An Act concerning water and sewer rates for residential use and amending various parts of the statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 8 of P.L.1946, c.138 (C.40:14A-8) is amended to read as follows:

8. (a) Every sewerage authority is hereby authorized to charge and collect rents, rates, fees or other charges (in [this act] P.L.1946, c.138 (C.40:14A-1 et seq.), sometimes referred to as "service charges") for direct or indirect connection with, or the use or services of, the sewerage system. Such service charges may be charged to and collected from any person contracting for such connection or use or services or from the owner or occupant, or both of them, of any real property which directly or indirectly is or has been connected with the system or from or on which originates or has originated sewage or other wastes which directly or indirectly have entered or may enter the sewerage system, and the owner of any such real property shall be liable for and shall pay such service charges to the sewerage authority at the time when and the place where such service charges are due and payable.

(b) Rents, rates, fees and charges for commercial use of sewerage services, which may be payable periodically, being in the nature of use or service charges, shall as nearly as the sewerage authority shall deem practicable and equitable be uniform throughout the district for the same type, class and amount of use or service of the sewerage system [, except as permitted by section 1 of P.L.1994, c.78 (C.40:14A-8.2),] and may be based or computed either on the consumption of water on or in connection with the real property [, making due allowance for commercial use of water,] or on the number and kind of water outlets on or in connection with the real property, or on the number and kind of plumbing or sewerage fixtures or facilities on or in connection with the real property, or on the number of persons [residing or] working on or otherwise connected or identified with the real property, or on the capacity of the improvements on or connected with the real property, or on any other factors determining the type, class and amount of use or service of the sewerage system, or on any combination of any such factors, and may give weight to the characteristics of the sewage and other wastes and any other special matter affecting the cost of treatment and disposal thereof, including chlorine demand, biochemical oxygen demand, concentration of solids and chemical composition. Rents, rates,
fees, and charges for residential use of sewerage services shall be uniform throughout the district for the same type, class, and amount of use or service of the sewerage system, except as permitted by section 1 of P.L.1994, c.78 (C.40:14A-8.2), and shall be based or computed on the metered consumption of water on or in connection with the real property; provided, however, that a residential customer with a separate account for outdoor water or sewerage services shall not be charged sewerage disposal fees for water obtained from an outdoor source or recorded by a meter dedicated to the outdoor account. A sewerage authority may establish a tiered system of rates, through which the authority may charge residential customers different rates based upon the total metered units of water consumed on or in connection with the real property in a billing cycle. In addition to any such periodic service charges, a separate charge in the nature of a connection fee or tapping fee, in respect of each connection of any property with the sewerage system, may be imposed upon the owner or occupant of the property so connected. Such connection charges shall be uniform within each class of users, except as provided by section 2 of P.L.2005, c.29 (C.40:14A-8.30) and except as provided by section 2 of P.L.2005, c.173 (C.40:14A-8.4), and the amount thereof shall not exceed the actual cost of the physical connection, if made by the authority, plus an amount computed in the following manner to represent a fair payment toward the cost of the system:

(1) The amount representing all debt service, including but not limited to sinking funds, reserve funds, the principal and interest on bonds, and the amount of any loans and interest thereon, paid by the sewerage authority to defray the capital cost of developing the system as of the end of the immediately preceding fiscal year of the authority shall be added to all capital expenditures made by the authority not funded by a bond ordinance or debt for the development of the system as of the end of the immediately preceding fiscal year of the authority.

(2) Any gifts, contributions or subsidies to the authority received from, and not reimbursed or reimbursable to any federal, State, county or municipal government or agency or any private person, and that portion of amounts paid to the authority by a public entity under a service agreement or service contract which is not repaid to the public entity by the authority, shall then be subtracted.

