August 30, 2006, Introduced by Reps. Emmons, Farhat, Nitz, Mortimer and Moore and referred to the Committee on Higher Education and Career Preparation.
A bill to amend 1931 PA 327, entitled
"An act to provide for the organization, regulation and
classification of corporations; to provide their rights, powers and
immunities; 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
prescribe the terms and conditions upon which foreign corporations
may be admitted to do business within this state; to require
certain 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, 173, and 177 (MCL 450.171, 450.172,
450.173, and 450.177).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 171. (1) For the purposes of this act, educational
corporations shall
be are classified as follows 1 of the
following:
(a) (w)
Those Class (w): those having a capital of not less
than
$500,000.00. ;
(b) (x)
Those Class (x): those having a capital of not less
than
$100,000.00 , and less than $500,000.00. ;
Class (x) also
includes an institution known as a kindergarten institution formed
under former 1913 PA 359.
(c) (y)
Those Class (y): those having a capital of
$1,000,000.00
or more. ;
(d) (z)
Those Class (z): those instituted and maintained by
any
an ecclesiastical or religious order, society,
corporation, or
corporations ,
retaining that retain control of
such the
institution for denominational purposes. Class (z) educational
corporations include, but are not limited to, all of the following:
(i) A school, academy, or college founded under former 1899 PA
135 and known under that act as an "Ursuline academy".
(ii) A school, academy, or college founded under former 1915 PA
121 and known under that act as an "ecclesiastical seminary".
(iii) A school, academy, or college founded under former 1901 PA
28 and known under that act as an "Evangelical Lutheran deaf mute
institution".
(iv) A school, academy, or college founded under former 1867 PA
135 and known under that act as an "industrial and charitable
school".
(v) A school, academy, or college organized under paragraph
(c), subdivision 1, chapter 2, part 4, of former 1921 PA 84.
(vi) A school, college, institution, or educational program of
like character and purpose to an educational corporation, school,
academy, or college described in this subdivision and formed under
any law of this state for educational purposes.
(2) Every educational corporation, before being authorized to
file
its articles of incorporation, shall be is required to
present
a written statement to the Michigan corporation
and
securities
commission in writing department
of labor and economic
growth,
from the state board of education that (1)
the approves
all of the following:
(a)
The housing space and administration
facilities which
that it possesses or proposes to provide for its declared field or
fields
of education are adequate. , (2) its
(b) Its proposed educational program leading to the diplomas
or
degrees which that
it proposes to offer is adequate. ,
(3)
its
(c)
The laboratory, library, and other
teaching facilities
which
that it possesses or proposes to provide are adequate. ,
(4)
it
(d) It has or proposes to employ an adequate staff, fully
trained,
for the instruction proposed. , and (5) at
(e) At least 50% of its capital, whether consisting of stock
or in gifts, devises, legacies, bequests or other contributions of
money
or property, has been paid in or reduced to is in its
possession.
(3) In determining whether any educational corporation
satisfies
the conditions specified in classes
(w), (x), (y) and
(z)
of this section subsection
(1), the state board of education
may
treat as a credit to the capital of
such the corporation
the
guaranteed
annual income of that corporation to the extent that it
deems
such considers that guaranteed income the equivalent of all
or any part of the required endowment.
(4) The use of the word "college" or "university" in the name
of
any group, organization, or association hereafter formed
in
this state after September 18, 1931 is limited to those educational
corporations complying with the requirements for class (w) or class
(y)
educational corporations or to such any
educational
corporations
of class (z) as shall that satisfy the
requirements
set
up established for class (y) corporations. :
Provided,
however,
That the The words "junior college" may be used by
educational
corporations of class (x). Whenever If this provision
is
violated, it shall be is the duty of the
prosecuting attorney,
in
the county where the organization educational corporation is
located,
to bring proceedings to enjoin the further use of such a
name
in violation of this act subsection.
(5) No
An educational corporation shall
be is not
permitted to expand its program beyond that specified in its
articles
of incorporation until it has presented to the Michigan
corporation
and securities commission a statement in writing
presents a written statement to the department of labor and
economic growth from the state board of education approving the
facilities, equipment, and staff or the proposed facilities,
equipment, and staff as adequate for the offering of the additional
educational program.
Sec.
172. (1) (a) Educational corporations of class (w) as
defined
in section 171 of this act shall have authority to An
educational corporation classified as class (w) under section
171(1)
may establish and conduct general
colleges a general
college for furnishing higher learning and to confer such
any
degrees
and honors as shall be approved by the state board of
education
prior to the filing of articles of incorporation. ; and
For
purposes of this section, the term
"college" as herein used
shall
be construed to include includes
a preparatory school or any
college, university, or other institution where the arts, sciences,
professions, and
higher learning are taught and degrees and honors
therein
in those areas are conferred. Such
colleges may also
include
preparatory schools as commonly understood;
(2) (b)
Educational corporations of class (x), as defined in
section
171, shall have authority to An educational corporation
classified as class (x) under section 171(1) may establish and
conduct a
junior colleges, seminaries, academies college,
seminary,
academy, or preparatory schools school,
as determined
and
approved by the state board of education, but not a general
colleges
or universities as defined college or university
described in subsection (a) hereof; (1).
