Bill Text: MI HB4691 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Environmental protection; sewage; municipal stormwater utilities; provide for, and authorize fee. Creates new act.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2019-06-04 - Bill Electronically Reproduced 06/06/2019 [HB4691 Detail]
Download: Michigan-2019-HB4691-Introduced.html
HOUSE BILL No. 4691
June 5, 2019, Introduced by Reps. Webber, Garza, Manoogian, Howell, Eisen and Jones and referred to the Committee on Regulatory Reform.
A bill to regulate the creation of stormwater management
utilities by local units of government; to regulate the adoption
and content of stormwater utility ordinances; to provide for the
allocation of the costs of planning, constructing, operating,
maintaining, financing, and administering a stormwater system to
real property served by the system; to provide for the
establishment and collection of stormwater utility fees; to provide
for the reduction or elimination of fees; to provide for appeals;
and to prescribe the powers and duties of certain local
governmental officers and entities.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"stormwater utility act".
Sec. 2. As used in this act:
(a) "Fund" means a stormwater fund established pursuant to
section 8.
(b) "Impervious area" means a surface area that is resistant
to permeation by surface water.
(c) "Local unit of government" or "local unit" means a city,
village, township, or county.
(d) "Operation and maintenance costs" means all costs, direct
and indirect, of materials, labor, professional services,
utilities, and other items for the management and uninterrupted
operation of a stormwater system in a manner for which the
stormwater system was designed and constructed.
(e) "Property" means real property or a parcel of real
property, as indicated by the context.
(f) "Stormwater" means stormwater runoff, snow melt runoff,
and surface runoff and drainage.
(g) "Stormwater management" means 1 or more of the following:
(i) The quantitative regulation through the stormwater system
of the volume and rate of stormwater runoff from property.
Quantitative regulation includes, but is not limited to, flood
control.
(ii) The qualitative regulation of stormwater runoff into the
stormwater system or of stormwater discharged from the stormwater
system. Qualitative regulation includes, but is not limited to,
stormwater treatment, pollution prevention activities, and
administration and enforcement of ordinances to reduce, eliminate,
or treat pollutants carried from property into the stormwater
system by stormwater.
(iii) Notifying property owners about the stormwater
management program, including, but not limited to, how to obtain a
reduction or elimination of fees for use of the stormwater system.
(h) "Stormwater management plan" or "plan" means a plan
described in and adopted pursuant to section 4.
(i) "Stormwater management program" means aspects of
stormwater management undertaken by a local unit of government.
(j) "Stormwater system" means features that are located or
partially located within the geographic limits of a system service
area and that are owned, operated, designed, maintained, or used by
a local unit of government for collecting, storing, treating,
conveying, or attenuating stormwater, such as roads, streets,
highways, catch basins, curbs, gutters, storm ditches, storm and
combined sewers and appurtenant features, pipes, interceptors,
conduits, swales, storm drains, gulches, gullies, flumes, culverts,
bridges, siphons, retention basins, detention basins, treatment
facilities, screening facilities, disinfection facilities, dams,
floodwalls, levees, pumping stations, and other similar features.
(k) "Stormwater utility fee" or "fee" means a fee provided for
under section 5.
(l) "Stormwater utility ordinance" means an ordinance
described in and adopted pursuant to section 3.
Sec. 3. (1) A stormwater management utility established after
the effective date of this section shall accomplish 1 or more of
the following regulatory purposes:
(a) Protect against economic loss, property damage, threats to
public health and safety, and damage to the environment and natural
resources from water pollution or from flooding or other instances
of high volumes or rates of stormwater runoff.
(b) Enable property owners to fulfill legal obligations
pertaining to increases in the quantity or reduction in the quality
of stormwater runoff resulting from voluntary choices made in the
manner of development of the property, including, but not limited
to, obligations under section 3109 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.3109, the
natural flow doctrine, and the law of trespass and nuisance.
(c) Provide property owners paying stormwater utility fees
with proportionate benefits described in subdivision (a). These
benefits include reciprocal benefits to a property owner when other
property owners pay fees to support the stormwater system and
thereby fulfill their legal obligations to that property owner
described in subdivision (b).
(2) To create a stormwater management utility, the legislative
body of a local unit of government shall do both of the following:
(a) Adopt a stormwater management plan by resolution.
(b) Adopt a stormwater utility ordinance that is consistent
with the adopted stormwater management plan.
Sec. 4. (1) A stormwater management plan shall include all of
the following:
(a) The time period covered by the plan.
(b) The service area of the stormwater management utility. The
service area may consist of all of the territory of the local unit
of government, a portion of the territory of the local unit, or all
or a portion of the territory of 2 or more local units that jointly
develop the plan.
(c) The type and level of stormwater management services to be
provided by the stormwater management utility, including system
reliability, level of flood protection, pollution control, and
structural condition of system components.
