84R21905 MAW-F
By: Smith H.B. No. 4068
Substitute the following for H.B. No. 4068:
By: Smith C.S.H.B. No. 4068
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of barber schools and beauty culture
schools; amending provisions subject to a criminal penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1601.001(a), Occupations Code, is
amended by amending Subdivisions (1-a), (4-b), and (6) and adding
Subdivisions (1-b), (4-c), (4-d), (6-a), (6-b), and (7-a) to read
as follows:
(1-a) "Barber establishment" means a barbershop,
mini-barbershop, specialty shop, dual shop, mini-dual shop, mobile
shop, or barber school that is subject to regulation under this
chapter.
(1-b) "Barber school" means a place that holds a
permit issued under Subchapter H to teach the practice of barbering
and may be privately or publicly funded. The term includes a barber
college.
(4-b) "Course" means an identifiable unit of
instruction that is part of a course of training.
(4-c) "Course of training" means the curriculum
offered by a barber school to satisfy licensure requirements.
(4-d) "Department" means the Texas Department of
Licensing and Regulation.
(6) "Enrollment agreement" means the written terms
under which a student agrees to attend a course of training.
(6-a) "Executive director" means the executive
director of the department.
(6-b) "Manager" means the person who controls or
directs the business of a barbershop or directs the work of a person
employed in a barbershop.
(7-a) "Owner" means, with respect to a barber
establishment:
(A) the individual owner of the barber
establishment;
(B) any partner of a partnership that owns the
barber establishment;
(C) the corporation that owns the barber
establishment and its directors, its officers, and each shareholder
owning shares of issued and outstanding stock aggregating at least
10 percent of the total of the issued and outstanding shares;
(D) the beneficiary of a trust that holds an
ownership interest in the barber establishment; or
(E) each person who owns not less than 10 percent
of a legal entity that owns the barber establishment.
SECTION 2. Section 1601.3571(b), Occupations Code, is
amended to read as follows:
(b) The comptroller shall invest the account in the same
manner as other state funds. Sufficient money from the account
shall be appropriated to the department for the purpose of
refunding unearned [unused] tuition if a barber school ceases
operation before its course of instruction is complete. The
department shall administer claims made against the account. In
this subsection, "unearned tuition" has the meaning assigned by
Section 1601.550.
SECTION 3. Subchapter L, Chapter 1601, Occupations Code, is
amended by adding Section 1601.550 to read as follows:
Sec. 1601.550. DEFINITIONS. In this subchapter:
(1) "Earned tuition" means the portion of tuition and
fees owed by a student to a barber school for instruction the
student has received.
(2) "Fees" means charges assessed by a barber school
that are in addition to tuition. The term includes charges for
instructional supplies, books, and kits, student activity fees,
laboratory fees, services charges, and deposits.
(3) "Tuition" means the agreed amount to be charged
for a complete course of training.
(4) "Unearned tuition" means the portion of tuition
and fees charged by a barber school to a student for which the
student has not yet received instruction.
SECTION 4. Section 1601.556, Occupations Code, is amended
to read as follows:
Sec. 1601.556. INFORMATION PROVIDED TO PROSPECTIVE
STUDENT. The holder of a barber school permit shall furnish each
prospective student with:
(1) a course outline;
(2) a schedule of the tuition and each fee [other fees]
assessed;
(3) the school's policies [refund policy] required
under Sections 1601.562 and [Section] 1601.563 and the information
provided by Section 1601.564;
(4) the school's grading policy and rules relating to
incomplete grades;
(5) the school's rules of operation and conduct,
including rules relating to absences;
(6) the department's name, mailing address, and
telephone number for the purpose of directing complaints to the
department; and
(7) the current rates of job placement and employment
of students who complete a course of training.
SECTION 5. Section 1601.563, Occupations Code, is amended
by amending Subsections (a) and (c) and adding Subsections (b-1),
(d), (e), and (f) to read as follows:
(a) A barber school permit holder shall maintain a refund
policy to provide for the refund of the unearned [unused part of]
tuition charged to [, fees, and other charges paid by] a student
who, after the expiration of the cancellation period established
under Section 1601.562:
(1) fails to begin the course of training;
(2) withdraws from the course of training; or
(3) is terminated from the course of training before
completion of the course of training.
