Report Title:

Occupations

Description:

Prohibits a governmental entity that administers student loans from certifying to a professional or vocational licensing board that a person is in default of a student loan that financed the person's education unless the governmental entity obtains a judgment from a court that specifies the exact amount of the default and includes a finding that the licensee or applicant for license has the financial means to cure the default without undue hardship. Permits the licensing authority to take action to suspend the license, deny the application or request for renewal or reinstatement based on the certification. (HB736 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

736

TWENTY-SECOND LEGISLATURE, 2003

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO PROFESSIONAL AND VOCATIONAL LICENSES.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. During the regular session of 2002, the legislature recognized that individuals who received state or federal student loans for their college degrees also secured something of value that cannot be lost or taken away, and which would give each borrower a continuing, lifelong economic benefit. The legislature also found that student loan recipients must make every effort available to them to honor their financial obligations, which are guaranteed by taxpayer dollars in the event of default. Thus, House Bill No. 2752, House Draft 1, Senate Draft 1, Conference Draft 1, was passed by the legislature and subsequently signed into law by the governor as Act 226, effectively providing for the denial, suspension, or revocation of a state professional or vocational license upon default by the borrower.

The purpose of this Act is to amend Act 226 by requiring the loan administering entity to obtain a court judgment prior to initiating license sanctions. The amendment is necessary to address concerns of a perceived lack of unbiased due process in Act 226, by necessitating proof of default in a Hawaii civil court through substantiating documents.

SECTION 2. Section 436C-2, Hawaii Revised Statutes, is amended to read as follows:

"[[]§436C-2[]] Professional and vocational license sanction for default of student loan or scholarship contract. (a) In addition to any other acts or conditions provided by law, the applicable licensing authority shall not renew or reinstate, or shall deny[,] or suspend [, or revoke] the license or application of any person who has been certified by an administering entity as being:

(1) In default or breach of any obligation under any student loan, student loan repayment contract, or scholarship contract that financed the licensee's or applicant's education; or

(2) At least sixty days past due with payments under a repayment plan. [The applicable licensing authority in receipt of the certification shall not renew or reinstate , or shall deny, suspend, or revoke the license or application without further review or hearing.]

(b) For the applicable licensing authority to act on the certification by an administering entity, the certification shall be based on a judgment from a district or circuit court in this state that:

(1) Specifies the amount of the default;

(2) Includes a finding by the court that the licensee or applicant has the financial means to cure the default without undue hardship; and

(3) Includes proof of service of notice to the applicant or licensee that the court judgment is being reported to the applicable licensing authority to request summary suspension of, denial of application for, or renewal of the license.

(c) The applicable licensing authority in receipt of a certification that complies with subsections (a) and (b) shall, as applicable:

(1) Suspend the license without further review or hearing;

(2) Deny the application or request for renewal of license; or

(3) Deny the request for reinstatement.

[(b)](d) The applicable licensing authority shall renew, reinstate, or grant the license upon receipt of an authorization from the administering entity stating that the person is making payments or taking other action satisfying the terms of the student loan, student loan repayment contract, or scholarship contract and is no longer in default or breach of the loan or contract.

[(c)](e) Any licensing fees paid prior to the denial, suspension, or revocation of a license under the licensing laws shall be forfeited. The applicable licensing authority may charge fees for reinstating a license and to cover the costs of administering this chapter.

[(d)](f) This chapter shall not apply to an individual against whom a court order is entered in connection with the default or breach in the nature of a garnishment process or other form of court-ordered repayment."

SECTION 3. Section 436B-19.6, Hawaii Revised Statutes, is amended to read as follows:

"[[]§436B-19.6[]] Denial[,] or suspension [, or revocation] of license for default of student loan or scholarship contract. (a) In addition to any other acts or conditions provided by law, the licensing authority shall not renew or reinstate, or shall deny[,] or suspend[, or revoke,] any license or application, if the department has received certification from an administering entity pursuant to chapter 436C that the licensee or applicant is in default or breach of any obligation under any student loan, student loan repayment contract, or scholarship contract that financed the licensee's or applicant's education, or has failed to comply with a repayment plan.

