644.383 - Surety bond.
644.383 Surety bond.
1. The owner of each school of cosmetology shall post with the Board a surety bond executed by the applicant as principal and by a surety company as surety. If the license for the school was issued:
(a) On or before June 30, 2005, the bond must be in the amount of $10,000; or
(b) On or after July 1, 2005, except as otherwise provided in subsections 6 and 7, the bond must be in the amount determined by the Board pursuant to subsections 2 to 5, inclusive.
2. The amount of the bond required for a school of cosmetology pursuant to paragraph (b) of subsection 1 is the total of the amounts of the bonds for all of the programs offered by the school, except that:
(a) The total amount determined pursuant to subsections 3, 4 and 5 must be rounded down to the nearest $5,000; and
(b) The amount of the bond required for the school must not be less than $10,000 or more than $400,000.
3. Except as otherwise provided in subsection 4, the amount of the bond for a program at a school of cosmetology is equal to the cost to be paid by a student for the program multiplied by the number of students who will enroll in the program each year.
4. If the length of a program at a school of cosmetology is less than 1 year, the amount of the bond for that program is equal to the amount determined pursuant to subsection 3 divided by 52 and multiplied by the number of whole or partial weeks in the program.
5. Except as otherwise provided in subsection 2, the amount of the bond required for a school of cosmetology pursuant to paragraph (b) of subsection 1 must be reduced to 12 percent of the total of the amounts calculated pursuant to subsections 3 and 4 if the school participates in:
(a) Any program of student assistance pursuant to Title IV of the Higher Education Act of 1965, as amended, 20 U.S.C. §§ 1070 et. seq.; or
(b) Any other program administered by the United States Department of Education through which students at the school receive loans.
6. If a school of cosmetology has been licensed for not less than 5 years, the Board shall set the amount of the bond required pursuant to paragraph (b) of subsection 1 for the school:
(a) In the amount of $10,000, if the Board did not receive any valid complaints against the school during the immediately preceding 5 years;
(b) In an amount not less than $10,000 and not more than the amount calculated pursuant to subsections 2 to 5, inclusive, if the Board received one or more valid complaints against the school during the immediately preceding 5 years and the Board determines that each such complaint was a complaint of a minor violation of the provisions of this chapter or of any regulations adopted pursuant to this chapter; and
(c) In the amount calculated pursuant to subsections 2 to 5, inclusive, if the Board received one or more valid complaints against the school during the immediately preceding 5 years and the Board determines that any such complaint was a complaint of a major violation of the provisions of this chapter or any regulations adopted pursuant thereto.
7. The bond required for a school of cosmetology must be in the amount of $10,000 if the school:
(a) Is initially licensed on or before June 30, 2005;
(b) Has been continuously licensed since June 30, 2005; and
(c) Is relocated and obtains a license for the new location on or after July 1, 2005.
8. The bond must be in the form approved by the Board and must be conditioned upon compliance with the provisions of this chapter and upon faithful compliance with the terms and conditions of any contracts, verbal or written, made by the school to furnish instruction to any person. The bond must be to the State of Nevada in favor of every person who pays or deposits money with the school as payment for instruction. A bond continues in effect until notice of termination is given by registered or certified mail to the Board, and every bond must set forth this fact.
9. A person claiming to be injured or damaged by an act of the school may maintain an action in any court of competent jurisdiction on the bond against the school and the surety named therein, or either of them, for refund of tuition paid. Any judgment against the principal or surety in any such action must include the costs thereof and those incident to the bringing of the action, including a reasonable attorney’s fee. The aggregate liability of the surety to all such persons may not exceed the sum of the bond.
10. The Board shall adopt regulations defining the terms “minor violation” and “major violation” for the purposes of subsection 6.
(Added to NRS by 1960, 316; A 1969, 95; 1981, 1357; 1985, 1635; 1987, 1204; 2005, 2856)