HB-5406, As Passed House, March 22, 2018

SUBSTITUTE FOR

HOUSE BILL NO. 5406

A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

(MCL 324.101 to 324.90106) by adding part 50.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

PART 50 WATER ASSET MANAGEMENT COUNCIL

Sec. 5001. As used in this section:

(a) "Asset management" means an ongoing process of

maintaining, upgrading, and operating physical assets cost-

effectively, based on a continuous physical inventory and condition

assessment and investment to achieve performance goals.

(b) "Asset management plan" means a set of procedures to

manage assets through their life cycles, based on principles of

life cycle costing.

operates drinking water assets, stormwater assets, or wastewater

assets that serve 1,000 or more individuals.

(d) "Central storage data agency" means the entity selected by

the water asset management council where the data collected are

stored and maintained.

(e) "Department" means the department of environmental

quality.

(f) "Drinking water assets" means a system of pipes and

structures through which drinking water is obtained and

distributed, including, but not limited to, wells and well

structures, wellhead protection areas, groundwater protection

areas, intakes and cribs, pumping stations, treatment plants,

storage tanks, pipelines, and appurtenances, or a combination of

these pipes and structures that are used or intended for use for

the purpose of furnishing drinking water for drinking or household

purposes.

(g) "Michigan infrastructure council" means the Michigan

infrastructure council created in the Michigan infrastructure

council act.

(h) "Performance goals" means standards of system performance

that reflect asset management principles for asset preservation and

sustainability, operations, capacity consistent with local needs,

and identified levels of service.

(i) "Region" means the geographic jurisdiction of any of the

following:

(i) A regional planning commission created pursuant to 1945 PA

281, MCL 125.11 to 125.25.

(ii) A regional economic development commission created

pursuant to 1966 PA 46, MCL 125.1231 to 125.1237.

(iii) A metropolitan area council formed pursuant to the

metropolitan councils act, 1989 PA 292, MCL 124.651 to 124.729.

(iv) A metropolitan planning organization established pursuant

to federal law.

(v) An agency directed and funded by section 822f of article

VIII of 2016 PA 268 to engage in joint decision-making practices

related but not limited to community development, economic

development, talent, and infrastructure opportunities.

(j) "Stormwater assets" means green or gray features that are

located within the geographic limits of an asset service area and

are designed or actively managed by a local unit of government for

collecting, storing, treating, conveying, or attenuating

stormwater, such as catch basins, curbs, gutters, ditches and

channels solely conveying stormwater, pipes, conduits, swales,

bioswales, storm drains, gulches, gullies, flumes, culverts,

bridges, siphons, retention, detention, or infiltration areas,

floodwalls, levees, pumping stations, and other similar facilities.

(k) "Transportation asset management council" means the

transportation asset management council created in section 9a of

1951 PA 51, MCL 247.659a.

(l) "Wastewater assets" means a system of pipes and

structures, including pipes, channels, conduits, manholes, pumping

stations, wastewater or wastewater treatment fixed assets,

diversion and regulatory devices, outfall structures, and

appurtenances, used to collect, convey, transport, treat, or

otherwise handle wastewater.

Sec. 5002. (1) The water asset management council is created

within the department.

(2) The water asset management council consists of 9 voting

members appointed by the Michigan infrastructure council. The

members shall represent the nonprofit, public, and private sectors

and academia, including individuals representing interests such as

drinking water, wastewater, and stormwater agencies, this state,

regional government, local units of government, drain

commissioners, and environmental organizations. At least 1 member

must have professional engineering experience and a degree in

engineering. The water asset management council may appoint the

central data storage agency as an ex officio, nonvoting member.

(3) Water asset management council members serve for terms of

3 years. However, of the initial appointments to the water asset

management council, 3 shall serve for 1 year, 3 shall serve for 2

years, and 3 shall serve for 3 years. A vacancy on the water asset

management council shall be filled in the same manner as the

original appointment.

(4) A member of the water asset management council may be

removed for incompetence, dereliction of duty, malfeasance during

his or her tenure in office, or any other cause considered

appropriate by the Michigan infrastructure council.

(5) At the first meeting of the water asset management

council, the water asset management council shall select a

chairperson from among its members.

(6) The water asset management council may appoint

subcommittees whose members serve as needed to provide research on

issues and projects as determined by the water asset management

council.

(7) The department shall provide qualified administrative

staff and qualified technical assistance to the water asset

management council.

Sec. 5003. The water asset management council shall do all of

the following:

(a) Advise the Michigan infrastructure council on a statewide

water asset management strategy and the processes and tools needed

to implement a strategy for all drinking water, wastewater, and

stormwater agencies and asset owners.

(b) Promote and oversee the implementation of the

recommendations from the regional infrastructure asset management

pilot program created under Executive Directive 2017-1 at a state

level related to drinking water, wastewater, and stormwater

infrastructure.

