Focus on New Laws: Drinking Water Service Connection Fee Increase

September 16, 2019

City water utilities are required to collect the fee from customers and send it to the state to finance drinking water testing and other support services.
(Published Sep 16, 2019)

The 2019 budget bill for the Minnesota Department of Health (MDH) included an increase in the drinking water service connection fee from $6.36 to $9.72 annually per connection.

City water utilities collect this fee from their customers, and then send the money to the state to finance water testing, technical support, and regulatory assistance provided by MDH. It was last increased in 2005.

The new language is found in the health and human service omnibus budget bill (2019 First Special Session, Chapter 9, Article 11, Section 21). It amends Minnesota Statutes, section 144.3831, which describes the fee collection and submission requirements that have been in place since 1992.

League supports the change

The League supported the increase in the fee, as the services provided through it are highly valued by city water utilities, especially by smaller cities and rural water systems.

The increase also ends the use of state revolving loan funds to finance the drinking water services done by MDH. This means more money is available for state low-interest loans for city water infrastructure.

Delayed effective date

Although budget items normally go into effect on July 1 following legislative adoption, the effective date of the fee increase was delayed until Jan. 1 to allow utilities time to change their billing systems to reflect the new amount.

Service connection fee collections and submissions, whether collected monthly, quarterly, or annually, should reflect the new rate beginning on that date.

—Learn more about the water service connection fee from the MDH website