SENATE 3rd Reading Unamended April 24, 2012 SENATE Amended 2nd Reading April 23, 2012Second Regular Session Sixty-eighth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 12-0486.01 Julie Pelegrin x2700 SENATE BILL 12-164 SENATE SPONSORSHIP Heath and King K., HOUSE SPONSORSHIP Massey and Todd, Senate Committees House Committees Education Finance Appropriations A BILL FOR AN ACT Concerning the operation of private postsecondary institutions in Colorado, and, in connection therewith, making an appropriation. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill makes several changes to the existing statutes concerning authorization of private colleges and universities and seminaries and bible colleges (private institutions) in the state, including changing the term "bible college" to "religious training institution". The changes generally clarify the types of institutions that are subject to authorization and specifically require the Colorado commission on higher education (commission) and the department of higher education (department) to set procedures for authorizing, renewing, and revoking the authorizations for private institutions. The commission must also set the amount of the fees that a private institution pays for the administration of the authorization process, including a separate fee if a private institution seeks approval of an educator preparation program. Each private institution must also report specified student information. Each private institution must obtain authorization for each campus, branch, or site that is separately accredited and operates in Colorado. Authorizations for private colleges and universities are based on the institution's accreditation and are subject to renewal every 3 years or on the same schedule that applies for renewing the institution's accreditation, whichever is longer. Authorizations for seminaries and religious training institutions are based on whether the institution continues to meet the definition for seminary or religious training institution. The bill clarifies the process and standards for renewing authorizations and the conditions and procedures under which the commission may revoke a private institution's authorization or place the authorization on probationary status. Under current law, a private institution that ceases operations must tell the department where it will store its records. The bill requires the private institution to turn its records over to the department, authorizes the commission to seek a court order to seize the records in certain circumstances, and makes the records subject to the open records statutes. The department must keep the records for specified periods. Private colleges or universities that meet specified criteria are not required to file a surety or to otherwise demonstrate financial integrity. Each private college or university that does not meet the criteria must demonstrate financial integrity based on evidence that it meets other criteria. If the private college or university cannot demonstrate financial integrity, it must post surety in a specified amount, which surety may be in the form of a bond, that the commission can use to reimburse students for a loss of tuition or fees or to provide services if the institution ceases to operate in Colorado or a student files a claim against the institution. If a private college or university that does not post surety ceases operations in the state, the attorney general may file a claim on behalf of students to recover any unearned, prepaid tuition. The department must maintain a list of authorized private institutions and establish a process for reviewing and acting on complaints against a private institution. The commission may negotiate reciprocal agreements with other states to assist in implementing authorizations for private institutions. The bill changes the terms of members appointed to the private occupational schools board (board) so that fewer members will be appointed at one time. The current law authorizes a student enrolled in a private occupational school to file with the board a complaint against the school. Under the bill, the student must first exhaust any complaint procedures that the school has in place. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, amend 23-2-102 as follows: 23-2-102. Definitions. As used in this article, unless the context otherwise requires: (1) "Alternate enrollment" means the opportunity for a student enrolled in a private college or university that ceases operation to meet the student's educational objectives through education provided by another authorized private college or university, a community college, an area vocational school, or any other educational arrangement acceptable to the department and the commission. (2) "Authorization" means the authorization granted to a private college or university or seminary or religious training institution by the commission as provided in this article and the policies adopted pursuant to this article. Authorization is not an endorsement of the institution by either the commission or the department. (1) (3) "Commission" means the Colorado commission on higher education created pursuant to section 23-1-102. (1.3) (4) "Degree" means any a statement, diploma, certificate, or other writing in any language which that indicates or represents, or which that is intended to indicate or represent, that the person named thereon is learned in or has satisfactorily completed a prescribed course of study in a particular field of endeavor or that the person named thereon has demonstrated proficiency in any a field of endeavor as a result of formal preparation or training. (1.5) (5) "Department" means the department of higher education created and existing pursuant to section 24-1-114, C.R.S. (6) "Enrollment agreement" means the contract prepared by a private college or university or seminary or religious training institution that a student signs to indicate agreement to the terms of admission, delivery of instruction, and monetary terms as outlined in the institution's student handbook or catalog. (7) "Governing board" means the elected or appointed group of persons that oversees and controls a private college or university or a seminary or religious training institution. (2) (8) "Honorary degree" means any a statement, diploma, certificate, or other writing in any language which that indicates or represents, or which that is intended to indicate or represent, that the person named thereon is learned in any a field of public service or has performed outstanding public service or that the person named thereon has demonstrated proficiency in any a field of endeavor without having completed formal courses of instruction or study or formal preparation or training. (9) "Out-of-state public institution" means an institution of higher education that is established by statute in a state other than Colorado. (10) "Owner" means: (a) An individual, if a private for-profit college or university is structured as a sole proprietorship; (b) Partners, if a private for-profit college