BILL ANALYSIS
AB 2182
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Date of Hearing: April 28, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 2182 (Huffman) - As Amended: April 5, 2010
SUBJECT : Contractual assessments: sewer lateral lines.
SUMMARY : Expands the authorization that allows public agencies
to enter into contractual assessments to finance the
installation of specified improvements to now include onsite
sewer improvements. Specifically, this bill :
1)Authorizes a public agency to enter into a contractual
assessment with a willing property owner to finance the
installation onsite sewer improvements.
2)States that it is the intent of the Legislature to address
water quality needs throughout California by permitting
voluntary individual sewer improvements that provide a public
benefit.
3)States that it is the intent of the Legislature that the
authorization created by this bill should be used to finance
the installation of onsite sewer improvements that are
permanently fixed to residential, commercial, industrial,
agricultural, or other real property, for the installation of
improvements to, and replacements of, existing onsite sewer
facilities served by a community sewer system and conversion
of the property from a septic system to community sewer
collection and treatment service.
4)States that to improve the quality of surface water and
groundwater necessary efforts, including the promotion of
onsite water improvements that provide a public benefit in
water quality protection, are needed.
5)States that the upfront cost of converting residential,
commercial, industrial, agricultural, or other real property
from an onsite septic system to sewer collection service, or
making needed improvements to or replacements of, existing
sewer laterals, prevents many property owners from making
those improvements.
6)States that to make those improvements more affordable and to
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promote the installation
of those improvements, it is necessary to authorize an
alternative procedure for authorizing assessments to finance
the cost of onsite sewer improvements.
7)Defines "onsite sewer improvements" as permanent sewer
improvements fixed to real property that convey sewage from
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, septic system abandonment, or one-time charges for
sewage treatment capacity associated with the improvements.
8)Provides that onsite sewer improvements may be installed for
either of the following purposes:
a) To convert residential, commercial, industrial,
agricultural, or other real property from an onsite septic
system to community sewer collection service; or,
b) To modify or replace existing onsite sewer improvements.
EXISTING LAW :
1)Authorizes public agencies, as defined, in California to
designate areas within which legislative bodies and willing
property owners may enter into contractual assessments to
finance the installation of distributed generation renewable
energy sources or energy or water efficiency improvements.
2)States legislative intent that the authorization listed above
should be used to finance the installation of distributed
generation renewable energy sources and energy or water
efficiency improvements that are fixed to residential,
commercial, industrial, agricultural, and other real property.
3)States that for the purpose of financing the installation of
water efficiency improvements, "public agency" means a city,
county, city and county, municipal utility district, community
services district, sanitary district, sanitation district, or
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water district.
4)Prohibits the authorization from being used to finance the
purchase or appliances or installations not fixed to real
property.
5)Makes findings and declarations concerning the need for energy
and water efficiency improvements in order to address global
climate change, the deterrent effect of high up-front costs on
making those improvements, and the need to authorize an
alternative procedure for authorizing assessments to finance
the cost of energy efficiency improvements in order to make
them more affordable and promote their installation.
6)Declares that a public purpose will be served by a contractual
assessment program that provides the legislative body of
specified public agencies with the authority to finance the
installation of distributed generation renewable energy
sources or energy or water efficiency improvements to
residential, commercial, industrial, agricultural and other
real property.
7)Authorizes the legislative body to determine that it would be
convenient, advantageous, and in the public interest to
designate an area within the public agencies jurisdiction,
which may encompass the entire jurisdiction or a lesser
portion, within which authorized legislative body officials
and property owners may enter into contractual assessments to
finance the installation of distributed generation renewable
energy sources or energy or water efficiency improvements that
are fixed to the property.
8)States that the term "energy efficient improvements" includes,
but is not limited to, the installation of distributed
generation renewable energy resources; and, that any energy
efficiency improvement must be fixed to the real property.
9)Requires that the resolution adopted by the governing body
direct the appropriate city official to prepare a report
including specified provisions.
10)Provides that, upon the written consent of an authorized city
official, the proposed arrangements for financing the program
pertaining to the installation of distributed generation
renewable energy resources, energy or water efficiency
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improvements fixed to real property may authorize the property
owner to purchase directly the related equipment and materials
and to contract directly for the work on the property owner's
residential, commercial, industrial, and other real property.
11)Specifies that assessments may be levied only with the free
and willing consent of the owner of each lot or parcel on
which an assessment is levied at the time the assessment is
levied.
12)States that assessments levied pursuant to this chapter, and
the interest and any penalties thereon shall constitute a lien
against the lots and parcels of land on which they are made
until they are paid.
