For the purposes of this chapter, the following words shall have the meanings respectively ascribed to them by this section:

(1) COURSE. Any course, or portion of a plan or program of instruction, whether conducted in person, by mail, or by any other method.

(2) SCHOOL. Any person, group of people, institution, establishment, agency, or organization offering or administering a plan, course, or program of instruction whether conducted in person, by mail, or by any other method.

(3) PRIVATE SCHOOL. Operation of either profit or nonprofit entity as opposed to publicly owned or operated schools.

(4) AGENT or REPRESENTATIVE. Salesperson who presents materials, sells courses, or solicits students for enrollment therefor in this state outside the boundaries of the school facilities.

(5) LICENSE. A private school license identifying the name and location of the school and establishing the courses which may be offered thereunder.

(6) PERMIT. A pocket card issued to a representative providing identification as an authorized agent of a school.

(7) ECONOMIC FRAUD. The sale of courses or programs of study which an institution is unable or unwilling to provide as advertised or described because of inadequate financial stability, facilities, instructional staff, or commitment to honor written or verbal contracts made with students. Included is the solicitation of students for enrollment through intentional deception or misrepresentation of fact and the use of advertising which is known to be false, inaccurate, or misleading. Failure to properly administer student cancellation and refund policies according to appropriate regulations or agreements made with students shall also constitute economic fraud.

(8) ACADEMIC FRAUD. Courses offered are insufficient in quality, content, or administration to achieve the stated or implied educational objective. Persons offering such courses who know or reasonably should know that said courses cannot achieve the stated or implied educational objective shall be considered to be involved in academic fraud.

(9) RESIDENT PRIVATE SCHOOL. A school which is domiciled within Alabama and has established for a period of three years permanent administrative and management facilities in this state.

(10) PRINCIPAL BASE OF OPERATIONS. A school which has established a main campus in Alabama. Administrative and managerial support and physical plant facilities are maintained continuously in this location. Franchises chartered independently of parent corporations may be accorded this status provided they comply with the residency requirements.

(11) CHURCH SCHOOL. A school operated by a local church, group of churches, denomination, and/or association of churches on a nonprofit basis.

It shall be unlawful for any person to violate any provisions of this chapter. Any person required by this chapter to have a license or permit who shall do in this state any business of the nature described in this chapter without first obtaining such a license or permit as required of him or her by this chapter shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than five hundred dollars ($500) or a term of imprisonment not to exceed six months, or both. Each day's violation of this chapter shall constitute a separate offense. All fines shall be deposited in the State Treasury to the credit of the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate.

It is hereby generally recognized that courses of instruction, whether given in residence or by mail, result in substantial benefits for students pursuing such courses, provided that such courses are designed and administered in accordance with recognized educational standards and practices. It is also recognized that persons taking such courses and institutions offering such courses should be afforded additional protection under the laws of this state. It is the purpose of this chapter to supplement the general law of fraud of this state so as to provide for students, educational institutions, and the general public such added protection.

(a) This chapter shall not apply to any of the following schools nor to any person in regard to the operation of such schools, except for the conditions stated in this section:

(1) Schools operated on a nonprofit basis offering only courses or programs of study in the performance of or preparation for the ministry of any established church, denomination, or religion.

(2) Courses conducted by employers exclusively for their employees and courses conducted by labor unions exclusively for their members.

(3) Schools offering instruction in grades K-12, including the kindergarten, elementary, or secondary level and operated by a parochial, denominational, or religious organization, and/or as a ministry of a local church or group of churches on a nonprofit basis.

(4) Schools offering instruction in grades K-12, including the kindergarten, elementary, or secondary level, and operated by a community, educational organization, or group of parents, organized as a nonprofit educational corporation with the expectation of establishing a more favorable environment for those in attendance.

(5) Schools, colleges, and universities principally operated and supported by the State of Alabama or its political subdivisions.

