Bill Text: NY S04268 | 2011-2012 | General Assembly | Introduced
Bill Title: Relates to the licensure of private proprietary schools; provides for increased competition among schools to improve the quality of training provided at private proprietary schools and the quality of student performance in the workplace.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2012-06-19 - SUBSTITUTED BY A7859A [S04268 Detail]
Download: New_York-2011-S04268-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 4268 2011-2012 Regular Sessions I N S E N A T E March 25, 2011 ___________ Introduced by Sen. LAVALLE -- (at request of the State Education Depart- ment) -- read twice and ordered printed, and when printed to be committed to the Committee on Higher Education AN ACT to amend the education law, in relation to the licensure of private proprietary schools; and providing for the repeal of certain provisions upon the expiration thereof THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. The article heading of article 101 of the education law is 2 amended to read as follows: 3 LICENSED PRIVATE [TRADE AND 4 CORRESPONDENCE] CAREER SCHOOLS AND CERTIFIED 5 ENGLISH AS A SECOND LANGUAGE SCHOOLS 6 S 2. Legislative intent. The Legislature hereby finds and declares 7 that there is a growing need to protect students enrolled in certain 8 non-degree granting proprietary schools from inadequate job training and 9 school closure, which disrupts the academic progress of these students 10 and jeopardizes their tuition funds. Given the growing needs and demands 11 of business and industry, the Legislature further finds and declares it 12 necessary to align the state education department's current oversight of 13 these schools with these significantly increasing needs. The Legislature 14 finds it necessary for the department to review these schools' curric- 15 ulums and instruction to help ensure students receive adequate training 16 to obtain employment and to successfully perform their occupation in the 17 workplace. It also finds it necessary for the department to intervene in 18 certain school closures where teach out plans may not be efficiently 19 implemented and students may not complete training. 20 The Legislature also finds it necessary for the department to review 21 these schools for financial viability to prevent school closure, which 22 will, in turn, preserve tuition funds and federal and state funding 23 sources. This act is also necessary to increase the accountability and EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08579-02-1 S. 4268 2 1 transparency of these schools by allowing students to check on whether a 2 school is approved or whether a teacher at such school is licensed. 3 The Legislature intends for this act to increase competition among 4 these schools, which will, in turn, improve the quality of training 5 offered at these schools and the quality of student performance in the 6 workplace. This act will provide the department with the tools and 7 resources necessary to effectively supervise these schools for compli- 8 ance and to reimburse students for tuition and other related costs when 9 these schools close as a result of fiscal failure or noncompliance, 10 which will overall strengthen student protection. 11 S 3. Section 5001 of the education law, as added by chapter 817 of the 12 laws of 1972, the section heading, subdivision 1, paragraph h of subdi- 13 vision 2 and paragraph b of subdivision 4 as amended and paragraphs i, 14 j, k, l and m of subdivision 2 and subdivisions 2-a and 2-b as added by 15 chapter 434 of the laws of 1999, paragraph b of subdivision 2 as amended 16 and subdivisions 5, 6, 7, 8 and 9 as added by chapter 887 of the laws of 17 1990, paragraph d of subdivision 2 and subdivision 4 as amended, para- 18 graphs a, b, c and d of subdivision 9 as added and subdivisions 5, 6, 7, 19 8 and 9 as renumbered by chapter 604 of the laws of 1993, paragraph e of 20 subdivision 2 as amended by chapter 439 of the laws of 1980, and para- 21 graph f of subdivision 2 as amended by chapter 13 of the laws of 2010, 22 is amended to read as follows: 23 S 5001. Licensed private CAREER schools [and registered business 24 schools/computer training facilities]. 1. Schools required to be 25 licensed [or registered]. No private school [or computer training facil- 26 ity] which charges tuition or fees [for] RELATED TO instruction and 27 which is not exempted hereunder shall be operated by any person or 28 persons, firm, corporation, or private organization for the purpose of 29 teaching or giving instruction in any subject or subjects, unless it is 30 licensed [or registered] by the department. As used in this article[, 31 the following terms shall have the following meanings]: 32 a. ["Licensed] "LICENSED private CAREER school" OR "LICENSED PRIVATE 33 SCHOOL" shall mean any entity offering to instruct or teach any subject 34 by any plan or method including written, visual or audio-visual meth- 35 ods[.], AND SHALL INCLUDE ANY INSTITUTION LICENSED OR REGISTERED AS A 36 REGISTERED BUSINESS SCHOOL OR COMPUTER TRAINING FACILITY ON THE EFFEC- 37 TIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND ELEVEN WHICH 38 AMENDED THIS SUBDIVISION. FOLLOWING SUCH EFFECTIVE DATE, THERE SHALL BE 39 NO DISTINCTION BETWEEN INSTITUTIONS PREVIOUSLY DEFINED AS "REGISTERED 40 BUSINESS SCHOOLS" OR "COMPUTER TRAINING FACILITIES" AND OTHER LICENSED 41 PRIVATE SCHOOLS, AND ANY REFERENCE IN LAW TO A REGISTERED BUSINESS 42 SCHOOL OR COMPUTER TRAINING FACILITY SHALL BE DEEMED A REFERENCE TO A 43 LICENSED PRIVATE CAREER SCHOOL. INSTITUTIONS HOLDING A VALID BUSINESS 44 SCHOOL REGISTRATION ON SUCH EFFECTIVE DATE, INCLUDING COMPUTER-TRAINING 45 FACILITIES, SHALL HAVE SUCH REGISTRATIONS REPLACED BY THE COMMISSIONER, 46 AT NO COST, WITH LICENSES VALID UNTIL THE EXPIRATION DATE LISTED ON SUCH 47 PREVIOUS REGISTRATION; AND 48 b. ["Registered business school" shall mean a school in which a 49 curriculum primarily provides a sequence of courses that may include 50 accounting or bookkeeping, marketing, business arithmetic, business law, 51 business English, shorthand, typing, computer business 52 applications/programming, or substantially all said courses, for the 53 purpose of preparing an individual to pursue a business occupation; 54 provided, however, that a registered business school program may include 55 instruction in English as a second language at a beginning or basic 56 level, provided such instruction shall not constitute more than fifty S. 4268 3 1 percent of such program. Such authorization shall apply to all students 2 who commence instruction in a registered business school program prior 3 to July first, nineteen hundred ninety-one. A business school registered 4 under this section shall employ only teachers licensed by the depart- 5 ment, whose qualifications are substantially equivalent to those 6 required of teachers of equivalent subjects in public secondary schools. 7 c. "Computer training facility" shall mean any entity primarily 8 engaged in providing training on the use, language, programs, applica- 9 tion, networking and technical repair of computers] "CERTIFIED ENGLISH 10 AS A SECOND LANGUAGE SCHOOL" OR "CERTIFIED ESL SCHOOL" SHALL MEAN A 11 LANGUAGE SCHOOL CONDUCTED FOR-PROFIT WHICH PROVIDES INSTRUCTION IN 12 ENGLISH AS A SECOND LANGUAGE AND WHICH ACCEPTS NO PUBLIC FUNDS AND IS 13 CERTIFIED PURSUANT TO PARAGRAPH F OF SUBDIVISION FOUR OF THIS SECTION. 14 2. Exempt schools. The following schools are exempted from the licens- 15 ing requirement of this section: 16 a. institutions authorized to confer degrees in this state; 17 b. schools[, other than correspondence schools,] providing kindergar- 18 ten, nursery, elementary or secondary education, except schools 19 conducted for profit which provide instruction in English as a second 20 language or preparation for high school equivalency examinations to 21 out-of-school youth or adults; 22 c. schools operated by governmental agencies or authorities; 23 d. schools which engage exclusively in training of students with disa- 24 bilities as defined in section forty-four hundred one of this chapter; 25 e. schools conducted on a not-for-profit basis by firms or organiza- 26 tions for the training of their own employees only, provided that such 27 instruction is offered at no charge to such employees, or by a fraternal 28 society or benevolent order for its members or their immediate relatives 29 only; 30 f. schools which provide instruction in the following subjects only: 31 religion, dancing, music, painting, drawing, sculpture, poetry, dramatic 32 art, languages, reading comprehension, mathematics, recreation, yoga, 33 martial arts, PILATES and athletics, including the training of students 34 to teach such subjects, PROVIDED, HOWEVER, THAT SCHOOLS CONDUCTED FOR 35 THE PURPOSE OF TRAINING PERSONAL TRAINERS SHALL BE EXCLUDED FROM THIS 36 EXEMPTION AND SHALL BE REQUIRED TO OBTAIN LICENSURE; 37 g. schools in which the course of instruction is licensed, registered 38 or approved under any other section of this chapter or by any other 39 department or agency of the state; 40 h. schools which provide instruction designed solely for giving flight 41 training and/or related ground school instruction; 42 i. schools in which instruction designed solely to prepare applicants 43 for admission to professional licensing examinations administered by the 44 department pursuant to title eight of this chapter, and applicants for 45 examination for admission to the practice of law; 46 j. schools which offer continuing education courses exclusively for 47 individuals licensed by the department pursuant to title eight of this 48 chapter and for individuals admitted to the practice of law; 49 k. schools which provide instruction given exclusively to employees of 50 a person or organization which has contracted with another person or 51 organization to provide such instruction at no cost to the employees; 52 l. conferences, trade shows, workshops, seminars, institutes or cours- 53 es of study offered and sponsored either jointly or individually by 54 recognized trade, business or professional organizations for the benefit 55 of their membership; [or those offered to the general public by individ- 56 uals, firms or organizations which neither conduct such activities for a S. 4268 4 1 duration of more than five consecutive days nor more frequently than 2 twice in any one calendar year;] 3 m. SCHOOLS THAT LIMIT THEIR TOTAL CONFERENCES, TRADE SHOWS, WORKSHOPS, 4 SEMINARS, INSTITUTES OR OTHER COURSE OFFERINGS TO NO MORE THAN TWICE IN 5 ONE CALENDAR YEAR WITH EACH OF THOSE OFFERINGS FOR NO MORE THAN FIVE 6 DAYS; 7 N. schools which provide instruction exclusively to persons employed 8 full-time or part-time in the field in which instruction is being 9 offered, where the instruction is provided to meet continuing education 10 standards required for professional licensure as defined by law in this 11 state; AND 12 O. SCHOOLS IN CANDIDACY STATUS PURSUANT TO SUBPARAGRAPH (IV) OF PARA- 13 GRAPH B OF SUBDIVISION FOUR OF THIS SECTION. 14 2-a. Schools exempted pursuant to subdivision two of this section may 15 waive such exemption and apply for a license [or registration]; 16 provided, however, that the review of such applications shall be left to 17 the discretion of the commissioner. 18 2-b. Programs offered by licensed private CAREER schools [or regis- 19 tered business schools to private businesses where there is no tuition 20 liability] TO EMPLOYEES OF A PERSON OR ORGANIZATION WHICH HAS CONTRACTED 21 WITH ANOTHER PERSON OR ORGANIZATION TO PROVIDE SUCH INSTRUCTION AT NO 22 COST to the employees shall be exempt from the requirements of this 23 article, provided that the following requirements are met: 24 a. Only employees of the [private business] EMPLOYER for which the 25 program is being offered may enroll in classes that make up the program. 26 b. Certificates or diplomas awarded to students in the program may not 27 reference in any way the department. 28 c. Prior to the commencement of the program, such schools shall submit 29 to the department a disclosure form, prescribed by the commissioner, 30 copies of which shall be provided to all students in such exempt 31 program, which shall include but not be limited to the following infor- 32 mation: 33 (i) a description of the location and time period in which the program 34 will be offered; 35 (ii) a statement that the students enrolled in the program shall not 36 be subject to any tuition liability for the program, even if such 37 students do not complete the program; 38 (iii) a statement that the program being provided to the [private 39 business] EMPLOYER has not been approved by the department and is not 40 under the department's jurisdiction and that the students in the program 41 have been advised of the fact; and 42 (iv) the signatures of the school director or owner of the school and 43 the representative of the [private business] EMPLOYER for which the 44 program is being offered certifying the accuracy of the statements on 45 the form. 46 d. Any additional student openings in a program deemed exempt by the 47 department may be made available to students not affiliated with the 48 [private business] EMPLOYER on the condition that such students execute 49 a disclosure form as prescribed in paragraph c of this subdivision. Such 50 admitted students shall only constitute up to ten percent of the exempt 51 program's total capacity. 52 4. Application, renewal application and application fees. a. Applica- 53 tion and renewal application for a license as a private CAREER school 54 [or registration as a business school] required by the commissioner 55 shall be filed on forms prescribed and provided by the department. 