BILL ANALYSIS Ó
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|Hearing Date:June 16, 2014 |Bill No:AB |
| |2451 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Ted W. Lieu, Chair
Bill No: AB 2451Author:Daly
As Amended: June 10, 2014Fiscal: Yes
SUBJECT: Weights and measures: water submeters.
SUMMARY: Authorizes the installation of a water submeter that was
inspected, tested, and sealed by a sealer of another county;
authorizes a county to establish and collect fees to cover the actual
costs of inspecting, calibrating, testing, and certifying water
submeters; requires a sealer to mark a water submeter that is found to
be incorrect, with the words "Out of Order" and allows the submeter to
be returned to the manufacturer under certain conditions.
Existing law:
1)Provides that the Division of Measurement Standards (DMS) within the
Department of Food and Agriculture (DFA) has general enforcement
supervision of the laws relating to weights and measures and
measuring devices, and provides for the enforcement of those laws
and the inspection and testing of measuring devices in each county
by the county sealer.
2)Requires the DFA to adopt regulations governing the inspection
frequency of all commercially used weights, measures, and weighing
and measuring apparatuses in the state, and requires the county
sealer of each county to perform the inspections required by DFA.
(Business and Professions Code (BPC) § 12212)
3) Authorizes a county to collect a fee, as specified, from the owner
or user for the inspection or testing of any weighing or measuring
device. (BPC § 12210.5)
4) Requires that a person who uses, or intends to use, any weight or
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measure, or weighing or measuring device for commercial purposes,
shall cause that device to be sealed by a sealer before use, unless
it has been sealed before sale, in which case the purchaser may use
it for the period authorized for its use. (BPC § 12501.1)
5)Defines, for purposes of weighing and measuring devices, the term
"placed in service" as permitting the use of a device that has been
tested and found to be correct, as specified, or to submit a device
to a sealer for verification prior to installation. (BPC § 12531)
6)Provides that a device may only be placed in service by a sealer or a
service agency who repairs a commercial device. (BPC § 12509)
7) Requires a sealer to condemn and seize, and authorizes the
destruction, of any incorrect weights and measures and weighing and
measuring instruments used for commercial purposes. The sealer may
additionally mark or tag an incorrect device with the words "Out of
order." (BPC § 12506)
8)Makes it a misdemeanor for any person to do certain acts in violation
of the weights and measures law, including use, for commercial
purposes, or retain in his or her possession an incorrect weight or
measure or weighing or measuring instrument. (BPC § 12510)
This bill:
1)Requires the county sealer, who possesses the appropriate equipment,
to perform tests on water submeters, to inspect, calibrate, test,
and certify the accuracy of a water submeter within the county and
upon written request of the owner, user, or operator of the water
submeter, in any of the following instances:
a) The service is requested to be performed in addition to, or
according to different schedule than the inspection schedule
established by regulations.
b) The requested service for a water submeter that is not
intended to be placed into service in the county within six
months.
c) The requested service pertains to a water submeter intended to
be placed into service in a different county.
2)Authorizes a county board of supervisors to authorize the sealer to
establish and collect fees to cover the actual costs of inspecting,
calibrating, testing, and certifying water submeters.
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3)Provides for a county sealer to authorize the installation of a water
submeter that has been inspected, tested, and sealed by a sealer of
another county if the following conditions are met:
a) The meter bears the current seal of the county in which the
water submeter was inspected (in accordance with the provisions
of Section 12505).
b) The water submeter is installed within 12 months of being
inspected, tested and sealed.
c) The sealer has no reason to believe the water submeter has
been tampered with, damaged, or otherwise rendered inoperable.
4)Requires a sealer to mark a water submeter submitted for inspection
and testing before its initial installation that is found to be
incorrect, as defined, with the words, "Out of Order" and allows the
submeter to be returned if:
a) The submeter does not have signs of intentional tampering to
facilitate fraud.
b) The submeter will not be placed in service in California.
5)Provides that an owner, user, or operator shall not be subject to
criminal prosecution or liable for other fines or penalties, if a
water submeter that has been installed is found to be incorrect,
subject to the following:
a) The water submeter was one of a submeter lot that had been
previously sample tested by a sealer, as specified.
b) The water submeter had not been previously tested by a sealer
and found to be correct.
c) The water submeter has not been found by the sealer to have
signs of intentional tampering, damage or alteration, as
specified.
d) The owner, user, or operator has maintained the water
submeter, as specified.
e) A water submeter that meets these conditions shall not be
reinstalled and placed into commercial use unless it is repaired
and recalibrated, as specified, and approved by the sealer.
