H. B. 2716
(By Delegate Mezzatesta)
[Introduced March 25, 1997; referred to the
Committee on Education.]
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 authority of
board of directors of the state college system over West
Virginia private institutions of higher education,
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.
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 West Virginia private
institutions of higher education, and
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 institution of higher education, or 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 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 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 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.
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. 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 West Virginia private institutions of higher learning,
and 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 West Virginia private institutions of higher
learning, and 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
school nor any representative of a school 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, 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 West Virginia private
institutions of higher education, and 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 a national or
regional accrediting agency or association approved 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 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
West Virginia private institutions of higher education, or 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 pursuant to article three-a, chapter twenty-nine-a of
this code.
For the purposes of this section, proprietary schools West
Virginia private institutions of higher education 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 West Virginia private institutions of higher
education, and to private, proprietary educational institutions
operating under this section of the code for at least five
years, accredited by a national or regional accrediting agency or
association recognized by the United States department of
education and which provide have provided training at a campus
located in this state for at least five years:
(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 West Virginia private institutions
of higher learning or 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 jail not more than sixty days, or both fined and
imprisoned. No West Virginia private institution of higher
education or correspondence, business, occupational or trade
school shall may 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 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 educational institution shall be authorized to use
the term "college" in its name only if it offers at least one
associate degree program, such as a specialized or occupational
associate degree, or associate of science or arts degree, at a
campus or location in this state: Provided, That any 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 if it has operated a campus in this state under authorization pursuant to this section for at least ten years
prior to the first day of January, one thousand nine hundred
ninety-seven. 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 board of directors or other
controlling body, appointment of a new president or other
officers or administrators, changes in the level of program
offerings, changes in majority ownership control, 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.
(3) An educational institution that has not operated a
campus in this state under permit issued pursuant to this section
for at least five years may not offer non-degree programs that are
longer than one year in length without approval of the West
Virginia board of directors, and may not offer associate degree
programs unless the institution is a subsidiary or division of
another educational institution authorized to award associate degrees in West Virginia: Provided, That any institution which
has offered associate degree programs, or non-degree 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.
NOTE: The purpose of this bill is to give the board of
directors of the state college system additional authority over
West Virginia private institutions of higher education,
correspondence, business, occupational and trade schools.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.