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AN ACT amending the Kansas proprietary school act; affecting definitions;
     increasing fees for certificates of
  approval and registration of representatives of schools; establishing the
     proprietary school tuition protection
  fund and prescribing revenue sources; providing for the assistance of students
     upon school closures; amend-
  ing K.S.A. 72-4919, 72-4920, 72-4921, 72-4922, 72-4924, 72-4925, 72-4926,
     72-4927, 72-4928, 72-4929, 72-
  4931, 72-4933, 72-4934, 72-4935, 72-4936, 72-4937, 72-4938, 72-4939 and
     72-4940 and K.S.A. 1996 Supp.
  72-4932 and repealing the existing sections; also repealing K.S.A. 72-4917,
     72-4918 and 72-4923.
Be it enacted by the Legislature of the State of Kansas:
  Section 1.  K.S.A. 72-4919 is hereby amended to read as follows: 72-4919. As
     used in this act, unless the
context otherwise requires:
  (a)  ``Proprietary school'' or ``school'' means any business enterprise,
     whether operated for on a profit, or on
a nonprofit not-for-profit basis, which:
  (1)  Maintains a place of business within the state of Kansas, or solicits
     business within the state of Kansas,
and which;
  (2)  is not specifically exempted by the provisions of this act; and
  (1)  which (3)  offers or maintains a course or courses of instruction or
     study; or
  (2)  at which place of business such a course or courses of instruction or
     study is available through classroom
instruction contact or by correspondence, or both, to a person or persons for
     the purpose of training or pre-
paring such person persons for a field of endeavor in a business, trade,
     technical, or industrial occupation, or
for avocational or personal improvement, except as hereinafter excluded.
  (b)  ``Owner'' of a school means:
  (1)  In the case of a school owned by an individual, that individual;
  (2)  in the case of a school owned by a partnership, all full, silent, and
     limited partners; and
  (3)  in the case of a school owned by a corporation, the corporation, its
     directors, officers and each share-
holder owning shares of issued and outstanding stock aggregating at least ten
     percent (10%) 10% of the total
of the issued and outstanding shares.
  (c)  ``Branch school'' means any subsidiary place of business maintained
     within the state of Kansas by a school
at a site which is separate from the site of the principal place of business
     maintained by the school and at which
subsidiary place of business the school offers a course or courses of
     instruction or study identical to the course
or courses of instruction or study offered by the school at its principal place
     of business.
  (c) (d)  ``School employee'' means any person, other than an owner, who
     directly or indirectly receives com-
pensation from a proprietary school for services rendered.
  (d) (e)  ``Representative'' means a any person employed by a proprietary
     school whether the school is located
within or without the state of Kansas, to act as an agent, solicitor, or broker
     or independent contractor to
directly procure students or enrollees for the school by solicitation within or
     without this state at any place
other than the office or a place of business of the school.
  (e) (f)  ``State board'' means the state board of education, or such person
     or persons as may be designated
by it the state board to administer the provisions of this act.
  (f)  ``Notice to the school'' means written correspondence sent to the
     address of record for legal service
contained in the application for a certificate of approval. ``Date of notice''
     means the date the notice is mailed
by the state board.
  (g)  ``Support'' or ``supported'' means the primary source and means by which
     a school derives revenue to
perpetuate its operation of the school.
  (h)  ``Person'' means any individual, firm, partnership, association, or
     corporation, or other private entity.
  Sec. 2.  K.S.A. 72-4920 is hereby amended to read as follows: 72-4920. The
     following schools or educational
institutions shall be specifically are exempt from the provisions of this act
     and shall not be considered to be
within the definition of ``proprietary school'':
  (a)  A school or educational institution supported primarily by taxation from
     either a local or state source.
  (b)  Nonprofit schools owned, controlled, operated and conducted by bona fide
     religious, denominational,
eleemosynary or similar public institutions exempt from property taxation under
     the laws of this state, but. Such
schools may choose to apply for a certificate of approval hereunder, and, upon
     approval of the application and
issuance of a certificate, shall be subject to the provisions of this act as
     determined by the state board.
  (c)  A school or training program which offers instruction of purely only
     for avocational or recreational
subjects purposes as determined by the state board.
