1.1                          A bill for an act
  1.2             relating to private business, trade, and 
  1.3             correspondence schools; modifying licensing standards; 
  1.4             clarifying miscellaneous provisions; amending 
  1.5             Minnesota Statutes 1994, sections 141.25, subdivision 
  1.6             7; 141.26, subdivision 5; 141.271, subdivision 4; and 
  1.7             141.29, subdivision 3; Minnesota Statutes 1995 
  1.8             Supplement, section 136A.685. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1995 Supplement, section 
  1.11  136A.685, is amended to read: 
  1.12     136A.685 [PRIVATE INSTITUTIONS; ADJUDICATION OF FRAUD OR 
  1.13  MISREPRESENTATION.] 
  1.14     The office shall not provide registration or degree or name 
  1.15  approval to a school if there has been a criminal or, civil, or 
  1.16  administrative adjudication of fraud or misrepresentation in 
  1.17  Minnesota or in another state or jurisdiction against the school 
  1.18  or its owner, officers, agents, or sponsoring organization.  
  1.19  Such an adjudication of fraud or misrepresentation shall be 
  1.20  sufficient cause for the office to determine that a school: 
  1.21     (1) does not qualify for exemption under section 136A.657; 
  1.22  or 
  1.23     (2) is not approved to grant degrees or to use the term 
  1.24  "academy," "institute," or "university" in its name. 
  1.25     Sec. 2.  Minnesota Statutes 1994, section 141.25, 
  1.26  subdivision 7, is amended to read:  
  1.27     Subd. 7.  [MINIMUM STANDARDS.] No license shall be issued 
  2.1   unless the board first determines: 
  2.2      (a) that the applicant has a sound financial condition with 
  2.3   sufficient resources available to meet the school's financial 
  2.4   obligations; to refund all tuition and other charges, within a 
  2.5   reasonable period of time, in the event of dissolution of the 
  2.6   school or in the event of any justifiable claims for refund 
  2.7   against the school by the student body; to provide adequate 
  2.8   service to its students and prospective students; and for the 
  2.9   proper use and support of the school to be maintained; 
  2.10     (b) that the applicant has satisfactory training facilities 
  2.11  with sufficient tools and equipment and the necessary number of 
  2.12  work stations to train adequately the students currently 
  2.13  enrolled, and those proposed to be enrolled; 
  2.14     (c) that the applicant employs a sufficient number of 
  2.15  qualified instructors trained by experience and education to 
  2.16  give the training contemplated; 
  2.17     (d) that the premises and conditions under which the 
  2.18  students work and study are sanitary, healthful, and safe, 
  2.19  according to modern standards; 
  2.20     (e) that each occupational course or program of instruction 
  2.21  or study shall be of such quality and content as to provide 
  2.22  education and training which will adequately prepare enrolled 
  2.23  students for entry level positions in the occupation for which 
  2.24  trained; 
  2.25     (f) that the living quarters which are owned, maintained, 
  2.26  or approved by the applicant for students are sanitary and safe; 
  2.27     (g) that the contract or enrollment agreement used by the 
  2.28  school complies with the following provisions: 
  2.29     (1) the name and address of the school must be clearly 
  2.30  stated; 
  2.31     (2) inclusion of a clear and conspicuous disclosure that 
  2.32  such agreement becomes a legally binding instrument upon written 
  2.33  acceptance of the student by the school unless canceled pursuant 
  2.34  to section 141.271; 
  2.35     (3) must contain the school's cancellation and refund 
  2.36  policy which shall be clearly and conspicuously entitled, 
  3.1   "Buyer's Right to Cancel"; 
  3.2      (4) the total cost of the course including tuition and all 
  3.3   other charges shall be clearly stated; 
  3.4      (5) the name and description of the course, including the 
  3.5   number of hours or credits of classroom instruction and/or home 
  3.6   study lessons shall be included; 
  3.7      (6) no contract or agreement shall contain a wage 
  3.8   assignment provision and/or a confession of judgment clause; 
  3.9      (7) each contract or enrollment agreement shall contain a 
  3.10  clear and conspicuous explanation of the form and means of 
  3.11  notice the student should use in the event the student elects to 
  3.12  cancel the contract or sale, the effective date of cancellation, 
  3.13  and the name and address of the seller to which the notice 
  3.14  should be sent or delivered; and 
  3.15     (h) that there has been no adjudication of fraud or 
  3.16  misrepresentation in any criminal, civil, or administrative 
  3.17  proceeding in any jurisdiction against the school or its owner, 
  3.18  officers, agents, or sponsoring organization.  