56 Except as provided in subparagraph (iii) of paragraph e of this subdivi- S. 4268 5 1 sion, each renewal application for [a private business school registered 2 pursuant to this section or for] a private CAREER school licensed pursu- 3 ant to this section shall include an audited financial statement audited 4 according to generally accepted auditing standards by an independent 5 certified public accountant or an independent public accountant and 6 statistical reports certified by the owner or operator of the school, as 7 required by the commissioner; provided, however, that the commissioner 8 shall accept a copy of a current financial statement previously filed by 9 a school with any other governmental agency in compliance with the 10 provisions of any federal or state laws, or rules or regulations if such 11 statement contains all of the information required under this subdivi- 12 sion and conforms to this subdivision's requirements of auditing, review 13 and certification. Any required audit of the financial statement shall 14 be a condition of licensure [or registration] and shall be paid for by 15 the school, and the results of the audit shall be forwarded to the 16 commissioner. Applications not accompanied by the audits and reports 17 required pursuant to this subdivision shall not be considered for 18 approval by the commissioner. Initial applications shall be accompanied 19 by financial reports as required by the commissioner. [The commissioner 20 shall act on an initial application for a license or registration within 21 one hundred twenty days of receipt of a complete application.] The 22 applicant shall receive a written approval or denial together with the 23 reasons for a denial of such application. 24 b. (i) An initial license [or registration] issued pursuant to the 25 provisions of this article shall be valid for a period of two years. A 26 renewal of license [or registration] issued pursuant to the provisions 27 of this article shall be valid for a period of four years. [All license 28 and registration fees for a renewal shall be double the amounts listed 29 in paragraph g of this subdivision.] 30 (ii) EVERY APPLICANT AND RENEWAL APPLICANT SHALL PAY TO THE DEPARTMENT 31 A NONREFUNDABLE, NONTRANSFERABLE APPLICATION FEE. THE INITIAL APPLICA- 32 TION FEE FOR NEW SCHOOLS SHALL BE FIVE THOUSAND DOLLARS, OF WHICH THREE 33 THOUSAND DOLLARS SHALL ACCRUE TO THE CREDIT OF THE PROPRIETARY VOCA- 34 TIONAL SCHOOL SUPERVISION ACCOUNT AND TWO THOUSAND DOLLARS SHALL ACCRUE 35 TO THE TUITION REIMBURSEMENT ACCOUNT. FOR ADDITIONAL LICENSED LOCATIONS 36 OF CURRENTLY OPERATING SCHOOLS, THE APPLICATION FEE SHALL BE TWO THOU- 37 SAND FIVE HUNDRED DOLLARS, WHICH SHALL ACCRUE TO THE CREDIT OF THE 38 PROPRIETARY VOCATIONAL SCHOOL SUPERVISION ACCOUNT. FOR RENEWAL APPLICA- 39 TIONS, THE FEE SHALL BE BASED ON GROSS ANNUAL TUITION INCOME AS DETER- 40 MINED BY THE ANNUAL FINANCIAL STATEMENTS REQUIRED IN PARAGRAPH A OF THIS 41 SUBDIVISION FOR THE MOST RECENT SCHOOL FISCAL YEAR, ACCORDING TO THE 42 FOLLOWING SCHEDULE: 43 GROSS ANNUAL TUITION INCOME FEE 44 0-$199,999 $ 750.00 45 $200,000-$499,999 $ 1,500.00 46 $500,000-$999,999 $ 2,225.00 47 $1,000,000-$4,999,999 $ 4,500.00 48 $5,000,000-$9,999,999 $ 9,000.00 49 $10,000,000 OR ABOVE $18,000.00 50 SUCH RENEWAL FEES SHALL ACCRUE TO THE CREDIT OF THE PROPRIETARY VOCA- 51 TIONAL SCHOOL SUPERVISION ACCOUNT. IF THE EVALUATION OF A PARTICULAR 52 COURSE OR FACILITY REQUIRES THE SERVICES OF AN EXPERT NOT EMPLOYED BY S. 4268 6 1 THE DEPARTMENT, THE DEPARTMENT SHALL RETAIN SUCH EXPERT AND THE SCHOOL 2 SHALL REIMBURSE THE DEPARTMENT FOR THE REASONABLE COST OF SUCH SERVICES. 3 (III) Each school shall display, near the entrance to the school [and 4 under glass], the license [or registration] which has been issued to it. 5 Such authorization shall be displayed only during the period of its 6 validity. 7 (IV) A SCHOOL WHICH HAS APPLIED FOR A PRIVATE CAREER SCHOOL LICENSE 8 MAY REQUEST CANDIDACY STATUS FOR ONE TIME ONLY. CANDIDACY STATUS SHALL 9 NOT BE ISSUED TO SCHOOLS OFFERING PROGRAMS TO TRAIN STUDENTS TO PASS 10 LICENSURE EXAMINATIONS SUCH AS APPEARANCE ENHANCEMENT TESTS, ACHIEVE 11 NURSE AIDE OR NURSE ASSISTANT CERTIFICATION, OR PASS EXAMINATIONS LEAD- 12 ING TO LICENSURE IN ANY OTHER PROFESSION OR OCCUPATION DETERMINED BY THE 13 COMMISSIONER TO REQUIRE FULL LICENSURE STATUS. CANDIDACY STATUS SHALL 14 ALLOW A SCHOOL TO OPERATE UNLICENSED FOR AN INITIAL PERIOD OF TWELVE 15 MONTHS DURING THE LICENSURE APPLICATION PROCESS, WHICH MAY BE EXTENDED 16 TO A MAXIMUM, NON-RENEWABLE PERIOD OF EIGHTEEN MONTHS, UNDER THE FOLLOW- 17 ING CONDITIONS: 18 (1) THE PROSPECTIVE SCHOOL SUBMITS A CANDIDATE SCHOOL APPLICATION FEE, 19 SEPARATE FROM THE SCHOOL APPLICATION FEE, OF FIVE THOUSAND DOLLARS WHICH 20 SHALL ACCRUE TO THE CREDIT OF THE PROPRIETARY VOCATIONAL SCHOOL SUPER- 21 VISION ACCOUNT; 22 (2) THE SCHOOL SHALL NOT REPRESENT THAT IT IS LICENSED OR THAT ITS 23 PROGRAMS ARE APPROVED THROUGH THE DEPARTMENT; 24 (3) TO EVERY PROSPECTIVE STUDENT, THE SCHOOL SHALL DISSEMINATE A 25 STATEMENT, PROVIDED BY THE DEPARTMENT, THAT THE FACILITIES, INSTRUCTORS, 26 AND PROGRAMS BEING PROVIDED HAVE NOT BEEN APPROVED AND ARE NOT UNDER THE 27 DEPARTMENT'S JURISDICTION DURING THE CANDIDACY PERIOD. SUCH STATEMENT 28 SHALL INDICATE THAT STUDENTS ATTENDING CANDIDATE SCHOOLS SHALL HAVE NO 29 RECOURSE THROUGH THE DEPARTMENT'S STUDENT COMPLAINT PROCESS NOR HAVE ANY 30 RESTITUTION AVAILABLE FROM THE TUITION REIMBURSEMENT ACCOUNT. STUDENTS 31 SHALL SIGN AN ATTESTATION TO THE RECEIPT OF THIS STATEMENT. THE SCHOOL 32 SHALL RETAIN THE SIGNED ATTESTATION AND PROVIDE THE STUDENT WITH A COPY 33 OF SUCH SIGNED STATEMENT; 34 (4) THE SCHOOL SHALL DEMONSTRATE FINANCIAL VIABILITY THROUGH MEANS 35 DEEMED APPROPRIATE BY THE COMMISSIONER. SUCH MEANS MAY INCLUDE SUBMIT- 36 TING AN AUDITED FINANCIAL STATEMENT BASED ON THE MOST RECENTLY COMPLETED 37 FISCAL YEAR; SECURING AND MAINTAINING A PERFORMANCE BOND, PAYABLE TO THE 38 COMMISSIONER, IN AN AMOUNT APPROPRIATE TO ELIMINATE ANY LIABILITY TO THE 39 TUITION REIMBURSEMENT ACCOUNT IN THE EVENT THE SCHOOL CEASES OPERATION; 40 LIMITING THE COLLECTION OF TUITION FUNDS UNTIL EACH STUDENT COMPLETES 41 THE PROGRAM OF STUDY; OR OTHER MEANS ACCEPTABLE TO THE COMMISSIONER; AND 42 (5) ANY BREACH OF THE ABOVE CONDITIONS SHALL RESULT IN THE DISAPPROVAL 43 OF THE SCHOOL'S LICENSURE APPLICATION AND THE FORFEITURE OF CANDIDATE 44 STATUS. CONTINUED OPERATION AFTER THIS DISAPPROVAL SHALL SUBJECT THE 45 SCHOOL TO THE DISCIPLINARY ACTION PRESCRIBED UNDER PARAGRAPH B OF SUBDI- 46 VISION SIX OF SECTION FIVE THOUSAND THREE OF THIS ARTICLE. 47 (6) ON OR BEFORE THE END OF THE INITIAL TWELVE-MONTH PERIOD OF CANDI- 48 DACY STATUS, THE COMMISSIONER SHALL REVIEW THE SCHOOL'S APPLICATION FOR 49 LICENSURE AND DOCUMENTATION RELATING TO THE SCHOOL'S CANDIDACY STATUS 50 AND SHALL DETERMINE WHETHER SUCH CANDIDACY STATUS SHOULD BE EXTENDED TO 51 THE FULL EIGHTEEN MONTHS AND WHETHER THE SCHOOL MAY CONTINUE TO ENROLL 52 STUDENTS BEYOND THE EIGHTEEN-MONTH PERIOD OR THE SCHOOL'S APPLICATION 53 FOR LICENSURE WILL BE INITIALLY DISAPPROVED FOR FAILURE TO MEET REQUIRED 54 STANDARDS. 55 c. An application for renewal of any license [or registration] shall 56 be submitted at least one hundred twenty days prior to the expiration S. 4268 7 1 date of the current authorization to operate accompanied by the nonre- 2 fundable application fee and such certified statistical reports and 3 annual financial statements required pursuant to this subdivision. 4 d. When complete and timely application has been made for renewal of 5 any license [or registration], the school shall receive a written 6 approval or denial, together with the reasons for denial of renewal, 7 from the commissioner no less than thirty days prior to the date such 8 license [or registration] expires. 9 e. Financial statements and statistical reports. (i) Licensed private 10 CAREER schools and [registered business] CANDIDATE schools shall submit 11 such certified statistical reports and annual financial statements as 12 required by the commissioner. The commissioner may require audited 13 statistical reports upon a determination that a school has provided 14 false or inaccurate certified statistical reports. The financial state- 15 ments shall be based on the fiscal year of the school and shall also 16 include an itemized account of tuition refunds due and owing to past or 17 presently enrolled students. Statistical reports shall include, but not 18 be limited to, enrollment, completion and placement data. The commis- 19 sioner shall use such financial statements and statistical reports 20 submitted for the purposes of licensure [and registration] of schools, 21 establishing fees or assessments pursuant to this article and determin- 22 ing standards pursuant to paragraph b of subdivision five of section 23 five thousand two of this article. The attorney general, the comptroller 24 and the president of the higher education services corporation shall 25 have access to this information when it is necessary to perform their 26 duties as required by state law. 27 (ii) Any school which received [in excess of two hundred fifty] FIVE 28 HUNDRED thousand dollars OR MORE in gross tuition in a school fiscal 29 year shall be required to submit TO THE COMMISSIONER an annual audited 30 financial statement [to the commissioner] PREPARED IN ACCORDANCE WITH 31 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES for that fiscal year. In addi- 32 tion, any school which has a gross tuition of [two hundred fifty] LESS 33 THAN FIVE HUNDRED thousand dollars [or less] in a school fiscal year but 34 whose combined state and federal student financial aid in such year 35 [exceeds] EQUALS one hundred thousand dollars OR MORE shall also submit 36 an annual audited financial statement to the commissioner for that 37 fiscal year. 38 (iii) Schools whose gross tuition is [two hundred fifty] LESS THAN 39 FIVE HUNDRED thousand dollars [or less] in a school fiscal year and 40 which receive less than one hundred thousand dollars in state and feder- 41 al student financial aid in a school fiscal year shall file with the 42 commissioner an unaudited financial statement in a format prescribed by 43 the commissioner, provided, however, that any such school [with gross 44 tuition in excess of fifty thousand dollars shall have filed at least 45 one audited financial statement after the first year of its operation. 46 The statement shall be signed by the president or chief executive offi- 47 cer and the chief fiscal officer of the school who shall certify that 48 the statements are true and accurate] SHALL FILE AN AUDITED FINANCIAL 49 STATEMENT THE FISCAL YEAR AFTER A REVIEWED FINANCIAL STATEMENT IS 50 SUBMITTED. FOR SUCH SCHOOLS, AUDITED FINANCIAL STATEMENTS ARE REQUIRED 51 EVERY TWO YEARS, AT MINIMUM, WITH REVIEWED FINANCIAL STATEMENTS ALLOWED 52 DURING THE ALTERNATE YEAR. Upon a determination by the commissioner that 53 a school has submitted false or inaccurate statements or that a signif- 54 icant, unsubstantiated decline in gross tuition has occurred, the 55 commissioner may require any such school to file an audited financial S. 4268 8 1 statement pursuant to this paragraph EVEN DURING ALTERNATE YEARS WHEN 2 REVIEWED STATEMENTS WOULD ORDINARILY BE ALLOWED. 3 f. Alternate licensing provision. The commissioner shall issue regu- 4 lations which define alternate licensing OR CERTIFICATION requirements 5 for the following: 6 (1) correspondence schools in which all approved programs and courses 7 are under three hundred hours; 8 (2) schools which are eligible for exemption under this section but 9 which elect to be licensed; 10 (3) non-profit schools exempt from taxation under section 501(c)(3) of 11 the internal revenue code whose programs are funded entirely through 12 donations from individuals or philanthropic organizations, or endow- 13 ments, and interest accrued thereon; and 14 (4) language schools conducted for-profit which provide instruction in 15 English as a second language and which accept no public funds. 16 [g. Application fee. Every applicant and renewal applicant shall pay 17 to the department a nonrefundable, nontransferable fee based on gross 18 annual tuition income as determined by the annual financial statements 19 required in paragraph a of this subdivision for the most recent school 20 fiscal year, according to the following schedule: 21 GROSS ANNUAL TUITION INCOME FEE 22 0-$199,999 $ 250.00 23 $200,000-$499,999 $ 500.00 24 $500,000-$999,999 $ 750.00 25 $1,000,000-$4,999,999 $1,500.00 26 $5,000,000-$9,999,999 $3,000.00 27 $10,000,000 or above $6,000.00 28 Such fees shall accrue to the credit of the proprietary vocational 29 school supervision account. If the evaluation of a particular course or 30 facility requires the services of an expert not employed by the depart- 31 ment, the department shall retain such expert and the school shall reim- 32 burse the department for the reasonable cost of such services.] 