S.B. No. 1371
  12-1                         COMMITTEE AMENDMENT NO. 1
  12-2          Amend SB 1371 by striking all below the enacting clause and
  12-3    substituting the following:
  12-4                   PART 1.  TEXAS PROPRIETARY SCHOOL ACT
  12-5          SECTION 1.01.  Section 32.02, Education Code, is amended to
  12-6    read as follows:
  12-7          Sec. 32.02.  Purpose and Objectives.  The aim in adopting
  12-8    this Chapter is to provide licensing <certification> and regulation
  12-9    of proprietary schools in Texas.
 12-10          SECTION 1.02.  Section 32.11, Education Code, is amended by
 12-11    amending Subdivisions (1), (5), and (6) and adding Subdivisions
 12-12    (10), (11), and (12) to read as follows:
 12-13                (1)  "Proprietary School," referred to as "school,"
 12-14    means any business enterprise operated for a profit, or on a
 12-15    nonprofit basis, which maintains a place of business within the
 12-16    State of Texas, or solicits business within the State of Texas, and
 12-17    which is not specifically exempted by the provisions of this
 12-18    Chapter and;
 12-19                      (A)  which offers or maintains a program <course
 12-20    or courses> of instruction <or study>; or
 12-21                      (B)  at which place of business such a program
 12-22    <course or courses> of instruction <or study> is available through
 12-23    classroom instruction or by correspondence, or both, to a person or
 12-24    persons for the purpose of training or preparing the person for a
 12-25    field of endeavor in a business, trade, technical, or industrial
 12-26    occupation, or for avocational or personal improvement, except as
 12-27    hereinafter excluded.
  13-1                (5)  "Administrator" means the commissioner of higher
  13-2    education <State Commissioner of Education> or a person,
  13-3    knowledgeable in the administration of regulating proprietary
  13-4    schools, designated by the Commissioner to administer the
  13-5    provisions of this chapter.
  13-6                (6)  "Notice to the school" means written
  13-7    correspondence sent to the address of record for legal service
  13-8    contained in the application for a license to operate <certificate
  13-9    of approval>.  "Date of Notice" means the date the notice is mailed
 13-10    by the administrator.
 13-11                (10)  "Probation" means a limitation on the continued
 13-12    approval of the license held by a school.
 13-13                (11)  "Central Education Agency" or "State Board of
 13-14    Education" means the Texas Department of Licensing and Regulation.
 13-15                (12)  "Commissioner of Education" means the
 13-16    commissioner of the Texas Department of Licensing and Regulation.
 13-17          SECTION 1.03.  Section 32.12, Education Code, is amended to
 13-18    read as follows:
 13-19          Sec. 32.12.  EXEMPTIONS.  (a)  The following schools or
 13-20    educational institutions are specifically exempt from the
 13-21    provisions of this chapter and are not within the definition of
 13-22    "proprietary school":
 13-23                (1)  a school or educational institution supported by
 13-24    taxation from either a local or State source;
 13-25                (2)  nonprofit schools owned, controlled, operated, and
 13-26    conducted by bona fide religious, denominational, or eleemosynary<,
 13-27    or similar public> institutions exempt from property taxation under
  14-1    the laws of this State, but such schools may choose to apply for a
  14-2    license to operate <certificate of approval> hereunder, and upon
  14-3    <approval and> issuance, shall be subject to the provisions of this
  14-4    chapter as determined by the administrator;
  14-5                (3)  a school or training program which offers
  14-6    instruction of purely avocational or recreational subjects as
  14-7    determined by the administrator;
  14-8                (4)  a program <course or courses> of instruction <or
  14-9    study> sponsored by an employer for the training and preparation of
 14-10    its own employees, and for which no tuition fee is charged to the
 14-11    student;
 14-12                (5)  a program <course or courses> of <study or>
 14-13    instruction sponsored by a recognized trade, business, or
 14-14    professional organization for the instruction of the members of the
 14-15    organization with a closed membership;
 14-16                (6)  private colleges or universities which award a
 14-17    recognized baccalaureate, or higher degree, and which maintain and
 14-18    operate educational programs for which a majority of the credits
 14-19    given are transferable to a college, junior college, or university
 14-20    supported entirely or partly by taxation from either a local or
 14-21    State source;
 14-22                (7)  a school which is otherwise regulated and approved
 14-23    under and pursuant to any other law of the State, except as
 14-24    provided by Subsection (c) of this section;
 14-25                (8)  aviation schools or instructors approved by and
 14-26    under the supervision of the Federal Aviation Administration;
 14-27                (9)  a school which offers intensive review courses
  15-1    designed to prepare students for certified public accountancy
  15-2    tests, <public accountancy tests,> law school aptitude tests, bar
  15-3    examinations, or medical college admissions tests;
  15-4                (10)  schools <(b)  Schools> offering a program <course
  15-5    or courses> of special <study or> instruction financed <and/>or
  15-6    subsidized by local, state or federal funds or any person, firm,
  15-7    association, or agency other than the student involved, on a
  15-8    contract basis and having a closed enrollment that applies <may
  15-9    apply> to the Administrator for exemption <of such course or
 15-10    courses from the provisions of this Chapter> and that <such course
 15-11    or courses may be declared exempt by> the Administrator declares
 15-12    exempt because the program is <where he finds the course or courses
 15-13    to be> outside the purview of this Chapter<.>; or
 15-14                (11)  schools offering a specialized course of
 15-15    instruction that does not prepare a person for a field of endeavor
 15-16    in a business, trade, technical, or industrial occupation as
 15-17    determined by the State Board of Education.
 15-18          (b) <(c)>  If a State agency that issues a license or other
 15-19    authorization for the practice of an occupation elects not to
 15-20    regulate or approve subject <course> hours that exceed the minimum
 15-21    education requirements for the issuance of the license or other
 15-22    authorization, the licensing agency shall enter into a memorandum
 15-23    of understanding with the Central Education Agency for the
 15-24    regulation of those excess subject <course> hours under this
 15-25    chapter.  Any course taught under a letter of approval or other
 15-26    written authorization issued by the licensing agency before the
 15-27    effective date of the memorandum is authorized under State law
  16-1    until the program <course> is reviewed by the Central Education
  16-2    Agency.  The licensing agency may terminate the memorandum of
  16-3    understanding on notice to the Central Education Agency.
  16-4          SECTION 1.04.  Section 32.21(b), Education Code, is amended
  16-5    to read as follows:
  16-6          (b)  The Central Education Agency shall prepare a comparison
  16-7    of the cost to a student of <courses of instruction or training>
  16-8    programs at proprietary schools to the cost to a student of similar
  16-9    <courses or> programs at schools that are exempt from this chapter
 16-10    under Section 32.12 of this code.
 16-11          SECTION 1.05.  Effective immediately, Subchapter C, Chapter
 16-12    32, Education Code, is amended by adding Section 32.211 to read as
 16-13    follows:
 16-14          Sec. 32.211.  TRANSFER OF ADMINISTRATION TO TEXAS DEPARTMENT
 16-15    OF LICENSING AND REGULATION.  (a)  The Central Education Agency and
 16-16    the commissioner of the Texas Department of Licensing and
 16-17    Regulation shall enter into an interagency contract for the
 16-18    transfer of the regulation of proprietary schools from the Central
 16-19    Education Agency to the Texas Department of Licensing and
 16-20    Regulation.  The transfer shall take effect on a date specified in
 16-21    the contract, but not later than February 1, 1994.  On the
 16-22    effective date of the transfer:
 16-23                (1)  all powers, duties, rights, and obligations of the
 16-24    Central Education Agency relating to the regulation of proprietary
 16-25    schools are transferred to the Texas Department of Licensing and
 16-26    Regulation;
 16-27                (2)  all assets, liabilities, equipment, data,
  17-1    documents, facilities, and other items of the Central Education
  17-2    Agency relating to the regulation of proprietary schools are
  17-3    transferred to the Texas Department of Licensing and Regulation;
  17-4    and
  17-5                (3)  any appropriation to the Central Education Agency
  17-6    relating to the regulation of proprietary schools is transferred to
  17-7    the Texas Department of Licensing and Regulation.
  17-8          (b)  The commissioner of Texas Department of Licensing and
  17-9    Regulation shall publish the contract in the Texas Register.
 17-10          (c)  The officers and employees of the Central Education
 17-11    Agency shall cooperate fully with the reorganization.
 17-12          (d)  Until the effective date of a transfer under Subsection
 17-13    (a) of this section, a reference in this chapter to the
 17-14    commissioner of higher education is considered to be a reference to
 17-15    the commissioner of education, and a reference to the Texas
 17-16    Department of Licensing and Regulation is considered to be a
 17-17    reference to the Central Education Agency.
 17-18          (e)  This section does not affect:
 17-19                (1)  the validity of any action taken by the Central
 17-20    Education Agency under this chapter before the effective date of
 17-21    the transfer described in Subsection (a) of this section; or
 17-22                (2)  a civil or administrative proceeding completed
 17-23    before the effective date of the transfer.
 17-24          (f)  This section does not affect the validity of a civil or
 17-25    administrative proceeding under this chapter, including
 17-26    certification or rulemaking, in progress on the effective date of
 17-27    the transfer described in Subsection (a) of this section.  A civil
  18-1    or administrative proceeding under this chapter that is in progress
  18-2    on the effective date of the transfer described in Subsection (a)
  18-3    of this section continues as if it had been initiated by the Texas
  18-4    Department of Licensing and Regulation under the law in effect on
  18-5    that date.
  18-6          (g)  All forms, rules, and procedures adopted by the Central
  18-7    Education Agency for the administration and enforcement of this
  18-8    chapter and in effect on the effective date of the transfer
  18-9    described in Subsection (a) of this section remain in effect on or
 18-10    after that date as if adopted by the Texas Department of Licensing
 18-11    and Regulation until amended, repealed, withdrawn, or otherwise
 18-12    superseded by the Texas Department of Licensing and Regulation.  A
 18-13    certificate of approval issued under this chapter and in effect on
 18-14    the effective date of the transfer described in Subsection (a) of
 18-15    this section remains in effect according to its terms as if issued
 18-16    by the Texas Department of Licensing and Regulation until the
 18-17    certificate expires or is revoked or surrendered.
 18-18          SECTION 1.06.  Section 32.23(c), Education Code, is amended
 18-19    to read as follows:
 18-20          (c)  The commission shall meet regularly in Austin once each
 18-21    month during the months of March, July, and November at a time and
 18-22    on a date designated by the chair <at 10:00 a.m. on the second
 18-23    Tuesday of January, May, and September>, and shall conduct special
 18-24    meetings at the call of the chair, the administrator, or upon the
 18-25    written petition of at least four members of the commission.
 18-26          SECTION 1.07.  Section 32.24(a), Education Code, is amended
 18-27    to read as follows:
  19-1          (a)  The administrator shall carry out the policies of this
  19-2    chapter and enforce the rules and regulations adopted by the State
  19-3    Board of Education.  He shall also certify the names of those
  19-4    schools meeting the requirements for a license to operate
  19-5    <certificate of approval>.
  19-6          SECTION 1.08.  Section 32.31, Education Code, is amended to
  19-7    read as follows:
  19-8          Sec. 32.31.  LICENSE TO OPERATE <CERTIFICATE OF APPROVAL>.
  19-9    (a)  A school may not maintain, advertise, solicit for, or conduct
 19-10    any program <course> of instruction in Texas before the later of:
 19-11                (1)  the 30th day after the date the school applies for
 19-12    a license to operate <certificate of approval> under this chapter;
 19-13    or
 19-14                (2)  the date the school receives a license to operate
 19-15    <certificate of approval> from the administrator.
 19-16          (b)  Any contract entered into with any person for a program
 19-17    <course> of instruction after the effective date of this chapter by
 19-18    or on behalf of any person operating any school to which a license
 19-19    to operate <certificate of approval> has not been issued pursuant
 19-20    to the provisions of this chapter, shall be unenforceable in any
 19-21    action brought thereon.
 19-22          SECTION 1.09.  Section 32.32, Education Code, is amended to
 19-23    read as follows:
 19-24          Sec. 32.32.  APPLICATION FOR License to Operate <Certificate
 19-25    of Approval>.  (a)  Every proprietary school desiring to operate in
 19-26    the State of Texas or do business in the State shall make written
 19-27    application to the administrator for a license to operate
  20-1    <certificate of approval>.  Such application shall be verified, be
  20-2    in such form as may be prescribed by the State Board of Education,
  20-3    and shall furnish the administrator such information as he may
  20-4    require.  The application must include a statement of any final
  20-5    convictions of the owners, school directors, recruiters,
  20-6    instructional faculty, or other selected personnel of the school as
  20-7    determined by the administrator.  The administrator may obtain
  20-8    criminal history records of school directors or instructional
  20-9    faculty from any law enforcement agency, including the United
 20-10    States Department of Justice, the Department of Public Safety of
 20-11    the State of Texas, the Texas Department of Criminal Justice, or
 20-12    the police department of a municipality.  The administrator may
 20-13    deny, revoke, or disapprove the application for, or existing
 20-14    license, registration, or approval of a person who has been
 20-15    convicted of, entered a plea of nolo contendere, or guilty to, or
 20-16    received deferred adjudication for, a felony or misdemeanor offense
 20-17    for which a refusal may be issued under Article 6252-13c, Vernon's
 20-18    Texas Civil Statutes.
 20-19          (b)  The State Board of Education may adopt rules providing
 20-20    for the issuance of various classes of licenses based on the number
 20-21    of students attending the school.  The license classifications may
 20-22    allow for stricter regulation and greater frequency of inspection
 20-23    of large schools, as defined by board rule, and for limited
 20-24    regulation of small schools, as defined by board rule.
 20-25          (c)  The administrator may not use the word "approval" or a
 20-26    variation of that term on the license of a school.  The terminology
 20-27    must be "licensed" to operate, or a variation of that phrase.
  21-1          SECTION 1.10.  Section 32.33, Education Code, is amended to
  21-2    read as follows:
  21-3          Sec. 32.33.  Criteria.  Except for a school or program
  21-4    intended to prepare a student for a course, school, or program
  21-5    listed in Section 32.331 of this code, the <The> administrator may
  21-6    approve the application of such proprietary school when the school
  21-7    is found, upon investigation at the premises of the school, to have
  21-8    met the following criteria:
  21-9                (a)  The subjects <courses>, programs <curriculum>, and
 21-10    instruction are of such quality, content, and length as may
 21-11    reasonably and adequately achieve the stated objective for which
 21-12    the subjects <courses>, programs, <curriculum> or instruction are
 21-13    offered.
 21-14                (b)  There is in the school adequate space, equipment,
 21-15    instructional material and instructor personnel to provide training
 21-16    of good quality.
 21-17                (c)  Educational and experience qualifications of
 21-18    directors, administrators and instructors are adequate.
 21-19                (d)  The school maintains a written record of the
 21-20    previous education and training of the applicant student and
 21-21    clearly indicates that appropriate credit has been given by the
 21-22    school for previous education and training, with the new training
 21-23    period shortened where warranted through use of appropriate skills
 21-24    or achievement tests and the student so notified.
 21-25                (e)  A copy of the program <course> outline; schedule
 21-26    of tuition, fees, refund policy, and other charges; regulations
 21-27    pertaining to absence, grading policy, and rules of operation and
  22-1    conduct; regulations pertaining to incomplete grades; the name,
  22-2    mailing address, and telephone number of the Central Education
  22-3    Agency for the purpose of directing complaints to the agency; the
  22-4    current rates of job placement and employment of students issued a
  22-5    certificate of completion; and notification of the availability of
  22-6    the cost comparison information prepared under Section 32.21(b) of
  22-7    this code through the Central Education Agency will be furnished
  22-8    the student prior to enrollment.
  22-9                (f)  Except as provided by Section 32.40 of this code,
 22-10    on completion of training, the student is given a certificate by
 22-11    the school indicating the program <course> and that training was
 22-12    satisfactorily completed.
 22-13                (g)  Adequate records as prescribed by the
 22-14    administrator are kept to show attendance and progress or grades,
 22-15    and satisfactory standards relating to attendance, progress and
 22-16    conduct are enforced.
 22-17                (h)  The school complies with all local, city, county,
 22-18    municipal, state and federal regulations<, such as fire, building
 22-19    and sanitation codes>.  The administrator may require such evidence
 22-20    of compliance as is deemed necessary.
 22-21                (i)  The school is financially sound and capable of
 22-22    fulfilling its commitments for training.
 22-23                (j)  The school's administrators, directors, owners,
 22-24    and instructors are of good reputation and character.
 22-25                (k)  The school has, maintains and publishes in its
 22-26    catalogue and enrollment contract, the proper policy for the refund
 22-27    of the unused portion of tuition, fees and other charges in the
  23-1    event the student enrolled by the school fails to take the program
  23-2    <course> or withdraws or is discontinued therefrom at any time
  23-3    prior to completion.
  23-4                (l)  The school does not utilize erroneous or
  23-5    misleading advertising, either by actual statement, omission, or
  23-6    intimation as determined by the State Board of Education.
  23-7                (m)  Such additional criteria as may be required by the
  23-8    State Board of Education.
  23-9                (n)  The school does not use a name like or similar to
 23-10    an existing tax supported school in the same area.
 23-11                (o)  The school furnishes to the Central Education
 23-12    Agency the current rates of students who receive a certificate of
 23-13    completion and of job placement and employment of students issued a
 23-14    certificate of completion.
 23-15                (p)  The school furnishes to the Central Education
 23-16    Agency for approval or disapproval student admission requirements
 23-17    for each course or program offered by the school.
 23-18                (q)  The school furnishes to the Central Education
 23-19    Agency for approval or disapproval the program <course> hour
 23-20    lengths and curriculum content for each program <course> offered by
 23-21    the school.
 23-22                (r)  The school does not owe a civil penalty under
 23-23    Section 32.611 of this code.
 23-24          SECTION 1.11.  Subchapter D, Chapter 32, Education Code, is
 23-25    amended by adding Section 32.331 to read as follows:
 23-26          Sec. 32.331.  TEST PREPARATION PROGRAMS FOR HIGHER EDUCATION
 23-27    ENTRANCE; PROFESSIONAL AND OCCUPATIONAL LICENSING; AND SHORT
  24-1    COURSES.  Test preparation courses, programs, or schools intended
  24-2    to prepare students for undergraduate, graduate, or postgraduate
  24-3    higher education, professional licensing and occupational entrance
  24-4    examinations, and short courses not exceeding 40 hours in length
  24-5    may be licensed by the administrator on the administrator's
  24-6    determination that the applicant has met the following criteria:
  24-7                (1)  the school must be educationally sufficient;
  24-8                (2)  instructors of the school must have the necessary
  24-9    educational qualifications;
 24-10                (3)  the school must be fiscally sound and have the
 24-11    necessary assets to offer the programs; and
 24-12                (4)  the school must comply with other rules and
 24-13    regulations the administrator may prescribe.
 24-14          SECTION 1.12.  Sections 32.34(a)-(e), Education Code, are
 24-15    amended to read as follows:
 24-16          (a)  The administrator, upon review of an application for a
 24-17    license to operate <certificate of approval> duly submitted in
 24-18    accordance with the provisions of Section 32.32 and meeting the
 24-19    requirements of Section 32.33 of this code <chapter>, shall issue a
 24-20    license to operate <certificate of approval> to the applicant
 24-21    school.  The license to operate <certificate of approval> shall be
 24-22    in a form recommended by the commission and approved by the State
 24-23    Board of Education and shall state in a clear and conspicuous
 24-24    manner at least the following information:
 24-25                (1)  date of issuance, effective date, and term of
 24-26    licensing <approval>;
 24-27                (2)  correct name and address of the school;
  25-1                (3)  authority for the license <approval> and
  25-2    conditions of licensing <approval>, if any, referring specifically
  25-3    to the <approved> catalogue or bulletin published by the school;
  25-4                (4)  signature of the administrator or such person as
  25-5    may have been designated by him to administer the provisions of
  25-6    this chapter; and
  25-7                (5)  any other fair and reasonable representations that
  25-8    are consistent with this chapter and deemed necessary by the
  25-9    administrator.
 25-10          (b)  The term for which a license to operate <certificate of
 25-11    approval> shall be issued shall not exceed one year.
 25-12          (c)  The license to operate <certificate of approval> shall
 25-13    be issued to the owner of the applicant school and shall be
 25-14    nontransferable.  In the event of a change in ownership of the
 25-15    school, a new owner must, at least 60 <thirty (30)> days prior to
 25-16    the change in ownership, apply for a new license to operate
 25-17    <certificate of approval>.
 25-18          (d)  At least 60 <thirty (30)> days prior to expiration of a
 25-19    license to operate <certificate of approval>, the school shall
 25-20    forward to the administrator an application for renewal.  The
 25-21    administrator shall reexamine the school at the premises of the
 25-22    school and either renew or cancel the school's license to operate
 25-23    <certificate of approval>.  If a school fails to file a complete
 25-24    application for renewal at least 60 <thirty (30)> days before the
 25-25    expiration date of the license to operate <certificate of
 25-26    approval>, the school, as a condition of renewal, must pay, in
 25-27    addition to the annual renewal fee, a late renewal fee in an amount
  26-1    established by State Board of Education rule of at least $100.
  26-2          (e)  A school not yet in operation when its application for
  26-3    license to operate <certificate of approval> is filed may not begin
  26-4    operation until receipt of the license to operate <certificate of
  26-5    approval>.
  26-6          SECTION 1.13.  Section 32.35, Education Code, is amended to
  26-7    read as follows:
  26-8          Sec. 32.35.  Denial of License to Operate <Certificate of
  26-9    Approval>.  (a)  If the administrator, upon review and
 26-10    consideration of an application for license to operate <certificate
 26-11    of approval>, shall determine the applicant to be unacceptable, the
 26-12    administrator shall set forth the reasons for denial, in writing,
 26-13    to the applicant.
 26-14          (b)  Any applicant whose application for a license to operate
 26-15    <certificate of approval> is denied shall have the right of appeal
 26-16    under Subchapter E of this chapter.
 26-17          SECTION 1.14.  Section 32.36, Education Code, is amended to
 26-18    read as follows:
 26-19          Sec. 32.36.  DENIAL OF, LIMITATION ON, OR Revocation of
 26-20    License to Operate <Certificate of Approval>.  (a)  The
 26-21    Administrator may revoke an issued license to operate <certificate
 26-22    of approval> or place reasonable conditions upon <the> continued
 26-23    licensing <approval represented by the certificate>.  Prior to
 26-24    revocation or imposition of conditions upon a license to operate
 26-25    <certificate of approval>, the Administrator shall notify the
 26-26    holder of the license <certificate>, in writing, of the impending
 26-27    action and set forth the grounds for the action.  The Administrator
  27-1    may reexamine a school two or more times during each year in which
  27-2    a notice relating to the school has been issued or conditions have
  27-3    been imposed on the school under this subsection.
  27-4          (b)  A license to operate <certificate of approval> may be
  27-5    revoked or made conditional if the Administrator has reasonable
  27-6    cause to believe that the school is guilty of a violation of this
  27-7    chapter or of any rules and regulations promulgated hereunder.
  27-8          (c)  The Administrator may deny, suspend, or revoke a license
  27-9    to operate or place the school on probation if the school or a
 27-10    representative of the school gives a prospective student
 27-11    information relating to the school that is false, fraudulent,
 27-12    deceptive, substantially inaccurate, or misleading.
 27-13          (d)  A holder of a license revoked or made conditional under
 27-14    this section may appeal the revocation or imposition of conditions
 27-15    decision under Subchapter E of this chapter.
 27-16          (e)  During any period a school is on probation under this
 27-17    section, the school must state clearly in any student solicitation
 27-18    that the school is on probation.
 27-19          SECTION 1.15.  Section 32.37(c), Education Code, is amended
 27-20    to read as follows:
 27-21          (c)  Denial or revocation of registration of a representative
 27-22    by the administrator shall be in accordance with the provisions of
 27-23    this chapter applicable to denial or revocation of a license to
 27-24    operate <certificate of approval>; provided, however, the
 27-25    administrator may deny, suspend or revoke the registration of a
 27-26    representative who has been convicted of a felony, whether within
 27-27    or without the State of Texas.
  28-1          SECTION 1.16.  Section 32.39, Education Code, is amended by
  28-2    amending Subsections (a), (b), (c), (d), and (e) and adding
  28-3    Subsections (g), (h), and (i) to read as follows:
  28-4          (a)  As a condition for granting a license to operate
  28-5    <certification> each school must maintain a cancellation and
  28-6    settlement policy which must provide a full refund of all monies
  28-7    paid by a student if:
  28-8                (1)  the student cancels the enrollment agreement or
  28-9    contract within 72 hours (until midnight of the third day excluding
 28-10    Saturdays, Sundays, and legal holidays) after the enrollment
 28-11    contract is signed by the prospective student;
 28-12                (2)  the enrollment of the student was procured as the
 28-13    result of any misrepresentation in advertising, promotional
 28-14    materials of the school, or representations by the owner or
 28-15    representatives of the school.
 28-16          (b)  As a condition for granting a license <certification>,
 28-17    each school must maintain a policy for the refund of the unused
 28-18    portion of tuition, fees, and other charges in the event the
 28-19    student, after expiration of the 72-hour cancellation privilege
 28-20    terminates enrollment or is terminated by the school, as provided
 28-21    by this subsection, <fails to enter the course, or withdraws, or is
 28-22    discontinued therefrom at any time prior to completion,> and such
 28-23    policy must provide:
 28-24                (1)  refunds for resident programs <courses> will be
 28-25    based on the period of enrollment computed on the basis of program
 28-26    <course> time expressed in clock hours;
 28-27                (2)  the effective date of the termination for payment
  29-1    of a refund <refund purposes> in residence schools will be the
  29-2    earliest of the following:
  29-3                      (A)  the last date of attendance, if the student
  29-4    is terminated for failure to satisfy a school attendance, grade, or
  29-5    work requirement <by the school>;
  29-6                      (B)  the date of receipt of written notice from
  29-7    the student;
  29-8                      (C)  the 10th consecutive school day the student
  29-9    has been absent, unless any of the absences are excused by the
 29-10    school <ten school days following the last date of attendance>; or
 29-11                      (D)  the date the student fails to return, as
 29-12    scheduled, from a leave of absence;
 29-13                (3)  if tuition and fees are <is> collected in advance
 29-14    of entrance, and if, after expiration of the 72-hour cancellation
 29-15    privilege, the student does not enter the residence school, not
 29-16    more than $100 shall be retained by the school;
 29-17                (4)  for the student who enters a residence program
 29-18    <course> of not more than 12 months in length, terminates or
 29-19    withdraws, the school may retain $100 of tuition and fees and the
 29-20    minimum refund of the remaining tuition and fees will be:
 29-21                      (A)  during the first week or one-tenth of the
 29-22    program <course>, whichever is less, 90 percent of the remaining
 29-23    tuition and fees;
 29-24                      (B)  after the first week or one-tenth of the
 29-25    program <course>, whichever is less, but within the first three
 29-26    weeks of the program <course>, 80 percent of the remaining tuition
 29-27    and fees;
  30-1                      (C)  after the first three weeks of the program
  30-2    <course>, but within the first quarter of the program <course>, 75
  30-3    percent of the remaining tuition and fees;
  30-4                      (D)  during the second quarter of the program
  30-5    <course>, 50 percent of the remaining tuition and fees;
  30-6                      (E)  during the third quarter of the program
  30-7    <course>, 10 percent of the remaining tuition and fees;
  30-8                      (F)  during the last quarter of the program
  30-9    <course>, the student may be considered obligated for the full
 30-10    tuition and fees;
 30-11                (5)  for residence programs <courses> more than 12
 30-12    months in length, the refund shall be applied to each 12-month
 30-13    period, or part thereof separately, in the manner provided by
 30-14    Subsection (b)(4) of this section;
 30-15                (6)  refunds of items of extra expense to the student,
 30-16    such as instructional supplies, books, student activities,
 30-17    laboratory fees, service charges, rentals, deposits, and all other
 30-18    such ancillary miscellaneous charges, where these items are
 30-19    separately stated and shown in the data furnished the student
 30-20    before enrollment, will be made in a reasonable manner acceptable
 30-21    to the administrator;
 30-22                (7)  refunds based on enrollment in residence schools
 30-23    will be totally consummated within 60 <30> days after the effective
 30-24    date of termination, as determined under Subdivision (2) of this
 30-25    subsection;
 30-26                (8)  refunds for correspondence programs <courses> will
 30-27    be computed on the basis of the number of lessons in the program
  31-1    <course>;
  31-2                (9)  the effective date of the termination for refund
  31-3    purposes in correspondence programs <courses> will be the earliest
  31-4    of the following:
  31-5                      (A)  the date of notification to the student if
  31-6    the student is terminated;
  31-7                      (B)  the date of receipt of written notice from
  31-8    the student;
  31-9                      (C)  the end of the third calendar month
 31-10    following the month in which the student's last lesson assignment
 31-11    was received unless notification has been received from the student
 31-12    that he wishes to remain enrolled;
 31-13                (10)  if tuition and fees are <is> collected before any
 31-14    lessons have been completed, and if, after expiration of the
 31-15    72-hour cancellation privilege, the student fails to begin the
 31-16    program <course>, not more than $50 shall be retained by the
 31-17    school;
 31-18                (11)  in cases of termination or withdrawal after the
 31-19    student has begun the correspondence program <course>, the school
 31-20    may retain $50 of tuition and fees, and the minimum refund policy
 31-21    must provide that the student will be refunded the pro rata portion
 31-22    of the remaining tuition fees and other charges that the number of
 31-23    lessons completed and serviced by the school bears to the total
 31-24    number of lessons in the program <course>;
 31-25                (12)  refunds based on enrollment in correspondence
 31-26    schools will be totally consummated within 60 <30> days after the
 31-27    effective date of termination, as determined under Subdivision (9)
  32-1    of this subsection.
  32-2          (c)  In lieu of the refund policy herein set forth, <for
  32-3    programs of instruction not regularly offered to the general
  32-4    public,> the State Board of Education may, for good cause shown,
  32-5    amend, modify, substitute and/or alter the terms of such policy due
  32-6    to the specialized nature and objective of the subject school's
  32-7    program <course> of instruction, including authorizing a refund on
  32-8    a pro rata basis or the elimination of the 72-hour cancellation
  32-9    privilege provided by Subsection (a) of this section, for a program
 32-10    conducted for 40 or fewer hours, such as a seminar or workshop.
 32-11          (d)  If a program <course of instruction> is discontinued by
 32-12    the school and this prevents the student from completing the
 32-13    program <course>, all tuition and fees paid are <then> due and
 32-14    refundable.
 32-15          (e)  If a refund is not made within the period required by
 32-16    this section, the school shall pay, as a penalty, interest on the
 32-17    refund for the interval beginning with the first day following the
 32-18    expiration of the refund period and ending with the day immediately
 32-19    preceding the date the refund is made.  If the refund is made to a
 32-20    lending institution, the interest shall also be paid to that
 32-21    institution and applied against the student's loan.  The
 32-22    commissioner of education annually shall establish the level of
 32-23    interest at a level sufficient to provide a deterrent to the
 32-24    retention of student funds.  The Central Education Agency may
 32-25    exempt a school from the payment of the interest if the school
 32-26    makes a good faith effort to refund the tuition but is unable to
 32-27    locate the student.  The school shall provide to the agency on
  33-1    request documentation of the effort to locate the student.
  33-2          (g)  Refunds under this section shall be applied:
  33-3                (1)  first, to the repayment of federal student loans,
  33-4    awards, and other Title IV student assistance, as prescribed by the
  33-5    Student Consumer Requirements in the U.S. Department of Education
  33-6    Higher Education Amendments of 1992;
  33-7                (2)  second, to the repayment of other government
  33-8    loans;
  33-9                (3)  third, to the repayment of other financial loans;
 33-10    and
 33-11                (4)  last, to the student's personal tuitional
 33-12    expenditures.
 33-13          (h)  Not later than the 30th day after the date on which a
 33-14    refund is due to a student who has received a student loan, the
 33-15    school shall notify the guaranty agency and the lender of the
 33-16    required refund and any refund previously made.  The guaranty
 33-17    agency and the lender shall notify the student and the school if
 33-18    the student's loan has been transferred to another holder.
 33-19          (i)  The failure of a school or a person to pay a tuition and
 33-20    fees refund as required by this section is a deceptive trade
 33-21    practice under Subchapter E, Chapter 17, Business & Commerce Code.
 33-22          SECTION 1.17.  Section 32.401, Education Code, is amended to
 33-23    read as follows:
 33-24          Sec. 32.401.  APPROVED DEGREES.  (a)  A proprietary school
 33-25    may offer an associate of applied arts, (AAA), associate of applied
 33-26    science, (AAS), or associate of occupational studies (AOS) <an
 33-27    associate of applied arts or an associate of applied science>
  34-1    degree approved by the Texas Higher Education Coordinating Board.
  34-2          (b)  A proprietary school may offer an applied technology
  34-3    degree, (AT), or Occupational Studies Degree, (OS), approved by the
  34-4    Texas Department of Licensing and Regulation.  The Texas Department
  34-5    of Licensing and Regulation shall have no authority to approve a
  34-6    degree title that uses "associate," "bachelor's," "master's," or
  34-7    "doctor's," in the title and shall consult with the Texas Higher
  34-8    Education Coordinating Board to ensure that the titles of degrees
  34-9    approved by the agency are distinctly different from the titles of
 34-10    degrees approved by the board.
 34-11          <(b)  A proprietary school may offer an applied technology
 34-12    degree, an occupational studies degree, or other degree approved by
 34-13    the Central Education Agency.  The Central Education Agency shall
 34-14    have no authority to approve a degree title that uses "associate,"
 34-15    "bachelor's," "master's," or "doctor's" in the title and shall
 34-16    consult with the Texas Higher Education Coordinating Board to
 34-17    ensure that the titles of degrees approved by the agency are
 34-18    distinctly different from the titles of degrees approved by the
 34-19    board.>
 34-20          SECTION 1.18.  Subchapter D, Chapter 32, Education Code, is
 34-21    amended by adding Sections 32.402-32.4014 to read as follows:
 34-22          Sec. 32.402.  CONSUMER INFORMATION.  (a)  A school must
 34-23    submit to the administrator for approval, on an annual basis, a
 34-24    school catalog or comparable written documents detailing the
 34-25    consumer information that must be given to a prospective student
 34-26    before enrollment.  The school catalog or document must include:
 34-27                (1)  the name and address of the school and the
  35-1    school's governing body and officials;
  35-2                (2)  a calendar of the school year;
  35-3                (3)  school policies on enrollment;
  35-4                (4)  rules relating to absences;
  35-5                (5)  the school grading policy;
  35-6                (6)  the school's hours of operation and rules of
  35-7    conduct;
  35-8                (7)  a schedule of the tuition and other fees assessed;
  35-9                (8)  the school's cancellation and refund policy;
 35-10                (9)  a general description of the programs offered;
 35-11                (10)  information on entrance testing and remedial
 35-12    development plans;
 35-13                (11)  state licensing requirements for programs
 35-14    intended to result in licensing of the student;
 35-15                (12)  starting range and reported average salaries for
 35-16    the prior year's graduates in occupations for which programs are
 35-17    offered, if the information is available;
 35-18                (13)  the current rates of job placement and employment
 35-19    of students who complete a program;
 35-20                (14)  the school policy on credit for previous
 35-21    education and training;
 35-22                (15)  school regulations relating to incomplete grades;
 35-23                (16)  information on the transferability of credits
 35-24    earned;
 35-25                (17)  the name, mailing address, and telephone number
 35-26    of the administrator for the purpose of directing complaints to the
 35-27    administrator and the mechanism and procedures for resolving
  36-1    grievances submitted to the administrator;
  36-2                (18)  a statement that the administrator has
  36-3    information on cost comparison with similar schools;
  36-4                (19)  market and job availability information, if
  36-5    available;
  36-6                (20)  the names of the members of any advisory council
  36-7    of the school and the company for which they work; and
  36-8                (21)  other information required by the administrator
  36-9    if reasonable notice has been given by the administrator to the
 36-10    school of the additional requirements.
 36-11          (b)  A school may not accept a signed student enrollment
 36-12    contract or accept a student into any school program until at least
 36-13    24 hours after the student has received the catalog or comparable
 36-14    written documents required under this section.
 36-15          (c)  A student must sign a receipt stating that:
 36-16                (1)  the catalog was received by the student before any
 36-17    commitment made by the student to the school or by the school to
 36-18    the student;
 36-19                (2)  the student was given an opportunity to discuss
 36-20    the catalog with a representative of the school; and
 36-21                (3)  the student understands the contents and
 36-22    implications of the catalog.
 36-23          (d)  The receipt required by Subsection (c) of this section
 36-24    must be placed in the student's permanent school file, and a copy
 36-25    of the receipt must be delivered to the student.
 36-26          Sec. 32.403.  PROGRAM LENGTH AND CURRICULUM.  (a)  A school
 36-27    must submit to the administrator for approval the program lengths
  37-1    and curriculum content for each program offered by the school.  The
  37-2    program lengths and content may not be implemented unless the
  37-3    administrator approves them.  The program lengths and content shall
  37-4    reasonably ensure that students develop the job skills and
  37-5    knowledge necessary for employment.
  37-6          (b)  The administrator shall require a school to fully
  37-7    account for all curriculum contents and program lengths before
  37-8    issuing or renewing a license to operate, and a school that is
  37-9    offering program lengths below or above industry standards may be
 37-10    issued a conditional license to operate.
 37-11          Sec. 32.404.  COMPLETION, EMPLOYMENT, AND PLACEMENT.  (a)
 37-12    The administrator shall set and enforce minimum standards for
 37-13    completion and employment rates of programs, based on collected
 37-14    data.
 37-15          (b)  In determining whether to renew a license to operate,
 37-16    the administrator shall consider the completion, placement, and
 37-17    employment rates of students of the programs.
 37-18          (c)  Before a school may begin offering a new program for
 37-19    students, the school must show the administrator the opportunity
 37-20    for jobs for graduates of the program and the possibility of
 37-21    placement or employment.
 37-22          (d)  Before the administrator issues or renews a license to
 37-23    operate involving a school that offers or advertises a placement
 37-24    service, the administrator may require the school to file a true
 37-25    and accurate copy of the school's placement records for the
 37-26    previous year.
 37-27          Sec. 32.405.  ON-SITE INSPECTIONS.  (a)  The administrator
  38-1    shall conduct on-site inspections of a school to determine the
  38-2    normal operating conditions of the school.
  38-3          (b)  The inspection required by Subsection (a) of this
  38-4    section shall be unannounced.
  38-5          (c)  The administrator may inspect such things as the
  38-6    instructional books and records, classrooms, dormitories, tools,
  38-7    equipment, and classes of a school or an applicant for a license to
  38-8    operate at any reasonable time.
  38-9          Sec. 32.406.  LICENSING REQUIREMENTS DISCLOSURE.  (a)  A
 38-10    school must disclose to all prospective students state licensing
 38-11    requirements to practice the occupation for which the student is
 38-12    training.
 38-13          (b)  A school must disclose to all prospective students the
 38-14    performance of graduates from the school on any licensing
 38-15    examination if that information is available.
