Bill Text: NY S06006 | 2009-2010 | General Assembly | Introduced
Bill Title: Relates to licensure of private proprietary schools; provides for the repeal of certain provisions of the education law upon expiration thereof.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-01-06 - REFERRED TO HIGHER EDUCATION [S06006 Detail]
Download: New_York-2009-S06006-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 6006 2009-2010 Regular Sessions I N S E N A T E June 19, 2009 ___________ Introduced by Sen. SCHNEIDERMAN -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the education law, in relation to the licensure of private proprietary schools; and providing for the repeal of certain provisions of the education law upon 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 ARTICLE 101 4 LICENSED PRIVATE [TRADE 5 AND CORRESPONDENCE] 6 CAREER 7 SCHOOLS 8 S 2. Section 5001 of the education law, as added by chapter 817 of the 9 laws of 1972, the section heading, subdivision 1, paragraph h of subdi- 10 vision 2 and paragraph b of subdivision 4 as amended and paragraphs i, 11 j, k, l and m of subdivision 2 and subdivisions 2-a and 2-b as added by 12 chapter 434 of the laws of 1999, paragraph b of subdivision 2 as amended 13 by chapter 887 of the laws of 1990 and subdivisions 5, 6, 7, 8 and 9 as 14 added by chapter 887 of the laws of 1990 and renumbered by chapter 604 15 of the laws of 1993, paragraph d of subdivision 2 and subdivision 4 as 16 amended and paragraphs a, b, c and d of subdivision 9 as added by chap- 17 ter 604 of the laws of 1993 and paragraphs e and f of subdivision 2 as 18 amended by chapter 439 of the laws of 1980, is amended to read as 19 follows: 20 S 5001. Licensed private CAREER schools [and registered business 21 schools/computer training facilities]. 1. Schools required to be 22 licensed [or registered]. No private school [or computer training 23 facility] which charges tuition or fees [for] RELATED TO instruction and EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14462-01-9 S. 6006 2 1 which is not exempted hereunder shall be operated by any person or 2 persons, firm, corporation, or private organization for the purpose of 3 teaching or giving instruction in any subject or subjects, unless it is 4 licensed [or registered] by the department. As used in this article, the 5 following terms shall have the following meanings: 6 a. ["Licensed] "LICENSED private CAREER school" OR "LICENSED PRIVATE 7 SCHOOL" shall mean any entity offering to instruct or teach any subject 8 by any plan or method including written, visual or audio-visual methods, 9 AND SHALL INCLUDE ANY INSTITUTION LICENSED OR REGISTERED AS A REGISTERED 10 BUSINESS SCHOOL OR COMPUTER TRAINING FACILITY ON THE EFFECTIVE DATE OF 11 THE CHAPTER OF THE LAWS OF TWO THOUSAND NINE WHICH AMENDED THIS SUBDIVI- 12 SION. FOLLOWING SUCH EFFECTIVE DATE, THERE SHALL BE NO DISTINCTION 13 BETWEEN INSTITUTIONS PREVIOUSLY DEFINED AS "REGISTERED BUSINESS SCHOOLS" 14 OR "COMPUTER TRAINING FACILITIES" AND OTHER LICENSED PRIVATE SCHOOLS, 15 AND ANY REFERENCE IN LAW TO A REGISTERED BUSINESS SCHOOL OR COMPUTER 16 TRAINING FACILITY SHALL BE DEEMED A REFERENCE TO A LICENSED PRIVATE 17 CAREER SCHOOL. INSTITUTIONS HOLDING A VALID BUSINESS SCHOOL REGISTRATION 18 ON SUCH EFFECTIVE DATE, INCLUDING COMPUTER-TRAINING FACILITIES, SHALL 19 HAVE SUCH REGISTRATIONS REPLACED BY THE COMMISSIONER, AT NO COST, WITH 20 LICENSES VALID UNTIL THE EXPIRATION DATE LISTED ON SUCH PREVIOUS REGIS- 21 TRATION. 22 b. ["Registered business school" shall mean a school in which a 23 curriculum primarily provides a sequence of courses that may include 24 accounting or bookkeeping, marketing, business arithmetic, business law, 25 business English, shorthand, typing, computer business 26 applications/programming, or substantially all said courses, for the 27 purpose of preparing an individual to pursue a business occupation; 28 provided, however, that a registered business school program may include 29 instruction in English as a second language at a beginning or basic 30 level, provided such instruction shall not constitute more than fifty 31 percent of such program. Such authorization shall apply to all students 32 who commence instruction in a registered business school program prior 33 to July first, nineteen hundred ninety-one. A business school registered 34 under this section shall employ only teachers licensed by the depart- 35 ment, whose qualifications are substantially equivalent to those 36 required of teachers of equivalent subjects in public secondary schools. 37 c. "Computer training facility" shall mean any entity primarily 38 engaged in providing training on the use, language, programs, applica- 39 tion, networking and technical repair of computers.] "CERTIFIED ENGLISH 40 AS A SECOND LANGUAGE SCHOOL" OR "CERTIFIED ESL SCHOOL" SHALL MEAN A 41 LANGUAGE SCHOOL CONDUCTED FOR-PROFIT WHICH PROVIDES INSTRUCTION IN 42 ENGLISH AS A SECOND LANGUAGE AND WHICH ACCEPTS NO PUBLIC FUNDS AND IS 43 CERTIFIED PURSUANT TO PARAGRAPH F OF SUBDIVISION FOUR OF THIS SECTION. 44 2. Exempt schools. The following schools are exempted from the licens- 45 ing requirement of this section: 46 a. institutions authorized to confer degrees in this state; 47 b. schools[, other than correspondence schools,] providing kindergar- 48 ten, nursery, elementary or secondary education, except schools 49 conducted for profit which provide instruction in English as a second 50 language or preparation for high school equivalency examinations to 51 out-of-school youth or adults; 52 c. schools operated by governmental agencies or authorities; 53 d. schools which engage exclusively in training of students with disa- 54 bilities as defined in section forty-four hundred one of this chapter; 55 e. schools conducted on a not-for-profit basis by firms or organiza- 56 tions for the training of their own employees only, provided that such S. 6006 3 1 instruction is offered at no charge to such employees, or by a fraternal 2 society or benevolent order for its members or their immediate relatives 3 only; 4 f. schools which provide instruction in the following subjects only: 5 religion, dancing, music, painting, drawing, sculpture, poetry, dramatic 6 art, languages, reading comprehension, mathematics, recreation and 7 athletics; 8 g. schools in which the course of instruction is licensed, registered 9 or approved under any other section of this chapter or by any other 10 department or agency of the state; 11 h. schools which provide instruction designed solely for giving flight 12 training and/or related ground school instruction; 13 i. schools in which instruction designed solely to prepare applicants 14 for admission to professional licensing examinations administered by the 15 department pursuant to title eight of this chapter, and applicants for 16 examination for admission to the practice of law; 17 j. schools which offer continuing education courses exclusively for 18 individuals licensed by the department pursuant to title eight of this 19 chapter and for individuals admitted to the practice of law; 20 k. schools which provide instruction given exclusively to employees of 21 a person or organization which has contracted with another person or 22 organization to provide such instruction at no cost to the employees; 23 l. conferences, trade shows, workshops, seminars, institutes or cours- 24 es of study offered and sponsored either jointly or individually by 25 recognized trade, business or professional organizations for the benefit 26 of their membership; [or those offered to the general public by individ- 27 uals, firms or organizations which neither conduct such activities for a 28 duration of more than five consecutive days nor more frequently than 29 twice in any one calendar year;] 30 m. SCHOOLS THAT LIMIT THEIR TOTAL CONFERENCES, TRADE SHOWS, WORK- 31 SHOPS, SEMINARS, INSTITUTES OR OTHER COURSE OFFERINGS TO NO MORE THAN 32 TWICE IN ONE CALENDAR YEAR WITH EACH OF THOSE OFFERINGS FOR NO MORE THAN 33 FIVE DAYS; 34 N. schools which provide instruction exclusively to persons employed 35 full-time or part-time in the field in which instruction is being 36 offered, where the instruction is provided to meet continuing education 37 standards required for professional licensure as defined by law in this 38 state; AND 39 O. SCHOOLS IN CANDIDACY STATUS PURSUANT TO SUBPARAGRAPH (III) OF PARA- 40 GRAPH B OF SUBDIVISION FOUR OF THIS SECTION. 41 2-a. Schools exempted pursuant to subdivision two of this section may 42 waive such exemption and apply for a license [or registration]; 43 provided, however, that the review of such applications shall be left to 44 the discretion of the commissioner. 45 2-b. Programs offered by licensed private CAREER schools [or regis- 46 tered business schools to private businesses where there is no tuition 47 liability] TO EMPLOYEES OF A PERSON OR ORGANIZATION WHICH HAS CONTRACTED 48 WITH ANOTHER PERSON OR ORGANIZATION TO PROVIDE SUCH INSTRUCTION AT NO 49 COST to the employees shall be exempt from the requirements of this 50 article, provided that the following requirements are met: 51 a. Only employees of the [private business] EMPLOYER for which the 52 program is being offered may enroll in classes that make up the program. 53 b. Certificates or diplomas awarded to students in the program may not 54 reference in any way the department. 55 c. Prior to the commencement of the program, such schools shall submit 56 to the department a disclosure form, prescribed by the commissioner, S. 6006 4 1 copies of which shall be provided to all students in such exempt 2 program, which shall include but not be limited to the following infor- 3 mation: 4 (i) a description of the location and time period in which the program 5 will be offered; 6 (ii) a statement that the students enrolled in the program shall not 7 be subject to any tuition liability for the program, even if such 8 students do not complete the program; 9 (iii) a statement that the program being provided to the [private 10 business] EMPLOYER has not been approved by the department and is not 11 under the department's jurisdiction and that the students in the program 12 have been advised of the fact; and 13 (iv) the signatures of the school director or owner of the school and 14 the representative of the [private business] EMPLOYER for which the 15 program is being offered certifying the accuracy of the statements on 16 the form. 17 d. Any additional student openings in a program deemed exempt by the 18 department may be made available to students not affiliated with the 19 [private business] EMPLOYER on the condition that such students execute 20 a disclosure form as prescribed in paragraph c of this subdivision. Such 21 admitted students shall only constitute up to ten percent of the exempt 22 program's total capacity. 23 4. Application, renewal application and application fees. a. Applica- 24 tion and renewal application for a license as a private CAREER school 25 [or registration as a business school] required by the commissioner 26 shall be filed on forms prescribed and provided by the department. 27 Except as provided in subparagraph (iii) of paragraph e of this subdivi- 28 sion, each renewal application for [a private business school registered 29 pursuant to this section or for] a private CAREER school licensed pursu- 30 ant to this section shall include an audited financial statement audited 31 according to generally accepted auditing standards by an independent 32 certified public accountant or an independent public accountant and 33 statistical reports certified by the owner or operator of the school, as 34 required by the commissioner; provided, however, that the commissioner 35 shall accept a copy of a current financial statement previously filed by 36 a school with any other governmental agency in compliance with the 37 provisions of any federal or state laws, or rules or regulations if such 38 statement contains all of the information required under this subdivi- 39 sion and conforms to this subdivision's requirements of auditing, review 40 and certification. Any required audit of the financial statement shall 41 be a condition of licensure [or registration] and shall be paid for by 42 the school, and the results of the audit shall be forwarded to the 43 commissioner. Applications not accompanied by the audits and reports 44 required pursuant to this subdivision shall not be considered for 45 approval by the commissioner. Initial applications shall be accompanied 46 by financial reports as required by the commissioner. [The commissioner 47 shall act on an initial application for a license or registration within 48 one hundred twenty days of receipt of a complete application.] The 49 applicant shall receive a written approval or denial together with the 50 reasons for a denial of such application. 51 b. (i) An initial license [or registration] issued pursuant to the 52 provisions of this article shall be valid for a period of two years. A 53 renewal of license [or registration] issued pursuant to the provisions 54 of this article shall be valid for a period of four years. [All license 55 and registration fees for a renewal shall be double the amounts listed 56 in paragraph g of this subdivision.] S. 6006 5 1 (ii) Each school shall display, near the entrance to the school [and 2 under glass], the license [or registration] which has been issued to it. 3 Such authorization shall be displayed only during the period of its 4 validity. 