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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)


STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6561

January 23, 1989

DRUGS AND MEDICINE:

Expenditure of controlled substances forfeiture proceeds by law enforcement task force

LAW ENFORCEMENT AGENCIES:

Functioning as a joint enterprise

MUNICIPAL CORPORATION:

Creation of law enforcement task force

Appropriation of proceeds of controlled substances forfeiture proceeds to task force

A law enforcement task force may be created by the legislative bodies of governmental units and, alternatively, law enforcement agencies may function as a joint enterprise.

A law enforcement task force against trafficking in illegal controlled substances may be formed pursuant to various statutes, including the intergovernmental contracts between municipalities act and the Urban Cooperation Act of 1967.

With the exception of a law enforcement task force established by interlocal agreement pursuant to the Urban Cooperation Act of 1967 as a separate administrative or legal entity, expenditures of the controlled substances forfeiture proceeds distributed by a court to a controlled substances law enforcement task force must be made pursuant to appropriation by the local units of government having representatives on the task force.

Mr. Robert A. Bowman

State Treasurer

Treasury Building

Lansing, MI 48933

You have requested my opinion as to three questions concerning task forces comprised of representatives of law enforcement agencies. Your letter cites the Vertical Narcotics Unit ('VNU') as an example of a task force. The formation and operation of VNU is described in correspondence from the Wayne County Prosecutor's Office which you forwarded with your letter:

'Four agencies--the Detroit Police Department, the Wayne County Prosecutor's Office, the U.S. Attorney's office, and the Drug Enforcement Administration--have entered into an agreement to form a new unit called the Vertical Narcotics Unit. The purpose of this unit is to take a proactive approach to drug enforcement against those individuals who are active in the higher levels of distributing crack cocaine in the city of Detroit.' [Letter dated September 9, 1987.]

'That unit is a task force comprised of designated personnel from four governmental offices to concentrate on the apprehension and prosecution of illegal drug wholesalers. To assure that these specially designated personnel concentrate their efforts on the targets, a board of supervisors for the task force consisting of the heads of the offices has been established to oversee the unit.' [Letter dated November 4, 1987.]

The Wayne County Prosecutor's Office also advises that VNU, as well as similar task forces, have received court-ordered distributions of the proceeds of forfeited goods seized in drug enforcement operations:

'The unit has already taken jurisdiction over a couple of cases with related forfeiture proceedings. When these forfeiture proceedings reached the judgment stage, the Circuit Judge directly distributed a portion of the forfeiture proceeds to the Vertical Narcotics Unit.' [Letter dated September 9, 1987.]

'In providing for the disposition of net forfeiture proceeds, the circuit judge has treated this special unincorporated task force as a seizing agency within the meaning of MCL 333.7524(1)(b)(i) (mentioning it by name in the dispositional order). The budgetary authority for the task force is the board of supervisors which has opened the subject bank account.

'. . ..

'Task Force operations similar to the VNU are common place in the law enforcement field. . . . [C]ourts routinely recognize them to be entities and make direct allocations of forfeiture proceeds to them. . . .' [Letter dated November 4, 1987.]

Your first two questions are related and will be considered together. They are:

1. May task force agencies be established by local unit legislative bodies or by local unit law enforcement departments?

2. May task force agencies established by local unit legislative bodies be organized in accordance with the intergovernmental contracts between municipalities act (MCL 124.1 et seq; MSA 5.4081 et seq) or the Urban Cooperation Act of 1967 (MCL 124.501 et seq; MSA 5.4088(1) et seq)?

Const 1963, art 7, Sec. 28, authorizes cooperation among local units of government. In Ecorse v Peoples Community Hosp Auth, 336 Mich 490, 501; 58 NW2d 159 (1953), the court said:

'It has been held in the comparatively few cases that have arisen in this field that 2 or more municipalities may unite in the promotion of a particular enterprise.'

A number of statutes authorize police intergovernmental cooperation. MCL 41.201 et seq; MSA 5.191 et seq, empowers two or more townships by majority vote of all township boards to appoint traffic officers at a joint meeting held for that purpose. MCL 41.181(1); MSA 5.45(1)(l), authorizes townships to provide, at the expense of the township, for policing by the county sheriff. MCL 41.851 et seq; MSA 5.2640(31) et seq, authorizes adjoining townships acting jointly to establish and maintain police departments. MCL 123.811 et seq; MSA 5.3323(1) et seq, authorizes two or more counties, cities, villages, or townships to enter into mutual assistance pacts. MCL 28.601 et seq; MSA 4.450(1) et seq, provides for the creation of a law enforcement council and law enforcement officers training fund.