 38-16          Sec. 32.407.  ENTRANCE REQUIREMENTS; MINIMUM SKILLS TEST.
 38-17    (a)  The administrator shall approve entrance requirements,
 38-18    including minimum skills testing, for students who may be accepted
 38-19    for a program in a school.  The requirements must be specific and
 38-20    provide that students who are allowed to enter a program will have
 38-21    a reasonable chance of completing the program.
 38-22          (b)  The school shall administer a standardized test to
 38-23    students entering the school, if testing for minimal skill
 38-24    competency is determined by the administrator as appropriate and
 38-25    necessary to determine if remediation is needed.  The test must be
 38-26    administered before enrollment and must be nationally recognized as
 38-27    appropriate and effective for minimum skills testing.  If the test
  39-1    reveals the necessity for remediation, the school must implement a
  39-2    plan to encourage the student to improve in basic general education
  39-3    skills.
  39-4          (c)  A student must achieve a successful score on the test
  39-5    required by this section before the student is obligated for
  39-6    tuition and fees for the vocational portion of the school's
  39-7    program.
  39-8          (d)  The school may, in accordance with federal statutory
  39-9    provisions affecting guaranteed student loan programs, on a
 39-10    case-by-case basis, refuse to provide the certification statements
 39-11    required for guaranteed student loan eligibility, or reduce the
 39-12    determination of need for a guaranteed student loan if the school
 39-13    determines that the student's expenses to be covered by the loan
 39-14    and the estimated cost of attendance, can be met more appropriately
 39-15    by the school, directly by the student, or by other sources.
 39-16          Sec. 32.408.  STUDENTS IN NEED OF REMEDIAL HELP.  (a)  An
 39-17    applicant without a high school diploma or high school equivalency
 39-18    certificate must pass an entrance test approved by the
 39-19    administrator and be considered to have the ability to benefit from
 39-20    the school before the school may enroll the student.
 39-21          (b)  A school that admits a student who does not have a high
 39-22    school diploma or high school equivalency certificate must develop
 39-23    and implement a plan for counseling the student on curriculum,
 39-24    student aid, employment opportunities, and the remediation
 39-25    necessary for the student to obtain a high school equivalency
 39-26    certificate and improve in basic general education skills.
 39-27          (c)  The school must assist the student in obtaining the
  40-1    remediation necessary for the student to pass a standardized
  40-2    minimum skills test, approved by the administrator, and the student
  40-3    must pass the test before entering the final quarter of the
  40-4    program.
  40-5          Sec. 32.409.  ENROLLMENT POLICIES.  (a)  The enrollment
  40-6    contract of a school must contain:
  40-7                (1)  a disclosure that the contract is a legally
  40-8    binding instrument on written acceptance of the student by the
  40-9    school, unless canceled as provided by law;
 40-10                (2)  the school's cancellation and refund policy;
 40-11                (3)  the method of cancellation of the contract, the
 40-12    effective date of any cancellation, and the name and address to
 40-13    which the notice of cancellation should be sent or delivered;
 40-14                (4)  the total cost of the program, including tuition
 40-15    and all other charges;
 40-16                (5)  a notification that the fair market value of
 40-17    equipment or supplies furnished to the student that the student
 40-18    fails to return in a condition suitable for resale not later than
 40-19    the 10th business day after the date of cancellation may be
 40-20    retained by the school and deducted from any refund of the student;
 40-21                (6)  a statement that if a student's enrollment is
 40-22    canceled for any reason, the school will notify an agency known to
 40-23    the school to be providing financial aid to the student of the
 40-24    cancellation not later than the 30th day after the date of
 40-25    cancellation;
 40-26                (7)  the name of the programs, including the number of
 40-27    hours of classroom instruction or home study lessons.
  41-1          (b)  An enrollment contract may not contain a wage assignment
  41-2    provision or a confession of judgment clause.
  41-3          (c)  Immediately after a prospective student has signed an
  41-4    enrollment contract, the school shall give the prospective student
  41-5    a copy of the contract, and a copy shall be placed in the student's
  41-6    permanent school file.
  41-7          Sec. 32.4010.  LOAN COUNSELING.  (a)  A school shall conduct
  41-8    loan counseling entrance interviews with each prospective student
  41-9    seeking a loan during the enrollment process.  A student borrower
 41-10    shall be counseled before the initial disbursement of loan
 41-11    proceeds, shortly before the student completes one-half of the
 41-12    program, and before the student is issued a certificate of
 41-13    completion.
 41-14          (b)  The school's financial aid officer or counselor shall
 41-15    conduct the interviews required by Subsection (a) of this section.
 41-16    The interview must include a discussion of:
 41-17                (1)  the rights and responsibilities of the student as
 41-18    a borrower;
 41-19                (2)  what a loan is and the importance of repayment;
 41-20                (3)  the total cost of the program in which the student
 41-21    will be enrolled;
 41-22                (4)  the availability of other forms of financial aid,
 41-23    grants, and part-time work;
 41-24                (5)  the starting range and average reported salaries
 41-25    of those in the occupation for which the student will be trained,
 41-26    if available; and
 41-27                (6)  job placement services provided by the school and
  42-1    the employment rate of persons who attended the school and were
  42-2    enrolled in the program in which the student is enrolled.
  42-3          (c)  A school approved to accept state or federal educational
  42-4    loans or grants shall adopt, in addition to the provisions in this
  42-5    section, measures to reduce defaults and improve borrowers
  42-6    understanding and respect for the loan repayment obligation as
  42-7    provided in 34 C.F.R., Parts 668 and 682.
  42-8          (d)  The school must give a copy of the Texas Guaranteed
  42-9    Student Loan Corporation's "Your Future" guide, or a comparable
 42-10    document, approved by the administrator, to a prospective student
 42-11    at a time and in a manner that provides the student with sufficient
 42-12    opportunity to read the guide or other document and discuss the
 42-13    contents with the school's financial aid officer, if necessary for
 42-14    understanding and clarity, before signing an enrollment contract
 42-15    and before the school accepts the student in a program.
 42-16          (e)  The prospective student must sign a document stating
 42-17    that the student:
 42-18                (1)  attended a loan counseling entrance interview; and
 42-19                (2)  received a copy of the "Your Future" guide or
 42-20    comparable document in the time provided by Subsection (d) of this
 42-21    section.
 42-22          (f)  A copy of the signed document required by Subsection (e)
 42-23    of this section must be sent to the student, guarantor, and lender
 42-24    and must be placed in the student's permanent school file.
 42-25          Sec. 32.4011.  RECORDS.  (a)  A school shall maintain
 42-26    permanent records for all students enrolled, as required by the
 42-27    administrator.
  43-1          (b)  A school shall adopt a plan to preserve permanent
  43-2    records and submit the plan to the administrator for approval.  The
  43-3    plan must:
  43-4                (1)  provide that at least one copy of the records will
  43-5    be held in a secure depository; and
  43-6                (2)  designate an appropriate official to provide a
  43-7    student with copies of records or transcripts on request.
  43-8          (c)  The school shall make the first copy of records or
  43-9    transcripts at no charge to the student.  The school may make a
 43-10    reasonable charge to provide additional copies of records,
 43-11    transcripts, or other student information.
 43-12          (d)  If a school closes, the records become the property of
 43-13    the state.
 43-14          Sec. 32.4012.  DISPLAY OF LICENSE TO OPERATE; COMPLAINTS.
 43-15    (a)  A holder of a license to operate issued under this chapter
 43-16    shall display the license in a conspicuous place at the premises of
 43-17    the school.
 43-18          (b)  A school that has received a license to operate under
 43-19    this chapter shall post on the premises of the school at a
 43-20    prominent and conspicuous location the name, mailing address, and
 43-21    telephone number of the administrator for the purpose of directing
 43-22    complaints to the administrator.
 43-23          Sec. 32.4013.  FINANCIAL STABILITY.  (a)  A school may not
 43-24    reflect unearned tuition as a current asset unless the amount shown
 43-25    in current assets that reflects unearned tuition is offset by an
 43-26    equal amount shown as a current liability.  The school must meet
 43-27    one of the following criteria in order to be determined as
  44-1    financially sound and capable of fulfilling its commitments for
  44-2    training:
  44-3                (1)  current assets must bear a relationship to current
  44-4    liabilities in a ratio of at least one-to-one; or
  44-5                (2)  the school must have posted, or set aside in a
  44-6    dedicated escrow account, a bond, certificate of deposit,
  44-7    irrevocable letter of credit, or comparable security, acceptable to
  44-8    the administrator, each made payable to the State of Texas, in an
  44-9    amount sufficient to cover the school's record storage costs,
 44-10    teachout, and tuition and fees refund and recovery exposure based
 44-11    on the evidence the school submits proving its projected maximum
 44-12    total unearned tuition during the period covered by the evidence of
 44-13    indebtedness to the State.
 44-14          (b)  The school must demonstrate to the satisfaction of the
 44-15    administrator its financial soundness and ability to fulfill its
 44-16    commitments for training.  If requested by the school and
 44-17    administrator, the School Accounts Advisory Board shall investigate
 44-18    the financial soundness of a school that does not meet the
 44-19    requirements of (1) or (2) above in order to determine if the
 44-20    school is capable of fulfilling its obligations under this Act.
 44-21          Sec. 32.4014.  COMPLAINTS.  The administrator shall prepare
 44-22    information of public interest describing the functions of the
 44-23    agency and the procedures by which complaints are filed with and
 44-24    resolved by the administrator against a proprietary school.  The
 44-25    agency shall make the information available to the public, to the
 44-26    appropriate state agencies, and to the schools.
 44-27          SECTION 1.19.  Section 32.41, Education Code, is amended to
  45-1    read as follows:
  45-2          Sec. 32.41.  Hearing.  Should the applicant be dissatisfied
  45-3    with the imposition of conditions on, or the denial or revocation
  45-4    of, a license to operate <certificate of approval> by the
  45-5    Administrator, the applicant shall have the right to appeal the
  45-6    decision of the Administrator and request a hearing with the
  45-7    Administrator within fifteen (15) days after receipt of notice.
  45-8    Upon receipt of the request for a hearing, the Administrator shall
  45-9    set a time and place for said hearing and then send notice to the
 45-10    school of said time and place.  Said hearing shall be held within
 45-11    thirty (30) days from the receipt of the request for a hearing.  At
 45-12    said hearing, an applicant may appear in person or by counsel and
 45-13    present evidence to the Administrator in support of the licensing
 45-14    without conditions or the retaining or granting of the permit
 45-15    specified herein.  All interested persons may also appear and
 45-16    present oral and documentary evidence to the Administrator,
 45-17    concerning the issuance of a license to operate <certificate of
 45-18    approval> to the applicant school.  Within ten (10) days after the
 45-19    hearing, the Administrator shall send notice to the school either
 45-20    affirming or rescinding <revoking> the revocation or denial of, or
 45-21    conditions imposed on, the license to operate <certificate of
 45-22    approval>.
 45-23          SECTION 1.20.  Section 32.61, Education Code, is amended to
 45-24    read as follows:
 45-25          Sec. 32.61.  Prohibitions.  No person shall:
 45-26                (1)  operate a school without a license to operate or
 45-27    assume ownership of an existing school without obtaining a new
  46-1    license to operate <certificate of approval issued by the
  46-2    Administrator>;
  46-3                (2)  solicit prospective students without being
  46-4    licensed <bonded> as required by this Chapter;
  46-5                (3)  accept contracts or enrollment applications from a
  46-6    representative who is not registered <bonded> as required by this
  46-7    Chapter;
  46-8                (4)  utilize advertising designed to mislead or deceive
  46-9    prospective students;
 46-10                (5)  fail to notify the Administrator of the
 46-11    discontinuance of the operation of any school within 72 hours of
 46-12    cessation of classes and make available accurate records as
 46-13    required by this Chapter;
 46-14                (6)  fail to secure and file within 30 days an
 46-15    increased bond as required by this Chapter;
 46-16                (7)  negotiate any promissory instrument received as
 46-17    payment of tuition or other charge prior to completion of 75
 46-18    percent of the course, provided that prior to such  time, the
 46-19    instrument may be transferred by assignment to a purchaser who
 46-20    shall be subject to all the defenses available against the school
 46-21    named as payee;
 46-22                (8)  enroll a student who fails to satisfy entrance
 46-23    requirements; or
 46-24                (9) <(8)>  violate any provision of this Chapter or a
 46-25    rule adopted under this Chapter.
 46-26          SECTION 1.21.  Section 32.611, Education Code, is amended to
 46-27    read as follows:
  47-1          Sec. 32.611.  ADMINISTRATIVE <CIVIL> PENALTY.  (a)  The
  47-2    administrator may impose an administrative penalty against a person
  47-3    who violates Section 32.61 of this code.
  47-4          (b)  The penalty for a violation may be in an amount not to
  47-5    exceed $10,000.
  47-6          (c)  The amount of the penalty shall be based on:
  47-7                (1)  the seriousness of the violation, including the
  47-8    nature, circumstances, extent, and gravity of any prohibited acts;
  47-9                (2)  efforts to correct the violation; and
 47-10                (3)  any other matter that justice may require.
 47-11          (d)  If the administrator determines that a violation has
 47-12    occurred, the administrator may issue a report that states the
 47-13    facts on which the determination is based and the administrator's
 47-14    recommendation on the imposition of a penalty, including a
 47-15    recommendation on the amount of the penalty.
 47-16          (e)  Within 14 days after the date the report is issued, the
 47-17    administrator shall give written notice of the report to the
 47-18    person.  The notice may be given by certified mail.  The notice
 47-19    must include a brief summary of the alleged violation and a
 47-20    statement of the amount of the recommended penalty and must inform
 47-21    the person that the person has a right to a hearing on the
 47-22    occurrence of the violation, the amount of the penalty, or both the
 47-23    occurrence of the violation and the amount of the penalty.
 47-24          (f)  Within 20 days after the date the person receives the
 47-25    notice, the person in writing may accept the determination and
 47-26    recommended penalty of the administrator or may make a written
 47-27    request for a hearing on the occurrence of the violation, the
  48-1    amount of the penalty, or both the occurrence of the violation and
  48-2    the amount of the penalty.
  48-3          (g)  If the person accepts the determination and recommended
  48-4    penalty of the administrator, the administrator by order shall
  48-5    impose the recommended penalty.
  48-6          (h)  If the person requests a hearing or fails to respond
  48-7    timely to the notice, the administrator shall set a hearing and
  48-8    give notice of the hearing to the person.  The hearing shall be
  48-9    held by the  administrator.  The administrator shall make findings
 48-10    of fact and conclusions of law and, based on the findings of fact
 48-11    and conclusions of law, by order may find that a violation has
 48-12    occurred and impose a penalty or find that no violation occurred.
 48-13          (i)  The notice of the administrator's order given to the
 48-14    person under the Administrative Procedure and Texas Register Act
 48-15    (Article 6252-13a, Vernon's Texas Civil Statutes) must include a
 48-16    statement of the right of the person to judicial review of the
 48-17    order.
 48-18          (j)  Within 30 days after the date the administrator's order
 48-19    is final as provided by Section 16(c), Administrative Procedure and
 48-20    Texas Register Act (Article 6252-13a, Vernon's Texas Civil
 48-21    Statutes), the person shall:
 48-22                (1)  pay the amount of the penalty;
 48-23                (2)  pay the amount of the penalty and file a petition
 48-24    for judicial review contesting the occurrence of the violation, the
 48-25    amount of the penalty, or both the occurrence of the violation and
 48-26    the amount of the penalty; or
 48-27                (3)  without paying the amount of the penalty, file a
  49-1    petition for judicial review contesting the occurrence of the
  49-2    violation, the amount of the penalty, or both the occurrence of the
  49-3    violation and the amount of the penalty.
  49-4          (k)  Within the 30-day period, a person who acts under
  49-5    Subsection (j)(3) of this section may:
  49-6                (1)  stay enforcement of the penalty by:
  49-7                      (A)  paying the amount of the penalty to the
  49-8    court for placement in an escrow account; or
  49-9                      (B)  giving to the court a supersedeas bond that
 49-10    is approved by the court for the amount of the penalty and that is
 49-11    effective until all judicial review of the board's order is final;
 49-12    or
 49-13                (2)  request the court to stay enforcement of the
 49-14    penalty by:
 49-15                      (A)  filing with the court a sworn affidavit of
 49-16    the person stating that the person is financially unable to pay the
 49-17    amount of the penalty and is financially unable to give the
 49-18    supersedeas bond; and
 49-19                      (B)  giving a copy of the affidavit to the
 49-20    administrator by certified mail.
 49-21          (l)  If the administrator receives a copy of an affidavit
 49-22    under Subsection (k)(2) of this section, the administrator may file
 49-23    with the court, within five days after the date the copy is
 49-24    received, a contest to the affidavit.  The court shall hold a
 49-25    hearing on the facts alleged in the affidavit as soon as
 49-26    practicable and shall stay the enforcement of the penalty on
 49-27    finding that the alleged facts are true.  The person who files an
  50-1    affidavit has the burden of proving that the person is financially
  50-2    unable to pay the amount of the penalty and to give a supersedeas
  50-3    bond.
  50-4          (m)  If the person does not pay the amount of the penalty and
  50-5    the enforcement of the penalty is not stayed, the administrator may
  50-6    refer the matter to the attorney general for collection of the
  50-7    amount of the penalty.
  50-8          (n)  Judicial review of the order of the administrator:
  50-9                (1)  is instituted by filing a petition as provided by
 50-10    Section 19, Administrative Procedure and Texas Register Act
 50-11    (Article 6252-13a, Vernon's Texas Civil Statutes); and
 50-12                (2)  is under the substantial evidence rule.
 50-13          (o)  If the court sustains the occurrence of the violation,
 50-14    the court may uphold or reduce the amount of the penalty and order
 50-15    the person to pay the full or reduced amount of the penalty.  If
 50-16    the court does not sustain the occurrence of the violation, the
 50-17    court shall order that no penalty is owed.
 50-18          (p)  When the judgment of the court becomes final, the court
 50-19    shall proceed under this subsection.  If the person paid the amount
 50-20    of the penalty and if that amount is reduced or is not upheld by
 50-21    the court, the court shall order that the appropriate amount plus
 50-22    accrued interest be remitted to the person.  The rate of the
 50-23    interest is the rate charged on loans to depository institutions by
 50-24    the New York Federal Reserve Bank, and the interest shall be paid
 50-25    for the period beginning on the date the penalty was paid and
 50-26    ending on the date the penalty is remitted.  If the person gave a
 50-27    supersedeas bond and if the amount of the penalty is not upheld by
  51-1    the court, the court shall order the release of the bond.  If the
  51-2    person gave a supersedeas bond and if the amount of the penalty is
  51-3    reduced, the court shall order the release of the bond after the
  51-4    person pays the amount.
  51-5          (q)  A penalty collected under this section shall be remitted
  51-6    to the comptroller for deposit in the general revenue fund.
  51-7          (r)  All proceedings under this section are subject to the
  51-8    Administrative Procedure and Texas Register Act (Article 6252-13a,
  51-9    Vernon's Texas Civil Statutes).  <If a person violates Section
 51-10    32.61 of this code, the administrator may assess a civil penalty
 51-11    against that person as provided by this section.>
 51-12          <(b)  The administrator may assess the civil penalty in an
 51-13    amount not to exceed $1,000.  In determining the amount of the
 51-14    penalty, the administrator shall consider the seriousness of the
 51-15    violation.>
 51-16          <(c)  If, after examination of a possible violation and the
 51-17    facts relating to that possible violation, the administrator
 51-18    concludes that a violation has occurred, the administrator shall
 51-19    issue a preliminary report that states the facts on which the
 51-20    conclusion is based, the fact that a civil penalty is to be
 51-21    imposed, and the amount to be assessed.  Not later than the 10th
 51-22    day after the date on which the administrator issues the
 51-23    preliminary report, the administrator shall send a copy of the
 51-24    report to the person charged with the violation, together with a
 51-25    statement of the right of the person to a hearing relating to the
 51-26    alleged violation and the amount of the penalty.>
 51-27          <(d)  Not later than the 20th day after the date on which the
  52-1    report is sent, the person charged must either make a written
  52-2    request for a hearing or remit the amount of the civil penalty to
  52-3    the administrator.  Failure either to request a hearing or to remit
  52-4    the amount of the civil penalty within the time provided by this
  52-5    subsection results in a waiver of a right to a hearing under this
  52-6    section.  If the person charged requests a hearing, the hearing
  52-7    shall be conducted in the same manner as a hearing on the denial of
  52-8    certificate of approval under Section 32.41 of this code.  If it is
  52-9    determined after a hearing that the person has committed the
 52-10    alleged violation, the administrator shall give written notice to
 52-11    the person of the findings established by the hearing and the
 52-12    amount of the penalty and shall enter an order requiring the person
 52-13    to pay the penalty.>
 52-14          <(e)  Not later than the 30th day after the date on which the
 52-15    notice is received, the person charged must pay the civil penalty
 52-16    in full or, if the person wishes to contest either the amount of
 52-17    the penalty or the fact of the violation, remit the assessed amount
 52-18    to the administrator for deposit in an escrow account.  If, after
 52-19    judicial review, it is determined that no violation occurred or
 52-20    that the amount of the penalty should be reduced, the administrator
 52-21    shall remit the appropriate amount to the person charged with the
 52-22    violation not later than the 30th day after the date on which the
 52-23    judicial determination becomes final.>
 52-24          <(f)  Failure to remit the amount of the civil penalty to the
 52-25    board within the time provided by Subsection (e) of this section
 52-26    results in a waiver of all legal rights to contest the violation or
 52-27    the amount of the penalty.>
  53-1          <(g)  A civil penalty owed under this section plus reasonable
  53-2    attorney fees and court costs may be recovered in a civil action
  53-3    brought by the attorney general at the request of the
  53-4    administrator.  Civil penalties recovered shall be deposited in the
  53-5    General Revenue Fund.  Attorney fees and court costs shall be
  53-6    appropriated to the attorney general.>
  53-7          SECTION 1.22.  Section 32.612, Education Code, is amended to
  53-8    read as follows:
  53-9          Sec. 32.612.  Competitive Bidding; Advertising.  (a)  The
 53-10    State Board of Education may not adopt rules that <to> restrict
 53-11    competitive bidding or advertising by a proprietary school except
 53-12    to prohibit false, misleading, or deceptive competitive bidding or
 53-13    advertising practices.  The <Those> rules may not restrict:
 53-14                (1)  the use of an advertising medium;
 53-15                (2)  the size or duration of an advertisement; or
 53-16                (3)  advertisement under a trade name.
 53-17          (b)  A school, the representative of a school, or a recruiter
 53-18    for the school may not advertise or represent, in writing or
 53-19    orally, that a school is approved or accredited by the state.
 53-20    Those entities or persons may advertise that the school has been
 53-21    licensed to operate by the state.
 53-22          (c)  A school, representative of a school, or recruiter of a
 53-23    school may not make or cause to be made a statement or
 53-24    representation, written, oral, or visual, offering or publicizing a
 53-25    subject, program, or school, if the school, representative, or
 53-26    recruiter knew or reasonably should have known that the statement
 53-27    or representation was false, fraudulent, deceptive, substantially
  54-1    inaccurate, or misleading.
  54-2          SECTION 1.23.  Section 32.64, Education Code, is amended by
  54-3    amending Subsection (a) and adding Subsection (c) to read as
  54-4    follows:
  54-5          (a)  If the Central Education Agency has reasonable cause to
  54-6    believe that a proprietary school has violated this chapter or a
  54-7    rule adopted under this chapter, the agency may:
  54-8                (1)  order a peer review of the school; or
  54-9                (2)  suspend the admission of students to the school,
 54-10    as provided by Subsection (c) of this section.
 54-11          (c)  The agency may suspend the admission of students to a
 54-12    school under Subsection (a) of this section after the administrator
 54-13    has given written notice to the applicant for or holder of a
 54-14    license to operate a proprietary school of the suspension and of
 54-15    the intent to deny or revoke the license, as provided by Section
 54-16    32.35 or 32.36 of this code, as applicable.  In addition, the
 54-17    notice shall state that a hearing will be held at a time and place
 54-18    and on a date specified in the notice to review the denial or
 54-19    revocation decision.  Except as provided by this subsection, the
 54-20    hearing is in place of a hearing under Section 32.41 of this code,
 54-21    and shall be held not later than the 20th day after the date notice
 54-22    was given.  If, after the hearing, the administrator upholds the
 54-23    denial or revocation of the license, the applicant for or holder of
 54-24    a license may appeal the decision, as provided by Section 32.42 of
 54-25    this code.  The admission of students is suspended during the
 54-26    period the decision is being appealed.  If the applicant for or
 54-27    holder of a license appears and the agency fails to hold a timely
  55-1    hearing, the agency may not continue to suspend the enrollment of
  55-2    students without the consent of the applicant for or holder of a
  55-3    license, and the applicant for or holder of a license is entitled
  55-4    to a hearing under Section 32.41 of this code not later than the
  55-5    30th day after the date the hearing under this subsection was to be
  55-6    held.  If the applicant for or holder of a license fails to appear,
  55-7    the applicant for or holder of a license is not entitled to any
  55-8    other hearing or to an appeal under Section 32.42 of this code, and
  55-9    the administrator may make final the decision to deny or revoke the
 55-10    license.
 55-11          SECTION 1.24.  Subchapter G, Chapter 32, Education Code, is
 55-12    amended by adding Section 32.65 to read as follows:
 55-13          Sec. 32.65.  CRIMINAL PENALTIES.  (a)  A person commits an
 55-14    offense if the person fails to comply with Section 32.61(1) or
 55-15    32.39 of this code.  Except as provided by Subsection (b) of this
 55-16    section, an offense under this subsection is a Class A misdemeanor.
 55-17          (b)  A person commits an offense if the person intentionally
 55-18    or knowingly uses for personal benefit funds in an amount greater
 55-19    than $10,000 that are due as student refunds under Section 32.39 of
 55-20    this code.  An offense under this subsection is a felony of the
 55-21    third degree.
 55-22          SECTION 1.25.  Subchapter G, Chapter 32, Education Code, is
 55-23    amended by adding Section 32.66 to read as follows:
 55-24          Sec. 32.66.  INVESTIGATION OF STUDENT COMPLAINTS.  The
 55-25    administrator shall investigate complaints filed against a school
 55-26    by a current or former student that identifies a possible violation
 55-27    of statute or rule that occurred on a date not earlier than two
  56-1    years before the date of the letter of complaint.  If the school is
  56-2    found to be at fault, the agency may, in addition to assessing an
  56-3    appropriate penalty and fee as provided by this chapter, order the
  56-4    school to provide a refund in an amount not to exceed the total
  56-5    tuition and fee charge to the student.
  56-6          SECTION 1.26.  Section 32.91, Education Code, is amended to
  56-7    read as follows:
  56-8          Sec. 32.91.  CONSOLIDATION OF FEES AND PROPRIETARY SCHOOL
  56-9    ACCOUNT <TUITION PROTECTION FUND>.  (a)  At the beginning of each
 56-10    fiscal year the <At the time that each school pays its annual
 56-11    renewal fee, in the years provided by Subsection (c) of this
 56-12    section, the> State Board of Education shall <also> collect a fee
 56-13    from the school for deposit to the credit of a special account
 56-14    <fund> in the general revenue fund in the state treasury to be
 56-15    called the proprietary school account and to be administered by the
 56-16    Central Education Agency <tuition protection fund>.
 56-17          (b)  The amount of the fee is determined by applying a
 56-18    percentage established by the State Board of Education, based on
 56-19    the recommendation of the school accounts advisory board, to each
 56-20    school's annual gross tuition, with consideration given to the
 56-21    school's size, expense of regulation, potential for teachouts,
 56-22    tuition refund and recovery exposure, and loan default rates and
 56-23    any other relevant factors <renewal fee>.  The account shall be
 56-24    used for:
 56-25                (1)  the administration of this chapter;
 56-26                (2)  the cost of teachouts as provided by Section 32.92
 56-27    of this code;
  57-1                (3)  the cost of tuition and fees recovery and the cost
  57-2    of student refunds that a school has not made in violation of
  57-3    Section 32.39 of this code; and
  57-4                (4)  the cost of storing student records that have
  57-5    become property of the state under this Act.  <The percentage is
  57-6    the rate as determined by the board that, when applied to the total
  57-7    of all renewal fees, will result in the collection of $250,000 for
  57-8    deposit in the fund in the first two years that the fee is
  57-9    collected.>
 57-10          (c)  The administrator may grant an exemption from payment
 57-11    into the account to a small school, as determined by the
 57-12    administrator, or to a school that does not use guaranteed student
 57-13    loans for tuition revenue.  A school exempt as provided for by this
 57-14    subsection must pay the necessary fees for regulation, as
 57-15    determined by the administrator, and provide a bond, certificate of
 57-16    deposit, or comparable security, as determined and approved by the
 57-17    administrator, that is sufficient to cover the cost of the school's
 57-18    record storage costs, teachout, and tuition and fees refund and
 57-19    recovery exposure based on the evidence the school submits proving
 57-20    its projected maximum total unearned tuition during the period of
 57-21    the license to operate.
 57-22          (d)  The security shall be provided by the school for the
 57-23    period during which the license to operate is issued, and the
 57-24    obligation of the bond or other security must be that neither this
 57-25    chapter nor any rule adopted under this chapter is violated by the
 57-26    school or any of its officers, agents, or employees.
 57-27          (e)  The bond, certificate of deposit, or comparable security
  58-1    must be issued by a company authorized to do business in the state,
  58-2    conditioned that the parties to the transaction shall pay all
  58-3    damages or expenses that the state or any governmental subdivision
  58-4    or any student or potential student sustains resulting from a
  58-5    violation.  The bond, certificate of deposit, or comparable
  58-6    security shall be to the state to be used only for payment for the
  58-7    school's teachout and tuition and fees refund due to a student or
  58-8    potential student.  The security must be filed with the
  58-9    administrator and shall be in such form as shall be approved by the
 58-10    administrator.
 58-11          (f)  Schools domiciled, or having their principal place of
 58-12    business, outside the state, that engage representatives to
 58-13    canvass, solicit, or contract with any person in the state are
 58-14    subject to the fee and security requirements of Subsection (c) of
 58-15    this section.
 58-16          (g)  The administrator shall refer all expenses incurred by
 58-17    the school account in administering Subsections (b)(2) and (3) of
 58-18    this section to the attorney general's office for collection.  The
 58-19    amounts collected shall be deposited to the credit of the account.
 58-20    Attorney's fees and court costs shall be appropriated to the
 58-21    attorney general's office  <Beginning on January 1, 1990, the board
 58-22    shall collect the fee for two years.  If on January 1, 1993, or any
 58-23    subsequent year the amount in the fund is less than $200,000, the
 58-24    board shall collect a fee during that year by applying a percentage
 58-25    to each school's annual renewal fee at a rate that will bring the
 58-26    balance of the fund to $250,000>.
 58-27          (h)  Interest the account earns shall be reinvested in the
  59-1    account.  <(d)>  The state treasurer shall invest the account
  59-2    <fund> in the same manner as other state funds.  Sufficient funds
  59-3    from the account, other fees collected by the agency, and earned
  59-4    federal funds <tuition protection fund> shall be appropriated to
  59-5    Central Education Agency administration for the purpose outlined in
  59-6    this subchapter <section>.
  59-7          (i)  The administrator by rule shall establish and assess
  59-8    reasonable and necessary fees to all persons and entities licensed
  59-9    under this Act to be used for the regulation of those persons and
 59-10    entities licensed under this Act and to supplement the
 59-11    administration and purposes outlined by this Act.
 59-12          (j)  The administrator may permit payment of any fee
 59-13    authorized under this section that exceeds $1,000 to be paid by
 59-14    installment.  The administrator shall provide for appropriate
 59-15    interest charges and late penalties in addition to any other remedy
 59-16    that is provided for by law for the late payment of a fee
 59-17    installment authorized under this section.  The administrator may
 59-18    assess a reasonable service charge to be paid by a school that pays
 59-19    a fee by installment in an amount not to exceed an annual rate of
 59-20    10 percent of the fee that is to be paid by installment.
 59-21          SECTION 1.27.  Subchapter J, Education Code, is amended by
 59-22    adding Section 32.911 to read as follows:
 59-23          Sec. 32.911.  SCHOOL ACCOUNTS ADVISORY BOARD.  (a)  The
 59-24    school accounts advisory board is created.  The board members
 59-25    consist of:
 59-26                (1)  the attorney general or the designee of the
 59-27    attorney general;
  60-1                (2)  the comptroller of public accounts or the designee
  60-2    of the comptroller;
  60-3                (3)  the president of the Texas Guaranteed Student Loan
  60-4    Corporation or the designee of the president;
  60-5                (4)  the commissioner of the Texas Higher Education
  60-6    Coordinating Board or the designee of the commissioner;
  60-7                (5)  the president of the Association of Texas Lenders
  60-8    for Education or the designee of the president;
  60-9                (6)  the president of the Texas Association of Student
 60-10    Financial Aid Administrators or the designee of the president;
 60-11                (7)  the commissioner of the Texas Department of
 60-12    Licensing and Regulation or the designee of the commissioner;
 60-13                (7)  the director of the division of the Texas
 60-14    Department of Licensing and Regulation regulating proprietary
 60-15    schools or the designee of the director;
 60-16                (8)  the executive director of the Texas Board of
 60-17    Private Investigators and Private Security Agencies or the designee
 60-18    of the executive director;
 60-19                (9)  the commissioner of health or the designee of the
 60-20    commissioner;
 60-21                (10)  the executive director of the State Board of
 60-22    Barber Examiners or the designee of the executive director;
 60-23                (11)  the executive director of the Texas Cosmetology
 60-24    Commission or the designee of the executive director;
 60-25                (12)-(17)  one member each, elected by the recognized
 60-26    constituent organization, representing schools regulated by the the
 60-27    Texas Board of Private Investigators and Private Security Agencies,
  61-1    the massage registration division of the Texas Department of Health
  61-2    or its successor in that function, the State Board of Barber
  61-3    Examiners, the Texas Cosmetology Commission, and two members
  61-4    representing schools regulated by the Texas Department of Licensing
  61-5    and Regulation, one of which shall be a representative of the
  61-6    catagory of small and test prep schools.
  61-7          (b)  Each member of the school accounts advisory board has
  61-8    one vote, and decisions shall be made on the basis of a majority of
  61-9    the board.  The school accounts advisory board shall meet, at the
 61-10    call of the board's elected chairman, to recommend fees for and
 61-11    expenditures from:
 61-12                (1)  the proprietary school account;
 61-13                (2)  the security officer school account;
 61-14                (3)  the massage school account;
 61-15                (4)  the barber school or college account; and
 61-16                (5)  the private beauty culture school account.
 61-17          (c)  The school accounts advisory board shall, on an annual
 61-18    basis, recommend the percentage applied to annual gross tuition and
 61-19    fees to be used in establishing the baseline amount, based on
 61-20    anticipated needs sufficient to fully cover the purposes of the
 61-21    school accounts listed in Subsection (b) of this section.  The
 61-22    school accounts advisory board shall monitor the administration of
 61-23    the accounts and the schools or colleges contributing to the
 61-24    accounts and make recommendations to the appropriate state agency
 61-25    regarding the percentage of annual gross tuition to charge schools
 61-26    or colleges for the appropriate account provided by Subsection (b)
 61-27    of this section or other aspects of the administration of the
  62-1    account or the schools or colleges.
  62-2          (d)  The school accounts advisory board may request an audit
  62-3    of the appropriate state agency regarding the administration of the
  62-4    appropriate account provided by Subsection (b) of this section.
  62-5          (e)  The school accounts advisory board shall serve as
  62-6    arbitrator and shall hear appeals and mediate the resolution of
  62-7    grievances regarding the administration of the accounts brought by
  62-8    any member of the board.  The school accounts advisory board shall
  62-9    hear second appeals as provided by Subsection (k) of this section.
 62-10          (f)  The school accounts advisory board shall monitor the
 62-11    default management of agencies administering school accounts,
 62-12    including this Act and the rules in 34 C.F.R., Parts 668 and 682.
 62-13    The board may, on findings that the default reduction initiatives
 62-14    of an agency are not sufficient, as evidenced by a school that that
 62-15    agency regulates exceeding the acceptable default rate as
 62-16    determined by the board, require the agency to approve a default
 62-17    prevention plan to be implemented by the affected school.
 62-18          (g)  The school accounts advisory board shall be funded by
 62-19    the member organizations.  Each member organization shall
 62-20    appropriate funds to pay a portion of the cost to administer the
 62-21    board and to pay the expenses incurred by that organization's
 62-22    representative on the board.
 62-23          (h)  The school accounts advisory board may consider and rule
 62-24    on any matter regarding the regulation of a school or licensee
 62-25    under this chapter, the administration of an agency regulating
 62-26    schools under this chapter, or the application by a school of a
 62-27    policy regarding the students enrolled in a school regulated under
  63-1    this chapter, if the board considers such consideration and ruling
  63-2    are appropriate and necessary.
  63-3          (i)  Each state agency administering an account shall
  63-4    consider the recommendations of the school accounts advisory board
  63-5    when making decisions regarding the account administered by that
  63-6    agency.
  63-7          (j)  Each state agency administering an account shall
  63-8    recognize a constituent organization comprised of representatives
  63-9    of schools regulated by the agency and the school's advisory
 63-10    council if one exists.  The recognized constituent organization
 63-11    must be independent, both fiscally and administratively, from the
 63-12    agency regulating constituent schools.  The agency shall consider
 63-13    the recommendations of the recognized constituent organization
 63-14    regarding the regulation of the constituent schools.
 63-15          (k)  Each state agency administering an account shall
 63-16    prepare, submit for approval of the school accounts advisory board,
 63-17    and on approval shall publish the agency's mechanism and procedures
 63-18    by which complaints may be brought before the agency by the
 63-19    recognized constituent organization representing schools regulated
 63-20    by the agency.  The procedure shall include the investigation,
 63-21    hearing, and appeals process of the agency to resolve grievances
 63-22    brought against the agency or a school regulated by the agency,
 63-23    regarding any aspect of the regulation of the constituent schools.
 63-24          SECTION 1.28.  Section 32.92, Education Code, is amended to
 63-25    read as follows:
 63-26          Sec. 32.92.  Closed School.  (a)  The State Board of
 63-27    Education shall adopt rules specifying the circumstances under
  64-1    which the administrator may declare a school closed.  If a
  64-2    proprietary school closes, the Central Education Agency shall
  64-3    attempt to arrange for students of the closed school to attend:
  64-4                (1)  another proprietary school with similar programs;
  64-5                (2)  a public or private school with similar programs;
  64-6                (3)  a similar program recognized by the Central
  64-7    Education Agency; or
  64-8                (4)  a similar program established by private industry.
  64-9          (b)  The expense incurred by a school in providing a teachout
 64-10    that is directly related to educating a student placed in the
 64-11    school under this section, including the applicable tuition and
 64-12    fees for the period of time for which the student has paid tuition
 64-13    and fees, shall be paid in accordance with rules of the State Board
 64-14    of Education <from the proprietary school tuition protection fund>.
