§ 115D‑95. (Effectiveuntil July 1, 2010) Bonds required.
(a) A guaranty bond isrequired for each school that is licensed to operate: Provided, however, aschool that is unable to secure a bond may, with the consent of the State Boardof Community Colleges, provide an alternative to a guaranty bond, as providedin subsection (c) of this section.
The State Board may revoke thelicense of a school that fails to maintain a bond or an alternative to a bond,pursuant to this section.
(b) (1) Whenapplication is made for a license or license renewal, the applicant shall filea guaranty bond with the clerk of the superior court of the county in which theschool will be located. The bond shall be in favor of the students. The bondshall be executed by the applicant as principal and by a bonding companyauthorized to do business in this State. The bond shall be conditioned toprovide indemnification to any student, or his parent or guardian, who hassuffered a loss of tuition or any fees by reason of the failure of the schoolto offer or complete student instruction, academic services, or other goods andservices related to course enrollment for any reason, including the suspension,revocation, or nonrenewal of a school's license, bankruptcy, foreclosure, orthe school ceasing to operate.
(2) The bond shall be inan amount determined by the State Board of Community Colleges to be adequate toprovide indemnification to any student, or his parent or guardian, under theterms of the bond. The bond amount for a school shall be at least equal to themaximum amount of prepaid tuition held at any time during the last fiscal yearby the school. The bond amount shall also be at least ten thousand dollars($10,000).
Eachapplication for a license shall include a letter signed by an authorizedrepresentative of the school showing in detail the calculations made and themethod of computing the amount of the bond, pursuant to this subdivision andthe rules of the State Board. If the State Board finds that the calculationsmade and the method of computing the amount of the bond are inaccurate or thatthe amount of the bond is otherwise inadequate to provide indemnification underthe terms of the bond, the State Board may require the applicant to provide anadditional bond.
(3) The bond shallremain in force and effect until cancelled by the guarantor. The guarantor maycancel the bond upon 30 days notice to the State Board of Community Colleges.Cancellation of the bond shall not affect any liability incurred or accruedprior to the termination of the notice period.
(c) An applicant thatis unable to secure a bond may seek a waiver of the guaranty bond from theState Board of Community Colleges and approval of one of the guaranty bondalternatives set forth in this subsection. With the approval of the StateBoard, an applicant may file with the clerk of the superior court of the countyin which the school will be located, in lieu of a bond:
(1) An assignment of asavings account in an amount equal to the bond required (i) which is in a formacceptable to the State Board of Community Colleges; (ii) which is executed bythe applicant; and (iii) which is executed by a state or federal savings andloan association, state bank, or national bank, that is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (iv) for which access to the account in favor of the State of NorthCarolina is subject to the same conditions as for a bond in subsection (b) ofthis section.
(2) A certificate ofdeposit (i) which is executed by a state or federal savings and loanassociation, state bank, or national bank, which is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (ii) which is either payable to the State of North Carolina,unrestrictively endorsed to the State Board of Community Colleges; in the caseof a negotiable certificate of deposit, is unrestrictively endorsed to theState Board of Community Colleges; or in the case of a nonnegotiable certificateof deposit, is assigned to the State Board of Community Colleges in a formsatisfactory to the State Board; and (iii) for which access to the certificateof deposit in favor of the State of North Carolina is subject to the sameconditions as for a bond in subsection (b) of this section. (1955, c. 1372, art. 30, s.5; 1957, c. 1000; 1961, c. 1175, s. 9; 1981, c. 423, s. 1; 1987, c. 442, ss. 1,2; 1989 (Reg. Sess., 1990), c. 824, s. 1.)
(a) Requirement. Anapplicant for a license must comply with the bond requirements in this section.The bond covers the potential loss by students of the school of prepaid tuitionand other payments made by them to a school licensed under this Article byreason of the school ceasing to operate for any reason, including thesuspension, revocation, or nonrenewal of a school's license, bankruptcy, orforeclosure.
(b) Amount. Anapplicant for a license must file a bond with the North Carolina State Board ofCommunity Colleges executed by the applicant as a principal and by a bondingcompany authorized to do business in this State. The bond must be payable tothe State Board of Community Colleges, must be conditioned on fulfillment ofthe school's obligations, and must remain in effect until cancelled by thebonding company. The bonding company may cancel the bond upon 30 days' noticeto the State Board of Community Colleges.
The application must set outcalculations made by the applicant to determine the amount of bond requiredwith the application. The required amount is determined as follows:
(1) Initial licensure. For an applicant for initial licensure of a school, the bond amount is theamount determined by the State Board that is adequate to provideindemnification to any student, or the student's parent or guardian who hassuffered a loss of tuition, fees, or any other instructional‑relatedexpenses paid to the school. A bond amount shall be at least twenty‑fivethousand dollars ($25,000).
