SB0306

SENATE BILL 306

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Nicole Tobiassen and Brian G. Baca

AN ACT

RELATING TO HIGHER EDUCATION; ELIMINATING THE DISTINCTION BETWEEN REGIONALLY AND NONREGIONALLY ACCREDITED INSTITUTIONS; CHANGING LANGUAGE FROM "REGISTRATION" TO "LICENSURE".

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 21-23-3 NMSA 1978 (being Laws 1971, Chapter 303, Section 3, as amended) is amended to read:

"21-23-3. DEFINITIONS.--As used in the Post-Secondary Educational Institution Act:

A. "career school" means a non-accredited private post-secondary educational institution offering a formal educational curriculum in New Mexico for a fee to members of the general public beyond compulsory school age, terminating in a certificate or diploma [associate degree] or comparable confirmation of completion of the curriculum;

B. "college" or "university" means [a] an accredited private post-secondary educational institution offering a formal educational curriculum in New Mexico for a fee to members of the general public beyond compulsory school age, terminating in [a] an associate, a baccalaureate, a master's or a doctoral degree or comparable confirmation of completion of the curriculum;

C. "department" means the higher education department;

D. "enrollment agreement" means an agreement, instrument or note executed before a person begins coursework that creates a binding obligation between the person and the post-secondary educational institution;

E. "license" means a written acknowledgment by the department that a [career school or nonregionally accredited college or university] private post-secondary educational institution has met the requirements of the department for offering a formal educational curriculum within New Mexico;

F. "post-secondary educational institution" includes an academic, vocational, technical, business, professional or other school, college or university or other organization or person offering or purporting to offer courses, instruction, training or education from a physical site in New Mexico, through distance education, correspondence or in person;

G. "private post-secondary educational institution" means a nonpublicly funded post-secondary educational institution that offers post-secondary education for a fee to members of the general public; and

H. "prospective student" means a person who demonstrates interest in signing an enrollment agreement with a private post-secondary educational institution [and

I. "registration" means a written acknowledgment by the department that a regionally accredited college or university has filed pertinent curriculum and enrollment information, as required by the department, and is authorized to operate a private post-secondary educational institution]."

SECTION 2. Section 21-23-5 NMSA 1978 (being Laws 1994, Chapter 108, Section 6, as amended) is amended to read:

"21-23-5. DUTIES OF THE DEPARTMENT.--

A. The department is charged with oversight of all private post-secondary educational institutions operating within the state.

B. The department shall provide for the [registration] licensure of all [regionally accredited colleges and universities] private post-secondary educational institutions operating in the state pursuant to the Post-Secondary Educational Institution Act.

[C. The department shall provide for the licensure of all career schools and all nonregionally accredited colleges and universities operating in the state pursuant to the Post-Secondary Educational Institution Act.]"

SECTION 3. Section 21-23-6 NMSA 1978 (being Laws 1994, Chapter 108, Section 7, as amended) is amended to read:

"21-23-6. [REGISTRATION OF COLLEGES AND UNIVERSITIES] LICENSURE OF PRIVATE POST-SECONDARY EDUCATIONAL INSTITUTIONS--SUBMISSION OF MATERIALS.--

[A. Every college or university operating in New Mexico that is regionally accredited or seeking regional accreditation by an accrediting agency approved by the department shall register with the department.

B.] A. A [college or university registering with] private post-secondary educational institution seeking licensure by the department pursuant to this section shall provide curriculum and enrollment information, financial information and all publication materials requested by the department.

[C.] B. A [college or university registering with] private post-secondary educational institution licensed by the department shall adopt a procedure for the resolution of student complaints.

[D. A college's or university's registration is valid for the same period as its grant of regional accreditation from its accrediting agency.]"

SECTION 4. Section 21-23-6.1 NMSA 1978 (being Laws 1994, Chapter 108, Section 8, as amended) is amended to read:

"21-23-6.1. LICENSURE OF [CAREER SCHOOLS--LICENSURE OF CERTAIN COLLEGES AND UNIVERSITIES] PRIVATE POST-SECONDARY EDUCATIONAL INSTITUTIONS.--

A. A [career school or nonregionally accredited college or university] private post-secondary educational institution operating in New Mexico shall be licensed by the department. It is unlawful to operate a [career school or nonregionally accredited college or university] private post-secondary educational institution without first obtaining a license from the department.

[B. A college or university operating in New Mexico that is not regionally accredited or is not seeking regional accreditation by an accrediting agency approved by the department shall be licensed by the department in the manner provided for career schools or other nonregionally accredited colleges or universities. It is unlawful to operate a college or university that is not accredited or seeking accreditation by an accrediting agency approved by the department without first obtaining a license from the department.

C.] B. No person other than an employee of [an] a private post-secondary educational institution licensed pursuant to this section shall, for a salary or fee, solicit attendance at that institution."

