ENROLLED
COMMITTEE SUBSTITUTE
FOR
H. B. 2697

(By Delegates Williams, Ennis, Heck, Henderson,
Manuel, Osborne and Shelton)
[Passed April 12, 1997; in effect July 1, 1997.]

AN ACT to amend and reenact section two, article one, chapter eighteen-b of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact section five, article three of said chapter; and to further amend said article by adding thereto two new sections, designated sections six and seven, all relating to authority of board of directors of the state college system over proprietary education institutions, some of which to be renamed West Virginia private postsecondary education institutions as well as correspondence, business, occupational and trade schools; permits; annual reports; accreditation standards; requirements for use of term "college" in name; requirements to offer associate degree programs or nondegree programs longer than one year; exemptions from requirements; prohibiting discrimination against students and graduates of West Virginia private institutions of higher education; participation in job training programs; definitions; and requirement of studies to address West Virginia higher education grant program, transferability of academic credits; study teams for study created; and reports to legislative oversight commission on education accountability.

Be it enacted by the Legislature of West Virginia:
That section two, article one, chapter eighteen-b of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; that section five, article three of said chapter and that said article be further amended by adding thereto two new sections, designated sections six and seven, all to read as follows:
CHAPTER 18B. HIGHER EDUCATION
ARTICLE 1. GOVERNANCE
§18B-1-2. Definitions.
The following words when used in this chapter and chapter eighteen-c of this code shall have the meaning hereinafter ascribed to them unless the context clearly indicates a different meaning:
(a) "Governing board" or "board" means the university of West Virginia board of trustees or the board of directors of the state college system, whichever is applicable within the context of the institution or institutions referred to in this chapter or in other provisions of law;
(b) "Governing boards" or "boards" means both the board of trustees and the board of directors;
(c) "Freestanding community colleges" means southern West Virginia community and technical college and West Virginia northern community and technical college, which shall not be operated as branches or off-campus locations of any other state institution of higher education;
(d) "Community college" or "community colleges" means community and technical college or colleges as those terms are defined in this section;
(e) "Community and technical college", in the singular or plural, means the freestanding community and technical colleges, community and technical education programs of regional campuses of West Virginia university, and divisions of state institutions of higher education which have a defined community and technical college district and offer community and technical college education in accordance with the provisions of section three-a, article three of this chapter;
(f) "Community and technical college education" means the programs, faculty, administration and funding associated with the mission of community and technical colleges as provided in section three-a, article three of this chapter, and also shall include postsecondary vocational education programs in the state as those terms are defined in this section. Community and technical college education shall be delivered through a system which includes eleven community and technical college districts assigned to state institutions of higher education under the jurisdiction of the board of directors and the board of trustees, respectively;
(g) "Directors" or "board of directors" means the board of directors of the state college system created pursuant to article three of this chapter or the members thereof;
(h) "Higher educational institution" means any institution as defined by Sections 401(f), (g) and (h) of the federal Higher Education Facilities Act of 1963, as amended;
(i) "Postsecondary vocational education programs" means any college-level course or program beyond the high school level provided through an institution of higher education which results in or may result in the awarding of a two-year associate degree, under the jurisdiction of the board of directors;
(j) "Rule" or "rules" means a regulation, standard, policy or interpretation of general application and future effect;
(k) "Senior administrator" means the person hired by the governing boards in accordance with section one, article four of this chapter, with powers and duties as may be provided for in section two of said article;
(l) "State college" means Bluefield state college, Concord college, Fairmont state college, Glenville state college, Shepherd college, West Liberty state college or West Virginia state college;
(m) "State college system" means the state colleges and community and technical colleges, and also shall include postsecondary vocational education programs in the state as those terms are defined in this section;
(n) "State college system community and technical colleges" means the freestanding community and technical colleges and community and technical colleges operated on the campuses of state colleges under the jurisdiction of the board of directors of the state college system and all of their associated branches, centers and off-campus locations;
