The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL



UNIVERSITIES:

COMMUNITY COLLEGES:

Reductions in appropriations and reporting requirements concerning providing employee benefits to the unmarried partners of university employees


Section 410 of 1996 PA 295, which reduces university appropriations by an amount equal to the cost of extending employee benefits to the unmarried partners of university employees, violates university autonomy under Const 1963, art 8, 5 and 6.

Section 707 of 1996 PA 295, which requires universities that extend employee benefits to unmarried partners of their employees to provide required program and financial information to the executive and legislative branches of state government, does not violate university autonomy under Const 1963, art 8, 5 and 6.

Section 304 of 1996 PA 293, which reduces community college appropriations by an amount equal to the cost of extending employee benefits to the unmarried partners of community college employees, does not violate the autonomy of community colleges under Const 1963, art 8, 7.

Section 303 of 1996 PA 293, which requires community colleges that extend employee benefits to unmarried partners of their employees to provide required program and financial information to the executive and legislative branches of state government, does not violate the autonomy of community colleges under Const 1963, art 8,  7.


Opinion No. 6938

April 11, 1997


Honorable Joseph F. Young, Jr.
State Senator
The Capitol
Lansing, Michigan

Honorable Alma Wheeler Smith
State Senator
The Capitol
Lansing, Michigan


You have asked questions about the extent to which the Legislature may place controls on the spending of appropriations by universities and community colleges. You have also asked whether the Legislature may require universities and community colleges to provide program and financial information to the executive and legislative branches of government.

Sections 410 of 1996 PA 295 reduces university appropriations by an amount equal to the cost of extending employee benefits to the unmarried partners of university employees. Section 707 of that act requires universities that extend these benefits to provide program and financial information to the executive and legislative branches of government. You have asked if these sections violate university autonomy under Const 1963, art 8,  5 and 6. You have also asked whether sections 303 and 304 of 1996 PA 293, which contain similar provisions for community colleges, violate the autonomy of those institutions under Const 1963, art 8,  7.

The higher education appropriations act, 1996 PA 295, provides in sections 410 and 707:

Sec. 410. A public university receiving funding under this act that extends employee benefits to the unmarried partners of the university's employees, other than prenatal and postnatal care, shall have their appropriation reduced by an amount equal to the cost of extending employee benefits to the unmarried partners of the university's employees.

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Sec. 707. A public university receiving funding under this act that extends employee benefits to the unmarried partners of the university's employees shall furnish all program and financial information that is required by and in a manner prescribed by the director of the department of management and budget or the house or senate appropriations committees.

The first question to be addressed is whether the appropriation reduction for universities in section 410 of 1996 PA 295 violates Const 1963, art 8, 5 and 6. For the reasons that follow, it is my opinion that this section is a condition that interferes with the management and control of universities by their governing boards and therefore violates Const 1963, art 8,  5 and 6.

In Const 1963, art 8,  5, the people conferred constitutional autonomy upon the governing boards of the University of Michigan, Michigan State University and Wayne State University by providing that "[e]ach board shall have the general supervision of its institution and the control and direction of all expenditures from the institution's funds."

Const 1963, art 8, 6, confers constitutional autonomy upon the governing boards of the other institutions of higher education that have the authority to grant baccalaureate degrees by providing that "[t]he board shall have general supervision of the institution and the control and direction of all expenditures from the institution's funds." The identical language quoted above in Const 1963, art 8,
5 and 6, confers the same constitutional autonomy on the boards of control of institutions of higher education falling under either 5 or 6. Bd of Control of Eastern Michigan University v Labor Mediation Bd, 384 Mich 561, 563; 184 NW2d 921 (1971).

Legislative attempts to restrict the constitutional autonomy of universities have been the subject of extensive review by our appellate courts. The courts have clearly and consistently interpreted the Constitution as conferring general fiscal autonomy on the university boards. In WT Andrew Co, Inc v Mid-State Surety Corp, 450 Mich 655, 662; 545 NW2d 351 (1996), the Michigan Supreme Court unanimously stated that a university board of control "possesses complete power over financial decisions affecting the university." (Footnote omitted.)

The fiscal autonomy of university boards includes the ability to determine the compensation of their employees. In Regents of the University of Michigan v State of Michigan, 47 Mich App 23; 208 NW2d 871 (1973), the court reviewed several provisions of a higher education appropriation act, including a provision that the appropriation could not be used to pay the salary of any faculty member or employee convicted of interfering with the normal operations of the university. The court held that those sections of the appropriation act that restricted the expenditure of legislatively appropriated funds by the university were unconstitutional.

A careful reading of the above sections reveals that the Legislature is attempting to control the internal operations of universities by dictating how the funds appropriated may be spent by the board of regents, governors, or trustees, as the case may be. Such control is clearly beyond the power of the Legislature. Const. 1963, art 8, 5 clearly vests the power to control and direct the expenditure of their institutional funds.

