BILL ANALYSIS �
SB 750
Page 1
Date of Hearing: July 3, 2013
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
SB 750 (Wolk) - As Amended: May 24, 2013
SENATE VOTE : 27-11
SUBJECT : Building standards: water meters: multiunit
structures
SUMMARY : Mandates that water purveyors adopt policies requiring
that newly constructed 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. Specifically, this bill :
1)Includes intent language.
2)Requires that meters or submeters be of types or designs which
have been approved in
accordance with state rules and regulations governing devices
that weigh and measure.
3)Requires that meters or submeters be installed and operated in
compliance with state regulations governing the tolerances and
specifications for measuring devices.
4)Provides that a water purveyor cannot be required to assume
responsibility for ensuring compliance with any law or
regulation governing installation, certification, maintenance,
and testing of water submeters associated with outside
plumbing.
5)Provides the following types of housing that are excluded from
the requirements:
a) Low-income housing;
b) Student dormitories;
c) Long-term health care facilities;
d) Time-share properties;
SB 750
Page 2
e) Residential care facilities; and
f) A structure that is greater than four stories, if the
owner or his or her agent demonstrates to the satisfaction
of the water provider that the structure's plumbing
configuration incorporates multiple points of entry in each
dwelling unit that renders the installation of the
submeters infeasible.
1)Includes the following definitions:
a) "Low-income housing" means a residential building
financed with low-income housing tax credits, tax-exempt
mortgage revenue bonds, general obligation bonds, or local
state or federal loans or grants provided to residents with
low incomes as defined and will deed restrictions, and for
which not less than 25% of the dwelling units in the
building are designated for occupancy by lower-income
households;
b) "Billing agent" is a person or entity that contracts to
provide submetering services, including billing, to a
landlord;
c) "Landlord" means all agents of the landlord, billing
agents, successors in interest to the real property
interests of the landlord. "Landlord" does not include a
tenant who rents all or a portion of a dwelling unit to
subtenants or a common interest development;
d) "Property" means real property containing two or more
dwelling units that are served by a single meter;
e) "Rental agreement" includes a fixed-term lease;
f) "Renting" includes leasing whether on a periodic or
fixed-term basis;
g) "Submeter" means:
i. a device that measures water consumption of an
individual rental unit within a multiunit residential
structure or mixed-used residential and commercial
structure, and which is owned and operated by the
SB 750
Page 3
landlord; and
ii. includes submeters if more than one submeter is
being used to measure water usage in a particular
dwelling unit;
a) "Water service" includes charges for other services
including sewage or storm water
service that are based on the volume of water usage recorded
by a water meter; and
b)"Water purveyor" means a water purveyor as defined in Water
Code Section 512.
1)Provides a landlord may not charge tenants separately for
water service in a property with submeters unless the
submetering system is installed, operated, and maintained as
follows:
a) A submeter is certified for commercial purposes pursuant
to law;
b) Installation conforms to all laws;
c) Installation was performed by a registered service
agency;
d) The submeter is operated in compliance with established
regulations;
e) The submeter for a dwelling unit measures only water
that is supplied for the particular use of the dwelling
unit;
f) The primary submeter indicator or remote reader may be
easily accessed and read by the tenant of the dwelling unit
and by the landlord without entering the unit;
g) Each submeter is reinspected and recalibrated with the
time limits specified in law or regulation; and
h) The plumbing fixtures conform to all laws regarding
habitability of dwellings and water conservation.
1)Requires a landlord that intends to charge a tenant separately
SB 750
Page 4
for water service to disclose the following to a tenant in
writing in at least 10-point type prior to executing a rental
agreement:
a) The tenant will be billed for water usage separately
from the rent;
b) The average bill for water usage for units at the
property over the most recent calendar year or portion
thereof, if the building is less than a year old;
c) The frequency of submeter readings;
d) The due dates and payment procedures for bills;
e) If a billing agent is used, the name, address, e-mail
address, normal hours of operation, and toll-free number of
the agent;
f) The date that the submeter was last tested and
calibrated and the date by which it must be tested and
recalibrated under law;
g) A statement that the tenant will be charged for water
service at the exact rate or rates charge by the water
purveyor;
h) A statement that the tenant will be charged for a
portion of any recurring fixed charge billed to the
property but the water purveyor and that the tenant's
portion of the recurring fixed charge is the proportional
amount of water the tenant uses in relation to the usage of
the entire property;
i) The current amount of the recurring charge;
j) A statement that no other connection, disconnection,
billing or other periodic fee or charge, except for an
administrative fee, a late fee, or a submeter testing fee
may be assessed;
aa) If a landlord reserves the right to charge an
administrative fee or late fee, the amount and terms of the
administrative fee or the late fee; and
SB 750
Page 5
bb) The location of the submeter and directions for the
tenant to read the submeter
1)Allows a landlord to only bill a tenant for the volumetric
usage of water and any fixed rate charge.
