1.1                          A bill for an act 
  1.2             relating to education; clarifying and changing 
  1.3             requirements for private career schools; providing for 
  1.4             rulemaking; amending Minnesota Statutes 1998, sections 
  1.5             141.21, subdivisions 3, 5, 6, and by adding 
  1.6             subdivisions; 141.22; 141.25, subdivisions 1, 2, 3, 5, 
  1.7             6, 7, 8, 9, 10, and 12; 141.26, subdivision 2; 
  1.8             141.271, subdivisions 1, 2, 3, 4, 5, 6, and 12; 
  1.9             141.28, subdivisions 3 and 5; 141.29, subdivision 1; 
  1.10            141.31; 141.32; and 141.35; proposing coding for new 
  1.11            law in Minnesota Statutes, chapter 141; repealing 
  1.12            Minnesota Statutes 1998, sections 141.25, subdivisions 
  1.13            9a, 9b, and 11; and 141.36. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1998, section 141.21, 
  1.16  subdivision 3, is amended to read: 
  1.17     Subd. 3.  [SOLICITOR.] "Solicitor" means a person who for a 
  1.18  salary or for commission, acts as an agent, independent 
  1.19  contractor, salesperson, or counselor in ~~procuring or attempting~~ 
  1.20  ~~to procure~~ recruiting students ~~or enrollees~~ for a ~~course of~~ 
  1.21  ~~instruction by solicitation in~~ program using any ~~form made~~ 
  1.22  method, at any place except on the actual business premises of 
  1.23  the school ~~and except for rendering~~, other than only providing 
  1.24  public information ~~service~~ at the invitation or permission of a 
  1.25  school or educational organization.  
  1.26     Sec. 2.  Minnesota Statutes 1998, section 141.21, 
  1.27  subdivision 5, is amended to read: 
  1.28     Subd. 5.  [SCHOOL.] "School" means any person, within or 
  1.29  ~~without~~ outside the state, ~~that~~ who maintains, advertises, 
  2.1   solicits, or conducts any ~~course of instruction~~ program for 
  2.2   profit ~~or for a tuition charge~~ at any level other than 
  2.3   baccalaureate or graduate programs, and ~~which~~ is not 
  2.4   specifically exempted by ~~the provisions of~~ sections 141.21 to 
  2.5   ~~141.36~~ 141.35.  
  2.6      Sec. 3.  Minnesota Statutes 1998, section 141.21, 
  2.7   subdivision 6, is amended to read: 
  2.8      Subd. 6.  [COURSE ~~OF INSTRUCTION~~.] "Course ~~of instruction~~" 
  2.9   means any classroom, correspondence, or extension ~~course of~~ 
  2.10  instruction; any subunit of a program; or any combination 
  2.11  thereof.  
  2.12     Sec. 4.  Minnesota Statutes 1998, section 141.21, is 
  2.13  amended by adding a subdivision to read: 
  2.14     Subd. 8.  [PROGRAM.] "Program" means any course or grouping 
  2.15  of courses that is advertised or listed in a school's catalog, 
  2.16  brochures, or other publications, or for which the school grants 
  2.17  a formal recognition. 
  2.18     Sec. 5.  Minnesota Statutes 1998, section 141.21, is 
  2.19  amended by adding a subdivision to read: 
  2.20     Subd. 9.  [DISTANCE EDUCATION SCHOOL.] "Distance education 
  2.21  school" means a school that establishes, keeps, or maintains a 
  2.22  facility or location where a program is offered through 
  2.23  correspondence, telecommunication, or electronic media. 
  2.24     Sec. 6.  Minnesota Statutes 1998, section 141.22, is 
  2.25  amended to read: 
  2.26     141.22 [CITATION.] 
  2.27     Sections 141.21 to ~~141.36~~ 141.35 may be cited as the 
  2.28  Private ~~Business, Trade and Correspondence~~ Career School Act.  
  2.29     Sec. 7.  Minnesota Statutes 1998, section 141.25, 
  2.30  subdivision 1, is amended to read: 
  2.31     Subdivision 1.  [REQUIRED.] ~~No~~ A school shall not maintain, 
  2.32  advertise, solicit for, or conduct any ~~course of instruction~~ 
  2.33  program in Minnesota without first obtaining a license from the 
  2.34  office.  
  2.35     Sec. 8.  Minnesota Statutes 1998, section 141.25, 
  2.36  subdivision 2, is amended to read: 
  3.1      Subd. 2.  [CONTRACT UNENFORCEABLE.] ~~Any~~ A contract entered 
  3.2   into with ~~any~~ a person for a ~~course of instruction~~ program 
  3.3   ~~after November 15, 1969,~~ by or on behalf of ~~any~~ a person 
  3.4   operating ~~any~~ a school to which a license has not been 
  3.5   issued ~~pursuant to~~ under sections 141.21 to ~~141.36~~ 141.35, shall 
  3.6   be unenforceable in any action ~~brought thereon~~.  
