Part 20.
TEXAS WORKFORCE COMMISSION
Chapter 807.
CAREER SCHOOLS AND COLLEGES
The Texas Workforce Commission (Commission) proposes amendments to
Subchapter A, General Provisions, §§807.1-807.2; Subchapter B, Certificates
of Approval, §§807.11-807.12, §§807.16-807.17; Subchapter
C, Financial Requirements, §807.31, §807.33 and §807.35; Subchapter
E, School Director and Administrative Staff, §807.61 and §807.65;
Subchapter G, Courses of Instruction, §§807.103-807.104; Subchapter
J, Admission, §807.144; Subchapter K, Progress Standards, §807.163;
Subchapter M, Cancellation and Refund Policy, §807.191 and §§807.193-807.194;
Subchapter Q, Closed Schools, §§807.251-807.252 of Chapter 807,
Proprietary Schools. The Commission also proposes the repeal of §807.5
of Subchapter A, General Provisions and new §§807.271-807.282 of
Subchapter R, Cease and Desist Orders, for Chapter 807, Proprietary Schools.
Background: Effective January 1, 1972, the Texas Legislature enacted the
Texas Proprietary School Act (Act) to provide protection of students in proprietary
schools and to provide certification and regulation of proprietary schools.
The Act was located in Chapter 32 of the Texas Education Code, and was administered
by the Texas Education Agency, Division of Proprietary Schools, Drivers Training,
and Veterans Education.
In 1995, Senate Bill 1, the 74th Texas Legislature recodified Chapter 32
to Chapter 132, Texas Education Code, and required that the Texas Employment
Commission assume the regulatory function of the system of proprietary schools.
During the same legislative session, House Bill 1863 created the Commission
to consolidate workforce employment and training related services and the
licensing and regulation of proprietary schools. Consequently, as of March
1, 1996, references in the law to the Texas Employment Commission mean the
Texas Workforce Commission.
In 2003, Senate Bills 280 and 1343, 78th Texas Legislature, Regular Session,
revised Chapter 132, Texas Education Code, changing all references to "proprietary
schools" to "career schools and colleges" and references to "correspondence"
to distance education. The bills added the requirement that certain schools
apply for, and receive, an exemption. The bills eliminated the requirement
for surety bonds and the tuition protection fund and created the career school
and college tuition trust account. The tuition trust account is a permanently
dedicated trust fund. It is more flexible than the tuition protection fund
in handling the payment of refunds to students of closed schools and the teach-out
expenses of schools that complete the training of the students of a closed
school. The remaining balance in the tuition protection fund on August 31,
2003 was transferred to the tuition trust account.
The bills also gave the Commission the authority to issue a cease and desist
order against a career school or college operating without a certificate of
approval. The ability to issue a cease and desist order against an unlicensed
school after an administrative hearing gives the Commission more flexibility
in enforcing the Act's licensing requirements. Insuring that the licensing
requirements are followed by all career schools and colleges increases the
protections available for students, helps provide students with better quality
training providers and supplies employers with an improved pool of trained
employees and job applicants.
Through the Act and Career School and College Rules, the Commission Career
Schools and Colleges Department licenses and regulates most private post-secondary
career schools that offer vocational training or continuing education. The
Department also investigates complaints about schools, monitors schools to
ensure regulatory compliance, arranges for the disposition of students affected
by a school closure and administers the Tuition Trust Account to pay tuition
refunds to students when a school closes. In carrying out its regulatory duties,
the Career Schools and Colleges Department seeks to provide customer protection
for Texas students as well as ensure quality training of the labor force to
meet the needs of Texas employers.
The purpose of the rule amendments is to address changes in the statute
as well as changes in the career school and college industry from the time
when the rules were last revised. Since that time, methods to deliver education
have evolved in a number of areas, particularly in the area of distance education.
The Internet has created opportunities for new delivery techniques and also
has provided new methods for advertising and enrolling students.
The proposed amendments to the Career School and College rules address
these issues in order to remove unnecessary requirements and streamline processes
in the regulation of Texas career schools and colleges. The proposed amendments
completely implement the changes to the Act made by Senate Bills 280 and 1343,
78th Texas Legislature, Regular Session. These changes are consistent with
the Governor's vision of limited and efficient State government.
Generally, throughout the chapter the amendments change references to "proprietary
schools" to "career schools and colleges," "correspondence" to "distance education,"
and "protection fund" to "trust account" to be consistent with legislative
changes to the statute. The other specific amendments as well as the reason
and purpose of each is described as follows:
Section 807.5 regarding a school's requirement to apply for an exemption
is repealed because it is now redundant of legislative changes to the statute.
In §807.11, the amendment deletes the requirement for a surety bond
as legislative changes to the statute no longer require a school to obtain
a surety bond.
In §807.12, the amendment deletes the requirement for a surety bond
as legislative changes to the statute no longer require a school to obtain
a surety bond.
In §807.16, the amendment deletes requirements for a school to offer
associate degree programs, deferring to the authority of the Texas Higher
Education Coordinating Board.
In §807.17, the amendment deletes surety bond claims as a form of
penalty or sanction as legislative changes to the statute no longer require
a school to obtain a surety bond.
In §807.31, the amendment deletes the reference to bonding as legislative
changes to the statute no longer require a school to obtain a surety bond.
In §807.33, the amendment requires new schools to submit a projection
of income in order to be assessed for the Tuition Trust Account in accordance
with legislative changes to the statute.
In §807.35, the amendment deletes the reference to bonding and substitutes
language that corresponds with legislative changes to the statutory definition
of a small school.
In §807.61, the amendment requires school directors to be present
the majority of the time the school is in operation so that they are accessible
to students.
In §807.65, the amendment deletes certain requirements for a director
of degree programs, deferring to the authority of the Texas Higher Education
Coordinating Board.
In §807.103, the amendment deletes program requirements for degree
granting schools, deferring to the authority of the Texas Higher Education
Coordinating Board.