33 5. Required disclosure for licensure. a. The commissioner shall 34 require that each applicant for a license for the operation of a private 35 [vocational or business] CAREER school disclose the following informa- 36 tion: 37 (1) Whether the applicant, or any corporation, partnership, associ- 38 ation or organization or person holding an ownership or control interest 39 in such school, or any employee responsible in a supervisory capacity 40 for the administration of student funds or governmental funds, has been 41 convicted of a crime defined in this article, or any other crime involv- 42 ing the operation of any educational or training program, or, in 43 connection with the operation of any such program, a crime involving the 44 unlawful acquisition, use, payment or expenditure of educational or 45 training program funds; and 46 (2) Whether the applicant, or any corporation, partnership, associ- 47 ation or organization or person holding an ownership or control interest 48 in such school, or any employee responsible in a supervisory capacity 49 for the administration of student funds or governmental funds has been 50 convicted: 51 (A) in this state of any of the following felonies defined in the 52 penal law: bribery involving public servants; commercial bribery; perju- 53 ry in the second degree; rewarding official misconduct; larceny, in S. 4268 9 1 connection with the provision of services or involving the theft of 2 governmental funds; offering a false instrument for filing, falsifying 3 business records; tampering with public records; criminal usury; scheme 4 to defraud; or defrauding the government; or 5 (B) in any other jurisdiction of an offense which is substantially 6 similar to any of the felonies defined in clause (A) of this subpara- 7 graph and for which a sentence to a term of imprisonment in excess of 8 one year was authorized and is authorized in this state regardless of 9 whether such sentence was imposed; and 10 (3) Whether the applicant, or any corporation, partnership, associ- 11 ation or organization or person holding an ownership or control interest 12 in such school, or any employee responsible in a supervisory capacity 13 for the administration of student funds or governmental funds, has been 14 finally determined in any administrative or civil proceeding to have 15 committed a violation of any provision of this article or any rules and 16 regulations promulgated pursuant thereto, or any related order or deter- 17 mination of the commissioner, or of any similar statute, rule, regu- 18 lation, order or determination of another jurisdiction pertaining to the 19 licensure and operation of any educational or training program; and 20 (4) Whether any school owned or operated by the applicant closed or 21 ceased operation and, if so, whether at the time of the closing the 22 applicant was subject to a pending disciplinary action, disallowance, 23 fine or other penalty and whether it owed refunds to any government 24 agency or students. 25 b. No application for any license pursuant to this article shall be 26 denied by reason of disclosure pursuant to this subdivision of the 27 applicant, or any corporation, partnership, association or organization 28 or person holding an ownership or control interest in such school, or 29 any employee responsible in a supervisory capacity for the adminis- 30 tration of student funds or governmental funds unless the commissioner 31 makes a written determination that there is a direct relationship 32 between one or more of such previous offenses and the license sought, or 33 that issuance of the license would create an unreasonable risk to prop- 34 erty or to the safety, education or welfare of specific individuals or 35 the general public. In making such determination, the commissioner shall 36 be guided by the factors set forth in section seven hundred fifty-three 37 of the correction law. For purposes of this subdivision, "ownership or 38 control interest" means: with respect to a school that is organized as 39 or owned by a corporation, a position as an officer or director of such 40 corporation; or, with respect to a school that is organized as or owned 41 by a partnership, a position as a partner; or any other interest total- 42 ing ten percent or more, whether direct or indirect, in the total equity 43 or assets of such school. 44 c. The commissioner may deny, suspend, revoke or decline to renew any 45 license: (1) if the significance of the convictions or administrative 46 violations warrant such action [or]; (2) if the commissioner determines 47 that a school did not make any disclosure required by this subdivision; 48 OR (3) IF THE COMMISSIONER DETERMINES THAT A SCHOOL'S FINANCIAL CONDI- 49 TION MAY RESULT IN THE INTERRUPTION OR CESSATION OF INSTRUCTION OR JEOP- 50 ARDIZE STUDENT TUITION FUNDS. 51 6. If, during the [two year] period for which a license [or registra- 52 tion] is granted, the commissioner determines that a school's financial 53 condition may result in the interruption or cessation of instruction or 54 jeopardize student tuition funds, the commissioner may, upon notice to 55 the school, place the school on probation for a period of no more than 56 [thirty days] ONE YEAR, during which time the school and the department S. 4268 10 1 must make efforts to resolve the problems at the school. THE SCHOOL 2 SHALL SUBMIT A REPORT ON ITS FINANCIAL CONDITION TO THE COMMISSIONER 3 WITHIN THE TIME PRESCRIBED BY THE COMMISSIONER. SUCH REPORT SHALL BE IN 4 THE FORM AND SHALL INCLUDE CONTENT PRESCRIBED BY THE COMMISSIONER AND 5 SHALL BE REVIEWED BY THE COMMISSIONER TO DETERMINE THE SCHOOL'S FINAN- 6 CIAL VIABILITY. THE COMMISSIONER MAY SUSPEND OR REVOKE THE SCHOOL'S 7 LICENSE, AS WELL AS REQUIRE THE CESSATION OF STUDENT ENROLLMENT, UPON A 8 DETERMINATION THAT THE SCHOOL'S FINANCIAL CONDITION CONTINUES TO THREAT- 9 EN ITS ABILITY TO EDUCATE STUDENTS AND/OR THE STUDENT TUITION FUNDS. 10 ALTERNATIVES FOR THE SCHOOL TO DEMONSTRATE A FISCALLY SOUND OPERATION 11 MAY INCLUDE SECURING AND MAINTAINING A PERFORMANCE BOND, PAYABLE TO THE 12 COMMISSIONER, IN AN APPROPRIATE AMOUNT TO ELIMINATE ANY LIABILITY TO THE 13 TUITION REIMBURSEMENT ACCOUNT SHOULD THE SCHOOL CEASE OPERATION, LIMIT- 14 ING THE COLLECTION OF TUITION FUNDS UNTIL EACH STUDENT COMPLETES THE 15 PROGRAM OF STUDY, OR OTHER MEANS ACCEPTABLE TO THE COMMISSIONER. If no 16 resolution can be attained, a hearing, pursuant to subdivisions two and 17 three of section five thousand three of this article will be scheduled. 18 Such probation may include additional monitoring, inspections, limita- 19 tions on enrollment, teaching out some or all of a school's present 20 students or temporary cessation of instruction. 21 7. No license [or registration] granted under this section shall be 22 transferable or assignable without the approval of the commissioner. 23 [Any] UPON transfer or assignment of any interest totaling [ten] TWEN- 24 TY-FIVE percent or more, whether direct or indirect, in the total equity 25 or assets of a school, SUCH SCHOOL shall be deemed a [transfer of such 26 school's license or registration. The commissioner shall approve or deny 27 a transfer or assignment based on the requirements set forth in subdivi- 28 sions three and four of this section. Such approval or denial, together 29 with the reasons for denial, shall be transmitted in writing within 30 ninety days of the receipt of the complete application by the commis- 31 sioner. Upon a showing of good cause as to why the applicant could not 32 obtain the commissioner's approval prior to a transfer or assignment, 33 the commissioner shall temporarily approve the transfer or assignment 34 for a period not to exceed forty-five days and for such additional peri- 35 ods as the commissioner may deem appropriate] NEW SCHOOL REQUIRED TO 36 SUBMIT A NEW SCHOOL APPLICATION AND OBTAIN A NEW LICENSE PURSUANT TO 37 THIS ARTICLE. PROVIDED, HOWEVER, THAT UPON SUCH A SUBSTANTIAL CHANGE IN 38 INTEREST, THE PREVIOUS SCHOOL LICENSE SHALL REMAIN IN EFFECT UNTIL THE 39 NEW LICENSE IS ISSUED OR DENIED OR THE PREVIOUS LICENSE EXPIRES OR IS 40 REVOKED, WHICHEVER OCCURS FIRST. 41 8. No licensed [or registered] school shall discontinue operation or 42 surrender its license [or registration] unless thirty days written 43 notice of its intention to do so and a plan for maintenance of safe 44 keeping of the records of the school is provided to the commissioner. 45 However, upon good cause shown, the commissioner may waive the thirty 46 days notice requirement. 47 9. Annual supervision fund and tuition reimbursement [fund] ACCOUNT 48 assessment. a. The commissioner shall annually assess each school a 49 total percentage of that school's gross tuition pursuant to subdivision 50 three of section five thousand two of this article, as determined by the 51 annual [financial statement or annual] audited financial statement 52 required by this article. This assessment shall be based upon each 53 school's gross tuition from the previous year, and shall be payable to 54 the commissioner in equal quarterly installments which shall be due on 55 June first, September first, December first and March first. S. 4268 11 1 b. (i) [Beginning April first, nineteen hundred ninety-one, such] SUCH 2 annualized assessment shall be one percent FOR SCHOOLS WHICH HAVE PAID 3 LESS THAN SIXTEEN QUARTERS OF ASSESSMENTS, BUT SUCH ANNUAL ASSESSMENT 4 SHALL NOT FALL BELOW FIVE HUNDRED DOLLARS. 5 (ii) [Beginning July first, nineteen hundred ninety-four, such] SUCH 6 annualized assessment shall be [nine-tenths] EIGHT-TENTHS of one percent 7 FOR SCHOOLS WHICH HAVE PAID SIXTEEN OR MORE QUARTERS OF ASSESSMENTS, BUT 8 SUCH ANNUAL ASSESSMENT SHALL NOT FALL BELOW FIVE HUNDRED DOLLARS. 9 [(iii) Beginning April first, nineteen hundred ninety-five, and in 10 each succeeding year, such annualized assessment shall be eight-tenths 11 of one percent.] 12 c. (i) Of the total assessment provided for herein, FIVE-TENTHS OF ONE 13 PERCENT SHALL ACCRUE TO THE CREDIT OF THE TUITION REIMBURSEMENT ACCOUNT 14 PURSUANT TO SECTION FIVE THOUSAND SEVEN OF THIS ARTICLE FOR THOSE 15 SCHOOLS WHICH HAVE PAID LESS THAN SIXTEEN QUARTERS OF ASSESSMENTS. OF 16 THE TOTAL ASSESSMENT PROVIDED FOR SCHOOLS WHICH HAVE PAID SIXTEEN OR 17 MORE QUARTERS OF ASSESSMENTS, three-tenths of one percent shall accrue 18 to the credit of the tuition reimbursement [fund] ACCOUNT pursuant to 19 section five thousand seven of this article. FOR SCHOOLS PAYING THE 20 MINIMUM FIVE HUNDRED DOLLARS ANNUAL ASSESSMENT, NONE SHALL ACCRUE TO THE 21 TUITION REIMBURSEMENT ACCOUNT. 22 (ii) The balance of the total assessment provided for herein shall be 23 dedicated to fund the department's supervision and regulation of 24 licensed private schools [and registered business schools] pursuant to 25 an annual appropriation and an annual plan of expenditure prepared by 26 the commissioner and approved by the director of the budget. [Following 27 the close of each fiscal year, the commissioner, in consultation with 28 the director of the budget, shall determine if the balance in the 29 proprietary vocational school supervision fund for such fiscal year 30 exceeded the amount required for the support of the department's super- 31 visory activities taking into account projected revenues and expendi- 32 tures for the subsequent fiscal year. To the extent that a surplus is 33 identified, the commissioner, with the approval of the director of the 34 budget, shall direct the transfer of such surplus to the tuition 35 reimbursement fund.] 36 d. Payments made within thirty days following the due date shall be 37 subject to interest at one percent above the prevailing prime rate. 38 Thereafter, late payments may result in suspension of licensure by the 39 commissioner. Payments required by this subdivision shall be considered 40 a condition of licensure [or registration]. 41 S 4. Section 5002 of the education law, as added by chapter 887 of the 42 laws of 1990, subparagraph 3 of paragraph b and paragraph d of subdivi- 43 sion 1, subparagraph 2 of paragraph g of subdivision 3 and subdivision 6 44 as amended and paragraph c of subdivision 1 and paragraph d of subdivi- 45 sion 2 as added by chapter 604 of the laws of 1993, paragraph c of 46 subdivision 2, paragraph a of subdivision 4 and subdivision 7 as amended 47 and paragraph e of subdivision 4 and paragraph c of subdivision 6 as 48 added by chapter 434 of the laws of 1999, paragraph f of subdivision 4 49 as added by chapter 457 of the laws of 2003 and subparagraph 2 of para- 50 graph b of subdivision 5 as amended by chapter 301 of the laws of 1996, 51 is amended to read as follows: 52 S 5002. Standards for licensed private CAREER schools [and registered 53 business schools]. Any school licensed [or registered] pursuant to 54 section five thousand one of this article shall be organized and 55 conducted only as a school and shall be subject to the jurisdiction of 56 the department exclusively, or in conjunction with such other state S. 4268 12 1 agency or department or district attorney upon which jurisdiction has 2 also been conferred by law. Such schools shall be subject to and comply 3 with the provisions of this section. 4 1. Standards. a. No program of such schools shall be conducted in a 5 factory or commercial establishment, except where the use of facilities 6 or equipment of such factory or commercial establishment is permitted 7 for necessary or desirable educational purposes and objectives. 8 b. For every such school, the commissioner shall set forth in regu- 9 lation standards governing all of the following: 10 (1) criteria for admission, which shall provide that students at least 11 possess a high school diploma or its equivalent or demonstrate the abil- 12 ity to benefit from the instruction, except that in the case of students 13 who do not possess a high school diploma or its equivalent, certif- 14 ication of the students' ability to benefit from instruction shall be 15 provided to the commissioner as provided in paragraph c of this subdivi- 16 sion; 17 (2) the standards and the methods of instruction; 18 (3) the equipment available for instruction with the maximum enroll- 19 ment that such equipment and physical plant will accommodate; 20 (4) the qualifications and experience of teaching and management 21 personnel; 22 (5) the form and content of the student enrollment agreement or 23 contract, provided that such agreement or contract shall be written in 24 the same language as that principally used in the sales presentation; 25 (6) the methods of collecting tuition; 26 (7) eligibility criteria for programs that will require licensure; 27 (8) the sufficiency and suitability of the resources available for the 28 support of such school; and 29 (9) counseling provided to students. 