Bill Text: MI HB5503 | 2013-2014 | 97th Legislature | Introduced
Bill Title: State financing and management; other; implementation of section 29 of article IX of the state constitution; provide for, and repeal 1979 PA 101. Implements sec. 29, art. IX of the state constitution & repeals 1979 PA 101 (MCL 21.231 - 21.244).
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2014-05-01 - Printed Bill Filed 05/01/2014 [HB5503 Detail]
Download: Michigan-2013-HB5503-Introduced.html
HOUSE BILL No. 5503
April 30, 2014, Introduced by Reps. Kowall and Walsh and referred to the Committee on Financial Liability Reform.
A bill to implement section 29 of article IX of the state
constitution of 1963; to provide a process for state compliance
with its obligation to finance the costs incurred by local units of
government to provide, administer, and implement certain activities
or services required by this state; to prescribe the powers and
duties of certain state agencies and public officers; to prescribe
certain powers and duties of the legislative branch; to provide for
the administration of this act; and to repeal acts and parts of
acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. (1) This act shall be known and may be cited as the
"Paul Harvey transparency act".
(2) For purposes of this act, the words and phrases defined in
sections 2 to 4 shall have the meanings ascribed to them in those
sections.
Sec. 2. (1) "Activity" means a specific and identifiable
administrative action of a local unit of government.
(2) "Consultation" means to seek information from a
representative sample of local units of government affected by a
state requirement in a manner which can reasonably be expected to
result in a fair estimate of the statewide cost of compliance with
the state requirement.
(3) "Court requirement" means a new activity or service or an
increase in the level of activity or service beyond that required
by existing law which is required of a local unit of government in
order to comply with a final state or federal court order arising
from the interpretation of the constitution of the United States,
the state constitution of 1963, or a federal statute, rule, or
regulation. Court requirement includes a state law whose enactment
is required by a final state or federal court order.
(4) "Department" means the department of technology,
management, and budget.
Sec. 3. (1) "Existing law" means a public or local act enacted
prior to December 23, 1978, a rule promulgated prior to December
23, 1978, or a court order concerning a public or local act or rule
described in this subsection. A rule initially promulgated after
December 22, 1978 implementing for the first time an act or
amendatory act in effect prior to December 23, 1978 shall also be
considered as existing law except to the extent that the public or
local act or administrative rule being implemented for the first
time imposes upon a local unit of government a new activity or
service or an increase in the level of any activity or service
beyond that required by existing law.
(2) "Federal requirement" means a federal law, rule,
regulation, executive order, guideline, standard, or other federal
action which has the force and effect of law and which requires the
state to take action affecting local units of government.
(3) "Implied federal requirement" means a federal law, rule,
regulation, executive order, guideline, standard, or other federal
action which has the force and effect of law and which does not
directly require the state to take action affecting local units of
government, but will, according to federal law, result in a loss of
federal funds or federal tax credits if state action is not taken
to comply with the federal action.
(4) "Legislature" means the house of representatives and the
senate of this state.
(5) "Local government mandate panel" means the local
government mandate panel created in chapter 7c of the legislative
council act, 1986 PA 268, MCL 4.1101 to 4.1901.
(6) "Local unit of government" means a political subdivision
of this state, including local school districts, community college
districts, intermediate school districts, cities, villages,
townships, counties, and authorities, if the political subdivision
has as its primary purpose the providing of local governmental
activities and services for residents in a geographically limited
area of this state and has the power to act primarily on behalf of
that area.
(7) "Necessary cost" means the cost of an activity or service
provided by a local unit of government. Necessary cost does not
include the cost of a state requirement if the state requirement
will result in an offsetting savings to an extent that, if the
duties of a local unit of government that existed before the
effective date of the state requirement are considered, the
requirement will not exceed the cost of the preexisting required
duties.
(8) "New activity or service or increase in the level of an
existing activity or service" does not include a state law, or
administrative rule promulgated under existing law, which provides
only clarifying nonsubstantive changes in an earlier, existing law
or state law; or the recodification of an existing law or state
law, or administrative rules promulgated under a recodification,
which does not require a new activity or service or does not
require an increase in the level of an activity or service above
the level required before the existing law or state law was
recodified.
