AN ACT Relating to exchange student placement services; adding a new chapter to Title 19 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter:

(1) "Exchange student placement agency" means a person, partnership, corporation, or other entity that provides services to foreign students under the age of twenty-one for the purpose, in whole or in part, of allowing the students an opportunity to study in the United States, but does not include any nonprofit organization that does not charge a fee for the exchange student services and that makes a suitable placement in the home of a member of the nonprofit organization.

(2) "Department" means the department of licensing.

(3) "Director" means the director of the department of licensing.

(4) "Suitable placement" means placement of an exchange student with a host family who provides adequate living space and an adequate diet for the student, who supports the educational goals of the student, and who does not require the student to provide services in exchange for the placement.

NEW SECTION. Sec. 2. (1) Each exchange student placement agency shall keep records of all services rendered to students and host families. The records shall contain, at a minimum:

(a) The name and address of the student to whom services are provided or promised;

(b) The name and address of each host family contacted on behalf of any student to whom services are provided or promised, and the name and address of the host family with whom the student is placed;

(d) A complete copy of any agreements entered into between the agency and students and the host families.

(2) The director may demand and examine, at the exchange student placement agency's regular place of business, all books, documents, and records in its possession for inspection. Unless otherwise provided by rules adopted by the director, the records shall be maintained for a period of five years from the date on which the records are made.

NEW SECTION. Sec. 3. An exchange student placement agency shall provide each student and host family who is contacted regarding the agency's services with an informational document, in both English and in the student's language, which shall have printed on it or attached to it a copy of this chapter and shall contain at a minimum the following:

(1) The name, address, and telephone number of the exchange student placement agency, including an emergency telephone hot-line available twenty-four hours a day, and the telephone number of the appropriate division within the department of licensing;

(2) Trade name of the exchange student placement agency, if any;

(3) The amount of the fee to be charged the student, or the method of computation of the fee, and the time and method of payments; and

(4) The name and address of the financial institution in which the trust account required in section 10 of this act will be deposited.

NEW SECTION. Sec. 4. (1) The director shall administer this chapter and shall adopt rules for enforcing and carrying out this chapter.

(2) The director shall have the power to compel the attendance of witnesses by the issuance of subpoenas, to administer oaths, and to take testimony and proofs concerning all matters pertaining to the administration of this chapter.

(3) The director shall have supervisory and investigative authority over all exchange student placement agencies. Upon receiving a complaint against any exchange student placement agency, the director shall have the right to examine all books, documents, or records in its possession. In addition, the director may examine the office or offices where business is or shall be conducted by the agency. Any information revealed during an examination of records under this subsection may be disclosed as a public record, at the director's sole discretion.

NEW SECTION. Sec. 5. (1) Before conducting any business as an exchange student placement agency, each licensee shall file with the director a surety bond in the sum of five thousand dollars running to the state of Washington, for the benefit of any person injured or damaged as a result of any violation by the licensee or agent of this chapter or of any rule adopted by the director under this chapter.

(2) In lieu of the surety bond required by this section, the license applicant may file with the director a cash deposit or other negotiable security acceptable to the director. If the license applicant has filed a cash deposit, the director shall deposit the funds with the state treasurer. The deposit shall be returned to the licensee at the expiration of one year after the agency's license has expired or been revoked, if no legal action has been instituted against the licensee or the deposit at the expiration of the year.

(3)(a) Any person having a claim against an exchange student placement agency for any violation of this chapter or any rule adopted under this chapter may bring suit upon the bond or deposit in an appropriate court of the county in which the office of the exchange student placement agency is located or of any county in which jurisdiction of the exchange student placement agency may be had. Action upon the bond or deposit shall be commenced by serving and filing the complaint within one year from the date of expiration of the exchange student placement agency license in force at the time the act occurred for which the suit is brought.

(b) A copy of the complaint shall be served by registered or certified mail upon the director at the time the suit is commenced, and the director shall maintain a record, available for public inspection, of all suits so commenced. Service on the director shall constitute service on the surety and the director shall transmit the complaint or a copy to the surety within five business days after it has been received.