 64-15          (c)  If the student cannot be placed in another school, the
 64-16    student's tuition and fees shall be refunded under Section 32.39(d)
 64-17    of this code.
 64-18          (d)  If a student does not accept a place that is available
 64-19    and reasonable in another school, the student's tuition and fees
 64-20    shall be refunded under the refund policy maintained by the closing
 64-21    school under Section 32.39(b) of this code.
 64-22          (e)  The administrator shall make reasonable attempts to
 64-23    ensure that schools under the administrator's jurisdiction,
 64-24    including closed schools, fulfill the refund obligation as provided
 64-25    by Section 32.39 of this code.  If a school refuses to fulfill the
 64-26    school's obligation or the school's bond is insufficient to pay the
 64-27    cost of the teachout and refund expenses, the teachout or the
  65-1    refund may be paid from the proprietary school account, except that
  65-2    no school owned, either in whole or in part, by a person or
  65-3    corporate entity who was an owner, in whole or in part, of a
  65-4    previously closed school shall be permitted to receive compensation
  65-5    for a teachout under this section  <If the amount of the closed
  65-6    school's bond under Section 32.38 of this code is less than the
  65-7    amount required for student refunds under Subsections (c) and (d)
  65-8    of this section, the refunds shall be paid from the proprietary
  65-9    school tuition protection fund in an amount not to exceed $25,000>.
 65-10          (f)  <If another school assumes responsibility for the closed
 65-11    school's students with no significant changes in the quality of
 65-12    training, the student is not entitled to a refund under Subsection
 65-13    (c) or (d) of this section.>
 65-14          <(g)>  Attorney's fees, court costs, or damages may not be
 65-15    paid from the proprietary school <tuition protection> fund.
 65-16          <(h)  This section take effect January 1, 1992.>
 65-17          SECTION 1.29.  Sections 32.21(d), 32.23, 32.42(f), 32.71, and
 65-18    32.92(f), Education Code, are repealed.
 65-19          SECTION 1.30.  (a)  Section 32.38(a), Education Code, is
 65-20    amended to read as follows:
 65-21          (a)  Before a license to operate <certificate of approval> is
 65-22    issued under this chapter, a bond shall be provided by the school
 65-23    for the period during which the license to operate <certificate of
 65-24    approval> is issued, and the obligation of the bond shall be that
 65-25    neither a provision of this chapter nor any rule or regulation
 65-26    adopted pursuant thereto shall be violated by the school or any of
 65-27    its officers, agents, or employees.  The bond shall be in the penal
  66-1    sum of $5,000 or a multiple of $5,000 that is not greater than
  66-2    $25,000.  The administrator shall determine the amount based on the
  66-3    evidence the school submits of its projected maximum total unearned
  66-4    tuition during the period of the license to operate <certificate of
  66-5    approval>.  The bond shall be a corporate surety bond issued by a
  66-6    company authorized to do business in the State, conditioned that
  66-7    the parties thereto shall pay all damages or expenses which the
  66-8    State or any governmental subdivision thereof, or any student or
  66-9    potential student may sustain resulting from a violation.  The bond
 66-10    shall be to the State to be used only for payment of a tuition
 66-11    refund due to a student or potential student.  The bond shall be
 66-12    filed with the administrator and shall be in such form as shall be
 66-13    approved by the administrator.
 66-14          (b)  Effective September 1, 1994, Section 32.38, Education
 66-15    Code, is repealed.  Any license to operate bond or any certificate
 66-16    of approval bond submitted before repeal remains in full force and
 66-17    effect.  Any obligation under a license to operate bond or
 66-18    certificate of approval bond submitted under Section 32.38 before
 66-19    repeal is not impaired by repeal.
 66-20          SECTION 1.31.  Any balance remaining in the tuition
 66-21    protection fund shall be transferred to the proprietary school
 66-22    account on the effective date of this Act.
 66-23          SECTION 1.32.  A proprietary school that holds a certificate
 66-24    of approval on the effective date of this Act is considered to hold
 66-25    a license to operate under Chapter 32, Education Code, as amended
 66-26    by this part.  The administrator shall replace a certificate with a
 66-27    license after the expiration of the certificate and on application
  67-1    for renewal.
  67-2                     PART 2.  SECURITY OFFICER SCHOOLS
  67-3          SECTION 2.01.  Section 20, Private Investigators and Private
  67-4    Security Agencies Act (Article 4413(29bb), Vernon's Texas Civil
  67-5    Statutes), is amended to read as follows:
  67-6          Sec. 20.  SECURITY OFFICER SCHOOL LICENSE; APPLICATION;
  67-7    REFUND POLICY <Training Programs>.  (a)  The board shall establish
  67-8    a basic training course for security officers.  The course must be
  67-9    offered and taught by schools and instructors licensed <approved>
 67-10    by the board.  To receive a license <board approval,> a school or
 67-11    an instructor must submit an application to the board on a form
 67-12    provided by the board.
 67-13          (b)  The basic training course approved by the board shall
 67-14    consist of a minimum of 30 hours and shall include:
 67-15                (1)  legal limitations on the use of firearms and on
 67-16    the powers and authority of a security officer;
 67-17                (2)  familiarity with this Act;
 67-18                (3)  field note taking and report writing;
 67-19                (4)  range firing and procedure, and firearms safety
 67-20    and maintenance; and
 67-21                (5)  any other topics of security officer training
 67-22    curriculum which the board deems necessary.
 67-23          (c)  The board shall develop a commissioned security officer
 67-24    training manual to be used in the instructing and training of
 67-25    commissioned security officers.
 67-26          (d)  The board shall promulgate all rules necessary to
 67-27    administer the provisions of this section concerning the training
  68-1    requirements of this Act.
  68-2          (e)  An application for a license to instruct at a security
  68-3    officer school must state the education and experience level of the
  68-4    applicant in all courses or programs that the applicant will teach
  68-5    or instruct and be on a form prescribed by the board.  The board
  68-6    shall review an application for competency, consistency, and the
  68-7    overall quality of the applicant.  An applicant for an instructor's
  68-8    license must receive a passing grade on an examination administered
  68-9    by the board.
 68-10          (f)  The board may not issue a security officer commission to
 68-11    an applicant employed by a licensee unless the applicant submits
 68-12    evidence satisfactory to the board that:
 68-13                (1)  he has completed the basic training course at a
 68-14    school or under an instructor approved by the board;
 68-15                (2)  he meets all qualifications established by this
 68-16    Act and by the rules of the board;
 68-17                (3)  he has satisfied his firearm training instructor
 68-18    that he has attained with a handgun a minimum average marksmanship
 68-19    competency of 160 out of 300 on an "Army L" target or a minimum of
 68-20    80 out of 150 on an F.B.I. Silhouette target (N.R.A. B-27), at 50
 68-21    feet with 10 shots slow fire, 10 shots time fire and 10 shots
 68-22    double-action or complies with the standards of marksmanship set by
 68-23    the board;
 68-24                (4)  he has satisfied his firearm training instructor
 68-25    that he has complied with the standards of marksmanship set by the
 68-26    board for minimum marksmanship competency with a shotgun.
 68-27          (g) <(f)>  In addition to the requirements of Subsection (f)
  69-1    <(e)> of this section, the board by rules and regulations shall
  69-2    establish other qualifications for persons who are employed in
  69-3    positions requiring the carrying of firearms.  These qualifications
  69-4    may include physical and mental standards, standards of good moral
  69-5    character, and other requirements that relate to the competency and
  69-6    reliability of individuals to carry firearms.  The board shall
  69-7    prescribe appropriate forms and rules and regulations by which
  69-8    evidence that the requirements are fulfilled is presented.  The
  69-9    board shall require commissioned security officers and applicants
 69-10    for security officer commissions to demonstrate proficiency in the
 69-11    use of firearms to the satisfaction of a firearm training
 69-12    instructor who is employed by a board approved training school.  An
 69-13    applicant for a security officer commission must demonstrate
 69-14    proficiency not earlier than the 90th day before the date on which
 69-15    the security officer commission is to be issued.  A commissioned
 69-16    security officer must demonstrate proficiency not earlier than the
 69-17    90th day before the date on which the commission is to be renewed.
 69-18    The records of this proficiency shall be maintained by the school
 69-19    and available for inspection by the board.
 69-20          (h) <(g)>  The board shall prescribe appropriate rules and
 69-21    regulations for the maintenance of records relating to persons
 69-22    issued security officer commissions by the board.
 69-23          (i)  An application for a security officer school license
 69-24    must be verified by the applicant and must contain a statement of
 69-25    any final convictions of the owners, school directors, recruiters,
 69-26    instructional faculty, or other selected personnel of the security
 69-27    officer school as determined by the board.  The board may obtain
  70-1    criminal history records of school directors or instructional
  70-2    faculty from any law enforcement agency, including the United
  70-3    States Department of Justice, the Department of Public Safety of
  70-4    the State of Texas, the Texas Department of Criminal Justice, or
  70-5    the police department of a municipality.  The administrator may
  70-6    deny, revoke, or disapprove the application for, or existing
  70-7    license, registration, or approval of a person who has been
  70-8    convicted of, entered a plea of nolo contendere, or guilty to, or
  70-9    received deferred adjudication for, a felony or misdemeanor offense
 70-10    for which a refusal may be issued under Article 6252-13c, Vernon's
 70-11    Texas Civil Statutes.
 70-12          (j)  The board shall determine that an applicant for a
 70-13    security officer school license is financially sound and capable of
 70-14    fulfilling its commitments for training before granting the permit.
 70-15          (k)  Each licensed security officer school must maintain a
 70-16    cancellation and settlement policy that provides a full refund of
 70-17    all money paid by a student if:
 70-18                (1)  the student cancels the enrollment agreement or
 70-19    contract not later than midnight of the third day after the date on
 70-20    which the agreement or contract is signed by the prospective
 70-21    student, excluding Saturdays, Sundays, and legal holidays; or
 70-22                (2)  the enrollment of the student was procured as a
 70-23    result of a misrepresentation made in the advertising or
 70-24    promotional materials of the school or a representation by an owner
 70-25    or representative of the school.
 70-26          (l)  Each licensed security officer school must maintain a
 70-27    refund policy for the refund of the unused part of tuition, fees,
  71-1    and other charges assessed a student if the student, at the
  71-2    expiration of the cancellation period established under Subsection
  71-3    (k) of this section, terminates  enrollment or is terminated by the
  71-4    school, as provided by this subsection.  The refund policy must
  71-5    provide that:
  71-6                (1)  a refund is based on the period of the student's
  71-7    enrollment, computed on the basis of course time expressed in clock
  71-8    hours;
  71-9                (2)  the effective date of the termination for payment
 71-10    of a refund is the earliest of:
 71-11                      (A)  the last date of attendance, if the student
 71-12    is terminated for failure to satisfy a school attendance, grade, or
 71-13    work requirement;
 71-14                      (B)  the date of receipt by the license holder of
 71-15    written notice of withdrawal by the student;
 71-16                      (C)  the 10th consecutive school day the student
 71-17    has been absent, unless any of the absences are excused by the
 71-18    school; or
 71-19                      (D)  the date the student fails to return, as
 71-20    scheduled, from a leave of absence; and
 71-21                (3)  if tuition is collected before beginning the
 71-22    course of training, and if, after the expiration of the
 71-23    cancellation period, the student does not begin the course of
 71-24    training, the school may retain not more than $100.
 71-25          (m)  If a student who begins a course of training that is
 71-26    scheduled to run not more than 12 months withdraws from the course
 71-27    or is terminated from the course by the school, the security
  72-1    officer school may retain $100 in tuition and fees paid by that
  72-2    student and is not obligated to refund any additional outstanding
  72-3    tuition if the student withdraws or is terminated during the last
  72-4    quarter of the course.  If the student withdraws or is terminated
  72-5    before the last quarter of the course begins, the school shall
  72-6    refund the following percentages of any outstanding tuition:
  72-7                (1)  for withdrawal or termination occurring during the
  72-8    first week or first one-tenth of the course, whichever is less, 90
  72-9    percent;
 72-10                (2)  for withdrawal or termination occurring after the
 72-11    first week or first one-tenth of the course, whichever is less, but
 72-12    within the first three weeks of the course, 80 percent;
 72-13                (3)  for withdrawal or termination occurring after the
 72-14    first three weeks of the course but not later than the last date of
 72-15    the first quarter of the course, 75 percent;
 72-16                (4)  for withdrawal or termination occurring during the
 72-17    second quarter of the course, 50 percent; and
 72-18                (5)  for withdrawal or termination occurring during the
 72-19    third quarter of the course, 10 percent.
 72-20          (n)  A refund owed under this section must be paid not later
 72-21    than the 60th day after the date on which the student becomes
 72-22    eligible for the refund, as determined under Subsection (l) of this
 72-23    section.
 72-24          (o)  If a refund is not made within the period required by
 72-25    this section, the school shall pay, as a penalty, interest on the
 72-26    refund for the interval beginning with the first day following the
 72-27    expiration of the refund period and ending with the day immediately
  73-1    preceding the date the refund is made.  If the refund is made to a
  73-2    lending institution, the interest shall also be paid to that
  73-3    institution and applied against the student's loan.  The board
  73-4    annually shall establish the level of interest at a level
  73-5    sufficient to provide a deterrent to the retention of student
  73-6    funds.  The board may exempt a school from the payment of the
  73-7    interest if the school makes a good faith effort to refund the
  73-8    tuition but is unable to locate the student.  The school shall
  73-9    provide to the board on request documentation of the effort to
 73-10    locate the student.
 73-11          (p)  A security officer school shall record a grade of
 73-12    "incomplete" for a student who withdraws but is not entitled to a
 73-13    refund under Subsection (m) of this section if the student requests
 73-14    the grade at the time the student withdraws and the student
 73-15    withdraws for an appropriate reason unrelated to the student's
 73-16    academic status.  A student who receives a grade of incomplete may
 73-17    reenroll in the program during the 12-month period following the
 73-18    date the student withdraws and may complete those incomplete
 73-19    subjects without payment of additional tuition.
 73-20          (q)  If a course of instruction is discontinued by the school
 73-21    and this prevents the student from completing the course, all
 73-22    tuition and fees paid are due and refundable.
 73-23          (r)  Refunds under this section shall be applied:
 73-24                (1)  first, to the repayment of federal student loans,
 73-25    awards, and other Title IV student assistance, as prescribed by the
 73-26    Student Consumer Requirements in the U.S. Department of Education
 73-27    Higher Education Amendments of 1992;
  74-1                (2)  second, to the repayment of other government
  74-2    loans;
  74-3                (3)  third, to the repayment of other financial loans;
  74-4    and
  74-5                (4)  last, to the student's personal tuitional
  74-6    expenditures.
  74-7          (s)  Not later than the 30th day after the date on which a
  74-8    refund is due to a student who has received a student loan, the
  74-9    school shall notify the guaranty agency and the lender of the
 74-10    required refund and any refund previously made.  The guaranty
 74-11    agency and the lender shall notify the student and the school if
 74-12    the student's loan has been transferred to another holder.
 74-13          (t)  The failure of a school or a person to pay a tuition
 74-14    refund as required by this section is a deceptive trade practice
 74-15    under Subchapter E, Chapter 17, Business & Commerce Code.
 74-16          SECTION 2.02.  The Private Investigators and Private Security
 74-17    Agencies Act (Article 4413(29bb), Vernon's Texas Civil Statutes) is
 74-18    amended by adding Sections 20A-20U to read as follows:
 74-19          Sec. 20A.  CRITERIA FOR SECURITY OFFICER SCHOOL LICENSE.
 74-20    Before the board may approve the application of a person for a
 74-21    security officer school license, the director must find, on
 74-22    investigation at the premises of the school, that the school meets
 74-23    the following criteria:
 74-24                (1)  the courses, curriculum, and instruction are of a
 74-25    quality, content, and length as may reasonably and adequately
 74-26    achieve the stated objective for which the courses, curriculum, or
 74-27    instruction are offered;
  75-1                (2)  there is in the school adequate space, equipment,
  75-2    instructional material, and instructor personnel to provide
  75-3    training of good quality;
  75-4                (3)  educational and experience qualifications of
  75-5    directors, administrators, and instructors are adequate;
  75-6                (4)  the school maintains a written record of the
  75-7    previous education and training of the applicant student and
  75-8    clearly indicates that appropriate credit has been given by the
  75-9    school for previous education and training, with the new training
 75-10    period shortened where warranted through use of appropriate skills
 75-11    or achievement tests and the student notified;
 75-12                (5)  a copy of the course outline; schedule of tuition,
 75-13    fees, refund policy, and other charges; regulations pertaining to
 75-14    absence, grading policy, and rules of operation and conduct;
 75-15    regulations pertaining to incomplete grades; the name, mailing
 75-16    address, and telephone number of the board for the purpose of
 75-17    directing complaints to the agency; the current rates of job
 75-18    placement and employment of students issued a certificate of
 75-19    completion; and notification of the availability of the cost
 75-20    comparison information prepared under Section 20G of this Act will
 75-21    be furnished to the student before enrollment;
 75-22                (6)  on completion of training, the student is given a
 75-23    certificate by the school indicating the course and that training
 75-24    was satisfactorily completed;
 75-25                (7)  adequate records as required by the director are
 75-26    kept to show attendance and progress or grades, and satisfactory
 75-27    standards relating to attendance, progress, and conduct are
  76-1    enforced;
  76-2                (8)  the school complies with all local, city, county,
  76-3    municipal, state, and federal regulations; the director may require
  76-4    evidence of compliance as is necessary;
  76-5                (9)  the school is financially sound and capable of
  76-6    fulfilling its commitments for training;
  76-7                (10)  the school's administrators, directors, owners,
  76-8    and instructors are of good reputation and character;
  76-9                (11)  the school has, maintains, and publishes in its
 76-10    catalog or comparable documents and enrollment contract the proper
 76-11    policy for the refund of the unused portion of tuition, fees, and
 76-12    other charges in the event the student enrolled by the school fails
 76-13    to take the course or withdraws or is discontinued from the course
 76-14    at any time before completion;
 76-15                (12)  the school does not use erroneous or misleading
 76-16    advertising, either by actual statement, omission, or intimation as
 76-17    determined by the board;
 76-18                (13)  additional criteria as may be required by the
 76-19    board;
 76-20                (14)  the school does not use a name like or similar to
 76-21    an existing tax-supported school in the same area;
 76-22                (15)  the school furnishes to the board the current
 76-23    rates of students who receive a certificate of completion and of
 76-24    job placement and employment of students issued a certificate of
 76-25    completion;
 76-26                (16)  the school furnishes to the board for approval or
 76-27    disapproval student admission requirements for each course or
  77-1    program offered by the school;
  77-2                (17)  the school furnishes to the board for approval or
  77-3    disapproval the course lengths and curriculum content for each
  77-4    course offered by the school; and
  77-5                (18)  the school does not owe a civil penalty under
  77-6    Section 20P of this Act.
  77-7          Sec. 20B.  CONSUMER INFORMATION.  (a)  A security officer
  77-8    school must submit to the board for approval, on an annual basis, a
  77-9    school catalog or comparable written documents detailing the
 77-10    consumer information that must be given to a prospective student
 77-11    before enrollment.  The school catalog or documents must include:
 77-12                (1)  the name and address of the school and the
 77-13    school's governing body and officials;
 77-14                (2)  a calendar of the school year;
 77-15                (3)  school policies on enrollment;
 77-16                (4)  rules relating to absences;
 77-17                (5)  the school grading policy;
 77-18                (6)  the school's hours of operation and rules of
 77-19    conduct;
 77-20                (7)  a schedule of the tuition and other fees assessed;
 77-21                (8)  the school's cancellation and refund policy;
 77-22                (9)  a general description of the course or courses
 77-23    offered;
 77-24                (10)  information on entrance testing and remedial
 77-25    development plans;
 77-26                (11)  state licensing requirements for courses intended
 77-27    to result in licensing of a student;
  78-1                (12)  starting range and reported average salaries for
  78-2    the prior year's graduates in occupations for which courses are
  78-3    offered, if the information is available;
  78-4                (13)  the current rates of job placement and employment
  78-5    of students who complete a course of training;
  78-6                (14)  the school policy on credit for previous
  78-7    education and training;
  78-8                (15)  school regulations relating to incomplete grades;
  78-9                (16)  information on the transferability of credits
 78-10    earned;
 78-11                (17)  the name, mailing address, and telephone number
 78-12    of the board for the purpose of directing complaints to the board
 78-13    and the mechanism and procedures for resolving grievances submitted
 78-14    to the board;
 78-15                (18)  a statement that the board has information on
 78-16    cost comparison with similar schools;
 78-17                (19)  market and job availability information, if
 78-18    available;
 78-19                (20)  the names of the members of any advisory council
 78-20    of the school and the company for which they work; and
 78-21                (21)  other information required by the director or
 78-22    board if reasonable notice has been given by the administrator to
 78-23    the school of the additional requirement.
 78-24          (b)  A security officer school may not accept a signed
 78-25    student enrollment contract or accept a student into any school
 78-26    program until at least 24 hours after the student has received the
 78-27    catalog or comparable written documents required under this
  79-1    section.
  79-2          (c)  A student must sign a receipt stating that:
  79-3                (1)  the catalog was received by the student before any
  79-4    commitment made by the student to the school or by the school to
  79-5    the student;
  79-6                (2)  the student was given an opportunity to discuss
  79-7    the catalog with a representative of the school; and
  79-8                (3)  the student understands the contents and
  79-9    implications of the catalog.
 79-10          (d)  The receipt required by Subsection (c) of this section
 79-11    must be placed in the student's permanent school file and a copy of
 79-12    the receipt must be delivered to the student.
 79-13          Sec. 20C.  COURSE LENGTH AND CURRICULUM OF SECURITY OFFICER
 79-14    SCHOOL.  (a)  A security officer school must submit to the board
 79-15    for approval the course lengths and curriculum content for each
 79-16    course offered by the school.  The course lengths and content may
 79-17    not be implemented unless the board approves them.  The course
 79-18    lengths and content shall reasonably ensure that students develop
 79-19    the job skills and knowledge necessary for employment.
 79-20          (b)  The board shall require a school to fully account for
 79-21    all curriculum contents and course lengths before issuing or
 79-22    renewing a license and a school that is offering course lengths
 79-23    below or above industry standards may be issued a conditional
 79-24    license.
 79-25          Sec. 20D.  COMPLETION, EMPLOYMENT, AND PLACEMENT IN RELATION
 79-26    TO SECURITY OFFICER SCHOOL.  (a)  The board shall set and enforce
 79-27    minimum standards for completion and employment rates of courses,
  80-1    based on collected data.
  80-2          (b)  In determining whether to renew a security officer
  80-3    school license, the board shall consider the completion, placement,
  80-4    and employment rates of students of the course.
  80-5          (c)  Before a school may begin offering a new course of study
  80-6    for students, the school must show the board the opportunity for
  80-7    jobs for graduates of the course and the possibility of placement
  80-8    or employment.
  80-9          (d)  Before the board issues or renews a security officer
 80-10    school license involving a school that offers or advertises a
 80-11    placement service, the board may require the school to file a true
 80-12    and accurate copy of the school's placement records for the
 80-13    previous year.
 80-14          Sec. 20E.  ON-SITE INSPECTIONS.  (a)  The board shall conduct
 80-15    on-site inspections of a security officer school to determine the
 80-16    normal operating conditions of the school.
 80-17          (b)  The inspection required by Subsection (a) of this
 80-18    section shall be unannounced.
 80-19          (c)  The director or a designee of the director may inspect
 80-20    such things as the instructional books and records, classrooms,
 80-21    dormitories, tools, equipment, and classes of a security officer
 80-22    school or an applicant for a license for a school at any reasonable
 80-23    time.
 80-24          Sec. 20F.  CONSOLIDATION OF FEES AND SECURITY OFFICER SCHOOL
 80-25    ACCOUNT.  (a)  At the beginning of each fiscal year the board shall
 80-26    collect a fee from the school for deposit in a special account in
 80-27    the general revenue fund in the state treasury called the security
  81-1    officer school account and to be administered by the board.
  81-2          (b)  The amount of the fee is determined by applying a
  81-3    percentage established by the board, based on the recommendation of
  81-4    the school accounts advisory board, to each school's annual gross
  81-5    tuition, with consideration given to the school's size, expense of
  81-6    regulation, potential for teachouts, tuition and fees refund and
  81-7    recovery expense, and loan default rates and any other relevant
  81-8    factors.  The account shall be used for:
  81-9                (1)  the administration of this Act;
 81-10                (2)  the cost of teachouts as provided by this Act;
 81-11                (3)  the cost of tuition and fees recovery and the cost
 81-12    of student refunds that a school has not made; and
 81-13                (4)  the cost of storing student records that have
 81-14    become property of the state under this Act.
 81-15          (c)  The board may grant an exemption from payment into the
 81-16    account to a small school, as determined by the director, or to a
 81-17    school that does not use guaranteed student loans for tuition
 81-18    revenue.  A school exempt as provided for by this subsection must
 81-19    pay the necessary fees for regulation, as determined by the
 81-20    director, and provide a bond, certificate of deposit, or comparable
 81-21    security, as determined and approved by the board, that is
 81-22    sufficient to cover the cost of the school's record storage,
 81-23    teachout, and tuition and fees refund and recovery exposure based
 81-24    on the evidence the school submits proving its projected maximum
 81-25    total unearned tuition during the period of the license.
 81-26          (d)  The security shall be provided by the school for the
 81-27    period during which the license is issued, and the obligation of
  82-1    the bond or other security must be that neither this Act nor any
  82-2    rule adopted under this Act is violated by the school or any of its
  82-3    officers, agents, or employees.
  82-4          (e)  The bond, certificate of deposit, or comparable security
  82-5    shall be issued by a company authorized to do business in the
  82-6    state, conditioned that the parties to the transaction  shall pay
  82-7    all damages or expenses that the state or any governmental
  82-8    subdivision or any student or potential student sustains resulting
  82-9    from a violation.  The bond, certificate of deposit, or comparable
 82-10    security shall be to the state to be used only for payment for the
 82-11    school's teachout and tuition and fees refund due to a student or
 82-12    potential student.  The security must be filed with the board and
 82-13    must be in such form as shall be approved by the board.
 82-14          (f)  Schools domiciled, or having their principal place of
 82-15    business, outside the state, that engage representatives to
 82-16    canvass, solicit, or contract with any person in the state are
 82-17    subject to the fee and security requirements of Subsection (c) of
 82-18    this section.
 82-19          (g)  The board shall refer all expenses incurred by the
 82-20    school account in administering Subsections (b)(2) and (3) of this
 82-21    section to the attorney general's office for collection.  The
 82-22    amounts collected shall be deposited to the account.  Attorney's
 82-23    fees and court costs shall be appropriated to the attorney
 82-24    general's office.
 82-25          (h)  Interest the account earns shall be reinvested in the
 82-26    account.  The state treasurer shall invest the account in the same
 82-27    manner as other state funds.  Sufficient funds from the account and
  83-1    other fees collected by the board shall be appropriated to the
  83-2    board for the purpose outlined in this section.  The board shall
  83-3    administer claims made against the account.
  83-4          (i)  If a school closes, the board shall attempt to arrange
  83-5    for students of the closed school to attend another security
  83-6    officer school.  The board shall adopt rules specifying the
  83-7    circumstances under which the director may declare a school closed.
  83-8          (j)  The expense incurred by a security officer school in
  83-9    providing training that is directly related to educating a student
 83-10    who was enrolled in a closed school and placed in the school under
 83-11    this section, including the applicable tuition for the period of
 83-12    time for which the student has paid tuition, shall be paid in
 83-13    accordance with the rules of the board.
 83-14          (k)  The board shall make reasonable attempts to ensure that
 83-15    schools under the board's jurisdiction, including closed schools,
 83-16    fulfill the refund obligation as provided by Section 20 of this
 83-17    Act.  If a school refuses to fulfill the school's obligation or the
 83-18    school's bond is insufficient to pay the cost of the teachout and
 83-19    refund expenses, the teachout or the refund may be paid from the
 83-20    security officer school account except that no school owned, either
 83-21    in whole or in part, by a person or corporate entity who was an
 83-22    owner, in whole or in part, of a previously closed school shall be
 83-23    permitted to receive compensation for a teachout under this
 83-24    section.
 83-25          (l)  If a student cannot be placed in another school, the
 83-26    student's tuition and fees shall be refunded under Section 20(q) of
 83-27    this Act.
  84-1          (m)  If a student does not accept a place that is available
  84-2    and reasonable in another school, the student's tuition and fees
  84-3    shall be refunded under the refund policy maintained by the closing
  84-4    school under Sections 20(l) and (m) of this Act.
  84-5          (n)  Attorney's fees, court costs, or damages may not be paid
  84-6    from the security officer school account.
  84-7          (o)  The board, by rule, shall establish and assess
  84-8    reasonable and necessary fees to all persons and entities licensed
  84-9    under this Act to be used for the regulation of those persons and
 84-10    entities licensed under this Act and to supplement the
 84-11    administration and purposes outlined by this Act.
 84-12          (p)  The board may permit payment of any fee authorized under
 84-13    this section that exceeds $1,000 to be paid by installment.  The
 84-14    board shall provide for appropriate interest charges and late
 84-15    penalties in addition to any other remedy that is provided for by
 84-16    law for the late payment of a fee installment authorized under this
 84-17    section.  The board may assess a reasonable service charge to be
 84-18    paid by a school that pays a fee by installment in an amount not to
 84-19    exceed an annual rate of 10 percent of the fee that is to be paid
 84-20    by installment.
 84-21          Sec. 20G.  COST COMPARISONS.  (a)  The board shall prepare a
 84-22    comparison of the cost to a student of courses of instruction or
 84-23    training programs at all security officer schools maintained by
 84-24    persons who hold security officer school licenses issued by the
 84-25    board.
 84-26          (b)  The cost comparison must include for each school a
 84-27    description of:
  85-1                (1)  average class size;
  85-2                (2)  facilities and equipment;
  85-3                (3)  employment and placement rates;
  85-4                (4)  length of program; and
  85-5                (5)  faculty qualifications.
  85-6          Sec. 20H.  LICENSING REQUIREMENTS DISCLOSED BY SECURITY
  85-7    OFFICER SCHOOL.  (a)  A security officer school must disclose to
  85-8    all prospective students state licensing requirements to practice
  85-9    the occupation for which the student is training.
 85-10          (b)  A school must disclose to all prospective students the
 85-11    performance of graduates from the school on the licensing
 85-12    examination of the board if that information is available.
 85-13          Sec. 20I.  ENTRANCE REQUIREMENTS FOR SECURITY OFFICER SCHOOL;
 85-14    MINIMUM SKILLS TEST.  (a)  The board shall approve entrance
 85-15    requirements, including minimum skills testing, for students who
 85-16    may be accepted for a course of study in a security officer school.
 85-17    The requirements must be specific and provide that students who are
 85-18    allowed to enter a program will have a reasonable chance of
 85-19    completing the program.
 85-20          (b)  The school shall administer a standardized test to
 85-21    students entering the school, if testing for minimum skills
 85-22    competency is determined by the board as appropriate and necessary
 85-23    to determine if remediation is needed.  The test must be
 85-24    administered before enrollment and must be nationally recognized as
 85-25    appropriate and effective for minimum skills testing.  If the test
 85-26    reveals the necessity for remediation, the school must implement a
 85-27    plan to encourage the student to improve in basic general education
  86-1    skills.
  86-2          (c)  A student must achieve a successful score on the test
  86-3    required by this section before the student is obligated for
  86-4    tuition and fees for the vocational portion of the school's
  86-5    program.
  86-6          (d)  The school may, in accordance with federal statutory
  86-7    provisions affecting guaranteed student loan programs, on a
  86-8    case-by-case basis, refuse to provide the certification statements
  86-9    required for guaranteed student loan eligibility, or reduce the
 86-10    determination of need for a guaranteed student loan if the school
 86-11    determines that the student's expenses to be covered by the loan
 86-12    and the estimated cost of attendance, can be met more appropriately
 86-13    by the school, directly by the student, or by other sources.
 86-14          Sec. 20J.  STUDENTS IN SECURITY OFFICER SCHOOLS IN NEED OF
 86-15    REMEDIAL HELP.  (a)  An applicant without a high school diploma or
 86-16    high school equivalency certificate must pass an entrance test
 86-17    approved by the board and be considered to have the ability to
 86-18    benefit from the school before the school may enroll the student.
 86-19          (b)  A school that admits a student who does not have a high
 86-20    school diploma or high school equivalency certificate must develop
 86-21    and implement a plan for counseling the student on curriculum,
 86-22    student aid, employment opportunities, and the remediation
 86-23    necessary for the student to obtain a high school equivalency
 86-24    certificate and improve in basic general education skills.
 86-25          (c)  The school must assist the student in obtaining the
 86-26    remediation necessary for the student to pass a standardized
 86-27    minimum skills test approved by the board, and the student must
  87-1    pass the test before entering the final quarter of the course.
  87-2          Sec. 20K.  ENROLLMENT POLICIES OF SECURITY OFFICER SCHOOL.
  87-3    (a)  The enrollment contract of a security officer school must
  87-4    contain:
  87-5                (1)  a disclosure that the contract is a legally
  87-6    binding instrument on written acceptance of the student by the
  87-7    school, unless canceled as provided by law;
  87-8                (2)  the school's cancellation and refund policy;
  87-9                (3)  the method of cancellation of the contract, the
 87-10    effective date of any cancellation, and the name and address to
 87-11    which the notice of cancellation should be sent or delivered;
 87-12                (4)  the total cost of the course including tuition and
 87-13    all other charges;
 87-14                (5)  a notification that the fair market value of
 87-15    equipment or supplies furnished to the student that the student
 87-16    fails to return in a condition suitable for resale not later than
 87-17    the 10th business day after the date of cancellation may be
 87-18    retained by the school and deducted from any refund of the student;
 87-19                (6)  a statement that if a student's enrollment is
 87-20    canceled for any reason, the school will notify an agency known to
 87-21    the school to be providing financial aid to the student of the
 87-22    cancellation not later than the 30th day after the date of
 87-23    cancellation;
 87-24                (7)  the name and description of the courses, including
 87-25    the number of hours of classroom instruction or home study lessons.
 87-26          (b)  An enrollment contract may not contain a wage assignment
 87-27    provision or a confession of judgment clause.
  88-1          (c)  Immediately after a prospective student has signed an
  88-2    enrollment contract, the school shall give the prospective student
  88-3    a copy of the contract, and a copy shall be placed in the student's
  88-4    permanent school file.
  88-5          Sec. 20L.  LOAN COUNSELING BY SECURITY OFFICER SCHOOL.  (a)
  88-6    A school shall conduct loan counseling entrance interviews with
  88-7    each prospective student seeking a loan during the enrollment
  88-8    process.  A student borrower shall be counseled before the initial
  88-9    disbursement of loan proceeds, shortly before the student completes
 88-10    one-half of the course, and before the student is issued a
 88-11    certificate of completion.
 88-12          (b)  The school's financial aid officer or counselor shall
 88-13    conduct the interviews required by Subsection (a) of this section.
 88-14    The interview must include a discussion of:
 88-15                (1)  the rights and responsibilities of the student as
 88-16    a borrower;
 88-17                (2)  what a loan is and the importance of repayment;
 88-18                (3)  the total cost of the program in which the student
 88-19    will be enrolled;
 88-20                (4)  the availability of other forms of financial aid,
 88-21    grants, and part-time work;
 88-22                (5)  the starting range and average reported salaries
 88-23    of those in the occupation for which the student will be trained,
 88-24    if available; and
 88-25                (6)  job placement services provided by the school and
 88-26    the employment rate of persons who attended the school and were
 88-27    enrolled in the program in which the student is enrolled.
  89-1          (c)  A school approved to accept state or federal educational
  89-2    loans or grants shall adopt, in addition to the provisions in this
  89-3    section, measures to reduce defaults and improve borrowers'
  89-4    understanding and respect for the loan repayment obligation as
  89-5    provided in 34 C.F.R., Parts 668 and 682.
  89-6          (d)  The school must give a copy of the Texas Guaranteed
  89-7    Student Loan Corporation's "Your Future" guide, or a comparable
  89-8    document approved by the board, to a prospective student at a time
  89-9    and in a manner that provides the student with sufficient
 89-10    opportunity to read the guide or other document and discuss the
 89-11    contents with the school's financial aid officer, if necessary for
 89-12    understanding and clarity, before signing an enrollment contract
 89-13    and before the school accepts the student in a course of study.
 89-14          (e)  The prospective student must sign a document stating
 89-15    that the student:
 89-16                (1)  attended a loan counseling entrance interview; and
 89-17                (2)  received a copy of the "Your Future" guide or
 89-18    comparable document in the time provided by Subsection (d) of this
 89-19    section.
 89-20          (f)  A copy of the signed document required by Subsection (e)
 89-21    of this section must be sent to the student, guarantor, and lender
 89-22    and must be placed in the student's permanent school file.
 89-23          Sec. 20M.  RECORDS OF SECURITY OFFICER SCHOOL.  (a)  A
 89-24    security officer school shall maintain permanent records for all
 89-25    students enrolled, as required by the board.
 89-26          (b)  A school shall adopt a plan to preserve permanent
 89-27    records and submit the plan to the board for approval.  The plan
  90-1    must:
  90-2                (1)  provide that at least one copy of the records will
  90-3    be held in a secure depository; and
  90-4                (2)  designate an appropriate official to provide a
  90-5    student with copies of records or transcripts on request.
  90-6          (c)  The school shall make the first copy of records or
  90-7    transcripts at no charge to the student.  The school may make a
  90-8    reasonable charge to provide additional copies of records,
  90-9    transcripts, or other student information.
 90-10          (d)  If a school closes, the records become the property of
 90-11    the state.
 90-12          Sec. 20N.  DISPLAY OF LICENSE.  (a)  Every holder of a
 90-13    security officer school license issued under this Act shall display
 90-14    the license in a conspicuous place at the premises of the school.
 90-15          (b)  The board may not use the word "approval" or a variation
 90-16    of that term on the license of a security officer school.  The
 90-17    terminology must be "licensed" to operate, or a variation of that
 90-18    phrase.
 90-19          Sec. 20O.  BOARD ADDRESS.  A security officer school shall
 90-20    post on the premises of the school at a prominent and conspicuous
 90-21    location the name, mailing address, and telephone number of the
 90-22    board for the purpose of directing complaints to the board.
 90-23          Sec. 20P.  REVOCATION AND SUSPENSION.  The board may deny,
 90-24    suspend, or revoke a security officer school license or place the
 90-25    school on probation if the license holder, school, or a
 90-26    representative of the school gives a prospective student
 90-27    information relating to the school that is false, fraudulent,
  91-1    deceptive, substantially inaccurate, or misleading.
