HB-5406, As Passed Senate, June 12, 2018

SENATE 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 an asset that meets either of the following requirements:

(i) Serves 1,000 or more individuals and is required by a

national pollutant discharge elimination system permit to have an

asset management plan.

(ii) Serves 1,000 or more individuals and is required by the

safe drinking water act, 1976 PA 399, MCL 324.1001 to 324.1003, to

have an asset management plan.

(d) "Department" means the department of environmental

quality.

(e) "Drinking water assets" means a system, owned by an asset

owner, 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.

(f) "Michigan infrastructure council" means the Michigan

infrastructure council created in the Michigan infrastructure

council act.

(g) "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.

(h) "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.

(i) "Stormwater assets" means green or gray features, owned by

an asset owner, that are located within the geographic limits of an

asset service area and are designed or actively managed by an asset

owner 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.

(j) "Transportation asset management council" means the

transportation asset management council created in section 9a of

1951 PA 51, MCL 247.659a.

(k) "Wastewater assets" means a system, owned by an asset

owner, 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 Michigan infrastructure council.

(2) Subject to subsection (3), the water asset management

council consists of the following members:

(a) Nine voting members appointed by the Michigan

infrastructure council as follows:

(i) One member from the department.

(ii) One member from the Michigan Municipal League.

(iii) One member from the Michigan Townships Association.

(iv) One member from the Michigan Association of Counties.

(v) One member from the Michigan Association of Drain

Commissioners.

(vi) One member representing a regional drinking water,

wastewater, or stormwater authority.

(vii) One member representing a water infrastructure

association.

(viii) One member with drinking water, wastewater, or

stormwater asset management experience.

(ix) One member representing a region.

(b) One ex officio, nonvoting member who has responsibilities

related to the department of technology, management, and budget's

role as the central data storage agency under section 5008,

appointed by the director of the department of technology,

management, and budget.

(3) The Michigan Municipal League, Michigan Townships

Association, Michigan Association of Counties, and Michigan

Association of Drain Commissioners shall each submit a list of 2

nominees to the Michigan infrastructure council from which the

respective appointments under subsection (2) shall be made. Names

shall be submitted within 60 days after the effective date of the

amendatory act that added this section. The Michigan infrastructure

council shall make the appointments within 30 days after the

receipt of the lists.

(4) Voting members of the water asset management council 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.

(5) 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.

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

council, the water asset management council shall select a

chairperson from among its members.

(7) The water asset management council may appoint advisory

committees whose members shall serve as needed to provide research

on issues and projects as determined by the water asset management

council. An advisory committee member who is not a member of the

water asset management council does not have voting rights on the

advisory committee. A recommendation from the advisory committee

appointed under this subsection is advisory only and is not

binding.

(8) 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 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.

contain requirements for information to be included in an asset

management plan submitted under section 5004. The template or

templates shall allow for local asset management plan components,

including, but not limited to, all of the following, but shall not

require components beyond those required in an asset management

plan associated with a permit:

(i) An asset inventory. This inventory may include 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. This analysis may include

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 asset owner's jurisdiction.

(iii) A risk of failure analysis. This analysis may identify

the probability and criticality of failure of the most critical

assets and any contingency plans.

(iv) Anticipated revenues and expenses. This component may

include 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. This analysis may

determine how the investment strategy achieves the desired levels

of service and performance goals. The asset management plan may

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 any plans of the asset owner to

coordinate with other entities, such as neighboring jurisdictions

and utilities, 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 that ensures that 1/3 of asset owners submit an

asset management plan each year. The asset management plans are

subject to all of the following:

(a) The asset management plans 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.

(b) The asset management plans 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 notify the entity submitting the asset management

plan of the deficiency in meeting the standards and shall require

the entity to revise the asset management plan to meet the

standards and resubmit the plan within 6 months of receiving the

notice.

approved asset management plan must implement the approved asset

management plan by October 1, 2024.

(2) An 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 asset owners

to implement this part as 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 asset owner shall annually report to the water asset

management council, consistent with current accounting procedures,

how its capital improvement program for assets included in any

asset management plans required under section 5004 are meeting its

investment goals in a form established by the water asset

management council.

(3) The department and each 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 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. The water asset management

council shall collaborate with the transportation asset management

council created in section 9a of 1951 PA 51, MCL 247.659a, on

potential coordination in the submission of asset management plans.

Sec. 5008. The department of technology, management, and

budget shall serve as the central data storage agency for purposes

of collecting, storing, and maintaining data under this part.

Enacting section 1. This amendatory act does not take effect

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