BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 750|
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THIRD READING
Bill No: SB 750
Author: Wolk (D), et al.
Amended: 5/14/13
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-1, 5/7/13
AYES: Evans, Corbett, Jackson, Leno, Monning
NOES: Anderson
NO VOTE RECORDED: Walters
SUBJECT : Building standards: water meters: multiunit
structures
SOURCE : California Rural Legal Assistance Foundation
Natural Resources Defense Council
Western Center on Law and Poverty
DIGEST : This bill requires that any newly constructed
multiunit residential structure that submits an application for
a water connection must install submeters to measure the water
supplied to each individual unit. This bill further prohibits
landlords from charging tenants separately for water service
unless a submetering system is installed, provides instruction
to landlords on how to charge tenants for submetered water
service, and specifies the information that must be disclosed to
tenants.
ANALYSIS :
Existing law:
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1.Requires urban water suppliers that do not get water from the
federal Central Valley Project, to install water meters on all
municipal and industrial service connections and to charge
each customer based on actual volume of water delivered.
2.Provides that each water corporation that is not already
subject to water metering requirements, under the existing
Water Measurement Law must currently install a water meter on
each new service connection and must retrofit each unmetered
service connection by January 1, 2025.
3.Authorizes the Building Standards Commission to approve and
adopt building standards, and provides that every three years
a building standards rulemaking is undertaken to revise and
update the California Building Standards Code.
This bill:
1. States the intent of the Legislature to encourage the
conservation of water in multifamily residential units and to
ensure that the practice of submetering for water service
provide appropriate safeguards for both tenants and
landlords.
2. Requires newly constructed multiunit residential structures,
and newly constructed mixed-use residential and commercial
structures, to require the installation a submeter, as
defined, to measure water supplied to each individual
dwelling unit.
3. Prohibits tenants from being charged separately for water
unless they reside in a building where submeters have been
installed. This bill further requires the landlord to ensure
that the water submeters comply with laws and regulations
governing installation, operation, and maintenance including
the following:
The installation was performed by a licensed service
provider;
The submeter for each dwelling unit measure only water
supplied for the exclusive use of that unit; and
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The submeter indicator may be easily accessed and read
by the tenant and the landlord without entering the
dwelling unit.
1. Exempts the following types of structures from the
requirements of this bill:
Low income housing, as defined;
Student dormitories;
Long-term healthcare facilities, as defined;
Time-share properties; as defined;
Residential care facilities, as defined; and
Structures greater than four stories in height where the
plumbing configuration renders the installation of
submeters infeasible, as specified.
1. Requires that prior to executing a rental agreement, a
landlord who intends to charge a tenant separately for water
service shall disclose specified information to a tenant,
including the following:
That the tenant will be billed for water separately from
the rent;
That the tenant will also be billed for a portion of any
recurring fixed charge billed to the property by the water
purveyor, as specified;
The due dates and payment procedures for bills of water
service;
That no other administrative, connection, disconnection,
billing, or other periodic fee or charge, except for a late
fee or submeter testing fee, may be assessed;
The terms of a late fee, if the landlord reserves the
right to charge one;
The average bill for water service per unit, as
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specified; and
The location of the submeter and how to read the
submeter.
1. Specifies that a landlord may only charge a tenant for a
portion of the water service bill based on the proportion of
the tenant's volumetric water use. This bill further
requires the landlord's billing cycle for water service to
match that of the water purveyor, as specified, and that each
bill include specified information including:
The submeter readings for the beginning and end of the
billing cycle, the dates read, and indicated consumption;
The unit of measure and rates charged;
Current charges for volumetric usage;
The amount of any recurring fixed charge for water
service;
The total water consumption for the property;
The percentage of the total water consumption that was
consumed by the tenant;
The total amount and date due, plus any late charges;
and
Contact information of the person who is authorized to
make adjustments to the bill.
1. Requires a submeter to be read within three days of the
beginning or end of a tenancy, to determine the amount of the
first or last bill for water service.
2. Prohibits a landlord from charging additional fees related
to water service, except for late fees or testing fees, as
provided. This bill further provides that landlords are not
prohibited from recovering costs by incorporating them into
the rent, as long as rent is a fixed amount per rental
period, as specified.
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3. Permits the assessment of late fees up to 5% for any water
service bill not paid within 20 days, as specified, and
authorizes a landlord to deduct unpaid fees from a security
deposit. However, this bill prohibits a landlord from
shutting off water service to a unit for any reason,
including nonpayment of a water bill.
4. Requires a landlord to maintain and make the following
available, in writing, upon the tenant's request within seven
days:
Installation and maintenance records of the tenant's
dwelling unit, as specified;
The most recent test results; and
The method and sources used to determine the rate at
which the tenant is charged for water.
1. Requires a landlord to make certain repairs on the water
system in a dwelling within seven days of a tenant's request.
This bill further allows a tenant to request that a landlord
have a submeter tested for accuracy, as specified. The
landlord is then required to pay for the testing if the
submeter is found to be inaccurate, or if the test indicates
that the usage has increased more than 25% over two of the
past three billing periods, as specified.
2. Permits, in addition to actual damages, a tenant to recover
from the landlord specified damages, costs, and fees for a
violation of the above provisions. This bill also provides
that any rights or obligations established under its
provisions may not be waived.
3. Authorizes a city, county, a city and county, or district to
enforce the above provisions.
4. Defines a number of terms, including submeter, water
service, and water purveyor.