2)Prohibits a landlord from imposing any periodic, connection,
termination or other fee, however denominated, except for
administrative fees, late fees, or testing fees.
3)Provides that the amount of the water bill shall be calculated
by multiplying the water volume as determined by the submeter
for the billing period by the rate(s) for the volumetric usage
established by the water purveyor for residential use.
4)Provides that if the rates established by the water purveyor
change the tenant's bill shall be prorated to reflect the time
each rate was in effect and the landlord has the option to
assess the charges for the entire billing period at the lower
rate.
5)Provides that if the beginning or ending submeter reading is
not available, the landlord may bill the tenant 75% of the
amount of the average bill for water usage disclosed to the
tenant at the time the rental agreement is provided.
6)Provides that the landlord may not charge a tenant for any
water usage if the readings have been unavailable for the last
three months.
7)Defines "fixed charges" charged to a tenant as the proportion
of the tenant's volumetric water use as shown on the submeter
in relation to the water use of the entire property as shown
on the property's water meter.
8)Requires the billing cycle for the tenant to match that of the
water purveyor.
9)Requires that submeters be read within three days of the same
point in each billing cycle.
10)Requires that bills must be due at the same point in each
billing cycle, however bills will be due no earlier than ten
days after mailing, if mailed, or five days after personal
delivery.
SB 750
Page 6
11)Requires a tenant's water bills to include the following
information:
a) The beginning and ending submeter readings, the dates
read, and the indicated consumption;
b) The unit of measure for the readings and usage;
c) The rates charged per unit of measure;
d) The amount of the current charge for volumetric use;
e) The amount of any recurring fixed charge for water
services billed to the property by the water purveyor;
f) The total water consumption for the property, as
indicated by the property's water meter;
g) The percentage of total water consumed on the property
that was consumed by the tenant;
h) The tenant's portion of the fixed charges;
i) A separate entry showing past due amounts;
j) A separate entry showing any previously-imposed late
charges;
aa) The total amount due;
bb) The due date for the bill;
cc) A statement of the amount of late charges, if any, and
when the late charges apply;
dd) The name mailing address, e-mail address, telephone
number, and regular business hours of the person or person
that the tenant may call with questions regarding the bill;
and
ee) The name and telephone number of a billing agent if one
is used.
1)Provides that if a tenancy begins or ends on a date more than
SB 750
Page 7
three days from a normal reading, the submeter shall be read
within three days of the beginning or end of the tenancy, and
the first and last bills calculated accordingly.
2)Provides that a tenancy that begins or ends within three days
of a normal reading may be billed based upon the normal
reading for the first and last bills.
3)Prohibits a landlord from charging or allowing the following
to be charged or recovered from a tenant:
a) Any additional servicing, establishment, maintenance,
meter reading, meter testing, billing or submetering fee or
other fee including those charged by a billing agent;
b) Any fees billed to the landlord by the water purveyor,
billing agent or any other person for any deposit,
disconnect, reconnect, late payment or other similar fees;
and
c) Any charges by the water purveyor not directly based on
volumetric usage, including any base charges, customer
service charges or monthly, bimonthly or other periodic
charges assessed regardless of the volume consumed.
1)Provides that a landlord may recover the costs associated with
the master metering system if they are incorporated into the
rent for a dwelling unit, if the rent is a fixed amount per
rental period, and the charges are not listed separately and
the rental charges are otherwise lawful.
2)Requires a landlord to make the following available to a
tenant upon request within seven days:
a) All installation and maintenance records of the submeter
in the tenant's dwelling unit, including the name, license
number, and contact information of the registered service
provider who installed or serviced the submeter;
b) The most recent test results of the submeter in the
tenant's dwelling; and
c) The method and sources used to determine the rate at
which the tenant is charged for water.
