RULES AND REGULATIONS
DEPARTMENT OF EDUCATION
[ 22 PA. CODE CH. 741 ]
Postsecondary Distance Education Reciprocity
[47 Pa.B. 3093]
[Saturday, June 3, 2017]The Department of Education (Department) adds Chapter 741 (relating to State authorization reciprocity) to set fees for institutions of higher education seeking to participate in the State Authorization Reciprocity Agreement (SARA) to support the Department's costs in implementing and administering SARA. The Department is publishing this final-omitted rulemaking under the authority granted by section 124(b) of the Public School Code of 1949 (School Code) (24 P.S. § 1-124(b)), as added by the act of June 1, 2016 (P.L. 252, No. 35).
Description
Chapter 741 sets fees for the administrative costs of implementing the mandate in section 124 of the School Code to join SARA.
Reason
At present, institutions of higher education in this Commonwealth that seek to offer distance education to students residing in other states apply for approval in those states and pay registration fees to each state. To address this issue, the four interstate education compacts have banded together to organize SARA as a way to provide for reciprocity among member states and their participating institutions. Section 124 of the School Code provides for Pennsylvania affiliation with one of the regional compacts and membership in SARA and establishes the Department as the agency responsible for implementation. Implementation requires the Commonwealth to pay an annual fee of $50,000 to affiliate with a regional compact. In addition, the Department estimates a need for $227,600 in additional staffing and administrative costs for implementation of the program with those institutions of higher education in this Commonwealth that are interested in joining SARA. The administrative responsibilities for SARA will exceed the Department's current staffing capacity.
Section 741.1 (relating to definitions) defines terms used in Chapter 741.
Section 741.11 (relating to State membership in a regional compact) sets forth that the Commonwealth has affiliated with the Southern Regional Education Board for the purposes of membership in SARA as authorized by section 124 of the School Code and to allow interested institutions in this Commonwealth to offer distance education in other SARA states without paying fees to each state. States can only join SARA through membership or affiliation with a regional compact and the Commonwealth was one of four states that was not a member of a regional compact.
Section 741.12 (relating to State membership in SARA) provides that the Department will be the portal agency for membership in SARA. Membership requires the identification of a single portal agency in each state. This section also provides for the Department's hiring of staff necessary to implement SARA and that the costs of staff and SARA membership will be covered by fees paid by postsecondary institutions rather than general fund resources. Postsecondary institutions are the prime beneficiary of membership in SARA and they will see a significant cost-savings through participation, notwithstanding the fees imposed under Chapter 741.
Section 741.13 (relating to institutional participation in SARA) requires institutions seeking to participate in SARA to submit an annual application to the Department on a form provided by the Department along with the required fees. Institutions whose submitted fee does not match distance education data in the Federal Integrated Postsecondary Education Data System database will be required to defend their calculation. This section further provides that applications will not be processed until the fees are received by the Department. Finally, this section establishes that the fees that are paid to the Department do not cover other institutional financial obligations related to SARA participation. Institutions are required to pay an annual fee of $2,000 to $6,000 directly to the National SARA organization for participation. It is not possible for the Department to pay this fee on behalf of institutions because an electronic payment system is employed for this payment.
Section 741.21 (relating to fee for postsecondary institutions in this Commonwealth to participate in SARA) provides that the fee paid to the Department is calculated based on tuition revenue from distance education in the most recently completed calendar year. Calendar year is used for consistency because different institutions follow different calendars for the academic year and the fiscal year. The fee is calculated based on tuition revenue rather than enrollment so that institutions with the highest tuition rates pay a fair share of the cost of supporting the Commonwealth's membership in SARA. Moreover, using tuition revenue in the calculation shares the cost equitably between public and private institutions in that the community colleges and State-system universities have the lowest tuition rates. In addition, some small institutions are very active in distance education and will experience very significant savings from membership. Likewise, some large institutions offer very little by distance education and would experience a minimal benefit. By calculating the fee based on distance education revenue only, the costs of membership will be distributed equitably based on the benefit to the institution.