  3.7      Sec. 9.  Minnesota Statutes 1998, section 141.25, 
  3.8   subdivision 3, is amended to read: 
  3.9      Subd. 3.  [APPLICATION.] Application for a license shall be 
  3.10  on forms prepared and furnished by the office, and shall ~~contain~~ 
  3.11  include the following and ~~such~~ other information as the office 
  3.12  may require: 
  3.13     ~~(a)~~ (1) the title or name of the school, ~~together with~~ 
  3.14  ownership and controlling officers, members, managing employees, 
  3.15  and director; 
  3.16     ~~(b)~~ (2) the specific ~~fields of instruction~~ programs which 
  3.17  will be offered and the specific purposes of ~~such~~ the 
  3.18  instruction; 
  3.19     ~~(c)~~ (3) the place or places where ~~such~~ the instruction will 
  3.20  be given; 
  3.21     ~~(d)~~ (4) a listing of the equipment available for 
  3.22  instruction in each ~~course of instruction~~ program; 
  3.23     ~~(e)~~ (5) the maximum enrollment to be accommodated with 
  3.24  equipment available in each specified ~~course of instruction~~ 
  3.25  program; 
  3.26     ~~(f)~~ (6) the qualifications of instructors and supervisors 
  3.27  in each specified ~~course of instruction~~ program; 
  3.28     ~~(g)~~ (7) a current balance sheet, income statement, and 
  3.29  adequate supporting documentation, prepared and certified by an 
  3.30  independent public accountant or CPA; 
  3.31     ~~(h)~~ (8) copies of all media advertising and promotional 
  3.32  literature and brochures currently used or reasonably expected 
  3.33  to be used by ~~such~~ the school; 
  3.34     ~~(i)~~ (9) copies of all Minnesota enrollment agreement forms 
  3.35  and contract forms and all enrollment agreement forms and 
  3.36  contract forms used in Minnesota; and 
  4.1      (10) gross income earned in the preceding year from student 
  4.2   tuition, fees, and other required institutional charges, unless 
  4.3   the school files with the office a surety bond equal to at least 
  4.4   $50,000 as described in subdivision 5.  
  4.5      Sec. 10.  Minnesota Statutes 1998, section 141.25, 
  4.6   subdivision 5, is amended to read: 
  4.7      Subd. 5.  [BOND.] (a) No license shall be issued to any 
  4.8   school which maintains, conducts, solicits for, or advertises 
  4.9   within the state of Minnesota any ~~course of instruction~~ program, 
  4.10  unless the applicant files with the office a continuous 
  4.11  corporate surety bond ~~in the sum of $10,000~~ written by a company 
  4.12  authorized to do business in Minnesota conditioned upon the 
  4.13  faithful performance of all contracts and agreements with 
  4.14  students made by the applicant.  ~~Such~~ 
  4.15     (b) The amount of the surety bond shall be ten percent of 
  4.16  the preceding year's gross income from student tuition, fees, 
  4.17  and other required institutional charges, but in no event less 
  4.18  than $10,000 nor greater than $50,000, except that a school may 
  4.19  deposit a greater amount at its own discretion.  A school in 
  4.20  each annual application for licensure must compute the amount of 
  4.21  the surety bond and verify that the amount of the surety bond 
  4.22  complies with this subdivision, unless the school maintains a 
  4.23  surety bond equal to at least $50,000.  A school that operates 
  4.24  at two or more locations may combine gross income from student 
  4.25  tuition, fees, and other required institutional charges for all 
  4.26  locations for the purpose of determining the annual surety bond 
  4.27  requirement.  The gross tuition and fees used to determine the 
  4.28  amount of the surety bond required for a school having a license 
  4.29  for the sole purpose of recruiting students in Minnesota shall 
  4.30  be only that paid to the school by the students recruited from 
  4.31  Minnesota. 
  4.32     (c) The bond shall run to the state of Minnesota and to any 
  4.33  person who may have a cause of action against the applicant 
  4.34  arising at any time after the bond is filed and before it is 
  4.35  canceled for breach of any contract or agreement made by the 
  4.36  applicant with any student.  The aggregate liability of the 
  5.1   surety for all breaches of the conditions of the bond shall not 
  5.2   exceed the principal sum ~~of $10,000~~ deposited by the school 
  5.3   under paragraph (b).  The surety of any ~~such~~ bond may cancel it 
  5.4   upon giving 60 days' notice in writing to the office and shall 
  5.5   be relieved of liability for any breach of condition occurring 
  5.6   after the effective date of cancellation. 
  5.7      (d) In lieu of bond, the applicant may deposit with the 
  5.8   state treasurer ~~the~~ a sum ~~of $10,000~~ equal to the amount of the 
  5.9   required surety bond in cash, or securities ~~such~~ as may be 
  5.10  legally purchased by savings banks or for trust funds in an 
  5.11  aggregate market value ~~of $10,000~~ equal to the amount of the 
  5.12  required surety bond.  
  5.13     (e) Failure of a school to post and maintain the required 
  5.14  surety bond or deposit under paragraph (d) may result in denial, 
  5.15  suspension, or revocation of the school's license.  
  5.16     Sec. 11.  Minnesota Statutes 1998, section 141.25, 
  5.17  subdivision 6, is amended to read: 
  5.18     Subd. 6.  [RESIDENT AGENT.] Schools ~~domiciled~~ located 
  5.19  outside the state of Minnesota ~~which~~ that offer, advertise, 
  5.20  solicit for, or conduct any ~~course of instruction~~ program within 
  5.21  the state of Minnesota shall first file with the secretary of 
  5.22  state a sworn statement designating a resident agent authorized 
  5.23  to receive service of process.  ~~Such~~ The statement shall 
  5.24  designate the secretary of state as resident agent for service 
  5.25  of process in the absence of ~~an~~ a designated agent ~~otherwise so~~ 
  5.26  ~~designated~~.  ~~In the event~~ If a school fails to file ~~such~~ the 
  5.27  statement, the secretary of state is ~~hereby~~ designated as the 
  5.28  resident agent authorized to receive service of process.  ~~Such~~ 
  5.29  The authorization shall be irrevocable as to causes of action 
  5.30  arising out of transactions occurring prior to the filing of 
  5.31  written notice of withdrawal from the state of Minnesota filed 
  5.32  with the secretary of state.  