(6) Seminars and short courses sponsored or offered by professional business, trade, or religious organizations primarily for benefit of members thereof, or similar public programs of training where the majority of the students have at least half of their tuition and enrollment fees paid by their employers, provided that evidence is supplied supporting this exemption continuously over the preceding five years.

(7) Any private school conducting resident courses whose principal base of operation is within the State of Alabama which has been in continuous operation for 20 years or more as of April 29, 1980, and that held accreditation as of that date by an accrediting agency recognized by the United States Department of Education.

(8) Programs of study regulated by other state boards, commissions, or agencies requiring school licensure and/or performance bonding, except where the appropriate regulatory agency requires a license under this chapter.

(9) Any proprietary postsecondary institution conducting resident courses that has been in operation within Alabama for at least five years as of July 1, 2004, and that is accredited by an accrediting agency recognized by the United States Department of Education shall be accorded the following provisions: Upon proof of such accreditation, such schools shall be issued a license and representative permits after required fees are paid to the Alabama Department of Postsecondary Education. The requisite accreditation shall satisfy the minimum standards of this chapter.

(b) Any private school exempted in this section shall retain the exempted status as long as the conditions of exemption remain valid. An accredited private school or program of study not elsewhere exempted whose accreditation is withdrawn, suspended, or revoked shall forfeit its exemption status until the grant of accreditation is restored. Due process of the accrediting agency shall be allowed prior to withdrawal of an exemption. Schools having accreditation withheld as a result of transfer of ownership shall be allowed a period of time to regain the grant in accordance with the appropriate accrediting agency regulations.

(c) An exemption pursuant to this section shall not be construed to constitute approval or endorsement by the State of Alabama for any purpose.

(d) Exempted private schools may voluntarily request to be licensed without surety as described in Sections 16-46-5 and 16-46-6.

(e) Private schools which cease operations shall place the student academic, attendance, and financial aid records in the office of the appropriate school administrator where a repository shall exist to safeguard and to make available these records to authorized persons upon request as follows:

(1) Schools which merge, consolidate, or undergo change of ownership shall deposit with the continuing school.

(2) Schools which are a part of a system, organization, franchise, or a ministry of a local church or a group of churches shall deposit with the administrative office thereof if such is to remain in operation.

(3) Elementary and secondary schools without system support shall deposit with the superintendent of the public county or city within whose district the school is located.

(4) Postsecondary, higher, and others not elsewhere designated shall deposit with the Alabama Department of Postsecondary Education.

No person shall:

(1) Make or cause to be made any statement or representation, oral, written, or visual, in connection with the operation of a school or the offering of a course, if such person knows or reasonably should know the statement or representation to be false, inaccurate, or misleading;

(2) Promise or guarantee employment utilizing information, training, or skill purported to be provided or otherwise enhanced by a course or school, unless such person offers the student or prospective student a bona fide contract of employment agreeing to employ said student or prospective student for a period of not less than six months in a business or other enterprise regularly conducted by him and in which such information, training, or skill is a normal condition of employment; or

(3) Do any act constituting part of the conduct of operating a school or administration of a course or the obtaining of students therefor if such person knows or reasonably should know that any phase or incident of the conduct or operation of the school or administration of the course is being carried on by the use of fraud, deception, or other misrepresentation or by a person or persons operating a school without a license or soliciting students without a permit provided for by this chapter.

(a) No proprietary postsecondary school, except those enumerated in Section 16-46-3, shall operate within this state unless the school first secures a license from the Alabama Department of Postsecondary Education, regardless of whether the school enrolls Alabama students or has a physical presence within the State of Alabama. Procedures for licensing and bonding of schools operating courses in separate locations shall be established in the rules and regulations pursuant to Section 16-46-7.

(b) No K-12 school, except those enumerated in Section 16-46-3, shall operate within this state unless the school first secures a license from the Alabama State Department of Education. Procedures for licensing and bonding of schools operating courses in separate locations shall be established in the rules and regulations pursuant to Section 16-46-7.

(c) Upon satisfactory review of a school, the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, shall issue a license to be publicly displayed on the premises where the school operates.

