(1) Before any property owner is required to pay for construction of or connection to treatment works constructed pursuant to ORS § 454.275 to 454.380, the local governing body shall file with the Environmental Quality Commission documentation that connection charges and user charges levied for sewer service are based upon the cost of providing sewer service, according to reasonable cost-of-service sewer utility ratemaking principles. The existence of a city boundary shall not be used as a basis for imposing a sewer user rate or connection fee differential unless there are documented cost causative factors to justify the differential.

(2) Any assessment imposed by a local improvement district for the construction of treatment works pursuant to an order of the commission under ORS § 454.305 shall not include costs incurred before September 27, 1987, that are associated with responding to litigation to amend or reverse the order or with development of the plan for constructing treatment works prepared pursuant to ORS § 454.290. [1987 c.627 5,6]