  (d)  A course or courses of instruction or study sponsored by an employer for
     the training and preparation
of its own employees, and for which no tuition or other fee is charged to the
     student.
  (e)  A course or courses of study or instruction sponsored by a recognized
     trade, business, or professional
organization having a closed membership for the instruction of the members of
     the organization with a closed
membership, and for which no tuition or other fee is charged to the student.
  (f)  Private colleges and universities which award a baccalaureate, or higher
     degree, and which maintain and
operate educational programs for which credits are given. A majority of said
     credits must be transferable to a
college, junior college, or university, and are accredited by a national
     nationally recognized accrediting agency
listed by the United States office of education under the provisions of chapter
     33, title 38, U.S. code and such
subsequent federal legislation as is approved by the state board.
  (g)  A school which is otherwise regulated and approved under any other law
     of this state.
  (h)  A course or courses of special study or instruction having a closed
     enrollment and financed and/or or
subsidized on a contract basis by the local or state government, private
     industry, or any person, firm, association
or agency, other than the student involved, on a contract basis and having a
     closed enrollment, except that. A
school financed and/or or subsidized by federal or special funds may apply to
     the state board for exemption
from the provisions of this act and may be declared exempt by the state board
     when it finds the operation of
such school to be outside the purview of this act.
  Sec. 3.  K.S.A. 72-4921 is hereby amended to read as follows: 72-4921. (a)
     The state board shall exercise
jurisdiction and control of the system of schools and enforce minimum standards
     for approval of schools under
rules and regulations and policies hereinafter set forth and as may from time to
     time be adopted pursuant to
the provisions of this act. The state board may adopt rules and regulations to
     carry out the intent and for
administration of the provisions of this act. Prior to the adoption of any such
     rules and regulations, the state
board shall afford the commission an opportunity to make recommendations
     thereon.
  (b)  The state board shall maintain a list of proprietary schools which have
     been issued a certificate of
approval.
  Sec. 4.  K.S.A. 72-4922 is hereby amended to read as follows: 72-4922. (a)
     The advisory commission on
proprietary schools, referred to as the ``commission,'' is hereby created
     consisting. The commission shall consist
of nine (9) members appointed by the state board, each member to. Members shall
     serve from the date of his
or her appointment until December 31, 1972, and for terms of four (4) calendar
     years each thereafter: Provided,
however, That the appointments effective as of January 1, 1973, shall be for
     three (3) members for terms of
four (4) years, three (3) members for terms of three (3) years and three (3)
     members for terms of two (2) years.
If a commission member resigns, or is otherwise unable to serve, a new member
     shall be appointed by the state
board to fill the unexpired term. Five members of the commission shall be owners
     or managers of proprietary
schools as defined in this act, and at least three two of the five members shall
     represent schools which, at the
time of appointment of such members, have received accreditation from any agency
     recognized by the United
States office of education enrollments of under 125 students. Four members shall
     be selected from among the
following categories: Secondary school principals, guidance counselors schools,
     postsecondary schools, agricul-
ture, business or management, organized labor, and health occupations, except
     that one member shall be a
person who does not fall within the categories specified in this subsection.
  (b)  The commission shall elect one member as chairman chairperson of the
     commission and such other
officers as may be necessary.
  (c)  The commission shall meet at least annually in Topeka at 10:00 o'clock
     a.m. on the second Tuesday
during the month of October, and shall conduct special meetings on the call of
     the chairman, chairperson or
the state board or at the request of at least four members of the commission.
  (d)  Members of the advisory commission on proprietary schools attending
     meetings of such commission, or
attending a subcommittee meeting thereof authorized by such commission, shall be
     paid amounts provided in
subsection (e) of K.S.A. 75-3223, and amendments thereto.
  (e)  A majority of the commission is a quorum for the to conduct of business,
     but no less than four members
must concur to pass upon any matter before the commission.
  (f)  The commission shall recommend policies, regulations, minimum standards
     and general rules that the
commission deems necessary for carrying out administering the provisions of this
     act.
  Sec. 5.  K.S.A. 72-4924 is hereby amended to read as follows: 72-4924. (a) By
     complying with the provisions
of the appropriate following sections of this act, a No proprietary school may
     obtain operate within this state
without obtaining a certificate of approval from the state board which shall
     permit the school to operate within
this state as provided in this act.
