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165A.360
Certificate of approval -- Bond -- Suspension or renewal -Transferability -- Voidable student contracts.
(1)
(2)
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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.
(5) 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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