In §807.104, the amendment changes "program" to "course of instruction"
to make it clear that both programs and seminars must comply with this section
concerning penalties related to courses of instruction.
In §807.144, the amendment requires enrollment agreements for long-term
seminars to facilitate investigations of student complaints and compute refunds.
In §807.163, the amendments change references to "correspondence"
to "distance education" to be consistent with legislative changes to the statute.
In §807.191, the amendments change references to "correspondence"
to "distance education" to be consistent with legislative changes to the statute.
In §807.193, the amendments change references to "correspondence"
to "distance education" to be consistent with legislative changes to the statute.
In §807.251, the amendment makes technical corrections to language
and adds the requirements for a teach-out from §807.252 for continuity.
In §807.252, the amendment changes references to "tuition protection
fund" to "tuition trust account" to be consistent with legislative changes
to the statute and clarifies the assessment method for new schools. It also
removes references to bonds as legislative changes to the statute no longer
require a school to obtain a surety bond and deletes the requirements for
a teach-out which were moved to §807.251.
The recent legislative changes to the Act gave the Commission the ability
to issue cease and desist orders to schools that are operating without a certificate
of approval. The following new rules are proposed as a new Subchapter R with
the reason and purpose of each described as follows:
Section 807.271, adds definitions used in the subsequent sections on cease
and desist orders. This new subsection is added as required by §132.306
of the Act.
Section 807.272 identifies the Executive Director of the Commission as
the individual that may issue a statement of charges and hearing notice for
the issuance of a cease and desist order. This new subsection is added as
required by §132.306 of the Act.
Section 807.273 states the required contents of the statement of charges
and hearing notice. This new subsection is added as required by §132.306
of the Act.
Section 807.274 states how the statement of charges and hearing notice
will be delivered. This new subsection is added as required by §132.306
of the Act.
Section 807.275 allows for a mutual agreement to postpone a hearing. This
new subsection is added as required by §132.306 of the Act.
Section 807.276 states where and how the hearing will be conducted. This
new subsection is added as required by §132.306 of the Act.
Section 807.277 states the rules of evidence for the hearing. This new
subsection is added as required by §132.306 of the Act.
Section 807.278 states conditions under which the hearing officer may be
disqualified or withdraw. This new subsection is added as required by §132.306
of the Act.
Section 807.279 states the hearing procedures. This new subsection is added
as required by §132.306 of the Act.
Section 807.280 states the permissible conditions for the granting of a
continuance of a hearing. This new subsection is added as required by §132.306
of the Act.
Section 807.281 states how the hearing decision will be rendered, becomes
final and the procedures for appeal. This new subsection is added as required
by §132.306 of the Act.
Section 807.282 states the effect of the cease and desist order. This new
subsection is added as required by §132.306 of the Act.
As required of certificate issuing state agencies by Chapter 2005 of the
Government Code, the Commission's minimum, maximum, and median times for processing
applications from the date the Commission received the initial applications
to the date of the final decision using the Commission's performance in the
past 12 months are respectively as follows: The Original Certificate of Approval
processing period is a maximum of 390 days, a minimum of 2 days, and a median
of 28 days. The Renewal Certificate of Approval processing period is a maximum
of 212 days, a minimum of 2 days, and a median of 49 days. The Change of Owner
processing period is a maximum of 163 days, a minimum of 2 days, and median
of 49 days. The Representative processing period is a maximum of 380 days,
a minimum of 2 days, and a median of 16 days. The Instructor processing period
is a maximum of 143 days, a minimum of 2 days, and a median of 60 days. The
Director processing period is a maximum of 70 days, a minimum of 2 days and
a median of 23 days. The Director of Education processing period is a maximum
of 59 days, a minimum of 4 days and a median of 20 days. The data used to
compile the processing periods is based on a mail tracking system. Based on
limitations of the mail tracking system, the following qualifiers are provided:
processing periods of one day were excluded from the calculations; in an indeterminate
number of cases, the data reflects total processing times irrespective of
whether additional information was needed to complete the applications; and
errors may exist due to processing and data base conversion complications.
The processing periods provided in §807.6 were based on a decrease in
department staffing and an increase in the number of applications needing
to be processed.
Randy Townsend, Chief Financial Officer, has determined that for each year
of the first five years the rules will be in effect the following statements
will apply:
There are no additional estimated costs to the state and to local governments
expected as a result of enforcing or administering the rules;
There are no estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the rules;
There are no estimated losses or increases in revenue to the state or local
governments as a result of enforcing or administering the rules; and
There are no foreseeable implications relating to costs or revenue to the
state or local governments as a result of enforcing or administering the rules.
Randy Townsend, Director of Finance, and Michael De Long, Career Schools
and Colleges Coordinator, have determined that there will be an effect on
small businesses and anticipated economic costs to persons who are required
to comply with the proposed rule amendments and new rules. The Commission
submitted policy concepts and a draft of the amended and new Career School
and College Rules to, as well as met with, the Career School and College Workgroup,
which included persons representing the interests of career schools and colleges.
The purpose of the Workgroup was to discuss issues pertaining to the revisions
of the rules and any costs incurred by the schools with respect to the changes
in the rules. Written and oral responses were received on the draft and the
concerns of career schools and colleges were also discussed at a Workgroup
meeting. During the drafting stage of the proposed rule amendments and new
rules, the Commission has worked with the career schools and colleges to incorporate
provisions to reduce the costs to small businesses.
Furthermore, the Commission requested analysis from some career schools
and colleges to determine the costs of complying with the amended and new
rules and to determine whether adverse economic effect would result. Factors
will cause the estimates to vary, such as the resources available to the school,
the wage rate of the person performing the task, the size of the school, and
numerous other variables which will bear upon the actual costs of compliance
for a particular school. Incidental costs such as postage and telephone calls
are not included because of their minimal nature.
