House Introduced Bill 5910

HOUSE BILL No. 5910

April 16, 2002, Introduced by Reps. Reeves and Ehardt and referred to the Committee on Employment Relations, Training and
Safety.

A bill to amend 1963 PA 40, entitled

"An act to authorize private trade schools, business schools,
correspondence schools and institutes to solicit students in this
state; to provide for the issuance of permits to solicitors; to
prescribe the powers and duties of the superintendent of public
instruction; to provide penalties for violations of this act; and
to repeal certain acts and parts of acts,"

by amending the title and sections 1, 2, 3, and 4 (MCL 395.121,

395.122, 395.123, and 395.124), section 3 as amended by 1988 PA

244.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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TITLE

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An act to authorize private trade schools, business schools,

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correspondence schools, and institutes to solicit students in

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this state; to provide for the issuance of permits to solicitors;

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to prescribe the powers and duties of the superintendent of

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public instruction DEPARTMENT OF CAREER DEVELOPMENT; to provide

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penalties; for violations of this act; and to repeal certain

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acts and parts of acts.

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Sec. 1. As used in this act:

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(a) "Superintendent" means the superintendent of public

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instruction "DEPARTMENT" MEANS THE DEPARTMENT OF CAREER

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DEVELOPMENT.

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(b) "School domiciled in this state" means a private trade

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school, business school, correspondence school, or institute

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licensed under Act No. 148 of the Public Acts of 1943, as

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amended, being sections 395.101 to 395.103 of the Compiled Laws

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of 1948 1943 PA 148, MCL 395.101 TO 395.103, or incorporated

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under Act No. 327 of the Public Acts of 1931, as amended, being

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sections 450.1 to 450.192 of the Compiled Laws of 1948 1931 PA

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327, MCL 450.1 TO 450.192.

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(c) "School domiciled outside of this state" means a private

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trade school, business school, correspondence school, or insti-

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tute located outside of this state and organized to give instruc-

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tion in any form or manner in any trade, occupation, or vocation

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for a consideration, reward, or promise of whatever nature, but

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not a school possessing authority to grant baccalaureate

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degrees.

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(d) "Solicitor" means a person or agent 18 years of age or

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over representing a school located within or outside of this

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state who personally attempts to procure students, enrollees, or

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subscribers at a place or places other than the office or place

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of business of the school.

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Sec. 2. Solicitor's permits are required for solicitors

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representing schools domiciled in this state, or schools

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domiciled outside of this state, which THAT have been autho-

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rized by the superintendent DEPARTMENT to solicit students in

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this state. The authorization may be granted TO a foreign school

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upon the submission of an application form provided for this pur-

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pose by the superintendent DEPARTMENT, which shall contain

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such THE information to enable the superintendent NECESSARY

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to evaluate the instructional program and practices of the school

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as well as its promotional and sales policies.

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Sec. 3. (1) A solicitor shall not personally solicit a pro-

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spective student to enroll in any school unless he or she applies

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for and obtains a permit from the superintendent DEPARTMENT,

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issued under rules promulgated by the superintendent DEPARTMENT

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in accordance with the administrative procedures act of 1969,

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Act No. 306 of the Public Acts of 1969, being sections 24.201 to

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24.328 of the Michigan Compiled Laws 1969 PA 306, MCL 24.201 TO

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24.328.

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(2) A solicitor shall not solicit a prospective student to

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enroll in a school other than a school specifically listed in the

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application and the permit.

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(3) A solicitor shall possess knowledge regarding available

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state and federal student financial aid programs and shall inform

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prospective students of their obligations under student financial

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aid programs including, but not limited to, loan repayment obli-

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gations under federally guaranteed student loan programs.

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(4) A solicitor who represents more than 1 school shall

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obtain a permit for each school THAT he or she represents.

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(5) Each application for a solicitor's permit shall be

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accompanied by a surety bond in the amount of $5,000.00. The

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bond may be continuing and shall be conditioned to provide indem-

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nification to a student suffering loss as a result of fraud or

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misrepresentation used in procuring the student's enrollment.

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The bond shall be supplied by the school as an individual or a

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blanket bond covering each of its representatives in the penal

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sum of $5,000.00. The liability to be incurred under an individ-

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ual or blanket surety bond shall not exceed $5,000.00 in the case

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of any 1 solicitor. The surety may relieve itself of liability

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thereafter and withdraw from the bond upon giving 30 days'

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notice in writing to the superintendent DEPARTMENT.

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(6) An annual fee shall be charged for each solicitor's

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permit. The fee shall be $125.00 for a solicitor representing a

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school domiciled in this state or $225.00 for a solicitor repre-

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senting a school domiciled outside of this state. The fee shall

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be deposited in the state treasury and credited to the department

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of education CAREER DEVELOPMENT to be used solely for adminis-

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trative expenses of this act and Act No. 148 of the Public Acts

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of 1943, being sections 395.101 to 395.103 of the Michigan

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Compiled Laws 1943 PA 148, MCL 395.101 TO 395.103. The fee

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amounts established in this subsection may be adjusted by the

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state board of education DEPARTMENT. An adjustment of a fee

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established under this section shall be the same as the

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percentage of adjustment made for costs associated with the

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licensing provisions of a proprietary school under Act No. 148

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of the Public Acts of 1943 1943 PA 148, MCL 395.101 TO 395.103,

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as determined annually by the legislature.

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(7) Each solicitor's permit shall expire 1 year from the

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date of issuance.

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Sec. 4. (a) Any solicitor's permit may be revoked by the

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superintendent DEPARTMENT upon 10 days' notice and after a

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hearing, if the holder of the permit solicits or enrolls students

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through fraud or misrepresentation.

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(b) All contracts entered into in this state by schools or

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their solicitors and all promissory notes or other evidences of

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indebtedness taken in lieu of cash payments by such schools or

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solicitors shall be null and void unless the schools are duly

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licensed, approved, or authorized to solicit prospective students

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and unless the solicitors have secured permits as required by

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this act.

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(c) Any person violating any of the provisions of this act

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is guilty of a misdemeanor.

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