Section 380.421 - Contracts; substantial conflict of interest. - Michigan Statutes

THE REVISED SCHOOL CODE (EXCERPT)
Act 451 of 1976

380.421 Contracts; substantial conflict of interest.

Sec. 421.

(1) This section applies to a first class school district only if the question under section 410 is approved in the first class school district.

(2) The mayor shall not nominate a person as chief executive officer under section 420 and the chief executive officer shall not appoint a person as chief financial officer if the person at the time of appointment has a pecuniary interest in a contract to which the first class school district is a party, or in a subcontract under such a contract, other than an employment contract.

(3) The chief executive officer shall ensure that the first class school district does not award a contract, and that a subcontract is not awarded under a contract with the first class school district, to the mayor, the chief executive officer, the chief financial officer, or a first class school board member, or to the mayor's, chief executive officer's, chief financial officer's, or board member's spouse or spouse's sibling or child, sibling or sibling's spouse or child, child or child's spouse, or parent or parent's sibling or spouse.

(4) The mayor, chief executive officer, chief financial officer, or a first class school board member shall not have a direct or indirect pecuniary interest in any contract with the first class school district that causes a substantial conflict of interest. As used in this subsection, “substantial conflict of interest” means that the pecuniary interest is of such substance as to induce action on the person's part to promote the contract for his or her own personal benefit. A contract between the first class school district and any of the following is not considered a substantial conflict of interest:

(a) A corporation in which the person 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 the stock has a present market value of $25,000.00 or less if the stock is listed on a stock exchange.

(b) A corporation in which a trust, in which the person 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 the stock has a present market value of $25,000.00 or less if the stock is listed on a stock exchange.

(c) A professional limited liability company organized pursuant to the Michigan limited liability company act, 1993 PA 23, MCL 450.4101 to 450.5200, if the person is an employee but not a member of the company.

History: Add. 2004, Act 303, Imd. Eff. Aug. 10, 2004
Popular Name: Act 451