  91-2          Sec. 20Q.  FINANCIAL STABILITY.  (a)  A school may not
  91-3    reflect unearned tuition as a current asset unless the amount shown
  91-4    in current assets that reflects unearned tuition is offset by an
  91-5    equal amount shown as a current liability.  The school must meet
  91-6    one of the following criteria in order to be determined as
  91-7    financially sound and capable of fulfilling its commitments for
  91-8    training:
  91-9                (1)  current assets must bear a relationship to current
 91-10    liabilities in a ratio of at least one-to-one; or
 91-11                (2)  the school must have posted, or set aside in a
 91-12    dedicated escrow account, a bond, certificate of deposit,
 91-13    irrevocable letter of credit, or comparable security, acceptable to
 91-14    the board, each made payable to the state, in an amount sufficient
 91-15    to cover the school's record storage costs, teachout, and tuition
 91-16    and fees refund and recovery exposure based on the evidence the
 91-17    school submits proving its projected maximum total unearned tuition
 91-18    during the period of time covered by the evidence of indebtedness
 91-19    to the state.
 91-20          (b)  The school must demonstrate to the satisfaction of the
 91-21    board its financial soundness and ability to fulfill its
 91-22    commitments for training.  If requested by the school and
 91-23    administrator, the School Accounts Advisory Board shall investigate
 91-24    the financial soundness of a school that does not meet the
 91-25    requirements of (1) or (2) above in order to determine if the
 91-26    school is capable of fulfilling its obligations under this Act.
 91-27          Sec. 20R.  PROHIBITIONS.  A person may not:
  92-1                (1)  operate a security officer school without a
  92-2    license or assume ownership of an existing security officer school
  92-3    without obtaining a new license;
  92-4                (2)  solicit prospective students for a security
  92-5    officer school without being licensed as required by this Act;
  92-6                (3)  accept contracts or enrollment applications from a
  92-7    representative of a security officer school who is not registered
  92-8    as required by any board rule requiring registration;
  92-9                (4)  use advertising designed to mislead or deceive
 92-10    prospective students of a security officer school;
 92-11                (5)  fail to notify the board of the discontinuance of
 92-12    the operation of any security officer school not later than the
 92-13    72nd hour after cessation of classes or make available accurate
 92-14    records as required by this Act;
 92-15                (6)  fail to secure and file within 30 days any
 92-16    increased bond required by this Act;
 92-17                (7)  negotiate any promissory instrument received as
 92-18    payment of tuition for a security officer school or other charge
 92-19    before completion of 75 percent of the course, provided that before
 92-20    that time, the instrument may be transferred by assignment to a
 92-21    purchaser who is subject to any defense available against the
 92-22    school named as payee;
 92-23                (8)  enroll a student in a security officer school who
 92-24    fails to satisfy entrance requirements; or
 92-25                (9)  violate any provision of this Act relating to a
 92-26    security officer school or a rule adopted under this Act relating
 92-27    to a security officer school.
  93-1          Sec. 20S.  ADMINISTRATIVE PENALTY.  (a)  The board may impose
  93-2    an administrative penalty against a person who violates Section 20R
  93-3    of this Act.
  93-4          (b)  The penalty for a violation may be in an amount not to
  93-5    exceed $10,000.
  93-6          (c)  The amount of the penalty shall be based on:
  93-7                (1)  the seriousness of the violation, including the
  93-8    nature, circumstances, extent, and gravity of any prohibited acts;
  93-9                (2)  efforts to correct the violation; and
 93-10                (3)  any other matter that justice may require.
 93-11          (d)  A director who determines that a violation has occurred
 93-12    may issue to the board a report that states the facts on which the
 93-13    determination is based and the director's recommendation on the
 93-14    imposition of a penalty, including a recommendation on the amount
 93-15    of the penalty.
 93-16          (e)  Within 14 days after the date the report is issued, the
 93-17    director shall give written notice of the report to the person.
 93-18    The notice may be given by certified mail.  The notice must include
 93-19    a brief summary of the alleged violation and a statement of the
 93-20    amount of the recommended penalty and must inform the person that
 93-21    the person has a right to a hearing on the occurrence of the
 93-22    violation, the amount of the penalty, or both the occurrence of the
 93-23    violation and the amount of the penalty.
 93-24          (f)  Within 20 days after the date the person receives the
 93-25    notice, the person in writing may accept the determination and
 93-26    recommended penalty of the director or may make a written request
 93-27    for a hearing on the occurrence of the violation, the amount of the
  94-1    penalty, or both the occurrence of the violation and the amount of
  94-2    the penalty.
  94-3          (g)  If the person accepts the determination and recommended
  94-4    penalty of the director, the board by order shall approve the
  94-5    determination and impose the recommended penalty.
  94-6          (h)  If the person requests a hearing or fails to respond
  94-7    timely to the notice, the director shall set a hearing and give
  94-8    notice of the hearing to the person.  The hearing shall be held by
  94-9    an administrative law judge of the State Office of Administrative
 94-10    Hearings.  The administrative law judge shall make findings of fact
 94-11    and conclusions of law and promptly issue to the board a proposal
 94-12    for a decision about the occurrence of the violation and the amount
 94-13    of a proposed penalty.  Based on the findings of fact, conclusions
 94-14    of law, and proposal for a decision, the board by order may find
 94-15    that a violation has occurred and impose a penalty or may find that
 94-16    no violation occurred.
 94-17          (i)  The notice of the board's order given to the person
 94-18    under the Administrative Procedure and Texas Register Act (Article
 94-19    6252-13a, Vernon's Texas Civil Statutes) and its subsequent
 94-20    amendments must include a statement of the right of the person to
 94-21    judicial review of the order.
 94-22          (j)  Within 30 days after the date the board's order is final
 94-23    as provided by Section 16(c), Administrative Procedure and Texas
 94-24    Register Act (Article 6252-13a, Vernon's Texas Civil Statutes), and
 94-25    its subsequent amendments, the person shall:
 94-26                (1)  pay the amount of the penalty;
 94-27                (2)  pay the amount of the penalty and file a petition
  95-1    for judicial review contesting the occurrence of the violation, the
  95-2    amount of the penalty, or both the occurrence of the violation and
  95-3    the amount of the penalty; or
  95-4                (3)  without paying the amount of the penalty, file a
  95-5    petition for judicial review contesting the occurrence of the
  95-6    violation, the amount of the penalty, or both the occurrence of the
  95-7    violation and the amount of the penalty.
  95-8          (k)  Within the 30-day period, a person who acts under
  95-9    Subsection (j)(3) of this section may:
 95-10                (1)  stay enforcement of the penalty by:
 95-11                      (A)  paying the amount of the penalty to the
 95-12    court for placement in an escrow account; or
 95-13                      (B)  giving to the court a supersedeas bond that
 95-14    is approved by the court for the amount of the penalty and that is
 95-15    effective until all judicial review of the board's order is final;
 95-16    or
 95-17                (2)  request the court to stay enforcement of the
 95-18    penalty by:
 95-19                      (A)  filing with the court a sworn affidavit of
 95-20    the person stating that the person is financially unable to pay the
 95-21    amount of the penalty and is financially unable to give the
 95-22    supersedeas bond; and
 95-23                      (B)  giving a copy of the affidavit to the
 95-24    director by certified mail.
 95-25          (l)  A director who receives a copy of an affidavit under
 95-26    Subsection (k)(2) of this section may file with the court, within
 95-27    five days after the date the copy is received, a contest to the
  96-1    affidavit.  The court shall hold a hearing on the facts alleged in
  96-2    the affidavit as soon as practicable and shall stay the enforcement
  96-3    of the penalty on finding that the alleged facts are true.  The
  96-4    person who files an affidavit has the burden of proving that the
  96-5    person is financially unable to pay the amount of the penalty and
  96-6    to give a supersedeas bond.
  96-7          (m)  If the person does not pay the amount of the penalty and
  96-8    the enforcement of the penalty is not stayed, the director may
  96-9    refer the matter to the attorney general for collection of the
 96-10    amount of the penalty.
 96-11          (n)  Judicial review of the order of the board:
 96-12                (1)  is instituted by filing a petition as provided by
 96-13    Section 19, Administrative Procedure and Texas Register Act
 96-14    (Article 6252-13a, Vernon's Texas Civil Statutes), and its
 96-15    subsequent amendments; and
 96-16                (2)  is under the substantial evidence rule.
 96-17          (o)  If the court sustains the occurrence of the violation,
 96-18    the court may uphold or reduce the amount of the penalty and order
 96-19    the person to pay the full or reduced amount of the penalty.  If
 96-20    the court does not sustain the occurrence of the violation, the
 96-21    court shall order that no penalty is owed.
 96-22          (p)  When the judgment of the court becomes final, the court
 96-23    shall proceed under this subsection.  If the person paid the amount
 96-24    of the penalty and if that amount is reduced or is not upheld by
 96-25    the court, the court shall order that the appropriate amount plus
 96-26    accrued interest be remitted to the person.  The rate of the
 96-27    interest is the rate charged on loans to depository institutions by
  97-1    the New York Federal Reserve Bank, and the interest shall be paid
  97-2    for the period beginning on the date the penalty was paid and
  97-3    ending on the date the penalty is remitted.  If the person gave a
  97-4    supersedeas bond and if the amount of the penalty is not upheld by
  97-5    the court, the court shall order the release of the bond.  If the
  97-6    person gave a supersedeas bond and if the amount of the penalty is
  97-7    reduced, the court shall order the release of the bond after the
  97-8    person pays the amount.
  97-9          (q)  A penalty collected under this section shall be remitted
 97-10    to the comptroller for deposit in the general revenue fund.
 97-11          (r)  All proceedings under this section are subject to the
 97-12    Administrative Procedure and Texas Register Act (Article 6252-13a,
 97-13    Vernon's Texas Civil Statutes) and its subsequent amendments.
 97-14          Sec. 20T.  CIVIL PENALTY.  A security officer school that
 97-15    violates this Act or a rule adopted under this Act is liable for a
 97-16    civil penalty in addition to any injunctive relief or other remedy
 97-17    provided by law.  The civil penalty may not exceed $1,000 a day for
 97-18    each violation.  The attorney general, at the request of the board,
 97-19    may bring a civil action to collect a civil penalty under this
 97-20    subsection.  Civil penalties recovered in a suit brought under this
 97-21    subsection shall be deposited in the state treasury to the credit
 97-22    of the general revenue fund.
 97-23          Sec. 20U.  CRIMINAL PENALTIES.  (a)  A person commits an
 97-24    offense if the person fails to comply with Section 20 of this Act.
 97-25    Except as provided by Subsection (b) of this section, an offense
 97-26    under this section is a Class A misdemeanor.
 97-27          (b)  A person commits an offense if the person intentionally
  98-1    or knowingly uses for personal benefit funds in an amount greater
  98-2    than $10,000 that are due as student refunds under Section 20 of
  98-3    this Act.  An offense under this subsection is a felony of the
  98-4    third degree.
  98-5          SECTION 2.03.  Section 30, Private Investigators and Private
  98-6    Security Agencies Act (Article 4413(29bb), Vernon's Texas Civil
  98-7    Statutes), is amended by adding Subsections (c) and (d) to read as
  98-8    follows:
  98-9          (c)  A security officer school, the representative of a
 98-10    school, or a recruiter for the school may not advertise or
 98-11    represent, in writing or orally, that a school is approved or
 98-12    accredited by the state.  Those entities or persons may advertise
 98-13    that the school has been licensed by the state.
 98-14          (d)  A school, representative of a school, or recruiter of a
 98-15    school may not make or cause to be made a statement or
 98-16    representation, written, oral, or visual, offering or publicizing a
 98-17    course, program, or school, if the school, representative, or
 98-18    recruiter knew or reasonably should have known that the statement
 98-19    or representation was false, fraudulent, deceptive, substantially
 98-20    inaccurate, or misleading.
 98-21          SECTION 2.04.  Section 50A, Private Investigators and Private
 98-22    Security Agencies Act (Article 4413(29bb), Vernon's Texas Civil
 98-23    Statutes), is amended by adding Subsection (c) to read as follows:
 98-24          (c)  The board shall prepare information of public interest
 98-25    describing the functions of the board and the procedures by which
 98-26    complaints are filed with and resolved by the board against a
 98-27    security officer school.  The board shall make the information
  99-1    available to the public and appropriate state agencies.
  99-2          SECTION 2.05.  Any balance remaining in funds designated for
  99-3    the purposes outlined in this Act shall be transferred to the
  99-4    Security Officer School Account in the General Revenue Fund on the
  99-5    effective date of this Act.
  99-6                         PART 3.  MASSAGE SCHOOLS
  99-7          SECTION 3.01.  Section 1(9), Chapter 752, Acts of the 69th
  99-8    Legislature, Regular Session, 1985 (Article 4512k, Vernon's Texas
  99-9    Civil Statutes), is amended to read as follows:
 99-10                (9)  "Massage school" means a person <an entity or
 99-11    organization with at least two instructors> that teaches, at a
 99-12    minimum, the course of instruction or any part of the course of
 99-13    instruction required for registration as a massage therapist under
 99-14    this Act.
 99-15          SECTION 3.02.  Section 2(b), Chapter 752, Acts of the 69th
 99-16    Legislature, Regular Session, 1985 (Article 4512k, Vernon's Texas
 99-17    Civil Statutes), is amended to read as follows:
 99-18          (b)  An individual who registers as a massage therapist under
 99-19    this Act must present evidence satisfactory to the board that the
 99-20    person:
 99-21                (1)  has satisfactorily completed massage therapy
 99-22    studies in a 300 hour, supervised course of instruction provided by
 99-23    a massage <therapy instructor, by a massage> school registered by
 99-24    the department, by a state approved educational institution, or by
 99-25    any combination of educational institutions <instructors> or
 99-26    schools, in which 125 hours are dedicated to the study of Swedish
 99-27    massage therapy techniques taught by a massage therapy instructor,
  100-1   50 hours to the study of anatomy, 25 hours to the study of
  100-2   physiology, 15 hours to the study of hydrotherapy, 15 hours to the
  100-3   study of business practices and professional ethics standards, and
  100-4   20 hours to the study of health and hygiene, and 50 hours to an
  100-5   internship program;
  100-6               (2)  is registered as a massage therapist in another
  100-7   state or country that has and maintains standards and requirements
  100-8   of practice and licensing or registration that substantially
  100-9   conform to those of this state, as determined by the department; or
 100-10               (3)  has practiced massage therapy as a profession for
 100-11   not less than five years in another state or country that does not
 100-12   have or maintain standards and requirements of practice and
 100-13   licensing or registration that substantially conform to those of
 100-14   this state, as determined by the department.
 100-15         SECTION 3.03.  Section 2A, Chapter 752, Acts of the 69th
 100-16   Legislature, Regular Session, 1985 (Article 4512k, Vernon's Texas
 100-17   Civil Statutes), is amended by amending Subsections (a) and (b) and
 100-18   adding Subsection (n) to read as follows:
 100-19         (a)  A massage school that offers, at a minimum, the course
 100-20   of instruction or any part of the course of instruction required
 100-21   for registration as a massage therapist must register with the
 100-22   department.  A massage school must meet the minimum standards of
 100-23   operation established by board rule.  The registration must include
 100-24   a statement of any final convictions of the owners, school
 100-25   directors, recruiters, instructional faculty, or other selected
 100-26   personnel of the massage school as determined by the department.
 100-27   The board may obtain criminal history records of school directors
  101-1   or instructional faculty from any law enforcement agency, including
  101-2   the United States Department of Justice, the Department of Public
  101-3   Safety of the State of Texas, the Texas Department of Criminal
  101-4   Justice, or the police department of a municipality.  The
  101-5   administrator may deny, revoke, or disapprove the application for,
  101-6   or existing license, registration, or approval of a person who has
  101-7   been convicted of, entered a plea of nolo contendere, or guilty to,
  101-8   or received deferred adjudication for, a felony or misdemeanor
  101-9   offense for which a refusal may be issued under Article 6252-13c,
 101-10   Vernon's Texas Civil Statutes.
 101-11         (b)  A massage therapy instructor must register with the
 101-12   department as provided by this Act.  The registration must state
 101-13   the education and experience level of the applicant in all courses
 101-14   or programs that the applicant will teach or instruct and be on a
 101-15   form prescribed by the department.  The department shall review a
 101-16   registration for competency, consistency, and the overall quality
 101-17   of the applicant.
 101-18         (n)  The department shall determine that an applicant for
 101-19   massage school registration is financially sound and capable of
 101-20   fulfilling its commitments for training before granting the
 101-21   registration.
 101-22         SECTION 3.04.  Section 5, Chapter 752, Acts of the 69th
 101-23   Legislature, Regular Session, 1985 (Article 4512k, Vernon's Texas
 101-24   Civil Statutes), is amended by adding Subsections (c)-(e) to read
 101-25   as follows:
 101-26         (c)  The department may not adopt rules that restrict
 101-27   advertising by a massage school except to prohibit false,
  102-1   misleading, or deceptive advertising practices.  The rules may not
  102-2   restrict:
  102-3               (1)  the use of an advertising medium;
  102-4               (2)  the size or duration of an advertisement; or
  102-5               (3)  advertisement under a trade name.
  102-6         (d)  A school, the representative of a school, or a recruiter
  102-7   for the school may not advertise or represent, in writing or
  102-8   orally, that a school is approved or accredited by the state.
  102-9   Those entities or persons may advertise that the school has been
 102-10   registered by the state.
 102-11         (e)  A school, representative of a school, or recruiter of a
 102-12   school may not make or cause to be made a statement or
 102-13   representation, written, oral, or visual, offering or publicizing a
 102-14   course, program, or school, if the school, representative, or
 102-15   recruiter knew or reasonably should have known that the statement
 102-16   or representation was false, fraudulent, deceptive, substantially
 102-17   inaccurate, or misleading.
 102-18         SECTION 3.05.  Section 7(b), Chapter 752, Acts of the 69th
 102-19   Legislature, Regular Session, 1985 (Article 4512k, Vernon's Texas
 102-20   Civil Statutes), is amended to read as follows:
 102-21         (b)  The department shall administer this Act.  The
 102-22   department and the Central Education Agency by agreement may
 102-23   provide for the agency to assist the department in administering
 102-24   the provisions of this Act relating to massage schools and massage
 102-25   therapy instructors.
 102-26         SECTION 3.06.  Section 10, Chapter 752, Acts of the 69th
 102-27   Legislature, Regular Session, 1985 (Article 4512k, Vernon's Texas
  103-1   Civil Statutes), is amended by adding Subsection (g) to read as
  103-2   follows:
  103-3         (g)  The department may not use the word "approval" or a
  103-4   variation of that term on the certificate of a massage school.  The
  103-5   terminology must be "registered" or a variation of that phrase, and
  103-6   a massage school must display the certificate in a conspicuous
  103-7   place.
  103-8         SECTION 3.07.  Section 11, Chapter 752, Acts of the 69th
  103-9   Legislature, Regular Session, 1985 (Article 4512k, Vernon's Texas
 103-10   Civil Statutes), is amended by adding Subsection (e) to read as
 103-11   follows:
 103-12         (e)  The department may deny, suspend, or revoke the
 103-13   registration of a massage school or place the school on probation
 103-14   if the certificate holder, school, or a representative of the
 103-15   school gives a prospective student information relating to the
 103-16   school that is false, fraudulent, deceptive, substantially
 103-17   inaccurate, or misleading.
 103-18         SECTION 3.08.  Chapter 752, Acts of the 69th Legislature,
 103-19   Regular Session, 1985 (Article 4512k, Vernon's Texas Civil
 103-20   Statutes), is amended by adding Sections 20-39 to read as follows:
 103-21         Sec. 20.  CRITERIA FOR REGISTRATION AS MASSAGE SCHOOL.
 103-22   Before the department may approve the application of a person to be
 103-23   registered as a massage school, the department must find, on
 103-24   investigation at the premises of the school, that the school meets
 103-25   the following criteria:
 103-26               (1)  the courses, curriculum, and instruction are of a
 103-27   quality, content, and length as may reasonably and adequately
  104-1   achieve the stated objective for which the courses, curriculum, or
  104-2   instruction are offered;
  104-3               (2)  there is in the school adequate space, equipment,
  104-4   instructional material, and instructor personnel to provide
  104-5   training of good quality;
  104-6               (3)  educational and experience qualifications of
  104-7   directors, administrators, and instructors are adequate;
  104-8               (4)  the school maintains a written record of the
  104-9   previous education and training of the applicant student and
 104-10   clearly indicates that appropriate credit has been given by the
 104-11   school for previous education and training in accordance with
 104-12   department rules, with the new training period shortened where
 104-13   warranted through use of appropriate skills or achievement tests
 104-14   and the student notified;
 104-15               (5)  a copy of the course outline; schedule of tuition,
 104-16   fees, refund policy, and other charges; regulations pertaining to
 104-17   absence, grading policy, and rules of operation and conduct;
 104-18   regulations pertaining to incomplete grades; the name, mailing
 104-19   address, and telephone number of the department for the purpose of
 104-20   directing complaints to the department; the current rates of job
 104-21   placement and employment of students issued a certificate of
 104-22   completion, if available;  and notification of the availability of
 104-23   the cost comparison information prepared under Section 27 of this
 104-24   Act will be furnished to the student in the catalog before
 104-25   enrollment;
 104-26               (6)  on completion of training, the student is given a
 104-27   certificate by the school indicating the course and that training
  105-1   was satisfactorily completed;
  105-2               (7)  adequate records as required by the department are
  105-3   kept to show attendance and progress or grades, and satisfactory
  105-4   standards relating to attendance, progress, and conduct are
  105-5   enforced;
  105-6               (8)  the school complies with all local, city, county,
  105-7   municipal, state, and federal regulations; the department may
  105-8   require evidence of compliance as is necessary;
  105-9               (9)  the school is financially sound and capable of
 105-10   fulfilling its commitments for training;
 105-11               (10)  the school's administrators, directors, owners,
 105-12   and instructors are of good reputation and character;
 105-13               (11)  the school has, maintains, and publishes in its
 105-14   catalog and enrollment contract the proper policy for the refund of
 105-15   the unused portion of tuition, fees, and other charges in the event
 105-16   the student enrolled by the school fails to take the course or
 105-17   withdraws or is discontinued from the course at any time before
 105-18   completion;
 105-19               (12)  the school does not use erroneous or misleading
 105-20   advertising, either by actual statement, omission, or intimation as
 105-21   determined by the commission;
 105-22               (13)  additional criteria as may be required by the
 105-23   department;
 105-24               (14)  the school does not use a name like or similar to
 105-25   an existing tax-supported school in the same area;
 105-26               (15)  the school furnishes to the department the
 105-27   current rates of students who receive a certificate of completion
  106-1   and of job placement and employment of students issued a
  106-2   certificate of completion, if available;
  106-3               (16)  the school furnishes to the department for
  106-4   approval or disapproval student admission requirements for each
  106-5   course or program offered by the school;
  106-6               (17)  the school furnishes to the department for
  106-7   approval or disapproval the course lengths and curriculum content
  106-8   for each course offered by the school that meets the educational
  106-9   requirements and curriculum established by the department;
 106-10               (18)  the physical facility used by the massage school
 106-11   meets the requirements of the department which shall take into
 106-12   consideration whether a school is based at a specific location or
 106-13   at various locations around the state; and
 106-14               (19)  the school does not owe a civil penalty under
 106-15   Section 13 of this Act.
 106-16         Sec. 21.  CONSUMER INFORMATION.  (a)  A massage school must
 106-17   submit to the department for approval, on an annual basis, a school
 106-18   catalog or comparable written documents detailing the consumer
 106-19   information that must be given to a prospective student before
 106-20   enrollment.  The school catalog or documents must include:
 106-21               (1)  the name and address of the school and the
 106-22   school's governing body and officials;
 106-23               (2)  a calendar of the school year;
 106-24               (3)  school policies on enrollment;
 106-25               (4)  rules relating to absences;
 106-26               (5)  the school grading policy;
 106-27               (6)  the school's hours of operation and rules of
  107-1   conduct;
  107-2               (7)  a schedule of the tuition and other fees assessed;
  107-3               (8)  the school's cancellation and refund policy;
  107-4               (9)  a general description of the course or courses
  107-5   offered;
  107-6               (10)  information on entrance testing and remedial
  107-7   development plans;
  107-8               (11)  state licensing requirements for courses intended
  107-9   to result in licensing of the student;
 107-10               (12)  starting range and reported average salaries for
 107-11   the prior year's graduates in occupations for which courses are
 107-12   offered, if the information is available;
 107-13               (13)  the current rates of job placement and employment
 107-14   of students who complete a course of training, if available;
 107-15               (14)  the department policy on credit for previous
 107-16   education and training;
 107-17               (15)  school regulations relating to incomplete grades;
 107-18               (16)  information on the transferability of credits
 107-19   earned;
 107-20               (17)  the name, mailing address, and telephone number
 107-21   of the department for the purpose of directing complaints to the
 107-22   department and the mechanism and procedures for resolving
 107-23   grievances submitted to the department;
 107-24               (18)  a statement that the department has information
 107-25   on cost comparison with similar schools;
 107-26               (19)  market and job availability information, if
 107-27   available;
  108-1               (20)  the names of the members of any advisory council
  108-2   of the school and the company for which they work; and
  108-3               (21)  other information required by the department if
  108-4   reasonable notice has been given by the department to the school of
  108-5   the additional requirements.
  108-6         (b)  A massage school may not accept a signed student
  108-7   enrollment contract or accept a student into any school program
  108-8   until at least 24 hours after the student has received the catalog
  108-9   or comparable written documents required under this section.
 108-10         (c)  A student must sign a receipt stating that:
 108-11               (1)  the catalog was received by the student before any
 108-12   commitment made by the student to the school or by the school to
 108-13   the student;
 108-14               (2)  the student was given an opportunity to discuss
 108-15   the catalog with a representative of the school; and
 108-16               (3)  the student understands the contents and
 108-17   implications of the catalog.
 108-18         (d)  The receipt required by Subsection (c) of this section
 108-19   must be placed in the student's permanent school file and a copy of
 108-20   the receipt must be delivered to the student.
 108-21         Sec. 22.  COURSE LENGTH AND CURRICULUM OF MASSAGE SCHOOL.
 108-22   (a)  A massage school must submit to the department for approval
 108-23   the course lengths and curriculum content for each course offered
 108-24   by the school that meets the educational requirements and
 108-25   curriculum established by the department.  The course lengths and
 108-26   content may not be implemented unless the department approves them.
 108-27   The course lengths and content shall reasonably ensure that
  109-1   students develop the job skills and knowledge necessary for
  109-2   employment.
  109-3         (b)  The department shall require a school to fully account
  109-4   for all curriculum contents and course lengths before issuing or
  109-5   renewing a license and a school that is offering course lengths
  109-6   below or above industry standards may be issued a conditional
  109-7   registration.
  109-8         Sec. 23.  COMPLETION, EMPLOYMENT, AND PLACEMENT IN RELATION
  109-9   TO MASSAGE SCHOOL.  (a)  The department shall set and enforce
 109-10   minimum standards for completion and employment rates of courses
 109-11   based on collected data.
 109-12         (b)  In determining whether to renew a massage school's
 109-13   registration, the department shall consider the completion,
 109-14   placement, and employment rates of students of the courses.
 109-15         (c)  Before a school may begin offering a new course of study
 109-16   for students the school must show the department the opportunity
 109-17   for jobs for graduates of the course and the possibility of
 109-18   placement or employment except where the new course is offered to
 109-19   credentialed professionals for professional continuing education.
 109-20         (d)  Before the department issues or renews a massage school
 109-21   registration involving a school that offers or advertises a
 109-22   placement service, the department may require the school to file a
 109-23   true and accurate copy of the school's placement records for the
 109-24   previous year.
 109-25         Sec. 24.  ON-SITE INSPECTIONS.  (a)  The department shall
 109-26   conduct on-site inspections of a massage school to determine the
 109-27   normal operating conditions of the school.
  110-1         (b)  The inspection required by Subsection (a) of this
  110-2   section shall be unannounced.
  110-3         (c)  The commissioner or a designee of the commissioner may
  110-4   inspect such things as the instructional books and records,
  110-5   classrooms, dormitories, tools, equipment, and classes of a massage
  110-6   school or an applicant for a license for a school at any reasonable
  110-7   time.
  110-8         Sec. 25.  REFUND.  (a)  Each registered massage school must
  110-9   maintain a cancellation and settlement policy that provides a full
 110-10   refund of all money paid by a student if:
 110-11               (1)  the student cancels the enrollment agreement or
 110-12   contract not later than midnight of the third day after the date on
 110-13   which the agreement or contract is signed by the prospective
 110-14   student, excluding Saturdays, Sundays, and legal holidays; or
 110-15               (2)  the enrollment of the student was procured as a
 110-16   result of a misrepresentation made in the advertising or
 110-17   promotional materials of the school or a representation by an owner
 110-18   or representative of the school.
 110-19         (b)  Each registered massage school must maintain a refund
 110-20   policy for the refund of the unused part of tuition, fees, and
 110-21   other charges assessed a student if the student, at the expiration
 110-22   of the cancellation period established under Subsection (a) of this
 110-23   section, terminates enrollment or is terminated by the school, as
 110-24   provided by this subsection.  The refund policy must provide that:
 110-25               (1)  a refund is based on the period of the student's
 110-26   enrollment, computed on the basis of course time expressed in clock
 110-27   hours;
  111-1               (2)  the effective date of the termination for payment
  111-2   of a refund is the earliest of:
  111-3                     (A)  the last date of attendance, if the student
  111-4   is terminated for failure to satisfy a school attendance, grade, or
  111-5   work requirement;
  111-6                     (B)  the date of receipt by the school of written
  111-7   notice of withdrawal by the student;
  111-8                     (C)  the 10th consecutive school day the student
  111-9   has been absent, unless any of the absences are excused by the
 111-10   school; or
 111-11                     (D)  the date the student fails to return, as
 111-12   scheduled, from a leave of absence; and
 111-13               (3)  if tuition is collected before beginning the
 111-14   course of training, and if, after the expiration of the
 111-15   cancellation period, the student does not begin the course of
 111-16   training, the school may retain not more than $100.
 111-17         (c)  If a student who begins a course of training that is
 111-18   scheduled to run not more than 12 months withdraws from the course
 111-19   or is terminated from the course by the school,  the school may
 111-20   retain $100 in tuition and fees paid by that student and is not
 111-21   obligated to refund any additional outstanding tuition if the
 111-22   student withdraws or is terminated during the last quarter of the
 111-23   course.  If the student withdraws or is terminated before the last
 111-24   quarter of the course begins, the school shall refund the following
 111-25   percentages of any outstanding tuition:
 111-26               (1)  for withdrawal or termination occurring during the
 111-27   first week or first one-tenth of the course, whichever is less, 90
  112-1   percent;
  112-2               (2)  for withdrawal or termination occurring after the
  112-3   first week or first one-tenth of the course, whichever is less, but
  112-4   within the first three weeks of the course, 80 percent;
  112-5               (3)  for withdrawal or termination occurring after the
  112-6   first three weeks of the course but not later than the last date of
  112-7   the first quarter of the course, 75 percent;
  112-8               (4)  for withdrawal or termination occurring during the
  112-9   second quarter of the course, 50 percent; and
 112-10               (5)  for withdrawal or termination occurring during the
 112-11   third quarter of the course, 10 percent.
 112-12         (d)  A refund owed under this section must be paid not later
 112-13   than the 60th day after the date on which the student becomes
 112-14   eligible for the refund, as determined under Subsection (b) of this
 112-15   section.
 112-16         (e)  If a refund is not made within the period required by
 112-17   this section, the school shall pay, as a penalty, interest on the
 112-18   refund for the interval beginning with the first day following the
 112-19   expiration of the refund period and ending with the day immediately
 112-20   preceding the date the refund is made.  If the refund is made to a
 112-21   lending institution, the interest shall also be paid to that
 112-22   institution and applied against the student's loan.  The board with
 112-23   the advice of the advisory council annually shall establish the
 112-24   level of interest at a level sufficient to provide a deterrent to
 112-25   the retention of student funds.  The board may exempt a school from
 112-26   the payment of the interest if the school makes a good faith effort
 112-27   to refund the tuition but is unable to locate the student.  The
  113-1   school shall provide to the department on request documentation of
  113-2   the effort to locate the student.
  113-3         (f)  A massage school shall record a grade of "incomplete"
  113-4   for a student who withdraws but is not entitled to a refund under
  113-5   Subsection (c) of this section if the student requests the grade at
  113-6   the time the student withdraws and the student withdraws for an
  113-7   appropriate reason unrelated to the student's academic status.  A
  113-8   student who receives a grade of incomplete may reenroll in the
  113-9   program during the 12-month period following the date the student
 113-10   withdraws and may complete those incomplete subjects without
 113-11   payment of additional tuition.
 113-12         (g)  If a course of instruction is discontinued by the school
 113-13   and this prevents the student from completing the course, all
 113-14   tuition and fees paid are due and refundable.
 113-15         (h)  Refunds under this section shall be applied:
 113-16               (1)  first, to the repayment of federal student loans,
 113-17   awards, and other Title IV student assistance, as prescribed by the
 113-18   Student Consumer Requirements in the U.S. Department of Education
 113-19   Higher Education Amendments of 1992;
 113-20               (2)  second, to the repayment of other government
 113-21   loans;
 113-22               (3)  third, to the repayment of other financial loans;
 113-23   and
 113-24               (4)  last, to the student's personal tuitional
 113-25   expenditures.
 113-26         (i)  Not later than the 30th day after the date on which a
 113-27   refund is due to a student who has received a student loan, the
  114-1   school shall notify the guaranty agency and the lender of the
  114-2   required refund and any refund previously made.  The guaranty
  114-3   agency and the lender shall notify the student and the school if
  114-4   the student's loan has been transferred to another holder.
  114-5         (j)  The failure of a school or a person to pay a tuition
  114-6   refund as required by this section is a deceptive trade practice
  114-7   under Subchapter E, Chapter 17, Business & Commerce Code, and its
  114-8   subsequent amendments.
  114-9         Sec. 26.  CONSOLIDATION OF FEES AND MASSAGE SCHOOL ACCOUNT.
 114-10   (a)  At the beginning of each fiscal year the department shall
 114-11   collect a fee from a school for deposit in a special account in the
 114-12   general revenue fund in the state treasury called the massage
 114-13   school account and to be administered by the department.
 114-14         (b)  The amount of the fee is determined by applying a
 114-15   percentage established by the department, based on the
 114-16   recommendation of the school accounts advisory board, to each
 114-17   school's annual gross tuition, with consideration given to the
 114-18   school's size, expense of regulation, potential for teachouts,
 114-19   tuition and fees refund and recovery exposure, and loan default
 114-20   rates and any other relevant factors.  The account shall be used
 114-21   for:
 114-22               (1)  the administration of this Act;
 114-23               (2)  the cost of teachouts as provided by this Act;
 114-24               (3)  the cost of tuition and fees recovery and the cost
 114-25   of student refunds that a school has not made; and
 114-26               (4)  the cost of storing student records that have
 114-27   become property of the state under this Act.
  115-1         (c)  The department may grant an exemption from payment into
  115-2   the account to a small school, as determined by the department, or
  115-3   to a school that does not use guaranteed student loans for tuition
  115-4   revenue.  A school exempt as provided for by this subsection must
  115-5   pay the necessary fees for regulation, as determined by the
  115-6   department, and provide a bond, certificate of deposit, or
  115-7   comparable security, as determined and approved by the department,
  115-8   that is sufficient to cover the cost of the school's record storage
  115-9   costs, teachout, and tuition and fees refund and recovery exposure
 115-10   based on the evidence the school submits proving its projected
 115-11   maximum total unearned tuition during the period of registration.
 115-12         (d)  The security shall be provided by the school for the
 115-13   period during which the registration is issued, and the obligation
 115-14   of the bond or other security must be that neither this Act nor any
 115-15   rule adopted under this Act is violated by the school or any of its
 115-16   officers, agents, or employees.
 115-17         (e)  The bond, certificate of deposit, or comparable security
 115-18   must be issued by a company authorized to do business in the state,
 115-19   conditioned that the parties to the transaction shall pay all
 115-20   damages or expenses that the state or any governmental subdivision
 115-21   or any student or potential student sustains resulting from a
 115-22   violation.  The bond, certificate of deposit, or comparable
 115-23   security shall be to the state to be used only for payment for the
 115-24   school's teachout and tuition and fees refund due to a student or
 115-25   potential student.  The security must be filed with the department
 115-26   and must be in such form as shall be approved by the department.
 115-27         (f)  Schools domiciled, or having their principal place of
  116-1   business, outside the state, that engage representatives to
  116-2   canvass, solicit, or contract with any person in the state are
  116-3   subject to the fee and security requirements of Subsection (c) of
  116-4   this section.
  116-5         (g)  The department shall refer all expenses incurred by the
  116-6   school account in administering Subsections (b)(2) and (3) of this
  116-7   section to the attorney general's office for collection.  The
  116-8   amounts collected shall be deposited to the account.  Attorney's
  116-9   fees and court costs shall be appropriated to the attorney
 116-10   general's office.
 116-11         (h)  Interest the account earns shall be reinvested in the
 116-12   account.  The state treasurer shall invest the account in the same
 116-13   manner as other state funds.  Sufficient funds from the account and
 116-14   fees collected by the department from massage instructors, massage
 116-15   establishments, and massage schools shall be appropriated to the
 116-16   department for the purpose outlined in this section.  The
 116-17   department shall administer claims made against the account.
 116-18         (i)  If a school closes, the department shall attempt to
 116-19   arrange for students of the closed school to attend another massage
 116-20   school.  The department shall adopt rules specifying the
 116-21   circumstances under which a school is considered closed.
 116-22         (j)  The expense incurred by a massage school in providing
 116-23   training that is directly related to educating a student who was
 116-24   enrolled in a closed school and placed in the school under this
 116-25   section, including the applicable tuition for the period of time
 116-26   for which the student has paid tuition, shall be paid in accordance
 116-27   with rules of the department.
  117-1         (k)  The department shall make reasonable attempts to ensure
  117-2   that schools under the department's jurisdiction, including closed
  117-3   schools, fulfill the refund obligation as provided by Section 25 of
  117-4   this Act.  If a school refuses to fulfill the school's obligation
  117-5   or the school's bond is insufficient to pay the cost of the
  117-6   teachout and refund expenses, the teachout or the refund may be
  117-7   paid from the massage school account except that no school owned,
  117-8   either in whole or in part, by a person or corporate entity who was
  117-9   an owner, in whole or in part, of a previously closed school shall
 117-10   be permitted to receive compensation for a teachout under this
 117-11   section.
 117-12         (l)  If a student cannot be placed in another school, the
 117-13   student's tuition and fees shall be refunded under Section 25(g) of
 117-14   this Act.
 117-15         (m)  If a student does not accept a place that is available
 117-16   and reasonable in another school, the student's tuition and fees
 117-17   shall be refunded under the refund policy maintained by the closing
 117-18   school under Sections 25(b) and (c) of this Act.
 117-19         (n)  Attorney's fees, court costs, or damages may not be paid
 117-20   from the massage school account.
 117-21         (o)  The department by rule shall establish and assess
 117-22   reasonable and necessary fees to all persons and entities licensed
 117-23   under this Act to be used for the regulation of those persons and
 117-24   entities licensed under this Act and to supplement the
 117-25   administration and purposes outlined by this Act.
 117-26         (p)  The department may permit payment of any fee authorized
 117-27   under this section that exceeds $1,000 to be paid by installment.