Section 741.22 (relating to fees nonrefundable) establishes that fees will not be refunded if the application is denied or if the institution withdraws the application. This is to protect against the provision of review services without compensation because the Department will incur all costs associated with processing the application within a few days of receipt. Likewise, this section provides that fees will not be refunded if the institution is suspended from participation or if the institution voluntarily withdraws from participation, since the Department's costs will likely have been incurred.
Section 741.23 (relating to institutional renewal to participate in SARA) clarifies that participation in SARA is valid for 1 calendar year, consistent with SARA requirements, and that the application process for the renewal follows the same process as the initial application, using a form provided by the National SARA organization with an addendum specific to Pennsylvania.
Persons or Entities Affected
This final-omitted rulemaking affects institutions of higher education in this Commonwealth that provide or seek to provide distance education to students in other states.
Fiscal Impact
There is no fiscal impact on the General Fund from the fees. There is a fiscal impact upon institutions of higher education in this Commonwealth that choose to participate in SARA. However, the fees represent a small fraction of the costs that these institutions currently bear to obtain state authorization to offer distance education in other states.
Paperwork Requirements
This final-omitted rulemaking will impose additional paperwork responsibilities on the Department and the regulated community because application materials will be developed by the Department and those materials will have to be completed and filed by interested institutions of higher education.
Effective and Sunset Dates
This final-omitted rulemaking will be effective upon publication in the Pennsylvania Bulletin. This final-omitted rulemaking will expire June 30, 2018, and will be replaced by regulations promulgated in accordance with the Regulatory Review Act (71 P.S. §§ 745.1—745.14).
Regulatory Review
Under section 5.1(c) of the Regulatory Review Act (71 P.S. § 745.5a(c)), on March 27, 2017, the Department submitted a copy of the final-omitted rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House and Senate Committees on Education. On the same date, the regulations were submitted to the Office of Attorney General for review and approval under the Commonwealth Attorneys Act (71 P.S. §§ 732-101—732-506).
Under section 5.1(j.2) of the Regulatory Review Act, on May 17, 2017, the final-omitted rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on May 18, 2017, and approved the final-omitted rulemaking.
Contact Person
The Department contact person for this final-omitted rulemaking is Patricia Landis, Division Chief, Division of Higher and Career Education, 333 Market Street, Harrisburg, PA 17126-0333, (717) 783-8228.
Findings
The Department finds that:
(1) Public notice of the Department's intention to amend its regulations has been omitted under section 124(b) of the School Code, which allows the Department to promulgate a final-omitted rulemaking.
(2) The amendment of the Department's regulations in the manner provided in this order is necessary and appropriate for the administration of the School Code.
Order
The Department, acting under its authorizing statute, orders that:
(a) The regulations of the Department, 22 Pa. Code, are amended by adding §§ 741.1, 741.11—741.13 and 741.21—741.23 to read as set forth in Annex A.
(b) The Department 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 Department shall submit this order and Annex A to IRRC and the House and Senate Committees as required by law.
(d) The Department shall certify this order and Annex and deposit them with the Legislative Reference Bureau as required by law.
(e) This order shall take effect upon publication and expire on June 30, 2018.
PEDRO A. RIVERA,
Secretary(Editor's Note: See 47 Pa.B. 3157 (June 3, 2017) for IRRC's approval order.)
Fiscal Note: 6-337. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 22. EDUCATION
PART XXIII. RECIPROCITY FOR DISTANCE EDUCATION Chap.
741. STATE AUTHORIZATION RECIPROCITY
CHAPTER 741. STATE AUTHORIZATION RECIPROCITY
DEFINITIONS 741.1.
Definitions.
SARA MEMBERSHIP 741.11.
State membership in a regional compact. 741.12. State membership in SARA. 741.13. Institutional participation in SARA.
FEES 741.21.
Fee for postsecondary institutions in this Commonwealth to participate in SARA. 741.22. Fees nonrefundable. 741.23. Institutional renewal to participate in SARA.
DEFINITIONS § 741.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Calendar year—January 1—December 31.
Department—The Department of Education of the Commonwealth.
