Senate Bill S6006

                            
                    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:

  Section  1. The article heading of article 101 of the education law is
amended to read as follows:
                               ARTICLE 101

                         LICENSED PRIVATE [TRADE
                           AND CORRESPONDENCE]
                                 CAREER
                                 SCHOOLS
  S 2. Section 5001 of the education law, as added by chapter 817 of the
laws of 1972, the section heading, subdivision 1, paragraph h of  subdi-
vision  2  and paragraph b of subdivision 4 as amended and paragraphs i,
j, k, l and m of subdivision 2 and subdivisions 2-a and 2-b as added  by
chapter 434 of the laws of 1999, paragraph b of subdivision 2 as amended
by  chapter 887 of the laws of 1990 and subdivisions 5, 6, 7, 8 and 9 as
added by chapter 887 of the laws of 1990 and renumbered by  chapter  604
of  the  laws of 1993, paragraph d of subdivision 2 and subdivision 4 as
amended and paragraphs a, b, c and d of subdivision 9 as added by  chap-
ter  604  of the laws of 1993 and paragraphs e and f of subdivision 2 as
amended by chapter 439 of the laws  of  1980,  is  amended  to  read  as
follows:
  S 5001. Licensed  private  CAREER  schools  [and  registered  business
schools/computer training  facilities].    1.  Schools  required  to  be
licensed  [or  registered].    No  private  school [or computer training
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

which is not exempted hereunder shall  be  operated  by  any  person  or
persons,  firm,  corporation, or private organization for the purpose of
teaching or giving instruction in any subject or subjects, unless it  is
licensed [or registered] by the department. As used in this article, the
following terms shall have the following meanings:
  a.  ["Licensed]  "LICENSED private CAREER school" OR "LICENSED PRIVATE
SCHOOL" shall mean any entity offering to instruct or teach any  subject
by any plan or method including written, visual or audio-visual methods,
AND SHALL INCLUDE ANY INSTITUTION LICENSED OR REGISTERED AS A REGISTERED
BUSINESS  SCHOOL  OR COMPUTER TRAINING FACILITY ON THE EFFECTIVE DATE OF
THE CHAPTER OF THE LAWS OF TWO THOUSAND NINE WHICH AMENDED THIS SUBDIVI-
SION.   FOLLOWING SUCH EFFECTIVE DATE, THERE  SHALL  BE  NO  DISTINCTION
BETWEEN INSTITUTIONS PREVIOUSLY DEFINED AS "REGISTERED BUSINESS SCHOOLS"
OR  "COMPUTER  TRAINING  FACILITIES" AND OTHER LICENSED PRIVATE SCHOOLS,
AND ANY REFERENCE IN LAW TO A REGISTERED  BUSINESS  SCHOOL  OR  COMPUTER
TRAINING  FACILITY  SHALL  BE  DEEMED  A REFERENCE TO A LICENSED PRIVATE
CAREER SCHOOL. INSTITUTIONS HOLDING A VALID BUSINESS SCHOOL REGISTRATION
ON SUCH EFFECTIVE DATE, INCLUDING  COMPUTER-TRAINING  FACILITIES,  SHALL
HAVE  SUCH  REGISTRATIONS REPLACED BY THE COMMISSIONER, AT NO COST, WITH
LICENSES VALID UNTIL THE EXPIRATION DATE LISTED ON SUCH PREVIOUS  REGIS-
TRATION.
  b.  ["Registered  business  school"  shall  mean  a  school in which a
curriculum primarily provides a sequence of  courses  that  may  include
accounting or bookkeeping, marketing, business arithmetic, business law,
business     English,     shorthand,     typing,    computer    business
applications/programming, or substantially all  said  courses,  for  the
purpose  of  preparing  an  individual  to pursue a business occupation;
provided, however, that a registered business school program may include
instruction in English as a second language  at  a  beginning  or  basic
level,  provided  such  instruction shall not constitute more than fifty
percent of such program. Such authorization shall apply to all  students
who  commence  instruction in a registered business school program prior
to July first, nineteen hundred ninety-one. A business school registered
under this section shall employ only teachers licensed  by  the  depart-
ment,   whose  qualifications  are  substantially  equivalent  to  those
required of teachers of equivalent subjects in public secondary schools.
  c. "Computer  training  facility"  shall  mean  any  entity  primarily
engaged  in  providing training on the use, language, programs, applica-
tion, networking and technical repair of computers.] "CERTIFIED  ENGLISH
AS  A  SECOND  LANGUAGE  SCHOOL"  OR "CERTIFIED ESL SCHOOL" SHALL MEAN A
LANGUAGE SCHOOL  CONDUCTED  FOR-PROFIT  WHICH  PROVIDES  INSTRUCTION  IN
ENGLISH  AS  A  SECOND LANGUAGE AND WHICH ACCEPTS NO PUBLIC FUNDS AND IS
CERTIFIED PURSUANT TO PARAGRAPH F OF SUBDIVISION FOUR OF THIS SECTION.
  2. Exempt schools. The following schools are exempted from the licens-
ing requirement of this section:
  a. institutions authorized to confer degrees in this state;
  b. schools[, other than correspondence schools,] providing  kindergar-
ten,   nursery,   elementary  or  secondary  education,  except  schools
conducted for profit which provide instruction in English  as  a  second
language  or  preparation  for  high  school equivalency examinations to
out-of-school youth or adults;
  c. schools operated by governmental agencies or authorities;
  d. schools which engage exclusively in training of students with disa-
bilities as defined in section forty-four hundred one of this chapter;
  e. schools conducted on a not-for-profit basis by firms  or  organiza-
tions  for  the training of their own employees only, provided that such

S. 6006                             3

instruction is offered at no charge to such employees, or by a fraternal
society or benevolent order for its members or their immediate relatives
only;
  f.  schools  which provide instruction in the following subjects only:
religion, dancing, music, painting, drawing, sculpture, poetry, dramatic
art,  languages,  reading  comprehension,  mathematics,  recreation  and
athletics;
  g.  schools in which the course of instruction is licensed, registered
or approved under any other section of this  chapter  or  by  any  other
department or agency of the state;
  h. schools which provide instruction designed solely for giving flight
training and/or related ground school instruction;
  i.  schools in which instruction designed solely to prepare applicants
for admission to professional licensing examinations administered by the
department pursuant to title eight of this chapter, and  applicants  for
examination for admission to the practice of law;
  j.  schools  which  offer continuing education courses exclusively for
individuals licensed by the department pursuant to title eight  of  this
chapter and for individuals admitted to the practice of law;
  k. schools which provide instruction given exclusively to employees of
a  person  or  organization  which has contracted with another person or
organization to provide such instruction at no cost to the employees;
  l. conferences, trade shows, workshops, seminars, institutes or cours-
es of study offered and sponsored  either  jointly  or  individually  by
recognized trade, business or professional organizations for the benefit
of their membership; [or those offered to the general public by individ-
uals, firms or organizations which neither conduct such activities for a
duration  of  more  than  five consecutive days nor more frequently than
twice in any one calendar year;]
  m.  SCHOOLS THAT LIMIT THEIR TOTAL  CONFERENCES,  TRADE  SHOWS,  WORK-
SHOPS,  SEMINARS,  INSTITUTES  OR OTHER COURSE OFFERINGS TO NO MORE THAN
TWICE IN ONE CALENDAR YEAR WITH EACH OF THOSE OFFERINGS FOR NO MORE THAN
FIVE DAYS;
  N. schools which provide instruction exclusively to  persons  employed
full-time  or  part-time  in  the  field  in  which instruction is being
offered, where the instruction is provided to meet continuing  education
standards  required for professional licensure as defined by law in this
state; AND
  O. SCHOOLS IN CANDIDACY STATUS PURSUANT TO SUBPARAGRAPH (III) OF PARA-
GRAPH B OF SUBDIVISION FOUR OF THIS SECTION.
  2-a. Schools exempted pursuant to subdivision two of this section  may
waive  such  exemption  and  apply  for  a  license  [or  registration];
provided, however, that the review of such applications shall be left to
the discretion of the commissioner.
  2-b. Programs offered by licensed private CAREER  schools  [or  regis-
tered  business  schools to private businesses where there is no tuition
liability] TO EMPLOYEES OF A PERSON OR ORGANIZATION WHICH HAS CONTRACTED
WITH ANOTHER PERSON OR ORGANIZATION TO PROVIDE SUCH  INSTRUCTION  AT  NO
COST  to  the  employees  shall  be exempt from the requirements of this
article, provided that the following requirements are met:
  a. Only employees of the [private business]  EMPLOYER  for  which  the
program is being offered may enroll in classes that make up the program.
  b. Certificates or diplomas awarded to students in the program may not
reference in any way the department.
  c. Prior to the commencement of the program, such schools shall submit
to  the  department  a  disclosure form, prescribed by the commissioner,

S. 6006                             4

copies of which shall  be  provided  to  all  students  in  such  exempt
program,  which shall include but not be limited to the following infor-
mation:
  (i) a description of the location and time period in which the program
will be offered;
  (ii)  a  statement that the students enrolled in the program shall not
be subject to any tuition  liability  for  the  program,  even  if  such
students do not complete the program;
  (iii)  a  statement  that  the  program being provided to the [private
business] EMPLOYER has not been approved by the department  and  is  not
under the department's jurisdiction and that the students in the program
have been advised of the fact; and
  (iv)  the signatures of the school director or owner of the school and
the representative of the [private  business]  EMPLOYER  for  which  the
program  is  being  offered certifying the accuracy of the statements on
the form.
  d. Any additional student openings in a program deemed exempt  by  the
department  may  be  made  available to students not affiliated with the
[private business] EMPLOYER on the condition that such students  execute
a disclosure form as prescribed in paragraph c of this subdivision. Such
admitted  students shall only constitute up to ten percent of the exempt
program's total capacity.
  4. Application, renewal application and application fees. a.  Applica-
tion  and  renewal  application for a license as a private CAREER school
[or registration as a business  school]  required  by  the  commissioner
shall  be  filed  on  forms  prescribed  and provided by the department.
Except as provided in subparagraph (iii) of paragraph e of this subdivi-
sion, each renewal application for [a private business school registered
pursuant to this section or for] a private CAREER school licensed pursu-
ant to this section shall include an audited financial statement audited
according to generally accepted auditing  standards  by  an  independent
certified  public  accountant  or  an  independent public accountant and
statistical reports certified by the owner or operator of the school, as
required by the commissioner; provided, however, that  the  commissioner
shall accept a copy of a current financial statement previously filed by
a  school  with  any  other  governmental  agency in compliance with the
provisions of any federal or state laws, or rules or regulations if such
statement contains all of the information required under  this  subdivi-
sion and conforms to this subdivision's requirements of auditing, review
and  certification.  Any required audit of the financial statement shall
be a condition of licensure [or registration] and shall be paid  for  by
the  school,  and  the  results  of  the audit shall be forwarded to the
commissioner. Applications not accompanied by  the  audits  and  reports
required  pursuant  to  this  subdivision  shall  not  be considered for
approval by the commissioner. Initial applications shall be  accompanied
by  financial reports as required by the commissioner. [The commissioner
shall act on an initial application for a license or registration within
one hundred twenty days of  receipt  of  a  complete  application.]  The
applicant  shall  receive a written approval or denial together with the
reasons for a denial of such application.
  b. (i) An initial license [or registration]  issued  pursuant  to  the
provisions  of  this article shall be valid for a period of two years. A
renewal of license [or registration] issued pursuant to  the  provisions
of  this article shall be valid for a period of four years. [All license
and registration fees for a renewal shall be double the  amounts  listed
in paragraph g of this subdivision.]