or university is structured as a partnership; (c) Members in a limited liability company, if a private for-profit college or university is structured as a limited liability company; or (d) Shareholders in a corporation that hold a controlling interest, if a private for-profit college or university is structured as a corporation. (3) (11) "Private college or university" means a postsecondary educational institution doing business or maintaining a place of business in the state of Colorado, which offers courses of instruction or study wherein credits may be earned and applied toward a degree in a field of endeavor institution enrolls the majority of its students in a baccalaureate or postgraduate degree program. (12) "Private nonprofit college or university" means a private college or university that maintains tax-exempt status pursuant to 26 U.S.C. sec. 501 (c) (3). (3.5) (13) "Private occupational school" means an institution authorized by the private occupational school division to confer associate degrees, under the provisions of article 59 of title 12, C.R.S. (4) (14) "Seminary" or "bible college" "religious training institution" means a bona fide religious postsecondary educational institution doing business that is operating or maintaining a place of business in the state of Colorado, and that is exempt from property taxation under the laws of this state, and that offers bachelor's, master's baccalaureate, master's, or doctoral degrees or diplomas. (5) (15) "State college or university" means a postsecondary educational institution, including a community and or junior colleges college, established and existing pursuant to law as an agency of the state of Colorado and supported wholly or in part by tax revenues. SECTION 2. In Colorado Revised Statutes, add 23-2-102.5 as follows: 23-2-102.5. Applicability of article. (1) (a) A private college or university that enrolls a majority of its students at the certificate or associate level is regulated by the division of private occupational schools and the private occupational school board pursuant to article 59 of title 12, C.R.S., and is not subject to the provisions of this article. (b) If, as a result of changes in student enrollment, a private college or university at times meets the definition provided in section 23-2-102 (11) and should therefore be regulated by the department and the commission, and at other times meets the requirements of paragraph (a) of this subsection (1) and should therefore be regulated by the division of private occupational schools and the private occupational schools board, the private college or university is subject to regulation by the entity that is appropriate as of July 1, 2012, if the private college or university is authorized as of said date, or as of the date the institution applies for authorization, and the institution shall be regulated by the same entity for the following three years. The department shall review the status of the private college or university every three years after July 1, 2012, or every three years after initial authorization, whichever is appropriate, to determine whether the institution should be subject to regulation by the department and the commission or by the division of private occupational schools and the private occupational school board. (2) An out-of-state public institution may request authorization pursuant to the provisions of this article from the department and the commission. In seeking and maintaining authorization pursuant to this article, an out-of-state public institution is subject to the same criteria and requirements that apply to a private college or university. SECTION 3. In Colorado Revised Statutes, amend 23-2-103 as follows: 23-2-103. Awarding degrees. Notwithstanding the provisions of section 7-50-105, C.R.S., or any other law to the contrary, no a person, partnership, corporation, company, society, or association doing business in the state of Colorado shall not award, bestow, confer, give, grant, convey, or sell to any other person a degree or honorary degree upon which is inscribed, in any language, the word "associate", "bachelor", "baccalaureate", "master", or "doctor", or any abbreviation thereof, or offer courses of instruction or credits purporting to lead to any such degree, except unless the person, partnership, corporation, company, society, or association is a state college or university; a private college or university that is authorized pursuant to this article; a private occupational school; or a seminary or bible college and except religious training institution that is authorized pursuant to this article; or a school, college, or university which that offers courses of instruction or study in compliance with standards prescribed by articles 2, 4, 22, 25, 32, 33, 35, 36, 38, 40, 41, 43, and 64 of title 12, C.R.S. SECTION 4. In Colorado Revised Statutes, add 23-2-103.1 as follows: 23-2-103.1. Commission - department - duties - limitation - reciprocity. (1) The commission shall: (a) Establish procedures for authorizing, reauthorizing, and revoking the authorization of private colleges and universities and seminaries and religious training institutions in accordance with the provisions of this article, including but not limited to procedures by which an institution may apply for authorization or reauthorization and the procedures the department shall follow in reviewing applications and making recommendations to the commission; (b) Grant or deny authorizations, renew authorizations, and revoke authorizations pursuant to sections 23-2-103.3 and 23-2-103.4; (c) Establish the types and amounts of fees that a private college or university or seminary or religious training institution shall pay as required in section 23-2-104.5; and (d) Establish policies to require private colleges and universities and seminaries and religious training institutions to submit to the department, upon request, data that is directly related to student enrollment and degree completion and, if applicable, student financial aid and educator preparation programs as described in section 23-1-121. The director of the commission and an employee of the department of higher education shall not divulge or make known in any way data for individual students or personnel, except in accordance with judicial order or as otherwise provided by law. A person who violates this paragraph (d) commits a class 1 misdemeanor and shall be punished as provided in section 18-1.3-501, C.R.S., and shall be removed or dismissed from public service on the grounds of malfeasance in office. (2) The department shall administer the provisions of this article in accordance with the provisions of this article and the policies, guidelines, and procedures adopted by the commission for the administration of this article. To administer this article, the department shall have, but need not be limited to, the following duties: (a) Recommending that the commission grant, deny, revoke, or renew an authorization to operate a private college or university or seminary or religious training