  118-1   The department shall provide for appropriate interest charges and
  118-2   late penalties in addition to any other remedy that is provided for
  118-3   by law for the late payment of a fee installment authorized under
  118-4   this section.  The department may assess a reasonable service
  118-5   charge to be paid by a school that pays a fee by installment in an
  118-6   amount not to exceed an annual rate of 10 percent of the fee that
  118-7   is to be paid by installment.
  118-8         Sec. 27.  COST COMPARISONS.  (a)  The department shall
  118-9   prepare a comparison of the cost to a student of courses of
 118-10   instruction or training programs at all registered massage schools.
 118-11         (b)  The cost comparison must include for each school a
 118-12   description of:
 118-13               (1)  average class size;
 118-14               (2)  facilities and equipment;
 118-15               (3)  employment and placement rates, if available;
 118-16               (4)  length of program; and
 118-17               (5)  faculty qualifications.
 118-18         Sec. 28.  LICENSING REQUIREMENTS DISCLOSED BY MASSAGE SCHOOL.
 118-19   (a)  A massage school must disclose to all prospective students
 118-20   state requirements to practice the occupation for which the student
 118-21   is training.
 118-22         (b)  A school must disclose to all prospective students the
 118-23   performance of graduates from the school on the licensing
 118-24   examination of the department if that information is available.
 118-25         Sec. 29.  ENTRANCE REQUIREMENTS FOR MASSAGE SCHOOL; MINIMUM
 118-26   SKILLS TEST.  (a)  The department shall approve entrance
 118-27   requirements, including minimum skills testing, for students who
  119-1   may be accepted for a course of study in a massage school.  The
  119-2   requirements must be specific and provide that students who are
  119-3   allowed to enter a course will have a reasonable chance of
  119-4   completing the program.
  119-5         (b)  The school shall administer a standardized test to
  119-6   students entering the school, if testing for minimum skill
  119-7   competency is determined by the department as appropriate and
  119-8   necessary to determine if remediation is needed.  The test must be
  119-9   administered before enrollment and must be nationally recognized as
 119-10   appropriate and effective for minimum skills testing.  If the test
 119-11   reveals the necessity for remediation, the school must implement a
 119-12   plan to encourage the student to improve in basic general education
 119-13   skills.
 119-14         (c)  A student must achieve a successful score on the test
 119-15   required by this section before the student is obligated for
 119-16   tuition and fees for the vocational portion of the school's
 119-17   program.
 119-18         (d)  The school may, in accordance with federal statutory
 119-19   provisions affecting guaranteed student loan programs, on a
 119-20   case-by-case basis, refuse to provide the certification statements
 119-21   required for guaranteed student loan eligibility or reduce the
 119-22   determination of need for a guaranteed student loan if the school
 119-23   determines that the student's expenses to be covered by the loan
 119-24   and the estimated cost of attendance can be met more appropriately
 119-25   by the school, directly by the student, or by other sources.
 119-26         Sec. 30.  STUDENTS IN MASSAGE SCHOOLS IN NEED OF REMEDIAL
 119-27   HELP.  (a)  An applicant without a high school diploma or high
  120-1   school equivalency certificate must pass an entrance test approved
  120-2   by the department and be considered to have the ability to benefit
  120-3   from the school before the school may enroll the student.
  120-4         (b)  A school that admits a student who does not have a high
  120-5   school diploma or high school equivalency certificate must develop
  120-6   and implement a plan for counseling the student on curriculum,
  120-7   student aid, employment opportunities, and the remediation
  120-8   necessary for the student to obtain a high school equivalency
  120-9   certificate and improve in basic general education skills.
 120-10         (c)  The school must assist the student in obtaining the
 120-11   remediation necessary for the student to pass a standardized
 120-12   minimum skills test, approved by the department, and the student
 120-13   must pass the test before entering the final quarter of the course.
 120-14         Sec. 31.  ENROLLMENT POLICIES OF MASSAGE SCHOOL.  (a)  The
 120-15   enrollment contract of a massage school must contain:
 120-16               (1)  a disclosure that the contract is a legally
 120-17   binding instrument on written acceptance of the student by the
 120-18   school, unless canceled as provided by law;
 120-19               (2)  the school's cancellation and refund policy;
 120-20               (3)  the method of cancellation of the contract, the
 120-21   effective date of any cancellation, and the name and address to
 120-22   which the notice of cancellation should be sent or delivered;
 120-23               (4)  the total cost of the course including tuition and
 120-24   all other charges;
 120-25               (5)  a notification that the fair market value of
 120-26   equipment or supplies furnished to the student that the student
 120-27   fails to return in a condition suitable for resale not later than
  121-1   the 10th business day after the date of cancellation may be
  121-2   retained by the school and deducted from any refund of the student;
  121-3               (6)  a statement that if a student's enrollment is
  121-4   canceled for any reason, the school will notify an agency known to
  121-5   the school to be providing financial aid to the student of the
  121-6   cancellation not later than the 30th day after the date of
  121-7   cancellation;
  121-8               (7)  the name and description of the courses, including
  121-9   the number of hours of classroom instruction or home study lessons.
 121-10         (b)  An enrollment contract may not contain a wage assignment
 121-11   provision or a confession of judgment clause.
 121-12         (c)  Immediately after a prospective student has signed an
 121-13   enrollment contract, the school shall give the prospective student
 121-14   a copy of the contract, and a copy shall be placed in the student's
 121-15   permanent school file.
 121-16         Sec. 32.  LOAN COUNSELING BY MASSAGE SCHOOL.  (a)  A school
 121-17   shall conduct loan counseling entrance interviews with each
 121-18   prospective student seeking a loan during the enrollment process.
 121-19   A student borrower shall be counseled before the initial
 121-20   disbursement of loan proceeds, shortly before the student ceases
 121-21   one-half of the course, and before the student is issued a
 121-22   certificate of completion.
 121-23         (b)  The school's financial aid officer or counselor shall
 121-24   conduct the interviews required by Subsection (a) of this section.
 121-25   The interview must include a discussion of:
 121-26               (1)  the rights and responsibilities of the student as
 121-27   a borrower;
  122-1               (2)  what a loan is and the importance of repayment;
  122-2               (3)  the total cost of the program in which the student
  122-3   will be enrolled;
  122-4               (4)  the availability of other forms of financial aid,
  122-5   grants, and part-time work;
  122-6               (5)  the starting range and average reported salaries
  122-7   of those in the occupation for which the student will be trained,
  122-8   if available; and
  122-9               (6)  job placement services provided by the school and
 122-10   the employment rate of persons who attended the school and were
 122-11   enrolled in the program in which the student is enrolled.
 122-12         (c)  A school approved to accept state or federal educational
 122-13   loans or grants shall adopt, in addition to the provisions in this
 122-14   section, measures to reduce defaults and improve borrowers'
 122-15   understanding and respect for the loan repayment obligation as
 122-16   provided in 34 C.F.R., Parts 668 and 682.
 122-17         (d)  The school must give a copy of the Texas Guaranteed
 122-18   Student Loan Corporation's "Your Future" guide, or a comparable
 122-19   document approved by the department, to a prospective student at a
 122-20   time and in a manner that provide the student with sufficient
 122-21   opportunity to read the guide or other document and discuss the
 122-22   contents with the school's financial aid officer, if necessary for
 122-23   understanding and clarity, before signing an enrollment contract
 122-24   and before the school accepts the student in a course of study.
 122-25         (e)  The prospective student must sign a document stating
 122-26   that the student:
 122-27               (1)  attended a loan counseling entrance interview; and
  123-1               (2)  received a copy of the "Your Future" guide, or
  123-2   comparable document in the time provided by Subsection (d) of this
  123-3   section.
  123-4         (f)  A copy of the signed document required by Subsection (e)
  123-5   of this section must be sent to the student, guarantor, and lender
  123-6   and must be placed in the student's permanent school file.
  123-7         Sec. 33.  RECORDS OF MASSAGE SCHOOL.  (a)  A massage school
  123-8   shall maintain permanent records for all students enrolled, as
  123-9   required by the department.
 123-10         (b)  A school shall adopt a plan to preserve permanent
 123-11   records and submit the plan to the department for approval.  The
 123-12   plan must:
 123-13               (1)  provide that at least one copy of the records will
 123-14   be held in a secure depository; and
 123-15               (2)  designate an appropriate official to provide a
 123-16   student with copies of records or transcripts on request.
 123-17         (c)  The school shall make the first copy of records or
 123-18   transcripts at no charge to the student.  The school may make a
 123-19   reasonable charge to provide additional copies of records,
 123-20   transcripts, or other student information.
 123-21         (d)  If a school closes, the records become the property of
 123-22   the state.
 123-23         Sec. 34.  DEPARTMENT ADDRESS.  A massage school shall post on
 123-24   the premises of the school at a prominent and conspicuous location
 123-25   the name, mailing address, and telephone number of the department
 123-26   for the purpose of directing complaints to the department.
 123-27         Sec. 35.  COMPLAINTS.  The department shall prepare
  124-1   information of public interest describing the functions of the
  124-2   department and the procedures by which complaints are filed with
  124-3   and resolved by the department against a massage school.  The
  124-4   department shall make the information available to the public and
  124-5   appropriate state agencies.
  124-6         Sec. 36.  FINANCIAL STABILITY.  (a)  A school may not reflect
  124-7   unearned tuition as a current asset unless the amount shown in
  124-8   current assets that reflects unearned tuition is offset by an equal
  124-9   amount shown as a current liability.  The school must meet one of
 124-10   the following criteria in order to be determined as financially
 124-11   sound and capable of fulfilling its commitments for training:
 124-12               (1)  current assets must bear a relationship to current
 124-13   liabilities in a ratio of at least one-to-one; or
 124-14               (2)  the school must have posted, or set aside in a
 124-15   dedicated escrow account, a bond, certificate of deposit,
 124-16   irrevocable letter of credit or comparable security, acceptable to
 124-17   the department, each made payable to the State of Texas, in an
 124-18   amount sufficient to cover the school's record storage costs,
 124-19   teachout, and tuition and fees refund and recovery exposure based
 124-20   on the evidence the school submits proving its projected maximum
 124-21   total unearned tuition during the period of time covered by the
 124-22   evidence of indebtedness to the state.
 124-23         (b)  The school must demonstrate to the satisfaction of the
 124-24   department its financial soundness and ability to fulfill its
 124-25   commitments for training.  If requested by the school and
 124-26   administrator, the School Accounts Advisory Board shall investigate
 124-27   the financial soundness of a school that does not meet the
  125-1   requirements of (1) or (2) above in order to determine if the
  125-2   school is capable of fulfilling its obligations under this Act.
  125-3         Sec. 37.  PROHIBITIONS.  A person may not:
  125-4               (1)  operate a massage school without registering with
  125-5   the department or assume ownership of an existing massage school
  125-6   without registering with the department;
  125-7               (2)  solicit prospective students for a massage school
  125-8   without being registered as required by this Act;
  125-9               (3)  accept contracts or enrollment applications from a
 125-10   representative of a massage school who is not registered as
 125-11   required by any department rule requiring registration;
 125-12               (4)  use advertising designed to mislead or deceive
 125-13   prospective massage school students;
 125-14               (5)  fail to notify the department of the
 125-15   discontinuance of the operation of any massage school not later
 125-16   than the 72nd hour after cessation of classes or make available
 125-17   accurate records as required by this Act;
 125-18               (6)  fail to secure and file within 30 days any
 125-19   increased bond required by this Act;
 125-20               (7)  negotiate any promissory instrument received as
 125-21   payment of tuition for a massage school or other charge before
 125-22   completion of 75 percent of the course, provided that before that
 125-23   time, the instrument may be transferred by assignment to a
 125-24   purchaser who is subject to any defense available against the
 125-25   school named as payee;
 125-26               (8)  enroll a student in a massage school who fails to
 125-27   satisfy  entrance requirements; or
  126-1               (9)  violate any provision of this Act relating to a
  126-2   massage school or a rule adopted under this Act relating to a
  126-3   massage school.
  126-4         Sec. 38.  ADMINISTRATIVE PENALTY.  (a)  The board may impose
  126-5   an administrative penalty against a person who violates Section 37
  126-6   of this Act.
  126-7         (b)  The penalty for a violation may be in an amount not to
  126-8   exceed $10,000.
  126-9         (c)  The amount of the penalty shall be based on:
 126-10               (1)  the seriousness of the violation, including the
 126-11   nature, circumstances, extent, and gravity of any prohibited acts;
 126-12               (2)  efforts to correct the violation; and
 126-13               (3)  any other matter that justice may require.
 126-14         (d)  If the commissioner of health determines that a
 126-15   violation has occurred, the commissioner may issue to the board a
 126-16   report that states the facts on which the determination is based
 126-17   and the  commissioner's recommendation on the imposition of a
 126-18   penalty, including a recommendation on the amount of the penalty.
 126-19         (e)  Within 14 days after the date the report is issued, the
 126-20   commissioner shall give written notice of the report to the person.
 126-21   The notice may be given by certified mail.  The notice must include
 126-22   a brief summary of the alleged violation and a statement of the
 126-23   amount of the recommended penalty and must inform the person that
 126-24   the person has a right to a hearing on the  occurrence of the
 126-25   violation, the amount of the penalty, or both the occurrence of the
 126-26   violation and the amount of the penalty.
 126-27         (f)  Within 20 days after the date the person receives the
  127-1   notice, the person in writing may accept the determination and
  127-2   recommended penalty of the commissioner or may make a written
  127-3   request for a hearing on the occurrence of the violation, the
  127-4   amount of the penalty, or both the occurrence of the violation and
  127-5   the amount of the penalty.
  127-6         (g)  If the person accepts the determination and recommended
  127-7   penalty of the commissioner, the board by order shall approve the
  127-8   determination and impose the recommended penalty.
  127-9         (h)  If the person requests a hearing or fails to respond
 127-10   timely to the notice, the commissioner shall set a hearing and give
 127-11   notice of the hearing to the person.  The hearing shall be held by
 127-12   a hearings examiner appointed by the commissioner.  The hearings
 127-13   examiner shall make findings of fact and conclusions of law and
 127-14   promptly issue to the board a proposal for a decision about the
 127-15   occurrence of the violation and the amount of a proposed penalty.
 127-16   Based on the findings of fact, conclusions of law, and proposal for
 127-17   a decision, the board by order may find that a violation has
 127-18   occurred and impose a penalty or may find that no violation
 127-19   occurred.
 127-20         (i)  The notice of the board's order given to the person
 127-21   under the Administrative Procedure and Texas Register Act (Article
 127-22   6252-13a, Vernon's Texas Civil Statutes) and its subsequent
 127-23   amendments must include a statement of the right of the person to
 127-24   judicial review of the order.
 127-25         (j)  Within 30 days after the date the board's order is final
 127-26   as provided by Section 16(c), Administrative Procedure and Texas
 127-27   Register Act (Article 6252-13a, Vernon's Texas Civil Statutes), and
  128-1   its subsequent amendments, the person shall:
  128-2               (1)  pay the amount of the penalty;
  128-3               (2)  pay the amount of the penalty and file a petition
  128-4   for judicial review contesting the occurrence of the violation, the
  128-5   amount of the penalty, or both the occurrence of the violation and
  128-6   the amount of the penalty; or
  128-7               (3)  without paying the amount of the penalty, file a
  128-8   petition for judicial review contesting the occurrence of the
  128-9   violation, the amount of the penalty, or both the occurrence of the
 128-10   violation and the amount of the penalty.
 128-11         (k)  Within the 30-day period, a person who acts under
 128-12   Subsection (j)(3) of this section may:
 128-13               (1)  stay enforcement of the penalty by:
 128-14                     (A)  paying the amount of the penalty to the
 128-15   court for placement in an escrow account; or
 128-16                     (B)  giving to the court a supersedeas bond that
 128-17   is approved by the court for the amount of the penalty and that is
 128-18   effective until all judicial review of the board's order is final;
 128-19   or
 128-20               (2)  request the court to stay enforcement of the
 128-21   penalty by:
 128-22                     (A)  filing with the court a sworn affidavit of
 128-23   the person stating that the person is financially unable to pay the
 128-24   amount of the penalty and is financially unable to give the
 128-25   supersedeas bond; and
 128-26                     (B)  giving a copy of the affidavit to the
 128-27   commissioner by certified mail.
  129-1         (l)  If the commissioner receives a copy of an affidavit
  129-2   under Subsection (k)(2) of this section the commissioner may file
  129-3   with the court, within five days after the date the copy is
  129-4   received, a contest to the affidavit.  The court shall hold a
  129-5   hearing on the facts alleged in the affidavit as soon as
  129-6   practicable and shall stay the enforcement of the penalty on
  129-7   finding that the alleged facts are true.  The person who files an
  129-8   affidavit has the burden of proving that the person is financially
  129-9   unable to pay the amount of the penalty and to give a supersedeas
 129-10   bond.
 129-11         (m)  If the person does not pay the amount of the penalty and
 129-12   the enforcement of the penalty is not stayed, the commissioner may
 129-13   refer the matter to the attorney general for collection of the
 129-14   amount of the penalty.
 129-15         (n)  Judicial review of the order of the board:
 129-16               (1)  is instituted by filing a petition as provided by
 129-17   Section 19, Administrative Procedure and Texas Register Act
 129-18   (Article 6252-13a, Vernon's Texas Civil Statutes), and its
 129-19   subsequent amendments; and
 129-20               (2)  is under the substantial evidence rule.
 129-21         (o)  If the court sustains the occurrence of the violation,
 129-22   the court may uphold or reduce the amount of the penalty and order
 129-23   the person to pay the full or reduced amount of the penalty.  If
 129-24   the court does not sustain the occurrence of the violation, the
 129-25   court shall order that no penalty is owed.
 129-26         (p)  When the judgment of the court becomes final, the court
 129-27   shall proceed under this subsection.  If the person paid the amount
  130-1   of the penalty and if that amount is reduced or is not upheld by
  130-2   the court, the court shall order that the appropriate amount plus
  130-3   accrued interest be remitted to the person.  The rate of the
  130-4   interest is the rate charged on loans to depository institutions by
  130-5   the New York Federal Reserve Bank, and the interest shall be paid
  130-6   for the period beginning on the date the penalty was paid and
  130-7   ending on the date the penalty is remitted.  If the person gave a
  130-8   supersedeas bond and if the amount of the penalty is not upheld by
  130-9   the court, the court shall order the release of the bond.  If the
 130-10   person gave a supersedeas bond and if the amount of the penalty is
 130-11   reduced, the court shall order the release of the bond after the
 130-12   person pays the amount.
 130-13         (q)  A penalty collected under this section shall be remitted
 130-14   to the comptroller for deposit in the general revenue fund.
 130-15         (r)  All proceedings under this section are subject to the
 130-16   Administrative Procedure and Texas Register Act (Article 6252-13a,
 130-17   Vernon's Texas Civil Statutes) and its subsequent amendments.
 130-18         Sec. 39.  CRIMINAL PENALTIES.  (a)  A person commits an
 130-19   offense if the person fails to comply with Section 2A or 25 of this
 130-20   Act.
 130-21         (b)  A person commits an offense if the person intentionally
 130-22   or knowingly uses for personal benefit funds in an amount greater
 130-23   than $10,000 that are due as student refunds under Section 25 of
 130-24   this Act.  An offense under this subsection is a felony of the
 130-25   third degree.  Except as provided by Subsection (b) of this
 130-26   section, an offense under this section is a Class A misdemeanor.
 130-27         SECTION 3.09.  Any balance remaining in funds designated for
  131-1   the purposes outlined in this Act shall be transferred to the
  131-2   Massage School Account in the General Revenue Fund on the effective
  131-3   date of this Act.
  131-4                   PART 4.  BARBER SCHOOLS OR COLLEGES
  131-5         SECTION 4.01.  Sections 3(b) and (f), Chapter 65, Acts of the
  131-6   41st Legislature, 1st Called Session, 1929 (Article 8407a, Vernon's
  131-7   Texas Civil Statutes), are amended to read as follows:
  131-8         (b)  Any firm, corporation or person who opens a new barber
  131-9   shop shall within three days submit an application in writing to
 131-10   the board for a temporary barber shop permit together with an
 131-11   inspection fee in an amount established by the board <not to exceed
 131-12   $70>.  The applicant must place in his application the permanent
 131-13   address of his shop including a legal description of the premises
 131-14   to be licensed and such other information as shall be required by
 131-15   the board.
 131-16         (f)  To continue operating a barber shop, a person must renew
 131-17   the permit issued to his shop by paying a renewal fee in an amount
 131-18   established by the board <not to exceed $70>.  All permits expire
 131-19   on July 1 of odd-numbered years.
 131-20         SECTION 4.02.  (a)  Effective September 1, 1994, Section
 131-21   9(a), Chapter 65, Acts of the 41st Legislature, 1st Called Session,
 131-22   1929 (Article 8407a, Vernon's Texas Civil Statutes), is amended to
 131-23   read as follows:
 131-24         (a)  Any person desiring to conduct or operate a barber
 131-25   school or college in this state shall first obtain a permit from
 131-26   the board after demonstrating that said school or college has first
 131-27   met the requirements of this section.  Said permit shall be
  132-1   prominently displayed at all times at such school or college.  The
  132-2   board shall determine that an applicant for a barber school or
  132-3   college permit is financially sound and capable of fulfilling its
  132-4   commitments for training before granting the permit.  <Each
  132-5   applicant shall furnish a surety bond in the amount of $10,000,
  132-6   payable to the state, and conditioned to refund unpaid tuition if
  132-7   the school or college closes or ceases operation before its courses
  132-8   of instruction have been completed.>
  132-9         (b)  Any surety bond furnished under Section 9(a), Chapter
 132-10   65, Acts of the 41st Legislature, 1st Called Session, 1929 (Article
 132-11   8407a, Vernon's Texas Civil Statutes), as Section 9(a) existed
 132-12   before amendment by this Act, remains in full force and effect.
 132-13   Any obligation under a surety bond furnished under Section 9(a)
 132-14   before amendment by this Act is not impaired by the amendment.
 132-15         SECTION 4.03.  Sections 9(b)-(y), Chapter 65, Acts of the
 132-16   41st Legislature, 1st Called Session, 1929 (Article 8407a, Vernon's
 132-17   Texas Civil Statutes), are amended to read as follows:
 132-18         (b)  No certificate or permit shall be issued as provided for
 132-19   herein to an applicant to be a student in such a school or college
 132-20   unless said applicant has completed at least a seventh grade
 132-21   education and such other requirements as shall be specified by the
 132-22   board.  Each applicant to be a student must submit an enrollment
 132-23   application to the board in the form prescribed by the board.  The
 132-24   application must be accompanied by a nonrefundable application fee
 132-25   set by the board <in an amount not to exceed $25>.  A separate
 132-26   application is required for each enrollment, reenrollment, or
 132-27   transfer enrollment.  However, the application fee applies only to
  133-1   the first enrollment and may not be charged for any later
  133-2   enrollment, reenrollment, or transfer enrollment.
  133-3         (c)  The board may not approve a barber school or college
  133-4   unless the school or college requires the following hours of
  133-5   instruction as a prerequisite for graduation:
  133-6               (1)  Class A barber--1,500 hours of instruction
  133-7   completed in a course of not less than nine months, with not less
  133-8   than 800 hours in the actual practice of cutting hair as a primary
  133-9   service;
 133-10               (2)  barber technician--300 hours of instruction
 133-11   completed in a course of not less than eight weeks;
 133-12               (3)  wig instructor--200 hours of instruction completed
 133-13   in a course of not less than eight weeks;
 133-14               (4)  wig specialist--300 hours of instruction completed
 133-15   in a course of not less than eight weeks;
 133-16               (5)  manicurist--300 hours of instruction completed in
 133-17   a course of not less than eight weeks; and
 133-18               (6)  teacher--1,000 hours of instruction completed in a
 133-19   course of not less than six months.
 133-20         (d)  If a school or college offers a refresher course, that
 133-21   course must require at least 300 hours of instruction.  The board
 133-22   by rule shall set the curriculum for a refresher course.
 133-23         (e)  A barber school or college shall submit a monthly
 133-24   progress report to the board regarding each student in attendance
 133-25   at the school or college.  The report must certify the daily
 133-26   attendance record of the student and the number of credit hours
 133-27   earned by the student during the previous month.  The school or
  134-1   college may not increase, decrease, or withhold for any reason the
  134-2   number of credit hours earned by a student.  On completion by a
  134-3   student of a prescribed course of instruction, the school or
  134-4   college shall certify to the board that the student has completed
  134-5   the required number of hours and is eligible to take the
  134-6   appropriate examination.  Each barber school or college permittee
  134-7   shall furnish to the board:
  134-8               (1)  the current course completion rates of students
  134-9   who attend a course of instruction offered by the school or
 134-10   college; and
 134-11               (2)  job placement rates and employment rates of
 134-12   students who complete a course of instruction.
 134-13         (f)  Such schools or colleges shall instruct students in the
 134-14   theory and practice of such subjects as may be necessary and
 134-15   beneficial in the practice of barbering, including the following:
 134-16               (1)  all laws governing the practice of barbering in
 134-17   this state;
 134-18               (2)  scientific fundamentals of barbering;
 134-19               (3)  hygienic bacteriology;
 134-20               (4)  histology of the hair, skin, muscles, and nerves;
 134-21               (5)  the structure of the head, neck and face;
 134-22               (6)  elementary chemistry relating to sterilization and
 134-23   antiseptics;
 134-24               (7)  common disorders of the skin and hair;
 134-25               (8)  massaging muscles of the scalp, face, and neck;
 134-26               (9)  hair-cutting;
 134-27               (10)  shaving, shampooing, and bleaching and dyeing of
  135-1   the hair;
  135-2               (11)  manicuring, administering facial treatments, hair
  135-3   weaving, servicing wigs; and
  135-4               (12)  any other skills, techniques, services,
  135-5   treatments, or undertakings within the definition of the practice
  135-6   of barbering provided for in this Act.
  135-7         (g)  No barber school or college which issues "Class A"
  135-8   certificates shall be approved by the Board for the issuance of a
  135-9   permit unless said school or college has the following:
 135-10               (1)  An adequate school site housed in a substantial
 135-11   building of a permanent-type construction containing a minimum of
 135-12   not less than two thousand, eight hundred (2,800) square feet of
 135-13   floor space.  Such space shall be divided into the following
 135-14   separate departments:  a senior department, a junior department, a
 135-15   class theory room, a supply room, an office space, a dressing and
 135-16   cloak room, and two (2) sanitary, modern separate rest rooms,
 135-17   equipped with one (1) commode each and a urinal in one (1) rest
 135-18   room.
 135-19               (2)  A hard-surface floor covering of tile or other
 135-20   suitable material.
 135-21               (3)  A minimum of twenty (20) modern barber chairs with
 135-22   cabinet and mirror for each chair.
 135-23               (4)  One (1) lavatory in back of each two (2) chairs.
 135-24               (5)  A liquid sterilizer for each chair.
 135-25               (6)  An adequate number of latherizers, vibrators, and
 135-26   hair dryers for the use of students.
 135-27               (7)  Adequate lighting of all rooms.
  136-1               (8)  At least twenty (20) classroom chairs, a
  136-2   blackboard, anatomical charts of the head, neck and face, and one
  136-3   (1) barber chair in the class theory room.
  136-4               (9)  A library and library facilities available to
  136-5   students, containing a medical dictionary and a standard work on
  136-6   the human anatomy.
  136-7               (10)  Adequate drinking fountain facilities, but at
  136-8   least one (1) to each floor.
  136-9               (11)  Adequate toilet facilities for the students.
 136-10               (12)  Adequate fire-fighting equipment to be maintained
 136-11   in case of emergency.
 136-12         (h)  Anything to the contrary in this Act notwithstanding,
 136-13   each such school shall place a sign on the front outside portion of
 136-14   its building in a prominent place.  Such sign shall read "BARBER
 136-15   SCHOOL--STUDENT BARBERS", and shall be a minimum size of ten-inch
 136-16   block letters.  Printed signs containing the foregoing information
 136-17   shall be prominently displayed upon each inside wall of the
 136-18   establishment.
 136-19         (i)  A minimum of five (5) hours a week must be devoted to
 136-20   the instruction of theory in the classroom, with Saturdays devoted
 136-21   exclusively to practical work over the chair.  If classes are
 136-22   conducted five (5) days a week, one (1) hour each day must be
 136-23   devoted to instruction in theory.  If classes are conducted four
 136-24   (4) days a week, one (1) hour and fifteen (15) minutes each day
 136-25   must be devoted to instruction in theory.  An attendance record
 136-26   book must be maintained by the school showing a record of the
 136-27   students' daily attendance.  These records are subject to
  137-1   inspection at any and all times by the Board.
  137-2         (j)  No barber school or college which issues "Class A"
  137-3   certificates shall be approved by the Board unless it is under the
  137-4   direct supervision and control of a barber who holds a current
  137-5   registered "Class A" certificate to practice barbering under the
  137-6   Texas Barber Law, and who can show evidence of at least five (5)
  137-7   years experience as a practicing barber.  Each school shall have at
  137-8   least one (1) teacher who has a teacher's certificate issued by the
  137-9   Board upon examination and who is capable and qualified to teach
 137-10   the curriculum outlined herein to the students of such school.  All
 137-11   such teachers are required to obtain a teacher's certificate from
 137-12   the Board and, in addition to requirements set forth by the Board,
 137-13   must meet the following requirements:
 137-14               (1)  Demonstrate their ability to teach the said
 137-15   curriculum outlined herein through a written and practical test to
 137-16   be given by the Board.
 137-17               (2)  Hold a current certificate as a registered "Class
 137-18   A" barber under this law.
 137-19               (3)  Demonstrate to the Board that such applicant is
 137-20   qualified to teach and instruct, to be determined at the discretion
 137-21   of the Board, and show evidence that the applicant has had at least
 137-22   six (6) months experience as a teacher in an approved school or
 137-23   college in Texas or in another state approved by the Board, or have
 137-24   completed 1,000 hours of instruction in a postgraduate course as a
 137-25   student teacher in an approved barber school or college in Texas.
 137-26         (k)  A licensed barber who presents evidence satisfactory to
 137-27   the Board of at least five (5) years' experience as a practicing
  138-1   barber in a barber shop operating under a permit issued by the
  138-2   Board, with not less than two (2) years' experience occurring in
  138-3   the period immediately before application, is also entitled to
  138-4   apply to take the examination for a teacher's certificate.
  138-5   Applicants desiring an examination for a teacher's certificate
  138-6   shall make an application to the Board and accompany same with an
  138-7   examination fee in an amount established by the Board <not to
  138-8   exceed $100>.  A new application and fee must be presented for each
  138-9   examination taken by the applicant and fees paid are not
 138-10   refundable.  The application must state the education and
 138-11   experience level of the applicant in all courses or programs that
 138-12   the applicant will teach or instruct.  The Board shall review an
 138-13   application for competency, consistency, and the overall quality of
 138-14   the applicant.  A teacher's certificate shall be issued upon
 138-15   satisfactory completion of the examination and payment of a
 138-16   certificate fee in an amount established by the Board <not to
 138-17   exceed $100 if the applicant fulfills the requirements during the
 138-18   period from November 1 of an odd-numbered year and extending
 138-19   through October 31 of the following even-numbered year or not to
 138-20   exceed $50 if the applicant fulfills the requirements during the
 138-21   period from November 1 of an even-numbered year and extending
 138-22   through October 31 of the following odd-numbered year>.  Teacher's
 138-23   certificates shall be renewed biennially on or before November 1st
 138-24   of odd-numbered years upon the payment of a renewal fee in an
 138-25   amount established by the Board <not to exceed $100>.
 138-26         (l)  In addition to a minimum of one (1) teacher required in
 138-27   Subsection (j)(3) of this Section, each barber school or college
  139-1   which issues "Class A" certificates shall maintain at least one (1)
  139-2   qualified instructor, holding a registered "Class A" certificate,
  139-3   for each twenty (20) students or any fraction thereof for
  139-4   instruction in practical work; provided, however, that a teacher
  139-5   can also serve as an instructor in practical work in addition to
  139-6   his position as a theory teacher.  A barber school or college may
  139-7   not enroll more than one (1) student teacher for each licensed
  139-8   teacher who teaches at the school or college.  A student teacher
  139-9   must concentrate on teaching skills and may not be booked with
 139-10   customers.  Violation of this requirement constitutes a ground for
 139-11   the revocation of the person's student teacher barber license.
 139-12         (m)  No barber school or college shall be issued a permit to
 139-13   operate under the provisions of this Section until it has first
 139-14   furnished the following evidence to the Board:
 139-15               (1)  A detailed drawing and chart of the proposed
 139-16   physical layout of such school, showing the departments, floor
 139-17   space, equipment, lights and outlets.
 139-18               (2)  Photographs of the proposed site for such school
 139-19   including the interior and exterior of the building, rooms and
 139-20   departments.
 139-21               (3)  A detailed copy of the training program.
 139-22               (4)  A copy of the school catalog and promotional
 139-23   literature.
 139-24               (5)  A copy of the building lease or proposed building
 139-25   lease where the building is not owned by the school or college.
 139-26               (6)  A sworn statement showing the true ownership of
 139-27   the school or college.
  140-1               (7)  A permit fee in an amount established by the Board
  140-2   <not to exceed $1,000>.
  140-3               (8)  A statement of any final convictions of the
  140-4   owners, school directors, recruiters, instructional faculty, or
  140-5   other selected personnel of the barber school or college as
  140-6   determined by the Board.  The Board may obtain  criminal  history
  140-7   records of school directors or instructional faculty from any law
  140-8   enforcement agency, including the United States Department of
  140-9   Justice, the Department of Public Safety of the State of Texas, the
 140-10   Texas Department of Criminal Justice, or the police department of a
 140-11   municipality.  The administrator may deny, revoke, or disapprove
 140-12   the application for, or existing license, registration, or approval
 140-13   of a person who has been convicted of, entered a plea of nolo
 140-14   contendere, or guilty to, or received deferred adjudication for, a
 140-15   felony or misdemeanor offense for which a refusal may be issued
 140-16   under Article 6252-13c, Vernon's Texas Civil Statutes.
 140-17         (n)  A barber school or college shall post on the premises of
 140-18   the school at a prominent and conspicuous location the name,
 140-19   mailing address, and telephone number of the Board for the purpose
 140-20   of directing complaints to the Board.
 140-21         (o) <(n)>  No such school or college shall be operated and no
 140-22   students shall be solicited or enrolled by it until the Board shall
 140-23   determine by inspection that the school has been set up and
 140-24   established in accordance with this Section and Section 9A of this
 140-25   Act and the proposal submitted to the Board and approved by it
 140-26   prior to the issuance of a permit.  A barber school or college that
 140-27   is not approved by the Board on initial inspection is subject to
  141-1   reinspection by the Board.  For each reinspection, the Board shall
  141-2   charge a reinspection fee set by the Board <in an amount not to
  141-3   exceed $500>.
  141-4         (p) <(o)>  Any such school or college must obtain renewal of
  141-5   its permit by September 1st each year by the payment of an annual
  141-6   renewal fee in an amount established by the Board <not to exceed
  141-7   $300>.
  141-8         (q) <(p)>  If a barber school or college changes ownership,
  141-9   the Board shall be notified of the transfer not later than the 10th
 141-10   day before the date on which the change becomes effective.
 141-11         (r) <(q)>  Any school or college desiring to change the
 141-12   location of such school or college must first obtain approval by
 141-13   the Board by showing that the proposed location meets the
 141-14   requirements of this Section.
 141-15         (s) <(r)>  If said Board refuses to issue a permit to any
 141-16   such school or college, such school or college may by written
 141-17   request demand the reasons for said refusal and if said school or
 141-18   college shall thereupon meet said requirements and makes a showing
 141-19   that the requirements of this law have been complied with, then if
 141-20   said Board refuses to issue said permit, a suit may be instituted
 141-21   by such school or college in any of the District Courts of Travis
 141-22   County, Texas, to require said Board to issue such permit.  Any
 141-23   such suit must be filed within twenty (20) days after the final
 141-24   order of said Board refusing to issue such permit is entered,
 141-25   provided registered notice is mailed or it is otherwise shown that
 141-26   said school or college has notice within ten (10) days from the
 141-27   entering or making of said order.
  142-1         (t) <(s)>  In the event such school or college after a permit
  142-2   is issued to it violates any of the requirements of this law,
  142-3   either directly or indirectly, then said Board shall suspend or
  142-4   revoke the permit of any such school or college.  Before suspending
  142-5   or revoking any such permit, said Board must give such school or
  142-6   college a hearing, notice of which hearing shall be delivered to
  142-7   such school or college at least twenty (20) days prior to the date
  142-8   of said hearing.  If said Board suspends or revokes said permit at
  142-9   said hearing, then such school or college may file suit to prevent
 142-10   the same or to appeal from said order.  Any and all suits filed
 142-11   hereunder shall be filed within twenty (20) days from the date of
 142-12   the order of said Board in any of the District Courts of Travis
 142-13   County, Texas, and not elsewhere, and the order shall not become
 142-14   effective until said twenty (20) days has expired.
 142-15         (u) <(t)>  The Attorney General may institute any injunction
 142-16   proceedings or such other proceeding as to enforce the provisions
 142-17   of this Act, and to enjoin any barber or school or college from
 142-18   operating without having complied with the provisions hereof, and
 142-19   each shall forfeit to the State of Texas the sum of Twenty-five
 142-20   Dollars ($25) per day as a penalty for each day's violation, to be
 142-21   recovered in a suit by the Attorney General.  An action for an
 142-22   injunction under this section must be brought in Travis County.
 142-23         (v) <(u)  A holder of a barber school or college permit shall
 142-24   furnish each prospective student with:>
 142-25               <(1)  a copy of the course outline;>
 142-26               <(2)  a schedule of the tuition and other fees
 142-27   assessed;>
  143-1               <(3)  the refund policy imposed under Section 9A of
  143-2   this Act;>
  143-3               <(4)  regulations relating to absences;>
  143-4               <(5)  the grading policy;>
  143-5               <(6)  the rules of operation and conduct;>
  143-6               <(7)  regulations relating to incomplete grades;>
  143-7               <(8)  the name, mailing address, and telephone number
  143-8   of the board for the purpose of directing complaints to the board;
  143-9   and>
 143-10               <(9)  the current rates of job placement and employment
 143-11   of students who complete a course of training.>
 143-12         <(v)  A holder of a barber school or college permit shall
 143-13   publish in its catalogue and enrollment contract a description of
 143-14   the refund policy required under Section 9A of this Act.>
 143-15         <(w)  If the board has reasonable cause to believe that a
 143-16   barber school or college has violated this Act or a rule adopted
 143-17   under this Act, the board may order a peer review of the school or
 143-18   college or suspend the admission of students to the school or
 143-19   college.  A peer review ordered under this subsection shall be
 143-20   conducted by a peer review team composed of knowledgeable persons
 143-21   selected by the board.  The board shall attempt to provide a
 143-22   balance on each team between members assigned to the team who are
 143-23   from this state and those who are from other states.  The team
 143-24   shall provide the board with an objective assessment of the content
 143-25   of the curriculum and its application.  The school or college under
 143-26   review shall pay the costs of the peer review.>
 143-27         <(x)>  A barber school or college must submit to the board
  144-1   for approval the course lengths and curriculum content for each
  144-2   course offered by the school or college.  The course lengths and
  144-3   content may not be implemented unless the board approves them.  The
  144-4   course lengths and content shall reasonably ensure that students
  144-5   develop the job skills and knowledge necessary for employment.  The
  144-6   board shall require a school or college to account fully for all
  144-7   curriculum contents and course lengths before issuing or renewing a
  144-8   permit, and a school or college that is manipulating course lengths
  144-9   below or above industry standards shall be placed on probation
 144-10   until justification for the deviation is proved or the practice
 144-11   ceases.