S. 6006                             5

  (ii)  Each  school shall display, near the entrance to the school [and
under glass], the license [or registration] which has been issued to it.
Such authorization shall be displayed only  during  the  period  of  its
validity.
  (III)  A  SCHOOL WHICH HAS APPLIED FOR A PRIVATE CAREER SCHOOL LICENSE
MAY REQUEST CANDIDACY STATUS FOR ONE TIME ONLY.  CANDIDACY  STATUS  WILL
NOT  BE  ISSUED  TO  SCHOOLS OFFERING PROGRAMS TO TRAIN STUDENTS TO PASS
LICENSURE EXAMINATIONS SUCH AS  APPEARANCE  ENHANCEMENT  TESTS,  ACHIEVE
NURSE  AIDE OR NURSE ASSISTANT CERTIFICATION, OR PASS EXAMINATIONS LEAD-
ING TO LICENSURE IN ANY OTHER PROFESSION OR OCCUPATION DETERMINED BY THE
COMMISSIONER TO REQUIRE FULL LICENSURE STATUS.  CANDIDACY  STATUS  SHALL
ALLOW  A  SCHOOL  TO  OPERATE UNLICENSED FOR AN INITIAL PERIOD OF TWELVE
MONTHS DURING THE LICENSURE APPLICATION PROCESS, WHICH MAY  BE  EXTENDED
TO A MAXIMUM, NON-RENEWABLE PERIOD OF EIGHTEEN MONTHS, UNDER THE FOLLOW-
ING CONDITIONS:
  (1) THE PROSPECTIVE SCHOOL SUBMITS A CANDIDATE SCHOOL APPLICATION FEE,
SEPARATE FROM THE SCHOOL APPLICATION FEE, OF FIVE THOUSAND DOLLARS WHICH
SHALL  ACCRUE  TO THE CREDIT OF THE PROPRIETARY VOCATIONAL SCHOOL SUPER-
VISION ACCOUNT;
  (2) THE SCHOOL MAY IN NO WAY REPRESENT THAT IT IS LICENSED OR THAT ITS
PROGRAMS ARE APPROVED THROUGH THE DEPARTMENT;
  (3) TO EVERY PROSPECTIVE STUDENT, THE SCHOOL MUST DISSEMINATE A STATE-
MENT, PROVIDED BY THE DEPARTMENT, THAT THE FACILITIES, INSTRUCTORS,  AND
PROGRAMS  BEING  PROVIDED  HAVE  NOT BEEN APPROVED AND ARE NOT UNDER THE
DEPARTMENT'S JURISDICTION DURING THE CANDIDACY  PERIOD.  SUCH  STATEMENT
SHALL  INDICATE  THAT  STUDENTS ATTENDING CANDIDATE SCHOOLS WILL HAVE NO
RECOURSE THROUGH THE DEPARTMENT'S STUDENT COMPLAINT PROCESS NOR HAVE ANY
RESTITUTION AVAILABLE FROM THE TUITION REIMBURSEMENT  ACCOUNT.  STUDENTS
MUST  SIGN  AN  ATTESTATION TO THE RECEIPT OF THIS STATEMENT. THE SCHOOL
MUST RETAIN THE SIGNED ATTESTATION AND PROVIDE THE STUDENT WITH  A  COPY
OF THAT SIGNED STATEMENT;
  (4)  THE  SCHOOL  MUST  DEMONSTRATE  FINANCIAL VIABILITY THROUGH MEANS
DEEMED APPROPRIATE BY THE COMMISSIONER. SUCH MEANS MAY  INCLUDE  SUBMIT-
TING AN AUDITED FINANCIAL STATEMENT BASED ON THE MOST RECENTLY COMPLETED
FISCAL YEAR; SECURING AND MAINTAINING A PERFORMANCE BOND, PAYABLE TO THE
COMMISSIONER, IN AN AMOUNT APPROPRIATE TO ELIMINATE ANY LIABILITY TO THE
TUITION  REIMBURSEMENT ACCOUNT IN THE EVENT THE SCHOOL CEASES OPERATION;
LIMITING THE COLLECTION OF TUITION FUNDS UNTIL  EACH  STUDENT  COMPLETES
THE PROGRAM OF STUDY; OR OTHER MEANS ACCEPTABLE TO THE COMMISSIONER; AND
  (5)  ANY BREACH OF THE ABOVE CONDITIONS WILL RESULT IN THE DISAPPROVAL
OF THE SCHOOL'S LICENSURE APPLICATION AND THE  FORFEITURE  OF  CANDIDATE
STATUS.  CONTINUED  OPERATION  AFTER  THIS  DISAPPROVAL WILL SUBJECT THE
SCHOOL TO THE DISCIPLINARY ACTION PRESCRIBED UNDER PARAGRAPH B OF SUBDI-
VISION SIX OF SECTION FIVE THOUSAND THREE OF THIS ARTICLE.
  (6) ON OR BEFORE THE END OF THE INITIAL TWELVE-MONTH PERIOD OF  CANDI-
DACY  STATUS, THE COMMISSIONER SHALL REVIEW THE SCHOOL'S APPLICATION FOR
LICENSURE AND DOCUMENTATION RELATING TO THE  SCHOOL'S  CANDIDACY  STATUS
AND  DETERMINE  WHETHER  SUCH CANDIDACY STATUS SHOULD BE EXTENDED TO THE
FULL EIGHTEEN MONTHS AND WHETHER  THE  SCHOOL  MAY  CONTINUE  TO  ENROLL
STUDENTS  BEYOND  THE  EIGHTEEN-MONTH PERIOD OR THE SCHOOL'S APPLICATION
FOR LICENSURE WILL BE INITIALLY DISAPPROVED FOR FAILURE TO MEET REQUIRED
STANDARDS.
  c. An application for renewal of any license [or  registration]  shall
be  submitted  at  least one hundred twenty days prior to the expiration
date of the current authorization to operate accompanied by  the  nonre-

S. 6006                             6

fundable  application  fee  and  such  certified statistical reports and
annual financial statements required pursuant to this subdivision.
  d.  When  complete and timely application has been made for renewal of
any license [or  registration],  the  school  shall  receive  a  written
approval  or  denial,  together  with the reasons for denial of renewal,
from the commissioner no less than thirty days prior to  the  date  such
license [or registration] expires.
  e.  Financial statements and statistical reports. (i) Licensed private
CAREER schools and [registered business] CANDIDATE schools shall  submit
such  certified  statistical  reports and annual financial statements as
required by the  commissioner.  The  commissioner  may  require  audited
statistical  reports  upon  a  determination  that a school has provided
false or inaccurate certified statistical reports. The financial  state-
ments  shall  be  based  on the fiscal year of the school and shall also
include an itemized account of tuition refunds due and owing to past  or
presently  enrolled students. Statistical reports shall include, but not
be limited to, enrollment, completion and placement  data.  The  commis-
sioner  shall  use  such  financial  statements  and statistical reports
submitted for the purposes of licensure [and registration]  of  schools,
establishing  fees or assessments pursuant to this article and determin-
ing standards pursuant to paragraph b of  subdivision  five  of  section
five thousand two of this article. The attorney general, the comptroller
and  the  president  of  the higher education services corporation shall
have access to this information when it is necessary  to  perform  their
duties as required by state law.
  (ii)  [Any  school which received in excess of two hundred fifty thou-
sand dollars in gross tuition in a school fiscal year] SCHOOLS shall  be
required  to  submit  TO  THE  COMMISSIONER  an annual audited financial
statement [to the commissioner] PREPARED IN  ACCORDANCE  WITH  GENERALLY
ACCEPTED  ACCOUNTING  PRINCIPLES  for [that] EACH fiscal year. [In addi-
tion, any school which has a gross tuition of two hundred fifty thousand
dollars or less in a school fiscal year but  whose  combined  state  and
federal  student financial aid in such year exceeds one hundred thousand
dollars shall also submit an annual audited financial statement  to  the
commissioner for that fiscal year.]
  (iii) [Schools] NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (II) OF
THIS PARAGRAPH, FOR FISCAL YEARS RELATING TO THE INITIAL TWO YEAR LICEN-
SURE  PERIOD,  ANY  SCHOOLS HAVING AN ANNUAL GROSS TUITION INCOME OF TWO
HUNDRED FIFTY THOUSAND DOLLARS OR LESS MAY SUBMIT A  REVIEWED  FINANCIAL
STATEMENT  RATHER  THAN AN AUDITED FINANCIAL STATEMENT. IN ADDITION, ANY
SCHOOL LICENSED PRIOR TO THE EFFECTIVE DATE OF THE CHAPTER OF  THE  LAWS
OF  TWO  THOUSAND  NINE  WHICH  AMENDED  THIS  SUBPARAGRAPH, whose gross
tuition is two hundred fifty thousand dollars or less in a school fiscal
year and which receive less than one hundred thousand dollars  in  state
and  federal  student  financial  aid  in  a school fiscal year shall BE
PERMITTED TO CONTINUE TO file with the commissioner an unaudited  finan-
cial  statement  in  a  format prescribed by the commissioner, provided,
however, that any such school [with gross tuition  in  excess  of  fifty
thousand  dollars shall have filed at least one audited financial state-
ment after the first year of  its  operation.  The  statement  shall  be
signed  by the president or chief executive officer and the chief fiscal
officer of the school who shall certify that the statements are true and
accurate] SHALL BEGIN FILING AUDITED  FINANCIAL  STATEMENTS  AS  OF  THE
SCHOOL'S FISCAL YEAR ENDING THREE YEARS OR MORE AFTER THE EFFECTIVE DATE
OF  THE  CHAPTER  OF  THE  LAWS  OF TWO THOUSAND NINE WHICH AMENDED THIS
SUBPARAGRAPH. Upon a determination by the commissioner that a school has

S. 6006                             7

submitted false or inaccurate statements or that a  significant,  unsub-
stantiated  decline  in gross tuition has occurred, the commissioner may
require any such school to file an audited financial statement  pursuant
to this paragraph.
  f.  Alternate  licensing provision. The commissioner shall issue regu-
lations which define alternate licensing OR  CERTIFICATION  requirements
for the following:
  (1)  correspondence schools in which all approved programs and courses
are under three hundred hours;
  (2) schools which are eligible for exemption under  this  section  but
which elect to be licensed;
  (3) non-profit schools exempt from taxation under section 501(c)(3) of
the  internal  revenue  code  whose programs are funded entirely through
donations from individuals or  philanthropic  organizations,  or  endow-
ments, and interest accrued thereon; and
  (4) language schools conducted for-profit which provide instruction in
English as a second language and which accept no public funds.
  g.  Application  fee.  (I) Every applicant and renewal applicant shall
pay to the department a nonrefundable, nontransferable APPLICATION  fee.
THE  APPLICATION  FEE FOR NEW SCHOOLS SHALL BE FIVE THOUSAND DOLLARS, OF
WHICH THREE THOUSAND DOLLARS SHALL ACCRUE TO THE CREDIT OF THE  PROPRIE-
TARY  VOCATIONAL  SCHOOL  SUPERVISION  ACCOUNT  AND TWO THOUSAND DOLLARS
SHALL ACCRUE  TO  THE  TUITION  REIMBURSEMENT  ACCOUNT.  FOR  ADDITIONAL
LICENSED  LOCATIONS  OF CURRENTLY OPERATING SCHOOLS, THE APPLICATION FEE
SHALL BE TWO THOUSAND FIVE HUNDRED DOLLARS, WHICH SHALL  ACCRUE  TO  THE
CREDIT OF THE PROPRIETARY VOCATIONAL SCHOOL SUPERVISION ACCOUNT.
  (II)  FOR RENEWAL APPLICATIONS, THE FEE SHALL BE based on gross annual
tuition income as determined by the annual financial statements required
in paragraph a of this subdivision for the  most  recent  school  fiscal
year, according to the following schedule:

     GROSS ANNUAL TUITION INCOME            FEE

     0-$199,999                             $[250.00] 750.00
     $200,000-$499,999                      $[500.00] 1,500.00
     $500,000-$999,999                      $[750.00] 2,250.00
     $1,000,000-$4,999,999                 $[1,500.00] 4,500.00
     $5,000,000-$9,999,999                 $[3,000.00] 9,000.00
     $10,000,000 or above                  $[6,000.00] 18,000.00

  Such  RENEWAL fees shall accrue to the credit of the proprietary voca-
tional school supervision account. If the  evaluation  of  a  particular
course  or  facility  requires the services of an expert not employed by
the department, the department shall retain such expert and  the  school
shall reimburse the department for the reasonable cost of such services.
  5.  Required  disclosure  for  licensure.  a.  The  commissioner shall
require that each applicant for a license for the operation of a private
[vocational or business] CAREER school disclose the  following  informa-
tion:
  (1)  Whether  the  applicant, or any corporation, partnership, associ-
ation or organization or person holding an ownership or control interest
in such school, or any employee responsible in  a  supervisory  capacity
for  the administration of student funds or governmental funds, has been
convicted of a crime defined in this article, or any other crime involv-
ing the operation  of  any  educational  or  training  program,  or,  in
connection with the operation of any such program, a crime involving the

