House Introduced Bill 6140

HOUSE BILL No. 6140


     November 14, 2000, Introduced by Reps. Julian and Vear and referred to the Committee on Regulatory Reform.


        A bill to amend 1931 PA 327, entitled

   "An act to provide for the organization, regulation and classifi-
   cation of corporations; to provide their rights, powers and immu-
   nities; to prescribe the conditions on which corporations may
   exercise their powers; to provide for the inclusion of certain
   existing corporations within the provisions of this act; to pre-
   scribe the terms and conditions upon which foreign corporations
   may be admitted to do business within this state; to require cer-
   tain annual reports to be filed by corporations; to prescribe
   penalties for the violations of the provisions of this act; and
   to repeal certain acts and parts of acts relating to
   corporations,"

   by amending sections 171, 172, and 185 (MCL 450.171, 450.172, and

   450.185).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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           Sec. 171.  (1) For the purposes of this act, AN educational

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       corporations shall be  CORPORATION IS classified as  follows
    1

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      OF THE FOLLOWING:

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            (w) Those having 




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           (A) EXCEPT FOR AN EDUCATIONAL CORPORATION DESCRIBED IN

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      SUBDIVISION (B), AN EDUCATIONAL CORPORATION THAT IS 1 OF THE

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      FOLLOWING:

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           (i) CLASS W - HAS a capital of not less than $500,000.00  ; 

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      AND LESS THAN $1,000,000.00.

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           (ii)  (x) Those having  CLASS X - HAS a capital of not less

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      than $100,000.00  ,  and less than $500,000.00,  ;  OR IS
   AN

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      INSTITUTION KNOWN AS A KINDERGARTEN INSTITUTION FORMED UNDER

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      FORMER 1913 PA 359.

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           (iii)  (y) Those having  CLASS Y - HAS a capital of AT LEAST

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      $1,000,000.00.  or more; 

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           (B)  (z) Those  CLASS Z - AN EDUCATIONAL CORPORATION insti-

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      tuted and maintained by any ecclesiastical or religious order,

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      society, corporation, or corporations,  retaining  THAT RETAINS

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      control of  such  THE institution for denominational purposes.

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      CLASS Z INCLUDES, BUT IS NOT LIMITED TO, ALL OF THE FOLLOWING:

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           (i) A SCHOOL, ACADEMY, OR COLLEGE FOUNDED UNDER FORMER 1899

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      PA 135 AND KNOWN UNDER THAT ACT AS AN "URSULINE ACADEMY".

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           (ii) A SCHOOL, ACADEMY, OR COLLEGE FOUNDED UNDER FORMER 1915

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      PA 121 AND KNOWN UNDER THAT ACT AS AN "ECCLESIASTICAL SEMINARY".

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           (iii) A SCHOOL, ACADEMY, OR COLLEGE FOUNDED UNDER FORMER

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      1901 PA 28 AND KNOWN UNDER THAT ACT AS AN "EVANGELICAL LUTHERAN

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      DEAF MUTE INSTITUTION".

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           (iv) A SCHOOL, ACADEMY, OR COLLEGE FOUNDED UNDER FORMER 1867

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      PA 135 AND KNOWN UNDER THAT ACT AS AN "INDUSTRIAL AND CHARITABLE

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      SCHOOL".




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           (v) A SCHOOL, ACADEMY, OR COLLEGE ORGANIZED UNDER PARAGRAPH

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      (C), SUBDIVISION 1, CHAPTER 2, PART 4, OF FORMER 1921 PA 84.

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           (vi) A SCHOOL, COLLEGE, OR INSTITUTION OF LIKE CHARACTER AND

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      PURPOSE TO A SCHOOL, ACADEMY, OR COLLEGE DESCRIBED IN SUBPARA-

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      GRAPH (i), (ii), (iii), (iv), OR (v) AND FORMED UNDER ANY LAW OF

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      THIS STATE FOR EDUCATIONAL PURPOSES.

