S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2372
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 25, 2023
                                ___________
 
 Introduced  by M. of A. HYNDMAN -- read once and referred to the Commit-
   tee on Higher Education
 
 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)
 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

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06326-01-3
              

 A. 2372                             2

 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
 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.
 A. 2372                             3
 
   § 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
 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
 A. 2372                             4
 
 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.