Sec. 4. (1) "Service" means a specific and identifiable
program of a local unit of government that is available to the
general public or is provided for the citizens of the local unit of
government.
(2) "State agency" means a state department, bureau, division,
section, board, commission, trustee, authority, or officer that is
created by the state constitution of 1963, by statute, or by state
agency action, and that has the authority to promulgate rules
pursuant to the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328. State agency does not include an agency in
the judicial branch of state government, an agency having direct
control over an institution of higher education, or the state civil
service commission.
(3) "State financed proportion of the necessary cost of an
existing activity or service required of local units of government
by existing law" means the percentage of necessary costs
specifically provided for an activity or service required of local
units of government by existing law and categorically funded by the
state on December 23, 1978.
(4) "State law" means a state statute or state agency rule or
regulation.
(5) "State requirement" means a state law that requires a new
activity or service or an increased level of activity or service
beyond that required of a local unit of government by an existing
law. State requirement does not include any of the following:
(a) A requirement imposed on a local unit of government by a
new amendment to the state constitution of 1963.
(b) A court requirement.
(c) A federal requirement.
(d) An implied federal requirement.
(e) A requirement of a state law which applies to a larger
class of persons or corporations and does not apply principally or
exclusively to a local unit or units of government.
(f) A requirement of a state law that does not require a local
unit of government to perform an activity or service but allows a
local unit of government to do so as an option, and by opting to
perform such an activity or service, the local unit of government
shall comply with certain minimum standards, requirements, or
guidelines.
(g) A requirement of a state law that changes the level of
requirements, standards, or guidelines of an activity or service
that is not required of a local unit of government by existing law
or state law, but that is provided at the option of the local unit
of government provided that state requirement shall include any
standards, requirements, or guidelines that require increased
necessary costs for activities and services directly related to
police, fire, or emergency medical transport services.
(h) A requirement of a state law enacted pursuant to section
18 of article VI of the state constitution of 1963.
Sec. 5. (1) The legislature shall appropriate and disburse
each year an amount sufficient to pay each local unit of government
the necessary cost of each state requirement pursuant to section 29
of article IX of the state constitution of 1963.
(2) The legislature shall appropriate and disburse each year
an amount sufficient to pay each local unit of government the state
financed proportion of the necessary cost of an existing activity
or service required of local units of government by existing law
and to appropriate and disburse to local units of government an
amount sufficient to pay for the costs of new activities or
services or increases in the level of activities and services
required by state law after December 23, 1978.
(3) Notwithstanding any provision of law to the contrary, no
local unit of government shall be obligated to provide a new
activity or service or increased level of activity or service
required by state law unless and until the local government mandate
panel has prepared and published a fiscal note in accordance with
section 6, and the state has appropriated and provided for
disbursement of the amounts sufficient based on the fiscal note
analysis to fund the necessary cost to the local unit of government
of providing the new activity or service or increase in the level
of a required activity or service or a court has determined that
the legislation does not impose a new activity or service or an
increase in the level of an existing activity or service. In the
event that legislation is enacted imposing a requirement on local
units of government without following the fiscal note process
described in section 6, local units of government are not required
to comply until that time that the fiscal note process described in
section 6 is followed or a court has determined that the
legislation does not impose a new activity or service or an
increase in the level of an existing activity or service.
Sec. 6. (1) A fiscal note process is hereby created. The
fiscal note process shall consist of all of the following:
(a) Before legislation affecting a local unit of government is
scheduled for third reading in the legislature, the local
government mandate panel shall conduct a review to determine
whether any new or increased level of activities or services is
likely to be required of local units of government by that
legislation if it becomes effective.
(b) If it is determined that a new activity or service or an
increased level of activity or service is likely to occur, the
local government mandate panel shall develop a written estimate of
the increased necessary costs, if any, that will result to local
units of government if that legislation becomes effective.