S. 6006                             8

unlawful  acquisition,  use,  payment  or  expenditure of educational or
training program funds; and
  (2)  Whether  the  applicant, or any corporation, partnership, associ-
ation or organization or person holding an ownership or control interest
in such school, or any employee responsible in  a  supervisory  capacity
for  the  administration of student funds or governmental funds has been
convicted:
  (A) in this state of any of the  following  felonies  defined  in  the
penal law: bribery involving public servants; commercial bribery; perju-
ry  in  the  second  degree;  rewarding official misconduct; larceny, in
connection with the provision of services  or  involving  the  theft  of
governmental  funds;  offering a false instrument for filing, falsifying
business records; tampering with public records; criminal usury;  scheme
to defraud; or defrauding the government; or
  (B)  in  any  other  jurisdiction of an offense which is substantially
similar to any of the felonies defined in clause (A)  of  this  subpara-
graph  and  for  which a sentence to a term of imprisonment in excess of
one year was authorized and is authorized in this  state  regardless  of
whether such sentence was imposed; and
  (3)  Whether  the  applicant, or any corporation, partnership, associ-
ation or organization or person holding an ownership or control interest
in such school, or any employee responsible in  a  supervisory  capacity
for  the administration of student funds or governmental funds, has been
finally determined in any administrative or  civil  proceeding  to  have
committed  a violation of any provision of this article or any rules and
regulations promulgated pursuant thereto, or any related order or deter-
mination of the commissioner, or of any  similar  statute,  rule,  regu-
lation, order or determination of another jurisdiction pertaining to the
licensure and operation of any educational or training program; and
  (4)  Whether  any  school owned or operated by the applicant closed or
ceased operation and, if so, whether at the  time  of  the  closing  the
applicant  was  subject  to a pending disciplinary action, disallowance,
fine or other penalty and whether it  owed  refunds  to  any  government
agency or students.
  b.  No  application  for any license pursuant to this article shall be
denied by reason of disclosure  pursuant  to  this  subdivision  of  the
applicant,  or any corporation, partnership, association or organization
or person holding an ownership or control interest in  such  school,  or
any  employee  responsible  in  a  supervisory capacity for the adminis-
tration of student funds or governmental funds unless  the  commissioner
makes  a  written  determination  that  there  is  a direct relationship
between one or more of such previous offenses and the license sought, or
that issuance of the license would create an unreasonable risk to  prop-
erty  or  to the safety, education or welfare of specific individuals or
the general public. In making such determination, the commissioner shall
be guided by the factors set forth in section seven hundred  fifty-three
of  the  correction law. For purposes of this subdivision, "ownership or
control interest" means: with respect to a school that is  organized  as
or  owned by a corporation, a position as an officer or director of such
corporation; or, with respect to a school that is organized as or  owned
by  a partnership, a position as a partner; or any other interest total-
ing ten percent or more, whether direct or indirect, in the total equity
or assets of such school.
  c. The commissioner may deny, suspend, revoke or decline to renew  any
license:  (1)  if  the significance of the convictions or administrative
violations warrant such action; or (2) if  the  commissioner  determines

S. 6006                             9

that  a school did not make any disclosure required by this subdivision;
OR (3) IF THE COMMISSIONER DETERMINES THAT A SCHOOL'S  FINANCIAL  CONDI-
TION MAY RESULT IN THE INTERRUPTION OR CESSATION OF INSTRUCTION OR JEOP-
ARDIZE STUDENT TUITION FUNDS.
  6.  If, during the [two year] period for which a license [or registra-
tion] is granted, the commissioner determines that a school's  financial
condition  may result in the interruption or cessation of instruction or
jeopardize student tuition funds, the commissioner may, upon  notice  to
the  school,  place the school on probation for a period of no more than
[thirty days] ONE YEAR, during which time the school and the  department
must  make  efforts  to  resolve the problems at the school.  THE SCHOOL
SHALL SUBMIT A REPORT ON ITS FINANCIAL  CONDITION  TO  THE  COMMISSIONER
WITHIN THE TIME PRESCRIBED BY THE COMMISSIONER.  SUCH REPORT SHALL BE IN
THE  FORM  AND  SHALL INCLUDE CONTENT PRESCRIBED BY THE COMMISSIONER AND
SHALL BE REVIEWED BY THE COMMISSIONER TO DETERMINE THE  SCHOOL'S  FINAN-
CIAL  VIABILITY.  THE  COMMISSIONER  MAY  SUSPEND OR REVOKE THE SCHOOL'S
LICENSE, AS WELL AS REQUIRE THE CESSATION OF STUDENT ENROLLMENT, UPON  A
DETERMINATION THAT THE SCHOOL'S FINANCIAL CONDITION CONTINUES TO THREAT-
EN  ITS  ABILITY  TO  EDUCATE STUDENTS AND/OR THE STUDENT TUITION FUNDS.
ALTERNATIVES FOR THE SCHOOL TO DEMONSTRATE A  FISCALLY  SOUND  OPERATION
MAY  INCLUDE SECURING AND MAINTAINING A PERFORMANCE BOND, PAYABLE TO THE
COMMISSIONER, IN AN APPROPRIATE AMOUNT TO ELIMINATE ANY LIABILITY TO THE
TUITION REIMBURSEMENT ACCOUNT SHOULD THE SCHOOL CEASE OPERATION,  LIMIT-
ING  THE  COLLECTION  OF  TUITION FUNDS UNTIL EACH STUDENT COMPLETES THE
PROGRAM OF STUDY, OR OTHER MEANS ACCEPTABLE TO THE COMMISSIONER.  If  no
resolution  can be attained, a hearing, pursuant to subdivisions two and
three of section five thousand three of this article will be  scheduled.
Such  probation  may include additional monitoring, inspections, limita-
tions on enrollment, teaching out some or  all  of  a  school's  present
students or temporary cessation of instruction.
  7.  No  license  [or registration] granted under this section shall be
transferable or assignable without the  approval  of  the  commissioner.
[Any]  UPON  transfer or assignment of any interest totaling [ten] TWEN-
TY-FIVE percent or more, whether direct or indirect, in the total equity
or assets of a school, SUCH SCHOOL shall be deemed a [transfer  of  such
school's license or registration. The commissioner shall approve or deny
a transfer or assignment based on the requirements set forth in subdivi-
sions three and four of this section.  Such approval or denial, together
with  the  reasons  for  denial,  shall be transmitted in writing within
ninety days of the receipt of the complete application  by  the  commis-
sioner.  Upon  a showing of good cause as to why the applicant could not
obtain the commissioner's approval prior to a  transfer  or  assignment,
the  commissioner  shall  temporarily approve the transfer or assignment
for a period not to exceed forty-five days and for such additional peri-
ods as the commissioner may deem appropriate]  NEW  SCHOOL  REQUIRED  TO
SUBMIT  A  NEW  SCHOOL  APPLICATION AND OBTAIN A NEW LICENSE PURSUANT TO
THIS ARTICLE. PROVIDED, HOWEVER THAT UPON SUCH A SUBSTANTIAL  CHANGE  IN
INTEREST,  THE  PREVIOUS SCHOOL LICENSE SHALL REMAIN IN EFFECT UNTIL THE
NEW LICENSE IS ISSUED OR DENIED OR THE PREVIOUS LICENSE  EXPIRES  OR  IS
REVOKED, WHICHEVER OCCURS FIRST.
  8.  No  licensed [or registered] school shall discontinue operation or
surrender its license  [or  registration]  unless  thirty  days  written
notice  of  its  intention  to  do so and a plan for maintenance of safe
keeping of the records of the school is provided  to  the  commissioner.
However,  upon  good  cause shown, the commissioner may waive the thirty
days notice requirement.

S. 6006                            10

  9. Annual supervision fund and tuition  reimbursement  [fund]  ACCOUNT
assessment.    a.  The  commissioner shall annually assess each school a
total percentage of that school's gross tuition pursuant to  subdivision
three of section five thousand two of this article, as determined by the
annual  [financial  statement  or  annual]  audited  financial statement
required by this article. This  assessment  shall  be  based  upon  each
school's  gross  tuition from the previous year, and shall be payable to
the commissioner in equal quarterly installments which shall be  due  on
June first, September first, December first and March first.
  b. (i) [Beginning April first, nineteen hundred ninety-one, such] SUCH
annualized  assessment  shall be one percent FOR SCHOOLS WHICH HAVE PAID
LESS THAN SIXTEEN QUARTERS OF ASSESSMENTS, BUT  SUCH  ANNUAL  ASSESSMENT
SHALL NOT FALL BELOW FIVE HUNDRED DOLLARS.
  (ii)  [Beginning  July first, nineteen hundred ninety-four, such] SUCH
annualized assessment shall be [nine-tenths] EIGHT-TENTHS of one percent
FOR SCHOOLS WHICH HAVE PAID SIXTEEN OR MORE QUARTERS OF ASSESSMENTS, BUT
SUCH ANNUAL ASSESSMENT SHALL NOT FALL BELOW FIVE HUNDRED DOLLARS.
  [(iii) Beginning April first, nineteen  hundred  ninety-five,  and  in
each  succeeding  year, such annualized assessment shall be eight-tenths
of one percent.]
  c. (i) Of the total assessment provided for herein, FIVE-TENTHS OF ONE
PERCENT SHALL ACCRUE TO THE CREDIT OF THE TUITION REIMBURSEMENT  ACCOUNT
PURSUANT  TO  SECTION  FIVE  THOUSAND  SEVEN  OF  THIS ARTICLE FOR THOSE
SCHOOLS WHICH HAVE PAID LESS THAN SIXTEEN QUARTERS  OF  ASSESSMENTS.  OF
THE  TOTAL  ASSESSMENT  PROVIDED  FOR SCHOOLS WHICH HAVE PAID SIXTEEN OR
MORE QUARTERS OF ASSESSMENTS, three-tenths of one percent  shall  accrue
to  the  credit  of the tuition reimbursement [fund] ACCOUNT pursuant to
section five thousand seven of this  article.  FOR  SCHOOLS  PAYING  THE
MINIMUM FIVE HUNDRED DOLLARS ANNUAL ASSESSMENT, NONE SHALL ACCRUE TO THE
TUITION REIMBURSEMENT ACCOUNT.
  (ii)  The balance of the total assessment provided for herein shall be
dedicated  to  fund  the  department's  supervision  and  regulation  of
licensed  private  schools [and registered business schools] pursuant to
an annual appropriation and an annual plan of  expenditure  prepared  by
the  commissioner and approved by the director of the budget. [Following
the close of each fiscal year, the commissioner,  in  consultation  with
the  director  of  the  budget,  shall  determine  if the balance in the
proprietary vocational school supervision  fund  for  such  fiscal  year
exceeded  the amount required for the support of the department's super-
visory activities taking into account projected  revenues  and  expendi-
tures  for  the  subsequent fiscal year. To the extent that a surplus is
identified, the commissioner, with the approval of the director  of  the
budget,  shall  direct  the  transfer  of  such  surplus  to the tuition
reimbursement fund.]
  d. Payments made within thirty days following the due  date  shall  be
subject  to  interest  at  one  percent above the prevailing prime rate.
Thereafter, late payments may result in suspension of licensure  by  the
commissioner.  Payments required by this subdivision shall be considered
a condition of licensure [or registration].
  S 3. Section 5002 of the education law, as added by chapter 887 of the
laws of 1990, subparagraph 3 of paragraph b and paragraph d of  subdivi-
sion 1, subparagraph 2 of paragraph g of subdivision 3 and subdivision 6
as  amended and paragraph c of subdivision 1 and paragraph d of subdivi-
sion 2 as added by chapter 604 of the  laws  of  1993,  paragraph  c  of
subdivision 2, paragraph a of subdivision 4 and subdivision 7 as amended
and  paragraph  e  of  subdivision 4 and paragraph c of subdivision 6 as

S. 6006                            11

added by chapter 434 of the laws of 1999, paragraph f of  subdivision  4
as  added by chapter 457 of the laws of 2003 and subparagraph 2 of para-
graph b of subdivision 5 as amended by chapter 301 of the laws of  1996,
is amended to read as follows:
  S 5002. Standards  for licensed private CAREER schools [and registered
business schools]. Any  school  licensed  [or  registered]  pursuant  to
section  five  thousand  one  of  this  article  shall  be organized and
conducted only as a school and shall be subject to the  jurisdiction  of
the  department  exclusively,  or  in  conjunction with such other state
agency or department or district attorney upon  which  jurisdiction  has
also  been conferred by law. Such schools shall be subject to and comply
with the provisions of this section.
  1. Standards. a. No program of such schools shall be  conducted  in  a
factory  or commercial establishment, except where the use of facilities
or equipment of such factory or commercial  establishment  is  permitted
for necessary or desirable educational purposes and objectives.
  b.  For  every  such school, the commissioner shall set forth in regu-
lation standards governing all of the following:
  (1) criteria for admission, which shall provide that students at least
possess a high school diploma or its equivalent or demonstrate the abil-
ity to benefit from the instruction, except that in the case of students
who do not possess a high school  diploma  or  its  equivalent,  certif-
ication  of  the  students' ability to benefit from instruction shall be
provided to the commissioner as provided in paragraph c of this subdivi-
sion;
  (2) the standards and the methods of instruction;
  (3) the equipment available for instruction with the  maximum  enroll-
ment that such equipment and physical plant will accommodate;
  (4)  the  qualifications  and  experience  of  teaching and management
personnel;
  (5) the form and  content  of  the  student  enrollment  agreement  or
contract,  provided  that such agreement or contract shall be written in
the same language as that principally used in the sales presentation;
  (6) the methods of collecting tuition;
  (7) eligibility criteria for programs that will require licensure;
  (8) the sufficiency and suitability of the resources available for the
support of such school; and
  (9) counseling provided to students.
  B-1. STUDENT LOANS AND FINANCIAL  AID.  (1)  STUDENT  LOANS  OR  OTHER
FINANCIAL  AID  FUNDS RECEIVED FROM FEDERAL, STATE, OR LOCAL GOVERNMENTS
OR ADMINISTERED UNDER THE FEDERAL STUDENT FINANCIAL ASSISTANCE  PROGRAMS
GOVERNED  BY  TITLE  IV  OF THE HIGHER EDUCATION ACT OF NINETEEN HUNDRED
SIXTY-FIVE, 20  U.S.C.  SECTION  1070  ET  SEQ.,  AS  AMENDED,  MUST  BE
COLLECTED  AND  APPLIED  IN  THE  MANNER AS CONTROLLED BY THE APPLICABLE
FEDERAL, STATE OR LOCAL REGULATIONS.
  (2) STUDENT LOANS OR OTHER FINANCIAL AID FUNDS RECEIVED  FROM  PRIVATE
ENTITIES  INCLUDING, BUT NOT LIMITED TO, BANKS, FINANCING COMPANIES, AND
OTHER LENDING SOURCES MUST BE COLLECTED OR DISBURSED  IN  THE  FOLLOWING
MANNER:
  (A) LOANS OR OTHER FINANCIAL AID PAYMENTS FOR AMOUNTS OF FIVE THOUSAND
DOLLARS OR LESS MAY BE DISBURSED AS A SINGLE DISBURSEMENT, REGARDLESS OF
COURSE LENGTH.
  (B)  LOANS  OR  OTHER  FINANCIAL AID PAYMENTS FOR AMOUNTS GREATER THAN
FIVE THOUSAND DOLLARS THAT REFLECT A CLASS TERM OF LESS THAN SIX  MONTHS
SHALL  HAVE  TWO EQUAL DISBURSEMENTS. THE DISBURSEMENT SCHEDULE FOR SUCH
LOANS OR PAYMENTS SHALL BE AS FOLLOWS: ONE-HALF OF  THE  TUITION  AMOUNT

