This legislation amends the payment period and interest rate on a public agency’s financing for the construction or improvement of public sewer systems and specifies the purposes for which the public agency may exercise its authority over public sewer systems.   

California Health & Safety Code §5464, 5465
Amended by A.B. 741

Effective: January 1, 2012

The period which a public agency is given to pay for the costs to construct or improve public sewer systems has been extended from 15 years to 30 years. The interest rate charged to a public agency on the unpaid balance of those costs has been increased from 6% to 12%.

The public agency has the authority to finance and order the construction or improvement of public sewer systems regardless of whether discharge or contamination has occurred. The agency may exercise this authority only for the following purposes:

  • to connect a property which has an onsite septic system to the public sewer system (costs cover but are not limited to pipes, pumps, other equipment, septic system abandonment and associated sewage treatment); or
  • to replace or repair existing sewer system laterals which connect the pipes to the public sewer system (cost of replacement or repair will be the same as the cost to connect a pipe to the public sewer system).

The following definitions apply in this section:

  • “Assessment district” is an improvement district or area served by the public sewer system;
  • “Government board” and “governing body” is the governing body of the public agency; and
  • “Ordinance” is a resolution.

Editor’s note – The public agency is defined as an entity, which includes counties, cities and counties, cities, sanitary districts, county sanitation districts, county service areas, sewer maintenance districts and other public corporations and districts authorized to acquire, construct, maintain and operate sanitary sewers and sewerage systems. [Calif. Health & Safety Code §5470]