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PA Bulletin, Doc. No. 96-1474




[22 PA. CODE CH. 73]

Private Licensed Schools

[26 Pa.B. 4334]

   The State Board of Private Licensed Schools (Board) at its meetings of February 17, 1995, and February 8, 1996, adopted a final rulemaking by amending Chapter 73 (relating to general provisions) which relates to the licensure and registration of schools which train individuals to pursue occupations in the skilled trades, industry or business to read as set forth in Annex A.

Scope and Purpose

   Section 73.42 (relating to exemptions from licensure) is revised to define the various categories of exempt schools, particularly the statutory term ''public and other service occupations,'' so that regulated entities will be able to know whether they must be licensed before they can operate. In addition, § 73.183a (relating to prosecution of violations and other matters) is adopted to create a review and recommendation panel of three Board members who will perform the prosecutorial functions of the Board. Other sections are revised to conform with these major changes.


   Notice of proposed rulemaking was published at 24 Pa.B. 5324 (October 22, 1994) with an invitation to submit written comments within 30 days. The Board received public comments from five schools or other interested entities, in addition to the comments of the House and Senate standing committees and the Independent Regulatory Review Commission (IRRC).

   Regarding § 73.1 (relating to definitions), the Senate Education Committee recommended the addition of language to require that one member of both the hearing panel and the review and recommendation panel be a ''public member'' as defined in the Private Licensed Schools Act (act) (24 P. S. §§ 6501--6518). This change was suggested to promote balance and consumer protection in the functioning of these panels. The Board concurred in this suggestion and amended both definitions accordingly.

   Several commentators suggested that the reference to the Dictionary of Occupational Titles (1991 edition) (Dictionary) was unduly restrictive. They suggested that this document is updated periodically to add new career titles. The Board concurred in this suggestion and thus amended § 73.41 (relating to private licensed schools and admission representatives) to include amendments or supplements to the dictionary.

   In a similar vein, a commentator observed that strict use of the career titles in the Dictionary might result in over-regulation. These titles include in their ambit functions taught by purveyors of software and hardware, often along with the sale or lease of the product. A final sentence was added to § 73.41 to exclude these entities and types of training from licensure.

   Another commentator expressed concern that the exemption from licensure for in-house training programs in § 73.42(8) (relating to exemptions from licensure) should not apply to contractors. The Board disagreed because it has consistently construed the statutory exemption broadly to exempt employers and unions which provide free in-house training as well as contracted trainers.

   IRRC made two recommendations regarding the provisions drafted to separate the Board's prosecutorial and adjudicative functions. First, IRRC felt that the phrase prohibiting review and recommendation panel members from serving on hearing panels ''during their service on the review and recommendation panel'' was unnecessary. The Board agreed and deleted this phrase. Second, IRRC observed that § 73.188 (relating to hearings), although clearly prohibiting review and recommendation panel members from participating in subsequent deliberation and decisions did not speak to whether hearing panel members could participate in the Board's adjudication of the panel's case. IRRC suggested that they should be able to participate, a suggestion with which the Board agreed and regarding which the section was amended.

   Several commentators addressed § 73.42(3), and most specifically as it relates to hospital-based allied health education programs. The Hospital Association of Pennsylvania, counsel to the Association and the House and Senate Education Committees all recommended that these programs be exempted from licensure. In fact, the House Education Committee suggested the addition of a separate subparagraph exempting these programs.

   IRRC contended that these allied health programs ''consisting of classes, where, for tuition, individuals receive resident instruction in preparation to pursue skilled occupations in hospitals, clinics or elsewhere in the health care field . . . '' fall squarely within the statutory definition of a ''private licensed school.'' In addition, however, IRRC opined that the Board's proposed exemption for ''other service occupations'' was too narrow and could be expanded to include all health service occupations whose primary function is to provide a public health service benefit. In this way, the concern of the hospitals could be addressed within the terms of existing law. Finally, and as a general matter, IRRC indicated that even the proposed amendments, in allowing flexibility to include occupations other than those specifically listed, presented a continued lack of clarity.