(d) Projected direct and indirect costs to provide services as
described in the plan pursuant to subdivision (c) for the
stormwater management utility, including cost of planning, capital,
operations, maintenance, permit compliance, and asset replacement.
(e) Recommendations for efficiencies to minimize costs.
(f) Current and projected impervious area and, if applicable
under section 7(2), an inventory of impervious surfaces and parcel
areas for properties within the stormwater management utility's
service area.
(g) A determination of which properties will be subject to any
stormwater utility fee for voluntary use of a stormwater system
owned and operated by the local unit of government, as required
under section 10(1), and the process and method that was used to
make that determination.
(h) The method of calculating any stormwater utility fees
proportionate to the cost of providing the locally determined level
of service of stormwater management.
(i) Provisions to ensure that the cost of those elements of
the stormwater management program directly or indirectly related to
the amount of stormwater managed will be allocated in proportion to
the amount of stormwater runoff from a property conveyed by the
stormwater system, employing methods that are relatively accurate
considering available technology.
(j) A description of the components of the stormwater system
owned and operated by the local unit of government.
(k) A description of how a stormwater utility fee may be
reduced or eliminated as provided under section 9.
(2) Before preparing a stormwater management plan, a local
unit of government must give notice that it intends to prepare a
stormwater management plan. The notice shall be given by all of the
following means:
(a) If the local unit has a website that is accessible to the
public free of charge, by posting on the website.
(b) By publication in a newspaper of general circulation
within the local unit. If there is no newspaper of general
circulation within the local unit, notice shall be given by first-
class mail to all persons to whom real property taxes are assessed
and to the occupants of all structures within the local unit.
(c) By first-class mail to the county drain commissioner or
water resources commissioner and to each local unit located
adjacent to or located, in whole or in part, within the local unit
preparing the plan. The notice under this subdivision shall request
the recipient's cooperation in and comment on the preparation of
the plan, including comment on jointly managing stormwater.
(3) Before adopting a stormwater management plan, a local unit
of government must hold at least 1 public hearing on the proposed
plan. The local unit shall give notice specifying the time, place,
and purpose of the hearing and the place where a copy of the
proposed plan is available for public inspection. The notice shall
be given by all of the following means:
(a) If the local unit has a website that is accessible to the
public free of charge, by posting the notice on the website at
least 14 days before the hearing and maintaining the posting until
the time of the hearing. The posting shall include a copy of the
proposed plan.
(b) By publication in a newspaper of general circulation
within the local unit. If there is no such newspaper, notice shall
be given by first-class mail to all persons to whom real property
taxes are assessed and to the occupants of all structures within
the local unit. If the local unit has a website that is accessible
to the public free of charge, the notice under this subdivision
shall include the website address at which a copy of the proposed
plan is posted under subdivision (a). The notice under this
subdivision shall be published or deposited in the United States
mail at least 14 days before the date of the hearing.
(c) By first-class mail to the county drain commissioner or
water resources commissioner and to each local unit located
adjacent to or located, in whole or in part, within the local unit
preparing the stormwater management plan. If the local unit has a
website that is accessible to the public free of charge, the notice
under this subdivision shall include the website address at which a
copy of the proposed plan is posted under subdivision (a). The
notice under this subdivision shall be deposited in the United
States mail at least 14 days before the date of the hearing.
(4) A stormwater management plan may be extended or otherwise
amended by resolution subject to the same procedure set forth in
this section for the adoption of the original plan.
Sec. 5. (1) A stormwater utility ordinance shall identify the
regulatory purposes under section 3(1) served by the ordinance.
(2) A stormwater utility ordinance may provide for a
stormwater utility fee on property serviced by a stormwater system
to pay the proportionate costs of the stormwater management
program. A stormwater utility fee shall not include components
other than as described in this section and sections 6 and 7.
(3) A stormwater utility ordinance shall describe the method
or methods used to determine any stormwater utility fee.
(4) A local unit of government may develop a corresponding
stormwater utility fee, calculation method, or both for each
stormwater management utility described in the stormwater
management plan.
(5) A stormwater utility fee shall be proportionate to the
direct and indirect cost to the local unit of government of
providing stormwater management to each property in a stormwater
management utility that uses the stormwater system that is not
financed by revenue received by the local unit of government from
any other source.
(6) A stormwater utility ordinance may define rate categories
for classes of properties for which the proportionate cost of
providing service is similar.
Sec. 6. (1) A stormwater management utility may assess a 1-
time stormwater utility fee for connection to the stormwater system
of newly developed or modified property benefited by the stormwater
system. The purpose of the fee is to finance the capital costs to
the local unit of government of elements of the public stormwater
system needed to serve that property and not otherwise financed by
the property developer or by revenue received by the local unit of
government from any other source.
