HBA-BSM H.B. 2404 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2404 By: Lewis, Ron Natural Resources 7/25/2001 Enrolled BACKGROUND AND PURPOSE Under previous state law, apartments could include water charges in the rent, and allocate water bills by dividing the charges among tenants by the number of occupants and/or square footage. Submetering water service in multifamily housing reduces water consumption between approximately 10 and 30 percent. If the apartment management is responsible for paying the water bills they have an incentive to replace old wasteful fixtures with high efficiency fixtures. However, tenants often do not have the finances to upgrade these fixtures or the incentive to do so as they do not own the property. The Texas Natural Resource Conservation Commission has revised rules governing submetering, but does not have the legislative authority to enforce its proposals. House Bill 2404 requires an owner or manager of a new apartment house, manufactured home rental community, multiple use facility, or condominium to provide for the submetering of each unit and sets forth provisions regarding the installation of plumbing fixtures that meet water savings performance standards. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Natural Resource Conservation Commission in SECTION 3 of this bill. ANALYSIS House Bill 2404 amends the Water Code to require a manager of a condominium or owner of an apartment house, manufactured home rental community, or multiple use facility on which construction begins after January 1, 2003 to provide for the measurement of the quantity of water, if any, consumed by the occupants of each unit through the installation of submeters owned by the property owner or manager or individual meters owned by the retail public utility. The bill requires an owner of an apartment house on which construction begins after January 1, 2003, and which provides government assisted or subsidized rental housing to low or very low income residents to install a plumbing system in the apartment house that is compatible with the installation of submeters for the measurement of the quantity of water, if any, consumed by the occupant of each unit. The bill requires a retail public utility on request by the property owner or manager to install individual meters owned by the utility in an apartment house, manufactured home rental community, multiple use facility, or condominium on which construction begins after January 1, 2003, unless the retail public utility determines that installation of meters is not feasible, in which case the property owner or manager is required to install a plumbing system that is compatible with the installation of submeters or individual meters. The bill authorizes a retail public utility to charge reasonable costs to install individual meters. The bill prohibits an owner of an apartment house, manufactured home rental community, or multiple use facility or a manager of a condominium from changing from submetered billing to allocated billing unless the executive director of the Texas Natural Resource Conservation Commission (TNRCC) approves of the change in writing after a demonstration of good cause, including meter reading or billing problems that could not feasiblely be corrected or equipment failures and the property owner meets rental agreement requirements established by TNRCC. The bill provides that after January 1, 2003, an owner of an apartment house, manufactured home rental community, or multiple use facility or a manager of a condominium may implement a program to bill tenants for submetered or allocated water service if the owner or manager meets certain water saving performance standards, performs a water leak audit of each unit and each common area, and repairs any leaks found. The bill requires an owner of an apartment house, manufactured home rental community, or multiple use facility or a manager of a condominium to remove any toilets that exceed a maximum flow of 3.5 gallons per flushing and install 1.6- gallon toilets that meet specified standards not later than the first anniversary of the date the owner or manager begins to bill for submetered or allocated water service. The provisions regarding plumbing fixture standards, audit, and installation do not apply to a manufactured home rental community owner who does not own the manufactured homes located in the community. TNRCC is required to enact rules to implement these provisions, not later than September 1, 2002. EFFECTIVE DATE September 1, 2001.