PROPOSED RULEMAKING
DEPARTMENT OF EDUCATION
[ 22 PA. CODE CHS. 741 AND 741a ]
Postsecondary Distance Education Reciprocity
[51 Pa.B. 1516]
[Saturday, March 20, 2021]The Department of Education (Department) proposes to amend Part XXIII (relating to reciprocity for distance education) by deleting Chapter 741 and adding Chapter 741a (relating to State authorization reciprocity), to read as set forth in Annex A.
Statutory Authority
This proposed rulemaking is authorized under section 124(b) of the Public School Code of 1949 (24 P.S. § 1-124(b)).
Purpose and Background
The act of June 1, 2016 (P.L. 252, No. 35) (Act 35) amended the Public School Code of 1949 by adding section 124(a), which requires the Secretary of Education ''to enter into and administer membership in a regional compact and an interstate reciprocity agreement for the provision of postsecondary distance education.'' Under this directive, the Department has affiliated with the Southern Regional Education Board, one of four regional compacts, for the sole purpose of participating in the State Authorization Reciprocity Agreement (SARA), the interstate reciprocity agreement adopted by the regional compacts to establish National standards for interstate delivery of postsecondary distance education.
Prior to Act 35, institutions of higher education in this Commonwealth seeking to offer distance education to students residing in other states needed to apply for authorization in those states and pay registration fees to each state. To address this issue, the four interstate education compacts worked together to organize SARA as a way to provide for reciprocity among member states and their participating institutions. Section 124(a) provides for Commonwealth affiliation with one of the regional compacts and membership in SARA and establishes the Department as the agency responsible for implementation and administration.
The Department is authorized under section 124(b) to ''charge administrative fees to institutions of higher education that choose to participate in the agreement, not to exceed the amount necessary to pay the administrative costs of the agreement.'' Under the authority in section 124(b), the Department promulgated a final-omitted rulemaking that set the fees for institutions of higher education seeking to join SARA, which were set in accordance with the Department's projected cost of implementing and administering participation. Section 124(b) directs that these ''final-omitted regulations shall expire June 30, 2018'' and ''any revisions to the administrative fees charged under this subsection shall be made through regulations promulgated under the Regulatory Review Act.'' Accordingly, this proposed rulemaking seeks to delete current Chapter 741, which expired on June 30, 2018, and add proposed Chapter 741a to set the fees for institutions of higher education seeking to join SARA. Additionally, this proposed rulemaking seeks to re-promulgate the sections of Chapter 741 concerning definitions, SARA membership, fees nonrefundable and annual renewals, while reducing the administrative fees currently in Chapter 741.
Explanation of Proposed Regulation
This proposed rulemaking seeks to reserve the current Chapter 741 in its entirety as it expired on June 30, 2018, under section 124(b). Additionally, this proposed rulemaking seeks to repromulgate the sections of Chapter 741 concerning definitions in § 741.1, SARA membership in §§ 741.11—741.13, fees nonrefundable in § 741.22 and Institutional renewal to participate in SARA in § 741.23, while reducing the administrative fees currently in Chapter 741 for institutions of higher education in this Commonwealth seeking to join SARA in § 741.21.
Section 741a.1 (relating to definitions) seeks to repromulgate the current § 741.1. Section 741a.1 establishes definitions for the following terms as used in the proposed rulemaking: Calendar year, Department, Distance education, Portal agency, Postsecondary institution, Regional compact, State Authorization Reciprocity Agreement (SARA) and Tuition.
Section 741a.11 (relating to State membership in a regional compact) seeks to re-promulgate the current § 741.11. Section 741a.11 of the regulation sets forth that this Commonwealth has affiliated with the Southern Regional Education Board for the purposes of membership in SARA as authorized under section 124 and to allow interested postsecondary institutions in this Commonwealth to offer distance education to students in other SARA member states without paying fees to each state. States can only join SARA through membership or affiliation with a regional compact. This Commonwealth was one of only four states that was not a member of a regional compact prior to Act 35.
Section 741a.12 (relating to State membership in SARA) seeks to repromulgate the current § 741.12. Section 741a.12 provides that the Department will be the portal agency for membership in SARA and employ necessary staff for the implementation of SARA. State membership in SARA requires the identification of a single portal agency in each state. This section provides 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 this regulation.
Section 741a.13 (relating to institutional participation in SARA) seeks to re-promulgate the current § 741.13. Section 741a.13 requires institutions in this Commonwealth seeking to participate in SARA to submit an annual application to the Department comprised of an application generated by the National Counsel for SARA (NC-SARA) with a supplemental application generated by the Department along with the required fees.1 Institutions whose submitted fee does not match distance education data in the Federal Integrated Postsecondary Education Data System database will be required to provide evidence to support 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 NC-SARA 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 741a.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 distributes 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.
The fee schedule in § 741a.21 reduces the administrative fees institutions will pay to participate in SARA from the current § 741.21. More institutions have joined SARA than initially anticipated in the first years of implementation, and therefore, revenue has exceeded initial estimates. The maximum fee will be reduced from $60,000 to $7,000. No institution will see an increase in fees. The administrative fee will remain the same for 35 institutions that currently participate in SARA. Savings per institution for the other 73 institutions will range from $3,000 per year to $53,000 per year with a total savings to the sector of $679,000.
