Older runoff systems would need voter-approved utilities or city funding

Cities, towns, and public utility boards would have to place covered runoff systems in a drainage utility or operate them with city or town funds. These rules cover runoff systems that cities or towns established, bought, built, expanded, maintained, or regulated before April 1, 2026, and systems handled by public utility boards before that date. Moving a system into a drainage utility, a local organization that manages runoff, would require approval from voters in its service area. The city-funded option would prohibit user fees unless voters approved them. The local improvement and public utility board sections also call for dissolution if neither option is followed, but do not clearly identify what must dissolve. The deadline to follow either operating option would be July 1, 2027. The dissolution clauses also use that date.

Cities and towns would stop covered runoff fees and refund earlier payments when the refund conditions apply. The refund rule covers fees collected under the specified city and town authority for diverting or managing runoff. Under the city-funded option, a majority voting on the question could approve user fees. Further votes would be required at municipal elections four years after the first approval. Cities would owe refunds if their systems had not entered a drainage utility or followed the city-funded option by April 1, 2026. Cities could keep collected fees pledged to repay revenue bonds issued before April 1, 2026. These restrictions would not prevent lawful fees for other services, including trash, water, and sewer service. Required refunds of fees collected before April 1, 2026, would be due by September 1, 2027.

The state would set aside $5,000 from its general fund to help cities and towns move runoff systems into drainage utilities. Cities and towns seeking to move systems established under the listed municipal laws before the bill's effective date into drainage utilities would qualify. The Office of State Lands and Investments would divide the money proportionally among eligible cities and towns. The money could be used only for this transition. Unspent and uncommitted money would return as required by law on June 30, 2028. The funding period would begin when the bill became law and end June 30, 2028.