  3.19     Sec. 3.  Minnesota Statutes 1994, section 141.26, 
  3.20  subdivision 5, is amended to read: 
  3.21     Subd. 5.  [FEE.] The initial and renewal application for 
  3.22  each permit shall be accompanied by a nonrefundable fee of 
  3.23  $250 as established by the office. 
  3.24     Sec. 4.  Minnesota Statutes 1994, section 141.271, 
  3.25  subdivision 4, is amended to read: 
  3.26     Subd. 4.  [RESIDENT SCHOOLS.] With respect to all schools 
  3.27  offering a resident course of instruction, when a student has 
  3.28  been accepted by the school and gives written notice of 
  3.29  cancellation after the start of the course of instruction period 
  3.30  of instruction for which the student has been charged, but 
  3.31  before completion of 75 percent of the course of instruction 
  3.32  period of instruction for which the student has been charged, 
  3.33  the amount charged for tuition, fees and all other charges for 
  3.34  the completed portion of the course period of instruction for 
  3.35  which the student has been charged shall not exceed the pro rata 
  3.36  portion of the total charges for tuition, fees and all other 
  4.1   charges that the length of the completed portion of the course 
  4.2   period of instruction for which the student has been charged 
  4.3   bears to its total length, plus 25 percent of the total cost of 
  4.4   the course period of instruction for which the student has been 
  4.5   charged but not to exceed $100.  After completion of 75 percent 
  4.6   of the course of instruction period of instruction for which the 
  4.7   student has been charged, no refunds are required.  
  4.8      Sec. 5.  Minnesota Statutes 1994, section 141.29, 
  4.9   subdivision 3, is amended to read: 
  4.10     Subd. 3.  [POWERS AND DUTIES.] The board office shall have 
  4.11  (in addition to the powers and duties now vested therein by law) 
  4.12  the following powers and duties: 
  4.13     (a) To negotiate and enter into interstate reciprocity 
  4.14  agreements with similar agencies in other states, if in the 
  4.15  judgment of the board office such agreements are or will be 
  4.16  helpful in effectuating the purposes of Laws 1973, Chapter 714; 
  4.17     (b) To grant conditional school license for periods of less 
  4.18  than one year if in the judgment of the board office correctable 
  4.19  deficiencies exist at the time of application and when refusal 
  4.20  to issue school license would adversely affect currently 
  4.21  enrolled students; 
  4.22     (c) The board office may upon the board's its own motion, 
  4.23  and shall upon the verified complaint in writing of any person 
  4.24  setting forth fact which, if proved, would constitute grounds 
  4.25  for refusal or revocation under Laws 1973, Chapter 714, 
  4.26  investigate the actions of any applicant or any person or 
  4.27  persons holding or claiming to hold a license or permit.  
  4.28  However, before proceeding to a hearing on the question of 
  4.29  whether a license or permit shall be refused, revoked or 
  4.30  suspended for any cause enumerated in subdivision 1, the board 
  4.31  office may grant a reasonable time to the holder of or applicant 
  4.32  for a license or permit to correct the situation.  If within 
  4.33  such time the situation is corrected and the school is in 
  4.34  compliance with the provisions of this chapter, no further 
  4.35  action leading to refusal, revocation, or suspension shall be 
  4.36  taken.  
  5.1      Sec. 6.  [MORATORIUM.] 
  5.2      Notwithstanding any law to the contrary, until June 30, 
  5.3   1997, an educational institution that was licensed under 
  5.4   Minnesota Statutes, chapter 141, on December 31, 1995, must 
  5.5   continue to comply with the provisions of that chapter and may 
  5.6   not use any of the exemptions available under Minnesota 
  5.7   Statutes, section 141.35. 
  5.8      Sec. 7.  [EFFECTIVE DATE.] 
  5.9      This act is effective the day following final enactment.