WATER AFFORDABILITY PROGRAM & FUND S.B. 549-554:
SUMMARY OF INTRODUCED BILL
IN COMMITTEE
Senate Bills 549 through 554 (as introduced 10-3-23)
Sponsor: Senator Stephanie Chang (S.B. 549 & 551)
Senator Rosemary Bayer (S.B. 550)
Senator Jeff Irwin (S.B. 552)
Senator Paul Wojno (S.B. 553)
Senator Mary Cavanagh (S.B. 554)
Committee: Housing and Human Services
Date Completed: 10-31-23
INTRODUCTION
The bills would create a Low-Income Water Residential Affordability Program (Program) to
ensure that a customer who had a household income of up to 200% of the Federal Poverty
Guidelines or who was eligible for certain assistance programs did not pay more than 3% of
the customer's household income on a water bill. The bills would create the Low-Income Water
Residential Affordability Fund (Fund) and require customers who received water or sewage to
pay a monthly $2 fee on each retail water meter to be deposited into the Fund for the
Program's implementation; the Department of Treasury (DoT) could adjust the fee annually
after three years. In addition, a water provider could implement its own Program that
corresponded with the Department of Health and Human Services' (DHHS) Program. The bills
would require providers and the Water Affordability Task Force to submit certain reports to
the DHHS and the Legislature concerning funding factors and Program information.
The bills would prohibit a provider from shutting off water services to a critical care customer
and a customer enrolled in a Program within 120 days of delinquency and only after specified
requirements were met. Customers that were unable to comply with a Program's
requirements would have to undergo triage to prevent disenrollment and service shut off. The
bills also would prohibit a person from tampering with a provider's service lines to restore
water after a shut off because of an inability to pay and prescribe a civil fine, misdemeanor,
or felony depending on the amount of damage arising out of a violation.
BRIEF FISCAL IMPACT
The bills would establish the structure for a Program in Michigan, which would aim to support
water providers in bridging the gap between customers' actual water bills and discounted bills
provided through residential water affordability programs. The funding factor would start at
$2 per month per retail water meter and could increase annually by up to 10% to a maximum
of $3. The Fund, estimated to reach $90.0 million in the first 18 months, could be used for
administrative costs, bill discounts, arrearage payments, and water loss mitigation programs.
The bills also could have fiscal impacts for the DoT, local courts, and water providers, as well
as criminal penalties that could affect law enforcement and correctional facilities.
Proposed MCL 400.14n et al. (S.B. 549) Legislative Analyst: Eleni Lionas
Proposed MCL 400.14t (S.B. 550) Fiscal Analyst: Bobby Canell; Joe Carrasco Jr.
MCL 750.282 & 750.383a (S.B. 552) John P. Maxwell; Elizbeth Raczkowski
777.16o & 777.16s (S.B. 553) Cory Savino, PhD; Michael Siracuse
Proposed MCL 554.601b (S.B. 554)
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CONTENT
Senate Bill 549 would amend the Social Welfare Act to do the following:
-- Create the Program within the DHHS to ensure an eligible customer did not pay
more than 3% of the customers household income on a water bill, subject to
certain Program funding.
-- Require the Program to apply immediately after its effective date to providers
with 500 or more retail service connections and apply to all water providers in
the State after 18 months.
-- Allow a water provider to create an its own Program and specify that its own
program would have to be comparable to the DHHS' Program.
-- Require the DHHS and the DoT to project annually funding needs for the Program
and, if funding were projected to be insufficient, identify alternative funding.
-- Create a Program Task Force and prescribe the DHHS-appointed members.
-- Require that the DHHS and DoT distribute money from the Fund created under
Senate Bill 550 to make up the difference between an eligible customer's water
bill and the total discounted water bill.
-- Require providers to provide notice of its own Program or the DHHS' program
and require the DHHS to notify all individuals who received benefit program
services of a Program by January 1, 2025.
-- Require the DHHS to develop a nonaffordabilty application form that would
trigger an eligibility review for the Program.
-- Establish payment tiers based on Federal Poverty Guidelines with corresponding
percentages of household income caps.
-- Create an appeal and complaint process for a customer to challenge the eligibility
decisions or make a complaint about the Program.
-- Require the DHHS or a program administrator to assess whether an eligible
customer needed a household plumbing repair and pay for up to $2,500 per
household for a repair.
-- Allow a customer who was enrolled in the Program to receive full forgiveness for
an overdue balance if the customer's balance were no more than $1,500 or allow
an enrolled customer with over $1,500 of overdue balance to be fully forgiven if
the customer were enrolled in the Program and made timely payments for 24
months.
Senate Bill 550 would amend the Social Welfare Act to do the following:
-- Create the Fund within the State Treasury and prescribe how the money in the
Fund could be spent.