  5.33     Sec. 12.  Minnesota Statutes 1998, section 141.25, 
  5.34  subdivision 7, is amended to read: 
  5.35     Subd. 7.  [MINIMUM STANDARDS.] ~~No~~ A license shall be issued 
  5.36  ~~unless~~ if the office first determines: 
  6.1      ~~(a)~~ (1) that the applicant has a sound financial condition 
  6.2   with sufficient resources available to: 
  6.3      (i) meet the school's financial obligations; ~~to~~ 
  6.4      (ii) refund all tuition and other charges, within a 
  6.5   reasonable period of time, in the event of dissolution of the 
  6.6   school or in the event of any justifiable claims for refund 
  6.7   against the school by the student body; ~~to~~ 
  6.8      (iii) provide adequate service to its students and 
  6.9   prospective students; and ~~for the proper use~~ 
  6.10     (iv) maintain and support ~~of~~ the school ~~to be maintained~~; 
  6.11     ~~(b)~~ (2) that the applicant has satisfactory ~~training~~ 
  6.12  facilities with sufficient tools and equipment and the necessary 
  6.13  number of work stations to ~~train~~ prepare adequately the students 
  6.14  currently enrolled, and those proposed to be enrolled; 
  6.15     ~~(c)~~ (3) that the applicant employs a sufficient number of 
  6.16  qualified ~~instructors trained by experience and education~~ 
  6.17  teaching personnel to ~~give~~ provide the ~~training~~ educational 
  6.18  programs contemplated; 
  6.19     ~~(d)~~ (4) that the school has an organizational framework 
  6.20  with administrative and instructional personnel to provide the 
  6.21  programs and services it intends to offer; 
  6.22     (5) that the premises and conditions under which the 
  6.23  students work and study are sanitary, healthful, and safe, 
  6.24  according to modern standards; 
  6.25     ~~(e)~~ (6) that the quality and content of each occupational 
  6.26  course or program ~~of instruction~~ or study ~~shall be of such~~ 
  6.27  ~~quality and content as to provide~~ provides education and 
  6.28  ~~training which will adequately prepare~~ adequate preparation to 
  6.29  enrolled students for entry level positions in the occupation 
  6.30  for which ~~trained~~ prepared; 
  6.31     ~~(f)~~ (7) that the living quarters which are owned, 
  6.32  maintained, or approved by the applicant for students are 
  6.33  sanitary and safe; 
  6.34     ~~(g)~~ (8) that the contract or enrollment agreement used by 
  6.35  the school complies with the ~~following~~ provisions~~:~~ in section 
  6.36  141.265; 
  7.1      ~~(1) the name and address of the school must be clearly~~ 
  7.2   ~~stated;~~ 
  7.3      ~~(2) inclusion of a clear and conspicuous disclosure that~~ 
  7.4   ~~such agreement becomes a legally binding instrument upon written~~ 
  7.5   ~~acceptance of the student by the school unless canceled pursuant~~ 
  7.6   ~~to section 141.271;~~ 
  7.7      ~~(3) must contain the school's cancellation and refund~~ 
  7.8   ~~policy which shall be clearly and conspicuously entitled,~~ 
  7.9   ~~"Buyer's Right to Cancel";~~ 
  7.10     ~~(4) the total cost of the course including tuition and all~~ 
  7.11  ~~other charges shall be clearly stated;~~ 
  7.12     ~~(5) the name and description of the course, including the~~ 
  7.13  ~~number of hours or credits of classroom instruction and/or home~~ 
  7.14  ~~study lessons shall be included;~~ 
  7.15     ~~(6) no contract or agreement shall~~ (9) that contracts and 
  7.16  agreements do not contain a wage assignment provision ~~and/or~~ or 
  7.17  a confession of judgment clause; and 
  7.18     ~~(7) each contract or enrollment agreement shall contain a~~ 
  7.19  ~~clear and conspicuous explanation of the form and means of~~ 
  7.20  ~~notice the student should use in the event the student elects to~~ 
  7.21  ~~cancel the contract or sale, the effective date of cancellation,~~ 
  7.22  ~~and the name and address of the seller to which the notice~~ 
  7.23  ~~should be sent or delivered; and~~ 
  7.24     ~~(h)~~ (10) that there has been no adjudication of fraud or 
  7.25  misrepresentation in any criminal, civil, or administrative 
  7.26  proceeding in any jurisdiction against the school or its owner, 
  7.27  officers, agents, or sponsoring organization.  
  7.28     Sec. 13.  Minnesota Statutes 1998, section 141.25, 
  7.29  subdivision 8, is amended to read: 
  7.30     Subd. 8.  [FEES AND TERMS OF LICENSE.] ~~(a) Applications~~ An 
  7.31  application for an initial license under sections 141.21 
  7.32  to ~~141.36~~ 141.35 shall be accompanied by a nonrefundable 
  7.33  application fee established by the office that is sufficient to 
  7.34  recover, but not exceed, its administrative costs. 