institution; (b) Maintaining a list of the private colleges and universities and seminaries and religious training institutions that have authorizations on file with the department; and (c) Establishing and maintaining a process in accordance with section 23-2-104 for reviewing and appropriately acting on a complaint concerning a private college or university or seminary or religious training institution operating in this state, including enforcing applicable state laws if the complaint is based on a claim of deceptive trade practice. (3) The commission and the department are not authorized to regulate the operations of, including but not limited to the content of courses provided by, a private college or university or seminary or religious training institution except to the extent expressly set forth in this article. (4) The commission may negotiate and enter into interstate reciprocity agreements with other states if, in the judgment of the commission, the agreements do not obligate a private college or university or seminary or religious training institution to comply with standards or requirements that exceed the standards and requirements specified in this article and the agreements will assist in accomplishing the purposes of this article. SECTION 5. In Colorado Revised Statutes, amend 23-2-103.3 as follows: 23-2-103.3. Authorization to operate in Colorado - renewal. (1) (a) To do business operate in Colorado, a private college or university shall apply for and receive authorization from the department commission. A private college or university shall obtain a separate authorization for each campus, branch, or site that is separately accredited. A private, nonprofit college or university shall submit with its application verification of nonprofit status, including a copy of the institution's tax-exempt certificate issued by the Colorado department of revenue. (b) After receiving an application, the department shall review the application to determine the compliance of a private college or university with the provisions of this article and other applicable law whether the private college or university is institutionally accredited by a regional or national accrediting body recognized by the United States department of education. The department shall not recommend and the commission shall not approve an application from a private college or university that, in the preceding two years preceding submission of the application, has had its accreditation suspended or withdrawn or has been prohibited from doing business operating in another state or that has substantially the same ownership owners, governing board, or principal officers as a private college or university that, in the two years preceding submission of the application, has had its accreditation suspended or withdrawn or that has been prohibited from doing business operating in another state. An application shall include payment of the fee determined according to section 23-2-104.5. (b) The provisions of paragraph (a) of this subsection (1) shall not apply to a private college or university that, as of May 29, 2008, was authorized to do business in Colorado and that awarded degrees. (2) To do business operate in Colorado, a private college or university is required to shall be institutionally accredited on the basis of an on-site review in Colorado by a nationally recognized regional accrediting association, by an accrediting agency or association by a regional or national accrediting body recognized by the United States department of education; or by an accrediting agency determined by the commission to be in accordance with its educational purposes and programs; except that a private college or university may operate for an initial period without accreditation if the commission determines, in accordance with standards established by the commission, that the private college or university is likely to become accredited in a reasonable period of time or is making reasonable and timely progress toward accreditation in accordance with the accrediting body's policies. The commission may grant a provisional authorization to a private college or university to operate for an initial period without accreditation. The private college or university shall annually renew its provisional authorization and report annually to the commission concerning the institution's progress in obtaining accreditation. (3) A private college or university shall immediately notify the department of any communication from its accrediting agency that indicates it may be at risk of losing accreditation, not being awarded accreditation, or being awarded a lesser accreditation status material information related to an action by the institution's accrediting body concerning the institution's accreditation status, including but not limited to reaffirmation or loss of accreditation, approval of a request for change, a campus evaluation visit, a focused visit, or approval of additional locations. In addition, the institution shall immediately notify the department if the institution's accrediting body is no longer recognized by the United States department of education. (4) To do business operate in Colorado, a bible college or seminary or religious training institution shall apply for and receive authorization from the department and establish that it qualifies as a bona fide religious institution and as an institution of postsecondary education, as defined by rules promulgated by the Colorado commission. on higher education. A bible college or seminary or religious training institution that meets the criteria and rules established by this subsection (4) shall be is exempt from the provisions of subsections (1), (2), and (3) of this section. An application from A bona fide religious institution and an institution of postsecondary education made that applies for authorization pursuant to this subsection (4) shall not include a payment of pay the fee determined established according to section 23-2-104.5. The provisions of this subsection (4) shall not apply to a bible college or seminary that, as of May 29, 2008, was authorized to do business in Colorado and that awarded degrees. (5) (a) The commission may order the department, for cause, to review a private college or university, bible college, or seminary to determine whether to revoke the private college's or university's, bible college's, or seminary's authorization or to place it on probationary status. A review conducted pursuant to this subsection (5) shall ensure that the private college or university or bible college or seminary meets the requirements adopted pursuant to this article. A private college or university that has authorization from the commission pursuant to this section and maintains its accreditation shall apply to the department for reauthorization in accordance with the schedule for reaccreditation by its accrediting body or every three years, whichever is longer. A seminary or religious training institution shall apply for reauthorization every three years. A private college or university or seminary