Section 741a.22 (relating to fees nonrefundable) seeks to repromulgate the current § 741.22. Section 741a.22 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 upon an institution's suspension or revocation of participation, or if the institution voluntarily withdraws from participation, since the Department's costs will likely have been incurred.
Section 741a.23 (relating to institutional renewal to participate in SARA) seeks to repromulgate § 741.23. Section 741a.23 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 an application generated by the NC-SARA and a supplemental application specific to this Commonwealth generated by the Department.
Section 741a.24 (relating to effective date) establishes that the fee schedule will go into effect on January 1, 2023. Services will be provided using current reserves, which will be adequate to cover administrative costs and fees until 2023.
Persons or Entities Affected
This proposed rulemaking affects the Department, as well as institutions of higher education in this Commonwealth which provide or seek to provide distance education to students in other states.
Fiscal Impact
Implementation requires the Department to pay an annual fee of $50,000 to affiliate with the Southern Regional Education Board Compact. In addition, the Department estimates a need for $227,907 in 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 may not be covered by general fund revenues. In accordance with section 124, this proposed rulemaking seeks to establish fees that pay the administrative costs of the program, without the need for funding from the Department's general funds.
This proposed rulemaking will equate to a fiscal savings to 73 of the 108 institutions of higher education in this Commonwealth that already chose to participate in SARA and provide for lower initial fees for any institution that chooses to join in the future. The proposed fees represent a small fraction of the costs that institutions in this Commonwealth would otherwise bear to obtain state authorization to offer distance education in other states if the Commonwealth did not join SARA.
Local governments do not have any involvement with the SARA program; as such, no fiscal impact is anticipated.
Paperwork Requirements
This proposed rulemaking will maintain current paperwork responsibilities on the Department and the regulated community because application materials have been developed by the Department and those materials have to be completed and filed annually by interested institutions of higher education. The paperwork requirements imposed by current Chapter 741 will remain the same in proposed Chapter 741a.
Effective Date
This proposed rulemaking will become effective upon final-form publication in the Pennsylvania Bulletin.
Sunset Date
No sunset date has been assigned.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P.S. § 745.5(a)), on March 9, 2021, the Department submitted a copy of this proposed 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 Education Committees. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendation or objections must specify the regulatory review criteria in section 5.2 of the Regulatory Review Act (71 P.S. § 745.5(b)) which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Department, the General Assembly, and the Governor.
Contact Person
The Department contact person for this regulation is Lynette Kuhn, Division Chief, Division of Higher and Career Education, 333 Market Street, Harrisburg, PA 17126-0333, (717) 783-8228.
NOE ORTEGA,
Acting SecretaryFiscal Note: 6-339. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 22. EDUCATION
PART XXIII. RECIPROCITY FOR DISTANCE EDUCATION
CHAPTER 741. (Reserved). § 741.1. (Reserved).
§§ 741.11—741.13. (Reserved).
§§ 741.21—741.23. (Reserved).
(Editor's Note: The following chapter is proposed to be added and printed in regular type to enhance readability.)
CHAPTER 741a. STATE AUTHORIZATION RECIPROCITY
DEFINITIONS Sec.
741a.1. Definitions.
SARA MEMBERSHIP
741a.11. State membership in a regional compact. 741a.12. State membership in SARA. 741a.13. Institutional participation in SARA.
FEES
741a.21. Fee for postsecondary institutions in this Commonwealth to participate in SARA. 741a.22. Fees nonrefundable. 741a.23. Institutional renewal to participate in SARA. 741a.24. Effective date.
DEFINITIONS § 741a.1. Definitions.
The following words and terms, when used in this chapter, have the following meaning, unless the context clearly indicates otherwise:
Calendar year—January 1—December 31.
Department—The Department of Education of this 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 or text, or both, including instruction provided online, by correspondence, or by interactive video.
(ii) Instruction provided by means of 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 § 741a.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.
§ 741a.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 §§ 741a.21 and 741a.22 (relating to fee for postsecondary institutions in this Commonwealth to participate in SARA; and fees nonrefundable).
§ 741a.13. Institutional Participation in SARA.
(a) Postsecondary institutions will apply annually to the Department for authorization to participate in SARA in such manner and on such 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 as set forth in §§ 741a.21 and 741a.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 § 741a.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—$4,999,999 $2,000 $5,000,000—$19,999,999 $3,000 $20,000,000—$39,999,999 $5,000 $40,000,000 and over $7,000 § 741a.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.
§ 741a.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 § 741a.13 (relating to institutional participation in SARA).
§ 741a.24. Effective date.
(a) The fees established in § 741a.21 (relating to fee for postsecondary institutions in this Commonwealth to participate in SARA) will become effective on January 1, 2023.
[Pa.B. Doc. No. 21-421. Filed for public inspection March 19, 2021, 9:00 a.m.] _______
1 The applications can be found on the Department's publicly accessible web site at https://www.education.pa.gov/Postsecondary-Adult/CollegeCareer/Pages/State-Authorization-Reciprocity-Agreement-(SARA).aspx.
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