47 Mich App at 43.

The fiscal autonomy of university governing boards also includes protection against the legislative reduction of already appropriated funds. In Regents of the University of Michigan v State of Michigan, supra, the Court of Appeals considered a section of an appropriation act that established a schedule of student fees. That section also provided that the appropriation to each university would automatically be reduced by the amount that revenue from actual tuition and fees charged by the university exceeded an amount calculated using the statutory schedule. The court held that the provision that automatically reduced the university's appropriation was an improper legislative attempt to indirectly regulate university tuition rates. The court held that this provision unconstitutionally infringed upon the governing boards' exclusive authority to set tuition rates. 47 Mich App at 50.

On appeal, the Supreme Court addressed the extent to which the Legislature may impose conditions on university appropriations. Regents of the University of Michigan v State of Michigan, 395 Mich 52; 235 NW2d 1 (1975). The Court concluded that, while the Legislature may appropriate funds for a special purpose that must be honored by the university if it accepts the money, the Legislature may not impose conditions that interfere with the management and control of universities by their governing boards.

From this case the conclusion can be drawn that some but not all conditions can be imposed upon an appropriation to a constitutional college or university. However, the Legislature may not interfere with the management and control of those institutions. This landmark case makes it clear that the Legislature within those limitations may appropriate state funds for a special purpose and if the university accepts the appropriation, it must use the funds for that purpose.

(Emphasis added); 395 Mich at 65.

Though university governing boards possess power over educational and financial decisions affecting their universities, the institutions are not immune from all laws. Legislation that constitutes a valid exercise of the police power for the general welfare of the people of the state or represents a matter of established public policy will be applied to state-supported universities despite their constitutional status. See, WT Andrew Co, Inc v Mid-State Surety Corp, 450 Mich at 668 (public works bond statute applies to the University of Michigan); Branum v Bd of Regents of the University of Michigan, 5 Mich App 134, 139; 145 NW2d 860 (1966) (Legislature's abrogation of state's governmental immunity, which represents "the clearly established public policy of the people of Michigan," also abrogated the university's governmental immunity).

In Regents of the University of Michigan v State of Michigan, 166 Mich App 314; 419 NW2d 773 (1988), the court addressed whether legislation specifically directed at state universities reflects a clearly established public policy of the state that may be enforced against a university without infringing upon its constitutional autonomy. The Regents challenged the constitutionality of 1982 PA 512, an amendment to the Elliott-Larsen Civil Rights Act that required educational institutions, including public universities, to divest their investments in organizations operating in the Republic of South Africa. The Court held that because the provision applied only to the universities and not generally to the investment of public funds, it did not constitute a clearly established public policy of the state. The provision, therefore, was an invalid infringement on the university's autonomy.

Section 410 of 1996 PA 295 provides that if a public university makes employee benefits available to the unmarried partners of its employees, the appropriation to that particular university shall be reduced by an amount equal to the cost of extending those benefits. Section 410 effectively imposes a condition on the receipt of the appropriation by the university. In order to avail itself of the entire appropriation, the university may not extend employee benefits to the unmarried partners of its employees. Clearly, this is a condition that interferes with the management and control of the university. Regents of the University of Michigan v State of Michigan, 395 Mich at 65.

Also, as with the divestiture statute considered by the Court of Appeals in Regents of the University of Michigan v State of Michigan, 166 Mich App at 328, section 410 does not reflect a clearly established public policy of the state. Neither the people nor the Legislature have clearly declared that Michigan public policy prohibits public employers from extending benefits to the unmarried partners of their employees. The statutory provisions in these appropriations acts apply only to public universities and community colleges. There are no comparable statutory provisions for local units of government, school districts or state government.

It is my opinion, therefore, in answer to your first question, that section 410 of 1996 PA 295, which reduces university appropriations by an amount equal to the cost of extending employee benefits to the unmarried partners of university employees, violates university autonomy under Const 1963, art 8, 5 and 6.

The second question to be addressed is whether section 707 of 1996 PA 295, which requires universities that extend employee benefits to unmarried partners of their employees to provide required program and financial information to the executive and legislative branches of state government, violates university autonomy under Const 1963, art 8, 5 and 6.

In Regents of the University of Michigan v State of Michigan, 395 Mich at 67-68, the Supreme Court considered statutory language that required a university to submit certain information relating to the construction of self-liquidating projects to the appropriate legislative committees. The Court held that the provision was constitutional because it did not prohibit the construction of the projects or require legislative approval. Rather, the provision only required that the Legislature be informed. The Court held that mere reporting measures without corollary supervision or control on the part of the legislative committees receiving the information do not impinge upon the university boards' management of their respective institutions.

