Degree Granting Institutions

Prohibits unaccredited institutions from issuing degrees unless
they comply with certain standards.

HOUSE OF REPRESENTATIVES                H.B. NO.252        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Chapter 446E, Hawaii Revised Statutes, is
 2 amended by adding three new sections to be appropriately
 3 designated and to read as follows:
 4      "446E-    Advisory board.  The state post-secondary
 5 education commission, as established by chapter 305H, shall serve
 6 as a resource to the director as needed regarding the
 7 requirements of this chapter.  The commission shall use as a
 8 guide the "National Guide to Education Credits for Training
 9 Program" by the American Council of Education.
10      446E-    Exceptions.  This chapter shall not apply to the
11 types of schools and courses of instruction that include:
12      (1)  Schools and educational programs conducted by firms,
13           corporations, or persons for the training of their own
14           employees;
15      (2)  Apprentice or other training programs provided by labor
16           unions to union members or union applicants for
17           membership;
18      (3)  Courses of instruction that do not lead to the
19           conferring of a degree;

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 1      (4)  Seminars, refresher courses, and programs of
 2           instruction sponsored by professional, business, or
 3           farming organizations or associations for their members
 4           or employees of their members;
 5      (5)  Courses of instruction conducted by a public school
 6           district or a combination of public school districts;
 7      (6)  Colleges and universities that grant degrees pursuant
 8           to chapters 304 and 305;
 9      (7)  Entities that are established under the jurisdiction of
10           the board of regents of the University of Hawaii;
11      (8)  Schools, courses of instruction, or courses of training
12           that are offered by a vendor to the purchaser or
13           prospective purchaser of the vendor's product when the
14           objective of the school or course is to enable the
15           purchaser or the purchaser's employees to gain skills
16           and knowledge which enable the purchaser to use the
17           product;
18      (9)  Schools and educational programs conducted by religious
19           organizations solely for the religious instruction of
20           their members;
21     (10)  Nondegree granting post-secondary educational
22           institutions licensed by the department of education or
23           the real estate commission; and

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 1     (11)  Schools that are accredited by an agency or
 2           organization approved or recognized by the United
 3           States Department of Education or a successor agency,
 4           except as provided for in section 446E-5(b).
 5     446E-    Powers and duties of the director.  The director
 6 may adopt rules in accordance with chapter 91 to carry out the
 7 functions, powers, and duties set forth in this chapter."
 8     SECTION 2.  Section 446E-1, Hawaii Revised Statutes, is
 9 amended to read as follows:
10     "[[]446E-1[]]  Definitions.  As used in this chapter:
11     "Degree" means a post-secondary credential, earned or
12 honorary, conferring on the recipient the title or designation of
13 "associate", "bachelor", "baccalaureate", "master", "doctor", or
14 "doctorate", or any designation, mark, appellation, series of
15 letters or words, or other symbol which signifies, purports, or
16 is generally taken to signify satisfactory completion of the
17 requirements of an academic or professional program of study
18 beyond the secondary school level.
19     "Degree granting institution" means a school, academy,
20 institute, junior college, college, university, [or person or
21 entity of whatever kind which furnishes or offers to furnish
22 instruction leading toward or prerequisite to an academic or
23 professional degree beyond the secondary school level.] agency,

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 1 individual, partnership, company, firm, society, trust,
 2 association, corporation, or any combination thereof that meets
 3 the following criteria:
 4     (1)   Provides a post-secondary instructional program or
 5           course leading to a degree;
 6     (2)   Uses in its name the term "college", "academy",
 7           "institute", "institution", or "university" or a
 8           similar term which implies that the organization or
 9           person is primarily engaged in the education of
10           students at the post-secondary level; and
11     (3)   Charges a fee for its services.
12     "Director" means the director of commerce and consumer
13 affairs.
14     "Employee" means a person who is hired on an hourly or
15 salaried basis for twenty or more hours per week.
16     "Presence" means offering courses, programs, or degrees or
17 maintaining a campus, or an administrative, corporate, or other
18 address in this State.
19     "Student" means a person who enrolls in or seeks to enroll in
20 a course of instruction offered or conducted by an unaccredited
21 institution.
22     "Unaccredited institution" means a degree granting
23 institution [which has not been] that is not accredited or

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 1 [provisionally accredited] a candidate for accreditation by at
 2 least one nationally recognized accrediting agency [or
 3 association which] that is listed by the United States Secretary
 4 of Education."
 5     SECTION 3.  Section 446E-2, Hawaii Revised Statutes, is
 6 amended to read as follows:
 7     "446E-2  Disclosures.(a)  Any unaccredited institution
 8 shall disclose in all catalogs, promotional materials, and
 9 [written] contracts for instruction, the fact that the
10 institution is not [fully] accredited by any nationally
11 recognized accrediting agency [or association] listed by the
12 United States Secretary of Education.  [The unaccredited
13 institution shall disclose whether it is a provisionally
14 accredited, or is a candidate for accreditation.  The accrediting
15 agency or association shall be identified.]  The disclosure shall
16 be made in [boldface print and] a type size as large or larger
17 than any other text in the catalog, promotional material, or
18 contract for instruction, excluding the name of the unaccredited
19 institution, and shall be presented in a manner reasonably
20 calculated to draw the attention of the reader [and].  In the
21 event the unaccredited institution includes in its catalogs,
22 promotional materials, or contracts for instruction any other
23 information relating in any manner to accreditation, to the

