SB326: Bill Text

LRB-3003/3

MJL:mfd:jf

1997 - 1998 LEGISLATURE

1997 Senate BILL 326

October 15, 1997 - Introduced by Committee on Education, by request of Educational Approval Board. Referred to Committee on Education.

SB326,1,5 An Act to amend 39.51 (1) (e), 39.51 (10) (a) and 39.51 (10) (c) (intro.); and to create 20.235 (3) (q), 25.17 (1) (vg), 25.85, 39.51 (1) (cr) and 39.51 (11) of the statutes; relating to: creating a tuition protection program for students enrolled in proprietary schools, granting rule-making authority and making an appropriation.

Analysis by the Legislative Reference Bureau

Current law generally requires each private trade, correspondence, business or technical school ("proprietary school") to obtain and annually renew approval from the educational approval board (EAB) of the quality, content and length of its courses of instruction.

This bill creates a tuition protection fund, administered by EAB, to reimburse the tuition of a proprietary school student, less the value of instruction received or tuition refunded, if the proprietary school closes without fully reimbursing the student's tuition, if the proprietary school discontinues a program in which a student is enrolled without fully reimbursing the student's tuition or if the proprietary school makes fraudulent representations to procure a student's enrollment or to procure approval. If the moneys in the tuition protection fund are insufficient to pay the full amount of claims, EAB must prorate the moneys among the entitled claimants. In addition, a proprietary school that closes must provide to EAB the names and addresses of all students who were attending the school at the time of the closing and notify them not later than 30 days after the closing of their right to make a claim for reimbursement from the tuition protection fund. If the EAB determines that a proprietary school has made fraudulent representations to procure approval, within 30 days after EAB's determination, EAB shall notify students enrolled in the proprietary school at the time of EAB's determination of their right to make a claim for reimbursement. A student may file a claim of reimbursement not later than 12 months after the proprietary school closes or the program is discontinued or after the student knew or should have known that the proprietary school had made fraudulent representations to procure the student's enrollment or to procure approval.

To renew approval, proprietary schools must pay into the tuition protection fund an annual fee, determined by EAB, until the tuition protection fund reaches $1,250,000. A proprietary school that receives initial approval after this bill takes effect must pay the annual fee for an obligatory payment period equal to the number of intervening years between the date on which the bill takes effect and the date on which the tuition protection fund reaches $1,250,000.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB326, s. 1 Section 1. 20.235 (3) (q) of the statutes is created to read:

SB326,2,4 20.235 (3) (q) Tuition protection fund. From the tuition protection fund, all moneys received under s. 39.51 (11) (e), (f) and (g) to be used for reimbursement of tuition under s. 39.51 (11) (d).

SB326, s. 2 Section 2. 25.17 (1) (vg) of the statutes is created to read:

SB326,2,6 25.17 (1) (vg) Tuition protection fund (s. 25.85);

SB326, s. 3 Section 3. 25.85 of the statutes is created to read:

SB326,2,11 25.85 Tuition protection fund. There is established a separate, nonlapsible trust fund designated as the tuition protection fund, consisting of all moneys received under s. 39.51 (11) (e), (f) and (g). All moneys in the tuition protection fund shall be used for the purposes specified in s. 39.51 (11).

SB326, s. 4 Section 4. 39.51 (1) (cr) of the statutes is created to read:

SB326,3,4 39.51 (1) (cr) "Obligatory payment period" means the number of intervening years between the effective date of this paragraph .... [revisor inserts date], and the date on which the tuition protection fund under s. 25.85 reaches $1,250,000. Any fraction of a year shall be rounded to a whole year.

SB326, s. 5 Section 5. 39.51 (1) (e) of the statutes, as affected by 1997 Wisconsin Act .... (Assembly Bill 100), is amended to read:

SB326,3,10 39.51 (1) (e) "School" means any person, located within or outside this state, maintaining, advertising or conducting any course or course of instruction for profit or a tuition charge; but in subs. (7), (8) and, (10) and (11) "school" means any private trade, correspondence, business or technical school not excepted under sub. (9).

