Bill Text: NY S05581 | 2019-2020 | General Assembly | Amended


Bill Title: Establishes the Non-Degree Proprietary School Supervision and Student Protection Act.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-01-08 - REFERRED TO HIGHER EDUCATION [S05581 Detail]

Download: New_York-2019-S05581-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         5581--A

                               2019-2020 Regular Sessions

                    IN SENATE

                                       May 7, 2019
                                       ___________

        Introduced  by Sen. STAVISKY -- read twice and ordered printed, and when
          printed to be committed  to  the  Committee  on  Higher  Education  --
          reported  favorably from said committee and committed to the Committee
          on Rules -- committee discharged, bill amended, ordered  reprinted  as
          amended and recommitted to said committee

        AN  ACT to amend the education law, in relation to enacting the "Non-De-
          gree Proprietary School Supervision and Student Protection Act"

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Short  title. This act shall be known and may be cited as
     2  the "Non-Degree Proprietary School Supervision  and  Student  Protection
     3  Act".
     4    §  2.  The  education  law is amended by adding a new section 239-c to
     5  read as follows:
     6    § 239-c.  Arbitration clauses in  proprietary  institution  enrollment
     7  contracts.  1.  No  proprietary  institution  of  higher education shall
     8  include  any  provision  requiring  mandatory  binding  arbitration   of
     9  disputes regarding any student enrollment contract or agreement.
    10    2.  For  purposes  of this section, "proprietary institution" shall be
    11  defined as any licensed private career school, certified  English  as  a
    12  second  language  school,  or online education marketplace as defined in
    13  paragraph c of subdivision one of section  five  thousand  one  of  this
    14  chapter  or any approved for-profit degree-granting institution pursuant
    15  to the department.
    16    § 3. Subparagraphs 1 and 2 of paragraph c of subdivision 1 of  section
    17  5003  of  the  education  law,  as amended by chapter 381 of the laws of
    18  2012, are amended to read as follows:
    19    (1) Any person who  believes  he  or  she  has  been  aggrieved  by  a
    20  violation  of  this section, except a person aggrieved by the actions or
    21  omissions of a candidate school, shall have the right to file a  written
    22  complaint  within:  (A) [two] six years of the alleged violation; or (B)

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11533-03-9

        S. 5581--A                          2

     1  one year of receiving notification from the  higher  education  services
     2  corporation or any other guarantee agency that the student has defaulted
     3  on  a student loan payment[; provided, however, that no complaint may be
     4  filed  after  three  years  from the date of the alleged violation]. The
     5  commissioner shall maintain a written record of each complaint  that  is
     6  made.  The  commissioner  shall  also  send  to  the  complainant a form
     7  acknowledging the complaint and requesting further information if neces-
     8  sary and shall advise the director of the school that  a  complaint  has
     9  been made and, where appropriate the nature of the complaint.
    10    (2) The commissioner shall within twenty days of receipt of such writ-
    11  ten  complaint  commence  an  investigation of the alleged violation and
    12  shall within ninety days of the receipt of such written complaint, issue
    13  a written finding. The commissioner shall furnish such findings  to  the
    14  person who filed the complaint and to the chief operating officer of the
    15  school  cited in the complaint. If the commissioner finds that there has
    16  been a violation of this section, the commissioner shall take  appropri-
    17  ate  action.  If  the  commissioner  shall  find  that  there has been a
    18  violation of this section, the commissioner  shall  also  place  such  a
    19  finding on a publicly accessible website disclosing the institution that
    20  was  in  violation and the substance of the complaint within thirty days
    21  of the commissioner's finding.
    22    § 4. Paragraphs a and b of subdivision 6 of section 5003 of the educa-
    23  tion law, as amended by chapter 381 of the laws of 2012, are amended  to
    24  read as follows:
    25    a. A hearing officer may recommend, and the commissioner may impose, a
    26  civil penalty not to exceed [three] five thousand [five hundred] dollars
    27  for any violation of this article, including a school's failure to offer
    28  a  course  or  program as approved by the commissioner. In the case of a
    29  second or further violation committed within five years of the  previous
    30  violation,  the liability shall be a civil penalty not to exceed [seven]
    31  ten thousand [five hundred] dollars for each such violation.
    32    b. Notwithstanding the provisions of paragraph a of this  subdivision,
    33  a hearing officer may recommend, and the commissioner may impose a civil
    34  penalty  not  to  exceed  [seventy-five] one hundred thousand dollars or
    35  double the documented amount from which the school benefited,  whichever
    36  is  greater,  for  any  of  the following violations: (1) operation of a
    37  school without a license in violation of section five  thousand  one  of
    38  this  article;  (2)  operation  of  a  school  knowing that the school's
    39  license has been suspended or revoked; (3)  use  of  false,  misleading,
    40  deceptive or fraudulent advertising; (4) employment of recruiters on the
    41  basis  of  a  commission,  bonus  or  quota, except as authorized by the
    42  commissioner; (5) directing or authorizing recruiters to  offer  guaran-
    43  tees  of jobs upon completion of a course; (6) failure to make a tuition
    44  refund when such failure is part of a pattern  of  misconduct;  (7)  the
    45  offering  of  a  course  or  program  that  has not been approved by the
    46  commissioner; (8) admitting students, who  subsequently  drop  out,  who
    47  were admitted in violation of the admission standards established by the
    48  commissioner,  where  such admissions constitute a pattern of misconduct
    49  and where the drop out resulted at least in part  from  such  violation;
    50  (9)  failure  to  provide  the  notice  of  discontinuance  and the plan
    51  required by subdivision seven of section five thousand one of this arti-
    52  cle; or (10) violation of any other provision of this  article,  or  any
    53  rule  or  regulation  promulgated  pursuant thereto, when such violation
    54  constitutes part of a pattern of misconduct which significantly  impairs
    55  the  educational quality of the program or programs being offered by the
    56  school. For each enumerated  offense,  a  second  or  further  violation