  (b)  Schools domiciled, or having their principal place of business, outside
     of the state of Kansas, that canvass,
solicit or contract with any person within the state of Kansas shall obtain a
     certificate of approval from the state
board for each such branch school.
  (c)  Any contract entered into with any person for a course or courses of
     instruction after the effective date
of this act by or on behalf of any owner, school employee or representative of a
     school which is subject to the
provisions of this act to, but which has not obtained a certificate of approval
     has not been issued, shall be
unenforceable in any action brought thereon.
  Sec. 6.  K.S.A. 72-4925 is hereby amended to read as follows: 72-4925. (a)
     Each proprietary schools school
shall make written application apply to the state board for certificates a
     certificate of approval. A proprietary
school shall not be required to obtain a certificate of approval for maintenance
     of any branch school.
  (b)  Such applications An application for a certificate of approval shall be
     made on forms a form prepared
and furnished by the state board and shall contain such information as provided
     by rules and regulations of
may be required by the state board.
  (c)  The state board may issue a certificate of approval upon determination
     that a proprietary school meets
the standards fixed established by the state board. The state board may issue a
     certificate of approval to any
proprietary school accredited by a regional or national accrediting agency
     recognized by the United States
office of education without further evidence.
  Sec. 7.  K.S.A. 72-4926 is hereby amended to read as follows: 72-4926. The
     state board shall issue a certif-
icate of approval to a school when it the state board is satisfied that a the
     school meets minimum standards
established in accordance with this act.
  Minimum standards shall be established by the state board by adoption of
     rules and regulations to insure
that:
  (a)  Courses, curriculum, and instruction in proprietary schools are of such
     quality, content, and length as
may reasonably and adequately achieve insure achievement of the stated objective
     for which the courses, cur-
riculum or instruction are offered.
  (b)  Proprietary schools have adequate space, equipment, instructional
     material, and personnel to provide
education and training of good quality.
  (c)  Educational and experience qualifications of directors, administrators,
     and instructors are such as may
reasonably insure that students will receive training consistent with the
     objectives of their program of study.
  (d)  Proprietary schools maintain written records of the previous education
     and training of students and
applicant students, and that training periods are shortened when warranted
     thereby by such previous education
and training or by skill or achievement tests.
  (e)  A copy of the course outline, schedule of tuition, fees, and other
     charges, settlement policy, rules per-
taining to absence, grading policy, and rules of operation and conduct are
     furnished to students upon entry
into class.
  (f)  Upon completion of training, students are given certificates or diplomas
     by the school indicating satis-
factory completion of training in courses.
  (g)  Adequate records are kept to show attendance, satisfactory academic
     progress or grades, and enforce-
ment of satisfactory standards are enforced relating to attendance, progress,
     and conduct.
  (h)  Schools comply with all local, city, county, municipal, state and
     federal regulations, such as fire codes,
building and sanitation codes.
  (i)  Schools are financially responsible and capable of fulfilling its
     commitments for training.
  (j)  Schools do not utilize erroneous or misleading advertising, either by
     actual statement, omission, or in-
timation, and are not in violation of minimum standards relating to advertising.
  (k)  School administrators, directors, owners and instructors are of good
     reputation and character.
  (l) (k)  Schools have and maintain a policy, which shall be subject to state
     board approval, for the refund of
the unused portions of tuition, fees, and other charges in the event a student
     enrolled by the school fails to
begin a course or withdraws or is discontinued therefrom at any time prior to
     completion, which policies shall
take into account those costs of the school that are not diminished by the
     failure of the student to enter or
complete a course of instruction. Policies under this subpart shall be consonant
     with standards approved by the
United States office of education, and such standards shall be presumed to be
     reasonable.
  Sec. 8.  K.S.A. 72-4927 is hereby amended to read as follows: 72-4927. (a)
     The state board, upon review of
an application for a certificate of approval duly submitted in accordance with
     the provisions of K.S.A. 72-4925,
and amendments thereto, and meeting the requirements of K.S.A. 72-4926, and
     amendments thereto, shall issue
a certificate of approval to the applicant proprietary school. Certificates of
     approval shall be in a form specified
by the state board with advice from the commission. Certificates of approval
     shall state clearly and conspicuously
at least the following information:
  (1)  The date of issuance, effective date and term of approval;
  (2)  the correct name and address of the school; and
  (3)  the authority for approval and conditions of approval, if any, referring
     specifically to the approved
catalog or bulletin published by the school;
  (4)  the signature of the commissioner of education or a person designated by
     the state board to administer
the provisions of this act; and.
