SF 1481

as introduced - 90th Legislature (2017 - 2018) Posted on 02/28/2017 09:12am

A bill for an act
relating to higher education; modifying certain higher education provisions;
amending Minnesota Statutes 2016, sections 135A.15, subdivision 1a; 136A.103;
136A.1795, subdivision 4; 136A.62, by adding subdivisions; 136A.64, subdivision
1; 136A.646; 136A.65, subdivisions 1a, 4, 7, by adding a subdivision; 136A.653;
136A.657, by adding a subdivision; 136A.67; 136A.68; 136A.821, by adding
subdivisions; 136A.822, subdivisions 4, 6, 12, 13; 136A.826, subdivision 2;
136A.827, subdivisions 2, 3; 136A.828, subdivision 3; 136A.83; 136A.833;
136A.834, by adding a subdivision; Laws 2015, chapter 69, article 3, section 20,
subdivision 10; proposing coding for new law in Minnesota Statutes, chapter 136A.

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

Section 1.

Minnesota Statutes 2016, section 135A.15, subdivision 1a, is amended to read:

Subd. 1a.

Sexual assault definition.

For the purposes of this section, "sexual assault"
means deleted text begin forcible sex offenses deleted text end new text begin rape, sex offenses - fondling, or sex offenses - statutory rape new text end
as defined in Code of Federal Regulations, title 34, part 668, subpart D, appendix A, as
amended.

Sec. 2.

Minnesota Statutes 2016, section 136A.103, is amended to read:

136A.103 INSTITUTION ELIGIBILITY REQUIREMENTS.

(a) A postsecondary institution is eligible for state student aid under chapter 136A and
sections 197.791 and 299A.45, if the institution is located in this state and:

(1) is operated by this state or the Board of Regents of the University of Minnesota; or

(2) is operated privately and, as determined by the office, meets the requirements of
paragraph (b).

(b) A private institution must:

(1) maintain academic standards substantially equivalent to those of comparable
institutions operated in this state;

(2) be licensed or registered as a postsecondary institution by the office; and

(3)(i) by July 1, 2010, participate in the federal Pell Grant program under Title IV of
the Higher Education Act of 1965, Public Law 89-329, as amended; or

(ii) if an institution was participating in state student aid programs as of June 30, 2010,
and the institution did not participate in the federal Pell Grant program by June 30, 2010,
the institution must require every student who enrolls to sign a disclosure form, provided
by the office, stating that the institution is not participating in the federal Pell Grant program.

(c) An institution that offers only graduate-level degrees or graduate-level nondegree
programs deleted text begin , or that offers only degrees or programs that do not meet the required minimum
program length to participate in the federal Pell Grant program, deleted text end is an eligible institution if
the institution is licensed or registered as a postsecondary institution by the office.

(d) An eligible institution under paragraph (b), clause (3), item (ii), that changes
ownership as defined in section 136A.63, subdivision 2, must participate in the federal Pell
Grant program within four calendar years of the first ownership change to continue eligibility.

(e) An institution that loses its eligibility for the federal Pell Grant program is not an
eligible institution.

new text begin (f) An institution must maintain adequate administrative and financial standards and
compliance with all state statutes, rules, and administrative policies related to state financial
aid programs.
new text end

Sec. 3.

Minnesota Statutes 2016, section 136A.1795, subdivision 4, is amended to read:

Subd. 4.

Loan forgiveness.

(a) The commissioner may select a maximum of five
applicants each year for participation in the loan forgiveness program, within the limits of
available funding. Applicants are responsible for securing their own qualified educational
loans.

(b) The commissioner must select participants based on their suitability for practice
serving the designated rural area, as indicated by experience or training. The commissioner
must give preference to applicants closest to completing their training.

(c) The commissioner must make annual disbursements directly to the participant of
$15,000 or the balance of the participant's qualifying educational loans, whichever is less,
for each year that a participant meets the service obligation required under subdivision 3,
paragraph (b), up to a maximum of five years.

(d) Before receiving loan repayment disbursements and as requested, the participant
must complete and return to the commissioner deleted text begin an affidavit deleted text end new text begin a confirmation new text end of practice form
provided by the commissioner verifying that the participant is practicing as required under
subdivision 2, paragraph (a). The participant must provide the commissioner with verification
that the full amount of loan repayment disbursement received by the participant has been
applied toward the designated loans. After each disbursement, verification must be received
by the commissioner and approved before the next loan repayment disbursement is made.

(e) Participants who move their practice remain eligible for loan repayment as long as
they practice as required under subdivision 2, paragraph (a).

Sec. 4.

Minnesota Statutes 2016, section 136A.62, is amended by adding a subdivision to
read:

new text begin Subd. 7. new text end

new text begin Compliance audit. new text end

new text begin "Compliance audit" means an audit of a school's compliance
with federal requirements related to its participation in federal Title IV student aid programs
or other federal grant programs performed under either Uniform Grant Guidance, including
predecessor Federal Circular A-133, or the United States Department of Education's audit
guide, Audits of Federal Student Financial Assistance Programs at Participating Institutions
and Institution Servicers.
new text end

Sec. 5.

Minnesota Statutes 2016, section 136A.62, is amended by adding a subdivision to
read:

new text begin Subd. 8. new text end

new text begin Entity. new text end

new text begin "Entity" means a specific school or campus location.
new text end

Sec. 6.

Minnesota Statutes 2016, section 136A.62, is amended by adding a subdivision to
read:

new text begin Subd. 9. new text end

new text begin Higher-level entity. new text end

new text begin "Higher-level entity" means a corporate parent or ultimate
parent company or, in the case of a public school, the larger public system of which an
entity is a part.
new text end

Sec. 7.

