SF 2169

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to higher education; providing for the licensing or registration of
private postsecondary educational institutions; providing penalties; providing
certain exemptions; amending Minnesota Statutes 2006, sections 136A.61;
136A.62, subdivision 3; 136A.63; 136A.64; 136A.65, subdivision 1, by adding
subdivisions; 136A.657, by adding a subdivision; 136A.66; 136A.67; 136A.68;
136A.69; 141.21, subdivisions 1a, 5; 141.25, subdivisions 1, 5, 7, 9, 10, 12;
141.255, subdivision 2; 141.265, subdivision 2; 141.271, subdivisions 10,
12; 141.28, subdivision 1; 141.32; 141.35; proposing coding for new law in
Minnesota Statutes, chapters 136A; 141.

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

Section 1.

Minnesota Statutes 2006, section 136A.61, is amended to read:

136A.61 POLICY.

The legislature has found and hereby declares that the availability of legitimate
courses and programs leading to academic degrees offered by responsible private
new text begin not-for-profit and for-profit new text end institutions of postsecondary education and the existence
of legitimate private colleges and universities are in the best interests of the people of
this state. The legislature has found and declares that the state can provide assistance
and protection for persons choosing private institutions and programs, by establishing
policies and procedures to assure the authenticity and legitimacy of private postsecondary
education institutions and programs. The legislature has also found and declares that
this same policy applies to any new text begin private and new text end public postsecondary educational institution
located in another state or country which offers or makes available to a Minnesota resident
any course, program or educational activity which does not require the leaving of the
state for its completion.

Sec. 2.

Minnesota Statutes 2006, section 136A.62, subdivision 3, is amended to read:

Subd. 3.

School.

"School" means new text begin : new text end

new text begin (1) new text end any deleted text begin individual, deleted text end partnership, company, firm, society, trust, association,
corporation, or any combination thereof, which deleted text begin (a) deleted text end new text begin (i) new text end is, owns, or operates a private,
nonprofit postsecondary education institution; deleted text begin (b) deleted text end new text begin (ii) is, owns, or operates a private
for-profit postsecondary education institution; (iii) new text end provides a postsecondary instructional
program or course leading to a degree whether or not for profit; deleted text begin (c) deleted text end new text begin or (iv) new text end is, owns, or
operates a private, postsecondary education institution which uses the term "college",
"academy", "institute" or "university" in its name; deleted text begin or (d) operates for profit and provides
programs or courses which are intended to allow an individual to fulfill in part or totally
the requirements necessary to maintain a license to practice an occupation. School shall
also mean
deleted text end

new text begin (2) new text end any public postsecondary educational institution located in another state or
country which offers or makes available to a Minnesota resident any course, program or
educational activity which does not require the leaving of the state for its completion new text begin ; or
new text end

new text begin (3) any individual, entity, or postsecondary institution located in another state
that contracts with any school located within the state of Minnesota for the purpose of
providing educational programs, training programs, or awarding postsecondary credits
or continuing education credits to Minnesota residents that may be applied to a degree
program new text end .

Sec. 3.

Minnesota Statutes 2006, section 136A.63, is amended to read:

136A.63 REGISTRATION.

new text begin Subdivision 1. new text end

new text begin Registration required. new text end

All schools located within Minnesota and
all schools located outside Minnesota which offer new text begin degree new text end programs or courses within
Minnesota shall register annually with the office.

new text begin Subd. 2. new text end

new text begin Sale of an institution. new text end

new text begin Any merger or consolidation with any corporation,
sale, lease, exchange, or other disposition of all or substantially all of the assets of a
school, the transfer of a controlling interest of at least 51 percent of the school's stock,
or a change in the not-for-profit or for-profit status of a school shall constitute a change
of ownership. Within 30 days of a change of ownership, the school must submit a
registration renewal application, all usual and ordinary information and materials for an
initial registration, and applicable registration fees for a new institution.
new text end

Sec. 4.

Minnesota Statutes 2006, section 136A.64, is amended to read:

136A.64 INFORMATION.

