1.1 	A bill for an act
1.2 	relating to higher education; providing for the licensing or registration of 
1.3 	private postsecondary educational institutions; providing penalties; providing 
1.4 	certain exemptions;amending Minnesota Statutes 2006, sections 136A.61; 
1.5 	136A.62, subdivision 3; 136A.63; 136A.64; 136A.65, subdivision 1, by adding 
1.6 	subdivisions; 136A.657, by adding a subdivision; 136A.66; 136A.67; 136A.68; 
1.7 	136A.69; 141.21, subdivisions 1a, 5; 141.25, subdivisions 1, 5, 7, 9, 10, 12; 
1.8 	141.255, subdivision 2; 141.265, subdivision 2; 141.271, subdivisions 10, 
1.9 	12; 141.28, subdivision 1; 141.32; 141.35; proposing coding for new law in 
1.10 	Minnesota Statutes, chapters 136A; 141.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. Minnesota Statutes 2006, section 136A.61, is amended to read:
1.13 	136A.61 POLICY.
1.14 	The legislature has found and hereby declares that the availability of legitimate 
1.15 	courses and programs leading to academic degrees offered by responsible private 
1.16 	not-for-profit and for-profit institutions of postsecondary education and the existence 
1.17 	of legitimate private colleges and universities are in the best interests of the people of 
1.18 	this state. The legislature has found and declares that the state can provide assistance 
1.19 	and protection for persons choosing private institutions and programs, by establishing 
1.20 	policies and procedures to assure the authenticity and legitimacy of private postsecondary 
1.21 	education institutions and programs. The legislature has also found and declares that 
1.22 	this same policy applies to any private and public postsecondary educational institution 
1.23 	located in another state or country which offers or makes available to a Minnesota resident 
1.24 	any course, program or educational activity which does not require the leaving of the 
1.25 	state for its completion.

2.1 	Sec. 2. Minnesota Statutes 2006, section 136A.62, subdivision 3, is amended to read:
2.2 		Subd. 3.School. "School" means:
2.3 	(1) any individual, partnership, company, firm, society, trust, association, 
2.4 	corporation, or any combination thereof, which (a)(i) is, owns, or operates a private, 
2.5 	nonprofit postsecondary education institution; (b)(ii) is, owns, or operates a private 
2.6 	for-profit postsecondary education institution; (iii) provides a postsecondary instructional 
2.7 	program or course leading to a degree whether or not for profit; (c)or (iv) is, owns, or 
2.8 	operates a private, postsecondary education institution which uses the term "college", 
2.9 	"academy", "institute" or "university" in its name; or (d) operates for profit and provides 
2.10 	programs or courses which are intended to allow an individual to fulfill in part or totally 
2.11 	the requirements necessary to maintain a license to practice an occupation. School shall 
2.12 	also mean
2.13 	(2) any public postsecondary educational institution located in another state or 
2.14 	country which offers or makes available to a Minnesota resident any course, program or 
2.15 	educational activity which does not require the leaving of the state for its completion; or
2.16 	(3) any individual, entity, or postsecondary institution located in another state 
2.17 	that contracts with any school located within the state of Minnesota for the purpose of 
2.18 	providing educational programs, training programs, or awarding postsecondary credits 
2.19 	or continuing education credits to Minnesota residents that may be applied to a degree 
2.20 	program.

2.21 	Sec. 3. Minnesota Statutes 2006, section 136A.63, is amended to read:
2.22 	136A.63 REGISTRATION.
2.23 		Subdivision 1.Registration required. All schools located within Minnesota and 
2.24 	all schools located outside Minnesota which offer degree programs or courses within 
2.25 	Minnesota shall register annually with the office.
2.26 		Subd. 2.Sale of an institution. Any merger or consolidation with any corporation, 
2.27 	sale, lease, exchange, or other disposition of all or substantially all of the assets of a 
2.28 	school, the transfer of a controlling interest of at least 51 percent of the school's stock, 
2.29 	or a change in the not-for-profit or for-profit status of a school shall constitute a change 
2.30 	of ownership. Within 30 days of a change of ownership, the school must submit a 
2.31 	registration renewal application, all usual and ordinary information and materials for an 
2.32 	initial registration, and applicable registration fees for a new institution.