or religious training institution that seeks reauthorization shall submit an application in accordance with the procedures and policies adopted by the commission and shall pay the reauthorization fee established by the commission pursuant to section 23-2-104.5. (b) The commission may revoke the private college's or university's authorization if it finds that the private college or university is no longer accredited. The commission may place the private college or university on probationary status if the commission finds the private college or university has been placed on probation or the equivalent by an accrediting agency. (c) The commission may revoke the bible college's or seminary's authorization or place it on probationary status only if it finds that the bible college or seminary no longer meets the definition of bible college or seminary as defined under section 23-2-102 or no longer meets the requirements adopted pursuant to this article. (6) Nothing in this section shall preclude a seminary or bible college religious training institution from seeking accreditation. (7) (a) By January 1, 2013, the commission shall adopt procedures by which a private college or university or seminary or religious training institution may renew its authorization to operate in Colorado. To renew its authorization to operate in Colorado, a private college or university or seminary or religious training institution shall demonstrate that it continues to meet the minimum operating standards specified in this section and section 23-2-103.8, if applicable. (b) (I) A private college or university that has had its accreditation reaffirmed without sanction is in compliance with section 23-2-103.8, and is not subject to investigation pursuant to section 23-2-103.4 is presumed qualified for renewal of authorization, and the department shall recommend renewal for a period of three years or the length of the institution's accreditation, if applicable, whichever is longer. (II) A seminary or religious training institution that continues to meet the minimum operating standards specified in this section is presumed qualified for renewal of authorization, and the department shall recommend that the commission renew the institution's authorization for three additional years. (c) If a private college or university or seminary or religious training institution cannot demonstrate that it meets the minimum operating standards specified in this section or section 23-2-103.8, if applicable, the department shall recommend that the commission deny the institution's application for renewal of the authorization. If, within six months after receiving the notice of denial of the application for renewal, the institution corrects the action or condition that resulted in denial of the application for renewal, the institution may reapply for renewal of the authorization. If the institution does not correct the action or condition within the six-month period, it may submit a new application for authorization after correcting the action or condition. (d) If a private college or university is under a sanction from its accrediting body at the time it files an application for renewal of authorization to operate in Colorado, the department may recommend that the commission renew the institution's authorization or that the commission grant a probationary renewal of the institution's authorization. If an institution receives a probationary renewal of its authorization, the institution shall reapply for renewal of its authorization annually until the accrediting body lifts the sanction, and the institution shall annually report to the commission concerning the institution's progress in removing the sanction. (e) If the department recommends that the commission grant a probationary renewal of authorization or deny an application for renewal of authorization, the commission shall notify the private college or university or seminary or religious training institution concerning the recommendation, and the department and the commission shall proceed in accordance with the provisions of the "State Administrative Procedure Act", article 4 of title 24, C.R.S. SECTION 6. In Colorado Revised Statutes, add 23-2-103.4 as follows: 23-2-103.4. Authorization - revocation - probationary status. (1) (a) If the commission has reason to believe that a private college or university or seminary or religious training institution meets one or more of the grounds specified in subsection (2) or (3) of this section for revocation of authorization or for placing an institution on probationary status, the commission may order the department to investigate the private college or university or seminary or religious training institution and make a recommendation concerning whether to revoke the institution's authorization or to place the institution on probationary status. (b) To assist the department in conducting an investigation pursuant to this subsection (1), the commission may subpoena any persons, books, records, or documents pertaining to the investigation, require answers in writing, under oath, to questions the commission or the department may ask, and administer an oath or affirmation to any person in connection with the investigation. In conducting the investigation, the department may physically inspect an institution's facilities and records. A subpoena issued by the commission pursuant to this paragraph (b) is enforceable by any court of record in this state. (c) Based on the findings of an investigation pursuant to this subsection (1), the department shall recommend to the commission that the commission should or should not revoke the institution's authorization or place the institution on probationary status. If the department recommends revocation or probationary status, it shall identify the applicable grounds for revocation or probationary status specified in subsection (2) or (3) of this section, and the department and the commission shall proceed in accordance with the provisions of the "State Administrative Procedure Act", article 4 of title 24, C.R.S. (2) With regard to the authorization of a private college or university, the commission may: (a) Revoke the private college's or university's authorization or place the institution on probationary status if the private college or university: (I) Fails to meet any of the minimum standards set forth in this article or in the commission's policies or rules adopted to implement this article; (II) Fails to substantially comply with the applicable laws or rules adopted or implemented by other state-level boards or agencies that have jurisdiction over the institution; or (III) Violates the federal criminal laws or the criminal laws of this state or any other state in which the institution operates; (b) Revoke the private college's or university's authorization if the institution loses its accreditation; (c) Place the private college or university on probationary status if the institution's accrediting body places the institution on probation or the equivalent; or (d) Revoke the private college's or