Bill Text: MI HB5762 | 2019-2020 | 100th Legislature | Introduced

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Bill Title: Water: water supply systems; clean water assistance and safe drinking water assistance funds allow use for energy efficiency water works projects; modify. Amends secs. 5301, 5403, 5405 & 5406 of 1994 PA 451 (MCL 324.5301 et seq.).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2020-12-02 - Referred To Second Reading [HB5762 Detail]

Download: Michigan-2019-HB5762-Introduced.html

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HOUSE BILL NO. 5762

May 05, 2020, Introduced by Rep. Griffin and referred to the Committee on Natural Resources and Outdoor Recreation.

A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending sections 5301, 5403, 5405, and 5406 (MCL 324.5301, 324.5403, 324.5405, and 324.5406), section 5301 as amended by 2012 PA 560, sections 5403 and 5405 as added by 1997 PA 26, and section 5406 as amended by 2012 PA 561.

the people of the state of michigan enact:

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Sec. 5301. As used in this part:

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(a) "Assistance" means 1 or more of the following activities to the extent authorized by the federal water pollution control act:

(i) Provision of loans to municipalities for construction of sewage treatment works projects, stormwater treatment projects, or nonpoint source projects.

(ii) Project refinancing assistance.

(iii) The guarantee or purchase of insurance for local obligations, if the guarantee or purchase action would improve credit market access or reduce interest rates.

(iv) Use of the proceeds of the fund as a source of revenue or security for the payment of principal and interest on revenue or general obligation bonds issued by this state, if the proceeds of the sale of the bonds will be deposited into the fund.

(v) Provision of loan guarantees for similar revolving funds established by municipalities.

(vi) The use of deposited funds to earn interest on fund accounts.

(vii) Provision for reasonable costs of administering and conducting activities under title VI of the federal water pollution control act, 33 USC 1381 to 1387.1388.

(b) "Authority" means the Michigan municipal bond authority created in the shared credit rating act, 1985 PA 227, MCL 141.1051 to 141.1076.

(c) "Capitalization grant" means the federal grant made to this state by the United States environmental protection agency Environmental Protection Agency for the purpose of establishing a state water pollution control revolving fund, as provided in title VI of the federal water pollution control act, 33 USC 1381 to

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1387.1388.

(d) "Construction activities" means any actions undertaken in the planning, designing, or building of sewage treatment works projects, stormwater treatment projects, or nonpoint source projects. Construction activities include, but are not limited to, all of the following:

(i) Project planning services.

(ii) Engineering services.

(iii) Legal services.

(iv) Financial services.

(v) Design of plans and specifications.

(vi) Acquisition of land or structural components, or both.

(vii) Building, erection, alteration, remodeling, or extension of a sewage treatment works.

(viii) Building, erection, alteration, remodeling, or extension of projects designed to control nonpoint source pollution, consistent with section 319 of title III of the federal water pollution control act, 33 USC 1329.

(ix) Building, erection, alteration, or remodeling of a stormwater treatment project.

(x) Municipal supervision of the project activities described in subparagraphs (i) to (ix).

(e) "Disadvantaged community" means a municipality in which all of the following conditions are met:

(i) Users within the area served by a proposed sewage treatment works project or stormwater treatment project are directly assessed for the costs of construction.

(ii) The median household income of the area served by a

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proposed sewage treatment works project or stormwater treatment project does not exceed 120% of the statewide median annual household income for Michigan.this state.

(iii) The municipality demonstrates at least 1 of the following:

(A) More than 50% of the area served by a proposed sewage treatment works project or stormwater treatment project is identified as a poverty area by the United States bureau of census.Census Bureau.

(B) The median annual household income of the area served by a proposed sewage treatment works project or stormwater treatment project is less than the most recently published federal poverty guidelines for a family of 4 in the 48 contiguous United States. In determining the median annual household income of the area served by the proposed sewage treatment works project or stormwater treatment project under this sub-subparagraph, the municipality shall utilize the most recently published statistics from the United States bureau of the census, Census Bureau, updated to reflect current dollars, for the community which most closely approximates the area being served by the project. As used in this sub-subparagraph, "federal poverty guidelines" means the poverty guidelines published annually in the federal register by the United States Department of Health and Human Services under its authority to revise the poverty line under 42 USC 9902.

