BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:   August 13, 2013

                   ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
                                Anthony Rendon, Chair
                     SB 750 (Wolk) - As Amended:  August 8, 2013

           SENATE VOTE  :   27-11

           SUBJECT  :   Water meters:  Multiunit structures 

           SUMMARY  :   Requires, as of January 1, 2015, that individual  
          water meters, also called submeters, be installed on all new  
          multifamily residential units or mixed commercial and  
          multifamily units and requires that landlords bill residents for  
          the increment of water they use.  Specifies landlord and tenant  
          rights and obligations.  Specifically,  this bill  : 

          1)Makes findings that the purpose of this bill is to encourage  
            water conservation in multifamily residential buildings while  
            ensuring that practices for water service billing are just,  
            reasonable, and include appropriate safeguards for both  
            landlords and tenants.

          2)Requires each water purveyor that sells, leases, rents, or  
            furnishes, or delivers water service to a newly constructed  
            multiunit residential structure or newly constructed mixed-use  
            residential and commercial structure for which a water  
            connection is submitted after January 1, 2015 to ensure each  
            individual unit be metered or submetered as a pre-condition to  
            new water service.

          3)Requires the applicant to provide appropriate documentation to  
            the water purveyor identifying the location of the water  
            meters or submeters.

          4)Prohibits the water purveyor from imposing an additional  
            capacity or connection fee or charge for submeter that is  
            installed by an owner or his or her agent.

          5)Defines "low-income housing," "billing agent," "landlord,"  
            "property," "rental agreement," "renting,"  "submeter," "water  
            service," and "water purveyor," for the purpose of the  
            statute.

          6)Exempts low-income housing, student dormitories, long-term  







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            health care facilities, time-share properties, and residential  
            care facilities from the requirement to submeter.

          7)Requires that meters or submeters conform to state rules and  
            regulations governing devices that weigh and measure and be  
            installed and operated in compliance with specifications for  
            measuring devices and that plumbing fixtures conform to state  
            laws governing habitability of dwellings and water  
            conservation.

          8)Specifies that water purveyors are not responsible for  
            ensuring compliance with installation, certification,  
            maintenance, and testing of water submeters and associated  
            onsite plumbing. 

          9)Requires a landlord that intends to charge a tenant separately  
            for water service to provide specified disclosures in writing  
            regarding the tenant's billing, testing, and repair rights,  
            among other provisions, in at least 10-point type, prior to  
            executing a rental agreement.

          10)Prohibits a landlord from separately charging tenants for  
            water service unless the submetering system is installed,  
            operated, and maintained as specified, including easily  
            accessible for the tenant to read.

          11)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 (volumetric use charge). 

          12)Specifies that the monthly bill for water service may only  
            include four charges: the volumetric use charge; a portion of  
            the fixed charges from the water purveyor divided equally, or  
            by proportion of volumetric use charge, among all property  
            units; a fee for the landlord's billing costs, up to $4 or 40%  
            of the amount actual billed for water use, whichever is less;  
            and a late fee, if applicable, and as specified under this  
            bill.  Prohibits a landlord from imposing any periodic,  
            connection, termination or other fee, however denominated.

          13)Provides that if a water system in a dwelling unit does not  
            function properly, including plumbing leaks that allow  
            unnecessary water consumption or a malfunction submeter, the  







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            landlord should investigate and, if warranted, repair the  
            condition.

          14)Requires a landlord who is notified of leaks or other  
            conditions causing water consumption or a submeter reading  
            indicating constant or abnormal water usage to repair the  
            condition within 10 days or be:
             a)   Restricted to charging the tenant, for the period after  
               the 10 days, $15 for the month's water use, or actual  
               usage, whichever is less; or, 
             b)   Allowed, at the landlord's option, to charge a maximum  
               of 50 cents per day for those days between the two meter  
               readings, or actual usage, whichever is less, if there are  
               meter  readings for both before and after the repair; and,
             c)   Prohibited from charging for water usage if the  
               condition is unrectified for 6 months after the  
               investigation.

          15)Allows the landlord, consistent with current laws governing  
            landlord entry, to access the tenant's unit for purposes of  
            installing, reading, repairing, testing and maintaining a  
            submeter or repairing or testing a water fixture the tenant  
            reports is in need of repair. 

          16)Provides that if a monthly submeter reading is unavailable,  
            the landlord shall advise the tenant and bill at a rate equal  
            to 75% of the tenant's average monthly use based on the three  
            prior months.  If billing for the three prior months is  
            unavailable, the use charge for days that data is unavailable  
            shall be 50 cents.  If readings remain unavailable for six  
            months, the volumetric use charge shall be zero.

          17)Allows a landlord to impose a late fee of up to $7 for bills  
            overdue by 20 days and a late fee of up to $10 if any amount  
            is unpaid after 50 days.  Allows a landlord, under specified  
            circumstances, to deduct late bills or bills of tenants who  
            have vacated from the security deposit, as well as other  
            remedies, but prohibits shutting off water from an occupied  
            unit.