university's authorization or place the private college or university on probationary status if the United States department of education ceases to recognize the institution's accrediting body. (3) The commission may revoke a seminary's or religious training institution's authorization or place the institution on probationary status if the seminary or religious training institution: (a) No longer meets the definition of a seminary or religious training institution specified in section 23-2-102; (b) Fails to meet any of the other minimum standards set forth in this article or in the commission's policies or rules adopted to implement this article; or (c) Violates the federal criminal laws or the criminal laws of this state or any other state in which the institution operates. SECTION 7. In Colorado Revised Statutes, repeal and reenact, with amendments, 23-2-103.5 as follows: 23-2-103.5. Deposit of records upon discontinuance. (1) (a) If a private college or university or seminary or religious training institution ceases operating within this state, the owner of the institution or his or her designee shall deposit with the department the original or legible true copies of all educational records of the institution. (b) If the commission determines that the records of a private college or university or seminary or religious training institution that ceases operating within the state are in danger of being destroyed, secreted, mislaid, or otherwise made unavailable to the department, the commission may seek a court order authorizing the department to seize and take possession of the records. (c) The department or the attorney general may enforce the provisions of this subsection (1) by filing a request for an injunction with a court of competent jurisdiction. (d) The commission shall adopt policies for the implementation of this subsection (1). (2) A person may request, in accordance with the provisions of the "Colorado Open Records Act", part 2 of article 72 of title 24, C.R.S., a copy of a record held by the department pursuant to this section. (3) The department shall permanently retain any student transcripts received pursuant to this section. The department shall retain any other records received pursuant to this section for ten years following the date on which it receives or obtains the records. After the required retention period, the department shall dispose of the records in a manner that will adequately protect the privacy of personal information included in the records. SECTION 8. In Colorado Revised Statutes, add 23-2-103.7 and 23-2-103.8 as follows: 23-2-103.7. Authorized institutions - responsibilities. (1) A private college or university or seminary or religious training institution that is authorized pursuant to this article: (a) Shall not make or cause to be made any oral, written, or visual statement or representation that violates section 23-2-104 (4); (b) Shall annually provide to the department a copy of the institution's enrollment agreement if the institution uses an enrollment agreement; (c) Shall provide bona fide instruction, in accordance with the standards and criteria set by the institution's accrediting body; and (d) If the ownership of the institution changes, shall provide to the department, within thirty days after the change, any material information concerning the transaction that is requested by the department. (2) If a private college or university or seminary or religious training institution violates any of the requirements specified in subsection (1) of this section, the department may recommend to the commission that the institution's authorization be revoked or placed on probationary status. 23-2-103.8. Financial integrity - surety. (1) A private college or university is exempt from the provisions of this section if: (a) The private college or university is a party to a performance contract with the commission under section 23-5-129; or (b) The private college or university: (I) Has been accredited for at least twenty years by an accrediting agency that is recognized by the United States department of education; (II) Has operated continuously in this state for at least twenty years; and (III) Has not at any time filed for bankruptcy protection pursuant to title 11 of the United States code. (2) (a) If a private college or university is not exempt from the requirements of this section pursuant to subsection (1) of this section, the commission shall determine the financial integrity of the private college or university by confirming that the institution meets or does not meet the criteria specified in paragraph (b) or (c) of this subsection (2). The private college or university shall present as part of the application for authorization verifiable evidence that the institution meets the criteria specified in paragraph (b) or (c) of this subsection (2). (b) (I) A private college or university may demonstrate financial integrity by meeting the following criteria: (A) The institution has been accredited for at least ten years by an accrediting agency that is recognized by the United States department of education; (B) The institution has operated continuously in this state for at least ten years; (C) During its existence, the institution has not filed for bankruptcy protection pursuant to title 11 of the United States code; (D) The institution maintains a composite score of at least 1.5 on its equity, primary reserve, and net income ratios, as required in 34 CFR 668.172; and (E) The institution meets or exceeds the pro rata refund policies required by the federal department of education in 34 CFR 668 or, if the institution does not participate in federal financial aid programs, the institution's refund and termination procedures comply with the requirements of the institution's accrediting body. (II) Notwithstanding any provision of subparagraph (I) of this paragraph (b) to the contrary, a private college or university is not required to meet the criteria specified in sub-subparagraphs (A) and (B) of subparagraph (I) of this paragraph (b) if the institution is part of a group of private colleges and universities that are owned and operated by a common owner, so long as all of the other institutions in the group meet the criteria specified in sub-subparagraphs (A) and (B) of subparagraph (I) of this paragraph (b). (c) A private college or university may demonstrate financial integrity by meeting the following criteria: (I) The institution has received and maintains full accreditation without sanction from an accrediting agency that is recognized by the United States department of education, which accrediting agency requires the institution to maintain surety or an escrow account or has affirmatively waived or otherwise removed the requirement for the institution; (II) The institution has been continuously authorized by the commission for at least five years; (III) The institution owns and operates a permanent instructional facility in the state; (IV) The institution annually provides to the commission audited financial statements for the most recent