Subdivision 1.

deleted text begin Schools to provide deleted text end Information new text begin required for registration new text end .

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,
deleted text begin requirements for admission, enrollments, tuition charge, refund policies, curriculum,
degrees granted, and faculty employed. The office shall have the authority to verify the
accuracy of the information submitted to it by inspection or any other means it deems
necessary. deleted text end new text begin the following, which shall be accompanied by an affidavit attesting to its
accuracy and truthfulness:
new text end

new text begin (1) articles of incorporation, constitution, bylaws, or other operating documents;
new text end

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

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

new text begin (4) 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;
new text end

new text begin (5) all current promotional and recruitment materials and advertisements; and
new text end

new text begin (6) the current school catalog and, if not contained in the catalog;
new text end

new text begin (i) the members of the board of trustees or directors, if any;
new text end

new text begin (ii) the current institutional officers;
new text end

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

new text begin (iv) a description of all school facilities;
new text end

new text begin (v) a description of all current course offerings;
new text end

new text begin (vi) all requirements for satisfactory completion of courses, programs, and degrees;
new text end

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

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

new text begin (ix) the school's policy about refunds and adjustments;
new text end

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

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

Subd. 2.

Financial records.

The office shall not disclose financial records new text begin or
accreditation reports new text end provided to it by a school pursuant to this section except for the
purpose of defending, at hearings pursuant to chapter 14, or other appeal proceedings, its
decision to approve or not to approve the granting of degrees or the use of a name by the
school. Section 15.17, subdivision 4, shall not apply to such records.

new text begin Subd. 3. new text end

new text begin Additional information. new text end

new text begin If the office is unable to determine the nature
and activities of a school on the basis of the information in subdivision 1, the office shall
notify the school of additional information needed.
new text end

new text begin Subd. 4. new text end

new text begin Verification of information. new text end

new text begin The office may verify the accuracy of
submitted information by inspection, visitation, or any other means it considers necessary.
new text end

new text begin Subd. 5. new text end

new text begin Public information. new text end

new text begin All information submitted to the office is public
information except financial and accreditation records and information. The office may
disclose financial records or information to defend its decision to approve or disapprove
granting of degrees or the use of a name or its decisions to revoke such approval at a
hearing under chapter 14 or other legal proceedings.
new text end

new text begin Subd. 6. new text end

new text begin Late registration penalty. new text end

new text begin Applications for renewal for any registration
received after the deadline date specified in the renewal materials provided by the office
are subject to a late fee equal to 20 percent of the annual registration renewal fee.
new text end

new text begin Subd. 7. new text end

new text begin Out of state expenses. new text end

new text begin A school shall reimburse the office for actual costs
associated with a site evaluation visit outside Minnesota if the visit is necessary under
subdivision 1 or 3.
new text end

Sec. 5.

new text begin [136A.645] SCHOOL CLOSURE.
new text end

new text begin When a school decides to cease postsecondary education operations, it must
cooperate with the office in assisting students to find alternative means to complete their
studies with a minimum of disruption, and inform the office of the following:
new text end

new text begin (1) the planned date for termination of postsecondary education operations;
new text end

new text begin (2) the planned date for the transfer of the student records;
new text end

new text begin (3) confirmation of the name and address of the organization to receive and hold
the student records; and
new text end

new text begin (4) the official at the organization receiving the student records who is designated to
provide official copies of records or transcripts upon request.
new text end

new text begin Upon notice from a school of its intention to cease operations, the office shall notify the
school of the date on which it must cease the enrollment of students and all postsecondary
educational operations.
new text end

Sec. 6.

new text begin [136A.646] ADDITIONAL SECURITY.
new text end

new text begin In the event any registered institution 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(f), or a Letter of Credit Alternative,
Code of Federal Regulations, title 34, section 668.175(c), such institution shall provide a
surety bond conditioned upon the faithful performance of all contracts and agreements
with students in a sum equal to the Letter of Credit required by the United States
Department of Education in the Letter of Credit Alternative, but in no event shall the bond
be less than $10,000 and not more than $250,000.
new text end

Sec. 7.