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6)Deletes from the definition of "placed in service" the submission of
a device to a sealer for verification prior to the device's
installation.
7)Makes technical, updating and conforming changes.
FISCAL EFFECT: This measure has been keyed "fiscal" by Legislative
Counsel. The May 7, 2014 Assembly Appropriations Committee analysis
cites negligible state costs. Counties are given fee authority to
cover their costs.
COMMENTS:
1.Purpose. This bill is sponsored by the California Apartment
Association and the Utility Management and Conservation Association
in order to make several changes dealing with the approval of water
submeters for use in California, including:
Allows the use of sealed submeters statewide, regardless of
what county tested them;
Redefines "placed in service" to eliminate unintended
liability for submeter manufacturers; and,
Adds language that sets a procedure for disposing of water
submeters that fail to pass state testing.
The Author believes that California law regarding the testing and
use of submeters discourages manufacturers from shipping submeters
to California. This, in turn, negatively impacts the construction
and use of multifamily rental units and the availability of properly
functioning submeters.
According to the Author, existing law is silent on the issue of
using a submeter that is tested in another county; however, the
practice in the field is to test the submeter in the county where
that submeter is to be used. This bill would allow a submeter
sealed in any county in California to be used in any other county.
The Author further contends that the "placed-in-service" definition
creates liability for manufacturers who simply ship submeters which
ultimately fail testing yet are not actually installed. This bill
revises the definition of "placed in service" to no longer provide
that a submeter is "placed into service" when it is simply submitted
to a sealer for testing.
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The Author also indicates that the current law permits the
destruction of submeters which fail testing by a county sealer. The
Author states the manufacturers, with no intention to attempt to use
them in California, would like the failed submeters returned to
them. This bill provides that a failed submeter may be returned to
a manufacturer if the sealer does not find an indication that the
submeter has been tampered with, and if the submeter will not be
used in California.
1.Background. The largest, least expensive and most environmentally
sound source of water to meet California's future needs is the water
currently being wasted in every sector of our economy, according to
a Pacific Institute report, Waste Not, Want Not: The Potential for
Urban Water Conservation in California. The report indicates that
California's urban water needs can be met in the foreseeable future
by reducing water waste through cost-effective water-saving
technologies, revised economic policies, appropriate state and local
regulations, and public education.
Water submeters provide a critically important tool in the state's
efforts to increase water conservation. The U.S. Environmental
Protection Agency (EPA) estimated that installing water submeters in
multifamily units reduced water consumption by an average of 28%.
These results are consistent and in line with California's goal of
reducing water usage by 20% by 2020.
2.Use of Submeters. A submeter is a device that measures water
consumption of an individual rental unit within a multi-unit
building or facility. Before the use of submeters, many landlords
either included the utility cost in the bulk price of the rent or
lease, or divided the utility usage among the tenants in some way
such as equally, by square footage, or some other means. Without a
meter to measure individual usage, there is less incentive to
conserve or stop water leaks, since the other tenants or landlord
may pay all or part of those costs. Submetering creates awareness
of water conservation since the tenant will pay for all of their
usage and any leaks they allow to remain unrepaired. Conservation
also allows property owners to keep the cost of rent reasonable and
fair for all units regardless of how much water or energy they
consume.
3. Related Legislation. SB 750 (Wolk, 2013-2014 Session) requires
individual water meters, also called submeters, to be installed on
all new multifamily residential units or mixed commercial and
multifamily units and requires that landlords bill residents for
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the increment of water they use. Specifies landlord and tenant
rights and obligations. ( Status : SB 750 failed passage in
Assembly Water, Parks and Wildlife Committee in August 2013, and
was granted reconsideration.)
SB 744 (Wyland, 2011) would have amended the definition of "placed in
service" to provide that a water submeter is not considered "placed
in service" prior to its installation, if the water submeter is to
be used in a multi-unit residential structure. The bill further
provided that any water submeter tested by standards promulgated by
the National Institute of Standards and Technology shall be deemed
to be sealed and approved for commercial use, as specified. The
bill was vetoed by the Governor citing that by allowing non-sealers
to verify the accuracy of these commercial devices, the bill
removes the Department of Food and Agriculture's cornerstone tenet
of weights and measures protections for the public. ( Status : SB
744 was vetoed by the Governor.)
AB 19 (Fong, 2011) would have mandated that water purveyors adopt
policies requiring that multiunit residential structures or mixed
use residential and commercial structures that apply for water
connections after January 1, 2014, have, as a condition of new
water service, submeters that measure the water supplied to each
individual dwelling unit. ( Status : AB 19 was held in Assembly
Housing and Community Development Committee.)
