S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5581--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                                May 7, 2019
                                ___________
 
 Introduced  by Sen. STAVISKY -- read twice and ordered printed, and when
   printed to be committed  to  the  Committee  on  Higher  Education  --
   reported  favorably from said committee and committed to the Committee
   on Rules -- committee discharged, bill amended, ordered  reprinted  as
   amended and recommitted to said committee

 AN  ACT to amend the education law, in relation to enacting the "Non-De-
   gree Proprietary School Supervision and Student Protection Act"
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Short  title. This act shall be known and may be cited as
 the "Non-Degree Proprietary School Supervision  and  Student  Protection
 Act".
   §  2.  The  education  law is amended by adding a new section 239-c to
 read as follows:
   § 239-C.  ARBITRATION CLAUSES IN  PROPRIETARY  INSTITUTION  ENROLLMENT
 CONTRACTS.  1.  NO  PROPRIETARY  INSTITUTION  OF  HIGHER EDUCATION SHALL
 INCLUDE  ANY  PROVISION  REQUIRING  MANDATORY  BINDING  ARBITRATION   OF
 DISPUTES REGARDING ANY STUDENT ENROLLMENT CONTRACT OR AGREEMENT.
   2.  FOR  PURPOSES  OF THIS SECTION, "PROPRIETARY INSTITUTION" SHALL BE
 DEFINED AS ANY LICENSED PRIVATE CAREER SCHOOL, CERTIFIED  ENGLISH  AS  A
 SECOND  LANGUAGE  SCHOOL,  OR ONLINE EDUCATION MARKETPLACE AS DEFINED IN
 PARAGRAPH C OF SUBDIVISION ONE OF SECTION  FIVE  THOUSAND  ONE  OF  THIS
 CHAPTER  OR ANY APPROVED FOR-PROFIT DEGREE-GRANTING INSTITUTION PURSUANT
 TO THE DEPARTMENT.
   § 3. Subparagraphs 1 and 2 of paragraph c of subdivision 1 of  section
 5003  of  the  education  law,  as amended by chapter 381 of the laws of
 2012, are amended to read as follows:
   (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] SIX years of the alleged violation; or (B)
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11533-03-9

 S. 5581--A                          2
 
 one year of receiving notification from the  higher  education  services
 corporation 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
 commissioner 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 neces-
 sary 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 days of receipt of such writ-
 ten  complaint  commence  an  investigation of the alleged violation and
 shall within ninety days of the receipt of such written complaint, issue
 a written finding. The commissioner 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  appropri-
 ate  action.  IF  THE  COMMISSIONER  SHALL  FIND  THAT  THERE HAS BEEN A
 VIOLATION OF THIS SECTION, THE COMMISSIONER  SHALL  ALSO  PLACE  SUCH  A
 FINDING ON A PUBLICLY ACCESSIBLE WEBSITE DISCLOSING THE INSTITUTION THAT
 WAS  IN  VIOLATION AND THE SUBSTANCE OF THE COMPLAINT WITHIN THIRTY DAYS
 OF THE COMMISSIONER'S FINDING.
   § 4. Paragraphs a and b of subdivision 6 of section 5003 of the educa-
 tion law, as amended by chapter 381 of the laws of 2012, are amended  to
 read as follows:
   a. A hearing officer may recommend, and the commissioner may impose, a
 civil penalty not to exceed [three] FIVE thousand [five hundred] dollars
 for any violation of this article, including a school's failure to offer
 a  course  or  program as approved by the commissioner. In the case of a
 second or further violation committed within five years of the  previous
 violation,  the liability shall be a civil penalty not to exceed [seven]
 TEN 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  [seventy-five] ONE HUNDRED 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  guaran-
 tees  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) admitting 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)  failure  to  provide  the  notice  of  discontinuance  and the plan
 required by subdivision seven of section five thousand one of this arti-
 cle; or (10) violation of any other provision of this  article,  or  any
 rule  or  regulation  promulgated  pursuant thereto, when such violation
 constitutes part of a pattern of misconduct which significantly  impairs
 the  educational quality of the program or programs being offered by the
 school. For each enumerated  offense,  a  second  or  further  violation