  (5)  any other fair and reasonable representations as are consistent with
     this act and deemed necessary by
the state board.
  (b)  Certificates of approval shall be valid for a term of one year.
  (c)  Each certificate of approval shall be issued to the owner of an
     applicant proprietary school and shall be
nontransferable. In the event of a change in ownership of a proprietary school,
     the new owner must apply,
within 60 30 days prior to the change in ownership, apply for a new certificate
     of approval. The state board
may waive the 60 30 day requirement upon its determination that an emergency
     exists and that the waiver and
change in ownership would be in the best interests of students currently
     enrolled in the proprietary school.
Whenever a change of ownership occurs as a result of death, court order or
     operation of law, the new owner
shall forthwith apply immediately for a new certificate of approval.
  (d)  At least 30 60 days prior to expiration of a certificate of approval,
     the state board shall forward to the
proprietary school a renewal application form which shall set forth any
     requirements by the state board for
revised or additional information to enable the state board to renew the
     certificate of approval.
  (e)  Any school which is not yet in operation when its application for a
     certificate of approval is filed shall
not begin operation accept payments for tuition, fees or other enrollment
     charges until receipt of a the certificate
of approval.
  (f)  Any school which does not plan to renew a certificate of approval must
     notify the state board at least 60
days prior to the expiration date of the certificate of approval.
  Sec. 9.  K.S.A. 72-4928 is hereby amended to read as follows: 72-4928. (a) If
     the state board, upon review
and consideration of an application for a certificate of approval, shall
     determine determines the applicant to be
unacceptable, the state board shall refuse to issue the certificate and set
     forth the reasons therefor for the
determination.
  (b)  If an applicant, upon written notification of refusal by the state
     board to issue a certificate of approval,
the applicant desires to contest such refusal, the applicant shall notify the
     state board in writing, within 15 days
after the date of service of such notice of refusal, of the desire to be heard,
     and such applicant shall be afforded
a hearing in accordance with the provisions of the Kansas administrative
     procedure act. Upon conclusion of
any such hearing hereunder, the state board shall issue a certificate of
     approval or a final refusal to do so.
  (c)  If an applicant, upon service of notice of refusal by the state board to
     issue a certificate of approval, fails
to request a hearing within 15 days thereafter after the date of service of such
     notice of refusal, the state board's
refusal shall be final.
  Sec. 10.  K.S.A. 72-4929 is hereby amended to read as follows: 72-4929. (a)
     The state board may revoke a
certificate of approval or place impose reasonable conditions upon the continued
     approval represented by a
certificate. Prior to revocation or imposition of conditions upon a certificate
     of approval, the state board shall
notify the holder of the certificate in writing of the impending action setting
     forth the grounds for the action
contemplated to be taken and affording a hearing on a date within 30 days after
     the date of such notice. Hearings
under this section shall be conducted in accordance with the provisions of the
     Kansas administrative procedure
act.
  (b)  A certificate of approval may be revoked or conditioned if the state
     board has reasonable cause to believe
that the school is guilty of a in violation of any provision of this act or of
     any rules and regulations adopted
hereunder under this act.
  Sec. 11.  K.S.A. 72-4931 is hereby amended to read as follows: 72-4931. (a)
     All representatives Each repre-
sentative of a proprietary school shall register with the state board.
     Application for registration may be made
at any time and shall be based on information submitted by the school and the
     representative in accordance
with the provisions of this act on a form prepared and furnished by the state
     board and shall contain such
information as may be required by the state board.
  (b)  Registration of a representative shall be effective upon receipt of
     notice from the state board and shall
remain in effect until expiration of the certificate of approval of the school
     employing such representative.
Renewal of representative registration shall be in accordance with the renewal
     application form forwarded to
the school by the state board.
  (c)  Denial or revocation of registration of a representative by the state
     board shall be in accordance with
the provisions of this act applicable to denial or revocation of a certificate
     of approval.