(C) The median annual household income of the area served by a proposed sewage treatment works project or stormwater treatment project is less than the most recently published statewide median annual household income for this state, and annual user costs for sewage treatment or stormwater treatment exceed 1% of the median annual household income of the area served by the proposed sewage

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treatment works project or stormwater treatment project.

(D) The median annual household income of the area served by a proposed sewage treatment works project or stormwater treatment project is not greater than 120% of the statewide median annual household income for this state, and annual user costs for sewage treatment or stormwater treatment exceed 3% of the median annual household income of the area served by the proposed project.

(f) "Federal water pollution control act" means 33 USC 1251 to 1387.1388.

(g) "Fund" means the state water pollution control revolving fund established under section 16a the shared credit rating act, 1985 PA 227, MCL 141.1051 to 141.1076, 141.1066a, established pursuant to under title VI of the federal water pollution control act, 33 USC 1381 to 1388.

(h) "Fundable range" means those projects, taken in descending order on the priority lists, for which sufficient funds are estimated by the department to exist to provide assistance at the beginning of each annual funding cycle.

(i) "Municipality" means a city, village, county, township, authority, or other public body, including an intermunicipal agency of 2 or more municipalities, authorized or created under state law; or an Indian tribe that has jurisdiction over construction and operation of sewage treatment works or other projects qualifying under section 319 of title III of the federal water pollution control act, 33 USC 1329.

(j) "Nonpoint source project" means construction activities designed to reduce nonpoint source pollution consistent with the state nonpoint source management plan pursuant to under section 319 of title III of the federal water pollution control act, 33 USC

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1329.

(k) "Priority list" means the annual ranked listing of projects developed by the department in section 5303. or used by the department pursuant to section 5315.

(l) "Project" means a sewage treatment works project, a stormwater treatment project, or a nonpoint source project, or a combination of these that may include utilization of more efficient energy and resources as described in the cost-effective governmental energy use act, 2012 PA 625, MCL 18.1711 to 18.1725.

(m) "Project refinancing assistance" means buying or refinancing the debt obligations of municipalities within the this state if construction activities commenced after March 7, 1985 and the debt obligation was incurred after March 7, 1985.

(n) "Sewage treatment works project" means construction activities on any device or system for the treatment, storage, collection, conveyance, recycling, or reclamation of the sewage of a municipality, including combined sewer overflow correction and major rehabilitation of sewers.

(o) "Stormwater treatment project" means construction activities of a municipality on any device or system for the treatment, storage, recycling, or reclamation of storm water that is conveyed by a storm sewer that is separate from a sanitary sewer.

(p) "Tier I project" means a project for which assistance is sought or provided from funds made directly available from the federal capitalization grant or from the Great Lakes water quality bond fund pursuant to under section 19708(1)(a).

(q) "Tier II project" means a project for which assistance is sought or provided from funds other than those made directly

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available from the federal capitalization grant or from the Great Lakes water quality bond fund pursuant to under section 19708(1)(a).

Sec. 5403. As used in this part:

(a) "Priority list" means the annual ranked listing of projects developed by the department in section 5406.

(b) "Project" means a project related to the planning, design, and construction or alteration of a waterworks system that may include utilization of more efficient energy and resources as described in the cost-effective governmental energy use act, 2012 PA 625, MCL 18.1711 to 18.1725.

(c) "Project refinancing assistance" means buying or refinancing the debt obligations of water suppliers if construction activities commenced, and the debt obligation was incurred, after the effective date of this part.

(d) "Public water supply" means a waterworks system that provides water for drinking or household purposes to persons other than the supplier of the water, except for those waterworks systems that supply water to only 1 house, apartment, or other domicile occupied or intended to be occupied on a day-to-day basis by an individual, family group, or equivalent.

