N.Y. Comp. Codes R. & Regs. tit. 15, § 10.4 – Eligibility to deliver an internet pre-licensing course; internet pre-licensing course approval.

(a) To become an approved sponsor, an applicant must be an approved sponsor of an internet accident prevention course, pursuant to article 12-C of the Vehicle and Traffic Law, prior to the effective date of article 12-D of the Vehicle and Traffic Law, and which delivers such courses to the public.
(b) An applicant must submit a completed application in a form and manner prescribed by the commissioner for approval in accordance with standards set forth in this Part. The application must include the signature of a person authorized to sign on behalf of the proposed sponsor. An application will not be considered complete until all information, materials, and fees required by this Part, article 12-D of the Vehicle and Traffic Law, and the commissioner have been submitted.
(c) To become a sponsor the applicant must address, as part of its application, among other things, the methodology to be used by the applicant, the applicant’s mastery of use of the internet as a course delivery method, the applicant’s internal controls, and the applicant’s overall ability to successfully deliver the course in a manner consistent with consumer service and the aims of the internet pre-licensing course.
(d) The sponsor must not disclose or otherwise make available to any person or entity any personal information, as defined in article 12-D of the Vehicle and Traffic Law, obtained by such provider about any student who registers for such course. The sponsor must also adhere to the department’s policies regarding the protection and non-disclosure of students’ personal information.
(e) An applicant must demonstrate that the internet pre-licensing course can validate:
1. (1) student identity at registration and throughout the course;
2. (2) participation throughout the course;
3. (3) that the time requirements of the course are met; and
4. (4) that the student successfully completed the course.
(f) Applicants may apply to become sponsors immediately upon the date this Part takes effect. No course will be approved until the completed application is received, reviewed by the department, and a determination to approve the application has been made.
(g) An application to administer the internet pre-licensing course may be denied if adverse material is uncovered during the application review process indicating that the sponsor is not of the high moral and financial character required to operate an internet course.
(h) For an application to be approved by the commissioner:
1. (1) Applicants must establish that the proposed sponsor owns or has a right to use all aspects of the internet pre-licensing course that they plan to deliver in New York State (e.g., if using proprietary biometric technology to validate identity and participation, sponsor must provide evidence that the sponsor has rights to use that proprietary technology for this purpose). Once approved, that internet pre-licensing course may not be delivered in New York State by any other sponsor.
2. (2) The course must provide a minimum of 270 minutes of instruction. The instruction must include active learning techniques (i.e., requiring student participation). The minimum 270 minutes shall only count toward time spent instructing the student and shall not count toward time spent on log-in procedures, administrative tasks, help functions, validation processes, audio/visual media download times and reading and responding to content questions.
3. (3) The course must include all education components required under section 502 of the Vehicle and Traffic Law and any content required by the commissioner.
4. (4) Applicants must provide a detailed transcript of the course, including all content, sections, logical breaks, internal controls, proposed audio and video clips (including time duration). Course topic sequencing may be different from the course curriculum (MV-277) established by the department as long as it does not detract from the logical flow and educational value of the course.
5. (5) Applicants must provide test questions to the commissioner.
6. (6) The course must meet all of the technical specifications prescribed by the commissioner.
7. (7) Applicants must provide information on when validation will occur and what validation methods they propose to use.
8. (8) Applicants must submit no more than one internet pre-licensing course for approval at a time. If the applicant’s primary internet pre-licensing course has been reviewed and denied, by the department, the applicant may submit a separate new application for the revised internet pre-licensing course in accordance with the standards set forth in this Part.
9. (9) Sponsors must not display advertising during any part of the internet pre-licensing course, including the registration, instruction, testing, validation, or completion periods, nor shall sponsors display any distracting material that is not related to the topic being presented.
10. (10) Applicants must provide the department with appropriate access to the course for the purposes of reviewing the materials and internal controls. Sponsors must obtain approval of all changes to course material in accordance with the change control requirements of this Part, prior to implementation by the sponsor. Once changes are approved, the sponsor must provide a new course transcript to be used in the monitoring of the course.
11. (11) Applicants must provide the following:
  1. (i) A non-refundable application fee of $7,500 must be submitted with each application in the form of a certified check.
  2. (ii) An initial bond, or a letter of credit, separate and apart from any bond or letter of credit required under Part 141 of the commissioner’s regulations, in the amount of $100,000 naming the department as the beneficiary, which would be paid to the sponsor in the event of a security or data breach or to the department in the event the sponsor ceases doing business in New York State during the pilot period, and/or to reimburse fees paid by students in cases where the sponsor is unable to provide the course. Payment of the bond must not be contingent upon sponsor’s approval. Applicants need not provide the bond or letter of credit with their initial application materials, though this requirement must be satisfied before the department will grant final approval to conduct an internet pre-licensing course. The sponsor must then submit the bond or letter of credit in order to be finally approved. The department will notify the sponsor when course delivery may commence. The sponsors must submit proof of bond renewal on an annual basis.
    (i) Disqualifying application information.
12. (1) An application will be denied or prior approval will be suspended or revoked if any manager, owner, operator, officer, partner, or employee of the sponsor has been convicted of a felony or any other crime involving fraudulent activity. At the discretion of the department, after a review of the felony or any other crime and the factors that lead to any such conviction, the department may issue a waiver.
13. (2) If it is established that any information provided in the application is fraudulent, the application will be denied, or, if previously approved, sponsor approval will be revoked. In either case, the applicant will not be permitted to file an application for 10 years from the date of denial or revocation.
  (j) Non-transferability.
  Sponsor approval to conduct an internet pre-licensing course is not transferable under any circumstances. Both the sponsor approval and internet pre-licensing course approval are tied directly to the sponsor business named on the application form, including all ownership information. An organization that acquires another sponsor’s course must submit an application and seek approval in accordance with the standards set forth in this Part.
(k) Change of officers, contact persons, contact information or address.
1. (1) Sponsors must notify the department in writing within 10 days of any change of any information provided on the original application forms. An amended application form, with signature, must be submitted with the written notification of change.
2. (2) Sponsors must notify the department in writing within 10 days of any changes in any owners, operators, managers, partners, officers, directors, or controlling shareholders of the sponsor.
3. (3) Failure to notify the department of such changes shall be grounds for immediate suspension of sponsor approval.
4. (4) Transfer of ownership will require the new owner(s) to file a new application with the department in accordance with the eligibility requirement and approval standards set forth in this section. The transferred course may not be delivered until the commissioner has approved the new application. The prior owner's internet pre-licensing course approval will be revoked immediately upon transfer of ownership.