  (d)  Schools domiciled, or having their principal place of business, outside
     of the state of Kansas that employ
representatives to canvass, solicit or contract with any person within the state
     of Kansas shall be subject to the
requirements for registration of representatives.
  (e) (d)  A representative representing employed by more than one school shall
     obtain a separate permit not
be required to register for each school which he represents, except that when a
     representative represents such
schools having have a common ownership, only one permit shall be required.
  Sec. 12.  K.S.A. 1996 Supp. 72-4932 is hereby amended to read as follows:
     72-4932. (a) Before a certificate
of approval is issued under this act, a bond in the penal sum of $20,000 shall
     be provided by the school for the
period during for which the certificate of approval is to be issued and. The
     obligation of the bond shall be that
neither this act nor any rule or regulation adopted thereunder shall be violated
     by the school or any of and its
officers, agents, representatives or and other employees shall be bound, upon
     closure of the school, to deliver
or make available to the state board the records of all students who are in
     attendance at the school at the time
of closure or who have attended the school at any time prior to closure. The
     bond shall be a corporate surety
bond issued by a company authorized to do business in this state conditioned
     that the parties thereto shall pay
all damages or expenses which the state, or any governmental subdivision
     thereof, or any person may sustain
resulting from any such violation. The bond shall be for use and benefit of the
     state or any person or govern-
mental subdivision of the state which may suffer expense or damage by breach
     thereof. The bond shall be filed
with the state board. If the proprietary school ceases operation, the state
     board may recover against the bond
all necessary costs for the acquisition, permanent filing, and maintenance of
     student records of the proprietary
school.
  (b)  Before a representative may be registered under this act, a bond in the
     penal sum of $2,000 shall be
provided by or for each such representative for a period running concurrently
     with that of the school's certif-
icate of approval and the obligation of the bond shall be that neither a
     provision of this act nor any rule or
regulation adopted thereunder shall be violated, nor shall fraud or
     misrepresentation in securing the enrollment
of a student be committed by the representative. The bond shall be a surety bond
     issued by a company au-
thorized to do business in this state conditioned that the parties thereto shall
     pay all damages or expenses which
the state, any governmental subdivision thereof, or any person may sustain
     resulting from any such violation.
The bond shall be for the use and benefit of the state or any person or
     governmental subdivision of the state
as may suffer expense or damage by breach thereof. The bond shall be filed with
     the state board.
  (c) (b)  In lieu of the corporate surety bond required in subsections under
     subsection (a) and (b) of this
section, a school may, in the alternative, provide any other similar certificate
     or evidence of indebtedness or
insurance as may be acceptable to the state board if such certificate or
     evidence of indebtedness or insurance
meets all is conditioned that the requirements of subsections subsection (a) and
     (b) shall be met.
  (d)  Schools domiciled, or having their principal place of business, outside
     of the state of Kansas, that employ
representatives to canvass, solicit or contract with any person within the state
     of Kansas shall be subject to the
bond requirements for both the school and its representatives.
  (e)  The state board, for good cause shown, as recommended by the commission,
     may waive and suspend
the requirements set forth in subsections (a), (b), and (c) of this section with
     respect to schools operating wholly
or in part under a federal grant where no tuition fee is charged to the
     student.
  Sec. 13.  K.S.A. 72-4933 is hereby amended to read as follows: 72-4933. (a)
     Subject to the provisions of
subsection (b), no tuition in an amount greater than $200 $350 shall be
     collected from a student by any non-
correspondence school more than 10 30 days before the student receives actual
     shop or classroom instruction,
and not more than $100 $150 of such an amount may be retained by a school from
     any student who fails to
enter the school.
  (b)  In the case of a correspondence school, no tuition in an amount greater
     than $100 $200 shall be collected
by any correspondence school sooner than 10 days after from a student prior to
     the first submission of a lesson
by such the student for evaluation at the home office of the school, and not
     more than $50 $75 of any such
amount may be retained by the a school from any student who fails to enter the
     school.
  Sec. 14.  K.S.A. 72-4934 is hereby amended to read as follows: 72-4934. (a)
     No person shall:
  (1)  Operate a school without a certificate of approval;
  (2)  solicit prospective students without being bonded and registered or
     certified as required by this act;
  (3)  accept contracts or enrollment applications from a representative who is
     not bonded and certified reg-
istered as required by this act;
  (4)  use fraud or misrepresentation in advertising or in procuring a
     student's enrollment of a student.
