[As Amended by Senate Committee of the Whole]
         

         
As Amended by Senate Committee
         

          Session of 1998
                   
SENATE BILL No. 444
         
By Committee on Education
         
1-15
          12             AN ACT amending the Kansas proprietary school act; affecting defini-
13             tions; increasing fees for certificates of approval and registration of
14             representatives of schools; establishing the proprietary school tuition
15             protection fund and prescribing revenue sources; providing for the
16             assistance of students disposition of student records upon school
17             closures; amending K.S.A. 72-4919, 72-4920, 72-4921, 72-4922, 72-
18             4924, 72-4925, 72-4926, 72-4927, 72-4928, 72-4929, 72-4931, 72-4933,
19             72-4934, 72-4935, 72-4936, 72-4937, 72-4938, 72-4939 and 72-4940
20             and K.S.A. 1997 Supp. 72-4932 and repealing the existing sections;
21             also repealing K.S.A. 72-4917, 72-4918 and 72-4923.
22            
23       Be it enacted by the Legislature of the State of Kansas:
24           Section 1. K.S.A. 72-4919 is hereby amended to read as follows:
25       72-4919. As used in this act, unless the context otherwise requires:
26           (a) ``Proprietary school'' or ``school'' means any business enterprise,
27       whether operated for on a profit, or on a nonprofit not-for-profit basis,
28       which:
29           (1) Maintains a place of business within the state of Kansas, or solicits
30       business within the state of Kansas, and which;
31           (2) is not specifically exempted by the provisions of this act; and
32           (1) which (3) offers or maintains a course or courses of instruction
33       or study; or
34           (2) at which place of business such a course or courses of instruction
35       or study is available through classroom instruction contact or by corre-
36       spondence, or both, to a person or persons for the purpose of training or
37       preparing such person persons for a field of endeavor in a business, trade,
38       technical, or industrial occupation, or for avocational or personal improve-
39       ment, except as hereinafter excluded.
40           (b) ``Owner'' of a school means:
41           (1) In the case of a school owned by an individual, that individual;
42           (2) in the case of a school owned by a partnership, all full, silent, and
43       limited partners; and

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  1           (3) in the case of a school owned by a corporation, the corporation,
  2       its directors, officers and each shareholder owning shares of issued and
  3       outstanding stock aggregating at least ten percent (10%) 10% of the total
  4       of the issued and outstanding shares.
  5           (c) ``Branch school'' means any subsidiary place of business main-
  6       tained within the state of Kansas by a school at a site which is separate
  7       from the site of the principal place of business maintained by the school
  8       and at which subsidiary place of business the school offers a course or
  9       courses of instruction or study identical to the course or courses of in-
10       struction or study offered by the school at its principal place of business.
11           (c) (d) ``School employee'' means any person, other than an owner,
12       who directly or indirectly receives compensation from a proprietary
13       school for services rendered.
14           (d) (e) ``Representative'' means a any person employed by a propri-
15       etary school whether the school is located within or without the state of
16       Kansas, to act as an agent, solicitor, or broker or independent contractor
17       to directly procure students or enrollees for the school by solicitation
18       within or without this state at any place other than the office or a place
19       of business of the school.
20           (e) (f) ``State board'' means the state board of education, or such
21       person or persons as may be designated by it the state board to administer
22       the provisions of this act.
23           (f) ``Notice to the school'' means written correspondence sent to the
24       address of record for legal service contained in the application for a cer-
25       tificate of approval. ``Date of notice'' means the date the notice is mailed
26       by the state board.
27           (g) ``Support'' or ``supported'' means the primary source and means
28       by which a school derives revenue to perpetuate its operation of the
29       school.
30           (h) ``Person'' means any individual, firm, partnership, association, or
31       corporation, or other private entity.
32           Sec. 2. K.S.A. 72-4920 is hereby amended to read as follows: 72-
33       4920. The following schools or educational institutions shall be specifically
34       are exempt from the provisions of this act and shall not be considered to
35       be within the definition of ``proprietary school'':
36           (a) A school or educational institution supported primarily by taxation
37       from either a local or state source.
38           (b) Nonprofit schools owned, controlled, operated and conducted by
39       bona fide religious, [bona fide religious,] denominational, eleemosynary
40       or similar public institutions exempt from property taxation under the
41       laws of this state, but. Such schools may choose to apply for a certificate
42       of approval hereunder, and, upon approval of the application and issuance
43       of a certificate, shall be subject to the provisions of this act as determined