1, 2019 for use under section 5004 by local drinking water,

wastewater, and stormwater agencies and asset owners submitting

asset management plans to the water asset management council for

approval. At a minimum, the template should ensure that local asset

management plans include all of the following components:

(i) An asset inventory that includes the location, material,

size, and condition of the assets in a format that allows for

digital mapping. All quality control standards and protocols shall,

at a minimum, be consistent with existing federal requirements and

regulations and existing government accounting standards.

(ii) A level of service analysis that includes desired levels

of service and performance goals of the assets to help the system

achieve reliability, responsiveness, safety, capacity,

environmental impacts, cost and affordability, and compliance with

law. Levels of service may vary among assets under the local

agency's jurisdiction.

(iii) A risk of failure analysis that identifies the

probability and criticality of failure of the most critical assets

and any contingency plans.

(iv) Anticipated revenues and expenses, including a

description of all revenue sources and anticipated receipts for the

period of the asset management plan, and expected infrastructure

repair and replacement expenditures, including planned improvements

or capital reconstruction.

(v) A performance outcomes analysis that determines how the

investment strategy achieves the desired levels of service and

performance goals. The asset management plan must include steps

necessary to ensure asset conditions meet or achieve stated goals,

including a description and explanation for any gap between

achievable condition and performance through the investment

strategy and desired goals.

(vi) A description of how the agency plans to coordinate with

other asset owners, including neighboring jurisdictions, to

minimize duplication of effort with regard to infrastructure

preservation and maintenance.

(vii) Proof of acceptance, certification, or adoption by the

jurisdiction's governing body.

Sec. 5004. (1) By October 1, 2019, the water asset management

council shall establish a schedule for submission of asset

management plans for drinking water, wastewater, and stormwater

agencies and asset owners that includes all of the following:

(a) Beginning October 1, 2020, each drinking water,

wastewater, and stormwater agency and asset owner shall submit an

asset management plan to the water asset management council.

(b) The asset management plans submitted under subdivision (a)

shall cover and be valid for a minimum of 3 years and shall be

consistent with the template provided by the water asset management

council.

shall be reviewed by the water asset management council within 6

months of receipt. The water asset management council shall compare

submitted asset management plans to the minimum components required

by this act and the template provided by the water asset management

council and shall determine if the asset management plans are in

compliance with those standards. If the water asset management

council determines that an asset management plan does not meet

established standards, the water asset management council shall

seek concurrence from the department. If the department concurs,

the water asset management council shall require that the entity

submitting the asset management plan meet acceptable standards

within 6 months of the submittal.

(d) A drinking water, wastewater, or stormwater agency or

asset owner that is required under this part to have an approved

asset management plan must implement the approved asset management

plan by October 1, 2024.

(2) A drinking water, wastewater, or stormwater agency or

asset owner may seek and use federal grants or loans to achieve the

goals and manage the asset inventory described in its asset

management plan.

Sec. 5005. The water asset management council shall annually

submit to the Michigan infrastructure council a report on asset

condition and investment that includes a summary analysis of the

asset management plans received from drinking water, wastewater,

and stormwater entities. The report shall also include

recommendations on drinking water, wastewater, and stormwater

condition goals and analysis of how the utilities are meeting those

goals. The water infrastructure asset management analyses contained

in the report shall be consistent with the Michigan infrastructure

council's asset management process and shall be reported consistent

with categories established by the Michigan infrastructure council.

Sec. 5006. (1) State funding may be provided to drinking

water, wastewater, and stormwater agencies and asset owners to

implement this part at a cost-share determined by the water asset

management council. Funding necessary for the department to support

the activities described in this section shall be provided by an

annual appropriation.

(2) Each drinking water, wastewater, and stormwater agency and

asset owner shall annually report to the water asset management

council, consistent with current accounting procedures, how its

capital improvement plans are meeting its investment goals, to

ensure consistency with its asset management plans.

(3) The department and each drinking water, wastewater, and

stormwater agency and asset owner shall keep accurate and uniform

records on all work performed and funds expended for the purposes

of this section, according to the procedures developed by the

Michigan infrastructure council.

(4) The water asset management council shall annually prepare

a report on the activities conducted during the preceding year and

the expenditure of funds related to the processes and activities

identified by the water asset management council. The report shall

also include an overview of the activities identified for the

succeeding year. The water asset management council shall submit

this report to the Michigan infrastructure council and the

legislature by May 2 of each year.

Sec. 5007. (1) The water asset management council shall

identify training needs to develop proficiency in using a multi-

asset management system for drinking water, wastewater, and

stormwater agencies and asset owners, and training to identify

asset system conditions based on a statewide asset condition

measure.

(2) The water asset management council shall coordinate and

collaborate with the transportation asset management council on

planning, reporting, and training.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 99th Legislature are

enacted into law:

(a) House Bill No. 5335.