5 (III) A SCHOOL WHICH HAS APPLIED FOR A PRIVATE CAREER SCHOOL LICENSE 6 MAY REQUEST CANDIDACY STATUS FOR ONE TIME ONLY. CANDIDACY STATUS WILL 7 NOT BE ISSUED TO SCHOOLS OFFERING PROGRAMS TO TRAIN STUDENTS TO PASS 8 LICENSURE EXAMINATIONS SUCH AS APPEARANCE ENHANCEMENT TESTS, ACHIEVE 9 NURSE AIDE OR NURSE ASSISTANT CERTIFICATION, OR PASS EXAMINATIONS LEAD- 10 ING TO LICENSURE IN ANY OTHER PROFESSION OR OCCUPATION DETERMINED BY THE 11 COMMISSIONER TO REQUIRE FULL LICENSURE STATUS. CANDIDACY STATUS SHALL 12 ALLOW A SCHOOL TO OPERATE UNLICENSED FOR AN INITIAL PERIOD OF TWELVE 13 MONTHS DURING THE LICENSURE APPLICATION PROCESS, WHICH MAY BE EXTENDED 14 TO A MAXIMUM, NON-RENEWABLE PERIOD OF EIGHTEEN MONTHS, UNDER THE FOLLOW- 15 ING CONDITIONS: 16 (1) THE PROSPECTIVE SCHOOL SUBMITS A CANDIDATE SCHOOL APPLICATION FEE, 17 SEPARATE FROM THE SCHOOL APPLICATION FEE, OF FIVE THOUSAND DOLLARS WHICH 18 SHALL ACCRUE TO THE CREDIT OF THE PROPRIETARY VOCATIONAL SCHOOL SUPER- 19 VISION ACCOUNT; 20 (2) THE SCHOOL MAY IN NO WAY REPRESENT THAT IT IS LICENSED OR THAT ITS 21 PROGRAMS ARE APPROVED THROUGH THE DEPARTMENT; 22 (3) TO EVERY PROSPECTIVE STUDENT, THE SCHOOL MUST DISSEMINATE A STATE- 23 MENT, PROVIDED BY THE DEPARTMENT, THAT THE FACILITIES, INSTRUCTORS, AND 24 PROGRAMS BEING PROVIDED HAVE NOT BEEN APPROVED AND ARE NOT UNDER THE 25 DEPARTMENT'S JURISDICTION DURING THE CANDIDACY PERIOD. SUCH STATEMENT 26 SHALL INDICATE THAT STUDENTS ATTENDING CANDIDATE SCHOOLS WILL HAVE NO 27 RECOURSE THROUGH THE DEPARTMENT'S STUDENT COMPLAINT PROCESS NOR HAVE ANY 28 RESTITUTION AVAILABLE FROM THE TUITION REIMBURSEMENT ACCOUNT. STUDENTS 29 MUST SIGN AN ATTESTATION TO THE RECEIPT OF THIS STATEMENT. THE SCHOOL 30 MUST RETAIN THE SIGNED ATTESTATION AND PROVIDE THE STUDENT WITH A COPY 31 OF THAT SIGNED STATEMENT; 32 (4) THE SCHOOL MUST DEMONSTRATE FINANCIAL VIABILITY THROUGH MEANS 33 DEEMED APPROPRIATE BY THE COMMISSIONER. SUCH MEANS MAY INCLUDE SUBMIT- 34 TING AN AUDITED FINANCIAL STATEMENT BASED ON THE MOST RECENTLY COMPLETED 35 FISCAL YEAR; SECURING AND MAINTAINING A PERFORMANCE BOND, PAYABLE TO THE 36 COMMISSIONER, IN AN AMOUNT APPROPRIATE TO ELIMINATE ANY LIABILITY TO THE 37 TUITION REIMBURSEMENT ACCOUNT IN THE EVENT THE SCHOOL CEASES OPERATION; 38 LIMITING THE COLLECTION OF TUITION FUNDS UNTIL EACH STUDENT COMPLETES 39 THE PROGRAM OF STUDY; OR OTHER MEANS ACCEPTABLE TO THE COMMISSIONER; AND 40 (5) ANY BREACH OF THE ABOVE CONDITIONS WILL RESULT IN THE DISAPPROVAL 41 OF THE SCHOOL'S LICENSURE APPLICATION AND THE FORFEITURE OF CANDIDATE 42 STATUS. CONTINUED OPERATION AFTER THIS DISAPPROVAL WILL SUBJECT THE 43 SCHOOL TO THE DISCIPLINARY ACTION PRESCRIBED UNDER PARAGRAPH B OF SUBDI- 44 VISION SIX OF SECTION FIVE THOUSAND THREE OF THIS ARTICLE. 45 (6) ON OR BEFORE THE END OF THE INITIAL TWELVE-MONTH PERIOD OF CANDI- 46 DACY STATUS, THE COMMISSIONER SHALL REVIEW THE SCHOOL'S APPLICATION FOR 47 LICENSURE AND DOCUMENTATION RELATING TO THE SCHOOL'S CANDIDACY STATUS 48 AND DETERMINE WHETHER SUCH CANDIDACY STATUS SHOULD BE EXTENDED TO THE 49 FULL EIGHTEEN MONTHS AND WHETHER THE SCHOOL MAY CONTINUE TO ENROLL 50 STUDENTS BEYOND THE EIGHTEEN-MONTH PERIOD OR THE SCHOOL'S APPLICATION 51 FOR LICENSURE WILL BE INITIALLY DISAPPROVED FOR FAILURE TO MEET REQUIRED 52 STANDARDS. 53 c. An application for renewal of any license [or registration] shall 54 be submitted at least one hundred twenty days prior to the expiration 55 date of the current authorization to operate accompanied by the nonre- S. 6006 6 1 fundable application fee and such certified statistical reports and 2 annual financial statements required pursuant to this subdivision. 3 d. When complete and timely application has been made for renewal of 4 any license [or registration], the school shall receive a written 5 approval or denial, together with the reasons for denial of renewal, 6 from the commissioner no less than thirty days prior to the date such 7 license [or registration] expires. 8 e. Financial statements and statistical reports. (i) Licensed private 9 CAREER schools and [registered business] CANDIDATE schools shall submit 10 such certified statistical reports and annual financial statements as 11 required by the commissioner. The commissioner may require audited 12 statistical reports upon a determination that a school has provided 13 false or inaccurate certified statistical reports. The financial state- 14 ments shall be based on the fiscal year of the school and shall also 15 include an itemized account of tuition refunds due and owing to past or 16 presently enrolled students. Statistical reports shall include, but not 17 be limited to, enrollment, completion and placement data. The commis- 18 sioner shall use such financial statements and statistical reports 19 submitted for the purposes of licensure [and registration] of schools, 20 establishing fees or assessments pursuant to this article and determin- 21 ing standards pursuant to paragraph b of subdivision five of section 22 five thousand two of this article. The attorney general, the comptroller 23 and the president of the higher education services corporation shall 24 have access to this information when it is necessary to perform their 25 duties as required by state law. 26 (ii) [Any school which received in excess of two hundred fifty thou- 27 sand dollars in gross tuition in a school fiscal year] SCHOOLS shall be 28 required to submit TO THE COMMISSIONER an annual audited financial 29 statement [to the commissioner] PREPARED IN ACCORDANCE WITH GENERALLY 30 ACCEPTED ACCOUNTING PRINCIPLES for [that] EACH fiscal year. [In addi- 31 tion, any school which has a gross tuition of two hundred fifty thousand 32 dollars or less in a school fiscal year but whose combined state and 33 federal student financial aid in such year exceeds one hundred thousand 34 dollars shall also submit an annual audited financial statement to the 35 commissioner for that fiscal year.] 36 (iii) [Schools] NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (II) OF 37 THIS PARAGRAPH, FOR FISCAL YEARS RELATING TO THE INITIAL TWO YEAR LICEN- 38 SURE PERIOD, ANY SCHOOLS HAVING AN ANNUAL GROSS TUITION INCOME OF TWO 39 HUNDRED FIFTY THOUSAND DOLLARS OR LESS MAY SUBMIT A REVIEWED FINANCIAL 40 STATEMENT RATHER THAN AN AUDITED FINANCIAL STATEMENT. IN ADDITION, ANY 41 SCHOOL LICENSED PRIOR TO THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS 42 OF TWO THOUSAND NINE WHICH AMENDED THIS SUBPARAGRAPH, whose gross 43 tuition is two hundred fifty thousand dollars or less in a school fiscal 44 year and which receive less than one hundred thousand dollars in state 45 and federal student financial aid in a school fiscal year shall BE 46 PERMITTED TO CONTINUE TO file with the commissioner an unaudited finan- 47 cial statement in a format prescribed by the commissioner, provided, 48 however, that any such school [with gross tuition in excess of fifty 49 thousand dollars shall have filed at least one audited financial state- 50 ment after the first year of its operation. The statement shall be 51 signed by the president or chief executive officer and the chief fiscal 52 officer of the school who shall certify that the statements are true and 53 accurate] SHALL BEGIN FILING AUDITED FINANCIAL STATEMENTS AS OF THE 54 SCHOOL'S FISCAL YEAR ENDING THREE YEARS OR MORE AFTER THE EFFECTIVE DATE 55 OF THE CHAPTER OF THE LAWS OF TWO THOUSAND NINE WHICH AMENDED THIS 56 SUBPARAGRAPH. Upon a determination by the commissioner that a school has S. 6006 7 1 submitted false or inaccurate statements or that a significant, unsub- 2 stantiated decline in gross tuition has occurred, the commissioner may 3 require any such school to file an audited financial statement pursuant 4 to this paragraph. 5 f. Alternate licensing provision. The commissioner shall issue regu- 6 lations which define alternate licensing OR CERTIFICATION requirements 7 for the following: 8 (1) correspondence schools in which all approved programs and courses 9 are under three hundred hours; 10 (2) schools which are eligible for exemption under this section but 11 which elect to be licensed; 12 (3) non-profit schools exempt from taxation under section 501(c)(3) of 13 the internal revenue code whose programs are funded entirely through 14 donations from individuals or philanthropic organizations, or endow- 15 ments, and interest accrued thereon; and 16 (4) language schools conducted for-profit which provide instruction in 17 English as a second language and which accept no public funds. 18 g. Application fee. (I) Every applicant and renewal applicant shall 19 pay to the department a nonrefundable, nontransferable APPLICATION fee. 20 THE APPLICATION FEE FOR NEW SCHOOLS SHALL BE FIVE THOUSAND DOLLARS, OF 21 WHICH THREE THOUSAND DOLLARS SHALL ACCRUE TO THE CREDIT OF THE PROPRIE- 22 TARY VOCATIONAL SCHOOL SUPERVISION ACCOUNT AND TWO THOUSAND DOLLARS 23 SHALL ACCRUE TO THE TUITION REIMBURSEMENT ACCOUNT. FOR ADDITIONAL 24 LICENSED LOCATIONS OF CURRENTLY OPERATING SCHOOLS, THE APPLICATION FEE 25 SHALL BE TWO THOUSAND FIVE HUNDRED DOLLARS, WHICH SHALL ACCRUE TO THE 26 CREDIT OF THE PROPRIETARY VOCATIONAL SCHOOL SUPERVISION ACCOUNT. 27 (II) FOR RENEWAL APPLICATIONS, THE FEE SHALL BE based on gross annual 28 tuition income as determined by the annual financial statements required 29 in paragraph a of this subdivision for the most recent school fiscal 30 year, according to the following schedule: 31 GROSS ANNUAL TUITION INCOME FEE 32 0-$199,999 $[250.00] 750.00 33 $200,000-$499,999 $[500.00] 1,500.00 34 $500,000-$999,999 $[750.00] 2,250.00 35 $1,000,000-$4,999,999 $[1,500.00] 4,500.00 36 $5,000,000-$9,999,999 $[3,000.00] 9,000.00 37 $10,000,000 or above $[6,000.00] 18,000.00 38 Such RENEWAL fees shall accrue to the credit of the proprietary voca- 39 tional school supervision account. If the evaluation of a particular 40 course or facility requires the services of an expert not employed by 41 the department, the department shall retain such expert and the school 42 shall reimburse the department for the reasonable cost of such services. 43 5. Required disclosure for licensure. a. The commissioner shall 44 require that each applicant for a license for the operation of a private 45 [vocational or business] CAREER school disclose the following informa- 46 tion: 47 (1) Whether the applicant, or any corporation, partnership, associ- 48 ation or organization or person holding an ownership or control interest 49 in such school, or any employee responsible in a supervisory capacity 50 for the administration of student funds or governmental funds, has been 51 convicted of a crime defined in this article, or any other crime involv- 52 ing the operation of any educational or training program, or, in 53 connection with the operation of any such program, a crime involving the S. 6006 8 1 unlawful acquisition, use, payment or expenditure of educational or 2 training program funds; and 3 (2) Whether the applicant, or any corporation, partnership, associ- 4 ation or organization or person holding an ownership or control interest 5 in such school, or any employee responsible in a supervisory capacity 6 for the administration of student funds or governmental funds has been 7 convicted: 8 (A) in this state of any of the following felonies defined in the 9 penal law: bribery involving public servants; commercial bribery; perju- 10 ry in the second degree; rewarding official misconduct; larceny, in 11 connection with the provision of services or involving the theft of 12 governmental funds; offering a false instrument for filing, falsifying 13 business records; tampering with public records; criminal usury; scheme 14 to defraud; or defrauding the government; or 15 (B) in any other jurisdiction of an offense which is substantially 16 similar to any of the felonies defined in clause (A) of this subpara- 17 graph and for which a sentence to a term of imprisonment in excess of 18 one year was authorized and is authorized in this state regardless of 19 whether such sentence was imposed; and 20 (3) Whether the applicant, or any corporation, partnership, associ- 21 ation or organization or person holding an ownership or control interest 22 in such school, or any employee responsible in a supervisory capacity 23 for the administration of student funds or governmental funds, has been 24 finally determined in any administrative or civil proceeding to have 25 committed a violation of any provision of this article or any rules and 26 regulations promulgated pursuant thereto, or any related order or deter- 27 mination of the commissioner, or of any similar statute, rule, regu- 28 lation, order or determination of another jurisdiction pertaining to the 29 licensure and operation of any educational or training program; and 30 (4) Whether any school owned or operated by the applicant closed or 31 ceased operation and, if so, whether at the time of the closing the 32 applicant was subject to a pending disciplinary action, disallowance, 33 fine or other penalty and whether it owed refunds to any government 34 agency or students. 