(3) The remainder shall be divided by the total number of service units served by the authority at the end of the immediately preceding fiscal year of the authority, and the results shall then be apportioned to each new connector according to the number of service units attributed to that connector, to produce the connector's contribution to the cost of the system. In attributing service units to each connector, the estimated average daily flow of sewage for the connector shall be divided by the average daily flow of sewage for the average single family residence in the authority's district to produce the number of service units to be attributed.

The connection fee shall be recomputed at the end of each fiscal year of the authority, after a public hearing is held in the manner prescribed in subsection (c) of this section. The revised connection fee may be imposed upon those who subsequently connect in that fiscal year to the system. The combination of such connection fee or tapping fee and the aforesaid periodic service charges shall meet the requirements of subsection (c) hereof.

(c) The sewerage authority shall prescribe and from time to time when necessary revise a schedule of service charges, which shall comply with the terms of any contract of the sewerage authority and in any event shall be such that the revenues of the sewerage authority will at all times be adequate to pay all expenses of operation and maintenance of the sewerage system, including reserves, insurance, extensions, and replacements, and to pay punctually the principal of and interest on any bonds and to maintain such reserves or sinking funds therefor as may be required by the terms of any contract of the sewerage authority or as may be deemed necessary or desirable by the sewerage authority. Said schedule shall thus be prescribed and from time to time revised by the sewerage authority after public hearing thereon which shall be held by the sewerage authority at least 20 days after notice of the proposed adjustment is mailed to the clerk of each municipality serviced by the authority and publication of notice of the proposed adjustment of the service charges and of the time and place of the public hearing in at least two newspapers of general circulation in the area serviced by the authority. The sewerage authority shall provide evidence at the hearing showing that the proposed adjustment of the service charges is necessary and reasonable, and shall provide the opportunity for cross-examination of persons offering such evidence, and a transcript of the hearing shall be made and a copy thereof shall be available upon request to any interested party at a reasonable fee. The sewerage authority shall likewise fix and determine the time or times when and the place or places where such service charges shall be due and payable and may require that such service charges shall be paid in advance for periods of not more than one year. A copy of such schedule of service charges in effect shall at all times be kept on file at the principal office of the sewerage authority and shall at all reasonable times be open to public inspection.

(d) Any county sewerage authority may establish sewerage regions in portions of the district. Rents, rates, fees and charges which may be payable periodically, being in the nature of use or service charges, shall as nearly as the sewerage authority shall deem practicable and equitable, be uniform throughout the district for the same type, class and amount of use or service of the sewerage systems, except as permitted by section 1 of P.L.1994, c.78
(C.40:14A-8.2), and shall meet all other requirements of subsection (b) hereof.

(cf: P.L.2005, c.173, s.1)

2. Section 21 of P.L.1957, c.183 (C.40:14B-21) is amended to read as follows:

21. a. Every municipal authority is hereby authorized to charge and collect rents, rates, fees or other charges (in [this act] P.L.1957, c.183 (C.40:14B-1 et seq.), sometimes referred to as "water service charges") for direct or indirect connection with, or the use, products or services of, the water system, or for sale of water or water supply services, water supply facilities or products. Such water service charges may be charged to and collected from any person contracting for such connection or use, products or services or for such sale or from the owner or occupant, or both of them, of any real property which directly or indirectly is or has been connected with the water system or to which directly or indirectly has been supplied or furnished such use, products or services of the water system or water or water supply services, water supply facilities or products, and the owner of any such real property shall be liable for and shall pay such water service charges to the municipal authority at the time when and place where such water service charges are due and payable. Such rents, rates, fees and charges for commercial use of water services shall as nearly as the municipal authority shall deem practicable and equitable be uniform throughout the district for the same type, class and amount of use, products or services of the water system [, except as permitted by section 1 of P.L.1992, c.215 (C.40:14B-22.2),] and may be based or computed either on the consumption of water on or in connection with the real property, or on the number and kind of water outlets on or in connection with the real property, or on the number and kind of plumbing fixtures or facilities on or in connection with the real property, or on the number of persons [residing or] working on or otherwise connected or identified with the real property, or on the capacity of the improvements on or connected with the real property, or on any other factors determining the type, class and amount of use, products or services of the water system supplied or furnished, or on any combination of such factors, and may give weight to the characteristics of the water or water services, facilities or products and, as to service outside the district, any other matter affecting the cost of supplying or furnishing the same, including the cost of installation of necessary physical properties. Rents, rates, fees, and charges for residential use of water services shall be uniform throughout the district for the same type, class, and amount of use, products, or services of the water system, except as permitted by section 1 of P.L.1992, c.215 (C.40:14B-22.2), and shall be based or computed on the metered consumption of water on or in connection with the real property. A municipal authority may establish a tiered system of rates, through which the authority may charge different rates based upon the total metered units of water consumed on or in connection with the real property in a billing cycle.