fiscal year that demonstrate that the institution maintains positive equity and profitability; (V) The institution maintains a composite score of at least 1.5 on its equity, primary reserve, and net income ratios, as required in 34 CFR 668.172; and (VI) The institution meets or exceeds the pro rata refund policies required by the federal department of education in 34 CFR 668 or, if the institution does not participate in federal financial aid programs, the institution's refund and termination procedures comply with the requirements of the institution's accrediting body. (3) (a) Each private college or university that is not exempt from the requirements of this section pursuant to subsection (1) of this section and cannot demonstrate financial integrity as provided in subsection (2) of this section, as determined by the commission, shall file evidence of surety in the amount calculated pursuant to subsection (5) of this section prior to receiving authorization to operate in Colorado. The surety may be in the form of a savings account, deposit, or certificate of deposit that meets the requirements of section 11-35-101, C.R.S., or an alternative method approved by the commission, or one bond as set forth in this section covering the applying institution. The commission may disapprove an institution's surety if the commission finds the surety is not sufficient to provide students with the indemnification and alternative enrollment required by this section. (b) If a private college or university files a bond, the bond shall be executed by the institution as principal and by a surety company authorized to do business in this state. The bond shall be continuous unless the surety is released as set forth in this section. (4) The surety shall be conditioned to provide indemnification to any student or enrollee, or to any parent or legal guardian of a student or enrollee, that the commission finds to have suffered loss of tuition or any fees as a result of any act or practice that is a violation of this article and to provide alternate enrollment as provided in subsection (7) of this section for students enrolled in an institution that ceases operation. (5) The amount of the surety that a private college or university submits pursuant to subsection (3) of this section is the greater of five thousand dollars or an amount equal to a reasonable estimate of the maximum prepaid, unearned tuition and fees of the institution for the period or term during the applicable academic year for which programs of instruction are offered including, but not limited to, programs offered on a semester, quarter, monthly, or class basis; except that the institution shall use the period or term of greatest duration and expense in determining this amount if the institution's academic year consists of one or more periods or terms. Following the initial filing of the surety with the department, the private college or university shall recalculate the amount of the surety annually based on a reasonable estimate of the maximum prepaid, unearned tuition and fees received by the institution for the applicable period or term. (6) (a) A student or enrollee, or a parent or guardian of the student or enrollee, who claims loss of tuition or fees may file a claim with the commission if the claim results from an act or practice that violates a provision of this article. The claims that are filed with the commission are public records and are subject to the provisions of article 72 of title 24, C.R.S.; except that the department shall not make the claims records public if the release would violate a federal privacy law. (b) Notwithstanding the provisions of paragraph (a) of this subsection (6), the commission shall not consider a claim that is filed more than two years after the date the student discontinues his or her enrollment with the institution. (7) (a) If a private college or university ceases operation, the commission may make demand on the surety of the institution upon the demand for a refund by a student or the implementation of alternate enrollment for the students enrolled in the institution, and the holder of the surety or, if the surety is a bond, the principal on the bond shall pay the claim due in a timely manner. To the extent practicable, the commission shall use the amount of the surety to provide alternate enrollment for students of the institution that ceases operation through a contract with another authorized private college or university, a community college, an area vocational school, or any other arrangement that is acceptable to the department. The alternate enrollment provided to a student shall replace the original enrollment agreement, if any, between the student and the private college or university; except that the student shall make the tuition and fee payments as required by the original enrollment agreement, if any. (b) A student who is enrolled in a private college or university that ceases operation and who declines the alternate enrollment required to be offered pursuant to paragraph (a) of this subsection (7) may file a claim with the commission for the student's prorated share of the prepaid, unearned tuition and fees that the student paid, subject to the limitations of paragraph (c) of this subsection (7). The commission shall not make a subsequent payment to a student unless the student submits proof of satisfaction of any prior debt to a financial institution in accordance with the commission's rules concerning the administration of this section. (c) If the amount of the surety is less than the total prepaid, unearned tuition and fees that have been paid by students at the time the private college or university ceases operation, the department shall prorate the amount of the surety among the students. (d) The provisions of this subsection (7) are applicable only to those students enrolled in the private college or university at the time it ceases operation, and, once an institution ceases operation, no new students shall be enrolled therein. (e) The commission is the trustee for all prepaid, unearned tuition and fees, student loans, Pell grants, and other student financial aid assistance if an authorized private college or university ceases operation. (f) The commission shall determine whether offering alternate enrollment for students enrolled in an authorized private college or university that ceases operation is practicable without federal government designation of the commission as trustee for student loans, Pell grants, and other student financial aid assistance pursuant to paragraph (e) of this subsection (7). (8) For claims made pursuant to this section that do not involve a private college or university that ceases operation, the commission shall conduct a hearing to determine whether there is loss of tuition or fees, and, if the commission finds that a claim is valid and due the claimant, the commission shall make demand upon the surety. If the holder of the surety or, if the surety is a bond, the principal on the bond fails or refuses to pay the claim due, the commission shall