STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6662

September 18, 1990

EXPORT DEVELOPMENT AUTHORITY:

Authority to hire executive director; authority over budget

AGRICULTURE, DEPARTMENT OF:

Authority of Director over budget of Export Development Authority

The authority to appoint its executive director resides in the Michigan Export Development Authority Board and not in the Director of the Department of Agriculture.

The preparation and control of the budgeting, procurement and related management functions of the Michigan Export Development Authority are subject to the direction and supervision of the Director of the Department of Agriculture; such direction and supervision, however, must be exercised consonant with the terms of any bond or note contract issued by the Authority.

Ms. Hildegard A. Adkins

Michigan Export Development Authority

4th Floor, Ottawa Building, North

P.O. Box 30017

Lansing, Michigan 48909

You have requested my opinion on two questions regarding the powers of the Board of Directors of the Michigan Export Development Authority (MEDA).

Your first question is:

MEDA was created by 1986 PA 157. Section 3(1) of that Act, MCL 447.154(1); MSA 12.90(54)(1), states:

Under section 4(1) of the Act, the governing and administrative powers of MEDA are vested in a twelve-member board of directors. MCL 447.154(1); MSA 12.90(54)(1). 1986 PA 157 does not expressly provide for the hiring of an executive director; however, section 5(2), MCL 447.155(2); MSA 12.90(55)(2), does provide:

Pursuant to the above section, Article III, section 6, of the MEDA by-laws provides that the Board may select and employ an executive director as the chief executive officer of the Authority.

A number of prior opinions have considered the appointing authority of various state agencies. Several of these opinions involved the Executive Organization Act of 1965, MCL 16.101 et seq; MSA 3.29(1), et seq. Under that Act, the executive branch was organized into 19 principal departments, and all administrative bodies were transferred to one of those departments. These transfers were designated by section 3 of the Act as type I, type II, or type III transfers. A type III transfer effectively abolished the transferred agency as a separate entity. A type II transfer vested all of the agency's powers and duties in the principal department. Finally, a type I transfer resulted in an allocation of authority between the agency and the principal department to which it was transferred.

Section 3(a) of the Executive Organization Act, MCL 16.103(a); MSA 3.29(3)(a), described the nature and effect of a type I transfer as follows:

OAG, 1965-1966, No 4468, p 291 (May 24, 1966), examined this language and concluded that, except for the enumerated areas of "rule making, licensing and registration" designated in the third sentence of this provision, the principal department's authority was paramount with regard to those bodies subject to a type I transfer. Thus, the opinion concluded, the International and Mackinac Bridge Authorities, having been transferred as type I agencies to the Department of State Highways, lost their plenary status; the power to appoint employees was transferred to the principal department.

In contrast, OAG, 1965-1966, No 4491, p 187 (January 3, 1966), concluded that the Michigan Employment Security Commission, which had been transferred to the Department of Labor under a separate section of the Executive Organization Act as an "autonomous entity," was not subject to the type I transfer provision. In light of the language making the MESC "autonomous," the opinion found that the MESC retained its authority to appoint employees.

A similar result was reached with respect to the Michigan State Housing Development Authority (MSHDA) in OAG, 1979-1980, No 5834, p 1119 (December 16, 1980). MSHDA was created by 1966 PA 346. Section 21(4) of that Act, MCL 125.1421(4); MSA 16.114(21)(4), as amended by 1981 PA 173, employs language nearly identical to section 3(1) of the Act creating MEDA. It states:

OAG, No 5834, supra, concluded that this language vested the principal Department with supervisory authority over budget, procurement and other related matters, but that "[a]ll other powers, duties and functions of MSHDA are to be exercised by MSHDA independent of the director of the Department of Commerce." Id, at 1122. (Emphasis added.)

Both the MSHDA and the MEDA statutes contain a broad grant of authority to the agency to "exercise [its] prescribed statutory powers, duties and functions independently" of the department director, followed by a specific, limited grant of authority to the director of the principal department to supervise "budgeting, procurement and related functions." OAG, 1979-1980, No 5834, supra, at 1121. This specific enumeration of the directors' powers implies the exclusion of all others. Michigan Wolverine Student Co-Operative, Inc v. Goodyear, 314 Mich 590, 598-599; 22 NW2d 884 (1946). Therefore, since the selection of an executive director is unrelated to budgeting and procurement, it remains within the authority of the MEDA Board.

This result finds further support in the express grant of power to the MEDA Board found in Section 5(2) of the Act, supra, authorizing the Board to delegate authority to "1 or more of its members or to an official, agent, or employee of the authority...." This express grant of power to delegate duties to its employees, as well as the express directive that MEDA is to exercise its authority independently of the Agriculture Commission and the Director, would be rendered ineffectual absent power in the Board to appoint its own executive director.

In addition, in Section 7(m) of the Act, MCL 447.157; MSA 12.90(57), the Legislature has authorized the Authority "[t]o exercise all of the powers and functions necessary or appropriate to carry out the duties and purposes set forth in this act."

It is my opinion, therefore, that the authority to appoint the executive director of MEDA resides in the MEDA Board and not in the Director of the Department of Agriculture.

Your second question is:

In other words, you have inquired generally about the relative authority of the MEDA Board and of the Director of the Department with respect to MEDA's budget request.

Section 3(1) of the Act creating MEDA, MCL 447.153(1); MSA 12.90(53)(1), quoted above, expressly provides that the budgeting, procurement, and related management functions of the authority shall be performed under the direction and supervision of the Director of the Department of Agriculture. The Executive Organization Act of 1965, MCL 16.103(a); MSA 3.29(3)(a), contains a similar provision, which provides in pertinent part:

Several Attorney General opinions have construed the latter provision. OAG, 1965-1966, No 4479, p 209, 214-215 (March 9, 1966), stated:

The opinion also construed the meaning of the word "supervise" as follows:

OAG, 1965-1966, No 4479, supra, p 212.

The Legislature has authorized MEDA to issue bonds, debentures and notes. MCL 447.167; MSA 12.90(67). These powers are similar to those enjoyed by MSHDA, an independent agency originally created in the Department of Social Services and transferred to the Department of Commerce by Executive Order 1980-1A. Under that Executive Order, the Commerce Director has supervisory powers over the budget, procurement and related management functions of MSHDA. OAG, 1979-1980, No 5834, supra, discussed the relationship between the Commerce Director and the MSHDA, and stated:

OAG, 1979-1980, No 5834, pp 1122-1123 (December 16, 1980).

It is my opinion, therefore, in response to your second question, that preparation and control of budgeting, procurement and related management functions are subject to the direction and supervision of the Director of the Department of Agriculture; such direction and supervision, however, must be exercised consonant with the terms of any bond or note contract issued by MEDA.

Frank J. Kelley

Attorney General