Mentally Ill Offender Treatment and Crime Reduction Act of 2002 - Amends the Omnibus Crime Control and Safe Streets Act of 1968 to authorize the Attorney General to award non-renewable grants to eligible applicants to prepare a comprehensive plan for and implement an adult or juvenile collaboration program, which targets adults or juveniles with mental illness or co-occurring mental illness and substance abuse disorders in order to promote public safety and public health.

Directs that grants be used to create or expand: (1) mental health courts; (2) programs that offer specialized training to the officers and employees of a criminal or juvenile justice agency and mental health personnel in procedures for identifying the symptoms of mental illness; and (3) programs that support cooperative efforts by criminal, juvenile justice, and mental health agencies to promote public safety by offering mental health and substance abuse treatment services.

Requires the Attorney General: (1) to develop a procedure under which applicants may apply simultaneously for a planning grant and an implementation grant; (2) and the Secretary of Health and Human Services to establish an interagency task force to identify policies which hinder or facilitate local collaborative initiatives; and (3) to develop a list of best practices for appropriate diversion from incarceration of adult and juvenile offenders. Requires applicants for an implementation grant to meet specified requirements, including ensuring individualized, needs-based assessments and access to community-based mental health services.