AB 1975 (Fong, 2010), similar to AB 19, required multiunit residential
structures or mixed use residential and commercial structures to
add, as a condition of new service, water meters or submeters that
measure the water supplied to each individual unit. ( Status : AB
1975 was held on Suspense in the Senate Appropriations Committee.)
AB 1173 (Keene, 2007) also similar to AB 19, required water suppliers
to require, for all multiunit residential structures (apartment
complexes) for which a construction permit is issued, the
installation of meters or submeters on each rental unit as a
condition for providing water service. Both AB 1975 and AB 1173
faced serious concerns regarding potential impacts to low income
tenants. ( Status : AB 1173 was held in the Assembly Appropriations
Committee.)
AB 2121 (Kehoe, 2002) would have exempted submeters for multifamily
residential and multitenant commercial property from county
requirements specifying that water submeters must be tested and
sealed by a licensed county sealer before installation. ( Status :
AB 2121 was held in the Assembly Rules Committee.)
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SB 1368 (Kuehl, 2002) would have required DFA to adopt regulations to
establish tolerances and specifications for water submetering
devices used to determine water usage in multifamily units that are
served by a single water meter of a regulated or municipally owned
utility. ( Status : SB 1368 was held in the Assembly Rules
Committee.)
4.Arguments in Support. The sponsors of the bill, the California
Apartment Association (CAA) and the Utility Management and
Conservation (UMCA) write in support that "AB 2451 addresses a
problem that apartment builders face today which is a lack of supply
and availability of water submeters for use in California. Submeter
manufacturers have informed us that some of California's rules and
regulations have made shipping the devices to the state too risky.
Without compromising the quality and content of California's testing
and certification of these devices, AB 2451 makes the state's
regulations and corresponding procedures more flexible so that an
adequate supply of state-approved submeters is available when
needed. AB 2451 revises certain provisions of the Business and
Professions Code with the intent to help improve the availability of
approved water submeters. UMCA and CAA believe that this bill will
reduce the uncertainty in California associated with submeter
availability and will ensure there is a ready supply when needed -
when new multifamily housing is about to begin construction. In
that way, California can more systematically improve water
conservation while supporting the resurgence of housing
construction.
The Western Center on Law & Poverty and the California Rural Legal
Assistance Foundation (CRLAF) states that the bill would streamline
the approval process for water submeters in several important
respects, while assuring that the submeters placed in service have a
high degree of accuracy. This in turn will help make submeters
available on a wider basis.
The California Building Industry Association (CBIA) argues that
California is home to the nation's most ambitious water conservation
goals and the state must ensure that its policies provide the means
to achieve those goals. Central to those needed policies, according
to CBIA, is assurance that an adequate supply of sub-meters for use
in multifamily housing is available. CBIA states, "California's
multifamily builders strive to comply with state and local water
conservation goals. Unfortunately, the lack of access, fear of
civil liability, and absence of state support to obtain water meters
is dramatically hurting the cause. As the state faces the worst
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drought in modern times, it's imperative that all industries strive
to conserve every last drop of water."
American Utility Management (AUM) states that current California rules
and regulations have created problems for submeter manufacturers
that ship devices to the State. "This has resulted in an uncertain
future for water submeters at a time when we need them the most to
conserve our scarce water supply. According to a study by the U.S.
Environmental Protection Agency (EPA), water use where submeters are
installed can, on average, reduce water use by 28% each month." The
bill streamlines the regulatory process to ensure ready access to
water submeters, according to AUM.
California Association of Realtors (CAR) argues that the bill creates
flexibility in the regulatory environment governing water meter
production that will generate better availability of state-approved
submeters and permit submeters to be tested in one county and used
in other California counties.
San Diego County Apartment Association states that the City of San
Diego passed an ordinance in 2010 mandating that submeters be
installed in all new rental housing construction. This bill will
ensure an adequate supply of submeters in California for
installation in rental housing.
SUPPORT AND OPPOSITION:
Support:
California Apartment Association (Sponsor)
Utility Management and Conservation Association (Sponsor)
American Utility Management
Apartment Association of Greater Los Angeles
California Association of Realtors
California Building Industry Association
California Rural Legal Assistance Foundation
MeterNet USA
Multifamily Utility Company
Natural Resource Management, Inc.
Northwestern Utility Billing Services, Inc.
San Diego County Apartment Association
Santa Barbara Rental Property Association
Urban Meters & Readers, Inc.
Western Center on Law and Poverty
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Opposition:
None received as of June 11, 2014.
Consultant:G. V. Ayers