ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fifth Legislature

First Regular Session

Senate: ED DPA/SE 7-1-0-0 | 3rd Read 29-0-1-0

House: ED DP 10-0-0-0 | 3rd Read 57-1-2-0

SB 1308: postsecondary board; tuition recovery fund

Sponsor: Senator Shope, LD 8

Transmitted to the Governor

Overview

Limits the annual assessment a private postsecondary education institution (institution) must pay to the State Board for Private Postsecondary Education (Board). Contains a Proposition 108 clause.

History

The Board is comprised of seven members who are appointed by the Governor and confirmed by the Senate. The Board, amongst other outlined duties, is responsible for administering the Student Tuition Recovery Fund (Fund), as well as receiving claims from individuals who are injured by the closure of an institution (A.R.S. § 32-3073).

An individual who is injured by the closure of an institution may recover from the Fund the amount of the actual damages sustained. Each institution that collects prepaid tuition must annually pay an assessment to the Board for each newly enrolled student in an amount equal to the sum of two-tenths of 1% of the total course cost. An institution is not required to pay assessments for: 1) a newly enrolled student who is not an Arizona resident and for whom the institution has paid a Fund assessment or a similar assessment in the student's state of residence; and 2) a student who is not an Arizona resident and who is enrolled in distance learning education.

Currently, the total assessment for each newly enrolled student may not exceed $10. Institutions that are accredited by a regional or specialized accrediting agency recognized by the United States Department of Education (U.S. DOE) are exempt from having to pay assessments (A.R.S. § 32-3072).

A newly enrolled student is currently defined as a student who is enrolling with an institution for the first time or who is reenrolling after an absence from the institution for one or more years (A.R.S. § 32-3071).

Provisions

1.   Caps the annual assessment an institution must pay to the Board at not more than:

a)   $10 per newly enrolled student, based upon the total cost of the course; and

b)   $25,000 per annual assessment period. (Sec. 3)

2.   Requires institutions accredited by a regional or specialized accrediting agency recognized by the U.S. DOE to pay an annual assessment to the Board for each newly enrolled student. (Sec. 2)

3.   Specifies that the Board, within 10 days after a Board meeting, must notify institutions that only newly or provisionally licensed institutions must pay the assessment if the Fund balance exceeds $500,000. (Sec. 4)

4.   Requires the Board to review the Fund balance at the first Board meeting held after June 30 annually. (Sec. 4)

5.   ☐ Prop 105 (45 votes) ☒ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteRemoves a student who reenrolls with an institution after an absence from the institution for one or more years from the definition of newly enrolled student. (Sec. 2)

6.   Deletes the definitions of regional accrediting agency and specialized accrediting agency. (Sec. 2)

7.   Contains a retroactivity clause of January 1, 2020. (Sec. 5)

8.   Contains a Proposition 108 clause. (Sec. 6)

9.   Makes technical changes. (Sec. 1, 2, 3, 4)

10.  Makes conforming changes. (Sec. 3)

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14.                    SB 1308

15.  Initials CH Page 0 Transmitted

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