Amended in Assembly September 4, 2015

Amended in Assembly August 31, 2015

Amended in Assembly July 16, 2015

Amended in Assembly July 7, 2015

Amended in Assembly June 18, 2015

Senate Bill No. 7

Introduced by Senator Wolk

(Coauthor: Assembly Member Williams)

December 1, 2014

An act to add Chapter 2.5 (commencing with Section 1954.201) to Title 5 of Part 4 of Division 3 of the Civil Code, to add Section 17922.14 to the Health and Safety Code, and to add Section 517 to, and to add Article 5 (commencing with Section 537) to Chapter 8 of Division 1 of, the Water Code, relating to housing.

LEGISLATIVE COUNSEL’S DIGEST

SB 7, as amended, Wolk. Housing: water meters: multiunit structures.

(1) Existing law generally regulates the hiring of dwelling units and, among other things, imposes certain requirements on landlords and tenants. Among these requirements, existing law requires landlords to provide tenants with certain notices or disclosures pertaining to, among other things, pest control and gas meters.

This bill would express the intent of the Legislature to encourage the conservation of water in multifamily residential rental buildings through means either within the landlord’s or the tenant’s control, and to ensure that the practices involving the submetering of dwelling units for water service are just and reasonable, and include appropriate safeguards for both tenants and landlords.

This bill would, if a submeter is used to charge a tenant separately for water service, impose requirements on landlords relating to submetered water service to individual dwelling units. The bill would require a landlord to make certain disclosures to the tenant prior to the execution of the rental agreement, if the landlord intends to charge a tenant separately from rent for water service in a property with submeters. The bill would specify that as part of the monthly bill for water service, a landlord may only bill a tenant for volumetric water usage, as specified, a portion of any recurring fixed charge billed to the property by the water purveyor, as specified, a billing, administrative, or other fee, as prescribed, and a late charge. The bill would specify that payments are required to be due at the same point in each billing cycle, as prescribed, and that each bill must include and separately set forth certain information. The bill would prohibit a landlord from charging certain additional fees. The bill would require a landlord to maintain and make available in writing to a tenant, as specified, the date the submeter was last inspected, tested, and verified, the data used to calculate the tenant’s bill, and the location of the submeter. The bill would require a landlord to investigate and, if warranted, rectify certain problems or a submeter reading that indicates constant or abnormal water usage. The bill would permit a landlord to enter a unit for specified purposes relating to a submeter or water fixture if certain requirements are met. The bill would permit a tenant to be charged late fees, as specified. The bill would provide that these provisions shall become operative on January 1, 2017.

(2) The California Building Standards Law provides for the adoption of building standards by state agencies by requiring all state agencies that adopt or propose adoption of any building standard to submit the building standard to the California Building Standards Commission for approval and adoption. Existing law creates the Building Standards Administration Special Revolving Fund and requires that funds deposited into the fund be expended, upon appropriation by the Legislature, to carry out specified provisions of law that relate to building standards, with emphasis placed on certain activities relating to green building standards.

This bill would authorize the Department of Housing and Community Development to develop and propose for adoption by the commission building standards that require the installation of water meters or submeters in multiunit residential buildings, as specified. The bill would exempt specified categories of structures from these building standards. This bill would provide that moneys in the fund are available to the department, upon appropriation, for administrative costs associated with the development of building standards that require the installation of water meters or submeters in multiunit residential buildings.

(3) The Water Measurement Law requires every water purveyor to require, as a condition of new water service on and after January 1, 1992, the installation of a water meter to measure water service. That law also requires urban water suppliers to install water meters on specified service connections, and to charge water users based on the actual volume of deliveries as measured by those water meters in accordance with a certain timetable.

This bill would add to the Water Measurement Law the requirement that a water purveyor that provides water service to a newly constructed multiunit residential structure or newly constructed mixed-use residential and commercial structure that submits an application for a water connection after January 1, 2017, measure the quantity of water supplied to each individual dwelling unit as a condition of new water service and permit the measurement to be by individual water meters or submeters, as defined. The bill would require the owner of the structure to ensure that a submeter installed for these purposes complies with laws and regulations governing the approval of submeter types or the installation, maintenance, reading, billing, and testing of submeters, including, but not limited to, the California Plumbing Code. The bill would further require installation of submeters to be provided by contractors licensed by the California Contractors State License Board using workers who meet specified training requirements. The bill would exempt certain structures from these requirements. The bill would prohibit a water purveyor from imposing an additional capacity or connection fee or charge for a submeter that is installed by the owner, or his or her agent. The bill would provide that these provisions shall become operative on January 1, 2017.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Chapter 2.5 (commencing with Section 1954.201)
is added to Title 5 of Part 4 of Division 3 of the Civil Code, to
read:

 

Chapter  2.5. Water Service

 

1954.201.  