Minnesota Statutes 2016, section 136A.62, is amended by adding a subdivision to
read:

new text begin Subd. 10. new text end

new text begin Audited financial statements. new text end

new text begin "Audited financial statements" means the
financial statements of an entity or higher-level entity that have been examined by a certified
public accountant or an equivalent government agency for public entities that include (1)
an auditor's report, a statement of financial position, an income statement, a statement of
cash flows, and notes to the financial statements or (2) the required equivalents for public
entities as determined by the Financial Accounting Standards Board, the Governmental
Accounting Standards Board, or the Securities and Exchange Commission.
new text end

Sec. 8.

Minnesota Statutes 2016, section 136A.64, subdivision 1, is amended to read:

Subdivision 1.

Schools to provide information.

As a basis for registration, schools
shall provide the office with such information as the office needs to determine the nature
and activities of the school, including but not limited to the following new text begin , new text end which shall be
accompanied by an affidavit attesting to its accuracy and truthfulness:

(1) articles of incorporation, constitution, bylaws, or other operating documents;

(2) a duly adopted statement of the school's mission and goals;

(3) evidence of current school or program licenses granted by departments or agencies
of any state;

(4) deleted text begin a fiscal balance sheet on an accrual basis, or a certified audit of the immediate past
fiscal year including any management letters provided by the independent auditor or, if the
school is a public institution outside Minnesota, an income statement for the immediate past
fiscal year; deleted text end new text begin financial documents related to the entity's and the higher-level entity's most
recently completed fiscal year, including:
new text end

new text begin (i) audited financial statements; and
new text end

new text begin (ii) a compliance audit;
new text end

(5) all current promotional and recruitment materials and advertisements; and

(6) the current school catalog and, if not contained in the catalog:

(i) the members of the board of trustees or directors, if any;

(ii) the current institutional officers;

(iii) current full-time and part-time faculty with degrees held or applicable experience;

(iv) a description of all school facilities;

(v) a description of all current course offerings;

(vi) all requirements for satisfactory completion of courses, programs, and degrees;

(vii) the school's policy about freedom or limitation of expression and inquiry;

(viii) a current schedule of fees, charges for tuition, required supplies, student activities,
housing, and all other standard charges;

(ix) the school's policy about refunds and adjustments;

(x) the school's policy about granting credit for prior education, training, and experience;
deleted text begin and
deleted text end

(xi) the school's policies about student admission, evaluation, suspension, and dismissal deleted text begin . deleted text end new text begin ;
and
new text end

new text begin (xii) the school's and the related higher-level entity's enrollment history for the current
and the immediately preceding five fiscal years.
new text end

Sec. 9.

Minnesota Statutes 2016, section 136A.646, is amended to read:

136A.646 ADDITIONAL SECURITY.

(a) deleted text begin In the event deleted text end new text begin New schools that have been granted conditional approval for degrees
or names to allow them the opportunity to apply for and receive accreditation under section
136A.65, subdivision 7, or new text end any registered institution new text begin that new text end is notified by the United States
Department of Education that it has fallen below minimum financial standards and that its
continued participation in Title IV will be conditioned upon its satisfying either the Zone
Alternative, Code of Federal Regulations, title 34, section 668.175, paragraph (f), or a Letter
of Credit Alternative, Code of Federal Regulations, title 34, section 668.175, paragraph (c),
the institution shall provide a surety bond deleted text begin conditioned upon the faithful performance of all
contracts and agreements with students deleted text end in a sum equal to deleted text begin the "letter of credit" required by
the United States Department of Education in the Letter of Credit Alternative, deleted text end new text begin ten percent
of the tuition and fees in the registered institution's prior fiscal year, new text end but in no event shall
such bond be less than $10,000 deleted text begin nor more than $250,000 deleted text end .

(b) In lieu of a bond, the applicant may deposit with the commissioner of management
and budget:

(1) a sum equal to the amount of the required surety bond in cash; deleted text begin or
deleted text end

(2) securities, as may be legally purchased by savings banks or for trust funds, in an
aggregate market value equal to the amount of the required surety bond deleted text begin . deleted text end new text begin ; or
new text end

new text begin (3) an irrevocable letter of credit issued by a financial institution to the amount of the
required surety bond.
new text end

(c) The surety of any bond may cancel it upon giving 60 days' notice in writing to the
office and shall be relieved of liability for any breach of condition occurring after the
effective date of cancellation.

new text begin (d) In the event of a school closure, the additional security must first be used to destroy
any personally identifiable information left at a physical campus in Minnesota. Any remaining
funds must then be used to reimburse tuition and fee costs to students that were enrolled at
the time of the closure or had withdrawn in the previous 120 calendar days, but did not
graduate. Priority for refunds will be given to students in the following order: personal
funds, private student loans, and then Veteran Administration education benefits that are
not restored by the Veteran Administration. If there are additional security funds remaining,
the additional security funds may be used to cover any administrative costs incurred by the
office related to the closure of the school.
new text end

new text begin (e) An institution that is subject to an additional security requirement shall submit to the
office data that establishes the prior year's revenue from tuition and fees.
new text end

Sec. 10.

Minnesota Statutes 2016, section 136A.65, subdivision 1a, is amended to read:

Subd. 1a.

Accreditation; requirement.

new text begin (a) new text end A school must not be registered deleted text begin or authorized
to offer any degree at any level deleted text end unless the school deleted text begin is accredited deleted text end new text begin has institutional accreditation new text end
by an agency recognized by the United States Department of Education for purposes of
eligibility to participate in Title IV federal financial aid programs. Any registered school
undergoing institutional accreditation shall inform the office of site visits by the accrediting
agency and provide office staff the opportunity to attend the visits, including any exit
interviews. The institution must provide the office with a copy of the final report upon
receipt.

new text begin (b) A school must not be authorized to offer any degree unless the program has
programmatic or institutional accreditation by an agency recognized by the United States
Department of Education for purposes of eligibility to participate in Title IV federal financial
aid programs. Any program offered by a registered school that is undergoing accreditation
shall inform the office of site visits by the accrediting agency and provide office staff the
opportunity to attend the visits, including any exit interviews. The school must provide the
office with a copy of the final report by the accreditor upon receipt.
new text end

Sec. 11.

