SECOND REGULAR SESSION

SENATE COMMITTEE SUBSTITUTE FOR

HOUSE COMMITTEE SUBSTITUTE FOR

HOUSE BILL NO. 1042

96TH GENERAL ASSEMBLY


 

     Reported from the Committee on Education, April 19, 2012, with recommendation that the Senate Committee Substitute do pass.

 

TERRY L. SPIELER, Secretary.

4431S.04C


 

AN ACT

To repeal sections 173.005, 173.040, 173.606, 173.608, 173.612, 173.614, 173.616, and 173.618, RSMo, and to enact in lieu thereof eight new sections relating to duties prescribed to the coordinating board for higher education, with a penalty provision.


 

Be it enacted by the General Assembly of the State of Missouri, as follows:

            Section A.  Sections 173.005, 173.040, 173.606, 173.608, 173.612, 173.614, 173.616, and 173.618, RSMo, are repealed and eight new sections enacted in lieu thereof, to be known as sections 173.005, 173.040, 173.606, 173.608, 173.612, 173.614, 173.616, and 173.618, to read as follows:

            173.005.  1.  There is hereby created a "Department of Higher Education", and the division of higher education of the department of education is abolished and all its powers, duties, functions, personnel and property are transferred as provided by the Reorganization Act of 1974, Appendix B, RSMo.  

            2.  The commission on higher education is abolished and all its powers, duties, personnel and property are transferred by type I transfer to the "Coordinating Board for Higher Education", which is hereby created, and the coordinating board shall be the head of the department.  The coordinating board shall consist of nine members appointed by the governor with the advice and consent of the senate, and not more than five of its members shall be of the same political party.  None of the members shall be engaged professionally as an educator or educational administrator with a public or private institution of higher education at the time appointed or during his term.  Moreover, no person shall be appointed to the coordinating board who shall not be a citizen of the United States, and who shall not have been a resident of the state of Missouri two years next prior to appointment, and at least one but not more than two persons shall be appointed to said board from each congressional district.  The term of service of a member of the coordinating board shall be six years and said members, while attending the meetings of the board, shall be reimbursed for their actual expenses.  Notwithstanding any provision of law to the contrary, nothing in this section relating to a change in the composition and configuration of congressional districts in this state shall prohibit a member who is serving a term on August 28, 2011, from completing his or her term.  The coordinating board may, in order to carry out the duties prescribed for it in subsections 1, 2, 3, 7, and 8 of this section, employ such professional, clerical and research personnel as may be necessary to assist it in performing those duties, but this staff shall not, in any fiscal year, exceed twenty-five full-time equivalent employees regardless of the source of funding.  In addition to all other powers, duties and functions transferred to it, the coordinating board for higher education shall have the following duties and responsibilities:

            (1)  The coordinating board for higher education shall have approval of proposed new degree programs to be offered by the state institutions of higher education;

            (2)  The coordinating board for higher education may promote and encourage the development of cooperative agreements between Missouri public four-year institutions of higher education which do not offer graduate degrees and Missouri public four-year institutions of higher education which do offer graduate degrees for the purpose of offering graduate degree programs on campuses of those public four-year institutions of higher education which do not otherwise offer graduate degrees.  Such agreements shall identify the obligations and duties of the parties, including assignment of administrative responsibility.  Any diploma awarded for graduate degrees under such a cooperative agreement shall include the names of both institutions inscribed thereon.  Any cooperative agreement in place as of August 28, 2003, shall require no further approval from the coordinating board for higher education.  Any costs incurred with respect to the administrative provisions of this subdivision may be paid from state funds allocated to the institution assigned the administrative authority for the program.  The provisions of this subdivision shall not be construed to invalidate the provisions of subdivision (1) of this subsection;

            (3)  In consultation with the heads of the institutions of higher education affected and against a background of carefully collected data on enrollment, physical facilities, manpower needs, institutional missions, the coordinating board for higher education shall establish guidelines for appropriation requests by those institutions of higher education; however, other provisions of the Reorganization Act of 1974 notwithstanding, all funds shall be appropriated by the general assembly to the governing board of each public four-year institution of higher education which shall prepare expenditure budgets for the institution;