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           (2)  Every educational corporation, before  BEFORE being

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      authorized to file its articles,  shall be  AN EDUCATIONAL CORPO-

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      RATION CLASSIFIED AS CLASS W, X, OR Y UNDER SUBSECTION (1) IS

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      required to present a statement IN WRITING to the  Michigan cor-

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      poration and securities commission in writing  CORPORATION,

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      SECURITIES, AND LAND DEVELOPMENT BUREAU from the state board of

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      education that  (1) the  CONFIRMS ALL OF THE FOLLOWING:

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           (A) THE housing space and administration facilities  which 

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      THAT it possesses or proposes to provide for its declared field

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      or fields of education are adequate.  , (2) its 

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           (B) ITS proposed educational program leading to the diplomas

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      or degrees which it proposes to offer is adequate.  , (3) its 

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           (C) THE laboratory, library, and other teaching facilities

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       which  THAT it possesses or proposes to provide are adequate.  ,

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      (4) it 

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           (D) IT has or proposes to employ an adequate staff, fully

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      trained, for the instruction proposed.  , and (5) at 

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           (E) AT least 50% of its capital, whether CONSISTING of stock

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      or in gifts, devises, legacies, bequests, or other contributions

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      of money or property, has been paid in or  reduced to  IS IN ITS

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      possession.



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           (3) In determining whether any educational corporation

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      satisfies  conditions specified in classes (w), (x), (y) and (z)

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      of this section  THE CAPITAL REQUIREMENT FOR CLASSIFICATION AS

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      CLASS W, X, OR Y UNDER SUBSECTION (1), the state board of educa-

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      tion may treat as a credit to the capital of  such  THE corpora-

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      tion the guaranteed annual income of that corporation to the

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      extent that it deems  such  THE guaranteed income the equivalent

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      of all or any part of the required endowment.

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           (4) The use of the word "college" or "university" in the

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      name of any group, organization, or association  hereafter 

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      formed AFTER THE EFFECTIVE DATE OF THIS ACT in this state is

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      limited to those educational corporations complying with the

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      requirements for  class (w) or class (y) educational corporations

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      or to such educational corporations of class (z) as shall satisfy

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      the requirements set up for class (y) corporations:  Provided,

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      however, That the  CLASSIFICATION AS CLASS W, Y, OR Z UNDER SUB-

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      SECTION (1).  THE words "junior college" may be used by THOSE

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      educational corporations  of class (x).  Whenever  COMPLYING WITH

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      THE REQUIREMENTS FOR CLASSIFICATION AS CLASS X UNDER SUBSECTION

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      (1).  IF this  provision  SUBSECTION is violated,  it shall be

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      the duty of  the prosecuting attorney  ,  in the county
   where the

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      organization is located  , to  SHALL bring proceedings to enjoin

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      the further use of  such  A name in violation of this  act 

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      SUBSECTION.

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           (5)  No  AN educational corporation shall  be permitted to
   

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      NOT expand its program beyond that specified in its articles of

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      incorporation  until  UNLESS it has presented to the  Michigan



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      corporation and securities commission  CORPORATION, SECURITIES,

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      AND LAND DEVELOPMENT BUREAU a statement in writing from the state

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      board of education approving the facilities, equipment, and staff

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      or the proposed facilities, equipment, and staff as adequate for

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      the offering of the additional educational program.

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           Sec. 172.  (1)  (a) Educational corporations of class (w) as

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      defined in section 171 of this act shall have authority to  AN

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      EDUCATIONAL CORPORATION CLASSIFIED AS CLASS W UNDER SECTION

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      171(1) MAY establish and conduct  general colleges  A GENERAL

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      COLLEGE for furnishing higher learning and to confer  such  ANY

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      degrees and honors  as shall be  approved by the state board of

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      education prior to the filing of articles of incorporation.  ;

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      and  FOR PURPOSES OF THIS SECTION, the term "college"  as herein

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      used shall be construed to include  INCLUDES any college,

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      university, or other institution where the arts, sciences,

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      professions, and higher learning are taught and degrees and

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      honors  therein  IN THOSE AREAS ARE conferred,  .  Such colleges
   

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      AND may  also  include A preparatory  schools as commonly

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      understood;  SCHOOL.