(2) First four renewals. For a school that has been licensed for one year but less than six years, thebond shall be in an amount equal to the greatest amount of unearned paidtuition in the school's possession at anytime during the prior fiscal year. Thebond amount shall be evaluated by the school quarterly and reported to theState Board or its representative. A quarterly evaluation requiring an increaseof five percent (5%) or more in the amount of the bond held by the school shallrequire an immediate increase in the bond amount. Bond amounts also shall beevaluated pursuant to this subdivision and the rules of the State Board at thetime of the school's annual license renewal and increased if necessaryregardless of the amount of the change.
(3) Schools in operationmore than five years. A guaranty bond shall be required for license renewalfor a school that has been continuously licensed to operate for more than fiveyears in the State, as follows:
a. If the balance ofthe Student Protection Fund in G.S. 115D‑95.1 is below the catastrophicloss amount, the school shall file a guaranty bond in an amount equal to themaximum amount of prepaid tuition held by the school during the prior fiscalyear multiplied by the percentage amount the fund is deficient.
b. If the school heldprepaid tuition in excess of the Student Protection Fund catastrophic lossamount during the prior fiscal year, in addition to any bond amount required bysub‑subdivision a. of this subdivision, the school shall file a guarantybond for the difference between the prepaid tuition amount held in the previousfiscal year and the Fund catastrophic loss amount.
(c) An applicant thatis unable to secure a bond may seek a waiver of the guaranty bond from theState Board of Community Colleges and approval of one of the guaranty bondalternatives set forth in this subsection. With the approval of the StateBoard, an applicant may obtain in lieu of a bond:
(1) An assignment of asavings account in an amount equal to the bond required (i) which is in a formacceptable to the State Board of Community Colleges; (ii) which is executed bythe applicant; and (iii) which is executed by a state or federal savings andloan association, state bank, or national bank, that is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (iv) for which access to the account in favor of the State of NorthCarolina is subject to the same conditions as for a bond in subsection (b) ofthis section.
(2) A certificate ofdeposit (i) which is executed by a state or federal savings and loanassociation, state bank, or national bank, which is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (ii) which is either payable to the State of North Carolina,unrestrictively endorsed to the State Board of Community Colleges; in the caseof a negotiable certificate of deposit, is unrestrictively endorsed to theState Board of Community Colleges; or in the case of a nonnegotiablecertificate of deposit, is assigned to the State Board of Community Colleges ina form satisfactory to the State Board; and (iii) for which access to thecertificate of deposit in favor of the State of North Carolina is subject tothe same conditions as for a bond in subsection (b) of this section. (1955, c. 1372, art. 30, s.5; 1957, c. 1000; 1961, c. 1175, s. 9; 1981, c. 423, s. 1; 1987, c. 442, ss. 1,2; 1989 (Reg. Sess., 1990), c. 824, s. 1; 2009‑562, s. 2.)
§ 115D‑95. (Effectiveuntil July 1, 2010) Bonds required.
(a) A guaranty bond isrequired for each school that is licensed to operate: Provided, however, aschool that is unable to secure a bond may, with the consent of the State Boardof Community Colleges, provide an alternative to a guaranty bond, as providedin subsection (c) of this section.
The State Board may revoke thelicense of a school that fails to maintain a bond or an alternative to a bond,pursuant to this section.
(b) (1) Whenapplication is made for a license or license renewal, the applicant shall filea guaranty bond with the clerk of the superior court of the county in which theschool will be located. The bond shall be in favor of the students. The bondshall be executed by the applicant as principal and by a bonding companyauthorized to do business in this State. The bond shall be conditioned toprovide indemnification to any student, or his parent or guardian, who hassuffered a loss of tuition or any fees by reason of the failure of the schoolto offer or complete student instruction, academic services, or other goods andservices related to course enrollment for any reason, including the suspension,revocation, or nonrenewal of a school's license, bankruptcy, foreclosure, orthe school ceasing to operate.
(2) The bond shall be inan amount determined by the State Board of Community Colleges to be adequate toprovide indemnification to any student, or his parent or guardian, under theterms of the bond. The bond amount for a school shall be at least equal to themaximum amount of prepaid tuition held at any time during the last fiscal yearby the school. The bond amount shall also be at least ten thousand dollars($10,000).