(d) The application for a license for a K-12 school shall be made on forms furnished by the Alabama State Department of Education. Application for a license for a proprietary postsecondary institution shall be made on forms furnished by the Alabama Department of Postsecondary Education.

(e) The State Board of Education shall promulgate a schedule of licensing fees, which may be revised from time to time upon reasonable notice at the discretion of the board. All licensing fees collected from postsecondary institutions shall be deposited in the State Treasury to the credit of the private school licensing section in the Alabama Department of Postsecondary Education. Licensing fees collected from K-12 schools shall be deposited in the State Treasury to the credit of the Alabama State Department of Education.

(f) All K-12 schools except those enumerated in Section 16-46-3 shall be required to establish financial stability by a surety acceptable to the Alabama State Department of Education in the penal sum of not more than $10,000.00. The sum required to provide prepaid tuition liability shall be established by the Alabama State Department of Education by appropriate regulation pursuant to Section 16-46-7. All proprietary postsecondary institutions, except those enumerated in Section 16-46-3, shall be required to establish financial stability by surety acceptable to the Alabama Department of Postsecondary Education in the penal sum of not more than twenty thousand dollars ($20,000). The sum required to provide prepaid tuition liability shall be established by the Alabama Department of Postsecondary Education by appropriate regulation pursuant to Section 16-46-7. Financial stability for separate locations shall be provided through the principal base of operations. Such surety shall be continuous and shall be conditioned to provide indemnification to any student suffering loss as a result of any fraud or misrepresentation used in procuring his or her enrollment in and/or administering a course covered by this chapter for the purpose of assuring due and faithful performance of agreements or contracts with students.

(g) A license shall be valid for two years from the date on which it was issued.

(h) Regardless of the number of years that a surety is in force, the aggregate liability thereon shall in no event exceed the penal sum of the surety accepted by either the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate. The surety may cancel the same upon giving 30 days' notice in writing to the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, and thereafter shall be relieved of liability for any breach of condition occurring after the effective date of the cancellation.

(i) Application for a license shall also be accompanied by a financial statement acceptable to the State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, and a copy of the current catalog, brochure, or bulletin of the school, which shall include all of the following:

(1) Identifying data such as volume number, date, and publication.

(2) Name, address, and telephone of the school and its governing body, officials, and faculty.

(3) A clear and concise statement of the objectives of the training given by the school.

(4) The exact manner in which the stated objectives are to be attained.

(5) A tuition and refund policy which is in compliance with the appropriate regulation pursuant to Section 16-46-7.

(6) A grievance policy which directs aggrieved students to first attempt to resolve complaints through the appropriate school officials. Student grievances not resolved by the school shall be referred to the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate.

(7) Such other reasonable information as the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, may impose.

(j) Upon receipt of the required information, the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, may issue a license provided the institution is complying with all of the following standards:

(1) The courses, curriculum, and instructions of such school are consistent, in quality and content, with recognized educational standards as determined by the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate.

(2) There is available to the school adequate space, equipment, instructional material, and instructor personnel to provide training of good quality.

(3) Adequate records as determined by the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, are kept to show attendance and student progress. Records shall be available upon request of the student to be furnished prospective employers and other interested parties.

(4) The school is financially sound and capable of fulfilling its commitments for training.

(5) Schools or courses domiciled outside Alabama shall designate a state agent who is a resident of this state to service all complaints against the school.

(6) A student enrollment agreement or contract shall be utilized to set forth clearly all conditions for enrollment in and completion of courses of instruction, itemized course cost, terms of payment, and other conditions the school may desire to establish. Conditions for forced withdrawal for academic or disciplinary reasons shall be stated. Contracts establishing installment payments with interest charges shall be in compliance with Alabama statutes regarding lending and usury and shall be certified by the Alabama State Banking Department.

(7) The school shall comply with all local, state, and federal laws and regulations.

