SB 740 amends Section 13912 of the California Water Code governing municipal wastewater agencies’ agreements with entities that manage stormwater and dry‑weather runoff. The bill adjusts the administrative requirement connected to those agreements and leaves intact the broader set of authorities in §13912 that govern discharge authorization, enforcement, and funding.
The change is procedural rather than substantive: it reallocates time between agencies and local review bodies. For agencies, consultants, and LAFCos, that reallocation affects compliance calendars, internal approvals, and when local formation commissions receive notice of new or amended agreements — which in turn shapes project start dates and billing or fee timelines for stormwater capture projects.
At a Glance
What It Does
Section 13912 continues to authorize municipal wastewater agencies to accept stormwater and dry‑weather runoff from industrial and commercial sites (subject to federal law), enforce compliance through pretreatment programs, and levy taxes, fees, or charges to fund projects under the chapter.
Who It Affects
Directly affected parties include municipal wastewater agencies, local agency formation commissions (LAFCos), municipal and industrial stormwater dischargers, and the consultants and legal teams that prepare and file interagency agreements.
Why It Matters
This statute frames how wastewater agencies operationalize stormwater capture projects and how local oversight is notified. Even a modest procedural change to filing timelines can shift when projects go live, when fees begin to be assessed, and how quickly LAFCos can spot jurisdictional or reorganization issues under the Cortese‑Knox‑Hertzberg framework.
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What This Bill Actually Does
Section 13912 is the Water Code provision that lets municipal wastewater agencies partner with stormwater managers and with industrial or commercial dischargers to route captured stormwater or dry‑weather runoff into wastewater collection or treatment systems. The provision bundles three practical powers: (1) to authorize such discharges so long as federal law permits, (2) to use existing legal powers to enforce water quality requirements and ensure projects fit local watershed priorities, and (3) to raise money—taxes, fees, or charges—to fund projects covered by the chapter.
The bill keeps those authorities in place and preserves the cross‑check that any new authority must comply with the Cortese‑Knox‑Hertzberg Local Government Reorganization Act. It also keeps the rule that LAFCo approval of an agreement generally isn’t required; the LAFCo role in the statute is notice, not a discretionary veto, except where CKH requires otherwise.The concrete operational change in the text alters the window for filing a copy of a new agreement or amendment with each county’s LAFCo: for agreements entered after January 1, 2022, the agency now has 40 days after the agreement’s effective date to file (the prior text used a 30‑day window).
That shift is small on its face but meaningful in practice: it changes deadlines for internal signoffs, legal review, and the point at which LAFCos receive documentary notice that could trigger additional review or administrative steps.Practically, agencies and their counsel will need to update checklists, contract templates, and compliance calendars; LAFCos and project partners should expect filings to arrive on a slightly different cadence. The statute still leaves open how LAFCos process filings operationally and does not add new review powers or substantive standards for the agreements themselves.
The Five Things You Need to Know
SB 740 leaves intact §13912’s core powers: authorization of captured stormwater discharges to wastewater systems, enforcement via pretreatment programs, and authority to levy taxes, fees, or charges to fund projects.
For agreements entered after January 1, 2022, the bill changes the required filing window with county LAFCos from within 30 days to within 40 days after the agreement’s effective date.
The bill explicitly ties the exercise of new authorities to compliance with the Cortese‑Knox‑Hertzberg Local Government Reorganization Act; LAFCo approval is not required except where CKH demands it.
The filing obligation is notice‑focused: it requires a copy of the agreement or amendment to be sent to each county LAFCo where the agency has territory; it does not create a new substantive review standard for the agreements.
SB 740 does not add funding, enforcement mechanisms, or substantive revisions to what counts as an acceptable agreement — it changes the timing and leaves other operational details to agencies and LAFCos.
Section-by-Section Breakdown
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Authorization to accept stormwater and dry‑weather runoff
This clause authorizes municipal wastewater agencies, to the extent federal law allows, to accept discharges of stormwater or dry‑weather runoff captured at industrial and commercial sites into their collection or treatment systems. Practically, this is the statutory permission point for projects that connect stormwater capture to sewer infrastructure; it preserves the caveat that federal permitting or treatment standards still constrain what an agency may accept.
