HOUSE BILL No. 4424

March 8, 2007, Introduced by Reps. Pastor and Stahl and referred to the Committee on Education.

A bill to amend 1976 PA 451, entitled

"The revised school code,"

(MCL 380.1 to 380.1852) by adding section 1254a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1254a. (1) Not later than July 1, 2007, each school board

shall adopt and implement a conflict of interest policy designed to

avoid conflicts of interest by school district officials and

employees.

(2) Not later than July 1, 2007, each school board shall adopt

and implement a policy to prohibit use of school district funds or

other public funds under the control of the school district for

purchasing alcoholic beverages, jewelry, gifts, fees for golf, or

any item the purchase or possession of which is illegal. Subject to

subsection (8), the policy may allow the use of public funds for

the purchase of a plaque, medal, trophy, or other award for the

recognition of an employee, volunteer, or pupil if the purchase

does not exceed $100.00 per recipient. As used in this subsection,

"public funds" means funds generated from taxes levied under this

act, state appropriations of state or federal funds, or payments

made to the school district for services by another school district

or any other person, but does not include voluntary contributions

made for a specific purpose by a school board member, a school

district employee, another individual, or a private entity.

(3) The department shall develop and distribute to school

districts a model conflict of interest policy for the purposes of

subsection (1) and a model policy meeting the requirements of

subsection (2).

(4) Subject to subsection (8), in any 1-month period, a school

board member or school district administrator shall not accept from

a person who does business or seeks to do business of any kind with

the school district any money, goods, or services with a value in

excess of $51.00 if the board member or administrator does not

provide goods or services of equal value in exchange. This

subsection does not apply to a gift or reward already prohibited

under section 1805.

(5) If a school board member or school district administrator

has a substantial conflict of interest in a proposed contract, the

school board shall not enter into that contract. As used in this

subsection, "substantial conflict of interest" means a conflict of

interest on the part of a school board member or school district

administrator in respect to a contract with the school district

that is of such substance as to induce action on his or her part to

promote the contract for his or her own personal benefit. In the

following cases, there is no substantial conflict of interest:

(a) A contract between the school district and any of the

following:

(i) A corporation in which a school board member or school

district administrator is a stockholder owning 1% or less of the

total stock outstanding in any class if the stock is not listed on

a stock exchange or owning stock that has a present market value of

$25,000.00 or less if the stock is listed on a stock exchange.

(ii) A corporation in which a trust, if a school board member

or school district administrator is a beneficiary under the trust,

owns 1% or less of the total stock outstanding in any class if the

stock is not listed on a stock exchange or owns stock that has a

present market value of $25,000.00 or less if the stock is listed

on a stock exchange.

(iii) A professional limited liability company organized

pursuant to the Michigan limited liability company act, 1993 PA 23,

MCL 450.4101 to 450.5200, if a school board member or school

district administrator is an employee but not a member of the

company.

(b) A contract between the school district and any of the

following:

(i) A corporation in which a school board member or school

district administrator is not a director, officer, or employee.

(ii) A firm, partnership, or other unincorporated association,

in which a school board member or school district administrator is

not a partner, member, or employee.

(iii) A corporation or firm that has an indebtedness owed to a

school board member or school district administrator.

school district or another school district.

(d) A contract awarded to the lowest qualified bidder, upon

receipt of sealed bids pursuant to a published notice for bids if

the notice does not bar, except as authorized by law, any qualified

person, firm, corporation, or trust from bidding. This subdivision

does not apply to amendments or renegotiations of a contract or to

additional payments under the contract that were not authorized by

the contract at the time of award.

(6) If a school board member, school district administrator,

or an employee of a school district who recommends, negotiates, or

is authorized to sign a contract on behalf of the school district

either is employed by or under contract with a business enterprise

with which the school district is considering entering into a

contract or knows that he or she has a family member who has an

ownership interest in or is employed by a business enterprise with

which the school district is considering entering into a contract,

the board member, administrator, or employee shall disclose this

fact to the school board at a public meeting of the school board

before the school board enters into the contract. If the school

board receives a disclosure described in this subsection, the

school board shall vote at a public meeting of the school board on

whether or not it considers the relationship described in the

disclosure to be a conflict of interest and shall not enter into

the contract without first voting at a public meeting of the school

board to enter into the contract. As used in this subsection,

"family member" means a person's spouse or spouse's sibling or

child; a person's sibling or sibling's spouse or child; a person's

child or child's spouse; or a person's parent or parent's spouse,

and includes these relationships as created by adoption or

marriage.

(7) A school board shall ensure that each employment contract

with a school administrator employed by the school district

includes both a provision prohibiting the school administrator from

engaging in conduct involving moral turpitude and a provision

allowing the school board to void the contract if the school

administrator violates the provision prohibiting conduct involving

moral turpitude.

(8) Beginning January 1, 2008, the monetary amounts specified

in subsections (2) and (4) shall be adjusted each January 1 by

multiplying the amount for the immediately preceding year by the

percentage by which the average consumer price index for all items

for the 12 months ending August 31 of the year in which the

adjustment is made differs from that index's average for the 12

months ending on August 31 of the immediately preceding year and

adding that product to the maximum amount that applied in the

immediately preceding year, rounding to the nearest whole dollar.

The adjustment shall apply only to expenditures or violations

occurring after the date of the adjusting of the amount. The

adjusted amount shall be determined and announced by the department