35 b. No application for any license pursuant to this article shall be 36 denied by reason of disclosure pursuant to this subdivision of the 37 applicant, or any corporation, partnership, association or organization 38 or person holding an ownership or control interest in such school, or 39 any employee responsible in a supervisory capacity for the adminis- 40 tration of student funds or governmental funds unless the commissioner 41 makes a written determination that there is a direct relationship 42 between one or more of such previous offenses and the license sought, or 43 that issuance of the license would create an unreasonable risk to prop- 44 erty or to the safety, education or welfare of specific individuals or 45 the general public. In making such determination, the commissioner shall 46 be guided by the factors set forth in section seven hundred fifty-three 47 of the correction law. For purposes of this subdivision, "ownership or 48 control interest" means: with respect to a school that is organized as 49 or owned by a corporation, a position as an officer or director of such 50 corporation; or, with respect to a school that is organized as or owned 51 by a partnership, a position as a partner; or any other interest total- 52 ing ten percent or more, whether direct or indirect, in the total equity 53 or assets of such school. 54 c. The commissioner may deny, suspend, revoke or decline to renew any 55 license: (1) if the significance of the convictions or administrative 56 violations warrant such action; or (2) if the commissioner determines S. 6006 9 1 that a school did not make any disclosure required by this subdivision; 2 OR (3) IF THE COMMISSIONER DETERMINES THAT A SCHOOL'S FINANCIAL CONDI- 3 TION MAY RESULT IN THE INTERRUPTION OR CESSATION OF INSTRUCTION OR JEOP- 4 ARDIZE STUDENT TUITION FUNDS. 5 6. If, during the [two year] period for which a license [or registra- 6 tion] is granted, the commissioner determines that a school's financial 7 condition may result in the interruption or cessation of instruction or 8 jeopardize student tuition funds, the commissioner may, upon notice to 9 the school, place the school on probation for a period of no more than 10 [thirty days] ONE YEAR, during which time the school and the department 11 must make efforts to resolve the problems at the school. THE SCHOOL 12 SHALL SUBMIT A REPORT ON ITS FINANCIAL CONDITION TO THE COMMISSIONER 13 WITHIN THE TIME PRESCRIBED BY THE COMMISSIONER. SUCH REPORT SHALL BE IN 14 THE FORM AND SHALL INCLUDE CONTENT PRESCRIBED BY THE COMMISSIONER AND 15 SHALL BE REVIEWED BY THE COMMISSIONER TO DETERMINE THE SCHOOL'S FINAN- 16 CIAL VIABILITY. THE COMMISSIONER MAY SUSPEND OR REVOKE THE SCHOOL'S 17 LICENSE, AS WELL AS REQUIRE THE CESSATION OF STUDENT ENROLLMENT, UPON A 18 DETERMINATION THAT THE SCHOOL'S FINANCIAL CONDITION CONTINUES TO THREAT- 19 EN ITS ABILITY TO EDUCATE STUDENTS AND/OR THE STUDENT TUITION FUNDS. 20 ALTERNATIVES FOR THE SCHOOL TO DEMONSTRATE A FISCALLY SOUND OPERATION 21 MAY INCLUDE SECURING AND MAINTAINING A PERFORMANCE BOND, PAYABLE TO THE 22 COMMISSIONER, IN AN APPROPRIATE AMOUNT TO ELIMINATE ANY LIABILITY TO THE 23 TUITION REIMBURSEMENT ACCOUNT SHOULD THE SCHOOL CEASE OPERATION, LIMIT- 24 ING THE COLLECTION OF TUITION FUNDS UNTIL EACH STUDENT COMPLETES THE 25 PROGRAM OF STUDY, OR OTHER MEANS ACCEPTABLE TO THE COMMISSIONER. If no 26 resolution can be attained, a hearing, pursuant to subdivisions two and 27 three of section five thousand three of this article will be scheduled. 28 Such probation may include additional monitoring, inspections, limita- 29 tions on enrollment, teaching out some or all of a school's present 30 students or temporary cessation of instruction. 31 7. No license [or registration] granted under this section shall be 32 transferable or assignable without the approval of the commissioner. 33 [Any] UPON transfer or assignment of any interest totaling [ten] TWEN- 34 TY-FIVE percent or more, whether direct or indirect, in the total equity 35 or assets of a school, SUCH SCHOOL shall be deemed a [transfer of such 36 school's license or registration. The commissioner shall approve or deny 37 a transfer or assignment based on the requirements set forth in subdivi- 38 sions three and four of this section. Such approval or denial, together 39 with the reasons for denial, shall be transmitted in writing within 40 ninety days of the receipt of the complete application by the commis- 41 sioner. Upon a showing of good cause as to why the applicant could not 42 obtain the commissioner's approval prior to a transfer or assignment, 43 the commissioner shall temporarily approve the transfer or assignment 44 for a period not to exceed forty-five days and for such additional peri- 45 ods as the commissioner may deem appropriate] NEW SCHOOL REQUIRED TO 46 SUBMIT A NEW SCHOOL APPLICATION AND OBTAIN A NEW LICENSE PURSUANT TO 47 THIS ARTICLE. PROVIDED, HOWEVER THAT UPON SUCH A SUBSTANTIAL CHANGE IN 48 INTEREST, THE PREVIOUS SCHOOL LICENSE SHALL REMAIN IN EFFECT UNTIL THE 49 NEW LICENSE IS ISSUED OR DENIED OR THE PREVIOUS LICENSE EXPIRES OR IS 50 REVOKED, WHICHEVER OCCURS FIRST. 51 8. No licensed [or registered] school shall discontinue operation or 52 surrender its license [or registration] unless thirty days written 53 notice of its intention to do so and a plan for maintenance of safe 54 keeping of the records of the school is provided to the commissioner. 55 However, upon good cause shown, the commissioner may waive the thirty 56 days notice requirement. S. 6006 10 1 9. Annual supervision fund and tuition reimbursement [fund] ACCOUNT 2 assessment. a. The commissioner shall annually assess each school a 3 total percentage of that school's gross tuition pursuant to subdivision 4 three of section five thousand two of this article, as determined by the 5 annual [financial statement or annual] audited financial statement 6 required by this article. This assessment shall be based upon each 7 school's gross tuition from the previous year, and shall be payable to 8 the commissioner in equal quarterly installments which shall be due on 9 June first, September first, December first and March first. 10 b. (i) [Beginning April first, nineteen hundred ninety-one, such] SUCH 11 annualized assessment shall be one percent FOR SCHOOLS WHICH HAVE PAID 12 LESS THAN SIXTEEN QUARTERS OF ASSESSMENTS, BUT SUCH ANNUAL ASSESSMENT 13 SHALL NOT FALL BELOW FIVE HUNDRED DOLLARS. 14 (ii) [Beginning July first, nineteen hundred ninety-four, such] SUCH 15 annualized assessment shall be [nine-tenths] EIGHT-TENTHS of one percent 16 FOR SCHOOLS WHICH HAVE PAID SIXTEEN OR MORE QUARTERS OF ASSESSMENTS, BUT 17 SUCH ANNUAL ASSESSMENT SHALL NOT FALL BELOW FIVE HUNDRED DOLLARS. 18 [(iii) Beginning April first, nineteen hundred ninety-five, and in 19 each succeeding year, such annualized assessment shall be eight-tenths 20 of one percent.] 21 c. (i) Of the total assessment provided for herein, FIVE-TENTHS OF ONE 22 PERCENT SHALL ACCRUE TO THE CREDIT OF THE TUITION REIMBURSEMENT ACCOUNT 23 PURSUANT TO SECTION FIVE THOUSAND SEVEN OF THIS ARTICLE FOR THOSE 24 SCHOOLS WHICH HAVE PAID LESS THAN SIXTEEN QUARTERS OF ASSESSMENTS. OF 25 THE TOTAL ASSESSMENT PROVIDED FOR SCHOOLS WHICH HAVE PAID SIXTEEN OR 26 MORE QUARTERS OF ASSESSMENTS, three-tenths of one percent shall accrue 27 to the credit of the tuition reimbursement [fund] ACCOUNT pursuant to 28 section five thousand seven of this article. FOR SCHOOLS PAYING THE 29 MINIMUM FIVE HUNDRED DOLLARS ANNUAL ASSESSMENT, NONE SHALL ACCRUE TO THE 30 TUITION REIMBURSEMENT ACCOUNT. 31 (ii) The balance of the total assessment provided for herein shall be 32 dedicated to fund the department's supervision and regulation of 33 licensed private schools [and registered business schools] pursuant to 34 an annual appropriation and an annual plan of expenditure prepared by 35 the commissioner and approved by the director of the budget. [Following 36 the close of each fiscal year, the commissioner, in consultation with 37 the director of the budget, shall determine if the balance in the 38 proprietary vocational school supervision fund for such fiscal year 39 exceeded the amount required for the support of the department's super- 40 visory activities taking into account projected revenues and expendi- 41 tures for the subsequent fiscal year. To the extent that a surplus is 42 identified, the commissioner, with the approval of the director of the 43 budget, shall direct the transfer of such surplus to the tuition 44 reimbursement fund.] 45 d. Payments made within thirty days following the due date shall be 46 subject to interest at one percent above the prevailing prime rate. 47 Thereafter, late payments may result in suspension of licensure by the 48 commissioner. Payments required by this subdivision shall be considered 49 a condition of licensure [or registration]. 50 S 3. Section 5002 of the education law, as added by chapter 887 of the 51 laws of 1990, subparagraph 3 of paragraph b and paragraph d of subdivi- 52 sion 1, subparagraph 2 of paragraph g of subdivision 3 and subdivision 6 53 as amended and paragraph c of subdivision 1 and paragraph d of subdivi- 54 sion 2 as added by chapter 604 of the laws of 1993, paragraph c of 55 subdivision 2, paragraph a of subdivision 4 and subdivision 7 as amended 56 and paragraph e of subdivision 4 and paragraph c of subdivision 6 as S. 6006 11 1 added by chapter 434 of the laws of 1999, paragraph f of subdivision 4 2 as added by chapter 457 of the laws of 2003 and subparagraph 2 of para- 3 graph b of subdivision 5 as amended by chapter 301 of the laws of 1996, 4 is amended to read as follows: 5 S 5002. Standards for licensed private CAREER schools [and registered 6 business schools]. Any school licensed [or registered] pursuant to 7 section five thousand one of this article shall be organized and 8 conducted only as a school and shall be subject to the jurisdiction of 9 the department exclusively, or in conjunction with such other state 10 agency or department or district attorney upon which jurisdiction has 11 also been conferred by law. Such schools shall be subject to and comply 12 with the provisions of this section. 13 1. Standards. a. No program of such schools shall be conducted in a 14 factory or commercial establishment, except where the use of facilities 15 or equipment of such factory or commercial establishment is permitted 16 for necessary or desirable educational purposes and objectives. 17 b. For every such school, the commissioner shall set forth in regu- 18 lation standards governing all of the following: 19 (1) criteria for admission, which shall provide that students at least 20 possess a high school diploma or its equivalent or demonstrate the abil- 21 ity to benefit from the instruction, except that in the case of students 22 who do not possess a high school diploma or its equivalent, certif- 23 ication of the students' ability to benefit from instruction shall be 24 provided to the commissioner as provided in paragraph c of this subdivi- 25 sion; 26 (2) the standards and the methods of instruction; 27 (3) the equipment available for instruction with the maximum enroll- 28 ment that such equipment and physical plant will accommodate; 29 (4) the qualifications and experience of teaching and management 30 personnel; 31 (5) the form and content of the student enrollment agreement or 32 contract, provided that such agreement or contract shall be written in 33 the same language as that principally used in the sales presentation; 34 (6) the methods of collecting tuition; 35 (7) eligibility criteria for programs that will require licensure; 36 (8) the sufficiency and suitability of the resources available for the 37 support of such school; and 38 (9) counseling provided to students. 39 B-1. STUDENT LOANS AND FINANCIAL AID. (1) STUDENT LOANS OR OTHER 40 FINANCIAL AID FUNDS RECEIVED FROM FEDERAL, STATE, OR LOCAL GOVERNMENTS 41 OR ADMINISTERED UNDER THE FEDERAL STUDENT FINANCIAL ASSISTANCE PROGRAMS 42 GOVERNED BY TITLE IV OF THE HIGHER EDUCATION ACT OF NINETEEN HUNDRED 43 SIXTY-FIVE, 20 U.S.C. SECTION 1070 ET SEQ., AS AMENDED, MUST BE 44 COLLECTED AND APPLIED IN THE MANNER AS CONTROLLED BY THE APPLICABLE 45 FEDERAL, STATE OR LOCAL REGULATIONS. 46 (2) STUDENT LOANS OR OTHER FINANCIAL AID FUNDS RECEIVED FROM PRIVATE 47 ENTITIES INCLUDING, BUT NOT LIMITED TO, BANKS, FINANCING COMPANIES, AND 48 OTHER LENDING SOURCES MUST BE COLLECTED OR DISBURSED IN THE FOLLOWING 49 MANNER: 50 (A) LOANS OR OTHER FINANCIAL AID PAYMENTS FOR AMOUNTS OF FIVE THOUSAND 51 DOLLARS OR LESS MAY BE DISBURSED AS A SINGLE DISBURSEMENT, REGARDLESS OF 52 COURSE LENGTH. 53 (B) LOANS OR OTHER FINANCIAL AID PAYMENTS FOR AMOUNTS GREATER THAN 54 FIVE THOUSAND DOLLARS THAT REFLECT A CLASS TERM OF LESS THAN SIX MONTHS 55 SHALL HAVE TWO EQUAL DISBURSEMENTS. THE DISBURSEMENT SCHEDULE FOR SUCH 56 LOANS OR PAYMENTS SHALL BE AS FOLLOWS: ONE-HALF OF THE TUITION AMOUNT S. 6006 12 1 RELEASED INITIALLY, AND THE REMAINDER RELEASED HALFWAY THROUGH THE 2 COURSE TERM. 3 (C) LOANS OR OTHER FINANCIAL AID PAYMENTS FOR AMOUNTS GREATER THAN 4 FIVE THOUSAND DOLLARS THAT REFLECT A CLASS TERM OF GREATER THAN SIX 5 MONTHS, BUT LESS THAN TWELVE MONTHS MUST HAVE THREE EQUAL DISBURSEMENTS. 6 THE DISBURSEMENT SCHEDULE FOR SUCH LOANS OR PAYMENTS SHALL BE AS 7 FOLLOWS: ONE-THIRD OF THE TUITION AMOUNT RELEASED INITIALLY, THE SECOND 8 DISBURSEMENT SHALL BE RELEASED ONE-THIRD OF THE WAY THROUGH THE LENGTH 9 OF THE TRAINING, AND THE REMAINDER RELEASED TWO-THIRDS OF THE WAY 10 THROUGH THE COURSE TERM. 11 (D) LOANS OF OTHER FINANCIAL AID PAYMENTS FOR AMOUNTS GREATER THAN 12 FIVE THOUSAND DOLLARS THAT REFLECT A CLASS TERM GREATER THAN TWELVE 13 MONTHS SHALL HAVE FOUR EQUAL DISBURSEMENTS. THE DISBURSEMENT SCHEDULE 14 FOR SUCH LOANS OR PAYMENTS SHALL BE AS FOLLOWS: ONE-QUARTER OF THE 15 TUITION AMOUNT RELEASED INITIALLY, THE SECOND DISBURSEMENT SHALL BE 16 RELEASED ONE QUARTER OF THE WAY THROUGH THE LENGTH OF THE TRAINING; THE 17 THIRD DISBURSEMENT SHALL BE RELEASED HALFWAY THROUGH THE LENGTH OF THE 18 TRAINING, AND THE REMAINDER SHALL BE RELEASED THREE-QUARTERS OF THE WAY 19 THROUGH THE TRAINING. 