Reduces allowed diversion of funds from stormwater, water, and sewer purposes to municipal and county budgets; requires municipalities and counties to notify Division of Local Government Services of diversions.

This bill reduces the maximum amount municipalities and counties can redirect from stormwater, water, and sewer utility funds to general budgets from 5% to 3% of the utility's annual operating costs. It applies to all stormwater, water, and sewer utilities established under state law, including those operated by municipalities or counties. The bill also requires local governments to provide written notice to the Division of Local Government Services whenever they redirect these funds, including the exact amount transferred. These changes apply to both utility surplus revenue and undesignated funds held by water/sewer authorities.