MINUTES OF THE ASSEMBLY COMMITTEE ON EDUCATION Sixty-eighth Session April 12, 1995 The Committee on Education was called to order at 3:30 p.m., on Wednesday, April 12, 1995, Chairman Wendell P. Williams presiding in Room 330 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. William Z. (Bill) Harrington, Chairman Mr. Wendell P. Williams, Chairman Mrs. Gene Wines Segerblom, Vice Chairman Ms. Patricia A. Tripple, Vice Chairman Mr. Thomas Batten Mr. Max Bennett Mrs. Deanna Braunlin Mrs. Vonne Chowning Mrs. Marcia de Braga Mr. Mark Manendo Mr. P.M. Roy Neighbors Mrs. Jeannine Stroth GUEST LEGISLATORS PRESENT: Ms. Barbara Buckley, Assembly District 8 STAFF MEMBERS PRESENT: H. Pepper Sturm, Chief Principal Research Analyst OTHERS PRESENT: David Perlman, Commission on Postsecondary Education John W. Riggs, Sr., Gun Owners Henry Etchemendy, Nevada Association of School Boards Robert McCart, Executive Director, Education Dynamics Institute Karen Stocking Melanie Meehan Crossley, Deputy Attorney General Mary Peterson, Superintendent, Nevada State Department of Education The hearing was opened on Senate Bill 85. SENATE BILL 85 - Revises provisions governing suspension or expulsion of pupil who possesses dangerous weapon or firearm. Mr. Henry Etchemendy, Nevada Association of School Boards (NASB) , explained S.B. 85 was drafted at the request of the association. Referring to Page 1 of S.B. 85, Mr. Etchemendy directed the committee's attention to Section 1, Subsections 1 and 2. Speaking to the current law, Mr. Etchemendy explained if a pupil commits a battery resulting in bodily injury or sells or distributes a controlled substance, the pupil must be suspended or expelled. He may be placed in another kind of school for a period equal to at least one semester. In Subsection 2, if a pupil is found on school grounds in possession of a dangerous weapon, the pupil may be expelled or placed in another kind of school for a period not to exceed the equivalent of one semester. The NASB felt the penalties should be up to local school boards and should be equal. Expulsion or placement in an alternative school for a period equal to one semester rather than less than one semester for possessing a dangerous weapon on the school grounds was suggested. The purpose of the bill was to make the penalties equivalent and up to the school boards to levy. Referring to Page 2 of S.B. 85, Mr. Etchemendy directed the committee's attention to Lines 28- 30. On Line 24 a definition is stated for "dangerous weapon", including various objects and explosives. He stated there are many other items which can and have been used as dangerous weapons. NASB felt an additional definition of "dangerous weapon" was needed. The new language defining "dangerous weapon" is included on Lines 28-30. During the bill drafting process, the Legislative Counsel Bureau contacted NASB with information pertaining to federal requirements enacted in 1994 to add requirements to state law with respect to firearms violation. Under federal law these violations require mandatory expulsion for one year. It allows, as shown on Page 1, Lines 20-22, the superintendent of schools of a given district may allow an exception to the expulsion requirement for this subsection. Those portions are from the Gun Free Schools Act and the state is required to enact these regulations. Chairman Williams asked if Mr. Etchemendy was referring to Section 1, Lines 20- 22. Mr. Etchemendy replied affirmatively. Assemblyman Stroth announced Assemblyman Perkins had a bill which would be out soon redefining dangerous weapon in the terms of its use and damage. Mr. Etchemendy stated when S.B. 85 was processed in the Senate, the Senate received a letter from a Las Vegas attorney, representing a legal consortium. They indicated the present, preferred terminology, rather than "dangerous weapon" was "deadly weapon". The Senate committee reviewed this information. Many statutes refer to "deadly weapon" and others refer to "dangerous weapon". Sometimes the terms are used interchangeably. It was requested the bill be processed containing existing language. Later, if another definition or term is enacted, all bills will need to be changed to conform. Assemblyman Segerblom asked if the federal requirements had been put in any bill yet. Mr. Etchemendy stated S.B. 85 was the first bill in which the requirements were added. He said he knew of two other bills where similar provisions were included for the same purpose. Assemblyman Bennett asked if the committee had processed A.B.123 previously. This bill contains some of the same basic language. Mr. Bennett expressed concern regarding conflict legislation. Mr. Etchemendy stated he believed A.B. 123 was drafted at the request of the State Board of Education. The board was attempting to conform to state statutes to the Gun Free Schools Act. He agreed with Mr. Bennett, stating conflict resolution would have to occur at a later time. Chairman Williams announced A.B. 123 was concurrently referred to Education and Judiciary. It is in Judiciary Committee at this time. Chairman Williams asked for clarification on school districts having options on deciding on expelling a student or placing the student in another school. Mr. Etchemendy stated school districts would be able to establish the amount of time a student could be placed in an alternative school, as opposed to suspension or expulsion. The school district would have the authority