   The Board carefully considered all of these comments, as well as the statutory intent of the exemption language. As a result, the Board opted to construe the statutory exemption narrowly and voted to revise § 73.42(3) to make the list of exempt occupations all inclusive. The Board did not add allied health occupations or other health service occupations providing a public service benefit to the listed exempt occupations. The Board felt that the general exemptions were contrary to the intent of the statute. In addition, training in these occupations is provided by private licensed schools, as well as hospitals. Moreover, the Board considered and recognized that several of the hospital-based programs either are not private licensed schools because they are not operated for profit or tuition or come within the free in-house training exemption of § 73.42(8).

   Lastly, IRRC contended that § 73.42(4), proposing to exempt from licensure all schools regulated by licensing boards within the Department of State, went beyond the language of the applicable statute and required amendment thereof. Thus, this section was altered and limited to the barber and cosmetology schools specified in law.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), the Board submitted a copy of the final rulemaking, which was published as proposed at 24 Pa.B. 5324 (October 22, 1994), and on June 20, 1996, delivered a copy thereof to IRRC and to the Chairpersons of the House and Senate Committees on Education for review and comment. In compliance with section 5(b.1) of the Regulatory Review Act, the Board also provided IRRC and the Committees with copies of the comments received, as well as other documentation.

   In preparing these final-form regulations, the Board has considered the comments received from IRRC, the Committees and the public.

   These final-form regulations were approved on June 20, 1996, by the Senate Education Committee and by the House Education Committee and were approved by IRRC on June 20, 1996, in accordance with section 5(c) of the Regulatory Review Act.

Effective Date

   The amendments will go into effect when published as final.


   These amendments are adopted under section 14 of the act (24 P. S. § 6514).

Contact Person

   The contact person is James G. Hobbs, Coordinating Secretary, State Board of Private Licensed Schools, 333 Market Street, Harrisburg, PA 17126-0333, (717) 783-8228, TDD (717) 783-8445.

Fiscal Impact and Paperwork Requirements

   The only fiscal impact of these regulatory changes will be upon those entities that must now become licensed because the Board has defined the categories of exemption from licensure. A previously unlicensed entity will now have to pay the $1,500 initial application fee and the site inspection user fee of $250. After 1 year of operation biennial renewal fees are on the graduated scale based upon gross tuition revenue. These fees are already set in § 73.151 (relating to fees) and are being paid by all presently licensed private schools.

   The opposition to these amendments of the Hospital Association of Pennsylvania is, in part, premised upon financial concerns. The association and its counsel, respectively, argued that licensure would cost association members between $500,000 and $375,000. For these estimates to be accurate, at a per hospital cost of $1,750 to obtain a license, approximately 200 hospitals would have to be operating allied health programs. This is clearly not the case. The total number of hospitals in this Commonwealth is only 250. Of this number, according to informal information from the Department of Health, approximately one-third operate some form of education program in the area of allied health. Thus, even assuming that all of these programs constitute schools or classes that require licensure, the initial costs of becoming licensed would only be $140,000 plus any costs associated with preparing the application and taking other steps that may be needed for licensure. Thus, the fiscal burden is certainly not what was projected and it is simply a start-up cost that is shared equally by all new private licensed schools in this Commonwealth.

   As in the case of fiscal impact, those entities that now must apply for licensure will be subject to the existing rules regarding filing of applications and documents published for use by students.


   The Board finds that:

   (1)  Public notice of intention to adopt the amendments adopted by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder 1 Pa. Code §§ 7.1 and 7.2.

   (2)  A public comment period was provided as required by law and all comments were considered.

   (3)  The adoption of the amendments in the manner provided by this order is necessary and appropriate for administration of the authorizing statute.