It is the intent of the Legislature in enacting this
chapter to do both of the following:

(a) To encourage the conservation of water in multifamily
residential rental buildings through means either within the
landlord’s or the tenant’s control.

(b) To ensure that the practices involving the submetering of
dwelling units for water service are just and reasonable, and include
appropriate safeguards for both tenants and landlords.

1954.202.  

For the purposes of this chapter:

(a) “Billing agent” means a person or entity who contracts to
provide submetering services to a landlord, including billing.

(b) “Landlord” means an owner of residential rental property.
“Landlord” does not include a tenant who rents all or a portion of
a dwelling unit to subtenants. “Landlord” does not include a
common interest development, as defined in Section 4100 of the
Civil Code.

(c) “Property” means real property containing two or more
dwelling units that is served by a single master meter.

(d) “Purveyor” means any local purveyor who bills the landlord
for charges related to water treatment, distribution, or usage,
including, but not limited to, water, sewer, stormwater, flood
control, and water treatment charges.

begin insert

(e) “Ratio utility billing system” means the allocation of water
and sewer costs to tenants based on the square footage, occupancy,
or other physical factors of a dwelling unit.

end insert begin delete

(e)

end delete

begin insert (f) end insert  “Rental agreement” includes a fixed-term lease.

begin delete

(f)

end delete

begin insert (g) end insert  “Renting” includes leasing, whether on a periodic or
fixed-term basis.

begin delete

(g)

end delete

begin insert (h) end insert  “Submeter” means a device that measures water consumption
of an individual rental unit within a multiunit residential structure
or mixed-use residential and commercial structure, and that is
owned and operated by the owner of the structure or the owner’s
agent. As used in this section, “multiunit residential structure” and
“mixed-use residential and commercial structure” mean real
property containing two or more dwelling units.

begin delete

(h)

end delete

begin insert (i) end insert  “Water service” includes any charges, whether presented for
payment on local purveyor bills, tax bills, or bills from other
entities, related to water treatment, distribution, or usage, including,
but not limited to, water, sewer, stormwater, flood control, and
water treatment charges.

begin delete

(i)

end delete

begin insert (j) end insert  “Water purveyor” means a water purveyor as defined in
Section 512 of the Water Code.

1954.203.  

(a) All properties that use submeters to separately
bill tenants for water service shall ensure:

(1) The submeter is inspected, tested, and verified for
commercial purposes pursuant to law, including, but not limited
to, Section 12500.5 of the Business and Professions Code.

(2) The installation conforms to all laws, including, but not
limited to, regulations established pursuant to Section 12107 of
the Business and Professions Code.

(3) The submeter for a dwelling unit measures only water that
is supplied for the exclusive use of the particular dwelling unit,
and only to an area within the exclusive possession and control of
the tenant of the dwelling unit.

(4) The submeter is capable of being accessed and read by the
tenant of the dwelling unit and read by the landlord without
entering the dwelling unit. A submeter installed before January 1,
2017, may be read by the landlord after entry into the unit, in
accordance with this chapter and Section 1954.

(5) Each submeter is reinspected and recalibrated within the
time limits specified in law or regulation.

(6) All plumbing fixtures and fittings within each dwelling unit
conform to all laws regarding water conservation.

(b) This section does not require a water purveyor to assume
responsibility for ensuring compliance with any law or regulation
governing installation, certification, maintenance, and testing of
submeters and associated onsite plumbing.

1954.204.  

Before executing a rental agreement, a landlord who
intends to charge a tenant separately from rent for water service
in a property with submeters shall clearly disclose the following
information to the tenant, in writing, in at least l0-point type, which
may be incorporated into the rental agreement:

(a) That the tenant will be billed for water service separately
from the rent.

(b) An estimate of the monthly bill for water service for units
at the property based on either of the following:

(1) The average or median bill for water service for comparative
units at the property over any three of the past six months.