to establish that in one section of the bill for one violation for a period not exceeding one semester. For the other violation, the punishment is for one semester. The two are separate as to the maximum term. NASB felt the limit should be the same for both violations. Chairman Williams asked if it allowed the student to attend a school in another school district. Mr. Etchemendy stated another statute, enacted in the 1993 session, which does not allow a pupil expelled in one district to go to another district and enroll until his original term of expulsion has expired. Chairman Williams talked about a bill from a previous session stating if a student was expelled or attended an alternative school, regardless of in or out of state, for causing a violent situation or assault on a teacher to occur, the new school and teacher would be notified of the charge. Reports have been received stating this is not happening. He asked if NASB had any way of determining if this were the case. Mr. Etchemendy stated he believed the bill was passed either two or three sessions ago. If school district central offices know of violations regarding the students, it is their responsibility to notify teachers. Some cases may slip through. He offered to attempt to find out if this were the case and would express concern to various superintendents. Assemblyman Manendo agreed with Chairman Williams' point. He added he felt teachers and students should be notified for safety reasons. Assemblyman Batten noted in the Judiciary Committee's consideration of A.B. 123, the description of dangerous weapons includes N.R.S. 202.350 as the description. This includes, without limitation, the same objects listed in S.B. 85. When firearms are described under 18 United States Code, Section 921, it is the same as described in A.B. 123. Mr. Batten stated he felt there was no problem with the way S.B. 85 was describing dangerous weapons and firearms. Chairman Harrington stated he liked both A.B. 123 and S.B. 85. He stated he liked the language in A.B. 123 somewhat better. Mr. John W. Riggs, Sr. representing gun owners in Nevada, stated gun owners have a selfish reason for supporting S.B. 85. One of the first things which happens when children are involved with firearms in a school is it becomes a highly charged, emotional issue. Often the immediate desire is to get rid of guns. Mr. Riggs stated the gun is not at fault. It takes someone to pull the trigger. Looking to protect their rights as law abiding citizens to possess guns, the Nevada gun owners support S.B. 85 and describe it as relevant. Mr. Riggs described a gun as a tool which can be used for good or bad. The user determines this. He stated it may make parents more responsible for their children. It suggests other areas of responsibility. Another reason the gun owners support S.B. 85 is because the superintendent of schools or the principal have some latitude in determining whether a student is allowed to bring a gun to school. This could be allowed for a school play, for example. Ms. Karen Stocking, University of Nevada-Reno student and employee of Wittenberg Hall, Reno, Nevada, testified against S.B. 85. She stated she felt it was important to have severe laws for juvenile offenders but believed preventative measures were in order before offenses occurred such as metal detectors or gun safety education. She felt sending offenders to alternative schools was a good option but stated expulsion was inappropriate due to the value of education. If a student is expelled and out in the community unsupervised, the students will not be helped. Referring to her work experience at Wittenberg Hall, Ms. Stocking stated the children she works with feel expulsion is more of a reward than a punishment. Mr. Manendo stated he understood Ms. Stocking's concerns. He felt the protection of the classroom needed to be addressed. Mr. Manendo asked Ms. Stocking where the line should be drawn regarding number of offenses to be tolerated in student's bringing weapons to school. Ms. Stocking agreed something needed to be done. She felt preventative measures were in order. She also agreed punishment was in order when offenses occur. Reiterating her belief that expulsion was not the solution, Ms. Stocking felt it would not be of any benefit to the community to have the students running around unsupervised. Mr. Manendo asked what preventative measures Ms. Stocking felt were appropriate. Ms. Stocking stated she felt school metal detectors were an option as well as gun safety education. Mr. Manendo described a proposed bond issue in Las Vegas in which more security for schools and metal detectors were requested. The bond issue was defeated. Yet, response to the problem is required. Ms. Stocking asked if the students committing these offenses could be sent to juvenile detention as an option. Schooling is provided there. Mr. Manendo noted the bill allows for the students to attend alternative schools. Ms. Stocking stated her concern was with students being expelled and out of school for a year. She believed it to be great loss of education time. When returning to the educational system, students would be required to review extensively. Mr. Manendo suggested this was where the parents needed to begin being responsible. Home schooling the child for the expulsion year was suggested. Ms. Stocking expressed concern about working parents and expelled students. Assemblyman Tripple stated there are those who believe everything that goes wrong with adolescents is pushed onto the schools. Ms. Tripple asked why Ms. Stocking felt metal detectors were a good idea. Ms. Stocking stated the public has to go through metal detectors to get on airplanes for their own safety. Ms. Tripple asked how long Ms. Stocking had worked at Wittenberg Hall, which is a juvenile detention center. Ms. Stocking stated she had worked there for five months and was currently on leave. She will return in the future. Ms. Tripple asked what Ms. Stocking knew about the adolescents at Wittenberg Hall. Ms. Stocking stated she felt they did not have a lot of positive role models. School is a great place to find positive role models. She believed parents need to take an active role in the students lives but many parents may not have the background or education to do so. Ms. Tripple asked if putting the students in Wittenberg Hall changed their behavior. Ms. Stocking said it did not. She described programs at Wittenberg Hall for family counseling, and parenting skills. Assemblyman Batten stated he supports the bill in its current form. He also stated he believes in individual responsibility and an individual's knowledge of right and wrong. He believed society has shifted the blame from the individual to the parents, giving the individual more excuses so charges can be fought in court. Under S.B. 85, alternative placement for students exist other than expulsion. If the students fail the alternative placement, the last stop is jail. Regarding metal detectors, Mr. Batten stated he felt they were good, although not foolproof, and expensive. Also, Mr. Batten discussed the tremendous pressures on the public school system and the lack of necessary funding they receive. He felt if individuals erred, they should pay the price. Ms. Stocking asked if Mr. Batten felt taking education away was the price to be paid. With a lack of education the students will be unable to be productive adults. Mr. Batten responded with the query "who's fault is that?" He wondered if any thought was given to the teachers and other students safety as the student is allowed back into school time after time. Ms. Stocking reiterated her belief of how vital education is. Mr. Bennett asked if the protection needs to lie with the majority of the students who do not carry weapons or with the minority. Ms. Stocking stated she believed all students need to be protected. Her main concern is not taking the students' schooling away. If alternative placement is an option, then so be it. She stated the bill is not clear as to how the students would be educated. Mr. Manendo asked what Ms. Stocking felt the punishment should be for a first time offender bringing a weapon to school. He wanted to know how many times would be acceptable. Ms. Stocking had no opinion. Taking education away is not the answer. Ms. Mary Peterson, Superintendent of Public Instruction, Nevada State Department of Education, testified in favor of S.B. 85 on behalf of the education coalition. The coalition consists of educational organizations who have met and discussed the issue. This includes the teacher's association, administrator's association, and the school board's association. Ms. Peterson spoke from prepared testimony (Exhibit C). She pointed out that although S.B. 85 was the school board's bill originally, the State Education Department submitted a request to the Legislative Counsel Bureau (LCB) to have provisions of Gun Free Schools Act addressed somewhere in legislation. LCB attached the Education Department's amendment to the school board's association's bill. Ms. Peterson discussed the requirements of the Gun Free Schools Act. She stated the amendments in S.B. 85 meet the requirements stipulated in the Gun Free Schools Act. She distributed a packet to the committee entitled "Guidance Concerning State and Local Responsibilities Under the Gun-Free Schools Act of 1994" (Exhibit D) provided by the United States Department of Education. Compliance is required at both state and local levels. Assemblyman de Braga felt the concerns of Ms. Stocking were legitimate and asked what happens to students who are expelled for a year. She asked about the procedure and if a report is filed with local authorities after expulsion. Ms. Peterson stated there are provisions. Originally the bill stated the student could be placed in another kind of school for the same period of time. She drew the committee's attention to the handout (Exhibit D). On pages 4 and 5 a referral policy is discussed. For local school districts to comply with the Gun-Free Schools Act, which they must do to receive federal funds, a referral policy must be in place. On page 8 of (Exhibit D) alternative settings are discussed. These are mandatory, but are encouraged and supported. Mr. Manendo asked if Mace or pepper spray fell under the bill. Ms. Peterson referred the committee to Page 2, Lines 28, 29 and 30 which states "any other object which is used or threatened to be used in such a manner and under such circumstances as to pose a threat of or cause bodily injury to a person". She stated it was possible Mace and pepper spray would fall under this provision. Chairman Harrington stated he had read an editorial by Al Shacker of New York who was distressed by the amount of violence and lack of alternatives for placement for disruptive students. In the old days reform schools existed. Dr. Harrington asked what