281 NAC 8-003. PROCEDURES FOR THE ADMINISTRATION OF THE FUND

003. PROCEDURES FOR THE ADMINISTRATION OF THE FUND. 003.01 Except as provided under section 003.04, each for-profit postsecondary institution authorized to operate in the state must pay into the fund in each assessment year, an amount equal to one-tenth of one percent (.001) of the institution's gross tuition revenue for the assessment year until the fund reaches the minimum fund level. 003.02 All payments made into the fund must be maintained by the State Treasurer and deposited into the Guaranty Recovery Cash Fund. 003.02(A) The assets of the fund may not be expended for any purpose except as provided under section 005 of this rule. 003.02(B) The fund must be administered by the Commission. 003.02(C) The fund must be maintained between the minimal fund level and maximum fund level. 003.02(D) At any time when the fund drops below the minimum fund level, the Commission may resume the assessment. 003.02(E) Funds in excess of the maximum fund level must be used as directed by the Commission to provide grants or scholarships for students attending for-profit postsecondary institutions in Nebraska as provided under section 006. 003.03 Payment into the fund must be made in the form of a company or cashier's check or money order made payable to the "Coordinating Commission for Postsecondary Education" and received no later than 30 days after the assessment year. 003.03(A) The for-profit postsecondary institution must certify on forms provided by the Commission that the institution maintains for five years a verifiable set of records which document the reported gross tuition revenue collected and shall make such records available to the Commission on request. Any such records made available to the Commission may be withheld from the public to the extent allowed by Neb. Rev. Stat. § 84-712.05. A copy of the form to be used may be found on the Commission website. 003.03(B) At the time of payment of the assessment, the for-profit postsecondary institution must submit to the Commission documentation supporting the gross tuition revenue used in calculating the assessment under section 003.01. 003.04 A for-profit postsecondary institution applying for an initial recurrent authorization to operate from the Commission after September 1, 2017, must not be assessed in its first fiscal year but must be assessed each year thereafter for four years or until the fund reaches the minimum fund level, whichever occurs last. 003.05 A for-profit postsecondary institution applying for an initial recurrent authorization to operate from the Commission after September 1, 2017, may be required to file with the Commission a security bond or other surety agreement equivalent to the projected highest annual tuition revenue collected by the institution over five years subsequent to the approval granted by the Commission to operate in Nebraska. This requirement may be met by: 003.05(A) A good and sufficient surety bond. 003.05(B) Other surety agreements acceptable to the Commission include only the following: 003.05(B)(i) An escrow account that provides the Commission with a recourse against the assets in the account as it would have against an insurance company on a bond. The terms on such an account would be the same as the terms on a bond. 003.05(B)(ii) An irrevocable Letter of Credit from a bank, made payable to the State of Nebraska and deposited with the Commission. The Irrevocable Letter of Credit will be released to the institution a year after the institution has ceased to be in operation, or immediately when replaced by another instrument with a similar amount. 003.05(C) The bond or agreement must be executed by the applicant as principal and by a surety company qualified and authorized to do business in the state. The bond or agreement must be conditioned to provide indemnification to any student or enrollee or his or her parent or guardian determined to have suffered loss or damage by the termination of operations by the for-profit postsecondary institution. The surety must pay any final judgment rendered by any court of this state having jurisdiction upon receipt of written notification of the judgment. Regardless of the number of years that such bond or agreement is in force, the aggregate liability of the surety thereon must in no event exceed the penal sum of the bond or agreement. The bond or agreement may be continuous. 003.05(D) Until the Guaranty Recovery Cash Fund initially reaches the minimum fund level, the bond or other security agreement of an institution must cover the period of the recurrent authorization to operate except when a surety is released as provided under section 003.05(E). 003.05(E) A bond or other security agreement may be released after such surety serves written notice on the Commission thirty days prior to the release. Such release must not discharge or otherwise affect any claim previously or subsequently filed by a student or enrollee or his or her parent or guardian provided for under section 004 for the termination of operations by the for-profit postsecondary institution during the term for which tuition has been paid while the bond or agreement was in force. 003.05(F) During the term of the bond or agreement and upon forfeiture of the bond or agreement, the Commission retains a property interest in the surety’s guarantee of payment under the bond or agreement which is not affected by the bankruptcy, insolvency, or other financial incapacity of the operator or principal on the bond or agreement.