BILL ANALYSIS                                                                                                                                                                                                    
                                                                  SB 407
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          Date of Hearing:   July 8, 2009
               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
                                 Norma Torres, Chair
                     SB 407 (Padilla) - As Amended:  July 1, 2009
          SENATE VOTE  :   22-15
           
          SUBJECT  :   Property transfers:  plumbing fixtures replacement
           SUMMARY  :   Seeks to require the replacement of all non-water  
          conserving plumbing fixtures, as defined, in commercial and  
          residential properties built prior to 1994 with water-conserving  
          fixtures by either 2017 or 2019, depending on the type of  
          property.  Specifically,  this bill  :
          1)Makes legislative findings and declarations, including that  
            economic analysis has identified urban water conservation as a  
            cost-effective approach to addressing water supply needs.
          2)Defines "commercial real property" as any real property that  
            is intended for commercial use including hotels and motels  
            that is not a single-family residential property or a  
            multi-family property.
          3)Defines "multifamily residential real property" as a building  
            containing one or more units that is intended for human  
            habitation, or any mixed residential commercial buildings,  
            including residential hotels but does not include hotels and  
            motels that are not residential hotels. 
          4)Defines "noncompliant plumbing fixtures" as meaning any of the  
            following:
             a)   Any toilet manufactured to use more than 1.6 gallons of  
               water per flush;
             b)   Any urinal manufactured to use more than one gallon of  
               water per flush; 
             c)   Any showerhead manufactured to have a flow capacity of  
               more then 2.5 gallons of water per minute; and
             d)   Any interior faucet that emits more than 2.2 gallons of  
               water per minute. 
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          5)Defines "water-conserving plumbing fixture" as any fixture  
            that complies with current building standards applicable to a  
            newly constructed real property of the same type.
          6)Proposes requirements that will apply to residential and  
            commercial real property built and available for use on or  
            before January 1, 1994, with the exception of: 
             g)   registered historical sites; 
             h)   real property for which a licensed plumber certifies  
               that, due to the age or configuration of the property or  
               its plumbing, installation of water-conserving plumbing  
               fixtures is not technically feasible; and 
             i)   a building that has had its water service permanently  
               disconnected.
          10)With respect to single family residential real property:
               a)   Requires the property owner to replace all noncompliant  
               plumbing fixtures in the property with water-conserving  
               plumbing fixtures on or before January 1, 2017.
             b)   Requires a building permit applicant to replace all  
               noncompliant plumbing fixtures in the property with  
               water-conserving plumbing fixtures as a condition for:
                 xi.   issuance of a certificate of final completion and  
                occupancy, or
                 xii.  approval of a final building permit by the local  
                building department, for all building alterations or  
                improvements on or after January 1, 2014.
             a)   Requires a seller or transferor of the property, in  
               providing the Real Estate Transfer Disclosure Statement  
               ("TDS") required by Insurance Code Section 1102.6, to  
               disclose in writing to the prospective purchaser or  
               transferee the following information:
                i.    The requirement that the property owner must replace  
                all noncompliant plumbing fixtures in the property with  
                water-conserving plumbing fixtures on or before January 1,  
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                2017; and 
               ii.   Whether the real property includes any noncompliant  
                plumbing fixtures.
           13)With respect to multifamily residential or commercial real  
            property:
               a)   Requires that all noncompliant plumbing fixtures in the  
               property be replaced with water-conserving plumbing  
               fixtures on or before January 1, 2019.
             b)   Requires a building permit applicant to replace all  
               noncompliant plumbing fixtures in the property with  
               water-conserving plumbing fixtures, as a condition for (i)  
               issuance of a certificate of final completion and  
               occupancy, or (ii) approval of a final building permit by  
               the local building department, for all building alterations  
               or improvements on or after January 1, 2014, subject to the  
               following provisions:
               i.    For building additions in which the sum of concurrent  
                building permits by the same building permit applicant  
                would increase the floor area of the space in a building  
                by more than 10 percent, the building permit applicant  
                shall replace all non-compliant plumbing fixtures in the  
                building.
               ii.   For building alteration or improvements in which the  
                total construction cost estimated in the building permit  
                is greater than one hundred fifty thousand dollars  
                ($150,000), the building permit applicant shall replace  
                all noncompliant plumbing fixtures that serve the specific  
                area of alteration or improvement.
               iii.  For any alterations or improvements to that room in a  
                building that contains any noncompliant plumbing fixtures  
                and that requires a building permit, the building permit  
                applicant shall replace all noncompliant plumbing fixtures  
                in that room, notwithstanding i) and ii) above.
               c)   Requires a seller or transferor of the property to  
               disclose in writing to the prospective purchaser or  
               transferee the following information:
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               i.    The requirement that all noncompliant plumbing  
                fixtures in the property be replaced with water-conserving  
                plumbing fixtures on or before January 1, 2019.
                