2.33 	Sec. 4. Minnesota Statutes 2006, section 136A.64, is amended to read:
2.34 	136A.64 INFORMATION.
3.1 		Subdivision 1.Schools to provide Information required for registration. As a 
3.2 	basis for registration, schools shall provide the office with such information as the office 
3.3 	needs to determine the nature and activities of the school, including but not limited to, 
3.4 	requirements for admission, enrollments, tuition charge, refund policies, curriculum, 
3.5 	degrees granted, and faculty employed. The office shall have the authority to verify the 
3.6 	accuracy of the information submitted to it by inspection or any other means it deems 
3.7 	necessary. the following, which shall be accompanied by an affidavit attesting to its 
3.8 	accuracy and truthfulness:
3.9 	(1) articles of incorporation, constitution, bylaws, or other operating documents;
3.10 	(2) a duly adopted statement of the school's mission and goals;
3.11 	(3) evidence of current school or program licenses granted by departments or 
3.12 	agencies of any state;
3.13 	(4) a fiscal balance sheet on an accrual basis, or a certified audit of the immediate 
3.14 	past fiscal year, including any management letters provided by the independent auditor 
3.15 	or, if the school is a public institution outside Minnesota, an income statement for the 
3.16 	immediate past fiscal year;
3.17 	(5) all current promotional and recruitment materials and advertisements; and
3.18 	(6) the current school catalog and, if not contained in the catalog;
3.19 	(i) the members of the board of trustees or directors, if any;
3.20 	(ii) the current institutional officers;
3.21 	(iii) current full-time and part-time faculty with degrees held or applicable 
3.22 	experience;
3.23 	(iv) a description of all school facilities;
3.24 	(v) a description of all current course offerings;
3.25 	(vi) all requirements for satisfactory completion of courses, programs, and degrees;
3.26 	(vii) the school's policy about freedom or limitation of expression and inquiry;
3.27 	(viii) a current schedule of fees, charges for tuition, required supplies, student 
3.28 	activities, housing, and all other standard charges;
3.29 	(ix) the school's policy about refunds and adjustments;
3.30 	(x) the school's policy about granting credit for prior education, training, and 
3.31 	experience; and
3.32 	(xi) the school's policies about student admission, evaluation, suspension, and 
3.33 	dismissal.
3.34 		Subd. 2.Financial records. The office shall not disclose financial records or 
3.35 	accreditation reports provided to it by a school pursuant to this section except for the 
3.36 	purpose of defending, at hearings pursuant to chapter 14, or other appeal proceedings, its 
4.1 	decision to approve or not to approve the granting of degrees or the use of a name by the 
4.2 	school. Section 15.17, subdivision 4, shall not apply to such records. 
4.3 		Subd. 3.Additional information. If the office is unable to determine the nature 
4.4 	and activities of a school on the basis of the information in subdivision 1, the office shall 
4.5 	notify the school of additional information needed.
4.6 		Subd. 4.Verification of information. The office may verify the accuracy of 
4.7 	submitted information by inspection, visitation, or any other means it considers necessary.
4.8 		Subd. 5.Public information. All information submitted to the office is public 
4.9 	information except financial and accreditation records and information. The office may 
4.10 	disclose financial records or information to defend its decision to approve or disapprove 
4.11 	granting of degrees or the use of a name or its decisions to revoke such approval at a 
4.12 	hearing under chapter 14 or other legal proceedings.
4.13 		Subd. 6.Late registration penalty. Applications for renewal for any registration 
4.14 	received after the deadline date specified in the renewal materials provided by the office 
4.15 	are subject to a late fee equal to 20 percent of the annual registration renewal fee.
4.16 		Subd. 7.Out of state expenses. A school shall reimburse the office for actual costs 
4.17 	associated with a site evaluation visit outside Minnesota if the visit is necessary under 
4.18 	subdivision 1 or 3.

4.19 	Sec. 5. [136A.645] SCHOOL CLOSURE.
4.20 	When a school decides to cease postsecondary education operations, it must 
4.21 	cooperate with the office in assisting students to find alternative means to complete their 
4.22 	studies with a minimum of disruption, and inform the office of the following:
4.23 	(1) the planned date for termination of postsecondary education operations;
4.24 	(2) the planned date for the transfer of the student records;
4.25 	(3) confirmation of the name and address of the organization to receive and hold 
4.26 	the student records; and
4.27 	(4) the official at the organization receiving the student records who is designated to 
4.28 	provide official copies of records or transcripts upon request.
4.29 	Upon notice from a school of its intention to cease operations, the office shall notify the 
4.30 	school of the date on which it must cease the enrollment of students and all postsecondary 
4.31 	educational operations.

4.32 	Sec. 6. [136A.646] ADDITIONAL SECURITY.
4.33 	In the event any registered institution is notified by the United States Department 
4.34 	of Education that it has fallen below minimum financial standards and that its continued 
5.1 	participation in Title IV will be conditioned upon its satisfying either the Zone Alternative, 
5.2 	Code of Federal Regulations, title 34, section 668.175(f), or a Letter of Credit Alternative, 
5.3 	Code of Federal Regulations, title 34, section 668.175(c), such institution shall provide a 
5.4 	surety bond conditioned upon the faithful performance of all contracts and agreements 
5.5 	with students in a sum equal to the Letter of Credit required by the United States 
5.6 	Department of Education in the Letter of Credit Alternative, but in no event shall the bond 
5.7 	be less than $10,000 and not more than $250,000.

5.8 	Sec. 7. Minnesota Statutes 2006, section 136A.65, subdivision 1, is amended to read:
5.9 		Subdivision 1.Prohibition. No school subject to registration shall grant a degree 
5.10 	unless such degree and its underlying curriculum is approved by the office, nor shall 
5.11 	any school subject to registration use the name "college," "academy," "institute" or 
5.12 	"university" in its name without approval by the office.

5.13 	Sec. 8. Minnesota Statutes 2006, section 136A.65, is amended by adding a subdivision 
5.14 	to read:
5.15 		Subd. 1a.Accreditation; requirement. No school shall be registered or authorized 
5.16 	to offer any degree at any level unless such school is accredited by an agency recognized 
5.17 	by the United States Department of Education for purposes of eligibility to participate in 
5.18 	federal financial aid programs, Title IV. Any registered school undergoing institutional 
5.19 	accreditation shall inform the office of site visits by the accrediting agency and provide 
5.20 	office staff the opportunity to attend the visits, including any exit interviews. The 
5.21 	institution must provide the office with a copy of the final report upon receipt.

