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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)



Opinion No. 6138

March 29, 1983


Intermediate school districts--authority to construct homes on private property

The Legislature has not empowered an intermediate school district to bid and contract with private persons to construct a house on private property.

Honorable Joseph S. Mack

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion on a question which may be stated as follows:

Does an intermediate school district operating a vocational education program, which offers a construction trades class and as part of that class provides practical experience in house construction, have statutory authority to bid and contract with private persons in competition with licensed contractors to construct a house on private property?

Your request is based upon a factual situation which has been communicated to my office. At the beginning of the current school year, an intermediate school district, in competition with private contractors, bid for and entered into a contract with private persons to build a house on private property. Students in construction trades classes provided by the intermediate school district then built the house as a class project. In preceeding years, construction trades classes in the intermediate school district have built one house each year on sites owned by the intermediate school district. Upon completion, these houses were sold to private purchasers.

School districts have only those powers expressly granted by statute or necessarily and fairly implied from the powers expressly granted by the legislature. Senghas v L'Anse Creuse Public Schools, 368 Mich 557; 118 NW2d 975 (1962). Intermediate school districts are authorized, subject to voter approval, to establish and operate vocational-technical education programs by the School Code of 1976, 1976 PA 451; MCLA 380.1 et seq; MSA 15.4001 et seq, Secs. 681-690. A school district may provide, as part of its vocational education program, a construction trades class in which the students construct a house which is then sold to a private buyer. Regulski v Murphy, 119 Mich App 418; 326 NW2d 528 (1982), lv app pending, Supreme Court Docket No. 70246.

My office has been advised by the Department of Education that it is a common practice of school districts to provide in construction trades classes for their students to actually construct a house. Such a project provides students with practical experience which is not possible in a classroom setting. Upon completion, such houses are usually sold at fair market value to private purchasers.

In this context, the house which is built is a by-product of the educational process. Once the course of instruction is completed, the school district is in possession and ownership of the finished house, which is not useful within the vocational educational program.

In the fact situation contemplated in your inquiry, however, the intermediate school district contracted with a private person to construct a house on property owned, not by the school district, but by the private person. The house is not constructed on the property of the school district. The district would use students enrolled in construction trades classes to build the house.

The Michigan Supreme Court has ruled in Attorney General, ex rel Sheehan v Board of Education of Detroit, 175 Mich 438, 441-442; 141 NW 574 (1913), that a school district has no authority to take on the character of a commercial venture when it held:

'Having power to prescribe the courses of study, the board has authority, undoubtedly, to provide the means necessary for pursuing the courses. Knabe v Board of Education, 67 Mich. 262 (34 N.W. 568). We are impressed, however, that the grant we are considering was not intended to empower the board of education of the city of Detroit to do everything whatever that may advance the interests of education in the city of Detroit, but only such things as it may do without changing its character as a board of education, without, for example, assuming or taking on the character of a commercial or trading corporation. . . .' (Emphasis in original.)

While entering into contracts to construct a house on private property may enable an intermediate school district to advance the interests of vocational education, the intermediate school district may not, as here, engage in a contract, the result of which is a commercial enterprise in active competition with other private enterprises. The Legislature has not, either expressly or by implication, granted intermediate school districts any power to enter into this type of contract.

It is my opinion, therefore, that while an intermediate school district may offer a construction trades class in which students construct a house on school district property and may thereafter sell the house to a private buyer, it does not have statutory authority to bid and contract with private persons to construct a house on private property.

Frank J. Kelley

Attorney General

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