(b) For the licensing authority to act on the certification by an administering entity, the certification shall be based on a judgment from a district or circuit court in this state that:

(1) Specifies the amount of the default;

(2) Includes a finding by the court that the licensee or applicant has the financial means to cure the default without undue hardship; and

(3) Includes proof of service of notice to the applicant or licensee that the court judgment is being reported to the applicable licensing authority to request summary suspension of, denial of application for, or renewal of the license.

(c) The licensing authority in receipt of a certification that complies with subsections (a) and (b) shall, as applicable:

(1) Suspend the license without further review or hearing;

(2) Deny the application or request for renewal of license; or

(3) Deny the request for reinstatement.

(d) Unless otherwise provided by law, the licensing authority shall renew, reinstate, or grant the license only upon receipt of an authorization from the administering entity. Chapter 91 and sections 92-17, 436B-18, 436B-20, 436B-21, 436B-24, and 436B-25 shall not apply to a license suspension or denial under this section."

SECTION 4. Section 302A-807, Hawaii Revised Statutes, is amended to read as follows:

"§302A-807 Refusal, suspension, revocation, and reinstatement of licenses. (a) The board shall serve as the final adjudicator for appeals relating to licensing, including the issuance or nonissuance of licenses, and the suspension, nonrenewal, and revocation of licenses.

(b) The board shall establish procedures for the conduct of proceedings for the consideration of requests filed with the board. In every case to revoke or suspend a license, the board shall give the person concerned written notice that a request has been filed with the board. The board shall conduct a hearing in conformity with chapter 91, and shall provide for confidentiality of the proceedings to protect the parties. In all proceedings before it, the board may administer oaths, compel the attendance of witnesses and production of documentary evidence, and examine witnesses. In case of disobedience by any person to any order of the board or to any subpoena issued by the board, or the refusal of any witness to testify to any matter that the person may be questioned lawfully, any circuit judge, on application of the board or a member thereof, shall compel obedience in the case of disobedience of the requirements of a subpoena issued by a circuit court or a refusal to testify.

(c) Any applicant who has been refused a license, or any licensee whose license has been suspended or revoked, shall have the right to appeal the board's decision to the circuit court of the circuit in which the applicant or licensee resides in the manner provided in chapter 91; provided that out-of-state resident applicants shall file their appeals in the first circuit court.

(d) Upon revocation of a license, the board may disclose the name, birthdate, social security number, and any other pertinent information about the former holder of the license:

(1) To the department; and

(2) For the purpose of exchanging information under chapter 315 with other national or state teacher certification agencies about school personnel who have had licenses revoked.

(e) The board shall not renew or reinstate, or shall deny[,] or suspend[, or revoke,] any license, credential, or application, if the board has received certification from an administering entity pursuant to chapter 436C that the licensee or applicant is in default or breach of any obligation under any student loan, student loan repayment contract, or scholarship contract[,] that financed the licensee's or applicant's education or has failed to comply with a repayment plan.

(f) For the licensing authority to act on the certification by an administering entity, the certification shall be based on a judgment from a district or circuit court in this state that:

(1) Specifies the amount of the default;

(2) Includes a finding by the court that the licensee or applicant has the financial means to cure the default without undue hardship; and

(3) Includes proof of service of notice to the applicant or licensee that the court judgment is being reported to the applicable licensing authority to request summary suspension of, denial of application for, or renewal of the license.

(g) The licensing authority in receipt of a certification that complies with this subsection shall, as applicable:

(1) Suspend the license without further review or hearing;

(2) Deny the application or request for renewal of license; or

(3) Deny the request for reinstatement.

(h) Unless otherwise provided by law, the board shall renew, reinstate, or grant the license or credential only upon receipt of an authorization from the administering entity."

SECTION 5. Section 321-15, Hawaii Revised Statutes, is amended to read as follows:

"§321-15 Biennial registration; fees, failure to register; denial, suspension, or revocation of a license. (a) Every person holding a license to practice any occupation specified in section 321-13(a)(1) shall reregister with the department of health every other year in accordance with the rules of the department, before February 1 except where superseded by federal law, and shall pay a reregistration fee. The failure, neglect, or refusal of any person holding such a license to reregister or pay the reregistration fee, after thirty days of delinquency, shall constitute a forfeiture of the person's license; provided that the license shall be restored upon written application therefor together with a payment of all delinquent fees and an additional late reregistration fee that may be established by the director of health. All fees collected pursuant to this section shall be deposited into the environmental health education fund established under section 321-27.