Minnesota Statutes 2016, section 136A.65, subdivision 4, is amended to read:

Subd. 4.

Criteria for approval.

(a) A school applying to be registered and to have its
degree or degrees and name approved must substantially meet the following criteria:

(1) the school has an organizational framework with administrative and teaching personnel
to provide the educational programs offered;

(2) the school has financial resources sufficient to meet the school's financial obligations,
including refunding tuition and other charges consistent with its stated policy if the institution
is dissolved, or if claims for refunds are made, to provide service to the students as promised,
and to provide educational programs leading to degrees as offered;

(3) the school operates in conformity with generally accepted deleted text begin budgeting and deleted text end accounting
principles new text begin according to the type of school and utilizes industry-appropriate budget
methodologies new text end ;

(4) the school provides an educational program leading to the degree it offers;

(5) the school provides appropriate and accessible library, laboratory, and other physical
facilities to support the educational program offered;

(6) the school has a policy on freedom or limitation of expression and inquiry for faculty
and students which is published or available on request;

(7) the school uses only publications and advertisements which are truthful and do not
give any false, fraudulent, deceptive, inaccurate, or misleading impressions about the school,
its personnel, programs, services, or occupational opportunities for its graduates for promotion
and student recruitment new text begin , consistent with subdivision 4a new text end ;

(8) the school's compensated recruiting agents who are operating in Minnesota identify
themselves as agents of the school when talking to or corresponding with students and
prospective students;

(9) the school provides information to students and prospective students concerning:

(i) comprehensive and accurate policies relating to student admission, evaluation,
suspension, and dismissal;

(ii) clear and accurate policies relating to granting credit for prior education, training,
and experience and for courses offered by the school;

(iii) current schedules of fees, charges for tuition, required supplies, student activities,
housing, and all other standard charges;

(iv) policies regarding refunds and adjustments for withdrawal or modification of
enrollment status; and

(v) procedures and standards used for selection of recipients and the terms of payment
and repayment for any financial aid program; and

(10) the school must not withhold a student's official transcript because the student is
in arrears or in default on any loan issued by the school to the student if the loan qualifies
as an institutional loan under United States Code, title 11, section 523(a)(8)(b).

(b) An application for degree approval must also include:

(i) title of degree and formal recognition awarded;

(ii) location where such degree will be offered;

(iii) proposed implementation date of the degree;

(iv) admissions requirements for the degree;

(v) length of the degree;

(vi) projected enrollment for a period of five years;

(vii) the curriculum required for the degree, including course syllabi or outlines;

(viii) statement of academic and administrative mechanisms planned for monitoring the
quality of the proposed degree;

(ix) statement of satisfaction of professional licensure criteria, if applicable;

(x) documentation of the availability of clinical, internship, externship, or practicum
sites, if applicable; and

(xi) statement of how the degree fulfills the institution's mission and goals, complements
existing degrees, and contributes to the school's viability.

Sec. 12.

Minnesota Statutes 2016, section 136A.65, is amended by adding a subdivision
to read:

new text begin Subd. 4a. new text end

new text begin Advertising requirements. new text end

new text begin (a) A school shall only make claims that are
evidence based, can be validated, and are based on current conditions and not on conditions
that are no longer relevant.
new text end

new text begin (b) A school shall not guarantee or imply the guarantee of employment.
new text end

new text begin (c) A school shall not guarantee or advertise any certain wage or imply earnings greater
than the prevailing wage for entry-level wages in the field of study for the geographic area
unless advertised wages are based on verifiable wage information from graduates.
new text end

new text begin (d) If placement statistics are used in advertising or other promotional materials, the
school must be able to substantiate the statistics with school records. These records must
be made available to the office upon request. A school is prohibited from reporting the
following in placement statistics:
new text end

new text begin (1) a student required to receive a job offer or start a job to be classified as a graduate;
new text end

new text begin (2) a graduate if the graduate held a position before enrolling in the program unless
graduating enabled the graduate to maintain the position or the graduate received a promotion
or raise upon graduating;
new text end

new text begin (3) a graduate who works less than 20 hours per week; and
new text end

new text begin (4) a graduate who is not expected to maintain the position for at least 180 days.
new text end

new text begin (e) A school shall not use endorsements, commendations, or recommendations by students
in favor of a school except with the consent of the student and without any offer of financial
or other material compensation. Endorsements may be used only when they portray current
conditions.
new text end

new text begin (f) A school may advertise that the school or its programs have been accredited by an
accrediting agency recognized by the United States Department of Education or the Council
for Higher Education Accreditation, but shall not advertise any other accreditation unless
approved by the office. The office may approve an institution's advertising of accreditation
that is not recognized by the United States Department of Education or the Council for
Higher Education if the accreditation is industry specific. Clear distinction must be made
when the school is in candidacy or application status versus full accreditation.
new text end

new text begin (g) A school may advertise that financial aid may be available, including a listing of the
financial aid programs in which the school participates, but federal and state financial aid
shall not be used as a primary incentive in advertisement, promotion, or recruitment.
new text end

new text begin (h) A school may advertise placement assistance or career assistance, if offered, but
shall not use the words "wanted," "help wanted," or "trainee," either in the headline or the
body of the advertisement.
new text end

new text begin (i) A school may not advertise under "help wanted," "employment," or similar
classification.
new text end

new text begin (j) A school shall not falsely claim that it is conducting a talent hunt, contest, or similar
test.
new text end

new text begin (k) The commissioner, at any time, may require the school to publish a retraction of any
false, misleading, or deceptive claim. The retraction must be published in the same manner
as the original claim.
new text end

Sec. 13.

Minnesota Statutes 2016, section 136A.65, subdivision 7, is amended to read:

Subd. 7.

