By:  Whitmire                                          S.B. No. 853
       73R4562 JD-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to driver and traffic safety education.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section 3, Texas Driver and Traffic Safety
    1-5  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
    1-6  is amended by amending Subdivisions (3), (5), and (7) and adding
    1-7  Subdivisions (16) and (17) to read as follows:
    1-8              (3)  "Commissioner" means the commissioner of education
    1-9  or a person knowledgeable in the administration of regulating
   1-10  driver training schools and driving safety schools and designated
   1-11  by the commissioner to administer this Act.
   1-12              (5)  "Driver training school" <or "school"> means any
   1-13  enterprise that maintains a place of business or solicits business
   1-14  in the state, that is operated by an individual, association,
   1-15  partnership, or corporation, for the education and training of
   1-16  persons, at a primary location or extension, in driver education<,
   1-17  driving safety, or any instructor development program, and> that is
   1-18  not specifically exempted by this Act.
   1-19              (7)  "Extension" means an entity that geographically
   1-20  extends the educational resources of a driving safety school by
   1-21  offering a driving safety course in a location other than the main
   1-22  business location of the school.  An extension may use multiple
   1-23  locations to teach a driving safety course if each location is
   1-24  approved by the parent driving safety school and the agency.  <A
    2-1  driver education course may not be conducted at an extension.>  An
    2-2  extension of an extension is not permitted.
    2-3              (16)  "Driving safety school" means any enterprise not
    2-4  specifically exempted by this Act that maintains a place of
    2-5  business or solicits business in the state, that is operated by an
    2-6  individual, association, partnership, or corporation, and that
    2-7  provides education and training of persons in driving safety or any
    2-8  instructor development program, at a primary location or extension.
    2-9              (17)  "School" means a driver training school or a
   2-10  driving safety school.
   2-11        SECTION 2.  Section 6(a), Texas Driver and Traffic Safety
   2-12  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
   2-13  is amended to read as follows:
   2-14        (a)  The commissioner shall carry out the policies of this
   2-15  Act, enforce rules adopted by the board, and certify those schools
   2-16  meeting the requirements for a driver training school license or a
   2-17  driving safety school license.
   2-18        SECTION 3.  Section 8, Texas Driver and Traffic Safety
   2-19  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
   2-20  is amended to read as follows:
   2-21        Sec. 8.  Competitive bidding; advertising.  The board may not
   2-22  adopt rules to restrict competitive bidding or advertising by a
   2-23  driver training school or a driving safety school except to
   2-24  prohibit false, misleading, or deceptive competitive bidding or
   2-25  advertising practices.  Specifically, no rule may restrict:
   2-26              (1)  the use of an advertising medium;
   2-27              (2)  the outside dimensions of a printed advertisement
    3-1  or outdoor display;
    3-2              (3)  the duration of an advertisement; or
    3-3              (4)  advertisement under a trade name.
    3-4        SECTION 4.  Section 9, Texas Driver and Traffic Safety
    3-5  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
    3-6  is amended to read as follows:
    3-7        Sec. 9.  Prohibitions.  A person may not:
    3-8              (1)  operate a driver training school without a driver
    3-9  training school license or a driving safety school without a
   3-10  driving safety school license issued by the commissioner;
   3-11              (2)  utilize advertising designed to mislead or deceive
   3-12  a prospective student;
   3-13              (3)  fail to notify the commissioner of the
   3-14  discontinuance of the operation of any school within three working
   3-15  days after cessation of classes and make available accurate records
   3-16  as required by this Act;
   3-17              (4)  sell, trade, or transfer a uniform certificate of
   3-18  completion to any person, school, or extension not authorized to
   3-19  possess it;
   3-20              (5)  sell, trade, or transfer a uniform certificate of
   3-21  completion to a student who has not successfully completed an
   3-22  agency-approved, six-hour <eight-hour> driving safety course;
   3-23              (6)  negotiate any promissory instrument received as
   3-24  payment of tuition or other charge before completion of 75 percent
   3-25  of the course, except that before that time, the instrument may be
   3-26  assigned to a purchaser who will be subject to all the defenses
   3-27  available against the school named as payee;
    4-1              (7)  conduct any part of an agency-approved driver
    4-2  education or driving safety course without an instructor who is
    4-3  physically present in appropriate proximity to the student for the
    4-4  type of instruction being given; or
    4-5              (8)  violate any provision of this Act.