For rules that do not add requirements on schools but merely detail how
the schools should comply with the statute, there are no costs other than
those required by the statute. Those costs are directly caused by the statute
and not by any additional cost to small businesses caused by the rules. For
example, the statute establishes a tuition trust account and states the method
of financing the account, the rules merely state some administrative details.
With the exception of the rules listed in the chart below, the Commission
anticipates the changes to the rules will present no costs other than those
directly required by the statute.
Figure: 40 TAC Chapter 807--Preamble
The comparison between the costs estimated by the career schools and colleges
for small and large businesses is apparent from the chart. For the costs which
could not be estimated, those costs for small businesses are estimated as
equal to or more than those costs of large businesses, due to the various
resources available to larger businesses.
The majority of currently approved career schools and colleges are small
businesses; however, many of these career schools or colleges are not defined
as "small career schools or colleges" pursuant to §132.054 of the Act
relating to the Small School Exemption, which states that "The Commission
may exempt small career schools and colleges from any requirement of this
chapter to reduce the cost to small schools of receiving a certificate of
approval." To lessen the costs on small businesses the Commission will continue
to use the waiver provisions in §807.4 which would permit a school to
request a waiver from all or part of these rules upon a showing of good cause
due to undue economic hardship. The Commission intends to reduce the costs
for small schools and small businesses in complying with the rules whenever
feasible by applying §132.054 of the Act and §807.4 of the rules.
Mark Hughes, Director of Labor Market and Career Information, has determined
that there is no foreseeable negative impact upon employment conditions in
this state as a result of the proposed rule amendments and new rules.
Michael De Long, Career Schools and Colleges Coordinator, has determined
that for each year of the first five years the rules are in effect, the public
benefit anticipated as a result of enforcing the rules shall be to provide
rules that are easier to understand and follow, make the process simpler for
current and prospective school owners to obtain a certificate of approval
and operate a school in compliance with the Act. Local workforce areas may
experience economic benefits from increased training of qualified workers
and job seekers. Additionally, existing or emerging businesses in the local
areas will have the opportunity to access a more qualified workforce. A more
qualified workforce may provide businesses with increased efficiencies, lower
costs, better products and a growing customer base. The extent to which the
economies of local workforce development areas will be affected by the changes
in the Career Schools and Colleges Rules will vary greatly across the state
and will depend on such factors as population, demographics, the technical
experience of the existing workforce, the number of job seekers needing training
and access to training resources.
Coordination Activities: In the development of these rules for publication
and public comment, the Commission sought and received the involvement of
each of Texas' twenty-eight Local Workforce Development Boards. The Commission
provided policy concepts to the Boards for consideration and review pursuant
to Texas Labor Code Section 302.064 and the Commission's Resolution Regarding
Board Coordination in Policy Development adopted September 24, 2002. Prior
and during this rulemaking process, the Commission considered the Boards'
contributions. In addition, the Commission held discussions with the Career
Schools and Colleges Workgroup and offered to present the policy concepts
to the Workforce Leadership of Texas (WLT) Policy Committee regarding the
development and implementation of these rules.
Comments on the proposed rule amendments and new rules may be submitted
to John Moore, General Counsel, Texas Workforce Commission, 101 East 15th
Street, Room 608, Austin, Texas, 78778-0001; telephone number (512) 463-3041;
facsimile number (512) 463-1426; e-mail address ruleandpolicy.comments@twc.state.tx.us.
The Commission will hold a public hearing if requested.
Subchapter A. GENERAL PROVISIONS
40 TAC §807.1, §807.2
The amendments are proposed under Texas Labor Code, Title
4, §301.0015 and §302.002(d), which provide the Texas Workforce
Commission with the authority to adopt, amend, or repeal such rules as it
deems necessary for the effective administration of the Commission and compliance
with Texas Education Code, Chapter 132, Career Schools and Colleges, and particularly §132.021,
which authorizes the Commission to adopt rules necessary to carry out this
chapter.
The proposed amendments affect the Texas Labor Code, Title 4, §301.0015
and §302.002(d), and Texas Education Code, Chapter 132, Career Schools
and Colleges.
§807.1.Title and Purpose.
(a)
These rules may be cited as the
Career School and
College
[
(b)
The purpose of these rules is to implement and interpret
the provisions of the Texas Education Code, Chapter 132,
Career Schools
and Colleges
[
§807.2.Definitions.
The following words and terms, when used in this chapter, shall have
the following meanings unless the context clearly indicates otherwise.
(1)
Academic quarter--A period of instruction that includes
at least ten weeks of instruction, unless otherwise approved by the Commission.
(2)
Academic semester--A period of instruction that includes
at least 15 weeks of instruction, unless otherwise approved by the Commission.
(3)
Accountant--An independent certified public accountant
properly registered with the appropriate state board of accountancy.
(4)
Act--Texas Education Code, Chapter 132,
Career Schools
and Colleges
[
(5)
Advertising--Any affirmative act designed to call attention
to a school or program for the purpose of encouraging enrollment.
(6)
Asynchronous distance education--Distance education training
that the Commission determines is not synchronous.
(7)
Board--A local workforce development board as created under
the Workforce and Economic Competitiveness Act.
(8)
Clock hour--Fifty minutes of instruction during a 60-minute
period.
(9)
Commission--The Texas Workforce Commission.
(10)
Coordinating Board--The Texas Higher Education Coordinating
Board.
(11)
Distance education
[
(12)
Distance education
[
(13)
Course of instruction--A program or seminar.
(14)
Employment--A graduating or graduate student's employment
in the same or substantially similar occupation for which the student was
trained.
(15)
Good reputation--A person is considered to be of good
reputation if the person:
(A)
has never been convicted of a felony related to the operation
of a school, and the person has been rehabilitated, including completion of
parole or probation, from any other convictions that would constitute risk
of harm to the school or students as determined by the Commission;
(B)
has never been successfully sued for fraud or deceptive
trade practices within the last 10 years;
(C)
does not own a school currently in violation of legal requirements,
has never owned a school with repeated violations, and has never owned a school
that closed with violations including, but not limited to, unpaid refunds;
and
(D)
has not knowingly falsified or withheld information from
the Commission.