(o) "State institution of higher education" means any university, college or community and technical college in the state university system or the state college system as those terms are defined in this section;
(p) "Trustees" and "board of trustees" means the university of West Virginia board of trustees created pursuant to article two of this chapter or the members thereof;
(q) "University", "university of West Virginia" and "state university system" means the multi-campus, integrated university of the state, consisting of West Virginia university, including West Virginia university at Parkersburg, Potomac state college of West Virginia university, West Virginia university institute of technology and the West Virginia university school of medicine; Marshall university, including the Marshall university school of medicine, and the Marshall university community and technical college, the Marshall University graduate college; and the West Virginia school of osteopathic medicine;
(r) "University system community and technical colleges" means Marshall university community and technical college, community and technical education programs at West Virginia university at Parkersburg, community and technical education programs at Potomac state college of West Virginia university and West Virginia university institute of technology community and technical college under the jurisdiction of the university of West Virginia board of trustees and all their associated branches, centers and off-campus locations;
(s) "Regional campus" means West Virginia university at Parkersburg, Potomac state college of West Virginia university, and West Virginia university institute of technology. The chief executive officer of a regional campus shall be known as "campus president", shall serve at the will and pleasure of the president of West Virginia university, and shall report to the president of West Virginia university or his or her designee in the method specified by West Virginia university. The board of advisors for West Virginia university established pursuant to section one, article six of this chapter shall serve as the advisory board for West Virginia university and its regional campuses. The advisory boards previously appointed for each regional campus shall be known as "Boards of visitors" and shall provide guidance to the regional campus presidents. Each regional campus shall adopt separate strategic plans required by section one-c of this article;
(t) The advisory board previously appointed for the West Virginia graduate college shall be known as the "Board of Visitors" and shall provide guidance to Marshall university graduate college;
(u) "Health Sciences and Technology Academy Programs" means programs set forth by the office of the vice chancellor for health sciences to assist junior high and high school students, in conjunction with their parents and teachers, to enhance their knowledge and abilities in subject matters which would further a career in the field of health sciences; and
(v) "Private postsecondary education institution" means an institution that has provided educational programs in West Virginia for at least fifty years; has been accredited by an accrediting agency recognized by the United States department of education under the Higher Education Act of 1965, as amended, for a total of at least twenty years; has offered associate degree educational programs at a campus in West Virginia for a total of at least fifteen years; has been authorized to operate in West Virginia under section five, article three of this chapter for a total of at least fifteen years; has been owned and operated by a private entity that has not undergone a change of ownership resulting in a change of majority control, unless the new majority ownership has previously held an ownership interest in a private postsecondary education institution for at least five years. Additional campuses or locations owned and supervised by an educational institution that meets the definition of a private postsecondary education institution are deemed to qualify under the main campus for purposes of meeting such definition, notwithstanding that the additional campuses or locations may not meet all five of the above stated standards. An accredited private postsecondary education institution that offers associate degree programs, and that has owned and supervised one or more West Virginia campuses under permit issued pursuant to article three, section five of this chapter for at least fifteen years prior to the first of July, one thousand nine hundred ninety-seven, is deemed to meet the standards required above.

ARTICLE 3. BOARD OF DIRECTORS OF THE STATE COLLEGE SYSTEM.

§18B-3-5. Permits required for West Virginia private postsecondary education institution, correspondence, business, occupational and trade schools; surety bonds and fees; issuance, renewal and revocation of permit; reports; rules; penalty and enforcement.

(a) It shall be unlawful for any person representing a West Virginia private postsecondary education institution (hereinafter "private postsecondary education institution"), or a correspondence, business, occupational or trade school (all collectively called "institutions" or "institution") inside or outside this state, as such shall be defined by the board of directors of the state college system (hereinafter the "board") by rule promulgated in accordance with article three-a, chapter twenty-nine-a of this code, to solicit, sell or offer to sell courses of instruction to any resident of this state for consideration or remuneration unless the institution first applies for a permit, or obtains a permit, from the board in the manner and on the terms herein prescribed.