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  1       by the state board.
  2           (c) A school or training program which offers instruction of purely
  3       only for avocational or recreational subjects purposes as determined by
  4       the state board.
  5           (d) A course or courses of instruction or study sponsored by an em-
  6       ployer for the training and preparation of its own employees, and for
  7       which no tuition or other fee is charged to the student.
  8           (e) A course or courses of study or instruction sponsored by a rec-
  9       ognized trade, business, or professional organization having a closed
10       membership for the instruction of the members of the organization with
11       a closed membership, and for which no tuition or other fee is charged to
12       the student.
13           (f) Private colleges and universities which award a baccalaureate, or
14       higher degree, and which maintain and operate educational programs for
15       which credits are given. A majority of said credits must be transferable
16       to a college, junior college, or university, and are accredited by a national
17       nationally recognized accrediting agency listed by the United States office
18       of education under the provisions of chapter 33, title 38, U.S. code and
19       such subsequent federal legislation as is approved by the state board.
20           (g) A school which is otherwise regulated and approved under any
21       other law of this state.
22           (h) A course or courses of special study or instruction having a closed
23       enrollment and financed and/or or subsidized on a contract basis by the
24       local or state government, private industry, or any person, firm, associa-
25       tion or agency, other than the student involved, on a contract basis and
26       having a closed enrollment, except that. A school financed and/or or sub-
27       sidized by federal or special funds may apply to the state board for ex-
28       emption from the provisions of this act and may be declared exempt by
29       the state board when it finds the operation of such school to be outside
30       the purview of this act.
31           Sec. 3. K.S.A. 72-4921 is hereby amended to read as follows: 72-
32       4921. (a) The state board shall exercise jurisdiction and control of the
33       system of schools and enforce minimum standards for approval of schools
34       under rules and regulations and policies hereinafter set forth and as may
35       from time to time be adopted pursuant to the provisions of this act. The
36       state board may adopt rules and regulations to carry out the intent and
37       for administration of the provisions of this act. Prior to the adoption of
38       any such rules and regulations, the state board shall afford the commission
39       an opportunity to make recommendations thereon.
40           (b) The state board shall maintain a list of proprietary schools which
41       have been issued a certificate of approval.
42           Sec. 4. K.S.A. 72-4922 is hereby amended to read as follows: 72-
43       4922. (a) The advisory commission on proprietary schools, referred to as

