. These School Performance Fact Sheets shall report data for the previous two calendar years based upon the number of students who began the program or the number of graduates for each reported calendar year. If two calendar years have not passed since the issuance of the approval to operate by the August 1 deadline for the School Performance Fact Sheet, unless data for two years is available, the institution shall report the required data for the period subsequent to the date of the issuance of the notice of approval.
(b) An institution exempt from all or part of this chapter pursuant to subdivision (i) or (j) of Section 94874 or Section 94874.1 that was approved to operate by the bureau before the effective date of this section shall be deemed to have been approved pursuant to this section.
(1) The bureau may approve the operation of an institution that is exempt from all or part of this chapter as specified above in accordance with the authority granted pursuant to Article 6 (commencing with Section 94885). Upon issuing an approval to operate to an institution pursuant to this section, the bureau is authorized to regulate that institution through the full set of powers granted, and duties imposed, by this chapter, as those powers and duties would apply to an institution that is not exempt from this chapter.
(2) Notwithstanding any other law, upon issuance of an approval to operate pursuant to this section, the institution is no longer eligible for exemption, from the provisions of this chapter pursuant to subdivision (i) or (j) of Section 94874 or Section 94874.1, unless authorized by subsequent legislation.
(3) Upon issuance of an approval to operate pursuant to this section, an institution is subject to all provisions of this chapter, and any regulations adopted pursuant to this chapter, that apply to an institution subject to this chapter, except as expressly provided in paragraph (4).
(4) (A) With respect to the placement and salary or wage data required to be collected, calculated, and reported by Article 16 (commencing with Section 94928), an institution issued an approval to operate pursuant to this section is not required to report on its first School Performance Fact Sheet any data from the period prior to the date of the issuance of the approval to operate that the institution was not required to collect and does not have available to it. An institution shall, however, report available data collected and calculated in accordance with this chapter and applicable regulations, regardless of the purpose for which the data was collected. If the required data is unavailable, the institution shall also disclose the unavailability of the data on all documents required by this chapter and regulations adopted pursuant to this chapter. Upon receiving an approval to operate pursuant to this section, an institution shall commence to collect and calculate all information necessary to comply with Article 16 (commencing with Section 94928).
(B) An institution receiving an approval to operate pursuant to this section shall provide to prospective students the School Performance Fact Sheet, file that fact sheet with the bureau, and post it on the institution's Internet Web site no later than the first August 1 after the institution is approved to operate and no later than August 1 of each year thereafter. These School Performance Fact Sheets shall report data for the previous two calendar years based upon the number of students who began the program or the number of graduates for each reported calendar year. If two calendar years have not passed since the issuance of the approval to operate by the August 1 deadline for the School Performance Fact Sheet, unless data for two years is available, the institution shall report the required data for the period subsequent to the date of the issuance of the notice of approval.
(b) An institution exempt from all or part of this chapter pursuant to subdivision (i) or (j) of Section 94874 or Section 94874.1 that was approved to operate by the bureau before the effective date of this section shall be deemed to have been approved pursuant to this section.
(a) An independent institution of higher education, as
defined in Section 66010, that is exempt from this chapter pursuant
to subdivision (i) of Section 94874 shall comply with all applicable
state and federal laws, including laws relating to fraud, abuse, and
false advertising.
(b) An institution described in subdivision (a) may execute a contract with the bureau for the bureau to review and, as appropriate, act on complaints concerning the institution, in accordance with Section 600.9 of Title 34 of the Code of Federal Regulations.
(c) The execution of a contract by the bureau with an institution pursuant to subdivision (b) shall constitute establishment by the state of that institution to offer programs beyond secondary education, including programs leading to a degree or certificate, in accordance with Section 600.9 of Title 34 of the Code of Federal Regulations.
(d) The bureau shall use a standard form contract for purposes of this section.
(e) A contract executed pursuant to this section shall, at a minimum, do all of the following:
(1) Require an institution to do all of the following:
(A) Cooperate with the bureau to resolve complaints received pursuant to this section.
(B) Provide the following disclosure notice in all written and Internet-based documentation in which the institution's complaint process is described, including the student catalog, student handbook, and the institution's Internet Web site:
(b) An institution described in subdivision (a) may execute a contract with the bureau for the bureau to review and, as appropriate, act on complaints concerning the institution, in accordance with Section 600.9 of Title 34 of the Code of Federal Regulations.
(c) The execution of a contract by the bureau with an institution pursuant to subdivision (b) shall constitute establishment by the state of that institution to offer programs beyond secondary education, including programs leading to a degree or certificate, in accordance with Section 600.9 of Title 34 of the Code of Federal Regulations.
(d) The bureau shall use a standard form contract for purposes of this section.