(k) Any license applied for pursuant to this section shall be granted, deferred, or denied within 30 days of the receipt of the application therefor by either the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate.

(l) The Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, may invoke negative actions against any license issued if the holder of the license solicits or enrolls students or administers instructions through fraud, deception, or misrepresentation. Negative actions shall include probation, suspension, and/or revocation.

(m) The fact that a surety is in force pursuant to this section shall not limit nor impair any right of recovery otherwise available under law, nor shall the amount of such surety be relevant in determining the amount of damages or other relief to which any plaintiff may be entitled.

(n) No recovery against any student shall be had on any contract if such school was not the holder of a license as required by this section at the time that such school or its representative negotiated the contract for or sold such course.

(o) Schools which undergo transfer of ownership shall be reviewed to determine that minimum standards remain in effect. The license may not be transferred to new ownership. Financial stability of the new ownership shall be established.

(p) The issuance of a license pursuant to this section shall represent authority to operate an educational institution in Alabama. Licensure may not be advertised as an endorsement or recommendation, but it implies compliance with the laws of Alabama. Advertising may indicate only that the school is licensed by the state.

(a) No person representing any school or other individual or organization offering courses in this state, or from a place of business in this state, whether located within or outside this state, shall sell any course or solicit students therefor in this state for a consideration or remuneration unless a permit is first secured from the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, with the exception of agents representing schools exempted under Section 16-46-3. If the agent represents more than one school, a separate permit shall be obtained for each school represented. The application for a permit shall be made on forms to be furnished by either the Alabama State Department of Education or Alabama Department of Postsecondary Education, as appropriate, and shall be renewed every two years.

(b) Upon satisfactory review of an agent, the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, shall issue a pocket card displaying the signature of the person, facial photo, name and address, the name and address of the employing school, and certifying that the person is an authorized agent of the school. A permit shall be valid for two years from the date on which it was issued. This permit shall be carried on person when representing the school as an agent.

(c) Schools utilizing agents shall provide indemnification to any student suffering loss as a result of any fraud or misrepresentation used by the agents in procuring enrollment.

(d) One complimentary agent's permit may be issued to a designated owner, director, or managerial person of each licensed school identified as a principal base of operation.

(e) No person shall be issued a permit to represent any school whether located within or outside this state until it has been determined by the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, that the school has qualified under the requirements of Section 16-46-5.

(f) Any permit applied for pursuant to this section shall be granted, deferred, or denied within 30 days of the receipt of the application therefor by the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate.

(g) The Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, may invoke negative actions against any permit issued if the holder of the permit solicits or enrolls students through fraud, deception, or misrepresentation or upon a finding that the license to operate the school represented is revoked or it is determined by the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, that the school located outside of the state which the holder of the permit represents does not meet the requirements of Section 16-46-5. Negative actions shall include probation, suspension, and/or revocation.

(h) The fact that a surety is in force shall not limit or impair any right of recovery otherwise available under law, nor shall the amount of such bond be relevant in determining the amount of damages or other relief to which any plaintiff may be entitled.

(i) No recovery shall be had on any contract for or in connection with a course by any person selling or administering such course if the representative soliciting the students or selling the course was not the holder of a permit as required by this section at the time that such representative negotiated the contract for or sold such course.

(j) No recovery shall be had on any contract for or in connection with a course by any person or institution holding such a contract who is legally a third party or holding agent for one of the other parties where the selling of the course or the conduct or operation of the school or the administering of the course is carried on by use of fraud, deception, or other misrepresentation or if the person or persons operating the school, administering the course, or soliciting students is without a license provided by this chapter.

(k) The issuance of a permit pursuant to this section shall not be deemed to constitute endorsement of any course, person, or institution offering, conducting, or otherwise administering the same. Any representation contrary to this subsection or tending to imply that a permit issued pursuant to this section constitutes such endorsement shall be a misrepresentation within the meaning of this chapter. Permits to sell courses, solicit students, or otherwise represent a school located within this state may not be issued unless the school first obtained a license to operate under Section 16-46-5, nor may permits be issued to represent schools located outside of the state until it has been determined by the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, that such school qualifies under the requirements of Section 16-46-5.