Eachapplication for a license shall include a letter signed by an authorizedrepresentative of the school showing in detail the calculations made and themethod of computing the amount of the bond, pursuant to this subdivision andthe rules of the State Board. If the State Board finds that the calculationsmade and the method of computing the amount of the bond are inaccurate or thatthe amount of the bond is otherwise inadequate to provide indemnification underthe terms of the bond, the State Board may require the applicant to provide anadditional bond.
(3) The bond shallremain in force and effect until cancelled by the guarantor. The guarantor maycancel the bond upon 30 days notice to the State Board of Community Colleges.Cancellation of the bond shall not affect any liability incurred or accruedprior to the termination of the notice period.
(c) An applicant thatis unable to secure a bond may seek a waiver of the guaranty bond from theState Board of Community Colleges and approval of one of the guaranty bondalternatives set forth in this subsection. With the approval of the StateBoard, an applicant may file with the clerk of the superior court of the countyin which the school will be located, in lieu of a bond:
(1) An assignment of asavings account in an amount equal to the bond required (i) which is in a formacceptable to the State Board of Community Colleges; (ii) which is executed bythe applicant; and (iii) which is executed by a state or federal savings andloan association, state bank, or national bank, that is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (iv) for which access to the account in favor of the State of NorthCarolina is subject to the same conditions as for a bond in subsection (b) ofthis section.
(2) A certificate ofdeposit (i) which is executed by a state or federal savings and loanassociation, state bank, or national bank, which is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (ii) which is either payable to the State of North Carolina,unrestrictively endorsed to the State Board of Community Colleges; in the caseof a negotiable certificate of deposit, is unrestrictively endorsed to theState Board of Community Colleges; or in the case of a nonnegotiable certificateof deposit, is assigned to the State Board of Community Colleges in a formsatisfactory to the State Board; and (iii) for which access to the certificateof deposit in favor of the State of North Carolina is subject to the sameconditions as for a bond in subsection (b) of this section. (1955, c. 1372, art. 30, s.5; 1957, c. 1000; 1961, c. 1175, s. 9; 1981, c. 423, s. 1; 1987, c. 442, ss. 1,2; 1989 (Reg. Sess., 1990), c. 824, s. 1.)
(a) Requirement. Anapplicant for a license must comply with the bond requirements in this section.The bond covers the potential loss by students of the school of prepaid tuitionand other payments made by them to a school licensed under this Article byreason of the school ceasing to operate for any reason, including thesuspension, revocation, or nonrenewal of a school's license, bankruptcy, orforeclosure.
(b) Amount. Anapplicant for a license must file a bond with the North Carolina State Board ofCommunity Colleges executed by the applicant as a principal and by a bondingcompany authorized to do business in this State. The bond must be payable tothe State Board of Community Colleges, must be conditioned on fulfillment ofthe school's obligations, and must remain in effect until cancelled by thebonding company. The bonding company may cancel the bond upon 30 days' noticeto the State Board of Community Colleges.
The application must set outcalculations made by the applicant to determine the amount of bond requiredwith the application. The required amount is determined as follows:
(1) Initial licensure. For an applicant for initial licensure of a school, the bond amount is theamount determined by the State Board that is adequate to provideindemnification to any student, or the student's parent or guardian who hassuffered a loss of tuition, fees, or any other instructional‑relatedexpenses paid to the school. A bond amount shall be at least twenty‑fivethousand dollars ($25,000).
(2) First four renewals. For a school that has been licensed for one year but less than six years, thebond shall be in an amount equal to the greatest amount of unearned paidtuition in the school's possession at anytime during the prior fiscal year. Thebond amount shall be evaluated by the school quarterly and reported to theState Board or its representative. A quarterly evaluation requiring an increaseof five percent (5%) or more in the amount of the bond held by the school shallrequire an immediate increase in the bond amount. Bond amounts also shall beevaluated pursuant to this subdivision and the rules of the State Board at thetime of the school's annual license renewal and increased if necessaryregardless of the amount of the change.
(3) Schools in operationmore than five years. A guaranty bond shall be required for license renewalfor a school that has been continuously licensed to operate for more than fiveyears in the State, as follows:
a. If the balance ofthe Student Protection Fund in G.S. 115D‑95.1 is below the catastrophicloss amount, the school shall file a guaranty bond in an amount equal to themaximum amount of prepaid tuition held by the school during the prior fiscalyear multiplied by the percentage amount the fund is deficient.
b. If the school heldprepaid tuition in excess of the Student Protection Fund catastrophic lossamount during the prior fiscal year, in addition to any bond amount required bysub‑subdivision a. of this subdivision, the school shall file a guarantybond for the difference between the prepaid tuition amount held in the previousfiscal year and the Fund catastrophic loss amount.