 144-12         (w) <(y)>  A barber school or college that violates this Act
 144-13   or a rule adopted under this Act is liable for a civil penalty in
 144-14   addition to any injunctive relief or other remedy provided by law.
 144-15   The civil penalty may not exceed $1,000 a day for each violation.
 144-16   The Attorney General, at the request of the board, may bring a
 144-17   civil action to collect a civil penalty under this subsection.
 144-18   Civil penalties recovered in a suit brought under this subsection
 144-19   shall be deposited in the state treasury to the credit of the
 144-20   General Revenue Fund.
 144-21         (x)  The board may deny, suspend, or revoke a barber school
 144-22   or college permit or place the holder of the permit on probation if
 144-23   the permit holder, the school, or a representative of the school
 144-24   gives a prospective student information relating to the school that
 144-25   is false, fraudulent, deceptive, substantially inaccurate, or
 144-26   misleading.
 144-27         SECTION 4.04.  Section 9A, Chapter 65, Acts of the 41st
  145-1   Legislature, 1st Called Session, 1929 (Article 8407a, Vernon's
  145-2   Texas Civil Statutes), is amended by amending Subsections (b)-(g)
  145-3   and adding Subsections (h)-(j) to read as follows:
  145-4         (b)  Each holder of a barber school or college permit must
  145-5   maintain a refund policy for the refund of the unused part of
  145-6   tuition, fees, and other charges assessed a student if the student,
  145-7   at the expiration of the cancellation period established under
  145-8   Subsection (a) of this section, terminates enrollment or is
  145-9   terminated by the school or college, as provided by this subsection
 145-10   <fails to enter the course of training, withdraws from the course
 145-11   of training, or is terminated from the course of training before
 145-12   completion of the course>.  The refund policy must provide that:
 145-13               (1)  a refund is based on the period of the student's
 145-14   enrollment, computed on the basis of course time expressed in clock
 145-15   hours;
 145-16               (2)  the effective date of the termination for payment
 145-17   of a refund <refund purposes> is the earliest of:
 145-18                     (A)  the last date of attendance, if the student
 145-19   is terminated for failure to satisfy an attendance, grade, or work
 145-20   requirement <by the school or college>;
 145-21                     (B)  the date of receipt by the permit holder of
 145-22   written notice of withdrawal by the student; <or>
 145-23                     (C)  the 10th consecutive <10> school day the
 145-24   student has been absent, unless any of the absences are excused by
 145-25   the school or college <days after the last date of attendance>; or
 145-26                     (D)  the date the student fails to return, as
 145-27   scheduled, from a leave of absence; and
  146-1               (3)  if tuition is collected before beginning the
  146-2   course of training and if, after the expiration of the cancellation
  146-3   period, the student does not begin the course of training, the
  146-4   school or college may retain not more than $100.
  146-5         (c)  If a student who begins a course of training that is
  146-6   scheduled to run not more than 12 months withdraws from the course
  146-7   or is terminated from the course by the school or college, the
  146-8   barber school or college may retain $100 in tuition and fees paid
  146-9   by that student and is not obligated to refund any additional
 146-10   outstanding tuition if the student withdraws or is terminated
 146-11   during the last quarter <50 percent> of the course.  If the student
 146-12   withdraws or is terminated before the last quarter <50 percent> of
 146-13   the course begins, the school or college shall refund the following
 146-14   percentages of any outstanding tuition:
 146-15               (1)  for withdrawal or termination occurring during the
 146-16   first week or first one-tenth of the course, whichever is less, 90
 146-17   percent;
 146-18               (2)  for withdrawal or termination occurring after the
 146-19   first week or first one-tenth of the course, whichever is less, but
 146-20   within the first three weeks of the course, 80 percent;
 146-21               (3)  for withdrawal or termination occurring after the
 146-22   first three weeks of the course but not later than the last date of
 146-23   the first 25 percent of the course, 75 percent; <and>
 146-24               (4)  for withdrawal or termination occurring during
 146-25   <not later than the completion of> the second 25 percent of the
 146-26   course, 50 percent;
 146-27               (5)  for withdrawal or termination occurring during the
  147-1   third 25 percent of the course, 10 percent; and
  147-2               (6)  for withdrawal or termination occurring after 50
  147-3   percent of the course has been completed, the school must allow the
  147-4   student to reenter at any time during the 48-month period following
  147-5   the date of withdrawal or termination at no additional charge,
  147-6   provided the full agreed-on tuition has been tendered.
  147-7         (d)  <For students withdrawing or terminating after 50
  147-8   percent of the course has been completed, the school must allow
  147-9   that student to reenter at any time during the 48-month period
 147-10   following the date of withdrawal or termination.>
 147-11         <(e)>  A refund owed under this section must be paid not
 147-12   later than the 60th <30th> day after the date on which the student
 147-13   becomes eligible for the refund, as determined under Subsection (b)
 147-14   of this section.
 147-15         (e) <(f)>  If a refund is not made within the period required
 147-16   by this section, the school or college shall pay, as a penalty,
 147-17   interest on the refund for the interval beginning with the first
 147-18   day following the expiration of the refund period and ending with
 147-19   the day immediately preceding the date the refund is made.  If the
 147-20   refund is made to a lending institution, the interest shall also be
 147-21   paid to that institution and applied against the student's loan.
 147-22   The board <commissioner of education> annually shall establish the
 147-23   level of interest at a level sufficient to provide a deterrent to
 147-24   the retention of student funds.  The board may exempt a school or
 147-25   college from the payment of the interest if the school or college
 147-26   makes a good faith effort to refund the tuition but is unable to
 147-27   locate the student.  The school or college shall provide to the
  148-1   agency on request documentation of the effort to locate the
  148-2   student.
  148-3         (f) <(g)>  A barber school or college shall record a grade of
  148-4   "incomplete" for a student who withdraws but is not entitled to a
  148-5   refund under Subsection (c) of this section if the student requests
  148-6   the grade at the time the student withdraws and the student
  148-7   withdraws for an appropriate reason unrelated to the student's
  148-8   academic status.  A student who receives a grade of incomplete may
  148-9   reenroll in the program during the 12-month <48-month> period
 148-10   following the date the student withdraws and may complete those
 148-11   incomplete subjects without payment of additional tuition.
 148-12         (g)  If a course of instruction is discontinued by the school
 148-13   and this prevents the student from completing the course, all
 148-14   tuition and fees paid are due and refundable.
 148-15         (h)  Refunds under this section shall be applied:
 148-16               (1)  first, to the repayment of federal student loans,
 148-17   awards, and other Title IV student assistance, as prescribed by the
 148-18   Student Consumer Requirements in the U.S. Department of Education
 148-19   Higher Education Amendments of 1992;
 148-20               (2)  second, to the repayment of other government
 148-21   loans;
 148-22               (3)  third, to the repayment of other financial loans;
 148-23   and
 148-24               (4)  last, to the student's personal tuitional
 148-25   expenditures.
 148-26         (i)  Not later than the 30th day after the date on which a
 148-27   refund is due to a student who has received a student loan, the
  149-1   school or college shall notify the guaranty agency and the lender
  149-2   of the required refund and any refund previously made.  The
  149-3   guaranty agency and the lender shall notify the student and the
  149-4   school or college if the student's loan has been transferred to
  149-5   another holder.
  149-6         (j)  The failure of a school or college or a person to pay a
  149-7   tuition refund as required by this section is a deceptive trade
  149-8   practice under Subchapter E, Chapter 17, Business & Commerce Code.
  149-9         SECTION 4.05.  Chapter 65, Acts of the 41st Legislature, 1st
 149-10   Called Session, 1929 (Article 8407a, Vernon's Texas Civil
 149-11   Statutes), is amended by adding Sections 9B-9S to read as follows:
 149-12         Sec. 9B.  Before the board may approve the application of a
 149-13   person for a barber school or college permit, the board must find,
 149-14   on investigation at the premises of the school, that the school
 149-15   meets the following criteria:
 149-16               (1)  the courses, curriculum, and instruction are of a
 149-17   quality, content, and length as may reasonably and adequately
 149-18   achieve the stated objective for which the courses, curriculum, or
 149-19   instruction are offered;
 149-20               (2)  there is in the school adequate space, equipment,
 149-21   instructional material, and instructor personnel to provide
 149-22   training of good quality;
 149-23               (3)  educational and experience qualifications of
 149-24   directors, administrators, and instructors are adequate;
 149-25               (4)  the school maintains a written record of the
 149-26   previous education and training of the applicant student and
 149-27   clearly indicates that appropriate credit has been given by the
  150-1   school for previous education and training, with the new training
  150-2   period shortened where warranted through use of appropriate skills
  150-3   or achievement tests and the student notified;
  150-4               (5)  a copy of the course outline; schedule of tuition,
  150-5   fees, refund policy, and other charges; regulations pertaining to
  150-6   absence, grading policy, and rules of operation and conduct;
  150-7   regulations pertaining to incomplete grades; the name, mailing
  150-8   address, and telephone number of the board for the purpose of
  150-9   directing complaints to the agency; the current rates of job
 150-10   placement and employment of students issued a certificate of
 150-11   completion; and notification of the availability of the cost
 150-12   comparison information prepared under Section 9H of this Act will
 150-13   be furnished to the student in the school catalog or comparable
 150-14   written documents before enrollment;
 150-15               (6)  on completion of training, the student is given a
 150-16   certificate by the school indicating the course and that training
 150-17   was satisfactorily completed;
 150-18               (7)  adequate records as required by the board are kept
 150-19   to show attendance and progress or grades, and satisfactory
 150-20   standards relating to attendance, progress, and conduct are
 150-21   enforced;
 150-22               (8)  the school complies with all local, city, county,
 150-23   municipal, state, and federal regulations; the board may require
 150-24   evidence of compliance as is necessary;
 150-25               (9)  the school is financially sound and capable of
 150-26   fulfilling its commitments for training;
 150-27               (10)  the school's administrators, directors, owners,
  151-1   and instructors are of good reputation and character;
  151-2               (11)  the school has, maintains, and publishes in its
  151-3   catalog and enrollment contract the proper policy for the refund of
  151-4   the unused portion of tuition, fees, and other charges in the event
  151-5   the student enrolled by the school fails to take the course or
  151-6   withdraws or is discontinued from the course at any time before
  151-7   completion;
  151-8               (12)  the school does not use erroneous or misleading
  151-9   advertising, either by actual statement, omission, or intimation as
 151-10   determined by the board;
 151-11               (13)  additional criteria as may be required by the
 151-12   commission;
 151-13               (14)  the school does not use a name like or similar to
 151-14   an existing tax-supported school in the same area;
 151-15               (15)  the school furnishes to the board the current
 151-16   rates of students who receive a certificate of completion and of
 151-17   job placement and employment of students issued a certificate of
 151-18   completion;
 151-19               (16)  the school furnishes to the board for approval or
 151-20   disapproval student admission requirements for each course or
 151-21   program offered by the school;
 151-22               (17)  the school furnishes to the board for approval or
 151-23   disapproval the course lengths and curriculum content for each
 151-24   course offered by the school; and
 151-25               (18)  the school does not owe a civil penalty under
 151-26   Section 9 of this Act.
 151-27         Sec. 9C.  (a)  A barber school or college must submit to the
  152-1   board for approval, on an annual basis, a school catalog or
  152-2   comparable written documents detailing the consumer information
  152-3   that must be given to a prospective student before enrollment.  The
  152-4   school catalog or documents must include:
  152-5               (1)  the name and address of the school and the
  152-6   school's governing body and officials;
  152-7               (2)  a calendar of the school year;
  152-8               (3)  school policies on enrollment;
  152-9               (4)  rules relating to absences;
 152-10               (5)  the school grading policy;
 152-11               (6)  the school's hours of operation and rules of
 152-12   conduct;
 152-13               (7)  a schedule of the tuition and other fees assessed;
 152-14               (8)  the school's cancellation and refund policy;
 152-15               (9)  a general description of the course or courses
 152-16   offered;
 152-17               (10)  information on entrance testing and remedial
 152-18   development plans;
 152-19               (11)  state licensing requirements for courses intended
 152-20   to result in licensing of the student;
 152-21               (12)  starting range and average reported salaries for
 152-22   the prior year's graduates in occupations for which courses are
 152-23   offered, if the information is available;
 152-24               (13)  the current rates of job placement and employment
 152-25   of students who complete a course of training;
 152-26               (14)  the school policy on credit for previous
 152-27   education and training;
  153-1               (15)  school regulations relating to incomplete grades;
  153-2               (16)  information on the transferability of credits
  153-3   earned;
  153-4               (17)  the name, mailing address, and telephone number
  153-5   of the board for the purpose of directing complaints to the board
  153-6   and the mechanism and procedures for resolving grievances submitted
  153-7   to the board;
  153-8               (18)  a statement that the board has information on
  153-9   cost comparison with similar schools;
 153-10               (19)  market and job availability information, if
 153-11   available;
 153-12               (20)  the names of the members of any advisory council
 153-13   of the school and the company for which they work; and
 153-14               (21)  other information required by the executive
 153-15   director or board if reasonable notice has been given by the board
 153-16   to the school of the additional requirements.
 153-17         (b)  A barber school or college may not accept a signed
 153-18   student enrollment contract or accept a student into any school
 153-19   program until at least 24 hours after the student has received the
 153-20   catalog or comparable written documents required under this
 153-21   section.
 153-22         (c)  A student must sign a receipt stating that:
 153-23               (1)  the catalog was received by the student before any
 153-24   commitment made by the student to the school or by the school to
 153-25   the student;
 153-26               (2)  the student was given an opportunity to discuss
 153-27   the catalog with a representative of the school; and
  154-1               (3)  the student understands the contents and
  154-2   implications of the catalog.
  154-3         (d)  The receipt required by Subsection (c) of this section
  154-4   must be placed in the student's permanent school file and a copy of
  154-5   the receipt must be delivered to the student.
  154-6         Sec. 9D.  (a)  A barber school or college must submit to the
  154-7   board for approval the course lengths and curriculum content for
  154-8   each course offered by the school or college.  The course lengths
  154-9   and content may not be implemented unless the board approves them.
 154-10   The course lengths and content shall reasonably ensure that
 154-11   students develop the job skills and knowledge necessary for
 154-12   employment.
 154-13         (b)  The board shall require a school or college to fully
 154-14   account for all curriculum contents and course lengths before
 154-15   issuing or renewing a permit and a school or college that is
 154-16   offering course lengths below or above industry standards may be
 154-17   issued a conditional permit to operate.
 154-18         Sec. 9E.  (a)  The board shall set and enforce minimum
 154-19   standards for completion and employment rates of courses, based on
 154-20   collected data.
 154-21         (b)  In determining whether to renew a barber school or
 154-22   college permit, the board shall consider the completion, placement,
 154-23   and employment rates of students of the courses.
 154-24         (c)  Before a school or college may begin offering a new
 154-25   course of study for students the school or college must show the
 154-26   board the opportunity for jobs for graduates of the course and the
 154-27   possibility of placement or employment.
  155-1         (d)  Before the board issues or renews a barber school or
  155-2   college permit involving a school or college that offers or
  155-3   advertises a placement service, the board may require the school or
  155-4   college to file a true and accurate copy of the school's or
  155-5   college's placement records for the previous year.
  155-6         Sec. 9F.  (a)  The board shall conduct on-site inspections of
  155-7   a barber school or college to determine the normal operating
  155-8   conditions of the school or college.
  155-9         (b)  The inspection required by Subsection (a) of this
 155-10   section shall be unannounced.
 155-11         (c)  The executive director or a designee of the executive
 155-12   director may inspect such things as the instructional books and
 155-13   records, classrooms, dormitories, tools, equipment, and classes of
 155-14   a barber school or college or an applicant for a permit for a
 155-15   school or college at any reasonable time.
 155-16         Sec. 9G.  (a)  At the beginning of each fiscal year the board
 155-17   shall collect a fee from the school or college for deposit in a
 155-18   special account in the general revenue fund of the state treasury
 155-19   called the barber school or college account and to be administered
 155-20   by the board.
 155-21         (b)  The amount of the fee is determined by applying a
 155-22   percentage established by the board, based on the recommendation of
 155-23   the school accounts advisory board, to each school's or college's
 155-24   annual gross tuition, with consideration given to the school's
 155-25   size, expense of regulation, potential for teachouts, tuition and
 155-26   fees refund and recovery exposure, and loan default rates and any
 155-27   other relevant factors.  The account shall be used for:
  156-1               (1)  the administration of this Act;
  156-2               (2)  the cost of teachouts as provided by this Act;
  156-3               (3)  the cost of tuition and fees recovery and the cost
  156-4   of student refunds that a school has not made; and
  156-5               (4)  the cost of storing student records that have
  156-6   become property of the state under this Act.
  156-7         (c)  The board may grant an exemption from payment into the
  156-8   account to a small school, as determined by the board, or to a
  156-9   school that does not use guaranteed student loans for tuition
 156-10   revenue.  A school exempt as provided for by this subsection must
 156-11   pay the necessary fees for regulation, as determined by the board,
 156-12   and provide a bond, certificate of deposit, or comparable security,
 156-13   as determined and approved by the board, that is sufficient to
 156-14   cover the cost of the school's or college's record storage costs,
 156-15   teachout, and tuition and fees refund and recovery exposure based
 156-16   on the evidence the school or college submits proving its projected
 156-17   maximum total unearned tuition during the period of the permit to
 156-18   operate.
 156-19         (d)  The security shall be provided by the school or college
 156-20   for the period during which the permit is issued, and the
 156-21   obligation of the bond or other security must be that neither this
 156-22   Act nor any rule adopted under this Act is violated by the school
 156-23   or college or any of its officers, agents, or employees.
 156-24         (e)  The bond, certificate of deposit, or comparable security
 156-25   must be issued by a company authorized to do business in the state,
 156-26   conditioned that the parties to the transaction shall pay all
 156-27   damages or expenses that the state or any governmental subdivision
  157-1   or any student or potential student sustains resulting from a
  157-2   violation.  The bond, certificate of deposit, or comparable
  157-3   security shall be to the state to be used only for payment for the
  157-4   school's or college's teachout and tuition and fees refund due to a
  157-5   student or potential student.  The security shall be filed with the
  157-6   board and must be in a form approved by the board.
  157-7         (f)  Schools domiciled, or having their principal place of
  157-8   business, outside the state, that engage representatives to
  157-9   canvass, solicit, or contract with any person in the state are
 157-10   subject to the fee and security requirements of Subsection (c) of
 157-11   this section.
 157-12         (g)  The board shall refer all expenses incurred by the
 157-13   school or college account in administering Subsections (b)(2) and
 157-14   (3) of this section to the attorney general's office for
 157-15   collection.  The amounts collected shall be deposited to the
 157-16   account.  Attorney's fees and court costs will be appropriated to
 157-17   the attorney general's office.
 157-18         (h)  Interest the account earns shall be reinvested in the
 157-19   account.  The state treasurer shall invest the account in the same
 157-20   manner as other state funds.  Sufficient funds from the account
 157-21   shall be appropriated to the board for the purpose outlined in this
 157-22   section.  The board shall administer claims made against the
 157-23   account.
 157-24         (i)  If a school or college closes, the board shall attempt
 157-25   to arrange for students of the closed school or college to attend
 157-26   another barber school or college.  The board shall adopt rules
 157-27   specifying the circumstances under which a school is considered
  158-1   closed.
  158-2         (j)  The expense incurred by a barber school or college in
  158-3   providing training that is directly related to educating a student
  158-4   who was enrolled in a closed school or college and placed in the
  158-5   school or college under this section, including the applicable
  158-6   tuition for the period of time for which the student has paid
  158-7   tuition, shall be paid in accordance with rules of the board.
  158-8         (k)  The board shall make reasonable attempts to ensure that
  158-9   schools under the board's jurisdiction, including closed schools,
 158-10   fulfill the refund obligation as provided by Section 9A of this
 158-11   Act.  If a school refuses to fulfill the school's obligation or the
 158-12   school's bond is insufficient to pay the cost of the teachout and
 158-13   refund expenses, the teachout or the refund may be paid from the
 158-14   barber school or college account except that no school owned,
 158-15   either in whole or in part, by a person or corporate entity who was
 158-16   an owner, in whole or in part, of a previously closed school shall
 158-17   be permitted to receive compensation for a teachout under this
 158-18   section.
 158-19         (l)  If a student cannot be placed in another school or
 158-20   college, the student's tuition and fees shall be refunded under
 158-21   Section 9A(g) of this Act.
 158-22         (m)  If a student does not accept a place that is available
 158-23   and reasonable in another school or college, the student's tuition
 158-24   and fees shall be refunded under the refund policy maintained by
 158-25   the closing school under Sections 9A(b) and (c) of this Act.
 158-26         (n)  Attorney's fees, court costs, or damages may not be paid
 158-27   from the barber school or college account.
  159-1         (o)  The board by rule shall establish and assess reasonable
  159-2   and necessary fees to all persons and entities licensed under this
  159-3   Act to be used for the regulation of those persons and entities
  159-4   licensed under this Act and to supplement the administration and
  159-5   purposes outlined by this Act.
  159-6         (p)  The board may permit payment of any fee authorized under
  159-7   this section that exceeds $1,000 to be paid by installment.  The
  159-8   board shall provide for appropriate interest charges and late
  159-9   penalties in addition to any other remedy that is provided for by
 159-10   law for the late payment of a fee installment authorized under this
 159-11   section.  The board may assess a reasonable service charge to be
 159-12   paid by a school that pays a fee by installment in an amount not to
 159-13   exceed an annual rate of 10 percent of the fee that is to be paid
 159-14   by installment.
 159-15         Sec. 9H.  (a)  The board shall prepare a comparison of the
 159-16   cost to a student of courses of instruction or training programs at
 159-17   all barber schools or colleges maintained by persons who hold
 159-18   barber school or college permits issued by the board.
 159-19         (b)  The cost comparison must include for each school or
 159-20   college a description of:
 159-21               (1)  average class size;
 159-22               (2)  facilities and equipment;
 159-23               (3)  employment and placement rates;
 159-24               (4)  length of program; and
 159-25               (5)  faculty qualifications.
 159-26         Sec. 9I.  (a)  A barber school or college must disclose to
 159-27   all prospective students state licensing requirements to practice
  160-1   the occupation for which the student is training.
  160-2         (b)  A school or college must disclose to all prospective
  160-3   students the performance of graduates from the school or college on
  160-4   the licensing examination of the board if that information is
  160-5   available.
  160-6         Sec. 9J.  (a)  The board shall approve entrance requirements,
  160-7   including minimum skills testing, for students who may be accepted
  160-8   for a course of study in a barber school or college.  The
  160-9   requirements must be specific and provide that students who are
 160-10   allowed to enter a course will have a reasonable chance of
 160-11   completing the program.
 160-12         (b)  The school or college shall administer a standardized
 160-13   test to students entering the school, if testing for minimum skill
 160-14   competency is determined by the board as appropriate and necessary
 160-15   to determine if remediation is needed.  The test must be
 160-16   administered before enrollment and must be nationally recognized as
 160-17   appropriate and effective for minimum skills testing.  If the test
 160-18   reveals the necessity for remediation, the school or college must
 160-19   implement a plan to encourage the student to improve in basic
 160-20   general education skills.
 160-21         (c)  A student must achieve a successful score on the test
 160-22   required by this section before the student is obligated for
 160-23   tuition and fees for the vocational portion of the school's
 160-24   program.
 160-25         (d)  The school or college may, in accordance with federal
 160-26   statutory provisions affecting guaranteed student loan programs, on
 160-27   a case-by-case basis, refuse to provide the certification
  161-1   statements required for guaranteed student loan eligibility, or
  161-2   reduce the determination of need for a guaranteed student loan if
  161-3   the school or college determines that the student's expenses to be
  161-4   covered by the loan and the estimated cost of attendance, can be
  161-5   met more appropriately by the school or college, directly by the
  161-6   student, or by other sources.
  161-7         Sec. 9K.  (a)  An applicant without a high school diploma or
  161-8   high school equivalency certificate must pass an entrance test
  161-9   approved by the board and be considered to have the ability to
 161-10   benefit from the school or college before the school or college may
 161-11   enroll the student.
 161-12         (b)  A school or college that admits a student who does not
 161-13   have a high school diploma or high school equivalency certificate
 161-14   must develop and implement a plan for counseling the student on
 161-15   curriculum, student aid, employment opportunities, and the
 161-16   remediation necessary for the student to obtain a high school
 161-17   equivalency certificate and improve in basic general education
 161-18   skills.
 161-19         (c)  The school or college must assist the student in
 161-20   obtaining the remediation necessary for the student to pass a
 161-21   standardized minimum skills test, approved by the board, and the
 161-22   student must pass the test before entering the final quarter of the
 161-23   course.
 161-24         Sec. 9L.  (a)  The enrollment contract of a barber school or
 161-25   college must contain:
 161-26               (1)  a disclosure that the contract is a legally
 161-27   binding instrument on written acceptance of the student by the
  162-1   school or college, unless canceled as provided by law;
  162-2               (2)  the school's or college's cancellation and refund
  162-3   policy;
  162-4               (3)  the method of cancellation of the contract, the
  162-5   effective date of any cancellation, and the name and address to
  162-6   which the notice of cancellation should be sent or delivered;
  162-7               (4)  the total cost of the course including tuition and
  162-8   all other charges;
  162-9               (5)  a notification that the fair market value of
 162-10   equipment or supplies furnished to the student that the student
 162-11   fails to return in a condition suitable for resale not later than
 162-12   the 10th business day after the date of cancellation may be
 162-13   retained by the school or college and deducted from any refund of
 162-14   the student;
 162-15               (6)  a statement that if a student's enrollment is
 162-16   canceled for any reason, the school or college will notify an
 162-17   agency known to the school or college to be providing financial aid
 162-18   to the student of the cancellation not later than the 30th day
 162-19   after the date of cancellation;
 162-20               (7)  the name and description of the courses, including
 162-21   the number of hours of classroom instruction or home study lessons.
 162-22         (b)  An enrollment contract may not contain a wage assignment
 162-23   provision or a confession of judgment clause.
 162-24         (c)  Immediately after a prospective student has signed an
 162-25   enrollment contract, the school or college shall give the
 162-26   prospective student a copy of the contract, and a copy shall be
 162-27   placed in the student's permanent school or college file.
  163-1         Sec. 9M.  (a)  A school or college shall conduct loan
  163-2   counseling entrance interviews with each prospective student
  163-3   seeking a loan during the enrollment process.  A student borrower
  163-4   shall be counseled before the initial disbursement of loan
  163-5   proceeds, shortly before the student completes one-half of the
  163-6   course, and before the student is issued a certificate of
  163-7   completion.
  163-8         (b)  The school's or college's financial aid officer or
  163-9   counselor shall conduct the interviews required by Subsection (a)
 163-10   of this section.  The interview must include a discussion of:
 163-11               (1)  the rights and responsibilities of the student as
 163-12   a borrower;
 163-13               (2)  what a loan is and the importance of repayment;
 163-14               (3)  the total cost of the program in which the student
 163-15   will be enrolled;
 163-16               (4)  the availability of other forms of financial aid,
 163-17   grants, and part-time work;
 163-18               (5)  the starting range and average reported salaries
 163-19   of those in the occupation for which the student will be trained,
 163-20   if available; and
 163-21               (6)  job placement services provided by the school or
 163-22   college and the employment rate of persons who attended the school
 163-23   or college and were enrolled in the program in which the student is
 163-24   enrolled.
 163-25         (c)  A school approved to accept state or federal educational
 163-26   loans or grants shall adopt, in addition to the provisions in this
 163-27   section, measures to reduce defaults and improve borrowers
  164-1   understanding and respect for the loan repayment obligation as
  164-2   provided in 34 C.F.R., Parts 668 and 682.
  164-3         (d)  The school or college must give a copy of the Texas
  164-4   Guaranteed Student Loan Corporation's "Your Future" guide, or a
  164-5   comparable document approved by the board, to a prospective student
  164-6   at a time and in a manner that provides the student with sufficient
  164-7   opportunity to read the guide or other document and discuss the
  164-8   contents with the school's financial aid officer, if necessary for
  164-9   understanding and clarity, before signing an enrollment contract
 164-10   and before the school accepts the student in a course of study.
 164-11         (e)  The prospective student must sign a document stating
 164-12   that the student:
 164-13               (1)  attended a loan counseling entrance interview; and
 164-14               (2)  received a copy of the "Your Future" guide or
 164-15   comparable document in the time provided by Subsection (d) of this
 164-16   section.
 164-17         (f)  A copy of the signed document required by Subsection (e)
 164-18   of this section must be sent to the student, guarantor, and lender
 164-19   and must be placed in the student's permanent school or college
 164-20   file.
 164-21         Sec. 9N.  (a)  A barber school or college shall maintain
 164-22   permanent records for all students enrolled, as required by the
 164-23   board.
 164-24         (b)  A school or college shall adopt a plan to preserve
 164-25   permanent records and submit the plan to the board for approval.
 164-26   The plan must:
 164-27               (1)  provide that at least one copy of the records will
  165-1   be held in a secure depository; and
  165-2               (2)  designate an appropriate official to provide a
  165-3   student with copies of records or transcripts on request.
  165-4         (c)  The school or college shall make the first copy of
  165-5   records or transcripts at no charge to the student.  The school or
  165-6   college may make a reasonable charge to provide additional copies
  165-7   of records, transcripts, or other student information.
  165-8         (d)  If a school or college closes, the records become the
  165-9   property of the state.
 165-10         Sec. 9O.  (a)  The board may not adopt rules that restrict
 165-11   advertising by a barber school or college except to prohibit false,
 165-12   misleading, or deceptive advertising practices.  The rules may not
 165-13   restrict:
 165-14               (1)  the use of an advertising medium;
 165-15               (2)  the size or duration of an advertisement; or
 165-16               (3)  advertisement under a trade name.
 165-17         (b)  A school or college, the representative of a school or
 165-18   college, or a recruiter for the school or college may not advertise
 165-19   or represent, in writing or orally, that a school or college is
 165-20   approved or accredited by the state.  Those entities or persons may
 165-21   advertise that the school or college has been granted a permit by
 165-22   the state.
 165-23         (c)  A school or college, representative of a school or
 165-24   college, or recruiter of a school or college may not make or cause
 165-25   to be made a statement or representation, written, oral, or visual,
 165-26   offering or publicizing a course, program, or school or college, if
 165-27   the school or college, representative, or recruiter knew or
  166-1   reasonably should have known that the statement or representation
  166-2   was false, fraudulent, deceptive, substantially inaccurate, or
  166-3   misleading.
  166-4         Sec. 9P.  (a)  A school or college may not reflect unearned
  166-5   tuition as a current asset unless the amount shown in current
  166-6   assets that reflects unearned tuition is offset by an equal amount
  166-7   shown as a current liability.  The school or college must meet one
  166-8   of the following criteria in order to be determined as financially
  166-9   sound and capable of fulfilling its commitments for training:
 166-10               (1)  current assets must bear a relationship to current
 166-11   liabilities in a ratio of at least one-to-one; or
 166-12               (2)  the school or college must have posted, or set
 166-13   aside in a dedicated escrow account, a bond, certificate of
 166-14   deposit, irrevocable letter of credit, or comparable security,
 166-15   acceptable to the board, each made payable to the State of Texas,
 166-16   in an amount sufficient to cover the school's or college's record
 166-17   storage costs, teachout, and tuition and fees refund and recovery
 166-18   exposure based on the evidence the school or college submits
 166-19   proving its projected maximum total unearned tuition during the
 166-20   period of time covered by the evidence of indebtedness to the
 166-21   State.
 166-22         (b)  The school or college must demonstrate to the
 166-23   satisfaction of the board its financial soundness and ability to
 166-24   fulfill its commitments for training.  If requested by the school
 166-25   and administrator, the School Accounts Advisory Board shall
 166-26   investigate the financial soundness of a school that does not meet
 166-27   the requirements of (1) or (2) above in order to determine if the
  167-1   school is capable of fulfilling its obligations under this Act.
  167-2         Sec. 9Q.  PROHIBITIONS.  A person may not:
  167-3               (1)  operate a barber school or college without a
  167-4   permit or assume ownership of an existing barber school or college
  167-5   without obtaining a new permit;
  167-6               (2)  solicit prospective students for a barber school
  167-7   or college without having a permit as required by this Act;
  167-8               (3)  accept contracts or enrollment applications from a
  167-9   representative of a barber school or college who is not registered
 167-10   as required by any board rule requiring registration;
 167-11               (4)  use advertising designed to mislead or deceive
 167-12   prospective barber school or college students;
 167-13               (5)  fail to notify the board of the discontinuance of
 167-14   the operation of any barber school or college not later than the
 167-15   72nd hour after cessation of classes or make available accurate
 167-16   records as required by this Act;
 167-17               (6)  fail to secure and file within 30 days any
 167-18   increased bond required by this Act;
 167-19               (7)  negotiate any promissory instrument received as
 167-20   payment of tuition for a barber school or college or other charge
 167-21   before completion of 75 percent of the course, provided that before
 167-22   that time, the instrument may be transferred by assignment to a
 167-23   purchaser who is subject to any defense available against the
 167-24   barber school or college named as payee;
 167-25               (8)  enroll a student in a barber school or college who
 167-26   fails to satisfy entrance requirements; or
 167-27               (9)  violate any provision of this Act relating to a
  168-1   barber school or college or a rule adopted under this Act relating
  168-2   to a barber school or college.
  168-3         Sec. 9R.  ADMINISTRATIVE PENALTY.  (a)  The board may impose
  168-4   an administrative penalty against a person  who violates Section 9Q
  168-5   of this Act.
  168-6         (b)  The penalty for a violation may be in an amount not to
  168-7   exceed $10,000.
  168-8         (c)  The amount of the penalty shall be based on:
  168-9               (1)  the seriousness of the violation, including the
 168-10   nature, circumstances, extent, and gravity of any prohibited acts;
 168-11               (2)  efforts to correct the violation; and
 168-12               (3)  any other matter that justice may require.
 168-13         (d)  An executive director who determines that a violation
 168-14   has occurred may issue to the board a report that states the facts
 168-15   on which the determination is based and the director's
 168-16   recommendation on the imposition of a penalty, including a
 168-17   recommendation on the amount of the penalty.
 168-18         (e)  Within 14 days after the date the report is issued, the
 168-19   executive director shall give written notice of the report to the
 168-20   person.  The notice may be given by certified mail.  The notice
 168-21   must include a brief summary of the alleged violation and a
 168-22   statement of the amount of the recommended penalty and must inform
 168-23   the person that the person has a right to a hearing on the
 168-24   occurrence of the violation, the amount of the penalty, or both the
 168-25   occurrence of the violation and the amount of the penalty.
 168-26         (f)  Within 20 days after the date the person receives the
 168-27   notice, the person in writing may accept the determination and
  169-1   recommended penalty of the executive director or may make a written
  169-2   request for a hearing on the occurrence of the violation, the
  169-3   amount of the penalty, or both the occurrence of the violation and
  169-4   the amount of the penalty.
  169-5         (g)  If the person accepts the determination and recommended
  169-6   penalty of the executive director, the board by order shall approve
  169-7   the determination and impose the recommended penalty.
  169-8         (h)  If the person requests a hearing or fails to respond
  169-9   timely to the notice, the executive director shall set a hearing
 169-10   and give notice of the hearing to the person.  The hearing shall be
 169-11   held by an administrative law judge of the State Office of
 169-12   Administrative Hearings.  The administrative law judge shall make
 169-13   findings of fact and conclusions of law and promptly issue to the
 169-14   board a proposal for a decision about the occurrence of the
 169-15   violation and the amount of a proposed penalty.  Based on the
 169-16   findings of fact, conclusions of law, and proposal for a decision,
 169-17   the board by order may find that a violation has occurred and
 169-18   impose a penalty or may find that no violation occurred.
 169-19         (i)  The notice of the board's order given to the person
 169-20   under the Administrative Procedure and Texas Register Act (Article
 169-21   6252-13a, Vernon's Texas Civil Statutes) and its subsequent
 169-22   amendments must include a statement of the right of the person to
 169-23   judicial review of the order.
 169-24         (j)  Within 30 days after the date the board's order is final
 169-25   as provided by Section 16(c), Administrative Procedure and Texas
 169-26   Register Act (Article 6252-13a, Vernon's Texas Civil Statutes), and
 169-27   its subsequent amendments, the person shall:
  170-1               (1)  pay the amount of the penalty;
  170-2               (2)  pay the amount of the penalty and file a petition
  170-3   for judicial review contesting the occurrence of the violation, the
  170-4   amount of the penalty, or both the occurrence of the violation and
  170-5   the amount of the penalty; or
  170-6               (3)  without paying the amount of the penalty, file a
  170-7   petition for judicial review contesting the occurrence of the
  170-8   violation, the amount of the penalty, or both the occurrence of the
  170-9   violation and the amount of the penalty.
 170-10         (k)  Within the 30-day period, a person who acts under
 170-11   Subsection (j)(3) of this section may:
 170-12               (1)  stay enforcement of the penalty by:
 170-13                     (A)  paying the amount of the penalty to the
 170-14   court for placement in an escrow account; or
 170-15                     (B)  giving to the court a supersedeas bond that
 170-16   is approved by the court for the amount of the penalty and that is
 170-17   effective until all judicial review of the board's order is final;
 170-18   or
 170-19               (2)  request the court to stay enforcement of the
 170-20   penalty by:
 170-21                     (A)  filing with the court a sworn affidavit of
 170-22   the person stating that the person is financially unable to pay the
 170-23   amount of the penalty and is financially unable to give the
 170-24   supersedeas bond; and
 170-25                     (B)  giving a copy of the affidavit to the
 170-26   executive director by certified mail.
 170-27         (l)  An executive director who receives a copy of an
  171-1   affidavit under Subsection (k)(2) of this section may file with the
  171-2   court, within five days after the date the copy is received, a
  171-3   contest to the affidavit.  The court shall hold a hearing on the
  171-4   facts alleged in the affidavit as soon as practicable and shall
  171-5   stay the enforcement of the penalty on finding that the alleged
  171-6   facts are true.  The person who files an affidavit has the burden
  171-7   of proving that the person is financially unable to pay the amount
  171-8   of the penalty and to give a supersedeas bond.
  171-9         (m)  If the person does not pay the amount of the penalty and
 171-10   the enforcement of the penalty is not stayed, the executive
 171-11   director may refer the matter to the attorney general for
 171-12   collection of the amount of the penalty.
