HF 4343

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/04/2024 04:39pm

A bill for an act
relating to higher education; imposing requirements related to higher education
institution contracts with online program management companies; proposing
coding for new law in Minnesota Statutes, chapter 135A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [135A.195] REQUIREMENTS RELATED TO ONLINE PROGRAM
MANAGEMENT COMPANIES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Commissioner" means the commissioner of the Office of Higher Education.
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new text begin (c) "Contract" means an agreement entered into by an institution of higher education
with an online program management company.
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new text begin (d) "Incentive compensation" means a commission or bonus from an institution of higher
education to third-party entities based on securing enrollment or financial aid. Incentive
compensation includes tuition sharing, which is a payment from an institution to the third
party that is equal to a percentage of the institution's tuition for services provided or payment
based directly or indirectly on securing enrollments or financial aid.
new text end

new text begin (e) "Institution of higher education" means a public postsecondary educational institution
operated by this state and the Board of Regents of the University of Minnesota. The Board
of Regents of the University of Minnesota is requested to comply with this section.
new text end

new text begin (f) "Online program management company" means a third-party entity that enters into
a contract with an institution of higher education to provide one or more of the following
services on behalf of the institution in exchange for financial compensation: advertising
and marketing services; recruiting, admissions, and financial services; instruction services;
student support services; technology resources and support services; and curriculum
development services.
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new text begin Subd. 2. new text end

new text begin Contract stipulations. new text end

new text begin A contract between an institution of higher education
and an online program management company must not contain a provision that:
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new text begin (1) allows incentive compensation as payment for recruitment services, including when
bundled with other services rendered by the online program management company;
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new text begin (2) allows online program management to be involved in institutional governance,
curriculum development, or implementation of existing or new online programs. The
institution shall maintain control of the programs and any associated instruction, assessment,
or curricular design; or
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new text begin (3) interferes with, modifies, or relinquishes any or all intellectual property rights or
patentable discoveries or inventions of faculty members of an institution of higher education.
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new text begin Subd. 3. new text end

new text begin Mandatory contract review and approval. new text end

new text begin Contracts and amendments to
contracts between an institution of higher education and an online project management
company must be reviewed and approved by the Board of Regents for the University of
Minnesota system and the Board of Trustees for the Minnesota State system. The review
requires a first and second reading of contract details or amendments prior to approval by
the respective board.
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new text begin Subd. 4. new text end

new text begin Reporting requirements. new text end

new text begin (a) Each institution of higher education that contracts
with an online program management company shall submit an annual expenditure report
to the commissioner concerning the spending activities of the online program management
company. At a minimum, the annual expenditure report shall include:
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new text begin (1) the information provided by the online program management company under
paragraph (b);
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new text begin (2) the total payments made by the institution to the online program management company
during each semester of the prior academic year; and
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new text begin (3) the number of students who received state financial assistance during the prior
academic year and were enrolled in each academic program for which the online program
management company provided services.
new text end

new text begin (b) An online program management company that enters into a contract with an institution
of higher education shall submit an annual report to the institution's chief financial officer
detailing all expenditures made on behalf of the institution during the prior academic year.
In addition to any other information required by the commissioner, the annual report shall
specify the amounts expended by the online program management company on each of the
following categories of expenditure:
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new text begin (1) advertising and marketing services;
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new text begin (2) admissions and financial services;
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new text begin (3) instruction services;
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new text begin (4) student support services;
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new text begin (5) technology resources and support services; and
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new text begin (6) curriculum development materials.
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new text begin (c) The commissioner shall publish each annual expenditure report received under this
section on the website of the Office of Higher Education.
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new text begin (d) Each institution of higher education that contracts with an online program management
company shall submit a copy of the contract to the commissioner within 60 days following:
new text end

new text begin (1) the execution of a new contract;
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new text begin (2) an amendment to or substantive change in the terms of a contract;
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new text begin (3) the renewal of a contract; and
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new text begin (4) the effective date of this section, in the case of a contract in effect on the effective
date of this section.
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new text begin (e) Any information filed with the commissioner under this section may be disclosed in
accordance with chapter 13, except that confidential information shall not be disclosed by
the commissioner to any person other than employees and representatives of the Office of
Higher Education.
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new text begin Subd. 5. new text end

new text begin Marketing requirements. new text end

new text begin (a) An institution of higher education that retains
an online program management company to provide marketing services for its academic
degree programs shall require that:
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new text begin (1) the online program management company self-identifies as a third-party entity that
is separate from the institution at the beginning of any communication with a prospective
student; and
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new text begin (2) any digital or print advertising provided by the online program management company
for an academic program of the institution includes a clear disclosure of the third-party
relationship between the online program management company and the institution.
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new text begin (b) An institution of higher education that contracts with an online program management
company shall make publicly available on its website the following information on the
online programs that are supported by the online program management company:
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new text begin (1) the name of the online program management company contracted by the institution;
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new text begin (2) the admission requirements;
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new text begin (3) the online program's tuition costs compared to on-campus program tuition costs;
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new text begin (4) the average financial aid amount provided to students in the online program; and
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new text begin (5) the percentage of students in the online program that receive financial aid.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for contracts entered into on or after July
1, 2024.
new text end