October 19, 2016, Introduced by Rep. McCready and referred to the Committee on Local Government.
A bill to authorize local units of government to adopt storm
water utility ordinances and create storm water management
utilities; to provide for the allocation of the costs of planning,
constructing, operating, maintaining, financing, and administering
a storm water system to real property served by the system; to
permit the establishment and collection of storm water utility
fees; to provide for credits and 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 "storm
water utility act".
Sec. 2. As used in this act:
(a) "Fund" means a storm water 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 or other governmental authority.
(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 storm water system in a manner for which the storm
water system was designed and constructed.
(e) "Property" means real property or a parcel of real
property, as indicated by the context.
(f) "Storm water" means that term as defined in 40 CFR
122.26(b)(l3).
(g) "Storm water management" means 1 or more of the following:
(i) The quantitative regulation through the storm water system
of the volume and rate of storm water runoff from property.
Quantitative regulation includes, but is not limited to, flood
control.
(ii) The qualitative regulation of storm water runoff into the
storm water system or of storm water discharged from the storm
water system. Qualitative regulation includes, but is not limited
to, storm water treatment, pollution prevention activities, and
administration and enforcement of ordinances to reduce, eliminate,
or treat pollutants carried from property into the storm water
system by storm water.
(iii) Notifying property owners about the storm water
management program, including, but not limited to, how to reduce or
eliminate fees for use of the storm water system.
(h) "Storm water management plan" means a plan described in
and adopted pursuant to section 4.
(i) "Storm water management program" means aspects of storm
water management undertaken by a local unit of government.
(j) "Storm water system" means features that are located or
partially located within the geographic limits of a local unit of
government and are designed or actively managed by the local unit
for collecting, storing, treating, or conveying storm water such as
roads, streets, highways, catch basins, curbs, gutters, ditches,
storm and combined sewers and appurtenant features, pipes,
interceptors, conduits, lakes, ponds, channels, swales, storm
drains, county drains, canals, creeks, streams, gulches, gullies,
flumes, culverts, bridges, siphons, retention or detention basins,
treatment, screening, or disinfection facilities, dams, floodwalls,
levees, pumping stations, and other similar facilities, and natural
watercourses.
(k) "Storm water utility fee" or "fee" means a fee provided
for under section 5.
(l) "Storm water utility ordinance" means an ordinance
described in and adopted pursuant to section 3.
Sec. 3. (1) Subject to subsection (2), the governing body of a
local unit of government may adopt a storm water utility ordinance
to 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 storm water runoff.
(b) Enable property owners to fulfill legal obligations
pertaining to increases in the quantity or reduction in the quality
of storm water 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 storm water 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 storm water system and
thereby fulfill their legal obligations to that property owner
described in subdivision (b).
(2) Before adopting a storm water utility ordinance, the
legislative body of a local unit of government shall by resolution
adopt a storm water management plan. The storm water utility
ordinance shall be consistent with the storm water management plan.
Sec. 4. (1) A storm water management plan shall include all of
the following:
(a) The planning period covered by the storm water management
plan.
(b) Geographic limits of the storm water management utility. A
storm water management utility shall encompass property with
similar cost of service characteristics and uses. A storm water
management utility 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 manage storm water within that utility.
(c) The type and level of storm water management services to
be provided to each storm water 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 each storm
water 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 each storm water management utility.
(g) A determination of which properties will be subject to any
storm water utility fee for voluntary use of a storm water 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 storm water utility fees
proportionate to the cost of providing the locally determined level
of service of storm water management.
(i) Provisions to ensure that the cost of those elements of
the storm water management program directly or indirectly related
to the amount of storm water managed will be allocated in
proportion to the amount of storm water runoff from a property
conveyed by the storm water system, employing methods that are
relatively accurate considering available technology.
(j) A description of the components of the storm water system
owned and operated by the local unit of government.
(k) A description of how a storm water utility fee may be
reduced as provided under section 9.
(2) Before preparing a storm water management plan, a local
unit of government shall give notice that it intends to prepare a
storm water 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 or electronic mail to each local unit
located adjacent to or located, in whole or in part, within the
local unit preparing the storm water management plan and to the
county drain commissioner or water resources commissioner. The
notice under this subdivision shall request the recipient's
cooperation and comment in the preparation of the storm water
management plan, including comment on jointly managing storm water.