5.22 	Sec. 9. Minnesota Statutes 2006, section 136A.65, is amended by adding a subdivision 
5.23 	to read:
5.24 		Subd. 4.School criteria. A school desiring to be registered and to have its degree 
5.25 	or degrees and name approved must substantially meet the following criteria:
5.26 	(1) the school has an organizational framework with administrative and teaching 
5.27 	personnel to provide the educational programs it purports to offer;
5.28 	(2) the school has financial resources sufficient to meet the school's financial 
5.29 	obligations, including refunding tuition and other charges consistent with its stated 
5.30 	policy, if the institution is dissolved or if claims for refunds are made, to provide service 
5.31 	to the students as purported, and to provide educational programs leading to degrees 
5.32 	as purported;
5.33 	(3) the school operates in conformity with generally accepted accounting principles;
6.1 	(4) the school provides an educational program leading to the degree it purports to 
6.2 	offer;
6.3 	(5) the school provides appropriate and accessible library, laboratory, and other 
6.4 	physical facilities to support the educational program offered;
6.5 	(6) the school has a policy on freedom or limitation of expression and inquiry for 
6.6 	faculty and students, which is published or available on request;
6.7 	(7) the school uses for promotion and student recruitment only publications 
6.8 	and advertisements that are truthful and do not give any false, fraudulent, deceptive, 
6.9 	inaccurate, or misleading impressions about the school, its personnel, programs, services, 
6.10 	or occupational opportunities for its graduates;
6.11 	(8) the school's agents who are paid at least in part to recruit students for the school 
6.12 	identify themselves as agents of the school when talking to or corresponding with students 
6.13 	and prospective students;
6.14 	(9) the school provides information to students and prospective students concerning:
6.15 	(i) comprehensive and accurate policies relating to student admission, evaluation, 
6.16 	suspension, and dismissal;
6.17 	(ii) clear and accurate policies relating to granting credit for prior education, training, 
6.18 	and experience and for courses offered by the school;
6.19 	(iii) current schedules of fees, charges for tuition, required supplies, student 
6.20 	activities, housing, and all other standard charges;
6.21 	(iv) policies regarding refunds and adjustments for withdrawal or modification 
6.22 	of enrollment status; and
6.23 	(v) procedures and standards used for selection of recipients and the terms of 
6.24 	payment and repayment for any financial aid program; and
6.25 	(10) the school provides the following information to the office relating to all 
6.26 	degrees:
6.27 	(i) the name of the degree and the formal recognition to be awarded;
6.28 	(ii) the location where the degree will be offered;
6.29 	(iii) the proposed implementation date of the degree;
6.30 	(iv) the admission requirements for the degree;
6.31 	(v) the number of credits required for the degree;
6.32 	(vi) the projected enrollment in the degree program for a period of five years;
6.33 	(vii) the degree curriculum, including course syllabi or outlines;
6.34 	(viii) the academic and administrative mechanisms planned for monitoring the 
6.35 	quality of the proposed degree;
6.36 	(ix) a statement as to the satisfaction of professional licensure criteria, if applicable;
7.1 	(x) documentation of the availability of clinical, internship, externship, or practicum 
7.2 	sites, if applicable; and
7.3 	(xi) a rationale showing that the degree is consistent with the school's mission and 
7.4 	goals.

7.5 	Sec. 10. Minnesota Statutes 2006, section 136A.65, is amended by adding a 
7.6 	subdivision to read:
7.7 		Subd. 5.Limits on school name. A school may use the term "academy" or 
7.8 	"institute" in its name without meeting any additional requirements. A school may use 
7.9 	the term "college" in its name if it offers at least one program leading to an associate 
7.10 	degree. A school may use the term "university" in its name if it offers at least one program 
7.11 	leading to a master's or doctorate degree.

7.12 	Sec. 11. Minnesota Statutes 2006, section 136A.65, is amended by adding a 
7.13 	subdivision to read:
7.14 		Subd. 6.Grandfathering of name. Names used before August 1, 2007, by a school 
7.15 	organized, operating, and using the term "academy," "institute," "college," or "university" 
7.16 	in its name may continue using such term whether or not it offers a program leading to 
7.17 	a degree.

7.18 	Sec. 12. Minnesota Statutes 2006, section 136A.65, is amended by adding a 
7.19 	subdivision to read:
7.20 		Subd. 7.Conditional approval. The office may grant conditional approval for a 
7.21 	degree or use of a term in its name for a period of less than one year if doing so would be 
7.22 	in the best interests of currently enrolled students or prospective students.

7.23 	Sec. 13. Minnesota Statutes 2006, section 136A.65, is amended by adding a 
7.24 	subdivision to read:
7.25 		Subd. 8.Disapproval of registration; appeal. If a school's degree or use of a term 
7.26 	in its name is disapproved by the office, the school may request a hearing under chapter 
7.27 	14. The request must be in writing and made to the office within 30 days of the date 
7.28 	the school is notified of the disapproval.
7.29 	(a) The office may refuse to renew, revoke, or suspend registration, approval of 
7.30 	a school's degree, or use of a regulated term in its name by giving written notice and 
7.31 	reasons to the school. The school may request a hearing under chapter 14. If a hearing is 
7.32 	requested, no revocation or suspension shall take effect until after the hearing.
8.1 	(b) Revocation or suspension of registration or approval may be for one or more 
8.2 	of the following reasons:
8.3 	(1) violating the provisions of sections 136A.61 to 136A.71;
8.4 	(2) providing false, misleading, or incomplete information to the office;
8.5 	(3) presenting to prospective students information about the school that is false, 
8.6 	fraudulent, misleading, deceptive, or inaccurate in a material respect; or
8.7 	(4) refusing to allow reasonable inspection or to supply reasonable information after 
8.8 	a written request by the office has been received.