Every municipal authority that furnishes water supply services or operates water supply facilities shall establish a rate structure that provides for uniform water service charges for water supply service and fire protection systems.

No municipal authority may impose standby fees or charges for any fire protection system to a residential customer served by a water service line of two inches or less in diameter.

Nothing in this section shall preclude a municipal authority from requiring separate dedicated service lines for fire protection. A municipal authority may require that fire service lines be metered. Nothing in this section shall alter the liability for maintenance and repair of service lines which exists on the effective date of P.L.2003, c.278.

b. In addition to any such water service charges, a separate charge in the nature of a connection fee or tapping fee, in respect of each connection of any property with the water system, may be imposed upon the owner or occupant of the property so connected. Such connection charges shall be uniform within each class of users, except as provided by section 5 of P.L.2005, c.29 (C.40:14B-22.3) and except as provided by section 5 of P.L.2005, c.173 (C.40:14B-22.4), and the amount thereof shall not exceed the actual cost of the physical connection, if made by the authority, plus an amount computed in the following manner to represent a fair payment toward the cost of the system:

(1) The amount representing all debt service, including but not limited to sinking funds, reserve funds, the principal and interest on bonds, and the amount of any loans and interest thereon, paid by a municipal authority to defray the capital cost of developing the system as of the end of the immediately preceding fiscal year of the authority shall be added to all capital expenditures made by the authority not funded by a bond ordinance or debt for the development of the system as of the end of the immediately preceding fiscal year of the authority.

(3) The remainder shall be divided by the total number of service units served by the authority at the end of the immediately preceding fiscal year of the authority, and the results shall then be apportioned to each new connector according to the number of service units attributed to that connector, to produce the connector's contribution to the cost of the system. In attributing service units to each connector, the estimated average daily flow of water for the connector shall be divided by the average daily flow of water to the average single family residence in the authority's district, to produce the number of service units to be attributed.

c. The connection fee shall be recomputed at the end of each fiscal year of the authority, after a public hearing is held in the manner prescribed in section 23 of P.L.1957, c.183 (C.40:14B-23). The revised connection fee may be imposed upon those who subsequently connect in that fiscal year to the system. The combination of such connection fee or tapping fee and the aforesaid water service charges all meet the requirements of section 23 of P.L.1957, c.183 (C.40:14B-23).

d. The foregoing notwithstanding, no municipal authority shall impose any charges or fees in excess of the cost of water actually used for any sprinkler system required to be installed in any residential health care facility pursuant to the "Health Care Facilities Planning Act," P.L.1971, c.136 (C.26:2H-1 et seq.) and regulations promulgated thereunder or in any rooming or boarding house pursuant to the "Rooming and Boarding House Act of 1979," P.L.1979, c.496 (C.55:13B-1 et al.) and regulations promulgated thereunder. Nothing herein shall preclude any municipal authority from charging for the actual cost of water main connections, except as provided by section 5 of P.L.2005, c.29 (C.40:14B-22.3) and except as provided by section 5 of P.L.2005, c.173 (C.40:14B-22.4).