(c) The surety on the bond shall not be liable in an aggregate amount in excess of the amount named in the bond, but in case claims pending at any one time exceed the amount of the bond, claims shall be satisfied in the order of judgment rendered.

(d) If a final judgment is entered against the deposit or security referred to in subsection (2) of this section, the director shall, upon receipt of a certified copy of the final judgment, order the judgment to be paid from the amount of the deposit or security.

(e) If a final judgment impairs the liability of the surety on the bond or the amount of the deposit so that there is not in effect a bond undertaking or deposit in the full amount prescribed in this section, the director shall suspend the license of the exchange student placement agency until the bond undertaking or deposit in the required amount, unimpaired by unsatisfied judgment claims, is furnished.

NEW SECTION. Sec. 6. (1) Every applicant for an exchange student placement agency's license or a license renewal shall file with the director a written application stating:

(a) The name and address of the applicant;

(b) The street and number of the building in which the business of the agency is to be conducted;

(d) The name under which the business of the agency is to be carried on;

(e) Whether or not the applicant is pecuniarily interested in the business to be carried on under the license; and

(f) The name and address of anyone holding over twenty percent interest in the agency.

The application shall be signed by the applicant and sworn to before a notary public. If the applicant is a corporation, the application shall state the names and addresses of the officers and directors of the corporation, and shall be signed and sworn to by the president and secretary of the corporation. If the applicant is a partnership, the application shall also state the names and addresses of all partners of the business, and shall be signed and sworn to by all of them. The application shall also state whether or not the applicant is, at the time of making the application, or has at any previous time been, engaged in or interested in or employed by anyone engaged in the business of an exchange student placement agency.

(2) The application shall require a certification that no officer or holder of more than twenty percent interest in the business has been convicted of a felony within ten years of the application which directly relates to the business for which the license is sought, or had any judgment entered against such person in any civil action involving fraud, misrepresentation, or conversion.

(3) All applications for exchange student placement agency licenses shall be accompanied by a copy of the form of any agreement and fee schedule to be used between the agency and students or host families.

NEW SECTION. Sec. 7. An exchange student placement agency license shall expire September 30th. Any license not renewed may be reinstated if the agency can show good cause to the director for renewal of the license and present proof of intent to continue to act as an exchange student placement agency. However, no license shall be issued upon application for reinstatement until all fees and penalties previously accrued under this chapter have been paid.

NEW SECTION. Sec. 8. No license granted under this chapter is transferable without the consent of the director. No exchange student placement agency shall permit any person not mentioned in the license application to become connected with the business as an owner, member, officer, or director without the consent of the director. Consent may be withheld for any reason for which an original application for a license might have been rejected, if the person in question had been mentioned in the application.

NEW SECTION. Sec. 9. The director shall determine the fees to be charged for original applications, annual renewal of licenses, and transfer of licenses. The fees shall be calculated in relationship to the number of students placed annually with private host families.

NEW SECTION. Sec. 10. (1) Each exchange student placement agency shall maintain a separate trust account in a recognized Washington state depositary authorized to receive funds, in which will be kept segregated from the agency's own funds, all moneys received from exchange students. Moneys received must be deposited within ten days after posting to the book of accounts. In no event shall moneys received be disposed of in any manner other than to deposit such moneys in the account or as otherwise provided in this section.

(2) The trust account shall bear some title sufficient to distinguish it from the agency's personal or general checking account, such as "Exchange Student Trust Fund Account." The trust account shall at all times contain sufficient funds to pay all moneys due or owing to all exchange students or host families or to satisfy the requirements of subsection (3) of this section, and no disbursements shall be made from the account except to students or host families, except that an agency may periodically withdraw moneys as may accrue to the agency as provided in subsection (4) of this section.

(3) Twenty-five percent of the total fee paid by any exchange student shall be maintained in the trust account and may not be dispersed from the account until the student has returned to his or her country of residence.

