House Introduced Bill 5912

HOUSE BILL No. 5912


     April 16, 2002, Introduced by Rep. Bisbee and referred to the Committee on Employment Relations, Training and Safety.


        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, 173, and 177 (MCL 450.171,

   450.172, 450.173, and 450.177).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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             Sec.  171.  For the purposes of this act, educational corpo-

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        rations shall be classified as follows:

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             (w) Those having a capital of not less than $500,000.00;

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             (x) Those having a capital of not less than $100,000.00, and

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        less than $500,000.00;


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             (y) Those having a capital of $1,000,000.00 or more;

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             (z) Those instituted and maintained by any ecclesiastical or

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        religious order, society, corporation, or corporations, retaining

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        control of  such  THE institution for denominational purposes.

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             Every educational corporation, before being authorized to

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        file its articles, shall be required to present a statement to

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        the Michigan corporation and securities commission in writing

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        from the  state board of education  DEPARTMENT OF CAREER

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        DEVELOPMENT that (1) the housing space and administration facili-

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        ties  which  THAT it possesses or proposes to provide for its

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        declared field or fields of education are adequate, (2) its pro-

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        posed educational program leading to the diplomas or degrees

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         which  THAT it proposes to offer is adequate, (3) its laborato-

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        ry, library, and other teaching facilities  which  THAT it pos-

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        sesses or proposes to provide are adequate, (4) it has or pro-

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        poses to employ an adequate staff, fully trained, for the

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        instruction proposed, and (5) at least 50% of its capital,

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        whether of stock or in gifts, devises, legacies, bequests, or

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        other contributions of money or property, has been paid in or

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        reduced to possession.

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             In determining whether any educational corporation satisfies

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

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        section, the  state board of education  DEPARTMENT OF CAREER

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        DEVELOPMENT may treat as a credit to the capital of  such  THAT

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        corporation the guaranteed annual income of that corporation to

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        the extent that it deems  such  THE guaranteed income the

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        equivalent of all or any part of the required endowment.



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             The use of the word "college" or "university" in the name of

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        any group, organization, or association  hereafter  formed in

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        this state is limited to those educational corporations complying

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        with the requirements for class (w) or class (y) educational cor-

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        porations or to  such  educational corporations of class (z)  as

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        shall  THAT satisfy the requirements set up for class (y)

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        corporations.  :  Provided, however, That the  THE words "junior

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        college" may be used by educational corporations of class (x).

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         Whenever  IF this provision is violated  it shall be the duty

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        of  the prosecuting attorney  ,  in the county  where
     IN WHICH

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        the organization is located  , to  SHALL bring proceedings to

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        enjoin the further use of  such  THAT name in violation of this

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        act.

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             No educational corporation shall  be permitted to  expand

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        its program beyond that specified in its articles of incorpora-

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        tion until it has presented to the Michigan corporation and

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        securities commission a statement in writing from the  state

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        board of education  DEPARTMENT OF CAREER DEVELOPMENT approving

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        the facilities, equipment, and staff or the proposed facilities,

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        equipment, and staff as adequate for the  offering of the  addi-

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        tional educational program.

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

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

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        establish and conduct general colleges for furnishing higher

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        learning and to confer  such  THE degrees and honors  as shall

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        be  approved by the  state board of education  DEPARTMENT OF

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        CAREER DEVELOPMENT prior to  the  filing of articles of



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        incorporation; and the term "college"  as herein used  shall be

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        construed to include any college, university, or other institu-

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        tion  where  AT WHICH the arts, sciences, professions, and higher

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        learning are taught and degrees and honors  therein  conferred.

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         Such colleges  COLLEGES may also include preparatory schools.

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         as commonly understood;

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

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        section 171,  shall have authority to  MAY establish and conduct

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        junior colleges, seminaries, academies, or preparatory schools,

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        as determined and approved by the  state board of education

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        DEPARTMENT OF CAREER DEVELOPMENT, but not general colleges or

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        universities as defined in subsection (a).  hereof;

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

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         said  section 171,  shall embrace such  INCLUDE schools, acade-

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        mies, or colleges  as have been heretofore  founded under  Act

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        135, Public Acts 1899  FORMER 1899 PA 135, AND known  thereunder

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        as "Ursuline academies";  those  SCHOOLS, ACADEMIES, OR COLLEGES

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        founded under  Act 121, Public Acts 1915  FORMER 1915 PA 121, and

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        known  thereunder  as "ecclesiastical seminaries";  those

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        SCHOOLS, ACADEMIES, OR COLLEGES founded under  Act 28, Public

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        Acts 1901  FORMER 1901 PA 28, and known  thereunder  as