20 (3) NO SCHOOL MAY ENTER INTO ANY CONTRACT OR AGREEMENT WITH, OR 21 RECEIVE ANY STUDENT LOAN OR FINANCIAL AID FUNDS FROM, PRIVATE ENTITIES 22 INCLUDING, BUT NOT LIMITED TO, BANKS, FINANCING COMPANIES, AND ANY OTHER 23 PRIVATE LENDING SOURCES UNLESS THE PRIVATE ENTITY HAS A DISBURSEMENT 24 POLICY THAT, AT A MINIMUM, MEETS THE REQUIREMENTS OF SUBPARAGRAPH TWO OF 25 THIS PARAGRAPH. 26 c. Notwithstanding any other provisions of this article to the contra- 27 ry, the commissioner shall define alternative educational and curriculum 28 standards for any program of less than forty hours designed exclusively 29 for non-occupational, personal enrichment purposes. 30 d. Admission of students under the ability to benefit provision. 31 (1) Certification. Each school admitting students who do not possess 32 at least a high school diploma or its equivalent shall certify to the 33 satisfaction of the commissioner that such prospective students have 34 been administered and passed an examination which has been approved by 35 the commissioner to determine their ability to benefit from the chosen 36 curriculum prior to admission to the curriculum or course of study. Such 37 examination shall, whenever possible, be a nationally recognized test 38 appropriate for the course of instruction which has been approved by the 39 commissioner. The examination results of each such student who is admit- 40 ted shall be made available to the commissioner at a time prescribed by 41 the commissioner and, together with the student's original answer sheet, 42 shall be maintained by the school in the student's permanent record. For 43 any student failing to achieve the necessary score on such examination 44 for enrollment, the school shall be required to provide such student 45 with a listing of appropriate counseling and educational opportunities 46 available to the student at no cost, as determined by the commissioner. 47 WHERE APPROPRIATE, THE COMMISSIONER MAY ACCEPT SUCH OTHER ENTRANCE 48 REQUIREMENT DOCUMENTATION SUCH AS PREREQUISITE COURSEWORK, PROFESSIONAL 49 OR VENDOR CERTIFICATIONS, PERSONAL INTERVIEWS, AND/OR ATTESTATIONS OF 50 EQUIVALENT KNOWLEDGE IN LIEU OF THE EXAMINATION REQUIREMENT. 51 (2) Counseling. Each school [admitting] OFFERING CURRICULA WHICH ADMIT 52 students who do not possess a high school diploma or its equivalent 53 shall develop a plan to be approved by the commissioner for the coun- 54 seling of such students on an individual basis on matters including but 55 not limited to the student's ability to progress in the curriculum, the 56 student's financial aid rights and responsibilities, the availability of S. 6006 13 1 programs to earn a high school equivalency diploma, including programs 2 provided at no cost to the student, and the potential of the training to 3 prepare the student for available employment opportunities within the 4 region. 5 (3) Compliance. (A) The commissioner shall monitor compliance with 6 this paragraph and verify the examination and counseling process and 7 student examination scores. Such procedures may include but not be 8 limited to an annual, statistically significant, random sampling of the 9 examinations taken by prospective students of each school administering 10 such examinations. 11 (B) [Such procedures shall provide that the examinations of each 12 school be inspected on site at least once annually. 13 (C)] In the event that the commissioner determines that the school is 14 out of compliance with the examination process and counseling, the 15 commissioner shall require that examinations and counseling for students 16 admitted under the ability to benefit provision and the counseling 17 required by subparagraph two of this paragraph be conducted off the 18 premises of the school by an entity approved by the commissioner for 19 such period of time as the commissioner deems appropriate, the cost of 20 which shall be incurred by the school. 21 2. Inspections. a. Every school licensed pursuant to this article 22 shall maintain adequate and accurate records for a period of not less 23 than [six] SEVEN years at its principal place of business within this 24 state. Such records shall be maintained in a manner and form prescribed 25 by the commissioner and shall be made available to the department and 26 the higher education services corporation upon request. 27 b. In addition to other requirements in this article, the information 28 to be made a part of the record shall include, but not be limited to: 29 (1) names and addresses of each enrolled student; 30 (2) the course of study offered by the institution; 31 (3) the name and address of its faculty, together with a record of the 32 educational qualifications of each; 33 (4) the graduation date of each student; and 34 (5) for each student who fails to complete his or her program, the 35 student's last date of attendance and, if applicable, the amount of any 36 refund paid to, or on behalf of, the student and the date the refund was 37 made. 38 c. The commissioner shall conduct periodic unscheduled inspections of 39 licensed private CAREER schools [and registered business schools] to 40 monitor compliance with the provisions of this article or the rules or 41 regulations promulgated thereunder or any final order or decision of the 42 commissioner made pursuant to this article. The department shall conduct 43 an inspection of each school at least once every [three years. The 44 department shall annually inspect schools: (1) having a high percentage 45 of students admitted under ability to benefit criteria as determined by 46 the commissioner; (2) having a high student loan default rate as deter- 47 mined by the commissioner in a manner consistent with federal standards; 48 or (3) which are the subject of a high volume of complaints by students 49 or other parties] LICENSURE PERIOD. All schools shall provide upon 50 request of the department, any and all records necessary to review 51 compliance with the provisions of this article. 52 d. Student permanent records, as defined in the regulations of the 53 commissioner, shall be maintained for a period of twenty years. 54 3. Tuition liability. a. The tuition charge for programs approved for 55 participation in student financial aid general award programs pursuant 56 to articles thirteen and fourteen of this chapter shall be apportioned S. 6006 14 1 on the basis of terms, quarters or semesters. For the purposes of this 2 section, the terms "term", "quarter" and "semester" shall be defined in 3 regulations by the commissioner. 4 b. The tuition refund policy for the first term or quarter of any 5 program at schools licensed [or registered] pursuant to section five 6 thousand one of this article shall be as follows: 7 (1) For programs which are divided into quarters of up to fourteen 8 weeks, the school shall evenly divide the total tuition charges among 9 the number of quarters. After instruction is begun in a school, if a 10 student withdraws or is discontinued, the school may retain no more 11 than: 12 (i) zero percent of the quarter's tuition if the termination is during 13 the first week of instruction; or 14 (ii) twenty-five percent of the quarter's tuition if the termination 15 is during the second week of instruction; or 16 (iii) fifty percent of the quarter's tuition if the termination is 17 during the third week of instruction; or 18 (iv) seventy-five percent of the quarter's tuition if the termination 19 is during the fourth week of instruction; or 20 (v) one hundred percent of the quarter's tuition if the termination 21 occurs after the fourth week of instruction. 22 (2) For programs organized by terms of fifteen, sixteen, seventeen or 23 eighteen weeks apiece, the school shall evenly divide the total tuition 24 charges among the number of terms. After instruction is begun in a 25 school, if a student withdraws or is discontinued, the school may retain 26 no more than: 27 (i) zero percent of the term's tuition if the termination is during 28 the first week of instruction; or 29 (ii) twenty percent of the term's tuition if the termination is during 30 the second week of instruction; or 31 (iii) thirty-five percent of the term's tuition if the termination is 32 during the third week of instruction; or 33 (iv) fifty percent of the term's tuition if the termination is during 34 the fourth week of instruction; or 35 (v) seventy percent of the term's tuition if the termination is during 36 the fifth week of instruction; or 37 (vi) one hundred percent of the term's tuition if the termination 38 occurs after the completion of the fifth week of instruction. 39 c. (1) The tuition refund policy for the second term or quarter of any 40 program at schools licensed [or registered] pursuant to section five 41 thousand one of this article shall be as follows: 42 (A) For programs which are divided into quarters of up to fourteen 43 weeks, the school shall evenly divide the total tuition charges among 44 the number of quarters. After instruction is begun in a school, if a 45 student withdraws or is discontinued, the school may retain no more 46 than: 47 (i) twenty-five percent of the quarter's tuition if the termination is 48 during the first week of instruction; or 49 (ii) fifty percent of the quarter's tuition if the termination is 50 during the second week of instruction; or 51 (iii) seventy-five percent of the quarter's tuition if the termination 52 is during the third week of instruction; or[.] 53 (iv) one hundred percent of the quarter's tuition if the termination 54 occurs after the third week of instruction. 55 (B) For programs organized by terms of fifteen, sixteen, seventeen or 56 eighteen weeks apiece, the school shall evenly divide the total tuition S. 6006 15 1 charges among the number of terms. After instruction is begun in a 2 school, if a student withdraws or is discontinued, the school may retain 3 no more than: 4 (i) twenty percent of the term's tuition if the termination is during 5 the first week of instruction; or 6 (ii) thirty-five percent of the term's tuition if the termination is 7 during the second week of instruction; or 8 (iii) fifty percent of the term's tuition if the termination is during 9 the third week of instruction; or 10 (iv) seventy percent of the term's tuition if the termination is 11 during the fourth week of instruction; or 12 (v) one hundred percent of the term's tuition if the termination 13 occurs after the completion of the fourth week of instruction. 14 (2) Notwithstanding the provisions of subparagraph one of this para- 15 graph, the tuition refund policy set forth in paragraph b of this subdi- 16 vision shall apply unless the school demonstrates that there are no 17 significant educational changes in the educational program of the 18 student, such changes as defined in regulations of the commissioner. 19 d. The tuition refund policy for the third and any subsequent term or 20 quarter of any program licensed [or registered] pursuant to section five 21 thousand one of this article shall be the policy set forth in subpara- 22 graph one of paragraph c of this subdivision. 23 e. No program shall have a term in excess of eighteen weeks. 24 f. The amount of the refund shall be calculated based on the last day 25 of student attendance. 26 g. (1) Any refund due to a student shall be paid by the school within 27 forty-five days of the date on which the student withdraws from the 28 program. For the purposes of this article, such date shall be the earli- 29 est of (i) the date on which the student gives written notice to the 30 school or (ii) the date on which the student is deemed to have withdrawn 31 pursuant to subparagraph two of this paragraph. 32 (2) If a student has failed to attend classes for a period of thirty 33 calendar days, the school shall send by regular mail a notice to the 34 student that the student shall be deemed to have withdrawn from the 35 program if the student does not notify the school to the contrary within 36 twelve days from the date on which the letter is sent. If the student 37 fails to respond within such twelve-day period, the student shall be 38 deemed to have withdrawn and the school shall notify the higher educa- 39 tion services corporation that the student has withdrawn and the date of 40 the withdrawal. 41 h. SCHOOLS SHALL SUBMIT, FOR APPROVAL BY THE COMMISSIONER, THE SCHOOL 42 CATALOG WITH A WEEKLY TUITION LIABILITY CHART FOR EACH PROGRAM THAT 43 INDICATES THE AMOUNT OF REFUND DUE THE STUDENT IN THE EVENT OF WITH- 44 DRAWAL. 45 I. Upon payment of a refund to a lender, the school shall forthwith 46 send a notice to a person designated by the president of the higher 47 education services corporation upon a form approved by the president 48 that such refund was made. 49 [i.] J. If the higher education services corporation fails to receive 50 the notice required by paragraph [h] I of this subdivision, it shall 51 forthwith notify the student of his or her right to a refund and the 52 commissioner of such failure. Upon receipt of such notification, the 53 commissioner shall take appropriate action against the school. 