               ii.   Whether the real property includes any noncompliant  
                plumbing fixtures.
          14)Permits a city or county to enact local ordinances or  
            established policies that promote compliance with this  
            article, or to enact local ordinances that will result in a  
            greater amount of water savings than those provided for in  
            this bill.
          15)Does not preempt local ordinances requiring retrofit of  
            noncompliant plumbing fixtures adopted prior to July 1, 2009  
            by a city or county.
           EXISTING LAW  :  
          1)Requires all water closets sold or installed in the state to  
            use no more than an average of 1.6 gallons per flush.  Further  
            requires that on and after January 1, 2014, all water closets,  
            other than institutional water closets, sold or installed in  
            this state must be high-efficiency water closets.  (Health &  
            Safety Code Section 17921.3(b)(1).)
          2)Requires all urinals sold or installed in the state to use no  
            more than an average of one gallon per flush.  Further  
            requires that on and after January 1, 2014, all urinals sold  
            or installed in this state, other than blow-out urinals, must  
            be high-efficiency urinals.  (Health & Safety Code Section  
            17921.3(b)(2).)
          3)Declares that it is the policy of the state that the  
            management of urban water demands and efficient use of water  
            shall be actively pursued to protect both the people of the  
            state and their water resources (Water Code Section 10610.4).
          4)Requires the seller or transferor of any residential real  
            property consisting of one to four dwelling units to deliver  
            to the prospective transferee, as soon as practicable before  
            transfer or execution of the sales contract, the Real Estate  
            Transfer Disclosure Statement ("TDS") specified by Section  
            1102.6 of the Civil Code (Civil Code Section 1102.3). 
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           FISCAL EFFECT  :   Unknown 
           COMMENTS  :   
          The California Building Standards Law establishes the California  
          Building Standards Commission (CBSC) and the process for  
          adopting universal state building standards.  Among CBSC duties  
          are the following:  receiving proposed building standards from  
          state agencies for consideration in an annual building code  
          adoption cycle; reviewing and approving building standards  
          submitted by state agencies; adopting building standards for  
          state buildings where no other state agency is authorized by  
          law; and publishing the approved building standards in the  
          California Building Standards Code (California Code of  
          Regulations, Title 24).  There are approximately twenty state  
          agencies that develop building standards; Department of Housing  
          & Community Development (HCD) is responsible for standards for  
          residential buildings. 
          Building standards are generally prospective in that they only  
          apply to new construction or to existing buildings that undergo  
          alteration or rehabilitation.  There are a few exceptions to  
          this rule however.  Current law requires that all water heaters  
          in existing residential structures be braced, anchored, or  
          strapped to resist falling or horizontal displacement due to  
          earthquake motion.  
           
