BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 741
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 741 (Huffman)
          As Amended  June 9, 2011
          Majority vote
           
           ----------------------------------------------------------------- 
          |ASSEMBLY:  |74-0 |(May 9, 2011)   |SENATE: |37-0 |(June 27,      |
          |           |     |                |        |     |2011)          |
           ----------------------------------------------------------------- 
            
           Original Committee Reference:    L. GOV.  

           SUMMARY  :  Authorizes a local agency that is authorized to 
          acquire, construct, maintain and operate sanitary sewers and 
          sewerage systems to use to, at a property owner's request, 
          construct all necessary plumbing to connect his or her property 
          to the adjoining public sewer system, the cost of which 
          constitutes a lien on the property. 

           The Senate amendments  :  

          1)Increase the time period from 15 to 30 years on installments 
            of payments for improvement costs.

          2)Increase the interest rate from 6% to 12% for unpaid balance 
            payments for improvement costs. 

           EXISTING LAW  :

          1)Specifies that any owner who has his or her property included 
            within an assessment district for the construction of a main 
            trunkline or collector sewer lines, may request the governing 
            board to construct all necessary plumbing to connect his or 
            her property to the adjoining street public sewer system. 

          2)Requires the person employed by the governing board to do the 
            work to have a lien upon the property, for work done and 
            materials furnished at the request of the property owner. 

          3)Authorizes the governing board of an agency to pay all, or any 
            part, of the cost or price of the connection to the person or 
            persons who furnished labor, materials, or equipment and, to 
            the extent that the governing board pays the cost or price of 
            the connection, at which time the lien would be transferred to 
            the governing board.








                                                                  AB 741
                                                                  Page  2


          4)Authorizes, alternatively to the procedures described above, 
            the governing body of the public agency performing the work of 
            connection to the public sewer to, by the power of ordinance 
            approved by a two-thirds vote of the members of the 
            legislative body, do the following:

             a)   Fix the cost of improvement for connection to the 
               sanitation or sewerage facilities;

             b)   Fix the times at which such costs shall become due;

             c)   Provide for the payment of the costs prior to the 
               construction and connection or in installments over a 
               period, not to exceed 15 years;

             d)   Provide a rate of interest, not to exceed 6% per year, 
               to be charged on the unpaid balance of the costs; and,

             e)   Provide that the amount of the costs and the interest 
               shall constitute a lien against the respective lots or 
               parcels upon which the facilities are constructed.

          5)Specifies that a governing body can alternatively, by 
            ordinance approved by a two-thirds vote of the members of the 
            legislative body, do the following:

             a)   Fix fees or charges for the privilege of connecting to 
               its sanitation or sewerage facilities and improvements 
               constructed by the entity pursuant to specified provisions;

             b)   Fix the time or times at which the fees or charges shall 
               become due; 

             c)   Provide for the payment of the fees or charges prior to 
               connection or in installments over a period of not to 
               exceed 30 years;

             d)   Provide the rate of interest, not to exceed 12% per 
               year, to be charged on the unpaid balance of the fees or 
               charges; and,

             e)   Provide that the amount of the fees or charges and the 
               interest shall constitute a lien against the respective 
               lots or parcels of land to which the facilities are 








                                                                  AB 741
                                                                  Page  3

               connected at the time and in a specified manner.

           AS PASSED BY THE ASSEMBLY  , this bill:

          1)Authorized a county, city and county, city, sanitary district, 
            county sanitation district, county service area, sewer 
            maintenance district, and other public corporations and 
            districts that are authorized to acquire, construct, maintain 
            and operate sanitary sewers and sewerage systems to, at a 
            property owner's request, construct all necessary plumbing to 
            connect his or her property to the adjoining public sewer 
            system, the cost of which constitutes a lien on the property. 

