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F I S C A L I M P A C T R E P O R T

SPONSOR Nunez

DATE TYPED 03/09/05 HB 541

SHORT TITLE Amend Post-Secondary Educational Act

SB

ANALYST Woods

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

Minimal Recurring OSF (CHE Budget)

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

Minimal

See Narrative

Recurring OSF (CHE Budget)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Commission on Higher Education (CHE)

SUMMARY

Synopsis of Bill

House Bill 541 – Relating to Higher Education; Amending the Post-Secondary Educational Institu-

tion Act; Providing for Licensure and Regulation of Non-Regionally Accredited Colleges and Uni-

versities; Exempting Organizations that Offer Brief Courses of Instruction in Specific Skills Train-

ing; Providing for Administrative Fees; Prescribing Penalties – amends the Post-Secondary Educa-

tional Institution Act which covers private proprietary post-secondary institutions.

House Bill 541 -- Page 2

In general, the proposed statutory changes are directed to:

•

clarifying definitions in the statute;

•

adding an exemption for brief courses of instruction;

•

requiring degree-granting institutions to obtain accreditation from an agency

recognized by the U.S. Department of Education; and

•

adding proposed wording clarifying the various types of disciplinary action

that may be taken and allowing CHE to charge an administrative fee based on

actual cost of service.

In addition to minor clarification items, the proposed legislation specifically seeks to amend Sec-

tion 1. Section 21-23-3 NMSA 1978 (being Laws 1971, Chapter 303, Section 3) as follows:

21-23-3. DEFINITIONS

D: Clarifies that license means a written acknowledgment by the commission that

a career school or non-regionally accredited college or university has met the re-

quirements of the commission for offering a formal educational curriculum within

New Mexico.

E: Clarifies that post-secondary educational institution includes an academic, vo-

cational, technical, business, professional or other school, college or university or

other organization or person offering or purporting to offer courses, instruction,

training or education from a physical site in New Mexico, through distance educa-

tion, correspondence or in person to any person within this state.

F: Clarifies that registration means a written acknowledgment by the commission

that a regionally accredited college or university has filed pertinent curriculum

and enrollment information as required by the commission.

With respect to Section 2. Section 21-23-4 NMSA 1978 (being Laws 1971, Chapter 303, Section

4) the proposed legislation specifically seeks to amend:

21-23-4. EXCEPTIONS.

Adds the language: An organization that provides only brief courses of instruction

designed to teach specific skills that may be applicable in a work setting but are

not sufficient in themselves to be a program of training in employment.

With respect to Section 3. Section 21-23-5 NMSA 1978 (being Laws 1994, Chapter 108, Section

6) the proposed legislation also specifically seeks to amend:

House Bill 541 -- Page 3

21-23-5. DUTIES OF THE COMMISSION.

C. Clarifies that the commission shall provide for the licensure of all career

schools and all non-regionally accredited colleges and universities operating in

the state pursuant to the Post-Secondary Educational Institution Act.

With respect to Section 7. Section 21-23-6.3 NMSA 1978 (being Laws 1994, Chapter 108, Sec-

tion 10) the proposed legislation specifically seeks to amend:

21-23-6.3. FEE AUTHORIZATION.

Adds the language: The commission may charge a reasonable administrative fee

not to exceed the actual cost of providing the administrative service.

With respect to Section 8. Section 21-23-10 NMSA 1978 (being Laws 1971, Chapter 303, Sec-

tion 9) the proposed legislation specifically seeks to add language with respect to disciplinary

action and to clarify the civil penalty language as follows:

21-23-10. DISCIPLINARY ACTIONS--CIVIL PENALTIES.

B: Clarifies that whoever violates any provision of this section may be assessed a

civil penalty not to exceed five hundred dollars ($500) per day per violation. Civil

penalties shall be credited to the current school fund as provided in Article 12,

Section 4 of the constitution of New Mexico.

C. Adds the language: After an investigation, the commission may take any one

or a combination of the following disciplinary actions against a post-secondary

education institution licensed in accordance with the Post-Secondary Educational

Institution Act:

(1) revoke a license;

(2) assess a civil penalty as provided in Subsection B of this section; or

(3) impose probation requirements.

Significant Issues

Additional information received from CHE subsequent to initial FIR submission indicates that

only thirty-eight institutions fall under this category. Further, that only a handful of these entities

are expected to be assessed the new fees authorized in this bill in a given year. The minimal

amount of revenue expected to be generated by these fees would be retained by CHE and would

be applied back to program costs.

CHE indicates that the purpose for many of the changes proposed in this legislation is to simplify

and clarify the language regarding private post-secondary schools. Reliance on accreditation by

a U.S. Department of Education-recognized accrediting body for those private schools offering

degrees will help assure academic quality of their programs.

House Bill 541 -- Page 4

CHE notes that the role of the commission is to establish and monitor guidelines for the licensure

of all private post-secondary institutions operating in New Mexico. Further, that the commission

has endorsed these statute changes as have the members of the CHE Advisory Council for

Proprietary Education.

FISCAL IMPLICATIONS

While there is no appropriation attached to this bill, CHE suggests that authorizing the commis-

sion to charge an administrative fee will bring the fee schedule into parity with surrounding

states. Currently, CHE charges no administrative fees. The below table reflects the various fees

from surrounding states:

Arizona

Colorado

Texas

Change of Location

$500

$150

$270

Change of Name

$500

$150

$150

New School Packet

$20

$20

$15

BFW/lg