Michigan Gov. Rick Snyder will propose $30 million US in state funding to help pay the water bills of Flint residents facing an emergency over the city's lead-contaminated water supply.

Snyder will brief Flint officials and pastors about the plan Wednesday and outline it to lawmakers next week as part of his 2016-2017 budget proposal, according to a statement the governor's office provided to The Associated Press.

The aid would cover the estimated portion of residential customers' utility bills for water that has been or will be used for drinking, cooking, bathing and washing hands. Customers would still be responsible for paying for water used to flush toilets, water lawns, wash clothes and other purposes.

"Flint residents will not have to pay for water they cannot drink," the Republican governor said in a statement to the AP late Tuesday. "My budget recommendation will include the request that the state make payments to the city's water system for residential bills going back to April 2014 and alleviate the need for residential water shutoffs."

Snyder has apologized for regulatory mistakes that caused Flint's water to become tainted with lead from old pipes after the city switched its supply source in 2014. His office estimates the $30 million Consumption and Consumer Use Credit — available because of a one-time $575 million budget surplus — would cover a two-year period from April 2014 until this spring, when officials hope the water supply is declared safe to consume again without filters.

An estimated 21,000 residential customers have continued paying their bills despite various water problems, while 9,000 have not, according to the Snyder administration.

Snyder 2016 Priorities

Michigan Gov. Rick Snyder's plan applies to bills going back to April 2014. (Carlos Osorio/The Associated Press)

The 21,000 customers, including those who have since moved away, would get a credit for 65 per cent of the water portion of their combined water/sewer bill — the part of the bill Snyder's office estimates is used for water that could be ingested or come into contact with skin. The 9,000 residential customers in arrears would be put on a payment plan to catch up on sewer charges and 35 per cent of their water fees, potentially over a period of years.

Businesses and other commercial customers would get a 20 per cent credit for the water portion of their bill.

Sewer fees account for a little more than half of a typical Flint resident's bill. So a household that pays $150 a month could get a $46 monthly credit, or about $1,100 for 24 months of having water that has had a host of problems, not just lead-related. Residents complained about the smell, taste and appearance of the water. They also raised health concerns, reporting rashes, hair loss and other problems.

Plan 'doesn't even come close': Top Democrat

Marc Edwards, a Virginia Tech professor who helped expose the lead problem in September, said: "It's hard to find moral justification in having (residents) pay for water that is not suitable for consumption nor, until recently, for bathing. This essentially refunds all the money associated with consumption or consumer use. I think it's an amazing gesture of common sense and goodwill, and it corrects an injustice."

Snyder, who met with Flint pastors last week, had promised to present them a plan on unpaid bills within a week. He met with Republican legislative leaders on Tuesday to discuss the proposal, which will require lawmakers' approval.

Angela Wittrock, spokeswoman for Senate Democratic Leader Jim Ananich of Flint, said Snyder's plan "doesn't even come close to refunding Flint residents for undrinkable, unusable water they paid for starting in April 2014 — let alone what they then paid for water they could use. And in many homes the water is still not safe to drink."

Over the weekend, a civil lawsuit — at least the sixth filed so far — was initiated in federal court seeking compensatory and punitive damages and class-action status for approximately 30,000 customers who paid for or were billed for Flint water.

Snyder and legislators last week enacted $28 million in emergency Flint funding for the current fiscal year, including $3 million to help the Flint Utilities Department with unpaid bills. Snyder is expected to include other Flint-related funding in his 2016-2017 spending plan.

Congressional hearing begins Wednesday

In Washington, Senators Gary Peters and Debbie Stabenow, Democrats from Michigan, pushed for $600 million in aid — mostly in federal funds — to help Flint replace pipes and provide health care.

Meanwhile, Senator James Inhofe, an Oklahoma Republican who chairs an environmental committee, said an agreement to help Flint was close and would be a combination of revolving funds and other aid he did not detail. Money from a revolving fund is like a loan, with the money going to the recipient and then being repaid so there is no net cost to U.S. taxpayers.

Senator John Cornyn of Texas, the second-ranking Republican in the Senate, said any aid to Flint must not add to U.S. budget deficits for "what is a local and state problem."

Flint Water

Flint Mayor Karen Weaver, seen on Jan. 27, says she wants lead pipes removed from the city's water distribution system as soon as possible, while Michigan Department of Environmental Quality Director Keith Creagh, centre, will testify in Washington on Wednesday. (Jake May/The Flint Journal-MLive.com via AP)

The U.S. House Oversight and Government Reform Committee will hold a hearing on the Flint crisis on Wednesday.

Michigan's top environmental regulator, in prepared testimony for the congressional hearing, says the state should have required the city of Flint to treat its water for corrosion after elevated lead levels were first discovered in the city's water a year ago.

Keith Creagh, director of the Michigan Department of Environmental Quality, said state officials "relied on technical compliance (with the law) instead of assuring safe drinking water." He called that a mistake.

Creagh said the state did not require corrosion treatment after officials noticed elevated lead levels in the city's water in January 2015. The Associated Press obtained a copy of Creagh's testimony in advance of the hearing.

While immediate treatment of the water was not required under federal law, "corrosion treatment should have been required by the MDEQ," said Creagh, who took over as head of the state agency last month following the resignation of Dan Wyant.

On Tuesday, Flint Mayor Karen Weaver told reporters she wants lead pipes removed from the city's water distribution system as soon as possible. She said she would like to start the pipe-removal process at the "highest-risk homes of kids under six and pregnant women."

Creagh said all levels of government deserve blame in the Flint crisis.

City officials did not follow proper protocol in conducting lead sampling of homes, he said, and the U.S. Environmental Protection Agency "did not display the sense of urgency that the situation demanded."

A June 2015 memo by an employee in EPA's Midwest regional office was not formally delivered to state environmental officials until November — after the state had begun taking actions to address the lead problem, Creagh said.

"Legitimate concerns raised by EPA's own expert staff were not elevated or provided to either the city or the state for review and action until after the state's response was well underway," Creagh said.

Creagh and Joel Beauvais, acting chief of the EPA's water office, are among those scheduled to testify Wednesday before the House Oversight and Government Reform Committee.

Detroit schools emergency manager Darnell Earley, who was state-appointed emergency manager for Flint when its water source was switched, had been asked to testify at Wednesday's hearing but declined. The oversight committee issued a subpoena to Earley on Tuesday but his lawyer refused service, a committee staffer said.

The hearing comes as the FBI said it is working with a multi-agency team investigating the lead contamination in Flint.

FBI spokeswoman Jill Washburn told the AP in an email that the agency is "investigating the matter to determine if there have been any federal violations." She declined to say when the FBI got involved.

Officials haven't said whether criminal or civil charges might follow the investigation.

Several local, state and federal officials have resigned since doctors revealed last year that using the Flint River for the city's drinking water supply caused elevated levels of lead in some children's blood. Lead contamination has been linked to learning disabilities and other problems. Michigan's governor has apologized repeatedly for the state's role.

In addition to the FBI and the EPA, the federal team includes the U.S. Postal Inspection Service, said Gina Balaya, a U.S. attorney's spokeswoman in Detroit.

In November, the EPA announced it was auditing how Michigan enforces drinking water rules and said it would identify how to strengthen state oversight. The U.S. attorney's office in Detroit said in January that it was investigating the water crisis with the EPA.

With files from Reuters