          18)Penalizes a landlord who violates this bill's provisions by  
            allowing the tenant to recover up to three times the amount of  
            actual damages, reasonable attorney's fees and costs, and a  
            civil 
            penalty of one month's rent unless the landlord can show the  







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            violation was in good faith and not part of a pattern and  
            practice of violating the this bill's provisions.

          19)Allows a city, county, city and county, or district to  
            enforce this bill's provisions.

          20)Specifies that landlord and tenant rights and  
            responsibilities, as established in this bill, shall apply  
            whenever submeters are in use, including submeters installed  
            as required by this bill; however, does not require units to  
            be retrofit with submeters or affect the billing at units with  
            installed but unused submeters to begin billing in accordance  
            with 

          21)Does not preclude or preempt ordinances that regulate  
            submetering if they were adopted prior to January 1, 2013.

          22)Does not prohibit a water purveyor, city, county, or other  
            local agency from adopting and implementing its own  
            submetering program as long as such program is at least as  
            stringent and the requirements of this bill.

          23)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)  







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            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  :   The purpose of this bill is to promote water  
          conservation by making tenants in multiunit buildings aware of,  
          and billed in accordance with, their water usage.

          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,  
          2015.  This bill is prospective and does not require an owner of  
          an existing multifamily dwelling to install submeters, retrofit  
          existing submeters, or use existing submeters that are currently  
          unused.

           Supporting arguments  :  The author states that the California  
          water supply is under intense pressure and that to "make  
          environmentally and economically responsible choices,  
          Californians must have accurate information about their water  
          usage and cost" so that they can "use existing supplies as  
          efficiently as possible."  The author advises that 46% of  
          Californians live in multi-family housing but for 80% of those  
          tenants there is no correlation between water use and cost  







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          because the cost of water is included with the cost of rent,  
          charged as a flat fee, or allocated some other way based on a  
          master meter.  Other supporters add that this "important bill  
          includes several consumer and tenant protections" and by  
          requiring the landlord to charge residents for water service  
          based on the actual volume of water it "establishes a pure  
          pass-through system for water costs" and "promotes increased  
          water conservation."  Supporters state that water metering and  
          volumetric pricing are essential tools towards a secure and  
          reliable water future in California.

           Opposing arguments  :  Opponents to the bill state that they  
          support the goal of encouraging water conservation but that "the  
          bill does not provide just and reasonable practices for  
          landlords" and "seems to only target landlords for liability and  
          penalties." For example, opponents advise that they are  
          concerned that the cap on the amount that can be charged for  
          late fees means landlords lack any effective remedy in the bill  
          to compel payment of the water bill whereas penalties against  
          landlords for errors in billing or faulty meters are excessive.   
          Opponents maintain that the bill places "unnecessary burdens on  
          both property owners and utility billing companies" by, in some  
          cases, asking "for information that simply does not exist."  In  
          addition, opponents are concerned that there may be an  
          inadequate supply of water meters even though the bill mandates  
          their installation prior to water service.

          This bill was heard in Assembly Housing and Community  
          Development Committee on July 3, 2013.

           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.   
          Two other previous attempts to introduce submetering, AB 19  
          (Fong), AB 1975 (Fong) and AB 1173 (Keene), failed because of,  
          among other concerns, potential impacts to low income tenants.   
          Those concerns are resolved in this bill.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Rural Legal Assistance Foundation (sponsor)
          Natural Resources Defense Council (sponsor)







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          The Western Center on Law and Poverty (sponsor)
          California Advocacy Committee of the U.S. Green Building Council
          California American Water
          California League of Conservation Voters
          California Municipal Utilities Association
          California State Association of Electrical Workers
          California State Pipe Trades Council
          California Water Association
          Clean Water Action
          Contra Costa Water District (if amended)
          County of Los Angeles
          East Bay Municipal Utility District
          Environmental Defense Fund
          Environmental Health Coalition
          Housing Long Beach
          Legal Aid Foundation of Los Angeles
          Long Beach Water Department
          Metropolitan Water District of Southern California (if amended)
          Planning and Conservation League
          San Diego County Water Authority
          Santa Clara Valley Water District
          Sierra Club California
          Sonoma County Board of Supervisors
          Sonoma County Water Agency
          Western State Council of Sheet Metal Workers
           
            Opposition 
           
          Apartment Association of Greater Los Angeles (unless amended)
          Apartment Association of Orange County (unless amended)
          Apartment Association, California Southern Cities (unless  
          amended)
          California Apartment Association (unless amended)
          East Bay Rental Housing Association (unless amended)
          El Dorado Irrigation District (unless amended)
          Nor Cal Rental Property Association (unless amended)
          San Diego County Apartment Association (unless amended)
          Santa Barbara Rental Property Association (unless amended)
          Utility Conservation Coalition (unless amended) 
          Utility Management and Conservation Association (unless amended)

           Analysis Prepared by  :    Tina Cannon Leahy / W., P. & W. / (916)  
          319-2096 









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