   The Board, acting under the authorizing statute, orders that:

   (a)  The regulations of the Board, 22 Pa. Code Chapter 73, are amended by amending §§ 73.1, 73.41, 73.42, 73.184--73.188, 73.192 and 73.201 and by adding § 73.183a to read as set forth in Annex A.

   (b)  The Board shall submit this order and Annex A to the Office of General Counsel and the Office of Attorney General for approval as to form and legality as required by law.

   (c)  The Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.

   (d)  This order shall take effect upon publication in the Pennsylvania Bulletin.

Acting Commissioner,
Office of Postsecondary and Higher Education

   (Editor's Note:  For the text of the order of the Independent Regulatory Review Commission relating to this document, see 26 Pa.B. 3237 (July 6, 1996).)

   Fiscal Note:  Fiscal Note 6-253 remains valid for the final adoption of the subject regulations.

Annex A





§ 73.1.  Definitions.

   The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

   Act--The Private Licensed Schools Act (24 P. S. §§ 6501--6518).

   Acting Director--The individual responsible for assuming the Director's duties in the temporary absence of the Director.

   Board--The State Board of Private Licensed Schools.

   Branch facility--A school facility whether or not located at the administrative headquarters of a school. A school with one school facility has one branch facility.

   Certificate--A document awarded by a school subject to this chapter upon the successful completion of a particular course.

   Chief executive officer--The person ultimately responsible for all phases of the school operation, plant and program, including the method of instruction, the employment of instructors, the organization of classes, the equipment, the advertising used, the maintenance of proper administrative records and other matters related to the administration of the school. The chief executive officer and the director may be the same person.

   Clock hour--A minimum of 50 minutes of instruction.

   Closure--The situation which results when a school ceases to operate.

   Complaint--A matter that has been reported to the review and recommendation panel under § 73.184 (relating to reporting of potential violations), has been investigated by Board staff and has been found to constitute a violation of the act or this chapter.

   Correspondence--A systematic course or program of nonresident instruction.

   Course--A unit of learning covering specific subject matter.

   Credit hour--A unit of curricular material which normally can be taught in a minimum of 14 clock hours of instruction. For laboratory instruction, a credit hour represents a minimum of 28 clock hours. For shop instruction and practicum experiences, including externship/internship experiences, a credit hour represents a minimum of 42 clock hours.

   Degree--A specialized associate degree awarded by a school with the approval of the Secretary under Chapter 42 (relating to program approval).

   Department--The Department of Education of the Commonwealth.

   Diploma--A document awarded by the school subject to this chapter upon the successful completion of an approved program.

   Director--The person designated by a school directly responsible for the day-to-day operation of a school. The Director and the chief executive officer may be the same person.

   Educational supervisor--An individual who reports to the director and supervises all or part of the instructional program in his curricular area.

   Hearing panel--Three Board members, one of whom shall be a public member as defined by section 3(a) of the act (24 P. S. § 6503(a)), who preside over hearings requested by schools to contest enforcement actions and who submit proposed findings and recommendations to the full Board for its adjudication.

   Internship or externship--A structured, supervised learning experience which takes place outside of the school and involves the practical application of competencies acquired during school-based instruction.

   Licensee--A person or entity holding a license issued by the Board in accordance with the act.

   Mail--Ordinary first class mail, United States Postal Service, ICC approved mail carrier or personal delivery, unless otherwise specified.

   Nonresident--A student who is off the premises of a school facility receiving instruction by correspondence, telecommunication or similar means.

   Notice--A written statement issued by the Board to a licensee or registrant or by a licensee or registrant to the Board.

   Prepaid tuition--A sum of money received by a school from a student, or on behalf of a student, for which the period of the student's enrollment has not yet begun.

   Private licensed school sales office--A permanent or temporary facility away from school premises to which an admissions representative reports or from which an admissions representative solicits or procures student enrollments.

   Program--An approved series of organized courses.

