CHAPTER 544

FORMERLY SENATE BILL NO. 525

AS AMENDED BY SENATE AMENDMENT

NO. 1 AND HOUSE AMENDMENT NO. 2

AN ACT TO AMEND DELAWARE CODE, TITLE 14, BY ENACTING A NEW CHAPTER RELATING TO PRIVATE BUSINESS AND TR ADE SCHOOLS.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Amend Delaware Code, Title 14, by enacting a new chapter as follows:

CHAPTER 85. PRIVATE BUSINESS AND TRADE SCHOOLS § 8501. Definitions

As used in this chapter, unless the context otherwise requires: "private business school", "private trade school", "trade school", or "school", means an educational institution privately owned and operated for profit or non-profit by an owner, partnership, or corporation, offering business or trade and industrial courses for which tuition may or may not be charged, and which may include those courses usually associated with business training schools, trade schools, specialized skill training schools or institutes, and other related subjects of a similar character or subjects of general education when they contribute values to the objectives of the course of study. Classes or courses may be identified by reference to Vocational Education and Occupations, published by the United States Office of Education, or The Dictionary of Occupational Titles, published by the United States Department of Labor; or lists prepared and promulgated from time to time by the Delaware State Board of Education, and in every case by evaluation of the information presented in the application required by § 8504, § 8507, and other applicable sections of this Title. Classes in any of the subjects herein referred to which are taught or coached in homes or elsewhere, are included in the term "school".

"Board" means the State Board of Education;

"Superintendent" means the State Superintendent of Public Instruction;

"Agent" means a person employed by a school as defined herein, whether such school is located within or outside Delaware, to act as an agent, solicitor, broker, or independent contractor to directly procure students or enrollees for such school by solicitation in any form made at any place in this State other than the office or place of business of the school.

§ 8502. Advisory Committee on private business and trade schools

The State Superintendent of Public Instruction in his capacity as Executive Secretary to the State Board of Education shall appoint an Advisory Committee of five persons whose function it shall be to advise the State Superintendent relative to the administration of this Act and through him to advise the State Board of Education in regard to policies concerning the conduct of private business schools serving clients in the State of Delaware.

One of the members of the Committee shall be an executive or managerial person in a private business school in the State; one shall be a person occupied in commerce or industry in this State in an executive or managerial position; one shall be an executive or managerial person in a private trade school in the State; one shall be the president of the Delaware Technical and Community College system; and one shall have, for at least five years, occupied managerial positions concerned primarily with the use of computers.

Members of the Advisory Committee, except the president of the Delaware Technical and Community College, shall serve for rotating terms of four years. At the initial meeting of the Committee, members shall draw lots to determine the length of terms for one, two, three, or four years. The State Superintendent of Public Instruction shall appoint a person from the staff of the State Department of Public Instruction to serve as Chairman and Secretary to the Committee and shall provide the necessary clerical services to the Committee from within the State Department of Public Instruction.

Members of the Advisory Committee shall receive no salary or

compensation for the performance of Committee duties but shall be entitled to reimbursement for expenses incurred in carrying out the assignments of the Committee. The rate of such expenses shall be in accordance with any statutes from time to time promulgated by the State of Delaware or according to Rules and Regulations adopted by the State Board of Education.

§ 8503. Necessity for certificate of approval — person eligible —nontransferability — display — approved lists

No person, partnership or corporation, whether its main office be located within or outside the State of Delaware, shall conduct a private school or classes as herein defined, or instruct individuals in business or trade subjects in this State, without having been issued a certificate of approval by the Board. A person, partnership or corporation shall be qualified to receive a certificate of approval who complies with every standard, rule, and regulation of the Board pertaining to this Act, who pays the fee for a certificate of approval, and whose school, after an examination conducted under the direction of the Board, is approved by the Board. Such certificates of approval are not transferrable.

The certificate of approval shall be prominently displayed at some place on the premises of the school open to the inspection of all interested persons.

The Board shall maintain, open to public inspection, a list of schools approved under this Act and may annually publish such list.

§ 8504. Application for certificate — contents

Every person, partnership or corporation desiring to obtain a certificate of approval shall make a verified application to the Board, setting forth the following information:

1. The title or name of a school, together with ownership and controlling officers thereof;

2. The specific fields and courses of instruction which will be offered;

3. The place or places where such instruction will be given and a description of the physical and sanitary facilities thereof;

4. A specific listing of the equipment available for instruction in each field and course;

5. The educational and teaching qualifications of instructors and supervisors;

6. The financial resources available to equip and maintain the school.

§ 8505. Application commitments

Each application for a certificate of approval shall also contain the following commitments:

I. To conduct the school in accordance with standards, rules and regulations from time to time established by the Board;

2. To agree to provide a surety company bond for the protection of the contractual rights of students in such form and amount, not to exceed $25,000, as will meet with the approval of the Board and written by a company authorized to do business in this State. Such bonds shall be deposited with the Secretary of State.

