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
JENNIFER M. GRANHOLM, ATTORNEY GENERAL
COLLEGES AND UNIVERSITIES:
Legislature's expression of intent regarding use of appropriated funds
Section 404 of 1999 PA 93, an expression of the Legislature's intent in appropriating funds to Michigan State University, does not violate Const 1963, art 8, § 5, which grants autonomy to the university in fiscal matters.
Opinion No. 7052
April 4, 2000
Honorable Laura Baird
You have asked if section 404 of 1999 PA 93, an expression of the Legislature's intent in appropriating funds to Michigan State University, violates Const 1963, art 8, § 5, which grants autonomy to the university in fiscal matters.
In 1995, Michigan State University, a public university, and the Detroit College of Law, a private law school, formed an alliance that resulted in the relocation of the Detroit College of Law to the Michigan State University campus. 1999 PA 93 appropriated funds to institutions of higher education, including Michigan State University, for the fiscal years ending September 30, 1999, and September 30, 2000. In section 404, the Legislature addressed the question of using public funds to support a private law school with regard to the Detroit College of Law-Michigan State University alliance, as follows:
It is the intent of the legislature that no funds, other than tuition and other revenues from law school students or private funds explicitly directed to the Detroit College of Law - Michigan State University law alliance, shall be used directly or indirectly to support the joint law school. The auditor general or a certified public accountant appointed by the auditor general shall audit the financial and accounting systems of the Detroit College of Law - Michigan State University law alliance to determine compliance with this statement of legislative intent and report its findings to the state budget director, house and senate fiscal agencies, and members of the house and senate appropriations subcommittees on higher education.1
Const 1963, art 8, § 5, confers fiscal autonomy upon the governing boards of the University of Michigan, Michigan State University, and Wayne State University. It provides that "[e]ach board shall have general supervision of its institution and the control and direction of all expenditures from the institution's funds." This autonomy was recently reaffirmed by the Michigan Supreme Court in Federated Publications, Inc v Michigan State University Bd of Trustees, 460 Mich 75, 86-87; 594 NW2d 491 (1999), where the court stated:
This Court has long recognized that Const 1963, art 8, § 5 and the analogous provisions of our previous constitutions limit the Legislature's power. "[T]he Legislature may not interfere with the management and control of" universities. [Regents of the University of Michigan v Michigan, 395 Mich 52, 65; 235 NW2d 1 (1975).] The constitution grants the governing boards authority over "the absolute management of the University, and the exclusive control of all funds received for its use." [State Bd of Agriculture v Auditor General, 226 Mich 417, 424; 197 NW 160 (1924).] This Court has "jealously guarded" these powers from legislative interference. Bd of Control of Eastern Michigan Univ v Labor Mediation Bd, 384 Mich 561, 565; 184 NW2d 921 (1971). (Footnote omitted.)
Legislative regulation that clearly infringes on the university's educational or financial autonomy must, therefore, yield to the university's constitutional power.
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This office has also repeatedly recognized the autonomy of our constitutionally protected universities. OAG, 1997-1998, No 6938, p 26 (April 11, 1997); OAG, 1967-1968, No 4597, p 84 (August 18, 1967); OAG, 1965-1966, No 4335, p 2 (January 12, 1965); 1 OAG, 1955, No 2227, p 721 (December 9, 1955).
Another constitutional provision reinforces state universities' autonomy over spending decisions. Const 1963, art 4, § 53, requires the Auditor General to conduct post audits of financial transactions of all institutions created by the state constitution or by statute. That provision, however, expressly recognizes the fiscal autonomy of our state universities by stating that:
Nothing in this section shall be construed in any way to infringe the responsibility and constitutional authority of the governing boards of the institutions of higher education to be solely responsible for the control and direction of all expenditures from the institutions' funds.2
Although Michigan's constitutionally protected universities enjoy considerable management fiscal autonomy, that autonomy is not absolute. Their autonomy does not prevent the Legislature from enacting statutes that may constitutionally be applied to those institutions. For example, Michigan courts have upheld legislation that applies to our constitutionally protected universities where the legislation is considered a valid exercise of the police power for the general welfare of the people of the state or where the legislation represents a matter of established public policy. See WT Andrew Co, Inc v Mid-State Surety Corp, 450 Mich 655, 668; 545 NW2d 351 (1996) (public works bond statute applies to University of Michigan); Regents of the University of Michigan v Employment Relations Comm'n, 389 Mich 96, 108-109; 204 NW2d 218 (1973) (certain University of Michigan employees may organize under Public Employees Relations Act); Branum v Bd of Regents of the University of Michigan, 5 Mich App 134, 138-139; 145 NW2d 860 (1966) (University of Michigan is independent branch of state government, "but it is not an island."). Similarly, the Michigan Supreme Court has ruled that the Legislature may appropriate state funds to a university for a special purpose, and if the university accepts the money, it must honor the purpose established by the Legislature. Regents of the University of Michigan v Michigan, 395 Mich 52, 65; 235 NW2d 1 (1975); OAG, 1997-1998, No 6938, at p 28.
In Regents of the University of Michigan, supra, the University of Michigan, Michigan State University, and Wayne State University challenged various sections of the 1971 higher education appropriation act. In those sections, the Legislature placed conditions on money appropriated to the universities. These conditions related to the universities' enrollment of out-of-state students, their use of legislatively appropriated funds for certain purposes, and their construction of certain buildings. The universities claimed that the Legislature infringed on their autonomy when it imposed these conditions.
The Michigan Supreme Court ruled that, while the Legislature may impose conditions upon certain appropriations to constitutionally protected universities, it may do so only if those conditions do not interfere with the management and control of the universities. Id., at 65. Before the court issued its opinion in the case, the Legislature changed the challenged language from "[i]t is a condition of this appropriation" to "[i]t is legislative intent" in subsequent higher education appropriation acts. The court held that this legislative change mooted the issue. Id. Regarding the new language, the court stated that the "Legislature has the right to state its advice or wishes through an expression of intent" and "may certainly indicate its preference without creating problems of constitutional dimension." Id., at 66, 67.
Section 404 of 1999 PA 93, the statutory provision that is the subject of your request, tracks the statutory language upheld in Regents of the University of Michigan, supra. Section 404 expresses the "intent of the [L]egislature" that Michigan State University not use any public funds to support the private law school. It does not condition Michigan State University's receipt of the entire state appropriation on compliance with its terms. Instead, the statutory language is simply an expression of the Legislature's intent or preference. Accordingly, it does not create a problem of constitutional dimension. Under Regents of the University of Michigan, supra, the Legislature has the right to express its intent in the manner set forth in section 404 of 1999 PA 93.
It is my opinion, therefore, that section 404 of 1999 PA 93, an expression of the Legislature's intent in appropriating funds to Michigan State University, does not violate Const 1963, art 8, § 5, which grants autonomy to the university in fiscal matters.
JENNIFER M. GRANHOLM
1 Similar expressions of legislative intent concerning the funding of the Detroit College of Law-Michigan State University alliance are found in prior university appropriations acts. See section 404 of 1996 PA 295, 1997 PA 84, and 1998 PA 271.
2 Consistent with section 404 of 1999 PA 93 and its predecessor provisions, the Auditor General issued his October 1999 report of the performance audit of the Detroit College of Law-Michigan State University law alliance for the period October 1, 1995, through April 30, 1999.