S. 6006                            12

RELEASED  INITIALLY,  AND  THE  REMAINDER  RELEASED  HALFWAY THROUGH THE
COURSE TERM.
  (C)  LOANS  OR  OTHER  FINANCIAL AID PAYMENTS FOR AMOUNTS GREATER THAN
FIVE THOUSAND DOLLARS THAT REFLECT A CLASS  TERM  OF  GREATER  THAN  SIX
MONTHS, BUT LESS THAN TWELVE MONTHS MUST HAVE THREE EQUAL DISBURSEMENTS.
THE  DISBURSEMENT  SCHEDULE  FOR  SUCH  LOANS  OR  PAYMENTS  SHALL BE AS
FOLLOWS: ONE-THIRD OF THE TUITION AMOUNT RELEASED INITIALLY, THE  SECOND
DISBURSEMENT  SHALL  BE RELEASED ONE-THIRD OF THE WAY THROUGH THE LENGTH
OF THE TRAINING, AND  THE  REMAINDER  RELEASED  TWO-THIRDS  OF  THE  WAY
THROUGH THE COURSE TERM.
  (D)  LOANS  OF  OTHER  FINANCIAL AID PAYMENTS FOR AMOUNTS GREATER THAN
FIVE THOUSAND DOLLARS THAT REFLECT A  CLASS  TERM  GREATER  THAN  TWELVE
MONTHS  SHALL  HAVE  FOUR EQUAL DISBURSEMENTS. THE DISBURSEMENT SCHEDULE
FOR SUCH LOANS OR PAYMENTS SHALL  BE  AS  FOLLOWS:  ONE-QUARTER  OF  THE
TUITION  AMOUNT  RELEASED  INITIALLY,  THE  SECOND DISBURSEMENT SHALL BE
RELEASED ONE QUARTER OF THE WAY THROUGH THE LENGTH OF THE TRAINING;  THE
THIRD  DISBURSEMENT  SHALL BE RELEASED HALFWAY THROUGH THE LENGTH OF THE
TRAINING, AND THE REMAINDER SHALL BE RELEASED THREE-QUARTERS OF THE  WAY
THROUGH THE TRAINING.
  (3)  NO  SCHOOL  MAY  ENTER  INTO  ANY  CONTRACT OR AGREEMENT WITH, OR
RECEIVE ANY STUDENT LOAN OR FINANCIAL AID FUNDS FROM,  PRIVATE  ENTITIES
INCLUDING, BUT NOT LIMITED TO, BANKS, FINANCING COMPANIES, AND ANY OTHER
PRIVATE  LENDING  SOURCES  UNLESS  THE PRIVATE ENTITY HAS A DISBURSEMENT
POLICY THAT, AT A MINIMUM, MEETS THE REQUIREMENTS OF SUBPARAGRAPH TWO OF
THIS PARAGRAPH.
  c. Notwithstanding any other provisions of this article to the contra-
ry, the commissioner shall define alternative educational and curriculum
standards for any program of less than forty hours designed  exclusively
for non-occupational, personal enrichment purposes.
  d. Admission of students under the ability to benefit provision.
  (1)  Certification.  Each school admitting students who do not possess
at least a high school diploma or its equivalent shall  certify  to  the
satisfaction  of  the  commissioner  that such prospective students have
been administered and passed an examination which has been  approved  by
the  commissioner  to determine their ability to benefit from the chosen
curriculum prior to admission to the curriculum or course of study. Such
examination shall, whenever possible, be a  nationally  recognized  test
appropriate for the course of instruction which has been approved by the
commissioner. The examination results of each such student who is admit-
ted  shall be made available to the commissioner at a time prescribed by
the commissioner and, together with the student's original answer sheet,
shall be maintained by the school in the student's permanent record. For
any student failing to achieve the necessary score on  such  examination
for  enrollment,  the  school  shall be required to provide such student
with a listing of appropriate counseling and  educational  opportunities
available  to the student at no cost, as determined by the commissioner.
WHERE APPROPRIATE, THE  COMMISSIONER  MAY  ACCEPT  SUCH  OTHER  ENTRANCE
REQUIREMENT  DOCUMENTATION SUCH AS PREREQUISITE COURSEWORK, PROFESSIONAL
OR VENDOR CERTIFICATIONS, PERSONAL INTERVIEWS,  AND/OR  ATTESTATIONS  OF
EQUIVALENT KNOWLEDGE IN LIEU OF THE EXAMINATION REQUIREMENT.
  (2) Counseling. Each school [admitting] OFFERING CURRICULA WHICH ADMIT
students  who  do  not  possess  a high school diploma or its equivalent
shall develop a plan to be approved by the commissioner  for  the  coun-
seling  of such students on an individual basis on matters including but
not limited to the student's ability to progress in the curriculum,  the
student's financial aid rights and responsibilities, the availability of

S. 6006                            13

programs  to  earn a high school equivalency diploma, including programs
provided at no cost to the student, and the potential of the training to
prepare the student for available employment  opportunities  within  the
region.
  (3)  Compliance.  (A)  The  commissioner shall monitor compliance with
this paragraph and verify the examination  and  counseling  process  and
student  examination  scores.  Such  procedures  may  include but not be
limited to an annual, statistically significant, random sampling of  the
examinations  taken by prospective students of each school administering
such examinations.
  (B) [Such procedures shall  provide  that  the  examinations  of  each
school be inspected on site at least once annually.
  (C)]  In the event that the commissioner determines that the school is
out of compliance with  the  examination  process  and  counseling,  the
commissioner shall require that examinations and counseling for students
admitted  under  the  ability  to  benefit  provision and the counseling
required by subparagraph two of this  paragraph  be  conducted  off  the
premises  of  the  school  by an entity approved by the commissioner for
such period of time as the commissioner deems appropriate, the  cost  of
which shall be incurred by the school.
  2.  Inspections.  a.  Every  school  licensed pursuant to this article
shall maintain adequate and accurate records for a period  of  not  less
than  [six]  SEVEN  years at its principal place of business within this
state. Such records shall be maintained in a manner and form  prescribed
by  the  commissioner  and shall be made available to the department and
the higher education services corporation upon request.
  b. In addition to other requirements in this article, the  information
to be made a part of the record shall include, but not be limited to:
  (1) names and addresses of each enrolled student;
  (2) the course of study offered by the institution;
  (3) the name and address of its faculty, together with a record of the
educational qualifications of each;
  (4) the graduation date of each student; and
  (5)  for  each  student  who fails to complete his or her program, the
student's last date of attendance and, if applicable, the amount of  any
refund paid to, or on behalf of, the student and the date the refund was
made.
  c.  The commissioner shall conduct periodic unscheduled inspections of
licensed private CAREER schools [and  registered  business  schools]  to
monitor  compliance  with the provisions of this article or the rules or
regulations promulgated thereunder or any final order or decision of the
commissioner made pursuant to this article. The department shall conduct
an inspection of each school at  least  once  every  [three  years.  The
department  shall annually inspect schools: (1) having a high percentage
of students admitted under ability to benefit criteria as determined  by
the  commissioner; (2) having a high student loan default rate as deter-
mined by the commissioner in a manner consistent with federal standards;
or (3) which are the subject of a high volume of complaints by  students
or  other  parties]  LICENSURE  PERIOD.   All schools shall provide upon
request of the department, any  and  all  records  necessary  to  review
compliance with the provisions of this article.
  d.  Student  permanent  records,  as defined in the regulations of the
commissioner, shall be maintained for a period of twenty years.
  3. Tuition liability. a. The tuition charge for programs approved  for
participation  in  student financial aid general award programs pursuant
to articles thirteen and fourteen of this chapter shall  be  apportioned

S. 6006                            14

on  the  basis of terms, quarters or semesters. For the purposes of this
section, the terms "term", "quarter" and "semester" shall be defined  in
regulations by the commissioner.
  b.  The  tuition  refund  policy  for the first term or quarter of any
program at schools licensed [or registered]  pursuant  to  section  five
thousand one of this article shall be as follows:
  (1)  For  programs  which  are divided into quarters of up to fourteen
weeks, the school shall evenly divide the total  tuition  charges  among
the  number  of  quarters.  After instruction is begun in a school, if a
student withdraws or is discontinued, the  school  may  retain  no  more
than:
  (i) zero percent of the quarter's tuition if the termination is during
the first week of instruction; or
  (ii)  twenty-five  percent of the quarter's tuition if the termination
is during the second week of instruction; or
  (iii) fifty percent of the quarter's tuition  if  the  termination  is
during the third week of instruction; or
  (iv)  seventy-five percent of the quarter's tuition if the termination
is during the fourth week of instruction; or
  (v) one hundred percent of the quarter's tuition  if  the  termination
occurs after the fourth week of instruction.
  (2)  For programs organized by terms of fifteen, sixteen, seventeen or
eighteen weeks apiece, the school shall evenly divide the total  tuition
charges  among  the  number  of  terms.  After instruction is begun in a
school, if a student withdraws or is discontinued, the school may retain
no more than:
  (i) zero percent of the term's tuition if the  termination  is  during
the first week of instruction; or
  (ii) twenty percent of the term's tuition if the termination is during
the second week of instruction; or
  (iii)  thirty-five percent of the term's tuition if the termination is
during the third week of instruction; or
  (iv) fifty percent of the term's tuition if the termination is  during
the fourth week of instruction; or
  (v) seventy percent of the term's tuition if the termination is during
the fifth week of instruction; or
  (vi)  one  hundred  percent  of  the term's tuition if the termination
occurs after the completion of the fifth week of instruction.
  c. (1) The tuition refund policy for the second term or quarter of any
program at schools licensed [or registered]  pursuant  to  section  five
thousand one of this article shall be as follows:
  (A)  For  programs  which  are divided into quarters of up to fourteen
weeks, the school shall evenly divide the total  tuition  charges  among
the  number  of  quarters.  After instruction is begun in a school, if a
student withdraws or is discontinued, the  school  may  retain  no  more
than:
  (i) twenty-five percent of the quarter's tuition if the termination is
during the first week of instruction; or
  (ii)  fifty  percent  of  the  quarter's tuition if the termination is
during the second week of instruction; or
  (iii) seventy-five percent of the quarter's tuition if the termination
is during the third week of instruction; or[.]
  (iv) one hundred percent of the quarter's tuition if  the  termination
occurs after the third week of instruction.
  (B)  For programs organized by terms of fifteen, sixteen, seventeen or
eighteen weeks apiece, the school shall evenly divide the total  tuition