(16)
Job placement--An affirmative effort by the school to
assist the student in obtaining employment in the same or substantially similar
stated occupation for which the student was trained.
(17)
Master student registration list--A comprehensive list
with an entry made for any person who signs an enrollment agreement, makes
a payment to attend the school, or attends a class. The entry shall be made
on the date the first of these events occurs.
(18)
Program--A sequence of approved subjects offered by a
school that teaches skills and fundamental knowledge required for employment
in the stated occupation.
(19)
Reimbursement contract basis--A school operating, or proposing
to operate, under a contract with a state or federal entity in which the school
receives payment upon completion of the training.
(20)
Residence school--A school that offers at least one program
that includes classroom instruction or synchronous distance education.
(21)
School--A
"career school or career college,"
[
(22)
Secondary education--Successful completion of public,
private, or home schooling at the high school level or obtainment of a recognized
high school equivalency credential.
(23)
Seminar--A course of instruction that enhances a student's
career, as opposed to a program that teaches skills and fundamental knowledge
required for a stated occupation. A seminar may include a workshop, an introduction
to an occupation or cluster of occupations, a short course that teaches part
of the skills and knowledge for a particular occupation, language training,
continuing professional education, and review for postsecondary examination.
(24)
Seminar school--A school that offers only seminars.
(25)
Small school--A "small
career
school
or college
" as defined in the Act.
(26)
Stated occupation--An occupation for which a program is
offered that:
(A)
is recognized by a state or federal law or by a state or
federal agency as existing or emerging;
(B)
is in demand; and
(C)
requires training to achieve entry-level proficiencies.
(27)
Student--Any individual solicited, enrolled, or trained
in Texas by a school.
(28)
Subject--A component of a program that includes specific
content designed to advance the practical skills and knowledge necessary to
prepare a student for employment in the stated occupation. A subject in a
school is similar to a course at a community or technical college.
(29)
Suspension of enrollments--A Commission sanction that
requires the school to suspend enrollments, re-enrollments, advertising, and
solicitation, and to cease, in any way, advising prospective students, either
directly or indirectly, of the available courses of instruction.
(30)
Synchronous distance education--The Commission may determine
distance education to be synchronous under the following conditions:
(A)
The training is conducted simultaneously in real time,
or the training is conducted so that the manner of delivery ensures that even
if the instructor and student are separated by time, the clock hours of instruction
that the student experiences can be determined; and
(B)
There is consistent interaction between the student(s)
and the instructor on a schedule that includes a definite time for completion
of the program and periodic verifiable student completion/performance measures
that allow the application of the progress standards of Subchapter K and attendance
standards of Subchapter L of this chapter.
(31)
Tour--An inspection of the facilities and equipment pertaining
to a course of instruction.
(32)
Week--Seven consecutive calendar days.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on January 6, 2004.
TRD-200400026
John Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 22, 2004
For further information, please call: (512) 463-2573
40 TAC §807.5
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Texas Workforce Commission or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The repeal is proposed under Texas Labor Code, Title
4, §301.0015 and §302.002(d), which provide the Texas Workforce
Commission with the authority to adopt, amend, or repeal such rules as it
deems necessary for the effective administration of the Commission and compliance
with Texas Education Code, Chapter 132, Career Schools and Colleges, and particularly §132.021,
which authorizes the Commission to adopt rules necessary to carry out this
chapter.
The proposed repeal affects the Texas Labor Code, Title 4, §301.0015
and §302.002(d), and Texas Education Code, Chapter 132, Career Schools
and Colleges.
§807.5.Exemptions.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State on January 6, 2004.
TRD-200400035
John Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 22, 2004
For further information, please call: (512) 463-2573
40 TAC §§807.11, 807.12, 807.16, 807.17
The amendments are proposed under Texas Labor Code, Title
4, §301.0015 and §302.002(d), which provide the Texas Workforce
Commission with the authority to adopt, amend, or repeal such rules as it
deems necessary for the effective administration of the Commission and compliance
with Texas Education Code, Chapter 132, Career Schools and Colleges, and particularly §132.021,
which authorizes the Commission to adopt rules necessary to carry out this
chapter.
The proposed amendments affect the Texas Labor Code, Title 4, §301.0015
and §302.002(d), and Texas Education Code, Chapter 132, Career Schools
and Colleges.
§807.11.Original Approvals.
A complete application for an original certificate of approval shall
consist of the following:
(1)
a completed application form provided by the Commission;
[
(2)
[
(3)
[
(4)
[
§807.12.Renewal.
(a)
For small schools, the certificate of approval shall be
renewed at least every three years, or more frequently as determined by the
Commission. A complete application for renewal of a certificate of approval
shall consist of the following:
[
(1)
[
(2)
[
(3)
[
(b)
For all other schools, the certificate of approval shall
be renewed annually. A complete application for renewal of a certificate of
approval shall consist of the following:
(1)
a completed application for renewal form provided by the
Commission;
[
(2)
[
(3)
[
(4)
[
(c)
The effective, expiration, and issuance dates are indicated
on the certificate of approval. The Commission may reflect the date of renewal
as the date following the date of expiration of the prior certificate of approval,
if the school submitted a timely request for renewal and met all of the requirements
contained in this chapter for renewal.
(d)
The complete renewal application shall be postmarked on
or before the due date as indicated in the Act.
§807.16.Associate Degrees.
(a)
If a school desires authorization to grant associate degrees,
the school shall make application to the Coordinating Board
.
[
[
[
[
[
[
(b)
[
§807.17.Penalties and Sanctions Regarding Schools.
