S.P. 727 - L.D. 1969
An Act to Protect Students of Barbering, Cosmetology and Other Proprietary Schools
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 20-A MRSA §9502, sub-§§1 and 2, as amended by PL 1997, c. 266, §12, are further amended to read:
1. Application requirements; licensing; bonding and revocation of license. The application for a license required by this chapter must be made on forms furnished by the commissioner and be accompanied by a fee of $100 and a surety bond in the penal sum of $10,000. For applicants that participate in state or federal financial aid programs, except the Federal Direct Student Loan Program under the federal Higher Education Act of 1965, 20 United States Code, Section 1087a et seq., the bond must be in favor of the Finance Authority of Maine. For all other applicants, the bond must be in favor of the department. The amount of the bond for a new applicant is $20,000. For renewal applicants, the amount of the bond must be equal to the greater of 10% of the applicant's gross receipts from tuition in the 12 months prior to the application for renewal or $20,000.
A. A license is valid for the calendar year in which it is issued.
B. The bond must be continuous and must provide indemnification to any student suffering loss as a result of any fraud or, misrepresentation, violation of this chapter or rules adopted under this chapter or breach of contract.
The bond must provide for written notification by the surety to the commissioner in the event of cancellation. Cancellation of the bond by the
surety, or of payment under the bond by the surety to the department or the Finance Authority of Maine, results in the revocation of the license. The bond must specifically provide that proceeds are available to pay tuition refunds to students or to student loan lenders on behalf of students eligible for those refunds pursuant to the policies of the school or state or federal law, rule or regulation.
C. If one or more students notify the department or the Finance Authority of Maine of a claim the student has against the school for fraud, misrepresentation, breach of contract or refund due, or that the school has violated the provisions of this chapter or applicable rules, or if any such event is discovered by the department or the Finance Authority of Maine from other sources and the holder of the bond has reason to believe the claim is valid, the holder may make a claim against the bond on behalf of the student or students affected, or on behalf of the department. The department and the Finance Authority of Maine have the concurrent right at any time to review the school's operations and all its records to determine if the school is in compliance with this chapter and rules adopted under this chapter, or to determine if any claim of a student against the school is valid.
2. Renewal fee and requirements. A fee of $50 is charged for the renewal of a license. Each submission for a license renewal must include the school's most recent financial audit conducted by a certified public accountant unaffiliated with the school. When a school does not participate in federal or state financial aid programs, internally prepared financial statements signed by the applicant are acceptable. Every renewal application must include a bond in the required amount. The commissioner shall provide copies of the audit or financial statements and, when the bond is not in favor of the department, the original bond to the Finance Authority of Maine and may provide financial information regarding the school to other state agencies with an interest in the operation of the school. When a school applies for renewal of a license, the school must certify that:
A. The school has included information in all school brochures and handbooks provided to students and has posted information in a location in the school frequented by students advising students of their rights to receive refunds and where to direct any complaints the students have concerning their education; and
B. The school is in compliance with all applicable federal and state laws and regulations.
Sec. 2. 20-A MRSA §9502, sub-§4 is enacted to read:
4. Definitions. As used in this section, the term "bond" means a bond, letter of credit or cash equivalent acceptable to the holder, in its discretion.
Sec. 3. 20-A MRSA §9502-A is enacted to read:
§9502-A. Complaints; license; refusal to renew; suspension; revocation
The commissioner may investigate complaints involving a school including any allegation of noncompliance with or violation of this chapter and applicable rules. The commissioner shall promptly notify the Finance Authority of Maine of any complaints involving student financial assistance. After a hearing in conformance with Title 5, chapter 375, subchapter IV, the commissioner may amend or modify a license and may suspend or refuse to renew a license as provided in Title 5, section 10004.
The Administrative Court may suspend or revoke the license of any person, partnership, association or corporation in violation of this chapter or any lawful order or rule issued by the department.
Sec. 4. 32 MRSA §9503, sub-§2, as enacted by PL 1983, c. 841, §4, is amended to read:
2. Enforcement actions. The State may bring an action in Superior Court to enjoin any person from violating this chapter, regardless of whether proceedings have been or may be instituted in the Administrative Court or whether criminal proceedings have been or may be instituted. A violation of the provisions of this chapter or any rules adopted under this chapter is prima facie evidence of a violation of the Maine Unfair Trade Practices Act. Responsible owners, officers and employees of licensees are personally liable to any person harmed by intentional violations of this chapter or applicable rules, including violations of rules regarding refunds, for the amount of damage caused by the violation.
