This bill establishes regulations for contracts between online program management companies and institutions of higher education, including proprietary institutions licensed to offer academic degrees. It prohibits institutions from providing incentive compensation, such as tuition sharing, to online program management companies, except for recruiting students from foreign countries. Contracts between institutions and these companies must be submitted to the Secretary of Higher Education within specified timeframes, and the governing board of the institution must review and approve these contracts. The bill outlines specific provisions that cannot be included in contracts, such as allowing incentive compensation for marketing services, permitting tuition sharing, or allowing the online program management company to influence institutional governance or hire instructors.

Additionally, the bill mandates that online program management companies submit annual reports detailing expenditures on behalf of the institution, which must be shared with faculty and staff unions. Institutions are also required to submit annual reports to the Secretary of Higher Education, including financial and demographic information about students. The bill emphasizes transparency by requiring institutions to disclose the relationship with online program management companies in communications and advertising. Violations of the bill's provisions can result in civil penalties of $10,000 per violation or the maximum amount of incentive compensation due under the contract. The Secretary of Higher Education is tasked with adopting necessary regulations to implement the bill.