8.9 	Sec. 14. Minnesota Statutes 2006, section 136A.657, is amended by adding a 
8.10 	subdivision to read:
8.11 		Subd. 4.Statement required; religious nature. Any degree awarded upon 
8.12 	completion of a religiously exempt program shall include descriptive language to make 
8.13 	the religious nature of the award clear.

8.14 	Sec. 15. Minnesota Statutes 2006, section 136A.66, is amended to read:
8.15 	136A.66 LIST.
8.16 	The office shall maintain a list of schoolsregistered institutions authorized to grant 
8.17 	degrees and schools authorized to use the name "college," "academy," "institute" or 
8.18 	"university," and shall make such list available to the public.

8.19 	Sec. 16. Minnesota Statutes 2006, section 136A.67, is amended to read:
8.20 	136A.67 UNAUTHORIZED REPRESENTATIONS.
8.21 	No school and none of its officials or employees shall advertise or represent in any 
8.22 	manner that such school is approved or accredited by the office or state of Minnesota 
8.23 	except that anyA school which is duly registered with the office, or any of its officials 
8.24 	or employees, may represent in advertising and shall disclose in catalogs, applications, 
8.25 	and enrollment materials that the school is registered with the office by prominently 
8.26 	displaying the following statement: "(Name of school) is registered as a private institution 
8.27 	with the Minnesota Office of Higher Education pursuant to sections 136A.61 to 136A.71. 
8.28 	Registration is not an endorsement of the institution. Credits earned at the institution 
8.29 	may not transfer to all other institutions".

8.30 	Sec. 17. Minnesota Statutes 2006, section 136A.68, is amended to read:
8.31 	136A.68 RECORDS.
9.1 	After August 1, 1975, all schools located in this state must maintain permanent 
9.2 	records of all students enrolled therein at any time. The office may require schools to 
9.3 	provide a plan acceptable to the office for preserving all such records for at least ten years. 
9.4 	The office may require that such plan include the filing of a continuous surety bond or a 
9.5 	deposit of funds in trust in an amount not to exceed $20,000 for the purpose of preserving 
9.6 	records after such school ceases to exist. A registered school shall maintain a permanent 
9.7 	record for each student for 50 years from the last date of the student's attendance. A 
9.8 	registered school offering distance instruction to a student located in Minnesota shall 
9.9 	maintain a permanent record for each Minnesota student for 50 years from the last date of 
9.10 	the student's attendance. Records include a student's academic transcript, documents, and 
9.11 	files containing student data about academic credits earned, courses completed, grades 
9.12 	awarded, degrees awarded, and periods of attendance. To preserve permanent records, a 
9.13 	school shall submit a plan that meets the following requirements:
9.14 	(1) at least one copy of the records must be held in a secure, fireproof depository or 
9.15 	duplicate records must be maintained off site in a secure location and manner approved 
9.16 	by the office;
9.17 	(2) an appropriate official must be designated to provide a student with copies of 
9.18 	records or a transcript upon request;
9.19 	(3) an alternative method approved by the office of complying with clauses (1) and 
9.20 	(2) must be established if the school ceases to exist; and
9.21 	(4) a continuous surety bond must be filed with the office in an amount not to exceed 
9.22 	$20,000 if the school has no binding agreement approved by the office for preserving 
9.23 	student records. The bond shall run to the state of Minnesota.

9.24 	Sec. 18. Minnesota Statutes 2006, section 136A.69, is amended to read:
9.25 	136A.69 FEES.
9.26 		Subdivision 1.Registration fees. The office shall collect reasonable registration 
9.27 	fees that are sufficient to recover, but do not exceed, its costs of administering the 
9.28 	registration program. The office shall charge $1,100 for initial registration fees and $950 
9.29 	for annual renewal fees.
9.30 		Subd. 2.Degree level addition fee. The office processing fee for adding a degree 
9.31 	level to an existing program is $2,000 per program.
9.32 		Subd. 3.Program addition fee. The office processing fee for adding a program 
9.33 	that represents a significant departure in the objectives, content, or method of delivery of 
9.34 	programs that are currently offered by the school is $500 per program.
10.1 		Subd. 4.Visit or consulting fee. If the office determines that a fact-finding visit 
10.2 	or outside consultant is necessary to review or evaluate any new or revised program, the 
10.3 	office shall be reimbursed for the expenses incurred related to the review as follows:
10.4 	(1) $300 for the team base fee or for a paper review conducted by a consultant if the 
10.5 	office determines that a fact-finding visit is not required;
10.6 	(2) $300 for each day or part thereof on site per team member; and
10.7 	(3) the actual cost of customary meals, lodging, and related travel expenses incurred 
10.8 	by team members.
10.9 		Subd. 5.Modification fee. The fee for modification of any existing program is 
10.10 	$100 and is due if there is:
10.11 	(1) an increase or decrease of 25 percent or more from the original date of program 
10.12 	approval, in clock hours, credit hours, or calendar length of an existing program;
10.13 	(2) a change in academic measurement from clock hours to credit hours or vice 
10.14 	versa; or
10.15 	(3) an addition or alteration of courses that represents a 25 percent change or more in 
10.16 	the objectives, content, or methods of delivery.