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  1       the ``commission,'' is hereby created consisting. The commission shall con-
  2       sist of nine (9) members appointed by the state board, each member to.
  3       Members shall serve from the date of his or her appointment until De-
  4       cember 31, 1972, and for terms of four (4) calendar years each thereafter:
  5       Provided, however, That the appointments effective as of January 1, 1973,
  6       shall be for three (3) members for terms of four (4) years, three (3)
  7       members for terms of three (3) years and three (3) members for terms
  8       of two (2) years. If a commission member resigns, or is otherwise unable
  9       to serve, a new member shall be appointed by the state board to fill the
10       unexpired term. Five members of the commission shall be owners or
11       managers of proprietary schools as defined in this act, and at least three
12       two of the five members shall represent schools which, at the time of
13       appointment of such members, have received accreditation from any
14       agency recognized by the United States office of education enrollments
15       of under 125 students. Four members shall be selected from among the
16       following categories: Secondary school principals, guidance counselors
17       schools, postsecondary schools, agriculture, business or management, or-
18       ganized labor, and health occupations, except that one member shall be
19       a person who does not fall within the categories specified in this subsec-
20       tion.
21           (b) The commission shall elect one member as chairman chairperson
22       of the commission and such other officers as may be necessary.
23           (c) The commission shall meet at least annually in Topeka at 10:00
24       o'clock a.m. on the second Tuesday during the month of October, and
25       shall conduct special meetings on the call of the chairman, chairperson
26       or the state board or at the request of at least four members of the
27       commission.
28           (d) Members of the advisory commission on proprietary schools at-
29       tending meetings of such commission, or attending a subcommittee meet-
30       ing thereof authorized by such commission, shall be paid amounts pro-
31       vided in subsection (e) of K.S.A. 75-3223, and amendments thereto.
32           (e) A majority of the commission is a quorum for the to conduct of
33       business, but no less than four members must concur to pass upon any
34       matter before the commission.
35           (f) The commission shall recommend policies, regulations, minimum
36       standards and general rules that the commission deems necessary for car-
37       rying out administering the provisions of this act.
38           Sec. 5. K.S.A. 72-4924 is hereby amended to read as follows: 72-
39       4924. (a) By complying with the provisions of the appropriate following
40       sections of this act, a No proprietary school may obtain operate within
41       this state without obtaining a certificate of approval from the state board
42       which shall permit the school to operate within this state as provided in
43       this act.

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  1           (b) Schools domiciled, or having their principal place of business,
  2       outside of the state of Kansas, that canvass, solicit or contract with any
  3       person within the state of Kansas shall obtain a certificate of approval
  4       from the state board for each such branch school.
  5           (c) Any contract entered into with any person for a course or courses
  6       of instruction after the effective date of this act by or on behalf of any
  7       owner, school employee or representative of a school which is subject to
  8       the provisions of this act to, but which has not obtained a certificate of
  9       approval has not been issued, shall be unenforceable in any action brought
10       thereon.
11           Sec. 6. K.S.A. 72-4925 is hereby amended to read as follows: 72-
12       4925. (a) Each proprietary schools school shall make written application
13       apply to the state board for certificates a certificate of approval. A pro-
14       prietary school shall not be required to obtain a certificate of approval
15       for maintenance of any branch school.
16           (b) Such applications An application for a certificate of approval shall
17       be made on forms a form prepared and furnished by the state board and
18       shall contain such information as provided by rules and regulations of
19       may be required by the state board.
20           (c) The state board may issue a certificate of approval upon deter-
21       mination that a proprietary school meets the standards fixed established
22       by the state board. The state board may issue a certificate of approval to
23       any proprietary school accredited by a regional or national accrediting
24       agency recognized by the United States office of education without fur-
25       ther evidence.
26           Sec. 7. K.S.A. 72-4926 is hereby amended to read as follows: 72-
27       4926. The state board shall issue a certificate of approval to a school when
28       it the state board is satisfied that a the school meets minimum standards
29       established in accordance with this act.
30           Minimum standards shall be established by the state board by adoption
31       of rules and regulations to insure that:
32           (a) Courses, curriculum, and instruction in proprietary schools are of
33       such quality, content, and length as may reasonably and adequately
34       achieve insure achievement of the stated objective for which the courses,
35       curriculum or instruction are offered.
36           (b) Proprietary schools have adequate space, equipment, instruc-
37       tional material, and personnel to provide education and training of good
38       quality.
39           (c) Educational and experience qualifications of directors, adminis-
40       trators, and instructors are such as may reasonably insure that students
41       will receive training consistent with the objectives of their program of
42       study.
43           (d) Proprietary schools maintain written records of the previous ed-