    4-6        SECTION 5.  Section 11, Texas Driver and Traffic Safety
    4-7  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
    4-8  is amended to read as follows:
    4-9        Sec. 11.  Locations authorized for instruction.  Driving
   4-10  safety courses complying with Section 143A, Uniform Act Regulating
   4-11  Traffic on Highways (Article 6701d, Vernon's Texas Civil Statutes),
   4-12  may be taught at an extension or in a driving safety <driver
   4-13  training> school if the entity is approved by the agency.
   4-14  Instructor preparation courses may be conducted at a course owner's
   4-15  facilities.  All other driver training courses must be conducted in
   4-16  agency-approved schools.
   4-17        SECTION 6.  Section 12, Texas Driver and Traffic Safety
   4-18  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
   4-19  is amended to read as follows:
   4-20        Sec. 12.  Application for <driver training> school license.
   4-21  (a)  To operate or do business in this state, a school must make
   4-22  written application to the commissioner for a <driver training
   4-23  school> license.  The application must be verified, be in the form
   4-24  prescribed by the board, and include all information required.  A
   4-25  school that offers driving safety courses shall obtain approval
   4-26  from the agency for any extension.
   4-27        (b)  A school may not maintain, advertise, solicit for, or
    5-1  conduct any course of instruction in this state before the later
    5-2  of:
    5-3              (1)  the 30th day after the date the school submits all
    5-4  required documentation, information, and fees and a surety bond for
    5-5  a <driver training school> license; or
    5-6              (2)  the date the school receives a <driver training
    5-7  school> license from the commissioner.
    5-8        (c)  Any contract entered into with any person for a course
    5-9  of instruction by or on behalf of any person operating any school
   5-10  to which a <driver training school> license has not been issued
   5-11  under this Act is unenforceable.
   5-12        SECTION 7.  Section 13, Texas Driver and Traffic Safety
   5-13  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
   5-14  is amended by amending Subsections (d), (e), (f), (g), and (h) and
   5-15  adding Subsections (i) and (j) to read as follows:
   5-16        (d)(1)  The commissioner, on review of an application for a
   5-17  <driver training> school license that is submitted in accordance
   5-18  with this Act and that meets the requirements of this Act, shall
   5-19  issue a <driver training> school license to the applicant.  A
   5-20  <driver training> school license shall be in a form recommended by
   5-21  the commissioner and approved by the board and shall show in a
   5-22  clear and conspicuous manner at least the following:
   5-23                    (A)  the date of issuance, effective date, and
   5-24  term of approval;
   5-25                    (B)  the name and address of the school;
   5-26                    (C)  the authority for approval and conditions of
   5-27  approval;
    6-1                    (D)  the signature of the commissioner; and
    6-2                    (E)  any other fair and reasonable
    6-3  representations that are consistent with this Act and considered
    6-4  necessary by the commissioner.
    6-5              (2)  The term for which a <driver training> school
    6-6  license is issued may not exceed one year.
    6-7              (3)  A <driver training> school license issued to an
    6-8  owner of the applicant school is nontransferable and is the
    6-9  property of the state.  In the event of a change in ownership of
   6-10  the school, a new owner shall, at least 30 days before the date of
   6-11  the change in ownership, apply for a new <driver training> school
   6-12  license.
   6-13              (4)  At least 30 days before the expiration of a
   6-14  <driver training> school license, the school shall forward to the
   6-15  commissioner an application for renewal.  The commissioner may
   6-16  reexamine the school premises and shall renew or cancel the
   6-17  school's <driver training> school license.  If a school fails to
   6-18  file a complete application for renewal at least 30 days before the
   6-19  expiration date of the <driver training> school license, the school
   6-20  shall pay as a condition of renewal and in addition to any annual
   6-21  renewal fee a late renewal fee in an amount established by board
   6-22  rule of at least $100, subject to Subsection (b) of this section.
   6-23              (5)  The commissioner shall visit a school and
   6-24  reexamine the school for compliance with the criteria adopted under
   6-25  this Act not later than three months after the date a school begins
   6-26  operation or after a change in ownership of a school.
   6-27        (e)(1)  If the commissioner determines the applicant for a
    7-1  <driver training> school license to be unacceptable, the
    7-2  commissioner shall state the reasons for denial, in writing, to the
    7-3  applicant.
    7-4              (2)  Any applicant whose <driver training> school
    7-5  license is denied has the right of appeal under Section 18 of this
    7-6  Act.