3. Agree to provide within each student application, contract or agreement a binding commitment to refund at least 95% of any fee or tuition payable in advance, if such student applicant decides for any reason whatsoever to cancel such contract or agreement as evidenced by written notice of cancellation forwarded by prepaid registered mail within thirty (30) days from the date of the contract or agreement, to a recognized appropriate official local address of the school.

4. Agree that within the thirty (30) days grace period reserved for cancellation as provided in § 8505 — 3 above, that the school will not discount any evidence of indebtedness given by a student applicant, or on his behalf, or in any other place such evidence of indebtedness into the hands of a holder in due course.

5. To permit the Board to inspect the school or classes

thereof from time to time; and to make available to the Board, at
any time when required to do so, information pertaining to the
activities of the school required for the administration of this Act.

6. That all advertising and solicitation will be free from misrepresentation, deception or fraud, and that no fraudulent or deceptive statements shall be made as to possible future employment opportunities or wage expectations.

§ 8506. Signing of application

Each application for a certificate of approval shall be signed by the applicant. If the applicant is a partnership, it shall be signed by each member thereof. If the applicant is a corporation, it shall be signed by any officer thereof.

§ 8507. Restriction of certificate to fields indicated in application — supplementary applications

Any certificate of approval issued shall be restricted to the fields or courses specifically indicated in the application for a certificate of approval. The holder of a certificate shall present a supplementary application, as may be directed by the Board for approval of additional fields or courses, in which it is desired to offer instruction during the effective period of the certificate of approval.

§ 8508. Filing fees — renewal fees

Each original application for a certificate of approval shall be accompanied by a filing fee to be determined by the Board,which fee shall include the cost of investigation and issuance of the original certificate of approval, if the application is approved. There shall be an annual renewal fee to be determined by the Board. No fee shall be charged for a supplementary application for the approval of additional fields or courses of instruction. Fees, charges or fines within the provisions of this Chapter shall be deposited to the General Fund of the State of Delaware.

§ 8509. Business or trade school agent permits — application —contents — fees — separate permits

Every agent representing a school as herein defined, whether

located in the State of Delaware or without, shall make application for an agent's permit to the Board, in writing, upon forms prepared and furnished by the Board. Each application shall state the name of the school which the applicant will represent, contain evidence of the honesty, truthfulness, and integrity of the applicant, shall be verified under oath by him, and shall be accompanied by the recommendation of two reputable persons, certifying that the applicant is truthful, honest, and of good reputation, and recommending that a permit, as an agent, be granted to the applicant. The fee for an original permit, as an agent, shall be determined by the Board, and there shall be an annual renewal fee determined by the Board. A separate permit shall be obtained for each school represented by an agent.

§ 8510. Issuance of pocket cards upon approval of application — contents

The Board, upon approval of an application for or renewal of a permit, shall prepare and deliver to each agent a pocket card which, among other things, shall contain the name and address of the agent and of the employing school, and shall certify that the person, whose name appears thereon, is an authorized agent of the school.

§ 8511. Annual renewal of certificates

Each school and each agent that continues as such shall annually, during the month of December, renew its or his certificate of approval and pay the required annual renewal fee. Every certificate of approval which has not been renewed during the month of December, in each year, shall expire on the following first day of January.

§ 8512. Issuance, revocation, renewal or restoration of certificates upon action and report of board

No certificate of approval shall be issued, revoked, renewed or restored, except upon the action and report in writing of a majority of the Board. The Board shall preserve a written report of its findings and recommendations.

§ 8513. Rules and regulations

In addition to standards provided for hereunder, the Board shall make and enforce reasonable rules and regulations as shall be

necessary for the proper administration and enforcement of this Act.

§ 8514. Prohibition against advertising school or soliciting students without board authorization

Prior to the establishment of a private business or trade school and the issuance of a certificate of approval therefor, no person shall advertise such a school or solicit prospective students for such a school unless such person has applied for and received from the Board authorization to conduct such activity.