  7.35     ~~(b)~~ All licenses shall expire one year from the date issued 
  7.36  by the office.  ~~Each renewal application shall be accompanied by~~ 
  8.1   ~~a nonrefundable renewal fee established by the office that is~~ 
  8.2   ~~sufficient to recover, but does not exceed, its administrative~~ 
  8.3   ~~costs.~~  
  8.4      ~~(c) Application for renewal of license shall be made at~~ 
  8.5   ~~least 30 days before the expiration of the school's current~~ 
  8.6   ~~license.  Each renewal form shall be supplied by the office.  It~~ 
  8.7   ~~shall not be necessary for an applicant to supply all~~ 
  8.8   ~~information required in the initial application at the time of~~ 
  8.9   ~~renewal unless requested by the office.~~  
  8.10     Sec. 14.  Minnesota Statutes 1998, section 141.25, 
  8.11  subdivision 9, is amended to read: 
  8.12     Subd. 9.  [CATALOG OR BROCHURE.] Before a license is issued 
  8.13  to a school~~, other than one which offers exclusively a~~ 
  8.14  ~~correspondence course of instruction~~, the school shall furnish 
  8.15  to the office a catalog or brochure ~~containing the~~ 
  8.16  ~~following~~ including: 
  8.17     (1) identifying data, such as volume number and date of 
  8.18  publication; 
  8.19     (2) name and address of the school and its governing body 
  8.20  and officials; 
  8.21     (3) a calendar of the school showing legal holidays, 
  8.22  beginning and ending dates of each course quarter, term, or 
  8.23  semester, and other important dates; 
  8.24     (4) the school policy and regulations on enrollment 
  8.25  including dates and specific entrance requirements for 
  8.26  each ~~course~~ program; 
  8.27     (5) the school policy and regulations about leave, 
  8.28  absences, class cuts, make-up work, tardiness, and interruptions 
  8.29  for unsatisfactory attendance; 
  8.30     (6) the school policy and regulations about standards of 
  8.31  progress for the student including the grading system of the 
  8.32  school, the minimum grades considered satisfactory, conditions 
  8.33  for interruption for unsatisfactory grades or progress, a 
  8.34  description of any probationary period allowed by the school, 
  8.35  and conditions of reentrance for those dismissed for 
  8.36  unsatisfactory progress; 
  9.1      (7) the school policy and regulations about student conduct 
  9.2   and conditions for dismissal for unsatisfactory conduct; 
  9.3      (8) a detailed schedule of fees, charges for tuition, 
  9.4   books, supplies, tools, student activities, laboratory fees, 
  9.5   service charges, rentals, deposits, and all other charges; 
  9.6      (9) the school policy and regulations, including an 
  9.7   explanation of section 141.271, about refunding tuition, fees, 
  9.8   and other charges if the student does not enter the ~~course~~ 
  9.9   program, withdraws from the program, or the program is 
  9.10  discontinued; 
  9.11     (10) a description of the available facilities and 
  9.12  equipment; 
  9.13     (11) a course outline for each course offered showing 
  9.14  course objectives, subjects or units in the course, type of work 
  9.15  or skill to be learned, and approximate time, hours, or credits 
  9.16  to be spent on each subject or unit; ~~and~~ 
  9.17     (12) the school policy and regulations about granting 
  9.18  credit for previous education and ~~training~~ preparation; 
  9.19     (13) a procedure for investigating and resolving student 
  9.20  complaints; and 
  9.21     (14) the name and address of the Minnesota higher education 
  9.22  services office. 
  9.23     A school exclusively offering a correspondence program is 
  9.24  exempt from clauses (3) and (5). 
  9.25     Sec. 15.  Minnesota Statutes 1998, section 141.25, 
  9.26  subdivision 10, is amended to read: 
  9.27     Subd. 10.  [PLACEMENT RECORDS.] (a) Before a license is 
  9.28  issued to a school that offers, advertises or implies a 
  9.29  placement service, the school shall file with the office for the 
  9.30  past year and thereafter at reasonable intervals determined by 
  9.31  the office, a certified copy of the school's placement record, 
  9.32  containing a list of graduates, a description of their ~~job~~ jobs, 
  9.33  ~~name~~ names of their ~~employer~~ employers, and other information as 
  9.34  the office may prescribe.  
  9.35     (b) Each school that offers a placement service shall 
  9.36  furnish to each prospective student, prior to enrollment, 
 10.1   written information concerning the percentage of the previous 
 10.2   year's graduates who were placed in the occupation for which 
 10.3   ~~trained~~ prepared or in related employment. 
 10.4      Sec. 16.  Minnesota Statutes 1998, section 141.25, 
 10.5   subdivision 12, is amended to read: 
 10.6      Subd. 12.  [PERMANENT RECORDS.] ~~Before a license is issued~~ 
 10.7   ~~to a school, each~~ A school licensed under this chapter and 
 10.8   located in Minnesota shall maintain a permanent ~~records~~ record 
 10.9   for ~~all students enrolled at any time~~ each student for 50 years 
 10.10  from the last date of the student's attendance.  ~~Each~~ A school 
 10.11  licensed under this chapter and offering a correspondence ~~course~~ 
 10.12  ~~of instruction~~ program to a student located in Minnesota shall 
 10.13  maintain a permanent ~~records~~ record for each Minnesota 
 10.14  ~~students enrolled at any time~~ student for 50 years from the last 
 10.15  date of the student's attendance.  Records include school 
 10.16  transcripts, documents, and files containing student data about 
 10.17  academic credits earned, courses completed, grades awarded, 
 10.18  degrees awarded, and periods of attendance.  To preserve 
 10.19  permanent records, a school shall submit a plan that meets the 
 10.20  following requirements: 
 10.21     ~~(a)~~ (1) at least one copy of the records must be held in a 
 10.22  secure depository; 
 10.23     ~~(b)~~ (2) an appropriate official must be designated to 
 10.24  provide a student with copies of records or a transcript upon 
 10.25  request; 
 10.26     ~~(c)~~ (3) an alternative method of complying with ~~paragraphs~~ 
 10.27  ~~(a) and (b)~~ clauses (1) and (2) must be established if the 
 10.28  school ceases to exist; and 
 10.29     ~~(d)~~ (4) a continuous surety bond must be filed with the 
 10.30  office in an amount not to exceed $20,000 if the school has no 
 10.31  binding agreement for preserving student records or a trust must 
 10.32  be arranged if the school ceases to exist. 
