Revision: Jan. 25, 2011, midnight
SB 117 – AS INTRODUCED
2011 SESSION
04/03
SENATE BILL 117
AN ACT relative to private postsecondary career schools and the student tuition guaranty fund.
SPONSORS: Sen. Odell, Dist 8; Sen. Stiles, Dist 24; Sen. Carson, Dist 14; Sen. Merrill, Dist 21; Sen. D'Allesandro, Dist 20; Rep. Day, Hills 7; Rep. Hawkins, Hills 18; Rep. Jeudy, Hills 10; Rep. Copeland, Rock 13
This bill:
I. Revises the definitions and exceptions for private postsecondary career schools.
II. Amends the requirements governing surety indemnification provided by a private postsecondary career school.
III. Authorizes the executive director of the postsecondary education commission to establish guidelines for exempting a private postsecondary career school from providing surety indemnification after such school has paid into the student tuition guaranty fund for at least 5 years.
IV. Repeals a contingent repeal of the surety indemnification requirement which would have taken effect when the student tuition guaranty fund balance reached a level sufficient to provide satisfactory coverage for fund participants.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-1030
04/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to private postsecondary career schools and the student tuition guaranty fund.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Regulation of Private Postsecondary Career Schools; Definitions; Exclusions. RSA 188-D:19 is repealed and reenacted to read as follows:
188-D:19 Definitions; Exclusions.
I. The following definitions shall apply in this subdivision except as otherwise provided:
(a) “Alternative delivery” means a mode of instruction, which does not involve face-to-face instruction between instructor and student in the same geographic location. This mode of instruction shall include Internet, televised, video, telephonic, and correspondence media.
(b) “Entity” means any individual, firm, partnership, association, corporation, organization, trust, school, or other legal entity or combination of these entities.
(c) “Executive committee” means the executive committee of the postsecondary education commission as defined in the postsecondary education commission bylaws.
(d) “Executive director” means the executive director of the postsecondary education commission, or designee.
(e) “Instructor” means any person who teaches, trains, or educates students.
(f) “Occupational” means related to an occupation or vocation.
(g) “Physical presence” means any physical location, place of contact, telephone exchange, or mail drop in this state, and if an individual is conducting one or more of the following activities within this state:
(1) Advertising.
(2) Solicitation of potential students.
(3) Enrollment of students.
(4) Providing student services.
(5) Student mentoring.
(6) Instruction of students.
(h) “Private postsecondary career school” means any for-profit or nonprofit, non-degree granting, postsecondary career entity maintaining a physical presence in this state and providing vocational or occupational education or training for tuition or a fee to the public. Private and postsecondary career schools that offer resident or non-resident programs, including programs using modes of alternative delivery, beyond the secondary school level to the public shall be included in this definition regardless of the fact that the school’s tuition and fees from education and training programs constitute only a part of the school’s revenue.
(i) “Student” means any person enrolled in a course or program at a private postsecondary career school.
(j) “Vocational” means related to an occupation or vocation.
II. “Private postsecondary career school” shall not include barbering or cosmetology schools, schools offering training that has been approved by a state agency with appropriate jurisdiction over such training, including but not limited to the plumber’s board, the electrician’s board, the office of the state fire marshal, the division of fire standards and training and emergency medical services, and schools providing federally-required flight or ground instruction to students.
2 Private Postsecondary Career Schools; Licenses and Fees. Amend RSA 188-D:20, II to read as follows:
II. [A] Any private postsecondary career school maintaining a physical presence in this state and which assesses tuition or fees for providing vocational or occupational training shall register to obtain a license or license renewal from the postsecondary education commission. The license shall be issued or renewed pursuant to rules, adopted under RSA 541-A, by the executive director, in consultation with the postsecondary education commission. The rules shall establish minimum criteria, including but not limited to, financial stability, educational program, administrative and staff qualifications, business procedures, facilities, equipment, and ethical practices to be met by licensees, and criteria for rejecting a licensing applicant and for suspending or revoking a license.
3 Private Postsecondary Career Schools; Surety Indemnification. Amend RSA 188-D:20-a, IV(b) to read as follows:
(b) A term deposit account held in the state treasury, payable to the postsecondary education commission, shall be held in trust for the benefit of students entitled thereto under this section. Said account shall be maintained for the licensing period as a minimum, in an amount determined by the postsecondary education commission. [Any interest shall be paid annually to the appropriate school, unless the term deposit account is activated due to a school closing.] The licensee, subject to the approval of the executive director, may replace the term deposit with either a bond or an irrevocable letter of credit. After receipt of the appropriate indemnification, the term deposit plus any accrued interest shall be returned to the licensee. Should the licensee for any reason, while not in default, discontinue operation, all moneys on deposit, including any interest, shall be released to the appropriate school subject to the approval of the executive director.
4 Private Postsecondary Career Schools; Student Tuition Guaranty Fund. Amend RSA 188-D:20-b to read as follows:
188-D:20-b Student Tuition Guaranty Fund.
I.(a) A student tuition guaranty fund is hereby established within the postsecondary education commission and shall be administered by the executive director.
(b) The fund shall be funded from an annual fee to be established by the executive director and assessed against each school duly licensed by the postsecondary education commission and all applicants for a license under RSA 188-D:20.
(c) The funds shall be placed in an interest-bearing account in the office of the state treasurer and the state treasurer shall deposit all interest earned on the funds into the account. These funds shall be nonlapsing and continually appropriated to the postsecondary education commission.
(d) The fund shall be used to reimburse students when a school has failed to faithfully perform its contractual obligations for tuition and instructional fees in the event of a school closing, and the expense of investigating and processing the claims. [The owner of] A school which fails to perform its contractual obligations shall be [personally] liable to reimburse the fund for the difference between the per student amount paid into the fund by the school and the amount paid out of the fund to a student to settle a claim made against the school.
(e) A school’s surety bond, irrevocable letter of credit, or other approved form of indemnification shall be exhausted prior to the use of any funds from the student tuition guaranty fund.
II. The executive director, in consultation with the postsecondary education commission, shall adopt rules, pursuant to RSA 541-A, relative to the administration and maintenance of the fund.
III. The executive director, in consultation with the postsecondary education commission, may establish guidelines for exempting schools from providing surety indemnification and from paying into the student tuition guaranty fund, provided the executive director determines that there are sufficient funds in the student tuition guaranty fund for disbursement in the event of a school closure. Neither the executive director nor the postsecondary education commission shall grant such an exemption to any school until the school has paid into the student tuition guaranty fund for at least 5 years and is in good standing with the postsecondary education commission. An exemption granted to a school may be revoked if the executive director, in consultation with the postsecondary education commission, determines that the student tuition guaranty fund balance is insufficient for disbursement in the event of a school closing.
5 Private Postsecondary Career Schools; Use of Fees. Amend RSA 188-D:25 to read as follows:
188-D:25 Use of Fees. Notwithstanding any provision of law to the contrary, all license fees collected under the provisions of this subdivision shall be [retained by] deposited in a nonlapsing account within the postsecondary education commission which shall be continually appropriated to the commission for use in meeting the expenses of administering this subdivision.
6 Repeal. The following are repealed:
I. 2004; 190:6, relative to the contingent repeal of the surety indemnification to be provided by private postsecondary career schools.
II. 2004; 190:7, relative to the written certification required for the contingent repeal in 2004; 190:6 to take effect.
7 Effective Date. This act shall take effect 60 days after its passage.