          Purpose of the bill  :  
          According to the author, reforms through legislation or plumbing  
          code have encouraged the installation of new water-saving  
          devices and have advanced the vast majority of water savings  
          statewide.  The existing reforms, most notably plumbing changes  
          that have led to the sale of highly efficient toilets throughout  
          California, are the primary reason why conservation activities  
          have lowered water use in Southern California by an estimated  
          one million acre foot per year.  This is more water, as an  
          important comparison, than Southern California receives this  
          year from the Sacramento San Joaquin Delta.  While California  
          retailers are now required to sell low-flush toilets, literally  
          millions of inefficient toilets still exist in homes and  
          businesses throughout the state.  Replacing an old inefficient  
          toilet with a new one can save 31 gallons per year, every day  
          for years.  Low-flow shower heads and faucets will save  
          additional water. 
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           Existing requirements for water closets and urinals  : 
          In 1992, the Legislature passed SB 1224, Chapter 1347, that  
          required all water closets (toilets) sold or installed on or  
          after January 1, 1994 to use no more than an average of 1.6  
          gallons per flush, and likewise for urinals, to use no more than  
          an average of one gallon per flush.   In 2007, AB 715 (Laird)  
          Chapter 499 prohibited the sale, after January 1, 2014, of  
          toilets that exceed 1.28 gallons per flush and urinals that  
          exceed 0.5 gallon per flush.  The CBSC adopted this standard for  
          new construction built after 2011.  
          This bill requires that all non-compliant plumbing fixtures in  
          single family homes built after 1994 are replaced by  
          water-conserving plumbing fixtures by January 1, 2017.  Water  
          conserving plumbing fixtures is defined as those fixtures that  
          comply with current building standards.  
          This bill seeks to capture those homes built prior to 1994 that  
          may have older, less water efficient toilets and water faucets.   
          Although owners in pre-1994 homes may replace older water  
          inefficient fixtures with new efficient ones as a result of  
          upgrades or the need to replace inoperable fixtures, this bill  
          will ensure that conversion takes place.
           Disclosure at the time of sale  :  
          When residential real property is to be sold or transferred,  
          existing law requires the seller or transferor to make certain  
          written disclosures, including the broad Transfer Disclosure  
          Statement (TDS) (specified in Civil Code Section 1102.6).  This  
          bill would augment those existing disclosures for single-family  
          residential real property sales by including written disclosure  
          of:  (1) the date by which the property owner must ensure that  
          all noncompliant plumbing fixtures in the property have been  
          replaced with water-conserving plumbing fixtures; and (2)  
          whether the property includes any noncompliant plumbing  
          fixtures.
           Existing Retrofit Ordinances in 11 Local Jurisdictions Will Be  
          Grandfathered.   
          At least 11 cities or local water district authorities,  
          including the cities of Los Angeles, San Francisco, and San  
          Diego, have already enacted retrofit ordinances that implement  
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          similar requirements and water conservation standards as this  
          bill.  This bill would not preempt any local ordinance requiring  
          retrofit of noncompliant plumbing fixtures adopted prior to July  
          1, 2009, but instead grandfather them into law.  Furthermore,  
          this bill permits a city or county to enact local ordinances  
          that promote compliance with this legislation or that will  
          result in an equivalent or greater amount of water savings.  
           Remaining Concerns  :  
          Although the author has eliminated almost all of the opposition  
          to this bill, the Apartment Associations of Orange County (AAOA)  
          and, California Southern Cities remain opposed unless amended  
          due to several remaining concerns.  
          First, the apartment associations would like assurance that once  
          landlords of multifamily buildings comply with the upgrades to  
          water efficient fixtures, they would not be required to update  
          devices each time a new device becomes available.  They have  
          requested a safe harbor of 20-years during which time landlords  
          cannot be required by state law or local ordinance to update  
          fixtures to result in greater water efficiency. 
          Second, the bill allows local governments to adopt ordinances  
          that will result in greater water savings than the standard  
          required by this bill.   The opponents' request that only local  
          governments that currently have ordinances that are more  
          stringent than the standards of this bill be grandfathered in to  
          state law and all other local governments be prohibited from  
          adopting a standard that requires greater water efficiency (than  
          the standards of this bill) going forward.  
          Finally, the opponents request that the bill make clear that  
          landlords can enter a unit in order to install the water  
          efficient devices required by the bill.  Additionally, they  
          request the bill specify that tenants be required to inform a  
          landlord if the water device becomes inoperable and a landlord  
          is not liable if a tenant modifies or removes a water device.   
          Prior Legislation  :  SB 1224 (Killea), Chapter 1347, Statutes of  
          1992, requires all water closets (toilets) sold or installed on  
          or after January 1, 1994 to use no more than an average of 1.6  
          gallons per flush, and requires all urinals sold or installed on  
          or after January 1, 1994 to use no more than an average of one  
          gallon per flush.  
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          AB 715 (Laird), Chapter 499 of the 2007 Statutes, prohibits the  
          sale, after January 1, 2014, of toilets that exceed 1.28 gallons  
          per flush and urinals that exceed 0.5 gallon per flush.
          Double referred  :  The Assembly Committee on Rules referred SB  
          407 to the Committee on Housing and Community Development and  
          Judiciary.  The bill passed the Assembly Committee on Judiciary  
          with amendments on June 30, 2009 by a vote of 7 to 3.
           
          REGISTERED SUPPORT / OPPOSITION  :
           Support 
           
          Association of California Water Agencies, co-sponsor
          Metropolitan District of Southern California, co-sponsor
          San Francisco Public Utilities Commission, co-sponsor
          Burbank Water and Power
          East Bay Municipal Utility District 
           
            Opposition 
           
          Apartment Association, California Southern Cities (unless  
          amended)
          Apartment Association of Orange County (unless amended)  
           Analysis Prepared by  :    Lisa Engel / H. & C.D. / (916) 319-2085