Senate Bill No. 442
(By Senators Lucht and Burdette, Mr. President)
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[Introduced February 21, 1994;
referred to the Committee on Education.]
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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 regulation of
certain schools; requiring a permit from the board of
directors of the state college system; establishing a permit
fee and a permit renewal fee; requiring certain bonds;
providing for fines for certain solicitations and
advertisements; providing a method for resolving disputes;
and declaring certain due process rights.
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) Private training or educational institutions, schools or
academies or other organizations, referred to later in this
section as "schools", may not provide vocational or technical
training or education, or advertise or solicit, in this state
without the permit required under the provisions of this section.
This section does not apply to: (1) Public education
institutions; (2) private education institutions that are
expressly authorized to offer four-year degree programs; (3)
other educational programs in this state licensed or authorized
under other provisions of this code; or (4) to private
organizations that offer only tax return preparation courses or
offer only nonvocational, nontechnical instruction or training,
and such instruction or training is not represented to the public
as enhancing the student's prospects for employment or job
performance.
Any private training or educational institution, school or
academy or other organization may apply for a permit from the
board of directors of the state college system on forms provided
by the board. Each initial application shall be accompanied by
a nonrefundable fee of two thousand five hundred 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 permit application within ninety days
after receipt of the application and fee. An applicant for a
permit shall show proof at the time of filing an application thatadequate 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 an applicants'
facilities to confirm its readiness for operation prior to
issuance of the 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 any school which has operated in West Virginia for less than
ten years shall provide a surety bond of fifty thousand dollars
if it participates in any government sponsored education or
training programs:
Provided, however, That any school may be
required to increase its bond to one hundred 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 such terminationhas been upheld on appeal, if the school appeals. (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 that is required to increase its
bond to one hundred thousand dollars may be required to further
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
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. Schools with more
than one campus within the state shall be required to provide a
bond for each of its campuses in an amount equal to the bond
required for its oldest established campus in this state. 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 or failure of the school to meet contractual
obligations. The bond shall be given by the school itself as a
blanket bond covering all of its representatives. The surety onany 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 actionagainst 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 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 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 post-secondary
education, may offer post-secondary 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 unaccreditedinstitutions 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 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 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 the code.
(f) In regard to private, proprietary educational
institutions operating under this section, 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 anysection of this 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 this 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 a new school that has not previously
held legal authorization to provide instruction in this state,who solicits or advertises in any manner in this state or enrolls
students prior to the new school receiving its first permit, may
be fined not more than two hundred dollars for each violation by
the board per violation, not to exceed a maximum of two thousand
dollars and, if the school is based or domiciled in another
state, the board may deny it a permit for a period of three years
from the date of the solicitation or advertisement. No
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 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 underauthority of this section.
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(NOTE: The purpose of this bill is to clarify and regulate
the process of granting permits for certain correspondence,
business, occupational and trade schools and institutions. Under
the bill, the Board of Directors of the State College System is
given responsibility for granting permits and for ensuring that
schools and institutions meet certain requirements. The bill
also establishes a permit fee and a permit renewal fee and it
requires that schools be bonded. Fines are levied for violation
of restrictions on solicitations and advertisements. The bill
sets a mechanism for resolving disputes between the board and
schools and it sets out certain due process and property rights
of students.)