S. 6006                            15

charges  among  the  number  of  terms.  After instruction is begun in a
school, if a student withdraws or is discontinued, the school may retain
no more than:
  (i)  twenty percent of the term's tuition if the termination is during
the first week of instruction; or
  (ii) thirty-five percent of the term's tuition if the  termination  is
during the second week of instruction; or
  (iii) fifty percent of the term's tuition if the termination is during
the third week of instruction; or
  (iv)  seventy  percent  of  the  term's  tuition if the termination is
during the fourth week of instruction; or
  (v) one hundred percent of  the  term's  tuition  if  the  termination
occurs after the completion of the fourth week of instruction.
  (2)  Notwithstanding  the provisions of subparagraph one of this para-
graph, the tuition refund policy set forth in paragraph b of this subdi-
vision shall apply unless the school  demonstrates  that  there  are  no
significant  educational  changes  in  the  educational  program  of the
student, such changes as defined in regulations of the commissioner.
  d. The tuition refund policy for the third and any subsequent term  or
quarter of any program licensed [or registered] pursuant to section five
thousand  one  of this article shall be the policy set forth in subpara-
graph one of paragraph c of this subdivision.
  e. No program shall have a term in excess of eighteen weeks.
  f. The amount of the refund shall be calculated based on the last  day
of student attendance.
  g.  (1) Any refund due to a student shall be paid by the school within
forty-five days of the date on which  the  student  withdraws  from  the
program. For the purposes of this article, such date shall be the earli-
est  of  (i)  the  date on which the student gives written notice to the
school or (ii) the date on which the student is deemed to have withdrawn
pursuant to subparagraph two of this paragraph.
  (2) If a student has failed to attend classes for a period  of  thirty
calendar  days,  the  school  shall send by regular mail a notice to the
student that the student shall be deemed  to  have  withdrawn  from  the
program if the student does not notify the school to the contrary within
twelve  days  from  the date on which the letter is sent. If the student
fails to respond within such twelve-day period,  the  student  shall  be
deemed  to  have withdrawn and the school shall notify the higher educa-
tion services corporation that the student has withdrawn and the date of
the withdrawal.
  h. SCHOOLS SHALL SUBMIT, FOR APPROVAL BY THE COMMISSIONER, THE  SCHOOL
CATALOG  WITH  A  WEEKLY  TUITION  LIABILITY CHART FOR EACH PROGRAM THAT
INDICATES THE AMOUNT OF REFUND DUE THE STUDENT IN  THE  EVENT  OF  WITH-
DRAWAL.
  I.  Upon  payment  of a refund to a lender, the school shall forthwith
send a notice to a person designated by  the  president  of  the  higher
education  services  corporation  upon  a form approved by the president
that such refund was made.
  [i.] J. If the higher education services corporation fails to  receive
the  notice  required  by  paragraph [h] I of this subdivision, it shall
forthwith notify the student of his or her right to  a  refund  and  the
commissioner  of  such  failure.  Upon receipt of such notification, the
commissioner shall take appropriate action against the school.
  4. Curriculum approval. a. An application AND FEE shall  be  made  for
the  initial  approval  of a curriculum or course and shall include such
information as the commissioner  may  require  by  regulation.  Approval

S. 6006                            16

shall  be  valid for a period not to exceed four years.  THE APPLICATION
FEE FOR ANY CURRICULUM OF ONE HUNDRED CLOCK HOURS OR MORE SHALL  BE  TWO
HUNDRED  FIFTY  DOLLARS. THE APPLICATION FEE FOR ANY COURSE OF LESS THAN
ONE  HUNDRED  CLOCK HOURS SHALL BE ONE HUNDRED DOLLARS. SUCH APPLICATION
FEES SHALL ACCRUE TO THE CREDIT OF  THE  PROPRIETARY  VOCATIONAL  SCHOOL
SUPERVISION ACCOUNT.
  b. In approving curriculum, the commissioner shall take into consider-
ation the following:
  (1)  that  the entrance requirements demonstrate that students possess
the skills, competencies and prerequisite knowledge needed  to  progress
in the curriculum;
  (2)  that  the content will enable the student to develop those skills
and competencies required for employment in the  occupational  area  for
which the curriculum was developed;
  (3)  that  the  school will utilize appropriate instructional methods;
[and]
  (4) that the instructional equipment used  within  the  curriculum  is
comparable  to  the  equipment currently used by business or industry in
the occupational area for which the curriculum was developed; AND
  (5) THAT A CURRICULUM MAY INCLUDE INSTRUCTION IN ENGLISH AS  A  SECOND
LANGUAGE  AT A BEGINNING OR BASIC LEVEL, PROVIDED SUCH INSTRUCTION SHALL
NOT CONSTITUTE MORE THAN FIFTY PERCENT OF SUCH PROGRAM.
  c. (1) If the evaluation of a particular course or  facility  requires
the services of an expert not employed by the department, the department
shall  retain such expert [and the school shall reimburse the department
for the reasonable cost of such services] AT  THE  SCHOOL'S  EXPENSE  IN
ADDITION  TO  THE  APPLICATION  FEES  PRESCRIBED  IN PARAGRAPH A OF THIS
SUBDIVISION.
  (2) If, in the interest of expediting the approvals, a school requests
the department to employ an outside consultant, the school shall  [reim-
burse  the department for] PAY the [reasonable] cost of such services IN
ADDITION TO THE APPLICATION FEES  PRESCRIBED  IN  PARAGRAPH  A  OF  THIS
SUBDIVISION.
  d. The commissioner shall act on applications for approval of a course
or  curriculum  within  one hundred twenty days of receipt of a complete
application and, in the case of a denial, shall set forth in writing the
reasons for such denial.
  e. Notwithstanding paragraphs b, c and d of this subdivision,  curric-
ulum  certified  by a nationally recognized vendor as defined in commis-
sioner's regulations shall be recognized by the department in lieu of an
expert evaluation when such curriculum is adopted by  a  school  in  the
original  format  provided by the vendor as long as the proposed curric-
ulum is a stand alone program and not part  of  a  larger  comprehensive
course.
  f.  Notwithstanding  any other provision of the law, a [not-for-profit
registered business] school[, that is eligible for participation in  the
tuition  assistance  program and] which has national accreditation, may,
for the purpose of calculation of federal financial  aid  amounts  only,
measure students' academic progress in an approved curriculum in non-de-
gree  granting  credit hours, based upon a national accrediting agency's
conversion and approval of clock hours to non-degree credit  hours.  For
the  purposes  of  this  paragraph,  "national accreditation" shall mean
accreditation by a national accrediting agency as defined in the commis-
sioner's regulations.
  5. Application for reapproval. a. An application AND FEE shall be made
for reapproval of a curriculum or  course.  Such  application  shall  be

S. 6006                            17

considered timely if submitted at least one hundred twenty days prior to
the  expiration  of  the current approval.   THE APPLICATION FEE FOR ANY
CURRICULUM OF ONE HUNDRED CLOCK HOURS OR MORE SHALL BE TWO HUNDRED FIFTY
DOLLARS.  THE  APPLICATION  FEE  FOR ANY COURSE OF LESS THAN ONE HUNDRED
CLOCK HOURS SHALL BE ONE HUNDRED DOLLARS, PROVIDED THAT NO FEE SHALL  BE
ASSESSED  FOR THE SUBMISSION OF A REAPPROVAL APPLICATION WITHOUT CHANGE.
SUCH APPLICATION FEES SHALL ACCRUE TO  THE  CREDIT  OF  THE  PROPRIETARY
VOCATIONAL SCHOOL SUPERVISION ACCOUNT.
  b. Curriculum   reapproval   standards.  (1)  The  commissioner  shall
prescribe by regulation, standards for reapproval after the  first  year
of  licensure,  of any curriculum or course based upon factors including
but not limited to the following, as appropriate:
  (i) for each curriculum or course, the percentage of students who have
dropped out;
  (ii) the acquisition of a specified minimum level  of  skills  by  the
students; and
  (iii) for each curriculum or course, the percentage of students placed
in occupations related to the instruction, where applicable.
  (2)  Such standards shall be consistent with those applied to all non-
degree career education programs.
  c. Reapproval contingency. Reapproval of a curriculum or course  shall
be  contingent upon a demonstration by the applicant that the curriculum
or course has met the curriculum reapproval standards set forth in  this
subdivision.  Except as otherwise provided in paragraph d of this subdi-
vision, no such curriculum or course or substantially similar curriculum
or course may be given without reapproval by the commissioner.
  d. When timely and complete application is made for the reapproval  of
a  curriculum or course, and no written denial is made thirty days prior
to the date of expiration of the existing approval,  the  curriculum  or
course  shall be deemed to be approved for the period of the curriculum.
If the application is denied, the commissioner shall set forth in  writ-
ing the reasons for such denial.
  e.  The  commissioner may provide in regulations for reapproval proce-
dures, consistent with this subdivision, for applications submitted less
than one hundred twenty days from the expiration date.
  f. The commissioner shall act upon enrollment agreements and  catalogs
within  ninety  days  of  receipt, and, in the case of denial, shall set
forth in writing the reasons for such denial. If the commissioner  fails
to  act  within  ninety days, a catalog shall be deemed approved for one
year and an enrollment agreement shall  be  deemed  approved  until  the
commissioner acts upon it.
  6. a. Teachers and directors. No person shall be employed by a private
CAREER  school  as  a  director  or  teacher who is not licensed in such
capacity by the department pursuant to regulations of the  commissioner,
which  shall  take  into  consideration such factors as moral character,
educational qualifications and  practical  experience.  The  application
shall  include  a  statement, signed by the president or chief executive
officer of the school, certifying that to the best of his or  her  know-
ledge,  the applicant is able to meet the educational qualifications and
practical experience set forth in the commissioner's  regulations.  Such
application shall be considered timely if mailed to the commissioner and
postmarked  four  days  prior  to  employment  at the school and must be
completed within twenty days thereafter;  provided,  however,  that  the
commissioner  may, for good cause shown, extend the time within which to
complete the application. When  a  complete  application  is  made,  the
commissioner  shall  act upon such application within thirty days. If no

S. 6006                            18

written denial is made within the thirty days, the application shall  be
deemed  to  be approved until the commissioner acts upon it or until the
end of the term or semester, whichever occurs first. If a written denial
is  made  after  the  thirty  day period, the commissioner may allow the
applicant to teach at the school for the remainder of the term or semes-
ter if the commissioner determines that the removal of the teacher would
not be in the best educational interest of the students.  This  subdivi-
sion shall not apply to directors or teachers employed on or before July
first,  nineteen  hundred  seventy-two.  Teachers' licenses issued on or
after [January first, nineteen hundred eighty-seven] THE EFFECTIVE  DATE
OF THE CHAPTER OF THE LAWS OF TWO THOUSAND NINE WHICH AMENDED THIS PARA-
GRAPH  shall  be  valid  at  all  [registered business] LICENSED PRIVATE
CAREER schools for the courses, curricula, or occupations  indicated  on
the  license.    TEACHERS  HOLDING VALID PRIVATE SCHOOL TEACHER LICENSES
VALID AT ONLY ONE SCHOOL LOCATION SHALL HAVE THEM REPLACED, AT NO  COST,
WITH  LICENSES  VALID  AT  ANY  LICENSED  SCHOOL  IN THE SAME SUBJECT OR
SUBJECTS AND WITH THE SAME EXPIRATION DATE AS WAS LISTED ON THE PREVIOUS
TEACHING LICENSE.
  b. A school director shall have  access  to  all  student  and  school
records  which  shall  be maintained in accordance with this article and
the regulations of the commissioner and shall make such  records  avail-
able  to  the  commissioner  or the commissioner's designee upon request
during an on-site school inspection.
  c. Notwithstanding paragraph a of this subdivision, a teacher who  has
been  certified  as  an  instructor by a nationally recognized vendor as
defined in commissioner's regulations may  be  deemed  qualified  as  an
instructor  by  the department, provided such teacher shall only provide
instruction in the course or courses for which he or she holds  vendor's
certification. A teacher authorized by this paragraph will be subject to
all licensing fees required by the department for licensed teachers.
  7. Advertising. a. The commissioner is authorized to commence a disci-
plinary  proceeding  pursuant  to  this  article  for false, misleading,
deceptive or fraudulent advertising pursuant to regulations  promulgated
by  the commissioner which shall be consistent with article twenty-two-A
of the general business law. The department shall issue guidelines as to
appropriate advertising content.  In  developing  such  guidelines,  the
department  shall  consider  advertising for similar programs offered by
various educational institutions. In  a  disciplinary  action  or  other
proceeding,  such  guidelines  shall  not  be  presumptive evidence that
particular advertising is appropriate.
  b. Beginning on January first, two thousand, all schools shall include
in their advertising, promotional material, or letterhead the  statement
"Licensed  by the State of New York" [or "Registered by the State of New
York", as appropriate], and an  accompanying  symbol  to  indicate  such
status,  issued  by  the  commissioner pursuant to section five thousand
nine of this article.
  8. The higher education services corporation  shall  adopt  rules  and
regulations  to  effectuate  the  cessation  of collection activities by
lenders or by the corporation in  cases  in  which  a  licensed  private
[vocational]  CAREER  school  [or a registered business school] at which
the student enrolled has closed or ceased its teaching activities during
the academic period for which the loan was made or guaranteed.
  S 4. Section 5003 of the education law, as added by chapter 887 of the
laws of 1990, subparagraph 1 of paragraph c of subdivision 1  and  para-
graphs d and e of subdivision 6 as amended by chapter 604 of the laws of
1993,  paragraphs b and f of subdivision 6 as amended and paragraph d of