(2) The amount of the bill based upon average indoor water use
of a family of four of approximately 200 gallons per day, and
including all other monthly charges that will be assessed. Estimates
for other gallons per day may also be included. The estimate shall
include a statement that the average family of four uses about 200
gallons of water each day.

(c) The due dates and payment procedures for bills for water
service.

(d) An email address and a toll-free telephone number or a local
telephone number for the tenant to contact with questions regarding
the water service billing and the days and hours for regular
telephone service at either number.

(e) That the monthly bill for water service may only include the
following charges:

(1) Payment due for the amount of usage as measured by the
submeter, charged at the same rate for commodity usage by the
purveyors.

(2) Payment of a portion of the fixed fee charged by the
purveyors for water service.

(3) A fee for the landlord’s or billing agent’s costs in accordance
with paragraph (3) of subdivision (a) of Section 1954.205.

(4) Any late fee, with the amounts and times assessed, in
compliance with Section 1954.213.

(f) A statement that the tenant shall notify the landlord in writing
of any leaks, drips, or other problems with the water system,
including problems with water-saving devices, and that the landlord
is required to investigate, and, if necessary, repair these problems.

(g) A statement that the landlord shall provide any of the
following information if asked by the tenant:

(1) The location of the submeter.

(2) The calculations used to determine a monthly bill.

(3) The date the submeter was last certified for use, and the date
it is next scheduled for certification.

(h) A statement that if the tenant believes that the submeter
reading is inaccurate or the submeter is malfunctioning, the tenant
shall first notify the landlord in writing and request an
investigation. A tenant shall be provided with notice that if an
alleged submeter malfunction is not resolved by the landlord, a
tenant may contact the local county sealer and request that the
submeter be tested. Contact information for the county sealer shall
be included in the disclosure to the tenant.

(i) A statement that this disclosure is only a general overview
of the laws regarding submeters and that the laws can be found at
Chapter 2.5 (commencing with Section 1954.201) of Title 5 of
Part 4 of Division 3 of the Civil Code, available online or at most
libraries.

1954.205.  

(a) As part of the regular bill for water service, a
landlord shall only bill a tenant for the following water service:

begin delete

(1) Volumetric charge for water at a rate calculated by dividing
the total charges for volumetric water use at the entire property by
the total volume of volumetric water used at the property multiplied
by the tenants measured usage at the property.

end delete begin insert

(1) A charge for volumetric usage, which may be calculated in
any the following ways:

end insert begin insert

(A) The amount shall be calculated by first determining the
proportion of the tenant’s usage, as shown by the submeter, to the
total usage as shown by the purveyor’s billing. The dollar amount
billed to the tenant for usage shall be in that same proportion to
the dollar amount for usage shown by the purveyor’s billing.

end insert begin insert

(B) If the purveyor charges for volumetric usage based on a
tiered rate schedule, the landlord may calculate the charge for a
tenant’s volumetric usage as described in subparagraph (A)or the
landlord may instead divide each tier’s volume evenly among the
number of dwelling units, and the rate applicable to each block
shall be applied to the consumption recorded for each dwelling
unit.

end insert begin insert

(C) If the purveyor charges the property rates on a per-dwelling
unit basis, the tenants may be charged at those exact per unit rates.

end insert

(2) Any recurring fixed charge for water service billed to the
property by the purveyors that, at the landlord’s discretion, shall
be calculated by either of the following:

(A) The tenant’s proportion of the total fixed charges charged
to the property. The tenant’s proportion shall be based on the
percentage of the tenant’s volumetric water use in relation to the
total volumetric water use of the entire property, as shown on the
property’s water bill during that period.

(B) Dividing the total fixed charges charged to the property
equally among the total number of residential units and
nonresidential units at the property.

(3) A billing, administrative, or other fee for the landlord’s and
billing agent’s costs, which shall be the lesser of an amount not to
exceed four dollars and seventy-five cents ($4.75), as adjusted
pursuant to this paragraph or 25 percent of the amount billed
pursuant to paragraph (1). Beginning January 1, 2018, the
maximum fee authorized by this paragraph may be adjusted each
calendar year by the landlord, no higher than a commensurate
increase in the Consumer Price Index based on a California fiscal
year average for the previous fiscal year, for all urban consumers,
as determined by the Department of Finance.

