S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6043

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 22, 2009
                               ___________

Introduced  by  Sen.  SCHNEIDERMAN -- (at request of the State Education
  Department) -- 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11821-01-9
              

S. 6043                             2

facility] which charges tuition or fees [for] RELATED TO instruction and
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;

S. 6043                             3

  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
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, EXCEPT SCHOOLS CONDUCTED FOR THE PURPOSE OF TRAINING TEACHERS
IN THESE VOCATIONAL SUBJECTS;
  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.

S. 6043                             4

  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,
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

S. 6043                             5

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.]
  (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.

S. 6043                             6

  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-
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

S. 6043                             7

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
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

S. 6043                             8

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
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.

S. 6043                             9

  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
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

S. 6043                            10

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.
  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-

S. 6043                            11

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
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.

S. 6043                            12

  (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
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

S. 6043                            13

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
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.

S. 6043                            14

  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
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

S. 6043                            15

  (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
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

S. 6043                            16

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
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

S. 6043                            17

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
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

S. 6043                            18

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
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

S. 6043                            19

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
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.

S. 6043                            20

  [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;
  (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.

S. 6043                            21

  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
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.

S. 6043                            22

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
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.

S. 6043                            23

  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  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

S. 6043                            24

  (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:
  (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;

S. 6043                            25

  (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.
  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

S. 6043                            26

  (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
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

S. 6043                            27

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.
  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

S. 6043                            28

amount to be deposited into the fund in an amount to  be  determined  by
the commissioner.
  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,

S. 6043                            29

and shall be conducted using means including, but not limited to, public
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

S. 6043                            30

pursuant to federal statute or regulation, state statute  or  regulation
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;  and
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.