HOUSE OF REPRESENTATIVES
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO EDUCATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Private trade, vocational, and technical schools provide specialized training for a number of professions in the State, including those in massage therapy, healthcare, tax preparation, and maritime activities.
Section 302A-425, Hawaii Revised Statutes, prohibits such schools and other private organizations or corporations for the purpose of teaching any trade, occupation, or vocation from operating prior to being licensed by the department of education. The department of education has had this responsibility since 1939, when the focus of such regulation was to ensure the quality of education and instruction at those schools providing post-secondary training below the college level.
Act 57, Session Laws of Hawaii 1998, amended section 302A-425, Hawaii Revised Statutes, to declare that the purpose of such regulation is to protect consumers from false, deceptive, misleading, and unfair practices and to ensure adequate educational quality.
Auditor’s Report No. 02-08, A Study on the Licensing of Private Trade, Vocational, and Technical Schools, acknowledged that the declaration of purpose added to section 302A-425, Hawaii Revised Statutes, by Act 57, Session Laws of Hawaii 1998, brought into question the appropriateness of the program’s administrative placement within the department of education.
In 2015, the legislature passed Senate Concurrent Resolution No. 46, Senate Draft 2, requesting the department of education and department of commerce and consumer affairs to convene a working group to evaluate and review the current licensing program for private trade, vocational, and technical schools. The working group collaborated to gather information and develop findings and recommendations. The working group jointly recommended that the licensure program be narrowed in scope, but was unable to come to any other joint recommendations.
The department of education’s primary mission is kindergarten to twelfth grade education, and does not include the provision of post-secondary education or the regulation of post-secondary institutions. The legislature finds that the department of education does not have the capacity or expertise in the specialized curricula of the various private trade, vocational, and technical schools currently under its licensing jurisdiction to effectively administer the requirements of section 302A-425, Hawaii Revised Statutes.
The purpose of this Act, therefore, is to narrow the scope of the licensure program and establish a licensing fee to ensure its sustainability.
SECTION 2. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§302A- Private trade, vocational, and technical school licensure special fund. There is created in the state treasury a special fund to be known as the private trade, vocational, and technical school licensure special fund into which shall be deposited all revenues and fees collected by the department pursuant to section 302A-425. Moneys in the fund shall be used to fund activities related to the licensure requirements established under section 302A-425."
SECTION 3. Section 302A-101, Hawaii Revised Statutes, is amended by amending the definition of "private trade, vocational, or technical school" to read:
""Private trade, vocational, or technical
school" means [
any plan or method used by any person or persons, firm,
or any other] an organization or corporation [ for giving] that
provides instruction in any form or manner in any trade, occupation, or
vocation for a consideration, reward, or promise of whatever nature, [ including
correspondence schools located within the State,] except [ as follows]:
(1) Schools maintained, or classes conducted, by employers for their own employees where no fee or tuition is charged;
(2) Courses of instruction given by any fraternal society, benevolent order, or professional organization to its members, which courses are not operated for profit;
(3) Flying schools qualified under the Federal Aviation Administration;
(4) Classes conducted for less than five students at one and the same time;
(5) Classes or courses of instruction that are conducted for twenty or fewer class sessions during any twelve-month period;
(6) Avocational, hobby, recreation, or health classes or courses;
(7) Courses of instruction on
religious subjects given under the auspices of a religious organization; [
(8) Schools registered by the
department of commerce and consumer affairs or by boards and commissions placed
in the department of commerce and consumer affairs for administrative purposes[
(9) Schools required to be authorized by the department of commerce and consumer affairs pursuant to chapter 305J.”
SECTION 4. Section 302A-425, Hawaii Revised Statutes, is amended to read as follows:
License required for] Licensure
of private trade, vocational, or technical school. [ No private trade, vocational, or technical
school shall be operated by any person or persons, firm, or any other private
organization or corporation for the purpose of teaching any trade, occupation,
or vocation unless there is first secured from the department a license issued
in accordance with section 302A-424 to 302A-428 and in such form as the
department may direct.] (a) The department shall license only those
private trade, vocational, or technical schools that require legal
authorization by the State to be considered an eligible institution pursuant to
34 Code of Federal Regulations section 600 for the purposes of participating in
student aid programs authorized under title IV of the federal Higher Education
Act of 1965, as amended. The purpose of the licensing and regulation is to
protect consumers against practices by private trade, vocational, or technical
schools that are false, deceptive, misleading, or unfair[ , and to help
ensure adequate educational quality at private trade, vocational, or technical
schools]. The department shall not be responsible for review of
curriculum or assurance of program quality for those private trade, vocational,
or technical schools whose curriculum or program falls outside of the
department’s mission, which is kindergarten to twelfth grade education.
