STAND. COM. REP. NO. 597

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 252
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 252, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO DEGREE GRANTING
     INSTITUTIONS,"

begs leave to report as follows:

     The purpose of this bill is to prohibit unaccredited
institutions from issuing degrees unless they comply with certain
standards.

     Testimony strongly supporting this bill was received from
the Department of Commerce and Consumer Affairs (DCCA), the
University of Phoenix, the Chamber of Commerce of Hawaii, the
Hawaii State Teachers Association, the University of Hawaii, the
University of the Nations, and the International University of
Professional Studies. DCCA stated that the business of
unaccredited degree granting institutions operating under Hawaii
laws is burgeoning, and this bill will significantly enhance the
DCCA's ability to prevent "diploma mills" from issuing Hawaii
degrees.  DCCA proposed amendments to further prevent
unaccredited institutions from misleading consumers by referring
to "pending accreditation" in promotional materials.  This
practice has caused much confusion among consumers.

     Your Committee finds that the proliferation of "diploma
mills" in this State is harmful to consumers and to all
legitimate educational institutions.  This bill provides consumer
safeguards, including requiring clearer disclosures, prohibiting

 
 
                                 STAND. COM. REP. NO. 597
                                 Page 2

 
issuance of certain types of degrees, creating a mechanism for
service of process, and requiring a level of physical presence in
this State in order to operate.  Your Committee further concurs
with DCCA's recommendations, and has amended the bill to provide
that no unaccredited institution shall disclose in any catalog,
promotional material, or written contract for instruction, that
it has applied for future accreditation.  To avoid inconsistency
between this amendment and the mandatory disclosure provisions,
your Committee also has made technical amendments to the bill.
   
     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 252, H.D. 1, as amended herein, and
recommends that it be referred to the Committee on Finance, in
the form attached hereto as H.B. No. 252, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair