STORMWATER MGMT UTILITY ACT; ESTABLISH S.B. 660 (S-2):
SUMMARY OF BILL
REPORTED FROM COMMITTEE
Senate Bill 660 (Substitute S-2 as reported)
Sponsor: Senator Rosemary Bayer
CONTENT
The bill would enact the "Stormwater Management Utility Act" to do the following:
-- Allow a local unit of government to create a stormwater management utility.
-- Prescribe requirements for a stormwater management plan, including requirements to hold at least one public hearing about the plan and to post notice of the hearing.
-- Allow a local unit of government to adopt a stormwater utility fee ordinance and prescribe requirements for the use of a stormwater management utility fee.
-- Require a local unit of government that created a stormwater utility to provide procedures for the reduction or elimination of the stormwater management utility fee for a property whose owner could prove a reduction or elimination of reliance on the stormwater management system.
-- Specify that each property owner would have the burden of demonstrating that the stormwater management utility fee reduction or elimination was justified for that property.
-- Require a local unit of government that created a stormwater utility to establish an appeals board and provide procedures for appeals of any stormwater management utility fee charged or determined under the bill.
-- Prescribe procedures for the appeals process, including that property owners could appeal a determination of the appeals board to the county circuit court.
-- Require a stormwater management utility that established a stormwater management utility fee to deposit those fees into a stormwater enterprise fund.
-- Prescribe requirements for the creation and use of a stormwater enterprise fund.
-- Specify that the bill would be construed as cumulative authority for the exercise of the powers granted to a local unit of government and would not repeal any existing laws or limit or preempt any existing powers or authorities of a local unit of government.
BRIEF RATIONALE
Stormwater surges harm Michigan communities by blocking critical transportation corridors and forcing wastewater treatment plants to dump waste into water streams because they are operating over capacity; however, there is no State law prescribing a method for funding stormwater management utilities and local governments' efforts have been denied due to the 1998 Michigan Supreme Court ruling Bolt v. City of Lansing. In Bolt, the Court said that Lansing's stormwater service charge was actually a disguised tax imposed in violation of the Michigan Constitution's requirement that all new taxes be approved by voters, and Lansing s stormwater service charge did not receive a vote from Lansing residents. The Court then ruled that stormwater service fees would be lawful if they were for a regulatory purpose, proportionate to the cost of managing the water, and voluntary.[1] The bill s provisions would meet the Court s criteria and would help municipalities set up voluntary infrastructure to protect communities against unmanaged stormwater surges.
Legislative Analyst: Alex Krabill
FISCAL IMPACT
The bill would have an indeterminate fiscal impact on local units of government and no fiscal impact on the State. The bill would allow local units of government to collect a new stormwater management utility fee to cover the costs of a stormwater management utility. The bill would add costs to local units of government by codifying the requirement for at least one public hearing, although the cost of a meeting would differ between local units of government. An appeals board also would have to be established that would raise costs to local units of government. In addition, the bill also could increase local court costs, as property owners could file to appeal the appeal board s decision with their circuit court. The fees could or could not cover the entire cost of the stormwater management utility, which could lead to a negative or positive fiscal impact on the local government unit; however, as intended, the costs would be fully covered by the fee, resulting in no fiscal impact to the local government unit.
Date Completed: 11-14-24 Fiscal Analyst: Bobby Canell
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.