 10.33     Sec. 17.  [141.251] [LICENSE RENEWAL.] 
 10.34     Subdivision 1.  [CONDITIONS.] The office shall adopt rules 
 10.35  establishing the different conditions for renewal of a license 
 10.36  based on the record of the school.  The conditions shall permit 
 11.1   renewal based on a relaxed standard of scrutiny for a school 
 11.2   that has demonstrated the quality of its program and operation 
 11.3   through longevity and performance.  The office shall specify 
 11.4   minimum longevity standards and performance indicators that must 
 11.5   be met before a school may be permitted to operate under the 
 11.6   relaxed standard of scrutiny.  The performance indicators used 
 11.7   in this determination shall include, but not be limited to:  
 11.8   degree granting status, national accreditation, loan default 
 11.9   rates, placement rate of graduates, student withdrawal rates, 
 11.10  audit results, student complaints, and school status with the 
 11.11  United States Department of Education.  Schools that meet the 
 11.12  requirements established in rule shall be required to submit a 
 11.13  full relicensure report once every four years, and in the 
 11.14  interim years will be exempt from the requirements of section 
 11.15  141.25, subdivision 3, clauses (4), (5), and (8), and Minnesota 
 11.16  Rules, parts 4880.1700, subpart 6; and 4880.2100, subpart 4. 
 11.17     Subd. 2.  [APPLICATION.] Application for renewal of a 
 11.18  license must be made at least 30 days before expiration of the 
 11.19  current license on a form provided by the office.  A renewal 
 11.20  application shall be accompanied by a nonrefundable fee 
 11.21  established by the office that is sufficient to recover, but 
 11.22  does not exceed, its administrative costs. 
 11.23     Sec. 18.  Minnesota Statutes 1998, section 141.26, 
 11.24  subdivision 2, is amended to read: 
 11.25     Subd. 2.  [APPLICATION FOR PERMIT.] (a) The application for 
 11.26  the permit shall state the full name, address, previous 
 11.27  employment, and such other information concerning the solicitor 
 11.28  applicant as the office may require.  
 11.29     (b) The application shall have attached to it a certified 
 11.30  affidavit signed by a school official and the solicitor 
 11.31  attesting to the fact that the applicant has been furnished a 
 11.32  copy, has read and has knowledge of the provisions of this 
 11.33  chapter and Minnesota Rules~~, parts 3530.6500 to 3530.7800~~.  
 11.34     Sec. 19.  [141.265] [INFORMATION TO STUDENTS.] 
 11.35     Subdivision 1.  [CATALOG.] A school or its agent shall 
 11.36  deliver the catalog or brochure required in section 141.25, 
 12.1   subdivision 9, to a prospective student in a time or manner that 
 12.2   provides the prospective student ample opportunity to read the 
 12.3   catalog or brochure before signing a contract or enrollment 
 12.4   agreement or before being accepted by a school that does not use 
 12.5   a written contract or enrollment agreement. 
 12.6      Subd. 2.  [CONTRACT INFORMATION.] A contract or enrollment 
 12.7   agreement used by a school must include at least the following: 
 12.8      (1) the name and address of the school, clearly stated; 
 12.9      (2) a clear and conspicuous disclosure that the agreement 
 12.10  is a legally binding instrument upon written acceptance of the 
 12.11  student by the school unless canceled under section 141.271; 
 12.12     (3) the school's cancellation and refund policy that shall 
 12.13  be clearly and conspicuously entitled "Buyer's Right to Cancel"; 
 12.14     (4) a clear statement of total cost of the program 
 12.15  including tuition and all other charges; 
 12.16     (5) the name and description of the program, including the 
 12.17  number of hours or credits of classroom instruction, 
 12.18  correspondence lessons, or both that shall be included; and 
 12.19     (6) a clear and conspicuous explanation of the form and 
 12.20  means of notice the student should use in the event the student 
 12.21  elects to cancel the contract or sale, the effective date of 
 12.22  cancellation, and the name and address of the seller to which 
 12.23  the notice should be sent or delivered. 
 12.24     Subd. 3.  [CONTRACT COPIES.] Immediately upon signing of 
 12.25  the enrollment agreement or the contract by a prospective 
 12.26  student, the school or agent shall furnish to the prospective 
 12.27  student an exact duplicate copy of the enrollment agreement or 
 12.28  contract.  
 12.29     Sec. 20.  Minnesota Statutes 1998, section 141.271, 
 12.30  subdivision 1, is amended to read: 
 12.31     Subdivision 1.  [~~NOTICE OF ACCEPTANCE OR REJECTION; RIGHT~~ 
 12.32  ~~TO REFUND~~ STUDENT.] For the purposes of this section, "student" 
 12.33  means the party to the contract, whether the party is the 
 12.34  student, the student's parent or guardian, or other person on 
 12.35  behalf of the student. 
 12.36     Subd. 1a.  [NOTICE; RIGHT TO REFUND.] Every school shall 
 13.1   notify each student, in writing, of acceptance or rejection.  In 
 13.2   the event that the student is rejected by the school, all 
 13.3   tuition, fees and other charges shall be refunded.  
 13.4      Sec. 21.  Minnesota Statutes 1998, section 141.271, 
 13.5   subdivision 2, is amended to read: 
 13.6      Subd. 2.  [SCHOOLS USING WRITTEN CONTRACTS.] (a) 
 13.7   Notwithstanding anything to the contrary, ~~every~~ a school ~~which~~ 
 13.8   that ~~utilizes~~ uses a written contract or enrollment agreement 
 13.9   shall refund all tuition, fees and other charges paid by a 
 13.10  student, if the student gives written notice of cancellation 
 13.11  within five business days after the day on which the contract 
 13.12  was executed regardless of whether the ~~course of instruction~~ 
 13.13  program has started.  