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  1       ucation and training of students and applicant students, and that training
  2       periods are shortened when warranted thereby by such previous educa-
  3       tion and training or by skill or achievement tests.
  4           (e) A copy of the course outline, schedule of tuition, fees, and other
  5       charges, settlement policy, rules pertaining to absence, grading policy,
  6       and rules of operation and conduct are furnished to students upon entry
  7       into class.
  8           (f) Upon completion of training, students are given certificates or
  9       diplomas by the school indicating satisfactory completion of training in
10       courses.
11           (g) Adequate records are kept to show attendance, satisfactory aca-
12       demic progress or grades, and enforcement of satisfactory standards are
13       enforced relating to attendance, progress, and conduct.
14           (h) Schools comply with all local, city, county, municipal, state and
15       federal regulations, such as fire codes, building and sanitation codes.
16           (i) Schools are financially responsible and capable of fulfilling its com-
17       mitments for training.
18           (j) Schools do not utilize erroneous or misleading advertising, either
19       by actual statement, omission, or intimation, and are not in violation of
20       minimum standards relating to advertising.
21           (k) School administrators, directors, owners and instructors are of
22       good reputation and character.
23           (l) (k) Schools have and maintain a policy, which shall be subject to
24       state board approval, for the refund of the unused portions of tuition,
25       fees, and other charges in the event a student enrolled by the school fails
26       to begin a course or withdraws or is discontinued therefrom at any time
27       prior to completion, which policies shall take into account those costs of
28       the school that are not diminished by the failure of the student to enter
29       or complete a course of instruction. Policies under this subpart shall be
30       consonant with standards approved by the United States office of edu-
31       cation, and such standards shall be presumed to be reasonable.
32           Sec. 8. K.S.A. 72-4927 is hereby amended to read as follows: 72-
33       4927. (a) The state board, upon review of an application for a certificate
34       of approval duly submitted in accordance with the provisions of K.S.A.
35       72-4925, and amendments thereto, and meeting the requirements of
36       K.S.A. 72-4926, and amendments thereto, shall issue a certificate of ap-
37       proval to the applicant proprietary school. Certificates of approval shall
38       be in a form specified by the state board with advice from the commission.
39       Certificates of approval shall state clearly and conspicuously at least the
40       following information:
41           (1) The date of issuance, effective date and term of approval;
42           (2) the correct name and address of the school; and
43           (3) the authority for approval and conditions of approval, if any, re-

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  1       ferring specifically to the approved catalog or bulletin published by the
  2       school;
  3           (4) the signature of the commissioner of education or a person des-
  4       ignated by the state board to administer the provisions of this act; and.
  5           (5) any other fair and reasonable representations as are consistent
  6       with this act and deemed necessary by the state board.
  7           (b) Certificates of approval shall be valid for a term of one year.
  8           (c) Each certificate of approval shall be issued to the owner of an
  9       applicant proprietary school and shall be nontransferable. In the event of
10       a change in ownership of a proprietary school, the new owner must apply,
11       within 60 30 days prior to the change in ownership, apply for a new
12       certificate of approval. The state board may waive the 60 30 day require-
13       ment upon its determination that an emergency exists and that the waiver
14       and change in ownership would be in the best interests of students cur-
15       rently enrolled in the proprietary school. Whenever a change of owner-
16       ship occurs as a result of death, court order or operation of law, the new
17       owner shall forthwith apply immediately for a new certificate of approval.
18           (d) At least 30 60 days prior to expiration of a certificate of approval,
19       the state board shall forward to the proprietary school a renewal appli-
20       cation form which shall set forth any requirements by the state board for
21       revised or additional information to enable the state board to renew the
22       certificate of approval.
23           (e) Any school which is not yet in operation when its application for
24       a certificate of approval is filed shall not begin operation accept payments
25       for tuition, fees or other enrollment charges until receipt of a the certifi-
26       cate of approval.
27           (f) Any school which does not plan to renew a certificate of approval
28       must notify the state board at least 60 days prior to the expiration date
29       of the certificate of approval.
30           Sec. 9. K.S.A. 72-4928 is hereby amended to read as follows: 72-
31       4928. (a) If the state board, upon review and consideration of an appli-
32       cation for a certificate of approval, shall determine determines the appli-
33       cant to be unacceptable, the state board shall refuse to issue the certificate
34       and set forth the reasons therefor for the determination.
35           (b) If an applicant, upon written notification of refusal by the state
36       board to issue a certificate of approval, the applicant desires to contest
37       such refusal, the applicant shall notify the state board in writing, within
38       15 days after the date of service of such notice of refusal, of the desire to
39       be heard, and such applicant shall be afforded a hearing in accordance
40       with the provisions of the Kansas administrative procedure act. Upon
41       conclusion of any such hearing hereunder, the state board shall issue a
42       certificate of approval or a final refusal to do so.
43           (c) If an applicant, upon service of notice of refusal by the state board