Conditional approval.

new text begin (a) new text end The office may grant new text begin a school a one-year new text end conditional
approval for a degree or use of a term in its name deleted text begin for a period of less than one year deleted text end if doing
so would be in the best interests of currently enrolled students or prospective students. new text begin
Conditional approval of a degree or use of a term under this paragraph must not exceed a
period of three years.
new text end

new text begin (b) The office may grant new text end new schools deleted text begin may be granted deleted text end new text begin and programs a one-year new text end conditional
approval for degrees or deleted text begin names annually for a period not to exceed five years deleted text end new text begin use of a term
in its name new text end to allow deleted text begin them deleted text end new text begin the school new text end the opportunity to apply for and receive accreditation
as required in subdivision 1a. new text begin Conditional approval of a school or program under this
paragraph must not exceed a period of five years. new text end A new school new text begin or program new text end granted
conditional approval may be allowed to continue deleted text begin as a registered institution deleted text end in order to
complete an accreditation process upon terms and conditions the office determines.

new text begin (c) The office may grant a registered school a one-year conditional approval for degrees
or use of a term in its name to allow the school the opportunity to apply for and receive
accreditation as required in subdivision 1a if the school's accrediting agency is no longer
recognized by the United States Department of Education for purposes of eligibility to
participate in Title IV federal financial aid programs. The office must not grant conditional
approvals under this paragraph to a school for a period of more than five years.
new text end

new text begin (d) The office may grant a registered school a one-year conditional approval for degrees
or use of a term in its name to allow the school to change to a different accrediting agency
recognized by the United States Department of Education for purposes of eligibility to
participate in Title IV federal financial aid programs. The office must not grant conditional
approvals under this paragraph to a school for a period of more than five years.
new text end

Sec. 14.

Minnesota Statutes 2016, section 136A.653, is amended to read:

136A.653 EXEMPTIONS.

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin A school that seeks an exemption from the provisions of
sections 136A.61 to 136A.71 must apply to the office to establish that the school meets the
requirements of an exemption. An exemption expires two years from the date of approval
or until a school adds a new program or makes a modification equal to or greater than 25
percent to an existing educational program. If a school is reapplying for an exemption, the
application must be submitted to the office 90 days before the current exemption expires.
new text end

deleted text begin Subdivision 1. deleted text end new text begin Subd. 1a. new text end

deleted text begin Exemption deleted text end new text begin Private career schools new text end .

A school that is subject
to licensing by the office under sections 136A.82 to 136A.834 is exempt from the provisions
of sections 136A.61 to 136A.71. The determination of the office as to whether a particular
school is subject to regulation under sections 136A.82 to 136A.834 is final for the purposes
of this exemption.

Subd. 2.

Educational program; nonprofit organizations.

Educational programs which
are sponsored by a bona fide and nonprofit trade, labor, business, professional or fraternal
organization, which programs are conducted solely for that organization's membership or
for the members of the particular industries or professions served by that organization, and
which are not available to the public on a fee basis, are exempted from the provisions of
sections 136A.61 to 136A.71.

Subd. 3.

Educational program; business firms.

Educational programs which are
sponsored by a business firm for the training of its employees or the employees of other
business firms with which it has contracted to provide educational services at no cost to the
employees are exempted from the provisions of sections 136A.61 to 136A.71.

Subd. 3a.

Tuition-free educational courses.

A school, including a school using an
online platform service, offering training, courses, or programs is exempt from sections
136A.61 to 136A.71, to the extent deleted text begin it offers tuition-free courses to students in Minnesota. A
course will be considered tuition-free if the school charges no tuition and the required fees
and other required charges paid by the student for the course deleted text end new text begin tuition, fees, and any other
charges for a student to participate new text end do not exceed two percent of the most recent average
undergraduate tuition and required fees as of January 1 of the current year charged for
full-time students at all degree-granting institutions as published annually by the United
States Department of Education as of January 1 of each year. To qualify for an exemption,
a school or online platform service must prominently display a notice comparable to the
following: "IMPORTANT: Each educational institution makes its own decision regarding
whether to accept completed coursework for credit. Check with your university or college."

Subd. 4.

Voluntary submission.

Any school or program exempted from the provisions
of sections 136A.61 to 136A.71 by the provisions of this section may voluntarily submit to
the provisions of those sections.

Sec. 15.

Minnesota Statutes 2016, section 136A.657, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Application. new text end

new text begin A school that seeks an exemption from the provisions of sections
136A.61 to 136A.71 must apply to the office to establish that the school meets the
requirements of an exemption. An exemption expires two years from the date of approval
or when a school adds a new program or makes a modification equal to or greater than 25
percent to an existing educational program. If a school is reapplying for an exemption, the
application must be submitted to the office 90 days before the current exemption expires.
new text end

Sec. 16.

Minnesota Statutes 2016, section 136A.67, is amended to read:

136A.67 REGISTRATION REPRESENTATIONS.

No school and none of its officials or employees shall advertise or represent in any
manner that such school is approved or accredited by the office or the state of Minnesota,
except a school which is duly registered with the office, or any of its officials or employees,
may represent in advertising and shall disclose in catalogues, applications, and enrollment
materials that the school is registered with the office by prominently displaying the following
statement: "(Name of school) is registered with the deleted text begin office deleted text end new text begin Minnesota Office of Higher
Education new text end pursuant to sections 136A.61 to 136A.71. Registration is not an endorsement of
the institution. Credits earned at the institution may not transfer to all other institutions." In
addition, all registered schools shall publish in the school catalog or student handbook the
name, street address, telephone number, and Web site address of the office.