Sec. 5. 20-A MRSA §9504, as amended by PL 1983, c. 841, §5, is further amended to read:
The commissioner may shall adopt rules for the administration and enforcement of this chapter. The rules may must establish requirements relating to advertising, records and recordkeeping record keeping, health and sanitation, safety, personnel, tuition, fees, contracts and other matters which may that protect the public and consumer interests and must establish requirements for payment of refunds, and notices and information to be provided to
students. Rules adopted pursuant to this chapter are routine technical rules pursuant to Title 5, chapter 375, subchapter II A.
Sec. 6. 20-A MRSA §9508 is enacted to read:
§9508. Actions on behalf of students
In addition to other powers or remedies under this chapter, the State may bring one or more actions in any state or federal court having jurisdiction on behalf of students harmed by fraud, misrepresentation, violation of this chapter or applicable rules, breach of contract or failure to pay refunds of tuition due from the school or its owners or employees. The Finance Authority of Maine has concurrent power to bring one or more actions in any state or federal court having jurisdiction on behalf of students harmed by failure to pay refunds of tuition due from the school or its owners or employees.
Sec. 7. 32 MRSA §14211, as amended by PL 1995, c. 397, §120, is repealed.
Sec. 8. 32 MRSA §14211-A is enacted to read:
1. Membership. The Board of Barbering and Cosmetology, as established by Title 5, section 12004-A, subsection 6, consists of 10 members including the Commissioner of Education or the commissioner's designee who is an ex officio and a nonvoting member. The Governor shall appoint the remaining 9 members, of whom 2 must be representatives of the public; 3 must be licensed and practicing cosmetologists; 2 must be licensed and practicing barbers; one must be a licensed instructor having no affiliation with any school currently licensed in the State; and one must be the owner of a licensed barbering or cosmetology school.
2. Term. Appointments are for 3-year terms and must comply with section 60. A member may be removed by the Governor for cause.
3. Qualifications. Each member of the board must be a citizen of the United States and a resident of this State. The cosmetologist and barber members must be currently licensed by the State and have engaged in active practice of their profession for at least 4 years immediately prior to appointment. The cosmetologist and barber members must hold valid licenses and must be actively engaged in the practice of cosmetology or barbering while serving on the board.
4. Meetings; quorum. The board shall meet at least once a year to conduct its business. Additional meetings may be held as necessary to conduct the business of the board and may be convened at the call of the chair or a majority of the board members. A majority of the board constitutes a quorum for all purposes.
5. Conflict of interest. The licensed barbering or cosmetology school owner member may not participate in any licensing or disciplinary proceeding before the board that involves the member's school or any former or current student of the member's school.
Sec. 9. 32 MRSA §14212, sub-§11 is enacted to read:
11. Inspections. The board or its agents or assistants shall inspect each establishment for compliance with the applicable requirements of this subchapter and the applicable rules of the board adopted pursuant to this subchapter. Each establishment must be inspected at least once a year for compliance with the applicable laws and rules relating to the public health and safety and the conduct and operation of establishments.
Sec. 10. 32 MRSA §14245, sub-§3, as enacted by PL 1997, c. 266, §18, is repealed.
Sec. 11. 32 MRSA §14246, as enacted by PL 1997, c. 266, §18, is amended to read:
§14246. License application form; fee; bond
1. Application requirements; licensing; bonding and revocation of license. The application for a license required by this subchapter must be made on forms furnished by the board and be accompanied by an application fee not to exceed $100 and a surety bond in the penal sum of $10,000. For applicants that participate in state or federal financial aid programs, except the Federal Direct Student Loan Program under the federal Higher Education Act of 1965, 20 United States Code, Section 1087a et seq., the bond must be in favor of the Finance Authority of Maine. For all other applicants, the bond must be in favor of the board. The amount of the bond for a new applicant is $20,000. For renewal applicants, the amount of the bond must be equal to the greater of 10% of the applicant's gross receipts from tuition in the 12 months prior to the application for renewal or $20,000.
