The New York State Senate

                    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.