(c) The chairperson of the local government mandate panel
shall promptly inform the legislature in writing of its
determination in subdivision (b) before the legislation is
scheduled for third reading.
(d) The disbursement process shall serve to disburse funds to
local units of government on a current basis or as costs to provide
the required activity or service are being incurred by the local
units of government.
(2) Not later than 1 year after the date of enactment of this
act, the department of treasury shall develop a standard accounting
system in a searchable format for use by the local government
mandate panel to access the fiscal note process.
Sec. 7. The local government mandate panel shall develop a
process that will accomplish all of the following:
(a) A review of statutes and administrative rules and
regulations that impose requirements on local units of government.
(b) Make recommendations to the legislature whether the
requirements described in subdivision (a) continue to be necessary
in terms of the cost/benefit to the public interest, and if not,
whether those requirements should be repealed, rescinded, or
modified.
(c) If it is determined by the local government mandate panel
that the requirements described in subdivisions (a) and (b) are
recommended to be continued, report as to whether the requirements
can be provided on a more cost-effective basis than presently
provided and to recommend legislation to achieve cost savings.
Sec. 8. The state shall not impose a penalty on, withhold
funds, or impose any other form of monetary or other sanction on
any local unit of government for failing to comply with a state
requirement under any of the following circumstances:
(a) The state has failed to follow the fiscal note process
provided in section 6 for that new activity or service or has
failed to make timely disbursement to fund the costs identified in
the fiscal note process provided in section 6 for that new activity
or service or increase in the level of an existing activity or
service.
(b) The state has prepared a fiscal note in connection with
the enactment of the state law and 1 of the following applies for
that new activity or service or increase in the level of an
existing activity or service:
(i) A taxpayer or local unit of government has filed a suit
through the filing of a complaint in the court of appeals pursuant
to section 308a of the revised judicature act of 1961, 1961 PA 236,
MCL 600.308a, asserting that the state law imposes a mandate under
section 29 of article IX of the state constitution of 1963 and that
the cost of compliance has not been fully funded by the state.
(ii) The court of appeals has either failed to issue an order
within 6 months after the complaint was filed ruling whether the
state law imposes a state requirement and whether the state has
underfunded the cost of compliance or, alternatively, ruled in
favor of the complainant.
Sec. 9. If requested by the local government mandate panel,
the department shall provide the local government mandate panel
with baseline data on the net cost of compliance if the state
provided the same activity or service and the necessary cost of
compliance with the state requirement by each unit of local
government, to the extent the department has that data regarding a
particular new activity or service or increase in the level of an
existing activity or service.
Sec. 10. Funds received by a local unit of government under
this act shall be separately accounted for by the local unit of
government to reflect the specific state requirement for which the
funds are appropriated. To facilitate monitoring and compliance
with this act, not later than October 1, 2013, the department shall
establish standard accounting systems which will allow local units
of government and the state to calculate and track all of the
following:
(a) The costs incurred by local units in complying with state
requirements and existing law.
(b) The state financed proportion of the necessary cost of an
existing activity or service required of local units of government
by existing law.
Sec. 11. (1) The local government mandate panel, in
consultation with local units of government, shall adopt a process
for monitoring the state's compliance with section 29 of article IX
of the state constitution of 1963, including appropriations and
disbursements to fund the cost of complying with state requirements
and the state's compliance with its obligation to fund the state
financed proportion of the necessary cost of an existing activity
or service required of local units of government by existing law.
(2) The local government mandate panel shall prepare and
submit recommendations to the legislature that address court
decisions that determine the state has failed to fully fund the
cost of complying with state requirements and the state's
compliance with its obligation to fund the state financed
proportion of the necessary cost of an existing activity or service
required of local units of government by existing law.
Sec. 12. This act does not prohibit the legislature from
enacting state laws to provide for other forms of dedicated state
aid, cost-sharing agreements, or specific methods of making
disbursements to a local unit of government for a cost incurred
pursuant to state laws enacted to which this act applies.
Sec. 13. 1979 PA 101, MCL 21.231 to 21.244, is repealed.