            (4)  No new state-supported senior colleges or residence centers shall be established except as provided by law and with approval of the coordinating board for higher education;

            (5)  The coordinating board for higher education shall establish admission guidelines consistent with institutional missions;

            (6)  The coordinating board for higher education shall require all public two-year and four-year higher education institutions to replicate best practices in remediation identified by the coordinating board and institutions from research undertaken by regional educational laboratories, higher education research organizations, and similar organizations with expertise in the subject, and identify and reduce methods that have been found to be ineffective in preparing or retaining students or that delay students from enrollment in college-level courses;

            (7)  The coordinating board shall establish policies and procedures for institutional decisions relating to the residence status of students;

            [(7)]  (8)  The coordinating board shall establish guidelines to promote and facilitate the transfer of students between institutions of higher education within the state and [shall ensure that as of the 2008-09 academic year, in order to receive increases in state appropriations, all approved public two- and four-year public institutions shall work with the commissioner of higher education to establish agreed-upon competencies for all entry-level collegiate courses in English, mathematics, foreign language, sciences, and social sciences associated with an institution's general education core and that], with the assistance of the committee on transfer and articulation, shall require all public two-year and four-year higher education institutions to create by July 1, 2014, a statewide core transfer library of at least twenty-five lower division courses across all institutions that are transferable among all public higher education institutions.  The coordinating board shall establish policies and procedures to ensure such courses are accepted in transfer among public institutions and treated as equivalent to similar courses at the receiving institutions.  The coordinating board shall develop a policy to foster reverse transfer for any student who has accumulated enough hours in combination with at least one public higher education institution in Missouri that offers an associate degree and one public four-year higher education institution in the prescribed courses sufficient to meet the public higher education institution's requirements to be awarded an associate degree.  The department of elementary and secondary education shall [align such competencies with] maintain the alignment of the assessments found in section 160.518 and successor assessments with the competencies previously established under this subdivision for entry-level collegiate courses in English, mathematics, foreign language, sciences, and social sciences associated with an institution's general education core;

            [(8)]  (9)  The coordinating board shall collect the necessary information and develop comparable data for all institutions of higher education in the state.  The coordinating board shall use this information to delineate the areas of competence of each of these institutions and for any other purposes deemed appropriate by the coordinating board;

            [(9)]  (10)  Compliance with requests from the coordinating board for institutional information and the other powers, duties and responsibilities, herein assigned to the coordinating board, shall be a prerequisite to the receipt of any funds which the coordinating board is responsible for administering;

            [(10)]  (11)  If any institution of higher education in this state, public or private, willfully fails or refuses to follow any lawful guideline, policy or procedure established or prescribed by the coordinating board, or knowingly deviates from any such guideline, or knowingly acts without coordinating board approval where such approval is required, or willfully fails to comply with any other lawful order of the coordinating board, the coordinating board may, after a public hearing, withhold or direct to be withheld from that institution any funds the disbursement of which is subject to the control of the coordinating board, or may remove the approval of the institution as an approved institution within the meaning of section 173.1102.  If any such public institution willfully disregards board policy, the commissioner of higher education may order such institution to remit a fine in an amount not to exceed one percent of the institution's current fiscal year state operating appropriation to the board.  The board shall hold such funds until such time that the institution, as determined by the commissioner of higher education, corrects the violation, at which time the board shall refund such amount to the institution.  If the commissioner determines that the institution has not redressed the violation within one year, the fine amount shall be deposited into the general revenue fund, unless the institution appeals such decision to the full coordinating board, which shall have the authority to make a binding and final decision, by means of a majority vote, regarding the matter.  However, nothing in this section shall prevent any institution of higher education in this state from presenting additional budget requests or from explaining or further clarifying its budget requests to the governor or the general assembly; and

            [(11)]  (12)  (a)  As used in this subdivision, the term "out-of-state public institution of higher education" shall mean an education institution located outside of Missouri that:

            a.  Is controlled or administered directly by a public agency or political subdivision or is classified as a public institution by the state;

            b.  Receives appropriations for operating expenses directly or indirectly from a state other than Missouri;

            c.  Provides a postsecondary course of instruction at least six months in length leading to or directly creditable toward a degree or certificate;

            d.  Meets the standards for accreditation by an accrediting body recognized by the United States Department of Education or any successor agency; and

            e.  Permits faculty members to select textbooks without influence or pressure by any religious or sectarian source.  