options are available now and what options are planned for the future. Ms. Peterson explained if a student commits a violent act in school, the student may be placed in another school as the alternative setting. As far as alternatives to the traditional settings, Ms. Peterson stated good examples are being seen in Clark County and other large urban districts. The State Department of Education supports this and has worked with districts to develop regulations to aid in flexibility in these programs. She expressed a need for more programs and the department's willingness to work with districts on this issue. Chairman Harrington asked if legislation and financing were needed for these programs. Ms. Peterson replied affirmatively. She explained legislation was passed in the 1993 session addressing alternative schooling. What is needed now is to expand options and provide as much funding as possible for those options. The hearing was closed on S.B. 85. The hearing was opened on Assembly Bill 411. ASSEMBLY BILL 411 - Revises amount of surety bond required of certain private postsecondary educational institutions. Chairman Williams announced a bill draft request from the Budget Division had been brought to the committee which was quite similar to A.B. 411. Assemblywoman Barbara Buckley, Assembly District 8, stated she was the sponsor of A.B. 411 and was aware of the bill draft from the Budget Division. She stated some of A.B. 411 would be amended with the bill draft request. Chairman Williams asked if Ms. Buckley wished for the bills to remain separate. Ms. Buckley stated there was a portion in the new bill draft request which is not in A.B. 411 and the two should remain separate. The portion in the bill draft request dealing with tuition recovery fund and bond will be placed in A.B. 411. Chairman Williams discussed working the two bills and coming before the committee with a final product. Committee introduction of the bill draft request would need to be considered and if passed and processed, the new bill and A.B. 411 could be considered. The proponents of both can come together and bring a product before the committee. Ms. Buckley stated A.B. 411 was sent to the Department of Post Secondary Education for comments. They suggested a different model to accomplish the same end. Ms. Buckley expressed willingness to yield to that model. Both parties were in attendance and Ms. Buckley offered both presentations for committee consideration. When the new bill comes before the committee, Ms. Buckley offered to return to the committee with a short presentation so complete, duplicate testimony would not be required. Ms. Buckley stated A.B. 411 concerns vocational schools. Ms. Buckley explained about five years ago, as an attorney for Nevada Legal Services she became involved in a case concerning twenty students at Southern Technical Institute, a vocational school in Las Vegas. The students enrolled in a counselor's course at Southern Technical Institute after seeing a commercial on television promising a counseling career after a six month program. The course cost $4,000. The students enrolled, paying the tuition through federal financial aid. The students assumed the program was a good one since it was government approved for student financial aid. A lawsuit ensued. Ms. Buckley stated what she learned about the federal financial aid system was appalling. Vocational schools are licensed and accredited, receiving federal financial aid through the same system as universities and community colleges. The system was originally engineered for universities and community colleges who were concerned with the overhead of running an educational institution and providing quality education. These institutions were not motivated by profit. The vocational schools entered the market in the 1980's and proliferated. Being subject to the same triad system, to obtain federal financial student aid the school must be licensed by the state, accredited by an accrediting body and certified by the federal government. The state licensing process, in the case of Southern Technical Institute, involved the state writing to the State Division of Mental Health inquiring how the program sounded. Mental Health stated no applicability in the public sector was seen. The license was issued the next day. Accreditation can be purchased through various accrediting agencies, some better than others. Southern Technical Institute was accredited by the National Association of Trade and Technical Schools. This body became concerned by the number of complaints coming from Southern Technical Institute. Cancellation of accreditation was threatened. The corporate owner purchased another school in Alabama which was accredited. The accrediting body of the Alabama school allowed Southern Technical Institute to hook onto the existing accreditation. No visits or curricular review were made. The federal certification process involves two parts, eligibility and certification. Eligibility is a paperwork stamp. Default rates of students were checked. Southern Technical Institute had a forty percent default rate. Schools are cut off at thirty- three percent, yet certification was issued. In the 1980's the certification rate was ninety-seven percent for four thousand schools. The federal government issued a Management by Objective quota stating the more schools you certified as an employee, the better off you would be. This referred to pure