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 online program management companies to influence institutional governance or decision-making.

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 data and demographic information about students. The bill emphasizes transparency by requiring institutions to disclose their relationships with online program management companies in communications and advertising. Violations of the bill's provisions can result in civil penalties. Overall, the legislation aims to enhance accountability and protect the integrity of higher education institutions in their dealings with online program management companies.