30 B-1. (1) STUDENT LOANS OR OTHER FINANCIAL AID FUNDS RECEIVED FROM 31 FEDERAL, STATE, OR LOCAL GOVERNMENTS OR ADMINISTERED UNDER THE FEDERAL 32 STUDENT FINANCIAL ASSISTANCE PROGRAMS GOVERNED BY TITLE IV OF THE HIGHER 33 EDUCATION ACT OF NINETEEN HUNDRED SIXTY-FIVE, 20 U.S.C. SECTION 1070 ET 34 SEQ., AS AMENDED, MUST BE COLLECTED AND APPLIED IN THE MANNER AS 35 CONTROLLED BY THE APPLICABLE FEDERAL, STATE OR LOCAL REGULATIONS. 36 (2) STUDENT LOANS OR OTHER FINANCIAL AID FUNDS RECEIVED FROM PRIVATE 37 ENTITIES, INCLUDING, BUT NOT LIMITED TO, BANKS, FINANCING COMPANIES, AND 38 OTHER LENDING SOURCES MUST BE COLLECTED OR DISBURSED IN THE FOLLOWING 39 MANNER: 40 (A) LOANS OR OTHER FINANCIAL AID PAYMENTS FOR AMOUNTS OF FIVE THOUSAND 41 DOLLARS OR LESS MAY BE DISBURSED AS A SINGLE DISBURSEMENT, REGARDLESS OF 42 COURSE LENGTH. 43 (B) LOANS OR OTHER FINANCIAL AID PAYMENTS FOR AMOUNTS GREATER THAN 44 FIVE THOUSAND DOLLARS THAT REFLECT A CLASS TERM OF LESS THAN SIX MONTHS 45 SHALL HAVE TWO EQUAL DISBURSEMENTS. THE DISBURSEMENT SCHEDULE FOR SUCH 46 LOANS OR PAYMENTS SHALL BE AS FOLLOWS: ONE-HALF OF THE TUITION AMOUNT 47 RELEASED INITIALLY, AND THE REMAINDER RELEASED HALFWAY THROUGH THE 48 COURSE TERM. 49 (C) LOANS OR OTHER FINANCIAL AID PAYMENTS FOR AMOUNTS GREATER THAN 50 FIVE THOUSAND DOLLARS THAT REFLECT A CLASS TERM OF GREATER THAN SIX 51 MONTHS, BUT LESS THAN TWELVE MONTHS MUST HAVE THREE EQUAL DISBURSEMENTS. 52 THE DISBURSEMENT SCHEDULE FOR SUCH LOANS OR PAYMENTS SHALL BE AS 53 FOLLOWS: ONE-THIRD OF THE TUITION AMOUNT RELEASED INITIALLY, THE SECOND 54 DISBURSEMENT SHALL BE RELEASED ONE-THIRD OF THE WAY THROUGH THE LENGTH 55 OF THE TRAINING, AND THE REMAINDER RELEASED TWO-THIRDS OF THE WAY 56 THROUGH THE COURSE TERM. S. 4268 13 1 (D) LOANS OF OTHER FINANCIAL AID PAYMENTS FOR AMOUNTS GREATER THAN 2 FIVE THOUSAND DOLLARS THAT REFLECT A CLASS TERM GREATER THAN TWELVE 3 MONTHS SHALL HAVE FOUR EQUAL DISBURSEMENTS. THE DISBURSEMENT SCHEDULE 4 FOR SUCH LOANS OR PAYMENTS SHALL BE AS FOLLOWS: ONE-QUARTER OF THE 5 TUITION AMOUNT RELEASED INITIALLY, THE SECOND DISBURSEMENT SHALL BE 6 RELEASED ONE QUARTER OF THE WAY THROUGH THE LENGTH OF THE TRAINING; THE 7 THIRD DISBURSEMENT SHALL BE RELEASED HALFWAY THROUGH THE LENGTH OF THE 8 TRAINING, AND THE REMAINDER SHALL BE RELEASED THREE-QUARTERS OF THE WAY 9 THROUGH THE TRAINING. 10 (3) NO SCHOOL MAY ENTER INTO ANY CONTRACT OR AGREEMENT WITH OR RECEIVE 11 ANY STUDENTS LOAN OR FINANCIAL AID FUNDS FROM PRIVATE ENTITIES, INCLUD- 12 ING, BUT NOT LIMITED TO, BANKS, FINANCING COMPANIES, AND ANY OTHER 13 PRIVATE LENDING SOURCES UNLESS THE PRIVATE ENTITY HAS A DISBURSEMENT 14 POLICY THAT, AT A MINIMUM, MEETS THE REQUIREMENTS OF SUBPARAGRAPH TWO OF 15 THIS PARAGRAPH. 16 (4) THE TERM PRIVATE ENTITY REFERENCED IN SUBPARAGRAPHS TWO AND THREE 17 OF THIS PARAGRAPH SHALL NOT BE CONSTRUED TO INCLUDE A FRIEND OR FAMILY 18 MEMBER OF THE STUDENT WHO IS NOT IN THE ROUTINE BUSINESS OF PROVIDING 19 STUDENT LOANS OR FINANCIAL AID FUNDS. THE PROVISION OF SUCH A LOAN OR 20 FUND BY A PRIVATE ENTITY SHALL ALSO NOT INCLUDE THE PAYMENT OF THE 21 STUDENT'S TUITION OR FEES BY USE OF A CREDIT CARD. 22 c. Notwithstanding any other provisions of this article to the contra- 23 ry, the commissioner shall define alternative educational and curriculum 24 standards for any program of less than forty hours designed exclusively 25 for non-occupational, personal enrichment purposes. 26 d. Admission of students under the ability to benefit provision. 27 (1) Certification. Each school admitting students who do not possess 28 at least a high school diploma or its equivalent shall certify to the 29 satisfaction of the commissioner that such prospective students have 30 been administered and passed an examination which has been approved by 31 the commissioner to determine their ability to benefit from the chosen 32 curriculum prior to admission to the curriculum or course of study. Such 33 examination shall, whenever possible, be a nationally recognized test 34 appropriate for the course of instruction which has been approved by the 35 commissioner. The examination results of each such student who is admit- 36 ted shall be made available to the commissioner at a time prescribed by 37 the commissioner and, together with the student's original answer sheet, 38 shall be maintained by the school in the student's permanent record. For 39 any student failing to achieve the necessary score on such examination 40 for enrollment, the school shall be required to provide such student 41 with a listing of appropriate counseling and educational opportunities 42 available to the student at no cost, as determined by the commissioner. 43 WHERE APPROPRIATE, THE COMMISSIONER MAY ACCEPT SUCH OTHER ENTRANCE 44 REQUIREMENT DOCUMENTATION SUCH AS PREREQUISITE COURSEWORK, PROFESSIONAL 45 OR VENDOR CERTIFICATIONS, PERSONAL INTERVIEWS, AND/OR ATTESTATIONS OF 46 EQUIVALENT KNOWLEDGE IN LIEU OF THE EXAMINATION REQUIREMENT. 47 (2) Counseling. Each school [admitting] OFFERING CURRICULA WHICH ADMIT 48 students who do not possess a high school diploma or its equivalent 49 shall develop a plan to be approved by the commissioner for the coun- 50 seling of such students on an individual basis on matters including but 51 not limited to the student's ability to progress in the curriculum, the 52 student's financial aid rights and responsibilities, the availability of 53 programs to earn a high school equivalency diploma, including programs 54 provided at no cost to the student, and the potential of the training to 55 prepare the student for available employment opportunities within the 56 region. S. 4268 14 1 (3) Compliance. (A) The commissioner shall monitor compliance with 2 this paragraph and verify the examination and counseling process and 3 student examination scores. Such procedures may include but not be 4 limited to an annual, statistically significant, random sampling of the 5 examinations taken by prospective students of each school administering 6 such examinations. 7 (B) [Such procedures shall provide that the examinations of each 8 school be inspected on site at least once annually. 9 (C)] In the event that the commissioner determines that the school is 10 out of compliance with the examination process and counseling, the 11 commissioner shall require that examinations and counseling for students 12 admitted under the ability to benefit provision and the counseling 13 required by subparagraph two of this paragraph be conducted off the 14 premises of the school by an entity approved by the commissioner for 15 such period of time as the commissioner deems appropriate, the cost of 16 which shall be incurred by the school. 17 2. Inspections. a. Every school licensed pursuant to this article 18 shall maintain adequate and accurate records for a period of not less 19 than [six] SEVEN years at its principal place of business within this 20 state. Such records shall be maintained in a manner and form prescribed 21 by the commissioner and shall be made available to the department and 22 the higher education services corporation upon request. 23 b. In addition to other requirements in this article, the information 24 to be made a part of the record shall include, but not be limited to: 25 (1) names and addresses of each enrolled student; 26 (2) the course of study offered by the institution; 27 (3) the name and address of its faculty, together with a record of the 28 educational qualifications of each; 29 (4) the graduation date of each student; and 30 (5) for each student who fails to complete his or her program, the 31 student's last date of attendance and, if applicable, the amount of any 32 refund paid to, or on behalf of, the student and the date the refund was 33 made. 34 c. The commissioner shall conduct periodic unscheduled inspections of 35 licensed private CAREER schools [and registered business schools] to 36 monitor compliance with the provisions of this article or the rules or 37 regulations promulgated thereunder or any final order or decision of the 38 commissioner made pursuant to this article. The department shall conduct 39 an inspection of each school at least once every [three years. The 40 department shall annually inspect schools: (1) having a high percentage 41 of students admitted under ability to benefit criteria as determined by 42 the commissioner; (2) having a high student loan default rate as deter- 43 mined by the commissioner in a manner consistent with federal standards; 44 or (3) which are the subject of a high volume of complaints by students 45 or other parties] LICENSURE PERIOD. All schools shall provide upon 46 request of the department, any and all records necessary to review 47 compliance with the provisions of this article. 48 d. Student permanent records, as defined in the regulations of the 49 commissioner, shall be maintained for a period of twenty years. 50 3. Tuition liability. a. The tuition charge for programs approved for 51 participation in student financial aid general award programs pursuant 52 to articles thirteen and fourteen of this chapter shall be apportioned 53 on the basis of terms, quarters or semesters. For the purposes of this 54 section, the terms "term", "quarter" and "semester" shall be defined in 55 regulations by the commissioner. S. 4268 15 1 b. The tuition refund policy for the first term or quarter of any 2 program at schools licensed [or registered] pursuant to section five 3 thousand one of this article shall be as follows: 4 (1) For programs which are divided into quarters of up to fourteen 5 weeks, the school shall evenly divide the total tuition charges among 6 the number of quarters. After instruction is begun in a school, if a 7 student withdraws or is discontinued, the school may retain no more 8 than: 9 (i) zero percent of the quarter's tuition if the termination is during 10 the first week of instruction; or 11 (ii) twenty-five percent of the quarter's tuition if the termination 12 is during the second week of instruction; or 13 (iii) fifty percent of the quarter's tuition if the termination is 14 during the third week of instruction; or 15 (iv) seventy-five percent of the quarter's tuition if the termination 16 is during the fourth week of instruction; or 17 (v) one hundred percent of the quarter's tuition if the termination 18 occurs after the fourth week of instruction. 19 (2) For programs organized by terms of fifteen, sixteen, seventeen or 20 eighteen weeks apiece, the school shall evenly divide the total tuition 21 charges among the number of terms. After instruction is begun in a 22 school, if a student withdraws or is discontinued, the school may retain 23 no more than: 24 (i) zero percent of the term's tuition if the termination is during 25 the first week of instruction; or 26 (ii) twenty percent of the term's tuition if the termination is during 27 the second week of instruction; or 28 (iii) thirty-five percent of the term's tuition if the termination is 29 during the third week of instruction; or 30 (iv) fifty percent of the term's tuition if the termination is during 31 the fourth week of instruction; or 32 (v) seventy percent of the term's tuition if the termination is during 33 the fifth week of instruction; or 34 (vi) one hundred percent of the term's tuition if the termination 35 occurs after the completion of the fifth week of instruction. 36 c. (1) The tuition refund policy for the second term or quarter of any 37 program at schools licensed [or registered] pursuant to section five 38 thousand one of this article shall be as follows: 39 (A) For programs which are divided into quarters of up to fourteen 40 weeks, the school shall evenly divide the total tuition charges among 41 the number of quarters. After instruction is begun in a school, if a 42 student withdraws or is discontinued, the school may retain no more 43 than: 44 (i) twenty-five percent of the quarter's tuition if the termination is 45 during the first week of instruction; or 46 (ii) fifty percent of the quarter's tuition if the termination is 47 during the second week of instruction; or 48 (iii) seventy-five percent of the quarter's tuition if the termination 49 is during the third week of instruction; or [.] 50 (iv) one hundred percent of the quarter's tuition if the termination 51 occurs after the third week of instruction. 52 (B) For programs organized by terms of fifteen, sixteen, seventeen or 53 eighteen weeks apiece, the school shall evenly divide the total tuition 54 charges among the number of terms. After instruction is begun in a 55 school, if a student withdraws or is discontinued, the school may retain 56 no more than: S. 4268 16 1 (i) twenty percent of the term's tuition if the termination is during 2 the first week of instruction; or 3 (ii) thirty-five percent of the term's tuition if the termination is 4 during the second week of instruction; or 5 (iii) fifty percent of the term's tuition if the termination is during 6 the third week of instruction; or 7 (iv) seventy percent of the term's tuition if the termination is 8 during the fourth week of instruction; or 9 (v) one hundred percent of the term's tuition if the termination 10 occurs after the completion of the fourth week of instruction. 11 (2) Notwithstanding the provisions of subparagraph one of this para- 12 graph, the tuition refund policy set forth in paragraph b of this subdi- 13 vision shall apply unless the school demonstrates that there are no 14 significant educational changes in the educational program of the 15 student, such changes as defined in regulations of the commissioner. 