1. (a) An institution must request and be granted a certificate of authority, an alternative certificate of authority, or a certificate of authorization by the Commissioner before it can offer to award degrees or courses leading to degrees. The Commissioner may issue a certificate of authorization to grant degrees to an institution, upon the institution's request and demonstration that it qualifies for an exemption under this subsection. The exemptions provided by this subsection apply only to the degree level for which the programs or the institution is accredited or approved, as applicable, and if an institution offers to award a degree at a level for which it is not accredited or approved by the appropriate agency of the State of Texas, the exemption does not apply. Upon issuance of a certificate of authorization as an exempt institution, the provisions of this chapter, with the exception of §§7.15 - 7.17 of this chapter do not apply to following types of postsecondary institutions:

   1. (1) Schools or colleges that do not award degrees or offer courses leading to degrees. However, such institutions are subject to the rules of the Texas Workforce Commission Pursuant to Chapter 132 of the Texas Education Code concerning career schools and colleges.
   2. (2) A branch campus, extension center, or other off-campus unit operated by a private or independent Texas postsecondary institution as defined by Texas Education Code, §61.003.
   3. (3) The home campus, headquarters, or Texas location(s) of an institution which have been fully accredited by a recognized accrediting agency.
   4. (4) An institution or degree program that has received approval by an agency of the State of Texas authorizing the graduates of the institution to take a state licensing examination administered by that agency. The granting of permission by a state agency to a graduate of an institution to take a licensing examination does not by itself constitute approval of the institution or degree program required for an exemption under this subsection.
2. (b) Institutions holding a Certificate of Approval from the Texas Workforce Commission to operate as a Career School or College and are not exempt under this chapter may be able to obtain a Certificate of Authority to award associate degrees under §7.9 of this chapter (relating to Certificate of Authority for Career Schools and Colleges). All other non-exempt institutions must use either §7.7 or §7.8.
3. (c) The home campus of an institution that is not exempt under the provisions of subsection (a) of this section may obtain a certificate of authority under either §7.7 of this chapter (relating to Certificate of Authority) or an alternative certificate of authority under §7.8 (relating to Alternative Certificates of Authority).
4. (d) Branch campuses of out-of-state public institutions must obtain a certificate of authority as outlined in §7.10 of this chapter (relating to Operation of Branch Campuses, Extension Centers, or Other Off-Campus Units by Exempt Institutions).
5. (e) Agents of an institution that is not exempt under the provisions of subsection (a) of this section, or operating with an alternative certificate of authority as provided by §7.8 of this chapter, must register with the Board as provided by §7.11 of this chapter (relating to Registration of Agents).
6. (f) A substantive change in the conditions under which an institution was granted a certificate of authority, an alternative certificate of authority or an exemption (certificate of authorization) must be reported in accordance with §7.12 of this chapter (relating to Occasional Courses, Changes of Level of Instruction, Changes of Ownership, and Other Substantive Changes). An accredited institution that is exempt under subsection (a)(3) of this section continues in that status so long as it maintains accreditation by a recognized accrediting agency.
7. (g) An institution offering only religious degrees may request a letter stating that the Board does not have oversight.

8. (h) Revocation of an exemption.

   1. (1) If the Commissioner receives credible evidence that an institution is no longer qualified for an exemption, the institution shall be notified that its exempt status is revoked, and that the institution is subject to the requirements of Texas Education Code, Chapters 61 or 132 as appropriate, and this chapter.
   2. (2) Upon receipt of the notice of revocation, the institution must cease granting or awarding degrees in Texas until it has either been granted a certificate of authority to grant degrees, or has received a determination that it did not lose its qualification for an exemption.
   3. (3) Within ten (10) days of its receipt of the Commissioner's notice, the institution must respond and offer proof of its continued qualification for the exemption.
   4. (4) After reviewing the evidence, the Commissioner will issue a notice of determination, which in the case of an adverse determination, shall contain information regarding the reasons for the denial, and the institution's right to a hearing.
   5. (5) If a determination under this section is adverse to an institution, it shall become final and binding unless, within forty-five (45) days of its receipt of the adverse determination, the institution invokes the administrative remedies contained in Chapter 1, Subchapter B of this title (relating to Dispute Resolution).

Source Note:The provisions of this §7.4 adopted to be effective May 27, 2008, 33 TexReg 4134; amended to be effective March 2, 2009, 34 TexReg 1421.