BILL ANALYSIS Ó AB 964 Page 1 Date of Hearing: April 6, 2011 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT Cameron Smyth, Chair AB 964 (Huffman) - As Amended: March 17, 2011 SUBJECT : State Water Pollution Control Revolving Fund: onsite sewer improvement projects. SUMMARY : Requires financial assistance provided from the State Water Pollution Control Fund (SRF) for onsite sewer improvements to be provided only for projects for which a public agency has adopted a sewer system management plan that includes a prescribed 10-year plan for sewer upgrades, and requires a public agency receiving financial assistance from the fund for that purpose to report to the board on its progress with respect to developing and implementing a 10-year plan for sewer upgrades. Specifically, this bill : 1)Requires financial assistance provided from the SRF for purposes of onsite sewer improvements to be provided only for projects for which a public agency has adopted a sewer system management plan that, in addition to other applicable requirements, includes a ten-year plan for sewer upgrades. 2)Defines ten-year plan for sewer upgrades as a plan that includes, but need not be limited to, all of the following: a) An evaluation that identifies and prioritizes the areas where onsite sewer improvements are needed in order to prevent, within ten years, sanitary sewer overflows due to excessive infiltration and inflow through cracked and leaking sewer laterals; b) Strategies for public outreach to private property owners to make repairs to, or replacement of, as necessary, private sewers laterals for the purpose of prevention or abatement of sewage contamination; and, c) Guidelines for managing and accounting for funding made available to property owners for the purposes of lateral repairs or replacements 3)Defines "onsite sewer improvements" as permanent sewer improvements fixed to real property that convey sewage from AB 964 Page 2 the property's interior plumbing to the point of discharge into the public agency's sewer facilities, and may include, but is not limited to, pipes, pumps, other equipment, sewer laterals, or one-time charges for sewage treatment capacity associated with the improvements. 4)States that onsite sewer and improvements may be installed to modify or replace existing onsite sewer improvements. 5)Defines "public agency" as city, county, city and county, municipal utility district, community services district, sanitary district, sanitation district, or water district, as defined. 6)Defines "sewer system management plan" as a system-specific plan that meets the requirements of the Statewide General Waste Discharge Requirements for Sanitary Sewer Systems (Order No. 2006-0003-DWQ of the State Water Resources Control Board (SWRCB)), as that order may be amended. 7)Requires, commencing January 1, 2014, a public agency receiving financial assistance from the SRF for onsite sewer improvements to report to the SWRCB on the progress of developing and implementing the ten-year plan for sewer upgrades. 8)Makes legislative findings and declarations related to water quality and financing onsite sewer system improvements. EXISTING LAW : 1)Creates SRF, as provided by the federal Clean Water Act, as a perpetual water pollution control revolving fund which is partially capitalized by federal contributions. The money in SRF is used for projects to mitigate water quality issues. 2)Requires the SWRCB, for the purposes of administering the SRF, to give favorable consideration to certain types of eligible projects, including projects undertaken in response to an administrative enforcement order. FISCAL EFFECT : Unknown AB 964 Page 3 COMMENTS : 1)The State Water Pollution Control Revolving Fund is a program funded by federal grants and State bond funds. The purpose of the SRF loan program is to implement the Federal Clean Water Act (CWA) and the Porter-Cologne Water Quality Act by providing financial assistance for the construction of facilities or implementation of measures necessary to address water quality problems and to prevent pollution in the waters of the state. SRF loans are intended to fund the following types of projects: construction of wastewater treatment facilities, the implementation of nonpoint source projects or programs, and stormwater treatment, estuary conservation and management plans, and other point source projects. SRF provides low-interest loans of between $200 to $300 million annually for construction of these types of projects. 2)According to the author, the goal of this bill is to help address the chronic water quality impacts caused by sanitary sewer overflows (SSOs) from aging cracked and damaged sewer laterals by encouraging public agencies to facilitate locally-administered low cost loan programs to finance the installation of onsite sewer improvements. An SSO is any overflow, spill, release, discharge or diversion of untreated or partially treated wastewater from a sanitary sewer system. As stated by the SWRCB: "SSOs often contain high levels of suspended solids, pathogenic organisms, toxic pollutants, nutrients, oil, and grease. SSOs pollute surface and ground waters, threaten public health, adversely affect aquatic life, and impair the recreational use and aesthetic enjoyment of surface waters. Typical consequences of SSOs include the closure of beaches and other recreational areas, inundated properties, and polluted rivers and streams." 3)Counties around the state are riddled with old and damaged sewer lines. Repair or replacement of the lateral is typically the responsibility of the homeowner. Yet, rehabilitation of laterals is important in preventing backups and overflows system wide. The SWRCB requires sanitation agencies to maintain public sewer lines, but there is no statewide program that mandates private lateral rehabilitation. AB 964 Page 4 4)According to the author, costs of sewer lateral replacements are expensive. A typical private sewer lateral replacement will cost somewhere in the range of $1,500 to $4,000. The costs can increase significantly if there are obstructions to the contractor such as extensive landscaping, driveways, or structures built over the lateral. The author's office reports that local wastewater agencies in the North Bay Watershed Association have already invested more than $200 million on improving publicly owned sewer mains and treatment facilities and have budgeted another $50 million or so in the next several years. But the problem cannot be resolved simply by upgrading the public sewer system. Private property owners must also address their sewer laterals so that public facilities are not overwhelmed, and overflows and sewer spills are avoided. The author believes that a public purpose will be served through this measure, by supporting locally administered low cost loan programs through the use of State Water Pollution Control Revolving Funds 5)Support arguments: The California Association of Sanitation Agencies, states that "because there are often high costs associated with the replacement or rehabilitation of private sewer lines, many homeowners are unable or unwilling to proceed with the necessary fixes to their properties. By providing a funding mechanism for agencies to alleviate the difficulty of financing these projects, this bill is a welcome alternative for agencies facing this dilemma." Opposition arguments: Opposition could argue that prohibiting a local agency from receiving monies from the SRF for onsite sewer improvements, unless the local agency has adopted a sewer system management plan that includes a prescribed 10-year plan for sewer upgrades, might unfairly disadvantage local agencies who need the funding quickly to deal with sanitary sewer overflows but do not have the time or the funding to create the required sewer management plan. 6 This bill is double-referred to the Committee on Environmental Safety and Toxic Materials. REGISTERED SUPPORT / OPPOSITION : Support Opposition AB 964 Page 5 CA Association of Sanitation AgenciesNone on file CA Association of REALTORS Analysis Prepared by : Katie Kolitsos / L. GOV. / (916) 319-3958