(e) "State drinking water standards" means rules promulgated under section 5 of Act 399, MCL 325.1005, that establish water quality standards necessary to protect public health or that establish treatment techniques to meet these water quality standards.

(f) "Water supplier" or "supplier" means a municipality or its designated representative accepted by the director, a legal business entity, or any other person who that owns a public water

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supply. However, water supplier does not include a water hauler.

(g) "Waterworks system" or "system" means a system of pipes and structures through which water is obtained or distributed and includes any of the following that are actually used or intended to be used for the purpose of furnishing water for drinking or household purposes:

(i) Wells and well structures.

(ii) Intakes and cribs.

(iii) Pumping stations.

(iv) Treatment plants.

(v) Storage tanks.

(vi) Pipelines and appurtenances.

(vii) A combination of any of the items specified in this subdivision.subparagraphs (i) through (vi).

Sec. 5405. (1) A water supplier who that is interested in applying for assistance under this part shall prepare and submit to the department a project plan as provided in this section. The department shall use a project plans plan submitted under this section to develop a priority list for assistance as provided under this part.

(2) During the development of a project plan, a water supplier that is a municipality shall consider and utilize, where practicable, cooperative regional or intermunicipal projects, and a water supplier that is not a municipality shall consider and utilize, where practicable, connection to, or ownership by, a water supplier that is a municipality.

(3) The project plan for a project shall must include documentation that demonstrates that the project is needed to assure maintenance of, or progress toward, compliance with the

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federal safe drinking water act. A complete project plan shall must include all of the following as background:

(a) Identification of planning area boundaries and characteristics.

(b) A description of the existing waterworks systems.

(c) A description of the existing waterworks problems and needs, including the severity and extent of water supply problems or public health problems.

(d) An examination of projected needs for the next 20 years.

(e) Population projections and the source and basis for the population projections.

(4) A project plan shall must include an analysis of alternatives, which shall must consist of a systematic identification, screening, study, evaluation, and cost-effectiveness comparison of feasible technologies, processes, and techniques. The alternatives shall must be capable of meeting the applicable state drinking water standards over the design life of the facility, while recognizing environmental and other nonmonetary considerations. The analysis shall must include, but not be is limited to, all of the following:

(a) A planning period for the cost-effectiveness analysis of 20 years or other such planning period as is justified by the unique characteristics of the project.

(b) Monetary costs that consider the present worth or equivalent annual value of all capital costs and operation and maintenance costs.

(c) Provisions for the ultimate disposal of residuals and sludge resulting from drinking water treatment processes.

(d) A synopsis of the environmental setting of the project and

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an analysis of the potential environmental and public health impacts of the various alternatives, as well as the identification of any significant environmental or public health benefits precluded by rejection of an alternative.

(e) Consideration of opportunities to make utilize more efficient use of energy and resources as described in the cost-effective governmental energy use act, 2012 PA 625, MCL 18.1711 to 18.1725.

(f) A description of the relationship between the service capacity of each waterworks systems alternative and the estimated future needs using population projections under subsection (3)(e).

(5) A project plan shall must include a description of the selected alternative, including all of the following:

(a) Relevant design parameters.

(b) Estimated capital construction costs, operation and maintenance costs, and a description of the manner in which project costs will be financed.

(c) A demonstration of the water supplier's ability to repay the incurred debt, including an analysis of the impacts of the annual user costs for water supply on its users.

(d) A demonstration that the selected alternative is implementable can be implemented considering the legal, institutional, technical, financial, and managerial resources of the water supplier.

(e) Assurance that there is sufficient waterworks system service capacity for the service area based on projected needs identified in subdivision (d) while avoiding the use of funds available under this part to finance the expansion of any public water system if a primary purpose of the expansion is to

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accommodate future development.

(f) Documentation of the project's consistency with the approved general plan prepared pursuant to under section 4 of Act 399, MCL 325.1004.

