SB 1197 Summary

• Enacts the "Headlee Unfunded Mandates Prohibition Act" to implement the state constitutional requirement that the state finance costs of activities or services it requires of local units of government.

• Establishes a fiscal note process requiring legislative fiscal agencies to estimate increased costs to local governments before legislation affecting them reaches third reading or before state agencies adopt new rules or regulations.

• Requires the state legislature to appropriate and disburse funds annually to pay local units of government the full necessary costs of new state-mandated activities, services, or increased service levels, with exceptions for court requirements, federal requirements, and constitutional amendments.

• Prohibits the state from imposing penalties, withholding funds, or other sanctions on local governments that fail to comply with state requirements if the state fails to follow the fiscal note process or fails to make timely full payments for the required costs.

• Repeals the prior 1979 Unfunded Mandates Act (1979 PA 101) and requires the Department of Treasury to develop a standard accounting system within one year to track state mandate costs.