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  1       to issue a certificate of approval, fails to request a hearing within 15 days
  2       thereafter after the date of service of such notice of refusal, the state
  3       board's refusal shall be final.
  4           Sec. 10. K.S.A. 72-4929 is hereby amended to read as follows: 72-
  5       4929. (a) The state board may revoke a certificate of approval or place
  6       impose reasonable conditions upon the continued approval represented
  7       by a certificate. Prior to revocation or imposition of conditions upon a
  8       certificate of approval, the state board shall notify the holder of the cer-
  9       tificate in writing of the impending action setting forth the grounds for
10       the action contemplated to be taken and affording a hearing on a date
11       within 30 days after the date of such notice. Hearings under this section
12       shall be conducted in accordance with the provisions of the Kansas ad-
13       ministrative procedure act.
14           (b) A certificate of approval may be revoked or conditioned if the
15       state board has reasonable cause to believe that the school is guilty of a
16       in violation of any provision of this act or of any rules and regulations
17       adopted hereunder under this act.
18           Sec. 11. K.S.A. 72-4931 is hereby amended to read as follows: 72-
19       4931. (a) All representatives Each representative of a proprietary school
20       shall register with the state board. Application for registration may be
21       made at any time and shall be based on information submitted by the
22       school and the representative in accordance with the provisions of this
23       act on a form prepared and furnished by the state board and shall contain
24       such information as may be required by the state board.
25           (b) Registration of a representative shall be effective upon receipt of
26       notice from the state board and shall remain in effect until expiration of
27       the certificate of approval of the school employing such representative.
28       Renewal of representative registration shall be in accordance with the
29       renewal application form forwarded to the school by the state board.
30           (c) Denial or revocation of registration of a representative by the state
31       board shall be in accordance with the provisions of this act applicable to
32       denial or revocation of a certificate of approval.
33           (d) Schools domiciled, or having their principal place of business,
34       outside of the state of Kansas that employ representatives to canvass,
35       solicit or contract with any person within the state of Kansas shall be
36       subject to the requirements for registration of representatives.
37           (e) (d) A representative representing employed by more than one
38       school shall obtain a separate permit not be required to register for each
39       school which he represents, except that when a representative represents
40       such schools having have a common ownership, only one permit shall be
41       required.
42           Sec. 12. K.S.A. 1997 Supp. 72-4932 is hereby amended to read as
43       follows: 72-4932. (a) Before a certificate of approval is issued under this