-- Require 3% of the Fund to be spent for administrative costs and prescribe how
the remaining money would be spent to implement the Program.
-- Create a $2 mandatory fee (funding factor) on each retail water meter payable
by every customer receiving water or sewerage service from a provider.
-- After three years, allow the DoT to adjust the funding factor by October 1 to
apply January 1 of the succeeding year.
-- Require providers to annually provide the Task Force with a report concerning
the Program and funding factor.
-- Require the Task Force to annually provide the Legislature with a report
concerning the Fund and post the report on the DHHS' website.
-- Allow the Attorney General (AG) to file a civil action against a provider that failed
to include the funding factor in customer's bills.
-- Allow customers or entities to donate to the Fund and designate any customer
or entity that contributed more than $5,000 a "water affordability champion.”
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Senate Bill 551 would enact the "Water Shutoff Protection Act" to do the following:
-- Prohibit a provider from shutting off residential water service while a customer
was part of a Program described in Senate Bill 549.
-- Prohibit a provider from shutting off residential water for nonpayment within
120 days of the payment's due date.
-- Prescribe the requirements for a water service provider to temporarily shut off
a residential water service.
-- Require a provider to contact a residential customer at least four times to notify
the customer of a delinquent account and require the provider to keep records
of such notices before shutting off service.
-- Prescribe the requirements of delinquency notices.
-- Allow a customer that had applied for a Program to pay $10 a month to a provider
to delay a shut off.
-- Specify that a shut off could only occur between the hours of 8 AM and 3 PM.
-- Prohibit a shut off from occurring on a day that the provider's restoration
services were not available.
-- Require a provider to provide restorative service upon payment or payment
arrangements, including a payment plan or enrollment in a Program.
-- Allow a provider to assess a maximum restoration fee of $150 and prohibit the
provider from issuing a shutoff fee.
-- Require a customer who failed to comply with the Program to participate in
triage to restore Program compliance and prevent disenrollment.
-- Allow a Program administrator to create a renewal agreement for the triage
process.
-- Allow a provider to proceed with a shutoff process if a Program customer failed
to comply with the triage.
-- Prohibit a provider from shutting off services if the Fund created by Senate Bill
550 were insufficient.
-- Allow the AG or a lawful occupant to file a civil action for damages, declaratory
relief, or temporary or permanent injunctive relief for a violation of the Act.
-- Require providers to take reasonable steps to provide equal language access to
water services and vital information to residential customers.
Senate Bill 552 would amend the Michigan Penal Code to prescribe penalties and
fines to an individual who restored water at the person's residence that was shutoff
due to an inability to pay.
Senate Bill 553 would add sentencing guidelines to the Code of Criminal Procedure
for felonies proposed by Senate Bill 552.
Senate Bill 554 would amend landlord-tenant Act to do the following:
-- Allow a tenant in a metered or sub-metered rental premises to request a copy
of water or sewer bills or a transfer of the bills to the tenant's name.
-- Require a landlord to comply with either request.
-- Prohibit a landlord from discriminating or retaliating against a tenant that made
such a request.
-- Require all rental agreements entered, renewed, or negotiated after the bill's
effective date to include information on the tenant's rights to request and
receive such information.
Senate Bills 549, 550, and 551 are tie-barred. Senate Bill 553 is tie-barred to Senate Bill 552.
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Senate Bill 549 would take effect 180 days after its enactment. Senate Bill 551 would take
effect one year after its enactment. Senate Bills 552 and 553 would take effect 90 days after
its enactment.
All the bills but Senate Bill 553 are described in further detail below.
Senate Bill 549
Low-Income Water Residential Affordability Program
The bill would create Program within the DHHS to address reduction or retiring of overdue
water bill balances, and to ensure that an eligible customer's monthly water bill, including
discounts, was based on the customer's household income. Subject to available funding in
the Fund proposed under Senate Bill 550, the Program would have to ensure that the
customer did not pay more than 3% of the household income on a water bill.
"Provider" would mean a community water supply that is publicly or privately owned and
provides retail water service in the State.
"Eligible customer" would mean a provider's customer whose household income does not
exceed 200% of the Federal poverty guidelines or who meets any of the following
requirements:
-- Has received assistance from a State Emergency Relief Program within the past year.
-- Receives food assistance under the Federal Supplemental Nutrition Assistance Program
(SNAP) administered by State.
-- Receives medical assistance administered under the Act.
-- Receives assistance under the Michigan Energy Assistance Program.
-- Receives assistance under the Special Supplemental Nutrition Program for Women,
Infants, And Children (WIC).
-- Receives supplemental security income.
-- Receives assistance under the Weatherization Assistance Program.