(g) An analysis of the environmental and public health impacts of the selected alternative.

(h) Consideration of structural and nonstructural measures that could be taken to mitigate or eliminate adverse effects on the environment.

(6) A project plan shall must describe the public participation activities conducted during planning and shall must include all of the following:

(a) Significant issues raised by the public and any changes to the project that were made as a result of the public participation process.

(b) A demonstration that there were adequate opportunities for public consultation, participation, and input in the decision-making process during alternative selection.

(c) A demonstration that before the adoption of the project plan, the water supplier held a public hearing on the proposed project not less than 30 days after advertising in local media of general circulation and at a time and place conducive to maximizing public input.

(d) A demonstration that, concurrent with advertisement of the hearing, a notice of public hearing was sent to all affected local, state, and federal agencies and to any public or private parties that have expressed an interest in the proposed project.

(e) A transcript or recording of the hearing, a list of all attendees, any written testimony received, and the water supplier's

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responses to the issues raised.

(7) A project plan shall must include either of the following, as appropriate:

(a) For a water supplier that is a municipality, a resolution adopted by the governing board of the municipality approving the project plan.

(b) For a water supplier that is not a municipality, a statement of intent to implement the project plan.

(8) A project plan shall must not have as a primary purpose the construction of or expansion of a waterworks system to accommodate future development.

Sec. 5406. (1) The department shall annually develop a priority list of projects eligible for assistance under this part. Projects that are not funded during the year that a priority list developed under this section is in effect shall must be automatically prioritized on the next annual list using the same criteria, unless the water supplier submits an amendment to its project plan that introduces new information to be used as the basis for prioritization. The priority list shall must be based on project plans submitted by water suppliers under section 5405 and the criteria listed in subdivisions (a) through (f). Each project shall must be assigned points up to a maximum of 1,000. The point values are maximum values available for each category or subcategory listed in this section and shall must only be awarded if the project substantially addresses the problem for which the point award is given. If a project is primarily designed to replace individual wells at private homes, 50% or more of the homes in the affected area shall must meet equivalent water quality or infrastructure deficiency criteria listed in subdivisions (a)

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through (f) in order to receive the maximum available points. If less than 50% of the homes in the affected area can demonstrate deficiencies, 1/2 of the total points available shall must be awarded. Points shall be awarded as follows:

(a) A maximum of 450 500 points may be awarded to a project that addresses drinking water quality as outlined in Act 399, if the project:

(i) Is designed to eliminate an acute violation of a drinking water standard as described in R 325.10401 to R 325.10420 of the Michigan administrative code. Administrative Code. A violation of a surface water treatment technique, or if a waterborne disease outbreak has been documented, 250 points shall must be awarded for each violation.

(ii) Is designed to eliminate a violation of a drinking water standard other than those outlined in subparagraph (i), 200 points shall must be awarded for each violation.

(iii) Is designed to upgrade a facility to maintain compliance with drinking water standards or system capacity requirements, 150 points shall must be awarded.

(iv) Is designed to eliminate an exceedance of a secondary maximum contaminant level for aesthetic water quality, 25 points shall must be awarded.

(v) Is designed to increase the utilization of more efficient energy and resources, as described in the cost-effective governmental energy use act, 2012 PA 625, MCL 18.1711 to 18.1725, 50 points must be awarded.

(b) A maximum of 350 points may be awarded to a project that addresses infrastructure improvements, as follows:

(i) If source or treatment facilities are upgraded, including

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the watermains to connect to the distribution system, a maximum of 125 points shall must be awarded, if the improvement is:

(A) To meet minimum capacity requirements, 100 points shall must be awarded.

(B) For reliability, 75 points shall must be awarded.

(C) For other source or treatment facility upgrades not included in subparagraph (i)(A) or (B), 25 points shall must be awarded.

(D) To satisfy the conditions of a formal enforcement action, 25 points shall must be awarded. Points awarded for formal enforcement actions are in addition to the maximum points allowable in any category.