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  1       act, a bond in the penal sum of $20,000 shall be provided by the school
  2       for the period during for which the certificate of approval is to be issued
  3       and. The obligation of the bond shall be that neither this act nor any rule
  4       or regulation adopted thereunder shall be violated by the school or any
  5       of and its officers, agents, representatives or and other employees shall
  6       be bound, upon closure of the school, to deliver or make available to the
  7       state board the records of all students who are in attendance at the school
  8       at the time of closure or who have attended the school at any time prior
  9       to closure. The bond shall be a corporate surety bond issued by a company
10       authorized to do business in this state conditioned that the parties thereto
11       shall pay all damages or expenses which the state, or any governmental
12       subdivision thereof, or any person may sustain resulting from any such
13       violation. The bond shall be for use and benefit of the state or any person
14       or governmental subdivision of the state which may suffer expense or
15       damage by breach thereof. The bond shall be filed with the state board.
16       If the proprietary school ceases operation, the state board may recover
17       against the bond all necessary costs for the acquisition, permanent filing,
18       and maintenance of student records of the proprietary school.
19           (b) Before a representative may be registered under this act, a bond
20       in the penal sum of $2,000 shall be provided by or for each such repre-
21       sentative for a period running concurrently with that of the school's cer-
22       tificate of approval and the obligation of the bond shall be that neither a
23       provision of this act nor any rule or regulation adopted thereunder shall
24       be violated, nor shall fraud or misrepresentation in securing the enroll-
25       ment of a student be committed by the representative. The bond shall
26       be a surety bond issued by a company authorized to do business in this
27       state conditioned that the parties thereto shall pay all damages or ex-
28       penses which the state, any governmental subdivision thereof, or any per-
29       son may sustain resulting from any such violation. The bond shall be for
30       the use and benefit of the state or any person or governmental subdivision
31       of the state as may suffer expense or damage by breach thereof. The bond
32       shall be filed with the state board.
33           (c) (b) In lieu of the corporate surety bond required in subsections
34       under subsection (a) and (b) of this section, a school may, in the alter-
35       native, provide any other similar certificate or evidence of indebtedness
36       or insurance as may be acceptable to the state board if such certificate or
37       evidence of indebtedness or insurance meets all is conditioned that the
38       requirements of subsections subsection (a) and (b) shall be met.
39           (d) Schools domiciled, or having their principal place of business,
40       outside of the state of Kansas, that employ representatives to canvass,
41       solicit or contract with any person within the state of Kansas shall be
42       subject to the bond requirements for both the school and its represen-
43       tatives.

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  1           (e) The state board, for good cause shown, as recommended by the
  2       commission, may waive and suspend the requirements set forth in sub-
  3       sections (a), (b), and (c) of this section with respect to schools operating
  4       wholly or in part under a federal grant where no tuition fee is charged to
  5       the student.
  6           Sec. 13. K.S.A. 72-4933 is hereby amended to read as follows: 72-
  7       4933. (a) Subject to the provisions of subsection (b), no tuition in an
  8       amount greater than $200 $350 shall be collected from a student by any
  9       noncorrespondence school more than 10 30 days before the student re-
10       ceives actual shop or classroom instruction, and not more than $100 $150
11       of such an amount may be retained by a school from any student who
12       fails to enter the school.
13           (b) In the case of a correspondence school, no tuition in an amount
14       greater than $100 $200 shall be collected by any correspondence school
15       sooner than 10 days after from a student prior to the first submission of
16       a lesson by such the student for evaluation at the home office of the
17       school, and not more than $50 $75 of any such amount may be retained
18       by the a school from any student who fails to enter the school.
19           Sec. 14. K.S.A. 72-4934 is hereby amended to read as follows: 72-
20       4934. (a) No person shall:
21           (1) Operate a school without a certificate of approval;
22           (2) solicit prospective students without being bonded and registered
23       or certified as required by this act;
24           (3) accept contracts or enrollment applications from a representative
25       who is not bonded and certified registered as required by this act;
26           (4) use fraud or misrepresentation in advertising or in procuring a
27       student's enrollment of a student.
28           (b) Violation of any provision of subsection (a) of this section or of
29       any other provision of this act is a class C nonperson misdemeanor.
30           Sec. 15. K.S.A. 72-4935 is hereby amended to read as follows: 72-
31       4935. Upon application of the attorney general or the a county or district
32       attorney, the district courts shall have the power and jurisdiction to enjoin
33       any violation of this act. In cases of substantial and willful violations of
34       the act, district courts shall have the power and jurisdiction and to enjoin
35       persons from engaging in business in this state. In any action brought to
36       enforce the provisions of this act, if the court finds that a person is willfully
37       using or has willfully used a method, any deceptive or misleading act or
38       practice declared to be unlawful by this act, the attorney general or the
39       a county or district attorney, upon petition to the court, may recover on
40       behalf of the state, in addition to the criminal penalties provided herein
41       in this act, on behalf of the state, a civil penalty of not exceeding one
42       thousand dollars ($1,000) $1,000 per person for each violation. For pur-
43       poses of this section, a willful violation occurs when the person commit-

