H. B. 2929
(By Delegates Faircloth and Mezzatesta)
[Introduced February 26, 1999; referred to the
Committee on Education then Finance.]
A BILL to amend and reenact section five, article three, chapter
eighteen-b of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to exempting
certain postsecondary religious institutions from obtaining
a certificate of approval to operate.
Be it enacted by the Legislature of West Virginia:
That section five, article three, chapter eighteen-b of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 3. BOARD OF DIRECTORS OF THE STATE COLLEGE SYSTEM.
§18B-3-5. Permits required for 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 is unlawful for any person representing a correspondence, business, occupational or trade school inside or
outside this state, as such shall be defined by the board of
directors 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 school first applies for
a permit, or obtains a permit, from the West Virginia board of
directors in the manner and on the terms herein prescribed.
All private training or educational institutions, schools or
academies or other organizations shall must apply for a permit
from the board of directors of the state college system 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.
A school is considered to be established under the
provisions of this article on the date it first begins to
lawfully operate. An established school 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 school for each campus it operates in this state.
(b) Each application shall must be accompanied by a surety
bond in the penal sum of thirty-five thousand dollars for any
school 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 school 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 school
which has operated in West Virginia for less than ten years,
including those schools which have changed ownership within the
last ten years except those schools 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 school located in another state which applies for a permit
hereunder, shall provide a surety bond of fifty thousand dollars:
Provided further, That any school may be required to increase its
bond to one hundred fifty thousand dollars if its accreditation
is terminated for cause or if the school'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 that act,
or failure to meet the requirements of one or more programs under
said that act, shall not be deemed may not be considered a
termination for cause.
In addition, any school 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 school's audited financial
statements are qualified because the school's continued financial
viability as an ongoing concern is in doubt, and the board of
directors determines an increased bond is reasonably necessary to
protect the financial obligations legally due the students then
enrolled at the institution. A school 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 school to meet
contractual obligations; or failure of the school to meet the
requirements of this section. The bond shall be given by the
school 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 the bond and to the state board of directors 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 the permit shall be deposited in the state treasury to the
credit of the board of directors.
The board may refuse a permit to any school if the board
finds that the school engages in practices which are inconsistent
with this section or with rules and regulations issued pursuant
thereto to this section. A permit issued hereunder, upon
fifteen days' notice and after a hearing, if a hearing is
requested by the school, may be suspended or revoked by the board
of directors for fraud or misrepresentation in soliciting or enrolling students, for failure of the school 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 state
board of directors pertinent thereto. Prior to the board taking
any adverse action, including refusal, suspension or revocation
of a permit, the school shall be given reasonable opportunity to
take corrective measures. Any refusal, suspension or revocation
of a permit, or any other adverse action against a school, shall
comply with all constitutional provisions, including due process,
relating to the protection of property rights.
(d) All correspondence, business, occupational or trade
schools which have been issued a permit shall make annual reports
to the board of directors on forms furnished by the board and
shall provide such appropriate information as the board
reasonably may require. All 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 of directors 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 school.
No A school nor any or representative of a school shall may not 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, state board of
directors or any other department or agency of the state.
The board of directors is hereby authorized to adopt rules
and conduct on-site reviews to evaluate academic standards
maintained by schools for the awarding of certificates, diplomas
and specialized associate degrees, which standards may include
curriculum, personnel, facilities, materials and equipment:
Provided, That in the case of accredited 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 the appropriate nationally recognized accrediting
agency or association approved 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 the
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 those institutions to maintain
recognized academic standards that are reasonably appropriate to
the nature of the institution and the training offered. The
board of directors 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 correspondence, business, occupational and
trade schools, and actions resulting from such the 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, proprietary schools that
award specialized associate degrees shall be defined as
institutions of higher education, and specialized associate
degrees shall mean degrees awarded by such institutions pursuant
to a program of not less than two academic years: Provided, That
nothing herein shall may be construed to qualify the said
proprietary schools for additional state moneys not otherwise
qualified for under other provisions of this code.
(f) In regard to private, proprietary educational
institutions operating under this section of the code, 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 of directors (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 of directors (or other agency
with jurisdiction) and as meeting other law or legal requirements
relating to the operation of proprietary institutions 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 may 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 reports or
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 school who solicits, sells or
offers to sell courses of instruction to any resident of this
state for consideration or remuneration unless the school first
applies for a permit, or obtains a permit, shall be is 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 regional jail not more than sixty days,
or both fined and imprisoned. No A correspondence, business,
occupational or trade school shall may not maintain an action in any court of this state to recover for services rendered pursuant
to a contract solicited by the school if the school 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 of directors 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 of directors (or the West Virginia state program
review entity or other agency with jurisdiction over institutions
operating hereunder) shall must 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) Operation without permit. -- Subject to the requirements
imposed by this section, the following institutions of
postsecondary education may operate without a certificate of
approval or permit required for West Virginia private
institutions:
(1) A religious degree-granting institution which certifies,
in accordance with procedures established by the board of
directors of the state college system, that it:
(a) Is founded and operated by a church or organization of
churches as an integral part of the religious ministry of that
church or organization;
(b) Offers sectarian instruction only designed for and aimed
at persons who hold or seek to learn particular religious faiths
or beliefs of churches or religious organizations and provides
only educational programs for religious vocations; and
(c) States on the diploma or degree the religious nature of
the degree; and
(2) A church or other religious institution offering a
postsecondary instructional program leading to a diploma or
certificate only if designed for and aimed at persons who hold or
seek to learn the particular religious faith or beliefs of that
church or religious organization and providing only educational
programs for religious purposes.
(j) Submission of financial statement. -- Each institution
of postsecondary education authorized to operate without a
certificate of approval under this section shall submit, every
four years, a financial statement compiled by an independent
accountant employed by the institution to the board. These
institutions of postsecondary education may not commence or continue to operate, do business, or function unless the board
determines on the basis of the financial statement submitted by
the institution under this section that the institution possesses
adequate financial resources to support its educational program.
NOTE: The purpose of this bill is to exempt certain
postsecondary religious institutions from obtaining a certificate
of approval to operate.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.