S*0321(Rat #0040, Act #0020 of 2007)  General Bill, By Alexander
 AN ACT TO AMEND SECTION 59-58-20, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO DEFINITIONS IN REGARD TO THE SOUTH CAROLINA NONPUBLIC
 POST-SECONDARY INSTITUTION LICENSE ACT, SO AS TO REVISE CERTAIN DEFINITIONS;
 TO AMEND SECTION 59-58-30, RELATING TO EXCLUSIONS FROM THE DEFINITION OF A
 "NONPUBLIC EDUCATIONAL INSTITUTION" FOR PURPOSES OF THE ACT, SO AS TO PROVIDE
 FOR FURTHER EXCLUSIONS; AND TO AMEND SECTION 59-58-80, RELATING TO BONDS OR
 COLLATERAL FOR THE PROTECTION OF STUDENT TUITION AND FEES, SO AS TO FURTHER
 PROVIDE FOR THE PURPOSE FOR WHICH THE PROCEEDS OF A SURETY BOND AND MONIES IN
 THE TUITION GUARANTY FUND, RENAMED THE STUDENT RECOVERY FUND, MAY BE USED. -
 ratified title

   01/24/07  Senate Introduced and read first time SJ-4
   01/24/07  Senate Referred to Committee on Education SJ-4
   03/01/07  Senate Committee report: Favorable Education SJ-7
   03/07/07  Senate Read second time SJ-26
   03/08/07  Senate Read third time and sent to House SJ-10
   03/13/07  House  Introduced and read first time HJ-47
   03/13/07  House  Referred to Committee on Ways and Means HJ-48
   04/18/07  House  Committee report: Favorable Ways and Means HJ-14
   04/24/07  House  Debate adjourned until Wednesday, April 25, 2007 HJ-84
   04/25/07  House  Debate adjourned until Thursday, April 26, 2007 HJ-299
   04/26/07  House  Read second time HJ-9
   05/01/07  House  Read third time and enrolled HJ-12
   05/09/07         Ratified R 40
   05/15/07         Signed By Governor
   05/17/07         Copies available
   05/17/07         Effective date 05/15/07
   05/22/07         Act No. 20

(A20, R40, S321)

AN ACT TO AMEND SECTION 59-58-20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS IN REGARD TO THE SOUTH CAROLINA NONPUBLIC POST-SECONDARY INSTITUTION LICENSE ACT, SO AS TO REVISE CERTAIN DEFINITIONS; TO AMEND SECTION 59-58-30, RELATING TO EXCLUSIONS FROM THE DEFINITION OF A "NONPUBLIC EDUCATIONAL INSTITUTION" FOR PURPOSES OF THE ACT, SO AS TO PROVIDE FOR FURTHER EXCLUSIONS; AND TO AMEND SECTION 59-58-80, RELATING TO BONDS OR COLLATERAL FOR THE PROTECTION OF STUDENT TUITION AND FEES, SO AS TO FURTHER PROVIDE FOR THE PURPOSE FOR WHICH THE PROCEEDS OF A SURETY BOND AND MONIES IN THE TUITION GUARANTY FUND, RENAMED THE STUDENT RECOVERY FUND, MAY BE USED.

Be it enacted by the General Assembly of the State of South Carolina:

Definition revised

SECTION    1.    Section 59-58-20(10) of the 1976 Code is amended to read:

"(10)    'Salesman', 'agent', or 'solicitor' means a person who, for remuneration, enrolls or seeks to enroll, away from the nonpublic educational institution's premises, a resident of South Carolina in courses or programs of instruction or study offered by the nonpublic educational institution. Administrators and faculty who make informational public appearances to include appearances at high school recruiting fairs, but whose primary task does not include service as a paid recruiter, are exempted from this definition."

Exclusions revised

SECTION    2.    Section 59-58-30 of the 1976 Code is amended by adding:

"(13)    institutions that offer programs and courses on federal military installations; and

(14)    degree-granting institutions accredited by an accrediting agency recognized by the United States Department of Education that conduct occasional or incidental recruiting activities to include activities at high school recruiting fairs or through seasonal recruitment advertising rather than continuing and regular activities that would otherwise establish an actual presence in South Carolina as defined in this chapter."

Use of bond or recovery fund monies

SECTION    3.    Section 59-58-80 of the 1976 Code is amended to read:

"Section 59-58-80.    (A)    Before an institution is licensed under this chapter, the commission may require that a surety bond be provided by the institution in an amount in compliance with the regulations prescribed by the commission. The obligation of the bond is that the institution, its officers, agents, and employees shall faithfully perform the terms and conditions of contracts for tuition and other instructional fees entered into between the institution and persons enrolling as students. The bond must be issued by a company authorized to do business in the State of South Carolina. The bond must be to the commission, in that form as approved by the commission, and is to be used for the benefit of students who suffer financial losses of tuition and fees prepaid to an institution as a result of the closing of the institution. The commission may use the funds for these purposes to pay refunds to these students for unearned tuition and fees, to pay for or subsidize the cost of providing facilities and instruction for these students to complete their programs, or to pay expenses to store and maintain student records of these students.

(B)    The bond company may not be relieved of liability on the bond unless it gives the institution and the commission ninety days' written notice of the company's intent to cancel the bond. If at any time the company that issued the bond cancels or discontinues the coverage, the institution's license is revoked as a matter of law on the effective date of the cancellation or discontinuance of bond coverage, unless a replacement bond is obtained and provided to the commissioner.

(C)    Instead of the surety bond required in subsection (A), the institution may pledge other means of collateral acceptable to the State Treasurer, in an aggregate market value of the required bond. The commission shall deliver a safekeeping receipt of collateral to the State Treasurer to be held until the commission serves notice for its release to the commission.

(D)    The commission may promulgate regulations establishing a student recovery fund for nonpublic educational institutions. The fund must be used to benefit students because an institution has failed to perform faithfully its contractual obligations for tuition and instructional fees in the event of an institution's closing. The commission may use the funds for these purposes to pay refunds to these students for unearned tuition and prepaid fees, to pay for or subsidize the cost of providing facilities and instruction for these students to complete their programs, or to pay expenses to store and maintain student records of these students."

Time effective

SECTION    4.    This act takes effect upon approval by the Governor.

Ratified the 9th day of May, 2007.

Approved the 15th day of May, 2007.