(b-1) The minimum refund of unearned tuition to a student is
calculated by dividing the number of hours remaining in the course
for which the student has been charged after the effective date of
the termination by the total number of hours in the course for which
the student has been charged, and then multiplying the resulting
number by the amount of the tuition.
(c) A barber school permit holder shall publish in the
catalogue and enrollment agreement of the school a description of
the refund policies [policy].
(d) The owner of a barber school shall calculate the refund
on a form approved by the department or in a manner acceptable to
the department.
(e) Refunds for fees charged to the student shall be made in
a reasonable manner.
(f) The owner of a barber school may seek recovery from a
student of the unpaid portion of earned tuition owed by the student.
SECTION 6. Sections 1601.564(a) and (c), Occupations Code,
are amended to read as follows:
(a) If a student who begins a course of training [scheduled
to last not more than 12 months] withdraws from the course or is
terminated from the course by the barber school, the school:
(1) may retain 100 percent of the earned [$100 in]
tuition [and fees paid by the student]; and
(2) is not obligated to refund any unearned
[additional outstanding] tuition if the student withdraws or is
terminated during the last 25 [50] percent of the course.
(c) If a student withdraws or is terminated after 50 percent
of the course has been completed, the school shall allow the student
to reenter the school at any time before the second [fourth]
anniversary of the date of withdrawal or termination.
SECTION 7. Section 1601.565(b), Occupations Code, is
amended to read as follows:
(b) A student who receives a grade of incomplete may
reenroll in the course of training before the second [fourth]
anniversary of the date the student withdraws and may complete the
subjects without incurring [paying] additional tuition charges.
SECTION 8. Sections 1601.566(a), (b), and (d), Occupations
Code, are amended to read as follows:
(a) A barber school shall pay a refund owed under this
subchapter not later than the 30th day after the later of:
(1) the effective date of the termination; or
(2) the date the student otherwise becomes eligible
for the refund.
(b) A school that fails to pay the refund within the period
required by this section shall pay penalty interest on the amount of
the refund for the period beginning on the first [31st] day after
the date the school was required to pay the refund under Subsection
(a) [student becomes eligible for the refund] and ending on the day
preceding the date the refund is made. The Texas Workforce
Commission [commissioner of education] shall annually set the
penalty interest rate at a rate sufficient to deter a school from
retaining money paid by a student.
(d) The executive director [department] may waive [exempt a
school from] the payment of penalty interest if the school makes a
good faith effort to refund the tuition but is unable to locate the
student. The school shall provide to the department on request
documentation of the school's effort to locate the student.
SECTION 9. Subchapter L, Chapter 1601, Occupations Code, is
amended by adding Section 1601.567 to read as follows:
Sec. 1601.567. EFFECT OF SCHOOL CLOSURE. (a) A school that
ceases to operate shall refund unearned tuition.
(b) A refund under this section may be paid from the barber
school tuition protection account. The amount paid from the
account may not exceed $1,000 per student.
SECTION 10. Section 1602.001, Occupations Code, is amended
by amending Subdivision (1) and adding Subdivisions (1-a), (2-a),
(2-b), (2-c), (3-b), and (4-a) to read as follows:
(1) "Beauty culture school" means a cosmetology
school, public or private, that is subject to regulation under this
chapter.
(1-a) "Board" means the Advisory Board on Cosmetology.
(2-a) "Cosmetology establishment" means a beauty
salon, beauty shop, specialty salon, specialty shop, mini-salon,
dual shop, mini dual-shop, mobile shop, or beauty culture school,
public or private, that is subject to regulation under this
chapter.
(2-b) "Course" means an identifiable unit of
instruction that is part of a course of training.
(2-c) "Course of training" means the curriculum
offered by a beauty culture school to satisfy licensure
requirements.
