Degree Granting Institutions

Prohibits unaccredited institutions from issuing degrees unless
they comply with certain standards.  (HB252 HD3)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 3
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.
 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

Page 2                                                     252
                                     H.B. NO.           H.D. 3

 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

Page 3                                                     252
                                     H.B. NO.           H.D. 3

 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,

Page 4                                                     252
                                     H.B. NO.           H.D. 3

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

Page 5                                                     252
                                     H.B. NO.           H.D. 3

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

Page 6                                                     252
                                     H.B. NO.           H.D. 3

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

Page 7                                                     252
                                     H.B. NO.           H.D. 3

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

Page 8                                                     252
                                     H.B. NO.           H.D. 3

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

Page 9                                                     252
                                     H.B. NO.           H.D. 3

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

Page 10                                                    252
                                     H.B. NO.           H.D. 3

 1 requirements that are part of the students' educational
 2 curriculum.
 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      (f)  No unaccredited institution shall disclose in any
 9 catalog, promotional material or written contract for instruction
10 that it has applied for future accreditation." 
11      SECTION 7.  Notwithstanding section 445E-5(d), Hawaii
12 Revised Statutes, each unaccredited institution with an office
13 and at least one employee on the effective date of this Act may
14 issue degrees for a period of no more than five consecutive years
15 from the effective date of this Act.  Thereafter, the
16 unaccredited institution shall be subject to section 446E-5(d),
17 Hawaii Revised Statutes.
18      SECTION 8.  Statutory material to be repealed is bracketed.
19 New statutory material is underscored.
20      SECTION 9.  This Act shall take effect upon its approval.