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SECOND REGULAR SESSION
HOUSE BILL NO. 3320
103RD GENERAL ASSEMBL Y
INTRODUCED BY REPRESENT A TIVE CASTEEL.
7229H.01I JOSEPH ENGLER, Chief Clerk
AN ACT
T o amend chapter 640, RSMo, by adding thereto one new section relating to the regulation of
community water systems.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Chapter 640, RSMo, is amended by adding thereto one new section, to be
2 known as section 640.138, to read as follows:
640.138 . 1. This section shall be known and may be cited as "The Drinking
2 W ater T ranspar ency and Accountability Act" which shall pr ovide:
3 (1) For the development and implementation of a community water system
4 accountability process which r equir es and supports drinking water infrastructur e
5 sustainability for the citizens of Missouri;
6 (2) Assurance to the citizens that the quality of drinking water is monitored and
7 maintained at levels essential for health, safety , welfare, and long-term sustainability;
8 (3) Clear standards and expectations for community water systems so that
9 assessment of their quality , performance, and sustainability will be understood;
10 (4) Information that will assist community water systems and citizens in
11 understanding expectations, outcomes, and consequences for failing community water
12 systems; and
13 (5) Consequences and penalties for community water systems that do not
14 achieve minimum standards.
15 2. For purposes of this section, the following terms mean:
16 (1) "Community water system", a public water system that serves at least fifteen
17 service connections and regul arly serves at least twenty-five res idents per year to
EXPLANA TION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law . Matter in bold-face type in the above bill is proposed language.
18 include, but not be limited to, water corporations, as defined in section 386.020, public
19 water districts under chapter 247, municipal water companies under chapter 91,
20 nonpr ofit water companies as described in section 393.900, and joint municipal water
21 commissions cr eated in sections 393.700 to 393.770;
22 (2) "Customer", the same as defined in section 640.102;
23 (3) "Department", the Missouri department of natural res ources.
24 3. The department shall pr ovide for a statewide system of accountability for
25 community water systems and establish a letter grade schedule to include community
26 water system quality , performance, and sustainability based on, at a minimum, the
27 following standards:
28 (1) V iolation of any federal drinking water laws;
29 (2) V iolation of any state drinking water laws;
30 (3) W ater system financial sustainability;
31 (4) Operation and maintenance performance history;
32 (5) Infrastructure violations including, but not limited to, failur e, damage, or
33 unauthorized tampering with any prop erty owned or operated by a community water
34 system.
35 4. (1) The department shall promulg ate rules necessary to implement pr ovisions
36 of this section. The rules shall pr ovide clear and appr opriate explanation for each
37 standard set forth in subsection 3 of this section. The rules shall crea te a tier ed
38 structur e of point deductions that utilizes violation metrics, excluding maximum
39 contaminant levels under section 640.120, for community water systems between zero to
40 fifty thousand customers, wher e one violation equates to one point deduction. For the
41 community water systems with over fifty thousand customers, five violations shall
42 equate to one point deduction. Point values shall be based on objective criteria so that
43 each community water system is assessed equally and fairly . Community water systems
44 shall be assigned a letter grade of "A", "B", "C", "D", or "F". The rules shall include a
45 pr ovision pr ohibiting disclosur es by the department pursuant to the pr ovisions of
46 section 610.032 of water system information if it is defined as a "trade secr et" as defined
47 in section 417.453. The rules shall r equir e that the system's consumer confidence report
48 list the system's grade along with the explanation that the grade is based on the r esults
49 under this section and not the federal Consumer Confidence Report.
50 (2) The rules shall not deduct points for water outages or boil advisories. The
51 rules shall pr ovide that for water corporations, the department shall only utilize data
52 pr ovided by the water corporation in its most re cent general rate case, if it has occurr ed
53 within the past thr ee years. Otherwise, the water corporation shall be r equir ed to
54 submit a rate study and audit.