(3)
(c) Educational corporations of class (z) as defined in
said
section 171 shall embrace such schools, academies, or colleges
as
have been heretofore founded under Act 135, Public Acts 1899,
known
thereunder as "Ursuline academies"; those founded under Act
121,
Public Acts 1915, and known thereunder as "ecclesiastical
seminaries";
those founded under Act 28, Public Acts 1901, and
known
thereunder as "Evangelical Lutheran deaf mute institutions";
those
founded under Act 135, Public Acts 1867, known as "industrial
and
charitable schools"; those organized under paragraph (c),
subdivision
1, chapter 2, part 4, of Act 84, Public Acts 1921, and
such
other schools, colleges and institutions of like character and
purpose
as may be formed under any law of this state for
educational
purposes shall have An educational corporation
classified as class (w), (x), (y), or (z) under section 171(1) and
formed under another act or former act of this state has all the
rights, powers, privileges, and immunities enjoyed under its act of
incorporation and without regard to the classification made in this
act,
and upon complying with the provisions hereof shall have
such
of this act has any
additional rights, powers, privileges,
and
immunities as are conferred hereunder under this act
according
to the classifications prescribed in this act: Provided
further,
That any corporation heretofore formed under Act 359,
Public
Acts 1913, and known thereunder as "kindergarten
institutions"
shall hereafter be classified under class (x) of
sections
171 and 172 of this act: Provided further, That any
corporation
of class (z) hereafter organized under this act may
enjoy
its classification under section 171(1).
(4) An educational corporation classified as class (z) under
section 171(1) and organized under this act has the privileges
provided
under classes (w), (x) and (y) of section 171, on
condition
that it satisfies the requirements set up for
corporations
of these respective classes to an educational
institution classified as class (w), (x), or (y).
(5) (d)
Educational corporations of class (y) as defined in
section
171 shall have authority to An educational institution
classified as class (y) under section 171(1) may establish and
conduct
colleges or universities a
college or university of a
graduate rank with programs of studies of 5 years or more.
Sec.
173. Same; articles of incorporation. The
articles of
incorporation of every educational corporation shall clearly set
forth the educational system of the institution to be founded and
the character of the degrees, honors, diplomas, or certificates
which
it proposes to grant. , and same Articles of incorporation
of an educational corporation shall be approved by the state board
of education prior to the filing of the articles of incorporation.
If
The articles of
incorporation of a college or
university , the
articles
shall state the number and name of the faculties to
be
established. ;
and if The articles of
incorporation of a
denominational
religious school or college , shall
state the name
of such
the denomination and the body supporting or controlling
the same
denomination. Such articles Articles of incorporation
shall
be filed as provided in section 5 of this act the nonprofit
corporation
act, 1982 PA 162, MCL 450.2101 to 450.3192. Any
such
corporation
may, by By increasing its capital to a higher class
and amending its articles, an educational corporation may assume
the
powers and privileges of such the
higher classification as
it
may thereby be it is entitled to.
as defined in this act.
Sec.
177. (1) Same; inspection by state board of education;
annual
report. Every such educational corporation shall be
visited
and inspected by the state board of education
superintendent of public instruction, in person or through visitors
or
inspectors appointed by them the
superintendent of public
instruction, at least once every 3 years. Said
state board of
education
The superintendent of public
instruction shall at the
time of visitation ascertain and publish information upon all
matters pertaining to the condition, management, instruction, and
practices
of such corporations the educational corporation, and
shall
file a copy of their the
report with the Michigan
corporation
and securities commission department
of labor and
economic growth.
(2) Upon evidence that the property is at any time less than
is
required by law, or that any such an educational corporation
is
not otherwise complying with the provisions of this act, they
the
superintendent of public instruction shall
serve notice on
such
the corporation to remedy the defects within a
reasonable
time to
be fixed in
such the notice. ,
and in case If the
deficiency
is not corrected within the time fixed by them, they
the superintendent of public instruction, he or she may institute
proceedings
at law for the dissolution of such the
educational
corporation. Such
trustees shall be
(3) The trustees of an educational corporation are required,
on or before the first day of December, annually, to provide a
report
to the state board of education, a statement of
superintendent of public instruction that includes the name of each
trustee,
officer, and teacher and the number of students of such
the
institution; ,
with a statement of its property; ,
the
amount
of stock subscribed, donated, and or
bequeathed; ,
and
the
amount actually paid in; , and such and any other information
as will tend to exhibit its condition and operations.
Enacting section 1. This amendatory act is intended to
transfer back to the state board of education and the
superintendent of public instruction certain powers, duties, and
functions that were transferred to the former department of career
development by Executive Reorganization Order No. 1999-7, MCL
388.995.