In addition to statutes specifically dealing with police organizations, statutes authorizing intergovernmental contracts include: (1) the Urban Cooperation Act of 1967, MCL 124.501 et seq; MSA 5.4088(1) et seq, which authorizes public agencies, including municipalities, upon approval of the respective governing bodies, to exercise jointly any power or authority which such agencies share in common pursuant to an interlocal agreement which may be administered by a separate legal or administrative entity established by the agreement; (2) the intergovernmental contracts between municipalities act, MCL 124.1 et seq; MSA 5.4081 et seq, which authorizes any municipality to execute a joint agreement with one or more other municipalities to own or operate any property or facility or perform any service provided each has the power to do so separately; and (3) the intergovernmental transfer of functions act, MCL 124.531 et seq; MSA 5.4087(1) et seq, which authorizes two or more political subdivisions to transfer functions or responsibilities to one another by contract.

In each of the foregoing statutes, the contract authorized is a contract between governmental entities with participation by their governing body.

A joint enterprise between governmental units was recognized in a case involving the South Oakland Tactical Support Unit and the Royal Oak City Policy Department. In that case, Berger v Mead, 127 Mich App 209, 216-217; 338 NW2d 919 (1983), lv den 419 Mich 867 (1984), the court stated:

'Looking at the facts in this case, we can only conclude that the South Oakland Tactical Support Unit is a joint enterprise. The community of interest among the different municipalities in the area is obvious. Pursuant to the South Oakland County Reciprocal Police Aid Agreement, each city or township supplied police officers to the unit and agreed to pay its own officers' salaries to build a unit which would respond to possible civil unrest. The agreement clearly shows a common responsibility among the municipalities in running the unit; each municipality has an equal voice in directing the unit's conduct.'

While municipalities may exercise some powers extraterritorially and while state statutes permit and, thus, municipal governments, through their governing bodies, police commissions or police commissioners, may authorize cooperative activity to achieve public goals, in most cases, one would expect that there be an intergovernmental agreement or contract dealing with the establishment of costs and cost contributions, personnel and sources of personnel acquisition, and expenditures and contributions to finance expenditures. The handling and disposition of seized property would also be an appropriate subject of agreement.

Although municipalities or their agencies may not be required, in every instance, to have written contracts in carrying out cooperative governmental activity, a municipality must appropriate any moneys or goods of a municipality under statutory authority or under contract which is statutorily authorized in order to permit subsequent expenditure. The Uniform Budgeting and Accounting Act, MCL 141.439(1); MSA 5.3228(39), imposes this requirement on units of local government:

'A member of the legislative body, the chief administrative officer, fiscal officer, an administrative officer, or an employee of a local unit shall not authorize or participate in the expenditure of funds except as authorized by a general appropriations act. An expenditure shall not be incurred except in pursuance of the authority and appropriations of the legislative body of the local unit.'

Thus, the legislative bodies of local units of government are authorized by statutes to enter into intergovernmental contracts for public purposes, including the establishment of law enforcement task forces. Law enforcement units are not prohibited from establishing a law enforcement task force as a joint enterprise acting within the scope of each law enforcement unit's authority.

It is my opinion, in answer to your first question, that a law enforcement task force may be created by legislative bodies of governmental units and, alternatively, law enforcement agencies may function as a joint enterprise.

It is my opinion, in answer to your second question, that task forces against trafficking in illegal controlled substances may be formed pursuant to various statutes, including both the intergovernmental contracts between municipalities act, MCL 124.1 et seq; MSA 5.4081 et seq, and the Urban Cooperation Act of 1967, MCL 124.501 et seq; MSA 5.4088(1) et seq.

Your third question asks:

'Would these [task force] agencies be considered 'the entity having budgetary authority,' as used in the Controlled Substances section of the Public Health Code, (MCL 333.7524[1][b][ii]; MSA 14.15 (7524)(1)(b)(ii)] or should one of the participating local units serve as the budget oversight unit and be held accountable for receipt and disbursement of the Funds?'

