H. B. 2709
(By Delegate Faircloth)
[Introduced January 28, 2003; 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 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 higher education policy commission 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 higher education policy
commission
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 higher education
policy commission on forms provided by the board commission. 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 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 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 commission 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 bond and to the state board of directors commission 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 of directors commission.
The board commission may refuse a permit to any school if the
board commission finds that the school engages in practices which
are inconsistent with this section or with rules and regulations
issued pursuant thereto. 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
commission 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 rule of the state
board of directors commission pertinent thereto. Prior to the
board commission 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 commission on forms furnished by the
board commission and shall provide such appropriate information as
the board commission reasonably may require. All correspondence,
business, occupational or trade schools which have been issued a
permit shall furnish to the board of directors commission a list of
its official representatives. Each school shall be issued a
certificate of identification by the board of directors commission
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 or any 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 higher education policy commission or any other
department or agency of the state.
The board of directors commission 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 accrediting agency. If a review undertaken by the
board commission 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 commission and the institution are unable to agree on
the deficiencies or the steps necessary to correct the
deficiencies, the board commission 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 commission and the accrediting agency.
The board commission 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 of directors commission may authorize an
investigation of written student complaints alleging a violation of
this section, board commission 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 evaluations or investigations, shall be
made in accordance with rules promulgated by the board of directors commission
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 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 commission (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 commission (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 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 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 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 or regional jail not more than sixty days, or both fined
and imprisoned. No Any 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 commission 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 commission (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) 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.