 13.14     (b) ~~With respect to those schools utilizing a written~~ 
 13.15  ~~contract or enrollment agreement,~~ When a student has been 
 13.16  accepted by the school and has entered into a contractual 
 13.17  agreement with the school and gives written notice of 
 13.18  cancellation following the fifth business day after the date of 
 13.19  execution of contract, but before the start of the ~~course of~~ 
 13.20  ~~instruction~~ program in the case of resident schools, or before 
 13.21  the first lesson has been serviced by the school in the case of 
 13.22  correspondence ~~(home study)~~ schools, all tuition, fees and other 
 13.23  charges, except 15 percent of the total cost of the ~~course~~ 
 13.24  program but not to exceed $50, shall be refunded to the student. 
 13.25     Sec. 22.  Minnesota Statutes 1998, section 141.271, 
 13.26  subdivision 3, is amended to read: 
 13.27     Subd. 3.  [SCHOOLS NOT USING WRITTEN CONTRACTS.] (a) 
 13.28  Notwithstanding anything to the contrary, ~~every~~ a school ~~which~~ 
 13.29  that does not ~~utilize~~ use a written contract or enrollment 
 13.30  agreement shall refund all tuition, fees and other charges paid 
 13.31  by a student if the student gives written notice of cancellation 
 13.32  within five business days after the day on which the student is 
 13.33  accepted by the school regardless of whether the ~~course of~~ 
 13.34  ~~instruction~~ program has started. 
 13.35     (b) ~~With respect to those schools not utilizing a written~~ 
 13.36  ~~contract or enrollment agreement,~~ When a student has been 
 14.1   accepted by the school and gives written notice of cancellation 
 14.2   following the fifth business day after the day of acceptance by 
 14.3   the school, but before the start of the ~~course of~~ 
 14.4   ~~instruction~~ program, in the case of resident schools, or before 
 14.5   the first lesson has been serviced by the school, in the case of 
 14.6   correspondence ~~(home study)~~ schools, all tuition, fees and other 
 14.7   charges, except 15 percent of the total cost of the ~~course~~ 
 14.8   program but not to exceed $50, shall be refunded to the student. 
 14.9      Sec. 23.  Minnesota Statutes 1998, section 141.271, 
 14.10  subdivision 4, is amended to read: 
 14.11     Subd. 4.  [RESIDENT SCHOOLS.] ~~With respect to all schools~~ 
 14.12  ~~offering a resident course of instruction,~~ When a student has 
 14.13  been accepted by ~~the~~ a school offering a resident program and 
 14.14  gives written notice of cancellation after the start of the 
 14.15  period of instruction for which the student has been charged, 
 14.16  but before completion of 75 percent of the period of instruction 
 14.17  ~~for which the student has been charged~~, the amount charged for 
 14.18  tuition, fees, and all other charges ~~for the completed portion~~ 
 14.19  ~~of the period of instruction for which the student has been~~ 
 14.20  ~~charged~~ shall ~~not exceed the pro rata~~ be prorated as a portion 
 14.21  of the total charges for tuition, fees, and all other charges 
 14.22  ~~that the length of the completed portion of the period of~~ 
 14.23  ~~instruction for which the student has been charged bears to its~~ 
 14.24  ~~total length, plus~~.  An additional 25 percent of the total cost 
 14.25  of the period of instruction ~~for which the student has been~~ 
 14.26  ~~charged~~ may be added, but shall not ~~to~~ exceed $100.  After 
 14.27  completion of 75 percent of the period of instruction for which 
 14.28  the student has been charged, no refunds are required.  
 14.29     Sec. 24.  Minnesota Statutes 1998, section 141.271, 
 14.30  subdivision 5, is amended to read: 
 14.31     Subd. 5.  [CORRESPONDENCE HOME STUDY SCHOOLS.] ~~With respect~~ 
 14.32  ~~to all schools offering a correspondence (home study) course of~~ 
 14.33  ~~instruction,~~ When a student has been accepted by ~~the~~ a 
 14.34  correspondence school and gives written notice of cancellation 
 14.35  after the first lesson has been completed by the student and 
 14.36  serviced by the school, but before completion of 75 percent of 
 15.1   the ~~course of instruction~~ program, the amount charged for 
 15.2   tuition, fees and all other charges for the completed lessons 
 15.3   shall ~~not exceed the pro rata~~ be prorated as a portion of the 
 15.4   total charges for tuition, fees and all other charges ~~that the~~ 
 15.5   ~~number of lessons completed by the student bears to the total~~ 
 15.6   ~~number of lessons offered, plus~~.  An additional 25 percent of 
 15.7   the total cost of the ~~course~~ program may be added but shall not 
 15.8   ~~to~~ exceed $75.  After completion of 75 percent of the ~~course of~~ 
 15.9   ~~instruction~~ program, no refunds are required.  
 15.10     Sec. 25.  Minnesota Statutes 1998, section 141.271, 
 15.11  subdivision 6, is amended to read: 
 15.12     Subd. 6.  [COMBINATION CORRESPONDENCE-RESIDENT SCHOOLS.] 
 15.13  ~~With respect to all schools offering a combination~~ 
 15.14  ~~correspondence (home study)-resident course of instruction,~~ When 
 15.15  a student has been accepted by ~~the~~ a school that offers a 
 15.16  combination correspondence-residence program and gives written 
 15.17  notice of cancellation after the start of the ~~course of~~ 
 15.18  ~~instruction~~ program or after the first lesson has been completed 
 15.19  by the student and serviced by the school, whichever phase comes 
 15.20  first, the school shall refund all tuition, fees and other 
 15.21  charges as provided ~~for~~ in subdivision 4 if cancellation occurs 
 15.22  during the resident portion, and as provided for in subdivision 
 15.23  5 if cancellation occurs during the correspondence portion~~;~~ 
 15.24  ~~provided that,~~.  If the cancellation occurs before the student 
 15.25  has commenced one of the phases, the price of that phase shall 
 15.26  not be considered in making the proration and the student shall 
 15.27  be entitled to a full refund of the ~~price thereof~~ charges.  