Sec. 17.

new text begin [136A.672] STUDENT COMPLAINTS.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin The office has the authority to review and take appropriate
action on student complaints from schools covered under the provisions of sections 136A.61
to 136A.71.
new text end

new text begin Subd. 2. new text end

new text begin Complaint. new text end

new text begin A complaint must be in writing, be signed by a student, and state
how the school's policies and procedures or sections 136A.61 to 136A.71 were violated.
Student complaints shall be limited to complaints that occurred within six years from the
date the concern should have been discovered with reasonable effort.
new text end

new text begin Subd. 3. new text end

new text begin Investigation. new text end

new text begin The office shall initiate an investigation upon receipt of a
complaint within the authority of subdivision 2. A school involved in an investigation shall
be informed of the alleged violations and the processes of the investigation. A school
involved in an investigation shall respond to the alleged violations and provide requested
documentation to the office. Upon completing an investigation, the office shall inform the
school and the student of the investigation outcome.
new text end

new text begin Subd. 4. new text end

new text begin Penalties. new text end

new text begin If violations are found, the office may require remedial action by
the school or assign a penalty under section 136A.705. Remedial action may include student
notification of violations, adjustments to the school's policies and procedures, and tuition
or fee refunds to impacted students.
new text end

Sec. 18.

Minnesota Statutes 2016, section 136A.68, is amended to read:

136A.68 RECORDS.

A registered school shall maintain a permanent record for each student for 50 years from
the last date of the student's attendance. A registered school offering distance instruction to
a student located in Minnesota shall maintain a permanent record for each Minnesota student
for 50 years from the last date of the student's attendance. Records include a student's
academic transcript, documents, and files containing student data about academic credits
earned, courses completed, grades awarded, degrees awarded, and periods of attendance.
To preserve permanent records, a school shall submit a plan that meets the following
requirements:

(1) at least one copy of the records must be held in a secure, fireproof depository or
duplicate records must be maintained off site in a secure location and in a manner approved
by the office;

(2) an appropriate official must be designated to provide a student with copies of records
or a transcript upon request;

(3) an alternative method approved by the office of complying with clauses (1) and (2)
must be established if the school ceases to exist; and

(4) if the school has no binding agreement approved by the office for preserving student
records, a continuous surety bond new text begin or an irrevocable letter of credit issued by a financial
institution new text end must be filed with the office in an amount not to exceed $20,000. The bond new text begin or
irrevocable letter of credit new text end shall run to the state of Minnesota. new text begin In the event of a school closure,
the surety bond or irrevocable letter of credit must be used by the office to retrieve, recover,
maintain, digitize, and destroy academic records.
new text end

Sec. 19.

Minnesota Statutes 2016, section 136A.821, is amended by adding a subdivision
to read:

new text begin Subd. 13. new text end

new text begin Compliance audit. new text end

new text begin "Compliance audit" means an audit of a school's compliance
with federal requirements related to its participation in federal Title IV student aid programs
or other federal grant programs performed under either Uniform Grant Guidance, including
predecessor Federal Circular A-133, or the United States Department of Education's audit
guide, Audits of Federal Student Financial Assistance Programs at Participating Institutions
and Institution Servicers.
new text end

Sec. 20.

Minnesota Statutes 2016, section 136A.821, is amended by adding a subdivision
to read:

new text begin Subd. 14. new text end

new text begin Entity. new text end

new text begin "Entity" means a specific school or campus location.
new text end

Sec. 21.

Minnesota Statutes 2016, section 136A.821, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Higher-level entity. new text end

new text begin "Higher-level entity" means a corporate parent or ultimate
parent company or, in the case of a public school, the larger public system of which an
entity is a part.
new text end

Sec. 22.

Minnesota Statutes 2016, section 136A.821, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Audited financial statements. new text end

new text begin "Audited financial statements" means the
financial statements of an entity or higher-level entity that have been examined by a certified
public accountant or an equivalent government agency for public entities that include (1)
an auditor's report, a statement of financial position, an income statement, a statement of
cash flows, and notes to the financial statements or (2) the required equivalents for public
entities as determined by the Financial Accounting Standards Board, the Governmental
Accounting Standards Board, or the Securities and Exchange Commission.
new text end

Sec. 23.

Minnesota Statutes 2016, section 136A.821, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin Review-level engagement. new text end

new text begin "Review-level engagement" means a service
performed by a certified public accountant that provides limited assurance that there are no
material modifications that need to be made to an entity's financial statements in order for
them to conform to generally accepted accounting principles. Review-level engagement
provides fewer assurances than those reported under audited financial statements.
new text end

Sec. 24.

Minnesota Statutes 2016, section 136A.822, subdivision 4, is amended to read:

Subd. 4.

Application.

Application for a license shall be on forms prepared and furnished
by the office, and shall include the following and other information as the office may require:

(1) the title or name of the private career school, ownership and controlling officers,
members, managing employees, and director;

(2) the specific programs which will be offered and the specific purposes of the
instruction;

(3) the place or places where the instruction will be given;

(4) a listing of the equipment available for instruction in each program;

(5) the maximum enrollment to be accommodated with equipment available in each
specified program;

(6) the qualifications of instructors and supervisors in each specified program;

(7) new text begin financial documents related to the entity's and higher-level entity's most recently
completed fiscal year:
new text end

new text begin (i) annual gross revenues from all sources;
new text end

new text begin (ii) financial statements subjected to a review level engagement or, if requested by the
office, audited financial statements;
new text end

new text begin (iii) a compliance audit, if applicable; and
new text end

new text begin (iv) new text end a current balance sheet, income statement, and adequate supporting documentation,
prepared and certified by an independent public accountant or CPA;

(8) copies of all media advertising and promotional literature and brochures or electronic
display currently used or reasonably expected to be used by the private career school;

(9) copies of all Minnesota enrollment agreement forms and contract forms and all
enrollment agreement forms and contract forms used in Minnesota; and

(10) gross income earned in the preceding year from student tuition, fees, and other
required institutional charges deleted text begin , unless the private career school files with the office a surety
bond equal to at least $250,000 as described in subdivision 6 deleted text end .