(4) A late charge as assessed pursuant to Section 1954.213.

(b) If a submeter reading for the beginning or end of a billing
period is, in good faith, not available, the landlord shall bill the
tenant according to Section 1954.212.

(c) This section does not prohibit a landlord or the landlord’s
billing agent from including any other lawful begin delete charges end delete begin insert charges,
including rent, end insert on the same bill.

1954.206.  

(a) Submeters shall be read within three days of the
same point in each billing cycle.

(b) Payments shall be due at the same point in each billing cycle.
A tenant may agree in writing to receive a bill electronically. A
tenant may rescind authorization for electronic delivery of bills at
any time. A tenant shall not be required to pay a bill electronically.

(c) A bill shall include and separately set forth the following
information:

(1) The submeter reading for the beginning date and ending
date of the billing cycle, the dates read, and the indicated
consumption as determined by subtracting the amount of the
beginning date submeter reading from the amount of the ending
date submeter reading. If the unit of measure is in something other
than gallons, the indicated consumption shall be expressed in
gallons.

(2) The amounts charged pursuant to subdivision (a) of Section
1954.205.

(3) The rate or rates charged for the volumetric charge per unit
of measure.

(4) The amount, if any, due from the previous month’s bill.

(5) The amount, if any, due from bills prior to the previous
month’s bill.

(6) The late fee, if any, imposed on amounts specified in
paragraph (4) or (5).

(7) The total amount due for the billing period.

(8) The due date for the payment.

(9) If a late fee is charged by the landlord, a statement of when
the late fees would apply.

(10) The procedure to contact the landlord or billing agent with
questions or concerns regarding the bill. Upon request of the tenant,
the landlord or billing agent shall respond in writing to any
questions or disputes from the tenant. If a billing agent is used, the
name of the billing agent shall be disclosed. The tenant shall be
provided a mailing address, email address, telephone number,
which shall be either a toll-free or a local number, and the time of
regular telephone hours for contact regarding billing inquiries.

(11) A statement that the landlord or billing agent is not the
water purveyor that includes the name of the local water purveyor
providing the water service to the master meter.

(d) Notwithstanding paragraphs (4) and (5) of subdivision (c),
a separate bill may be provided for past due amounts if past due
amounts are not included on the current month’s bill.

1954.207.  

(a) At the beginning of a tenancy, a submeter shall
be read after the tenant takes possession. If the regular reading
occurs less than five days prior to the tenant taking possession,
that reading may be substituted to establish usage. If the submeter
is manually read, the first bill may be estimated based on the rate
established in subdivision (b) of Section 1954.212.

(b) For a water-service bill at the end of a tenancy, the submeter
shall be read within five days, if possible. If the submeter cannot
be read within five days at the end of a tenancy, the bill amount
for the final month shall be based on the bill amount for the
previous month.

(c) The landlord may deduct an unpaid water service bill from
the security deposit upon the ending of a tenancy, if the last water
service bill showing the amount due is attached to the
documentation required by Section 1950.5.

1954.208.  

Unless it can be documented that a penalty is solely
the result of a tenant’s failure to comply with state or local water
use regulations or restrictions, or both, regarding wasting of water,
a landlord shall not charge, recover, or allow to be charged or
recovered, fees incurred by the landlord from the purveyors, billing
agent, or any other person for any deposit, disconnection,
reconnection, late payment by the landlord, or any other penalty
assessed against the landlord. This section shall not prevent a
landlord from charging a tenant for the tenant’s late payment of
any bill.

1954.209.  

The landlord shall maintain and make available in
writing, at the tenant’s written or electronic request, within seven
days after the request, the following:

(a) The date the submeter was last inspected, tested, and verified,
and the date by which it shall be reinspected, tested, and verified
under law, if available. If this information is not available, the
landlord shall disclose that the information is not available.

(b) The data used to calculate the tenant’s bill, as follows:

(1) The most recent water bill for the property’s master water
meter showing the recurring fixed charge for water service billed
to the property by the water purveyor, and the usage charges for
the property, including any tiered amounts.

(2) Any other bills for water service, as defined in subdivision
begin delete (h) end delete begin insert (i) end insert of Section 1954.202, for the property.

(3) The number of units in the property.

(4) If not shown on the bill for the property, the per unit charges
for volumetric water usage, including any tiered amounts.