 S. 5581--A                          3
 
 committed  within five years, shall be subject to a civil penalty not to
 exceed one and one-half times the amount of the previous  violation  for
 each such violation.
   §  5.  Subdivision 10 of section 5007 of the education law, as amended
 by chapter 381 of the laws of 2012, is amended to read as follows:
   10. Management of the tuition reimbursement account.  a.  As  used  in
 this  subdivision,  net balance is defined as the actual cash balance of
 the account as determined by the commissioner on June  thirtieth,  nine-
 teen  hundred  ninety-three  and  every three months thereafter. For the
 purpose of calculating the net balance, the commissioner shall not  take
 into  consideration  any refunds made from the account pursuant to para-
 graphs d and f of subdivision four of this section for  the  year  imme-
 diately preceding the date on which the calculation is made.
   b.  In  the  event  that  the account has accumulated a net balance in
 excess of [one] TWO million eight hundred thousand dollars, the  commis-
 sioner  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] TWO million three hundred thousand dollars.
   c. In the event the net balance of the account falls below  [one]  TWO
 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] TWO 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] TWO
 million three hundred thousand dollars, all schools licensed after  June
 thirtieth,  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.
   F. IN THE EVENT THAT THE BALANCE OF THE TUITION REIMBURSEMENT  ACCOUNT
 IS  EQUAL  TO  OR IN EXCESS OF THREE MILLION DOLLARS, UP TO FIVE HUNDRED
 THOUSAND DOLLARS OF THE AMOUNTS ASSESSED TO SCHOOLS IN  ACCORDANCE  WITH
 THE PROVISIONS OF PARAGRAPHS D AND E OF THIS SUBDIVISION SHALL BE APPRO-
 PRIATED  TO THE DEPARTMENT FOR THE HIRING OF ADDITIONAL STAFF TO PERFORM
 REGULATORY OVERSIGHT OF THE SCHOOLS COVERED UNDER THIS ARTICLE.
   g. In the event that the balance of the tuition reimbursement  account
 is  equal  to  or  in  excess  of  [two]  THREE million FIVE HUNDRED ONE
 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.
   h. The commissioner may annually apportion from the account an  amount
 up to two hundred thousand dollars for the purpose of securing, scanning

 S. 5581--A                          4
 
 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.
   §  6. Subdivision 5 of section 5002 of the education law is amended by
 adding a new paragraph g to read as follows:
   G. (1) THE COMMISSIONER SHALL REQUIRE ANNUALLY, THAT AVAILABLE DATA BE
 SUBMITTED ON THE  GAINFUL  EMPLOYMENT  OUTCOMES  OF  STUDENTS  FOR  EACH
 CURRICULUM,  COURSE,  OR  PROGRAM  OF  ANY  SCHOOL  LICENSED PURSUANT TO
 SECTION FIVE THOUSAND ONE OF THIS ARTICLE.   THE COMMISSIONER  SHALL  BE
 AUTHORIZED  TO  PROMULGATE  RULES AND REGULATIONS THAT DEFINE AND DETAIL
 WHAT SHALL BE REQUIRED AS PART OF SUCH SUBMISSION. THE SUBMISSION  MUST,
 AT  A  MINIMUM  INCLUDE THE AVERAGE AMOUNT OF STUDENT DEBT A STUDENT HAS
 INCURRED THROUGH A SCHOOL'S CURRICULUM, COURSE, OR PROGRAM AND THE AVER-
 AGE ADJUSTED GROSS INCOME THAT STUDENTS ATTAIN  THREE  YEARS  AFTER  THE
 STUDENTS HAVE COMPLETED THE CURRICULUM, COURSE, OR PROGRAM.
   (2)  SCHOOLS  SUBMITTING STUDENT DATA PERTAINING TO GAINFUL EMPLOYMENT
 OUTCOMES SHALL ATTEST TO THE COMPLETENESS AND ACCURACY OF  THE  INFORMA-
 TION  SUBMITTED TO THE COMMISSIONER UNDER PENALTY FOR VIOLATION OF FRAU-
 DULENT STATEMENTS OR REPRESENTATIONS TO THE DEPARTMENT AS OUTLINED UNDER
 SECTION FIVE THOUSAND THREE OF THIS ARTICLE.
   (3) FOR THE PURPOSE OF THIS SECTION, A SCHOOL SHALL HAVE SATISFIED THE
 COMPLETENESS AND ACCURACY OF THE INFORMATION SUBMITTED IF THEY  REPORTED
 THE  AVERAGE ADJUSTED GROSS INCOME OF APPLICABLE FORMER STUDENTS THROUGH
 SUCH SCHOOL'S AVAILABLE ACCESS TO TAX DATA  OF  SUCH  APPLICABLE  FORMER
 STUDENTS.  HOWEVER,  IF THE SCHOOL DOES NOT HAVE AVAILABLE ACCESS TO TAX
 DATA OF SUCH APPLICABLE FORMER STUDENTS THEN THE SCHOOL CAN SATISFY  THE
 COMPLETENESS  AND  ACCURACY  OF THE INFORMATION SUBMITTED REQUIREMENT BY
 CONDUCTING A SURVEY OF  APPLICABLE  FORMER  STUDENTS  RELATED  TO  THEIR
 EARNED  INCOME.  SUCH  SURVEY  SHALL BE DONE PURSUANT TO REGULATIONS AND
 GUIDANCE PROMULGATED BY THE COMMISSIONER.
   § 7. If any clause, sentence, paragraph, or part of this  act  or  the
 application  thereof  to  any  person  or  circumstances, shall, for any
 reason, be adjudged by a court of competent jurisdiction to be  invalid,
 such  judgment  shall not affect, impair, or invalidate the remainder of
 this act, and the application thereof to other person or  circumstances,
 but  shall  be  confined in its operation to the clause, sentence, para-
 graph, or part thereof directly involved in  the  controversy  in  which
 such  judgment  shall  have  been  rendered and to the person or circum-
 stances involved. It is hereby declared to  be  the  legislative  intent
 that  this  act  would have been adopted had such invalid provisions not
 been included.
   § 8. This act shall take effect on the one hundred eightieth day after
 it shall have become a law. Effective immediately, the addition,  amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation  of  this act on its effective date are authorized to be made and
 completed on or before such effective date.