(2) A stormwater utility fee under subsection (1) shall be
computed based on the newly developed or modified property's
proportionate share of the local unit of government's cost to
expand the stormwater system to manage the additional stormwater
from that property, including, if appropriate, the newly developed
or modified property's proportionate share of the local unit of
government's existing capital investment in the stormwater system.
This proportionate share shall be calculated consistent with the
method used by the local unit of government under section 7
considering the available data at the time of the property's
development or modification.
Sec. 7. (1) A stormwater management utility may assess a
stormwater utility fee for the use of a stormwater system.
(2) The method for determining a stormwater utility fee under
subsection (1) shall be based on the quantity or quality, or both,
of stormwater runoff from each property or category of property.
(3) A stormwater utility fee or portion thereof charged to a
property for those elements of the stormwater management program
whose cost is attributable to the quantity of stormwater runoff
from each individual property or category of properties shall be
calculated, consistent with stormwater management plan provisions
under section 4(1)(i), using 1 or more methods generally accepted
by licensed professional engineers or regional or national
professional groups associated with stormwater experts, including,
but not limited to, the following methods:
(a) Impervious area, based solely on the impervious area of
the property.
(b) Equivalent residential unit or equivalent service unit,
based on the impervious area of the property in comparison to the
typical impervious area associated with single-family residential
properties within the service area of the stormwater management
utility.
(c) Intensity of development, based on the total area of the
property multiplied by a rate category. A rate category shall apply
to properties with statistically similar stormwater-runoff-
generating characteristics. The stormwater utility fee shall be
proportionate to the percentage of the property's impervious area
to its total area.
(d) Equivalent hydraulic area, calculated as follows:
(i) Multiply the impervious area of the property by a
stormwater runoff factor.
(ii) Multiply the pervious area of the property by a
stormwater runoff factor.
(iii) Add the products under subparagraphs (i) and (ii).
(e) Other billing methodologies that can be demonstrated to
provide an equitable distribution of costs in proportion to the
property's use of the stormwater system.
(4) A stormwater utility fee or portion thereof charged to a
property for those elements of the stormwater management program
whose cost is attributable to the quality of stormwater managed and
is not covered by other revenue shall be proportionate to the cost
of those elements of the stormwater management program.
Sec. 8. (1) A stormwater utility ordinance that establishes a
stormwater utility fee shall establish a stormwater fund. All
stormwater utility fees collected by the local unit of government
shall be deposited into the fund. The treasurer of the local unit
of government may receive money or other assets from any other
source for deposit into the fund. Money in the fund shall be
invested pursuant to 1943 PA 20, MCL 129.91 to 129.97a. The
treasurer shall credit to the fund interest and earnings from fund
investments. Money in the fund at the close of the fiscal year
shall remain in the fund and shall not lapse to the general fund of
the local unit.
(2) The treasurer of the local unit of government shall expend
money from the fund, upon appropriation, only for the regulatory
purpose of defraying any of the following stormwater management
program costs:
(a) Operation, maintenance, planning, engineering,
acquisition, construction, installation, improvement, or
enlargement of a stormwater system, including financing and debt
service costs and indirect and overhead costs that are fairly
chargeable to such activities under applicable generally accepted
accounting principles and the uniform budgeting and accounting act,
1968 PA 2, MCL 141.421 to 141.440a.
(b) Administration of the stormwater management program.
(c) Development of a stormwater management plan.
(d) Providing user education related to the stormwater
management plan or required by federal or state regulations or
required by permits issued to the local unit of government by
federal or state regulatory bodies.
(3) If the local unit of government has a website that is
accessible to the public free of charge, the local unit shall post
on its website the most recent audit report for the fund under the
uniform budgeting and accounting act, 1968 PA 2, MCL 141.421 to
141.440a.
Sec. 9. (1) Subject to subsection (2), a stormwater utility
ordinance that imposes a stormwater utility fee shall provide for
the reduction or elimination of the stormwater utility fee for a
property if a modification or improvement made to that property or
to that and 1 or more other properties reduces the rate or volume
of or eliminates runoff of or pollutant loadings in excess of
natural levels of stormwater entering the stormwater system. Each
property owner has the burden of demonstrating that the stormwater
utility fee reduction or elimination is justified for that
property, using methods that are reasonably accurate considering
available technology.
(2) A reduction in or elimination of the stormwater utility
fee under subsection (1) shall be proportionate to the reduction of
the cost of service of the stormwater system to the property or
properties.
Sec. 10. (1) To ensure that stormwater utility fees are
voluntary, property is not subject to a fee unless the local unit
of government demonstrates both of the following:
(a) That the property utilizes the stormwater system.