Minnesota Statutes 2006, section 136A.65, subdivision 1, is amended to read:

Subdivision 1.

Prohibition.

No school subject to registration shall grant a degree
unless such degree new text begin and its underlying curriculum new text end is approved by the office, nor shall
any school subject to registration use the name "college," "academy," "institute" or
"university" in its name without approval by the office.

Sec. 8.

Minnesota Statutes 2006, section 136A.65, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Accreditation; requirement. new text end

new text begin No school shall be registered or authorized
to offer any degree at any level unless such school is accredited by an agency recognized
by the United States Department of Education for purposes of eligibility to participate in
federal financial aid programs, Title IV. 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 end

Sec. 9.

Minnesota Statutes 2006, section 136A.65, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin School criteria. new text end

new text begin A school desiring to be registered and to have its degree
or degrees and name approved must substantially meet the following criteria:
new text end

new text begin (1) the school has an organizational framework with administrative and teaching
personnel to provide the educational programs it purports to offer;
new text end

new text begin (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 purported, and to provide educational programs leading to degrees
as purported;
new text end

new text begin (3) the school operates in conformity with generally accepted accounting principles;
new text end

new text begin (4) the school provides an educational program leading to the degree it purports to
offer;
new text end

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

new text begin (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;
new text end

new text begin (7) the school uses for promotion and student recruitment only publications
and advertisements that 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;
new text end

new text begin (8) the school's agents who are paid at least in part to recruit students for the school
identify themselves as agents of the school when talking to or corresponding with students
and prospective students;
new text end

new text begin (9) the school provides information to students and prospective students concerning:
new text end

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

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

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

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

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

new text begin (10) the school provides the following information to the office relating to all
degrees:
new text end

new text begin (i) the name of the degree and the formal recognition to be awarded;
new text end

new text begin (ii) the location where the degree will be offered;
new text end

new text begin (iii) the proposed implementation date of the degree;
new text end

new text begin (iv) the admission requirements for the degree;
new text end

new text begin (v) the number of credits required for the degree;
new text end

new text begin (vi) the projected enrollment in the degree program for a period of five years;
new text end

new text begin (vii) the degree curriculum, including course syllabi or outlines;
new text end

new text begin (viii) the academic and administrative mechanisms planned for monitoring the
quality of the proposed degree;
new text end

new text begin (ix) a statement as to the satisfaction of professional licensure criteria, if applicable;
new text end

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

new text begin (xi) a rationale showing that the degree is consistent with the school's mission and
goals.
new text end

Sec. 10.

Minnesota Statutes 2006, section 136A.65, is amended by adding a
subdivision to read:

new text begin Subd. 5. new text end

new text begin Limits on school name. new text end

new text begin A school may use the term "academy" or
"institute" in its name without meeting any additional requirements. A school may use
the term "college" in its name if it offers at least one program leading to an associate
degree. A school may use the term "university" in its name if it offers at least one program
leading to a master's or doctorate degree.
new text end

Sec. 11.

Minnesota Statutes 2006, section 136A.65, is amended by adding a
subdivision to read:

new text begin Subd. 6. new text end

new text begin Grandfathering of name. new text end

new text begin Names used before August 1, 2007, by a school
organized, operating, and using the term "academy," "institute," "college," or "university"
in its name may continue using such term whether or not it offers a program leading to
a degree.
new text end

Sec. 12.

Minnesota Statutes 2006, section 136A.65, is amended by adding a
subdivision to read:

new text begin Subd. 7. new text end

new text begin Conditional approval. new text end

new text begin The office may grant conditional approval for a
degree or use of a term in its name for a period of less than one year if doing so would be
in the best interests of currently enrolled students or prospective students.
new text end

Sec. 13.