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 1 unaccredited institution's current or future accreditation
 2 status, or to accreditation by an agency not nationally
 3 recognized by the United States Secretary of Education, the
 4 disclosure required by this subsection shall be repeated on every
 5 page the information appears, or, where the information is
 6 presented electronically, directly preceding and following any
 7 such information.  The disclosure shall read [substantially] as
 8 follows:
 9      (Name of Degree Granting Institution) IS NOT ACCREDITED
12                      SECRETARY OF EDUCATION.
13     Note:  In the United States, many licensing authorities
14     require accredited degrees as the basis for eligibility for
15     licensing.  In some cases, accredited colleges may not accept
16     for transfer, courses and degrees completed at unaccredited
17     colleges, and some employers may require an accredited degree
18     as a basis for eligibility for employment.
19      (b)  Every unaccredited institution subject to this chapter
20 shall[, in accordance with the rules prescribed by the
21 department,] keep true and accurate records of student
22 enrollment, courses, fees, and matriculation rates.  These
23 records shall be retained for five years.  Upon demand, these

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 1 records, and any other information requested or subpoenaed by the
 2 director, shall be made available to the [department for
 3 inspection.  Such records shall be retained for a period of five
 4 years.] director."
 5      SECTION 4.  Section 446E-3, Hawaii Revised Statutes, is
 6 amended to read as follows:
 7      "[[]446E-3[]]  Sanction.  [Failure by any unaccredited
 8 institution to make the disclosure required by this section shall
 9 constitute an unfair or deceptive act or practice under section
10 480-2.] Any person who violates this chapter shall be deemed to
11 have engaged in an unfair or deceptive act or practice pursuant
12 to section 480-2."
13      SECTION 5.  Section 446E-4, Hawaii Revised Statutes, is
14 amended to read as follows:
15      "[[]446E-4[]  Registration.]  Service of process.  (a)  Any
16 unaccredited institution with a presence in the State shall
17 [register with the department of commerce and consumer affairs in
18 a manner established by rules adopted pursuant to chapter 91.
19 The department may request, as part of the registration process,
20 copies of any contracts, brochures, catalogues, or similar
21 materials which are distributed to prospective students.]
22 designate and continuously maintain an agent in this State
23 authorized to accept service of process on behalf of the

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 1 institution and shall deliver to the director the name, address,
 2 and telephone number of the agent so designated in a manner
 3 prescribed by the director.  The designated agent shall be an
 4 agent of the unaccredited institution for service of any process,
 5 notice, or demand required or permitted by law to be served upon
 6 the unaccredited institution.
 7      (b)  If an unaccredited institution fails to appoint or
 8 maintain an agent for service of process in this State or the
 9 agent for service of process cannot with reasonable diligence be
10 found at the agent's address, service of process may be made upon
11 the unaccredited institution by registered or certified mail,
12 return receipt requested, addressed to the unaccredited
13 institution at the most recent address listed in the records of
14 the director.
15      (c)  Service by registered or certified mail is effected
16 under subsection (b) at the earliest of:
17      (1)  The date the unaccredited institution receives the
18           process, notice, or demand;
19      (2)  The date shown on the return receipt, if signed on
20           behalf of the unaccredited institution; or
21      (3)  Five days after its deposit in the mail, if mailed
22           postpaid and correctly addressed.
23      (d)  This section shall not affect the right to serve

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 1 process, notice, or demand in any other manner provided by law."
 2      SECTION 6.  Section 446E-5, Hawaii Revised Statutes, is
 3 amended to read as follows:
 4      "[[]446E-5[]]  Prohibited practices.  (a)  No unaccredited
 5 institution shall [refer to registration under this chapter,
 6 compliance with the requirements of this chapter, or to any
 7 agency or employee of the State in a manner which suggests]
 8 indicate or suggest that the State licenses, approves, or
 9 regulates its operations.  Acceptance by the director of any
10 documents from an unaccredited institution shall not be construed
11 as evidence that the director has determined the adequacy of any
12 filing.
13      (b)  Any institution that is not accredited by the American
14 Bar Association shall not issue a juris doctor degree (J.D.), a
15 master of laws degree (LL.M.), or any equivalent or comparable
16 degree.
17      (c)  Any institution that is not accredited by the Liaison
18 Committee on Medical Education shall not issue a doctor of
19 medicine degree (M.D.), or any equivalent or comparable degree.
20      (d)  No unaccredited institution shall issue degrees unless
21 the institution has an office, at least one employee, and at
22 least twenty-five enrolled students in Hawaii in each academic
23 year of its operation for the purpose of performing course

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 1 requirements that are part of the students' educational
 2 curriculum, or as provided for in subsection (e).
 3      (e)  No unaccredited institution that operates in or from
 4 the State or has a presence in this State shall accept or receive
 5 any tuition payment or other fee from or on behalf of a student
 6 unless the institution complies with all of the requirements of
 7 this chapter."
 8      SECTION 7.  Notwithstanding section 445E-5(d), Hawaii
 9 Revised Statutes, each unaccredited institution with an office
10 and at least one employee on the effective date of this Act may
11 issue degrees for a period of no more than five consecutive years
12 from the effective date of this Act.  Thereafter, the
13 unaccredited institution shall be subject to section 446E-5(d),
14 Hawaii Revised Statutes.
15      SECTION 8.  Statutory material to be repealed is bracketed.
16 New statutory material is underscored.
17      SECTION 9.  This Act shall take effect upon its approval.
19                           INTRODUCED BY:  _______________________