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)



STATE OF MICHIGAN

JENNIFER M. GRANHOLM, ATTORNEY GENERAL


COLLEGES AND UNIVERSITIES:

CONFLICT OF INTEREST:

CONSTITUTIONAL LAW:

STATE OFFICERS AND EMPLOYEES:

University student serving as member of university's governing board


A student at a state institution of higher education granting baccalaureate degrees, by simultaneously serving as a member of that institution's governing board, does not violate Const 1963, art 4,  10, or the state officer's conflict of interest act.


Opinion No. 7029

August 25, 1999


Honorable Alma Wheeler Smith
State Senator
The Capitol
Lansing, MI


You have asked whether a student at a state institution of higher education granting baccalaureate degrees, by serving as a member of that institution's governing board, violates Const 1963, art 4,  10, or the state officer's conflict of interest act.

Const 1963, art 4, 10, which prohibits state officers from being directly or indirectly interested in a contract with the state which would cause a substantial conflict of interest, provides as follows:

No member of the legislature nor any state officer shall be interested directly or indirectly in any contract with the state or any political subdivision thereof which shall cause a substantial conflict of interest. The legislature shall further implement this provision by appropriate legislation.

Members of governing boards of state institutions of higher education which enjoy constitutional status under Const 1963, art 8, and which are authorized to grant baccalaureate degrees, are state officers subject to Const 1963, art 4, 10. OAG, 1967-1968, No 4587, p 118, 124 (September 26, 1967).

To constitute a substantial conflict of interest prohibited by Const 1963, art 4,  10, the interest must be material, as opposed to trivial, and the interest must involve a pecuniary or beneficial interest. OAG, 1965-1966, No 4492, p 216, 229-230 (March 10, 1966); OAG, 1969-1970, No 4679, p 98, 100 (December 2, 1969). In Booker v Grand Rapids Medical College, 156 Mich 95, 99-100; 120 NW 589 (1909), the court held that the relationship between a student enrolled in a private college and the college was based upon contract. Noting that the decision in Booker was in accord with the general rule in this country, OAG, 1969-1970, No 4679, supra, concluded that a student who has matriculated at a state university granting baccalaureate degrees establishes a contractual relationship with the university and, therefore, if the student serves as a member of the university's governing board, this gives rise to a substantial conflict of interest prohibited by Const 1963, art 4, 10.

Through enactment of the state officer's conflict of interest act (Act), 1968 PA 318, MCL 15.301 et seq; MSA 4.1700(21) et seq, the Legislature has implemented Const 1963, art 4,  10. Section 4 of the Act enumerates situations where there is deemed to be no "substantial conflict of interest." OAG, 1973-1974, No 4799, p 116, 119 (February 1, 1974), concluded that the Act "represent[s] a fair effort to explicate rather than restrict the terms of [Const 1963, art 4, 10]."

Following the issuance of OAG, 1969-1970, No 4679, the Legislature, by 1974 PA 317, added section 4a which provides additional situations where there is deemed to be no conflict of interest.

In addition to the cases set forth in section 4, there shall not be deemed to be a conflict of interest with respect to a contract arising out of the status of being a student at an institution of higher education granting baccalaureate degrees or an institution established pursuant to section 7 of article 8 of the state constitution of 19631 where the student is elected or appointed to the governing board of the institution of higher education.

(Emphasis added.)

1974 PA 317 was considered by the Legislature as 1974 HB 6194. The legislative purposes for its enactment are stated in House Legislative Analysis, HB 6194, November 26, 1974:

Under the bill, students would be eligible to be elected or appointed to the governing boards of institutions which they attend on the same basis as any other citizen.

***

It is a common practice in Michigan government to have members of the groups concerned sit on boards which make decisions affecting the welfare of these groups [and are] indispensable to the making of equitable and sound policy. . . substantially affecting their welfare.

Through 1975 PA 227, the Legislature repealed the Act. Prior to its effective date, however, the Michigan Supreme Court declared 1975 PA 227 unconstitutional.2 Advisory Opinion Re Constitutionality of 1975 PA 227, 396 Mich 123; 240 NW2d 193 (1976). Since 1975 PA 227 was invalidated, it did not operate to repeal the Act, and thus, section 4a of the Act remains valid. OAG, 1975-1976, No 5019, p 386 (April 14, 1976).

Section 4a of the Act was enacted pursuant to Const 1963, art 4,  10, which imposes upon the Legislature the responsibility to "further implement" its prohibition by legislation. OAG No 4799, supra, concluded that, in "further implementing" the provisions of Const 1963, art 4,  10, the Legislature may enact statutory provisions which are "declaratory and co-extensive" with the terms of the constitution:

In doing so, the legislature performs a service to the citizens of the state by codifying and expanding upon the constitutional provision and court decisions. Such enactments are clearly within legislative prerogatives so long as no effort is made to restrict the applicability of the constitutional provision.

Id., p 118 (emphasis added).

As OAG No 4799 also stated: "It is evident from the statements of delegates to the Constitutional Convention that some legislative activity expanding on the term 'substantial' was anticipated." Id.

Section 4a refines the definition of "substantial conflict of interest" by specifying that no prohibited conflict of interest arises solely from being a student at an institution of higher education granting baccalaureate degrees and simultaneously serving on that institution's governing board. Section 4a of the Act does not restrict the applicability of Const 1963, art 4 10. Rather, it codifies and expands upon this constitutional provision. Thus, the Legislature has, as is its prerogative, explicated yet another situation in which no prohibited conflict of interest exists. In light of this legislative amendment, OAG, 1969-1970, No 4679, is superseded.

It is my opinion, therefore, that a student at a state institution of higher education granting baccalaureate degrees, by simultaneously serving as a member of that institution's governing board, does not violate Const 1963, art 4,  10, or the state officer's conflict of interest act.


JENNIFER M. GRANHOLM
Attorney General


1 Const 1963, art 8,  7, requires the Legislature to create and support community and junior colleges.

2 The court found that 1975 PA 227 violated Const 1963, art 4,  24, which prohibits a law from embracing more than one object, which shall be expressed in its title.