16 d. The tuition refund policy for the third and any subsequent term or 17 quarter of any program licensed [or registered] pursuant to section five 18 thousand one of this article shall be the policy set forth in subpara- 19 graph one of paragraph c of this subdivision. 20 e. No program shall have a term in excess of eighteen weeks. 21 f. The amount of the refund shall be calculated based on the last day 22 of student attendance. 23 g. (1) Any refund due to a student shall be paid by the school within 24 forty-five days of the date on which the student withdraws from the 25 program. For the purposes of this article, such date shall be the earli- 26 est of (i) the date on which the student gives written notice to the 27 school or (ii) the date on which the student is deemed to have withdrawn 28 pursuant to subparagraph two of this paragraph. 29 (2) If a student has failed to attend classes for a period of thirty 30 calendar days, the school shall send by regular mail a notice to the 31 student that the student shall be deemed to have withdrawn from the 32 program if the student does not notify the school to the contrary within 33 twelve days from the date on which the letter is sent. If the student 34 fails to respond within such twelve-day period, the student shall be 35 deemed to have withdrawn and the school shall notify the higher educa- 36 tion services corporation that the student has withdrawn and the date of 37 the withdrawal. 38 h. SCHOOLS SHALL SUBMIT, FOR APPROVAL BY THE COMMISSIONER, THE SCHOOL 39 CATALOG WITH A WEEKLY TUITION LIABILITY CHART FOR EACH PROGRAM THAT 40 INDICATES THE AMOUNT OF REFUND DUE THE STUDENT IN THE EVENT OF WITH- 41 DRAWAL. 42 I. Upon payment of a refund to a lender, the school shall forthwith 43 send a notice to a person designated by the president of the higher 44 education services corporation upon a form approved by the president 45 that such refund was made. 46 [i.] J. If the higher education services corporation fails to receive 47 the notice required by paragraph [h] I of this subdivision, it shall 48 forthwith notify the student of his or her right to a refund and the 49 commissioner of such failure. Upon receipt of such notification, the 50 commissioner shall take appropriate action against the school. 51 4. Curriculum approval. a. An application AND FEE shall be made for 52 the initial approval of a curriculum or course and shall include such 53 information as the commissioner may require by regulation. Approval 54 shall be valid for a period not to exceed four years. THE APPLICATION 55 FEE FOR ANY CURRICULUM OF ONE HUNDRED CLOCK HOURS OR MORE SHALL BE TWO 56 HUNDRED FIFTY DOLLARS. THE APPLICATION FEE FOR ANY COURSE OF LESS THAN S. 4268 17 1 ONE HUNDRED CLOCK HOURS SHALL BE ONE HUNDRED DOLLARS. SUCH APPLICATION 2 FEES SHALL ACCRUE TO THE CREDIT OF THE PROPRIETARY VOCATIONAL SCHOOL 3 SUPERVISION ACCOUNT. 4 b. In approving curriculum, the commissioner shall take into consider- 5 ation the following: 6 (1) that the entrance requirements demonstrate that students possess 7 the skills, competencies and prerequisite knowledge needed to progress 8 in the curriculum; 9 (2) that the content will enable the student to develop those skills 10 and competencies required for employment in the occupational area for 11 which the curriculum was developed; 12 (3) that the school will utilize appropriate instructional methods; 13 [and] 14 (4) that the instructional equipment used within the curriculum is 15 comparable to the equipment currently used by business or industry in 16 the occupational area for which the curriculum was developed; AND 17 (5) THAT A CURRICULUM MAY INCLUDE INSTRUCTION IN ENGLISH AS A SECOND 18 LANGUAGE AT A BEGINNING OR BASIC LEVEL, PROVIDED SUCH INSTRUCTION SHALL 19 NOT CONSTITUTE MORE THAN FIFTY PERCENT OF SUCH PROGRAM. 20 c. (1) If the evaluation of a particular course or facility requires 21 the services of an expert not employed by the department, the department 22 shall retain such expert [and the school shall reimburse the department 23 for the reasonable cost of such services] AT THE SCHOOL'S EXPENSE IN 24 ADDITION TO THE APPLICATION FEES PRESCRIBED IN PARAGRAPH A OF THIS 25 SUBDIVISION. 26 (2) If, in the interest of expediting the approvals, a school requests 27 the department to employ an outside consultant, the school shall [reim- 28 burse the department for] PAY the [reasonable] cost of such services IN 29 ADDITION TO THE APPLICATION FEES PRESCRIBED IN PARAGRAPH A OF THIS 30 SUBDIVISION. 31 d. The commissioner shall act on applications for approval of a course 32 or curriculum within one hundred twenty days of receipt of a complete 33 application and, in the case of a denial, shall set forth in writing the 34 reasons for such denial. 35 e. Notwithstanding paragraphs b, c and d of this subdivision, curric- 36 ulum certified by a nationally recognized vendor as defined in commis- 37 sioner's regulations shall be recognized by the department in lieu of an 38 expert evaluation when such curriculum is adopted by a school in the 39 original format provided by the vendor as long as the proposed curric- 40 ulum is a stand alone program and not part of a larger comprehensive 41 course. 42 f. Notwithstanding any other provision of the law, a [not-for-profit 43 registered business] school[, that is eligible for participation in the 44 tuition assistance program and] which has national accreditation, may, 45 for the purpose of calculation of federal financial aid amounts only, 46 measure students' academic progress in an approved curriculum in non-de- 47 gree granting credit hours, based upon a national accrediting agency's 48 conversion and approval of clock hours to non-degree credit hours. For 49 the purposes of this paragraph, "national accreditation" shall mean 50 accreditation by a national accrediting agency as defined in the commis- 51 sioner's regulations. 52 5. Application for reapproval. a. An application AND FEE shall be made 53 for reapproval of a curriculum or course. Such application shall be 54 considered timely if submitted at least one hundred twenty days prior to 55 the expiration of the current approval. THE APPLICATION FEE FOR ANY 56 CURRICULUM OF ONE HUNDRED CLOCK HOURS OR MORE SHALL BE TWO HUNDRED FIFTY S. 4268 18 1 DOLLARS. THE APPLICATION FEE FOR ANY COURSE OF LESS THAN ONE HUNDRED 2 CLOCK HOURS SHALL BE ONE HUNDRED DOLLARS, PROVIDED THAT NO FEE SHALL BE 3 ASSESSED FOR THE SUBMISSION OF A REAPPROVAL APPLICATION WITHOUT CHANGE. 4 SUCH APPLICATION FEE SHALL ACCRUE TO THE CREDIT OF THE PROPRIETARY VOCA- 5 TIONAL SCHOOL SUPERVISION ACCOUNT. 6 b. Curriculum reapproval standards. (1) The commissioner shall pre- 7 scribe by regulation, standards for reapproval after the first year of 8 licensure, of any curriculum or course based upon factors including but 9 not limited to the following, as appropriate: 10 (i) for each curriculum or course, the percentage of students who have 11 dropped out; 12 (ii) the acquisition of a specified minimum level of skills by the 13 students; and 14 (iii) for each curriculum or course, the percentage of students placed 15 in occupations related to the instruction, where applicable. 16 (2) Such standards shall be consistent with those applied to all non- 17 degree career education programs. 18 c. Reapproval contingency. Reapproval of a curriculum or course shall 19 be contingent upon a demonstration by the applicant that the curriculum 20 or course has met the curriculum reapproval standards set forth in this 21 subdivision. Except as otherwise provided in paragraph d of this subdi- 22 vision, no such curriculum or course or substantially similar curriculum 23 or course may be given without reapproval by the commissioner. 24 d. When timely and complete application is made for the reapproval of 25 a curriculum or course, and no written denial is made thirty days prior 26 to the date of expiration of the existing approval, the curriculum or 27 course shall be deemed to be approved for the period of the curriculum. 28 If the application is denied, the commissioner shall set forth in writ- 29 ing the reasons for such denial. 30 e. The commissioner may provide in regulations for reapproval proce- 31 dures, consistent with this subdivision, for applications submitted less 32 than one hundred twenty days from the expiration date. 33 f. The commissioner shall act upon enrollment agreements and catalogs 34 within ninety days of receipt, and, in the case of denial, shall set 35 forth in writing the reasons for such denial. If the commissioner fails 36 to act within ninety days, a catalog shall be deemed approved for one 37 year and an enrollment agreement shall be deemed approved until the 38 commissioner acts upon it. 39 6. a. Teachers and directors. No person shall be employed by a private 40 CAREER school as a director or teacher who is not licensed in such 41 capacity by the department pursuant to regulations of the commissioner, 42 which shall take into consideration such factors as moral character, 43 educational qualifications and practical experience. The application 44 shall include a statement, signed by the president or chief executive 45 officer of the school, certifying that to the best of his or her know- 46 ledge, the applicant is able to meet the educational qualifications and 47 practical experience set forth in the commissioner's regulations. Such 48 application shall be considered timely if mailed to the commissioner and 49 postmarked four days prior to employment at the school and must be 50 completed within twenty days thereafter; provided, however, that the 51 commissioner may, for good cause shown, extend the time within which to 52 complete the application. When a complete application is made, the 53 commissioner shall act upon such application within thirty days. If no 54 written denial is made within the thirty days, the application shall be 55 deemed to be approved until the commissioner acts upon it or until the 56 end of the term or semester, whichever occurs first. If a written denial S. 4268 19 1 is made after the thirty day period, the commissioner may allow the 2 applicant to teach at the school for the remainder of the term or semes- 3 ter if the commissioner determines that the removal of the teacher would 4 not be in the best educational interest of the students. This subdivi- 5 sion shall not apply to directors or teachers employed on or before July 6 first, nineteen hundred seventy-two. Teachers' licenses issued on or 7 after [January first, nineteen hundred eighty-seven] THE EFFECTIVE DATE 8 OF THE CHAPTER OF THE LAWS OF TWO THOUSAND ELEVEN WHICH AMENDED THIS 9 PARAGRAPH shall be valid at all [registered business] LICENSED PRIVATE 10 CAREER schools for the courses, curricula, or occupations indicated on 11 the license. TEACHERS HOLDING VALID PRIVATE SCHOOL TEACHER LICENSES 12 VALID AT ONLY ONE SCHOOL LOCATION SHALL HAVE THEM REPLACED, AT NO COST, 13 WITH LICENSES VALID AT ANY LICENSED SCHOOL IN THE SAME SUBJECT OR 14 SUBJECTS AND WITH THE SAME EXPIRATION DATE AS WAS LISTED ON THE PREVIOUS 15 TEACHING LICENSE. 16 b. A school director shall have access to all student and school 17 records which shall be maintained in accordance with this article and 18 the regulations of the commissioner and shall make such records avail- 19 able to the commissioner or the commissioner's designee upon request 20 during an on-site school inspection. 21 c. Notwithstanding paragraph a of this subdivision, a teacher who has 22 been certified as an instructor by a nationally recognized vendor as 23 defined in commissioner's regulations may be deemed qualified as an 24 instructor by the department, provided such teacher shall only provide 25 instruction in the course or courses for which he or she holds vendor's 26 certification. A teacher authorized by this paragraph will be subject to 27 all licensing fees required by the department for licensed teachers. 28 7. Advertising. a. The commissioner is authorized to commence a disci- 29 plinary proceeding pursuant to this article for false, misleading, 30 deceptive or fraudulent advertising pursuant to regulations promulgated 31 by the commissioner which shall be consistent with article twenty-two-A 32 of the general business law. The department shall issue guidelines as to 33 appropriate advertising content. In developing such guidelines, the 34 department shall consider advertising for similar programs offered by 35 various educational institutions. In a disciplinary action or other 36 proceeding, such guidelines shall not be presumptive evidence that 37 particular advertising is appropriate. 38 b. Beginning on January first, two thousand, all schools shall include 39 in their advertising, promotional material, or letterhead the statement 40 "Licensed by the State of New York" [or "Registered by the State of New 41 York", as appropriate], and an accompanying symbol to indicate such 42 status, issued by the commissioner pursuant to section five thousand 43 nine of this article. 44 8. The higher education services corporation shall adopt rules and 45 regulations to effectuate the cessation of collection activities by 46 lenders or by the corporation in cases in which a licensed private 47 [vocational] CAREER school [or a registered business school] at which 48 the student enrolled has closed or ceased its teaching activities during 49 the academic period for which the loan was made or guaranteed. 50 S 5. Section 5003 of the education law, as added by chapter 887 of the 51 laws of 1990, subparagraph 1 of paragraph c of subdivision 1 and para- 52 graphs d and e of subdivision 6 as amended by chapter 604 of the laws of 53 1993, paragraph d of subdivision 1 as added and paragraphs b and f of 54 subdivision 6 as amended by chapter 434 of the laws of 1999, is amended 55 to read as follows: S. 4268 20 1 S 5003. Disciplinary actions, hearings and penalties. 