          2)Specified that the process listed above in 1) may be used for 
            either of the following purposes, whether or not an order or 
            other action has been issued or taken for an abatement of 
            contamination created by sewage disposal:

             a)   Converting properties from onsite septic systems and 
               connecting them to a sewer system. The conversion 
               improvements and costs may include, but are not limited to, 
               pipes, pumps and other equipment, septic system 
               abandonment, and associated sewage treatment capacity; or,

             b)   Replacing or repairing existing sewer laterals 
               connecting pipes to a sewer system.  The cost of the 
               lateral replacement or repair shall constitute the cost of 
               an improvement for connection to a sewer system.

          3)Specified that the authority granted by this measure shall be 
            in addition to, shall not be in derogation of, and shall not 
            affect, any authority granted by other law relating to 
            recovering the cost incurred by an entity for connecting 
            properties to the public sewer system, or the entity's 
            exercise of powers pursuant to any other law. 
          
          4)Stated that this section shall be deemed to provide a complete 
            and supplemental method for exercising the powers authorized 
            by this section, and shall be deemed supplemental to the 
            powers conferred by other applicable laws.

           FISCAL EFFECT  :  None

           COMMENTS  :  According to the United States Environmental 
          Protection Agency, septic systems that are properly planned, 








                                                                  AB 741
                                                                  Page  4

          designed, sited, installed, operated and maintained can provide 
          excellent wastewater treatment.  However, systems that are sited 
          in densities that exceed the treatment capacity of regional 
          soils and systems that are poorly designed, installed, operated 
          or maintained can cause problems.  The most serious documented 
          problems involve contamination of surface waters and groundwater 
          with disease-causing pathogens and nitrates.  Other problems 
          include excessive nitrogen discharges to sensitive coastal 
          waters and phosphorus pollution of inland surface waters, which 
          increases algal growth and lowers dissolved oxygen levels.  
          Contamination of important shellfish beds and swimming beaches 
          by pathogens is also a concern in some coastal regions.

          According to the author, converting from a septic to sewer 
          system protects public and environmental health by ensuring that 
          wastewater is collected and conveyed to treatment and disposal 
          facilities with minimal risk and increases water quality 
          benefits.  But the cost to convert a septic system to a sewer 
          system can be expensive.  There can be multiple major costs in 
          converting from a septic system to sewer service, including:  
          the public sewer infrastructure, side sewer construction, septic 
          system abandonment, and connection fees.  The co-sponsor, Irvine 
          Ranch Water District (IRWD), states that the costs to customers 
          of converting their septic systems to a community sewer system, 
          or for replacing aging sewer laterals, are often prohibitive, 
          costing $2,000 to $14,000 for septic conversions and $3,000 to 
          $12,000 for laterals.  If pumps or pump replacements are needed, 
          this can be an additional $10,000. 

          This bill builds on existing law by authorizing public 
          wastewater agencies to offer voluntary private liens to private 
          property owners to finance lateral replacements and conversions 
          from septic to sewer systems.  According to IRWD, this change in 
          law would help private property owners finance the costs of 
          converting from a septic system to a community sewer system and 
          the replacement of sewer laterals.  IRWD believes that by making 
          these improvements feasible this bill would protect water 
          quality, the environment and public health from contamination 
          caused by leaking septic tanks, eroding pipes and other aging 
          sewage infrastructure.  

          Support arguments:  Supporters argue that this bill provides 
          property owners with options on financing the needed sewer and 
          lateral conversions, which will encourage property owners to 
          convert from septic systems to community sewer systems and to 








                                                                  AB 741
                                                                  Page  5

          replace aging and damaged sewer laterals.  Moreover, supporters 
          believe that the bill protects water quality, the environment, 
          and public health from contamination caused by these aging 
          infrastructures. 

          Opposition arguments:  Opposition could argue that this bill 
          does not provide any protections to the local agencies when 
          entering into an agreement with a property owner to do these 
          costly upgrades.  The Legislature may wish to consider if it 
          might be prudent to require a local agency establishing these 
          liens to verify the credit worthiness of the property owner 
          prior to entering into an agreement.  
           

          Analysis Prepared by  :    Katie Kolitsos / L. GOV. / (916) 
          319-3958 

                                                               FN:  0001294