All private training or educational institutions, schools or academies or other organizations shall apply for a permit from the board on forms provided by the board. This section does not apply to private organizations that offer only tax return preparation courses. Each initial application shall be accompanied by a nonrefundable fee of two thousand dollars. The board may also assess an additional fee based on any additional expense required to evaluate the application. The board shall make a determination on the initial permit application within ninety days after receipt of the application and fee. An applicant for an initial permit shall show proof at the time of filing an application that adequate facilities are available and ready for occupancy and that all instructional equipment, books and supplies and personnel are in place and ready for operation. A representative of the board shall make an on-site visit to all new applicants' facilities to confirm its readiness for operation prior to issuance of the initial permit if the facilities are located in West Virginia.
An institution is considered to be established under the provisions of this article on the date it first begins to lawfully operate. An established institution is not required to reapply for a permit as a result of changes in governance; administration; ownership; or form of operation. After the first permit year an annual fee of five hundred dollars is imposed on each institution for each campus it operates in this state.
(b) Each application shall be accompanied by a surety bond in the penal sum of thirty-five thousand dollars for any institution which has its physical facilities located in this state and which has operated in this state for at least ten years: Provided, That if the institution has changed ownership within the last ten years by transfer of ownership control to a person who is a spouse, parent, sibling, child or grandchild of the previous owner, the surety bond shall continue in the penal sum of thirty-five thousand dollars: Provided, however, That any institution which has operated in West Virginia for less than ten years, including those institutions which have changed ownership within the last ten years except those institutions noted above who have transferred ownership control to a spouse, parent, sibling, child or grandchild of the previous owner within the last ten years and any institution located in another state which applies for a permit hereunder, shall provide a surety bond of fifty thousand dollars: Provided further, That any institution may be required to increase its bond to one hundred fifty thousand dollars if its accreditation is terminated for cause or if the institution's institutional eligibility under the Higher Education Act of 1965, as amended, has been terminated for cause: And provided further, That expiration, nonrenewal or voluntary relinquishment of accreditation or institutional eligibility under said act, or failure to meet the requirements of one or more programs under said act, shall not be deemed a termination for cause.
In addition, any institution may be required to increase its bond to an amount not to exceed four hundred thousand dollars if, in accordance with the standards of the American institute of certified public accountants, the institution's audited financial statements are qualified because the institution's continued financial viability as an ongoing concern is in doubt, and the board determines an increased bond is reasonably necessary to protect the financial obligations legally due the students then enrolled at the institution. An institution may be required to maintain the increased bonding requirements described above until all students attending classes at the date of termination either graduate or withdraw. The bond may be continuous and shall be conditioned to provide indemnification to any student suffering loss as a result of any fraud or misrepresentation used in procuring the student's enrollment; failure of the institution to meet contractual obligations; or failure of the institution to meet the requirements of this section. The bond shall be given by the institution itself as a blanket bond covering all of its representatives. The surety on any such bond may cancel the same upon giving thirty days' notice in writing to the principal on said bond and to the board and thereafter shall be relieved of liability for any breach of condition occurring after the effective date of said cancellation.
(c) A permit shall be valid for one year corresponding to the effective date of the bond and, upon application, accompanied by the required fee and the surety bond as herein required, may be renewed. All fees collected for the issuance or renewal of such permit shall be deposited in the state treasury to the credit of the board.
The board may refuse a permit to any institution if the board finds that the institution engages in practices which are inconsistent with this section or with rules issued pursuant thereto. A permit issued hereunder, upon fifteen days' notice and after a hearing, if a hearing is requested by the institution may be suspended or revoked by the board for fraud or misrepresentation in soliciting or enrolling students, for failure of the institution to fulfill its contract with one or more students who are residents of West Virginia, or for violation of or failure to comply with any provision of this section or with any regulation of the board pertinent thereto. Prior to the board taking any adverse action, including refusal, suspension or revocation of a permit, the institution shall be given reasonable opportunity to take corrective measures. Any refusal, suspension or revocation of a permit, or any other adverse action against an institution, shall comply with all constitutional provisions, including due process, relating to the protection of property rights.
(d) All private postsecondary education institutions, correspondence, business, occupational or trade schools which have been issued a permit shall make annual reports to the board on forms furnished by the board and shall provide such appropriate information as the board reasonably may require. All private postsecondary education institutions , correspondence, business, occupational or trade schools which have been issued a permit shall furnish to the board of directors a list of its official representatives. Each school shall be issued a certificate of identification by the board for each of its official representatives.