(b) A private trade, vocational, or technical school that requires licensure under subsection (a) shall submit the following to the department in such form as the department may direct:
(1) Certification on official letterhead, signed by the head of school, that the school has students currently receiving, or who have applied to receive, aid under title IV of the federal Higher Education Act of 1965, as amended;
(2) Proof that the school is accredited by an accrediting commission of career schools and colleges, accrediting council for continuing education and training, or an accrediting bureau of health education schools; provided that in lieu of such accreditation, the school may provide a letter from the relevant state licensure board that graduates completing the school’s curriculum are eligible for state licensure;
(3) Proof of current business registration demonstrating good standing;
(4) A copy of the school’s current general excise tax license, including a current tax clearance; and
(5) Proof that the school has secured a surety bond in the sum of $50,000, payable in a form satisfactory to the department, to provide indemnification to any student suffering a financial loss as a result of the school not fulfilling its obligations under the terms of its license; provided that the bonding requirement may be reduced at the discretion of the department.
(c) A private trade, vocational, or technical school applying for initial licensure shall pay an initial license fee of $10,000 to the department upon application for licensure under this section.
(d) Every two years following the date of initial licensure, a private trade, vocational, or technical school shall apply for a renewal license by:
(1) Submitting all documents required under subsection (b), with updated information as appropriate;
(2) Submitting a list of complaints officially filed with the department of commerce and consumer affairs pursuant to subsection (e); and
(3) Paying a renewal licensure fee of $10,000.
(e) Complaints alleging unfair or deceptive acts or practices by a private trade, vocational, or technical school shall be filed with the department of commerce and consumer affairs for review, investigation, and appropriate recommendation for action, including appeals from action taken. The department of commerce and consumer affairs may assess a fine equal to a sum of not less than $500 nor more than $10,000 for each violation. The penalties provided for in this subsection shall be cumulative to the remedies or penalties available under all other laws of this State. Each day that a violation occurs shall be considered a separate violation.
(f) Fees collected pursuant to this section shall be deposited into the private trade, vocational, and technical school licensure special fund established under section 302A- ; provided that fines collected pursuant to subsection (e) shall be deposited in the compliance resolution fund, established under section 26-9(o).
(g) The board may adopt rules relating to the enforcement of sections 302A-425 and 302A-426."
SECTION 5. Section 302A-426, Hawaii Revised Statutes is amended by amending subsection (a) to read as follows:
The department, after notice and opportunity for a hearing, may suspend or
revoke a license at any time when, in the judgment of the department, the
licensee is not complying with [
sections 302A-424 to 302A-428] section
302A-425 or the rules that may be adopted by the board. The notice of
hearing shall be served personally or sent to the licensee by registered or
certified mail with return receipt at the licensee’s last known address."
SECTION 6. Section 302A-424, Hawaii Revised Statutes, is repealed.
[§302A-424] Regulation of other schools
and classes. The department, at its discretion, may regulate
schools, classes, or courses excepted from the definition of “private trade,
vocational, or technical school"."]
SECTION 7. Section 302A-427, Hawaii Revised Statutes, is repealed.
Powers of department. No license shall be issued under sections
302A-424 to 302A-428 until the department has approved the method and content
of the advertising, the standards and the methods of instruction, and the
equipment provided. The department may consult with trade or vocational
experts as to the equipment provided and the standards and methods of
instruction offered. The department may adopt reasonable rules relating to the
enforcement of sections 302A-424 to 302A-428."]
SECTION 8. Section 302A-428, Hawaii Revised Statutes, is repealed.
Penalty. Any person, firm, or corporation that violates sections
302A-424 to 302A-428 shall be guilty of a misdemeanor, but shall be subject to
a maximum fine of not more than $100 or imprisonment for not more than ninety
days, or both."]
SECTION 9. All rules, policies, procedures, guidelines, and other material adopted or developed by the department of education to implement sections 302A-424 to 302A-428, Hawaii Revised Statutes, shall remain in full force and effect until amended or repealed pursuant to chapter 91, Hawaii Revised Statutes. All licenses current as of the effective date of this Act shall remain valid until the expiration of the licensure term, at which point the private trade, vocational, or technical school shall be required to apply for initial licensure under section 302A-425, Hawaii Revised Statutes.
SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 11. This Act shall take effect on September 1, 2017.
Private Trade, Vocational, or Technical Schools; Special Fund; Licensing Fee
Requires licensure for certain private trade, vocational or technical schools. Creates a private trade, vocational, and technical school licensure special fund. Implements a licensure fee.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.