BILL ANALYSIS                                                                                                                                                                                                    





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          |                                                                 |
          |         SENATE COMMITTEE ON NATURAL RESOURCES AND WATER         |
          |                   Senator Fran Pavley, Chair                    |
          |                    2009-2010 Regular Session                    |
          |                                                                 |
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          BILL NO: AB 1975                   HEARING DATE: June 22, 2010  
          AUTHOR: Fong                       URGENCY: No  
          VERSION: June 16, 2010             CONSULTANT: Dennis O'Connor  
          DUAL REFERRAL: Committee on Rules  FISCAL: Yes  
          SUBJECT: Water charges and meters: multiunit structures.  
          
          BACKGROUND AND EXISTING LAW

          The Water Measurement Law required, beginning January 1, 1992,  
          every water purveyor to require the installation of a water  
          meter as a condition of new water service.  That law also  
          requires urban water suppliers to install water meters on  
          service connections that predate January 1, 1992, in accordance  
          with a specific timetable, but in all cases by January 1, 2025.   
          The law does not require the metering or submetering of  
          individual units in multiunit residential structures.

          PROPOSED LAW
          
          1.This bill would require, beginning January 1, 2013:
                 Architectural plans for individual dwelling units in a  
               newly constructed multiunit residential structures must  
               include the installation of either a water meter or a  
               submeter, at the discretion of the water purveyor, as a  
               condition for the issuance of the building permit.
                 The owner of such a structure, or his or her agent, must  
               charge occupants for water service.  The charge must be  
               based on the actual volume of water delivered as measured  
               by the water meter or submeter. 
                 The owner of the structure must ensure that a water  
               submeter complies with laws and regulations governing  
               installation, certification, maintenance, billing, and  
               testing of water submeters. 
                 Water purveyors would be prohibited from charging an  
               owner of a such a structure, or his or her agent, a fee for  
               the installation of a water meter or submeter that is  
               installed by the owner or his or her agent..
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          1.This bill would require the Department of Housing and  
            Community Development, during the next regularly scheduled  
            building standards annual code adoption cycle beginning on or  
            after January 1, 2011, to do the following:
                 Develop and submit building standards for the  
               installation of water meters and submeters in residential  
               units within a multiunit residential structure or a  
               mixed-use residential and commercial structure.
                 Determine circumstances under which the installation of  
               water meters or submeters shall be deemed infeasible, and  
               provide an exemption for these circumstances in the  
               proposed building standards.
                 Exempt from those building standards low-income housing,  
               student dormitories, senior living facilities.
                 Before adopting these proposed building standards, the  
               department must determine that a sufficient number of water  
               meters and submeters are available in the market.

          ARGUMENTS IN SUPPORT

          According to the Sierra Club, "Water metering and volumetric  
          pricing are paramount to giving Californians an accurate price  
          signal for their water use.  However for most multiple dwelling  
          housing units, like apartments and condominiums, water agencies  
          do not provide meters to individual unit.  Instead, there are  
          master meters for groups of dwelling units.  The cost of water  
          use is included with the cost of rent, charged as a flat fee, or  
          allocated in some way among residents connected to the master  
          meter.  Residents in such dwelling units will not know how much  
          water they use unless their units are sub-metered."

          "Studies have shown that water submeters are associated with  
          decreased water usage.  A 2004 Aquacraft Inc. study showed water  
          savings of 15.3% when comparing sub-metered properties with  
          rental properties that do not bill water separately from rent  
          ("in-rent" properties.)  Another study showed water usage in  
          sub-metered properties to be 18% to 39% less than in-rent  
          properties."

          ARGUMENTS IN OPPOSITION

          The Western Center on Law & Poverty writes "The bill would  
          require water usage in each new multifamily dwelling unit to be  
          measured by a utility-owned and operated meter, or a submeter  
          owned and operated by the building's owner or landlord. It is  
          the latter option that causes our concern."  The Center  
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          identifies a number of concerns, mostly related to tenant rights  
          under a submetering program.  These concerns include issues  
          associated with:
           Enforced installation standards. 
           Adequate disclosures. 
           Conservation not being an excuse for soaking tenants.
           Billing practices. 
           Dispute resolution. 
           Leaks. 
           Landlord remedies

          COMMENTS 
          
           Sub-Metering Is The Challenge.   In a metered system, the water  
          purveyor supplies and bills water to each unit on the basis of a  
          meter serving just that unit.  The bill is paid directly by the  
          resident of that unit to the water purveyor.  In contrast, in a  
          submetered system, the water purveyor supplies and bills water  
          on the basis of a master meter at the main service connection.   
          The bill is paid by the owner or the owner's agent.  Further  
          down line, submeters are installed on the supply line to each  
          unit.  The landlord then reads and bills each unit separately  
          based on the reading of the submeter.

          The challenge is that under a submetered system, the landlord  
          acts in a way similar to a retail water utility, but without the  
          same level of regulatory oversight.  Consequently, conflicts can  
          arise over issues of meter accuracy, billing surcharges, etc.

          This bill would apply only to "newly constructed multiunit  
          residential structure or a mixed-use residential and commercial  
          structure for which the application for a building permit is  
          submitted on or after January 1, 2013."  To avoid the challenges  
          raised by submetered systems, it might make sense to eliminate  
          the option of submetered systems, thereby requiring all units to  
          be individually metered. (See suggested amendments)

           Refer to Rules.   Based on the June 16 amendments, the Rules  
          Committee has asked that the bill be referred back to them for  
          further consideration.

          SUGGESTED AMENDMENTS 

               AMENDMENT 1:  On page 3, line 7, strike "and submeters" 

               AMENDMENT 2:  On page 3, line 12, strike "or submeters" 

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               AMENDMENT 3:  On page 3, line 25, strike "and submeters" 

               AMENDMENT 4:  On page 4, line 10, strike "(a)" 

               AMENDMENT 5:  On page 4, line 15, strike "either a water  
               meter or a submeter, at the discretion of the water  
               purveyor," and insert "a water meter"

               AMENDMENT 6:  On page 4, strike lines 18 through 22  
               inclusive

               AMENDMENT 7:  On page 4 strike lines 29through 40 inclusive

               AMENDMENT 8:  On page 5, strike lines 1 through 9 inclusive
               
          SUPPORT
          Sierra Club California (Sponsor)
          American Society of Engineers
          Association of California Water Agencies
          California League of Conservation Voters
          California Municipal Utilities Association
          Clean Water Action
          County of Los Angeles
          East Bay Municipal Utility District
          El Dorado Irrigation District
          GreenPlumbersUSA
          Inland Empire Utilities Agency
          Planning and Conservation League
          Santa Clara Valley Water District
          Santa Clara Valley Water District
          Utility Conservation Coalition
          Walnut Valley Water District

          OPPOSITION
          California Rural Legal Assistance Foundation
          Coalition for Economic Survival
          Western Center on Law & Poverty










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