            (b)  No later than July 1, 2008, the coordinating board shall promulgate rules regarding:

            a.  The board's approval process of proposed new degree programs and course offerings by any out-of-state public institution of higher education seeking to offer degree programs or course work within the state of Missouri; and

            b.  The board's approval process of degree programs and courses offered by any out-of-state public institutions of higher education that, prior to July 1, 2008, were approved by the board to operate a school in compliance with the provisions of sections 173.600 to 173.618.  The rules shall ensure that, as of July 1, 2008, all out-of-state public institutions seeking to offer degrees and courses within the state of Missouri are evaluated in a manner similar to Missouri public higher education institutions.  Such out-of-state public institutions shall be held to standards no lower than the standards established by the coordinating board for program approval and the policy guidelines of the coordinating board for data collection, cooperation, and resolution of disputes between Missouri institutions of higher education under this section.  Any such out-of-state public institutions of higher education wishing to continue operating within this state must be approved by the board under the rules promulgated under this subdivision.  The coordinating board may charge and collect fees from out-of-state public institutions to cover the costs of reviewing and assuring the quality of programs offered by out-of-state public institutions.  Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028.  This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly under chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2007, shall be invalid and void.

            (c)  Nothing in this subdivision or in section 173.616 shall be construed or interpreted so that students attending an out-of-state public institution are considered to be attending a Missouri public institution of higher education for purposes of obtaining student financial assistance.

            3.  The coordinating board shall meet at least four times annually with an advisory committee who shall be notified in advance of such meetings.  The coordinating board shall have exclusive voting privileges.  The advisory committee shall consist of thirty-two members, who shall be the president or other chief administrative officer of the University of Missouri; the chancellor of each campus of the University of Missouri; the president of each state-supported four-year college or university, including Harris-Stowe State University, Missouri Southern State University, Missouri Western State University, and Lincoln University; the president of Linn State Technical College; the president or chancellor of each public community college district; and representatives of each of five accredited private institutions selected biennially, under the supervision of the coordinating board, by the presidents of all of the state's privately supported institutions; but always to include at least one representative from one privately supported community college, one privately supported four-year college, and one privately supported university.  The conferences shall enable the committee to advise the coordinating board of the views of the institutions on matters within the purview of the coordinating board.  

            4.  The University of Missouri, Lincoln University, and all other state-governed colleges and universities, chapters 172, 174, 175, and others, are transferred by type III transfers to the department of higher education subject to the provisions of subsection 2 of this section.  

            5.  The state historical society, chapter 183, is transferred by type III transfer to the University of Missouri.

            6.  The state anatomical board, chapter 194, is transferred by type II transfer to the department of higher education.  

            7.  All the powers, duties and functions vested in the division of public schools and state board of education relating to community college state aid and the supervision, formation of districts and all matters otherwise related to the state's relations with community college districts and matters pertaining to community colleges in public school districts, chapters 163, 178, and others, are transferred to the coordinating board for higher education by type I transfer.  Provided, however, that all responsibility for administering the federal-state programs of vocational-technical education, except for the 1202a postsecondary educational amendments of 1972 program, shall remain with the department of elementary and secondary education.  The department of elementary and secondary education and the coordinating board for higher education shall cooperate in developing the various plans for vocational-technical education; however, the ultimate responsibility will remain with the state board of education.  

            8.  All the powers, duties, functions, and properties of the state poultry experiment station, chapter 262, are transferred by type I transfer to the University of Missouri, and the state poultry association and state poultry board are abolished.  In the event the University of Missouri shall cease to use the real estate of the poultry experiment station for the purposes of research or shall declare the same surplus, all real estate shall revert to the governor of the state of Missouri and shall not be disposed of without legislative approval.

