Degree Granting Institutions

Prohibits unaccredited institutions from issuing degrees unless
they comply with certain standards.  (HB252 CD1)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 3
TWENTIETH LEGISLATURE, 1999                                S.D. 2
STATE OF HAWAII                                            C.D. 1 

                   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.
 8      446E-    Exceptions.  This chapter shall not apply to the
 9 types of schools and courses of instruction that include:
10      (1)  Schools and educational programs conducted by firms,
11           corporations, or persons for the training of their own
12           employees;
13      (2)  Apprentice or other training programs provided by labor
14           unions to union members or union applicants for
15           membership;
16      (3)  Courses of instruction that do not lead to the
17           conferring of a degree;
18      (4)  Seminars, refresher courses, and programs of
19           instruction sponsored by professional, business, or

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

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

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 1 the following criteria:
 2     (1)   Provides a post-secondary instructional program or
 3           course leading to a degree;
 4     (2)   Uses in its name the term "college", "academy",
 5           "institute", "institution", or "university" or a
 6           similar term which implies that the organization or
 7           person is primarily engaged in the education of
 8           students at the post-secondary level; and
 9     (3)   Charges a fee for its services.
10     "Director" means the director of commerce and consumer
11 affairs.
12     "Employee" means a person who is hired on an hourly or
13 salaried basis for twenty or more hours per week.
14     "Office" means space within a structure that is leased,
15 subleased, rented, or owned by the unaccredited institution or
16 one or more of its officers or directors for the exclusive use by
17 the unaccredited institution, as evidenced by a written lease
18 agreement, sublease agreement, rental agreement, or conveyance
19 document, and shall not include an arrangement for mail
20 forwarding services or mailbox rental.
21     "Presence" means offering courses, programs, or degrees or
22 maintaining a campus, or an administrative, corporate, or other
23 address in this State.

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 1     "Student" means a person who enrolls in or seeks to enroll in
 2 a course of instruction offered or conducted by an unaccredited
 3 institution.
 4     "Unaccredited institution" means a degree granting
 5 institution [which has not been] that is not accredited or
 6 [provisionally accredited] a candidate for accreditation by at
 7 least one nationally recognized accrediting agency [or
 8 association which] that is listed by the United States Secretary
 9 of Education."
10     SECTION 3.  Section 446E-2, Hawaii Revised Statutes, is
11 amended to read as follows:
12     "446E-2  Disclosures.(a)  Any unaccredited institution
13 shall disclose in all catalogs, promotional materials, and
14 [written] contracts for instruction, the fact that the
15 institution is not [fully] accredited by any nationally
16 recognized accrediting agency [or association] listed by the
17 United States Secretary of Education.  [The unaccredited
18 institution shall disclose whether it is a provisionally
19 accredited, or is a candidate for accreditation.  The accrediting
20 agency or association shall be identified.]  The disclosure shall
21 be made in [boldface print and] a type size as large or larger
22 than any other text in the catalog, promotional material, or
23 contract for instruction, excluding the name of the unaccredited

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 1 institution, and shall be presented in a manner reasonably
 2 calculated to draw the attention of the reader [and].  If the
 3 unaccredited institution includes in its catalogs, promotional
 4 materials, or contracts for instruction any other information
 5 relating in any manner to accreditation, or to accreditation by
 6 an agency not nationally recognized by the United States
 7 Secretary of Education, the disclosure required by this
 8 subsection shall be repeated on every page on which the
 9 information appears.  Where the information is presented
10 electronically, the disclosure shall be made directly preceding
11 or following the information.  The disclosure shall read
12 [substantially] as follows:
13      (Name of Degree Granting Institution) IS NOT ACCREDITED
16                      SECRETARY OF EDUCATION.
17     Note:  In the United States, many licensing authorities
18     require accredited degrees as the basis for eligibility for
19     licensing.  In some cases, accredited colleges may not accept
20     for transfer courses and degrees completed at unaccredited
21     colleges, and some employers may require an accredited degree
22     as a basis for eligibility for employment.
23      (b)  Every unaccredited institution subject to this chapter