Distance education—
(i) Instruction offered by any means when the student and faculty member are in separate physical locations so that face-to-face communication is absent and communication is accomplished by one or more technological media. It includes real-time or delayed interaction using voice, video, data and/or text, including instruction provided online, by correspondence or by interactive video.
(ii) Instruction provided by synchronous video from an institution in this Commonwealth to additional campus sites of the same institution in this Commonwealth is not considered distance education.
(iii) Distance education is instructor-led and is not independent study.
Portal agency—The single entity designated to serve as the interstate point of contact for SARA questions, complaints and other communications.
Postsecondary institution—An institution legally authorized to award degrees at the associate level or above.
Regional compact—A nonprofit organization with member states dedicated to advancing education in a region. The four regional compacts are the Midwestern Higher Education Compact, the New England Board of Higher Education, the Southern Regional Education Board and the Western Interstate Commission for Higher Education.
SARA—State Authorization Reciprocity Agreement—A voluntary agreement adopted by the regional compacts to establish National standards for interstate delivery of postsecondary education through distance education.
Tuition—
(i) Moneys charged by the institution for instruction.
(ii) The term does not include moneys charged as fees, such as technology fees, student services fees or activities fees if those fees are noted on the invoice and in publications as fees that are separated from tuition.
SARA MEMBERSHIP § 741.11. State membership in a regional compact.
The Department, consistent with section 124(b) of the Public School Code of 1949 (24 P.S. § 1-124(b)), has affiliated with the Southern Regional Education Board for the sole purpose of being able to participate in SARA and facilitate interested postsecondary institutions in this Commonwealth offering distance education to students in other SARA member states.
§ 741.12. State membership in SARA.
(a) The Department will be the SARA portal agency for the Commonwealth and will employ staff as necessary to provide the services required to implement SARA.
(b) The Department's staffing and other costs related to SARA membership and responsibilities will be covered by fees paid by postsecondary institutions in accordance with §§ 741.21 and 741.22 (relating to fee for postsecondary institutions in this Commonwealth to participate in SARA; and fees nonrefundable).
§ 741.13. Institutional participation in SARA.
(a) Postsecondary institutions will apply annually to the Department for authorization to participate in SARA in a manner and on forms as prescribed by the Department. If the fee submitted with the application does not correspond to the distance education enrollment data in the Federal Integrated Postsecondary Education Data System database for the most recent reporting year, the institution will be required to provide evidence to support the calculation of the fee amount.
(b) The required fees in §§ 741.21 and 741.22 (relating to fee for postsecondary institutions in this Commonwealth to participate in SARA; and fees nonrefundable) must accompany the application. The Department will not process an application until the fees are received.
(c) The fees established by this chapter cover the administrative costs of the Department and do not cover other fees due to other organizations.
FEES § 741.21. Fee for postsecondary institutions in this Commonwealth to participate in SARA.
Postsecondary institutions in this Commonwealth shall pay a fee to the Department based on tuition revenue from distance education in the most recently completed calendar year for the initial application fee and for each annual renewal to the Department to participate in SARA.
Distance Tuition Revenue Fee $0—9,999 $1,000 $10,000—999,999 $2,000 $1,000,000—4,999,999 $5,000 $5,000,000—9,999,999 $10,000 $10,000,000—19,999,999 $20,000 $20,000,000—29,999,999 $30,000 $30,000,000—39,999,999 $40,000 $40,000,000—49,999,999 $50,000 $50,000,000 and over $60,000 § 741.22. Fees nonrefundable.
(a) The fee submitted with an application is not refundable if the registration or participation is denied or if the postsecondary institution withdraws its application.
(b) No portion of the fee will be refunded upon suspension or revocation of participation or optional termination of participation.
§ 741.23. Institutional renewal to participate in SARA.
(a) Approval for participation in SARA is valid for 1 calendar year.
(b) An application for renewal of participation is required annually in accordance with § 741.13 (relating to institutional participation in SARA).
[Pa.B. Doc. No. 17-927. Filed for public inspection June 2, 2017, 9:00 a.m.]
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