ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
AMENDED
CTEDs;
nonprofits; postsecondary institutions; agreements..
(NOW: postsecondary board; tuition recovery fund)
Purpose
Removes exemptions for qualified institutions from paying an annual assessment to the Student Tuition Recovery Fund (Fund). Outlines assessment limits and notification requirements. Contains requirements for enactment and becomes effective on signature of the Governor (Proposition 108).
Background
The Fund is administered by the State Board for Private Postsecondary Education (Board) to allow a person injured by a private postsecondary education institution that ceases operations to recover an amount limited to the actual damages sustained (A.R.S. 32-3072). As of FY 2019, the estimated year-end Fund balance was $246,500 (FY 2020 Baseline).
Each private postsecondary education institution collecting prepaid tuition pays an annual assessment to the Board for each newly enrolled student in an amount based on the sum of two-tenths of one percent of the total course cost for each newly enrolled student. The total assessment for each newly enrolled student is limited to $10. Currently, institutions accredited by a regional or specialized accrediting agency that are recognized by the U.S. Department of Education (DOE) are exempt from paying the annual assessment (A.R.S. 32-3072).
A newly enrolled student is a student enrolling with a private postsecondary education institution for the first time or reenrolling after an absence from the institution for one or more years (A.R.S. 32-3071).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires institutions, accredited by a DOE-recognized regional or specialized accrediting agency, to pay an annual assessment to the Board for each newly enrolled student.
2. Removes students who reenroll, after at least a one-year absence from the institution, from the definition of newly enrolled student.
3. Limits the annual assessment each institution pays to the Board to no more than:
a) $10 per newly enrolled student, based upon the total course cost; and
b) $25,000 per annual assessment period.
4. Requires the Board to:
a) notify institutions, within 10 business days after a Board meeting, that only newly or provisionally licensed institutions must pay an assessment, during or after a fiscal year in which the Fund balance exceeds $500,000; and
b) review the Fund balance at the first Board meeting held after June 30 of each year.
5. Makes technical and conforming changes.
6. Requires for enactment the affirmative vote of at least two-thirds of the members of each house of the Legislature (Proposition 108).
7. Becomes effective on signature of the Governor, retroactive to January 1, 2020.
Amendments Adopted by Committee
1. Adopted the strike-everything amendment.
2. Removes the requirement that each location of an education institution pay the prescribed assessment.
Senate Action
ED 2/16/21 DPA/SE 7-1-0
Prepared by Senate Research
March 1, 2021
JO/gs