  (b)  Violation of any provision of subsection (a) of this section or of any
     other provision of this act is a class
C nonperson misdemeanor.
  Sec. 15.  K.S.A. 72-4935 is hereby amended to read as follows: 72-4935. Upon
     application of the attorney
general or the a county or district attorney, the district courts shall have the
     power and jurisdiction to enjoin
any violation of this act. In cases of substantial and willful violations of the
     act, district courts shall have the
power and jurisdiction and to enjoin persons from engaging in business in this
     state. In any action brought to
enforce the provisions of this act, if the court finds that a person is
     willfully using or has willfully used a method,
any deceptive or misleading act or practice declared to be unlawful by this act,
     the attorney general or the a
county or district attorney, upon petition to the court, may recover on behalf
     of the state, in addition to the
criminal penalties provided herein in this act, on behalf of the state, a civil
     penalty of not exceeding one thousand
dollars ($1,000) $1,000 per person for each violation. For purposes of this
     section, a willful violation occurs
when the person committing the violation knew or should have known that his the
     conduct of the person con-
sisted of acts or practices which were deceptive or misleading.
  Sec. 16.  K.S.A. 72-4936 is hereby amended to read as follows: 72-4936. Any
     note or contract taken by any
school, or its officers, directors, agents, solicitors, or representatives,
     without having complied with the provi-
sions of this act, shall be null and void and any person who shall have entered
     into a contract with such a school
or its officers, directors, agents, solicitors, or representatives shall be
     entitled to a full refund of the money or
consideration paid plus interest accruing from the date of payment at the a rate
     of eight percent (8%) per annum
from the date of payment equal to the rate specified in K.S.A. 16-207, and
     amendments thereto, together with
other damages sustained by such student person.
  Sec. 17.  K.S.A. 72-4937 is hereby amended to read as follows: 72-4937.
     Whenever any school negotiates
any promissory instrument or note received from a student or on behalf of a
     student as payment of tuition or
other charges fees charged by such school, any person or assignee or holder to
     whom the instrument or note is
assigned shall take such instruments instrument or note subject to all defenses
     of any student which would be
available to that the student in an action on a simple contract from whom or on
     behalf of whom the instrument
or note was received.
  Sec. 18.  K.S.A. 72-4938 is hereby amended to read as follows: 72-4938. Fees
     for certificates of approval
and registration of representatives shall be collected by the state board in
     accordance with the following
schedule:
  (a)  For schools domiciled or having their principal place of business within
     the state of Kansas:
(1)  Initial issuance of certificate of approval  $250.00 $800.00
(2)  Renewal of certificate of approval, annual fee  200.00 300.00
(3)  Initial registration of representative  25.00 50.00
(4)  Annual renewal of registration of representative  15.00 25.00
  (b)  For schools domiciled or having their principal place of business
     outside the state of Kansas:
(1)  Initial issuance of certificate of approval  $700.00 $1500.00
(2)  Renewal of certificate of approval, annual fee  600.00 750.00
(3)  Initial registration of representative  70.00 100.00
(4)  Annual renewal of registration of representative  50.00 75.00
  Sec. 19.  K.S.A. 72-4939 is hereby amended to read as follows: 72-4939.
     Necessary and reasonable expense
of (a) (1) Subject to the provisions of subsection (b), the state board incurred
     in investigation or examination of
any school applying for a certificate of approval under this act shall be borne
     by such school and shall be paid
to the state board as a condition of and prior to the issuance of such
     certificate. shall remit all moneys received
pursuant to the provisions of this act to the state treasurer. Upon receipt of
     each such remittance, the state
treasurer shall be deposited deposit the entire amount remitted in the state
     treasury and credited shall credit
the same to a special the proprietary school fee fund to be used for the purpose
     of administering this act. All
expenditures from the proprietary school fee fund shall be made in accordance
     with appropriations acts upon
warrants of the director of accounts and reports issued pursuant to vouchers
     approved by the state board or by
a person or persons designated by the state board.