(5) The formula used to calculate the charge for the tenant’s
volumetric water usage.

(c) The location of the submeter.

1954.210.  

(a) If a tenant notifies the landlord in writing of, or
the landlord otherwise becomes aware of, a leak, a drip, a running
toilet, or other submeter problem, or a submeter reading indicates
constant or abnormal high water usage, the landlord shall have the
condition investigated, and, if warranted, rectify the condition.

(b) A tenant shall not remove any water fixtures or water
conservation devices that have been installed by the landlord.

(c) If the condition is rectified more than 14 days after the tenant
notifies the landlord in writing pursuant to subdivision (a), the
tenant’s volumetric usage for any month or months that include
the period between 14 days after the initial investigation and the
repair shall be deemed to be fifteen dollars ($15) or actual usage,
whichever is less. At the landlord’s option, if submeter readings
are available to determine the usage at a point prior to investigation
and a point following repair, usage shall be deemed to be fifty
cents ($0.50) per day for those days between the two submeter
readings or actual usage, whichever is less.

(d) If the condition remains unrectified for six months after
investigation, no further volumetric usage charges may be imposed
until the condition is repaired.

1954.211.  

In addition to the grounds for entry specified in
subdivision (a) of Section 1954, the landlord may enter a unit as
follows:

(a) For the purpose of installing, repairing, testing, and
maintaining a submeter, or for the purpose of repairing or testing
any water fixture suspected by the landlord or reported by the
tenant to be in need of repair, if the requirements of Section 1954
are met.

(b) To read a submeter, if the requirements of this chapter and
Section 1954 are met. Notwithstanding paragraph (3) of subdivision
(d) of Section 1954, notice shall be given only in writing.

1954.212.  

(a) If a monthly submeter reading necessary to
measure volumetric usage is unavailable, the tenant may be charged
75 percent of the average amount billed for volumetric usage for
the last three months for which complete billing information is
available. The adjustment shall be disclosed on the bill.

(b) If no complete billing information is available for the prior
three months, the volumetric usage charge shall be deemed to be
fifty cents ($0.50) per day that the data is not available.

(c) If monthly submeter readings remain unavailable for more
than six months, the volumetric usage charge shall be deemed to
be zero for any subsequent month that the data is not available.

1954.213.  

(a) A tenant may be charged a late fee for any water
service bill not paid 25 days after mailing or other transmittal of
the bill. If the 25th day falls on a Saturday, Sunday, or holiday,
the late fee shall not be imposed until the day after the first business
day following the 25th day.

(b) A late fee of up to seven dollars ($7) may be imposed if any
amount of a bill remains unpaid after the time described in
subdivision (a). A late fee of up to ten dollars ($10) may be
imposed in each subsequent bill if any amount remains unpaid. If
any partial payments are made, they shall be credited against the
bill that has been outstanding the longest.

(c) In addition to the purposes specified in subdivision (b) of
Section 1950.5, if a water service bill remains unpaid after the
time described in subdivision (a) expires, the landlord may also
claim the amount of the unpaid bill from the security deposit.

(d) If a water service bill remains unpaid for 30 days after the
time described in subdivision (a) expires, the nonpayment shall
constitute a curable material breach of the lease. The landlord shall
have the right to terminate the tenancy in accordance with
paragraph (3) of Section 1161 of the Code of Civil Procedure with
the service of a three-day notice to cure covenant or quit upon the
tenant.

begin insert

(e) If the water bill remains unpaid for six months after the time
period provided in subdivision (a) expires or the amount of the
unpaid water bill equals or exceeds two hundred fifty dollars
($250), the landlord may terminate the tenancy in accordance with
Section 1161 of the Code of Civil Procedure with the service of a
three-day notice to pay or quit upon the tenant.

end insert begin delete

(e)

end delete

begin insert (f) end insert  Water service charges under this chapter shall not constitute
rent.

begin delete

(f)

end delete

begin insert (g) end insert  The water service to a dwelling unit shall not be shut off or
otherwise interfered with by the landlord for any reason, including
nonpayment of a bill. Notwithstanding the foregoing, a landlord
or its agent may shut off water service to a dwelling unit or the
property, in order to make repairs, replacements of equipment, or
perform other maintenance at the property.

1954.214.  