 171-13         (n)  Judicial review of the order of the board:
 171-14               (1)  is instituted by filing a petition as provided by
 171-15   Section 19, Administrative Procedure and Texas Register Act
 171-16   (Article 6252-13a, Vernon's Texas Civil Statutes), and its
 171-17   subsequent amendments; and
 171-18               (2)  is under the substantial evidence rule.
 171-19         (o)  If the court sustains the occurrence of the violation,
 171-20   the court may uphold or reduce the amount of the penalty and order
 171-21   the person to pay the full or reduced amount of the penalty.  If
 171-22   the court does not sustain the occurrence of the violation, the
 171-23   court shall order that no penalty is owed.
 171-24         (p)  When the judgment of the court becomes final, the court
 171-25   shall proceed under this subsection.  If the person paid the amount
 171-26   of the penalty and if that amount is reduced or is not upheld by
 171-27   the court, the court shall order that the appropriate amount plus
  172-1   accrued interest be remitted to the person.  The rate of the
  172-2   interest is the rate charged on loans to depository institutions by
  172-3   the New York Federal Reserve Bank, and the interest shall be paid
  172-4   for the period beginning on the date the penalty was paid and
  172-5   ending on the date the penalty is remitted.  If the person gave a
  172-6   supersedeas bond and if the amount of the penalty is not upheld by
  172-7   the court, the court shall order the release of the bond.  If the
  172-8   person gave a supersedeas bond and if the amount of the penalty is
  172-9   reduced, the court shall order the release of the bond after the
 172-10   person pays the amount.
 172-11         (q)  A penalty collected under this section shall be remitted
 172-12   to the comptroller for deposit in the general revenue fund.
 172-13         (r)  All proceedings under this section are subject to the
 172-14   Administrative Procedure and Texas Register Act (Article 6252-13a,
 172-15   Vernon's Texas Civil Statutes) and its subsequent amendments.
 172-16         Sec. 9S.  (a)  A person commits an offense if the person
 172-17   fails to comply with Section 9 or 9A of this Act.  Except as
 172-18   provided by Subsection (b) of this section, an offense under this
 172-19   section is a Class A misdemeanor.
 172-20         (b)  A person commits an offense if the person intentionally
 172-21   or knowingly uses for personal benefit funds in an amount greater
 172-22   than $10,000 that are due as student refunds under Section 9A of
 172-23   this Act.  An offense under this subsection is a felony of the
 172-24   third degree.
 172-25         SECTION 4.06.  Sections 15(c) and (d), Chapter 65, Acts of
 172-26   the 41st Legislature, 1st Called Session, 1929 (Article 8407a,
 172-27   Vernon's Texas Civil Statutes), are amended to read as follows:
  173-1         (c)  The application shall be made on a form prescribed by
  173-2   the board and an <a $10> administration fee in an amount
  173-3   established by the board must accompany the application.
  173-4         (d)  The applicant is entitled to a manicurist license if
  173-5   such applicant possesses the qualifications enumerated in Section
  173-6   15(b), satisfactorily completes the examination, pays a license fee
  173-7   in an amount established by the board <not to exceed $30>, and has
  173-8   not committed an act which constitutes grounds for denial of a
  173-9   license under this Act.
 173-10         SECTION 4.07.  Sections 15A(b) and (g), Chapter 65, Acts of
 173-11   the 41st Legislature, 1st Called Session, 1929 (Article 8407a,
 173-12   Vernon's Texas Civil Statutes), are amended to read as follows:
 173-13         (b)  An applicant for a manicurist specialty shop permit must
 173-14   submit a written application to the board.  The application must be
 173-15   accompanied by an inspection fee set by the board <in an amount not
 173-16   to exceed $50>.  The application must include the address of the
 173-17   shop, a legal description of the premises for which the permit is
 173-18   sought, and any other information required by the board.  As soon
 173-19   as practicable after receipt of the application and fee, the board
 173-20   shall issue a temporary manicurist specialty shop permit to the
 173-21   applicant.
 173-22         (g)  A permit issued under this section expires July 1 of
 173-23   each odd-numbered year.  A holder may renew the permit by
 173-24   submitting a renewal application to the board, accompanied by a
 173-25   renewal fee set by the board <not to exceed $50>.
 173-26         SECTION 4.08.  Sections 16(c) and (d), Chapter 65, Acts of
 173-27   the 41st Legislature, 1st Called Session, 1929 (Article 8407a,
  174-1   Vernon's Texas Civil Statutes), are amended to read as follows:
  174-2         (c)  The application shall be made on a form prescribed by
  174-3   the board <commission> and an <a $10> administration fee in an
  174-4   amount established by the board must accompany the application.
  174-5         (d)  The applicant is entitled to a wig specialist license if
  174-6   he possesses the qualifications enumerated in Subsection (b) of
  174-7   this section, satisfactorily completes the examination, pays a
  174-8   license fee in an amount established by the board <not to exceed
  174-9   $30>, and has not committed an act which constitutes grounds for
 174-10   revocation of a license under this Act.
 174-11         SECTION 4.09.  Sections 17(c) and (d), Chapter 65, Acts of
 174-12   the 41st Legislature, 1st Called Session, 1929 (Article 8407a,
 174-13   Vernon's Texas Civil Statutes), are amended to read as follows:
 174-14         (c)  The application shall be made on a form prescribed by
 174-15   the board, state the education and experience level of the
 174-16   applicant in all courses or programs that the applicant will teach
 174-17   or instruct, and an <a $5> administration fee in an amount
 174-18   established by the board must accompany the application.
 174-19         (d)  The board shall review an application for competency,
 174-20   consistency, and the overall quality of the applicant.  The
 174-21   applicant is entitled to a wig instructor license if he possesses
 174-22   the qualifications enumerated in Subsection (b) of this section,
 174-23   satisfactorily completes the examination, pays a license fee in an
 174-24   amount established by the board <not to exceed $100>, and has not
 174-25   committed any act constituting grounds for revocation of a license
 174-26   under this Act.
 174-27         SECTION 4.10.  Sections 18(b) and (g), Chapter 65, Acts of
  175-1   the 41st Legislature, 1st Called Session, 1929 (Article 8407a,
  175-2   Vernon's Texas Civil Statutes), are amended to read as follows:
  175-3         (b)  An applicant for a wig specialty shop permit must submit
  175-4   a written application to the board.  The application must be
  175-5   accompanied by an inspection fee set by the board <in an amount not
  175-6   to exceed $50>.  The application must include the address of the
  175-7   shop, a legal description of the premises for which the permit is
  175-8   sought, and any other information required by the board.  As soon
  175-9   as practicable after receipt of the application and fee, the board
 175-10   shall issue a temporary wig specialty shop permit to the applicant.
 175-11         (g)  A permit issued under this section expires July 1 of
 175-12   each odd-numbered year.  A holder may renew the permit by
 175-13   submitting a renewal application to the board, accompanied by a
 175-14   renewal fee set by the board <not to exceed $50>.
 175-15         SECTION 4.11.  Section 18.1(c), Chapter 65, Acts of the 41st
 175-16   Legislature, 1st Called Session, 1929 (Article 8407a, Vernon's
 175-17   Texas Civil Statutes), is amended to read as follows:
 175-18         (c)  The applicant is entitled to a wig school permit if the
 175-19   application shows compliance with the rules and regulations of the
 175-20   board, a <$100> permit fee in an amount established by the board is
 175-21   paid, and applicant has not committed an act which constitutes
 175-22   grounds for revocation of a license or permit under this Act.
 175-23         SECTION 4.12.  Section 19, Chapter 65, Acts of the 41st
 175-24   Legislature, 1st Called Session, 1929 (Article 8407a, Vernon's
 175-25   Texas Civil Statutes), is amended to read as follows:
 175-26         Sec. 19.  DISPLAY OF CERTIFICATE.  (a)  Every holder of a
 175-27   certificate of registration or license issued by the board shall
  176-1   display the original certificate or license, together with an
  176-2   attached photograph of the certificate holder or licensee, in a
  176-3   conspicuous place adjacent to or near the certificate holder's or
  176-4   licensee's work-chair in the shop in which the certificate holder
  176-5   or licensee is working or employed.
  176-6         (b)  The board may not use the word "approval" or a variation
  176-7   of that term on the permit of a barber school or college.  The
  176-8   terminology must be "permit" to operate, or a variation of that
  176-9   phrase.
 176-10         SECTION 4.13.  Sections 20(a), (c), and (d), Chapter 65, Acts
 176-11   of the 41st Legislature, 1st Called Session, 1929 (Article 8407a,
 176-12   Vernon's Texas Civil Statutes), are amended to read as follows:
 176-13         (a)  Each certificate of registration or license issued under
 176-14   this Act expires two years from the date of issuance.  Each
 176-15   registered Class A barber, barber technician, teacher, wig
 176-16   instructor, wig specialist, manicurist, or other licensed
 176-17   specialist who continues in active practice or service must renew
 176-18   the certificate or license on or before the expiration date.  The
 176-19   Board shall issue a renewal certificate or license on receipt of a
 176-20   renewal application in the form prescribed by the Board,
 176-21   accompanied by the renewal fee set by the Board in the amount for
 176-22   an original certificate or license<, but not to exceed $100>.
 176-23         (c)  Any registered barber or licensee whose certificate of
 176-24   registration or license has been expired for not more than five (5)
 176-25   years may reinstate the certificate of registration or license by
 176-26   making proper showing to the Board, supported by his personal
 176-27   affidavit, which, in the opinion of the Board, would justify the
  177-1   Board in issuing a certificate or license to such applicant as upon
  177-2   an original application upon payment of a fee equal to the current
  177-3   amount of the original certificate or license fee, plus a
  177-4   delinquency fee in an amount established by the Board <of $30> for
  177-5   each year or part of a year that the certificate or license has
  177-6   been expired.
  177-7         (d)  Any registered barber or licensee who retires from
  177-8   practice and whose certificate of registration or license has been
  177-9   expired for more than five (5) years may qualify for a new
 177-10   certificate of registration or license by making application to the
 177-11   Board and by making proper showing to the Board, supported by his
 177-12   personal affidavit, and by paying an examination fee in an amount
 177-13   established by the Board <not to exceed $100>, passing a
 177-14   satisfactory examination conducted by the Board, and paying the fee
 177-15   for an original certificate of registration or license.
 177-16         SECTION 4.14.  Section 20a, Chapter 65, Acts of the 41st
 177-17   Legislature, 1st Called Session, 1929 (Article 8407a, Vernon's
 177-18   Texas Civil Statutes), is amended to read as follows:
 177-19         Sec. 20a.  Any registered barber, barber technician, teacher,
 177-20   manicurist, or wig specialist shall not be required to renew his
 177-21   certificate of registration while serving on active duty in the
 177-22   military, air or naval forces of the United States, and the Board
 177-23   shall issue a renewal certificate upon application and payment of a
 177-24   renewal fee within ninety (90) days from the date such registered
 177-25   barber, barber technician, teacher, manicurist, or wig specialist
 177-26   is released or discharged from active duty in the armed forces.
 177-27   The renewal fee shall be in an amount established by the Board and
  178-1   different renewal fees may be established depending on whether<:>
  178-2               <(1)  Ten Dollars ($10) if> the application and payment
  178-3   is made:
  178-4               (1)  during the period from November 1 of an
  178-5   odd-numbered year and extending through October 31 of the following
  178-6   even-numbered year; or
  178-7               (2)  <Five Dollars ($5) if the application and payment
  178-8   is made> during the period from November 1 of an even-numbered year
  178-9   and extending through October 31 of the following odd-numbered
 178-10   year.
 178-11         SECTION 4.15.  Sections 23(b) and (c), Chapter 65, Acts of
 178-12   the 41st Legislature, 1st Called Session, 1929 (Article 8407a,
 178-13   Vernon's Texas Civil Statutes), are amended to read as follows:
 178-14         (b)  The fee <fees> to be paid to the Board by an applicant
 178-15   for an examination to determine his fitness to receive a
 178-16   certificate of registration to practice barbering or to practice as
 178-17   a barber technician shall be in an amount established by the Board
 178-18   <$10>.
 178-19         (c)  The fee <fees> to be paid to the Board by an applicant
 178-20   who has satisfactorily passed the examination and complied with the
 178-21   other provisions of this Act to receive a certificate of
 178-22   registration to practice barbering or to practice as a barber
 178-23   technician shall be set by the Board <in an amount not to exceed
 178-24   $100>.
 178-25         SECTION 4.16.  Section 29A, Chapter 65, Acts of the 41st
 178-26   Legislature, 1st Called Session, 1929 (Article 8407a, Vernon's
 178-27   Texas Civil Statutes), is amended to read as follows:
  179-1         Sec. 29A.  (a)  The board shall keep an information file
  179-2   about each complaint filed with the board that the board has
  179-3   authority to resolve.  If a written complaint is filed with the
  179-4   board that the board has authority to resolve, the board, at least
  179-5   quarterly and until final disposition of the complaint, shall
  179-6   notify the parties to the complaint of the status of the complaint
  179-7   unless the notice would jeopardize an undercover investigation.
  179-8         (b)  The board shall prepare information of public interest
  179-9   describing the functions of the board and the procedures by which
 179-10   complaints are filed with and resolved by the board against a
 179-11   barber school or college.  The board shall make the information
 179-12   available to the public and appropriate state agencies.
 179-13         SECTION 4.17.  Section 29E, Chapter 65, Acts of the 41st
 179-14   Legislature, 1st Called Session, 1929 (Article 8407a, Vernon's
 179-15   Texas Civil Statutes), is amended to read as follows:
 179-16         Sec. 29E.  A barber shop, specialty shop, or barber school
 179-17   permit that has been expired for more than 30 days may be renewed
 179-18   by filing a renewal application with the board, accompanied by the
 179-19   regular renewal fee, and a delinquency fee in an amount established
 179-20   by the board <of $30> for each year or part of a year that the
 179-21   permit has been expired.
 179-22         SECTION 4.18.  Any balance remaining in funds designated for
 179-23   the purposes of this Act shall be transferred to the Barber School
 179-24   or College Account in the General Revenue Fund on the effective
 179-25   date of this Act.
 179-26                 PART 5.  PRIVATE BEAUTY CULTURE SCHOOLS
 179-27         SECTION 5.01.  Section 9(b), Chapter 1036, Acts of the 62nd
  180-1   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
  180-2   Civil Statutes), is amended to read as follows:
  180-3         (b)  A person may not conduct or operate a beauty shop,
  180-4   private<,> beauty culture school, specialty shop, or any other
  180-5   place of business in which the practice of cosmetology is taught or
  180-6   practiced, conduct a vocational cosmetology program in a public
  180-7   school, or lease space on the premises of a beauty shop to engage
  180-8   in the practice of cosmetology as an independent contractor without
  180-9   first obtaining a license.
 180-10         SECTION 5.02.  Section 10(d), Chapter 1036, Acts of the 62nd
 180-11   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 180-12   Civil Statutes), is amended to read as follows:
 180-13         (d)  The applicant is entitled to an operator license if he
 180-14   possesses the qualifications enumerated in Subsection (b) of this
 180-15   section, satisfactorily completes the examination, pays a <$35>
 180-16   license fee in an amount established by the commission, and has not
 180-17   committed an act that constitutes a ground for denial of a license.
 180-18         SECTION 5.03.  Section 11(d), Chapter 1036, Acts of the 62nd
 180-19   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 180-20   Civil Statutes), is amended to read as follows:
 180-21         (d)  The applicant is entitled to a manicurist license if he
 180-22   possesses the qualifications enumerated in Subsection (b) of this
 180-23   section, satisfactorily completes the examination, pays a <$35>
 180-24   license fee in an amount established by the commission, and has not
 180-25   committed an act that constitutes a ground for denial of a license.
 180-26         SECTION 5.04.  Sections 12(c) and (d), Chapter 1036, Acts of
 180-27   the 62nd Legislature, Regular Session, 1971 (Article 8451a,
  181-1   Vernon's Texas Civil Statutes), are amended to read as follows:
  181-2         (c)  The application must state the education and experience
  181-3   level of the applicant in all courses or programs that the
  181-4   applicant will teach or instruct, be on a form prescribed by the
  181-5   commission, and <must> be filed at least 10 days before the date
  181-6   set for the examination.
  181-7         (d)  The commission shall review an application for
  181-8   competency, consistency, and the overall quality of the applicant.
  181-9   The applicant is entitled to an instructor license if he possesses
 181-10   qualifications enumerated in Subsection (b) of this section,
 181-11   satisfactorily completes the examination, pays a <$50> license fee
 181-12   in an amount established by the commission, and has not committed
 181-13   an act that constitutes a ground for denial of a license.
 181-14         SECTION 5.05.  Section 13(d), Chapter 1036, Acts of the 62nd
 181-15   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 181-16   Civil Statutes), is amended to read as follows:
 181-17         (d)  The applicant is entitled to a specialty certificate if
 181-18   he possesses the qualifications enumerated in Subsection (b) of
 181-19   this section, pays a <$35> certificate fee in an amount established
 181-20   by the commission, and has not committed an act that constitutes a
 181-21   ground for denial of a certificate.
 181-22         SECTION 5.06.  Section 15(b), Chapter 1036, Acts of the 62nd
 181-23   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 181-24   Civil Statutes), is amended to read as follows:
 181-25         (b)  A temporary license shall be issued on submission of an
 181-26   application form prescribed by the commission and payment of a
 181-27   <$45> temporary license fee in an amount established by the
  182-1   commission if the applicant meets the requirements of Subsection
  182-2   (a) of this section.
  182-3         SECTION 5.07.  Section 16, Chapter 1036, Acts of the 62nd
  182-4   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
  182-5   Civil Statutes), is amended to read as follows:
  182-6         Sec. 16.  Duplicate License or Certificate.  (a)  A duplicate
  182-7   license or certificate shall be issued upon application on a form
  182-8   prescribed by the commission and on the payment of a <$35> fee in
  182-9   an amount established by the commission.
 182-10         (b)  A transcript shall be given to licensees under this Act
 182-11   upon application on a form prescribed by the commission and payment
 182-12   of a <$5> fee in an amount established by the commission.
 182-13         SECTION 5.08.  Section 17(b), Chapter 1036, Acts of the 62nd
 182-14   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 182-15   Civil Statutes), is amended to read as follows:
 182-16         (b)  The applicant shall submit an application on a form
 182-17   prescribed by the commission and pay a <$100> fee in an amount
 182-18   established by the commission, plus the applicable license or
 182-19   certification fee.
 182-20         SECTION 5.09.  Sections 18(b) and (c), Chapter 1036, Acts of
 182-21   the 62nd Legislature, Regular Session, 1971 (Article 8451a,
 182-22   Vernon's Texas Civil Statutes), are amended to read as follows:
 182-23         (b)  A student permit shall be issued on submission of an
 182-24   application form prescribed by the commission and payment of a
 182-25   <$25> fee in an amount established by the commission which must
 182-26   accompany the application.
 182-27         (c)  The cost of the permit shall also include one
  183-1   examination fee in an amount established by the commission and a
  183-2   transcript fee in an amount established by the commission and may
  183-3   not be refunded.
  183-4         SECTION 5.10.  Sections 19(b) and (c), Chapter 1036, Acts of
  183-5   the 62nd Legislature, Regular Session, 1971 (Article 8451a,
  183-6   Vernon's Texas Civil Statutes), are amended to read as follows:
  183-7         (b)  An applicant for a beauty shop license must submit an
  183-8   application on a form prescribed by the commission.  The
  183-9   application must contain proof of the particular requisites for a
 183-10   beauty shop as established by the commission and must be verified
 183-11   by the applicant.  With the application, the applicant must submit
 183-12   an <a $35> inspection fee in an amount established by the
 183-13   commission.
 183-14         (c)  The applicant is entitled to a beauty shop license if
 183-15   the application shows compliance with the rules of the commission,
 183-16   a <$45> license fee in an amount established by the commission is
 183-17   paid, and he has not committed an act that constitutes a ground for
 183-18   denial of a license.
 183-19         SECTION 5.11.  Sections 20(b) and (c), Chapter 1036, Acts of
 183-20   the 62nd Legislature, Regular Session, 1971 (Article 8451a,
 183-21   Vernon's Texas Civil Statutes), are amended to read as follows:
 183-22         (b)  An applicant for a specialty shop license must submit an
 183-23   application on a form prescribed by the commission.  The
 183-24   application must contain proof of the particular requisites for a
 183-25   specialty shop as established by the commission and must be
 183-26   verified by the applicant.  With the application, the applicant
 183-27   must submit an <a $35> inspection fee in an amount established by
  184-1   the commission.
  184-2         (c)  The applicant is entitled to a specialty shop license if
  184-3   the application shows compliance with the rules and regulations of
  184-4   the commission, a <$45> license fee in an amount established by the
  184-5   commission is paid, and he has not committed an act that
  184-6   constitutes a ground for denial of a license.
  184-7         SECTION 5.12.  Section 21, Chapter 1036, Acts of the 62nd
  184-8   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
  184-9   Civil Statutes), is amended to read as follows:
 184-10         Sec. 21.  PRIVATE BEAUTY CULTURE SCHOOL LICENSE; APPLICATION;
 184-11   REFUND POLICY.  (a)  A person holding a private beauty culture
 184-12   school license may maintain an establishment in which any practice
 184-13   of cosmetology is taught.
 184-14         (b)  An applicant for a private beauty culture school license
 184-15   must submit an application on a form prescribed by the commission.
 184-16   Each application must be verified by the applicant and must
 184-17   contain:
 184-18               (1)  a detailed floor plan of the school building
 184-19   divided into three separate areas, one for instruction in theory,
 184-20   one for practice work of senior students, and one for practice work
 184-21   of juniors; <and>
 184-22               (2)  a statement that the building is fireproof and of
 184-23   permanent type construction, contains a minimum of 3,500 square
 184-24   feet of floor space, with separate restrooms for male and female
 184-25   students, and contains or will contain before classes commence the
 184-26   equipment established by rule of the commission as sufficient to
 184-27   properly instruct a minimum of 50 students; and
  185-1               (3)  a statement of any final convictions of the
  185-2   owners, school directors, recruiters, instructional faculty, or
  185-3   other selected personnel of the private beauty culture school as
  185-4   determined by the commission.  The commission may obtain criminal
  185-5   history records of school directors or instructional faculty from
  185-6   any law enforcement agency, including the United States Department
  185-7   of Justice, the Department of Public Safety of the State of Texas,
  185-8   the Texas Department of Criminal Justice, or the police department
  185-9   of a municipality.  The administrator may deny, revoke, or
 185-10   disapprove the application for, or existing license, registration,
 185-11   or approval of a person who has been convicted of, entered a plea
 185-12   of nolo contendere, or guilty to, or received deferred adjudication
 185-13   for, a felony or misdemeanor offense for which a refusal may be
 185-14   issued under Article 6252-13c, Vernon's Texas Civil Statutes.
 185-15         (c)  The commission shall determine that an applicant for a
 185-16   private beauty culture school license is financially sound and
 185-17   capable of fulfilling the school's commitments for training before
 185-18   granting the license.
 185-19         (d)  Each application for a private beauty culture school
 185-20   license must be accompanied by payment of a <$500> license fee and
 185-21   an <a $200> inspection fee.  Each application for certification as
 185-22   a public secondary or public postsecondary beauty culture school
 185-23   must be accompanied by an <a $200> inspection fee.  The inspection
 185-24   fee is charged for each inspection trip required before approval of
 185-25   the license or certificate.  The commission shall establish the
 185-26   amount of the fees required under this section.
 185-27         (e)  The facilities of each applicant shall be inspected.
  186-1   The applicant is entitled to a private beauty culture school
  186-2   license if the inspection shows that this Act and the rules of the
  186-3   commission have been met and the applicant has not committed an act
  186-4   that constitutes a ground for denial of a license.
  186-5         (f)  Each holder of a private beauty culture school license
  186-6   must maintain a cancellation and settlement policy that provides a
  186-7   full refund of all money paid by a student if:
  186-8               (1)  the student cancels the enrollment agreement or
  186-9   contract not later than midnight of the third day after the date on
 186-10   which the agreement or contract is signed by the prospective
 186-11   student, excluding Saturdays, Sundays, and legal holidays; or
 186-12               (2)  the enrollment of the student was procured as a
 186-13   result of a misrepresentation made in the advertising or
 186-14   promotional materials of the school or a representation by an owner
 186-15   or representative of the school.
 186-16         (g)  Each holder of a private beauty culture school license
 186-17   must maintain a refund policy for the refund of the unused part of
 186-18   tuition, fees, and other charges assessed a student if the student,
 186-19   at the expiration of the cancellation period established under
 186-20   Subsection (f) of this section, terminates enrollment or is
 186-21   terminated by the school, as provided by this subsection <fails to
 186-22   enter the course of training, withdraws from the course of
 186-23   training, or is terminated from the course of training before
 186-24   completion of the course>.  The refund policy must provide that:
 186-25               (1)  a refund is based on the period of the student's
 186-26   enrollment, computed on the basis of course time expressed in clock
 186-27   hours;
  187-1               (2)  the effective date of the termination for payment
  187-2   of a refund <refund purposes> is the earliest of:
  187-3                     (A)  the last date of attendance, if the student
  187-4   is terminated for failure to satisfy a school attendance, grade, or
  187-5   work requirement <by the school>;
  187-6                     (B)  the date of receipt by the license holder of
  187-7   written notice of withdrawal by the student; <or>
  187-8                     (C)  the 10th consecutive <10> school day the
  187-9   student has been absent, unless any of the absences have been
 187-10   excused by the school <days after the last date of attendance>; or
 187-11                     (D)  the date the student fails to return, as
 187-12   scheduled, from a leave of absence; and
 187-13               (3)  if tuition is collected before beginning the
 187-14   course of training and if, after the expiration of the cancellation
 187-15   period, the student does not begin the course of training, the
 187-16   school may retain not more than $100.
 187-17         (h)  If a student who begins a course of training that is
 187-18   scheduled to run not more than 12 months withdraws from the course
 187-19   or is terminated from the course by the school, the private beauty
 187-20   culture school may retain $100 in tuition and fees paid by that
 187-21   student and is not obligated to refund any additional outstanding
 187-22   tuition if the student withdraws or is terminated during the last
 187-23   quarter <50 percent> of the course.  If the student withdraws or is
 187-24   terminated before the last quarter <50 percent> of the course
 187-25   begins, the school shall refund the following percentages of any
 187-26   outstanding tuition:
 187-27               (1)  for withdrawal or termination occurring during the
  188-1   first week or first one-tenth of the course, whichever is less, 90
  188-2   percent;
  188-3               (2)  for withdrawal or termination occurring after the
  188-4   first week or first one-tenth of the course, whichever is less, but
  188-5   within the first three weeks of the course, 80 percent;
  188-6               (3)  for withdrawal or termination occurring after the
  188-7   first three weeks of the course but not later than the completion
  188-8   of the first 25 percent of the course, 75 percent; <and>
  188-9               (4)  for withdrawal or termination occurring during the
 188-10   <not later than the completion of the> second quarter <25 percent>
 188-11   of the course, 50 percent;
 188-12               (5)  for withdrawal or termination occurring during the
 188-13   third quarter of the course, 10 percent; and
 188-14               (6)  for students withdrawing or terminating after 50
 188-15   percent of the course has been completed, the school must allow
 188-16   that student to reenter at any time during the 12-month period
 188-17   following the date of withdrawal or termination at no additional
 188-18   charge provided the full agreed on tuition has been tendered.
 188-19         (i)  <For students withdrawing or terminating after 50
 188-20   percent of the course has been completed, the school must allow
 188-21   that student to reenter at any time during the 48-month period
 188-22   following the date of withdrawal or termination.>
 188-23         <(j)>  A refund owed under this section must be paid not
 188-24   later than the 60th <30th> day after the date on which the student
 188-25   becomes eligible for the refund, as determined under Subsection (g)
 188-26   of this section.
 188-27         (j) <(k)>  If a refund is not made within the period required
  189-1   by this section, the school shall pay, as a penalty, interest on
  189-2   the refund for the interval beginning with the first day following
  189-3   the expiration of the refund period and ending with the day
  189-4   immediately preceding the date the refund is made.  If the refund
  189-5   is made to a lending institution, the interest shall also be paid
  189-6   to that institution and applied against the student's loan.  The
  189-7   commissioner of education annually shall establish the level of
  189-8   interest at a level sufficient to provide a deterrent to the
  189-9   retention of student funds.  The commission may exempt a school
 189-10   from the payment of the interest if the school makes a good faith
 189-11   effort to refund the tuition but is unable to locate the student.
 189-12   The school shall provide to the commission on request documentation
 189-13   of the effort to locate the student.
 189-14         (k) <(l)>  A private beauty culture school shall record a
 189-15   grade of "incomplete" for a student who withdraws but is not
 189-16   entitled to a refund under Subsection (h) of this section if the
 189-17   student requests the grade at the time the student withdraws and if
 189-18   the student withdraws for an appropriate reason unrelated to the
 189-19   student's academic status.  A student who receives a grade of
 189-20   incomplete may re-enroll in the program during the 12-month
 189-21   <48-month> period following the date the student withdraws and
 189-22   complete those incomplete subjects without payment of additional
 189-23   tuition.
 189-24         (l)  If a course of instruction is discontinued by the school
 189-25   and this prevents the student from completing the course, all
 189-26   tuition and fees paid are due and refundable.
 189-27         (m)  Refunds under this section shall be applied:
  190-1               (1)  first, to the repayment of federal student loans,
  190-2   awards, and other Title IV student assistance, as prescribed by the
  190-3   Student Consumer Requirements in the U.S. Department of Education
  190-4   Higher Education Amendments of 1992;
  190-5               (2)  second, to the repayment of other government
  190-6   loans;
  190-7               (3)  third, to the repayment of other financial loans;
  190-8   and
  190-9               (4)  last, to the student's personal tuitional
 190-10   expenditures.
 190-11         (n)  Not later than the 30th day after the date on which a
 190-12   refund is due to a student who has received a student loan, the
 190-13   school shall notify the guaranty agency and the lender of the
 190-14   required refund and any refund previously made.  The guaranty
 190-15   agency and the lender shall notify the student and the school if
 190-16   the student's loan has been transferred to another holder.
 190-17         (o)  The failure of a school or a person to pay a tuition
 190-18   refund as required by this section is a deceptive trade practice
 190-19   under Subchapter E, Chapter 17, Business & Commerce Code.
 190-20         SECTION 5.13.  Chapter 1036, Acts of the 62nd Legislature,
 190-21   Regular Session, 1971 (Article 8451a, Vernon's Texas Civil
 190-22   Statutes), is amended by adding Sections 21D-21L to read as
 190-23   follows:
 190-24         Sec. 21D.  ADDITIONAL CRITERIA FOR PRIVATE BEAUTY CULTURE
 190-25   SCHOOL LICENSE.  Before the commission may approve the application
 190-26   of a person for a private beauty culture school license, the
 190-27   executive director must find, on investigation at the premises of
  191-1   the school, that the school meets the following criteria:
  191-2               (1)  the courses, curriculum, and instruction are of a
  191-3   quality, content, and length as may reasonably and adequately
  191-4   achieve the stated objective for which the courses, curriculum, or
  191-5   instruction are offered;
  191-6               (2)  there is in the school adequate space, equipment,
  191-7   instructional material, and instructor personnel to provide
  191-8   training of good quality;
  191-9               (3)  educational and experience qualifications of
 191-10   directors, administrators, and instructors are adequate;
 191-11               (4)  the school maintains a written record of the
 191-12   previous education and training of the applicant student and
 191-13   clearly indicates that appropriate credit has been given by the
 191-14   school for previous education and training, with the new training
 191-15   period shortened where warranted through use of appropriate skills
 191-16   or achievement tests and the student notified;
 191-17               (5)  a copy of the course outline; schedule of tuition,
 191-18   fees, refund policy, and other charges; regulations pertaining to
 191-19   absence, grading policy, and rules of operation and conduct;
 191-20   regulations pertaining to incomplete grades; the name, mailing
 191-21   address, and telephone number of the commission for the purpose of
 191-22   directing complaints to the agency; the current rates of job
 191-23   placement and employment of students issued a certificate of
 191-24   completion; and notification of the availability of the cost
 191-25   comparison information prepared under Section 21I of this Act will
 191-26   be furnished to the student in the catalog before enrollment;
 191-27               (6)  on completion of training, the student is given a
  192-1   certificate by the school indicating the course and that training
  192-2   was satisfactorily completed;
  192-3               (7)  adequate records as required by the executive
  192-4   director are kept to show attendance and progress or grades, and
  192-5   satisfactory standards relating to attendance, progress, and
  192-6   conduct are enforced;
  192-7               (8)  the school complies with all local, city, county,
  192-8   municipal, state, and federal regulations; the executive director
  192-9   may require evidence of compliance as is necessary;
 192-10               (9)  the school is financially sound and capable of
 192-11   fulfilling its commitments for training;
 192-12               (10)  the school's administrators, directors, owners,
 192-13   and instructors are of good reputation and character;
 192-14               (11)  the school has, maintains, and publishes in its
 192-15   school catalog or comparable documents and enrollment contract the
 192-16   proper policy for the refund of the unused portion of tuition,
 192-17   fees, and other charges in the event the student enrolled by the
 192-18   school fails to take the course or withdraws or is discontinued
 192-19   from the course at any time before completion;
 192-20               (12)  the school does not use erroneous or misleading
 192-21   advertising, either by actual statement, omission, or intimation as
 192-22   determined by the commission;
 192-23               (13)  additional criteria as may be required by the
 192-24   commission;
 192-25               (14)  the school does not use a name like or similar to
 192-26   an existing tax-supported school in the same area;
 192-27               (15)  the school furnishes to the commission the
  193-1   current rates of students who receive a certificate of completion
  193-2   and of job placement and employment of students issued a
  193-3   certificate of completion;
  193-4               (16)  on the graduation of a student from a course of
  193-5   training offered by a private beauty culture school or the
  193-6   student's withdrawal or transfer from a course of training without
  193-7   completion of the training, the private beauty culture school shall
  193-8   send the commission a certified written copy of the student's
  193-9   record, indicating all course hours completed by the student and
 193-10   whether the agreed tuition has been paid;
 193-11               (17)  the school furnishes to the commission for
 193-12   approval or disapproval student admission requirements for each
 193-13   course or program offered by the school;
 193-14               (18)  the school furnishes to the commission for
 193-15   approval or disapproval the course lengths and curriculum content
 193-16   for each course offered by the school; and
 193-17               (19)  the school does not owe a civil penalty under
 193-18   Section 22 of this Act.
 193-19         Sec. 21E.  CONSUMER INFORMATION.  (a)  A private beauty
 193-20   culture school must submit to the commission for approval, on an
 193-21   annual basis, a school catalog or comparable written documents
 193-22   detailing the consumer information that must be given to a
 193-23   prospective student before enrollment.  The school catalog or
 193-24   documents must include:
 193-25               (1)  the name and address of the school and the
 193-26   school's governing body and officials;
 193-27               (2)  a calendar of the school year;
  194-1               (3)  school policies on enrollment;
  194-2               (4)  rules relating to absences;
  194-3               (5)  the school grading policy;
  194-4               (6)  the school's hours of operation and rules of
  194-5   conduct;
  194-6               (7)  a schedule of the tuition and other fees assessed;
  194-7               (8)  the school's cancellation and refund policy;
  194-8               (9)  a general description of the course or courses
  194-9   offered;
 194-10               (10)  information on entrance testing and remedial
 194-11   development plans;
 194-12               (11)  state licensing requirements for courses intended
 194-13   to result in licensing of the student;
 194-14               (12)  starting range and reported average salaries for
 194-15   the prior year's graduates in occupations for which courses are
 194-16   offered, if the information is available;
 194-17               (13)  the current rates of job placement and employment
 194-18   of students who complete a course of training;
 194-19               (14)  the school policy on credit for previous
 194-20   education and training;
 194-21               (15)  school regulations relating to incomplete grades;
 194-22               (16)  information on the transferability of credits
 194-23   earned;
 194-24               (17)  the name, mailing address, and telephone number
 194-25   of the commission for the purpose of directing complaints to the
 194-26   commission and the mechanism and procedures for resolving
 194-27   grievances submitted to the commission;
  195-1               (18)  a statement that the commission has information
  195-2   on cost comparison with similar schools;
  195-3               (19)  market and job availability information, if
  195-4   available;
  195-5               (20)  the names of the members of any advisory council
  195-6   of the school and the company for which they work; and
  195-7               (21)  other information required by the executive
  195-8   director or commission if reasonable notice has been given by the
  195-9   director or commission to the school of the additional
 195-10   requirements.
 195-11         (b)  A private beauty culture school may not accept a signed
 195-12   student enrollment contract or accept a student into any school
 195-13   program until at least 24 hours after the student has received the
 195-14   catalog or comparable written documents required under this
 195-15   section.
 195-16         (c)  A student must sign a receipt stating that:
 195-17               (1)  the catalog was received by the student before any
 195-18   commitment made by the student to the school or by the school to
 195-19   the student;
 195-20               (2)  the student was given an opportunity to discuss
 195-21   the catalog with a representative of the school; and
 195-22               (3)  the student understands the contents and
 195-23   implications of the catalog.
 195-24         (d)  The receipt required by Subsection (c) of this section
 195-25   must be placed in the student's permanent school file and a copy of
 195-26   the receipt must be delivered to the student.
 195-27         Sec. 21F.  COMPLETION, EMPLOYMENT, AND PLACEMENT IN RELATION
  196-1   TO PRIVATE BEAUTY CULTURE SCHOOL.  (a)  The commission shall set
  196-2   and enforce minimum standards for completion and employment rates
  196-3   of courses based on collected data.
  196-4         (b)  In determining whether to renew a private beauty culture
  196-5   school license, the commission shall consider the completion,
  196-6   placement, and employment rates of students of the courses.
  196-7         (c)  Before a school may begin offering a new course of study
  196-8   for students, the school must show the commission the opportunity
  196-9   for jobs for graduates of the course and the possibility of
 196-10   placement or employment.
 196-11         (d)  Before the commission issues or renews a private beauty
 196-12   culture school license involving a school that offers or advertises
 196-13   a placement service, the commission may require the school to file
 196-14   a true and accurate copy of the school's placement records for the
 196-15   previous year.
 196-16         Sec. 21G.  ON-SITE INSPECTIONS.  (a)  The commission shall
 196-17   conduct on-site inspections of a private beauty culture school to
 196-18   determine the normal operating conditions of the school.
 196-19         (b)  The inspection required by Subsection (a) of this
 196-20   section shall be unannounced.
 196-21         (c)  The executive director or a designee of the executive
 196-22   director may inspect such things as the instructional books and
 196-23   records, classrooms, dormitories, tools, equipment, and classes of
 196-24   a private beauty culture school or an applicant for a license for a
 196-25   school at any reasonable time.
 196-26         Sec. 21H.  CONSOLIDATION OF FEES AND PRIVATE BEAUTY CULTURE
 196-27   SCHOOL ACCOUNT.  (a)  At the beginning of each fiscal year the
  197-1   commission shall collect a fee from the school for deposit in a
  197-2   special account in the general revenue fund in the state treasury
  197-3   called the private beauty culture school account and to be
  197-4   administered by the commission.