Minnesota Statutes 2006, section 136A.65, is amended by adding a
subdivision to read:

new text begin Subd. 8. new text end

new text begin Disapproval of registration; appeal. new text end

new text begin If a school's degree or use of a term
in its name is disapproved by the office, the school may request a hearing under chapter
14. The request must be in writing and made to the office within 30 days of the date
the school is notified of the disapproval.
new text end

new text begin (a) The office may refuse to renew, revoke, or suspend registration, approval of
a school's degree, or use of a regulated term in its name by giving written notice and
reasons to the school. The school may request a hearing under chapter 14. If a hearing is
requested, no revocation or suspension shall take effect until after the hearing.
new text end

new text begin (b) Revocation or suspension of registration or approval may be for one or more
of the following reasons:
new text end

new text begin (1) violating the provisions of sections 136A.61 to 136A.71;
new text end

new text begin (2) providing false, misleading, or incomplete information to the office;
new text end

new text begin (3) presenting to prospective students information about the school that is false,
fraudulent, misleading, deceptive, or inaccurate in a material respect; or
new text end

new text begin (4) refusing to allow reasonable inspection or to supply reasonable information after
a written request by the office has been received.
new text end

Sec. 14.

Minnesota Statutes 2006, section 136A.657, is amended by adding a
subdivision to read:

new text begin Subd. 4. new text end

new text begin Statement required; religious nature. new text end

new text begin Any degree awarded upon
completion of a religiously exempt program shall include descriptive language to make
the religious nature of the award clear.
new text end

Sec. 15.

Minnesota Statutes 2006, section 136A.66, is amended to read:

136A.66 LIST.

The office shall maintain a list of deleted text begin schools deleted text end new text begin registered institutions new text end authorized to grant
degrees and schools authorized to use the name "college," "academy," "institute" or
"university," and shall make such list available to the public.

Sec. 16.

Minnesota Statutes 2006, section 136A.67, is amended to read:

136A.67 UNAUTHORIZED REPRESENTATIONS.

deleted text begin 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 state of Minnesota
except that any deleted text end new text begin A new text end school which is duly registered with the office, or any of its officials
or employees, may represent new text begin in advertising and shall disclose in catalogs, applications,
and enrollment materials new text end that the school is registered with the office new text begin by prominently
displaying the following statement: "(Name of school) is registered as a private institution
with the Minnesota Office of Higher Education 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" new text end .

Sec. 17.

Minnesota Statutes 2006, section 136A.68, is amended to read:

136A.68 RECORDS.

deleted text begin After August 1, 1975, all schools located in this state must maintain permanent
records of all students enrolled therein at any time. The office may require schools to
provide a plan acceptable to the office for preserving all such records for at least ten years.
The office may require that such plan include the filing of a continuous surety bond or a
deposit of funds in trust in an amount not to exceed $20,000 for the purpose of preserving
records after such school ceases to exist. deleted text end new text begin 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:
new text end

new text begin (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 manner approved
by the office;
new text end

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

new text begin (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
new text end

new text begin (4) a continuous surety bond must be filed with the office in an amount not to exceed
$20,000 if the school has no binding agreement approved by the office for preserving
student records. The bond shall run to the state of Minnesota.
new text end

Sec. 18.

Minnesota Statutes 2006, section 136A.69, is amended to read:

136A.69 FEES.

new text begin Subdivision 1. new text end

new text begin Registration fees. new text end

The office shall collect reasonable registration
fees that are sufficient to recover, but do not exceed, its costs of administering the
registration program. The office shall charge $1,100 for initial registration fees and $950
for annual renewal fees.

new text begin Subd. 2. new text end

new text begin Degree level addition fee. new text end

new text begin The office processing fee for adding a degree
level to an existing program is $2,000 per program.
new text end

new text begin Subd. 3. new text end

new text begin Program addition fee. new text end

new text begin The office processing fee for adding a program
that represents a significant departure in the objectives, content, or method of delivery of
programs that are currently offered by the school is $500 per program.
new text end

new text begin Subd. 4. new text end

new text begin Visit or consulting fee. new text end

new text begin If the office determines that a fact-finding visit
or outside consultant is necessary to review or evaluate any new or revised program, the
office shall be reimbursed for the expenses incurred related to the review as follows:
new text end