 15.28  Conversely, if the student has completed a phase of the ~~course~~ 
 15.29  program before cancellation, the ~~price thereof~~ charges may be 
 15.30  retained by the school provided that the total tuition, fees and 
 15.31  other charges for each phase have been stated separately in the 
 15.32  school's catalog and contract or enrollment agreement.  
 15.33     Sec. 26.  Minnesota Statutes 1998, section 141.271, 
 15.34  subdivision 12, is amended to read: 
 15.35     Subd. 12.  [INSTRUMENT NOT TO BE NEGOTIATED.] ~~No~~ A school 
 15.36  shall not negotiate any promissory instrument received as 
 16.1   payment of tuition or other charge prior to completion of 50 
 16.2   percent of the ~~course of instruction~~ program.  Prior to ~~such~~ 
 16.3   that time, ~~such~~ instruments may be transferred by assignment to 
 16.4   purchasers who shall be subject to all defenses available 
 16.5   against the school named as payee.  
 16.6      Sec. 27.  Minnesota Statutes 1998, section 141.28, 
 16.7   subdivision 3, is amended to read: 
 16.8      Subd. 3.  [FALSE STATEMENTS.] ~~No~~ A school, agent, or 
 16.9   solicitor shall not make, or cause to be made, any statement or 
 16.10  representation, oral, written or visual, in connection with the 
 16.11  offering or publicizing of a ~~course~~ program, if ~~such~~ the school, 
 16.12  agent, or solicitor knows or reasonably should have known the 
 16.13  statement or representation to be false, fraudulent, deceptive, 
 16.14  substantially inaccurate, or misleading.  
 16.15     Sec. 28.  Minnesota Statutes 1998, section 141.28, 
 16.16  subdivision 5, is amended to read: 
 16.17     Subd. 5.  [IMPROBABLE ~~COURSE~~ PROGRAM COMPLETION OR 
 16.18  EMPLOYMENT.] ~~No~~ A school, agent, or solicitor shall not enroll a 
 16.19  prospective student when it is obvious that the prospective 
 16.20  student is unlikely to successfully complete a ~~course of~~ 
 16.21  ~~instruction~~ program or is unlikely to qualify for employment in 
 16.22  the vocation or field for which the ~~training~~ preparation is 
 16.23  designed unless this fact is affirmatively disclosed to the 
 16.24  prospective student.  If a prospective student expresses a 
 16.25  desire to enroll after such disclosure, a disclaimer may be 
 16.26  obtained by the school.  ~~Such~~ The disclaimer shall be signed by 
 16.27  the student and shall state substantially ~~as follows~~ one or both 
 16.28  of the following:  "I am fully aware that it is unlikely I will 
 16.29  be able to successfully complete the ~~course of instruction~~ 
 16.30  program" and~~/or~~ "I am fully aware of the improbability or 
 16.31  impossibility that I will qualify for employment in the vocation 
 16.32  or field for which the ~~course~~ program was designed."  
 16.33     Sec. 29.  Minnesota Statutes 1998, section 141.29, 
 16.34  subdivision 1, is amended to read: 
 16.35     Subdivision 1.  [GROUNDS.] The office may, after notice and 
 16.36  upon providing an opportunity for a hearing, ~~pursuant to~~ under 
 17.1   chapter 14 if requested by the parties adversely affected, 
 17.2   refuse to issue, refuse to renew, revoke, or suspend ~~any~~ a 
 17.3   license or solicitor's permit for any ~~one or any combination~~ of 
 17.4   the following grounds: 
 17.5      ~~(a)~~ (1) violation of any provisions of sections 141.21 to 
 17.6   ~~141.36~~ 141.35 or any rule ~~promulgated~~ adopted by the office; 
 17.7      ~~(b)~~ (2) furnishing to the office false, misleading, or 
 17.8   incomplete information; 
 17.9      ~~(c)~~ (3) presenting to prospective students information 
 17.10  relating to the school ~~which~~ that is false, fraudulent, 
 17.11  deceptive, substantially inaccurate, or misleading; 
 17.12     ~~(d)~~ (4) refusal to allow reasonable inspection or supply 
 17.13  reasonable information after written request ~~therefor~~ by the 
 17.14  office; 
 17.15     ~~(e)~~ (5) the existence of any circumstance ~~which~~ that would 
 17.16  be grounds for the refusal of an initial or renewal license 
 17.17  under section 141.25.  
 17.18     Sec. 30.  Minnesota Statutes 1998, section 141.31, is 
 17.19  amended to read: 
 17.20     141.31 [INJUNCTION.] 
 17.21     Upon application of the attorney general the district 
 17.22  courts shall have jurisdiction to enjoin any violation of 
 17.23  sections 141.21 to ~~141.36~~ 141.35.  
 17.24     Sec. 31.  Minnesota Statutes 1998, section 141.32, is 
 17.25  amended to read: 
 17.26     141.32 [PENALTY.] 