SB 750
Page 8
1)Provides that if a water system in a dwelling unit does not
function properly including leaks, a fixture allowing
unnecessary water consumption or a malfunction submeter the
tenant may request the landlord repair the problem and the
landlord must make the repairs within seven days.
2)Provides that a tenant may request that a landlord have a
submeter tested for accuracy and the landlord must respond to
the request within seven days and the test must be carried out
as soon as practical.
3)Requires the test on a submeter must be performed by a
licensed service provider or other person authorized by law to
perform the test.
4)Provides if the test shows that the submeter is inaccurate,
beyond the tolerances established by law, the landlord must
repair or replace it.
5)Provides that if the test shows the submeter was indicating
more usage than the true amount, beyond the established
tolerances the landlord must refund the estimated overcharge
to the tenant within 30 days of the receipt of the results.
6)Requires the landlord to pay for the cost of the test if
either is true:
a) The tenant requests the test because the submeter has
indicated that water usage has increased more than 25% for
two consecutive billing periods over the previous three
billing periods; or
b) The submeter is found to be inaccurate beyond the
tolerances established by law.
1)Requires the tenant to pay for the test in all other cases up
to a maximum of $75.
2)Provides that a landlord is not required to test a submeter,
if requested by a tenant, if the submeter was tested and found
to be accurate within two years prior to the tenant's request
and the landlord provides the written results to the tenant.
3)Provides that if a tenant pays for the cost of the test in
advance then the landlord is required to perform the test.
SB 750
Page 9
4)Allows the landlord to charge an administrative fee for the
actual cost of reading the submeter and providing billing
service up to $4 per submetered tenant per month for a water
service bill totaling $10 or more.
5)Allows a landlord to charge an administrative fee for the
actual costs of reading the submeters and providing billing
services of up to 40% of the water service bill per submetered
tenant per month if a tenants' water service bill is $9.99 or
less.
6)Allows the administrative fee to be adjusted annual by the
landlord commensurate with an increase in the Consumer Price
Index, beginning January 1, 2017.
7)Permits a landlord to impose a late fee of up to 5% if a water
bill is not paid within 20 days of the due date.
8)Provides that if the 20th day after a bill is due, falls on a
weekend or holiday the late fee may not be imposed until one
day after the extended time for a payment.
9)Provides that if a bill goes unpaid, the landlord may in lieu
of a late fee deduct the amount from the security deposit and
then require an additional payment of security following the
deduction.
10)Provides that a landlord may deduct the last water payment
from the security deposit at the end of a tenancy if the
landlord provides documentation of the deduction and all other
requirements of the security deposit are met.
11)Provides that if a bill remains unpaid for 30 days, the
nonpayment constitutes a curable breach of a material lease
obligation and the landlord may take action in court to remedy
the breach.
12)Provides that water charges do not constitute rent.
13)Prohibits a landlord from shutting off the water or otherwise
interfering with a tenants water services for any reason
including nonpayment of a bill.
14)Provides that in addition to any actual damages sustained by
SB 750
Page 10
the tenant, for a violation by a landlord, the tenant may
recover from the landlord three times the amount of actual
damages, a civil penalty three times one month's rent, and
reasonable attorney's fees and court costs.
15)Provides that a landlord is not liable for a civil penalty if
the landlord proves that the violation was a good faith,
unintentional mistake.
16)Provides that a city, county, or district may enforce the
provisions of this bill.
17)Provides that the rights and obligations provided by this
bill may not be waived and any waiver is void.
EXISTING LAW
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)Each water corporation with 500 or more service connections
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 Building Standards Commission (BSC) to approve and
adopt building standards. Every three years a building
standards rulemaking is undertaken to revise and update the
California Building Standards Code (Title 24 of the California
Code of Regulations).
4)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.
FISCAL EFFECT : None.
COMMENTS :
SB 750
Page 11
As the Pacific Institute highlighted in the report Waste Not,
Want Not: The Potential for Urban Water Conservation in
California, water conservation is the largest, least expensive,
and most environmentally sound source of water to meet
California's future needs. The installation of water meters on
multiunit residential and mixed use commercial buildings has
been shown to encourage increased conservation by making
homeowners, business owners, or renters aware of the amount of
water they are utilizing. Conceptually, this legislation is
similar to a draft ordinance requiring submetering that was
adopted by the City of San Diego on April 5, 2010. San Diego
adopted its ordinance after a report from the City of San Diego
Office of the Independent Budget Analyst found that multifamily
units comprised 44% of the total housing in San Diego, the trend
was increasing, and multifamily properties achieved a 15% to 39%
water savings when submetered.