(e) The issuance of a permit pursuant to this section does not constitute approval or accreditation of any course or institution. No school nor any representative of a institution shall make any representation stating, asserting or implying that a permit issued pursuant to this section constitutes approval or accreditation by the state of West Virginia, board or any other department or agency of the state.
The board is hereby authorized to adopt rules and conduct on-site reviews to evaluate academic standards maintained by institutions for the awarding of certificates, diplomas and associate degrees, which standards may include curriculum, personnel, facilities, materials and equipment: Provided, That in the case of accredited private postsecondary education institutions, correspondence, business, occupational and trade schools under permit on the first day of July, one thousand nine hundred seventy-nine, having their physical facilities located in this state, and which are accredited by a national or regional accrediting agency or association recognized by the United States department of education, the accrediting agency's standards, procedures and criteria shall be accepted as meeting applicable laws, standards and rules of the board of directors: Provided, however, That institutions, which are institutionally accredited by accrediting agencies that are recognized by the United States department of education to establish academic standards for postsecondary education, may offer postsecondary educational programs leading to (and upon successful completion of such programs award graduates) certificates, diplomas and associate degrees in accordance with the academic standards required by such accrediting agency. If a review undertaken by the board indicates there may be deficiencies in the academic standards the institution maintains in its educational programs, that are of such a material nature as to jeopardize continued accreditation, the board shall notify the institution. If the board and the institution are unable to agree on the deficiencies or the steps necessary to correct the deficiencies, the board shall consult with the institution's accrediting agency regarding an academically appropriate resolution, which resolution may include a joint on- site review by the board and the accrediting agency. The board may also review the academic standards of unaccredited institutions and may require such institutions to maintain recognized academic standards that are reasonably appropriate to the nature of the institution and the training offered. The board may authorize an investigation of written student complaints alleging a violation of this section, board rules, or accreditation standards and may take appropriate action based on the findings of such an investigation. All evaluations or investigations of private postsecondary education institutions, correspondence, business, occupational and trade schools, and actions resulting from such evaluations or investigations, shall be made in accordance with rules promulgated by the board of directors pursuant to article three-a, chapter twenty-nine-a of this code.
For the purposes of this section, private postsecondary education institutions that award associate degrees shall be defined as private postsecondary education institutions, and associate degrees shall mean degrees awarded by such private postsecondary education institutions pursuant to a program of not less than two academic years: Provided, That nothing herein shall be construed to qualify the said proprietary institutions for additional state moneys not otherwise qualified for under other provisions of this code.
(f) In regard to private, postsecondary education institutions and other proprietary institutions operating under this section of the code which are accredited by a national or regional accrediting agency or association recognized by the United States department of education and which provide training at a campus located in this state:
(1) Any rule or standard which is authorized by this or any section of the code or other law and which is now in effect or promulgated hereafter by the board (or other agency with jurisdiction) shall be clearly, specifically and expressly authorized by narrowly construed enabling law and shall be unenforceable and without legal effect unless authorized by an act of the Legislature under the provisions of article three-a, chapter twenty-nine-a of this code.
(2) Notwithstanding any other provision of this section or other law to the contrary, the institution's accrediting agency standards, procedures and criteria shall be accepted as the standards and rules of the board (or other agency with jurisdiction) and as meeting other law or legal requirements relating to the operation of private postsecondary education institutions or correspondence, business, occupational and trade schools which such board or other agency has the legal authority to enforce under any section of the code or other law: Provided, That nothing in this section shall be construed to deny students the use of remedies that would otherwise be available under state or federal consumer laws or federal law relating to federal college financial assistance programs.
(3) Accredited institutions operating hereunder are hereby recognized as postsecondary. Academic progress shall be measured and reported in credit hours and all reports/documents filed on a credit hour basis unless the institution notifies the board that it utilizes clock hours as its unit of measurement.
