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HB 5089

Human services: services or financial assistance; water rate affordability fund; provide for. Amends 1939 PA 280 (MCL 400.1 - 400.119b) by adding sec. 14t.

2023-2024 Regular Session Introduced by Abraham Aiyash and 11 co-sponsors

Creates the Low-Income Water Residential Affordability Fund and a $2/month per meter fee to fund income-based discounts, arrearage relief, and water-loss programs in Michigan.

placed on third reading
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Bill Summary · HB 5089

Summary — HB 5089 (Substitute H-3)

Status: Placed on third reading (committee substitute H‑3 adopted). Introduced March 13, 2025. Sponsor: Rep. Sarah Lightner (primary in later version); original sponsor Rep. Donavan McKinney. Companion/related bills (affordability program and shutoff protections) must be enacted for this section to take effect.

Purpose

Creates the Low‑Income Water Residential Affordability Fund to collect dedicated, statewide revenues to support a low‑income water affordability program. The fund finances income‑based bill discounts/caps/rates, arrearage relief, water‑loss mitigation, and related program and provider administrative costs.

Key provisions

  • Fund creation and administration

    • Establishes the Low‑Income Water Residential Affordability Fund in the state treasury.
    • State Treasurer may accept money/assets, invest the fund and credit earnings; balances do not lapse to the general fund.
    • Department of Treasury is designated administrator for collection and auditing; Department of Health and Human Services (DHHS) is identified elsewhere as the program “department.”

  • Eligible uses (expenditures only by appropriation)

    • Administration (H‑3: 5% to the department for program admin costs; $425,000 to Treasury).
    • Remainder disbursed to providers and program administrators for:
    • Provider/program administrative costs (up to 15%).
    • Income‑based bill discounts, caps, or rates.
    • Arrearage payments.
    • Water‑loss mitigation programs (limit in H‑3: up to $15,000,000 for these programs).

  • Revenue mechanism — affordability funding factor (mandatory fee)

    • Default fee: $2.00 per month per retail water‑metered or flat‑rate account (or equivalent per billing cycle).
    • After 3 years, Treasury may adjust the funding factor annually (on recommendation of the task force), but it may not exceed $3.00/month or cause collections to increase more than 10% over the previous year, whichever is less.
    • Providers must show the fee on retail bills (line item or incorporated in rates) and remit collections to the Treasurer at a frequency matching their billing cycle but no later than 30 days after the cycle end.
    • Providers with pre‑existing water assistance programs may use specified reduction/credit options on the per‑meter fee.

  • Reporting, regional distribution, and oversight

    • Providers must annually report (by April 1 after first full year of collection) meter counts, amounts collected, uncollected amounts, remittances, and admin costs.
    • Money collected is to be disbursed within the same Department of Treasury business service center region.
    • A task force must publish an annual report by July 1 to the Legislature and post it online (including collections, distributions and recommendations).
    • Attorney General may enforce collection/remittance and billing disclosure requirements via civil action; providers not liable for uncollected fee amounts beyond normal business collection practices.
    • Creates donation mechanism and recognizes contributions over $5,000 with a “water affordability champion” designation.
    • Section explicitly does not confer regulatory authority over public water utilities to the Michigan Public Service Commission.

  • Conditions for effectiveness

    • The amendatory section does not take effect unless companion bills establishing the affordability program and shutoff protections are enacted (cross‑references to HB 5088 and HB 5090 / corresponding Senate bills).

Who is affected

  • All retail water customers and providers in Michigan (fee applies per retail water meter or equivalent). The fee funds programs that principally benefit low‑income residential customers as defined in companion legislation.
  • Water providers are responsible for collecting, remitting, reporting, and implementing program administration or coordinating with program administrators.

Fiscal/operational impact

  • Direct, dedicated revenue stream (estimated at $2/month per meter initially) to fund affordability measures, provider reimbursements, arrearage relief, and water‑loss mitigation.
  • Administrative set‑asides and statutory caps on adjustments (max $3/month or 10% collection growth) limit revenue volatility.
  • No direct state general fund lapse; fund balances carry forward.
  • Costs of marker erection in related memorial highway versions not applicable here; fiscal impacts center on administration and flows to providers and program administrators.

Timing and procedural notes

  • Treasury may adjust the fee each October 1 (effective January 1 following year).
  • Providers’ annual reporting due April 1 after the first full year of collection; task force report due July 1 annually.
  • Enactment tied to passage of companion bills that establish the underlying program and protections (so implementation depends on legislative package passage).

Compiled from official sources — confirm details with the bill’s official record.

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