HB-6014, As Passed House, June 22, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 6014

     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 and 176 (MCL 450.171 and 450.176) and by

adding section 177a.

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.  ;

(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.

(2) Every educational corporation, before being authorized to

file its articles of incorporation,  shall be  is required to

present  obtain a written statement  to  from the  Michigan

corporation and securities commission in writing from the state

board of education  department of labor and economic growth that

(1) the  confirms 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

department of labor and economic growth 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  Except as provided in section 177a concerning

religious colleges, 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)  w or class  (y)  y educational corporations or to  such  any

educational corporations of class  (z) as shall  z that satisfy the

requirements  set up  established for class  (y)  y corporations.

: Provided, however, That the  The words "junior college" may be

used by educational corporations of class  (x). Whenever  x. 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 from

the state board of education  obtains a written statement from the

department of labor and economic growth approving the facilities,

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

staff as adequate for the offering of the additional educational

program.

     Sec. 176.  Same; privileges of holders of diplomas, or

certificates. Every  A diploma, certificate of graduation, or other

evidence of attendance at  such institution, shall entitle  an

educational corporation or a religious college described in section

177a entitles the lawful recipient  thereof to all the privileges

and immunities  which  that by custom or usage are allowed to

holders of similar diplomas or certificates granted by similar

institutions in this country.  : Provided, That as to any  However,

if an occupation or profession is regulated by statute as to the

requirements and qualifications necessary to the practice  thereof,

no such  of that occupation or profession, the diploma or

certificate of graduation  shall  does not entitle the recipient to

any  such privilege or immunity  where such  if those statutory

requirements or qualifications  have not been  are not complied

with.

     Sec. 177a. (1) An ecclesiastical corporation that meets all of

the following criteria may organize and operate a postsecondary

religious college under this section:

     (a) The ecclesiastical corporation was incorporated under this

act in 1986.

     (b) At the time it organizes the religious college, according

to the most recent federal decennial census, the ecclesiastical

corporation is located in a county with a population of more than

22,500 and fewer than 25,000 residents.

     (2) A religious college organized and operated under this

section must meet all of the following criteria:

     (a) The religious college is organized and operated by an

ecclesiastical corporation as an unincorporated program of the

ecclesiastical corporation and began operating before January 1,

2007.

     (b) The ecclesiastical corporation retains control of the

religious college for denominational purposes.

     (c) The religious college has an academic advisory board to

assist the religious college in the development of its educational

programs. The board shall consist of at least 4 individuals,

appointed by the ecclesiastical corporation, who represent similar

religious colleges.

     (d) The educational programs of the religious college are

solely designed for, directed toward, and attended by students who

seek to learn the particular religious faith or beliefs of the

ecclesiastical corporation.

     (e) The sole purpose of the educational programs of the

religious college is to prepare students for ordination or

appointment as a member of the clergy of a church, denomination, or

religious association, order, or sect. The religious college may

also offer programs for the purpose of preparing students to enter

into other vocations directly related to the particular faith of

the ecclesiastical corporation. However, the religious college may

not offer general or liberal arts educational programs or any other

programs that do not prepare students for ordination or appointment

as a member of the clergy of a church, denomination, or religious

association, order, or sect or other vocations directly related to

the particular faith of the ecclesiastical corporation.

     (3) An ecclesiastical corporation may use the word "college"

in the name of the religious college. However, immediately

following the name of the religious college, the ecclesiastical

corporation shall clearly and prominently indicate on any signs,

publications, and other printed materials that the religious

college is an unincorporated division of the ecclesiastical

corporation. If the ecclesiastical corporation uses the word

college in the name of the religious college, it shall file a

certificate of assumed name for the religious college with the

department of labor and economic growth.

     (4) Subject to subsection (5), a religious college may award 1

of the following degrees to a student of the religious college who

satisfactorily completes a course of study prescribed by the

ecclesiastical corporation for that degree:

     (a) If the course of study requires at least 60 semester hours

or equivalent of study, an associate of biblical studies, an

associate of religious studies, an associate of theology, an

associate of church secretarial sciences, or another substantially

similar associate degree that does not include the word "arts" or

"science".