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  1       ting the violation knew or should have known that his the conduct of the
  2       person consisted of acts or practices which were deceptive or misleading.
  3           Sec. 16. K.S.A. 72-4936 is hereby amended to read as follows: 72-
  4       4936. Any note or contract taken by any school, or its officers, directors,
  5       agents, solicitors, or representatives, without having complied with the
  6       provisions of this act, shall be null and void and any person who shall
  7       have entered into a contract with such a school or its officers, directors,
  8       agents, solicitors, or representatives shall be entitled to a full refund of
  9       the money or consideration paid plus interest accruing from the date of
10       payment at the a rate of eight percent (8%) per annum from the date of
11       payment equal to the rate specified in K.S.A. 16-207, and amendments
12       thereto, together with other damages sustained by such student person.
13           Sec. 17. K.S.A. 72-4937 is hereby amended to read as follows: 72-
14       4937. Whenever any school negotiates any promissory instrument or note
15       received from a student or on behalf of a student as payment of tuition
16       or other charges fees charged by such school, any person or assignee or
17       holder to whom the instrument or note is assigned shall take such instru-
18       ments instrument or note subject to all defenses of any student which
19       would be available to that the student in an action on a simple contract
20       from whom or on behalf of whom the instrument or note was received.
21           Sec. 18. K.S.A. 72-4938 is hereby amended to read as follows: 72-
22       4938. Fees for certificates of approval and registration of representatives
23       shall be collected by the state board in accordance with the following
24       schedule:
25           (a) For schools domiciled or having their principal place of business
26       within the state of Kansas:
27       (1)Initial issuance of certificate of approval $250.00 $800.00
28       (2)Renewal of certificate of approval, annual fee 200.00 300.00
29       (3)Initial registration of representative 25.00 50.00
30       (4)Annual renewal of registration of representative 15.00 25.00
31           (b) For schools domiciled or having their principal place of business
32       outside the state of Kansas:
33       (1)Initial issuance of certificate of approval $700.00 $1500.00
34       (2)Renewal of certificate of approval, annual fee 600.00 750.00
35       (3)Initial registration of representative 70.00 100.00
36       (4)Annual renewal of registration of representative 50.00 75.00
37           Sec. 19. K.S.A. 72-4939 is hereby amended to read as follows: 72-
38       4939. Necessary and reasonable expense of (a) (1) Subject to the provi-
39       sions of subsection (b), the The state board incurred in investigation or
40       examination of any school applying for a certificate of approval under this
41       act shall be borne by such school and shall be paid to the state board as
42       a condition of and prior to the issuance of such certificate. shall remit all
43       moneys received pursuant to the provisions of this act to the state trea-

