BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2182|
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THIRD READING
Bill No: AB 2182
Author: Huffman (D)
Amended: 8/11/10 in Senate
Vote: 21
SENATE LOCAL GOVERNMENT COMMITTEE : 4-1, 6/30/10
AYES: Cox, Kehoe, DeSaulnier, Price
NOES: Aanestad
ASSEMBLY FLOOR : 65-6, 5/6/10 - See last page for vote
SUBJECT : Contractual assessments: onsite sewer and
septic
improvements
SOURCE : Irvine Ranch Water District
North Bay Watershed Association
DIGEST : This bill adds onsite sewer and septic
improvements that are permanently fixed to residential,
commercial, industrial, agricultural, or other real
property to the list of improvements that local agencies
can finance using "voluntary contractual assessments." The
bill states the Legislature's intent that a property owner
cannot participate in a voluntary contractual assessment
program if participation would result in the total amount
of any annual property taxes and assessments exceeding five
percent of the property's appraised market value.
Senate Floor Amendments of 8/11/10 clarify the bill's cap
CONTINUED
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on property taxes and assessments, and avoid potential
chaptering-out conflicts with other bills.
ANALYSIS : A benefit assessment is an involuntary charge
that property owners pay for a public improvement or
service that provides a special benefit to their property.
The amount of the assessment is directly related to the
amount of the benefit their property receives. Benefit
assessments can finance public projects like flood control,
street improvement, streetlights, and public landscaping.
As an alternative to benefit assessments, and only with the
free and willing consent of affected property owners,
public agencies can use "voluntary contractual assessments"
to finance:
1.Public improvements to developed parcels (SB 837,
McQuorquodale, Chapter 1388, Statutes of 1987).
2.Renewable energy sources or energy efficiency
improvements that are permanently fixed to real property
(AB 811, Levine, Chapter 159, Statutes of 2008).
3.Water efficiency improvements that are permanently fixed
to real property (AB 474, Blumenfield, Chapter 444,
Statutes of 2009).
To use voluntary contractual assessments, a public agency's
legislative body must adopt a resolution, which:
1.Determines that it would be convenient, advantageous, and
in the public interest to designate an area within which
officials and property owners may enter into contractual
assessments and make related financing arrangements.
2.Identifies the kinds of public works which may be
financed.
3.Describes the area where contractual assessments may be
used.
4.Describes the proposed financing arrangements, including
criteria for determining the creditworthiness of a
property owner.
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5.States the time and place for a public hearing.
6.Directs an official to prepare a detailed report about
the contractual assessment program and consult with the
county auditor and county controller regarding fees.
The report on the proposed assessment program must contain:
1.A map of the area where contractual assessments will be
offered.
2.A draft contract specifying the terms and conditions.
3.A list of the types of facilities and improvements which
may be financed.
4.The official authorized to enter into contractual
assessments on behalf of the county or city.
5.The maximum aggregate dollar amount of contractual
assessments.
6.A method for prioritizing requests from property owners
for financing.
7.A plan for raising a capital amount required to pay for
work performed pursuant to contractual assessments.
8.Information about the county auditor's and county
controller's fees.
The legislative body must give written notice to all water
or electricity providers within a proposed area where
voluntary contractual assessments will be offered. After
holding a public hearing, the legislative body may adopt a
resolution confirming the program as detailed in the
report, may confirm a modified version of the report, or
may abandon the proceedings.
The legislative body must designate an office to:
1.Prepare the annual roll of assessment obligations on
property subject to a voluntary contractual assessment.
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2.Establish procedures for responding to inquiries
concerning estimated voluntary contractual assessment
liabilities.
The legislative body must provide for documents to be
recorded with the county recorder, providing notice of a
contractual assessment on real property.
This bill authorizes the use of contractual assessments to
finance the installation of onsite sewer and septic
improvements that are permanently fixed to residential,
commercial, industrial, agricultural, or other real
property.
Onsite sewer improvements may be installed either:
1.To convert residential, commercial, industrial,
agricultural, or other real property from an onsite
septic system to community sewer collection service, or
2.To modify or replace existing onsite sewer improvements.
This bill defines "onsite sewer and septic improvements" as
permanent 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,
including pipes, pumps, other equipment, sewer laterals,
septic system abandonment, or one-time charges for sewage
treatment capacity associated with the improvements.