10.17 	Sec. 19. [136A.705] PENALTY.
10.18 	The director may assess fines for violations of a provision of sections 136A.61 to 
10.19 	136A.71. Each day's failure to comply with a provision of sections 136A.61 to 136A.71 
10.20 	shall be a separate violation and fines shall not exceed $500 per day per violation. 
10.21 	Amounts received under this section must be deposited in the special revenue fund and are 
10.22 	appropriated for the purposes in sections 136A.61 to 136A.71.

10.23 	Sec. 20. Minnesota Statutes 2006, section 141.21, subdivision 1a, is amended to read:
10.24 		Subd. 1a.Office of Higher Education; office. "Office of Higher Education" or 
10.25 	"office" means the Minnesota Office of Higher Education.

10.26 	Sec. 21. Minnesota Statutes 2006, section 141.21, subdivision 5, is amended to read:
10.27 		Subd. 5.School. "School" means any person, within or outside the state, who 
10.28 	maintains, advertises, administers, solicits for, or conducts any program for profit at any
10.29 	less than an associate degree level other than baccalaureate or graduate programs, and is 
10.30 	not specifically exempted by sections 141.21 to is not registered as a private institution 
10.31 	under sections 136A.61 to 136A.71 and is not specifically exempted by sections 141.35
10.32 	or 141.37. 

11.1 	Sec. 22. Minnesota Statutes 2006, section 141.25, subdivision 1, is amended to read:
11.2 		Subdivision 1.Required. A school must not maintain, advertise, solicit for, 
11.3 	administer, or conduct any program in Minnesota without first obtaining a license from 
11.4 	the office.

11.5 	Sec. 23. Minnesota Statutes 2006, section 141.25, subdivision 5, is amended to read:
11.6 		Subd. 5.Bond. (a) No license shall be issued to any school which maintains, 
11.7 	conducts, solicits for, or advertises within the state of Minnesota any program, unless the 
11.8 	applicant files with the office a continuous corporate surety bond written by a company 
11.9 	authorized to do business in Minnesota conditioned upon the faithful performance of all 
11.10 	contracts and agreements with students made by the applicant.
11.11 	(b) The amount of the surety bond shall be ten percent of the preceding year's gross 
11.12 	income from student tuition, fees, and other required institutional charges, but in no event 
11.13 	less than $10,000 nor greater than $250,000, except that a school may deposit a greater 
11.14 	amount at its own discretion. A school in each annual application for licensure must 
11.15 	compute the amount of the surety bond and verify that the amount of the surety bond 
11.16 	complies with this subdivision, unless the school maintains a surety bond equal to at least 
11.17 	$250,000. A school that operates at two or more locations may combine gross income 
11.18 	from student tuition, fees, and other required institutional charges for all locations for the 
11.19 	purpose of determining the annual surety bond requirement. The gross tuition and fees 
11.20 	used to determine the amount of the surety bond required for a school having a license for 
11.21 	the sole purpose of recruiting students in Minnesota shall be only that paid to the school 
11.22 	by the students recruited from Minnesota.
11.23 	(c) The bond shall run to the state of Minnesota and to any person who may have a 
11.24 	cause of action against the applicant arising at any time after the bond is filed and before it 
11.25 	is canceled for breach of any contract or agreement made by the applicant with any student. 
11.26 	The aggregate liability of the surety for all breaches of the conditions of the bond shall not 
11.27 	exceed the principal sum deposited by the school under paragraph (b). The surety of any 
11.28 	bond may cancel it upon giving 60 days' notice in writing to the office and shall be relieved 
11.29 	of liability for any breach of condition occurring after the effective date of cancellation.
11.30 	(d) In lieu of bond, the applicant may deposit with the commissioner of finance a 
11.31 	sum equal to the amount of the required surety bond in cash, or securities as may be 
11.32 	legally purchased by savings banks or for trust funds in an aggregate market value equal 
11.33 	to the amount of the required surety bond.
11.34 	(e) Failure of a school to post and maintain the required surety bond or deposit under 
11.35 	paragraph (d) mayshall result in denial, suspension, or revocation of the school's license.

12.1 	Sec. 24. Minnesota Statutes 2006, section 141.25, subdivision 7, is amended to read:
12.2 		Subd. 7.Minimum standards. A license shall be issued if the office first 
12.3 	determines:
12.4 	(1) that the applicant has a sound financial condition with sufficient resources 
12.5 	available to:
12.6 	(i) meet the school's financial obligations;
12.7 	(ii) refund all tuition and other charges, within a reasonable period of time, in the 
12.8 	event of dissolution of the school or in the event of any justifiable claims for refund against 
12.9 	the school by the student body;
12.10 	(iii) provide adequate service to its students and prospective students; and
12.11 	(iv) maintain and support the school;
12.12 	(2) that the applicant has satisfactory facilities with sufficient tools and equipment 
12.13 	and the necessary number of work stations to prepare adequately the students currently 
12.14 	enrolled, and those proposed to be enrolled;
12.15 	(3) that the applicant employs a sufficient number of qualified teaching personnel to 
12.16 	provide the educational programs contemplated;
12.17 	(4) that the school has an organizational framework with administrative and 
12.18 	instructional personnel to provide the programs and services it intends to offer;
12.19 	(5) that the premises and conditions under which the students work and study are 
12.20 	sanitary, healthful, and safe, according to modern standards;
12.21 	(6) that the quality and content of each occupational course or program of study 
12.22 	provides education and adequate preparation to enrolled students for entry level positions 
12.23 	in the occupation for which prepared;
12.24 	(7) that the living quarters which are owned, maintained, recommended, or approved 
12.25 	by the applicant for students are sanitary and safe;
12.26 	(8) that the contract or enrollment agreement used by the school complies with 
12.27 	the provisions in section 141.265; 
12.28 	(9) that contracts and agreements do not contain a wage assignment provision or a 
12.29 	confession of judgment clause; and
12.30 	(10) that there has been no adjudication of fraud or misrepresentation in any 
12.31 	criminal, civil, or administrative proceeding in any jurisdiction against the school or its 
12.32 	owner, officers, agents, or sponsoring organization.