(E) For source water protection, 50 points shall must be awarded.

(ii) If transmission or distribution watermains are upgraded, a maximum of 125 points shall must be awarded, if the improvement is:

(A) To meet minimum capacity where flow or residual pressure is less than acceptable, 100 points shall must be awarded.

(B) For reliability, including looping or redundant feeds, 75 points shall must be awarded.

(C) Other transmission or distribution system upgrades not included in subparagraph (ii)(A) or (B), 25 points shall must be awarded.

(D) To satisfy the conditions of a formal enforcement action, 25 points shall must be awarded. Points awarded for formal enforcement actions are in addition to the maximum points allowable in any category.

(iii) If water storage facilities or pumping stations are upgraded, a maximum of 125 points shall must be awarded, if the

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improvement is:

(A) To meet minimum capacity where storage or pumping capacity is less than minimum requirements, 100 points shall must be awarded.

(B) For reliability, 75 points shall must be awarded.

(C) Other storage facility or pumping station upgrades not included in subparagraph (iii)(A) or (B), 25 points shall must be awarded.

(D) To satisfy the conditions of a formal enforcement action, 25 points shall must be awarded. Points awarded for formal enforcement actions are in addition to the maximum points allowable in any category.

(c) A maximum of 50 points shall must be awarded based on the population served by the water system according to the following table. However, a transient noncommunity water supply as defined in section 2 of Act 399, MCL 325.1002, is eligible for 1/2 of the point value listed in the following table:

Population	Points
>50,000	50
10,001 – 50,000	40
3,301 – 10,000	30
501 – 3,300	20
0 - 500	10

(d) A maximum of 50 points shall must be awarded to a community water supply that serves a disadvantaged community.

(e) A maximum of 100 points shall must be awarded for projects that include consolidation as follows:

(i) If 1 or more public water supplies are brought into compliance with state drinking water standards as a result of

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consolidation, 100 points shall must be awarded.

(ii) If deficiencies, which are documented in writing by the department, at 1 or more public water supplies are corrected as a result of consolidation, 60 points shall must be awarded.

(iii) Other consolidations, not included under subparagraph (i) or (ii), shall must be awarded 40 points.

(f) For communities that have completed an approved source water protection program, 100 points shall must be awarded.

(g) After scoring, using the criteria in subdivisions (a) through (f), if 2 or more projects have the same score, the following tie-breaker shall must be applied:

(i) If the system has fewer than 2 violations of the monitoring, record-keeping, and reporting requirements of Act 399 in the previous 2-year reporting period, or no violations if ownership of the system has changed in the previous 2 years, it shall must rank above systems having more violations.

(ii) After applying the tie-breaker in subparagraph (i), if 2 or more projects score exactly the same, a calculation of the cost per population served by the water system shall must be made. The affected projects shall must be ranked with the highest ratio of cost to population ranked higher.

(2) The priority list shall must be submitted annually to the chairpersons of the senate and house of representatives standing committees that primarily consider legislation pertaining to the protection of public health and the environment.

(3) In preparing the priority list, to ensure that a disproportionate share of available funds for a given fiscal year is not committed to a single water supply project, the department may segment a project if either of the following criteria is

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present:

(a) The cost of the proposed project is more than 30% of the total amount available in the fund during the fiscal year.

(b) The department has approved a water supplier's application for segmenting a project.

(4) Segments of a project that have been segmented under subsection (3) shall must be assigned priority points based on the project as identified in the project plan. After funding assistance for the first segment is accepted, the remaining segments will retain first priority for funding assistance on the next 3 fiscal year priority lists. All projects with previously funded segments will be designated with first priority. Ranking order for these projects to receive funding assistance will be subject to the relative ranking of all first segment projects.

(5) In preparing the intended use plan, the department shall make every effort to assure that funding for assistance is equitably distributed among public water supplies of varying sizes.

(6) For purposes of providing assistance, the priority list shall take takes effect on the first day of each fiscal year.