54 4. Curriculum approval. a. An application AND FEE shall be made for 55 the initial approval of a curriculum or course and shall include such 56 information as the commissioner may require by regulation. Approval S. 6006 16 1 shall be valid for a period not to exceed four years. THE APPLICATION 2 FEE FOR ANY CURRICULUM OF ONE HUNDRED CLOCK HOURS OR MORE SHALL BE TWO 3 HUNDRED FIFTY DOLLARS. THE APPLICATION FEE FOR ANY COURSE OF LESS THAN 4 ONE HUNDRED CLOCK HOURS SHALL BE ONE HUNDRED DOLLARS. SUCH APPLICATION 5 FEES SHALL ACCRUE TO THE CREDIT OF THE PROPRIETARY VOCATIONAL SCHOOL 6 SUPERVISION ACCOUNT. 7 b. In approving curriculum, the commissioner shall take into consider- 8 ation the following: 9 (1) that the entrance requirements demonstrate that students possess 10 the skills, competencies and prerequisite knowledge needed to progress 11 in the curriculum; 12 (2) that the content will enable the student to develop those skills 13 and competencies required for employment in the occupational area for 14 which the curriculum was developed; 15 (3) that the school will utilize appropriate instructional methods; 16 [and] 17 (4) that the instructional equipment used within the curriculum is 18 comparable to the equipment currently used by business or industry in 19 the occupational area for which the curriculum was developed; AND 20 (5) THAT A CURRICULUM MAY INCLUDE INSTRUCTION IN ENGLISH AS A SECOND 21 LANGUAGE AT A BEGINNING OR BASIC LEVEL, PROVIDED SUCH INSTRUCTION SHALL 22 NOT CONSTITUTE MORE THAN FIFTY PERCENT OF SUCH PROGRAM. 23 c. (1) If the evaluation of a particular course or facility requires 24 the services of an expert not employed by the department, the department 25 shall retain such expert [and the school shall reimburse the department 26 for the reasonable cost of such services] AT THE SCHOOL'S EXPENSE IN 27 ADDITION TO THE APPLICATION FEES PRESCRIBED IN PARAGRAPH A OF THIS 28 SUBDIVISION. 29 (2) If, in the interest of expediting the approvals, a school requests 30 the department to employ an outside consultant, the school shall [reim- 31 burse the department for] PAY the [reasonable] cost of such services IN 32 ADDITION TO THE APPLICATION FEES PRESCRIBED IN PARAGRAPH A OF THIS 33 SUBDIVISION. 34 d. The commissioner shall act on applications for approval of a course 35 or curriculum within one hundred twenty days of receipt of a complete 36 application and, in the case of a denial, shall set forth in writing the 37 reasons for such denial. 38 e. Notwithstanding paragraphs b, c and d of this subdivision, curric- 39 ulum certified by a nationally recognized vendor as defined in commis- 40 sioner's regulations shall be recognized by the department in lieu of an 41 expert evaluation when such curriculum is adopted by a school in the 42 original format provided by the vendor as long as the proposed curric- 43 ulum is a stand alone program and not part of a larger comprehensive 44 course. 45 f. Notwithstanding any other provision of the law, a [not-for-profit 46 registered business] school[, that is eligible for participation in the 47 tuition assistance program and] which has national accreditation, may, 48 for the purpose of calculation of federal financial aid amounts only, 49 measure students' academic progress in an approved curriculum in non-de- 50 gree granting credit hours, based upon a national accrediting agency's 51 conversion and approval of clock hours to non-degree credit hours. For 52 the purposes of this paragraph, "national accreditation" shall mean 53 accreditation by a national accrediting agency as defined in the commis- 54 sioner's regulations. 55 5. Application for reapproval. a. An application AND FEE shall be made 56 for reapproval of a curriculum or course. Such application shall be S. 6006 17 1 considered timely if submitted at least one hundred twenty days prior to 2 the expiration of the current approval. THE APPLICATION FEE FOR ANY 3 CURRICULUM OF ONE HUNDRED CLOCK HOURS OR MORE SHALL BE TWO HUNDRED FIFTY 4 DOLLARS. THE APPLICATION FEE FOR ANY COURSE OF LESS THAN ONE HUNDRED 5 CLOCK HOURS SHALL BE ONE HUNDRED DOLLARS, PROVIDED THAT NO FEE SHALL BE 6 ASSESSED FOR THE SUBMISSION OF A REAPPROVAL APPLICATION WITHOUT CHANGE. 7 SUCH APPLICATION FEES SHALL ACCRUE TO THE CREDIT OF THE PROPRIETARY 8 VOCATIONAL SCHOOL SUPERVISION ACCOUNT. 9 b. Curriculum reapproval standards. (1) The commissioner shall 10 prescribe by regulation, standards for reapproval after the first year 11 of licensure, of any curriculum or course based upon factors including 12 but not limited to the following, as appropriate: 13 (i) for each curriculum or course, the percentage of students who have 14 dropped out; 15 (ii) the acquisition of a specified minimum level of skills by the 16 students; and 17 (iii) for each curriculum or course, the percentage of students placed 18 in occupations related to the instruction, where applicable. 19 (2) Such standards shall be consistent with those applied to all non- 20 degree career education programs. 21 c. Reapproval contingency. Reapproval of a curriculum or course shall 22 be contingent upon a demonstration by the applicant that the curriculum 23 or course has met the curriculum reapproval standards set forth in this 24 subdivision. Except as otherwise provided in paragraph d of this subdi- 25 vision, no such curriculum or course or substantially similar curriculum 26 or course may be given without reapproval by the commissioner. 27 d. When timely and complete application is made for the reapproval of 28 a curriculum or course, and no written denial is made thirty days prior 29 to the date of expiration of the existing approval, the curriculum or 30 course shall be deemed to be approved for the period of the curriculum. 31 If the application is denied, the commissioner shall set forth in writ- 32 ing the reasons for such denial. 33 e. The commissioner may provide in regulations for reapproval proce- 34 dures, consistent with this subdivision, for applications submitted less 35 than one hundred twenty days from the expiration date. 36 f. The commissioner shall act upon enrollment agreements and catalogs 37 within ninety days of receipt, and, in the case of denial, shall set 38 forth in writing the reasons for such denial. If the commissioner fails 39 to act within ninety days, a catalog shall be deemed approved for one 40 year and an enrollment agreement shall be deemed approved until the 41 commissioner acts upon it. 42 6. a. Teachers and directors. No person shall be employed by a private 43 CAREER school as a director or teacher who is not licensed in such 44 capacity by the department pursuant to regulations of the commissioner, 45 which shall take into consideration such factors as moral character, 46 educational qualifications and practical experience. The application 47 shall include a statement, signed by the president or chief executive 48 officer of the school, certifying that to the best of his or her know- 49 ledge, the applicant is able to meet the educational qualifications and 50 practical experience set forth in the commissioner's regulations. Such 51 application shall be considered timely if mailed to the commissioner and 52 postmarked four days prior to employment at the school and must be 53 completed within twenty days thereafter; provided, however, that the 54 commissioner may, for good cause shown, extend the time within which to 55 complete the application. When a complete application is made, the 56 commissioner shall act upon such application within thirty days. If no S. 6006 18 1 written denial is made within the thirty days, the application shall be 2 deemed to be approved until the commissioner acts upon it or until the 3 end of the term or semester, whichever occurs first. If a written denial 4 is made after the thirty day period, the commissioner may allow the 5 applicant to teach at the school for the remainder of the term or semes- 6 ter if the commissioner determines that the removal of the teacher would 7 not be in the best educational interest of the students. This subdivi- 8 sion shall not apply to directors or teachers employed on or before July 9 first, nineteen hundred seventy-two. Teachers' licenses issued on or 10 after [January first, nineteen hundred eighty-seven] THE EFFECTIVE DATE 11 OF THE CHAPTER OF THE LAWS OF TWO THOUSAND NINE WHICH AMENDED THIS PARA- 12 GRAPH shall be valid at all [registered business] LICENSED PRIVATE 13 CAREER schools for the courses, curricula, or occupations indicated on 14 the license. TEACHERS HOLDING VALID PRIVATE SCHOOL TEACHER LICENSES 15 VALID AT ONLY ONE SCHOOL LOCATION SHALL HAVE THEM REPLACED, AT NO COST, 16 WITH LICENSES VALID AT ANY LICENSED SCHOOL IN THE SAME SUBJECT OR 17 SUBJECTS AND WITH THE SAME EXPIRATION DATE AS WAS LISTED ON THE PREVIOUS 18 TEACHING LICENSE. 19 b. A school director shall have access to all student and school 20 records which shall be maintained in accordance with this article and 21 the regulations of the commissioner and shall make such records avail- 22 able to the commissioner or the commissioner's designee upon request 23 during an on-site school inspection. 24 c. Notwithstanding paragraph a of this subdivision, a teacher who has 25 been certified as an instructor by a nationally recognized vendor as 26 defined in commissioner's regulations may be deemed qualified as an 27 instructor by the department, provided such teacher shall only provide 28 instruction in the course or courses for which he or she holds vendor's 29 certification. A teacher authorized by this paragraph will be subject to 30 all licensing fees required by the department for licensed teachers. 31 7. Advertising. a. The commissioner is authorized to commence a disci- 32 plinary proceeding pursuant to this article for false, misleading, 33 deceptive or fraudulent advertising pursuant to regulations promulgated 34 by the commissioner which shall be consistent with article twenty-two-A 35 of the general business law. The department shall issue guidelines as to 36 appropriate advertising content. In developing such guidelines, the 37 department shall consider advertising for similar programs offered by 38 various educational institutions. In a disciplinary action or other 39 proceeding, such guidelines shall not be presumptive evidence that 40 particular advertising is appropriate. 41 b. Beginning on January first, two thousand, all schools shall include 42 in their advertising, promotional material, or letterhead the statement 43 "Licensed by the State of New York" [or "Registered by the State of New 44 York", as appropriate], and an accompanying symbol to indicate such 45 status, issued by the commissioner pursuant to section five thousand 46 nine of this article. 47 8. The higher education services corporation shall adopt rules and 48 regulations to effectuate the cessation of collection activities by 49 lenders or by the corporation in cases in which a licensed private 50 [vocational] CAREER school [or a registered business school] at which 51 the student enrolled has closed or ceased its teaching activities during 52 the academic period for which the loan was made or guaranteed. 53 S 4. Section 5003 of the education law, as added by chapter 887 of the 54 laws of 1990, subparagraph 1 of paragraph c of subdivision 1 and para- 55 graphs d and e of subdivision 6 as amended by chapter 604 of the laws of 56 1993, paragraphs b and f of subdivision 6 as amended and paragraph d of S. 6006 19 1 subdivision 1 as added by chapter 434 of the laws of 1999, is amended to 2 read as follows: 3 S 5003. Disciplinary actions, hearings and penalties. 1. Disciplinary 4 action. a. The commissioner for good cause, after affording a school an 5 opportunity for a hearing, may take disciplinary action as hereinafter 6 provided against any school authorized to operate under this article. 7 b. Good cause shall include, but not be limited to, any of the follow- 8 ing: 9 (1) fraudulent statements or representations to the department, the 10 public or any student in connection with any activity of the school; 11 (2) violation of any provision of this article or regulation of the 12 commissioner; 13 (3) conviction or a plea of no contest on the part of any owner, oper- 14 ator, director or teacher: 15 (A) of any of the following felonies defined in the penal law: bribery 16 involving public servants; commercial bribery; perjury in the second 17 degree; rewarding official misconduct; larceny, in connection with the 18 provision of services or involving the theft of governmental funds; 19 offering a false instrument for filing, falsifying business records; 20 tampering with public records; criminal usury; scheme to defraud; or 21 defrauding the government; or 22 (B) in any other jurisdiction of an offense which is substantially 23 similar to any of the felonies defined in clause (A) of this subpara- 24 graph and for which a sentence to a term of imprisonment in excess of 25 one year was authorized and is authorized in this state regardless of 26 whether such sentence was imposed; or 27 (4) incompetence of any owner or operator to operate a school. 28 c. (1) Any person who believes he or she has been aggrieved by a 29 violation of this section, EXCEPT A PERSON AGGRIEVED BY THE ACTIONS OR 30 OMISSIONS OF A CANDIDATE SCHOOL, shall have the right to file a written 31 complaint within: (A) two years of the alleged violation; or (B) one 32 year of receiving notification from the higher education services corpo- 33 ration or any other guarantee agency that the student has defaulted on a 34 student loan payment; provided, however, that no complaint may be filed 35 after three years from the date of the alleged violation. The commis- 36 sioner shall maintain a written record of each complaint that is made. 37 The commissioner shall also send to the complainant a form acknowledging 38 the complaint and requesting further information if necessary and shall 39 advise the director of the school that a complaint has been made and, 40 where appropriate the nature of the complaint. 