12.33 	Sec. 25. Minnesota Statutes 2006, section 141.25, subdivision 9, is amended to read:
13.1 		Subd. 9.Catalog, brochure, or electronic display. Before a license is issued to 
13.2 	a school, the school shall furnish to the office a catalog, brochure, or electronic display 
13.3 	including:
13.4 	(1) identifying data, such as volume number and date of publication;
13.5 	(2) name and address of the school and its governing body and officials;
13.6 	(3) a calendar of the school showing legal holidays, beginning and ending dates of 
13.7 	each course quarter, term, or semester, and other important dates;
13.8 	(4) the school policy and regulations on enrollment including dates and specific 
13.9 	entrance requirements for each program;
13.10 	(5) the school policy and regulations about leave, absences, class cuts, make-up 
13.11 	work, tardiness, and interruptions for unsatisfactory attendance;
13.12 	(6) the school policy and regulations about standards of progress for the student 
13.13 	including the grading system of the school, the minimum grades considered satisfactory, 
13.14 	conditions for interruption for unsatisfactory grades or progress, a description of any 
13.15 	probationary period allowed by the school, and conditions of reentrance for those 
13.16 	dismissed for unsatisfactory progress;
13.17 	(7) the school policy and regulations about student conduct and conditions for 
13.18 	dismissal for unsatisfactory conduct;
13.19 	(8) a detailed schedule of fees, charges for tuition, books, supplies, tools, student 
13.20 	activities, laboratory fees, service charges, rentals, deposits, and all other charges;
13.21 	(9) the school policy and regulations, including an explanation of section 141.271, 
13.22 	about refunding tuition, fees, and other charges if the student does not enter the program, 
13.23 	withdraws from the program, or the program is discontinued;
13.24 	(10) a description of the available facilities and equipment;
13.25 	(11) a course outline syllabus for each course offered showing course objectives, 
13.26 	subjects or units in the course, type of work or skill to be learned, and approximate time, 
13.27 	hours, or credits to be spent on each subject or unit;
13.28 	(12) the school policy and regulations about granting credit for previous education 
13.29 	and preparation;
13.30 	(13) a notice to students relating to the transferability of any credits earned at the 
13.31 	school to other institutions;
13.32 	(14) a procedure for investigating and resolving student complaints; and
13.33 	(14)(15) the name and address of the Minnesota Office of Higher Education.
13.34 	A school that is exclusively a distance education school is exempt from clauses 
13.35 	(3) and (5).

14.1 	Sec. 26. Minnesota Statutes 2006, section 141.25, subdivision 10, is amended to read:
14.2 		Subd. 10.Placement records. (a) Before a license is issuedreissued to a school 
14.3 	that offers, advertises or implies a placement service, the school shall file with the office 
14.4 	for the past year and thereafter at reasonable intervals determined by the office, a certified 
14.5 	copy of the school's placement record, containing a list of graduates, a description of their 
14.6 	jobs, names of their employers, and other information as the office may prescribe.
14.7 	(b) Each school that offers a placement service shall furnish to each prospective 
14.8 	student, upon request, prior to enrollment, written information concerning the percentage 
14.9 	of the previous year's graduates who were placed in the occupation for which prepared or 
14.10 	in related employment.

14.11 	Sec. 27. Minnesota Statutes 2006, section 141.25, subdivision 12, is amended to read:
14.12 		Subd. 12.Permanent records. A school licensed under this chapter and located 
14.13 	in Minnesota shall maintain a permanent record for each student for 50 years from the 
14.14 	last date of the student's attendance. A school licensed under this chapter and offering 
14.15 	distance instruction to a student located in Minnesota shall maintain a permanent record 
14.16 	for each Minnesota student for 50 years from the last date of the student's attendance. 
14.17 	Records include school transcripts, documents, and files containing student data about 
14.18 	academic credits earned, courses completed, grades awarded, degrees awarded, and 
14.19 	periods of attendance. To preserve permanent records, a school shall submit a plan that 
14.20 	meets the following requirements:
14.21 	(1) at least one copy of the records must be held in a secure, fireproof depository;
14.22 	(2) an appropriate official must be designated to provide a student with copies of 
14.23 	records or a transcript upon request;
14.24 	(3) an alternative method, approved by the office, of complying with clauses (1) and 
14.25 	(2) must be established if the school ceases to exist; and
14.26 	(4) a continuous surety bond must be filed with the office in an amount not to exceed 
14.27 	$20,000 if the school has no binding agreement approved by the office for preserving 
14.28 	student records or a trust must be arranged if the school ceases to exist. The bond shall run 
14.29 	to the state of Minnesota.