(g) A representative of any institution who solicits, sells or offers to sell courses of instruction to any resident of this state for consideration or remuneration unless the institution first applies for a permit, or obtains a permit, shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more that two hundred dollars per day per violation, or imprisoned in the county jail not more than sixty days, or both fined and imprisoned. No private postsecondary education institution, correspondence, business, occupational or trade school shall maintain an action in any court of this state to recover for services rendered pursuant to a contract solicited by the institution if the institution did not hold a valid permit at the time the contract was signed by any of the parties thereto. The attorney general or any county prosecuting attorney, at the request of the board or upon his or her own motion, may bring any appropriate action or proceeding in any court of competent jurisdiction for the enforcement of the provisions of this section relating to permits, bonds and sureties.
(h) In regard to institutions operating under this section, all substantive standards and procedural requirements established by the board (or the West Virginia state program review entity or other agency with jurisdiction over institutions operating hereunder) shall meet all substantive and procedural standards of due process relating to the protection of an individual citizen's property rights as provided for under the United States Constitution, and shall follow the substantive standards and procedural requirements established by or under authority of this section.
(i) The following provisions are applicable to certain institutions authorized to operate under this section:
(1) An institution shall be authorized to use the term "college" in its name only if it offers at least one associate degree program, such as an associate or occupational associate degree, or associate of science or arts degree, at a campus or location in this state: Provided, That any West Virginia institution using the term "college" in its name on the first day of January, one thousand nine hundred ninety-seven, may continue using the term "college" in its name or in any future name, revision or designation. A West Virginia branch campus or additional location, or other training facility established by an institution originating in and licensed by another state that is not authorized to use the term "college" in its state of origin may not use the term "college" in its West Virginia operations.
(2) Institutional changes, such as the addition of a new campus or training facility, the relocation of the main campus, appointment of new members to the private postsecondary education institution board of directors or other controlling body, appointment of a new president or other officers or administrators, changes in the level of program offerings, or any other such changes, may not cause the institution to be deemed to be a new institution or otherwise adversely alter the institution's legal status or rights granted under any section of the code or other law unless specifically provided for therein: Provided, That the private postsecondary education institution continues to offer at least one associate degree program.
(3) An institution that has not operated a campus in this state under a permit issued pursuant to this section for at least five years may not offer nondegree programs that are longer than one year in length without approval of the board of directors, and may not offer associate degree programs unless the institution is a subsidiary or division of another private postsecondary education institution authorized to award associate degrees in West Virginia: Provided, That any institution which has offered associate degree programs, or nondegree programs longer than one year in length, at a campus in this state on or after the first day of January, one thousand nine hundred ninety-two, may continue to offer such programs.
§18B-3-6. Students of private postsecondary education institutions eligible for state employment and job training opportunities provided by or on behalf of the state of West Virginia under equal protection of the law; private postsecondary education institution defined; board of directors and higher education central office report to be provided to legislative oversight commission on education accountability.
(a) Students and graduates of private postsecondary education institutions shall be accorded equal protection of the laws as accorded by the constitution of the United States and the constitution of the state of West Virginia.
(1) For purposes of qualifying an individual for employment, promotion or training opportunities offered by or through the state of West Virginia, and all of its agencies and political subdivisions, the educational and training achievements attained by students and graduates of private postsecondary education institutions, including academic credits, credentials and degrees awarded shall be recognized and accepted to the same extent as educational and training achievements attained by students at public community colleges or other educational institutions: Provided, That the academic credits, credentials and degrees awarded are comparable to the educational and training achievements attained by students at public community colleges or other educational institutions.
(2) Individuals who are eligible for job training assistance or benefits through state, federal or joint state and federal job training and assistance programs administered by or on behalf of the state of West Virginia may use such job training assistance or benefits to enroll in any job training program offered by a private postsecondary education institution or institutions to the extent allowed by federal law or by the requirements of the job assistance program, funding or benefit.
(b) A private postsecondary education institution that meets the standards established by section two, article one of this chapter shall be designated as a "West Virginia Private Postsecondary Education Institution," and the annual permit issued by the board shall identify the institution utilizing only such designation and referring only to this section of the code: Provided, That, except as may be otherwise provided for in this section, the institution shall continue operating under the provisions of section five of this article, and such designation shall not affect the legal rights and legal responsibilities applicable to the institution under section five nor shall such designation cause any other legal mandates, obligations or requirements to be applied to the private postsecondary education institutions under any other provision of this code.

