PRINTER'S NO.  2296

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

1793

Session of

2011

  

  

INTRODUCED BY SAYLOR, AUMENT, CREIGHTON, DONATUCCI, FARRY, GILLESPIE, GOODMAN, GROVE, HENNESSEY, KAUFFMAN, KAVULICH, KILLION, KOTIK, MANN, MURT, PYLE, QUINN, RAPP, SWANGER, VULAKOVICH AND YOUNGBLOOD, JULY 20, 2011

  

  

REFERRED TO COMMITTEE ON EDUCATION, JULY 20, 2011  

  

  

  

AN ACT

  

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Amending the act of December 15, 1986 (P.L.1585, No.174),

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entitled "An act defining and providing for the licensing and

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regulation of private schools; establishing the State Board

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of Private Licensed Schools; imposing penalties; and making

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repeals," further providing for definitions and for

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application for license; and providing for Student Tuition

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Recovery Fund.

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The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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Section 1.  Section 2 of the act of December 15, 1986

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(P.L.1585, No.174), known as the Private Licensed Schools Act,

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is amended by adding definitions to read:

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Section 2.  Definitions.

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The following words and phrases when used in this act shall

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have the meanings given to them in this section unless the

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context clearly indicates otherwise:

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* * *

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"Assessment."  The amount a private postsecondary education

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institution is required to pay to the Student Tuition Recovery

 


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Fund.

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* * *

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"Ceasing operations."  A private postsecondary education

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institution that has stopped offering educational courses or

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programs to the public for any reason.

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* * *

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"Fund."  The Student Tuition Recovery Fund established in

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section 7.1.

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* * *

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"Newly enrolled student."  A student enrolling with a private

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postsecondary education institution for the first time or

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reenrolling after an absence from the institution for one or

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more years.

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"Person injured."  A student of a private postsecondary

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education institution, which charges prepaid tuition to a

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student, who is damaged monetarily by the institution's ceasing

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operations before fulfilling its contractual obligations or

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fully providing the services which were paid for in advance. The

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term does not include a nonresident student who is eligible to

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claim for recovery under a student tuition recovery fund or

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similar fund in the student's state of residence or a

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nonresident of this Commonwealth enrolled in distance learning

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instruction.

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"Prepaid tuition."  Money advanced to an education

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institution before it provides its service.

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* * *

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"Total course cost."  The tuition and other fees charged by

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the private postsecondary education institution for each course

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offered.

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Section 2.  Section 7(b) of the act is amended to read:

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Section 7.  Application for license.

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* * *

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(b)  [Financial responsibility.--Each private licensed or

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registered school shall demonstrate to the board that it has

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adequate resources or forms of surety available for the purpose

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of reimbursing unearned tuition due students whenever the

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licensed or registered school ceases to operate. The form of

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financial responsibility or surety established by the private

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licensed or registered school shall be subject to approval by

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the board. The board shall promulgate regulations under this act

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establishing the levels and forms of financial responsibility or

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surety that the private licensed or registered school is

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permitted to establish. Until such regulations take effect, the

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surety requirements in existence on the effective date of this

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act shall continue to be enforced] (Reserved).

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* * *

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Section 3.  The act is amended by adding a section to read:

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Section 7.1.  Student Tuition Recovery Fund.

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(a)  Establishment.--The Student Tuition Recovery Fund is

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established and shall be administered by the board. A person

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injured by a private postsecondary education institution ceasing

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operations may recover from the fund an amount not to exceed the

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actual damages sustained. The board shall adopt rules necessary

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to administer this fund.

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(b)  Assessment.--Each private postsecondary education

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institution which collects prepaid tuition shall annually pay an

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assessment to the board for each newly enrolled student in an

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amount consistent with the following:

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(1)  In the first year of enactment, the assessment shall

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be in an amount equal to the sum of two-tenths of one percent

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of gross tuition revenue.

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(2)  If on June 30 of a fiscal year the fund balance is

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less than $5,000,000, the assessment for the following fiscal

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year shall be in an amount equal to the sum of two-tenths of

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one percent of gross tuition revenue.

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(3)  If on June 30 of a fiscal year the fund balance

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exceeds $5,000,000 but is less than $10,000,000, the

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assessment for the following fiscal year shall be in an

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amount equal to the sum of one-tenth of one percent of gross

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tuition revenue.

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(4)  If on June 30 of a fiscal year the fund balance

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exceeds $10,000,000, the assessment for the following fiscal

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year shall be in an amount equal to the sum of one-tenth of

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one percent of gross tuition revenue and shall apply only to

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newly licensed schools.

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(c)  Use of funds.--

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(1)  A person injured by a private postsecondary

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education institution ceasing operations is eligible to

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submit a claim against the fund.

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(2)  A claim against the fund shall not be commenced

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later than one year after the private postsecondary education

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institution has ceased operations. The person injured shall

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submit a complaint to the board outlining the circumstances

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surrounding the claim. The board shall promptly investigate

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the complaint. If the complaint and claim are valid, the

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board shall pay the claim in the amount it considers

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reasonable.

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(3)  The money deposited in the fund is continuously

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appropriated to the board to carry out the purposes of the

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fund.

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(4)  The board may use up to three percent of the fund

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per year to administer the fund.

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(5)  Unexpended and unencumbered money in the fund at the

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close of a fiscal year shall not revert to the General Fund.

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(d)  Exemption.--A private postsecondary institution shall

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not be required to pay assessments for newly enrolled students

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who are not residents of this Commonwealth for whom the

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institution has paid a student tuition recovery fund assessment

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or an assessment to a similar fund in the student's state of

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residence. A private postsecondary institution shall not be

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required to pay assessments for students who are not residents

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of this Commonwealth and who are enrolled in distance learning

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instruction.

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Section 4.  This act shall take effect in 60 days.

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