A. A license is valid for the calendar year in which it is issued.
B. The bond must be continuous and must provide indemnification to any student suffering loss as a result of any fraud or, misrepresentation, violation of this subchapter or rules adopted under this subchapter or breach of contract. The bond must provide for written notification by the surety to the board in the event of cancellation. Cancellation of the bond by the surety, or pay-
ment under the bond by the surety to the board or the Finance Authority of Maine, results in the revocation of the license. The bond must also specifically provide that proceeds are available to pay tuition refunds to students or to student loan lenders on behalf of students eligible for those refunds pursuant to the policies of the school or state or federal law, rule or regulation.
C. If one or more students notify the board or the Finance Authority of Maine of a claim the student has against the school for fraud, misrepresentation, breach of contract or refund due, or that the school has violated the provisions of this subchapter or applicable rules, or if any such event is discovered by the board or the Finance Authority of Maine from other sources and the holder of the bond has reason to believe the claim is valid, the holder may make a claim against the bond on behalf of the student or students affected, or on behalf of the board. The board and the Finance Authority of Maine have the concurrent right at any time to review the school's operations and all its records to determine if the school is in compliance with this subchapter and rules adopted under this subchapter, or to determine if any claim of a student against the school is valid.
2. License fee; renewal fee; renewal requirements. A fee not to exceed $500 is charged for the initial license and for the annual renewal of a license. Each submission for a license renewal must include the school's most recent financial audit conducted by a certified public accountant unaffiliated with the school. When a school does not participate in federal or state financial aid programs, internally prepared financial statements signed by the applicant are acceptable. Every renewal application must include a bond in the required amount. The board shall provide copies of the audit or financial statements and, in cases in which the bond is not in favor of the board, the original bond to the Finance Authority of Maine and may provide financial information regarding the school to other state agencies with an interest in the operation of the school. When a school applies for renewal of a license the school must certify that:
A. The school has included information in all school brochures and handbooks provided to students, and has posted information in a location in the school frequented by students advising students of their rights to receive refunds and where to direct any complaints the students have concerning their education; and
B. The school is in compliance with all applicable federal and state laws and regulations.
3. Definitions. As used in this section, the term "bond" means a bond, letter of credit or cash equivalent, acceptable to the holder, in its discretion.
Sec. 12. 32 MRSA §14247, as enacted by PL 1997, c. 266, §18, is amended to read:
The board shall adopt rules for the licensing of persons, partnerships, associations or corporations to maintain and operate schools of barbering and schools of cosmetology. The rules must include standards relating to educational programs, instructor qualifications, records and recordkeeping record keeping, health and sanitation, safety and physical facilities, payment of refunds, and notices and information to be provided to students. Rules adopted pursuant to this subchapter chapter are routine technical rules pursuant to Title 5, chapter 375, subchapter II-A.
Sec. 13. 32 MRSA §14249, first ¶, as enacted by PL 1997, c. 266, §18, is amended to read:
The board may investigate complaints involving a school including any allegation of noncompliance with or violation of this subchapter and applicable rules. The board shall promptly notify the Finance Authority of Maine of any complaints involving student financial assistance. After a hearing in conformance with Title 5, chapter 375, subchapter IV, the board may amend or modify any license and may suspend or refuse to renew a license as provided in Title 5, section 10004.
Sec. 14. 32 MRSA §§14251 and 14252 are enacted to read:
The State may bring an action in Superior Court to enjoin any person from violating this subchapter or rules adopted under this subchapter regardless of whether proceedings have been or may be instituted in the Administrative Court or whether criminal proceedings have been or may be instituted. A violation of this subchapter or any rule adopted under this subchapter is prima facie evidence of a violation of the Maine Unfair Trade Practices Act. Responsible owners, officers and employees of licensees are personally liable to any person harmed by intentional violations of this subchapter or applicable rules, including violations of rules regarding the payment of refunds, for the amount of damage caused by the violation.
§14252. Actions on behalf of students
In addition to other powers or remedies under this subchapter, the State may bring one or more actions in any state or federal court having jurisdiction
on behalf of students harmed by fraud, misrepresentation, violation of this subchapter or applicable rules. The Finance Authority of Maine has concurrent power to bring one or more actions in any state or federal court having jurisdiction on behalf of students harmed by failure to pay refunds of tuition due from the school or its owners or employees.
Effective July 9, 1998, unless otherwise indicated.
| Revisor of Statutes Homepage | Subject Index | Search | Laws of Maine | Maine Legislature |