1. Disciplinary 2 action. a. The commissioner for good cause, after affording a school an 3 opportunity for a hearing, may take disciplinary action as hereinafter 4 provided against any school authorized to operate under this article. 5 b. Good cause shall include, but not be limited to, any of the follow- 6 ing: 7 (1) fraudulent statements or representations to the department, the 8 public or any student in connection with any activity of the school; 9 (2) violation of any provision of this article or regulation of the 10 commissioner; 11 (3) conviction or a plea of no contest on the part of any owner, oper- 12 ator, director or teacher: 13 (A) of any of the following felonies defined in the penal law: bribery 14 involving public servants; commercial bribery; perjury in the second 15 degree; rewarding official misconduct; larceny, in connection with the 16 provision of services or involving the theft of governmental funds; 17 offering a false instrument for filing, falsifying business records; 18 tampering with public records; criminal usury; scheme to defraud; or 19 defrauding the government; or 20 (B) in any other jurisdiction of an offense which is substantially 21 similar to any of the felonies defined in clause (A) of this subpara- 22 graph and for which a sentence to a term of imprisonment in excess of 23 one year was authorized and is authorized in this state regardless of 24 whether such sentence was imposed; or 25 (4) incompetence of any owner or operator to operate a school. 26 c. (1) Any person who believes he or she has been aggrieved by a 27 violation of this section, EXCEPT A PERSON AGGRIEVED BY THE ACTIONS OR 28 OMISSIONS OF A CANDIDATE SCHOOL, shall have the right to file a written 29 complaint within: (A) two years of the alleged violation; or (B) one 30 year of receiving notification from the higher education services corpo- 31 ration or any other guarantee agency that the student has defaulted on a 32 student loan payment; provided, however, that no complaint may be filed 33 after three years from the date of the alleged violation. The commis- 34 sioner shall maintain a written record of each complaint that is made. 35 The commissioner shall also send to the complainant a form acknowledging 36 the complaint and requesting further information if necessary and shall 37 advise the director of the school that a complaint has been made and, 38 where appropriate the nature of the complaint. 39 (2) The commissioner shall within twenty days of receipt of such writ- 40 ten complaint commence an investigation of the alleged violation and 41 shall within ninety days of the receipt of such written complaint, issue 42 a written finding. The commissioner shall furnish such findings to the 43 person who filed the complaint and to the chief operating officer of the 44 school cited in the complaint. If the commissioner finds that there has 45 been a violation of this section, the commissioner shall take appropri- 46 ate action. 47 (3) The commissioner may initiate an investigation without a 48 complaint. 49 d. During the initial two year licensing period, before the commis- 50 sioner may bring enforcement proceedings against a licensed entity, the 51 following shall be taken into consideration: 52 (1) whether such entity has demonstrated that the regulations promul- 53 gated under this chapter are unduly burdensome given the nature of the 54 instruction provided by such entity; S. 4268 21 1 (2) whether such entity has identified potential areas of noncompli- 2 ance with this chapter and any such regulation within sixty days of the 3 licensing or registration date of such entity; 4 (3) whether such entity has engaged in good faith discussions with the 5 department to resolve such violations and/or promulgate regulations 6 which further the goals of this chapter. 7 2. Hearing procedures. a. Upon a finding that there is good cause to 8 believe that a CANDIDATE SCHOOL UNDER THE PROVISIONS OF SUBPARAGRAPH 9 (IV) OF PARAGRAPH B OF SUBDIVISION FOUR OF SECTION FIVE THOUSAND ONE OF 10 THIS ARTICLE, OR A LICENSED school, or an officer, agent, employee, 11 partner or teacher, has committed a violation of this article, the 12 commissioner shall initiate proceedings by serving a notice of hearing 13 upon each and every such party subject to the administrative action. The 14 school or such party shall be given reasonable notice of hearing, 15 including the time, place, and nature of the hearing and a statement 16 sufficiently particular to give notice of the transactions or occur- 17 rences intended to be proved, the material elements of each cause of 18 action and the civil penalties and/or administrative sanctions sought. 19 b. Opportunity shall be afforded to the party to respond and present 20 evidence and argument on the issues involved in the hearing including 21 the right of cross examination. In a hearing, the school or such party 22 shall be accorded the right to have its representative appear in person 23 or by or with counsel or other representative. Disposition may be made 24 in any hearing by stipulation, agreed settlement, consent order, default 25 or other informal method. 26 c. (1) The commissioner shall designate an impartial hearing officer 27 to conduct the hearing, who shall be empowered to: 28 (A) administer oaths and affirmations; and 29 (B) regulate the course of the hearings, set the time and place for 30 continued hearings, and fix the time for filing of briefs and other 31 documents; and 32 (C) direct the school or such party to appear and confer to consider 33 the simplification of the issues by consent; and 34 (D) grant a request for an adjournment of the hearing only upon good 35 cause shown. 36 (2) The strict legal rules of evidence shall not apply, but the deci- 37 sion shall be supported by substantial evidence in the record. 38 3. Decision after hearing. The hearing officer shall make written 39 findings of fact and conclusions of law, and shall also recommend in 40 writing to the commissioner a final decision including penalties. The 41 hearing officer shall mail a copy of his OR HER findings of fact, 42 conclusions of law and recommended penalty to the party and his or her 43 attorney, or representative. The commissioner shall make the final 44 decision, which shall be based exclusively on evidence and other materi- 45 als introduced at the hearing. If it is determined that a party has 46 committed a violation, the commissioner shall issue a final order and 47 shall impose penalties in accordance with this section. The commissioner 48 shall send by certified mail, return receipt requested, a copy of the 49 final order to the party and his or her attorney, or representative. The 50 commissioner shall, at the request of the school or such party, furnish 51 a copy of the transcript or any part thereof upon payment of the cost 52 thereof. 53 4. Judicial review. Any order imposed under this section shall be 54 subject to judicial review under article seventy-eight of the civil 55 practice law and rules, but no such determination shall be stayed or S. 4268 22 1 enjoined except upon application to the court after notice to the 2 commissioner. 3 5. Enforcement proceedings. The attorney general, in his or her own 4 capacity, or at the request of the commissioner, may bring an appropri- 5 ate action or proceeding in any court of competent jurisdiction to 6 recover a fine or otherwise enforce any provision of this article. 7 6. Civil penalties and administrative sanctions. a. A hearing officer 8 may recommend, and the commissioner may impose, a civil penalty not to 9 exceed [two] THREE thousand five hundred dollars for any violation of 10 this article. In the case of a second or further violation committed 11 within [the previous] five years OF THE PREVIOUS VIOLATION, the liabil- 12 ity shall be a civil penalty not to exceed [five] SEVEN thousand FIVE 13 HUNDRED dollars for each such violation. 14 b. Notwithstanding the provisions of paragraph a of this subdivision, 15 a hearing officer may recommend, and the commissioner may impose a civil 16 penalty not to exceed [fifty] SEVENTY-FIVE thousand dollars OR DOUBLE 17 THE DOCUMENTED AMOUNT FROM WHICH THE SCHOOL BENEFITED, WHICHEVER IS 18 GREATER, for any of the following violations: (1) operation of a school 19 without a license in violation of section five thousand one of this 20 article; (2) operation of a school knowing that the school's license has 21 been suspended or revoked; (3) use of false, misleading, deceptive or 22 fraudulent advertising; (4) employment of recruiters on the basis of a 23 commission, bonus or quota, except as authorized by the commissioner; 24 (5) directing or authorizing recruiters to offer guarantees of jobs upon 25 completion of a course; (6) failure to make a tuition refund when such 26 failure is part of a pattern of misconduct; (7) the offering of a course 27 or program that has not been approved by the commissioner; (8) FAILURE 28 TO OFFER A COURSE OR PROGRAM AS APPROVED BY THE COMMISSIONER; (9) admit- 29 ting students, who subsequently drop out, who were admitted in violation 30 of the admission standards established by the commissioner, where such 31 admissions constitute a pattern of misconduct and where the drop out 32 resulted at least in part from such violation; [(9)] (10) failure to 33 provide the notice of discontinuance and the plan required by subdivi- 34 sion seven of section five thousand one of this article; or [(10)] (11) 35 violation of any other provision of this article, or any rule or regu- 36 lation promulgated pursuant thereto, when such violation constitutes 37 part of a pattern of misconduct which significantly impairs the educa- 38 tional quality of the program or programs being offered by the school. 39 For each enumerated offense, a second or further violation committed 40 within [the previous] five years, shall be subject to a civil penalty 41 not to exceed [seventy-five thousand dollars] ONE AND ONE-HALF TIMES THE 42 AMOUNT OF THE PREVIOUS VIOLATION for each such violation. 43 c. In addition to the penalties authorized in paragraphs a and b of 44 this subdivision, a hearing officer may recommend and the commissioner 45 may impose any of the following administrative sanctions: (1) a cease 46 and desist order; (2) a mandatory direction; (3) a suspension or revoca- 47 tion of a license; (4) a probation order; or (5) an order of restitu- 48 tion. 49 d. Penalty factors. In the recommendation of any penalty, a hearing 50 officer shall, at a minimum, give due consideration, where applicable, 51 to the good faith of the violator[; the performance of the school with 52 respect to student placement and retention rates, and students' acquisi- 53 tion of skills;] AND the gravity of the violation[; and the harm caused 54 to the student]. 55 e. The commissioner may suspend a license [or registration] upon the 56 failure of a school to pay any fee, fine, penalty, settlement or assess- S. 4268 23 1 ment as required by this article unless such failure is determined by 2 the commissioner to be for good cause. 3 f. All civil penalties, fines and settlements received after April 4 first, nineteen hundred ninety shall accrue to the credit of the tuition 5 reimbursement account established pursuant to section ninety-seven-hh of 6 the state finance law. 7 7. Criminal penalties. In addition to any other penalties elsewhere 8 prescribed: 9 a. Any person who knowingly violates any of the provisions of this 10 article shall be guilty of a class B misdemeanor punishable in accord- 11 ance with the penal law. If the conviction is for a second offense 12 committed within five years of the first conviction under this para- 13 graph, such person shall be guilty of a class A misdemeanor punishable 14 in accordance with the penal law. 15 b. Any person who knowingly (1) falsifies or destroys school or other 16 business records relating to the operation of the school with intent to 17 defraud; (2) fails to make a tuition refund as required by section five 18 thousand two of this article with the intent to defraud more than one 19 person; or (3) operates a school without a valid license required by 20 section five thousand one of this article shall be guilty of a class A 21 misdemeanor punishable in accordance with the penal law. 22 c. Any person who, having been convicted within the past five years of 23 failing to make a tuition refund in violation of subparagraph two of 24 paragraph b of this subdivision, knowingly and intentionally engages in 25 a scheme constituting a systematic ongoing course of conduct involving 26 the wrongful withholding of refunds in violation of section five thou- 27 sand two of this article with the intent to defraud ten or more persons, 28 and so withholds tuition refunds in excess of one thousand dollars, 29 shall be guilty of a class E felony punishable in accordance with the 30 penal law. 31 d. Upon a determination that there exist reasonable grounds to believe 32 that a violation of this article has been committed, or that any other 33 crime has been committed in connection with the operation of a school 34 required to be licensed pursuant to this article, the commissioner shall 35 refer such determination, and the information upon which it is based, to 36 the attorney general or to the appropriate district attorney. The attor- 37 ney general or a district attorney may bring an action on his or her own 38 initiative. 39 8. Private right of action. A student injured by a violation of this 40 article may bring an action against the owner or operator of a licensed 41 private CAREER school [or registered business school] for actual damages 42 or one hundred dollars, whichever is greater. A court may, in its 43 discretion, award reasonable attorney's fees to a prevailing plaintiff. 