S. 6006                            19

subdivision 1 as added by chapter 434 of the laws of 1999, is amended to
read as follows:
  S 5003. Disciplinary actions, hearings and penalties.  1. Disciplinary
action.  a. The commissioner for good cause, after affording a school an
opportunity for a hearing, may take disciplinary action  as  hereinafter
provided against any school authorized to operate under this article.
  b. Good cause shall include, but not be limited to, any of the follow-
ing:
  (1)  fraudulent  statements  or representations to the department, the
public or any student in connection with any activity of the school;
  (2) violation of any provision of this article or  regulation  of  the
commissioner;
  (3) conviction or a plea of no contest on the part of any owner, oper-
ator, director or teacher:
  (A) of any of the following felonies defined in the penal law: bribery
involving  public  servants;  commercial  bribery; perjury in the second
degree; rewarding official misconduct; larceny, in connection  with  the
provision  of  services  or  involving  the theft of governmental funds;
offering a false instrument for  filing,  falsifying  business  records;
tampering  with  public  records;  criminal usury; scheme to defraud; or
defrauding the government; or
  (B) in any other jurisdiction of an  offense  which  is  substantially
similar  to  any  of the felonies defined in clause (A) of this subpara-
graph and for which a sentence to a term of imprisonment  in  excess  of
one  year  was  authorized and is authorized in this state regardless of
whether such sentence was imposed; or
  (4) incompetence of any owner or operator to operate a school.
  c. (1) Any person who believes he or  she  has  been  aggrieved  by  a
violation  of  this section, EXCEPT A PERSON AGGRIEVED BY THE ACTIONS OR
OMISSIONS OF A CANDIDATE SCHOOL, shall have the right to file a  written
complaint  within:  (A)  two  years of the alleged violation; or (B) one
year of receiving notification from the higher education services corpo-
ration or any other guarantee agency that the student has defaulted on a
student loan payment; provided, however, that no complaint may be  filed
after  three  years  from the date of the alleged violation. The commis-
sioner shall maintain a written record of each complaint that  is  made.
The commissioner shall also send to the complainant a form acknowledging
the  complaint and requesting further information if necessary and shall
advise the director of the school that a complaint has  been  made  and,
where appropriate the nature of the complaint.
  (2)  The  commissioner shall within [twenty] THIRTY days of receipt of
such  written  complaint  commence  an  investigation  of  the   alleged
violation  and  shall  within  [ninety]  ONE  HUNDRED TWENTY days of the
receipt of such written complaint, issue a written finding. The  commis-
sioner shall furnish such findings to the person who filed the complaint
and to the chief operating officer of the school cited in the complaint.
If  the  commissioner  finds  that  there  has  been a violation of this
section, the commissioner shall take appropriate action.
  (3)  The  commissioner  may  initiate  an  investigation   without   a
complaint.
  [d.  During  the initial two year licensing period, before the commis-
sioner may bring enforcement proceedings against a licensed entity,  the
following shall be taken into consideration:
  (1)  whether such entity has demonstrated that the regulations promul-
gated under this chapter are unduly burdensome given the nature  of  the
instruction provided by such entity;

S. 6006                            20

  (2)  whether  such entity has identified potential areas of noncompli-
ance with this chapter and any such regulation within sixty days of  the
licensing or registration date of such entity;
  (3) whether such entity has engaged in good faith discussions with the
department  to  resolve  such  violations  and/or promulgate regulations
which further the goals of this chapter.]
  (4) NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH ONE OF  THIS  PARA-
GRAPH  OR ANY OTHER PROVISION OF THIS ARTICLE TO THE CONTRARY, A STUDENT
AT A CANDIDATE SCHOOL SHALL HAVE THE RIGHT TO FILE A  WRITTEN  COMPLAINT
FROM  AN ALLEGED VIOLATION OF THE PROVISIONS OF CLAUSE THREE OF SUBPARA-
GRAPH (III) OF PARAGRAPH B OF SUBDIVISION FOUR OF SECTION FIVE  THOUSAND
ONE  OF THIS ARTICLE THAT REQUIRE DISCLOSURE OF CANDIDACY STATUS AND ITS
IMPLICATIONS AND A SIGNED ATTESTATION BY THE STUDENT, WITHIN  TWO  YEARS
OF  SUCH  VIOLATION.  UPON A FINDING THAT SUCH A VIOLATION HAS OCCURRED,
THE CANDIDATE SCHOOL SHALL BE REQUIRED TO PROVIDE A REFUND OF ALL MONIES
AND FEES RECEIVED FROM OR ON BEHALF OF THE STUDENT.  APPROPRIATE  ACTION
SHALL  ALSO  BE  TAKEN  AGAINST  THE  CANDIDATE  SCHOOL  PURSUANT TO THE
PROVISIONS OF SUBPARAGRAPH (III) OF PARAGRAPH B OF SUBDIVISION  FOUR  OF
SECTION FIVE THOUSAND ONE OF THIS ARTICLE.
  2.  Hearing  procedures. a. Upon a finding that there is good cause to
believe that a CANDIDATE SCHOOL UNDER  THE  PROVISIONS  OF  SUBPARAGRAPH
(III) OF PARAGRAPH B OF SUBDIVISION FOUR OF SECTION FIVE THOUSAND ONE OF
THIS  ARTICLE,  OR  A  LICENSED  school, or an officer, agent, employee,
partner or teacher, has committed  a  violation  of  this  article,  the
commissioner  shall  initiate proceedings by serving a notice of hearing
upon each and every such party subject to the administrative action. The
school or such party  shall  be  given  reasonable  notice  of  hearing,
including  the  time,  place,  and nature of the hearing and a statement
sufficiently particular to give notice of  the  transactions  or  occur-
rences  intended  to  be  proved, the material elements of each cause of
action and the civil penalties and/or administrative sanctions sought.
  b. Opportunity shall be afforded to the party to respond  and  present
evidence  and  argument  on the issues involved in the hearing including
the right of cross examination. In a hearing, the school or  such  party
shall  be accorded the right to have its representative appear in person
or by or with counsel or other representative. Disposition may  be  made
in any hearing by stipulation, agreed settlement, consent order, default
or other informal method.
  c.  (1)  The commissioner shall designate an impartial hearing officer
to conduct the hearing, who shall be empowered to:
  (A) administer oaths and affirmations; and
  (B) regulate the course of the hearings, set the time  and  place  for
continued  hearings,  and  fix  the  time for filing of briefs and other
documents; and
  (C) direct the school or such party to appear and confer  to  consider
the simplification of the issues by consent; and
  (D)  grant  a request for an adjournment of the hearing only upon good
cause shown.
  (2) The strict legal rules of evidence shall not apply, but the  deci-
sion shall be supported by substantial evidence in the record.
  3.  Decision  after  hearing.  The  hearing officer shall make written
findings of fact and conclusions of law, and  shall  also  recommend  in
writing  to  the  commissioner a final decision including penalties. The
hearing officer shall mail a copy  of  his  OR  HER  findings  of  fact,
conclusions  of  law and recommended penalty to the party and his or her
attorney, or representative.   The commissioner  shall  make  the  final

S. 6006                            21

decision, which shall be based exclusively on evidence and other materi-
als  introduced  at  the  hearing.  If it is determined that a party has
committed a violation, the commissioner shall issue a  final  order  and
shall impose penalties in accordance with this section. The commissioner
shall  send  by  certified mail, return receipt requested, a copy of the
final order to the party and his or her attorney, or representative. The
commissioner shall, at the request of the school or such party,  furnish
a  copy  of  the transcript or any part thereof upon payment of the cost
thereof.
  4. Judicial review. Any order imposed  under  this  section  shall  be
subject  to  judicial  review  under  article seventy-eight of the civil
practice law and rules, but no such determination  shall  be  stayed  or
enjoined  except  upon  application  to  the  court  after notice to the
commissioner.
  5. Enforcement proceedings. The attorney general, in his  or  her  own
capacity,  or at the request of the commissioner, may bring an appropri-
ate action or proceeding in  any  court  of  competent  jurisdiction  to
recover a fine or otherwise enforce any provision of this article.
  6.  Civil penalties and administrative sanctions. a. A hearing officer
may recommend, and the commissioner may impose, a civil penalty  not  to
exceed  [two]  THREE  thousand five hundred dollars for any violation of
this article. In the case of a second  or  further  violation  committed
within  [the previous] five years OF THE PREVIOUS VIOLATION, the liabil-
ity shall be a civil penalty not to exceed [five]  SEVEN  thousand  FIVE
HUNDRED dollars for each such violation.
  b.  Notwithstanding the provisions of paragraph a of this subdivision,
a hearing officer may recommend, and the commissioner may impose a civil
penalty not to exceed [fifty] SEVENTY-FIVE thousand  dollars  OR  DOUBLE
THE  DOCUMENTED  AMOUNT  FROM  WHICH  THE SCHOOL BENEFITED, WHICHEVER IS
GREATER, for any of the following violations: (1) operation of a  school
without  a  license  in  violation  of section five thousand one of this
article; (2) operation of a school knowing that the school's license has
been suspended or revoked; (3) use of false,  misleading,  deceptive  or
fraudulent  advertising;  (4) employment of recruiters on the basis of a
commission, bonus or quota, except as authorized  by  the  commissioner;
(5) directing or authorizing recruiters to offer guarantees of jobs upon
completion  of  a course; (6) failure to make a tuition refund when such
failure is part of a pattern of misconduct; (7) the offering of a course
or program that has not been approved by the commissioner;  (8)  FAILURE
TO OFFER A COURSE OR PROGRAM AS APPROVED BY THE COMMISSIONER; (9) admit-
ting students, who subsequently drop out, who were admitted in violation
of  the  admission standards established by the commissioner, where such
admissions constitute a pattern of misconduct and  where  the  drop  out
resulted  at  least  in  part from such violation; [(9)] (10) failure to
provide the notice of discontinuance and the plan required  by  subdivi-
sion  seven of section five thousand one of this article; or [(10)] (11)
violation of any other provision of this article, or any rule  or  regu-
lation  promulgated  pursuant  thereto,  when such violation constitutes
part of a pattern of misconduct which significantly impairs  the  educa-
tional  quality  of the program or programs being offered by the school.
For each enumerated offense, a second  or  further  violation  committed
within  [the  previous]  five years, shall be subject to a civil penalty
not to exceed [seventy-five thousand dollars] ONE AND ONE-HALF TIMES THE
AMOUNT OF THE PREVIOUS VIOLATION for each such violation.
  c. In addition to the penalties authorized in paragraphs a  and  b  of
this  subdivision,  a hearing officer may recommend and the commissioner

S. 6006                            22

may impose any of the following administrative sanctions:  (1)  a  cease
and desist order; (2) a mandatory direction; (3) a suspension or revoca-
tion  of  a  license; (4) a probation order; or (5) an order of restitu-
tion.
  d.  Penalty  factors.  In the recommendation of any penalty, a hearing
officer shall, at a minimum, give due consideration,  where  applicable,
to  the  good faith of the violator; [the performance of the school with
respect to student placement and retention rates, and students' acquisi-
tion of skills;] AND the gravity of the violation[; and the harm  caused
to the student].
  e.  The  commissioner may suspend a license [or registration] upon the
failure of a school to pay any fee, fine, penalty, settlement or assess-
ment as required by this article unless such failure  is  determined  by
the commissioner to be for good cause.
  f.  All  civil  penalties,  fines and settlements received after April
first, nineteen hundred ninety shall accrue to the credit of the tuition
reimbursement account established pursuant to section ninety-seven-hh of
the state finance law.
  7. Criminal penalties. In addition to any  other  penalties  elsewhere
prescribed:
  a.  Any  person  who  knowingly violates any of the provisions of this
article shall be guilty of a class B misdemeanor punishable  in  accord-
ance  with  the  penal  law.  If  the conviction is for a second offense
committed within five years of the first  conviction  under  this  para-
graph,  such  person shall be guilty of a class A misdemeanor punishable
in accordance with the penal law.
  b. Any person who knowingly (1) falsifies or destroys school or  other
business  records relating to the operation of the school with intent to
defraud; (2) fails to make a tuition refund as required by section  five
thousand  two  of  this article with the intent to defraud more than one
person; or (3) operates a school without a  valid  license  required  by
section  five  thousand one of this article shall be guilty of a class A
misdemeanor punishable in accordance with the penal law.
  c. Any person who, having been convicted within the past five years of
failing to make a tuition refund in violation  of  subparagraph  two  of
paragraph  b of this subdivision, knowingly and intentionally engages in
a scheme constituting a systematic ongoing course of  conduct  involving
the  wrongful  withholding of refunds in violation of section five thou-
sand two of this article with the intent to defraud ten or more persons,
and so withholds tuition refunds in  excess  of  one  thousand  dollars,
shall  be  guilty  of a class E felony punishable in accordance with the
penal law.
  d. Upon a determination that there exist reasonable grounds to believe
that a violation of this article has been committed, or that  any  other
crime  has  been  committed in connection with the operation of a school
required to be licensed pursuant to this article, the commissioner shall
refer such determination, and the information upon which it is based, to
the attorney general or to the appropriate district attorney. The attor-
ney general or a district attorney may bring an action on his or her own
initiative.
  8. Private right of action. A student injured by a violation  of  this
article  may bring an action against the owner or operator of a licensed
private CAREER school [or registered business school] for actual damages
or one hundred dollars, whichever  is  greater.  A  court  may,  in  its
discretion, award reasonable attorney's fees to a prevailing plaintiff.