commence an action on the surety in a court of competent jurisdiction; except that the commission shall not file an action more than six years after the date of the violation that gives rise to the right to file a claim pursuant to this section. (9) The authorization for a private college or university is suspended by operation of law when the institution is no longer covered by surety as required by this section. The department shall give written notice to the institution at the last-known address, at least forty-five days before the release of the surety, to the effect that the institution's authorization is suspended by operation of law until the institution files evidence of surety in like amount as the surety being released. (10) The principal on a bond filed under the provisions of this section is released from the bond after the principal serves written notice thereof to the commission at least sixty days before the release. The release does not discharge or otherwise affect a claim filed by a student or enrollee or his or her parent or legal guardian for loss of tuition or fees that occurred while the bond was in effect or that occurred under any note or contract executed during any period of time when the bond was in effect, except when another bond is filed in a like amount and provides indemnification for any such loss. (11) Each private college or university that files a surety pursuant to subsection (3) of this section shall provide annual verification of continued coverage by surety as required by this section in a report to the commission due by January 1 of each year. The commission may disapprove a surety if it finds that the surety is not adequate to provide students with the indemnification and alternate enrollment required by this section. (12) If a private college or university that is exempt from the provisions of this section or that demonstrates financial integrity pursuant to subsection (2) of this section ceases to operate in this state, the state attorney general may file a claim against the institution on behalf of students enrolled in the institution at the time it ceases operation to recover any amount of unearned, prepaid tuition that may be owed to the students. (13) A seminary or religious training institution is not subject to the requirements of this section. SECTION 9. In Colorado Revised Statutes, amend 23-2-104 as follows: 23-2-104. Administration of article - complaints - injunctive proceedings. (1) The department is charged with the administration of shall administer this article pursuant to statute and appropriate policies adopted by the commission. (2) (a) The commission shall specify procedures by which a student or former student of a private college or university bible college or seminary or religious training institution may file a complaint with the department concerning the institution in which the student is or was enrolled. If a former student files a complaint, he or she must do so within two years after discontinuing enrollment at the institution. The department is authorized to may investigate complaints based on a claim of a deceptive trade practice as described in subsection (4) of this section. The department shall does not have jurisdiction to consider complaints that infringe on the academic freedom or religious freedom of, or question the curriculum content of, a private college or university bible college or seminary or religious training institution; except that the department shall have has jurisdiction to consider a complaint that pertains to the general education core course requirements of a private college or university bible college, or seminary or religious training institution, or to any of the specific core courses included in said requirements, if the private college or university bible college or seminary has chosen or religious training institution chooses to seek transferability of its general education core courses pursuant to section 23-1-125 (5). (b) Upon receipt of a complaint, the department shall verify that the complaint warrants investigation under the guidelines established by the commission and as a deceptive trade practice. A complaint will warrant investigation only when the student has exhausted all complaint and appeals processes available at the institution. The department shall dismiss a complaint shall be dismissed if it does not warrant investigation under the commission's guidelines and is not a deceptive trade practice. If the complaint warrants investigation, the department shall first forward the complaint to the institution for a written response. The institution shall have thirty days to forward its response respond in writing to the department, and to forward a copy of the response shall be forwarded to the student. During the thirty-day period, the institution may attempt to resolve the complaint with the student, and the department shall assist in the efforts to resolve the complaint. If the department determines at any time that a complaint no longer warrants investigation, the department shall dismiss the complaint. (c) If a complaint is not resolved during the thirty-day period, the department may dismiss the complaint based on the institution's response, investigate the complaint further, or recommend that the commission evaluate the merits of the complaint. If the commission finds the complaint is meritorious, it may recommend that the private college or university or bible college or seminary or religious training institution take appropriate action to remedy the complaint. (d) If the private college or university bible college or seminary or religious training institution does not take the action on the recommendation of recommended by the commission, the commission may forward the complaint and findings to the attorney general. (3) The commission, acting through the attorney general, may proceed by injunction against any violation of this article, but an injunction proceeding or an order issued therein or as a result thereof shall not bar the imposition of any other penalty imposed for violation of this article. (4) It is a deceptive trade practice for: (a) A school An institution or agent to make or cause to be made any statement or representation, oral, written, or visual, in connection with the offering of educational services if such school the institution or agent knows or reasonably should have known the statement or representation to be materially false, substantially inaccurate, or materially misleading; (b) A school An institution or agent to represent falsely or to deceptively conceal, directly or by implication, through the use of a trade or business name, to deceptively conceal the fact that it an institution is a school; (c) A school An institution or agent to adopt a name, trade name, or trademark that represents falsely, directly or by implication, the quality, scope, nature, size, or integrity of the school institution or its educational services; (d) A school An institution or agent to intentionally and materially represent falsely, directly or by implication, that