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165A.360 Certificate of approval -- Bond -- Suspension or renewal -Transferability -- Voidable student contracts.
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No person shall maintain or operate a proprietary school located and doing
business within this state until said school shall have been issued a certificate
of approval by the commission pursuant to the provisions of KRS 165A.310 to
165A.410. No person shall maintain or operate a proprietary school located
without this state and do business within this state until said school shall have
been issued a certificate of approval or a certificate of registration by the
commission pursuant to the provisions of KRS 165A.310 to 165A.410. No
certificate of approval shall be issued by the commission to any proprietary
school which denies enrollment in said school to any pupil, on account of race,
color, or creed. The Kentucky Commission on Human Rights shall have power
to make investigation as to discriminatory practices of any proprietary school
and shall report thereon to the commission, and said commission shall, upon
report that any such school is engaging in discriminatory practices, deny or
suspend a certificate of such school in accordance with the provisions of this
section and after notice and public hearing as required herein.
No proprietary school shall be issued a certificate unless it shall make
application, through its officers or an owner, upon forms to be provided by the
commission, and unless the application shall be accompanied by a fee as
established by the commission and a good and sufficient surety bond or other
collateral in a penal sum of not less than twenty thousand dollars ($20,000).
(a) The surety bond or other collateral shall be conditioned to provide
indemnification to any student or enrollee or his parent or guardian
suffering loss or damage as a result of any fraud or misrepresentation
used in procuring his enrollment or as a result of any fraud or
misrepresentation as represented by the application for the certificate, or
as a result of the student being unable to complete the course or courses
because the school ceased operations. Such indemnification shall, in no
case, exceed the advanced tuition paid or to be paid by said student or
students or any such parent or guardian and regardless of the number of
years that a school's bond is in force, the aggregate liability of the surety
bond shall, in no event, exceed the penal sum of the bond. The surety
bond may be continuous.
(b) Any claimant may file with the commission a duly verified claim against a
proprietary school. The commission shall consider complaints in a timely
manner after ten (10) days' written notice by certified mail, return receipt
requested, to such school of said complaint giving time and place of
hearing thereon and, if such claim is found to be correct and due to the
claimant and if the commission cannot effect a settlement by persuasion
and conciliation, the commission shall make a demand upon the principal
on such bond and the surety thereon, and if not paid may bring an action
on such bond in any court of record within the State of Kentucky.
A surety on said bond may be released therefrom after said surety shall have
made a written notice thereof directed to the commission at least thirty (30)
days prior to said release.
The surety bond shall cover the period of the certificate except when said
surety shall be released in the manner as provided by this section.
(6) (a) The certificate shall be suspended by operation of law when said
proprietary school is no longer covered by a surety bond or other
collateral as required by this section; but the commission shall cause said
proprietary school to receive at least ten (10) days' written notice prior to
the release of said surety to the effect that said approval shall be
suspended by operation of law until another surety bond shall be filed in
the same manner and like amount as required for the initial surety bond.
(b) The certificate shall be suspended by operation of law at any time any
certified proprietary school shall deny enrollment in said school to any
pupil, on account of race, color, or creed.
(7) The application for a certificate shall be accompanied by such supporting
documents as the commission may require. The application and accompanying
data shall be certified as true and correct in content and policy by the chief
executive officer of said proprietary school.
(8) A certificate shall be valid for a period of one (1) school year. A certificate may
be renewed in the same manner and under the conditions prescribed by the
commission.
(9) Certificates are transferable to another owner. If a change of ownership occurs,
the new owner shall within ten (10) days, reexecute and affirm the application
for certificate of approval or certificate of registration and the information
therein, governing said certificate in effect at the time of sale. The commission
may establish a reasonable fee for the recording and processing of such
changes.
(10) The bonding or other collateral requirements herein set forth may be reduced
at the sole discretion of the commission upon a showing by the proprietary
school that they are excessive in the case of any particular proprietary school.
(11) (a) Contracts by and between a proprietary school operating or doing
business within this state and a student are voidable at the option of the
student unless said school has been previously issued a certificate by the
commission.
(b) No proprietary school operating or doing business within this state shall
be entitled to any money collected from students, in whatever manner
collected, unless said school has been previously issued a certificate by
the commission.
(c) Contracts by and between a proprietary school operating or doing
business within this state which are entered into prior to the issuance of a
certificate by the commission, shall be voidable at the option of the
student notwithstanding any subsequent issuance of a certificate to the
school by the commission.
(d) Restitution of any money paid by a student under a contract voided
pursuant to this section, may be obtained through action brought by the
student in either District Court or Circuit Court in the county of the
student's residence or other appropriate court, at the option of the
student.
Effective:July 12, 2012
History: Amended 2012 Ky. Acts ch. 76, sec. 6, effective July 12, 2012. -Amended 1982 Ky. Acts ch. 31, sec. 5, effective July 15, 1982. -- Amended
1980 Ky. Acts ch. 114, sec. 27, effective July 15, 1980. -- Created 1976 Ky. Acts
ch. 363, sec. 6, effective July 1, 1976.
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