Sec. 25.

Minnesota Statutes 2016, section 136A.822, subdivision 6, is amended to read:

Subd. 6.

Bond.

(a) No license shall be issued to any private career school which
maintains, conducts, solicits for, or advertises within the state of Minnesota any program,
unless the applicant files with the office a continuous corporate surety bond written by a
company authorized to do business in Minnesota conditioned upon the faithful performance
of all contracts and agreements with students made by the applicant.

(b)(1) The amount of the surety bond shall be ten percent of the preceding year's gross
income from student tuition, fees, and other required institutional charges, but in no event
less than $10,000 deleted text begin nor greater than $250,000 deleted text end , except that a private career school may deposit
a greater amount at its own discretion. A private career school in each annual application
for licensure must compute the amount of the surety bond and verify that the amount of the
surety bond complies with this subdivision deleted text begin , unless the private career school maintains a
surety bond equal to at least $250,000 deleted text end . A private career school that operates at two or more
locations may combine gross income from student tuition, fees, and other required
institutional charges for all locations for the purpose of determining the annual surety bond
requirement. The gross tuition and fees used to determine the amount of the surety bond
required for a private career school having a license for the sole purpose of recruiting students
in Minnesota shall be only that paid to the private career school by the students recruited
from Minnesota.

(2) A person required to obtain a private career school license due to the use of
"academy," "institute," "college," or "university" in its name and which is also licensed by
another state agency or board new text begin , except not including those schools licensed exclusively in
order to participate in state grants or SELF loan financial aid programs, new text end shall be required
to provide a school bond of $10,000.

(c) The bond shall run to the state of Minnesota and to any person who may have a cause
of action against the applicant arising at any time after the bond is filed and before it is
canceled for breach of any contract or agreement made by the applicant with any student.
The aggregate liability of the surety for all breaches of the conditions of the bond shall not
exceed the principal sum deposited by the private career school under paragraph (b). The
surety of any bond may cancel it upon giving 60 days' notice in writing to the office and
shall be relieved of liability for any breach of condition occurring after the effective date
of cancellation.

(d) In lieu of bond, the applicant may deposit with the commissioner of management
and budget a sum equal to the amount of the required surety bond in cash, an irrevocable
letter of credit issued by a financial institution equal to the amount of the required surety
bond, or securities as may be legally purchased by savings banks or for trust funds in an
aggregate market value equal to the amount of the required surety bond.

(e) Failure of a private career school to post and maintain the required surety bond or
deposit under paragraph (d) deleted text begin shall deleted text end new text begin may new text end result in denial, suspension, or revocation of the
school's license.

Sec. 26.

Minnesota Statutes 2016, section 136A.822, subdivision 12, is amended to read:

Subd. 12.

Permanent records.

A private career school licensed under sections 136A.82
to 136A.834 and located in Minnesota shall maintain a permanent record for each student
for 50 years from the last date of the student's attendance. A private career school licensed
under this chapter and offering distance instruction to a student located in Minnesota shall
maintain a permanent record for each Minnesota student for 50 years from the last date of
the student's attendance. Records include school transcripts, documents, and files containing
student data about academic credits earned, courses completed, grades awarded, degrees
awarded, and periods of attendance. To preserve permanent records, a private career school
shall submit a plan that meets the following requirements:

(1) at least one copy of the records must be held in a secure, fireproof depository;

(2) an appropriate official must be designated to provide a student with copies of records
or a transcript upon request;

(3) an alternative method, approved by the office, of complying with clauses (1) and (2)
must be established if the private career school ceases to exist; and

(4) a continuous surety bond new text begin or irrevocable letter of credit issued by a financial institution
new text end must be filed with the office in an amount not to exceed $20,000 if the private career school
has no binding agreement approved by the office, for preserving student records. The bond
new text begin or irrevocable letter of credit new text end shall run to the state of Minnesota. new text begin In the event of a school
closure, the surety bond or irrevocable letter of credit must be used by the office to retrieve,
recover, maintain, digitize, and destroy academic records.
new text end

Sec. 27.

Minnesota Statutes 2016, section 136A.822, subdivision 13, is amended to read:

Subd. 13.

Private career schools licensed by another state agency or board.

A private
career school required to obtain a private career school license due to the use of "academy,"
"institute," "college," or "university" in its name or licensed for the purpose of participating
in state financial aid under chapter 136A, and which is also licensed by another state agency
or board shall be required to satisfy only the requirements of subdivisions 4, clauses (1),
(2), (3), (5), (7), new text begin (8), new text end and (10); 5; 6, paragraph (b), clause (2); 8, clauses (1) new text begin , (4), (7), (8), new text end
and (9); 9; 10 deleted text begin , clause (13) deleted text end ; and 12. new text begin If a school is licensed to participate in state financial aid
under this chapter, the school must follow the refund policy in section 136A.827, even if
that section conflicts with the refund policy of the licensing agency or board. new text end A distance
education private career school located in another state, or a school licensed to recruit
Minnesota residents for attendance at a school outside of this state, or a school licensed by
another state agency as its primary licensing body, may continue to use the school's name
as permitted by its home state or its primary licensing body.

Sec. 28.

Minnesota Statutes 2016, section 136A.826, subdivision 2, is amended to read:

Subd. 2.

Contract information.

A contract or enrollment agreement used by a private
career school must include at least the following:

(1) the name and address of the private career school, clearly stated;

(2) a clear and conspicuous disclosure that the agreement is a legally binding instrument
upon written acceptance of the student by the private career school unless canceled under
section 136A.827;

(3) the private career school's cancellation and refund policy that shall be clearly and
conspicuously entitled "Buyer's Right to Cancel";

(4) a clear statement of total cost of the program including tuition and all other charges;

(5) the name and description of the program, including the number of hours or credits
of classroom instruction, or distance instruction, that shall be included; and

(6) a clear and conspicuous explanation of the form and means of notice the student
should use in the event the student elects to cancel the contract or sale, the effective date of
cancellation, and the name and address new text begin , e-mail address, or phone number new text end of the seller to
which the notice should be sent or delivered.