This bill specifies that "onsite sewer and septic
improvements" includes the replacement or upgrade of an
existing septic system if:
1.The public agency determines that the building served by
the septic system is not within range of service by an
existing or planned public sewer.
2.The replacement or upgrade satisfies all local
requirements regarding pretreatment, effluent filters, or
other devices to control solids releases, and emergency
capacity and malfunction alarming devices.
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This bill specifies that, for financing the installation of
onsite sewer and septic improvements, "public agency" means
a city, county, city and county, municipal utility
district, community services district, sanitary district,
sanitation district, or water district, as defined in
statute.
This bill prohibits a property owner's participating in a
voluntary contractual assessment program if participation
would result in the total amount of annual property taxes
and assessments exceeding five percent of the property's
appraised market value, as determined at the time of
approval of the owner's contractual assessment.
This bill contains legislative findings and declarations
regarding the need to finance sewer and septic improvements
using contractual assessments.
This bill states that the statute's provisions do not void
or otherwise release a property owner from voluntary
contractual assessment obligations, particularly in the
event that the total amount of annual property taxes and
assessments exceeds five percent of a property's appraised
value after a property owner has entered into a contractual
assessment.
This bill contains provisions to avoid potential
chaptering-out conflicts with other bills that amend the
same statutes.
Comments
Antiquated or damaged sewer laterals or septic systems can
leak sewage into the ground, harming the environment and
threatening public health. Faulty sewer laterals can allow
excessive infiltration and inflow of groundwater and
stormwater into the lateral, leading to spills and backups
into homes, streets, and watersheds. Faulty septic systems
can contaminate surface waters and groundwater with
pathogens and nitrates. Because commercial loans for sewer
and septic improvements can be expensive, local officials
want to accelerate upgrades to sewer and septic systems by
loaning money to private property owners at below-market
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rates. This bill provides local officials with another
tool they can use to help property owners pay for upgrades
that protect water quality and public health.
To address concerns about property owners' ability to pay
for financed improvements, current law requires public
agencies that offer voluntary contractual assessment
programs to establish criteria for determining a property
owners' creditworthiness. Additionally, many local
voluntary contractual benefit assessment programs impose
caps on the total amount of assessments that are imposed on
parcels.
Related Legislation
SB 1340 (Kehoe), lets local officials use contractual
assessments to finance electric vehicle charging
infrastructure.
AB 1755 (Swanson), lets local officials use contractual
assessments to finance seismic strenghtening improvements.
AB 44 (Blakeslee), lets local officials use contractual
assessments to finance distributed generation renewable
energy systems attached to real property pursuant to an
electricity purchase agreement.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/12/10)
Irvine Ranch Water District (co-source)
North Bay Watershed Association (co-source)
Association of California Water Agencies
California Association of Realtors
California Association of Sanitation Agencies
California Municipal Utilities Association
California Special Districts Association
California State Association of Counties
Central Marin Sanitation Agency
Clean Water Action
Costa Mesa Sanitary District
Cucamonga Valley Water District
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East Bay Municipal Utility District
Eastern Municipal Water District
El Dorado Irrigation District
Engineering Contractors Association
Environmental Justice Coalition for Water
Inland Empire Utilities Agency
Las Gallinas Valley Sanitation District
Marin Builders Association
Regional Council of Rural Counties
Three Valleys Municipal Water District
Western Municipal Water District
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Beall, Bill Berryhill,
Blakeslee, Blumenfield, Bradford, Brownley, Buchanan,
Caballero, Charles Calderon, Carter, Chesbro, Conway,
Coto, Davis, De La Torre, Emmerson, Eng, Evans, Feuer,
Fletcher, Fong, Fuentes, Fuller, Furutani, Gaines,
Galgiani, Garrick, Hagman, Hall, Hayashi, Hernandez,
Hill, Huber, Huffman, Jeffries, Jones, Lieu, Logue,
Bonnie Lowenthal, Ma, Monning, Nava, Nestande, Niello,
Nielsen, V. Manuel Perez, Portantino, Ruskin, Salas,
Saldana, Skinner, Smyth, Solorio, Audra Strickland,
Swanson, Torlakson, Torres, Torrico, Tran, Villines,
Yamada, John A. Perez
NOES: Anderson, Tom Berryhill, DeVore, Knight, Miller,
Silva
NO VOTE RECORDED: Bass, Block, Cook, De Leon, Gilmore,
Harkey, Mendoza, Norby
AGB:nl 8/12/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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