Public Act 132 of 2022 that revised Public Act 451 of 1994 allows for overburdened and significantly overburdened scoring criteria to be updated no more frequently than every three years. The current criteria have been in place for the FY24, FY25, and FY26 loan cycles and EGLE is reviewing and potentially updating the criteria for State Revolving Fund projects in FY27 and beyond.
The final overburdened criteria for projects beginning in Fiscal Year 2027 are posted. The following are frequently asked questions and answers taken from the public comments received.
All data from the American Community Survey (US Census) 5-Year estimates are estimates. EGLE is using a combination of Census information, state information, and system information.
The state information comes directly from the Michigan Department of Treasury and is not an estimate. This combination of the most used census data, state-specific data, and local system cost data gives a more balanced result than just using Census data estimates.
EGLE received some excellent academic research showing that poverty percentage can sometimes be a better indicator to use than median annual household income (MAHI). When EGLE applied this data to the hundreds of systems that applied to the SRF programs over the last three years, there were no clear breaks in the poverty percentage that could be used to set limits for significantly overburdened and overburdened status. Using just the poverty percentage with the systems that applied to the SRF programs would result in nearly all systems qualifying or almost none.
EGLE did find using the current criteria and the proposed criteria that the poverty percentage thresholds suggested in the public comments lined up within 1% of each other. This was confirmation that the current criteria are achieving the outcomes the commenters were asking for, even if not being used the way that was suggested.
EGLE ensures this by recognizing the intermunicipal service agreements in place that regional systems have applied to their users.
If a community within a system comes in for a project and indicates only that community’s users are paying the project debt, EGLE does not include the rest of the regional municipalities in the calculations.
EGLE posted the timeline and data used on a webpage designed specifically for overburdened criteria for seven months.
Additionally, the two public meetings and a public hearing notification were posted and available to watch as soon as they were completed.
EGLE looked at additional indicators but is trying to keep the form and application process as simple as possible.
When additional indicators were added they followed in line with the outcomes produced by using median annual household income (MAHI), taxable value per capita (TVPC), and system cost of service per residential equivalency unit (REU). This reinforced the continued use of the current criteria with only changes to the threshold and percentage of income.
EGLE used the project data that was submitted for FY23, FY24, and FY25. This information was used to run different scenarios to see how the numbers would change when different statics were added or tweaked.
It was also compared against the Climate and Economic Justice Screening Tool to see how the results compared to the former federal tool.
EGLE decided on the 80% median annual household income (MAHI) threshold along with the annual user cost exceeding 1.5% of system MAHI after running many options using different statistics.
The 1.5% of MAHI was taken from an EPA report to congress from December of 2024 as the lowest threshold to use to determine a user’s high water/wastewater cost.
These criteria would have reduced the number of overburdened and significantly overburdened applicants over the last couple of years to about 58% instead of 87%. EGLE, along with many public comments, believe if too many systems qualify it negatively impacts those most in need.
This updated criteria mimicked what the Climate and Economic Justice Screening Tool showed it would have labeled systems over that same period.
Total principal forgiveness is determined each year based capitalization grants awarded to Michigan from the EPA.
This process is independent of the criteria to be defined as overburdened or significantly overburdened for the State Revolving Fund (SRF) programs.
Climate and Economic Justice Screening Tool (CJEST) was removed from the federal website in January of 2025 and will not be updated.
Changes to the former criteria for overburdened municipal systems are highlighted below.
An Overburdened municipal system is a municipal system in which all the following conditions are met:
A Significantly overburdened municipal system is a municipal system in which all the following conditions are met:
A municipal system which qualifies as a significantly overburdened municipal system would also be considered an overburdened municipal system. However, any potential benefits may only be applied under one designation or the other.
On August 11, 2025, EGLE held a virtual public hearing on the draft Overburdened Criteria for SRF programs. Attendance at the public hearing was not required and comments given at the hearing will not be given more weight than comments submitted via email. The public comment period opened May 15, 2025 and closed August 29, 2025. Direct your questions to Mark Conradi
Watch the recorded public hearingTwo identical presentations and listening sessions were held virtually on different days and times to allow for more participation. Recordings of each of the meetings have been made available for reference.
The following statistics were compiled from projects on the FY24 and FY25 Intended Use Plans. It is not intended to be an exhaustive list or imply if and what changes EGLE may propose for the overburdened qualification criteria for FY27, FY28, and FY29.
EGLE mapped FY24 and FY25 projects in the fundable range and compared them to the most recent version of The Council on Environmental Quality’s (CEQ) Climate and Economic Justice Screening Tool (CEJST) which was used to determine progress towards the Environmental Justice 40 policy.
CEJST used indicators of burdens in eight categories: climate change, energy, health, housing, legacy pollution, transportation, water and wastewater, and workforce development and from that determines if a community is classified as disadvantaged, partially disadvantaged, or not disadvantaged. When comparing the methods in how CEJST and EGLE SRF classify communities, CEJST classified 60% of the projects in Michigan’s fundable range as disadvantaged. Using EGLE’s overburdened criteria, which use median household income, taxable value per capita, and cost of service per residential equivalent unit, 87% of projects in the fundable range qualified as overburdened. While EGLE uses fewer complex criteria to define an overburdened community, it resulted in more projects qualifying as overburdened.