new text begin (1) $300 for the team base fee or for a paper review conducted by a consultant if the
office determines that a fact-finding visit is not required;
new text end

new text begin (2) $300 for each day or part thereof on site per team member; and
new text end

new text begin (3) the actual cost of customary meals, lodging, and related travel expenses incurred
by team members.
new text end

new text begin Subd. 5. new text end

new text begin Modification fee. new text end

new text begin The fee for modification of any existing program is
$100 and is due if there is:
new text end

new text begin (1) an increase or decrease of 25 percent or more from the original date of program
approval, in clock hours, credit hours, or calendar length of an existing program;
new text end

new text begin (2) a change in academic measurement from clock hours to credit hours or vice
versa; or
new text end

new text begin (3) an addition or alteration of courses that represents a 25 percent change or more in
the objectives, content, or methods of delivery.
new text end

Sec. 19.

new text begin [136A.705] PENALTY.
new text end

new text begin The director may assess fines for violations of a provision of sections 136A.61 to
136A.71. Each day's failure to comply with a provision of sections 136A.61 to 136A.71
shall be a separate violation and fines shall not exceed $500 per day per violation.
Amounts received under this section must be deposited in the special revenue fund and are
appropriated for the purposes in sections 136A.61 to 136A.71.
new text end

Sec. 20.

Minnesota Statutes 2006, section 141.21, subdivision 1a, is amended to read:

Subd. 1a.

Office new text begin of Higher Education; office new text end .

"Office new text begin of Higher Education new text end " new text begin or
"office" new text end means the Minnesota Office of Higher Education.

Sec. 21.

Minnesota Statutes 2006, section 141.21, subdivision 5, is amended to read:

Subd. 5.

School.

"School" means any person, within or outside the state, who
maintains, advertises, new text begin administers, new text end solicits new text begin for new text end , or conducts any program deleted text begin for profit deleted text end at deleted text begin any deleted text end
new text begin less than an associate degree new text end level deleted text begin other than baccalaureate or graduate programs, and is
not specifically exempted by sections 141.21 to deleted text end new text begin is not registered as a private institution
under sections 136A.61 to 136A.71 and is not specifically exempted by sections new text end 141.35 new text begin
or 141.37 new text end .

Sec. 22.

Minnesota Statutes 2006, section 141.25, subdivision 1, is amended to read:

Subdivision 1.

Required.

A school must not maintain, advertise, solicit for,
new text begin administer, new text end or conduct any program in Minnesota without first obtaining a license from
the office.

Sec. 23.

Minnesota Statutes 2006, section 141.25, subdivision 5, is amended to read:

Subd. 5.

Bond.

(a) No license shall be issued to any 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) 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 nor greater than $250,000, except that a school may deposit a greater
amount at its own discretion. A 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, unless the school maintains a surety bond equal to at least
$250,000. A 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 school having a license for
the sole purpose of recruiting students in Minnesota shall be only that paid to the school
by the students recruited from Minnesota.

(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 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 finance a
sum equal to the amount of the required surety bond in cash, 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 school to post and maintain the required surety bond or deposit under
paragraph (d) deleted text begin may deleted text end new text begin shall new text end result in denial, suspension, or revocation of the school's license.

Sec. 24.

Minnesota Statutes 2006, section 141.25, subdivision 7, is amended to read:

Subd. 7.

Minimum standards.

A license shall be issued if the office first
determines:

(1) that the applicant has a sound financial condition with sufficient resources
available to:

(i) meet the school's financial obligations;

(ii) refund all tuition and other charges, within a reasonable period of time, in the
event of dissolution of the school or in the event of any justifiable claims for refund against
the school by the student body;

(iii) provide adequate service to its students and prospective students; and

(iv) maintain and support the school;

(2) that the applicant has satisfactory facilities with sufficient tools and equipment
and the necessary number of work stations to prepare adequately the students currently
enrolled, and those proposed to be enrolled;

(3) that the applicant employs a sufficient number of qualified teaching personnel to
provide the educational programs contemplated;