(e) A contract executed pursuant to this section shall, at a minimum, do all of the following:
(1) Require an institution to do all of the following:
(A) Cooperate with the bureau to resolve complaints received pursuant to this section.
(B) Provide the following disclosure notice in all written and Internet-based documentation in which the institution's complaint process is described, including the student catalog, student handbook, and the institution's Internet Web site:
"An individual may contact the Bureau for Private Postsecondary
Education for review of a complaint. The bureau may be contacted at
(address), Sacramento, CA (ZIP Code), (Internet Web site address),
(telephone and fax numbers)."
(C) Designate a person at the institution to act as a liaison to
the bureau.
(D) Pay one thousand seventy-six dollars ($1,076) each year for costs incurred by the bureau to perform activities pursuant to the contract, unless another amount is determined by the bureau.
(2) (A) Authorize the bureau, for any complaint it receives, including any complaints related to the institution's policies or procedures, or both, as determined by the bureau, to refer the complaint to the institution, an accrediting agency, or another appropriate entity for resolution.
(B) The bureau shall notify the complainant and the institution of a referral.
(C) This paragraph shall not be construed to relieve the bureau of its responsibility to ensure that a complaint it has referred for purposes of resolution is resolved by the receiving entity.
(f) The bureau may terminate a contract executed pursuant to this section if an institution is no longer an independent institution of higher education as defined in Section 66010 or fails to comply with the provisions of the contract.
(g) All moneys collected by the bureau that relate to a contract executed pursuant to this section, including payments collected in accordance with subparagraph (D) of paragraph (1) of subdivision (e), shall be deposited in the Private Postsecondary Education Administration Fund.
(h) The bureau shall maintain, on its Internet Web site, both of the following:
(1) The provisions of the standard form contract used for purposes of this section.
(2) A list of institutions with which the bureau has executed a contract pursuant to this section.
(i) On or before February 1, 2017, and each year thereafter, the bureau shall report to the Director of Finance and, in conformity with Section 9795 of the Government Code, to the Legislature regarding implementation of this section. The report shall include all of the following information:
(1) A list of institutions with which the bureau has executed a contract pursuant to this section.
(2) The total number of complaints received by the bureau relating to institutions listed in paragraph (1).
(3) The general nature of those complaints.
(4) The total number of those complaints referred to another entity, disaggregated by the entity to which each complaint was referred.
(5) The total number of complaints resolved, disaggregated by the entity that resolved each complaint.
(6) The total number of complaints pending, disaggregated by the entity to which each complaint was referred.
(j) Notwithstanding any other law, the Department of General Services, at the request of the bureau, may exempt contracts executed pursuant to this section from any laws, rules, resolutions, or procedures that are otherwise applicable to public contracts that the Department of General Services administers.
(D) Pay one thousand seventy-six dollars ($1,076) each year for costs incurred by the bureau to perform activities pursuant to the contract, unless another amount is determined by the bureau.
(2) (A) Authorize the bureau, for any complaint it receives, including any complaints related to the institution's policies or procedures, or both, as determined by the bureau, to refer the complaint to the institution, an accrediting agency, or another appropriate entity for resolution.
(B) The bureau shall notify the complainant and the institution of a referral.
(C) This paragraph shall not be construed to relieve the bureau of its responsibility to ensure that a complaint it has referred for purposes of resolution is resolved by the receiving entity.
(f) The bureau may terminate a contract executed pursuant to this section if an institution is no longer an independent institution of higher education as defined in Section 66010 or fails to comply with the provisions of the contract.
(g) All moneys collected by the bureau that relate to a contract executed pursuant to this section, including payments collected in accordance with subparagraph (D) of paragraph (1) of subdivision (e), shall be deposited in the Private Postsecondary Education Administration Fund.
(h) The bureau shall maintain, on its Internet Web site, both of the following:
(1) The provisions of the standard form contract used for purposes of this section.
(2) A list of institutions with which the bureau has executed a contract pursuant to this section.
(i) On or before February 1, 2017, and each year thereafter, the bureau shall report to the Director of Finance and, in conformity with Section 9795 of the Government Code, to the Legislature regarding implementation of this section. The report shall include all of the following information:
(1) A list of institutions with which the bureau has executed a contract pursuant to this section.
(2) The total number of complaints received by the bureau relating to institutions listed in paragraph (1).
(3) The general nature of those complaints.
(4) The total number of those complaints referred to another entity, disaggregated by the entity to which each complaint was referred.
(5) The total number of complaints resolved, disaggregated by the entity that resolved each complaint.
(6) The total number of complaints pending, disaggregated by the entity to which each complaint was referred.
(j) Notwithstanding any other law, the Department of General Services, at the request of the bureau, may exempt contracts executed pursuant to this section from any laws, rules, resolutions, or procedures that are otherwise applicable to public contracts that the Department of General Services administers.
