BILL ANALYSIS �
AB 19
Page 1
Date of Hearing: April 27, 2011
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 19 (Fong) - As Amended: April 15, 2011
SUBJECT : Building standards: water meters: multiunit
structures
SUMMARY : Mandates that water purveyors adopt policies
requiring that multiunit residential structures or mixed use
residential and commercial structures that apply for water
connections after January 1, 2014, have, as a condition of new
water service, submeters that measure the water supplied to each
individual dwelling unit. 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 that a water purveyor may adopt and implement a
program for the use of water meters and submeters for
multiunit residential structures or mixed use residential
commercial structures that promotes water conservations and is
at least as stringent as the requirements of this bill.
6)Provides that the following types of housing are excluded from
the requirements of this Act:
a) Low-income housing;
b) Student dormitories;
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c) Long-term health care facilities;
d) Time-share properties; and
e) 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;
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, person and entities with which
the landlord contracts with for billing, meter reading,
meter maintenance or repair or other services in connect
with imposing water charges;
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
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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
services that are based on charges for water services;
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 unless the water and submetering system is
installed, operated and maintained as follows:
a) A submeter is certified for commercial purposes pursuant
to law;
b) Installations conforms to all laws;
c) Installation was performed by a licensed provider;
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 to disclose the following to a tenant in
writing in at least 10-point type prior to executing a rental
agreement:
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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 lasted tested, calibrated
and the date by which it must be tested and recalibrated
under law;
g) A statement that the tenant will only be charged for the
actual water usage and not for any other administrative,
connection, disconnection or billing fee or charge, other
than a late fee;
h) The amount and terms of the late fee; and
i) The location of the submeter and directions for the
tenant to read the submeter
1)Provides that a landlord may only bill a tenant for the
volumetric usage of water.
2)Prohibits a landlord from imposing any periodic, connection,
termination or other fee, however denominated, except for late
fees or testing fees as provided by this Act.
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
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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)Requires the billing cycle for the tenant to match that of the
water purveyor.
8)Requires that submeters must be normally read at the same
point in each billing cycle but may be read within three days
of the normal date
9)Requires that bills must be due at the same point in each
billing cycle, however bills will be due no earlier than five
days after mailing, if mailed, or one day after personal
delivery.
10)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;
e) A separate entry showing past due amounts;
f) A separate entry showing any previously-imposed late
charges;
g) The total amount due;
h) The due date for the bill;
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i) A statement of the amount of late charges, if any, and
when the late charges apply;
j) 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
aa) 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
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, administrative, 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
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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 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.
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
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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 $50.
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.
4)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.
5)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.
6)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.
7)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.
8)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.
9)Provides that water charges do not constitute rent.
10)Prohibits a landlord from shutting off the water or otherwise
interfering with a tenants water services for any reason
including nonpayment of a bill.
11)Provides that in addition to any actual damages sustained by
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
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reasonable attorney's fees and court costs.
12)Provides that a landlord is not liable for a civil penalty if
the landlord proves that the violation was a good faith,
unintentional mistake.
13)Provides that a city, county or district may enforce the
provisions of this bill.
14)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 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 :
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
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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 the installation water submeters in all
newly constructed multi-residential dwellings, for which an
application for water connect is received, after 2014.
Previous legislation :
Two previous attempts to introduce submetering, AB 1975 (Fong)
of 2010 and AB 1173 (Keene) of 2007, failed because of concerns
regarding potential impacts to low-income tenants. Both
measures would have exempted low-income housing from its
provisions as well as student dormitories, long-term health care
facilities and time-share properties.
Billing and tenant protections:
This bill includes extensive consumer protections for tenants.
A landlord could only charge for the tenant's actual water usage
and could not include a monthly fee for billing. If a landlord,
contracts with a billing agent or wishes to pass their own cost
on for administering the billing process, that cost could be
built into the monthly rent that a tenant pays. A landlord can
charge a late fee if a water bill is not paid within 20 days of
the due date. Additionally, the landlord is required to review
the fact that the units are water metered, the process for
billing, contact information if a billing agent exists and
location of the submeter and directions for the tenant to read
the submeter, as part of signing up a new tenant.
Building standards process :
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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. The Division of Measurement Standards (DMS) within
the Department of Food and Agriculture (DFA) oversees the
testing submeters for accuracy. AB 19 requires submeters to be
certified for commercial purposes, 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
has moved forward with an ordinance to require submeters in new
apartment buildings last year 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.