The contract or enrollment agreement must not include a wage assignment provision or a
confession of judgment clause.

Sec. 29.

Minnesota Statutes 2016, section 136A.827, subdivision 2, is amended to read:

Subd. 2.

Private career schools using written contracts.

(a) Notwithstanding anything
to the contrary, a private career school that uses a written contract or enrollment agreement
shall refund all tuition, fees and other charges paid by a student, if the student gives deleted text begin written deleted text end
notice of cancellation within five business days after the day on which the contract was
executed regardless of whether the program has started.

(b) When a student has been accepted by the private career school and has entered into
a contractual agreement with the private career school and gives deleted text begin written deleted text end notice of cancellation
following the fifth business day after the date of execution of contract, but before the start
of the program in the case of resident private career schools, or before the first lesson has
been serviced by the private career school in the case of distance education private career
schools, all tuition, fees and other charges, except 15 percent of the total cost of the program
but not to exceed $50, shall be refunded to the student.

Sec. 30.

Minnesota Statutes 2016, section 136A.827, subdivision 3, is amended to read:

Subd. 3.

Notice; amount.

(a) A private career school shall refund all tuition, fees and
other charges paid by a student if the student gives deleted text begin written deleted text end notice of cancellation within five
business days after the day on which the student is accepted by the private career school
regardless of whether the program has started.

(b) When a student has been accepted by the private career school and gives deleted text begin written deleted text end
notice of cancellation following the fifth business day after the day of acceptance by the
private career school, but before the start of the program, in the case of resident private
career schools, or before the first lesson has been serviced by the private career school, in
the case of distance education private career schools, all tuition, fees and other charges,
except 15 percent of the total cost of the program but not to exceed $50, shall be refunded
to the student.

Sec. 31.

Minnesota Statutes 2016, section 136A.828, subdivision 3, is amended to read:

Subd. 3.

False statements.

new text begin (a) new text end A private career school, agent, or solicitor shall not make,
or cause to be made, any statement or representation, oral, written or visual, in connection
with the offering or publicizing of a program, if the private career school, agent, or solicitor
knows or reasonably should have known the statement or representation to be false,
fraudulent, deceptive, substantially inaccurate, or misleading.

new text begin (b) A school shall only make claims that are evidence-based, can be validated, and are
based on current conditions and not on conditions that are no longer relevant.
new text end

new text begin (c) A school shall not guarantee or imply the guarantee of employment.
new text end

new text begin (d) A school shall not guarantee or advertise any certain wage or imply earnings greater
than the prevailing wage for entry-level wages in the field of study for the geographic area
unless advertised wages are based on verifiable wage information from graduates.
new text end

new text begin (e) If placement statistics are used in advertising or other promotional materials, the
school must be able to substantiate the statistics with school records. These records must
be made available to the office upon request. A school is prohibited from reporting the
following in placement statistics:
new text end

new text begin (1) a student required to receive a job offer or start a job to be classified as a graduate;
new text end

new text begin (2) a graduate if the graduate held a position before enrolling in the program, unless
graduating enabled the graduate to maintain the position or the graduate received a promotion
or raise upon graduation;
new text end

new text begin (3) a graduate who works less than 20 hours per week; and
new text end

new text begin (4) a graduate who is not expected to maintain the position for at least 180 days.
new text end

new text begin (f) A school shall not use endorsements, commendations, or recommendations by a
student in favor of a school except with the consent of the student and without any offer of
financial or other material compensation. Endorsements may be used only when they portray
current conditions.
new text end

new text begin (g) A school may advertise that the school or its programs have been accredited by an
accrediting agency recognized by the United States Department of Education or the Council
for Higher Education Accreditation, but shall not advertise any other accreditation unless
approved by the office. The office may approve an institution's advertising of accreditation
that is not recognized by the United States Department of Education or the Council for
Higher Education if that accreditation is industry specific. Clear distinction must be made
when the school is in candidacy or application status versus full accreditation.
new text end

new text begin (h) A school may advertise that financial aid is available, including a listing of the
financial aid programs in which the school participates, but federal or state financial aid
shall not be used as a primary incentive in advertisement, promotion, or recruitment.
new text end

new text begin (i) A school may advertise placement or career assistance, if offered, but shall not use
the words "wanted," "help wanted," or "trainee," either in the headline or the body of the
advertisement.
new text end

new text begin (j) A school shall not be advertised under any "help wanted," "employment," or similar
classification.
new text end

new text begin (k) A school shall not falsely claim that it is conducting a talent hunt, contest, or similar
test.
new text end

new text begin (l) The commissioner, at any time, may require a retraction of a false, misleading, or
deceptive claim.
new text end

Sec. 32.

new text begin [136A.8295] STUDENT COMPLAINTS.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin The office has the authority to review and take appropriate
action on student complaints from schools covered under the provisions of sections 136A.822
to 136A.834.
new text end

new text begin Subd. 2. new text end

new text begin Complaint. new text end

new text begin A complaint must be in writing, be signed by a student, and state
how the school's policies and procedures or sections 136A.822 to 136A.834 were violated.
Student complaints shall be limited to complaints in which the last incident of the student
concern has occurred in the prior six years.
new text end

new text begin Subd. 3. new text end

new text begin Investigation. new text end

new text begin The office shall initiate an investigation upon receipt of a
complaint within the authority of subdivision 2. A school involved in an investigation shall
be informed of the alleged violations and the processes of the investigation. A school
involved in an investigation shall respond to the alleged violations and provide requested
documentation to the office. Upon completion of an investigation, the office shall inform
the school and the student of the investigation outcome.
new text end

new text begin Subd. 4. new text end

new text begin Penalties. new text end

new text begin If violations are found, the office may require remedial action by
the school or assign a penalty under section 136A.832. Remedial action may include student
notification of violations, adjustments to the school's policies and procedures, and tuition
or fee refunds to impacted students.
new text end

Sec. 33.

