2006 Utah Code - 13-34-107 — Advertising, recruiting, or operating a proprietary school -- Required registration statement or exemption -- Certificate of registration -- Registration does not constitute endorsement.

     13-34-107.   Advertising, recruiting, or operating a proprietary school -- Required registration statement or exemption -- Certificate of registration -- Registration does not constitute endorsement.
     (1) (a) Unless an institution complies with Subsection (1)(b), the institution may not do any of the following in this state:
     (i) advertise a proprietary school;
     (ii) recruit students for a proprietary school; or
     (iii) operate a proprietary school.
     (b) An institution may not engage in an activity described in Subsection (1)(a) unless the institution:
     (i) (A) files with the division a registration statement relating to the proprietary school that is in compliance with:
     (I) applicable rules made by the division; and
     (II) the requirements set forth in this chapter; and
     (B) obtains a certificate of registration; or
     (ii) establishes an exemption with the division.
     (2) (a) The registration statement or exemption described in Subsection (1) shall be:
     (i) verified by the oath or affirmation of the owner or a responsible officer of the proprietary school filing the registration statement or exemption; and
     (ii) include a certification as to whether any of the following has violated laws, federal regulations, or state rules as determined in a criminal, civil, or administrative proceeding:
     (A) the proprietary school; or
     (B) any of the following with respect to the proprietary school:
     (I) an owner;
     (II) an officer;
     (III) a director;
     (IV) an administrator;
     (V) a faculty member;
     (VI) a staff member; or
     (VII) an agent.
     (b) The proprietary school shall:
     (i) make available, upon request, a copy of the registration statement, showing the date upon which it was filed; and
     (ii) display the certificate of registration obtained from the division in a conspicuous place on the proprietary school's premises.
     (3) (a) A registration statement and the accompanying certificate of registration are not transferable.
     (b) In the event of a change in ownership or in the governing body of the proprietary school, the new owner or governing body, within 30 days after the change, shall file a new registration statement.
     (4) Except as provided in Subsection (3)(b), a registration statement or a renewal statement and the accompanying certificate of registration are effective for a period of two years after the date of filing and issuance.
     (5) (a) The division shall establish a graduated fee structure for the filing of registration statements by various classifications of institutions pursuant to Section 63-38-3.2.

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     (b) Fees are not refundable.
     (c) Fees shall be deposited in the Commerce Service Fund pursuant to Section 13-1-2.
     (6) (a) Each proprietary school shall:
     (i) demonstrate fiscal responsibility at the time the proprietary school files its registration statement as prescribed by rules of the division; and
     (ii) provide evidence to the division that the proprietary school:
     (A) is financially sound; and
     (B) can reasonably fulfill commitments to and obligations the proprietary school has incurred with students and creditors.
     (b) A proprietary school applying for an initial certificate of registration to operate shall prepare and submit financial statements and supporting documentation as requested by the division.
     (c) A proprietary school applying for renewal of a certificate of registration to operate or renewal under new ownership must provide audited financial statements.
     (d) The division may require evidence of financial status at other times when it is in the best interest of students to require such information.
     (7) (a) A proprietary school applying for an initial certificate of registration or seeking renewal shall provide in a form approved by the division:
     (i) a surety bond;
     (ii) a certificate of deposit; or
     (iii) an irrevocable letter of credit.
     (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the division may make rules providing for:
     (i) the amount of the bond, certificate, or letter of credit required under Subsection (7)(a), not to exceed in amount the anticipated tuition and fees to be received by the proprietary school during a school year;
     (ii) the execution of the bond, certificate, or letter of credit;
     (iii) cancellation of the bond, certificate, or letter of credit during or at the end of the registration term; and
     (iv) any other matters related to providing the bond, certificate, or letter of credit required under Subsection (7)(a).
     (c) The bond, certificate, or letter of credit shall be used as a protection against loss of advanced tuition, book fees, supply fees, or equipment fees:
     (i) collected by the proprietary school from a student or a student's parent, guardian, or sponsor prior to the completion of the program or courses for which it was collected; or
     (ii) for which the student is liable.
     (8) (a) Except as provided in Section 13-34-113, the division may not refuse acceptance of a registration statement that is:
     (i) tendered for filing and, based on a preliminary review, appears to be in compliance with Subsections (1), (2), and (6); and
     (ii) accompanied by:
     (A) the required fee; and
     (B) one of the following required by Subsection (7):
     (I) surety bond;
     (II) certificate of deposit; or

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     (III) irrevocable letter of credit.
     (b) A certificate of registration is effective upon the date of issuance.
     (c) The responsibility of compliance is upon the proprietary school and not upon the division.
     (d) (i) If it appears to the division that a registration statement on file may not be in compliance with this chapter, the division may advise the proprietary school as to the apparent deficiencies.
     (ii) After a proprietary school has been notified of a deficiency under Subsection (8)(d)(i), a new or amended statement may be presented for filing by the proprietary school, accompanied by:
     (A) the required fee; and
     (B) one of the following required by Subsection (7):
     (I) surety bond;
     (II) certificate of deposit; or
     (III) irrevocable letter of credit.
     (9) The following does not constitute and may not be represented by any person to constitute, an endorsement or approval of the proprietary school by either the division or the state:
     (a) an acceptance of:
     (i) a registration statement;
     (ii) a renewal statement; or
     (iii) an amended registration statement; and
     (b) issuance of a certificate of registration.

Amended by Chapter 242, 2005 General Session