            173.040.  The coordinating board is directed to submit a written report to the governor or governor-elect at least forty-five days prior to the opening of each regular session of the general assembly and to submit the same report to the general assembly within five days after the opening of each regular session.  The report shall include:

            (1)  A statement of the initial coordinated plan for higher education in Missouri, together with subsequent changes and implementations;

            (2)  A review of recent changes in enrollments and programs among institutions of higher education in the state;

            (3)  A review of requests and recommendations made by the coordinating board to institutions of higher education in accordance with section 173.030 and of the college's or university's response to requests and recommendations, including noncompliance therewith;

            (4)  The coordinating board's recommendations for development and coordination in state-supported higher education in the forthcoming biennium, within the context of the long-range coordinated plan;

            (5)  The coordinating board's budget recommendations for each state-supported college or university for the forthcoming biennium; and

            (6) The campus-level data on student persistence and a description, including the basis of measurement, of progress towards implementing revised remediation, transfer, and retention practices under subdivisions (6) and (8) of subsection 2 of section 173.005.

            173.606.  1.  Annually, each proprietary school desiring to operate in this state shall make written application to the board on forms furnished by the board.  Such application shall include the identification of all locations operated by a proprietary school and shall identify a single location as a principal facility for the purpose of record keeping and administration.  Any location at which education is offered by a franchisee of a franchisor approved to operate as a proprietary school shall be deemed a location within the scope of such franchisor's approval if such franchisor establishes the course curriculum and guidelines for teaching at such location.

            2.  The department of higher education shall review the application and may conduct an investigation of the applicant to ensure compliance with the rules and regulations.  A proprietary school in continuous operation for a period of no less than five years shall be eligible to apply for certification that is valid for two years.

            3.  A certificate of approval is nontransferable.  A change in the sole proprietor of a school, a change in the majority interest of general partners of a partnership owning a school, or a change in majority of stock ownership of a school shall for the purpose of sections 173.600 to 173.618 be deemed a transfer of ownership.  Within thirty days of a transfer of ownership the new owner shall make written application to the board for a new certificate of approval.  This application shall be processed like an initial application, except that the board may issue a temporary certificate of approval if the chief administrator of the school furnishes a written statement asserting that all of the conditions set forth in the rules and regulations are being met or will be met before offering training or education.  A temporary certificate shall be effective for a maximum of sixty days.

            4.  Any school denied exemption or a certificate of approval and any approved school whose certificate is revoked or suspended may appeal to the administrative hearing commission.

            173.608.  1.  The base annual fee for a proprietary school certificate of approval shall be [$.001] $.0013 per one dollar of net tuition and fees income (excluding refunds, books, tools and supplies), with a maximum of [two thousand five hundred] five thousand dollars and a minimum of [two hundred fifty] five hundred dollars per school.  For a school having a certificate of approval for the sole purpose of recruiting students in Missouri, the net tuition used for this computation shall be only that paid to the school by students recruited from Missouri and the fee shall be [two hundred fifty] five hundred dollars plus the amount produced by the foundation calculation, with a maximum of five thousand dollars.  Every five years, beginning with fiscal year 2013, the coordinating board may increase the base annual fee as well as the related minimum and maximum amounts by administrative rule no more than the Consumer Price Index for All Urban Consumers (CPI-U), 1982-1984=100, not seasonally adjusted, as defined and officially recorded by the United States Department of Labor, or its successor agency, for the period since the last fee increase.

            2.  In addition to the annual fee for a certificate of approval, the coordinating board may establish by administrative rule additional appropriate fees if necessary to generate funding sufficient to cover the entirety of costs associated with the operation of the proprietary school certification program, with advice of the proprietary school advisory committee.

            [2.]  3.  Any school which operates at two or more locations, or has franchised schools as provided in section 173.606, may combine tuition and fees for all locations for the purpose of determining the annual fee payable under sections 173.600 to 173.618.   [All fees received shall be deposited in the state treasury to the credit of general revenue.]