The Commission may impose penalties or sanctions for violations of
the Act or this chapter, including:
(1)
collecting a late renewal fee from the school;
(2)
denying the school's application for a certificate of approval;
(3)
revoking the school's certificate of approval;
(4)
placing restrictions on the school's certificate of approval;
(5)
denying, suspending, or revoking the registration of the
school's representatives;
[
(6)
[
(7)
[
(8)
[
(9)
[
(10)
[
(11)
[
(12)
[
(13)
[
(14)
[
(15)
[
(16)
[
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State on January 6, 2004.
TRD-200400027
John Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 22, 2004
For further information, please call: (512) 463-2573
40 TAC §§807.31, 807.33, 807.35
The amendments are proposed under Texas Labor Code, Title
4, §301.0015 and §302.002(d), which provide the Texas Workforce
Commission with the authority to adopt, amend, or repeal such rules as it
deems necessary for the effective administration of the Commission and compliance
with Texas Education Code, Chapter 132, Career Schools and Colleges, and particularly §132.021,
which authorizes the Commission to adopt rules necessary to carry out this
chapter.
The proposed amendments affect the Texas Labor Code, Title 4, §301.0015
and §302.002(d), and Texas Education Code, Chapter 132, Career Schools
and Colleges.
§807.31.Definitions Relating to Financial Requirements.
The following words and terms, when used in this subchapter, shall
have the following meanings unless the context clearly indicates otherwise.
[
(1)
[
(2)
[
(3)
[
(4)
[
§807.33.Financial Requirements for Original Approvals.
(a)
The prospective owner shall furnish the Commission with
the following:
(1)
for a school owned by a sole proprietor, a reviewed personal
balance sheet with notes that disclose the amount of payments for the next
five years to meet debt agreements as required by GAAP; or
(2)
for all other ownership structures, an audited balance
sheet consistent with GAAP and GAAS and certified by an accountant.
(b)
The school shall submit a balance sheet, a list of the
expected school-related expenses for the first three months of operation of
the school, and a sworn statement signed by the owner affirming the availability
of sufficient cash to cover projected expenses at the date of licensure. A
school currently operating, or proposing to operate, on a reimbursement contract
basis may request a waiver of this section from the Commission. Projected
expenses may include the following:
(1)
employee salaries, listed by position title, including
withholding, unemployment taxes, and any other related expenses;
(2)
lease payments for equipment listed by the name of the
equipment;
(3)
lease payments for facilities;
(4)
accounting, legal, and other specifically identified professional
fees; and
(5)
an estimate of other expenses such as advertising, travel,
textbooks, office supplies, classroom supplies, printing, telephone, utilities,
taxes, and sales commissions.
(c)
The school shall submit a projection of
the gross amount of tuition and fees to be collected during each of the first
two years of operation.
(d)
[
§807.35.Financial Requirements for Renewal.
(a)
A school shall submit annual financial statements as set
forth in this section that shall be:
(1)
audited by an accountant and consistent with GAAP;
(2)
reviewed by an accountant and consistent with GAAP (except
for the first renewal, which must be audited or compiled); or
(3)
compiled by an accountant, containing an unearned tuition
affidavit and at least one note disclosing the current and long-term liabilities.
This note shall be similar to that required by GAAP for reviewed and audited
statements. Compiled statements are acceptable under the following conditions:
(A)
the gross annual revenue from student tuition and fees
, less refunds, is less than or equal to $100,000, or
[
(B)
the courses of instruction are less than one month in length
.
[
[
(b)
Each school shall furnish financial statements in association
with an accountant annually and not later than 180 days from the close of
the school's fiscal year. These statements shall include the following:
(1)
balance sheet;
(2)
statement of results of operation, which includes a statement
of income and retained earnings;
(3)
statement of cash flows; and
(4)
the gross amount minus refunds of annual student tuition
and fees for each school, separated from other revenues unrelated to training.
(c)
A school with a gross annual revenue from student
tuition and fees, less refunds, less than or equal to $100,000
[
(1)
an unearned tuition affidavit;
(2)
a copy of the annual income tax form filed specifically
for the business; and
(3)
an owner's sworn statement certifying that the unearned
tuition affidavit and the copy of the annual income tax form are true and
correct.
(d)
A school that is a subsidiary of a corporation may submit,
in lieu of the statements required in this section, the annual audited financial
statements of the parent corporation provided that:
(1)
said statements are accompanied by an audited list of any
student tuition refunds payable by the subsidiary school at the close of its
fiscal year. The statements shall also be accompanied by an owner's sworn
statement reflecting the gross amount minus refunds of student tuition and
fees earned during the fiscal year on all programs approved under the Act;
and
(2)
the parent corporation ensures that each student enrolled
in the subsidiary school receives either the training agreed upon or a refund
as provided in the Act, and submits either a certified resolution of its board
of directors to this effect or any other evidence as deemed appropriate by
the Commission to establish financial responsibility by the parent corporation.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State on January 6, 2004.
TRD-200400028
John Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 22, 2004
For further information, please call: (512) 463-2573
40 TAC §807.61, §807.65
The amendments are proposed under Texas Labor Code, Title
4, §301.0015 and §302.002(d), which provide the Texas Workforce
Commission with the authority to adopt, amend, or repeal such rules as it
deems necessary for the effective administration of the Commission and compliance
with Texas Education Code, Chapter 132, Career Schools and Colleges, and particularly §132.021,
which authorizes the Commission to adopt rules necessary to carry out this
chapter.
The proposed amendments affect the Texas Labor Code, Title 4, §301.0015
and §302.002(d), and Texas Education Code, Chapter 132, Career Schools
and Colleges.
§807.61.School Director Requirements.
(a)
Each school shall designate one person as the school director.
(b)
A person may not concurrently serve as a school director
for more than one school.
(c)
A school director must be physically present
at the school's location for a majority of the time the school is open for
regular operation.
§807.65.Director of Degree Programs Requirements.