44 S 6. Subdivisions 3 and 4 of section 5004 of the education law, as 45 amended by chapter 604 of the laws of 1993, are amended and a new subdi- 46 vision 4-a is added to read as follows: 47 3. Exempted from the requirements of this section are persons acting 48 solely for schools which are not required to be licensed or are specif- 49 ically exempted from the licensing [or registration] requirements of 50 this article. Persons who are paid to procure, solicit or enroll 51 students on the premises of schools required to be licensed [or regis- 52 tered] shall not be exempt from the provisions of this section. The 53 certification requirements of this section shall not apply to persons 54 receiving gifts or other non-monetary considerations valued at not more 55 than [twenty-five] SEVENTY-FIVE dollars from a school from which they S. 4268 24 1 have graduated or are currently enrolled for each student referred for 2 enrollment at the school. 3 4. Application and renewal application for a private school agent's 4 certificate shall be filed on forms to be prescribed and provided by the 5 commissioner. Said certificate shall be valid for [two] THREE years from 6 the date of issuance. Certificates which have been renewed shall be 7 valid for a period of [two] THREE years from the expiration date of the 8 certificate which has been renewed. Every applicant and renewal appli- 9 cant shall pay to the department a fee of [one] TWO hundred dollars. 10 4-A. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION FOUR OF THIS 11 SECTION, THE SCHOOL DIRECTOR MAY APPLY FOR A PRIVATE SCHOOL AGENT'S 12 CERTIFICATE ON FORMS TO BE PRESCRIBED AND PROVIDED BY THE COMMISSIONER 13 WITHOUT INCURRING THE AGENT APPLICATION FEE. 14 S 7. Section 5006 of the education law, as added by chapter 887 of the 15 laws of 1990, is amended to read as follows: 16 S 5006. Teachout plans. 1. A school may submit a teachout plan to the 17 commissioner for approval pursuant to regulations established by the 18 commissioner. A teachout plan shall consist of a contract between a 19 [registered business or] licensed private CAREER school, with another 20 school, hereinafter called the teachout school, so that in the event 21 that the [registered business or] licensed private CAREER school ceases 22 instruction, the teachout school will provide the necessary instruction 23 specified in a student's original enrollment agreement with the school 24 ceasing instruction. A teachout plan may employ more than one teachout 25 school to provide instruction to students in the school ceasing instruc- 26 tion. Schools under common ownership but having separate licenses [or 27 registrations] may, subject to the approval of the commissioner, enter 28 into teachout agreements. A TEACHOUT PLAN MAY BE CONTRACTED BETWEEN THE 29 COMMISSIONER AND ONE OR MORE TEACHOUT SCHOOLS IN THE EVENT THAT THE 30 CLOSING SCHOOL IS UNABLE OR UNWILLING TO DO SO. 31 2. A teachout plan shall include the following provisions: (a) the 32 teachout school must offer courses of study that are substantially simi- 33 lar to those offered in the school ceasing instruction; 34 (b) teachout schools must be located in the geographic area in which 35 the school ceasing instruction was located UNLESS THE SCHOOL CEASING 36 INSTRUCTION PROVIDED DISTANCE LEARNING OR ONLINE TRAINING; 37 (c) all provisions for a teachout plan must be included in the enroll- 38 ment agreement signed by the student; and 39 (d) the teachout school shall agree to fulfill the enrollment agree- 40 ment signed by the student at the school ceasing instruction. 41 3. The [registered business or] licensed school shall provide to the 42 teachout school and to the department [immediately upon closure] the 43 following information PRIOR TO CLOSURE: 44 (a) Copies of the academic and financial records for all students in 45 attendance at the school at the projected time of closure; 46 (b) A listing of all such students presently in attendance including 47 their names, addresses, social security numbers, curriculum that each 48 student is enrolled in and the number of hours the students will have 49 completed at the time of the school closure. 50 4. The department will provide to the teachout school, immediately 51 upon notification of a school closing, a copy of each approved curric- 52 ulum that the closing school is presently offering. 53 5. The commissioner shall require all teachout schools to address the 54 following issues: 55 (a) Integration of students into a curriculum which may be different 56 from the curriculum in which they are currently receiving instruction; S. 4268 25 1 (b) Assessments of students' progress so that they may be placed into 2 an appropriate course; 3 (c) Provision of remedial instruction to students who are found to be 4 deficient in one or more course areas upon their initial assessment; 5 (d) Provision by the teachout school to adhere to the required 6 student/teacher ratios and room capacities; and 7 (e) Compliance with statutory and regulatory requirements during the 8 teachout. 9 6. The student shall not be subject to any costs beyond the total 10 costs identified in the original enrollment agreement. 11 7. A student may decline to pursue instruction at the teachout school 12 and may instead seek a refund pursuant to section five thousand seven of 13 this article. 14 S 8. Section 5007 of the education law, as added by chapter 887 of the 15 laws of 1990, the section heading, subdivision 1 and subdivision 10 as 16 amended by chapter 434 of the laws of 1999, paragraph a of subdivision 17 3, paragraphs c and d of subdivision 4, subparagraphs 1 and 3 of para- 18 graph a and paragraph b of subdivision 5, paragraph b of subdivision 9 19 as amended and paragraphs e and f of subdivision 4 as added by chapter 20 604 of the laws of 1993, is amended to read as follows: 21 S 5007. Tuition reimbursement account. 1. Except as otherwise provided 22 in subdivision six of this section, the portion of the annual assessment 23 of schools [registered and] licensed pursuant to section five thousand 24 one of this article as prescribed in subdivision [eight] NINE of such 25 section and all fines, penalties and settlements received pursuant to 26 this article shall be transferred upon receipt into the tuition 27 reimbursement account. 28 3. a. The commissioner shall develop a complaint form and provide such 29 form to students. In order to claim a refund, a student shall apply to 30 the fund with a complaint form pursuant to the requirements of section 31 five thousand three of this article. Except as otherwise provided in 32 this article, the commissioner shall compute the refund, if any, using 33 the refund formula established by subdivision three of section five 34 thousand two of this article. 35 b. Claimants who had been enrolled in schools which have not closed or 36 ceased operation shall be required to show in a manner determined by the 37 commissioner that: 38 (1) the student is eligible for a refund; 39 (2) the student has made a request to the school for a refund; and 40 (3) the school has failed to make the refund within the time period 41 required by this article. 42 c. The commissioner shall act on each refund request within thirty 43 business days of such request. 44 4. Students may be eligible for refunds under this section as follows: 45 a. A student who is offered a teachout plan for the curriculum in 46 which the student was enrolled at the time the school closed or ceased 47 operation, which has been approved by the department, may elect to 48 continue instruction pursuant to the teachout plan or may decline to 49 continue instruction and may instead apply for a full refund under this 50 section. The option to apply for a refund shall extend to the end of the 51 first week of instruction at the teachout school. 52 b. A student who was enrolled in a school which has not closed or 53 ceased operation is entitled to a refund computed in accordance with the 54 refund policy established by subdivision three of section five thousand 55 two of this article. S. 4268 26 1 c. A student who was enrolled in a school at the time the school clos- 2 es or ceases operation is entitled to a refund of the full amount of 3 prepaid tuition. In addition, commencing September first, nineteen 4 hundred ninety-three, a student who drops out of a school, where such 5 school closes within [fourteen] THIRTY days of the student's termination 6 and prior to completion of such student's program as specified in the 7 enrollment agreement, shall be entitled to a FULL refund of [the full 8 amount of prepaid tuition] ALL TUITION, FEES AND BOOK CHARGES PAID FOR 9 BY OR ON BEHALF OF THE STUDENT IN CASH OR IN LOANS, EXCLUDING FUNDING 10 PROVIDED BY ANY GOVERNMENT AGENCIES. 11 d. A student who was enrolled in a school which has not closed or 12 ceased operation, and who has dropped out, is entitled to a full refund 13 of all tuition, fees and other required costs paid by the student if the 14 student has submitted a complaint form to the commissioner and the 15 commissioner has determined that a violation of this article has 16 occurred which warrants a refund. The commissioner shall promulgate 17 regulations identifying those violations that warrant a refund. 18 e. Commencing September first, nineteen hundred ninety-three, a 19 student who drops out of a school, which subsequently closes, and who is 20 owed a refund for the failure of such school to follow the provisions 21 enumerated in subdivision three of section five thousand two of this 22 article shall be eligible for a refund from the tuition reimbursement 23 fund according to the provisions of subdivision three of section five 24 thousand two of this article. 25 f. Commencing September first, nineteen hundred ninety-three, any 26 student enrolled in a school based upon an ability to benefit examina- 27 tion shall be eligible for a full refund, regardless of whether the 28 student is currently enrolled, graduated or dropped out, if the school 29 enrolled the student contrary to the provisions of the approved entrance 30 requirements and the student complies with the requirements of subdivi- 31 sion one of section five thousand three of this article. 32 5. a. For a student who had been enrolled in a school that has not 33 closed or ceased operation, the refund shall be paid as follows: 34 (1) guaranteed student loans, if any, in which case the commissioner 35 shall notify the student of such payment and shall be paid directly to 36 the lender or guarantee agency where appropriate; 37 (2) actual personal tuition expenditures, if any; and 38 (3) tuition assistance program awards and other governmental aid. 39 b. For schools that have closed or ceased operation, the commissioner 40 shall refund actual personal tuition, FEES AND BOOK expenditures to the 41 student. The repayment of any loans incurred by the student as part of 42 the actual personal tuition, FEES AND BOOK expenditures shall be paid 43 directly to the lender or the guarantee agency where appropriate. 44 6. a. Where a claim is paid to a student of an operating school, the 45 commissioner shall immediately notify the school. 46 b. Within ten days of the receipt of the notice, the school shall 47 either request a hearing to challenge the commissioner's determination 48 that a refund was owed to the student or reimburse the fund the amount 49 paid to the claimant plus a penalty up to two times such amount. This 50 payment shall also incur interest for each day it remains unpaid at an 51 annual interest rate of one percent above the prime rate. The commis- 52 sioner may promulgate streamlined procedures for conducting hearings 53 pursuant to this paragraph. Any penalty assessed under this paragraph 54 shall be in addition to any other penalties assessed pursuant to this 55 article. Notwithstanding any other provision of law, penalties and 56 interest paid pursuant to this paragraph shall accrue to the credit of S. 4268 27 1 the proprietary vocational school supervision account to support the 2 costs associated with the hearings authorized in this subdivision. 3 7. Notwithstanding the notice procedures described in subdivision 4 three of this section, in the event of a school closing, the commission- 5 er on his or her own initiative may take appropriate action in accord- 6 ance with this section to process refund claims on behalf of all of the 7 students of the closed school. 8 8. Assignment of rights. Persons and entities receiving refunds under 9 this section shall be deemed to have assigned or subrogated their 10 tuition reimbursement rights to the commissioner on behalf of the 11 tuition reimbursement fund only for the amount refunded by the tuition 12 reimbursement fund. Within [thirty] NINETY days of any refund made 13 pursuant to this section, the commissioner or the attorney general shall 14 take appropriate action to recover the total amount of the refunds made, 15 plus administrative costs, from the school. 16 9. a. A student whose loan liability is exempted pursuant to FORMER 17 section six hundred eighty-three of this chapter and is entitled to or 18 owed a refund shall transfer to the higher education services corpo- 19 ration the right to claim the refund owed and due from the tuition 20 reimbursement fund. In such event, the corporation shall be entitled to 21 receive a refund for that portion of the claim not paid to the corpo- 22 ration by the United States Secretary of Education pursuant to the 23 federal guaranteed loan program. 24 b. Any amounts remaining in the tuition reimbursement fund as of June 25 first, nineteen hundred ninety-three and on every March thirty-first 26 thereafter, shall be made available to the higher education services 27 corporation for payment of student loans on which collection activity 28 has ceased pursuant to the provisions of subdivision six of FORMER 29 section six hundred eighty-three of this chapter. No amounts shall be 30 paid to the higher education services corporation for loans on which 31 collection activity has ceased because of the operation of section 437 32 of the Higher Education Act of 1965, as amended. 