   Registered school sales office--A permanent or temporary facility in this Commonwealth of a registered school to which an admissions representative reports or from which an admissions representative solicits or procures student enrollments.

   Remote laboratory--A detached facility for teaching practical application of theoretical instruction, such as a firing range for a security or private investigator program or kitchen facilities for a food service program.

   Reportable event--A circumstance or occurrence as defined in § 73.201 (relating to reportable events) which takes place at a school or which pertains to the school, within the knowledge of the school's owner, director or chief executive officer.

   Resident--A student who is regularly scheduled to be present at a school facility for the purposes of instruction, including attendance at approved externships, internships or field experience.

   Review and recommendation panel--Three Board members, one of whom shall be a public member as defined by section 3(a) of the act, whose role is to perform or direct Board staff in the performance of the prosecutorial functions involved in an enforcement action against a school.

   School--A private licensed school or registered school as defined in the act. An entity requiring a license or registration under the act. The term includes an instructional facility requiring a license when the facility has a different ownership of more than 25% or has a different director or is a separate and distinct legal entity from a licensee.

   Secretary--The Secretary of the Department.

   Student--A person enrolled in a school for the purpose of instruction.

   Teachout--The continuation of instruction to complete the program or course, whenever the school's license has been suspended or revoked or a school has advised the Board that it intends to discontinue operations.

   Telecommunications--Nonresident, systematic instruction by electronic or electromagnetic means.

   Unearned tuition--The portion of tuition charges billed to students of a school but not yet earned by the school. These amounts represent future educational services to be rendered to presently enrolled students.


§ 73.41.  Private licensed schools and admissions representatives.

   Schools and admissions representatives shall be licensed or registered under the act and this chapter. A school that trains or educates individuals so that they may pursue an occupation or career which is listed in the Dictionary of Occupational Titles (1991 edition) as amended or supplemented, unless specifically exempt from licensure under § 73.42 (relating to exemptions from licensure), shall obtain a license under the act and this chapter before operating, advertising or enrolling students. Individual classes or short courses offered by an entity which are ancillary to the sale, lease or use of a product and that provide training in the use of the product, as opposed to training to pursue an occupation or career, are not subject to licensure.

§ 73.42.  Exemptions from licensure.

   The following schools and their admissions representatives are exempt from licensure, except that they may elect to obtain an optional license under § 73.31 (relating to general):

   (1)  A private academic school, which falls under the Private Academic Schools Act (24 P. S. §§ 6701--6721) and this part.

   (2)  A school or class providing training for the vocation of homemaking. Schools or classes which fall into this category are those where the training is specifically designed and advertised as being for home use, as opposed to commercial or business use, and where students are instructed in areas such as cooking, nutrition, child care, consumerism and home decorating.

   (3)  A school or class providing training in public service or other service occupations. Persons engaged in public service occupations are limited to ambulance personnel, emergency medical technicians, firefighters, police, school bus drivers and school crossing guards. Persons engaged in other service occupations are limited to maids, butlers and chauffeurs.

   (4)  A barber school or a school of cosmetology.

   (5)  A school that provides training or instruction in flying and which is being regulated by the Federal Aviation Administration.

   (6)  A private tutorial school that provides individual instruction, including schools in music or dance or individual instruction by a private tutor in other areas.

   (7)  A school authorized to award degrees under 24 Pa.C.S. § 6505 (relating to power to confer degrees), other than those schools approved to award specialized associate degrees under §§ 42.11--42.14 (relating to specialized associate degree programs approval procedure).

   (8)  In-house programs of education or training, such as those provided free of charge by employers or trade unions to their employes or members.

   (9)  A school owned and operated by a bona fide religious institution for the sole purpose of giving religious instruction.

   (10)  A school operated by the Commonwealth or a political subdivision thereof, such as the Department of Education's Stevens State School of Technology, community colleges or area vocational technical schools.