§18B-3-7. Higher education grant program not accessible to private postsecondary education institutions as defined, correspondence courses, business schools or other proprietary institutions; transferability of credits to postsecondary education institutions within the university of West Virginia system and the state college system of West Virginia from private postsecondary education institutions as defined, correspondence courses, business schools, and other proprietary institutions is permissive but not mandatory; requirement of study of transferability of credits and access and cost of such access to the West Virginia higher education grant program to be performed by the higher education central office.

(a)It is the intent of the Legislature that:
(1) The West Virginia higher education grant program not be subject to subsection (a), section six, article three, chapter eighteen-b of the code of West Virginia, one thousand nine hundred thirty-one, as amended.
(2) The transferability of credits from private postsecondary education institutions as defined in section two, article one of this chapter, to institutions within the university system of West Virginia or the state college system of West Virginia be permissive. The receiving state institution of higher education shall use the same discretion, policies and procedures promulgated by it or its governing board as it would use to evaluate credits received from other education institutions.
(b) The higher education central office is hereby required to make a study of the West Virginia higher education grant program established pursuant to section three, article five, chapter 18-b of this Code, with regard to (i) making the West Virginia higher education grant program accessible to the students of private postsecondary education institutions, correspondence schools, business schools and other proprietary institutions; (ii) the additional cost if any of making the West Virginia higher education grant program so accessible; (iii) the ability of the higher education central office staff to monitor disbursements to such students; (iv) the ability of the higher education central office staff to assure compliance with applicable state and federal regulations with regard to disbursements of student financial aid to such students; (v) the additional cost to the state of West Virginia, if any, to make the West Virginia higher education grant program so accessible; and (vi) studying other matters as are required to complete this study.
(1) The study team for the study shall include the secretary of education and the arts or designee, the senior administrator of the higher education central office or designee, the vice chancellor for community colleges, five members from the private postsecondary education institution or other proprietary school community, one member to be selected by the senior administrator from the West Virginia higher education grant program advisory council of West Virginia grants who represents private independent institutions and one member from the West Virginia higher education grant program advisory council of West Virginia grants to be selected by the senior administrator who is representative of state institutions of higher education, one member to be selected by the chancellor of the state college system from one of the state institutions of higher education of the state college system, one member to be selected by the chancellor of the university system of West Virginia from one of the state institutions of higher education of the university system of West Virginia; Provided, That if the selection of five members from the private postsecondary education institutions is not provided for by associational membership in a representative organization or some other representative body then all participants in the development of this study who represent the private postsecondary education institution community shall have a total of five votes rather than five members.
(2) Members of the study team shall pay for their own expenses associated with serving on the study team, except for state employees who shall be reimbursed by their agencies.
(c) The higher education central office is hereby required to make a study of the transferability of comparable credits between the private postsecondary education institutions and other proprietary institutions and the state institutions of higher education governed by the board of trustees and the board of the directors.
(1) The study team for the study shall include the secretary of education and the arts or designee, the vice chancellor for community colleges, the director of academic affairs for the higher education central office, one academic officer from a state institution of higher education within the university system of West Virginia to be selected by the chancellor of the board of trustees, one academic officer from a state institution of higher education within the state college system to be selected by the chancellor of the board of directors, four members from the private postsecondary education institutions and other proprietary postsecondary education institutions community; Provided, That if the selection of four members from the private postsecondary education institutions is not provided for by associational membership in a representative organization or some other representative body then all participants in the development of this study who represent the private postsecondary education institution community shall have a total of four votes rather than four members.
(2) Members of the study team shall pay for their own expenses associated with serving on the study team, except for state employees who shall be reimbursed by their agencies.
(d) The studies as described in subsections (b) and (c) of this section shall commence on the first day of July, one thousand nine hundred, ninety-seven, and be completed by the thirtieth day of November, one thousand nine hundred ninety- seven. Findings of both studies shall be presented at the December meeting of the legislative oversight commission on education accountability. The findings may include a minority report in addition to a majority report, if three or more members wish the minority report to be included in the report to the legislative oversight commission on education accountability. Those members voting to include a minority report may also, with the leave of the chairmen of the Legislative oversight commission on education accountability, present the minority report to the commission.