Michigan House Bill HB4821

Michigan 2025-2026 Regular Session

• Introduced: 8/26/25
• Refer: 8/26/25

Caption

Local government: water and sewer; regulation of certain drainage fees; provide for. Amends 1968 PA 2 (MCL 141.421 - 141.440a) by adding sec. 13b.

Impact

The proposed bill will fundamentally change how municipalities handle drainage fees, mandating a stricter separation between these revenues and the general fund. The intent is to prevent the potential misuse of these funds and ensure that expenditures align explicitly with the stormwater services for which the fees are intended. This could lead to improved infrastructure management while fostering increased public trust in local government financial practices. Furthermore, municipalities must provide detailed annual reporting concerning the collected fees and their use, which aligns with broader goals of governmental transparency.

Summary

House Bill 4821 aims to amend the Uniform Budgeting and Accounting Act in Michigan by introducing regulations regarding drainage fees imposed by municipalities. Specifically, the bill dictates that municipalities generating over $10 million from drainage fees or exceeding 5% of their general fund budget must manage these funds in a separate, designated account. This recent legislation seeks to ensure that revenues gathered from drainage fees are utilized solely for stormwater management and related services, thereby enhancing financial accountability and transparency in municipal budgeting procedures.

Contention

Despite the potential benefits, there are notable points of contention regarding HB 4821. Some critics worry that the new regulations could impose undue burdens on smaller municipalities, which may struggle with the administrative requirements of maintaining separate accounts and conducting annual audits. Additionally, concerns have been raised about the implications of civil penalties for non-compliance, which could heavily impact smaller municipalities financially. There are fears that such regulatory measures could inadvertently lead to discontinuation of drainage fee assessments, ultimately compromising stormwater management efforts in those areas.