This chapter does not preclude or preempt an
ordinance or regulation adopted prior to January 1, 2013, that
regulates the approval of submeter types or the installation,
maintenance, reading, billing, or testing of submeters and
associated onsite plumbing.

1954.215.  

The rights or obligations established under this
chapter shall not be waived. Any purported waiver is void.

1954.216.  

(a) This chapter applies to the following:

(1) All dwelling units offered for rent or rented in a building
where submeters were required to be installed pursuant to a
building standard adopted in accordance with Section 17922.14
of the Health and Safety Code.

(2) All dwelling units where submeters are used to charge a
tenant separately for water service.

(b) Nothing in this chapter shall be construed to apply to any
dwelling units other than those described in subdivision (a).

begin insert

(c) Nothing in this chapter shall be construed to state a
legislative policy favoring or disfavoring the use of a ratio utility
billing system.

end insert

begin insert

begin insert 1954.217. end insert   

A submetering system that measures only a portion
of a dwelling unit’s water usage, including, but not limited to, a
system that measures only hot water usage, shall not be subject to
this chapter if the system was first put in service before January
1, 2017.

end insert

begin delete 1954.217. end delete
begin insert 1954.218. end insert   

This chapter shall become operative on January 1,
2017.

begin delete 1954.218. end delete
begin insert 1954.219. end insert   

Any property that is required to install individual
submeters pursuant to Article 5 (commencing with Section 537)
of Chapter 8 of Division 1 of the Water Code shall at all times be
required to bill residents for water service pursuant to this chapter.

SEC. 2.  

Section 17922.14 is added to the Health and Safety
Code, to read:

17922.14.  

(a) During the next regularly scheduled intervening
code cycle that commences on or after January 1, 2016, or during
a subsequent code adoption cycle, the department may develop
and propose for adoption by the California Building Standards
Commission, pursuant to Chapter 4 (commencing with Section
18935) of Part 2.5, building standards requiring the installation of
water meters or submeters in multiunit residential structures, as
those terms are defined in Section 517 of the Water Code. These
standards shall conform to Article 5 (commencing with Section
537) of Chapter 8 of Division 1 of the Water Code.

(b) (1) The department shall determine whether and under what
circumstances the installation of water meters or submeters is
infeasible and include in the building standards proposed in
subdivision (a) the appropriate provision for exemption from this
requirement. The department may consider whether there are any
issues specific to high-rise multifamily buildings that would require
an exemption from the requirement for the installation of water
meters or submeters.

(2) The following categories of structures shall be exempt from
the building standards established pursuant to subdivision (a):

(A) Long-term health care facilities, as defined in Section 1418.

(B) Low-income housing. For the purposes of this subparagraph,
“low-income housing” means a residential building that is financed
with low-income housing tax credits, tax-exempt mortgage revenue
bonds, general obligation bonds, or federal, state, or local loans
or grants, for which rents charged to lower income households do
not exceed rents prescribed by deed restrictions or regulatory
agreements pursuant to the terms of the financing or financial
assistance, and for which not less than 90 percent of the dwelling
units within the building are designated for occupancy by lower
income households. As used in this subparagraph, “lower income
households” has the same meaning as defined in Section 50079.5.

(C) Residential care facilities for the elderly, as defined in
subdivision (k) of Section 1569.2.

begin delete

(D) Student dormitories.

end delete begin insert

(D) Housing at a place of education, as defined in Section 202
of the California Building Standards Code (Title 24 of the
California Code of Regulations).

end insert

(E) Time-share property, as defined in subdivision (aa) of
Section 11212 of the Business and Professions Code.

(c) Moneys in the Building Standards Administration Special
Revolving Fund established pursuant to Section 18931.7 shall be
available, upon appropriation by the Legislature, for the
department’s administrative costs associated with the development
of building standards in accordance with this section.

SEC. 3.  

Section 517 is added to the Water Code, to read:

517.  

“Submeter” means a device that measures water
consumption of an individual rental unit within a multiunit
residential structure or mixed-use residential and commercial
structure, and that is owned and operated by the owner of the
structure or the owner’s agent. As used in this section, “multiunit
residential structure” and “mixed-use residential and commercial
structure” mean real property containing two or more dwelling
units.

SEC. 4.  

Article 5 (commencing with Section 537) is added to
Chapter 8 of Division 1 of the Water Code, to read:

 

Article 5.  Multiunit Structures

 

537.  