            4.  All revenue received by the coordinating board from the fees authorized in this section shall be deposited in the state treasury to the credit of the "Proprietary School Certification Fund" which is hereby created for the sole purpose of funding the costs associated with the operation of the proprietary school program.  Notwithstanding the provisions of section 33.080 to the contrary, any moneys remaining in the fund at the end of the biennium shall not revert to the credit of the general revenue fund.

            173.612.  1.  The board shall, through the department of higher education, administer, supervise, and enforce the provisions and policies of sections 173.600 to 173.618 and shall assign the personnel that are necessary to exercise its powers and duties.

            2.  The rules and regulations adopted by the board under sections 173.600 to 173.618, together with any amendments thereto, shall be filed with the office of the secretary of state.  The board may:

            (1)  Issue proprietary school certificates of approval or temporary certificates of approval to applicants meeting the requirements of sections 173.600 to 173.618;

            (2)  Suspend or revoke certificates or temporary certificates of approval, or place certified schools on probation;

            (3)  Require each proprietary school to file a security bond covering the school and its agents to indemnify any student, enrollee or parent, guardian, or sponsor of a student or enrollee who suffers loss or damage because of a violation of sections 173.600 to 173.618 by the school, or because a student is unable to complete the course due to the school's ceasing operation or because a student does not receive a refund to which he is entitled.  The bond or other security shall cover all the facilities and locations of a proprietary school and shall not be less than five thousand dollars or ten percent of the preceding year's gross tuition, whichever is greater, but in no case shall it exceed [twenty-five] one hundred thousand dollars.  The bond shall clearly state that the school and the agents of the school are covered by it.  The board may authorize the use of certificates of deposit, letters of credit, or other assets to be posted as security in lieu of this surety bond requirement;

            (4)  Collect only that data from certified proprietary schools [appropriate to establish records and statistics necessary to provide evaluation and planning by the department of higher education] necessary to administer, supervise, and enforce the provisions of sections 173.600 to 173.619.  The department shall, subject to appropriations, provide a system to electronically submit all data;

            (5)  Review proposals for new programs within ninety days from the date that a certified school submits a new program for review, and review proposals for revised programs within sixty days from the date that a certified school submits a revised program for review.  If the department fails to review a proposal for a new or revised program within the prescribed time frame, the school shall be permitted to offer the program until the department completes its review and identifies a substantive issue or issues that need correction.  In such case the department shall notify the school within an additional ninety days and the school shall then have ninety days from the date it is informed that a program offering has a deficiency to correct the deficiency without having to cease offering the program;

            (6)  Administer sections 173.600 to 173.618 and initiate action to enforce it.

            3.  Any school which closes or whose certificate of approval is suspended, revoked, or not renewed shall, on the approval of the coordinating board, make partial or full refund of tuition and fees to the students enrolled, continue operation under a temporary certificate until students enrolled have completed the program for which they were enrolled, make arrangements for another school or schools to complete the instruction for which the students are enrolled, employ a combination of these methods in order to fulfill its obligations to the students, or implement other plans approved by the coordinating board.

            4.  Any rule or portion of a rule promulgated pursuant to sections 173.600 to 173.618 may be suspended by the joint house-senate committee on administrative rules until such time as the general assembly may by concurrent resolution signed by the governor reinstate such rule.

            173.614.  1.  The "Proprietary School Advisory Committee" is hereby created consisting of seven members.  All members shall be appointed by the [board] commissioner of higher education and shall be [either individual proprietors, general partners of partnerships,] owners or managerial employees of proprietary schools.  The initial appointment of members to the committee shall be made within sixty days after September 28, 1983, and shall consist of two members appointed for terms expiring one year from September 28, 1983, two members appointed for terms expiring two years from September 28, 1983, and three members appointed for terms expiring three years from September 28, 1983.  The terms of members initially appointed shall be designated by the board.  Thereafter, each appointment shall be for a term of three years.  If a committee member resigns or for any reason is unable or ineligible to continue to serve, a new member shall be appointed by the board to fill the unexpired term.  At all times at least three members of the committee shall represent schools that confer a degree and at least one of the three shall represent a school that confers a degree at the baccalaureate level or higher.

            2.  The committee shall organize itself by the election of a chairman and other officers as needed.

            3.  The committee shall report to the board at least twice annually and advise the board on matters within the scope of sections 173.600 to 173.618.