41 (2) The commissioner shall within [twenty] THIRTY days of receipt of 42 such written complaint commence an investigation of the alleged 43 violation and shall within [ninety] ONE HUNDRED TWENTY days of the 44 receipt of such written complaint, issue a written finding. The commis- 45 sioner shall furnish such findings to the person who filed the complaint 46 and to the chief operating officer of the school cited in the complaint. 47 If the commissioner finds that there has been a violation of this 48 section, the commissioner shall take appropriate action. 49 (3) The commissioner may initiate an investigation without a 50 complaint. 51 [d. During the initial two year licensing period, before the commis- 52 sioner may bring enforcement proceedings against a licensed entity, the 53 following shall be taken into consideration: 54 (1) whether such entity has demonstrated that the regulations promul- 55 gated under this chapter are unduly burdensome given the nature of the 56 instruction provided by such entity; S. 6006 20 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 (4) NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH ONE OF THIS PARA- 8 GRAPH OR ANY OTHER PROVISION OF THIS ARTICLE TO THE CONTRARY, A STUDENT 9 AT A CANDIDATE SCHOOL SHALL HAVE THE RIGHT TO FILE A WRITTEN COMPLAINT 10 FROM AN ALLEGED VIOLATION OF THE PROVISIONS OF CLAUSE THREE OF SUBPARA- 11 GRAPH (III) OF PARAGRAPH B OF SUBDIVISION FOUR OF SECTION FIVE THOUSAND 12 ONE OF THIS ARTICLE THAT REQUIRE DISCLOSURE OF CANDIDACY STATUS AND ITS 13 IMPLICATIONS AND A SIGNED ATTESTATION BY THE STUDENT, WITHIN TWO YEARS 14 OF SUCH VIOLATION. UPON A FINDING THAT SUCH A VIOLATION HAS OCCURRED, 15 THE CANDIDATE SCHOOL SHALL BE REQUIRED TO PROVIDE A REFUND OF ALL MONIES 16 AND FEES RECEIVED FROM OR ON BEHALF OF THE STUDENT. APPROPRIATE ACTION 17 SHALL ALSO BE TAKEN AGAINST THE CANDIDATE SCHOOL PURSUANT TO THE 18 PROVISIONS OF SUBPARAGRAPH (III) OF PARAGRAPH B OF SUBDIVISION FOUR OF 19 SECTION FIVE THOUSAND ONE OF THIS ARTICLE. 20 2. Hearing procedures. a. Upon a finding that there is good cause to 21 believe that a CANDIDATE SCHOOL UNDER THE PROVISIONS OF SUBPARAGRAPH 22 (III) OF PARAGRAPH B OF SUBDIVISION FOUR OF SECTION FIVE THOUSAND ONE OF 23 THIS ARTICLE, OR A LICENSED school, or an officer, agent, employee, 24 partner or teacher, has committed a violation of this article, the 25 commissioner shall initiate proceedings by serving a notice of hearing 26 upon each and every such party subject to the administrative action. The 27 school or such party shall be given reasonable notice of hearing, 28 including the time, place, and nature of the hearing and a statement 29 sufficiently particular to give notice of the transactions or occur- 30 rences intended to be proved, the material elements of each cause of 31 action and the civil penalties and/or administrative sanctions sought. 32 b. Opportunity shall be afforded to the party to respond and present 33 evidence and argument on the issues involved in the hearing including 34 the right of cross examination. In a hearing, the school or such party 35 shall be accorded the right to have its representative appear in person 36 or by or with counsel or other representative. Disposition may be made 37 in any hearing by stipulation, agreed settlement, consent order, default 38 or other informal method. 39 c. (1) The commissioner shall designate an impartial hearing officer 40 to conduct the hearing, who shall be empowered to: 41 (A) administer oaths and affirmations; and 42 (B) regulate the course of the hearings, set the time and place for 43 continued hearings, and fix the time for filing of briefs and other 44 documents; and 45 (C) direct the school or such party to appear and confer to consider 46 the simplification of the issues by consent; and 47 (D) grant a request for an adjournment of the hearing only upon good 48 cause shown. 49 (2) The strict legal rules of evidence shall not apply, but the deci- 50 sion shall be supported by substantial evidence in the record. 51 3. Decision after hearing. The hearing officer shall make written 52 findings of fact and conclusions of law, and shall also recommend in 53 writing to the commissioner a final decision including penalties. The 54 hearing officer shall mail a copy of his OR HER findings of fact, 55 conclusions of law and recommended penalty to the party and his or her 56 attorney, or representative. The commissioner shall make the final S. 6006 21 1 decision, which shall be based exclusively on evidence and other materi- 2 als introduced at the hearing. If it is determined that a party has 3 committed a violation, the commissioner shall issue a final order and 4 shall impose penalties in accordance with this section. The commissioner 5 shall send by certified mail, return receipt requested, a copy of the 6 final order to the party and his or her attorney, or representative. The 7 commissioner shall, at the request of the school or such party, furnish 8 a copy of the transcript or any part thereof upon payment of the cost 9 thereof. 10 4. Judicial review. Any order imposed under this section shall be 11 subject to judicial review under article seventy-eight of the civil 12 practice law and rules, but no such determination shall be stayed or 13 enjoined except upon application to the court after notice to the 14 commissioner. 15 5. Enforcement proceedings. The attorney general, in his or her own 16 capacity, or at the request of the commissioner, may bring an appropri- 17 ate action or proceeding in any court of competent jurisdiction to 18 recover a fine or otherwise enforce any provision of this article. 19 6. Civil penalties and administrative sanctions. a. A hearing officer 20 may recommend, and the commissioner may impose, a civil penalty not to 21 exceed [two] THREE thousand five hundred dollars for any violation of 22 this article. In the case of a second or further violation committed 23 within [the previous] five years OF THE PREVIOUS VIOLATION, the liabil- 24 ity shall be a civil penalty not to exceed [five] SEVEN thousand FIVE 25 HUNDRED dollars for each such violation. 26 b. Notwithstanding the provisions of paragraph a of this subdivision, 27 a hearing officer may recommend, and the commissioner may impose a civil 28 penalty not to exceed [fifty] SEVENTY-FIVE thousand dollars OR DOUBLE 29 THE DOCUMENTED AMOUNT FROM WHICH THE SCHOOL BENEFITED, WHICHEVER IS 30 GREATER, for any of the following violations: (1) operation of a school 31 without a license in violation of section five thousand one of this 32 article; (2) operation of a school knowing that the school's license has 33 been suspended or revoked; (3) use of false, misleading, deceptive or 34 fraudulent advertising; (4) employment of recruiters on the basis of a 35 commission, bonus or quota, except as authorized by the commissioner; 36 (5) directing or authorizing recruiters to offer guarantees of jobs upon 37 completion of a course; (6) failure to make a tuition refund when such 38 failure is part of a pattern of misconduct; (7) the offering of a course 39 or program that has not been approved by the commissioner; (8) FAILURE 40 TO OFFER A COURSE OR PROGRAM AS APPROVED BY THE COMMISSIONER; (9) admit- 41 ting students, who subsequently drop out, who were admitted in violation 42 of the admission standards established by the commissioner, where such 43 admissions constitute a pattern of misconduct and where the drop out 44 resulted at least in part from such violation; [(9)] (10) failure to 45 provide the notice of discontinuance and the plan required by subdivi- 46 sion seven of section five thousand one of this article; or [(10)] (11) 47 violation of any other provision of this article, or any rule or regu- 48 lation promulgated pursuant thereto, when such violation constitutes 49 part of a pattern of misconduct which significantly impairs the educa- 50 tional quality of the program or programs being offered by the school. 51 For each enumerated offense, a second or further violation committed 52 within [the previous] five years, shall be subject to a civil penalty 53 not to exceed [seventy-five thousand dollars] ONE AND ONE-HALF TIMES THE 54 AMOUNT OF THE PREVIOUS VIOLATION for each such violation. 55 c. In addition to the penalties authorized in paragraphs a and b of 56 this subdivision, a hearing officer may recommend and the commissioner S. 6006 22 1 may impose any of the following administrative sanctions: (1) a cease 2 and desist order; (2) a mandatory direction; (3) a suspension or revoca- 3 tion of a license; (4) a probation order; or (5) an order of restitu- 4 tion. 5 d. Penalty factors. In the recommendation of any penalty, a hearing 6 officer shall, at a minimum, give due consideration, where applicable, 7 to the good faith of the violator; [the performance of the school with 8 respect to student placement and retention rates, and students' acquisi- 9 tion of skills;] AND the gravity of the violation[; and the harm caused 10 to the student]. 11 e. The commissioner may suspend a license [or registration] upon the 12 failure of a school to pay any fee, fine, penalty, settlement or assess- 13 ment as required by this article unless such failure is determined by 14 the commissioner to be for good cause. 15 f. All civil penalties, fines and settlements received after April 16 first, nineteen hundred ninety shall accrue to the credit of the tuition 17 reimbursement account established pursuant to section ninety-seven-hh of 18 the state finance law. 19 7. Criminal penalties. In addition to any other penalties elsewhere 20 prescribed: 21 a. Any person who knowingly violates any of the provisions of this 22 article shall be guilty of a class B misdemeanor punishable in accord- 23 ance with the penal law. If the conviction is for a second offense 24 committed within five years of the first conviction under this para- 25 graph, such person shall be guilty of a class A misdemeanor punishable 26 in accordance with the penal law. 27 b. Any person who knowingly (1) falsifies or destroys school or other 28 business records relating to the operation of the school with intent to 29 defraud; (2) fails to make a tuition refund as required by section five 30 thousand two of this article with the intent to defraud more than one 31 person; or (3) operates a school without a valid license required by 32 section five thousand one of this article shall be guilty of a class A 33 misdemeanor punishable in accordance with the penal law. 34 c. Any person who, having been convicted within the past five years of 35 failing to make a tuition refund in violation of subparagraph two of 36 paragraph b of this subdivision, knowingly and intentionally engages in 37 a scheme constituting a systematic ongoing course of conduct involving 38 the wrongful withholding of refunds in violation of section five thou- 39 sand two of this article with the intent to defraud ten or more persons, 40 and so withholds tuition refunds in excess of one thousand dollars, 41 shall be guilty of a class E felony punishable in accordance with the 42 penal law. 43 d. Upon a determination that there exist reasonable grounds to believe 44 that a violation of this article has been committed, or that any other 45 crime has been committed in connection with the operation of a school 46 required to be licensed pursuant to this article, the commissioner shall 47 refer such determination, and the information upon which it is based, to 48 the attorney general or to the appropriate district attorney. The attor- 49 ney general or a district attorney may bring an action on his or her own 50 initiative. 51 8. Private right of action. A student injured by a violation of this 52 article may bring an action against the owner or operator of a licensed 53 private CAREER school [or registered business school] for actual damages 54 or one hundred dollars, whichever is greater. A court may, in its 55 discretion, award reasonable attorney's fees to a prevailing plaintiff. S. 6006 23 1 S 5. Subdivisions 3 and 4 of section 5004 of the education law, as 2 amended by chapter 604 of the laws of 1993, are amended and a new subdi- 3 vision 4-a is added to read as follows: 4 3. Exempted from the requirements of this section are persons acting 5 solely for schools which are not required to be licensed or are specif- 6 ically exempted from the licensing [or registration] requirements of 7 this article. Persons who are paid to procure, solicit or enroll 8 students on the premises of schools required to be licensed [or regis- 9 tered] shall not be exempt from the provisions of this section. The 10 certification requirements of this section shall not apply to persons 11 receiving gifts or other non-monetary considerations valued at not more 12 than [twenty-five] SEVENTY-FIVE dollars from a school from which they 13 have graduated or are currently enrolled for each student referred for 14 enrollment at the school. 