(a)
A school with a degree program shall have a director of
the degree programs as required by the Coordinating Board. [
(b)
A director of degree programs shall be of good reputation
.
[
[
[
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State on January 6, 2004.
TRD-200400029
John Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 22, 2004
For further information, please call: (512) 463-2573
40 TAC §807.103, §807.104
The amendments are proposed under Texas Labor Code, Title
4, §301.0015 and §302.002(d), which provide the Texas Workforce
Commission with the authority to adopt, amend, or repeal such rules as it
deems necessary for the effective administration of the Commission and compliance
with Texas Education Code, Chapter 132, Career Schools and Colleges, and particularly §132.021,
which authorizes the Commission to adopt rules necessary to carry out this
chapter.
The proposed amendments affect the Texas Labor Code, Title 4, §301.0015
and §302.002(d), and Texas Education Code, Chapter 132, Career Schools
and Colleges.
§807.103.Program Requirements for Degree Granting Schools.
A school shall provide evidence to the Commission that they are
authorized by the Coordinating Board to offer degree programs.
[
[
[
[
§807.104.Penalties Relating to Courses of Instruction.
(a)
If an approved
course of instruction
[
(b)
The Commission may suspend enrollments in a particular
course of instruction
[
(1)
inadequate instruction;
(2)
unapproved or inadequate curriculum;
(3)
inadequate equipment; or
(4)
inadequate facilities.
(c)
If a school begins teaching a
course of instruction
[
(d)
If upon review and consideration of an original, renewal,
or revised application for
course of instruction
[
(e)
The Commission may revoke approval of a school's
course of instruction
[
(1)
any statement contained in the application for the
course of instruction
[
(2)
the school's failure to maintain the instructors, facilities,
equipment, or
courses of instruction
[
(3)
advertising made on behalf of the school which is false,
misleading, or deceptive, including those that use the word "associate" to
describe a degree other than those approved by the Coordinating Board;
(4)
courses of instruction
[
(5)
courses of instruction
[
(6)
repeated violations by the school that negatively impact
the quality of a particular
course of instruction
[
(7)
violations by the school of any applicable provision of
the Act or this chapter.
(f)
A school whose
course of instruction
[
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on January 6, 2004.
TRD-200400030
John Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 22, 2004
For further information, please call: (512) 463-2573
40 TAC §807.144
The amendments are proposed under Texas Labor Code, Title
4, §301.0015 and §302.002(d), which provide the Texas Workforce
Commission with the authority to adopt, amend, or repeal such rules as it
deems necessary for the effective administration of the Commission and compliance
with Texas Education Code, Chapter 132, Career Schools and Colleges, and particularly §132.021,
which authorizes the Commission to adopt rules necessary to carry out this
chapter.
The proposed amendments affect the Texas Labor Code, Title 4, §301.0015
and §302.002(d), and Texas Education Code, Chapter 132, Career Schools
and Colleges.
§807.144.Enrollment Agreement.
(a)
A school does not need an enrollment agreement to enroll
a student in a seminar
that will be completed within three consecutive
calendar days
.
(b)
For
distance education
[
(c)
A school shall submit an enrollment agreement to the Commission
for approval.
(d)
A school shall use only an approved enrollment agreement
to enroll students.
(e)
The executed enrollment agreement shall include, but is
not limited to, the following:
(1)
full and correct name and location of the school;
(2)
program title, tuition, fees, reasonable estimate cost
of books and supplies, any other expenses, total cost of the program, items
subject to cost change, method of payment and payment schedule, disclosure
statement if interest is charged on more than three payments, and detachable
buyer's right to cancel if enrollment is procured off campus;
(3)
date training is to begin and program length;
(4)
name, address, and signature of the student;
(5)
statement by the school that the student will receive a
copy of the school enrollment agreement and catalog at the time of signing
by the student;
(6)
cancellation and refund policy; and
(7)
a Federal Trade Commission statement for holder in due
course, unless no loans, grants, or installment payments are involved.
(f)
The school shall provide a notice of cancellation, attached
to the enrollment agreement, for any student enrolled off the school premises.
The notice shall:
(1)
be in duplicate;
(2)
be easily detachable;
(3)
be printed in boldface type, with a minimum font of 10
point;
(4)
contain the date of the enrollment agreement, name and
address of school, the date on which the statutory 72-hour cancellation privilege
will expire, and any other provisions as determined by the Commission;
(5)
be printed in the same language as used in the enrollment
agreement; and
(6)
be in such a form that can be used by the student to notify
the school of the student's desire to cancel by dating, signing, and mailing
or otherwise delivering the form to the school's address shown.
(g)
A copy of the enrollment agreement form shall be given
to the student and a copy maintained as a part of the student's file.
(h)
The Commission may permit a school to submit an abbreviated
enrollment agreement for students enrolled on a reimbursement contract basis.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on January 6, 2004.
TRD-200400031
John Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 22, 2004
For further information, please call: (512) 463-2573
40 TAC §807.163
The amendments are proposed under Texas Labor Code, Title
4, §301.0015 and §302.002(d), which provide the Texas Workforce
Commission with the authority to adopt, amend, or repeal such rules as it
deems necessary for the effective administration of the Commission and compliance
with Texas Education Code, Chapter 132, Career Schools and Colleges, and particularly §132.021,
which authorizes the Commission to adopt rules necessary to carry out this
chapter.
The proposed amendments affect the Texas Labor Code, Title 4, §301.0015
and §302.002(d), and Texas Education Code, Chapter 132, Career Schools
and Colleges.
§807.163.Progress Requirements for Distance Education [
(a)
Distance education
[
(1)
the date course materials are mailed to the student;
(2)
the date the lesson assignment is received from the student;
(3)
the grade on a per-lesson basis;
(4)
the instructor's name;
(5)
the date graded assignments are returned to the student;
and
(6)
the final grade for the program with completion date indicated.
(b)
If at the end of the time period specified in the enrollment
agreement, the student has not completed the program, the student's enrollment
shall be terminated.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on January 6, 2004.