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 1 shall[, in accordance with the rules prescribed by the
 2 department,] keep true and accurate records of student
 3 enrollment, courses, fees, and matriculation rates.  These
 4 records shall be retained for five years.  Upon demand, these
 5 records, and any other information requested or subpoenaed by the
 6 director, shall be made available to the [department for
 7 inspection.  Such records shall be retained for a period of five
 8 years.] director."
 9      SECTION 4.  Section 446E-3, Hawaii Revised Statutes, is
10 amended to read as follows:
11      "[[]446E-3[]]  Sanction.  [Failure by any unaccredited
12 institution to make the disclosure required by this section shall
13 constitute an unfair or deceptive act or practice under section
14 480-2.] Any person who violates this chapter shall be deemed to
15 have engaged in an unfair or deceptive act or practice pursuant
16 to section 480-2."
17      SECTION 5.  Section 446E-4, Hawaii Revised Statutes, is
18 amended to read as follows:
19      "[[]446E-4[]  Registration.]  Service of process.  (a)  Any
20 unaccredited institution with a presence in the State shall
21 [register with the department of commerce and consumer affairs in
22 a manner established by rules adopted pursuant to chapter 91.
23 The department may request, as part of the registration process,

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 1 copies of any contracts, brochures, catalogues, or similar
 2 materials which are distributed to prospective students.]
 3 designate and continuously maintain an agent in this State
 4 authorized to accept service of process on behalf of the
 5 institution and shall transmit to the director the name, address,
 6 and telephone number of the agent so designated in a manner
 7 prescribed by the director.  The designated agent shall be an
 8 agent of the unaccredited institution for service of any process,
 9 notice, or demand required or permitted by law to be served upon
10 the unaccredited institution.
11      (b)  If an unaccredited institution fails to appoint or
12 maintain an agent for service of process in this State or the
13 agent for service of process cannot with reasonable diligence be
14 found at the agent's address, service of process may be made upon
15 the unaccredited institution by registered or certified mail,
16 return receipt requested, addressed to the unaccredited
17 institution at the most recent address listed in the records of
18 the director.
19      (c)  Service by registered or certified mail shall be
20 effected under subsection (b) at the earliest of:
21      (1)  The date the unaccredited institution receives the
22           process, notice, or demand;
23      (2)  The date shown on the return receipt, if signed on

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 1           behalf of the unaccredited institution; or
 2      (3)  Five days after its deposit in the mail, if mailed
 3           postpaid and correctly addressed.
 4      (d)  This section shall not affect the right to serve
 5 process, notice, or demand in any other manner provided by law."
 6      SECTION 6.  Section 446E-5, Hawaii Revised Statutes, is
 7 amended to read as follows:
 8      "[[]446E-5[]]  Prohibited practices.  (a)  No unaccredited
 9 institution shall [refer to registration under this chapter,
10 compliance with the requirements of this chapter, or to any
11 agency or employee of the State in a manner which suggests]
12 indicate or suggest that the State licenses, approves, or
13 regulates its operations.  Acceptance by the director of any
14 documents from an unaccredited institution shall not be construed
15 as evidence that the director has determined the adequacy of any
16 filing.
17      (b)  Any institution that is not accredited by the American
18 Bar Association shall not issue a juris doctor degree (J.D.), a
19 master of laws degree (LL.M.), or any equivalent or comparable
20 degree.
21      (c)  Any institution that is not accredited by the Liaison
22 Committee on Medical Education shall not issue a doctor of
23 medicine degree (M.D.), or any equivalent or comparable degree.

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 1      (d)  No unaccredited institution shall issue degrees unless
 2 the institution has an office located in Hawaii, at least one
 3 employee who resides in Hawaii, and at least twenty-five enrolled
 4 students in Hawaii, in each academic year of its operation for
 5 the purpose of performing course requirements that are part of
 6 the students' educational curriculum.
 7      (e)  No unaccredited institution that operates in or from
 8 the State or has a presence in this State shall accept or receive
 9 any tuition payment or other fee from or on behalf of a student
10 unless the institution complies with all of the requirements of
11 this chapter.
12      (f)  No unaccredited institution shall disclose in any
13 catalog, promotional material or written contract for instruction
14 that it has applied for future accreditation." 
15      SECTION 7.  Notwithstanding section 445E-5(d), Hawaii
16 Revised Statutes, an unaccredited institution may issue degrees
17 only for a period of no more than three consecutive years from
18 the effective date of this Act; provided that:  
19      (1)  The institution has, on the effective date of this Act
20           and for as long thereafter as it issues degrees
21           pursuant to this section of the Act, an office located
22           in Hawaii, and at least one employee who resides in
23           Hawaii; and

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 1      (2)  This period may be extended by two additional
 2           consecutive years if the institution has applied for
 3           and has been granted eligibility for candidacy or
 4           accreditation by an agency approved or recognized by
 5           the United States Department of Education or a
 6           successor agency prior to the expiration of the initial
 7           three-year period.  Thereafter, the unaccredited
 8           institution shall be subject to section 445E-5(d),
 9           Hawaii Revised Statutes.
10      SECTION 8.  Statutory material to be repealed is bracketed.
11 New statutory material is underscored.
12      SECTION 9.  This Act shall take effect upon its approval.