S. 6006                            23

  S  5.  Subdivisions  3  and 4 of section 5004 of the education law, as
amended by chapter 604 of the laws of 1993, are amended and a new subdi-
vision 4-a is added to read as follows:
  3.  Exempted  from the requirements of this section are persons acting
solely for schools which are not required to be licensed or are  specif-
ically  exempted  from  the  licensing [or registration] requirements of
this article. Persons  who  are  paid  to  procure,  solicit  or  enroll
students  on  the premises of schools required to be licensed [or regis-
tered] shall not be exempt from the provisions of  this  section.    The
certification  requirements  of  this section shall not apply to persons
receiving gifts or other non-monetary considerations valued at not  more
than  [twenty-five]  SEVENTY-FIVE  dollars from a school from which they
have graduated or are currently enrolled for each student  referred  for
enrollment at the school.
  4.  Application  and  renewal application for a private school agent's
certificate shall be filed on forms to be prescribed and provided by the
commissioner. Said certificate shall be valid for [two] THREE years from
the date of issuance. Certificates which  have  been  renewed  shall  be
valid  for a period of [two] THREE years from the expiration date of the
certificate which has been renewed. Every applicant and  renewal  appli-
cant shall pay to the department a fee of [one] TWO hundred dollars.
  4-A.  NOTWITHSTANDING  THE  PROVISIONS  OF  SUBDIVISION  FOUR  OF THIS
SECTION, THE SCHOOL DIRECTOR MAY APPLY  FOR  A  PRIVATE  SCHOOL  AGENT'S
CERTIFICATE  ON  FORMS TO BE PRESCRIBED AND PROVIDED BY THE COMMISSIONER
WITHOUT INCURRING THE AGENT APPLICATION FEE.
  S 6. Section 5006 of the education law, as added by chapter 887 of the
laws of 1990, is amended to read as follows:
  S 5006. Teachout plans.  1. A school may submit a teachout plan to the
commissioner for approval pursuant to  regulations  established  by  the
commissioner.  A  teachout  plan  shall  consist of a contract between a
[registered business or] licensed private CAREER  school,  with  another
school,  hereinafter  called  the  teachout school, so that in the event
that the [registered business or] licensed private CAREER school  ceases
instruction,  the teachout school will provide the necessary instruction
specified in a student's original enrollment agreement with  the  school
ceasing  instruction.  A teachout plan may employ more than one teachout
school to provide instruction to students in the school ceasing instruc-
tion. Schools under common ownership but having  separate  licenses  [or
registrations]  may,  subject to the approval of the commissioner, enter
into teachout agreements. A TEACHOUT PLAN MAY BE CONTRACTED BETWEEN  THE
COMMISSIONER  AND  ONE  OR  MORE  TEACHOUT SCHOOLS IN THE EVENT THAT THE
CLOSING SCHOOL IS UNABLE OR UNWILLING TO DO SO.
  2. A teachout plan shall include the following provisions:    (a)  the
teachout school must offer courses of study that are substantially simi-
lar to those offered in the school ceasing instruction;
  (b)  teachout  schools must be located in the geographic area in which
the school ceasing instruction was located  UNLESS  THE  SCHOOL  CEASING
INSTRUCTION PROVIDED DISTANCE LEARNING OR ON-LINE TRAINING;
  (c) all provisions for a teachout plan must be included in the enroll-
ment agreement signed by the student; and
  (d)  the  teachout school shall agree to fulfill the enrollment agree-
ment signed by the student at the school ceasing instruction.
  3. The [registered business or] licensed school shall provide  to  the
teachout  school  and  to  the department [immediately upon closure] the
following information PRIOR TO CLOSURE:

S. 6006                            24

  (a) Copies of the academic and financial records for all  students  in
attendance at the school at the projected time of closure;
  (b)  A  listing of all such students presently in attendance including
their names, addresses, social security numbers,  curriculum  that  each
student  is  enrolled  in and the number of hours the students will have
completed at the time of the school closure.
  4. The department will provide to  the  teachout  school,  immediately
upon  notification  of a school closing, a copy of each approved curric-
ulum that the closing school is presently offering.
  5. The commissioner shall require all teachout schools to address  the
following issues:
  (a)  Integration  of students into a curriculum which may be different
from the curriculum in which they are currently receiving instruction;
  (b) Assessments of students' progress so that they may be placed  into
an appropriate course;
  (c)  Provision of remedial instruction to students who are found to be
deficient in one or more course areas upon their initial assessment;
  (d) Provision by  the  teachout  school  to  adhere  to  the  required
student/teacher ratios and room capacities; and
  (e)  Compliance  with statutory and regulatory requirements during the
teachout.
  6. The student shall not be subject to  any  costs  beyond  the  total
costs identified in the original enrollment agreement.
  7.  A student may decline to pursue instruction at the teachout school
and may instead seek a refund pursuant to section five thousand seven of
this article.
  S 7. Section 5007 of the education law, as added by chapter 887 of the
laws of 1990, the section heading, subdivision 1, and subdivision 10  as
amended  by  chapter 434 of the laws of 1999, paragraph a of subdivision
3, paragraphs c and d of subdivision 4, subparagraphs 1 and 3  of  para-
graph  a  and paragraph b of subdivision 5, paragraph b of subdivision 9
as amended and paragraphs e and f of subdivision 4 as added  by  chapter
604 of the laws of 1993, is amended to read as follows:
  S 5007. Tuition reimbursement account. 1. Except as otherwise provided
in subdivision six of this section, the portion of the annual assessment
of  schools  [registered and] licensed pursuant to section five thousand
one of this article as prescribed in subdivision eight of  such  section
and all fines, penalties and settlements received pursuant to this arti-
cle  shall  be  transferred  upon receipt into the tuition reimbursement
account.
  3. a. The commissioner shall develop a complaint form and provide such
form to students. In order to claim a refund, a student shall  apply  to
the  fund  with a complaint form pursuant to the requirements of section
five thousand three of this article. Except  as  otherwise  provided  in
this  article,  the commissioner shall compute the refund, if any, using
the refund formula established by  subdivision  three  of  section  five
thousand two of this article.
  b. Claimants who had been enrolled in schools which have not closed or
ceased operation shall be required to show in a manner determined by the
commissioner that:
  (1) the student is eligible for a refund;
  (2) the student has made a request to the school for a refund; and
  (3)  the  school  has failed to make the refund within the time period
required by this article.
  c. The commissioner shall act on each refund request  within  [thirty]
FORTY-FIVE business days of such request.

S. 6006                            25

  4. Students may be eligible for refunds under this section as follows:
  a.  A  student  who  is  offered a teachout plan for the curriculum in
which the student was enrolled at the time the school closed  or  ceased
operation,  which  has  been  approved  by  the department, may elect to
continue instruction pursuant to the teachout plan  or  may  decline  to
continue  instruction  and  may  instead  apply for a full refund OF ALL
TUITION, FEES AND BOOK CHARGES PAID FOR BY OR ON BEHALF OF  THE  STUDENT
IN  CASH OR IN LOANS, EXCLUDING FUNDING PROVIDED BY ANY GOVERNMENT AGEN-
CIES under this section. The option to apply for a refund  shall  extend
to the end of the first week of instruction at the teachout school.
  b.  A  student  who  was  enrolled in a school which has not closed or
ceased operation is entitled to a refund computed in accordance with the
refund policy established by subdivision three of section five  thousand
two of this article.
  c. A student who was enrolled in a school at the time the school clos-
es  or  ceases  operation  is entitled to a refund of the full amount of
prepaid tuition.  In  addition,  commencing  September  first,  nineteen
hundred  ninety-three,  a  student who drops out of a school, where such
school closes within [fourteen] THIRTY days of the student's termination
and prior to completion of such student's program as  specified  in  the
enrollment  agreement,  shall  be entitled to a FULL refund of [the full
amount of prepaid tuition] ALL TUITION, FEES AND BOOK CHARGES  PAID  FOR
BY  OR  ON  BEHALF OF THE STUDENT IN CASH OR IN LOANS, EXCLUDING FUNDING
PROVIDED BY ANY GOVERNMENT AGENCIES.
  d. A student who was enrolled in a school  which  has  not  closed  or
ceased  operation, and who has dropped out, is entitled to a full refund
of all tuition, fees and other required costs paid by the student if the
student has submitted a complaint  form  to  the  commissioner  and  the
commissioner  has  determined  that  a  violation  of  this  article has
occurred which warrants a  refund.  The  commissioner  shall  promulgate
regulations identifying those violations that warrant a refund.
  e.  Commencing  September  first,  nineteen  hundred  ninety-three,  a
student who drops out of a school, which subsequently closes, and who is
owed a refund for the failure of such school to  follow  the  provisions
enumerated  in  subdivision  three  of section five thousand two of this
article shall be eligible for a refund from  the  tuition  reimbursement
fund  according  to  the provisions of subdivision three of section five
thousand two of this article.
  f. Commencing September  first,  nineteen  hundred  ninety-three,  any
student  enrolled  in a school based upon an ability to benefit examina-
tion shall be eligible for a full  refund,  regardless  of  whether  the
student  is  currently enrolled, graduated or dropped out, if the school
enrolled the student contrary to the provisions of the approved entrance
requirements and the student complies with the requirements of  subdivi-
sion one of section five thousand three of this article.
  5.  a.  For  a  student who had been enrolled in a school that has not
closed or ceased operation, the refund shall be paid as follows:
  (1) guaranteed student loans, if any, in which case  the  commissioner
shall  notify  the student of such payment and shall be paid directly to
the lender or guarantee agency where appropriate;
  (2) actual personal tuition expenditures, if any; and
  (3) tuition assistance program awards and other governmental aid.
  b. For schools that have closed or ceased operation, the  commissioner
shall  refund actual personal tuition, FEES AND BOOK expenditures to the
student. The repayment of any loans incurred by the student as  part  of

S. 6006                            26

the  actual  personal  tuition, FEES AND BOOK expenditures shall be paid
directly to the lender or the guarantee agency where appropriate.
  6.  a.  Where a claim is paid to a student of an operating school, the
commissioner shall immediately notify the school.
  b. Within ten days of the receipt of  the  notice,  the  school  shall
either  request  a hearing to challenge the commissioner's determination
that a refund was owed to the student or reimburse the fund  the  amount
paid  to  the  claimant plus a penalty up to two times such amount. This
payment shall also incur interest for each day it remains unpaid  at  an
annual  interest  rate  of one percent above the prime rate. The commis-
sioner may promulgate streamlined  procedures  for  conducting  hearings
pursuant  to  this  paragraph. Any penalty assessed under this paragraph
shall be in addition to any other penalties assessed  pursuant  to  this
article.    Notwithstanding  any  other  provision of law, penalties and
interest paid pursuant to this paragraph shall accrue to the  credit  of
the  proprietary  vocational  school  supervision account to support the
costs associated with the hearings authorized in this subdivision.
  7. Notwithstanding the  notice  procedures  described  in  subdivision
three of this section, in the event of a school closing, the commission-
er  on  his or her own initiative may take appropriate action in accord-
ance with this section to process refund claims on behalf of all of  the
students of the closed school.
  8.  Assignment of rights. Persons and entities receiving refunds under
this section shall be  deemed  to  have  assigned  or  subrogated  their
tuition  reimbursement  rights  to  the  commissioner  on  behalf of the
tuition reimbursement fund only for the amount refunded by  the  tuition
reimbursement  fund.  Within  [thirty]  NINETY  days  of any refund made
pursuant to this section, the commissioner or the attorney general shall
take appropriate action to recover the total amount of the refunds made,
plus administrative costs, from the school.
  9. a. A student whose loan liability is exempted pursuant  to  section
six  hundred  eighty-three  of this chapter and is entitled to or owed a
refund shall transfer to the higher education services  corporation  the
right  to  claim  the refund owed and due from the tuition reimbursement
fund. In such event, the corporation shall  be  entitled  to  receive  a
refund  for that portion of the claim not paid to the corporation by the
United States Secretary of Education pursuant to the federal  guaranteed
loan program.
  b.  Any amounts remaining in the tuition reimbursement fund as of June
first, nineteen hundred ninety-three and  on  every  March  thirty-first
thereafter,  shall  be  made  available to the higher education services
corporation for payment of student loans on  which  collection  activity
has  ceased pursuant to the provisions of subdivision six of section six
hundred eighty-three of this chapter. No amounts shall be  paid  to  the
higher  education  services  corporation  for  loans on which collection
activity has ceased because of the operation of section 437 of the High-
er Education Act of 1965, as amended.
  10. Management of the tuition reimbursement account.  a.  As  used  in
this  subdivision,  net balance is defined as the actual cash balance of
the account as determined by the commissioner on June  thirtieth,  nine-
teen  hundred  ninety-three  and  every three months thereafter. For the
purpose of calculating the net balance, the commissioner shall not  take
into  consideration  any refunds made from the account pursuant to para-
graphs d and f of subdivision four of this section for  the  year  imme-
diately preceding the date on which the calculation is made.