  (2)  On or before the 10th of each month, the director of accounts and
     reports shall transfer from the state
general fund to the proprietary school fee fund interest earnings based on: (A)
     The average daily balance of
moneys in the proprietary school fee fund for the preceding month; and (B) the
     net earnings rate for the pooled
money investment portfolio for the preceding month.
  (b) (1)  There is established in the state treasury the proprietary school
     tuition protection fund. The fund
shall consist of moneys collected from fees established under this subsection.
     The state board shall collect from
each proprietary school: (A) At the time of collection of the fee for initial
     issuance of a certificate of approval,
and as a condition of such issuance, a fee in the amount of $200, which fee
     shall be in addition to the fee for
issuance of the certificate of approval; and (B) at the time of collection of
     the fee for renewal of a certificate of
approval, and as a condition of such renewal, a fee in an amount not to exceed
     $4 per student enrolled at the
proprietary school during the preceding year, which fee shall be in addition to
     the fee for renewal of the certificate
of approval. The state board shall provide for collection of the fees
     established under this subsection as necessary
to attain a balance of $60,000 in the fund and thereafter as necessary to
     maintain a balance of not less than
$50,000 in the fund. Fees paid to the state board pursuant to this subsection
     shall be deposited in the state
treasury and credited to the proprietary school tuition protection fund.
  (2)  If a proprietary school ceases operation in the state of Kansas after
     the effective date of this act, the state
board of education shall assist the students of such school to continue and
     complete the courses of instruction or
study of such students at another proprietary school. Any expenses incurred by
     the state board in assisting
students to continue their courses of instruction or study or to receive a
     refund from a proprietary school that
has ceased operation in the state of Kansas, and any extraordinary expenses
     incurred by a proprietary school
that is providing a teachout for students placed at such school in accordance
     with this subsection, may be paid
from the proprietary school tuition protection fund. If a student cannot be
     placed at another proprietary school,
a refund of the student's tuition and fees may be made to the student from the
     fund. If another proprietary school
is willing to assume responsibility for continuance of the courses of
     instruction or study of a student of a pro-
prietary school that ceases operation in the state of Kansas with no significant
     changes in proximity or in the
quality of the courses of instruction or study, the student shall not be
     entitled to a refund. Attorney fees, court
costs, and damage awards which are related to the cessation of operation of a
     proprietary school may not be paid
from the fund.
  (3)  In order to be eligible for payments from the proprietary school tuition
     protection fund, students of
proprietary schools that have ceased operation shall submit an application for
     payment to the state board. Ap-
plications shall contain such information and be prepared and submitted in such
     form and manner as the state
board shall require.
  (4)  All payments from the proprietary school tuition protection fund shall
     be made upon warrants of the
director of accounts and reports pursuant to vouchers approved by the state
     board or by a person or persons
designated by the state board.
  (5)  Any proprietary school that ceases operation in the state of Kansas
     after the effective date of this act shall
be liable to the state board for any payments made from the proprietary school
     tuition protection fund for or on
behalf of students of such school. All amounts recovered by the state board
     pursuant to this provision shall be
deposited in the state treasury and credited to the proprietary school tuition
     protection fund.
  (6)  On or before the 10th of each month, the director of accounts and
     reports shall transfer from the state
general fund to the proprietary school tuition protection fund interest earnings
     based on: (A) The average daily
balance of moneys in the proprietary school tuition protection fund for the
     preceding month; and (B) the net
earnings rate for the pooled money investment portfolio for the preceding
     month.
  Sec. 20.  K.S.A. 72-4940 is hereby amended to read as follows: 72-4940. If
     any clause, paragraph, subsection
or sections section of this the Kansas proprietary school act shall be held
     unconstitutional or invalid, it shall be
conclusively presumed that the legislature would have created enacted the
     remainder of the act without such
unconstitutional or invalid clause, paragraph, subsection or sections section.
  Sec. 21.  K.S.A. 72-4917, 72-4918, 72-4919, 72-4920, 72-4921, 72-4922,
     72-4923, 72-4924, 72-4925, 72-4926,
72-4927, 72-4928, 72-4929, 72-4931, 72-4933, 72-4934, 72-4935, 72-4936, 72-4937,
     72-4938, 72-4939 and 72-
4940 and K.S.A. 1996 Supp. 72-4932 are hereby repealed.
  Sec. 22.  This act shall take effect and be in force from and after its
     publication in the statute book.