Sponsors and industry push rollback of groundwater discharge fee increases; EGLE warns of staff, service impacts

Representatives sponsoring House Bills 4192 and 4193 told the House Committee on Natural Resources and Tourism that a 2023 change to groundwater discharge permit fees has sharply increased costs for small manufactured-housing communities and campgrounds and that the Legislature should restore parity with small municipalities.

Representative Van Werkom, one of the sponsors of HB4192, said the rule change reclassified many manufactured-housing communities, RV parks and campgrounds into the highest fee category. "As of 2023, EGLE redefined their fee structure to classify manufactured housing communities, RV parks, and campgrounds as group 1 ... doubling their fees and lumping them into the same class as large corporations, cities, and groups with significantly higher volumes of wastewater," Van Werkom said. Representative Snyder, the co-sponsor for HB4193, said the bills would let communities with fewer than 1,000 sites or residents be treated like municipalities of the same size and pay the lower group‑2 annual fee of $1,800 instead of the group‑1 fee of $7,500.

Why it matters: Sponsors and industry witnesses told the committee that 33 manufactured-housing communities and five campgrounds (38 total facilities, by one account) now pay the higher group‑1 rate and that the spike in fees falls disproportionately on small, privately owned communities. John Lindley, president and CEO of the Michigan Manufactured Housing Association and the Michigan Association of RVs and Campgrounds, said he was "surprised two years ago in January when I received an invoice for our annual discharge permit that was more than double what I expected." Phil Klein, owner of Klein's Resort in Three Rivers, described his property and said the resort operates for about 400 residents and 85 seasonal campsites and was classified in group 1 because of an older lagoon system.

EGLE opposition and fiscal/operational impacts: Sydney Hart, legislative liaison for the Department of Environment, Great Lakes and Energy, and Phil Arderoff, assistant division director in EGLE's Water Resources Division, testified in opposition. Hart said groundwater discharge permits "are required under Michigan law to ensure that our wastewater is treated and discharged in a manner that's protective of public health and environment." She told the committee the October 2023 fee changes were the sole funding source for the groundwater discharge program and estimated the two bills would reduce department revenue by roughly $188,000 (HB4192) and $28,000 (HB4193), a combined loss of about $216,000, which EGLE said equates to roughly 1 to 2 staff positions. "Any revenue loss diminishes EGLE's ability to uphold environmental protections and public health standards," Hart said.

Committee questions and areas of disagreement: Members pressed EGLE on the 2023 process, stakeholder outreach and what the fees fund. EGLE said the group categories date to 2004 and that the October 2023 fee changes were adopted as part of a budget implementation measure; the department acknowledged limited stakeholder engagement before the changes and offered to convene stakeholders going forward to seek a revenue-neutral solution. Committee members repeatedly asked EGLE about vacancy rates, backlog, permitting timelines and whether reduced staff would slow permits and inspections; EGLE answered that the program has vacancies and that losing positions would reduce the division's ability to review permits and perform inspections in a timely manner.

Points of quantification and competing estimates: Sponsors and industry witnesses said 38 facilities pay the higher group‑1 rate and that those facilities contributed a disproportionate share of the recent increase (figures cited included roughly $200,000 of the approximately $680,000 in increased fee revenue). EGLE provided a slightly different breakdown (33 mobile home communities and five campgrounds) and tied the higher fee revenues to four specific staff positions: two in the permits section, one in enforcement and one in a district office. The committee and witnesses discussed historical rates: group‑1 was described as rising from about $3,650 to $7,500; group‑2 rose from $1,500 to $1,800; smaller groups saw 20% increases.

Next steps: EGLE told the committee it will convene stakeholders within about a month to discuss alternatives that would leave the department "whole" (revenue-neutral) while addressing the sponsors' concerns; no vote was taken on HB4192 or HB4193 during this hearing. Committee members requested additional data, including counts of affected facilities, comparisons with neighboring states, and precise vacancy numbers in EGLE's water resources program. Sponsors and industry groups said they were open to alternative fee mechanisms but urged relief for affected small communities.

Ending: The committee heard both technical and lived-experience testimony and left proponents and the department with follow-up work: EGLE to provide further data and convene stakeholders, and the sponsors to consider alternatives that preserve program funding while addressing equity concerns for small private communities.