Enforcement and alignment with watershed priorities
This provision reiterates that agencies can use their existing legal powers—such as industrial pretreatment programs—to enforce water quality requirements and ensure projects are consistent with local watershed obligations. For compliance officers, this is the statutory hook to require permits, monitoring, and pretreatment where necessary and to tie projects into broader watershed planning rather than treat them as isolated hookups.
Funding authority — taxes, fees, and charges
The statute explicitly authorizes agencies to levy taxes, fees, and charges consistent with their existing authority to fund projects under the chapter. The language leaves the mechanics (rate setting, voter or board approval where required, and pass‑through to ratepayers) to existing law and local procedures, so agencies must map this authorization onto their fiscal and public‑process obligations.
Subject to Cortese‑Knox‑Hertzberg
New authorities granted under the chapter must comply with the Cortese‑Knox‑Hertzberg (CKH) Act. That places a procedural overlay on any jurisdictional changes or service‑area effects that flow from agreements, and it is the statutory basis for LAFCo involvement in ensuring orderly local government organization.
Filing requirement with LAFCo and non‑approval posture
Paragraph (c)(1) requires that when an agency enters into a new agreement or amends one (for agreements after Jan 1, 2022), it must file a copy with each county LAFCo where the agency has territory—now within 40 days after the agreement’s effective date. Paragraph (c)(2) clarifies that LAFCo approval of the agreement is not required unless CKH makes approval necessary. The practical implication: LAFCos receive formal notice without being converted into routine approvers, but they retain statutory avenues to act when CKH issues arise.
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Explore Environment in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Municipal wastewater agencies — gain an extra 10 days to finalize internal approvals and complete administrative filings, easing contract closeout and legal review timelines.
- Project developers and stormwater dischargers — slightly more predictable lead time for agency signature and downstream administrative steps, which can smooth project scheduling and procurement.
- Legal, engineering, and consulting firms — clarity about the filing window reduces transactional risk and gives consultants a defined calendar for delivering final documents to LAFCo.
Who Bears the Cost
- Ratepayers and local taxpayers — the statute preserves authority to levy taxes, fees, or charges to fund projects, which can translate into new or higher charges borne by customers if agencies exercise that power.
- Local agency formation commissions (LAFCos) — adjustments in filing cadence can change when LAFCos receive materials and require administrative handling; they may face short‑term workload smoothing needs without additional funding.
- Municipal wastewater agencies — although the change gives more time to file, agencies still retain substantive enforcement and funding obligations (pretreatment, monitoring, fee administration), which require staff time and budget to implement.
Key Issues
The Core Tension
The central tension is between giving municipal wastewater agencies operational breathing room to close and document agreements (and thus facilitate projects) and preserving timely local transparency and oversight through LAFCo notice; a small extension helps internal workflows but can compress or delay local review windows and public awareness with no change to substantive review powers.
The bill is a narrowly targeted drafting change, but those are the changes that surface thorny operational questions. The most immediate implementation issues are calendaring and retroactivity: the statute applies to agreements "after January 1, 2022," so agencies and LAFCos must confirm which executed agreements fall into that bucket and whether late filings prior to the change expose agencies to any administrative consequences.
The statute does not provide transition rules or penalties tied to filing timing, which leaves ambiguity about enforcement and remedies for missed deadlines.
There is also a governance trade‑off embedded in the filing function. The filing is notice‑oriented, not approval‑oriented, yet LAFCos retain CKH tools to challenge or review agreements that affect local government organization.
Changing the filing window reallocates a small slice of time between agency internal processes and LAFCo receipt; depending on local practice that could either reduce rushed filings or delay LAFCo awareness of jurisdictional implications. Finally, the text preserves federal‑law constraints on accepting stormwater, but does not clarify how to reconcile conflicted standards (for example, when federal permits impose monitoring or treatment that raises project costs), so agencies must navigate multi‑layered regulatory obligations without new statutory guidance or funding in this bill.
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