15 4. Application and renewal application for a private school agent's 16 certificate shall be filed on forms to be prescribed and provided by the 17 commissioner. Said certificate shall be valid for [two] THREE years from 18 the date of issuance. Certificates which have been renewed shall be 19 valid for a period of [two] THREE years from the expiration date of the 20 certificate which has been renewed. Every applicant and renewal appli- 21 cant shall pay to the department a fee of [one] TWO hundred dollars. 22 4-A. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION FOUR OF THIS 23 SECTION, THE SCHOOL DIRECTOR MAY APPLY FOR A PRIVATE SCHOOL AGENT'S 24 CERTIFICATE ON FORMS TO BE PRESCRIBED AND PROVIDED BY THE COMMISSIONER 25 WITHOUT INCURRING THE AGENT APPLICATION FEE. 26 S 6. Section 5006 of the education law, as added by chapter 887 of the 27 laws of 1990, is amended to read as follows: 28 S 5006. Teachout plans. 1. A school may submit a teachout plan to the 29 commissioner for approval pursuant to regulations established by the 30 commissioner. A teachout plan shall consist of a contract between a 31 [registered business or] licensed private CAREER school, with another 32 school, hereinafter called the teachout school, so that in the event 33 that the [registered business or] licensed private CAREER school ceases 34 instruction, the teachout school will provide the necessary instruction 35 specified in a student's original enrollment agreement with the school 36 ceasing instruction. A teachout plan may employ more than one teachout 37 school to provide instruction to students in the school ceasing instruc- 38 tion. Schools under common ownership but having separate licenses [or 39 registrations] may, subject to the approval of the commissioner, enter 40 into teachout agreements. A TEACHOUT PLAN MAY BE CONTRACTED BETWEEN THE 41 COMMISSIONER AND ONE OR MORE TEACHOUT SCHOOLS IN THE EVENT THAT THE 42 CLOSING SCHOOL IS UNABLE OR UNWILLING TO DO SO. 43 2. A teachout plan shall include the following provisions: (a) the 44 teachout school must offer courses of study that are substantially simi- 45 lar to those offered in the school ceasing instruction; 46 (b) teachout schools must be located in the geographic area in which 47 the school ceasing instruction was located UNLESS THE SCHOOL CEASING 48 INSTRUCTION PROVIDED DISTANCE LEARNING OR ON-LINE TRAINING; 49 (c) all provisions for a teachout plan must be included in the enroll- 50 ment agreement signed by the student; and 51 (d) the teachout school shall agree to fulfill the enrollment agree- 52 ment signed by the student at the school ceasing instruction. 53 3. The [registered business or] licensed school shall provide to the 54 teachout school and to the department [immediately upon closure] the 55 following information PRIOR TO CLOSURE: S. 6006 24 1 (a) Copies of the academic and financial records for all students in 2 attendance at the school at the projected time of closure; 3 (b) A listing of all such students presently in attendance including 4 their names, addresses, social security numbers, curriculum that each 5 student is enrolled in and the number of hours the students will have 6 completed at the time of the school closure. 7 4. The department will provide to the teachout school, immediately 8 upon notification of a school closing, a copy of each approved curric- 9 ulum that the closing school is presently offering. 10 5. The commissioner shall require all teachout schools to address the 11 following issues: 12 (a) Integration of students into a curriculum which may be different 13 from the curriculum in which they are currently receiving instruction; 14 (b) Assessments of students' progress so that they may be placed into 15 an appropriate course; 16 (c) Provision of remedial instruction to students who are found to be 17 deficient in one or more course areas upon their initial assessment; 18 (d) Provision by the teachout school to adhere to the required 19 student/teacher ratios and room capacities; and 20 (e) Compliance with statutory and regulatory requirements during the 21 teachout. 22 6. The student shall not be subject to any costs beyond the total 23 costs identified in the original enrollment agreement. 24 7. A student may decline to pursue instruction at the teachout school 25 and may instead seek a refund pursuant to section five thousand seven of 26 this article. 27 S 7. Section 5007 of the education law, as added by chapter 887 of the 28 laws of 1990, the section heading, subdivision 1, and subdivision 10 as 29 amended by chapter 434 of the laws of 1999, paragraph a of subdivision 30 3, paragraphs c and d of subdivision 4, subparagraphs 1 and 3 of para- 31 graph a and paragraph b of subdivision 5, paragraph b of subdivision 9 32 as amended and paragraphs e and f of subdivision 4 as added by chapter 33 604 of the laws of 1993, is amended to read as follows: 34 S 5007. Tuition reimbursement account. 1. Except as otherwise provided 35 in subdivision six of this section, the portion of the annual assessment 36 of schools [registered and] licensed pursuant to section five thousand 37 one of this article as prescribed in subdivision eight of such section 38 and all fines, penalties and settlements received pursuant to this arti- 39 cle shall be transferred upon receipt into the tuition reimbursement 40 account. 41 3. a. The commissioner shall develop a complaint form and provide such 42 form to students. In order to claim a refund, a student shall apply to 43 the fund with a complaint form pursuant to the requirements of section 44 five thousand three of this article. Except as otherwise provided in 45 this article, the commissioner shall compute the refund, if any, using 46 the refund formula established by subdivision three of section five 47 thousand two of this article. 48 b. Claimants who had been enrolled in schools which have not closed or 49 ceased operation shall be required to show in a manner determined by the 50 commissioner that: 51 (1) the student is eligible for a refund; 52 (2) the student has made a request to the school for a refund; and 53 (3) the school has failed to make the refund within the time period 54 required by this article. 55 c. The commissioner shall act on each refund request within [thirty] 56 FORTY-FIVE business days of such request. S. 6006 25 1 4. Students may be eligible for refunds under this section as follows: 2 a. A student who is offered a teachout plan for the curriculum in 3 which the student was enrolled at the time the school closed or ceased 4 operation, which has been approved by the department, may elect to 5 continue instruction pursuant to the teachout plan or may decline to 6 continue instruction and may instead apply for a full refund OF ALL 7 TUITION, FEES AND BOOK CHARGES PAID FOR BY OR ON BEHALF OF THE STUDENT 8 IN CASH OR IN LOANS, EXCLUDING FUNDING PROVIDED BY ANY GOVERNMENT AGEN- 9 CIES under this section. The option to apply for a refund shall extend 10 to the end of the first week of instruction at the teachout school. 11 b. A student who was enrolled in a school which has not closed or 12 ceased operation is entitled to a refund computed in accordance with the 13 refund policy established by subdivision three of section five thousand 14 two of this article. 15 c. A student who was enrolled in a school at the time the school clos- 16 es or ceases operation is entitled to a refund of the full amount of 17 prepaid tuition. In addition, commencing September first, nineteen 18 hundred ninety-three, a student who drops out of a school, where such 19 school closes within [fourteen] THIRTY days of the student's termination 20 and prior to completion of such student's program as specified in the 21 enrollment agreement, shall be entitled to a FULL refund of [the full 22 amount of prepaid tuition] ALL TUITION, FEES AND BOOK CHARGES PAID FOR 23 BY OR ON BEHALF OF THE STUDENT IN CASH OR IN LOANS, EXCLUDING FUNDING 24 PROVIDED BY ANY GOVERNMENT AGENCIES. 25 d. A student who was enrolled in a school which has not closed or 26 ceased operation, and who has dropped out, is entitled to a full refund 27 of all tuition, fees and other required costs paid by the student if the 28 student has submitted a complaint form to the commissioner and the 29 commissioner has determined that a violation of this article has 30 occurred which warrants a refund. The commissioner shall promulgate 31 regulations identifying those violations that warrant a refund. 32 e. Commencing September first, nineteen hundred ninety-three, a 33 student who drops out of a school, which subsequently closes, and who is 34 owed a refund for the failure of such school to follow the provisions 35 enumerated in subdivision three of section five thousand two of this 36 article shall be eligible for a refund from the tuition reimbursement 37 fund according to the provisions of subdivision three of section five 38 thousand two of this article. 39 f. Commencing September first, nineteen hundred ninety-three, any 40 student enrolled in a school based upon an ability to benefit examina- 41 tion shall be eligible for a full refund, regardless of whether the 42 student is currently enrolled, graduated or dropped out, if the school 43 enrolled the student contrary to the provisions of the approved entrance 44 requirements and the student complies with the requirements of subdivi- 45 sion one of section five thousand three of this article. 46 5. a. For a student who had been enrolled in a school that has not 47 closed or ceased operation, the refund shall be paid as follows: 48 (1) guaranteed student loans, if any, in which case the commissioner 49 shall notify the student of such payment and shall be paid directly to 50 the lender or guarantee agency where appropriate; 51 (2) actual personal tuition expenditures, if any; and 52 (3) tuition assistance program awards and other governmental aid. 53 b. For schools that have closed or ceased operation, the commissioner 54 shall refund actual personal tuition, FEES AND BOOK expenditures to the 55 student. The repayment of any loans incurred by the student as part of S. 6006 26 1 the actual personal tuition, FEES AND BOOK expenditures shall be paid 2 directly to the lender or the guarantee agency where appropriate. 3 6. a. Where a claim is paid to a student of an operating school, the 4 commissioner shall immediately notify the school. 5 b. Within ten days of the receipt of the notice, the school shall 6 either request a hearing to challenge the commissioner's determination 7 that a refund was owed to the student or reimburse the fund the amount 8 paid to the claimant plus a penalty up to two times such amount. This 9 payment shall also incur interest for each day it remains unpaid at an 10 annual interest rate of one percent above the prime rate. The commis- 11 sioner may promulgate streamlined procedures for conducting hearings 12 pursuant to this paragraph. Any penalty assessed under this paragraph 13 shall be in addition to any other penalties assessed pursuant to this 14 article. Notwithstanding any other provision of law, penalties and 15 interest paid pursuant to this paragraph shall accrue to the credit of 16 the proprietary vocational school supervision account to support the 17 costs associated with the hearings authorized in this subdivision. 18 7. Notwithstanding the notice procedures described in subdivision 19 three of this section, in the event of a school closing, the commission- 20 er on his or her own initiative may take appropriate action in accord- 21 ance with this section to process refund claims on behalf of all of the 22 students of the closed school. 23 8. Assignment of rights. Persons and entities receiving refunds under 24 this section shall be deemed to have assigned or subrogated their 25 tuition reimbursement rights to the commissioner on behalf of the 26 tuition reimbursement fund only for the amount refunded by the tuition 27 reimbursement fund. Within [thirty] NINETY days of any refund made 28 pursuant to this section, the commissioner or the attorney general shall 29 take appropriate action to recover the total amount of the refunds made, 30 plus administrative costs, from the school. 31 9. a. A student whose loan liability is exempted pursuant to section 32 six hundred eighty-three of this chapter and is entitled to or owed a 33 refund shall transfer to the higher education services corporation the 34 right to claim the refund owed and due from the tuition reimbursement 35 fund. In such event, the corporation shall be entitled to receive a 36 refund for that portion of the claim not paid to the corporation by the 37 United States Secretary of Education pursuant to the federal guaranteed 38 loan program. 39 b. Any amounts remaining in the tuition reimbursement fund as of June 40 first, nineteen hundred ninety-three and on every March thirty-first 41 thereafter, shall be made available to the higher education services 42 corporation for payment of student loans on which collection activity 43 has ceased pursuant to the provisions of subdivision six of section six 44 hundred eighty-three of this chapter. No amounts shall be paid to the 45 higher education services corporation for loans on which collection 46 activity has ceased because of the operation of section 437 of the High- 47 er Education Act of 1965, as amended. 