students completing who successfully complete a course or program of instruction successfully may transfer credit therefor the credits earned to any institution of higher education; (e) A school An institution or agent to intentionally and materially represent falsely, directly or by implication, in its advertising or promotional materials or in any other manner, the size, location, facilities, or equipment of the school institution; the number or educational experience qualifications of its faculty; the extent or nature of any approval received from any state agency; or the extent or nature of any accreditation received from any accrediting agency or association; (f) A school An institution or agent to provide prospective students with any testimonials, endorsements, or other information that has the tendency to materially mislead or deceive prospective students or the public regarding current practices of the school institution; (g) An agent representing an out-of-state school to represent, directly or by implication, that said the school is approved or accredited authorized by the state of Colorado or approved or accredited by an accrediting agency or body when the institution has not been authorized, approved, or accredited; (h) A school or agent to designate titles to employees whose primary job duties are to recruit students, which titles have the tendency to mislead or deceive prospective students or the public regarding the authority or qualifications of such employees An institution to designate or refer to its sales representatives by titles that imply the sales representatives have training in academic counseling or advising if they do not. SECTION 10. In Colorado Revised Statutes, amend 23-2-104.5 as follows: 23-2-104.5. Fees - public hearing. (1) The commission shall establish a fee fees to be paid by a private college or university that submits an application pursuant to or seminary or religious training institution for the administration of this article. The amount of the fee fees shall reflect the direct and indirect costs of the administration of administering this article. The commission shall propose, as part of the department's annual budget request, an adjustment in the amount of the fees that it is authorized to collect pursuant to this section. The budget request and the adjusted fees shall reflect the direct and indirect costs of administering this article. (2) The commission may establish a fee to be paid to the department by a private college or university that is authorized pursuant to this article and that applies for approval of an educator preparation program pursuant to section 23-1-121. The amount of the fee shall reflect the direct and indirect costs of the department in administering the provisions of section 23-1-121. (3) Prior to establishing a new fee or increasing the amount of an existing fee, the commission shall hold a public hearing to discuss and take testimony concerning the new fee or increase in fees. The commission shall provide notice of the public hearing and the proposed new fee or fee increase to each private college or university and seminary and religious training institution at least thirty days prior to the date of the public hearing. SECTION 11. In Colorado Revised Statutes, 12-59-105.1, amend (5) as follows: 12-59-105.1. Proprietary postsecondary education board - established - membership. (5) (a) The board members shall serve four-year terms; except that, of the members first appointed to the board, three members to be selected by the governor shall serve two-year terms. No A member shall not serve more than two consecutive four-year terms. (b) Notwithstanding the provisions of paragraph (a) of this subsection (5), of the three members appointed to replace persons whose terms expire on June 30, 2012, one member selected by the governor shall serve a two-year term, one member selected by the governor shall serve a three-year term, and one member selected by the governor shall serve a four-year term. Subsequent appointments to the positions identified in this paragraph (b) shall serve four-year terms. (c) Notwithstanding the provisions of paragraph (a) of this subsection (5), of the four members appointed to replace persons whose terms expire on June 30, 2014, one member selected by the governor shall serve a one-year term, one member selected by the governor shall serve a two-year term, one member selected by the governor shall serve a three-year term, and one member selected by the governor shall serve a four-year term. Subsequent appointments to the positions identified in this paragraph (c) shall serve four-year terms. SECTION 12. In Colorado Revised Statutes, 12-59-118, amend (1) as follows: 12-59-118. Complaints of deceptive trade or sales practices. (1) A person claiming pecuniary loss as a result of a deceptive trade or sales practice, pursuant to section 12-59-117, by a school or agent shall first exhaust all complaint and appeals processes available at the school. If the person's complaint is not resolved to the person's satisfaction, the person may file with the board a written complaint against the school or agent. The complaint shall set forth the alleged violation and such other relevant information as may be required by the board. A complaint filed under this section is a public record subject to the provisions of article 72 of title 24, C.R.S., and shall be filed within two years after the student discontinues his or her training at the school or at any time prior to the commencement of training. SECTION 13. In Colorado Revised Statutes, 12-47-902.5, amend (5) (a) as follows: 12-47-902.5. Alcohol-without-liquid devices - legislative declaration - unlawful acts. (5) (a) Subsection (3) of this section shall not apply to a hospital, as defined in section 25.5-1-503 (3), C.R.S., that operates primarily for the purpose of conducting scientific research, a state institution conducting bona fide research, a private college or university, as defined in section 23-2-102 (3) (11), C.R.S., conducting bona fide research, or to a pharmaceutical company or biotechnology company conducting bona fide research and that complies with the provisions of this subsection (5). SECTION 14. In Colorado Revised Statutes, 12-59-115, amend (13) as follows: 12-59-115. Bonds. (13) For the purposes of this section, "school" and "private occupational school" shall include a for-profit private college or university, as defined in section 23-2-102 (3) (11), C.R.S., in which the majority of students are enrolled in courses and programs that are occupational in nature, as defined by the board. SECTION 15. Appropriation. In addition to any other appropriation, there is hereby appropriated, to the department of higher education, for the fiscal year beginning July 1, 2012, the sum of $75,500 cash funds, from fees paid by private colleges and universities pursuant to section 23-2-104.5, Colorado Revised Statutes, or so much thereof as may be necessary, for the implementation of this act. SECTION 16. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.