BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Section 8505, Chapter 85, Title 14, Delaware Code, by designating the present Section as Subsection (a) of Section 8505.
Section 2. Amend Subsection 8505(a), Title 14, Delaware Code, by deleting paragraph (2) in its entirety and substituting in lieu thereof the following:
"(2) To agree to provide a surety company bond for the protection of the contractual rights of students in such form and amount as will meet 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. The amount of the surety bond shall be determined in accordance with Subsection (b) of this Section, except that in no case shall the surety bond of a business and trade school covered by this Chapter be for less than $5,000 per calendar year."
Section 3. Amend Section 8505, Title 14, Delaware Code, by adding a new Subsection (b) to read as follows:
"(b) The amount of the surety bond required of a private business or trade school shall be determined as follows:
(1) The following private business and trade schools shall only be required to post a bond in the amount of $5,000:
(a) Schools which only solicit students in the State and which do not receive any revenues for services provided within the State; and
(b) Schools which do not receive revenue directly from their students for tuition or any other services. Revenue received by such schools cannot be generated by guaranteed student loans and/or state or federal student grants.
(2) All other private business and trade schools which operate in or from the State, or who render services to students within the State, shall provide a bond in an amount equal to the highest anticipated gross prepaid tuition for students enrolled on any given day in the calendar year for which a certificate of approval is requested. This amount shall include monies paid by all students regardless of their state of residence."