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  1       surer. Upon receipt of each such remittance, the state treasurer shall be
  2       deposited deposit the entire amount remitted in the state treasury and
  3       credited shall credit the same to a special the proprietary school fee fund
  4       to be used for the purpose of administering this act. All expenditures from
  5       the proprietary school fee fund shall be made in accordance with appro-
  6       priations acts upon warrants of the director of accounts and reports issued
  7       pursuant to vouchers approved by the state board or by a person or
  8       persons designated by the state board.
  9           (2) (b) On or before the 10th of each month, the director of accounts
10       and reports shall transfer from the state general fund to the proprietary
11       school fee fund interest earnings based on: (A) (1) The average daily
12       balance of moneys in the proprietary school fee fund for the preceding
13       month; and (B) (2) the net earnings rate for the pooled money investment
14       portfolio for the preceding month.
15           (b) (1) There is established in the state treasury the proprietary
16       school tuition protection fund. The fund shall consist of moneys collected
17       from fees established under this subsection. The state board shall collect
18       from each proprietary school: (A) At the time of collection of the fee for
19       initial issuance of a certificate of approval, and as a condition of such
20       issuance, a fee in the amount of $200, which fee shall be in addition to
21       the fee for issuance of the certificate of approval; and (B) at the time of
22       collection of the fee for renewal of a certificate of approval, and as a
23       condition of such renewal, a fee in an amount not to exceed $4 per student
24       enrolled at the proprietary school during the preceding year, which fee
25       shall be in addition to the fee for renewal of the certificate of approval.
26       The state board shall provide for collection of the fees established under
27       this subsection as necessary to attain a balance of $60,000 in the fund and
28       thereafter as necessary to maintain a balance of not less than $50,000 in
29       the fund. Fees paid to the state board pursuant to this subsection shall be
30       deposited in the state treasury and credited to the proprietary school
31       tuition protection fund.
32           (2) If a proprietary school ceases operation in the state of Kansas after
33       the effective date of this act, the state board of education shall assist the
34       students of such school to continue and complete the courses of instruction
35       or study of such students at another proprietary school. Any expenses
36       incurred by the state board in assisting students to continue their courses
37       of instruction or study or to receive a refund from a proprietary school
38       that has ceased operation in the state of Kansas, and any extraordinary
39       expenses incurred by a proprietary school that is providing a teachout for
40       students placed at such school in accordance with this subsection, may be
41       paid from the proprietary school tuition protection fund. If a student
42       cannot be placed at another proprietary school, a refund of the student's
43       tuition and fees may be made to the student from the fund. If another

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  1       proprietary school is willing to assume responsibility for continuance of
  2       the courses of instruction or study of a student of a proprietary school
  3       that ceases operation in the state of Kansas with no significant changes
  4       in proximity or in the quality of the courses of instruction or study, the
  5       student shall not be entitled to a refund. Attorney fees, court costs, and
  6       damage awards which are related to the cessation of operation of a pro-
  7       prietary school may not be paid from the fund.
  8           (3) In order to be eligible for payments from the proprietary school
  9       tuition protection fund, students of proprietary schools that have ceased
10       operation shall submit an application for payment to the state board.
11       Applications shall contain such information and be prepared and sub-
12       mitted in such form and manner as the state board shall require.
13           (4) All payments from the proprietary school tuition protection fund
14       shall be made upon warrants of the director of accounts and reports pur-
15       suant to vouchers approved by the state board or by a person or persons
16       designated by the state board.
17           (5) Any proprietary school that ceases operation in the state of Kansas
18       after the effective date of this act shall be liable to the state board for any
19       payments made from the proprietary school tuition protection fund for
20       or on behalf of students of such school. All amounts recovered by the state
21       board pursuant to this provision shall be deposited in the state treasury
22       and credited to the proprietary school tuition protection fund.
23           (6) On or before the 10th of each month, the director of accounts and
24       reports shall transfer from the state general fund to the proprietary school
25       tuition protection fund interest earnings based on: (A) The average daily
26       balance of moneys in the proprietary school tuition protection fund for
27       the preceding month; and (B) the net earnings rate for the pooled money
28       investment portfolio for the preceding month.
29           Sec. 20. K.S.A. 72-4940 is hereby amended to read as follows: 72-
30       4940. If any clause, paragraph, subsection or sections section of this the
31       Kansas proprietary school act shall be held unconstitutional or invalid, it
32       shall be conclusively presumed that the legislature would have created
33       enacted the remainder of the act without such unconstitutional or invalid
34       clause, paragraph, subsection or sections section.
35           Sec. 21. K.S.A. 72-4917, 72-4918, 72-4919, 72-4920, 72-4921, 72-
36       4922, 72-4923, 72-4924, 72-4925, 72-4926, 72-4927, 72-4928, 72-4929,
37       72-4931, 72-4933, 72-4934, 72-4935, 72-4936, 72-4937, 72-4938, 72-4939
38       and 72-4940 and K.S.A. 1997 Supp. 72-4932 are hereby repealed.
39           Sec. 22. This act shall take effect and be in force from and after its
40       publication in the statute book.
41