Meeting of the Board of Regents | June 2007

SUMMARY

Issue for Decision (Consent Agenda)

Should the Board of Regents transfer degree powers to Business Informatics Center, Inc.’s owner following a change in control?

Reason for Consideration

             

              Required by State statute.

Proposed Handling

The question will come before the Higher Education and Professional Practice Committee at its June 2007 meeting where it will be voted on and action taken.  It will then come before the full Board at its June 2007 meeting for final action.

Procedural History

In November 1999, the Board of Regents granted authority to Business Informatics Center, Inc., in Valley Stream, New York to award the Associate in Occupational Studies (A.O.S.) degree.  Ownership was distributed evenly between the spousal owners, at 50 percent each. In December 2006, the death of one of the two owners resulted in a redistribution of ownership to 100 percent to the surviving owner. In the spring of 2007, the Department determined that this constituted a change in the control of the Center under Section 224(1)(b) of the Education Law. 

Background Information

Section 224(1)(b) of the Education Law prohibits individuals, associations, partnerships, or corporations operating educational institutions on a for-profit basis and holding degree-granting powers conferred by the Regents from conveying, assigning, or transferring such degree powers through a change of ownership.  Degree powers may be conveyed only by action of the Board of Regents.  Business Informatics Center, Inc. is authorized to award the Associate in Occupational Studies (A.O.S.) degree.

Section 3.58(e)(6)(ii) of the Rules of the Board of Regents requires that the prospective owner must apply to the State Education Department for degree-conferring authority and submit documentation that substantiates the prospective owner’s capacity to operate the college.  In instances where there is a change of ownership within a family, the Department will tailor the request for evidence to meet the circumstances of the change in ownership.

Section 3.58(e)(3) provides that the Department may expedite the review of the transfer of degree-conferring authority in instances where the change of ownership or control of the institution is between family members, upon adequate showing of good cause.  Evidence of good cause will include, but not be limited to, evidence satisfactory to the Department that the change of ownership will not materially affect the management of the institution and that the change is in the best interest of students at the institution. 

The change of ownership of Business Informatics Center, Inc. is within a family.  The surviving owner has been and continues to be significantly involved in the institution’s administration and operation.  It offers Associate in Occupational Studies degrees in two areas, Court Reporting and Computer Office Technologies.  The transfer of ownership from 50 percent to 100 percent to the surviving owner will not materially affect the management of the institution. 

Recommendation

It is recommended that the Board of Regents authorize, effective June 26, 2007, Business Informatics Center, Inc. to confer on duly qualified students successfully completing its registered programs the Associate in Occupational Studies (A.O.S.) degree.

Timetable for Implementation

The authorization of degree-granting authority would take effect immediately.