33 10. Management of the tuition reimbursement account. a. As used in 34 this subdivision, net balance is defined as the actual cash balance of 35 the account as determined by the commissioner on June thirtieth, nine- 36 teen hundred ninety-three and every three months thereafter. For the 37 purpose of calculating the net balance, the commissioner shall not take 38 into consideration any refunds made from the account pursuant to para- 39 graphs d and f of subdivision four of this section for the year imme- 40 diately preceding the date on which the calculation is made. 41 b. In the event that the account has accumulated a net balance in 42 excess of one million eight hundred thousand dollars, the commissioner 43 shall, with the approval of the director of the budget, waive an amount 44 not to exceed the amount due for the next quarterly assessment pursuant 45 to this section and subdivision nine of section five thousand one of 46 this article FOR SCHOOLS WHICH HAVE PAID SIXTEEN QUARTERS OR MORE OF 47 ASSESSMENTS ONLY. In such event, payment of future quarterly assessments 48 shall be suspended FOR SCHOOLS WHICH HAVE PAID SIXTEEN QUARTERS OR MORE 49 OF ASSESSMENTS until the net balance of the account falls below one 50 million three hundred thousand dollars. 51 c. In the event the net balance of the account falls below one million 52 three hundred thousand dollars, if the quarterly assessment has been 53 suspended FOR SCHOOLS WHICH HAVE PAID SIXTEEN QUARTERS OR MORE OF 54 ASSESSMENTS pursuant to paragraph b of this subdivision, it shall be 55 reinstated for the next quarterly assessment and all subsequent quarter- S. 4268 28 1 ly assessments until the account has accumulated a net balance in excess 2 of one million eight hundred thousand dollars. 3 d. [Notwithstanding the provisions of paragraph b of this subdivision, 4 in the event that the balance of the account is in excess of one million 5 three hundred thousand dollars, all schools licensed after June thirti- 6 eth, nineteen hundred ninety-nine shall be required to pay into the 7 account the equivalence of three years of annual assessments over a five 8 year period. 9 e. Notwithstanding the provisions of paragraph b of this subdivision 10 all schools licensed after June thirtieth, nineteen hundred ninety-three 11 and before July first, nineteen hundred ninety-nine will be required to 12 pay into the account the equivalence of three years of annual assess- 13 ments within four years of the effective date of this paragraph. This 14 amount to be assessed shall be determined based upon the school's gross 15 tuition in its first three years of licensure. 16 g. In the event that the balance of the tuition reimbursement account 17 is equal to or in excess of one million five hundred thousand dollars, 18 the amounts assessed the schools in accordance with the provisions of 19 paragraphs d and e of this subdivision shall be deposited directly to 20 the proprietary vocational school supervision account.] IN THE EVENT THE 21 ACCOUNT HAS ACCUMULATED A NET BALANCE IN EXCESS OF TWO MILLION DOLLARS, 22 ANY FUNDS IN THE TUITION REIMBURSEMENT FUND IN EXCESS OF TWO MILLION 23 DOLLARS SHALL BE TRANSFERRED TO THE PROPRIETARY SCHOOL SUPERVISION 24 ACCOUNT. 25 E. THE COMMISSIONER MAY ANNUALLY APPORTION FROM THE ACCOUNT AN AMOUNT 26 UP TO TWO HUNDRED THOUSAND DOLLARS FOR THE PURPOSE OF SECURING, SCANNING 27 AND OTHERWISE MAKING STUDENT RECORDS FROM CLOSED SCHOOLS AVAILABLE TO 28 STUDENTS WHO ATTENDED SUCH SCHOOLS. PROVIDED, HOWEVER, THAT IN NO CASE 29 SHALL SUCH APPORTIONMENT CAUSE THE ACCOUNT TO FALL BELOW THE BALANCE SET 30 FORTH IN PARAGRAPH C OF THIS SUBDIVISION, NOR SHALL SUCH APPORTIONMENT 31 CAUSE SCHOOLS WHOSE QUARTERLY ASSESSMENTS HAVE BEEN SUSPENDED TO PAY 32 ADDITIONAL QUARTERLY ASSESSMENTS. 33 11. Fund audit. The state comptroller shall [annually] audit or cause 34 to be audited the tuition reimbursement fund ONCE EVERY TWO YEARS and 35 produce an [annual] AUDITED financial statement according to generally 36 accepted accounting principles. 37 12. New schools. Within the first [six months] YEAR that a school 38 begins LICENSED operation, the commissioner shall assess such school an 39 amount to be deposited into the fund in an amount to be determined by 40 the commissioner. 41 S 9. Section 5008 of the education law, as added by chapter 887 of 42 the laws of 1990, is amended to read as follows: 43 S 5008. Trust accounts. 1. If the commissioner determines that a 44 school has demonstrated a pattern or practice of failing to make tuition 45 refunds in a timely manner consistent with this article AND/OR THE 46 SCHOOL'S FINANCIAL CONDITION MAY RESULT IN THE INTERRUPTION OR CESSATION 47 OF INSTRUCTION OR JEOPARDIZE STUDENT TUITION FUNDS, the commissioner 48 shall require a school to establish a trust account in a form or manner 49 which the commissioner[, after consultation with the advisory council,] 50 shall [prescribe in regulations] DETERMINE TO BE APPROPRIATE. The assets 51 or funds contained in the trust account shall be maintained for the sole 52 and exclusive benefit of the students. 53 2. In making this determination, the commissioner shall consider the 54 following factors: the number of refunds not paid by the school in a 55 timely manner; the number of claims made to, or paid by, the tuition 56 reimbursement [fund] ACCOUNT; [and] a pattern of misconduct which S. 4268 29 1 substantially affects the financial interests of students or the state, 2 POTENTIAL LIABILITY TO THE TUITION REIMBURSEMENT ACCOUNT, CURRENT ASSETS 3 AS OPPOSED TO CURRENT LIABILITIES, AND SUCH OTHER MEASURES AS MAY BE 4 APPROPRIATE. 5 S 10. Section 5009 of the education law, as amended by chapter 434 of 6 the laws of 1999, is amended to read as follows: 7 S 5009. Duties of the commissioner. In addition to all other duties 8 assigned in this article, the duties of the commissioner shall include, 9 but not be limited to: 10 [(a) submitting a report to the governor, the temporary president of 11 the senate, the speaker of the assembly, the minority leader of the 12 senate and the minority leader of the assembly beginning the fifteenth 13 day of January after this section shall have become effective, and annu- 14 ally thereafter on that date, on the implementation and enforcement of 15 this article, which shall include but not be limited to (i) curriculum 16 approval and reapproval standards, (ii) student complaints, (iii) the 17 resolution of disciplinary actions brought by the department or other 18 appropriate state agency, (iv) the audited financial statements submit- 19 ted by the schools, (v) tuition reimbursement account activity, (vi) 20 data regarding retention and completion rates for students enrolled in 21 nondegree, appropriate degree or certificate programs of two years or 22 less at registered business schools, licensed private schools, proprie- 23 tary degree-granting schools and independent and public colleges, (vii) 24 the extent to which the department has met the timelines mandated by 25 this article, (viii) entrance standards, (ix) the number of schools 26 inspected annually, and (x) the number of trust accounts imposed. 27 (b)] 1. ensuring that up-to-date, accurate information is available to 28 the public, via the internet and other appropriate media, regarding 29 every duly licensed proprietary school in this state, as well as disci- 30 plinary actions decided by the state. 31 [(c)] 2. developing and issuing to duly licensed [and registered] 32 proprietary schools a symbol to indicate such status; provided that such 33 symbol shall be developed and made available to such schools no later 34 than September thirtieth, nineteen hundred ninety-nine. 35 [(d)] 3. administering a public information campaign aimed at increas- 36 ing awareness about the importance of attending licensed [or registered] 37 proprietary vocational schools. Such campaign shall be targeted to popu- 38 lations at risk of enrolling in unlicensed [or unregistered] schools, 39 and shall be conducted using means including, but not limited to, public 40 service announcements on commercial radio and television stations, 41 public access television, and print media. 42 [(e)] 4. providing for the orderly maintenance of any student records 43 which may be transferred to the department pursuant to any school's plan 44 developed pursuant to subdivision eight of section five thousand one of 45 this article; including responding to student requests for transcripts 46 and records within twenty days of receiving a request. The commissioner 47 is hereby authorized to impose an appropriate fee for such transcripts 48 pursuant to a schedule approved by the director of the budget. 49 S 11. Section 5010 of the education law, as added by chapter 887 of 50 the laws of 1990, subdivision 1 as amended and subdivision 4 as added by 51 chapter 604 of the laws of 1993, and subdivision 5 as added by chapter 52 434 of the laws of 1999, is amended to read as follows: 53 S 5010. Advisory council. 1. An advisory council for [registered busi- 54 ness and] licensed [trade] PRIVATE CAREER schools is hereby created for 55 the purpose of advising the board of regents and the commissioner as 56 provided herein. The council shall be composed of eleven members S. 4268 30 1 appointed by the governor, two of whom shall be upon the recommendation 2 of the temporary president of the senate, two of whom shall be upon the 3 recommendation of the speaker of the assembly, one of whom shall be upon 4 the recommendation of the minority leader of the senate and one of whom 5 shall be upon the recommendation of the minority leader of the assembly. 6 Of the five remaining members, one shall be an owner or director of a 7 school regulated pursuant to this article, [one shall be a currently 8 enrolled student at the time of appointment or a graduate of such a 9 school who graduated within three years of appointment] and one shall be 10 a student advocate. The governor shall designate a chairperson from such 11 members. The commissioner [of education], the president of the higher 12 education services corporation, the chair of the consumer protection 13 board, the comptroller, the director of the division of the budget, and 14 the executive director of the job training partnership council, or their 15 designees, shall serve as ex-officio, non-voting members of the council. 16 2. The council shall meet no less than four times a year. Members of 17 the council shall receive no compensation for their services but shall 18 be reimbursed for reasonable expenses actually and necessarily incurred 19 by them in the performance of their duties. COUNCIL MEMBER TERMS OF 20 OFFICE SHALL BE LIMITED TO THREE YEARS, PROVIDED THAT MEMBERS MAY BE 21 REAPPOINTED. ALL APPOINTMENTS TO THE COUNCIL TO FILL VACANCIES IN EXIST- 22 ENCE ON THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND 23 ELEVEN WHICH AMENDED THIS SUBDIVISION SHALL BE MADE WITHIN NINETY DAYS 24 OF SUCH EFFECTIVE DATE. 25 3. The council shall advise the commissioner on [the following] SUCH 26 matters[: 27 (a) trust accounts; 28 (b) performance standards; 29 (c) the effectiveness and utilization of the tuition reimbursement 30 fund; 31 (d) the efficacy of instituting a fee-for-service system; 32 (e) the effectivesness of the timelines mandated by this article; 33 (f) the impact of assessments on schools; 34 (g) recruitment bonuses; and 35 (h) such other matters] as the council determines are appropriate. 36 [4. The proprietary school advisory council shall conduct a study 37 concerning the methodologies used to determine student refunds. Such 38 study shall include, but not be limited to, refund policies promulgated 39 pursuant to federal statute or regulation, state statute or regulation 40 and the policies of national accrediting organizations as they relate to 41 term-based and clock hour-based programs. Not later than July first, 42 nineteen hundred ninety-four, the advisory council shall make recommen- 43 dations to the commissioner and the board of regents for any changes in 44 legislation, regulations, policy or practice needed to improve and 45 simplify the student refund process. The commissioner shall submit a 46 report of the findings of the advisory council together with the recom- 47 mendations of the department to the legislature and the governor not 48 later than the first day of October, nineteen hundred ninety-four. 49 5. The advisory council shall report to the governor, the temporary 50 president of the senate, the speaker of the assembly, and the commis- 51 sioner on the status of unlicensed proprietary schools in this state. 52 The report shall also contain a statement on the effectiveness of the 53 change in the tuition reimbursement fund and any recommendations for an 54 extension of the changes or the consideration of different changes when 55 such changes are repealed. Such report is to be delivered on April 56 first, two thousand two.] S. 4268 31 1 S 12. This act shall take effect on the one hundred twentieth day 2 after it shall have become a law; provided, however, that subparagraph 3 (iv) of paragraph b of subdivision 4 of section 5001 of the education 4 law, as added by section three of this act, shall expire and be deemed 5 repealed three years after such effective date; and provided, further, 6 that effective immediately, the commissioner of education is authorized 7 and directed to promulgate any regulations needed to implement the 8 provisions of this act on such effective date.