(4) Unless the requirements of subsection (3) of this section cannot be met, any money in the trust account belonging to an exchange student placement agency may be withdrawn for the purpose of transferring the funds into the possession of the agency or into a personal or general account of the agency.

NEW SECTION. Sec. 11. If, as part of its agreement with an exchange student, the exchange student placement agency makes arrangements for the student's return to his or her country of residence, including the purchase of a ticket for the return passage, the return ticket purchased by the agency shall be immediately forwarded to and kept at all times by the principal of the school in which the student is enrolled, until returned to the student upon completion of the exchange program.

NEW SECTION. Sec. 12. At the request of the director, the secretary of the department of social and health services shall have the power to investigate persons for character and suitability to act as host families for exchange students. This investigation may include a criminal background check.

NEW SECTION. Sec. 13. In accordance with chapter 34.05 RCW, the director may by order deny, suspend, or revoke the license of any exchange student placement agency if he or she finds that the applicant or licensee:

(1) Was previously the holder of a license issued under this chapter, which was revoked for cause and never reissued by the director, or which license was suspended for cause and the terms of the suspension have not been fulfilled;

(2) Has been found guilty of any felony within the past five years involving moral turpitude, or for any misdemeanor concerning fraud or conversion, or suffering any judgment in any civil action involving willful fraud, misrepresentation or conversion;

(3) Has made a false statement of a material fact in his or her application or in any data attached to the application;

(4) Fails to provide a suitable placement for an exchange student with whom the agency has contracted for services unless the student terminates the contract;

(5) Has violated any provisions of this chapter, or failed to comply with any rule or regulation issued by the director pursuant to this chapter; or

(6) Has violated any requirement of federal law pertaining to exchange students, including but not limited to immigration requirements.

NEW SECTION. Sec. 14. (1) The director may refer evidence as may be available to the director concerning violations of this chapter or of any rule adopted under this chapter to the attorney general or the prosecuting attorney of the county in which the alleged violation arose. The attorney general or prosecuting attorney may, in his or her discretion, with or without the reference and in addition to any other action that might be commenced, bring an action in the name of the state against any person to restrain the doing of any act or practice prohibited by this chapter. This chapter shall be considered in conjunction with chapters 9.04 and 19.86 RCW and the powers and duties of the attorney general and the prosecuting attorney as provided in chapters 9.04 and 19.86 RCW shall apply against all persons subject to this chapter.

(2) In the enforcement of this chapter, the attorney general or prosecuting attorney may accept an assurance of discontinuance from a person deemed in violation of this chapter. The assurance shall be in writing and shall be filed with and subject to the approval of the superior court of the county in which the alleged violator resides or has the principal place of business, or in Thurston county.

(3) Any person who violates the terms of any court order or temporary or permanent injunction issued under this chapter, shall be subject to a civil penalty of not more than five thousand dollars. For the purpose of this section, the superior court issuing an injunction shall retain continuing jurisdiction and the attorney general or the prosecuting attorney acting in the name of the state may petition for the recovery of civil penalties.

NEW SECTION. Sec. 15. (1) An exchange student placement agency may not bring or maintain a cause of action in any court of this state for compensation for, or seeking equitable relief in regard to, services rendered to students or host families unless the agency alleges and proves that at the time of rendering the services or contracting for the services, it was validly licensed under this chapter.

(2) Any person who gives consideration of any kind to any exchange student placement agency for the performance of services in this state when the agency is not validly licensed under this chapter shall have a cause of action against the agency. Any court having jurisdiction may enter judgment for treble the amount of the consideration paid, plus reasonable attorneys' fees and costs.

NEW SECTION. Sec. 16. It is a misdemeanor for any person to conduct an exchange student placement agency in this state unless he or she is licensed as required by this chapter.

NEW SECTION. Sec. 17. Sections 1 through 16 of this act shall constitute a new chapter in Title 19 RCW.