(3-b) "Enrollment agreement" means the written terms
under which a student agrees to attend a course of training.
(4-a) "Owner" means, with respect to a cosmetology
establishment:
(A) the individual owner of the cosmetology
establishment;
(B) any partner of a partnership that owns the
cosmetology establishment;
(C) the corporation that owns the cosmetology
establishment and its directors, its officers, and each shareholder
owning shares of issued and outstanding stock aggregating at least
10 percent of the total of the issued and outstanding shares;
(D) the beneficiary of a trust that holds an
ownership interest in the cosmetology establishment; or
(E) each person who owns not less than 10 percent
of a legal entity that owns the cosmetology establishment.
SECTION 11. Subchapter J, Chapter 1602, Occupations Code,
is amended by adding Section 1602.450 to read as follows:
Sec. 1602.450. DEFINITIONS. In this subchapter:
(1) "Earned tuition" means the portion of tuition and
fees owed by a student to a beauty culture school for instruction
the student has received.
(2) "Fees" means charges assessed by a beauty culture
school that are in addition to tuition. The term includes charges
for instructional supplies, books, and kits, student activity fees,
laboratory fees, services charges, and deposits.
(3) "Tuition" means the agreed amount to be charged
for a complete course of training.
(4) "Unearned tuition" means the portion of tuition
and fees charged by a beauty culture school to a student for which
the student has not yet received instruction.
SECTION 12. Section 1602.452, Occupations Code, is amended
to read as follows:
Sec. 1602.452. INFORMATION PROVIDED TO PROSPECTIVE
STUDENT. The holder of a private beauty culture school license
shall furnish each prospective student with:
(1) a course outline;
(2) a schedule of the tuition and each fee [other fees]
assessed;
(3) the policies [refund policy] required under
Sections 1602.457 and [Section] 1602.458 and the information
provided by Section 1602.459;
(4) the school grading policy and rules relating to
incomplete grades;
(5) the school rules of operation and conduct,
including rules relating to absences;
(6) the name, mailing address, and telephone number of
the department for the purpose of directing complaints to the
department; and
(7) the current rates of job placement and employment
of students who complete a course of training.
SECTION 13. Section 1602.455(d), Occupations Code, is
amended to read as follows:
(d) The department may [On evaluation and approval, the
executive director shall] certify [in writing] to the student and
to the school to which the student seeks a transfer that:
(1) the stated courses and hours have been
successfully completed; and
(2) the student is not required to repeat the hours of
instruction.
SECTION 14. Section 1602.458, Occupations Code, is amended
to read as follows:
Sec. 1602.458. REFUND POLICY. (a) The holder of a private
beauty culture school license shall maintain a refund policy to
provide for the refund of any unearned [unused part of] tuition
charged to [, fees, and other charges paid by] a student who, at the
expiration of the cancellation period established under Section
1602.457:
(1) fails to enter the course of training;
(2) withdraws from the course of training; or
(3) is terminated from the course of training before
completion of the course of training.
(b) The refund policy must provide that:
(1) the refund is based on the period of the student's
enrollment, computed on the basis of course time expressed in
scheduled hours, as specified by an enrollment agreement, contract,
or other document acceptable to the department;
(2) the effective date of the termination for refund
purposes is the earliest of:
(A) the last date of attendance, if the student
is terminated by the school;
(B) the date the license holder receives the
student's written notice of withdrawal; or
(C) 10 school days after the last date of
attendance; and
(3) the school may retain not more than $100 if:
(A) tuition is collected before the course of
training begins; and
(B) the student does not begin [fails to withdraw
from] the course of training before the cancellation period
expires.
(c) The minimum refund of unearned tuition to a student is
calculated by dividing the number of hours remaining in the course
for which the student has been charged after the effective date of
the termination by the total number of hours in the course for which
the student has been charged, and then multiplying the resulting
number by the amount of the tuition.
(d) The owner of a beauty culture school shall calculate the
refund on a form approved by the department or in a manner
acceptable to the department.
(e) Refunds for fees charged to the student shall be made in
a reasonable manner.