numbers. The result was between 1983 and 1989 the loan volume for the Guaranteed Student Loan program almost doubled from six to twelve million dollars. The loan defaults increased by thirty-three percent. The cost of the defaults nationwide as a result of the vocational schools rose from ten percent in 1980 to thirty-six percent in 1989 to more than fifty percent in fiscal year 1990. Forty-four percent of the defaults were attributed to vocational schools as opposed to ten percent to community colleges and universities. Protection is needed for vocational school students. Ms. Buckley explained Southern Technical Institute closed. The corporate owner had twenty schools nationwide, which collapsed all at once leaving many students with no skills and no refunds. The program promised to the students represented by Ms. Buckley was for employment as psychiatric assistants. There is no such position in the mental health field. Because of the large number of vocational schools in Nevada and other states closing and leaving students with no recourse, or offering adequate job preparation education, states have increasingly turned to setting up increased bonding for the schools and to request federal financial aid reform. Nevada currently has a $5000 bond per institution. The refund owed to students at Southern Technical Institute far exceeded the available $5000. What the proposed legislation does, along with proposed amendments, is increases the bond from $5,000 to $10,000 and sets up a tuition recovery fund. Originally in A.B. 411, the bond was increased to either $10,000 or half of the amount of tuition collected. The Department of Postsecondary Education informed Ms. Buckley research revealed bonding over the $10,000 amount was prohibitively expensive and difficult to obtain. The department recommended the tuition recovery fund. A tuition recovery fund passed out of the Senate and Assembly in the 1993 session and was vetoed by the Governor. It was vetoed due to a clause which stated the state would be responsible for any amounts over and above the tuition recovery fund. The proposed amendment to A.B. 411 does not contain that amendment. It provides each school shall pay five dollars per student into a fund. Concern was expressed regarding prohibitive costs in the industry to A.B. 411. Ms. Buckley expressed willingness to use the model which passed last session. She urged the passage of one of the versions of the bill. To do nothing would allow Nevada vocational school students to be victimized. These are people who wish to improve their lives, enroll in schools, are defrauded and have to repay the student loans. Ms. Buckley distributed the proposed amendment "Student Tuition Indemnification Fund" (Exhibit E) and a document entitled "Abuses in Federal Student Aid Programs (Exhibit F). Chairman Harrington, referring to A.B. 411, Line 2, inquired if "Each postsecondary educational institution" meant all state universities also. He stated it was not clear in the bill that these institutions were exempt from posting the bond. Ms. Buckley stated it was her understanding those institutions were to be excluded because they are not "for profit" vocational schools. Chairman Harrington asked if it specifies "for profit" vocational schools in the bill. Mr. David Perlman, Administrator for the Commission on Postsecondary Education stated N.R.S. 394 pertains to private postsecondary educational institutions only. Assemblyman Tripple asked if the schools had to be accredited by the Northwest Accrediting Association. Ms. Buckley replied the schools could be accredited by any nationally recognized accrediting body. Research revealed an accrediting body could be found to accredit anyone. Ms. Tripple stated how difficult it was for her to understand how this could happen. Ms. Buckley, referring to (Exhibit F), noted there was information on accrediting on Page 15. She stated accrediting for vocational schools was very different from colleges and universities. Assemblyman Chowning expressed her concern over the issue and students being cheated in the name of education. She stated her concern over reputable schools having to pay the costs caused by irreputable schools. Ms. Chowning wanted to know how the schools in question slipped by the state of Nevada approvals and questioned if there were any state reviews. Ms. Buckley, referring to the reputable school concern, stated it is never known when a reputable school may have problems in the future. This has occurred. Ms. Buckley's research shows schools sometimes become overextended by opening other schools in other states, run into financial difficulties, are forced to close and leave their students with no recourse in refund recovery. Discussing the bearing of the cost, Ms. Buckley stated many times industry must bear the cost of industry abuses. This exists in many fields and is a cost of the industry policing themselves. Ms. Buckley, discussing Ms. Chowning's concern about how this happened in Nevada, stated it happened before Mr. Perlman's takeover at the Department of Post Secondary Education. She commended Mr. Perlman for his assistance in these matters. She noted there are staffing problems at state licensing departments and often time and manpower are lacking to insure proper licensure investigation. Ms. Chowning suggested perhaps no one be licensed until certain steps are agreed upon for licensing so outside sources, such as the