SECTION 5. Section 21-23-6.2 NMSA 1978 (being Laws 1994, Chapter 108, Section 9, as amended) is amended to read:

"21-23-6.2. LICENSURE STANDARDS--REQUIREMENTS--FEE AUTHORIZATION.--

A. Every [career school and nonregionally accredited college and university] private post-secondary educational institution operating in the state shall annually apply to the department for licensure. The [career school and nonregionally accredited college or university] institution shall apply on forms approved by the department, shall supply all information requested by the department and shall pay an annual licensure fee set by the department.

B. The department or its designee shall consider information submitted by the [career school and nonregionally accredited college or university] private post-secondary educational institution, information from independent accreditation bodies and information gathered during visits to the [career school and nonregionally accredited college or university] institution in determining eligibility for licensure.

C. The department shall promulgate and file, in accordance with the State Rules Act, rules that:

(1) require each [career school and nonregionally accredited college and university] private post-secondary educational institution to supply annually information regarding enrollment, program completion by students, employment and other educational placements of students and operating revenue budgets;

(2) provide standards and methods for the evaluation and appraisal of [career schools and nonregionally accredited colleges and universities] institutions;

(3) provide for a tuition refund policy;

(4) require maintenance of adequate records by each [career school and nonregionally accredited college and university] institution and provide reasonable availability of records for inspection;

(5) regulate the use of deceptive and misleading advertising and determine what information shall be furnished to each student prior to enrollment;

(6) assure that any [career school or nonregionally accredited college or university] institution licensed pursuant to the Post-Secondary Educational Institution Act has entered into a teach-out agreement with at least one other private or public institution operating in the state unless the department determines that such an agreement is not feasible;

(7) provide standards for the award of associate, baccalaureate, master's and doctoral degrees;

(8) require all degree-granting [schools] institutions to seek appropriate external accreditation by an agency recognized by the federal department of education as a means of assuring quality instruction;

(9) name an advisory committee of education providers and consumers, including owners and operators of [career schools and nonregionally accredited colleges and universities] private post-secondary educational institutions;

(10) provide for the maintenance of records for [career schools and nonregionally accredited colleges and universities] institutions no longer in operation;

(11) provide standards for the evaluation of the financial stability and ability to meet the commitments of [career schools and nonregionally accredited colleges and universities] the institutions;

(12) require each [career school and nonregionally accredited college and university] institution to adopt a procedure for the resolution of student complaints; and

(13) establish other requirements necessary to carry out the provisions of the Post-Secondary Educational Institution Act.

D. The department may solicit information pertaining to the financial history and stability of a [career school or nonregionally accredited college or university] private post-secondary educational institution and its owners, including information pertaining to actions of bankruptcy filed within the immediately preceding five years. The department may consider such information in determining eligibility for licensure."

SECTION 6. Section 21-23-6.3 NMSA 1978 (being Laws 1994, Chapter 108, Section 10, as amended) is amended to read:

"21-23-6.3. FEE AUTHORIZATION.--

A. The department may establish initial application fees for all colleges, universities or career schools seeking to operate in New Mexico. The initial application fee shall be not less than two hundred dollars ($200) or more than five thousand dollars ($5,000). In setting the fee, the department shall consider the projected revenue of the institution and the projected cost of performing the review.

B. The department may establish an annual licensing fee for all [career schools or nonregionally accredited colleges or universities] private post-secondary educational institutions licensed by the department. The licensing fee shall be proportionate to each school's gross annual tuition revenue; provided the fee shall be not less than two hundred dollars ($200) or more than five thousand dollars ($5,000).

C. The department may charge a reasonable administrative fee not to exceed the actual cost of providing the administrative service.

D. All fees imposed and collected by the department shall be deposited in the post-secondary educational institution fund."

SECTION 7. Section 21-23-7 NMSA 1978 (being Laws 1971, Chapter 303, Section 7, as amended) is amended to read:

"21-23-7. CLAIMS--LIMITATIONS--APPEALS.--

A. Any person having a claim against a [college, university or career school registered or] private post- secondary educational institution licensed by the department or that [college's, university's or career school's] institution's agents, instructors or other personnel shall first seek resolution of the claim with the [college, university or career school] institution; thereafter, a person may file a verified complaint with the department, setting forth the basis of the claim and the name and address of the [college, university or career school] institution complained against and any other persons involved or having knowledge of the claim. All claims shall be limited to the amount of tuition actually paid or to any charge or fee received by the [college, university or career school] institution or its agents or employees.

B. Upon the receipt of a verified complaint, the department or its authorized employee shall attempt to resolve the claim outlined in the complaint. The department or its authorized employee may convene a hearing and shall give written notice to the [college, university or career school] private post-secondary educational institution and to all persons involved of the hearing and its time, date and place. The notice shall state that the hearing is an informal one for the purpose of determining the facts surrounding the claim and, if the claim is correct, to effect a settlement by persuasion and conciliation.