(cf: P.L.2005, c.173, s.3)

3. Section 22 of P.L.1957, c.183 (C.40:14B-22) is amended to read as follows:

22. Every municipal authority is hereby authorized to charge and collect rents, rates, fees or other charges (in [this act] P.L.1957, c.183 (C.40:14B-1 et seq.), sometimes referred to as "sewerage service charges") for direct or indirect connection with, or the use or services of, the sewerage system. Such sewerage service charges may be charged to and collected from any person contracting for such connection or use or services or from the owner or occupant, or both of them, of any real property which directly or indirectly is or has been connected with the sewerage system or from or on which originates or has originated sewage or other wastes which directly or indirectly have entered or may enter the sewerage system, and the owner of any such real property shall be liable for and shall pay such sewerage service charges to the municipal authority at the time when and place where such sewerage service charges are due and payable. Such rents, rates, fees and charges for commercial use of sewerage services, being in the nature of use or service charges, shall as nearly as the municipal authority shall deem practicable and equitable be uniform throughout the district for the same type, class and amount of use or service of the sewerage system [, except as permitted by section 1 of P.L.1992, c.215 (C.40:14B-22.2),] and may be based or computed either on the consumption of water on or in connection with the real property [, making due allowance for commercial use of water,] or on the number and kind of water outlets on or in connection with the real property, or on the number and kind of plumbing or sewerage fixtures or facilities on or in connection with the real property, or on the number of persons [residing or] working on or otherwise connected or identified with the real property, or on the capacity of the improvements on or connected with the real property, or on any other factors determining the type, class and amount of use or service of the sewerage system, or on any combination of any such factors, and may give weight to the characteristics of the sewage and other wastes and any other special matter affecting the cost of treatment and disposal of the same, including chlorine demand, biochemical oxygen demand, concentration of solids and chemical composition, and, as to service outside the district, the cost of installation of necessary physical properties. Rents, rates, fees, and charges for residential use of sewerage services shall be uniform throughout the district for the same type, class, and amount of use, products, or services of the water system, except as permitted by section 1 of P.L.1992, c.215 (C.40:14B-22.2), and shall be based or computed on the metered consumption of water on or in connection with the real property; provided, however, that a residential customer with a separate account for outdoor water services shall not be charged sewerage disposal fees for water obtained for outdoor use or recorded by a meter dedicated to the outdoor account. In addition to any such sewerage service charges, a separate charge in the nature of a connection fee or tapping fee, in respect of each connection of any property with the sewerage system, may be imposed upon the owner or occupant of the property so connected. Such connection charges shall be uniform within each class of users, except as provided by section 5 of P.L.2005, c.29 (C.40:14B-22.3) and except as provided by section 5 of P.L.2005, c.173 (C.44:14B-22.4), and the amount thereof shall not exceed the actual cost of the physical connection, if made by the authority, plus an amount computed in the following manner to represent a fair payment towards the cost of the system:

a. The amount representing all debt service, including but not limited to sinking funds, reserve funds, the principal and interest on bonds, and the amount of any loans and the interest thereon, paid by the municipal authority to defray the capital cost of developing the system as of the end of the immediately preceding fiscal year of the authority shall be added to all capital expenditures made by a municipal authority not funded by a bond ordinance or debt for the development of the system as of the end of the immediately preceding fiscal year of the authority.

b. Any gifts, contributions or subsidies to the authority received from, and not reimbursed or reimbursable to, any federal, State, county or municipal government or agency or any private person, and that portion of amounts paid to the authority by a public entity under a service agreement or service contract which is not repaid to the public entity by the authority, shall then be subtracted.

c. The remainder shall be divided by the total number of service units served by the authority at the end of the immediately preceding fiscal year of the authority, and the results shall then be apportioned to each new connector according to the number of service units attributed to that connector. In attributing service units to each connector, the estimated average daily flow of sewage for the connector shall be divided by the average daily flow of sewage from the average single family residence in the authority's district, to produce the number of service units to be attributed.

