The Tennessee legislature made good late Monday on its threat to crack down on Vanderbilt University, passing a bill that revokes the school's state funding if it doesn't abandon its controversial nondiscrimination policy.

Under the policy, official student organizations must be open to anyone who wants to join, and groups must be willing to pick leaders who might not share their beliefs. Fraternities and sororities are exempt.

Thirteen Christian groups oppose the policy, saying it violates their religious liberty. But as a private institution, Vanderbilt is allowed to restrict any activity on campus, including religious groups' freedom to meet and worship.

The state legislation originally mentioned only state schools, forbidding them from adopting similar policies. But on Monday, the bill's sponsors in the House and Senate proposed amendments that targeted Vanderbilt.

Under the final version of the bill, any private school receiving more than $24 million in state tax revenue each year-a description that applies only to Vanderbilt-can adopt a nondiscrimination policy only if it also requires fraternities and sororities to accept all students who apply for membership.

The bill serves mostly as a warning to the school, which already received this year's state funding. Vanderbilt will not lose any money between now and next year's legislative session, giving the school time to reconsider its policy, said Sen. Mae Beavers, the bill's sponsor.

"This maintains the status quo for 12 months," she said on the Senate floor Monday. "It gives Vanderbilt a choice."

The bill will expire automatically in July 2013, but legislators could reinstate it if the school chooses not to comply.

The measure passed the Senate with a vote of 19-12 and sailed through the House with an almost two-thirds majority-60 to 22. The bill now heads to Gov. Bill Haslam's desk, to be signed into law.

Despite ongoing pressure from donors, alumni and the student groups who oppose the policy, Vanderbilt administrators have so far refused to back down. Several weeks ago, students took their appeal to the school's trustees, hoping they would encourage administrators to change course. But trustees remain silent on the issue.

Beth Fortune, vice chancellor for public affairs, said school administrators were disappointed by the legislature's action: "We will further evaluate the legislation and determine what our next steps can and will be."

Vanderbilt is not the only school attempting to prevent Christian groups from requiring leaders to share their beliefs. At state schools, groups have taken their fight for freedom to federal court, with mixed success. The U.S. Supreme Court has yet to rule on the constitutionality of nondiscrimination policies that include exemptions for certain groups, like fraternities and sororities.

But Supreme Court rulings on religious liberty do not apply to private institutions, and even the policy's opponents are wary of giving the government any control over a private school's operations. Once the state steps in to the fray over the Vanderbilt policy, what's to stop future legislatures from dictating to the state's religious schools, including Union University, what tenants of their beliefs they can and cannot apply in their policies, Sen. Roy Herron asked during the debate before the vote.

"I might not have the same policy, but I don't know that I think big government coming in and running private institutions is what the people in my district want," said Herron, a Democrat. "I know this much-it's not conservative, and it's not getting government out of people's lives."