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           (2)  (b) Educational corporations of class (x), as defined

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      in section 171, shall have authority to  AN EDUCATIONAL CORPORA-

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      TION CLASSIFIED AS CLASS X UNDER SECTION 171(1) MAY establish and

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      conduct A junior  colleges, seminaries, academies  COLLEGE, SEMI-

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      NARY, ACADEMY, or preparatory  schools  SCHOOL, as determined and

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      approved by the state board of education, but not A general

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       colleges or universities as defined  COLLEGE OR UNIVERSITY

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      DESCRIBED in subsection  (a) hereof;  (1).



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           (3)  (c) Educational corporations of class (z) as defined in

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      said section 171 shall embrace such schools, academies, or col-

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      leges as have been heretofore founded under Act 135, Public Acts

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      1899, known thereunder as "Ursuline academies"; those founded

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      under Act 121, Public Acts 1915, and known thereunder as

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      "ecclesiastical seminaries"; those founded under Act 28, Public

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      Acts 1901, and known thereunder as "Evangelical Lutheran deaf

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      mute institutions"; those founded under Act 135, Public Acts

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      1867, known as "industrial and charitable schools"; those orga-

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      nized under paragraph (c), subdivision 1, chapter 2, part 4, of

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      Act 84, Public Acts 1921, and such other schools, colleges and

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      institutions of like character and purpose as may be formed under

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      any law of this state for educational purposes shall have  AN

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      EDUCATIONAL CORPORATION CLASSIFIED AS CLASS W, X, Y, OR Z UNDER

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      SECTION 171(1) AND FORMED UNDER ANOTHER ACT OR FORMER ACT HAS all

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      the rights, powers, privileges, and immunities enjoyed under its

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      act of incorporation and without regard to the classification

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      made in this act, and upon complying with the provisions  hereof 

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      OF THIS ACT shall have  such  ANY additional rights, powers,

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      privileges, and immunities  as are  conferred  hereunder 
   UNDER

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      THIS ACT according to  the classifications prescribed in this

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      act:  Provided further, That any corporation heretofore formed

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      under Act 359, Public Acts 1913, and known thereunder as

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      "kindergarten institutions" shall hereafter be classified under

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      class (x) of sections 171 and 172 of this act:  Provided further,

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      That any corporation of class (z) hereafter organized under this

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      act may enjoy  ITS CLASSIFICATION UNDER SECTION 171(1).



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           (4) AN EDUCATIONAL CORPORATION CLASSIFIED AS CLASS Z UNDER

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      SECTION 171(1) AND ORGANIZED UNDER THIS ACT HAS the privileges

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      provided  under classes (w), (x) and (y) of section 171, on con-

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      dition that it satisfies the requirements set up for corporations

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      of these respective classes  TO AN EDUCATIONAL INSTITUTION CLAS-

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      SIFIED AS CLASS W, X, OR Y.

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           (5)  (d) Educational corporations of class (y) as defined in

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      section 171 shall have authority to  AN EDUCATIONAL INSTITUTION

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      CLASSIFIED AS CLASS Y UNDER SECTION 171(1) MAY establish and con-

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      duct  colleges or universities  A COLLEGE OR UNIVERSITY of a

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      graduate rank with programs of studies of 5 years or more.

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           Sec. 185.  Same; powers of churches not restricted.

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      Nothing in this act contained shall be construed as limiting or

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      restricting  THIS ACT DOES NOT LIMIT OR RESTRICT the rights,

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      powers, privileges, immunities, or  the  practices of any church

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       heretofore  established or incorporated under any law of this

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      state BEFORE THE EFFECTIVE DATE OF THIS SECTION;  nor as requir-

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      ing any such  DOES NOT REQUIRE THAT church to alter or change any

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      rule of discipline, custom, or usage in respect of its church

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      policy or government;  nor as interfering  AND DOES NOT INTERFERE

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      with the lawful acquisition, use, or disposition of any property

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      now owned or held by  any such church corporation  THAT CHURCH,

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      INCLUDING, BUT NOT LIMITED TO, THE GRANT OF A DEGREE, DIPLOMA, OR

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      CERTIFICATE BY AN EDUCATIONAL INSTITUTION CLASSIFIED AS CLASS Z

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      UNDER SECTION 171(1).  The provisions of this act relating to

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      ecclesiastical corporations shall be liberally construed in the

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      interests of religion and morality.



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