H. B. 2249
(By Delegates Faircloth and Mezzatesta)
[Introduced
February 15, 2001
; 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 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 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 than 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.