Section 707 of 1996 PA 295 is a reporting provision. It does not prohibit university governing boards from making any employee compensation decisions they wish to make.

It is my opinion, therefore, in answer to your second question, that section 707 of 1996 PA 295, which requires universities that extend employee benefits to unmarried partners of their employees to provide required program and financial information to the executive and legislative branches of state government, does not violate university autonomy under Const 1963, art 8, 5 and 6.

1996 PA 293, which appropriates funds to community colleges, provides in sections 303 and 304:

Sec. 303. A community college receiving funding under this act that extends employee benefits to the unmarried partners of the community college's employees shall furnish all program and financial information that is required by and in a manner prescribed by the director of the department of management and budget or by the house or senate appropriations committee.

Sec. 304. A community college receiving funding under this act that extends employee benefits to the unmarried partners of the community college's employees shall have its appropriation reduced by an amount equal to the cost of extending employee benefits to the unmarried partners of the community college's employees.

Your third question is whether section 304 of 1996 PA 293, which reduces community college appropriations by an amount equal to the cost of extending employee benefits to the unmarried partners of community college employees, violates the autonomy of community colleges under Const 1963, art 8, 7. For the reasons that follow, it is my opinion that section 304 of 1996 PA 293 does not violate Const 1963, art 8,  7.

Though community colleges and junior colleges have existed in Michigan under various statutory provisions for many years, Const 1963, art 8, 7, was a new provision that requires the Legislature to establish and support community colleges. It provides, in pertinent part:

The legislature shall provide by law for the establishment and financial support of public community and junior colleges which shall be supervised and controlled by locally elected boards.

(emphasis added).

The Michigan Supreme Court has held that where the phrase "provided by law" has been used in the 1963 Constitution, the Legislature shall do the entire job of implementing the constitutional provision. Beech Grove Investment Co v Civil Rights Comm, 380 Mich 405, 418-419; 157 NW2d 213 (1968).

The Legislature has implemented Const 1963, art 8, 7, and provided for the establishment of community colleges by enacting the Community College Act of 1966, MCL 389.1 et seq; MSA 15.615(101) et seq. See, section 191 of that statute.

Section 105 of the Community College Act of 1966 defines a community college as follows:

(1) A community college means an educational institution providing, primarily for all persons above the twelfth grade age level and primarily for those within commuting distance, collegiate and noncollegiate level education including area vocational-technical education programs which may result in the granting of diplomas and certificates including those known as associate degrees but not including baccalaureate or higher degrees.

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(4) A community college is eligible to receive such state aid and assistance as may be appropriated by the legislature for the aid and support of junior colleges or community colleges.

Community colleges are local institutions established by one or more contiguous counties, by a school district or contiguous school districts that operate grades kindergarten through 12, or by an intermediate school district or adjoining intermediate school districts. See, respectively, sections 11, 31 and 51 of the Community College Act of 1966. Under section 103 of the Community College Act of 1966, community college districts are bodies corporate. They are governed by boards of trustees elected at large from the community college district. See, respectively, sections 14, 34, 34a and 54 of the Community College Act of 1966. The powers of the board of trustees are enumerated and limited in the Community College Act of 1966.

Contrasting the language of Const 1963, art 8, 5 and 6, with art 8, 7, it is clear that community colleges are different entities that do not possess the constitutional fiscal autonomy and authority of our public universities. Rather, the Legislature, having the entire control of the establishment, operations and financial support of community colleges, may impose whatever conditions and limitations it chooses upon their operations.

It is my opinion, therefore, in answer to your third question, that section 304 of 1996 PA 293, which reduces community college appropriations by an amount equal to the cost of extending employee benefits to the unmarried partners of community college employees, does not violate the autonomy of community colleges under Const 1963, art 8, 7.1

Your fourth question is whether section 303 of 1996 PA 293, which requires community colleges that extend employee benefits to unmarried partners of their employees to provide required program and financial information to the executive and legislative branches of state government, violates the autonomy of community colleges under Const 1963, art 8, 7.

As set forth above in the answer to the second question, the reporting requirements are valid as applied to the constitutional universities. It follows, of course, that the Legislature may impose these reporting requirements on the legislatively created and regulated community colleges.

It is my opinion, therefore, in answer to your fourth question, that section 303 of 1996 PA 293, which requires community colleges that extend employee benefits to unmarried partners of their employees to provide required program and financial information to the executive and legislative branches of state government, does not violate the autonomy of community colleges under Const 1963, art 8, 7.

FRANK J. KELLEY
Attorney General

1 This opinion does not address the possible application of the constitutional provision that prohibits legislation impairing the obligation of contracts, Const 1963, art 1, 10, where a legislatively imposed condition affects the payment of employee benefits under a preexisting collective bargaining agreement.