Executive Summary

In Public Act 326 of 2004, the Michigan Legislature granted broad authority to the State Administrative Board and the Department of Management and Budget to sell the former site of the Ypsilanti State Hospital. This delegation of the Legislature’s power was, in fact, unconstitutional under the conditions stated in the lead opinion of the 1978 Michigan Supreme Court case Westervelt v. Natural Resources Commission, a ruling cited specifically by the Michigan Supreme Court in its order to the Michigan Court of Appeals to reconsider DPG York v. Michigan.

The Westervelt lead opinion posited a two-part test for the constitutionality of a delegation of legislative authority:

(1) The authorizing legislation must contain "standards … as reasonably precise as the subject matter of the legislation ‘requires or permits.’ " Failure to provide such standards would produce a delegation of legislative authority to an executive agency in violation of the Michigan Constitution’s requirement of a separation of powers between the branches of government.

(2) The authorizing legislation must provide safeguards "assuring that the public will be protected against potential abuse of discretion at the hands of administrative officials." The absence of such safeguards violates the Michigan Constitution’s "due process clause," which protects citizens, businesses and organizations from arbitrary exercises of government power.

Public Act 326 satisfies neither part of the Westervelt test:

(1) The act violates the separation-of-powers component by providing only general criteria that the State Administrative Board and the Department of Budget "may consider" in the course of the sale, but need not follow. Despite the absence of binding standards, the act further welcomes the SAB and the DMB to determine the "best interests of the state" — a patently legislative function.

(2) The act fails to protect due process, since no legislative checks, provisions of the Administrative Procedures Act or other due-process safeguards restrain the SAB and the DMB in their dealings with potential buyers. Indeed, rather than discouraging administrative favoritism, the act openly invites it, allowing the SAB and the DMB to award the land to a bidder through one-on-one negotiations and to approve the sale without considering competing bids or the appraised value of the land.

The Michigan Court of Appeals should declare the act unconstitutional.