(c) An applicant thatis unable to secure a bond may seek a waiver of the guaranty bond from theState Board of Community Colleges and approval of one of the guaranty bondalternatives set forth in this subsection. With the approval of the StateBoard, an applicant may obtain in lieu of a bond:
(1) An assignment of asavings account in an amount equal to the bond required (i) which is in a formacceptable to the State Board of Community Colleges; (ii) which is executed bythe applicant; and (iii) which is executed by a state or federal savings andloan association, state bank, or national bank, that is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (iv) for which access to the account in favor of the State of NorthCarolina is subject to the same conditions as for a bond in subsection (b) ofthis section.
(2) A certificate ofdeposit (i) which is executed by a state or federal savings and loanassociation, state bank, or national bank, which is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (ii) which is either payable to the State of North Carolina,unrestrictively endorsed to the State Board of Community Colleges; in the caseof a negotiable certificate of deposit, is unrestrictively endorsed to theState Board of Community Colleges; or in the case of a nonnegotiablecertificate of deposit, is assigned to the State Board of Community Colleges ina form satisfactory to the State Board; and (iii) for which access to thecertificate of deposit in favor of the State of North Carolina is subject tothe same conditions as for a bond in subsection (b) of this section. (1955, c. 1372, art. 30, s.5; 1957, c. 1000; 1961, c. 1175, s. 9; 1981, c. 423, s. 1; 1987, c. 442, ss. 1,2; 1989 (Reg. Sess., 1990), c. 824, s. 1; 2009‑562, s. 2.)
§ 115D‑95. (Effectiveuntil July 1, 2010) Bonds required.
(a) A guaranty bond isrequired for each school that is licensed to operate: Provided, however, aschool that is unable to secure a bond may, with the consent of the State Boardof Community Colleges, provide an alternative to a guaranty bond, as providedin subsection (c) of this section.
The State Board may revoke thelicense of a school that fails to maintain a bond or an alternative to a bond,pursuant to this section.
(b) (1) Whenapplication is made for a license or license renewal, the applicant shall filea guaranty bond with the clerk of the superior court of the county in which theschool will be located. The bond shall be in favor of the students. The bondshall be executed by the applicant as principal and by a bonding companyauthorized to do business in this State. The bond shall be conditioned toprovide indemnification to any student, or his parent or guardian, who hassuffered a loss of tuition or any fees by reason of the failure of the schoolto offer or complete student instruction, academic services, or other goods andservices related to course enrollment for any reason, including the suspension,revocation, or nonrenewal of a school's license, bankruptcy, foreclosure, orthe school ceasing to operate.
(2) The bond shall be inan amount determined by the State Board of Community Colleges to be adequate toprovide indemnification to any student, or his parent or guardian, under theterms of the bond. The bond amount for a school shall be at least equal to themaximum amount of prepaid tuition held at any time during the last fiscal yearby the school. The bond amount shall also be at least ten thousand dollars($10,000).
Eachapplication for a license shall include a letter signed by an authorizedrepresentative of the school showing in detail the calculations made and themethod of computing the amount of the bond, pursuant to this subdivision andthe rules of the State Board. If the State Board finds that the calculationsmade and the method of computing the amount of the bond are inaccurate or thatthe amount of the bond is otherwise inadequate to provide indemnification underthe terms of the bond, the State Board may require the applicant to provide anadditional bond.
(3) The bond shallremain in force and effect until cancelled by the guarantor. The guarantor maycancel the bond upon 30 days notice to the State Board of Community Colleges.Cancellation of the bond shall not affect any liability incurred or accruedprior to the termination of the notice period.
(c) An applicant thatis unable to secure a bond may seek a waiver of the guaranty bond from theState Board of Community Colleges and approval of one of the guaranty bondalternatives set forth in this subsection. With the approval of the StateBoard, an applicant may file with the clerk of the superior court of the countyin which the school will be located, in lieu of a bond:
(1) An assignment of asavings account in an amount equal to the bond required (i) which is in a formacceptable to the State Board of Community Colleges; (ii) which is executed bythe applicant; and (iii) which is executed by a state or federal savings andloan association, state bank, or national bank, that is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (iv) for which access to the account in favor of the State of NorthCarolina is subject to the same conditions as for a bond in subsection (b) ofthis section.
