Bill
HB 5248
Sets a statutory process for the State to finance costs of state-imposed activities or services on local governments, repealing the old unfunded mandates framework.
Status
- Title: State management: other; state financing of activities or services required of local units of government; provide for. Implements sec. 29, art. IX of the state constitution & repeals 1979 PA 101 (MCL 21.231–21.244).
- Introduced: March 14, 2025 (Rep. Tom Kuhn). Bill electronically reproduced 11/12/2025 and referred to Committee on Appropriations (11/12/2025).
- Legislative activity (selected): Referred to Public Health (4/7/2025); committee hearings and substitute considered (May 2025); reported favorably as substituted and placed on General State Calendar (5/15/2025). Companion: SB 1263.
Purpose and intent
- Implements Section 29, Article IX of the Michigan Constitution (the constitutional prohibition on unfunded mandates) by establishing a statutory process for the State to comply with its obligation to finance costs that local units of government incur to provide, administer, or implement activities or services required by the State.
- Repeals the prior statutory framework established by 1979 PA 101 (MCL 21.231–21.244).
Key provisions (high-level)
- Short title: “Headlee unfunded mandates prohibition act.”
- Definitions: provides detailed statutory definitions for terms used in the act, including:
- Activity — an identifiable administrative action by a local unit.
- Service — a specific program available to the public.
- State requirement — a state law that creates a new activity/service or increases an existing level of activity/service beyond what existing law required.
- Local unit of government — political subdivisions (school districts, community colleges, ISDs, cities, villages, townships, counties, authorities).
- Court requirement — new or increased duties imposed by a final state or federal court order (includes state laws whose enactment is required by such orders).
- De minimis cost — net cost not exceeding $300 per claim.
- Department — Department of Technology, Management, and Budget (DTMB).
- Necessary cost determination: establishes how to calculate the “necessary cost” of a state-required activity or service:
- Generally, the necessary cost is the actual cost if the State itself were to provide the service.
- If the State lacks experience to estimate reliably, necessary cost may be determined as the actual cost to the local unit.
- The State’s determination of which method applies is conclusive.
- Exclusions: de minimis claims (≤ $300) and requirements that produce offsetting savings are excluded from necessary cost.
- Consultation requirement: defines “consultation” as seeking information from a representative sample of affected local units to reasonably estimate statewide compliance costs.
- Coverage of federal and implied federal requirements: distinguishes direct federal requirements from “implied federal requirements” (federal actions that would cause loss of federal funds/tax credits unless the State acts).
Who would be affected
- Local units of government (schools, colleges, cities, townships, counties, authorities) that receive state-imposed requirements.
- State agencies (including DTMB), and the Legislature and its fiscal agencies (House and Senate fiscal agencies) in their roles for cost estimation, consultation, and administration.
- State budget/appropriations processes, to the extent the State must finance necessary costs established under the act.
Potential impacts
- Strengthens procedural obligations on the State when imposing new or increased requirements on local units by requiring cost estimation, consultation, and a process for determining and financing necessary costs consistent with the state constitution.
- Could increase State fiscal obligations in order to fund mandates previously borne by local units; it may also impose additional administrative requirements (cost estimates, consultations) on state agencies and legislative fiscal offices.
- Preserves narrow exclusions (de minimis claims and requirements producing net offsets); treats court-ordered mandates and implied federal requirements within the statutory framework (definitions provided), though implementation details and any specific exemptions or timelines are set out in additional sections not included in the excerpt.
Notes and next steps
- The bill repeals 1979 PA 101 (MCL 21.231–21.244), replacing the prior statutory approach to unfunded mandates.
- The full text (beyond the excerpt) should be consulted for procedural detail on how and when financing must be provided, any timelines, enforcement mechanisms, and interactions with court-ordered or federally compelled requirements.
Compiled from official sources — confirm details with the bill’s official record.
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