This bill would require installation of water submeters in all
newly constructed multi-residential dwellings, for which an
application for water connect is received, after January 1,
2014. This bill is prospective and does not require an owner of
an existing multifamily dwelling to install submeters or
retrofit existing submeters.
Billing and tenant protections:
This bill includes extensive consumer protections for tenants.
A landlord may only charge a tenant for their actual water
usage, any recurring fixed charges, and an administrative fee
for billing costs. The fixed charge is determined by dividing
the tenant's total water usage by the usage of the entire
property. A landlord may charge a tenant an administrative fee
for bills that are up to $4 on water bills of $10 or more. For
water bills that are $9.99 or less the landlord can charge a
tenant up to 40% of the water service bill. This administrative
fee was not in previous versions of this legislation.
Additionally, prior to entering into a new lease with a tenant,
the landlord is required to provide a tenant in a submetered
unit with various information including, the process for
billing, contact information for the billing agent if one
exists, the location of the submeter, and directions on how to
read the submeter.
This bill only allows a landlord to charge a tenant for water,
SB 750
Page 12
separately from the rent, if a water meter or submeter is
installed, operated, and maintained in accordance with specified
provisions.
A submeter must be installed so that it can be easily accessed
and read by a tenant and by the owner or landlord without
entering the unit. This a requirement of the current
regulations of the Department of Food and Agriculture (DFA),
Division of Measurement Standards (DMS), which is responsible
for testing, sealing, and regulating water and utility submeters
that are used in the private commercial and residential settings
in California.
Building standards process :
The California Building Standards Law establishes the BSC and
the process for adopting state building standards. Statewide
building standards are intended to provide uniformity in
building across the state. The purpose of the building
standards process is to address any issues regarding the health
and safety of the standards and that in some cases the
technology required to implement the standards is available on
the market. DMS within the DFA oversees the testing submeters
for accuracy. SB 750 requires submeters to be installed in
conformity with all laws, be installed by a licensed provider
and be operated in compliance with established regulations. The
City of San Diego adopted an ordinance to require submeters in
new apartment buildings without statewide building standards.
The committee may wish to consider what if any additional
consideration, the building standards process could provide that
is not provided in the bill.
Concerns have been raised that water purveyors could charge a
"hookup fee" to an owner of a building for installing a
submeter. It is unclear if this practice occurs, but the
committee may wish to clarify in the bill that this practice is
prohibited.
Effect on existing local ordinances :
Several communities have adopted ordinances requiring
submetering in multifamily dwellings. The committee may wish to
consider an amendment to grandfather into law those ordinances
that are adopted prior to January 1, 2014, the effective date of
this bill. The committee may also wish to give water
purveyors and local governments authority to adopt ordinances or
SB 750
Page 13
programs that are more stringent than this bill.
Liability standard:
This bill sets significant penalties if a landlord is found to
have violated the billing or notice provision for submetering.
In part this is because a tenant has no meaningful redress
should a submeter malfunction. Were the landlord regulated by
the Public Utilities Commission, the tenant would have a forum
for his or her concerns. No such forum is feasible for
submetering systems. If the overage is only $5 or $10 a month,
and the landlord is uncooperative, the tenant basically has the
choice to either put up with it or move.
Several apartment associations have raised a concern that the
standard the landlord must meet to avoid a civil penalty is too
high. The bill requires the landlord to prove that the
violations were a good faith, unintentional mistake. The
committee may wish to consider amending this section to require
the landlord to prove that the violation was in good faith and
also not systemic and does not represent a pattern of abuse.
Arguments in Opposition:
The author is continuing to work with the opponents to address
concerns. A remaining concern of the California Apartment
Association (CAA) is how the late fee is applied and if it is
sufficient. In addition, CAA is concerned that there may not be
enough submeters available on the market to meet the demand when
the bill takes effect January 1, 2014.