        S. 5581--A                          3

     1  committed  within five years, shall be subject to a civil penalty not to
     2  exceed one and one-half times the amount of the previous  violation  for
     3  each such violation.
     4    §  5.  Subdivision 10 of section 5007 of the education law, as amended
     5  by chapter 381 of the laws of 2012, is amended to read as follows:
     6    10. Management of the tuition reimbursement account.  a.  As  used  in
     7  this  subdivision,  net balance is defined as the actual cash balance of
     8  the account as determined by the commissioner on June  thirtieth,  nine-
     9  teen  hundred  ninety-three  and  every three months thereafter. For the
    10  purpose of calculating the net balance, the commissioner shall not  take
    11  into  consideration  any refunds made from the account pursuant to para-
    12  graphs d and f of subdivision four of this section for  the  year  imme-
    13  diately preceding the date on which the calculation is made.
    14    b.  In  the  event  that  the account has accumulated a net balance in
    15  excess of [one] two million eight hundred thousand dollars, the  commis-
    16  sioner  shall, with the approval of the director of the budget, waive an
    17  amount not to exceed the amount due for the  next  quarterly  assessment
    18  pursuant  to  this section and subdivision nine of section five thousand
    19  one of this article for schools which have paid sixteen quarters or more
    20  of assessments only. In such event, payment of future quarterly  assess-
    21  ments shall be suspended for schools which have paid sixteen quarters or
    22  more  of  assessments  until  the net balance of the account falls below
    23  [one] two million three hundred thousand dollars.
    24    c. In the event the net balance of the account falls below  [one]  two
    25  million  three hundred thousand dollars, if the quarterly assessment has
    26  been suspended for schools which have paid sixteen quarters or  more  of
    27  assessments  pursuant  to  paragraph  b of this subdivision, it shall be
    28  reinstated for the next quarterly assessment and all subsequent quarter-
    29  ly assessments until the account has accumulated a net balance in excess
    30  of [one] two million eight hundred thousand dollars.
    31    d. Notwithstanding the provisions of paragraph b of this  subdivision,
    32  in  the  event that the balance of the account is in excess of [one] two
    33  million three hundred thousand dollars, all schools licensed after  June
    34  thirtieth,  nineteen  hundred  ninety-nine shall be required to pay into
    35  the account the equivalence of three years of annual assessments over  a
    36  five year period.
    37    e.  Notwithstanding  the provisions of paragraph b of this subdivision
    38  all schools licensed after June thirtieth, nineteen hundred ninety-three
    39  and before July first, nineteen hundred ninety-nine will be required  to
    40  pay  into  the  account the equivalence of three years of annual assess-
    41  ments within four years of the effective date of  this  paragraph.  This
    42  amount  to be assessed shall be determined based upon the school's gross
    43  tuition in its first three years of licensure.
    44    f. In the event that the balance of the tuition reimbursement  account
    45  is  equal  to  or in excess of three million dollars, up to five hundred
    46  thousand dollars of the amounts assessed to schools in  accordance  with
    47  the provisions of paragraphs d and e of this subdivision shall be appro-
    48  priated  to the department for the hiring of additional staff to perform
    49  regulatory oversight of the schools covered under this article.
    50    g. In the event that the balance of the tuition reimbursement  account
    51  is  equal  to  or  in  excess  of  [two]  three million five hundred one
    52  dollars, the  amounts  assessed  the  schools  in  accordance  with  the
    53  provisions  of paragraphs d and e of this subdivision shall be deposited
    54  directly to the proprietary vocational school supervision account.
    55    h. The commissioner may annually apportion from the account an  amount
    56  up to two hundred thousand dollars for the purpose of securing, scanning