(f) The owner of a beauty culture school may seek recovery
from a student of the unpaid portion of earned tuition owed by the
student.
SECTION 15. Section 1602.459(a), Occupations Code, is
amended to read as follows:
(a) If a student begins a course of training at a private
beauty culture school [that is scheduled to run not more than 12
months] and, during the last 25 [50] percent of the course,
withdraws from the course or is terminated by the school, the
school:
(1) may retain 100 percent of the earned tuition and
fees paid by the student; and
(2) is not obligated to refund unearned [any
additional outstanding] tuition.
SECTION 16. Section 1602.460, Occupations Code, is amended
by amending Subsections (a), (c), and (d) and adding Subsection
(a-1) to read as follows:
(a) A beauty culture school shall pay a refund owed under
this subchapter not later than the 30th day after the later of:
(1) the effective date of the termination; or
(2) the date the student otherwise becomes eligible
for the refund.
(a-1) If tuition is not refunded within the period required
by this section [Section 1602.459], the school shall pay penalty
interest on the amount of the refund for the period beginning the
first day after the date the school was required to pay the refund
under Subsection (a) [period expires] and ending the day preceding
the date the refund is made.
(c) The Texas Workforce Commission [commissioner of
education] shall annually set the penalty interest rate at a rate
sufficient to deter a school from retaining money paid by a student.
(d) The executive director [department] may waive [exempt a
school from] the payment of penalty interest if the school makes a
good faith effort to refund the tuition but is unable to locate the
student. The school shall provide to the department on request
documentation of the effort to locate the student.
SECTION 17. Section 1602.461, Occupations Code, is amended
to read as follows:
Sec. 1602.461. REENTRY OF STUDENT AFTER WITHDRAWAL OR
TERMINATION. If a student voluntarily withdraws or is terminated
after completing 50 percent of the course at a private beauty
culture school, the school shall allow the student to reenter at any
time during the 24-month [48-month] period following the date of
withdrawal or termination.
SECTION 18. Section 1602.462(b), Occupations Code, is
amended to read as follows:
(b) A student who receives a grade of incomplete may
reenroll in the program during the 24-month [48-month] period
following the date the student withdraws and complete the subjects
without incurring [payment of] additional tuition charges.
SECTION 19. Sections 1602.463(a), (b), and (c), Occupations
Code, are amended to read as follows:
(a) If a private beauty culture school ceases to operate
[closes], the department shall attempt to arrange for students
enrolled in the closed school to attend another [private beauty
culture] school.
(b) If a student from a closed school is placed in another [a
private beauty culture] school, the expense incurred by the
receiving school in providing training directly related to
educating the student, including the applicable tuition for the
period for which the student paid tuition, shall be paid from the
private beauty culture school tuition protection account.
(c) A school that ceases to operate shall refund unearned
tuition. [If a student from a closed school cannot be placed in
another school, the student's tuition and fees shall be refunded as
provided by Section 1602.458. If a student from a closed school
does not accept a place that is available and reasonable in another
school, the student's tuition and fees shall be refunded under the
refund policy maintained by the closed school under Section
1602.459.] A refund under this subsection may [shall] be paid from
the private beauty culture school tuition protection account. The
amount of the refund may not exceed $35,000.
SECTION 20. The following provisions of the Occupations
Code are repealed:
(1) Section 1601.001(b);
(2) Section 1601.564(b);
(3) Section 1602.455(e); and
(4) Sections 1602.459(b) and (c).
SECTION 21. Not later than December 1, 2015, the Texas
Commission of Licensing and Regulation shall adopt rules
implementing Chapters 1601 and 1602, Occupations Code, as amended
by this Act.
SECTION 22. The changes in law made by this Act apply only
to a student enrolling in a barber school or beauty culture school
on or after February 1, 2016. A student enrolling in a barber
school or beauty culture school before that date is governed by the
law in effect immediately before the effective date of this Act, and
the former law is continued in effect for that purpose.
SECTION 23. This Act takes effect September 1, 2015.