   (11)  A school which is operated by a hospital licensed under the Health Care Facilities Act (35 P. S. §§ 448.101--448.904) and which is accredited by a regional or National accreditation agency.


§ 73.183a.  Prosecution of violations and other matters.

   Prosecution of suspected violations and of actions to refuse, suspend or revoke licenses or registrations will be under the direction and control of the review and recommendation panel. On or before July 1 of each year, the Board chairperson will appoint three Board members to serve on the review and recommendation panel from July 1 through June 30. Members of this panel shall be prohibited from serving on hearing panels under § 73.188 (relating to hearings). In addition, they shall recuse themselves at all times from service on a hearing panel and from Board deliberation and action on any matter that came before the review and recommendation panel during their time of service.

§ 73.184.  Reporting of potential violation.

   (a)  A suspected violation of the act or this chapter may be reported to Board staff.

   (b)  The report will be investigated by the Board staff to determine if the action constitutes a violation of the act or this chapter.

   (c)  If the violation is verified by Board staff as a complaint, it will be reported to the review and recommendation panel for disposition.

   (d)  The review and recommendation panel will consider the report of Board staff and other relevant information and give specific instructions to the staff for the resolution of complaints.

   (e)  A complaint which is not resolved to the satisfaction of the review and recommendation panel may subject the school to enforcement proceedings under §§ 73.181--73.193 (relating to enforcement, refusal, suspension or revocation of license).

§ 73.185.  Investigation procedure.

   The Board staff will investigate a possible violation of the act or this chapter. The investigation will, at a minimum, include interviewing both the complainant and a representative of the school and collecting relevant documents. Upon completion of the investigation, recommendations will be made to the school. The school's response to the recommendations will be monitored. If the Board staff determines that a violation has occurred and it has not been satisfied or corrected, staff will prepare a written report of its findings for submission to the review and recommendation panel. After consideration of the report, the review and recommendation panel will direct the staff to take appropriate action resolving the complaint or initiating enforcement proceedings.

§ 73.186.  Notice of violation.

   (a)  When the review and recommendation panel directs staff to initiate enforcement proceedings against a school or admissions representative, staff shall prepare and send an appropriate notice of violation. The notice of violation will state that the school may be in violation of the act or this chapter, the nature of the violation, the basis for the panels' conclusions and that the school or admissions representative may be subject to penalties in this chapter and a penalty for default. The violation shall be cured within the period specified in the notice or within 14-calendar days from the mailing date of the notice when a period is not specified.

   (b)  The notice will be served upon the school by United States Postal Service certified mail, return receipt requested and is effective from the date of the notice.

   (c)  Within the cure period, the school or admissions representative shall provide to the Board staff a sworn or verified written statement stating that the violation has been cured or did not exist and the facts which establish the same. Upon receipt of the statement, staff will refer it to the review and recommendation panel. At the direction of the panel, Board staff will either notify the school in writing that the statement is accepted and that the complaint is closed or that the statement is rejected and that the school should show cause why enforcement action should not be taken. In the latter case, the school or admissions representative has 14-calendar days from the mailing date of the notification to request a hearing. The request shall be in writing and addressed to the Coordinating Secretary of the Board.

§ 73.187.  Notice of civil penalty.

   A school which has received a notice of violation, has not responded or has not responded to the satisfaction of the review and recommendation panel and has not requested a hearing within the time prescribed, is liable to a levy of civil penalty or conviction of a summary offense.

§ 73.188.  Hearings.

   (a)  General. A hearing requested before the Board will be conducted under the procedures in 2 Pa.C.S. §§ 501--508 (relating to practice and procedure of Commonwealth agencies) and 1 Pa. Code Part II (relating to general rules of administrative practice and procedure).

   (b)  Scheduling. Upon receipt of a request for a hearing, the Board will establish a hearing date and provide the requesting party reasonable notice of the date, time and place of the hearing.

