BILL ANALYSIS
By: Puente
Committee Report (Substituted)
BACKGROUND AND PURPOSE
State law currently allows landlords using master water meters to allocate water charges among tenants based on an allocation formula, such as the number of people, number of bedrooms, square footage, etc. in a dwelling unit (called Ratio Utility Billing Systems, or RUBS). This removes any financial incentive for tenants to conserve water since they are not billed for their actual usage. Likewise, property owners have little financial incentive to eliminate indoor water waste since the cost is passed on to tenants.
Recognizing vast water savings potential, the state has taken steps toward submetering in the multi-family residential sector. In 2001 the 77th Legislature passed HB2404, requiring that all multi-family construction begun after January 1, 2003 include submeters or individual meters for measuring individual units’ water use.[1]
HB2404 did not require that landlords immediately begin billing individual tenants for actual water use. It did, however, require Texas Commission on Environmental Quality (commission) approval before a property owner could switch from an existing submetered billing system to a RUBS system due to a good-cause hardship. Unfortunately, some property owners may abuse the good-cause exemption and switch to a RUBS system merely to avoid the cost of maintaining their submetering systems.
C.S.H.B. 2434 amends Section 13.502, Water Code, to require that, in order for the executive director of the commission to approve a request to switch from submetering to a RUBS system, property owners or managers must submit certain information. The executive director may not approve the request unless the property owner or manager demonstrates that all reasonable steps were taken to ensure the proper installation and maintenance of the submetering system and that the circumstances reasonably justify the change.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the Texas Commission on Environmental Quality in SECTION 1 of this bill.
ANALYSIS
C.S.H.B. 2434 requires that before the executive director may approve a request to change from sub-metered billing to allocated billing, property owners or managers must submit documentation to the commission in support of the request. The executive director shall assign commission staff knowledgeable in water billing issues to review the documentation and make a recommendation to the executive director of the commission.
In reviewing the documentation, the commission shall consider whether needed repairs or problems are routine in nature or are extraordinary and constitute good cause for the billing change. The executive director may not approve the request unless the property owner or manager demonstrates that all reasonable steps were taken to ensure the proper installation and maintenance of the sub-metering system and that the circumstances reasonably justify the change.
The commission by rule shall require a property owner or manager requesting a billing change to provide timely notice to affected tenants that includes information relating to the manner in which a tenant may comment to the commission on the request.
C.S.H.B. 2434 provides that if the executive director does not approve a request for a billing change, the executive director shall provide to the property owner or manager an explanation of why the request was not approved.
C.S.H.B. 2434 provides that a property owner or manager who submits a request for a billing change must submit with the request any relevant information including, if the request is based on equipment failures, bids for replacement, copies of repair or service invoices, and an explanation of why the equipment failed before it's expected useful life. If the request is based on meter reading or billing problems, copies of resident complaints, correspondence with billing companies, correspondence from the commission regarding consumer complaints and an affidavit by the property owner or manager regarding efforts to find alternative service providers should be provided.
C.S.H.B. 2434 applies prospectively to requests upon which the commission has not issued a final decision before the effective date of the Act.
EFFECTIVE DATE
September 1, 2005.
COMPARISON OF ORIGINAL TO SUBSTITUTE
C.S.H.B. 2434 sets forth a procedure and certain documentation requirements for requesting a change from sub-metering to allocated billing in multi-family housing. The original bill specifically required notice and hearing for such a request. In addition, as filed, the bill included a requirement that property owners and/or utilities bill for water using submeters or individual meters installed per the 2001 law, except for certain low income housing. This requirement has been deleted.
[1] HB2404 made an exception for government assisted or subsidized rental housing for low or very low income housing. In such cases, property owners were required to plumb individual units for compatibility with submeters, but they were not required to actually install submeters.