C. In the event that the party complained against refuses to attend the hearing or effect the settlement of any claim determined by the department to be correct, the department shall invoke its powers to take such action as shall be necessary for the indemnification of the claimant.

D. Any person aggrieved by a final department decision [rendered subsequent to a claim hearing may appeal to the district court in the judicial district in which the hearing was conducted. The appeal shall be based upon the record established at the claim hearing] may appeal as provided in Section 39-3-1.1 NMSA 1978."

SECTION 8. Section 21-23-7.1 NMSA 1978 (being Laws 1994, Chapter 108, Section 12, as amended) is amended to read:

"21-23-7.1. SURETY BOND REQUIRED--ALTERNATIVE SURETY.--

A. A [college, university or career school registered or] private post-secondary educational institution licensed by the department shall post with the department and maintain in effect a surety bond. The bond shall be payable to the department and shall be sufficient in amount to indemnify any student damaged as a result of fraud or misrepresentation by a [registered or] licensed [college, university or career school] institution or as a result of the [college, university or career school] institution ceasing operation prior to its students having completed the programs for which they have contracted.

B. The department is authorized to establish the amount of bond required on an individual basis, taking into consideration factors such as the [college's, university's or career school's] private post-secondary educational institution's size, number of students and total income and assets of the [college, university or career school] institution in the state. In no case shall the bond be less than five thousand dollars ($5,000) nor shall it exceed twenty percent of [a college's, university's or career school's] an institution's gross annual tuition revenue in New Mexico.

C. Surety bonds may be canceled only following delivery of written notice to the department no less than ninety days prior to the date of cancellation. In case of cancellation, the [college, university or career school] private post-secondary educational institution shall provide the department with a like surety or acceptable alternative in order to maintain licensure.

D. As an alternative to a surety bond, a [college, university or career school] private post-secondary educational institution may elect to and the department may require that [a college, university or career school] an institution establish and maintain a cash deposit escrow account, irrevocable letter of credit or alternative payable to the department in an amount set by the department and subject to rules promulgated by the department. In no case shall the deposit or account required exceed twenty percent of the [college's, university's or career school's] institution's gross tuition annual revenue in New Mexico."

SECTION 9. Section 21-23-10 NMSA 1978 (being Laws 1971, Chapter 303, Section 9, as amended) is amended to read:

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

A. A person shall not:

(1) operate a [career school or nonregionally accredited college or university] private post-secondary educational institution within the state until that school has been licensed by the department;

[(2) operate a regionally accredited college or university within the state until that college or university has registered with the department;

(3)] (2) deny enrollment to or make any distinction or classification of students in the program or practices of any private post-secondary educational institution under the jurisdiction of the department on account of race, color, culture, ancestry, national origin, sex, age, religion or disability; or

[(4)] (3) solicit, directly or through an agent or employee, the enrollment of any person in a private post-secondary educational institution within the state by the use of fraud, misrepresentation or collusion.

B. Whoever violates any provision of this section may be assessed a civil penalty not to exceed five hundred dollars ($500) per day per violation. Civil penalties shall be credited to the current school fund as provided in Article 12, Section 4 of the constitution of New Mexico.

C. After an investigation, the department may take any one or a combination of the following disciplinary actions against a private post-secondary educational institution [registered or] licensed in accordance with the Post-Secondary Educational Institution Act:

(1) revoke a license, including if the institution has had its accreditation revoked by its accrediting agency;

[(2) revoke the registration, if the institution has had its regional accreditation revoked by its accrediting agency;

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

[(4)] (3) impose probation requirements."

SECTION 10. Section 21-23-11 NMSA 1978 (being Laws 1971, Chapter 303, Section 10, as amended) is amended to read:

"21-23-11. EXISTING PRIVATE POST-SECONDARY EDUCATIONAL INSTITUTIONS.--All private post-secondary educational institutions existing prior to July 1, 1994 shall have ninety days to [register or to] apply for a license in accordance with the terms of the Post-Secondary Educational Institution Act."