     (b) If the course of study requires at least 120 semester

hours or equivalent of study, a bachelor of biblical studies, a

bachelor of religious studies, a bachelor of theology, or another

substantially similar bachelor's degree that does not include the

word "arts" or "science".

     (c) If the course of study requires a bachelor's degree and at

least 30 additional semester hours or equivalent of study, a master

of theology, a master of biblical studies, a master of religious

studies, or another substantially similar master's degree that does

not include the word "arts" or "science".

     (d) If the course of study requires a bachelor's degree and at

least 90 additional semester hours or equivalent of study,

including, but not limited to, dissertation credits or research

study, a doctor of theology, a doctor of biblical studies, a doctor

of religious studies, or another substantially similar doctoral

degree that does not include the word "arts" or "science".

     (5) A religious college shall clearly and prominently state

all of the following on a student's diploma, certificate of

graduation, transcript, or any other document prepared by or

provided by the religious college to establish or verify that the

student had attended the religious college or completed a course of

study at the religious college:

     (a) For a degree awarded by the religious college, the name of

the degree, including the religious limitation on that degree

required under subsection (4). A religious limitation required for

a degree title under subsection (4) shall immediately precede or be

part of the degree title wherever the degree title appears in the

diploma or other document.

     (b) That the religious college is not licensed, approved, or

otherwise endorsed by the state of Michigan and that the state of

Michigan does not guarantee that any of the degrees or credits

granted by the religious college will be recognized by any

organization for any purpose.

     (6) An ecclesiastical corporation is not required to obtain

the approval of or a license from the department of labor and

economic growth to operate a religious college under this section

in this state and the operation of the religious college and its

educational programs are not subject to the supervision of that

department. However, if an ecclesiastical corporation does not

obtain the approval of or a license from the department of labor

and economic growth to operate a religious college, the

ecclesiastical corporation shall clearly and prominently print a

disclaimer on all of its application materials, course catalogs,

brochures, websites, and other publications that states all of the

following:

     (a) The religious college is an unincorporated division of the

ecclesiastical corporation.

     (b) The educational programs offered by the religious college

are solely designed for, directed toward, and attended by students

who seek to learn the particular religious faith or beliefs of the

ecclesiastical corporation.

     (c) The religious college is not licensed, approved, or

otherwise endorsed by the state of Michigan and that the state of

Michigan does not guarantee that any of the degrees or credits

granted by the religious college will be recognized by any

organization for any purpose.

     (7) If a religious college describes any of the degrees

offered by the religious college in any document provided to the

department of labor and economic growth or in any application

materials, course catalogs, brochures, websites, or other

publications made available by the religious college, the religious

college shall include the religious limitation on that degree

required under subsection (4), either immediately preceding or as

part of the degree title, wherever the degree title appears in the

document or publication.

     (8) Every 4 years, an ecclesiastical corporation organizing or

operating a religious college shall submit a sworn affidavit to the

department of labor and economic growth that certifies that the

religious college complies with the requirements of this section

and includes all of the following:

     (a) The name of the religious college. The name stated in the

affidavit must comply with subsection (3).

     (b) A statement that the religious college offers only

educational programs that prepare students for religious vocations

as ministers, professionals, or laypersons in the categories of

ministry and theology.

     (c) A statement that each degree awarded by the religious

college complies with subsection (5).

     (d) A statement that each document provided or publication

made available by the religious college under subsection (7)

complies with that subsection.

     (e) A statement that the religious college does not accept

state or federal assistance for its educational programs and does

not accept students who are receiving state or federal financial

aid under any higher education loan, grant, or scholarship program.

     (9) An ecclesiastical corporation operating a religious

college that is in compliance with the requirements of this section

is authorized to conduct business as a religious college in this

state.

     Enacting section 1.  This amendatory act does not take effect

unless House Bill No. 6016 of the 93rd Legislature is enacted into

law.