(b) That such utilization imposes a net cost to the stormwater
system when offset by any activities or conditions that reduce the
cost of service to the stormwater system or are reasonably related
to a benefit to the stormwater system provided by that property or
its owner, including, but not limited to, modifications or
improvements described in section 9(1).
(2) The local unit of government shall provide the owner of
property initially determined to be subject to a stormwater utility
fee under subsection (1) with the opportunity to demonstrate that
the property either does not utilize the stormwater system or does
not utilize the stormwater system to the extent calculated by the
local unit of government in establishing the stormwater utility fee
and is therefore entitled to the elimination of or a reduction in
the fee. The stormwater utility ordinance shall set forth
procedures to implement this subsection.
(3) A stormwater utility ordinance that establishes a
stormwater utility fee shall provide that, when additional property
begins to utilize the stormwater system, a stormwater utility fee,
as determined by the local unit of government, accrues.
Sec. 11. A stormwater utility ordinance shall designate an
entity within the local unit of government to administer the
stormwater management utility and shall establish the
administrative duties. A stormwater utility ordinance shall
establish administrative policies and procedures or authorize the
administrator to establish the administrative policies and
procedures. The administrative policies and procedures shall
include at least the following topics, as applicable:
(a) Criteria used to determine whether a stormwater utility
fee will be billed to the property owner.
(b) Procedures for updating billing data based upon changes in
property boundaries, ownership, and stormwater runoff
characteristics, and stormwater runoff calculation methods.
(c) Billing and payment procedures of the stormwater
management utility including the billing period, billing
methodology, credit application procedures, and penalties.
(d) Policies establishing the type and manner of service that
will be provided by the stormwater management utility.
(e) Procedures for granting and modifying the reduction or
elimination of a fee, as authorized pursuant to section 9.
(f) Procedures for appeals as described in section 13.
(g) Enforcement policies and procedures.
(h) A process by which fees, formulas for calculating fees,
and formulas for calculating fee reductions will be reviewed and
updated at least every 3 years.
Sec. 12. (1) A stormwater utility ordinance shall establish
remedies for any unpaid stormwater utility fees as described in
this section.
(2) A local unit of government may collect a stormwater
utility fee by any method authorized by law.
(3) A partial payment of delinquent stormwater utility fees
shall be applied to the oldest delinquent fees, and remaining fees
may continue to accrue interest and penalties.
Sec. 13. (1) A stormwater utility ordinance or the
administrative policies and procedures adopted under the ordinance
shall provide a procedure for appeals, the establishment of an
appeals board, and the reduction or elimination of any stormwater
utility fee. The procedure shall include at least all of the
following:
(a) Any property owner liable for a stormwater utility fee may
appeal the determination that the property utilizes the stormwater
system or the amount of a stormwater utility fee, including a
determination on a reduction in or the elimination of the fee under
section 9. An appeal may be based on the quantity or quality of
stormwater runoff generated, the reductions established, the
reductions allocated, or any other matter relating to the
determination of the stormwater utility fee.
(b) An appeal under subdivision (a) shall be heard by a
stormwater utility appeals board appointed by the local unit of
government. The appeals board shall consist of 3 members, 2 of whom
shall be licensed professional engineers not employed by the local
unit of government.
(c) An appeal of a stormwater utility fee shall not be brought
more than 1 year after the fee was billed.
(d) To prevail in an appeal of a stormwater utility fee, the
appellant must demonstrate in accordance with the requirements of
the stormwater management plan that the property does not use the
system to the extent determined by the local unit of government in
the calculation of that property's stormwater utility fee or that
there was a mathematical error in the calculation.
(e) The sole remedy for a property owner who prevails in an
appeal of a stormwater utility fee is a prospective correct
recalculation of the stormwater utility fee.
(f) If in an appeal of a stormwater utility fee a local unit
of government finds that the requirements of subdivision (d) have
not been met, that finding is conclusive until the property is
modified to either increase or decrease the utilization of the
system. The property owner remains eligible for a reduction in or
elimination of fees under the stormwater utility ordinance.
(g) A property owner making an appeal shall provide the
appeals board with information necessary to make a determination.
(2) A person aggrieved by a decision of the appeals board on
an appeal under this section may appeal to the circuit court in
which the property is located.
Sec. 14. This act does not do any of the following:
(a) Expand existing authority of local units of government.
(b) Limit existing authority of local units of government to
cooperate with respect to or jointly create and operate stormwater
management utilities, subject to section 3(1).
(c) Require a local unit of government with a separated storm
sewer system to adopt a stormwater utility fee or a rate model that
includes a stormwater utility fee.
(d) Require a local unit of government with a combined storm
and sanitary sewer system to adopt a stormwater utility fee or a
rate model that includes a stormwater utility fee.
Enacting section 1. This act takes effect 90 days after the
date it is enacted into law.