TRD-200400032
John Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 22, 2004
For further information, please call: (512) 463-2573
40 TAC §§807.191, 807.193, 807.194
The amendments are proposed under Texas Labor Code, Title
4, §301.0015 and §302.002(d), which provide the Texas Workforce
Commission with the authority to adopt, amend, or repeal such rules as it
deems necessary for the effective administration of the Commission and compliance
with Texas Education Code, Chapter 132, Career Schools and Colleges, and particularly §132.021,
which authorizes the Commission to adopt rules necessary to carry out this
chapter.
The proposed amendments affect the Texas Labor Code, Title 4, §301.0015
and §302.002(d), and Texas Education Code, Chapter 132, Career Schools
and Colleges.
§807.191.Right to Cancel after Tour.
(a)
Distance education
[
(b)
Any potential student who has not been provided the opportunity
to tour the school facilities and inspect the equipment before signing an
enrollment contract has an additional three days, excluding Saturdays, Sundays,
and legal holidays, following a tour and inspection to cancel enrollment and
request a full refund of any money paid to the school and release from all
obligations. The student shall sign and date an acknowledgement form certifying
the completion of the tour.
§807.193.Refund Requirements for Residence Schools.
(a)
Students are entitled to a full refund for classes attended
if the school does not provide a class with:
(1)
an approved instructor;
(2)
an instructor for whom an application has been properly
submitted to the Commission; or
(3)
a temporary instructor for whom the school submitted notice
to the Commission.
(b)
If a class has no instructor for more than one class period,
students are entitled to a full refund for each such class attended.
(c)
The length of a program, for purposes of calculating refunds
owed, is the shortest scheduled time period in which the program may be completed
by continuous attendance of a full-time student.
(d)
A school shall calculate refunds for students based upon
scheduled hours of classes through the last date of attendance. A school shall
not count leaves of absence, suspensions, school holidays, days when classes
are not offered, and summer vacations for purposes of calculating a student's
refund.
(e)
For all schools other than
distance education
[
(1)
the first day of the student's scheduled classes if the
student is not provided an opportunity to tour the school facilities, which
includes inspection of equipment, before signing an enrollment contract; or
(2)
the day the tour of the school facilities, including inspection
of the equipment, is completed, when provided before the first day of the
student's scheduled classes.
§807.194.Penalties Relating to Refunds.
(a)
A penalty shall be paid on any refund not consummated in
a timely manner as required by the Act. The penalty assessment shall begin
on the first day following the expiration of the statutorily defined refund
period and end on the day preceding the date the refund is consummated.
(b)
Penalties assessed on late refunds for grants shall be
paid to the tuition
trust account
[
(1)
to the student's account at a lending institution for the
balance of principal and interest on the student loan;
(2)
to the student for tuition and fees paid directly by the
student; and
(3)
to the tuition
trust account
[
(c)
If the Commission determines that the method used by the
school to calculate refunds is in error or the school does not routinely pay
refunds within the time required by the Act, the school shall submit an audited
report conducted by an accountant of the refunds due former students that
includes any penalty due as specified in the Act. An audit opinion letter
shall accompany a schedule of student refunds due, which discloses the following
information for the four years prior to the date of the Commission's request:
(1)
student information, including name, address, and social
security number;
(2)
pertinent dates, including last date of attendance and
date of termination; and
(3)
refund information, including amount of refund with principal,
penalty, and any balance due separately stated, payee, and date and check
number of payment if payment has been made.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State on January 6, 2004.
TRD-200400033
John Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 22, 2004
For further information, please call: (512) 463-2573
Proprietary School
] Rules.
Proprietary Schools
]. The Commission shall
evaluate each school according to the standards of practice set forth in the
Act and this chapter. The Commission will provide assistance, whenever possible,
in complying with this chapter.
Proprietary Schools
].
Correspondence
]
course--
Either
[
Distance education, either
] a seminar
or a program[
,
] that is offered to non-residence school students
via correspondence or other media from a remote site on a self-paced schedule,
excluding programs using interactive instruction.
Correspondence
]
school--A school that offers only
distance education
[
correspondence
] courses.
"proprietary school,"
] as defined in the Act, that includes each location
where courses of instruction shall be offered.
Subchapter B. CERTIFICATES OF APPROVAL
(2)
a properly executed school bond;
]
(3)
] complete and correct financial
statements, as specified in this chapter, demonstrating the school is financially
stable and capable of fulfilling its commitments for training;
(4)
] the application fee as specified
in this chapter; and
(5)
] any other revisions or evidence
necessary to bring the school's application for approval to a current and
accurate status as requested by the Commission.
(1)
a properly executed school bond continuation
certificate;
]
(2)
] complete and correct annual
financial statements, as specified in this chapter, demonstrating the school
is financially stable and capable of fulfilling its commitments for training;
(3)
] the renewal fee and the fee
for the tuition
trust account
[
protection fund
], if
applicable, specified in this chapter; and
(4)
] any other revisions or evidence
necessary to bring the school's application for approval to a current and
accurate status as requested by the Commission.
(2)
a properly executed school bond;
]
(3)
] complete and correct annual
financial statements for the most recent fiscal year demonstrating the school
is financially stable and capable of fulfilling its commitments for training;
(4)
] the renewal fee and the fee
for the tuition
trust account
[
protection fund
], if
applicable, specified by this chapter; and
(5)
] any other revisions or evidence
necessary to bring the school's application for approval to a current and
accurate status as requested by the Commission.
and have:
]
(1)
a current certificate of approval from
the Commission;
]
(2)
an accreditation by an agency or association
recognized by the United States Secretary of Education;
]
(3)
a history of conducting classes for the
past two years in Texas and compliance with the Act as a non-degree-granting
school; and
]
(4)
an ability to fully operate as a degree
granting school in compliance with the Coordinating Board's requirements.