 17.27     Violation of ~~any provisions~~ a provision of this chapter 
 17.28  shall be a misdemeanor.  Each day's failure to comply with this 
 17.29  chapter shall be a separate violation.  The office shall adopt 
 17.30  rules establishing a list of civil penalties and the fine 
 17.31  associated with each violation.  Fines for violations shall not 
 17.32  exceed $500 per day per violation.  
 17.33     Sec. 32.  Minnesota Statutes 1998, section 141.35, is 
 17.34  amended to read: 
 17.35     141.35 [EXEMPTIONS.] 
 17.36     ~~None of the provisions of~~ Sections 141.21 to ~~141.36~~ 141.35 
 18.1   shall not apply to the following: 
 18.2      ~~(a)~~ (1) ~~colleges authorized by the laws of Minnesota or of~~ 
 18.3   ~~any other state or foreign country to grant degrees~~ public 
 18.4   post-secondary institutions; 
 18.5      (2) private post-secondary institutions registered under 
 18.6   sections 136A.61 to 136A.71 that are nonprofit, or that are for 
 18.7   profit and registered under sections 136A.61 to 136A.71 as of 
 18.8   December 31, 1998, or are approved to offer exclusively 
 18.9   baccalaureate or postbaccalaureate programs; 
 18.10     ~~(b)~~ (3) schools of nursing accredited by the state board of 
 18.11  nursing or an equivalent public board of another state or 
 18.12  foreign country; 
 18.13     ~~(c) public schools as defined in section 120A.05,~~ 
 18.14  ~~subdivisions 9, 11, 13, and 17;~~ 
 18.15     ~~(d)~~ (4) private schools complying with the requirements of 
 18.16  section 120A.22, subdivision ~~2~~ 4; 
 18.17     ~~(e) private and parochial nonprofit schools exempt from~~ 
 18.18  ~~taxation under the constitution of Minnesota;~~ 
 18.19     ~~(f)~~ (5) courses taught to students in a valid 
 18.20  apprenticeship program taught by or required by a trade union; 
 18.21     ~~(g)~~ (6) schools exclusively engaged in training physically 
 18.22  or mentally handicapped persons for the state of Minnesota; 
 18.23     ~~(h)~~ (7) schools ~~now or hereafter~~ licensed by boards 
 18.24  authorized under Minnesota law to issue ~~such~~ licenses; 
 18.25     ~~(i)~~ (8) schools and educational programs, or training 
 18.26  programs, conducted by persons, firms, corporations, or 
 18.27  associations, for the training of their own employees, for which 
 18.28  no fee is charged the employee; 
 18.29     ~~(j)~~ (9) schools engaged exclusively in the teaching of 
 18.30  purely avocational, recreational, or remedial subjects as 
 18.31  determined by the office~~.  Private schools teaching a method or~~ 
 18.32  ~~procedure to increase the speed with which a student reads are~~ 
 18.33  ~~not within this exemption~~; 
 18.34     ~~(k)~~ (10) driver training schools and instructors as defined 
 18.35  in section 171.33, subdivisions 1 and 2; 
 18.36     ~~(l)~~ (11) classes, courses, or programs conducted by a bona 
 19.1   fide trade, professional, or fraternal organization, solely for 
 19.2   that organization's membership; 
 19.3      ~~(m) courses of instruction~~ (12) programs in the fine arts 
 19.4   provided by organizations exempt from taxation ~~pursuant to~~ under 
 19.5   section 290.05 and registered with the attorney general ~~pursuant~~ 
 19.6   ~~to~~ under chapter 309.  For the purposes of this clause, "fine 
 19.7   arts" means activities resulting in artistic creation or 
 19.8   artistic performance of works of the imagination which are 
 19.9   engaged in for the primary purpose of creative expression rather 
 19.10  than commercial sale or employment. In making this determination 
 19.11  the office may seek the advice and recommendation of the 
 19.12  Minnesota board of the arts; 
 19.13     ~~(n)~~ (13) classes, courses, or programs intended to fulfill 
 19.14  the continuing education requirements for licensure or 
 19.15  certification in a profession, ~~which classes, courses, or~~ 
 19.16  ~~programs~~ that have been approved by a legislatively or 
 19.17  judicially established board or agency responsible for 
 19.18  regulating the practice of the profession, and ~~which~~ that are 
 19.19  offered primarily to ~~a person who currently practices~~ an 
 19.20  individual practicing the profession; 
 19.21     ~~(o)~~ (14) classes, courses, or programs intended to prepare 
 19.22  students to sit for undergraduate, graduate, postgraduate, or 
 19.23  occupational licensing and occupational entrance examinations; 
 19.24     ~~(p)~~ (15) classes, courses, or programs ~~of a seminar nature~~ 
 19.25  providing 16 or fewer clock hours of instruction ~~that are not~~ 
 19.26  ~~part of the curriculum for an occupation or are not intended to~~ 
 19.27  ~~prepare a person for entry level employment~~; 
 19.28     ~~(q)~~ (16) classes, courses, or programs ~~of a seminar nature~~ 
 19.29  providing instruction in personal development, modeling, or 
 19.30  acting; ~~and~~ 
 19.31     ~~(r)~~ (17) training or instructional programs, in which one 
 19.32  instructor teaches an individual student, that are not part of 
 19.33  the curriculum for an occupation or are not intended to prepare 
 19.34  a person for entry level employment; and 
 19.35     (18) schools with no physical presence in Minnesota engaged 
 19.36  exclusively in offering distance education courses or programs 
 20.1   that are located in and regulated by other states or 
 20.2   jurisdictions.  
 20.3      Sec. 33.  [REPEALER.] 
 20.4      Minnesota Statutes 1998, sections 141.25, subdivisions 9a, 
 20.5   9b, and 11; and 141.36, are repealed.