(4) that the school has an organizational framework with administrative and
instructional personnel to provide the programs and services it intends to offer;

(5) that the premises and conditions under which the students work and study are
sanitary, healthful, and safe, according to modern standards;

(6) that the quality and content of each occupational course or program of study
provides education and adequate preparation to enrolled students for entry level positions
in the occupation for which prepared;

(7) that the living quarters which are owned, maintained, new text begin recommended, new text end or approved
by the applicant for students are sanitary and safe;

(8) that the contract or enrollment agreement used by the school complies with
the provisions in section 141.265;

(9) that contracts and agreements do not contain a wage assignment provision or a
confession of judgment clause; and

(10) that there has been no adjudication of fraud or misrepresentation in any
criminal, civil, or administrative proceeding in any jurisdiction against the school or its
owner, officers, agents, or sponsoring organization.

Sec. 25.

Minnesota Statutes 2006, section 141.25, subdivision 9, is amended to read:

Subd. 9.

Catalog, brochure, or electronic display.

Before a license is issued to
a school, the school shall furnish to the office a catalog, brochure, or electronic display
including:

(1) identifying data, such as volume number and date of publication;

(2) name and address of the school and its governing body and officials;

(3) a calendar of the school showing legal holidays, beginning and ending dates of
each course quarter, term, or semester, and other important dates;

(4) the school policy and regulations on enrollment including dates and specific
entrance requirements for each program;

(5) the school policy and regulations about leave, absences, class cuts, make-up
work, tardiness, and interruptions for unsatisfactory attendance;

(6) the school policy and regulations about standards of progress for the student
including the grading system of the school, the minimum grades considered satisfactory,
conditions for interruption for unsatisfactory grades or progress, a description of any
probationary period allowed by the school, and conditions of reentrance for those
dismissed for unsatisfactory progress;

(7) the school policy and regulations about student conduct and conditions for
dismissal for unsatisfactory conduct;

(8) a detailed schedule of fees, charges for tuition, books, supplies, tools, student
activities, laboratory fees, service charges, rentals, deposits, and all other charges;

(9) the school policy and regulations, including an explanation of section 141.271,
about refunding tuition, fees, and other charges if the student does not enter the program,
withdraws from the program, or the program is discontinued;

(10) a description of the available facilities and equipment;

(11) a course outline syllabus for each course offered showing course objectives,
subjects or units in the course, type of work or skill to be learned, and approximate time,
hours, or credits to be spent on each subject or unit;

(12) the school policy and regulations about granting credit for previous education
and preparation;

(13) new text begin a notice to students relating to the transferability of any credits earned at the
school to other institutions;
new text end

new text begin (14) new text end a procedure for investigating and resolving student complaints; and

deleted text begin (14) deleted text end new text begin (15) new text end the name and address of the Minnesota Office of Higher Education.

A school that is exclusively a distance education school is exempt from clauses
(3) and (5).

Sec. 26.

Minnesota Statutes 2006, section 141.25, subdivision 10, is amended to read:

Subd. 10.

Placement records.

(a) Before a license is deleted text begin issued deleted text end new text begin reissued new text end to a school
that offers, advertises or implies a placement service, the school shall file with the office
for the past year and thereafter at reasonable intervals determined by the office, a certified
copy of the school's placement record, containing a list of graduates, a description of their
jobs, names of their employers, and other information as the office may prescribe.

(b) Each school that offers a placement service shall furnish to each prospective
student, new text begin upon request, new text end prior to enrollment, written information concerning the percentage
of the previous year's graduates who were placed in the occupation for which prepared or
in related employment.

Sec. 27.

Minnesota Statutes 2006, section 141.25, subdivision 12, is amended to read:

Subd. 12.

Permanent records.

A school licensed under this chapter 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 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 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 school ceases to exist; and

(4) a continuous surety bond must be filed with the office in an amount not to exceed
$20,000 if the school has no binding agreement new text begin approved by the office new text end for preserving
student records deleted text begin or a trust must be arranged if the school ceases to exist deleted text end . new text begin The bond shall run
to the state of Minnesota.
new text end

Sec. 28.