The Building Industry Association is neutral on the bill and
working on amendments with the author to make the provisions of
this bill operative through January 1, 2017 or until the
Building Standards Commission adopts similar standards. The
amendments would also give Department of Housing and Community
Development authority to propose standards through the next
update to the building standards or plumbing code but would not
mandate them to propose them.
Arguments in Support:
According to the Natural Resources Defense Council, "water
metering and volumetric pricing are essential tools to provide
Californians with an accurate price signal regarding their water
SB 750
Page 14
use. Over one-third of all California households live in
multifamily housing and submetering ensures that all water users
receive an appropriate signal regarding the volume and costs of
their water series thus incentivizing residents to undertake
responsible water use. Studies have shown that water submeters
are associated with decreased water usage. The national Multiple
Family Submetering and Allocation Study amount others found
water savings of 15.3% when comparing submetered properties with
rental properties that include water in rent. Another study
showed water usage in sub-metered properties to be 18% to 39%
less than in-rent properties."
Various water purveyors are in support of the bill. According
to the Santa Clara Valley Water
District, extending metering to multiunit residential structures
is an important and necessary step if the state is to meet its
goal of reducing urban per capita water use by 20% by the end of
the decade.
Previous legislation :
AB 19 (Fong) of 2011 was substantially similar to this bill but
did not include the administrative fee that is in this bill.
AB 1975 (Fong) of 2010 would have required the Department of
Housing and Community to adopt building standards requiring
installation of individual water meters and submeters in newly
constructed multiunit residential buildings.
AB 1173 (Keene) of 2007 would have required submeters in
multiunit residential structure built after January 1, 2010.
Committee amendments:
1) The following amendment prohibits a water purveyor from
charging a fee to hookup a submeter:
A water purveyor shall not impose an additional capacity or
connection fee or charge for a submeter that is installed by the
owner or his agent.
2) The following amendment address the ability of a water
purveyor or city, county or city and county to adopt a
program that is more stringent that the provisions of this
bill:
SB 750
Page 15
(c)(1) This section shall not restrict the authority of a water
purveyor, city, county, or city, and other local agency to adopt
and implement a program to promote water conservation that
includes the required installation of water meters or submeters
for multiunit structures if such program is at least as
stringent as the requirements of this section.
3) The following amendment grandfathers existing local
ordinances and allows local governments to adopt an
ordinance that is more stringent than the requirements of
this bill.
Any ordinance that regulates the installation, approval of
submeter type, maintenance, reading, billing, and testing of
water submeters and associated onsite plumbing is not prohibited
by this section provided either:
(a) the ordinance was adopted prior to January 1, 2013; or,
(b) the ordinance meets or exceeds the minimum requirements
provided by this chapter.
1) Delete the requirement that landlords prove a violation
as a good faith, unintentional mistake and rather require
the landlord to prove it was in good faith and not part of
a pattern of violations.
On page 10, delete lines 10 through 16 and insert:
In addition to actual damages sustained by a tenant for a
violation of this chapter, the tenant may recover from the
landlord three times the amount of actual damages, reasonable
attorney's fees, and costs. The landlord may also be liable for
a civil penalty of up the one month's rent, unless the landlord
shows that the violation was made in good faith and not part of
a pattern and practice of violations of this chapter.
2) On page 11, delete lines 22 to 27.
Double referral: If SB 750 bill passes this committee, it will
be referred to the Committee Water, Parks, and Wildlife.
SB 750
Page 16
REGISTERED SUPPORT / OPPOSITION :
Support
California Rural Legal Assistance Foundation (co-sponsor)
Natural Resources Defense Council (co-sponsor)
Western Center on Law & Poverty (co-sponsor)
California Advocacy Committee of the United States Green
Building Council
California American Water
California League of Conservation Voters
California Municipal Utilities Association
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
League of Women Voters of California
Long Beach Water Department
Los Angeles County Board of Supervisors
Natural Resources Defense Council
Planning and Conservation League
Santa Clara Valley Water District
Sierra Club California
Sonoma County Board of Supervisors
Sonoma County Water Agency
Opposition
Apartment Association
Apartment Association of Greater Los Angeles
Apartment Association of Orange County
California Apartment Association
California Business Properties Association
California Southern Cities
East Bay Rental Housing Association
Nor Cal Rental Property Association
San Diego County Apartment Association
Santa Barbara Rental Property Association
Utility Conservation Coalition
Utility Management and Conservation Association
SB 750
Page 17
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085