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WASHINGTON — Utah Rep. Burgess Owens introduced a bill Tuesday afternoon amending the application and review process for institutions of higher education that want to change ownership, or for a private institution that wants to become public.
"The Change of Ownership and Conversion Improvement Act ensures that colleges and universities seeking ownership changes or transitioning from for-profit to nonprofit undergo thorough evaluation," Owens, who represents Utah' 4th Congressional District, told the Deseret News.
The act amends a previous bill from 1965, which provided financial assistance to universities and students.
Revisions to the current system are necessary because it operates "at an extraordinary slow rate of speed, with some institutions waiting up to five years before receiving a final determination," per the bill.
The proposed changes will foster "a transparent and accountable system," Owens explained. "The Change of Ownership and Conversion Improvement Act is a proactive step towards streamlining processes, empowering institutions, and safeguarding the integrity of conversions," he said.
The bill would require institutions to fund process
Currently, general taxpayers fund the review process. The act would require institutions themselves to pay a fee when seeking an ownership change.
Requiring fees from institutions to fund the application process will "enhance accountability," and allow the education institutions to "adapt smoothly without bureaucratic hindrances," Owens told the Deseret News.
The legislation would require the fee to cover the cost of processing the applications. Half would go toward the Department of Education's processing team, and half would go to the IRS to determine if the institution is tax exempt and follows tax laws.
The bill would also guarantee an "expedited review process for all applicants." If the Secretary of Education fails to approve or deny the application within 90 days, it would be considered approved.
Safeguarding nonprofit organizations
The bill would also require any sales of higher ed institutions to be "no more than fair market value."
If a private institution wants to become a public institution, the bill also requires a "committee of directors" to review and approve "any substantial asset acquisition, service, or lease agreements with the proprietary institution."
Owens said this is necessary to avoid conflict of interest in situations where multiple people have significant ownership in both for-profit and nonprofit institutions.