    7-7        (f)(1)  The commissioner may revoke a <driver training>
    7-8  school license or may place reasonable conditions on the continued
    7-9  approval represented by the license.  On revocation or imposition
   7-10  of conditions on a <driver training> school license, the
   7-11  commissioner shall notify the licensee, in writing, of the
   7-12  impending action and state the grounds for the proposed action.
   7-13  The commissioner may reexamine a school two or more times during
   7-14  any year in which a notice relating to the school has been issued
   7-15  or conditions have been imposed on the school under this
   7-16  subsection.
   7-17              (2)  A <driver training> school license may be revoked
   7-18  or be made conditional if the commissioner has reasonable cause to
   7-19  believe that the school is guilty of a violation of this Act or any
   7-20  rule adopted under this Act.
   7-21        (g)(1)  Before a <driver training> school license may be
   7-22  issued under this Act, a bond shall be provided by the school for
   7-23  the period for which the license is to be issued, and the
   7-24  obligation of the bond shall be that neither a provision of this
   7-25  Act nor any rule adopted under this Act shall be violated by the
   7-26  school or any of its officers, agents, or employees.
   7-27              (2)  A school <that teaches driver education> shall
    8-1  submit a bond in the amount of $50,000 <$10,000>.  <All other
    8-2  schools shall submit a bond in the amount of $5,000.>  A bond must
    8-3  be a corporate surety bond issued by a company authorized to do
    8-4  business in the state, be payable to the state, and be used <only>
    8-5  for payment of a refund due to a student or potential student.  The
    8-6  bond shall be filed with the commissioner and shall be in such form
    8-7  as shall be approved by the commissioner.
    8-8              (3)  A school shall submit to the commissioner with the
    8-9  school's application for a school license or for the renewal of a
   8-10  school license a financial statement on the school that is prepared
   8-11  in accordance with generally accepted accounting practices.
   8-12  <Posting of these bond amounts shall satisfy the requirements for
   8-13  financial stability for schools under this Act.>
   8-14        (h)(1)  As a condition for the granting of a <driver
   8-15  training> school license, a school must maintain a cancellation and
   8-16  settlement policy that provides a full refund of all money paid by
   8-17  a student if:
   8-18                    (A)  the student cancels the enrollment agreement
   8-19  or contract before midnight of the third day, excluding Saturdays,
   8-20  Sundays, and legal holidays, after the date the enrollment contract
   8-21  is signed by the prospective student, unless the student has
   8-22  completed the course and accepted a certificate of completion
   8-23  during that period; or
   8-24                    (B)  the enrollment of the student was procured
   8-25  as a result of any misrepresentation in advertising, promotional
   8-26  materials of the school, or representation made by an owner or
   8-27  employee of the school.
    9-1              (2)  As <Unless only driving safety courses are
    9-2  proposed to be provided, as> a condition for granting a <driver
    9-3  training> school license, a school shall maintain a policy for the
    9-4  refund of the unused portion of tuition, fees, and other charges if
    9-5  a student, after expiration of the cancellation period described by
    9-6  Subdivision (1) of this subsection, fails to enter the course,
    9-7  withdraws, or is discontinued from the course at any time before
    9-8  completion, and the policy must provide that:
    9-9                    (A)  refunds are based on the period of
   9-10  enrollment computed on the basis of course time expressed in clock
   9-11  hours;
   9-12                    (B)  the effective date of the termination for
   9-13  refund purposes is the earliest of the following:
   9-14                          (i)  the last day of attendance, if the
   9-15  student's enrollment is terminated by the school;
   9-16                          (ii)  the date of receipt of written notice
   9-17  from the student; or
   9-18                          (iii)  the 10th school day following the
   9-19  last day of attendance;
   9-20                    (C)  if tuition is collected in advance of
   9-21  entrance and if, after expiration of the cancellation period
   9-22  described by Subdivision (1) of this subsection, a student does not
   9-23  enter the school, terminates enrollment, or withdraws, the school
   9-24  may retain up to $50 as administrative expenses and, from the
   9-25  remainder, shall refund that portion of the classroom tuition and
   9-26  fees and behind-the-wheel tuition and fees for services not
   9-27  previously received by the student;
   10-1                    (D)  refunds of items of extra expense to the
   10-2  student, including instructional supplies, books, laboratory fees,
   10-3  service charges, rentals, deposits, and all other such ancillary
   10-4  miscellaneous charges, will be made within 30 days after the
   10-5  effective date of enrollment termination, if these items are
   10-6  separately stated and shown in the data furnished the student
   10-7  before enrollment; and
   10-8                    (E)  refunds will be completed within 30 days
   10-9  after the effective date of enrollment termination.