48 10. Management of the tuition reimbursement account. a. As used in 49 this subdivision, net balance is defined as the actual cash balance of 50 the account as determined by the commissioner on June thirtieth, nine- 51 teen hundred ninety-three and every three months thereafter. For the 52 purpose of calculating the net balance, the commissioner shall not take 53 into consideration any refunds made from the account pursuant to para- 54 graphs d and f of subdivision four of this section for the year imme- 55 diately preceding the date on which the calculation is made. S. 6006 27 1 b. In the event that the account has accumulated a net balance in 2 excess of one million eight hundred thousand dollars, the commissioner 3 shall, with the approval of the director of the budget, waive an amount 4 not to exceed the amount due for the next quarterly assessment pursuant 5 to this section and subdivision nine of section five thousand one of 6 this article FOR SCHOOLS WHICH HAVE PAID SIXTEEN QUARTERS OR MORE OF 7 ASSESSMENTS ONLY. In such event, payment of future quarterly assess- 8 ments shall be suspended FOR SCHOOLS WHICH HAVE PAID SIXTEEN QUARTERS OR 9 MORE OF ASSESSMENTS until the net balance of the account falls below one 10 million three hundred thousand dollars. 11 c. In the event the net balance of the account falls below one million 12 three hundred thousand dollars, if the quarterly assessment has been 13 suspended FOR SCHOOLS WHICH HAVE PAID SIXTEEN QUARTERS OR MORE OF 14 ASSESSMENTS pursuant to paragraph b of this subdivision, it shall be 15 reinstated for the next quarterly assessment and all subsequent quarter- 16 ly assessments until the account has accumulated a net balance in excess 17 of one million eight hundred thousand dollars. 18 d. [Notwithstanding the provisions of paragraph b of this subdivision, 19 in the event that the balance of the account is in excess of one million 20 three hundred thousand dollars, all schools licensed after June thirti- 21 eth, nineteen hundred ninety-nine shall be required to pay into the 22 account the equivalence of three years of annual assessments over a five 23 year period. 24 e. Notwithstanding the provisions of paragraph b of this subdivision 25 all schools licensed after June thirtieth, nineteen hundred ninety-three 26 and before July first, nineteen hundred ninety-nine will be required to 27 pay into the account the equivalence of three years of annual assess- 28 ments within four years of the effective date of this paragraph. This 29 amount to be assessed shall be determined based upon the school's gross 30 tuition in its first three years of licensure. 31 g. In the event that the balance of the tuition reimbursement account 32 is equal to or in excess of one million five hundred thousand dollars, 33 the amounts assessed the schools in accordance with the provisions of 34 paragraphs d and e of this subdivision shall be deposited directly to 35 the proprietary vocational school supervision account] IN THE EVENT THE 36 ACCOUNT HAS ACCUMULATED A NET BALANCE IN EXCESS OF TWO MILLION DOLLARS, 37 ANY FUNDS IN THE TUITION REIMBURSEMENT FUND IN EXCESS OF TWO MILLION 38 DOLLARS SHALL BE TRANSFERRED TO THE PROPRIETARY SCHOOL SUPERVISION 39 ACCOUNT. 40 E. THE COMMISSIONER MAY ANNUALLY APPORTION FROM THE ACCOUNT AN AMOUNT 41 UP TO TWO HUNDRED THOUSAND DOLLARS FOR THE PURPOSE OF SECURING, SCANNING 42 AND OTHERWISE MAKING STUDENT RECORDS FROM CLOSED SCHOOLS AVAILABLE TO 43 STUDENTS WHO ATTENDED SUCH SCHOOLS. PROVIDED, HOWEVER, THAT IN NO CASE 44 SHALL SUCH APPORTIONMENT CAUSE THE ACCOUNT TO FALL BELOW THE BALANCE SET 45 FORTH IN PARAGRAPH C OF THIS SUBDIVISION, NOR SHALL SUCH APPORTIONMENT 46 CAUSE SCHOOLS WHOSE QUARTERLY ASSESSMENTS HAVE BEEN SUSPENDED TO PAY 47 ADDITIONAL QUARTERLY ASSESSMENTS. 48 11. Fund audit. The state comptroller shall [annually] audit or cause 49 to be audited the tuition reimbursement fund ONCE EVERY TWO YEARS and 50 produce an [annual] AUDITED financial statement according to generally 51 accepted accounting principles. 52 12. New schools. Within the first [six months] YEAR that a school 53 begins LICENSED operation, the commissioner shall assess such school an 54 amount to be deposited into the fund in an amount to be determined by 55 the commissioner. S. 6006 28 1 S 8. Section 5008 of the education law, as added by chapter 887 of the 2 laws of 1990, is amended to read as follows: 3 S 5008. Trust accounts. 1. If the commissioner determines that a 4 school has demonstrated a pattern or practice of failing to make tuition 5 refunds in a timely manner consistent with this article AND/OR THE 6 SCHOOL'S FINANCIAL CONDITION MAY RESULT IN THE INTERRUPTION OR CESSATION 7 OF INSTRUCTION OR JEOPARDIZE STUDENT TUITION FUNDS, the commissioner 8 shall require a school to establish a trust account in a form or manner 9 which the commissioner[, after consultation with the advisory council,] 10 shall [prescribe in regulations] DETERMINE TO BE APPROPRIATE. The assets 11 or funds contained in the trust account shall be maintained for the sole 12 and exclusive benefit of the students. 13 2. In making this determination, the commissioner shall consider the 14 following factors: the number of refunds not paid by the school in a 15 timely manner; the number of claims made to, or paid by, the tuition 16 reimbursement [fund] ACCOUNT; [and] a pattern of misconduct which 17 substantially affects the financial interests of students or the state, 18 POTENTIAL LIABILITY TO THE TUITION REIMBURSEMENT ACCOUNT, CURRENT ASSETS 19 AS OPPOSED TO CURRENT LIABILITIES, AND SUCH OTHER MEASURES AS MAY BE 20 APPROPRIATE. 21 S 9. Section 5009 of the education law, as amended by chapter 434 of 22 the laws of 1999, is amended to read as follows: 23 S 5009. Duties of the commissioner. In addition to all other duties 24 assigned in this article, the duties of the commissioner shall include, 25 but not be limited to: 26 [(a) submitting a report to the governor, the temporary president of 27 the senate, the speaker of the assembly, the minority leader of the 28 senate and the minority leader of the assembly beginning the fifteenth 29 day of January after this section shall have become effective, and annu- 30 ally thereafter on that date, on the implementation and enforcement of 31 this article, which shall include but not be limited to (i) curriculum 32 approval and reapproval standards, (ii) student complaints, (iii) the 33 resolution of disciplinary actions brought by the department or other 34 appropriate state agency, (iv) the audited financial statements submit- 35 ted by the schools, (v) tuition reimbursement account activity, (vi) 36 data regarding retention and completion rates for students enrolled in 37 nondegree, appropriate degree or certificate programs of two years or 38 less at registered business schools, licensed private schools, proprie- 39 tary degree-granting schools and independent and public colleges, (vii) 40 the extent to which the department has met the timelines mandated by 41 this article, (viii) entrance standards, (ix) the number of schools 42 inspected annually, and (x) the number of trust accounts imposed. 43 (b)] 1. ensuring that up-to-date, accurate information is available to 44 the public, via the internet and other appropriate media, regarding 45 every duly licensed proprietary school in this state, as well as disci- 46 plinary actions decided by the state. 47 [(c)] 2. developing and issuing to duly licensed [and registered] 48 proprietary schools a symbol to indicate such status; provided that such 49 symbol shall be developed and made available to such schools no later 50 than September thirtieth, nineteen hundred ninety-nine. 51 [(d)] 3. administering a public information campaign aimed at increas- 52 ing awareness about the importance of attending licensed [or registered] 53 proprietary vocational schools. Such campaign shall be targeted to popu- 54 lations at risk of enrolling in unlicensed [or unregistered] schools, 55 and shall be conducted using means including, but not limited to, public S. 6006 29 1 service announcements on commercial radio and television stations, 2 public access television, and print media. 3 [(e)] 4. providing for the orderly maintenance of any student records 4 which may be transferred to the department pursuant to any school's plan 5 developed pursuant to subdivision eight of section five thousand one of 6 this article; including responding to student requests for transcripts 7 and records within twenty days of receiving a request. The commissioner 8 is hereby authorized to impose an appropriate fee for such transcripts 9 pursuant to a schedule approved by the director of the budget. 10 S 10. Section 5010 of the education law, as added by chapter 887 of 11 the laws of 1990, subdivision 1 as amended and subdivision 4 as added by 12 chapter 604 of the laws of 1993 and subdivision 5 as added by chapter 13 434 of the laws of 1999, is amended to read as follows: 14 S 5010. Advisory council. 1. An advisory council for [registered busi- 15 ness and] licensed [trade] PRIVATE CAREER schools is hereby created for 16 the purpose of advising the board of regents and the commissioner as 17 provided herein. The council shall be composed of eleven members 18 appointed by the governor, two of whom shall be upon the recommendation 19 of the temporary president of the senate, two of whom shall be upon the 20 recommendation of the speaker of the assembly, one of whom shall be upon 21 the recommendation of the minority leader of the senate and one of whom 22 shall be upon the recommendation of the minority leader of the assembly. 23 Of the five remaining members, one shall be an owner or director of a 24 school regulated pursuant to this article, [one shall be a currently 25 enrolled student at the time of appointment or a graduate of such a 26 school who graduated within three years of appointment] and one shall be 27 a student advocate. The governor shall designate a chairperson from such 28 members. The commissioner [of education], the president of the higher 29 education services corporation, the chair of the consumer protection 30 board, the comptroller, the director of the division of the budget, and 31 the executive director of the job training partnership council, or their 32 designees, shall serve as ex-officio, non-voting members of the council. 33 2. The council shall meet no less than four times a year. Members of 34 the council shall receive no compensation for their services but shall 35 be reimbursed for reasonable expenses actually and necessarily incurred 36 by them in the performance of their duties. COUNCIL MEMBER TERMS OF 37 OFFICE SHALL BE LIMITED TO THREE YEARS, PROVIDED THAT MEMBERS MAY BE 38 REAPPOINTED. ALL APPOINTMENTS TO THE COUNCIL TO FILL VACANCIES IN EXIST- 39 ENCE ON THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND 40 NINE WHICH AMENDED THIS SUBDIVISION SHALL BE MADE WITHIN NINETY DAYS OF 41 SUCH EFFECTIVE DATE. 42 3. The council shall advise the commissioner on [the following] SUCH 43 matters[: 44 (a) trust accounts; 45 (b) performance standards; 46 (c) the effectiveness and utilization of the tuition reimbursement 47 fund; 48 (d) the efficacy of instituting a fee-for-service system; 49 (e) the effectivesness of the timelines mandated by this article; 50 (f) the impact of assessments on schools; 51 (g) recruitment bonuses; and 52 (h) such other matters] as the council determines are appropriate. 53 [4. The proprietary school advisory council shall conduct a study 54 concerning the methodologies used to determine student refunds. Such 55 study shall include, but not be limited to, refund policies promulgated 56 pursuant to federal statute or regulation, state statute or regulation S. 6006 30 1 and the policies of national accrediting organizations as they relate to 2 term-based and clock hour-based programs. Not later than July first, 3 nineteen hundred ninety-four, the advisory council shall make recommen- 4 dations to the commissioner and the board of regents for any changes in 5 legislation, regulations, policy or practice needed to improve and 6 simplify the student refund process. The commissioner shall submit a 7 report of the findings of the advisory council together with the recom- 8 mendations of the department to the legislature and the governor not 9 later than the first day of October, nineteen hundred ninety-four. 10 5. The advisory council shall report to the governor, the temporary 11 president of the senate, the speaker of the assembly, and the commis- 12 sioner on the status of unlicensed proprietary schools in this state. 13 The report shall also contain a statement on the effectiveness of the 14 change in the tuition reimbursement fund and any recommendations for an 15 extension of the changes or the consideration of different changes when 16 such changes are repealed. Such report is to be delivered on April 17 first, two thousand two.] 18 S 11. This act shall take effect on the one hundred twentieth day 19 after it shall have become a law; provided that subparagraph (iii) of 20 paragraph b of subdivision 4 of section 5001 of the education law, as 21 added by section two of this act, shall expire and be deemed repealed 22 three years after the effective date of section two of this act; 23 provided, further, that effective immediately, the commissioner of 24 education is authorized and directed to promulgate any regulations need- 25 ed to implement the provisions of this act on such effective date; and 26 provided, however, that the amendments to paragraph g of subdivision 10 27 of section 5007 of the education law made by section seven of this act 28 shall not affect the expiration of such paragraph and shall be deemed 29 repealed therewith.