Call it the "problem child" of Utah's teen-help industry.

Majestic Ranch in Randolph - one of four Utah boarding schools that cater to troubled teens - has, until recently, failed to become licensed as required by law. It is the only school to fall short of health and safety benchmarks imposed in October 2005.

The hang-up: minor changes to an employee handbook, say regulators, who permitted the school to operate without a license for the past 18 months. Regulators say no harm was done; because Majestic is in good standing, they granted the school a probationary license on June 25.

But the school's slow road to compliance points to a larger problem with Utah's oversight of adoption agencies, wilderness camps, schools and other programs for vulnerable children: a loophole in state law.

Operating without a license is a misdemeanor only if someone is harmed.

Operating these businesses without a license is a class A misdemeanor - but only if someone is harmed, said Ken Stettler, Human Services licensing director.

"Usually if it's a new program just coming on, then they simply don't begin operation until they're licensed," said Stettler. "What was uncommon in [Majestic's] case was that we had an existing program that was already operating when the laws went into effect. In this case we don't close them down."

But at least one new business venture - an adoption agency - slipped through the loophole. Focus on Children, now defunct and facing federal charges of running a baby smuggling operation in Samoa, did business in Utah for 2 1/2 years without a license.

The agency's owners applied in March 2001, but did not submit all the paperwork. After nudging from regulators, they were licensed on August 1, 2003.

No one, to Stettler's knowledge, is lobbying to give regulators stronger powers to insist on licensing.

Utah's Republican-dominated Legislature has traditionally opposed government meddling in the private sector. "Therapeutic" boarding schools, including 21-year-old Majestic Ranch, went unregulated until 2005.

The law defines "therapeutic schools" as serving students "who have a history of failing to function at home or public school" and that offer room and board.

Majestic initially fought regulation through its partner World Wide Association of Speciality Programs, a Utah-based chain of get-tough treatment programs.

Later, after it came to light that Majestic had been investigated three times for abuse, the boarding school became a proponent of regulation. Only one probe ended in a criminal charge and conviction when a staffer - who was eventually fired - pleaded guilty to misdemeanor assault.

Child welfare caseworkers received another complaint of abuse in 2005, but dismissed it as having no merit, said Carol Sisco, Human Services spokeswoman.

Tammy Johnson, Majestic Ranch director, said the licensing process has helped foster better relations with the state, but it hasn't changed the school's curricula or practices.

"The only thing that changed is we have to file more paperwork; quite a bit more paperwork," said Johnson. Johnson blames some of the licensing delays on regulators who took a year to review Majestic's policies, but stressed, "they've been wonderful to work with."

Bad press, stemming from "frivolous" complaints from disgruntled employees, have hurt Majestic, said Johnson. Over the past two years enrollment has dropped from about 60 students to 32, Johnson said. The school caters to 7-to-14-year-olds; annual tuition costs about $42,000.

"We lose on average of five kids a month to negative publicity on the Internet. It's unfortunate," said Johnson. "I wouldn't be able to come to work every day if I didn't feel I was making a difference in these families' and students' lives. It's not an easy job."

World Wide also has suffered. In 2005, there were seven schools in the network. Now there are two, including Majestic Ranch, said World Wide president Ken Kay.

Kay likens World Wide to a trade or service organization that helps market, handle admissions and purchase classroom materials for boarding schools. But the group also leases buildings to schools. And Majestic owner Dan Peart is related by marriage to World Wide founder Robert Lichfield.

Still, Kay said Majestic will probably sever ties with World Wide.

"There's a time for everything. At one point, it was a necessity for a bunch of schools to get together. But as schools grew, they decided they could do everything on their own. I'd be surprised if World Wide lasted more than a year."

kstewart@sltrib.com