§ 8515. Procedure for approval of applications and programs

The Board shall provide such rules and regulations as are necessary to direct applicants for a certificate of approval in the preparation of a statement of the existing or planned educational programs and managerial organization and financial status of the applicant school. Upon receipt of any application, prepared in accordance with the provisions of this Chapter, the Board shall provide for the review of that application and shall, within 90 days of its receipt, notify the applicant that the application is approved or disapproved or that further negotiation will be afforded toward the goal of approval.

§ 8516. Grounds for refusal to issue, renew, or to revoke certificates or permits

In addition to any other cause herein set forth, the Board may refuse to issue, or to renew, or may revoke any certificate of approval or permit for any combination of the following causes:

1. Violation of any provision of this Act or any rule or regulation made by the Board;

2. Furnishing of false, misleading or incomplete information to the Board or failure to furnish information requested by the Board;

3. If any person who signed an application has entered a plea of nolo contendere or been found guilty of any crime involving moral turpitude;

4. If any person, who signed an application, is found by competent medical authority to be addicted to the use of any narcotic drug, other than a drug currently prescribed for treatment or who has been found mentally incompetent;

5. Violation of any commitment made in an application for a certificate of approval;

6. Presenting to prospective students information relating to the school, or to employment opportunities or opportunities for enrollment in institutions of higher learning after entering into or completing courses offered by the school, which is false, misleading or fraudulent;

7. Failure to provide or maintain premises or equipment in a safe and sanitary condition as required by laws, regulations or ordinances applicable at the location of the school;

8. Refusal by an agent to display his permit upon demand of a prospective student, the Board or its representative, or any other interested person;

9. Failure to maintain financial resources adequate for the satisfactory conduct of the courses of instruction offered or to retain a sufficient and qualified instructional and administrative staff;

0. Conduct of instruction in a course or field which has not been approved by the Board for the particular school.

1. Refusal to admit applicants solely on account of race, color, creed, age, or sex.

§ 8517. Investigations by Board upon its own motion or upon verified complaint, opportunity for correction

The Board may, upon its own motion, and shall, upon the verified complaint in writing of any person setting forth facts which, if proved, would constitute grounds for refusal or revocation under this Act, investigate the actions of any applicant or any person or persons holding or claiming to hold a certificate or permit.

However, before proceeding to a hearing on the question of whether a certificate of approval shall be refused or revoked for any cause enumerated in Section 8516, exclusive of those causes enumerated in paragraphs three and four of that Section, the Board may grant a reasonable time to the holder of or applicant for a certificate of approval to correct the situation. If within such time, the situation is corrected, no further action, leading to refusal or revocation shall be taken.

§ 8518. Hearings

Any applicant for a Certificate or for the renewal of a Certificate, who is refused issue of that Certificate or its renewal, may appeal for hearing before the State Board of Education in accordance with the authority granted to the Board to conduct such hearings in Delaware Code, Title 14, Chapter 1, § 121 and § 129, and such other sections as may be found applicable.

§ 8519. Power to subpoena and administer oaths

The Board, over the signature of any member thereof, is authorized to subpoena and bring before the Board nay person or persons in this State and to take testimony, either orally or by deposition or by exhibit, with the same fees and mileage and in the same manner as prescribed by law in judicial procedure in civil cases in Superior Courts of this State.

Any member of the Board may administer oaths to witnesses at any hearing which the Board is authorized by law to conduct.

§ 8520. Powers of the Board

Upon the application of the respondent or complainant, the Board, may by order duly entered, require the attendance of witnesses and the production of relevant books and papers before the Board in any hearing it is authorized to conduct, and the board may compel obedience to its order by proceedings for contempt in the Superior Court.

§ 8521. Board to Provide Stenographer — record of proceedings — transcripts costs

testimony and preserve a record of all proceedings at the hearing of any case involving the refusal to issue or renew, or the revocation of a certificate or permit. The notice of hearing, complaint and all other documents in the nature of pleadings and written motions filed in the proceedings, the transcript of testimony, the report and orders of the Board shall be the record of such proceedings. The Board shall furnish a transcript of such record to any person or persons interested in such hearing upon payment therefor, the amount to be determined by the Board; provided, that the charge for any part of such transcript ordered and paid for previous to the writing of the original record thereof shall be determined by the Board.

§ 8522. Service of Board's report upon respondent — motion for rehearing — time — surrender of certificate

In any case involving the refusal to issue or renew or the revocation of a certificate or permit, a copy of the Board's report shall be served upon the respondent, either personally or by registered mail as provided in this Act for the service of the notice of hearing. Within 20 days after such service, the respondent may present to the Board a motion in writing for a rehearing, which written motion shall specify the particular grounds therefor. In the event no such motion for rehearing be filled, then upon the expiration of the time specified for filing a motion for rehearing, or in the event such motion be filed and, denied, then upon such denial, the chairman may enter an order in accordance with recommendations of the Board. If such applicant or registrant shall order and pay for a transcript of the record, as provided in this Act, the time elapsing thereafter and before such transcript is ready for delivery, shall not be counted as part of such 20 days.