The connection fee shall be recomputed at the end of each fiscal year of the authority, after a public hearing is held in the manner prescribed in section 23 of P.L.1957, c.183 (C.40:14B-23). The revised connection fee may be imposed upon those who subsequently connect in that fiscal year to the system.

The combination of such connection fee or tapping fee and the aforesaid sewerage service charges shall meet the requirements of section 23 of P.L.1957, c.183 (C.40:14B-23).

(cf: P.L.2005, c.173, s.4)

4. R.S.40:62-107 is amended to read as follows:

40:62-107. The governing body of any municipality owning its water and sewer systems and operating the same as one utility may fix a combination water and sewer rental in the same manner as a municipal authority pursuant to the provisions of sections 21 and 22 of P.L.1957, c.183 (C.40:14B-21 and C.40:14B-22) concerning the computation of rates and rentals, and in case prompt payment of said combined rent is not made according to the regulations adopted by said governing body cause said water to be shut off from such houses, tenements, buildings or other premises so supplied and not to turn the same on again until all arrears, with interest and penalties, shall be fully paid.

(cf: R.S.40:62-107)

5. R.S.40:62-107.6 is amended to read as follows:

40:62-107.6. a. After any municipality shall have purchased a water distribution system pursuant to sections 40:62-107.4 and 40:62-107.5 of this title, the governing body of the municipality shall be authorized to operate the water distribution system as nearly as may be as a part of its own system, and any schedule of rates, rents, charges and penalties which the governing body shall thereafter fix shall be applicable to water users within both municipalities, and in the collection of all rates, rents, charges and penalties the municipality shall have all the rights and remedies that may apply to private water companies supplying water to municipalities of this State.

b. The governing body of a municipality that has purchased a water distribution system shall establish a rate structure that provides for uniform rates, rentals, or other service charges for water supply service and fire protection systems in the same manner as a municipal authority pursuant to the provisions of section 21 of P.L.1957, c.183 (C.40:14B-21) concerning the computation of rates and rentals.

The governing body shall not impose standby fees or charges for any fire protection system to a residential customer served by a water service line of two inches or less in diameter.

Nothing in this section shall preclude the governing body of a municipality that has purchased a water distribution system from requiring separate dedicated service lines for fire protection. The governing body of a municipality that has purchased a water distribution system may require that fire service lines be metered. Nothing in this section shall alter the liability for maintenance and repair of service lines which exists on the effective date of P.L.2003, c.278.

(cf: P.L.2003, c.278, s.3)

6. R.S.40:62-127 is amended to read as follows:

40:62-127. a. The water commission may prescribe and change from time to time rates to be charged for water supplied by the waterworks so acquired, and by any extension or enlargement thereof, but rates for the same kind or class of service shall be calculated in the same manner as a municipal authority pursuant to the provisions of section 21 of P.L.1957, c.183 (C.40:14B-21) concerning the computation of rates and rentals and uniform in all the municipalities supplied by the waterworks.

The water commission shall establish a rate structure that provides for uniform water service charges for municipal water supply service and fire protection systems.

No rates shall include the imposition of standby fees or charges for any fire protection system to a residential customer served by a water service line of two inches or less in diameter.

Nothing in this section shall preclude a water commission from requiring separate dedicated service lines for fire protection. The water commission may require that fire service lines be metered. Nothing in this section shall alter the liability for maintenance and repair of service lines which exists on the effective date of P.L.2003, c.278.

No rates shall include the imposition of any fees in excess of the cost of water actually used for any sprinkler system required to be installed in any residential health care facility pursuant to the "Health Care Facilities Planning Act," P.L.1971, c.136 (C.26:2H-1 et seq.) and regulations promulgated thereunder or in any rooming or boarding house pursuant to the "Rooming and Boarding House Act of 1979," P.L.1979, c.496 (C.55:13B-1 et al.) and regulations promulgated thereunder.