"Water bill" would mean a request from a provider to a retail water customer for payment for
water service. The term would include a request for payment of sewer, stormwater, or other
related services if the provider charges for those services. "Retail water customer" would
mean a residential or nonresidential customer receiving a water bill for water service.
"Residential customer" would mean an individual who is either receiving or is eligible to
receive water service at that individual's primary residence.
The DHHS would have to develop and, with the assistance of third-party organizations,
administer the Program to customers of a water provider that chose to use the DHHS'
Program. On an annual basis, the DHHS and the DoT would have to prepare projections to
determine the estimated funding that would be required to offer applicable Program benefits
to all enrolled and eligible customers and projected eligible applicants who could enroll for the
coming fiscal year. If the projections reflected that the required funding would be insufficient,
the DHHS, the DoT, and the Low-income Water Affordability Program Task Force (Task Force)
would have to identify alternative funding sources or adjust Program benefits in a manner
that could be sustained through available funding. The DHHS, in consultation with the Task
Force and the DoT, would have final decision-making authority to ensure Program benefits
did not exceed revenue collected. The DHHS, DoT, and the Task Force would have to prioritize
Program benefits designed to provide eligible applicants with household income-based water
bills over other program benefits, based on available funding. Reducing the Program benefits
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corresponding with the tier with the lowest household income could only occur if all other
alternatives had been exhausted.
The Program would have to begin 18 months after collection for the Fund began and would
immediately apply to providers with 500 or more retail water service connections. The
Program would apply to all water providers in the State 18 months after the Program's
initiation.
Low-income Water Affordability Program Task Force
Within 30 days after the bill's effective date, the DHHS would have to create the Task Force.
The Director of the DHHS would have to appoint at least the following members of the Task
Force:
-- Representatives of a water provider with a population served of less than 3,300.
-- A water provider with a population served of between 3,300 and 10,000.
-- A water provider with a population served of over 10,000.
-- Representatives of water and sewerage customer advocacy groups
-- Representatives of community action agencies.
-- Representatives of municipal governments.
-- Environmental groups.
The Task Force would have to do all the following:
-- Discuss, and advise the DHHS on, best practices for administering the Program.
-- Within nine months of the bill's effective date, develop further guidance for the Program.
-- Work with the DHHS to develop educational outreach materials about the Program.
-- Seek additional funding sources for the Program.
-- Explore ways to expand the Program to include more types of water providers.
Under the bill, the DHHS would have to implement the plan on further guidance within 18
months of the bill's effective date.
The DHHS would have to collaborate with the DoT to distribute money from the Fund to the
water providers to make up the difference between the total of customers' actual water,
sewerage, and stormwater bills and the total discounted water and sewerage bills provided
through the DHHS' or a provider's Program. The DHHS would also have to collaborate with
the DoT to distribute funds to assist with plumbing repairs and other necessary repairs and
the DoT would have to set aside a specific funding amount for plumbing repairs.
The DHHS would have to collaborate with the DoT to distribute funds to third-party
organizations that the DHHS collaborated with to administer the Program to cover the
administrative costs.
Program Notice
Each provider would have to give notice to its customers regarding the availability of either
the DHHS' Program or the provider's own Program, if it had one, and the process to apply for
that Program. The notice described above would have to be given to each customer in writing
on the customer's water bill and by posting on the provider's website if the provider
maintained a website.
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Beginning January 1, 2025, the DHHS would have to inform all individuals receiving benefit
program services from the DHHS regarding the availability of the Program and the process to
apply for that Program.
Nonaffordability Requirements
"Nonaffordability application" would mean a form that the DHHS must develop to trigger an
income eligibility review for the Program. The nonaffordability application would have to
include the option of authorization for release of the customer's information to the provider
and the option for indicating consent to receive telephonic communications about the
Program.
Within 30 days after the DHHS or program administrator received a signed nonaffordability
application, the program administrator would have to complete an income eligibility review to
determine if the individual were eligible. The DHHS or the program administrator would have
to ensure that the application was as simple and accessible as possible. The application would
have to include an authorization for release of the customer's information to the provider and
an authorization for the program administrator to call the individual on the telephone or send
a text message about the affordability program. The DHHS or program administrator would
determine eligibility. The DHHS or program administrator would have to notify immediately
the provider it had begun an eligibility review and that the provider could not pursue shutoff
during the review. The DHHS or program administrator would have to send notification to the
applicant and the provider about the results of the eligibility review promptly once that review
was completed.
"Program administrator" would mean the DHHS, provider, or third-party organization that
administers a Program.
In addition to any other verification of income accepted by the Program administrator, the
Program administrator could accept a Federal income tax return as documentation of income.
When applicable, the Program administrator would have to use publicly available information
regarding standard benefit amounts for supplemental s