(2) A certificate ofdeposit (i) which is executed by a state or federal savings and loanassociation, state bank, or national bank, which is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (ii) which is either payable to the State of North Carolina,unrestrictively endorsed to the State Board of Community Colleges; in the caseof a negotiable certificate of deposit, is unrestrictively endorsed to theState Board of Community Colleges; or in the case of a nonnegotiable certificateof deposit, is assigned to the State Board of Community Colleges in a formsatisfactory to the State Board; and (iii) for which access to the certificateof deposit in favor of the State of North Carolina is subject to the sameconditions as for a bond in subsection (b) of this section. (1955, c. 1372, art. 30, s.5; 1957, c. 1000; 1961, c. 1175, s. 9; 1981, c. 423, s. 1; 1987, c. 442, ss. 1,2; 1989 (Reg. Sess., 1990), c. 824, s. 1.)
(a) Requirement. Anapplicant for a license must comply with the bond requirements in this section.The bond covers the potential loss by students of the school of prepaid tuitionand other payments made by them to a school licensed under this Article byreason of the school ceasing to operate for any reason, including thesuspension, revocation, or nonrenewal of a school's license, bankruptcy, orforeclosure.
(b) Amount. Anapplicant for a license must file a bond with the North Carolina State Board ofCommunity Colleges executed by the applicant as a principal and by a bondingcompany authorized to do business in this State. The bond must be payable tothe State Board of Community Colleges, must be conditioned on fulfillment ofthe school's obligations, and must remain in effect until cancelled by thebonding company. The bonding company may cancel the bond upon 30 days' noticeto the State Board of Community Colleges.
The application must set outcalculations made by the applicant to determine the amount of bond requiredwith the application. The required amount is determined as follows:
(1) Initial licensure. For an applicant for initial licensure of a school, the bond amount is theamount determined by the State Board that is adequate to provideindemnification to any student, or the student's parent or guardian who hassuffered a loss of tuition, fees, or any other instructional‑relatedexpenses paid to the school. A bond amount shall be at least twenty‑fivethousand dollars ($25,000).
(2) First four renewals. For a school that has been licensed for one year but less than six years, thebond shall be in an amount equal to the greatest amount of unearned paidtuition in the school's possession at anytime during the prior fiscal year. Thebond amount shall be evaluated by the school quarterly and reported to theState Board or its representative. A quarterly evaluation requiring an increaseof five percent (5%) or more in the amount of the bond held by the school shallrequire an immediate increase in the bond amount. Bond amounts also shall beevaluated pursuant to this subdivision and the rules of the State Board at thetime of the school's annual license renewal and increased if necessaryregardless of the amount of the change.
(3) Schools in operationmore than five years. A guaranty bond shall be required for license renewalfor a school that has been continuously licensed to operate for more than fiveyears in the State, as follows:
a. If the balance ofthe Student Protection Fund in G.S. 115D‑95.1 is below the catastrophicloss amount, the school shall file a guaranty bond in an amount equal to themaximum amount of prepaid tuition held by the school during the prior fiscalyear multiplied by the percentage amount the fund is deficient.
b. If the school heldprepaid tuition in excess of the Student Protection Fund catastrophic lossamount during the prior fiscal year, in addition to any bond amount required bysub‑subdivision a. of this subdivision, the school shall file a guarantybond for the difference between the prepaid tuition amount held in the previousfiscal year and the Fund catastrophic loss amount.
(c) An applicant thatis unable to secure a bond may seek a waiver of the guaranty bond from theState Board of Community Colleges and approval of one of the guaranty bondalternatives set forth in this subsection. With the approval of the StateBoard, an applicant may obtain in lieu of a bond:
(1) An assignment of asavings account in an amount equal to the bond required (i) which is in a formacceptable to the State Board of Community Colleges; (ii) which is executed bythe applicant; and (iii) which is executed by a state or federal savings andloan association, state bank, or national bank, that is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (iv) for which access to the account in favor of the State of NorthCarolina is subject to the same conditions as for a bond in subsection (b) ofthis section.
(2) A certificate ofdeposit (i) which is executed by a state or federal savings and loanassociation, state bank, or national bank, which is doing business in NorthCarolina and whose accounts are insured by a federal depositors corporation;and (ii) which is either payable to the State of North Carolina,unrestrictively endorsed to the State Board of Community Colleges; in the caseof a negotiable certificate of deposit, is unrestrictively endorsed to theState Board of Community Colleges; or in the case of a nonnegotiablecertificate of deposit, is assigned to the State Board of Community Colleges ina form satisfactory to the State Board; and (iii) for which access to thecertificate of deposit in favor of the State of North Carolina is subject tothe same conditions as for a bond in subsection (b) of this section. (1955, c. 1372, art. 30, s.5; 1957, c. 1000; 1961, c. 1175, s. 9; 1981, c. 423, s. 1; 1987, c. 442, ss. 1,2; 1989 (Reg. Sess., 1990), c. 824, s. 1; 2009‑562, s. 2.)
