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League hears changes to HB501; bill would tie state water funding to local rate hikes but revenue "stays with the local system"
Summary
League staff briefed members on HB501, which conditions eligibility for state water-infrastructure funds on local rate increases but clarifies any increased revenue would remain in the local system; the substitute removed a universal 2031 mandate and left unresolved concerns about a "reasonable basis" test and conservancy-district treatment.
Justin, the League staff lead, told the Legislative Policy Committee that the latest substitute to HB501 keeps the core idea that entities must raise local water or wastewater rates to qualify for state water-development funds but clarifies who keeps that revenue. "The rates stay with the local system," Justin said, adding that the phrase "local contribution" in the bill has been confusing because it could imply funds flow to a state account when, under the substitute, those revenues would remain at the local level.
The briefing stressed two material changes from earlier drafts. First, the previously included universal mandate requiring every system to raise rates beginning Jan. 1, 2031, was removed; under the substitute, a rate increase is only required if a system wants to…
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