C.S.H.B. 2388 78(R) BILL ANALYSIS C.S.H.B. 2388 By: Cook, Robby Business & Industry Committee Report (Substituted) BACKGROUND AND PURPOSE Sec. 13.501 of the Texas Water Code allows the owner or manager of several types of rental properties, including apartments, to bill residents for submetered or allocated water consumed by them in their respective homes. The Texas Commission on Environmental Quality (TCEQ) regulates water billing and a number of consumer protections are built into the rules. For example, residents must receive a lease addendum outlining the billing program and must also receive a summary of the rules prepared by TCEQ. Rules also govern areas such as the type of information that must be included on a bill, billing calculations, etc. When a property is submetered, the property owner sends a bill to the resident for only the water actually consumed in the resident's apartment unit. When a property is not submetered, the property owner sends the resident an allocated bill that is calculated based on a formula approved by the TCEQ. The property owner is responsible for paying the entire property's mastermetered water bill, and then collects the submetered or allocated water bills from the residents. It is common to allow a late fee on utility bills to encourage customers to pay in a timely manner. For example, the Public Utility Commission rules for submetered or allocated electricity specifically allow a 5 percent late fee if the resident does not pay his bill on time. But the TCEQ rules (and the Water Code) are silent on late fees for submetered or allocated water. They neither expressly allow nor prohibit a property owner from charging the resident a late fee when the resident is delinquent in paying his water bill to the landlord. Without the ability to charge late fees, the property owner is left with few realistic alternatives short of seeking an eviction whenever the resident doesn't pay his submetered or allocated water bill. Under the TCEQ rules, a tenant has at least 16 days from the time the bill is mailed or hand delivered to the tenant to pay a water bill before it is considered delinquent. C.S.H.B. 2388 would allow a property owner to charge a resident a late fee of up to 5 percent if the resident does not pay a submetered or allocated water bill by the due date. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS SECTION 1. Amends Sections 13.503(b), Water Code to allow a property owner to charge a tenant a late fee of up to five percent of the bill, if the tenant fails to pays a submetered or allocated water bill when due. SECTION2. Amends Section 13.5031, Water Code to allow a property owner to charge a tenant a late fee of up to five percent of the bill, if the tenant fails to pays a submetered or allocated water bill when due. SECTION 3. Effective Date: September 1, 2003. EFFECTIVE DATE September 1, 2003 COMPARISON OF ORIGINAL TO SUBSTITUTE The Original bill was not a Legislative Council draft, the substitute is a Legislative Council draft. Additionally, the original bill as filed improperly referenced the Property Code when it should have been the Water Code. All references to the Property Code have been deleted and substituted with references to the Water Code.