(3) Before adopting a storm water management plan, a local
unit of government shall hold at least 1 public hearing on the
proposed plan. The local unit shall give notice of the hearing as
provided in subsection (2)(a) to (c). Notice as provided in
subsection (2)(a) shall be posted on the website at least 14 days
before the hearing and maintained on the website until the time of
the hearing. Notice as provided in subsection (2)(b) and (c) shall
be given at least 14 days before the date of the hearing. Notice
under this subsection shall specify the time, place, and purpose of
the hearing and the place where a copy of the proposed storm water
management plan is available for public inspection. If the local
unit has a website that is accessible to the public free of charge,
both of the following apply:
(a) Notice of the hearing as provided in subsection (2)(a)
shall include a copy of the proposed storm water management plan.
(b) Notice of the hearing as provided in subsection (2)(b) and
(c) shall provide the local unit of government's website address.
(4) The local unit of government shall also provide notice of
the hearing under subsection (3) at least 14 days before the
hearing to the local units and drain commissioner described in
subsection (2). The notice under this subsection shall be made by
personal delivery, first-class mail, or electronic mail. However,
the local unit preparing the storm water management plan shall not
give notice by electronic mail unless, in the notice described in
subsection (2), the local unit stated that it intended to give
notice by electronic mail and the recipient did not respond by
objecting to the use of electronic mail. The notice under this
subsection shall specify the time, place, and purpose of the
hearing and include a copy of the proposed storm water management
plan. However, notice by electronic mail may contain a link to a
website on which the proposed storm water management plan is posted
if the website is accessible to the public free of charge.
(5) A storm water management plan may be extended or otherwise
amended by resolution subject to the procedure set forth in
subsections (3) and (4).
Sec. 5. (1) A storm water utility ordinance may provide for a
storm water utility fee on property serviced by a storm water
system to pay the proportionate costs of the storm water management
program. A storm water utility fee shall not include components
other than as described in sections 6 and 7.
(2) A storm water utility ordinance shall describe the method
or methods used to determine any storm water utility fees.
(3) A local unit of government may develop a corresponding
storm water utility fee, calculation method, or both for each storm
water management utility described in the storm water management
plan.
(4) A storm water utility fee shall be proportionate to the
direct and indirect cost to the local unit of government of
providing storm water management to each property in a storm water
management utility that uses the storm water system that is not
financed by revenue received by the local unit of government from
any other source.
(5) A storm water utility ordinance may define rate categories
for classes of properties for which the proportionate cost of
providing service is similar.
Sec. 6. (1) A storm water management utility may assess a 1-
time storm water utility fee for connection to the storm water
system of newly developed or modified property benefited by the
storm water system. The purpose of the fee is to finance the
capital costs to the local unit of government of elements of the
public storm water 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 storm water 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 storm water system to manage the additional storm water
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 storm water 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 storm water management utility may assess a
storm water utility fee for the use of a storm water system.
(2) The method for determining a storm water utility fee under
subsection (1) shall be based on the quantity or quality, or both,
of storm water runoff from each property or category of property.
(3) A storm water utility fee or portion thereof charged to a
property for those elements of the storm water management program
whose cost is attributable to the quantity of storm water runoff
from each individual property or category of properties shall be
calculated, consistent with storm water 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 storm water 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 geographic limits of the storm water
management utility.
(c) Single-family residential unit, based solely on the
impervious area of the property in comparison to the impervious
area of a typical single-family residence within the geographic
limits of the storm water management utility.
(d) 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 storm-water-runoff-
generating characteristics. The storm water utility fee shall be
proportionate to the percentage of the property's impervious area
to its total area.
(e) Equivalent hydraulic area, calculated as follows:
(i) Multiply the impervious area of the property by a storm
water runoff factor.
(ii) Multiply the pervious area of the property by a storm
water runoff factor.
(iii) Add the products under subparagraphs (i) and (ii).
(iv) Multiply the sum under subparagraph (iii) by the total
area of the property to obtain the storm water runoff contribution
in relation to other properties.