(a) The structures in all of the following categories shall
be exempt from this article:

(1) Low-income housing. For purposes of this paragraph,
“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, for which the rents of the occupants in lower income
households, as defined in Section 50079.5 of the Health and Safety
Code, do not exceed rents prescribed by deed restrictions or
regulatory agreements pursuant to the terms of the financing or
financial assistance, and for which not less than 90 percent of the
dwelling units within the building are designated for occupancy
by lower income households, as defined in Section 50079.5 of the
Health and Safety Code.

begin delete

(2) Student dormitories.

end delete begin insert

(2) Housing at a place of education, as defined in Section 202
of the California Building Standards Code (Title 24 of the
California Code of Regulations).

end insert

(3) Long-term health care facilities, as defined in Section 1418
of the Health and Safety Code.

(4) Time-share property, as defined in subdivision (aa) of
Section 11212 of the Business and Professions Code.

(5) Residential care facilities for the elderly, as defined in
Section 1569.2 of the Health and Safety Code.

(b) A submeter used to measure water supplied to an individual
residential unit that is required pursuant to this chapter shall be of
a type approved pursuant to Section 12500.5 of the Business and
Professions Code, and shall be installed and operated in compliance
with regulations established pursuant to Section 12107 of the
Business and Professions Code.

537.1.  

(a) Each water purveyor that sells, leases, rents,
furnishes, or delivers water service to a newly constructed multiunit
residential structure or newly constructed mixed-use residential
and commercial structure for which an application for a water
connection, or more than one connection, is submitted after January
1, 2017, shall require a measurement of the quantity of water
supplied to each individual dwelling unit as a condition of new
water service. The measurement may be by individual water meters
or submeters.

begin insert

(b) Unless the water purveyor or local government is operating
under an ordinance or regulation requiring individual metering,
the owner shall be required to install and read submeters, unless
the water purveyor agrees to install and read individual meters.

end insert begin delete

(b)

end delete

begin insert (c) end insert  (1) The owner of the structure shall ensure that each submeter
installed complies with all laws and regulations governing the
approval of submeter types or the installation, maintenance,
reading, billing, and testing of submeters, including, but not limited
to, the California Plumbing Code.

(2) This subdivision does not require a water purveyor to fund
or assume responsibility for ensuring compliance with any law or
regulation governing the approval of submeter types or the
installation, maintenance, reading, billing, and testing of submeters
and associated onsite plumbing.

(3) Installation of submeters shall be provided by contractors
licensed by the California Contractors State License Board using
workers who have graduated from a state-approved apprenticeship
program.

begin delete

(c)

end delete

begin insert (d) end insert  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 or her agent.

begin delete

(d)

end delete

begin insert (e) end insert  This section shall remain operative until the date on which
the California Building Standards Commission includes standards
in the California Building Standards Code that conform to this
article.

begin insert

begin insert 537.2. end insert   

(a) A final occupancy permit for a building shall not
be denied by a local building official if water submeters or meters
have not been installed for each residential unit as required by
this chapter if the building owner can demonstrate either of the
following:

(1) Water submeters have been ordered and were delayed by
the manufacturer.

(2) Water submeters for the building were submitted to a county
sealer and are awaiting approval for use.

(b) After issuance of the occupancy permit, the owner shall
ensure that the submeters are installed in the building within 120
days of approval by the county sealer.

end insert

begin delete 537.2. end delete
begin insert 537.3. end insert   

(a) This article does not preclude or preempt an
ordinance or regulation that regulates the approval of submeter
types or the installation, maintenance, reading, billing, or testing
of submeters and associated onsite plumbing if the ordinance or
regulation was adopted prior to January 1, 2013.

(b) This article does not restrict the authority of a water
purveyor, city, county, city and county, or other local agency to
adopt and implement a program to promote water conservation
that includes the installation of water meters and submeters, as
required pursuant to subdivision (a) of Section 537.1, if the
program is at least as stringent as the requirements of this article.

begin delete 537.3. end delete
begin insert 537.4. end insert   

It is the intent of the Legislature that this article should
not be construed to impose costs on any local government agency,
except to the extent that the local government agency is a water
purveyor.

begin delete 537.4. end delete
begin insert 537.5. end insert   

This article shall become operative on January 1, 2017.