(b) The department shall suspend, refuse to renew, reinstate, or restore, or deny any license or application if the department has received certification from the child support enforcement agency pursuant to the terms of section 576D-13 that the licensee or applicant is not in compliance with an order of support as defined in section 576D-1 or has failed to comply with a subpoena or warrant relating to a paternity or child support proceeding. Unless otherwise provided by law, the department shall grant, renew, restore, or reinstate a license only upon receipt of an authorization from the child support enforcement agency, office of child support hearings, or family court.

(c) The department shall not renew or reinstate, or shall deny[,] or suspend[, or revoke,] any license or application, if the department has received certification from an administering entity pursuant to chapter 436C that the licensee or applicant is in default or breach of any obligation under any student loan, student loan repayment contract, or scholarship contract[,] that financed the licensee's or applicant's education or has failed to comply with a repayment plan.

(d) For the licensing authority to act on the certification by an administering entity, the certification shall be based on a judgment from a district or circuit court in this state that:

(1) Specifies the amount of the default;

(2) Includes a finding by the court that the licensee or applicant has the financial means to cure the default without undue hardship; and

(3) Includes proof of service of notice to the applicant or licensee that the court judgment is being reported to the applicable licensing authority to request summary suspension of, denial of application for, or renewal of the license.

(e) The licensing authority in receipt of a certification that complies with this subsection shall, as applicable:

(1) Suspend the license without further review or hearing;

(2) Deny the application or request for renewal of license; or

(3) deny the request for reinstatement.

(f) Unless otherwise provided by law, the department shall grant, renew, or reinstate a license only upon receipt of an authorization from the administering entity."

SECTION 6. Section 431:9-235, Hawaii Revised Statutes, is amended to read as follows:

"§431:9-235 Denial, suspension, revocation of licenses. (a) The commissioner may suspend, revoke, or refuse to extend any license issued under this article for any cause specified in any other provision of this article, or for any of the following causes:

(1) For any cause for which issuance of the license could have been refused had it then existed and been known to the commissioner;

(2) If the licensee wilfully violates or knowingly participates in the violation of any provision of this code;

(3) If the licensee has obtained or attempted to obtain any such license through wilful misrepresentation or fraud, or has failed to pass any examination required by section 431:9-206;

(4) If the licensee has misappropriated, or converted to the licensee's own use, or has illegally withheld moneys required to be held in a fiduciary capacity;

(5) If the licensee has, with intent to deceive, materially misrepresented the terms or effect of any insurance contract; or has engaged or is about to engage in any fraudulent transaction;

(6) If the licensee has been guilty of any unfair practice or fraud as defined in article 13;

(7) If in the conduct of the licensee's affairs under the license, the licensee has shown oneself to be a source of injury and loss to the public;

(8) If the licensee issues or purports to issue any binder as to any insurer named therein as to which the licensee is not then authorized so to bind; or

(9) If the licensee has dealt with, or attempted to deal with, insurance or to exercise powers relative to insurance outside the scope of the licensee's licenses.

(b) The license of any partnership or corporation may be so suspended, revoked, or refused for any of such causes as relate to any individual designated in the license to exercise its powers.

(c) The holder of any license which has been revoked or suspended shall surrender the license certificate to the commissioner at the commissioner's request.

(d) The commissioner shall not renew or reinstate, or shall deny or suspend any license or application, if the commissioner has received certification from an administering entity pursuant to chapter 436C that the licensee or applicant is in default or breach of any obligation under any student loan, student loan repayment contract, or scholarship contract that financed the licensee's or applicant's education or has failed to comply with a repayment plan.

(e) For the licensing authority to act on the certification by an administering entity, the certification shall be based on a judgment from a district or circuit court in this state that:

(1) Specifies the amount of the default;

(2) Includes a finding by the court that the licensee or applicant has the financial means to cure the default without undue hardship; and

(3) Includes proof of service of notice to the applicant or licensee that the court judgment is being reported to the applicable licensing authority to request summary suspension of, denial of application for, or renewal of the license.

(f) The licensing authority in receipt of a certification that complies with this subsection shall, as applicable:

(1) Suspend the license without further review or hearing;

(2) Deny the application or request for renewal of license; or

(3) Deny the request for reinstatement.

