HB 3320 (2026) – Missouri
Summary: The Drinking Water Transparency and Accountability Act establishing a statewide community water system grading program overseen by the Department of Natural Resources (DNR), plus penalties, oversight, and potential state intervention for lower-graded systems.
1) Purpose and intent
- Create: A statewide accountability framework for community water systems (CWS) focused on drinking water infrastructure sustainability, quality, and performance.
- Public transparency: Require annual posting of each system’s grade and provide information to help systems and citizens understand expectations, outcomes, and consequences of failure.
- Encourage improvements: Authorize enforcement and corrective actions to bring failing systems into compliance.
2) Key provisions and changes
Definitions and scope
- New term: “Drinking Water Transparency and Accountability Act” under Section 640.138.
- “Community water system” defined to include various system types (water corporations, public districts, municipal systems, nonprofit water companies, and joint municipal commissions) serving at least 15 service connections and regularly serving at least 25 residents per year.
Standards and grading
- DNR must establish a statewide system of accountability and a letter-grade schedule (A, B, C, D, F) based on:
- Violations of federal drinking water laws
- Violations of Missouri state drinking water laws
- Water system financial sustainability
- Operation and maintenance (O&M) performance history
- Infrastructure violations (including damage, failure, or tampering)
- Rules will include a tiered point-deduction system to determine grades. For small systems (0–50k customers): 1 violation = 1 point; for large systems (>50k customers): 5 violations = 1 point.
- Grades posted publicly on DNR website annually. Systems can review/appeal scores before publication.
- CCRs must include the system’s grade and clarify it reflects this state scoring, not the federal CCR.
Rules and implementation details
- DNR to promulgate implementing rules, including:
- A notification process for appeals
- Provisions to suspend publication for up to 12 months after an ownership change
- Language to be used in CCRs following ownership changes (for 36 months)
- Prohibitions: Points deductions cannot be made for water outages or boil advisories.
Data and reporting
- DNR to develop/enhance a data system to track:
- Violations, rate studies, audits, appeals, receivership status, and funding data (including non-DNR funding)
- Scores, grades, and related enforcement actions
- DNR may hire additional staff (see FTEs below) to manage data collection, grading, and enforcement actions.
Penalties and remedies for D and F grades
- Systems with grades D or F are deemed operationally unacceptable and may face:
- Administrative penalties under 640.131
- Department-approved auditors to oversee all federal/state funding and oversee expenditures
- Notices to prohibit incurring new debt not related to improvement efforts
- However, D/F grades do not automatically bar funding for improvements; funding decisions may still occur based on other criteria.
Authority to intervene and receivership
- If a CWS is graded D or F, the department may petition for:
- Appointment of a receiver or fiscal administrator
- Mandatory safe water purchase from another system, as determined by the department
- Local authorities must comply with approved improvement plans developed by the receiver, with authority granted to implement the plan.
Timing and data publication
- First letter grades publicly posted by January 1, 2028.
- Federal funds-driven infrastructure upgrades require a detailed plan describing how funds will be used (reported to the department).
Interplay with existing law
- The act is not federally mandated; it adds a parallel state grading framework and enforcement mechanisms.
- The rules and penalties operate alongside existing SDWA requirements and CCR obligations.
3) Who is affected
- Community water systems (1,550+ estimated per DNR analysis; includes many small to mid-sized utilities)
- Missouri Department of Natural Resources (DNR): new program development, data system upgrades, rulemaking, annual grading, and enforcement actions
- Local governing authorities operating CWS: potential restrictions on expenditures, debt, or forced change in ownership or management
- Utilities receiving federal funding for upgrades: must provide detailed use plans
- Stakeholders and industries: small businesses supplying engineering, auditing, and compliance services; local school districts could be affected by penalties and penalties’ fiscal impacts
4) Procedural and timeline aspects
- Rulemaking: DNR to promulgate implementing rules (with appeal and suspension procedures)
- Publication schedule: first grades posted by January 1, 2028; annual updates thereafter
- Ownership changes: possible 12-month publication suspension window; 36-month compliance language on CCRs after ownership changes
- Fiscal notes: DNR would require additional personnel (5 FTE in year 1; 5 FTE ongoing) and IT/database enhancements; potential unknown costs/unknown revenue impacts to state funds and loan programs
- Legal/oversight: penalties possible; receivership and forced purchases if grades persistently low
5) Fiscal and administrative impact (highlights)
- State government: net general revenue impact of about $515k in FY2027 rising to $565k in FY2029 for five new FTE and related costs; potential additional staff to manage enforcement and data
- Other state funds: potential unknown impacts to Water Pollution Permit Subaccount (1568) and Water and Wastewater Loan Revolving Fund (1602) depending on withheld payments or debt defaults
- Local governments/school districts: potential penalties and financial effects if D/F grades trigger enforcement; fines could flow to school districts per constitutional provisions
- Small businesses: possible increase in regulatory burden and costs for compliance consultants, auditors, and system operators
Note: The fiscal note indicates significant implementation costs and potential unknown revenue effects, with the overall policy raising questions about local control and the appropriateness of a state-imposed grading scheme.
Overall assessment
- HB 3320 would create a broad, state-directed A–F grading system for community water systems, with public posting, appeals, and potential state intervention for low grades. It significantly expands data collection, reporting, and enforcement activities at DNR and could impact local governance and financing. Supporters argue it enhances transparency and accountability; opponents contend it duplicates federal standards, increases costs, and reduces local control.