        S. 5581--A                          4

     1  and  otherwise  making  student records from closed schools available to
     2  students who attended such schools. Provided, however, that in  no  case
     3  shall such apportionment cause the account to fall below the balance set
     4  forth  in  paragraph c of this subdivision, nor shall such apportionment
     5  cause schools whose quarterly assessments have  been  suspended  to  pay
     6  additional quarterly assessments.
     7    §  6. Subdivision 5 of section 5002 of the education law is amended by
     8  adding a new paragraph g to read as follows:
     9    g. (1) The commissioner shall require annually, that available data be
    10  submitted on the  gainful  employment  outcomes  of  students  for  each
    11  curriculum,  course,  or  program  of  any  school  licensed pursuant to
    12  section five thousand one of this article.   The commissioner  shall  be
    13  authorized  to  promulgate  rules and regulations that define and detail
    14  what shall be required as part of such submission. The submission  must,
    15  at  a  minimum  include the average amount of student debt a student has
    16  incurred through a school's curriculum, course, or program and the aver-
    17  age adjusted gross income that students attain  three  years  after  the
    18  students have completed the curriculum, course, or program.
    19    (2)  Schools  submitting student data pertaining to gainful employment
    20  outcomes shall attest to the completeness and accuracy of  the  informa-
    21  tion  submitted to the commissioner under penalty for violation of frau-
    22  dulent statements or representations to the department as outlined under
    23  section five thousand three of this article.
    24    (3) For the purpose of this section, a school shall have satisfied the
    25  completeness and accuracy of the information submitted if they  reported
    26  the  average adjusted gross income of applicable former students through
    27  such school's available access to tax data  of  such  applicable  former
    28  students.  However,  if the school does not have available access to tax
    29  data of such applicable former students then the school can satisfy  the
    30  completeness  and  accuracy  of the information submitted requirement by
    31  conducting a survey of  applicable  former  students  related  to  their
    32  earned  income.  Such  survey  shall be done pursuant to regulations and
    33  guidance promulgated by the commissioner.
    34    § 7. If any clause, sentence, paragraph, or part of this  act  or  the
    35  application  thereof  to  any  person  or  circumstances, shall, for any
    36  reason, be adjudged by a court of competent jurisdiction to be  invalid,
    37  such  judgment  shall not affect, impair, or invalidate the remainder of
    38  this act, and the application thereof to other person or  circumstances,
    39  but  shall  be  confined in its operation to the clause, sentence, para-
    40  graph, or part thereof directly involved in  the  controversy  in  which
    41  such  judgment  shall  have  been  rendered and to the person or circum-
    42  stances involved. It is hereby declared to  be  the  legislative  intent
    43  that  this  act  would have been adopted had such invalid provisions not
    44  been included.
    45    § 8. This act shall take effect on the one hundred eightieth day after
    46  it shall have become a law. Effective immediately, the addition,  amend-
    47  ment and/or repeal of any rule or regulation necessary for the implemen-
    48  tation  of  this act on its effective date are authorized to be made and
    49  completed on or before such effective date.
feedback