legislature, could look and see if proper steps have been taken before licensure is issued. Mr. Perlman stated a new policy is to have existing schools to get a letter from their state licensing agency stating they operate under state guidelines. Also, a curriculum review is required and must be approved before the commission considers it. The cost of the approval is put on the school. If an outside source is required for approval, such as horseshoing, the cost is borne by the school. He noted his commission is threatened with lawsuits almost daily due to not issuing licensure fast enough for some applicants. This situation has been in existence for the last two and one half years since Mr. Perlman has been in charge. Ms. Chowning asked how much it costs per month to increase the bond to the school. Mr. Perlman stated it was difficult to know because the bonding companies do not like to give prices out. After the $25,000 figure, an audited statement is required and have the school must have assets to back up the amount. The last figure Mr. Perlman heard was it would cost $120,000 per year for a $1.5 million bond. Mr. Perlman distributed prepared testimony on A.B. 411, although he did not discuss all of it. Assemblyman Stroth asked if the students normally pay in advance. Ms. Buckley stated the students usually pay a small amount out of their own pockets and immediately sign for the federal financial aid. Half of the aid is released immediately prior to enrollment. The second half of the aid is received after approximately thirty days. Fraud was not discovered until all monies had been released by the federal government. Then the students were stuck on the loans. Ms. Stroth asked if the money had then been paid. Ms. Buckley replied affirmatively. Ms. Stroth asked if there was a way to limit the schools from accepting payment in advance. Paying monthly, for example, would aid students in not getting defrauded in such great amounts. Ms. Buckley stated there was not because it is governed by the federal financial aid provisions which take precedence over state law. Most schools are involved in the federal financial aid programs. Ms. Buckley noted these schools are charging exorbitant prices. Some six month classes cost as much as $6,000 for six months. Ms. Stroth asked if any kind of scaled bonding mechanism had been considered for those businesses who had operated in good faith for a number of years. Ms. Buckley stated she had considered it. With the switch to the five dollar per student idea, which would be less than the original suggested bond idea, the possibility of schools overextending themselves still existed. Mr. Perlman stated there have been 54 school closures since 1990, five of which have resulted in the intervention of the Commission on Postsecondary Education where teach out arrangements were attempted. He noted in almost all cases the bond currently required has been insufficient. He explained there is a wide range of schools ranging from nationally accredited schools to a lady who had been involved in this type of education very successfully for years and upon opening a new school, went under in one month. Mr. Perlman explained a four dollar fund was established in 1989. This fee is currently collected, audited and monitored with current staffing. He felt no added burden would be felt by the current staff in the administration of the added fee. Chairman Harrington asked how many students are enrolled in private vocational programs in the state. Mr. Perlman stated the number was approximately 15,000 since 1990. Last year the commission received 77 complaints. All but one were resolved before a hearing was required. Chairman Harrington noted the recommended fund was capped at $250,000. He asked if the amount was per school or for the whole state. Mr. Perlman replied the amount was for the whole state. Chairman Harrington asked if the capped amount would be enough. Mr. Perlman stated current federal regulations have "strung out" payments to the school and are not as quick to pay. More education is being received before payment is made currently. Some students would be totally funded, and some would have only paid a small down payment. In 1992 the federal government changed legislation saying when a school closes and leaves students without opportunities to complete their education, the student loan has to be forgiven. Chairman Harrington asked if any consideration was given to a percentage of the tuition paid instead of the five dollar amount. Ms. Buckley stated the percentage consideration was her first bill. It was revised because it would be too much of a hardship for the good schools. Chairman Harrington asked if it was felt the five dollars per student amount would be sufficient. Mr. Perlman stated he felt it should be enough. Assemblyman Braunlin echoed Ms. Chowning's concerns regarding reputable schools. She asked if problems had been encountered with schools operating for twenty years or more and have not been purchased or sold. Mr. Perlman said he did not think so. Ms. Buckley stated other complaints have been received concerning the schools. Exorbitant tuition rates are often charged. Assemblyman Manendo asked if the schools were closing basically because of the money. Ms. Buckley stated they were closing because they were "fly by night" for profit schools wishing to gain as much money as possible without giving any quality education. Assemblyman Neighbors