SECTION 11. Section 21-24-2 NMSA 1978 (being Laws 1971, Chapter 304, Section 2, as amended) is amended to read:

"21-24-2. DEFINITIONS.--As used in the Out-of-State Proprietary School Act:

[A. "course" means any course, plan or program of instruction, conducted in person, by mail or by other methods;

B. "student" means any person within this state who is above compulsory school age and eligible for one or more courses of instruction;

C.] A. "agent" means [any] a person who solicits in person and for a fee the enrollment of a student in a course of instruction offered by a proprietary school;

B. "course" means any course, plan or program of instruction, conducted in person, by mail or by other methods;

C. "department" means the higher education department;

D. "license" means a written acknowledgment by the department that a career school or accredited college or university has met the requirements of the department for offering a formal educational curriculum to New Mexico students;

[D.] E. "proprietary school" means a nonpublic out-of-state school, academy or similar institution offering within New Mexico a course of instruction or training through correspondence or similar methods or offering within New Mexico a course of instruction or training to be conducted outside New Mexico, but does not include a private out-of-state post- secondary educational institution offering instruction or training within New Mexico, to any student within this state; and

[E. "commission" means the commission on higher education]

F. "student" means a person within New Mexico who is above compulsory school age and eligible for one or more courses of instruction."

SECTION 12. Section 21-24-4 NMSA 1978 (being Laws 1971, Chapter 304, Section 4, as amended) is amended to read:

"21-24-4. PUBLICIZING OF INSTRUCTION.--[No] An agent shall not:

A. make or cause to be made any statement or representation, oral, written or visual, in connection with the offering or publicizing of a course if the agent knows or reasonably should know the statement or representation to be false, deceptive, substantially inaccurate or misleading;

B. promise or guarantee employment [utilizing] using information, training or skill purported to be provided or otherwise enhanced by a course, unless the promisor or guarantor offers the student or prospective student a bona fide contract of employment agreeing to employ the student or prospective student for a period of not less than ninety days in a business or other enterprise regularly conducted by [him] the promisor or guarantor in which such information, training or skill is a normal condition of employment; or

C. do any act constituting part of the conduct or administration of a course, or the obtaining of students [therefor] for a course, if the agent knows or reasonably should know that any phase or incident in the conduct or administration of the course is being carried on by the use of fraud, deception or other form of misrepresentation or by any agent soliciting students without a [registration] license."

SECTION 13. Section 21-24-5 NMSA 1978 (being Laws 1971, Chapter 304, Section 5, as amended) is amended to read:

"21-24-5. [REGISTRATION] LICENSURE--SURETY BOND.--

A. No agent representing a proprietary school shall sell any course or solicit students in person or by mail, telephone or similar means in New Mexico for a consideration unless the institution [has registered with] is licensed by the [commission] department. The [commission] department shall charge an annual [registration] license fee of not less than five hundred dollars ($500) for each proprietary school and an annual agent fee of not less than one hundred dollars ($100) for each agent operating in New Mexico.

B. [Registration] A license application shall be made on forms provided by the [commission] department and accompanied by the annual [registration] license fee.

C. The [registration] license application shall include a surety bond acceptable to the [commission] department in an amount not less than ten thousand dollars ($10,000) or more than twenty-five thousand dollars ($25,000). The bond may be continuous and shall be conditioned to provide indemnification to any student suffering loss as a result of any fraud or misrepresentation used in procuring [his] the student's enrollment and shall be supplied by the proprietary school. The surety may cancel the bond upon giving ninety days' notice in writing to the [commission] department and thereafter is relieved of liability for any breach of condition occurring after the effective date of the cancellation.

D. [Registration] Licensure shall not be [permitted] granted unless the applying proprietary school agrees to adhere to the [commission] department rules [and regulations] that provide for a tuition refund policy.

E. Upon ten days' notice, [any registration] a license may be suspended by the [commission] department pending a hearing by the [commission] department if the [registrant] licensee solicits or enrolls students through fraud, deception or misrepresentation.

F. [Registration] A license shall be valid for one year, from July 1 through June 30. An application for renewal shall be accompanied by the fee and shall include a surety bond if a continuous bond has not been furnished.

G. The existence of a surety bond shall not be construed as a limitation or impairment of any right of recovery otherwise available, nor shall the amount of the bond be relevant in determining the amount of damages or other relief to which a plaintiff may be entitled.

H. No recovery shall be had by a proprietary school on any contract for or in connection with a course unless the proprietary school had [registered] been licensed at the time that its agent sold or negotiated the contract for the particular course.

I. [Registration] Licensure shall not constitute approval of any course, agent or proprietary school conducting or administering courses. Any representation to the contrary is a misrepresentation within the meaning of Section 21-24-4 NMSA 1978.

J. All fees collected from [registration] licensure or renewal of [registration] licensure shall be deposited with the state treasurer's office to the credit of the post- secondary educational institution fund and shall be spent by the [commission] department for the administration of the Out-of-State Proprietary School Act."

SECTION 14. Section 21-24-8 NMSA 1978 (being Laws 1971, Chapter 304, Section 8, as amended) is amended to read:

"21-24-8. JUDICIAL REVIEW.--Any final determination of the [commission] department respecting the issuance, denial or revocation of a [registration] license may be appealed to the district court pursuant to the provisions of Section 39-3-1.1 NMSA 1978."

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