(1) The institution has, on the effective date of this Act [July 1, 1999] and for as long thereafter as it issues degrees pursuant to this section of the Act, an office located in Hawaii, and at least one employee who resides in Hawaii; and

(2) This period may be extended by two additional consecutive years if the institution has applied for and has been granted eligibility for candidacy or accreditation by an agency approved or recognized by the United States Department of Education or a successor agency prior to the expiration of the initial three-year period. Thereafter, the unaccredited institution shall be subject to section 446E-5(d), Hawaii Revised Statutes."