  197-5         (b)  The amount of the fee is determined by applying a
  197-6   percentage established by the commission, based on the
  197-7   recommendation of the school accounts advisory board, to each
  197-8   school's annual gross tuition, with consideration given to the
  197-9   school's size, expense of regulation, potential for teachouts,
 197-10   tuition refund and recovery exposure, and loan default rates and
 197-11   any other relevant factors.  The account shall be used for:
 197-12               (1)  the administration of this Act;
 197-13               (2)  the cost of teachouts as provided by this Act;
 197-14               (3)  the cost of tuition and fees recovery and the cost
 197-15   of student refunds that a school has not made; and
 197-16               (4)  the cost of storing student records that have
 197-17   become property of the state under this Act.
 197-18         (c)  The commission may grant an exemption from payment into
 197-19   the account to a small school as determined by the commission, or
 197-20   to a school that does not use guaranteed student loans for tuition
 197-21   revenue.  A school exempt as provided for by this subsection must
 197-22   pay the necessary fees for regulation, as determined by the
 197-23   commission, and provide a bond, certificate of deposit, or
 197-24   comparable security, as determined and approved by the commission,
 197-25   that is sufficient to cover the cost of the school's record storage
 197-26   costs, teachout, and tuition and fees refund and recovery exposure
 197-27   based on the evidence the school submits proving its projected
  198-1   maximum total unearned tuition during the period of the license to
  198-2   operate.
  198-3         (d)  The security must be provided by the school for the
  198-4   period during which the license to operate is issued, and the
  198-5   obligation of the bond or other security must be that neither this
  198-6   Act nor any rule adopted under this Act is violated by the school
  198-7   or any of its officers, agents, or employees.
  198-8         (e)  The bond, certificate of deposit, or comparable security
  198-9   must be issued by a company authorized to do business in the state,
 198-10   conditioned that the parties to the transaction must pay all
 198-11   damages or expenses that the state or any governmental subdivision,
 198-12   or any student or potential student sustains resulting from a
 198-13   violation.  The bond, certificate of deposit, or comparable
 198-14   security must be to the state to be used only for payment for the
 198-15   school's teachout and tuition and fees refund due to a student or
 198-16   potential student.  The security must be filed with the commission
 198-17   and shall be in a form approved by the commission.
 198-18         (f)  Schools domiciled, or having their principal place of
 198-19   business, outside the state, that engage representatives to
 198-20   canvass, solicit, or contract with any person in the state are
 198-21   subject to the fee and security requirements of Subsection (c) of
 198-22   this section.
 198-23         (g)  The commission shall refer all expenses incurred by the
 198-24   school account in administering Subsections (b)(2) and (3) of this
 198-25   section to the attorney general's office for collection.  The
 198-26   amounts collected shall be deposited to the account.  Attorney's
 198-27   fees and court costs shall be appropriated to the attorney
  199-1   general's office.
  199-2         (h)  Interest the account earns shall be reinvested in the
  199-3   account.  The state treasurer shall invest the account in the same
  199-4   manner as other state funds.  Sufficient funds from the account and
  199-5   other fees collected by the commission shall be appropriated to the
  199-6   commission for the purpose outlined in this section.  The
  199-7   commission shall administer claims made against the account.
  199-8         (i)  If a school closes, the commission shall attempt to
  199-9   arrange for students of the closed school to attend another private
 199-10   beauty culture school.  The commission shall adopt rules specifying
 199-11   the circumstances under which a school is considered closed.
 199-12         (j)  The expense incurred by a private beauty culture school
 199-13   in providing training that is directly related to educating a
 199-14   student who was enrolled in a closed school and placed in the
 199-15   school under this section, including the applicable tuition for the
 199-16   period of time for which the student has paid tuition, shall be
 199-17   paid in accordance with rules of the commission.
 199-18         (k)  The commission shall make reasonable attempts to ensure
 199-19   that schools under the commission's jurisdiction, including closed
 199-20   schools, fulfill the refund obligation as provided by Section 21 of
 199-21   this Act.  If a school refuses to fulfill the school's obligation
 199-22   or the school's bond is insufficient to pay the cost of the
 199-23   teachout and refund expenses, the teachout or the refund may be
 199-24   paid from the private beauty culture school account except that no
 199-25   school owned, either in whole or in part, by a person or corporate
 199-26   entity who was an owner, in whole or in part, of a previously
 199-27   closed school shall be permitted to receive compensation for a
  200-1   teachout under this section.
  200-2         (l)  If a student cannot be placed in another school, the
  200-3   student's tuition and fees shall be refunded under Section 21(k) of
  200-4   this Act.
  200-5         (m)  If a student does not accept a place that is available
  200-6   and reasonable in another school, the student's tuition and fees
  200-7   shall be refunded under the refund policy maintained by the closing
  200-8   school under Sections 21(f) and (g) of this Act.
  200-9         (n)  Attorney's fees, court costs, or damages may not be paid
 200-10   from the private beauty culture school account.
 200-11         (o)  The commission by rule shall establish and assess
 200-12   reasonable and necessary fees to all persons and entities licensed
 200-13   under this Act to be used for the regulation of those persons and
 200-14   entities licensed under this Act and to supplement the
 200-15   administration and purposes outlined by this Act.
 200-16         (p)  The commission may permit payment of any fee authorized
 200-17   under this section that exceeds $1,000 to be paid by installment.
 200-18   The commission shall provide for appropriate interest charges and
 200-19   late penalties in addition to any other remedy that is provided for
 200-20   by law for the late payment of a fee installment authorized under
 200-21   this section.  The commission may assess a reasonable service
 200-22   charge to be paid by a school that pays a fee by installment in an
 200-23   amount not to exceed an annual rate of 10 percent of the fee that
 200-24   is to be paid by installment.
 200-25         Sec. 21I.  COST COMPARISONS.  (a)  The commission shall
 200-26   prepare a comparison of the cost to a student of courses of
 200-27   instruction or training programs at all private beauty culture
  201-1   schools maintained by persons who hold private beauty culture
  201-2   school licenses issued by the commission.
  201-3         (b)  The cost comparison must include for each school a
  201-4   description of:
  201-5               (1)  average class size;
  201-6               (2)  facilities and equipment;
  201-7               (3)  employment and placement rates;
  201-8               (4)  length of program; and
  201-9               (5)  faculty qualifications.
 201-10         Sec. 21J.  FINANCIAL STABILITY.  (a)  A school may not
 201-11   reflect unearned tuition as a current asset unless the amount shown
 201-12   in current assets that reflects unearned tuition is offset by an
 201-13   equal amount shown as a current liability.  The school must meet
 201-14   one of the following criteria in order to be determined as
 201-15   financially sound and capable of fulfilling its commitments for
 201-16   training:
 201-17               (1)  current assets must bear a relationship to current
 201-18   liabilities in a ratio of at least one-to-one; or
 201-19               (2)  the school must have posted, or set aside in a
 201-20   dedicated escrow account, a bond, certificate of deposit,
 201-21   irrevocable letter of credit, or comparable security, acceptable to
 201-22   the commission, each made payable to the State of Texas, in an
 201-23   amount sufficient to cover the school's record storage costs,
 201-24   teachout, and tuition and fees refund and recovery exposure based
 201-25   on the evidence the school submits proving its projected maximum
 201-26   total unearned tuition during the period of time covered by the
 201-27   evidence of indebtedness to the state.
  202-1         (b)  The school must demonstrate to the satisfaction of the
  202-2   commission its financial soundness and ability to fulfill its
  202-3   commitments for training.  If requested by the school and
  202-4   administrator, the School Accounts Advisory Board shall investigate
  202-5   the financial soundness of a school that does not meet the
  202-6   requirements of (1) or (2) above in order to determine if the
  202-7   school is capable of fulfilling its obligations under this Act.
  202-8         Sec. 21K.  PROHIBITIONS.  A person may not:
  202-9               (1)  operate a private beauty culture school without a
 202-10   license or assume ownership of an existing private beauty culture
 202-11   school without obtaining a new license to operate;
 202-12               (2)  solicit prospective students for a private beauty
 202-13   culture school without being licensed as required by this Act;
 202-14               (3)  accept contracts or enrollment applications from a
 202-15   representative of a private beauty culture school who is not
 202-16   registered as required by any commission rule requiring
 202-17   registration;
 202-18               (4)  use advertising designed to mislead or deceive
 202-19   prospective private beauty culture school students;
 202-20               (5)  fail to notify the commission of the
 202-21   discontinuance of the operation of any private beauty culture
 202-22   school not later than the 72nd hour after cessation of classes or
 202-23   make available accurate records as required by this Act;
 202-24               (6)  fail to secure and file within 30 days any
 202-25   increased bond required by this Act;
 202-26               (7)  negotiate any promissory instrument received as
 202-27   payment of tuition for a private beauty culture school or other
  203-1   charge before completion of 75 percent of the course, provided that
  203-2   before that time, the instrument may be transferred by assignment
  203-3   to a purchaser who is subject to any defense available against the
  203-4   school named as payee;
  203-5               (8)  enroll a student in a private beauty culture
  203-6   school who fails to satisfy entrance requirements; or
  203-7               (9)  violate any provision of this Act relating to
  203-8   private beauty culture schools or a rule adopted under this Act
  203-9   relating to private beauty culture schools.
 203-10         Sec. 21L.  ADMINISTRATIVE PENALTY.  (a)  The commission may
 203-11   impose an administrative penalty against a person who violates
 203-12   Section 21K of this Act.
 203-13         (b)  The penalty for a violation may be in an amount not to
 203-14   exceed $10,000.
 203-15         (c)  The amount of the penalty shall be based on:
 203-16               (1)  the seriousness of the violation, including the
 203-17   nature, circumstances, extent, and gravity of any prohibited acts;
 203-18               (2)  efforts to correct the violation; and
 203-19               (3)  any other matter that justice may require.
 203-20         (d)  An executive director who determines that a violation
 203-21   has occurred may issue to the commission a report that states the
 203-22   facts on which the determination is based and the director's
 203-23   recommendation on the imposition of a penalty, including a
 203-24   recommendation on the amount of the penalty.
 203-25         (e)  Within 14 days after the date the report is issued, the
 203-26   executive director shall give written notice of the report to the
 203-27   person.  The notice may be given by certified mail.  The notice
  204-1   must include a brief summary of the alleged violation and a
  204-2   statement of the amount of the recommended penalty and must inform
  204-3   the person that the person has a right to a hearing on the
  204-4   occurrence of the violation, the amount of the penalty, or both the
  204-5   occurrence of the violation and the amount of the penalty.
  204-6         (f)  Within 20 days after the date the person receives the
  204-7   notice, the person in writing may accept the determination and
  204-8   recommended penalty of the executive director or may make a written
  204-9   request for a hearing on the occurrence of the violation, the
 204-10   amount of the penalty, or both the occurrence of the violation and
 204-11   the amount of the penalty.
 204-12         (g)  If the person accepts the determination and recommended
 204-13   penalty of the executive director, the commission by order shall
 204-14   approve the determination and impose the recommended penalty.
 204-15         (h)  If the person requests a hearing or fails to respond
 204-16   timely to the notice, the executive director shall set a hearing
 204-17   and give notice of the hearing to the person.  The hearing shall be
 204-18   held by an administrative law judge of the State Office of
 204-19   Administrative Hearings.  The administrative law judge shall make
 204-20   findings of fact and conclusions of law and promptly issue to the
 204-21   commission a proposal for a decision about the occurrence of the
 204-22   violation and the amount of a proposed penalty.  Based on the
 204-23   findings of fact, conclusions of law, and proposal for a decision,
 204-24   the commission by order may find that a violation has occurred and
 204-25   impose a penalty or may find that no violation occurred.
 204-26         (i)  The notice of the commission's order given to the person
 204-27   under the Administrative Procedure and Texas Register Act (Article
  205-1   6252-13a, Vernon's Texas Civil Statutes) and its subsequent
  205-2   amendments must include a statement of the right of the person to
  205-3   judicial review of the order.
  205-4         (j)  Within 30 days after the date the commission's order is
  205-5   final as provided by Section 16(c), Administrative Procedure and
  205-6   Texas Register Act (Article 6252-13a, Vernon's Texas Civil
  205-7   Statutes), and its subsequent amendments, the person shall:
  205-8               (1)  pay the amount of the penalty;
  205-9               (2)  pay the amount of the penalty and file a petition
 205-10   for judicial review contesting the occurrence of the violation, the
 205-11   amount of the penalty, or both the occurrence of the violation and
 205-12   the amount of the penalty; or
 205-13               (3)  without paying the amount of the penalty, file a
 205-14   petition for judicial review contesting the occurrence of the
 205-15   violation, the amount of the penalty, or both the occurrence of the
 205-16   violation and the amount of the penalty.
 205-17         (k)  Within the 30-day period, a person who acts under
 205-18   Subsection (j)(3) of this section may:
 205-19               (1)  stay enforcement of the penalty by:
 205-20                     (A)  paying the amount of the penalty to the
 205-21   court for placement in an escrow account; or
 205-22                     (B)  giving to the court a supersedeas bond that
 205-23   is approved by the court for the amount of the penalty and that is
 205-24   effective until all judicial review of the board's order is final;
 205-25   or
 205-26               (2)  request the court to stay enforcement of the
 205-27   penalty by:
  206-1                     (A)  filing with the court a sworn affidavit of
  206-2   the person stating that the person is financially unable to pay the
  206-3   amount of the penalty and is financially unable to give the
  206-4   supersedeas bond; and
  206-5                     (B)  giving a copy of the affidavit to the
  206-6   executive director by certified mail.
  206-7         (l)  An executive director who receives a copy of an
  206-8   affidavit under Subsection (k)(2) of this section may file with the
  206-9   court, within five days after the date the copy is received, a
 206-10   contest to the affidavit.  The court shall hold a hearing on the
 206-11   facts alleged in the affidavit as soon as practicable and shall
 206-12   stay the enforcement of the penalty on finding that the alleged
 206-13   facts are true.  The person who files an affidavit has the burden
 206-14   of proving that the person is financially unable to pay the amount
 206-15   of the penalty and to give a supersedeas bond.
 206-16         (m)  If the person does not pay the amount of the penalty and
 206-17   the enforcement of the penalty is not stayed, the executive
 206-18   director may refer the matter to the attorney general for
 206-19   collection of the amount of the penalty.
 206-20         (n)  Judicial review of the order of the commission:
 206-21               (1)  is instituted by filing a petition as provided by
 206-22   Section 19, Administrative Procedure and Texas Register Act
 206-23   (Article 6252-13a, Vernon's Texas Civil Statutes), and its
 206-24   subsequent amendments; and
 206-25               (2)  is under the substantial evidence rule.
 206-26         (o)  If the court sustains the occurrence of the violation,
 206-27   the court may uphold or reduce the amount of the penalty and order
  207-1   the person to pay the full or reduced amount of the penalty.  If
  207-2   the court does not sustain the occurrence of the violation, the
  207-3   court shall order that no penalty is owed.
  207-4         (p)  When the judgment of the court becomes final, the court
  207-5   shall proceed under this subsection.  If the person paid the amount
  207-6   of the penalty and if that amount is reduced or is not upheld by
  207-7   the court, the court shall order that the appropriate amount plus
  207-8   accrued interest be remitted to the person.  The rate of the
  207-9   interest is the rate charged on loans to depository institutions by
 207-10   the New York Federal Reserve Bank, and the interest shall be paid
 207-11   for the period beginning on the date the penalty was paid and
 207-12   ending on the date the penalty is remitted.  If the person gave a
 207-13   supersedeas bond and if the amount of the penalty is not upheld by
 207-14   the court, the court shall order the release of the bond.  If the
 207-15   person gave a supersedeas bond and if the amount of the penalty is
 207-16   reduced, the court shall order the release of the bond after the
 207-17   person pays the amount.
 207-18         (q)  A penalty collected under this section shall be remitted
 207-19   to the comptroller for deposit in the general revenue fund.
 207-20         (r)  All proceedings under this section are subject to the
 207-21   Administrative Procedure and Texas Register Act (Article 6252-13a,
 207-22   Vernon's Texas Civil Statutes) and its subsequent amendments.
 207-23         SECTION 5.14.  Section 22, Chapter 1036, Acts of the 62nd
 207-24   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 207-25   Civil Statutes), is amended to read as follows:
 207-26         Sec. 22.  Additional Requirements Applying to Private Beauty
 207-27   Culture Schools.  (a)  The holder of a private beauty culture
  208-1   school license shall:
  208-2               (1)  maintain a sanitary establishment;
  208-3               (2)  maintain on its staff and on duty during business
  208-4   hours not less than two full-time instructors licensed under this
  208-5   Act, except that one instructor will be sufficient whenever the
  208-6   student enrollment drops below 15;
  208-7               (3)  maintain a daily record of attendance of students;
  208-8               (4)  establish regular class and instruction hours and
  208-9   grades, and hold examinations before issuing diplomas;
 208-10               (5)  require a school term of not less than nine months
 208-11   and not less than 1,500 hours instruction for a complete course in
 208-12   cosmetology;
 208-13               (6)  require a school term of not less than 250 hours
 208-14   instruction for a complete course in manicuring;
 208-15               (7)  require no student to work or be instructed or
 208-16   receive credit for more than eight hours of instruction in any one
 208-17   day or for more than six days in any one calendar week;
 208-18               (8)  maintain a copy of its curriculum in a conspicuous
 208-19   place and verify that this curriculum is being followed as to
 208-20   subject matter being taught; and
 208-21               (9)  submit to the executive director the name of each
 208-22   student within 10 days after enrollment in the school and notify
 208-23   the executive director of the withdrawal or graduation of a student
 208-24   within 10 days of the withdrawal or graduation.
 208-25         (b)  Each holder of a private beauty culture school license
 208-26   shall furnish to the commission:
 208-27               (1)  the current course completion rates of students
  209-1   who attend a course of instruction offered by the school; and
  209-2               (2)  job placement rates and employment rates of
  209-3   students who complete a course of instruction.
  209-4         (c)  On the graduation of a student from a course of training
  209-5   offered by a private beauty culture school or the student's
  209-6   withdrawal or transfer from a course of training without completion
  209-7   of the training, the private beauty culture school shall send the
  209-8   commission a certified written copy of the student's record,
  209-9   indicating all course hours completed by the student and whether
 209-10   the agreed tuition has been paid.
 209-11         (d)  <A holder of a private beauty culture school license
 209-12   shall furnish each prospective student with:>
 209-13               <(1)  a copy of the course outline;>
 209-14               <(2)  a schedule of the tuition and other fees
 209-15   assessed;>
 209-16               <(3)  the refund policy required under Section 21 of
 209-17   this Act;>
 209-18               <(4)  school regulations relating to absences;>
 209-19               <(5)  the school grading policy;>
 209-20               <(6)  the school rules of operation and conduct;>
 209-21               <(7)  school regulations  relating to incomplete
 209-22   grades;>
 209-23               <(8)  the name, mailing address, and telephone number
 209-24   of the commission for the purpose of directing complaints to the
 209-25   commission; and>
 209-26               <(9)  the current rates of job placement and employment
 209-27   of students who complete a course of training.>
  210-1         <(e)  A holder of a private beauty culture school license
  210-2   shall publish in its catalogue and enrollment contract a
  210-3   description of the refund policy required under Section 21 of this
  210-4   Act.>
  210-5         <(f)  If the commission has reasonable cause to believe that
  210-6   a private beauty culture school has violated this Act or a rule
  210-7   adopted under this Act, the commission may order a peer review of
  210-8   the school or suspend the admission of students to the school.  A
  210-9   peer review ordered under this subsection shall be conducted by a
 210-10   peer review team composed of knowledgeable persons selected by the
 210-11   commission.  The commission shall attempt to provide a balance on
 210-12   each team between members assigned to the team who are from this
 210-13   state and those who are from other states.  The team shall provide
 210-14   the commission with an objective assessment of the content of the
 210-15   school's curriculum and its application.  The school under review
 210-16   shall pay the costs of the peer review.>
 210-17         <(g)>  A private beauty culture school that violates this Act
 210-18   or a rule adopted under this Act is liable for a civil penalty in
 210-19   addition to any injunctive relief or other remedy provided by law.
 210-20   The civil penalty may not exceed $1,000 a day for each violation.
 210-21   The attorney general, at the request of the commission, may bring a
 210-22   civil action to collect a civil penalty under this subsection.
 210-23   Civil penalties recovered in a suit brought under this subsection
 210-24   shall be deposited in the state treasury to the credit of the
 210-25   General Revenue Fund.
 210-26         SECTION 5.15.  Chapter 1036, Acts of the 62nd Legislature,
 210-27   Regular Session, 1971 (Article 8451a, Vernon's Texas Civil
  211-1   Statutes), is amended by adding Sections 22A-22F to read as
  211-2   follows:
  211-3         Sec. 22A.  LICENSING REQUIREMENTS DISCLOSED BY PRIVATE BEAUTY
  211-4   CULTURE SCHOOL.  (a)  A private beauty culture school must disclose
  211-5   to all prospective students state licensing requirements to
  211-6   practice the occupation for which the student is training.
  211-7         (b)  A school must disclose to all prospective students the
  211-8   performance of graduates from the school on the licensing
  211-9   examination of the commission if that information is available.
 211-10         Sec. 22B.  ENTRANCE REQUIREMENTS FOR PRIVATE BEAUTY CULTURE
 211-11   SCHOOL; MINIMUM SKILLS TEST.  (a)  The commission shall approve
 211-12   entrance requirements, including minimum skills testing, for
 211-13   students who may be accepted for a course of study in a private
 211-14   beauty culture school.  The requirements must be specific and
 211-15   provide that students who are allowed to enter a course will have a
 211-16   reasonable chance of completing the program.
 211-17         (b)  The school shall administer a standardized test to
 211-18   students entering the school, if testing for minimum skill
 211-19   competency is determined by the commission as appropriate and
 211-20   necessary to determine if remediation is needed.  The test must be
 211-21   administered before enrollment and must be nationally recognized as
 211-22   appropriate and effective for minimum skills testing.  If the test
 211-23   reveals the necessity for remediation, the school must implement a
 211-24   plan to encourage the student to improve in basic general education
 211-25   skills.
 211-26         (c)  A student must achieve a successful score on the test
 211-27   required by this section before the student is obligated for
  212-1   tuition and fees for the vocational portion of the school's
  212-2   program.
  212-3         (d)  The school may, in accordance with federal statutory
  212-4   provisions affecting guaranteed student loan programs, on a
  212-5   case-by-case basis, refuse to provide the certification statements
  212-6   required for guaranteed student loan eligibility, or reduce the
  212-7   determination of need for a guaranteed student loan if the school
  212-8   determines that the student's expenses to be covered by the loan,
  212-9   and the estimated cost of attendance, can be met more appropriately
 212-10   by the school, directly by the student, or by other sources.
 212-11         Sec. 22C.  STUDENTS IN PRIVATE BEAUTY CULTURE SCHOOLS IN NEED
 212-12   OF REMEDIAL HELP.  (a)  An applicant without a high school diploma
 212-13   or high school equivalency certificate must pass an entrance test
 212-14   approved by the commission and be considered to have the ability to
 212-15   benefit from the school before the school may enroll the student.
 212-16         (b)  A school that admits a student who does not have a high
 212-17   school diploma or high school equivalency certificate must develop
 212-18   and implement a plan for counseling the student on curriculum,
 212-19   student aid, employment opportunities, and the remediation
 212-20   necessary for the student to obtain a high school equivalency
 212-21   certificate and improve in basic general education skills.
 212-22         (c)  The school must assist the student in obtaining the
 212-23   remediation necessary for the student to pass a standardized
 212-24   minimum skills test, approved by the commission, and the student
 212-25   must pass the test before entering the final quarter of the course.
 212-26         Sec. 22D.  ENROLLMENT POLICIES OF PRIVATE BEAUTY CULTURE
 212-27   SCHOOL.  (a)  The enrollment contract of a private beauty culture
  213-1   school must contain:
  213-2               (1)  a disclosure that the contract is a legally
  213-3   binding instrument on written acceptance of the student by the
  213-4   school, unless canceled as provided by law;
  213-5               (2)  the school's cancellation and refund policy;
  213-6               (3)  the method of cancellation of the contract, the
  213-7   effective date of any cancellation, and the name and address to
  213-8   which the notice of cancellation should be sent or delivered;
  213-9               (4)  the total cost of the course including tuition and
 213-10   all other charges;
 213-11               (5)  a notification that the fair market value of
 213-12   equipment or supplies furnished to the student that the student
 213-13   fails to return in a condition suitable for resale  not later than
 213-14   the 10th business day after the date of cancellation may be
 213-15   retained by the school and deducted from any refund of the student;
 213-16               (6)  a statement that if a student's enrollment is
 213-17   canceled for any reason, the school will notify an agency known to
 213-18   the school to be providing financial aid to the student of the
 213-19   cancellation not later than the 30th day after the date of
 213-20   cancellation;
 213-21               (7)  the name and description of the courses, including
 213-22   the number of hours of classroom instruction.
 213-23         (b)  An enrollment contract may not contain a wage assignment
 213-24   provision or a confession of judgment clause.
 213-25         (c)  Immediately after a prospective student has signed an
 213-26   enrollment contract, the school shall give the prospective student
 213-27   a copy of the contract, and a copy shall be placed in the student's
  214-1   permanent school file.
  214-2         Sec. 22E.  LOAN COUNSELING BY PRIVATE BEAUTY CULTURE SCHOOL.
  214-3   (a)  A  school shall conduct loan counseling entrance interviews
  214-4   with each prospective student seeking a loan during the enrollment
  214-5   process.  A student borrower shall be counseled before the initial
  214-6   disbursement of loan proceeds, shortly before the student completes
  214-7   one-half of the course, and before the student is issued a
  214-8   certificate of completion.
  214-9         (b)  The school's financial aid officer or counselor shall
 214-10   conduct the interviews required by Subsection (a) of this section.
 214-11   The interview must include a discussion of:
 214-12               (1)  the rights and responsibilities of the student as
 214-13   a borrower;
 214-14               (2)  what a loan is and the importance of repayment;
 214-15               (3)  the total cost of the program in which the student
 214-16   will be enrolled;
 214-17               (4)  the availability of other forms of financial aid,
 214-18   grants, and part-time work;
 214-19               (5)  the starting range and average reported salaries
 214-20   of those in the occupation for which the student will be trained,
 214-21   if available; and
 214-22               (6)  job placement services provided by the school and
 214-23   the employment rate of persons who attended the school and were
 214-24   enrolled in the program in which the student is enrolled.
 214-25         (c)  A school approved to accept state or federal educational
 214-26   loans or grants shall adopt, in addition to the provisions in this
 214-27   section, measures to reduce defaults and improve borrower's
  215-1   understanding and respect for the loan repayment obligation as
  215-2   provided in 34 C.F.R., Parts 668 and 682.
  215-3         (d)  The school must give a copy of the Texas Guaranteed
  215-4   Student Loan Corporation's "Your Future" guide, or a comparable
  215-5   document approved by the commission, to a prospective student at a
  215-6   time and in a manner that provides the student with sufficient
  215-7   opportunity to read the guide or other document and discuss the
  215-8   contents with the school's financial aid officer, if necessary for
  215-9   understanding and clarity, before signing an enrollment contract
 215-10   and before the school accepts the student in a course of study.
 215-11         (e)  The prospective student must sign a document stating
 215-12   that the student:
 215-13               (1)  attended a loan counseling entrance interview; and
 215-14               (2)  received a copy of the "Your Future" guide, or
 215-15   comparable document, in the time provided by Subsection (d) of this
 215-16   section.
 215-17         (f)  A copy of the signed document required by Subsection (e)
 215-18   of this section must be sent to the student, guarantor, and lender
 215-19   and must be placed in the student's permanent school file.
 215-20         Sec. 22F.  RECORDS OF PRIVATE BEAUTY CULTURE SCHOOL.  (a)  A
 215-21   private beauty culture school shall maintain permanent records for
 215-22   all students enrolled, as required by the commission.
 215-23         (b)  A school shall adopt a plan to preserve permanent
 215-24   records and submit the plan to the commission for approval.  The
 215-25   plan must:
 215-26               (1)  provide that at least one copy of the records will
 215-27   be held in a secure depository; and
  216-1               (2)  designate an appropriate official to provide a
  216-2   student with copies of records or transcripts on request.
  216-3         (c)  The school shall make the first copy of records or
  216-4   transcripts at no charge to the student.  The school may make a
  216-5   reasonable charge to provide additional copies of records,
  216-6   transcripts, or other student information.
  216-7         (d)  If the school closes, the records become the property of
  216-8   the state.
  216-9         SECTION 5.16.  Section 27, Chapter 1036, Acts of the 62nd
 216-10   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 216-11   Civil Statutes), is amended to read as follows:
 216-12         Sec. 27.  Display of License.  (a)  Every holder of a license
 216-13   or certificate issued under this Act shall display the license or
 216-14   certificate in a conspicuous place in his place of business or
 216-15   employment.
 216-16         (b)  The commission may not use the word "approval" or a
 216-17   variation of that term on the license of a private beauty culture
 216-18   school.  The terminology must be "licensed" to operate, or a
 216-19   variation of that phrase.
 216-20         SECTION 5.17.  Section 30(a), Chapter 1036, Acts of the 62nd
 216-21   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 216-22   Civil Statutes), is amended to read as follows:
 216-23         (a)  The commission shall use a written examination, selected
 216-24   by the commission, to examine license applicants and shall <may>
 216-25   require a practical examination for licenses and certificates
 216-26   issued under this Act, as the commission considers necessary.  The
 216-27   written examination must be validated by independent testing
  217-1   professionals or be purchased from a national testing service.  The
  217-2   commission shall prescribe the method and content of any practical
  217-3   examination.
  217-4         SECTION 5.18.  Sections 33(c), (e), (f), and (g), Chapter
  217-5   1036, Acts of the 62nd Legislature, Regular Session, 1971 (Article
  217-6   8451a, Vernon's Texas Civil Statutes), are amended to read as
  217-7   follows:
  217-8         (c)  A renewal license shall be issued on payment of the
  217-9   renewal fee as established by the commission under this Act if the
 217-10   licensee is not in violation of this Act at the time of renewal.
 217-11         (e)  A license that has been expired for less than 30 days
 217-12   may be renewed.   A renewal license shall be issued on submission
 217-13   of a completed application form prescribed by the commission and
 217-14   payment of the renewal fee, plus a <$10> delinquency fee in an
 217-15   amount established by the commission.
 217-16         (f)  Except as provided by Subsection (h) of this section, a
 217-17   license that has been expired for more than 30 days but less than
 217-18   five years may be renewed.   A renewal license shall be issued on
 217-19   submission of an application, payment of the fee established by the
 217-20   commission under this Act for each year the license has been
 217-21   expired, and payment of a delinquency fee.  Delinquency fees for
 217-22   the following licenses shall be established by the commission
 217-23   <under this subsection are>:
 217-24               (1)  operator or specialty license           <$25>;
 217-25               (2)  instructor license                      <$50>;
 217-26               (3)  manicurist license                      <$25>; and
 217-27               (4)  beauty or specialty salon license       <$35>.
  218-1         (g)  An applicant for renewal of a license that has been
  218-2   expired for more than five years shall be issued a license on
  218-3   submission of an application, payment of the examination fee,
  218-4   satisfactory completion of the examination, and payment of a <$50>
  218-5   reinstatement fee in an amount established by the commission.
  218-6         SECTION 5.19.  Section 34(a), Chapter 1036, Acts of the 62nd
  218-7   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
  218-8   Civil Statutes), is amended to read as follows:
  218-9         (a)  Renewal fees for the following licenses shall be
 218-10   established by the commission <under this Act are>:
 218-11               (1)  Operator or specialty license        <$35>;
 218-12               (2)  Instructor license                   <$50>;
 218-13               (3)  Manicurist license                   <$35>;
 218-14               (4)  Private beauty school license <$200 per year>; and
 218-15               (5)  Beauty or specialty shop license    <$45>.
 218-16         SECTION 5.20.  Section 36, Chapter 1036, Acts of the 62nd
 218-17   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 218-18   Civil Statutes), is amended to read as follows:
 218-19         Sec. 36.  Grounds for Denial, Suspension, or Revocation of a
 218-20   Permit.  (a)  A license or certificate may be denied, or after a
 218-21   hearing, suspended or revoked if the applicant or licensee has:
 218-22               (1)  secured a license or certificate by fraud or
 218-23   deceit;
 218-24               (2)  violated or conspired to violate this Act or a
 218-25   rule issued under this Act;
 218-26               (3)  knowingly made false or misleading statements in
 218-27   any advertising of the licensee's services;
  219-1               (4)  advertised, practiced, or attempted to practice
  219-2   under the name or trade name of another licensee under this Act; or
  219-3               (5)  engaged in gross malpractice in practicing
  219-4   cosmetology.
  219-5         (b)  In addition to taking a disciplinary action under
  219-6   Subsection (a) of this section, the commission may deny, suspend,
  219-7   or revoke a private beauty culture school license or place the
  219-8   holder of the license on probation if the license holder, the
  219-9   school, or a representative of the school gives a prospective
 219-10   student information relating to the school that is false,
 219-11   fraudulent, deceptive, substantially inaccurate, or misleading.
 219-12         SECTION 5.21.  Section 41, Chapter 1036, Acts of the 62nd
 219-13   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
 219-14   Civil Statutes), is amended by amending Subsection (a) and adding
 219-15   Subsections (c) and (d) to read as follows:
 219-16         (a)  The commission shall keep an information file about each
 219-17   complaint filed with the commission relating to a cosmetologist,
 219-18   <or> cosmetology establishment, or private beauty culture school.
 219-19         (c)  The commission shall prepare information of public
 219-20   interest describing the functions of the commission and the
 219-21   procedures by which complaints are filed with and resolved by the
 219-22   commission against a private beauty culture school.  The commission
 219-23   shall make the information available to the public and appropriate
 219-24   state agencies.
 219-25         (d)  A private beauty culture school shall post on the
 219-26   premises of the school at a prominent and conspicuous location the
 219-27   name, mailing address, and telephone number of the commission for
  220-1   the purpose of directing complaints to the commission.
  220-2         SECTION 5.22.  Chapter 1036, Acts of the 62nd Legislature,
  220-3   Regular Session, 1971 (Article 8451a, Vernon's Texas Civil
  220-4   Statutes), is amended by adding Sections 42 and 43 to read as
  220-5   follows:
  220-6         Sec. 42.  ADVERTISING.  (a)  The commission may not adopt
  220-7   rules that restrict advertising by a private beauty culture school
  220-8   except to prohibit false, misleading, or deceptive advertising
  220-9   practices.  The rules may not restrict:
 220-10               (1)  the use of an advertising medium;
 220-11               (2)  the size or duration of an advertisement; or
 220-12               (3)  advertisement under a trade name.
 220-13         (b)  A school, the representative of a school, or a recruiter
 220-14   for the school may not advertise or represent, in writing or
 220-15   orally, that a school is approved or accredited by the state.
 220-16   Those entities or persons may advertise that the school has been
 220-17   licensed by the state.
 220-18         (c)  A school, representative of a school, or recruiter of a
 220-19   school may not make or cause to be made a statement or
 220-20   representation, written, oral, or visual, offering or publicizing a
 220-21   course, program, or school, if the school, representative, or
 220-22   solicitor knew or reasonably should have known that the statement
 220-23   or representation was false, fraudulent, deceptive, substantially
 220-24   inaccurate, or misleading.
 220-25         Sec. 43.  CRIMINAL PENALTY.  (a)  A person commits an offense
 220-26   if the person fails to comply with Section 21 of this Act.  Except
 220-27   as provided by Subsection (b) of this section, an offense under
  221-1   this section is a Class A misdemeanor.
  221-2         (b)  A person commits an offense if the person intentionally
  221-3   or knowingly uses for personal benefit funds in an amount greater
  221-4   than $10,000 that are due as student refunds under Section 21 of
  221-5   this Act.  An offense under this subsection is a felony of the
  221-6   third degree.
  221-7         SECTION 5.23.  Section 21A, Chapter 1036, Acts of the 62nd
  221-8   Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
  221-9   Civil Statutes), as added by S.B. No. 378, Acts of the 72nd
 221-10   Legislature, Regular Session, 1991, is repealed.
 221-11         SECTION 5.24.  Any balance remaining in funds designated for
 221-12   the purposes of this Act shall be transferred to the Private Beauty
 221-13   Culture School Account in the General Revenue Fund on the effective
 221-14   date of this Act.
 221-15                    PART 6.  MISCELLANEOUS PROVISIONS
 221-16         SECTION 6.01.  Section 32.45(a), Penal Code, is amended to
 221-17   read as follows:
 221-18         (a)  For purposes of this section:
 221-19               (1)  "Fiduciary" includes:
 221-20                     (A)  a trustee, guardian, administrator,
 221-21   executor, conservator, and receiver;
 221-22                     (B)  a proprietary school, or its owner, that
 221-23   receives payment for tuition, fees, or other charges, including
 221-24   guaranteed student loans;
 221-25                     (C)  any other person acting in a fiduciary
 221-26   capacity, but not a commercial bailee; and
 221-27                     (D) <(C)>  an officer, manager, employee, or
  222-1   agent carrying on fiduciary functions on behalf of a fiduciary.
  222-2               (2)  "Misapply" means deal with property contrary to:
  222-3                     (A)  an agreement under which the fiduciary holds
  222-4   the property; or
  222-5                     (B)  a law prescribing the custody or disposition
  222-6   of the property.
  222-7               (3)  "Proprietary school" means any business enterprise
  222-8   operated for a profit, or on a nonprofit basis, which maintains a
  222-9   place of business within the State of Texas, or solicits business
 222-10   within the State of Texas, and:
 222-11                     (A)  which offers or maintains a course or
 222-12   courses of instruction or study; or
 222-13                     (B)  at which place of business such a course or
 222-14   courses of instruction or study is available through classroom
 222-15   instruction or by correspondence, or both, to a person or persons
 222-16   for the purpose of training or preparing the person for a field of
 222-17   endeavor in a business, trade, technical, or industrial occupation,
 222-18   or for avocational or personal improvement.
 222-19         SECTION 6.02.  (a)  The changes in law made by this Act apply
 222-20   only to an offense committed on or after the effective date of this
 222-21   Act.  For purposes of this section, an offense is committed before
 222-22   the effective date of this Act if any element of the offense occurs
 222-23   before the effective date.
 222-24         (b)  An offense committed before the effective date of this
 222-25   Act is covered by the law in effect when the offense was committed,
 222-26   and the former law is continued in effect for this purpose.
 222-27         SECTION 6.03.  Except as otherwise provided by this Act, this
  223-1   Act takes effect January 1, 1994.
  223-2         SECTION 6.04.  The importance of this legislation and the
  223-3   crowded condition of the calendars in both houses create an
  223-4   emergency and an imperative public necessity that the
  223-5   constitutional rule requiring bills to be read on three several
  223-6   days in each house be suspended, and this rule is hereby suspended,
  223-7   and that this Act take effect and be in force according to its
  223-8   terms, and it is so enacted.