Minnesota Statutes 2016, section 136A.83, is amended to read:

136A.83 INSPECTION.

(a) The office or a delegate may inspect the instructional books and records, classrooms,
dormitories, tools, equipment and classes of any private career school or applicant for license
at any reasonable time. The office may require the submission of deleted text begin a certified public audit,
or if there is no such audit available deleted text end new text begin audited financial statements. new text end The office or a delegate
may inspect the financial books and records of the private career school. In no event shall
such financial information be used by the office to regulate or set the tuition or fees charged
by the private career school.

(b) Data obtained from an inspection of the financial records of a private career school
or submitted to the office as part of a license application or renewal are nonpublic data as
defined in section 13.02, subdivision 9. Data obtained from inspections may be disclosed
to other members of the office, to law enforcement officials, or in connection with a legal
or administrative proceeding commenced to enforce a requirement of law.

Sec. 34.

Minnesota Statutes 2016, section 136A.833, is amended to read:

136A.833 EXEMPTIONS.

new text begin Subdivision 1. new text end

new text begin Application for exemptions. new text end

new text begin A school that seeks an exemption from the
provisions of sections 136A.822 to 136A.834 must apply to the office to establish that the
school meets the requirements of an exemption. An exemption expires two years from the
date of approval or when a school adds a new program or makes a modification equal to or
greater than 25 percent to an existing educational program. If a school is reapplying for an
exemption, the application must be submitted to the office 90 days before the current
exemption expires.
new text end

new text begin Subd. 2. new text end

new text begin Exemption reasons. new text end

Sections 136A.821 to 136A.832 shall not apply to the
following:

(1) public postsecondary institutions;

(2) postsecondary institutions registered under sections 136A.61 to 136A.71;

(3) private career schools of nursing accredited by the state Board of Nursing or an
equivalent public board of another state or foreign country;

(4) private schools complying with the requirements of section 120A.22, subdivision 4;

(5) courses taught to students in a valid apprenticeship program taught by or required
by a trade union;

(6) private career schools exclusively engaged in training physically or mentally disabled
persons for the state of Minnesota;

(7) private career schools licensed by boards authorized under Minnesota law to issue
licenses except private career schools required to obtain a private career school license due
to the use of "academy," "institute," "college," or "university" in their names;

(8) private career schools and educational programs, or training programs, contracted
for by persons, firms, corporations, government agencies, or associations, for the training
of their own employees, for which no fee is charged the employee;

(9) private career schools engaged exclusively in the teaching of purely avocational,
recreational, or remedial subjects as determined by the office except private career schools
required to obtain a private career school license due to the use of "academy," "institute,"
"college," or "university" in their names unless the private career school used "academy"
or "institute" in its name prior to August 1, 2008;

(10) classes, courses, or programs conducted by a bona fide trade, professional, or
fraternal organization, solely for that organization's membership;

(11) programs in the fine arts provided by organizations exempt from taxation under
section 290.05 and registered with the attorney general under chapter 309. For the purposes
of this clause, "fine arts" means activities resulting in artistic creation or artistic performance
of works of the imagination which are engaged in for the primary purpose of creative
expression rather than commercial sale or employment. In making this determination the
office may seek the advice and recommendation of the Minnesota Board of the Arts;

(12) classes, courses, or programs intended to fulfill the continuing education
requirements for licensure or certification in a profession, that have been approved by a
legislatively or judicially established board or agency responsible for regulating the practice
of the profession, and that are offered exclusively to an individual practicing the profession;

(13) classes, courses, or programs intended to prepare students to sit for undergraduate,
graduate, postgraduate, or occupational licensing and occupational entrance examinations;

(14) classes, courses, or programs providing 16 or fewer clock hours of instruction that
are not part of the curriculum for an occupation or entry level employment except private
career schools required to obtain a private career school license due to the use of "academy,"
"institute," "college," or "university" in their names;

(15) classes, courses, or programs providing instruction in personal development,
modeling, or acting;

(16) training or instructional programs, in which one instructor teaches an individual
student, that are not part of the curriculum for an occupation or are not intended to prepare
a person for entry level employment;

(17) private career schools with no physical presence in Minnesota, as determined by
the office, engaged exclusively in offering distance instruction that are located in and
regulated by other states or jurisdictions new text begin if the distance education instruction does not include
internships, externships, field placements, or clinical placements for residents of Minnesota new text end ;
and

(18) private career schools providing exclusively training, instructional programs, or
courses where tuition, fees, and any other charges for a student to participate do not exceed
$100.

Sec. 35.

Minnesota Statutes 2016, section 136A.834, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Application. new text end

new text begin A school that seeks an exemption from the provisions of sections
136A.82 to 136A.834 must apply to the office to establish that the school meets the
requirements of an exemption. An exemption expires two years from the date of approval
or when a school adds a new program or makes a modification equal to or greater than 25
percent to an existing educational program. If a school is reapplying for an exemption, the
application must be submitted to the office 90 days before the current exemption expires.
new text end

Sec. 36.

Laws 2015, chapter 69, article 3, section 20, subdivision 10, is amended to read:

Subd. 10.

Credit load.

new text begin By the end of the first academic year including summer term, new text end a
grantee must have accumulated deleted text begin at least deleted text end new text begin the lesser of new text end 30 program credits deleted text begin by the end of the
first academic year including summer term deleted text end new text begin or the number of credits that the student's program
is scheduled for during the first academic year new text end . A college must certify that a grantee is
carrying sufficient credits in the second grant year to complete the program at the end of
the second year, including summer school. The commissioner shall set the terms and provide
the form for certification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end