Minnesota Statutes 2006, section 141.255, subdivision 2, is amended to read:

Subd. 2.

Renewal licensure fee; late fee.

(a) The office processing fee for a
renewal licensure application is:

(1) for a category A school, as determined by the office, the fee is $865 if the school
offers one program or $1,150 if the school offers two or more programs; and

(2) for a category B or C school, as determined by the office, the fee is $430 if the
school offers one program or $575 if the school offers two or more programs.

(b) If a license renewal application is not received by the office by the close of
business at least 60 days before the expiration of the current license, a late fee of $100
per business day new text begin , not to exceed $3,000, new text end shall be assessed.

Sec. 29.

Minnesota Statutes 2006, section 141.265, subdivision 2, is amended to read:

Subd. 2.

Contract information.

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

(1) the name and address of the 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 school unless canceled under
section 141.271;

(3) the 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 of the seller to which the notice should
be sent or delivered.

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

Sec. 30.

Minnesota Statutes 2006, section 141.271, subdivision 10, is amended to read:

Subd. 10.

Cancellation occurrence.

Written notice of cancellation shall take place
on the date the letter of cancellation is postmarked or, in the cases where the notice is hand
carried, it shall occur on the date the notice is delivered to the school. If a student has not
attended deleted text begin classes deleted text end new text begin class new text end for a period of 21 consecutive days new text begin without contacting the school to
indicate an intent to continue in school or otherwise making arrangements concerning the
absence new text end , the student is considered to have withdrawn from school for all purposes as of
the student's last documented date of attendance.

Sec. 31.

Minnesota Statutes 2006, section 141.271, subdivision 12, is amended to read:

Subd. 12.

Instrument not to be negotiated.

A school shall not negotiate any
promissory instrument received as payment of tuition or other charge prior to completion
of 50 percent of the program deleted text begin . deleted text end new text begin , except that new text end prior to that time, instruments may be transferred
by assignment to purchasers who shall be subject to all defenses available against the
school named as payee.

Sec. 32.

Minnesota Statutes 2006, section 141.28, subdivision 1, is amended to read:

Subdivision 1.

deleted text begin Not to advertise state approval deleted text end new text begin Disclosure required new text end .

deleted text begin Schools,
agents of schools, and solicitors may not advertise or represent in writing or orally that
such school is approved or accredited by the state of Minnesota, except that any deleted text end new text begin A new text end school,
agent, or solicitor may deleted text begin advertise deleted text end new text begin represent in advertisements and shall disclose in its
catalogs, applications, and enrollment materials new text end that the school deleted text begin and solicitor have been deleted text end
new text begin is new text end duly licensed by the state deleted text begin using deleted text end new text begin by prominently displaying new text end the following deleted text begin language deleted text end new text begin
statement new text end :

"(Name of school) is licensed as a private career school with the Minnesota Office of
Higher Education. Licensure is not an endorsement of the institution. Credits earned at the
institution may not transfer to all other institutions. deleted text begin The educational programs may not
meet the needs of every student or employer. deleted text end "

Sec. 33.

Minnesota Statutes 2006, section 141.32, is amended to read:

141.32 PENALTY.

deleted text begin Violation of a provision of this chapter shall be a misdemeanor. Each day's failure
to comply with this chapter shall be a separate violation. The office shall adopt rules
establishing a list of civil penalties and the fine associated with each violation. Fines
for violations shall not exceed $500 per day per violation. deleted text end new text begin The director may assess
fines for violations of a provision of this chapter. Each day's failure to comply with this
chapter shall be a separate violation and fines shall not exceed $500 per day per violation.
Amounts received under this section must be deposited in the special revenue fund and are
appropriated for the purposes of this chapter.
new text end

Sec. 34.