Charges to a resident:
As drafted, the bill only allows a landlord to pass through a
tenant's actual volumetric water usage. Water bills include not
only the water usage but also administrative fees charged by the
water purveyor. While the water usage varies by ratepayer, the
fixed costs of administrative fees remain relatively constant
These fees vary from community to community, in most cases they
are relatively small but in some communities they can be for
example $200 to $400 for a 48-unit apartment building in Contra
Costa County. Unlike the billing fees that this bill prohibits
a landlord from passing through to a tenant, these
service/administrative charges from the water purveyor are fixed
and are not subject to negotiation.
The committee may wish to consider whether it is appropriate to
allow the landlord to pass these charges on to the tenant since
they are fixed and a part of the service provided by the water
purveyor.
Effect on existing local ordinances :
The bill allows a water purveyor to implement a program for
submeters for multiunit residential structures that is at least
as stringent as the requirements of this bill. According to the
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sponsor, the intent of that provision is to allow local
ordinances that have already been adopted or that will be
adopted to continue to operate provided they are at least as
stringent as this bill. The committee may wish to consider,
clarifying that this provision applies to local governments as
well as water purveyors to ensure that ordinances like the one
in San Diego are protected.
Arguments in Opposition:
Various apartment associations are opposed to the bill. They
would like to be able to include a billing charge as part of the
tenant's monthly water bill. In addition, they are concerned
that the tenant protections could apply to a landlord that
converts their property to individual water meters. Landlords
would be prohibited from imposing any fee for costs associated
with the collection of water and could not charge for water
until the water purveyor imposes a "volumetric" fee, which
exceeds the base water rate.
The Community Association Institute (CAI) is opposed to the bill
because they are concerned that it would require existing
homeowner associations that replace a master water meter in the
future out of necessity to be required to tear into every
building wall and floor with a water line.
They are also concerned that the bill would require existing
rental developments that could otherwise be converted to
homeownership, to retrofit every dwelling with a separate water
meter.
California Building Industry Association, California Apartment
Association and California Business Properties Association are
also opposed. They are concerned that the bill establishes
building standards in statute rather than building code that
will not be vetted by the Department of Housing and Community
Development (HCD). In addition they would like clarification
that neither water purveyors nor local governments can charge a
hook up fee for installation of submeters. Finally, they are
concerned that there may not be enough water meters available on
the market to meet the demand.
Arguments in Support:
The Sierra Club (sponsor), states that "submetering encourages
water users to be more aware of their usage, giving them a
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financial incentive to conserve. Leaks may be reported and fixed
more promptly if occupants are paying for water based on actual
usage. Studies show that water submeters are associated with
decreased water usage. A 2004 Aquacraft Inc. study showed water
savings of 15.5% when comparing sub-metered properties with
rental properties that do not bill water separately from 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.
Western Center on Law & Poverty is support of the bill and
states, "in past years, we have opposed measures similar to AB
19, in part because a tenant has no meaningful redress should a
submeter malfunction. A landlord has little incentive to fix a
submeter that is reading high. 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 is either putting up with it or moving. AB 19 minimizes
putting tenants in that predicament by ensuring that the
submeters are as accurate as possible upon installation."
Staff comments:
The committee may wish to consider that the requirements to
install water meters on multi-residential units are for new
construction only. There is no requirement that property owners
of existing multi-residential units install individual water
meters. If a property owner does choose to install water meters
on their existing property, then it seems appropriate that the
tenant protection that are required for new construction also
apply to existing tenants.
Committee Amendments:
1)On page 6, strike the provision that limits the landlord to
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charging only for the volumetric usage incurred by the tenant
and not for the "base charges, customer service charges or
monthly, bimonthly or other periodic charges assessed
regardless of the volume consumed:
1963.080.
(a) A landlord shall not charge or recover, or allow to be
charged or recovered, any of the following:
(1) Any additional servicing, administrative, establishment,
maintenance, meter reading, meter testing, billing, or
submetering fee or other fee whatsoever, however denominated,
including those charged by a billing agent.
(2) 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.
(3) 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.
(b) This section does not prohibit a landlord from recovering
any costs listed in subdivision (a) that are incorporated into
the rent for a dwelling unit, if the rent is a fixed amount per
rental period, the charges are not listed separately, and the
rental charges are otherwise lawful.
2)Add the following language to the bill to allow landlord's to
pass through the fixed services charges from the water
purveyor to the tenant:
a) On page 4 line 35: (changes to Section 1963.040):
(i) A statement that the tenant shall only be charged for actual
water usage service at the exact volumetric rate(s) charged by
the water purveyor of water service serving the property.
b) At page 4, line 37: strike out:
servicing the building for volumetric water usage, and that
and insert:
(j) A statement that the tenant shall also be changed for a
portion of any recurring fixed charge billed to the property by
the purveyor of water service, which will be proportional to the
amount of water the tenant uses in relation to the usage for the
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entire property
(k) The current amount of the recurring fixed charge referred to
in subdivision (j).