   (c)  Panel.  The Board will empanel three of its members to conduct a hearing. The hearing panel will hear the evidence and submit written findings and recommendations to the Board. The hearing panel may not include any member of the review and recommendation panel that reviewed and directed the prosecution of the case.

   (d)  Briefs and argument. The parties to the hearing may submit briefs to the Board and may request the opportunity to present oral argument before the full Board.

   (e)  Adjudication. After consideration of the hearing panel's findings and recommendation, and briefs or oral arguments, the Board will vote on the matter and reduce its decision to writing. The Board members who served on the review and recommendation panel for the matter being considered by the Board shall recuse themselves from the discussion, consideration and voting on the matter. Hearing panel members may participate in the Board's adjudication of the matter heard by the panel. The Board's written decision will contain findings of fact, conclusions of law and discussion thereof. The Board's written decision and an accompanying order describing the disciplinary action taken in connection therewith, will be sent to all parties by United States Postal Service certified mail, return receipt requested, and is effective as of the date of mailing. The written decision of the Board constitutes an adjudication within the meaning of 2 Pa.C.S. § 101 (relating to definitions) and may be appealed under 2 Pa.C.S. § 702 (relating to appeals). If the Board adjudication is not appealed, it will be deemed final.

§ 73.192.  Violation by unlicensed or unregistered person or entity.

   (a)  Upon determination by the review and recommendation panel that an unlicensed or unregistered activity has occurred or is occurring, the panel may direct staff to serve upon the person or entity a notice of unlicensed or unregistered activity. The notice will require the person or entity to cease and desist from the activity under specified sections of the act or this chapter proscribing the activity, or the person or entity will be liable to pay a civil penalty of not more than $1,000 and will be liable to prosecution for a summary offense punishable by a maximum fine of $300. The notice will state that if a hearing is not requested within 24 hours of receipt of the notice, the notice shall constitute a final adjudication by the Board.

   (b)  A person or entity who engages in an unlicensed or unregistered activity and fails to obey or otherwise respond to a notice to cease and desist from the activity under this section or fails to obey or otherwise respond to the processes of a judicial district of this Commonwealth or a subpoena of the Attorney General will be refused a license by the Board for at least 5 years from the mailing date of the notice of unlicensed or unregistered activity.


§ 73.201.  Reportable events.

   (a)  A school is required to notify Board staff of an event which is reportable under this chapter.

   (1)  No particular form of notice is required by the Board.

   (2)  A notice shall be in writing and mailed to Board staff.

   (3)  An event shall be deemed reported when the written notice is deposited in the mail.

   (4)  A notice of a reportable event shall be made to the Board within 48 hours from the date the school knew or should have known of the occurrence of the event.

   (5)  Failure by a school to report an event within the time prescribed by this section is a violation.

   (b)  The following are reportable events:

   (1)  The financial condition of the school has changed materially as the term ''material change'' is understood in accordance with standard accounting practice.

   (2)  The school's form of surety has or is about to lapse or the level of surety has become insufficient to protect the contractual rights of students.

   (3)  The school is the named voluntary debtor in a petition in bankruptcy filed under 11 U.S.C.A. §§ 101--1330, known as the Federal Bankruptcy Act, or has made an assignment for the benefit of creditors or has become insolvent. If a licensee is named as an involuntary debtor, the licensee shall notify the Board when a court of appropriate jurisdiction declares the licensee bankrupt.

   (4)  The school has been notified of a building code violation affecting the health and safety of its occupants.

   (5)  The school has been notified that the licensed premises are endangered by an environmental hazard.

   (6)  The school is to be subject to a Title IV--section 487(c) of the Higher Education Act of 1965 (20 U.S.C.A. § 1094)--audit initiated by the United States General Accounting Office.

   (7)  Another event in a section of this chapter which imposes on a school an obligation to notify the Board, subject to the specific reporting requirements of the section.

[Pa.B. Doc. No. 96-1474. Filed for public inspection September 6, 1996, 9:00 a.m.]

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