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                            CHAPTER 366-H.F.No. 2565 
                  An act relating to private business, trade, and 
                  correspondence schools; modifying licensing standards; 
                  clarifying miscellaneous provisions; amending 
                  Minnesota Statutes 1994, sections 141.25, subdivision 
                  7; 141.26, subdivision 5; 141.271, subdivision 4; and 
                  141.29, subdivision 3; Minnesota Statutes 1995 
                  Supplement, section 136A.685. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        136A.685, is amended to read: 
           136A.685 [PRIVATE INSTITUTIONS; ADJUDICATION OF FRAUD OR 
        MISREPRESENTATION.] 
           The office shall not provide registration or degree or name 
        approval to a school if there has been a criminal or, civil, or 
        administrative adjudication of fraud or misrepresentation in 
        Minnesota or in another state or jurisdiction against the school 
        or its owner, officers, agents, or sponsoring organization.  
        Such an adjudication of fraud or misrepresentation shall be 
        sufficient cause for the office to determine that a school: 
           (1) does not qualify for exemption under section 136A.657; 
        or 
           (2) is not approved to grant degrees or to use the term 
        "academy," "institute," or "university" in its name. 
           Sec. 2.  Minnesota Statutes 1994, section 141.25, 
        subdivision 7, is amended to read:  
           Subd. 7.  [MINIMUM STANDARDS.] No license shall be issued 
        unless the board first determines: 
           (a) that the applicant has a sound financial condition with 
        sufficient resources available to meet the school's financial 
        obligations; to refund all tuition and other charges, within a 
        reasonable period of time, in the event of dissolution of the 
        school or in the event of any justifiable claims for refund 
        against the school by the student body; to provide adequate 
        service to its students and prospective students; and for the 
        proper use and support of the school to be maintained; 
           (b) that the applicant has satisfactory training facilities 
        with sufficient tools and equipment and the necessary number of 
        work stations to train adequately the students currently 
        enrolled, and those proposed to be enrolled; 
           (c) that the applicant employs a sufficient number of 
        qualified instructors trained by experience and education to 
        give the training contemplated; 
           (d) that the premises and conditions under which the 
        students work and study are sanitary, healthful, and safe, 
        according to modern standards; 
           (e) that each occupational course or program of instruction 
        or study shall be of such quality and content as to provide 
        education and training which will adequately prepare enrolled 
        students for entry level positions in the occupation for which 
        trained; 
           (f) that the living quarters which are owned, maintained, 
        or approved by the applicant for students are sanitary and safe; 
           (g) that the contract or enrollment agreement used by the 
        school complies with the following provisions: 
           (1) the name and address of the school must be clearly 
        stated; 
           (2) inclusion of a clear and conspicuous disclosure that 
        such agreement becomes a legally binding instrument upon written 
        acceptance of the student by the school unless canceled pursuant 
        to section 141.271; 
           (3) must contain the school's cancellation and refund 
        policy which shall be clearly and conspicuously entitled, 
        "Buyer's Right to Cancel"; 
           (4) the total cost of the course including tuition and all 
        other charges shall be clearly stated; 
           (5) the name and description of the course, including the 
        number of hours or credits of classroom instruction and/or home 
        study lessons shall be included; 
           (6) no contract or agreement shall contain a wage 
        assignment provision and/or a confession of judgment clause; 
           (7) each contract or enrollment agreement shall contain a 
        clear and conspicuous explanation of the form and means of 
        notice the student should use in the event the student elects to 
        cancel the contract or sale, the effective date of cancellation, 
        and the name and address of the seller to which the notice 
        should be sent or delivered; and 
           (h) that there has been no adjudication of fraud or 
        misrepresentation in any criminal, civil, or administrative 
        proceeding in any jurisdiction against the school or its owner, 
        officers, agents, or sponsoring organization.  
           Sec. 3.  Minnesota Statutes 1994, section 141.26, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FEE.] The initial and renewal application for 
        each permit shall be accompanied by a nonrefundable fee of 
        $250 as established by the office. 
           Sec. 4.  Minnesota Statutes 1994, section 141.271, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RESIDENT SCHOOLS.] With respect to all schools 
        offering a resident course of instruction, when a student has 
        been accepted by the school and gives written notice of 
        cancellation after the start of the course of instruction period 
        of instruction for which the student has been charged, but 
        before completion of 75 percent of the course of instruction 
        period of instruction for which the student has been charged, 
        the amount charged for tuition, fees and all other charges for 
        the completed portion of the course period of instruction for 
        which the student has been charged shall not exceed the pro rata 
        portion of the total charges for tuition, fees and all other 
        charges that the length of the completed portion of the course 
        period of instruction for which the student has been charged 
        bears to its total length, plus 25 percent of the total cost of 
        the course period of instruction for which the student has been 
        charged but not to exceed $100.  After completion of 75 percent 
        of the course of instruction period of instruction for which the 
        student has been charged, no refunds are required.  
           Sec. 5.  Minnesota Statutes 1994, section 141.29, 
        subdivision 3, is amended to read: 
           Subd. 3.  [POWERS AND DUTIES.] The board office shall have 
        (in addition to the powers and duties now vested therein by law) 
        the following powers and duties: 
           (a) To negotiate and enter into interstate reciprocity 
        agreements with similar agencies in other states, if in the 
        judgment of the board office such agreements are or will be 
        helpful in effectuating the purposes of Laws 1973, Chapter 714; 
           (b) To grant conditional school license for periods of less 
        than one year if in the judgment of the board office correctable 
        deficiencies exist at the time of application and when refusal 
        to issue school license would adversely affect currently 
        enrolled students; 
           (c) The board office may upon the board's its own motion, 
        and shall upon the verified complaint in writing of any person 
        setting forth fact which, if proved, would constitute grounds 
        for refusal or revocation under Laws 1973, Chapter 714, 
        investigate the actions of any applicant or any person or 
        persons holding or claiming to hold a license or permit.  
        However, before proceeding to a hearing on the question of 
        whether a license or permit shall be refused, revoked or 
        suspended for any cause enumerated in subdivision 1, the board 
        office may grant a reasonable time to the holder of or applicant 
        for a license or permit to correct the situation.  If within 
        such time the situation is corrected and the school is in 
        compliance with the provisions of this chapter, no further 
        action leading to refusal, revocation, or suspension shall be 
        taken.  
           Sec. 6.  [MORATORIUM.] 
           Notwithstanding any law to the contrary, until June 30, 
        1997, an educational institution that was licensed under 
        Minnesota Statutes, chapter 141, on December 31, 1995, must 
        continue to comply with the provisions of that chapter and may 
        not use any of the exemptions available under Minnesota 
        Statutes, section 141.35. 
           Sec. 7.  [EFFECTIVE DATE.] 
           This act is effective the day following final enactment. 
           Presented to the governor March 21, 1996 
           Signed by the governor March 22, 1996, 10:50 a.m.