(l) A statement that no other administrative, connection,
disconnection, billing, or other periodic fee or charge may be
assessed, other than a late fee. If the landlord reserves the
right to charge a late fee, the amount and terms of the late fee
shall also be disclosed.
c) At page 5, line 3 (changes to Section 1963.040)
(j) (m)
d) Page 5, line 5 (changes to Section 1963.050)
1963.050. (a) A landlord shall bill a tenant only for volumetric
usage of water service . ,plus a portion of any recurring fixed
charge for water service billed to the property by the purveyor
of water service . The landlord shall not impose any other
periodic, connection, termination, or other fee, however
denominated, except for late fees or testing fees as provided in
this chapter.
e) Page 5, line 9:
(b) The amount of the volumetric portion of the bill shall be
calculated by multiplying the
water volume, as determined by the submeter for the billing
period in question, times the rate(s) for volumetric usage
established by the water purveyor of water service for
residential use.
f) Page 5, Line13:
(c) If the rates established by the water purveyor of water
service change, the bill shall be prorated to reflect the time
each rate was in effect. At the landlord's option, the landlord
may assess charges for the entire billing period based on the
lower rate.
(d) If a beginning or ending submeter reading is, in good
faith,not available, the landlord may bill the tenant 75 percent
of the amount originally disclosed to the tenant under
subdivision (b) of Section 1963.040.
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(e) No charges shall be imposed under this chapter if readings
have been unavailable for more than three months
g) Page 5, line 23 add:
(f) The amount of the bill to assess a portion of any recurring
fixed charge for water service billed to the property by the
purveyor of water service shall be calculated by assessing to
each tenant a percentage of the fixed charge using the ratio of
the tenant's volume of water use, as shown on the submeter,
bears to the water use of the entire property, as shown on the
property's water meter.
h) Page 5, line 36 (changes to Section 1963.060(d) starting
at (4))
(4) The amount of the current charges for volumetric use.
(5) The amount of any recurring fixed charge for water service
billed to the property by the purveyor of water service.
(6) The total water consumption for the property, as indicated
by the property's water meter.
(7) The percentage of the total water consumption of the
property that was consumed by the tenant.
(8) The amount of current charges assessed to the tenant for
the tenant's share of any recurring fixed charges for water
service billed to the property by the purveyor of water service.
(5) (9) A separate entry showing past due amounts, if any.
(6) (10) A separate entry showing any previously-imposed
latecharges.
(7) (11) The total amount due.
i) Page 6, line 26 (changes to Section 1963.080 (3)) strike
out:
(3) 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)On page 11, clarify the provision requiring common interest
developments apply to newly constructed units as follows:
539. Each water purveyor that sells, leases, rents, furnishes,
or delivers water service to a newly constructed a multiunit
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residential structure or mixed-use residential and commercial
structure that is part of a common interest development for
which an application for a water connection, or more than one
connection, is submitted after January 1, 2014, shall require
the installation of a water meter to measure water supplied to
each individual dwelling unit as a condition of new water
service.
Double referred : The Assembly Committee on Rules referred AB 19
to the Committee on Water, Parks and Wildlife and Housing and
Community Development. The bill passed the Committee on Water,
Parks and Wildlife on March 22, 2011, by a vote of 8 to 0.
REGISTERED SUPPORT / OPPOSITION :
Support
Sierra Club California (sponsor)
California Advocacy Committee of the United States Green
Building Council
California League of Conservation Voters
California Rural Legal Assistance Foundation
California Water Association
California Water Services Company
Clean Water Action California
County of Los Angeles Board of Supervisors
Environmental Defense Fund
Environmental Justice Coalition for Water
Executive Council of Homeowners
Friends of the River
Natural Resources Defense Council
Planning and Conservation League
Santa Clara Valley Water District
Western Center on Law & Poverty
Opposition
Apartment Association, California Southern Cities
Apartment Association of Greater Los Angeles
Apartment Association of Orange County
California Apartment Association
California Building Industry Association
California Business Properties Association
Citrus Heights Water District
Community Associations Institute
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Rental Housing Association of Northern Alameda County
San Diego County Apartment Association
San Francisco Association of Realtors
San Joaquin Rental Property Association
Santa Barbara Rental Property Association
Utility Conservation Coalition
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085