  10-10              (3)  If the course of instruction is discontinued by
  10-11  the school, preventing a student from completing the course, all
  10-12  tuition and fees paid are then due and refundable.
  10-13              (4)  If a refund is not made within the period required
  10-14  by this subsection, the school shall pay interest on the refund for
  10-15  the interval beginning with the first day following the expiration
  10-16  of the refund period and ending with the day immediately preceding
  10-17  the date the refund is made.  The commissioner annually shall
  10-18  establish the rate of interest at a rate sufficient to provide a
  10-19  deterrent to the retention of student funds.  The agency may except
  10-20  a school from the payment of the interest if the school makes a
  10-21  good-faith effort to refund tuition but is unable to locate the
  10-22  student to whom the refund is owed.  The school shall provide on
  10-23  request of the agency documentation of the effort to locate a
  10-24  student.
  10-25        (i)  An applicant for a driving safety school license must
  10-26  include with the application a description of the manner in which
  10-27  the applicant will control the issuance of state certificates of
   11-1  course completion.
   11-2        (j)  As a condition of the granting of a school license, a
   11-3  school must agree to submit to a performance audit when an audit is
   11-4  requested by the commissioner and agree to bear the cost of the
   11-5  audit.  An audit under this subsection shall be performed by an
   11-6  independent auditor designated by the commissioner.
   11-7        SECTION 8.  Chapter 173, Acts of the 47th Legislature,
   11-8  Regular Session, 1941 (Article 6687b, Vernon's Texas Civil
   11-9  Statutes), is amended by adding Section 4C to read as follows:
  11-10        Sec. 4C.  COURSE REQUIRED FOR ORIGINAL DRIVER'S LICENSE.  The
  11-11  department may not issue an original driver's license to any
  11-12  applicant who has not successfully completed:
  11-13              (1)  the approved driver training course referred to in
  11-14  Section 7 of this Act; or
  11-15              (2)  a driving safety course approved by the Central
  11-16  Education Agency under the Texas Driver and Traffic Safety
  11-17  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes)
  11-18  and its subsequent amendments.
  11-19        SECTION 9.  Section 10(c), Chapter 173, Acts of the 47th
  11-20  Legislature, Regular Session, 1941 (Article 6687b, Vernon's Texas
  11-21  Civil Statutes), is amended to read as follows:
  11-22        (c)  The Director may certify and set standards for
  11-23  certification of certain employers, governmental agencies, and
  11-24  other appropriate organizations to train and test for the ability
  11-25  to operate certain types or general classes of vehicles.  The
  11-26  Department shall set standards for the training and testing of
  11-27  applicants.  The Director, in issuing the driver's licenses for
   12-1  certain types or general classes of vehicles, may waive a driving
   12-2  test for an applicant if the applicant has successfully completed
   12-3  and passed the approved driver training course referred to in
   12-4  Section 7 of this Act or a driving safety course approved by the
   12-5  Central Education Agency under the Texas Driver and Traffic Safety
   12-6  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes)
   12-7  and subsequent amendments to that Act <and testing by the certified
   12-8  entity>.
   12-9        SECTION 10.  (a)  This Act takes effect September 1, 1993.
  12-10        (b)  The changes in law made by Sections 1-7 of this Act
  12-11  apply only to the requirements for licensure and to the operation
  12-12  of a driving safety school or a driver training school on or after
  12-13  September 1, 1993.  A driving safety school or a driver training
  12-14  school that was teaching a driving safety course on August 31,
  12-15  1993, may not continue to teach the course unless on or before
  12-16  January 1, 1994, the school applies for a driving safety school
  12-17  license under the Texas Driver and Traffic Safety Education Act
  12-18  (Article 4413(29c), Vernon's Texas Civil Statutes), as amended by
  12-19  this Act.  A driving safety school or a driver training school that
  12-20  applies for a driving safety school license on or before January 1,
  12-21  1994, may continue to operate during the period that the
  12-22  application is pending.
  12-23        (c)  The changes in law made by Sections 8 and 9 of this Act
  12-24  apply only to a person who applies for an original driver's license
  12-25  on or after September 1, 1993.
  12-26        SECTION 11.  The importance of this legislation and the
  12-27  crowded condition of the calendars in both houses create an
   13-1  emergency and an imperative public necessity that the
   13-2  constitutional rule requiring bills to be read on three several
   13-3  days in each house be suspended, and this rule is hereby suspended.