13)Specifies that the collection of assessments in the same
manner and at the same time as the general taxes of the city
on real property are payable.
14)Requires that a specified city official enter into
consultations with the office of the county auditor or
controller in order to reach agreement on what additional
fees, if any, will be charged to the city or county for
incorporating the proposed contractual assessments into the
assessments of the general taxes of the city or county on real
property, and to include a report on the results of these
consultations in the report to be submitted to the legislative
body of the city.
15)Requires a legislative body to publish notice of a hearing
regarding contractual assessments.
16)Defines "city" for purposes of these sections as a city,
county, or city and county.
17)Defines "water district" as any district or other political
subdivision, other than a city or county, a primary function
of which is the irrigation, reclamation, or drainage of land
or the diversion, storage, management, or distribution of
water primarily for domestic, municipal, agricultural,
industrial, recreation, fish and wildlife enhancement, flood
control, or power production purposes.
18)Specifies for the purpose of financing the installation of
distributed generation renewable energy sources or energy
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efficiency improvements, "public agency" means a county, city,
city and county, or a municipal utility district, an
irrigation district, or public utility district that owns and
operates an electric distribution system.
FISCAL EFFECT : None
COMMENTS :
1)According to the U.S. Environmental Protection Agency, septic
systems that are properly planned, 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 ground water 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.
2)According to the author's office, 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,
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.
3)AB 2182 expands the existing contractual assessment
authorization, currently used for renewable energy and water
use efficiency improvements, to now include sewer lateral
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improvements and septic-to-sewer conversions. Specifically,
this bill authorizes public agencies and special districts to
offer loans for sewer lateral and septic improvements on
private property when those improvements will result in public
benefits due to water quality improvements to surface and
ground water.
AB 2182 also authorizes a contractual assessment for onsite
sewer improvements to include one-time charges for sewer
treatment capacity associated with the improvement. The
Committee may wish to consider if one-time fees should be
authorized since the basic premise behind contractual
assessments is that the improvement is permanently affixed to
the property.
4)AB 811 (Levine), Chapter 159, Statutes of 2008, proposed to
further the public interest
of addressing climate change through energy conservation efforts
by authorizing cities to provide up-front financing to
property owners to install solar or other renewable
energy-generating devices or make specified energy efficiency
improvements to their properties through a system of
contractual assessments. Prior to AB 811, contractual
assessments were only authorized for certain types of public
works projects. Under contractual assessments, the property
owner or owners within a designated area choose to assess
themselves for the cost of energy efficiency improvements or
public works projects (i.e., under grounding of power lines or
installation of streetlights). The local government then
provides the up-front funds for the project, and the property
owners pay an annual assessment until those funds, plus
interest, are repaid. The underlying purpose is to create a
means by which a project that provides both a public benefit
and an incidental benefit to particular property owners can be
financed without imposing the cost on property owners in other
parts of the city who derive no benefit.
AB 474 (Blumenfield), Chapter 444, Statutes of 2009, added
water efficiency improvements to the list of improvements that
can be paid for through a contractual assessment between a
willing property owner and a public agency.
5)Support Arguments: Supporters state that over time, septic
systems and private sewer laterals can become damaged and
blocked, leading to leaking of wastewater into the ground,
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potentially threatening water quality and public health and
safety. Additionally, damaged laterals can contribute to
sewage blockages and backups in the public system. The costs
to private property owners for conversion from septic to
community sewer lines are often prohibitive. Supporters argue
that providing additional options for the financing of these
important projects is vital to water quality and public health
protection in our communities.
Opposition Arguments : Opposition could argue that this
measure adds yet another improvement to the laundry list of
improvements that a local government can finance through
contractual assessments; the Committee may wish to consider
whether it is prudent to continue to authorize local
governments to become a glorified bank to help pay for on-site
property improvements. The Committee may also wish to
consider if it would be wise to place some type of cap on the
amount of contractual assessments a local government may enter
into at any one time in order to reduce the financial risk for
the local agency.
6)AB 2182 is similar to AB 1755 (Swanson), which is currently
pending in the Committee.
As these contractual assessment bills move forward, each will
need to be amended to avoid chaptering out issues.
REGISTERED SUPPORT / OPPOSITION :
Support
Irvine Ranch Water District [CO-SPONSOR]
North Bay Watershed Association [CO-SPONSOR]
Association of CA Water Agencies
CA Association of Sanitation Agencies
CA Special Districts Association
Cucamonga Valley Water District
Dublin San Ramon Services District
East Bay Municipal Utility District
Eastern Municipal Water District
Regional Council of Rural Counties
Three Valleys Municipal Water District
Western Municipal Water District
Opposition
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None on file
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958