1. The Account for Student Indemnification is hereby created in the State General Fund. The existence of the Account does not create a right in any person to receive money from the Account. The Administrator shall administer the Account in accordance with regulations adopted by the Commission.

2. Except as otherwise limited by subsection 3, the money in the Account may be used to indemnify any student or enrollee who has suffered damage as a result of:

(a) The discontinuance of operation of a postsecondary educational institution licensed in this state; or

(b) The violation by such an institution of any provision of NRS 394.383 to 394.560, inclusive, or the regulations adopted pursuant thereto.

3. If a student or enrollee is entitled to indemnification from a surety bond pursuant to NRS 394.480, the bond must be used to indemnify the student or enrollee before any money in the Account may be used for indemnification.

4. In addition to the expenditures made for indemnification pursuant to subsection 2, the Administrator may use the money in the Account to pay extraordinary expenses incurred to investigate claims for indemnification or resulting from the discontinuance of the operation of a postsecondary educational institution licensed in this state. Money expended pursuant to this subsection must not exceed, for each institution for which indemnification is made, 15 percent of the total amount expended for indemnification pursuant to subsection 2 or $10,000, whichever is less.

5. No expenditure may be made from the Account if the expenditure would cause the balance in the Account to fall below $10,000.

6. Interest and income earned on the money in the Account, after deducting any applicable charges, must be credited to the Account.

7. The money in the Account does not lapse to the State General Fund at the end of any fiscal year.

(Added to NRS by 1995, 323)