Nothing herein shall preclude any commission from charging for the actual cost of water main connection.

b. The supplying of water to locations beyond the boundaries of the municipalities owning the waterworks shall be basis for separate classification of service to permit reasonable differentiation of rates. As soon as practicable after acquiring the waterworks, rates shall be prescribed, and shall be revised from time to time whenever necessary, so that the waterworks shall be self-supporting, the earnings to be sufficient to provide for all expenses of operation and maintenance and such charges as interest, sinking fund and amortization, so as to prevent any deficit to be paid by taxation from accruing. The interest, sinking fund and amortization shall be construed to include:

(1) All service on debt heretofore or hereafter incurred by the commission or by any municipality represented by the commission in connection with the acquisition of such privately-owned waterworks, and any extensions thereto and enlargements thereof, heretofore or hereafter formally assumed by the commission or its successors, and

(2) All service on debt heretofore or hereafter incurred by the commission or by a municipality represented by the commission, or its successors, and heretofore or hereafter formally assumed by the commission, or its successors, as part of any agreement with the municipality relative to the acquisition, by the commission, or its successors, of the ownership of or the management and control of or the right to use any water supply or part thereof or interest therein or any distribution system of water mains and connections, or any part thereof, which any such municipality may own or control.

c. The provisions of this section shall be deemed a contract with the holders of all obligations which shall be or may have been issued for the purpose of financing such acquisitions or which heretofore have been or may hereafter be issued to refund temporary bonds or obligations issued for such purposes, the payment of any of which obligations, and interest thereon, the commission, or its successors, has heretofore or may hereafter formally assume as aforesaid.

d. The commission and any succeeding commission may prescribe, and alter and enforce all reasonable rules and regulations for the maintenance and operation of the waterworks and the collection of rates.

(cf: P.L.2003. c.278, s.4)

7. N.J.S.40A:26A-10 is amended to read as follows:

40A:26A-10. After the commencement of operation of sewerage facilities, the local unit or units may prescribe and, from time to time, alter rates or rentals to be charged to users of sewerage services. Rates or rentals being in the nature of use or service charges or annual rental charges, shall be uniform and equitable for the same types and classes of use and service of the facilities, except as permitted by section 5 of P.L.1994, c.78 (C.40A:26A-10.1). Rates or rentals and types and classes of use and service for commercial purposes may be based on any factors which the governing body or bodies of that local unit or units shall deem proper and equitable within the region served. Rates or rentals for residential use shall be based or computed on the metered consumption of water on or in connection with the real property; provided, however, that a residential customer with a separate account for outdoor water services shall not be charged sewerage disposal fees for water obtained for outdoor use or recorded by a meter dedicated to the outdoor account. A local unit may establish a tiered system of rates, through which the local unit may charge different rates based upon the total metered units of water consumed on or in connection with the real property in a billing cycle.

In fixing rates, rental and other charges for supplying sewerage services, the local unit or units shall establish a rate structure that allows, within the limits of any lawful covenants made with bondholders, the local unit to:

a. Recover all costs of acquisition, construction or operation, including the costs of raw materials, administration, real or personal property, maintenance, taxes, debt service charges, fees and an amount equal to any operating budget deficit occurring in the immediately preceding fiscal year;

b. Establish a surplus in an amount sufficient to provide for the reasonable anticipation of any contingency that may affect the operating of the sewerage facility, and, at the discretion of the local unit or units, allow for the transfer of moneys from the budget for the sewerage facilities to the local budget in accordance with section 5 of P.L.1983, c.111 (C.40A:4-35.1).