Minnesota Statutes 2006, section 141.35, is amended to read:

141.35 EXEMPTIONS.

Sections 141.21 to new text begin 141.34 new text end shall not apply to the following:

(1) public postsecondary institutions;

(2) deleted text begin private deleted text end postsecondary institutions registered under sections 136A.61 to
136A.71 deleted text begin that are nonprofit, or that are for profit and registered under sections 136A.61
to 136A.71 as of December 31, 1998, or are approved to offer exclusively baccalaureate
or postbaccalaureate programs deleted text end ;

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

(7) schools licensed by boards authorized under Minnesota law to issue licenses;

(8) 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) schools engaged exclusively in the teaching of purely avocational, recreational,
or remedial subjects as determined by the office;

(10) deleted text begin driver training schools and instructors as defined in section 171.33, subdivisions
1 and 2;
deleted text end

deleted text begin (11) deleted text end classes, courses, or programs conducted by a bona fide trade, professional, or
fraternal organization, solely for that organization's membership;

deleted text begin (12) deleted text end new text begin (11) new text end 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;

deleted text begin (13) deleted text end new text begin (12) new text end 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;

deleted text begin (14) deleted text end new text begin (13) new text end classes, courses, or programs intended to prepare students to sit for
undergraduate, graduate, postgraduate, or occupational licensing and occupational
entrance examinations;

deleted text begin (15) deleted text end new text begin (14) new text end 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;

deleted text begin (16) deleted text end new text begin (15) new text end classes, courses, or programs providing instruction in personal
development, modeling, or acting;

deleted text begin (17) deleted text end new text begin (16) new text end 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; and

deleted text begin (18) deleted text end new text begin (17) new text end 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.

Sec. 35.

new text begin [141.37] EXEMPTION; RELIGIOUS SCHOOLS.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption. new text end

new text begin Any school or any department or branch of a school
(1) that is substantially owned, operated, or supported by a bona fide church or religious
organization; (2) whose programs are primarily designed for, aimed at, and attended by
persons who sincerely hold or seek to learn the particular religious faith or beliefs of that
church or religious organizations; and (3) whose programs are primarily intended to
prepare its students to become ministers of, to enter into some other vocation closely
related to, or to conduct their lives in consonance with the particular faith of that church or
religious organization is exempt from the provisions of sections 141.21 to 141.34.
new text end

new text begin Subd. 2. new text end

new text begin Limitations. new text end

new text begin This exemption shall not extend to any school or to any
department or branch of a school or program of such school that, through advertisements
or solicitations, represents to any students or prospective students that the school, its
aims, goals, missions, or purposes, or its programs are different from those described in
subdivision 1. This exemption shall not extend to any school that represents to any student
or prospective student that the major purpose of its programs is to prepare the student for a
vocation not closely related to that particular religious faith, or to provide the student with
a general educational program recognized by other schools or the broader educational,
business, or social community as being substantially equivalent to the educational
programs offered by schools or departments or branches of schools that are not religious
in nature and are not exempt from chapter 141 and rules adopted under this chapter.
new text end

new text begin Subd. 3. new text end

new text begin Scope. new text end

new text begin Nothing in this chapter or the rules adopted under it shall be
interpreted as permitting the office to determine the truth or falsity of any particular set
of religious beliefs.
new text end

new text begin Subd. 4. new text end

new text begin Descriptive language required. new text end

new text begin Any certificate, diploma, degree, or other
formal recognition awarded upon completion of any religiously exempt program shall
include such descriptive language as to make the religious nature of the award clear.
new text end

Sec. 36. new text begin EFFECTIVE DATE; TRANSITION PROCESS.
new text end

new text begin Sections 1 to 35 are effective July 1, 2007. Schools currently licensed under
Minnesota Statutes, chapter 141, that qualify for private institution registration after July
1, 2007, shall apply for and complete the process for registration prior to the expiration
of their current private career school license. Schools currently registered as private
institutions under Minnesota Statutes, sections 136A.61 to 136A.71, that are required to
obtain a private career school license after July 1, 2007, shall apply for and complete the
process for licensure prior to the expiration of the current registration, but in any event,
no later than December 31, 2007. The office is authorized to extend existing license
or registration for a reasonable period of time to allow for the completion of the new
processes when necessary.
new text end