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55 (3) The department shall publish scor es and letter grades under this section
56 earned by each community water system on its website on an annual fr equency
57 established by rule. The department shall pr omulgate rules that prov ide a pr ocess by
58 which the community water systems can review and appeal the department’ s scor es and
59 grades prior to website publication. The department shall promulg ate rules that permit
60 community water systems to requ est that the department suspend publication of scor es
61 and letter grades for no mor e than twelve months if the community water system has
62 changed ownership. For thirty-six months following an ownership change, the system
63 may include the following language on its consumer confidence re port: "The system has
64 changed ownership and is in the compliance enhancement pro cess". Any rule or
65 portion of a rule, as that term is defined in section 536.010, that is creat ed under the
66 authority delegated in this section shall become effective only if it complies with and is
67 subject to all of the pr ovisions of chapter 536 and, if applicable, section 536.028. This
68 section and chapter 536 are nonseverable and if any of the powers vested with the
69 general assembly pursuant to chapter 536 to revie w , to delay the effective date, or to
70 disappr ove and annul a rule ar e subsequently held unconstitutional, then the grant of
71 rulemaking authority and any rule pr oposed or adopted after August 28, 2026, shall be
72 invalid and void.
73 5. (1) Any community water system that recei ves a letter grade of "D" or "F"
74 shall be consider ed operationally unacceptable and may be subject to the following:
75 (a) Administrative penalties pursuant to the pr ovisions of section 640.131;
76 (b) Oversight of all federal or state funding by an auditor appr oved by the
77 department who has experience with fiscal management of local government. Such
78 oversight shall include the authority to make decisions rega rding the expenditure of
79 funding;
80 (c) Submit a notice to the safe drinking water commission, the public service
81 commission, and the attorney general to pr ohibit the community water system or the
82 local governing authority operating the community water system fr om incurring any
83 additional debt for anything not dir ectly rel ated to the impro vement and sustainability
84 of the community drinking water system pursuant to a plan appr oved by the
85 department.
86 (2) A community water system that receiv es a letter grade of "D" or "F" shall
87 not be pr ecluded fr om obtaining funding for the impro vement and sustainability of the
88 community drinking water system based solely on the letter grade.
89 6. Notwithstanding any pr ovision of law to the contrary , no local governing
90 authority that operates a community water system that receiv es a grade of "D" or "F"
91 shall expend any moneys raised thr ough payments made by customers for access to
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92 water or fr om any other water system r evenue for any item, debt payment, or public
93 purpose other than the impro vement and sustainability of the community water system
94 specifically relat ed to the point deductions or letter grade standards under this section.
95 A violation of this subsection shall be gr ounds, upon a petition fr om the department, for
96 a court to appoint a rece iver or fiscal administrator or to order the mandatory safe
97 water purch ase fro m another system as determined by the department. The pr ovisions
98 of this subsection shall not be construed to pr ohibit the payment of bonded indebtedness
99 secur ed by the water system's rev enue prior to August 28, 2026.
100 7. No later than ninety days after appointment, the receiv er shall develop and
101 submit an impr ovement plan to the department for appr oval. The impr ovement plan
102 shall include the ability to incr ease rates paid by users of the community water system
103 based on a fair assessment of the community water system compar ed to other
104 comparable water systems, the consolidation of the community water system with a
105 neighboring system or systems, or other measur e which may be pr oposed by the
106 r eceiver or the department to ensure the sustainability of the system for the benefit of
107 the customers who rel y on the community water system for their drinking water . The
108 r eceiver shall include in the impr ovement plan any additional measur es pro posed by the
109 department necessary to bring the community water system into technical and
110 operational compliance and financial sustainability under this section. The appointing
111 court shall grant authority to the rec eiver necessary to implement the impr ovement plan
112 as appr oved by the department.
113 8. The department shall publish the first letter grades issued pursuant to this
114 section no later than January 1, 2028.
115 9. A community water system r eceiving federal funds, including stimulus or
116 r elief payments or grants, for the upgrade, r epair , or otherwise repl acement of the water
117 system infrastructur e shall submit to the department a detailed plan describing how the
118 federal funds will be used.
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