S. 6006                            27

  b.  In  the  event  that  the account has accumulated a net balance in
excess of one million eight hundred thousand dollars,  the  commissioner
shall,  with the approval of the director of the budget, waive an amount
not to exceed the amount due for the next quarterly assessment  pursuant
to  this  section  and  subdivision nine of section five thousand one of
this article FOR SCHOOLS WHICH HAVE PAID SIXTEEN  QUARTERS  OR  MORE  OF
ASSESSMENTS  ONLY.    In such event, payment of future quarterly assess-
ments shall be suspended FOR SCHOOLS WHICH HAVE PAID SIXTEEN QUARTERS OR
MORE OF ASSESSMENTS until the net balance of the account falls below one
million three hundred thousand dollars.
  c. In the event the net balance of the account falls below one million
three hundred thousand dollars, if the  quarterly  assessment  has  been
suspended  FOR  SCHOOLS  WHICH  HAVE  PAID  SIXTEEN  QUARTERS OR MORE OF
ASSESSMENTS pursuant to paragraph b of this  subdivision,  it  shall  be
reinstated for the next quarterly assessment and all subsequent quarter-
ly assessments until the account has accumulated a net balance in excess
of one million eight hundred thousand dollars.
  d. [Notwithstanding the provisions of paragraph b of this subdivision,
in the event that the balance of the account is in excess of one million
three  hundred thousand dollars, all schools licensed after June thirti-
eth, nineteen hundred ninety-nine shall be  required  to  pay  into  the
account the equivalence of three years of annual assessments over a five
year period.
  e.  Notwithstanding  the provisions of paragraph b of this subdivision
all schools licensed after June thirtieth, nineteen hundred ninety-three
and before July first, nineteen hundred ninety-nine will be required  to
pay  into  the  account the equivalence of three years of annual assess-
ments within four years of the effective date of  this  paragraph.  This
amount  to be assessed shall be determined based upon the school's gross
tuition in its first three years of licensure.
  g. In the event that the balance of the tuition reimbursement  account
is  equal  to or in excess of one million five hundred thousand dollars,
the amounts assessed the schools in accordance with  the  provisions  of
paragraphs  d  and  e of this subdivision shall be deposited directly to
the proprietary vocational school supervision account] IN THE EVENT  THE
ACCOUNT  HAS ACCUMULATED A NET BALANCE IN EXCESS OF TWO MILLION DOLLARS,
ANY FUNDS IN THE TUITION REIMBURSEMENT FUND IN  EXCESS  OF  TWO  MILLION
DOLLARS  SHALL  BE  TRANSFERRED  TO  THE  PROPRIETARY SCHOOL SUPERVISION
ACCOUNT.
  E. THE COMMISSIONER MAY ANNUALLY APPORTION FROM THE ACCOUNT AN  AMOUNT
UP TO TWO HUNDRED THOUSAND DOLLARS FOR THE PURPOSE OF SECURING, SCANNING
AND  OTHERWISE  MAKING  STUDENT RECORDS FROM CLOSED SCHOOLS AVAILABLE TO
STUDENTS WHO ATTENDED SUCH SCHOOLS. PROVIDED, HOWEVER, THAT IN  NO  CASE
SHALL SUCH APPORTIONMENT CAUSE THE ACCOUNT TO FALL BELOW THE BALANCE SET
FORTH  IN  PARAGRAPH C OF THIS SUBDIVISION, NOR SHALL SUCH APPORTIONMENT
CAUSE SCHOOLS WHOSE QUARTERLY ASSESSMENTS HAVE  BEEN  SUSPENDED  TO  PAY
ADDITIONAL QUARTERLY ASSESSMENTS.
  11.  Fund audit. The state comptroller shall [annually] audit or cause
to be audited the tuition reimbursement fund ONCE EVERY  TWO  YEARS  and
produce  an  [annual] AUDITED financial statement according to generally
accepted accounting principles.
  12. New schools. Within the first [six  months]  YEAR  that  a  school
begins  LICENSED operation, the commissioner shall assess such school an
amount to be deposited into the fund in an amount to  be  determined  by
the commissioner.

S. 6006                            28

  S 8. Section 5008 of the education law, as added by chapter 887 of the
laws of 1990, is amended to read as follows:
  S 5008. Trust  accounts.    1.  If  the commissioner determines that a
school has demonstrated a pattern or practice of failing to make tuition
refunds in a timely manner  consistent  with  this  article  AND/OR  THE
SCHOOL'S FINANCIAL CONDITION MAY RESULT IN THE INTERRUPTION OR CESSATION
OF  INSTRUCTION  OR  JEOPARDIZE  STUDENT TUITION FUNDS, the commissioner
shall require a school to establish a trust account in a form or  manner
which  the commissioner[, after consultation with the advisory council,]
shall [prescribe in regulations] DETERMINE TO BE APPROPRIATE. The assets
or funds contained in the trust account shall be maintained for the sole
and exclusive benefit of the students.
  2. In making this determination, the commissioner shall  consider  the
following  factors:  the  number  of refunds not paid by the school in a
timely manner; the number of claims made to, or  paid  by,  the  tuition
reimbursement  [fund]  ACCOUNT;  [and]  a  pattern  of  misconduct which
substantially affects the financial interests of students or the  state,
POTENTIAL LIABILITY TO THE TUITION REIMBURSEMENT ACCOUNT, CURRENT ASSETS
AS  OPPOSED  TO  CURRENT  LIABILITIES, AND SUCH OTHER MEASURES AS MAY BE
APPROPRIATE.
  S 9. Section 5009 of the education law, as amended by chapter  434  of
the laws of 1999, is amended to read as follows:
  S 5009. Duties  of  the commissioner.  In addition to all other duties
assigned in this article, the duties of the commissioner shall  include,
but not be limited to:
  [(a)  submitting  a report to the governor, the temporary president of
the senate, the speaker of the assembly,  the  minority  leader  of  the
senate  and  the minority leader of the assembly beginning the fifteenth
day of January after this section shall have become effective, and annu-
ally thereafter on that date, on the implementation and  enforcement  of
this  article,  which shall include but not be limited to (i) curriculum
approval and reapproval standards, (ii) student  complaints,  (iii)  the
resolution  of  disciplinary  actions brought by the department or other
appropriate state agency, (iv) the audited financial statements  submit-
ted  by  the  schools,  (v) tuition reimbursement account activity, (vi)
data regarding retention and completion rates for students  enrolled  in
nondegree,  appropriate  degree  or certificate programs of two years or
less at registered business schools, licensed private schools,  proprie-
tary  degree-granting schools and independent and public colleges, (vii)
the extent to which the department has met  the  timelines  mandated  by
this  article,  (viii)  entrance  standards,  (ix) the number of schools
inspected annually, and (x) the number of trust accounts imposed.
  (b)] 1. ensuring that up-to-date, accurate information is available to
the public, via the internet  and  other  appropriate  media,  regarding
every  duly licensed proprietary school in this state, as well as disci-
plinary actions decided by the state.
  [(c)] 2. developing and issuing  to  duly  licensed  [and  registered]
proprietary schools a symbol to indicate such status; provided that such
symbol  shall  be  developed and made available to such schools no later
than September thirtieth, nineteen hundred ninety-nine.
  [(d)] 3. administering a public information campaign aimed at increas-
ing awareness about the importance of attending licensed [or registered]
proprietary vocational schools. Such campaign shall be targeted to popu-
lations at risk of enrolling in unlicensed  [or  unregistered]  schools,
and shall be conducted using means including, but not limited to, public

S. 6006                            29

service  announcements  on  commercial  radio  and  television stations,
public access television, and print media.
  [(e)]  4. providing for the orderly maintenance of any student records
which may be transferred to the department pursuant to any school's plan
developed pursuant to subdivision eight of section five thousand one  of
this  article;  including responding to student requests for transcripts
and records within twenty days of receiving a request. The  commissioner
is  hereby  authorized to impose an appropriate fee for such transcripts
pursuant to a schedule approved by the director of the budget.
  S 10. Section 5010 of the education law, as added by  chapter  887  of
the laws of 1990, subdivision 1 as amended and subdivision 4 as added by
chapter  604  of  the laws of 1993 and subdivision 5 as added by chapter
434 of the laws of 1999, is amended to read as follows:
  S 5010. Advisory council. 1. An advisory council for [registered busi-
ness and] licensed [trade] PRIVATE CAREER schools is hereby created  for
the  purpose  of  advising  the board of regents and the commissioner as
provided herein.  The  council  shall  be  composed  of  eleven  members
appointed  by the governor, two of whom shall be upon the recommendation
of the temporary president of the senate, two of whom shall be upon  the
recommendation of the speaker of the assembly, one of whom shall be upon
the  recommendation of the minority leader of the senate and one of whom
shall be upon the recommendation of the minority leader of the assembly.
Of the five remaining members, one shall be an owner or  director  of  a
school  regulated  pursuant  to  this article, [one shall be a currently
enrolled student at the time of appointment or  a  graduate  of  such  a
school who graduated within three years of appointment] and one shall be
a student advocate. The governor shall designate a chairperson from such
members.    The commissioner [of education], the president of the higher
education services corporation, the chair  of  the  consumer  protection
board,  the comptroller, the director of the division of the budget, and
the executive director of the job training partnership council, or their
designees, shall serve as ex-officio, non-voting members of the council.
  2. The council shall meet no less than four times a year.  Members  of
the  council  shall receive no compensation for their services but shall
be reimbursed for reasonable expenses actually and necessarily  incurred
by  them  in  the  performance of their duties.  COUNCIL MEMBER TERMS OF
OFFICE SHALL BE LIMITED TO THREE YEARS, PROVIDED  THAT  MEMBERS  MAY  BE
REAPPOINTED. ALL APPOINTMENTS TO THE COUNCIL TO FILL VACANCIES IN EXIST-
ENCE  ON  THE  EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND
NINE WHICH AMENDED THIS SUBDIVISION SHALL BE MADE WITHIN NINETY DAYS  OF
SUCH EFFECTIVE DATE.
  3.  The  council shall advise the commissioner on [the following] SUCH
matters[:
  (a) trust accounts;
  (b) performance standards;
  (c) the effectiveness and utilization  of  the  tuition  reimbursement
fund;
  (d) the efficacy of instituting a fee-for-service system;
  (e) the effectivesness of the timelines mandated by this article;
  (f) the impact of assessments on schools;
  (g) recruitment bonuses; and
  (h) such other matters] as the council determines are appropriate.
  [4.  The  proprietary  school  advisory  council shall conduct a study
concerning the methodologies used to  determine  student  refunds.  Such
study  shall include, but not be limited to, refund policies promulgated
pursuant to federal statute or regulation, state statute  or  regulation

S. 6006                            30

and the policies of national accrediting organizations as they relate to
term-based  and  clock  hour-based  programs. Not later than July first,
nineteen hundred ninety-four, the advisory council shall make  recommen-
dations  to the commissioner and the board of regents for any changes in
legislation, regulations, policy  or  practice  needed  to  improve  and
simplify  the  student  refund  process. The commissioner shall submit a
report of the findings of the advisory council together with the  recom-
mendations  of  the  department  to the legislature and the governor not
later than the first day of October, nineteen hundred ninety-four.
  5. The advisory council shall report to the  governor,  the  temporary
president  of  the  senate, the speaker of the assembly, and the commis-
sioner on the status of unlicensed proprietary schools  in  this  state.
The  report  shall  also contain a statement on the effectiveness of the
change in the tuition reimbursement fund and any recommendations for  an
extension  of the changes or the consideration of different changes when
such changes are repealed. Such report  is  to  be  delivered  on  April
first, two thousand two.]
  S  11.  This  act  shall  take effect on the one hundred twentieth day
after it shall have become a law; provided that  subparagraph  (iii)  of
paragraph  b  of  subdivision 4 of section 5001 of the education law, as
added by section two of this act, shall expire and  be  deemed  repealed
three  years  after  the  effective  date  of  section  two of this act;
provided, further,  that  effective  immediately,  the  commissioner  of
education is authorized and directed to promulgate any regulations need-
ed  to  implement the provisions of this act on such effective date; and
provided, however, that the amendments to paragraph g of subdivision  10
of  section  5007 of the education law made by section seven of this act
shall not affect the expiration of such paragraph and  shall  be  deemed
repealed therewith.