]
(b)
A certified and accredited branch campus
of a fully and separately accredited school approved to grant a degree in
Texas may apply to grant the same degree, provided that the branch campus
is also in compliance with all other minimum standards, except for the history
of conducting classes for the past two years.
]
(c)
] The Commission may recognize
the authorization to grant degrees upon receipt of a copy of the letter of
authorization issued by the Coordinating Board.
(6)
filing a claim against the school's surety
bond;
]
(7)
] collecting a late refund penalty
from the school;
(8)
] assessing an administrative
penalty;
(9)
] applying for an injunction
against the school;
(10)
] asking the Attorney General
to collect a civil penalty from any person who violates the Act or this chapter;
(11)
] ordering a peer review of
the school;
(12)
] revoking a program approval;
(13)
] denying a program approval;
(14)
] requiring full or partial
refunds to students for program violations or deficiencies;
(15)
] suspending the admission
of students to the school;
(16)
] charging the school an investigation
fee to resolve a complaint against the school; and
(17)
] charging the school interest
and penalties on late payments of fee installments.
Subchapter C. FINANCIAL REQUIREMENTS
(1)
Alternative bonding--A situation in which
the school's bond amount exceeds the highest amount of unearned tuition as
shown on the unearned tuition affidavit.
]
(2)
] GAAP--Generally Accepted Accounting
Principles.
(3)
] GAAS--Generally Accepted Auditing
Standards.
(4)
] Sworn statement--A notarized
statement including the following language: "I swear or affirm that the information
in these statements is true and correct to the best of my knowledge."
(5)
] Unearned tuition affidavit--A
statement of the highest amount of unearned tuition at any time during the
most recent fiscal year, the projected highest unearned tuition at any time
during the next fiscal year, and the gross amount minus refunds of student
tuition and fees earned during the fiscal year in all programs approved under
the Act.
(c)
] The prospective owner shall
also furnish such other evidence as may be deemed appropriate by the Commission
to establish financial stability.
is $50,000
or less
];
; or
]
(C)
the school maintains alternative bonding.
]
An alternative bonded school
] may submit all of the following in lieu
of the financial statements required in this section:
Subchapter E. SCHOOL DIRECTOR AND ADMINISTRATIVE STAFF
The Commission
shall grandfather schools from meeting the director of degree programs requirements
contained in this section for a particular director of degree programs provided
that the school has submitted the application for approval of the director
of degree programs to the Commission prior to the effective date of this section
and the application results in approval by the Commission.
]
and have:
]
(1)
a master's degree with three years of
work-related or administrative experience within the ten years immediately
preceding employment by the school; or
]
(2)
a bachelor's degree with five years of
work-related or administrative experience within the ten years immediately
preceding employment by the school.
]
Subchapter G. COURSES OF INSTRUCTION
(a)
The quality, content, and sequence of
each subject or program shall be appropriate for the purpose of the school
and shall be such that the school may reasonably and adequately achieve the
stated objectives of the subject or program by providing graduates of these
programs with marketable skills.
]
(b)
Prior to graduation students shall demonstrate
the attainment of advanced skills as appropriate to the degree.
]
(c)
At least 95% of the subjects required
for each degree shall be offered in organized classes.
]
(d)
A school may contract with another school
for the instruction of general education or applied foundation courses if
the Coordinating Board has approved that contract.
]
program
] is discontinued for any reason, the Commission shall be notified
within 72 hours of discontinuance and furnished with the names and addresses
of any students who were prevented from completion of the
course of instruction
[
program
] due to discontinuance. Should the school fail
to make arrangements satisfactory to the students and the Commission for the
completion of the
course of instruction
[
program
], the
full amount of all tuition and fees paid by the students are then due and
refundable. Any
course of instruction
[
program
] discontinued
will be removed from the list of approved
courses of instruction
[
programs
].
program
] at any time the Commission
finds cause. For purposes of this subsection, cause includes, but is not limited
to:
program
] or revised
course of instruction
[
program
] that has not been approved by the Commission, the Commission
may require the school to refund to the enrolled students all or a portion
of the tuition fees.
program
] approval, the Commission determines that the applicant fails to meet
the requirements in the Act or this chapter, the Commission shall notify the
school, setting forth in writing the reasons for the denial. This may include
summaries of peer evaluations from both educators and employers offering similar
courses of instruction
[
programs
].
program
] at any time the Commission
finds cause. For purposes of this subsection, cause includes, but is not limited
to:
program
] approval which is untrue;
programs
], or
course of instruction
[
program
] outcomes on the basis of
which approval was issued;
programs
]
without clearly stated limited transferability if there are no articulation
agreements with other postsecondary institutions in the same geographic area;
programs
]
for which financial aid is advertised but is not available;
program
]; or
program
] approval is denied or revoked shall have the right to appeal.
The Commission will conduct hearings in accordance with Commission policies
and procedures applicable to the appeal.
Subchapter J. ADMISSION
correspondence
] schools, the enrollment agreement shall specify the amount of time
allotted to the student to complete the program.
Subchapter K. PROGRESS STANDARDS Correspondence ] Schools.
Correspondence
]
schools shall evaluate progress as the school receives each lesson assignment.
The school shall maintain the record of progress on forms approved by the
Commission. Forms shall include:
Subchapter M. CANCELLATION AND REFUND POLICY
Correspondence
],
combination
distance education-residence
[
correspondence-residence
], and seminars are not required to provide the student a tour.
correspondence
], combination
distance education-residence
[
correspondence-residence
], and seminars, a student may cancel enrollment,
request a full refund, and request a release from any obligations to the school
within three days, excluding Saturdays, Sundays and legal holidays following:
protection fund
]
if the amount is $15 or less. Any other penalty assessed on a school's late
payment of student refunds shall be disbursed in the following order of priority:
protection
fund
] for any remaining balance of assessed penalty.
Subchapter Q. CLOSED SCHOOLS