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        "Evangelical Lutheran deaf mute institutions";  those  SCHOOLS,

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        ACADEMIES, OR COLLEGES founded under  Act 135, Public Acts 1867

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        FORMER 1867 PA 135, AND known as "industrial and charitable

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        schools";  those  SCHOOLS, ACADEMIES, OR COLLEGES organized under

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         paragraph (c), subdivision 1, chapter 2, part 4, of Act 84,

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        Public Acts 1921  FORMER 1921 PA 84, and  such  ANY other



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        schools, colleges, and institutions of like character and purpose

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         as may be  formed under any law of this state for educational

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        purposes. AN EDUCATIONAL CORPORATION INCLUDED UNDER CLASS (Z)

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        shall have all the rights, powers, privileges, and immunities

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        enjoyed under its act of incorporation and without regard to the

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        classification made in this act, and upon complying with the pro-

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        visions  hereof  OF THIS ACT shall have  such  ANY additional

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        rights, powers, privileges, and immunities  as are  conferred

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         hereunder  UNDER THIS ACT according to the classifications pre-

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        scribed in this act.  :  Provided further, That any  ANY corpora-

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        tion  heretofore  formed under  Act 359, Public Acts 1913  1913

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        PA 359, and known  thereunder  as "kindergarten institutions"

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        shall  hereafter  be classified under class (x),  of sections  AS

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        DEFINED IN SECTION 171 and  172 of this act:  Provided further,

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        That any  THIS SECTION.  ANY corporation of class (z)  hereafter

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        organized under this act  may enjoy  HAS the privileges provided

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        under classes (w), (x), and (y),  of  AS DEFINED IN section 171,

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         on condition that it  IF THAT CORPORATION satisfies the require-

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        ments set up for corporations of  these  THOSE respective

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        classes.

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

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        section 171,  shall have authority to  MAY establish and conduct

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        colleges or universities of a graduate rank with programs of

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        studies of 5 years or more.

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             Sec. 173.   Same; articles of incorporation.  The articles

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        of every educational corporation shall clearly set forth the

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        educational system of the institution to be founded and the



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        character of the degrees, honors, diplomas, or certificates

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         which  THAT it proposes to grant,  and same  WHICH shall be

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        approved by the  state board of education  DEPARTMENT OF CAREER

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        DEVELOPMENT prior to the filing of the articles of

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        incorporation.  If a college or university, the articles shall

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        state the number and name of the faculties to be established.  ;

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        and if  IF a denominational religious school or college, the name

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        of  such  THE denomination and the body supporting or controlling

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        the  same  SCHOOL OR COLLEGE.   Such articles shall be filed as

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        provided in section 5 of this act.  Any  such  corporation may,

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        by increasing its capital to a higher class and amending its

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        articles, assume the powers and privileges of  such  THAT higher

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        classification.  as it may thereby be entitled to as defined in

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        this act.

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             Sec. 177.   Same; inspection by state board of education;

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        annual report.  Every  such  educational corporation shall be

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        visited and inspected by the  state board of education, in person

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        or through visitors or inspectors appointed by them  DEPARTMENT

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        OF CAREER DEVELOPMENT, at least once every 3 years.   Said state

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        board of education  THE DEPARTMENT OF CAREER DEVELOPMENT shall at

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        the time of visitation ascertain and publish information upon all

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        matters pertaining to the condition, management, instruction, and

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        practices of  such corporations  THAT CORPORATION, and shall file

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        a copy of  their  ITS report with the Michigan corporation and

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        securities commission.  Upon evidence that the property is at any

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        time less than is required by law, or that any  such  educational

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        corporation is not otherwise complying with the provisions of



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        this act,  they  THE DEPARTMENT OF CAREER DEVELOPMENT shall serve

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        notice on  such  THAT corporation to remedy the defects within a

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        reasonable time to be fixed in  such  THE notice, and in case the

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        deficiency is not corrected within the time fixed,  by them,

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        they  THE DEPARTMENT OF CAREER DEVELOPMENT may institute proceed-

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        ings at law for the dissolution of  such  THAT corporation.

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         Such  THE trustees shall  be required  ANNUALLY REPORT, on or

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        before the first day of December,  annually, to report  to the

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         state board of education  DEPARTMENT OF CAREER DEVELOPMENT, a

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        statement of the name of each trustee, officer, AND teacher and

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        the number of students of  such  THE institution, with a state-

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        ment of its property, the amount of stock subscribed, donated,

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        and bequeathed, and the amount actually paid in, and  such  ANY

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        other information  as  THAT will tend to exhibit its condition

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        and operations.



























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