MCL 333.7524(1)(b)(ii); MSA 14.15(7524)(1)(b)(ii), provides:

'The balance remaining after the payment of expenses shall be distributed by the court having jurisdiction over the forfeiture proceedings to the entity having budgetary authority over the seizing agency. If more than 1 agency was substantially involved in effecting the forfeiture, the court having jurisdiction over the forfeiture proceeding shall equitably distribute the money among the entities having budgetary authority over the seizing agencies. The money received under this subparagraph shall be used to enhance law enforcement efforts pertaining to this article.' (Emphasis added.)

There are no Michigan appellate cases interpreting which units or agencies constitute 'an entity having budgetary authority over the seizing agency.' However, the information provided by the Wayne County Prosecutor's Office makes clear that a number of circuit courts have ordered the distribution of the proceeds of drug-related forfeitures to these task forces, presumably concluding that these task forces constitute entities having budgetary authority over the seizing agency.

Task force agencies receiving such court-ordered forfeiture proceeds have a fiduciary duty to account to their respective departments and local units of government for the funds received by the task force. In addition, as noted previously, no expenditure of funds should be made by a task force without appropriation therefor by the local units from which the participants of the task force originate.

It is noted that the Department of Treasury has issued Letter No. 1-87, dated January 29, 1987, regarding accounting requirements for drug-related forfeitures. Letter No. 1-87 mandates the creation of a special revenue fund entitled 'Drug Law Enforcement Fund' and describes its operation and use as follows:

'Money for the operation of this fund is normally supplied by forfeited money, negotiable instruments, securities, and the proceeds of the sale of other property and articles of value. Expenditures include payments for expenses of seizure, forfeiture and sale. The available balance is to be used to enhance law enforcement efforts pertaining to controlled substances (Article 7). The legislative body of the unit is to approve all expenditures. This fund is mandatory if the unit has received forfeited assets.'

While the determination as to the form of a specific task force rests with the local units involved, it would appear to be the better practice for units engaged in substantial and ongoing cooperative law enforcement activity to facilitate their efforts by entering into an interlocal agreement which outlines their respective obligations and evidences their authority by creating a separate legal or administrative entity to administer the interlocal agreement. This entity may be a board, commission, or council, as authorized by MCL 124.507(1); MSA 5.4088(7)(1), which also describes its membership and limitations, in part, as follows:

'The governing body of each public agency shall appoint a member of the commission, board, or council constituted pursuant to the agreement. That member may be removed by the appointing governing body at will. The Administrative or legal entity shall not be operated for profit. No part of its earnings shall inure to the benefit of a person other than the public agencies which created it. Upon termination of the interlocal agreement, title to all property owned by the entity shall vest in the public agencies which incorporated it.'

The local units forming this entity may give it a broad range of powers as provided in MCL 124.507(2); MSA 5.4088(7)(2):

'A separate legal or administrative entity created by an interlocal agreement shall possess the common power specified in the agreement and may exercise it in the manner or according to the method provided in the agreement. The entity may be, in addition to its other powers, authorized in its own name to make and enter into contracts, to employ agencies or employees, to acquire, construct, manage, maintain, or operate buildings, works, or improvements, to acquire, hold, or dispose of property, to incur debts, liabilities, or obligations which, except as expressly authorized by the parties, do not constitute the debts, liabilities, or obligations of any of the parties to the agreement . . .. The entity may sue and be sued in its own name.'

Where a task force, having been established as a separate entity by an interlocal agreement, is substantially involved in the activities which result in the forfeiture of drug-related assets, the task force would not only be eligible to receive the court-ordered proceeds of drug-related forfeitures, but also to direct their expenditure in support of the task force's law enforcement activities in the manner permitted in the interlocal agreement. MCL 124.505(e); MSA 5.4088(5)(e), authorizes local units entering into an interlocal agreement which creates a separate legal or administrative entity to provide for '[t]he manner in which funds may be paid to and disbursed by . . . [the] separate legal or administrative entity . . ..'

Because of the significant role of prosecuting attorneys in coordinating law enforcement, it may be appropriate for such public officers to be ex officio members of those task forces established as separate entities by interlocal agreement.

It is my opinion, in answer to your third question, that with the exception of a law enforcement task force established by interlocal agreement pursuant to MCL 124.501 et seq; MSA 5.4088(1) et seq, as a separate administrative or legal entity, expenditures of drug-related forfeiture proceeds distributed by court action to a controlled substances law enforcement task force must be made pursuant to appropriation by the local units of government having representatives on the task force.

Frank J. Kelley

Attorney General

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