(g) Unless otherwise provided by law, the commissioner shall renew, reinstate, or grant a license only upon receipt of an authorization from the administering entity."

SECTION 7. Section 457-9, Hawaii Revised Statutes, is amended to read as follows:

"§457-9 Renewal of license; denial, suspension, or revocation of license for default of student loan or scholarship contract. (a) The license of every person licensed under this chapter shall expire on June 30 of every odd-numbered year and shall be renewed biennially, except as provided in this section. Biennially in each odd-numbered year, the board shall make available an application for renewal of license before the deadline set forth by the board to every person to whom a license was issued or renewed during the biennium. The applicant shall complete the application and submit it to the board with a renewal fee and any required documents on or before the deadline set forth by the board. The applicant shall provide documents from proper agencies or parties relating to any disciplinary action taken or pending in this State or any other state in the United States or any territory or possession under the jurisdiction of the United States within the two years prior to application for renewal of license. Upon receipt of the application and fee the board shall verify the accuracy of the application and issue to the applicant a certificate of renewal for the biennium expiring two years hence on the deadline set forth by the board. The renewal shall render the holder thereof a legal practitioner of nursing for the period stated on the renewal form.

(b) Any licensee who fails to renew a license as provided in subsection (a) but continues to practice shall be considered an illegal practitioner and shall be subject to the penalties provided for violations of this chapter; provided that the person's license may be restored by the board on satisfactory explanation of the failure to renew and on payment of the renewal fee and a penalty fee.

A nurse who fails to renew a license as provided in subsection (a) and does not engage in nursing in the State for one year after the license has been forfeited shall not be required to pay the renewal or penalty fee; provided that the nurse remains inactive during that year. Should the nurse wish to resume nursing at some future time, the nurse shall notify the board and remit the renewal fee and application form as provided in subsection (a).

(c) Notwithstanding any provision in this chapter to the contrary, the board shall not renew or reinstate, or shall deny[,] or suspend[, or revoke,] any license or application, if the board has received certification from an administering entity pursuant to chapter 436C that the licensee or applicant is in default or breach of any obligation under any student loan, student loan repayment contract, or scholarship contract[,] that financed the licensee's or applicant's education or has failed to comply with a repayment plan.

(d) For the licensing authority to act on the certification by an administering entity, the certification shall be based on a judgment from a district or circuit court in this state that:

(1) Specifies the amount of the default;

(2) Includes a finding by the court that the licensee or applicant has the financial means to cure the default without undue hardship; and

(3) Includes proof of service of notice to the applicant or licensee that the court judgment is being reported to the applicable licensing authority to request summary suspension of, denial of application for, or renewal of the license.

(e) The licensing authority in receipt of a certification that complies with this subsection shall, as applicable:

(1) Suspend the license without further review or hearing;

(2) Deny the application or request for renewal of license; or

(3) Deny the request for reinstatement.

(f) Unless otherwise provided by law, the board shall renew, reinstate, or grant the license only upon receipt of an authorization from the administering entity."

SECTION 8. Section 466J-8, Hawaii Revised Statutes, is amended to read as follows:

"§466J-8 Denial, revocation, or suspension of license. (a) The board shall have the power to deny, revoke, or suspend any license issued or applied for in accordance with this chapter, upon proof that the person:

(1) Is guilty of fraud or deceit in procuring or attempting to procure a license to practice as a radiographer or as a radiation therapy technologist;

(2) Is mentally incompetent;

(3) Is guilty of unprofessional conduct; or

(4) Has knowingly or repeatedly violated this chapter.

(b) Before denying, suspending, or revoking any license pursuant to subsection (a), the board shall furnish the licensee a notice in writing as prescribed by section 91-9 and shall afford the licensee an opportunity to be heard in person and by or with counsel. Any order denying a license, or suspending or revoking a license shall be rendered not later than fifteen days after the hearing, and any aggrieved person may appeal the order as provided in chapter 91.

(c) The board shall suspend, refuse to renew, reinstate, or restore, or deny any license or application if the board has received certification from the child support enforcement agency pursuant to the terms of section 576D-13 that the licensee or applicant is not in compliance with an order of support or has failed to comply with a subpoena or warrant relating to a paternity or child support proceeding. Unless otherwise provided by law, the board shall issue, renew, restore, or reinstate the license only upon receipt of an authorization from the child support enforcement agency, office of child support hearings, or family court. Subsection (b) shall not apply to a license suspension pursuant to this subsection.