stated he felt the proposed fee could be considered a cost of doing business. He suggested a graduated scale be considered for those in business over an extended period of time. Ms. Melanie Meehan-Crossley, Deputy Attorney General, stated she favored the recovery fund. She noted a provision exists for the superintendent to tap the fund to pay for extra expenses incurred by the commission for "cleaning up some of the messes". She suggested the possible hiring of extra employees to secure records of defunct schools and other administrative options. Ms. Tripple stated there was a lot of federal money for vocational education which has been misused. She suggested a resolution be written to suggest a program screening for acceptability. Mr. Perlman stated a proposal is before the United States Department of Education to require states to repay from state coffers a percentage of defaulted loans. He noted it is stalled at the moment but is still being considered. It graduates up from twelve and one-half percent and stops at around twenty-five percent. Mr. Perlman submitted an informative document to the committee regarding surety bonding (Exhibit G). Mr. Robert McCart, Executive Director, Education Dynamics Institute (EDI), Las Vegas, Nevada testified. He explained EDI has operated in the Las Vegas area for 34 years as a private, postsecondary institution offering both diploma and associate degree programs in electronics, air conditioning, drafting, medical assisting and computerized business administration. Twelve hundred students per year are educated, eighty percent of which graduate. Ninety percent of graduates are placed in jobs. The University of Nevada and Clark County Community College readily accept credits from EDI and the university system has rated the EDI education as a Class A educational school. To his knowledge, EDI is the only private institution offering occupational training in the state which has received such a rating from those institutions. Mr. McCart expressed concerns on A.B. 411. He stated if the bonding portion is adopted, EDI would be required to secure a $1.7 million surety bond. His bonding agent informed Mr. McCart he would never be able to obtain the bond. Therefore, EDI would be out of business immediately. He stated his students would be out their education and he would not be able to train them based on state law. If Mr. McCart could obtain the bond, it would cost $120,000 per year. He felt the amount of money was excessive and felt in the case of EDI, the bond would not be used. The issue of student protection is important to those at EDI. Mr. McCart noted his industry has a poor reputation and he finds this embarrassing and upsetting, especially since EDI gets "put in the same pot" as everyone else. As a point of clarification, Mr. McCart stated the Higher Education Amendments of 1992 passed in Washington D.C. have changed the ability to obtain Title IV funding and its disbursal drastically. Eligibility and certification have been changed. The ability of a school to draw down funds on the recovery fund has been severely limited. In addition, refund regulations have been issued requiring private schools to refund monies on a dollar per dollar basis on the first sixty percent of the program. Mr. McCart expressed support for a student tuition recovery fund. He encouraged the committee to look carefully at the student tuition recovery fund as opposed to the proposed bond. Mr. McCart stated EDI's last accreditation visit was made by a Ph.D. professor out of the master's education program at the University of Nevada-Las Vegas. All curriculums were approved. Regarding tuitions and program costs, Mr. McCart explained differences exist between his school and public, traditional education. Students are in school six hours per day, five days per week. More in class time is incurred by students at EDI over a seven month period than students incur in two years at UNLV. Charges need to be examined in regard to actual class time spent. Assemblyman Bennett commended Mr. McCart on his schools success rate. He asked what admission criteria EDI required. Mr. McCart stated prospective students must pass a test to attend EDI. Often students not passing the admissions test have language skill difficulties or need basic cognitive ability. EDI does some GED training on site and students are referred for additional help. Students are required to have a GED or high school diploma. The hearing on A.B. 411 was closed. Bill Draft Request 34-1806 was offered for the committee's consideration. Chairman Williams explained the BDR was similar in content to A.B. 411. B.D.R. 34-1806 - Establishes account to indemnify students enrolled in licensed postsecondary educational institutions that discontinue service or violate certain laws. ASSEMBLYMAN CHOWNING MOVED FOR COMMITTEE INTRO- DUCTION OF B.D.R. 34-1806. ASSEMBLYMEN DE BRAGA AND NEIGHBORS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT. Chairman Williams announced when the B.D.R. was drafted into bill form all interested parties would be notified to attempt to work out a compromise agreeable to everyone. There being no further business to come before the committee, the meeting was adjourned at 5:05 p.m. RESPECTFULLY SUBMITTED: Barbara Prudic, Committee Secretary APPROVED BY: Assemblyman William Z. Harrington, Chairman Assemblyman Wendell P. Williams, Chairman Assembly Committee on Education April 12, 1995 Page