14.30 	Sec. 28. Minnesota Statutes 2006, section 141.255, subdivision 2, is amended to read:
14.31 		Subd. 2.Renewal licensure fee; late fee. (a) The office processing fee for a 
14.32 	renewal licensure application is:
14.33 	(1) for a category A school, as determined by the office, the fee is $865 if the school 
14.34 	offers one program or $1,150 if the school offers two or more programs; and
15.1 	(2) for a category B or C school, as determined by the office, the fee is $430 if the 
15.2 	school offers one program or $575 if the school offers two or more programs.
15.3 	(b) If a license renewal application is not received by the office by the close of 
15.4 	business at least 60 days before the expiration of the current license, a late fee of $100 
15.5 	per business day, not to exceed $3,000,  shall be assessed.

15.6 	Sec. 29. Minnesota Statutes 2006, section 141.265, subdivision 2, is amended to read:
15.7 		Subd. 2.Contract information. A contract or enrollment agreement used by a 
15.8 	school must include at least the following:
15.9 	(1) the name and address of the school, clearly stated;
15.10 	(2) a clear and conspicuous disclosure that the agreement is a legally binding 
15.11 	instrument upon written acceptance of the student by the school unless canceled under 
15.12 	section 141.271; 
15.13 	(3) the school's cancellation and refund policy that shall be clearly and conspicuously 
15.14 	entitled "Buyer's Right to Cancel";
15.15 	(4) a clear statement of total cost of the program including tuition and all other 
15.16 	charges;
15.17 	(5) the name and description of the program, including the number of hours or 
15.18 	credits of classroom instruction, or distance instruction, that shall be included; and
15.19 	(6) a clear and conspicuous explanation of the form and means of notice the student 
15.20 	should use in the event the student elects to cancel the contract or sale, the effective 
15.21 	date of cancellation, and the name and address of the seller to which the notice should 
15.22 	be sent or delivered.
15.23 	The contract or enrollment agreement must not include a wage assignment provision or a 
15.24 	confession of judgment clause.

15.25 	Sec. 30. Minnesota Statutes 2006, section 141.271, subdivision 10, is amended to read:
15.26 		Subd. 10.Cancellation occurrence. Written notice of cancellation shall take place 
15.27 	on the date the letter of cancellation is postmarked or, in the cases where the notice is hand 
15.28 	carried, it shall occur on the date the notice is delivered to the school. If a student has not 
15.29 	attended classesclass for a period of 21 consecutive days without contacting the school to 
15.30 	indicate an intent to continue in school or otherwise making arrangements concerning the 
15.31 	absence, the student is considered to have withdrawn from school for all purposes as of 
15.32 	the student's last documented date of attendance.

15.33 	Sec. 31. Minnesota Statutes 2006, section 141.271, subdivision 12, is amended to read:
16.1 		Subd. 12.Instrument not to be negotiated. A school shall not negotiate any 
16.2 	promissory instrument received as payment of tuition or other charge prior to completion 
16.3 	of 50 percent of the program., except that prior to that time, instruments may be transferred 
16.4 	by assignment to purchasers who shall be subject to all defenses available against the 
16.5 	school named as payee.

16.6 	Sec. 32. Minnesota Statutes 2006, section 141.28, subdivision 1, is amended to read:
16.7 		Subdivision 1.Not to advertise state approval Disclosure required. Schools, 
16.8 	agents of schools, and solicitors may not advertise or represent in writing or orally that 
16.9 	such school is approved or accredited by the state of Minnesota, except that anyA school, 
16.10 	agent, or solicitor may advertiserepresent in advertisements and shall disclose in its 
16.11 	catalogs, applications, and enrollment materials that the school and solicitor have been
16.12 	is duly licensed by the state usingby prominently displaying the following language
16.13 	statement:
16.14 	"(Name of school) is licensed as a private career school with the Minnesota Office of 
16.15 	Higher Education. Licensure is not an endorsement of the institution. Credits earned at the 
16.16 	institution may not transfer to all other institutions. The educational programs may not 
16.17 	meet the needs of every student or employer."

16.18 	Sec. 33. Minnesota Statutes 2006, section 141.32, is amended to read:
16.19 	141.32 PENALTY.
16.20 	Violation of a provision of this chapter shall be a misdemeanor. Each day's failure 
16.21 	to comply with this chapter shall be a separate violation. The office shall adopt rules 
16.22 	establishing a list of civil penalties and the fine associated with each violation. Fines 
16.23 	for violations shall not exceed $500 per day per violation. The director may assess 
16.24 	fines for violations of a provision of this chapter. Each day's failure to comply with this 
16.25 	chapter shall be a separate violation and fines shall not exceed $500 per day per violation. 
16.26 	Amounts received under this section must be deposited in the special revenue fund and are 
16.27 	appropriated for the purposes of this chapter.

16.28 	Sec. 34. Minnesota Statutes 2006, section 141.35, is amended to read:
16.29 	141.35 EXEMPTIONS.
16.30 	Sections 141.21 to 141.35141.34 shall not apply to the following:
16.31 	(1) public postsecondary institutions;
17.1 	(2) private postsecondary institutions registered under sections 136A.61 to 
17.2 	136A.71that are nonprofit, or that are for profit and registered under sections 136A.61
17.3 	to 136A.71 as of December 31, 1998, or are approved to offer exclusively baccalaureate 
17.4 	or postbaccalaureate programs;
17.5 	(3) schools of nursing accredited by the state Board of Nursing or an equivalent 
17.6 	public board of another state or foreign country;
17.7 	(4) private schools complying with the requirements of section 120A.22, subdivision 
17.8 	4;
17.9 	(5) courses taught to students in a valid apprenticeship program taught by or 
17.10 	required by a trade union;
17.11 	(6) schools exclusively engaged in training physically or mentally disabled persons 
17.12 	for the state of Minnesota;
17.13 	(7) schools licensed by boards authorized under Minnesota law to issue licenses;
17.14 	(8) schools and educational programs, or training programs, contracted for by 
17.15 	persons, firms, corporations, government agencies, or associations, for the training of their 
17.16 	own employees, for which no fee is charged the employee;
17.17 	(9) schools engaged exclusively in the teaching of purely avocational, recreational, 
17.18 	or remedial subjects as determined by the office;
17.19 	(10) driver training schools and instructors as defined in section 171.33, subdivisions 
17.20 	1 and 2;
17.21 	(11) classes, courses, or programs conducted by a bona fide trade, professional, or 
17.22 	fraternal organization, solely for that organization's membership;
17.23 	(12)(11) programs in the fine arts provided by organizations exempt from taxation 
17.24 	under section 290.05 and registered with the attorney general under chapter 309. For 
17.25 	the purposes of this clause, "fine arts" means activities resulting in artistic creation or 
17.26 	artistic performance of works of the imagination which are engaged in for the primary 
17.27 	purpose of creative expression rather than commercial sale or employment. In making 
17.28 	this determination the office may seek the advice and recommendation of the Minnesota 
17.29 	Board of the Arts;
17.30 	(13)(12) classes, courses, or programs intended to fulfill the continuing education 
17.31 	requirements for licensure or certification in a profession, that have been approved by 
17.32 	a legislatively or judicially established board or agency responsible for regulating the 
17.33 	practice of the profession, and that are offered exclusively to an individual practicing 
17.34 	the profession;
18.1 	(14)(13) classes, courses, or programs intended to prepare students to sit for 
18.2 	undergraduate, graduate, postgraduate, or occupational licensing and occupational 
18.3 	entrance examinations;
18.4 	(15)(14) classes, courses, or programs providing 16 or fewer clock hours of 
18.5 	instruction that are not part of the curriculum for an occupation or entry level employment;
18.6 	(16)(15) classes, courses, or programs providing instruction in personal 
18.7 	development, modeling, or acting;
18.8 	(17)(16) training or instructional programs, in which one instructor teaches an 
18.9 	individual student, that are not part of the curriculum for an occupation or are not intended 
18.10 	to prepare a person for entry level employment; and
18.11 	(18)(17) schools with no physical presence in Minnesota, as determined by the 
18.12 	office, engaged exclusively in offering distance instruction that are located in and 
18.13 	regulated by other states or jurisdictions.

18.14 	Sec. 35. [141.37] EXEMPTION; RELIGIOUS SCHOOLS.
18.15 		Subdivision 1.Exemption. Any school or any department or branch of a school 
18.16 	(1) that is substantially owned, operated, or supported by a bona fide church or religious 
18.17 	organization; (2) whose programs are primarily designed for, aimed at, and attended by 
18.18 	persons who sincerely hold or seek to learn the particular religious faith or beliefs of that 
18.19 	church or religious organizations; and (3) whose programs are primarily intended to 
18.20 	prepare its students to become ministers of, to enter into some other vocation closely 
18.21 	related to, or to conduct their lives in consonance with the particular faith of that church or 
18.22 	religious organization is exempt from the provisions of sections 141.21 to 141.34.
18.23 		Subd. 2.Limitations. This exemption shall not extend to any school or to any 
18.24 	department or branch of a school or program of such school that, through advertisements 
18.25 	or solicitations, represents to any students or prospective students that the school, its 
18.26 	aims, goals, missions, or purposes, or its programs are different from those described in 
18.27 	subdivision 1. This exemption shall not extend to any school that represents to any student 
18.28 	or prospective student that the major purpose of its programs is to prepare the student for a 
18.29 	vocation not closely related to that particular religious faith, or to provide the student with 
18.30 	a general educational program recognized by other schools or the broader educational, 
18.31 	business, or social community as being substantially equivalent to the educational 
18.32 	programs offered by schools or departments or branches of schools that are not religious 
18.33 	in nature and are not exempt from chapter 141 and rules adopted under this chapter.
19.1 		Subd. 3.Scope. Nothing in this chapter or the rules adopted under it shall be 
19.2 	interpreted as permitting the office to determine the truth or falsity of any particular set 
19.3 	of religious beliefs.
19.4 		Subd. 4.Descriptive language required. Any certificate, diploma, degree, or other 
19.5 	formal recognition awarded upon completion of any religiously exempt program shall 
19.6 	include such descriptive language as to make the religious nature of the award clear.

19.7 	Sec. 36. EFFECTIVE DATE; TRANSITION PROCESS.
 19.8 	Sections 1 to 35 are effective July 1, 2007. Schools currently licensed under 
19.9 	Minnesota Statutes, chapter 141, that qualify for private institution registration after July 
19.10 	1, 2007, shall apply for and complete the process for registration prior to the expiration 
19.11 	of their current private career school license. Schools currently registered as private 
19.12 	institutions under Minnesota Statutes, sections 136A.61 to 136A.71, that are required to 
19.13 	obtain a private career school license after July 1, 2007, shall apply for and complete the 
19.14 	process for licensure prior to the expiration of the current registration, but in any event, 
19.15 	no later than December 31, 2007. The office is authorized to extend existing license 
19.16 	or registration for a reasonable period of time to allow for the completion of the new 
19.17 	processes when necessary.