(d) The board shall not renew or reinstate, or shall deny[,] or suspend[, or revoke,] any license or application, if the board has received certification from an administering entity pursuant to chapter 436C that the licensee or applicant is in default or breach of any obligation under any student loan, student loan repayment contract, or scholarship contract[,] that financed the licensee's or applicant's education or has failed to comply with a repayment plan.

(e) For the licensing authority to act on the certification by an administering entity, the certification shall be based on a judgment from a district or circuit court in this state that:

(1) Specifies the amount of the default;

(2) Includes a finding by the court that the licensee or applicant has the financial means to cure the default without undue hardship; and

(3) Includes proof of service of notice to the applicant or licensee that the court judgment is being reported to the applicable licensing authority to request summary suspension of, denial of application for, or renewal of the license.

(f) The licensing authority in receipt of a certification that complies with this subsection shall, as applicable:

(1) Suspend the license without further review or hearing;

(2) Deny the application or request for renewal of license; or

(3) Deny the request for reinstatement.

(g) Unless otherwise provided by law, the board shall renew, reinstate, or grant the license only upon receipt of an authorization from the administering entity."

SECTION 9. Section 605-1, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) In addition to other qualifications for licensure and conditions for continuing eligibility to hold a license, applicants for licensure, licensees renewing their licenses, and existing licensees shall be in compliance with any obligation under any student loan, student loan repayment contract, or scholarship contract[,] that financed the licensee's or applicant's education or shall be in compliance with a repayment plan as provided in chapter 436C. For the licensing authority to act on the certification by an administering entity, the certification shall be based on a judgment from a district or circuit court in this state that:

(1) Specifies the amount of the default;

(2) Includes a finding by the court that the licensee or applicant has the financial means to cure the default without undue hardship; and

(3) Includes proof of service of notice to the applicant or licensee that the court judgment is being reported to the applicable licensing authority to request summary suspension of, denial of application for the license, or renewal of the license."

SECTION 10. Section 431:9A-112, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The commissioner may deny, place on probation, suspend, revoke, or refuse to issue or renew an insurance producer's license and may levy a civil penalty in accordance with articles 2 and 3, or any combination of these actions, for any of the following causes:

(1) Providing incorrect, misleading, incomplete, or materially untrue information in the license application;

(2) Violating any law, or violating any rule, subpoena, or order of the commissioner or of another state's commissioner;

(3) Obtaining or attempting to obtain a license through misrepresentation or fraud;

(4) Improperly withholding, misappropriating, or converting any moneys or properties received in the course of doing business;

(5) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;

(6) Having been convicted of a felony;

(7) Having admitted to or been found to have committed any insurance unfair trade practice or fraud;

(8) Using fraudulent, coercive, or dishonest practice or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this State or elsewhere;

(9) Having an insurance producer license or its equivalent denied, placed on probation, suspended, or revoked in any other state, province, district, or territory;

(10) Forging another's name to an application or to any document related to a transaction;

(11) Improperly using notes or any other reference material while taking an examination for an insurance license;

(12) Accepting insurance business from a person who is not licensed;

(13) Failing to comply with an administrative or court order imposing a child support obligation; [or]

(14) Failing to pay federal or state income taxes or failing to comply with any administrative or court order directing payment of federal or state income taxes[.]; or

(15) Receiving certification from an administering entity pursuant to chapter 436C that the licensee or applicant is in default or breach of any obligation under any student loan, student loan repayment contract, or scholarship contract that financed the licensee's or applicant's education, or has failed to comply with a repayment plan. For the licensing authority to act on the certification by an administering entity, the certification shall be based on a judgment from a district or circuit court in this state that:

(A) Specifies the amount of the default;

(B) Includes a finding by the court that the licensee or applicant has the financial means to cure the default without undue hardship; and

(C) Includes proof of service of notice to the applicant or licensee that the court judgment is being reported to the applicable licensing authority to request summary suspension of, denial of application for a license, or renewal of a license."

SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 12. This Act shall take effect upon its approval.