(cf: P.L.1994, c.78, s.6)

8. N.J.S.40A:31-10 is amended to read as follows:

40A:31-10. a. After the commencement of operation of water supply facilities, the local unit or units may prescribe and, from time to time, alter rates or rentals to be charged to users of water supply services. Rates or rentals being in the nature of use or service charges or annual rental charges, shall be uniform and equitable for the same type and class of use or service of the facilities, except as permitted by section 7 of P.L.1994, c.78 (C.40A:31-10.1). Rates or rentals and types and classes of use and service for commercial use may be based on any factors which the governing body or bodies of that local unit or units shall deem proper and equitable within the region served. Rates or rentals for residential use shall be based or computed on the metered consumption of water on or in connection with the real property. A local unit may establish a tiered system of rates, through which the local unit may charge different rates based upon the total metered units of water consumed on or in connection with the real property in a billing cycle.

b. Every local unit operating a municipal water supply facility shall establish a rate structure that provides for uniform rates, rentals, or other charges for water supply service and fire protection systems.

No local unit may impose standby fees or charges for any fire protection system to a residential customer served by a water service line of two inches or less in diameter.

c. In fixing rates, rental and other charges for supplying water services, the local unit or units shall establish a rate structure that allows, within the limits of any lawful covenants made with bondholders, the local unit to:

(1) Recover all costs of acquisition, construction or operation, including the costs of raw materials, administration, real or personal property, maintenance, taxes, debt service charges, fees and an amount equal to any operating budget deficit occurring in the immediately preceding fiscal year;

(2) Establish a surplus in an amount sufficient to provide for the reasonable anticipation of any contingency that may affect the operation of the utility, and, at the discretion of the local unit or units, allow for the transfer of moneys from the budget for the water supply facilities to the local budget in accordance with section 5 of P.L.1983, c.111 (C.40A:4-35.1).

d. No local unit or units shall impose any rates or rentals in excess of the cost of water actually used for any sprinkler system required to be installed in any residential health care facility pursuant to the "Health Care Facilities Planning Act," P.L.1971, c.136 (C.26:2H-1 et seq.) and regulations promulgated thereunder or in any rooming or boarding house pursuant to the "Rooming and Boarding House Act of 1979," P.L.1979, c.496 (C.55:13B-1 et al.) and regulations promulgated thereunder.

e. Nothing in this section shall preclude a local unit operating a municipal water supply facility from requiring separate dedicated service lines for fire protection. The local unit may require that fire service lines be metered. Nothing in this section shall alter the liability for maintenance and repair of service lines which exists on the effective date of P.L.2003, c.278.

(cf: P.L.2003, c.278, s.7)

9. This act shall take effect immediately, but shall remain inoperative with respect to municipal authorities and municipalities that do not have meters installed on the effective date of this act; in which case the provisions of this act shall become operative as soon as technically feasible but not later than the first day of the fourth year next following enactment.

STATEMENT

This bill would require local public authorities that charge for water and sewer services to base residential customers' bills exclusively upon metered consumption. These charges, which will be tied to consumption, would 'improve residential consumers' awareness of the level and cost associated with their frequent water consumption. As such, residents would potentially be inclined to seek lower charges by instituting conservation methods, particularly in water usage.

Under current law, local public authorities providing water and sewer services may establish charges for those services based on any number of factors, including consumption, the number and type of water outlets, the number and type of plumbing fixtures or facilities, the number of persons residing on the property, the capacity of fixtures, or any other factors determining the type, class, and amount of water or sewer use. This bill would require local public authorities providing water and sewer services to base their charges for residential services on metered consumption. In addition, this bill permits local authorities and local units to establish a tiered system of rates, through which a local unit may charge different rates based upon the total metered units of water consumed on or in connection with the real property in a billing cycle. The bill also exempts residential customers with separate outdoor water or sewer accounts from charges for sewer disposal services recorded by meters tied to the outdoor account or that resulted from the disposal of water obtained from an outdoor source. Essentially, a resident with a separate outdoor account would not be responsible for sewer service charges related to the resident's use of water from an outdoor source.

This bill would take effect immediately, except with respect to municipal authorities and municipalities that do not have meters installed on the effective date of this bill. In those areas, the provisions of this act will become operative as soon as technically feasible, but not later than the first day of the fourth year next following enactment.