Background
Traditionally, renters were not responsible for utility costs.
They were responsible for paying rent, and could use an
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unlimited amount of utilities. The movement towards individual
billing began in the late 1970s and early 1980s when the United
States was faced with a critical energy crisis that led
government officials to explore alternative energy conservation
measures. This effort led to a variety of significant changes
in our culture, including more fuel-efficient automobiles, and
the individual metering of gas and electricity for multifamily
housing residents.
Prior to the energy crisis, the majority of communities were
served by only one gas meter and one electric meter. Thus,
residents of these properties had no financial motivation to
conserve. Confronted with limited energy resources, the
majority of states enacted measures that mandated individual
metering of gas and electricity for newly constructed
communities. Similarly, in the past decade, the need to
conserve water has moved to the forefront of discussions about
conservation across the country. Property owners who bill their
residents for water usage typically use one of two methods:
submetering or allocation. A submetered property is one that
consists of a separate meter that measures water usage for that
unit. Residents are then billed monthly for their water. This
billing is often performed by a third party billing company on
behalf of the property owner. Alternatively, allocation systems
may be used when a submeter is not installed. In these
situations, residents are billed for water based on another
factor, such as the square footage of their apartment home, or
the number of occupants.
Many studies have shown that California's particular water needs
could be met by increased conservation and efficiency efforts.
The Pacific Institute's Report, Waste Not, Want Not: The
Potential for Urban Water Conservation in California, concluded
that "California's urban water needs can be met into the
foreseeable future by reducing water waste through
cost-effective water saving technologies, revised economic
policies, appropriate state and local regulations, and public
education."
Prior Legislation
AB 19 (Fong, 2011), was substantially similar to this bill.
This bill died in the Assembly Housing and Community Development
Committee.
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AB 1975 (Fong, 2010), would have required the Department of
Housing and Community Development to adopt building standards
requiring the installation of individual water meters or
submeters in newly constructed multi-unit residential buildings.
This bill died in the Senate Appropriations Committee.
AB 1173 (Keene, 2007), would have required submeters in every
multiunit residential structure built after January 1, 2010. It
also would have authorized landlords to charge tenants based on
the actual volume of water delivered to a tenant's unit or
authorized landlords operating buildings without water submeters
to charge tenants separately for the costs of water by a
prescribed allocation formula. This bill died in the Senate
Appropriations Committee.
AB 2572 (Kehoe, Chapter 884, Statutes of 2004) required urban
water suppliers to install water meters by 2025 on all service
connections constructed before 1992.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 5/13/13)
California Rural Legal Assistance Foundation (co-source)
Natural Resources Defense Council (co-source)
Western Center on Law and Poverty (co-source)
California Advocacy Committee
California League of Conservation Voters
California Water Association
Clean Water Action
East Bay Municipal Utility District
Environmental Defense Fund
Environmental Health Coalition
Housing Long Beach
Legal Aid Foundation of Los Angeles
Long Beach Water Department
Planning and Conservation League
Sierra Club California
Sonoma County
Sonoma County Water Agency
U.S. Green Building Council
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OPPOSITION : (Verified 5/13/13)
Apartment Association of Greater Los Angeles
California Apartment Association
California Association of Realtors
California Building Industry Association
California Business Properties Association
San Diego County Apartment Association
Santa Barbara Rental Property Association
Utility Conservation Coalition
Utility Management and Conservation Association
ARGUMENTS IN SUPPORT : The Environmental Defense Fund writes,
"Multi-unit submetering in new construction is an essential step
towards a secure and reliable water future in California.
Submetering ensures that consumers receive an appropriate signal
regarding both the volume and cost of their water use. It
incentivizes residents to undertake responsible water use, and
can also be useful in identifying locations of unnecessary
leakage."
The Western Center on Law and Poverty, in support of this bill,
stresses the necessity of tenant protections as water
conservation plans are executed with respect to multiunit
residences. They note that, "as this strategy is implemented,
it is important that tenants are protected and a comprehensive
and fair framework is put in place. Tenants must have the
opportunity to address concerns regarding the operation of water
meters and to redress unfair water charges."
ARGUMENTS IN OPPOSITION : The opposition raises concerns to
these provisions, arguing that landlords will not be able to
adequately cover the costs associated with submetering programs.
The California Apartment Association writes:
With the mandate for the installation of water meters or
submeters, SB 750 asks property owners to provide a service
currently conducted by water utilities. SB 750 would
require property owners to bear all the costs of
installing, maintaining, and repairing submeters. In
addition, it requires owners to read submeters and
individually bill each tenant.
Most rental property owners don't have the expertise to
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conduct such a program and would simply hire third party
vendors. Vendors who perform these services would charge
and bill tenants between four and five dollars per occupied
unit for the costs of reading and billing. Recovering
ACTUAL costs associated with a submetering program is a
customary practice in other states and, for example, in the
City of San Diego. SB 750 expressly prohibits any
administrative or servicing fee, thereby preempting local
ordinances like San Diego's.
The opposition has expressed concerns about other costs
associated with submeters. For example, the California Building
Industry Association argues that, "over the years we have
witnessed the provision of unjustified fees by local governments
when property owners and developers attempt to voluntarily
install submeters. There have been instances where local
governments have charged developers separate hook-up or
connection fees for EACH individual submeter, in addition to a
fee for the mater meter. This practice must be curtailed if we
plan to mandate meters and submeters."
(AL:nl):ej 5/14/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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