            4.  The proprietary school advisory committee shall have the following responsibilities:

            (1)  To advise the board in the administration of sections 173.600 to 173.618;

            (2)  To make recommendations with respect to the rules and regulations establishing minimum standards which are to be adopted by the board; and

            (3)  To advise the board with respect to grievances and complaints.

            5.  Members of the committee shall serve without compensation but may be reimbursed for traveling and other expenses necessarily incurred in the performance of their duties from funds of the department of higher education.

            173.616.  1.  The following schools, training programs, and courses of instruction shall be exempt from the provisions of sections 173.600 to 173.618:

            (1)  A public institution;

            (2)  Any college or university represented directly or indirectly on the advisory committee of the coordinating board for higher education as provided in subsection 3 of section 173.005;

            (3)  An institution that is certified by the board as an "approved private institution" under subdivision (2) of section [173.205] 173.1102;

            (4)  A not-for-profit religious school that is accredited by the American Association of Bible Colleges, the Association of Theological Schools in the United States and Canada, or a regional accrediting association, such as the North Central Association, which is recognized by the Council on Postsecondary Accreditation and the United States Department of Education; and

            (5)  Beginning July 1, 2008, all out-of-state public institutions of higher education, as such term is defined in subdivision [(11)] (12) of subsection 2 of section 173.005.  

            2.  The coordinating board shall exempt the following schools, training programs and courses of instruction from the provisions of sections 173.600 to 173.618:

            (1)  A not-for-profit school owned, controlled and operated by a bona fide religious or denominational organization which offers no programs or degrees and grants no degrees or certificates other than those specifically designated as theological, bible, divinity or other religious designation;

            (2)  A not-for-profit school owned, controlled and operated by a bona fide eleemosynary organization which provides instruction with no financial charge to its students and at which no part of the instructional cost is defrayed by or through programs of governmental student financial aid, including grants and loans, provided directly to or for individual students;

            (3)  A school which offers instruction only in subject areas which are primarily for avocational or recreational purposes as distinct from courses to teach employable, marketable knowledge or skills, which does not advertise occupational objectives and which does not grant degrees;

            (4)  A course of instruction, study or training program sponsored by an employer for the training and preparation of its own employees;

            (5)  A course of study or instruction conducted by a trade, business or professional organization with a closed membership where participation in the course is limited to bona fide members of the trade, business or professional organization, or a course of instruction for persons in preparation for an examination given by a state board or commission where the state board or commission approves that course and school;

            (6)  A school or person whose clientele are primarily students aged sixteen or under.  

            3.  A school which is otherwise licensed and approved under and pursuant to any other licensing law of this state shall be exempt from sections 173.600 to 173.618, but a state certificate of incorporation shall not constitute licensing for the purpose of sections 173.600 to 173.618.  

            4.  Any school, training program or course of instruction exempted herein may elect by majority action of its governing body or by action of its director to apply for approval of the school, training program or course of instruction under the provisions of sections 173.600 to 173.618.  Upon application to and approval by the coordinating board, such school training program or course of instruction may become exempt from the provisions of sections 173.600 to 173.618 at any subsequent time, except the board shall not approve an application for exemption if the approved school is then in any status of noncompliance with certification standards and a reversion to exempt status shall not relieve the school of any liability for indemnification or any penalty for noncompliance with certification standards during the period of the school's approved status.  

            173.618.  1.  Any act, method, or practice which violates the provisions of sections 173.600 to 173.618 shall be an unlawful practice within the meaning of section 407.020, and any action authorized in section 407.020 may be taken.  In addition, the board may seek an injunction in the manner provided in chapter 407.  The board may exercise the authority granted in subdivision (2) of subsection 2 of section 173.612 without seeking injunction.

            2.  Any person convicted of operating a proprietary school without certificate of approval or a temporary certificate of approval, or of failure to file bond or security as required by sections 173.600 to 173.618 or of violating any other provision of sections 173.600 to 173.618 is guilty of a class A misdemeanor and upon conviction shall be punished in the manner provided by law.