The Alabama State Board of Education may adopt rules and regulations for the administration and enforcement of this chapter and shall require the Chancellor to establish an advisory committee of owners or operators of proprietary postsecondary institutions to which this chapter applies and of other persons with knowledge in the field to which this chapter applies to advise the Chancellor in the administration of this chapter relating to proprietary postsecondary institutions. The advisory committee may review any action taken or policy established by the Alabama Department of Postsecondary Education, as appropriate, in the administration of this chapter and may offer recommendations to the Chancellor or State Board of Education. Reimbursement for per diem and travel to advisory committee meetings shall be authorized under this chapter and shall be expended by voucher as required by the Alabama Department of Postsecondary Education.

The Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, may institute such action of law or in equity as may be necessary to enforce this chapter. In addition to any other remedy under this chapter, the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, may apply for relief by injunction, mandamus, or any other appropriate remedy in equity without being compelled to allege or prove that an adequate remedy at law does not otherwise exist. The Alabama State Department of Education and the Alabama Department of Postsecondary Education are not required to give or post bond in any action to which it is party, whether upon appeal or otherwise. All legal actions shall be brought against the Alabama State Department of Education or the Alabama Department of Postsecondary Education, as appropriate, in the name of the Alabama State Board of Education or the Alabama Department of Postsecondary Education, as appropriate. The Alabama State Department of Education and the Alabama Department of Postsecondary Education, as appropriate, may institute an action by its own attorney, but each shall have the right, if it deems advisable, to call upon any assistant district attorney or district attorney to represent it in the circuit courts of this state or the Attorney General to represent it on appeal in the appellate courts of this state.

Any person or school aggrieved by the actions of the Alabama State Department of Education or the Alabama Department of Postsecondary Education with respect to exemption, issuance, denial, deferral, probation, suspension, or revocation of a license or permit provided for in Sections 16-46-3, 16-46-5, and 16-46-6, may file within 30 days a petition for review by the Alabama State Board of Education. The aggrieved person or school shall then be entitled to a hearing before the Alabama State Board of Education. The person or school may be represented by counsel at the hearing. The aggrieved person or school may adduce evidence, both oral and documentary, at such hearing and on official record if such hearing shall be transcribed by a qualified court reporter. After the Alabama State Board of Education acts on the petition for review, any person or school aggrieved by the Alabama State Board of Education's actions shall, within 30 days after receiving notice of any such action, have such action reviewed by a writ of certiorari by filing in the Circuit Court of Montgomery County, Alabama, a verified petition setting out the specific action of the Alabama State Board of Education by which the person or school is aggrieved. The court shall consider only such matters as are contained in the petition. Upon such petition being filed, a writ of certiorari shall be issued out of the court directly to the Alabama State Board of Education requiring it to file with the court the records and transcript of testimony upon which such action or order was made and requiring the board to file an answer to the petition within 30 days of service of the writ. Upon the board filing such answer, the issue shall be joined thereon without further pleading and the case considered on the petition, the records of the board, and the answer filed by the board, but no new or additional evidence shall be taken or heard by the court. If new or additional evidence is discovered by any party or school, after the hearing of the Alabama State Board of Education, the evidence may be made grounds for a motion for a new hearing before the Alabama State Board of Education under the rules applicable to similar laws for a new trial in the state courts of Alabama. Such court may suspend or stay such actions of the Alabama State Board of Education complained of in such petition, pending final hearing, only upon the petitioner executing a bond in such amount as the court deems reasonably sufficient to pay all costs of appeal if the petition is not sustained. In no case shall the bond be less than the reasonable cost of the transcript of the hearing before the Alabama State Board of Education that is being appealed. Upon final hearing, the court shall have jurisdiction to reverse, vacate, or modify the action complained of if, upon the consideration of the issues before the court, the court is of the opinion that the action is unlawful.