SB326, s. 6 Section 6. 39.51 (10) (a) of the statutes, as affected by 1997 Wisconsin Act .... (Assembly Bill 100), is amended to read:

SB326,3,20 39.51 (10) (a) Authority. All proprietary schools shall be examined and approved by the board before operating in this state. Approval shall be granted to schools satisfying sub. (11) (e) or (f) and meeting the criteria established by the board for a period not to exceed one year. No school may advertise in this state unless approved by the board. All approved schools shall submit quarterly reports, including information on enrollment, number of teachers and their qualifications, course offerings, number of graduates, number of graduates successfully employed and such other information as the board deems necessary.

SB326, s. 7 Section 7. 39.51 (10) (c) (intro.) of the statutes, as affected by 1997 Wisconsin Act .... (Assembly Bill 100), is amended to read:

SB326,3,25 39.51 (10) (c) Fees; rule making. (intro.) The board shall promulgate rules to establish fees under this paragraph. In promulgating rules to establish fees, the board shall:

SB326, s. 8 Section 8. 39.51 (11) of the statutes is created to read:

SB326,4,5 39.51 (11) Tuition protection program. (a) A student enrolled in a proprietary school, or in the case of a minor, his or her parents or guardian, may file a claim for reimbursement of tuition with the board if any of the following occurs and the proprietary school does not reimburse the student's tuition:

SB326,4,6 1. The proprietary school closes.

SB326,4,8 2. The proprietary school discontinues a program in which the student is enrolled.

SB326,4,10 3. The proprietary school makes fraudulent representations to procure a student's enrollment or to procure approval under sub. (10).

SB326,4,19 (b) A proprietary school that closes shall provide to the board at the time of the closing the names and addresses of all students who were attending the proprietary school at the time of the closing and shall notify these students in writing not later than 30 days after the closing of their right to make a claim for reimbursement under this subsection. If the board determines that a proprietary school has made fraudulent representations to procure approval under sub. (10), within 30 days after the determination, the board shall notify students enrolled in the proprietary school at the time of the determination of their right to make a claim for reimbursement under this subsection.

SB326,4,24 (c) A student may file a claim under par. (a) 1. and 2. not later than 12 months after the proprietary school closes or the program is discontinued. A student may file a claim under par. (a) 3. not later than 12 months after the student knew or should have known that the proprietary school had made fraudulent representations to procure the student's enrollment or to procure approval under sub. (10).

SB326,5,10 (d) If the board determines that the student is entitled to a refund of tuition, the board shall pay the student, or if the student is a minor, his or her parents or guardian, from the appropriation under s. 20.235 (3) (q), an amount equal to the total of the student's tuition, less the amount of any refund or reimbursement of tuition that the student has received from the proprietary school. The board may reduce the amount of the payment by the value of the education the proprietary school provided to the student before the closing of the proprietary school, as determined by the board. If the moneys in the appropriation under s. 20.235 (3) (q) are insufficient to pay the full amount of claims, the board shall prorate the moneys among the entitled claimants.

SB326,5,15 (e) If a proprietary school receives initial approval under sub. (10) before the effective date of this paragraph .... [revisor inserts date], as a condition for receiving renewal of approval, the proprietary school shall pay the board for deposit into the tuition protection fund an annual fee, whose amount the board shall establish by rule, until the tuition protection fund reaches $1,250,000.

SB326,5,19 (f) If a proprietary school receives initial approval under sub. (10) on or after the effective date of this paragraph .... [revisor inserts date], the proprietary school shall pay the board for deposit into the tuition protection fund the annual fee under par. (e) for the obligatory payment period.

SB326,5,22 (g) The board is subrogated to the rights of the payee under par. (d) and may bring an action in circuit court or maintain or intervene in a payee's action for a violation of par. (a).

SB326,5,25 (h) The moneys deposited in the tuition protection fund and all interest earned on the moneys are exempt from garnishment, attachment, execution or any other process of law.

SB326,6,2 (i) The board shall promulgate rules to implement and administer this subsection.

SB326, s. 9 Section 9. Initial applicability.

SB326,6,6 (1) The treatment of section 39.51 (11) (a) of the statutes first applies to schools that close, programs that are discontinued and fraudulent representations that are made on the effective date of this subsection.

SB326,6,7 (End)