(f) Other billing methodologies that can be demonstrated to
provide an equitable distribution of costs in proportion to the
property's use of the storm water system.
(4) A storm water utility fee or portion thereof charged to a
property for those elements of the storm water management program
whose cost is attributable to the quality of storm water managed
and is not covered by other revenue shall be proportionate to the
cost of those elements of the storm water management program.
Sec. 8. (1) A storm water utility ordinance that establishes a
storm water utility fee shall establish a storm water fund. All
storm water 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 storm water management
program costs:
(a) Operation, maintenance, planning, engineering,
acquisition, construction, installation, improvement, or
enlargement of a storm water 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 storm water management program.
(c) Development of a storm water management plan.
(d) Providing user education related to the storm water
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 storm water utility
ordinance that imposes a storm water utility fee shall provide for
the reduction or elimination of the storm water utility fee for a
property if modifications or improvements made to the property
reduce the rate or volume of or eliminate runoff of or pollutant
loadings in excess of natural levels of storm water entering the
storm water system. The property owner has the burden of
demonstrating that the storm water utility fee reduction or
elimination is justified, using methods that are reasonably
accurate considering available technology.
(2) A reduction in the storm water utility fee under
subsection (1) shall be proportionate to the reduction of the cost
of service of the storm water system to the property.
Sec. 10. (1) To ensure that storm water 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 storm water system.
(b) That such utilization imposes a net cost to the storm
water system when offset by any activities or conditions that
reduce the cost of service to the storm water system or are
reasonably related to a benefit to the storm water 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 storm water
utility fee under subsection (1) with the opportunity to
demonstrate that the property either does not utilize the storm
water system or does not utilize the storm water system to the
extent calculated by the local unit of government in establishing
the storm water utility fee and is therefore entitled to the
elimination of or a reduction in the fee. The storm water utility
ordinance shall set forth procedures to implement this subsection.
(3) A storm water utility ordinance that establishes a storm
water utility fee shall provide that, when additional property
begins to utilize the storm water system, a storm water utility
fee, as determined by the local unit of government, accrues.
Sec. 11. A storm water utility ordinance shall designate an
entity within the local unit of government to administer the storm
water management utility and shall establish the administrative
duties. A storm water 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 storm water utility
fee will be billed to the property owner.
(b) Procedures for updating billing data based upon changes in
property boundaries, ownership, and storm water runoff
characteristics, and storm water runoff calculation methods.
(c) Billing and payment procedures of the storm water
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 storm water management utility.
(e) Regulations governing the resolution of storm water
management disputes that arise between property owners within the
storm water management utility.
(f) Procedures for granting and modifying fee reductions
authorized pursuant to section 9.
(g) Procedures for appeals as described in section 13.
(h) Enforcement policies and procedures.
(i) 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 storm water utility ordinance shall establish
remedies for any unpaid storm water utility fees as described in
this section.
(2) A local unit of government may collect a storm water
utility fee by any method authorized by law.
(3) A partial payment of delinquent storm water utility fees
shall be applied to the oldest delinquent fees, and remaining fees
may continue to accrue interest and penalties.
Sec. 13. (1) A storm water 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 adjustment or elimination of any storm water
utility fee. The procedure shall include at least all of the
following:
(a) Any property owner liable for a storm water utility fee
may appeal the determination that the property utilizes the storm
water system or the amount of a storm water 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 storm water runoff generated, the reductions established, the
reductions allocated, or any other matter relating to the
determination of the storm water utility fee.
(b) An appeal under subdivision (a) shall be heard by a storm
water 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 storm water utility fee shall not be
brought more than 1 year after the fee was billed.
(d) To prevail in an appeal of a storm water utility fee, the
appellant shall demonstrate in accordance with the requirements of
the plan that the use of the system by the property is less than
the amount used by the local unit of government in the calculation
of that property's storm water 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 storm water utility fee is a prospective correct
recalculation of the storm water utility fee.
(f) If in an appeal of a storm water 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 reduction or
elimination of fees under the storm water 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 expand existing authority of local
units of government.
Enacting section 1. This act takes effect 90 days after the
date it is enacted into law.