Upon the revocation of a certificate or permit, the holder shall be required to surrender such certificate or permit to the Board, and upon failure or refusal so to do, the Board shall have the right to seize the same.

§ 8523. Forfeiture of bond

If any school certified, pursuant to this Chapter, should fail to provide the services called for in a contract or agreement with a student, as determined by the Superior Court of the State of Delaware, the bond prescribed by § 8505 — 2 of this Chapter, or

any part thereof, shall be forfeited, and the proceeds distributed by the Board in such manner as justice and the circumstances require.

§ 8524. Appeal to Superior Court — provisions of administrative review — act to govern — certification of record

Any person affected by a final administrative decision of the Board may have such decision reviewed judicially by the Superior Court of the County wherein such person resides, or in the case of a corporation, wherein the registered office is located. If the plaintiff in the review proceeding is not a resident of this State, the venue shall be in any County of this State.

Service of summons issued in such review proceedings may be had upon any member of the Board. The Board shall not be required to certify the record of the proceeding unless the plaintiff, in the review proceedings, shall first pay to the Board a sum to be determined by the Board for every page of such record. Exhibits shall be certified without cost.

§ 8525. Unlawful acts of school employees not ground for revocation of certificate — exception

Any unlawful act or violation of any of the provisions of this Act upon the part of any agent or employee of a business or trade school shall not be cause for the revocation of the certificate of approval unless it shall appear to the satisfaction of the Board that any one or more of the controlling officers, members or managing employees had guilty knowledge thereof.

§ 8526. Penalties for violations

Any person or corporation violating the provisions of this Act shall, if a person, be punished by a fine of not to exceed $500, or by imprisonment for a period not to exceed one year, or both such fine and imprisonment; and, if a corporation, shall be punished by a fine of not to exceed $1,000. Any officer or agent of a corporation or member, or agent of a copartnership, or association, shall be subject to the penalties herein prescribed for individuals; and the State's Attorney for the County where such offense is committed shall prosecute all persons violating the provisions of this Act upon proper complaint being made.

The Superior Court shall have exclusive jurisdiction of violation of this Chapter.

8527. Incorporated institution

Any applicant seeking incorporation under the Delaware Code, Title 8, in order to conduct a private business or trade school within the State of Delaware shall, first, seek approval as an applicant to conduct a business or trade school in accordance with the provisions of this Chapter. Upon approval of such application and the issuance of a certificate to conduct a private business or trade school, the State Board of Education shall notify the Secretary of State of such approval. At any time that a Certificate of Approval is denied or revoked by the State Board of Education, the applicant, for that Certificate, shall no longer be authorized to conduct classes as a private business or trade school in the State of Delaware, other provisions of a Corporate Charter notwithstanding.

8528. Previously existing schools — temporary authorization

Any institution as herein defined that was established and presenting courses or classes in Delaware prior to the effective date of this Act and that is not incorporated in Delaware, or that was incorporated in Delaware without authority to grant a degree, shall be granted temporary approval by the Board for a period not to exceed one year after that date. During the one year of temporary authorization the school shall carry out all necessary steps for compliance with this chapter. No extension of the period of temporary authorization shall be granted except to allow necessary time for the State Department of Public Instruction to complete the review and analysis herein required.

8529. Certain schools exempt

Any institution whose main facilities are located in the State of Delaware and which was approved by the State Board of Education in compliance with Delaware Code, Title 8, § 125, prior to the enactment of this chapter shall be exempt from the provisions of this Chapter. Apprenticeship and training programs offered or conducted by persons, partnerships, joint ventures, corporations, political subdivisions, employers or employer associations for their employees or prospective employees or by

labor organizations or association of employees for their members
or apprentices shall be exempt from the provisions of this chapter.

Section 2. There is hereby appropriated from the General Fund of the State of Delaware the sum of $5,000 (five thousand dollars) which sum shall be used for the implementation of this Act, and considered to be a supplemental appropriation to the Budget Act of 1972-73. The unused portion of these funds shall not revert to the General Fund until June 30, 1973. No portion of said funds shall be used for salary or wage payments, but shall be expended for contractual services, travel or equipment.

Approved July 18, 1972.