[Federal Register Volume 68, Number 167 (Thursday, August 28, 2003)]
[Notices]
[Pages 51777-51780]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22053]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-7550-7]


Applicability of the Safe Drinking Water Act to Submetered 
Properties

AGENCY: Environmental Protection Agency.

ACTION: Notice of availability; request for comments.

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SUMMARY: The Environmental Protection Agency (EPA) is seeking public 
comment on revising the current policy regarding regulatory 
requirements under the Safe Drinking Water Act (SDWA) of submetered 
properties. The draft revised policy is shown in the Supplementary 
Information section below, in the memorandum form it would take if the 
policy is made final. Under SDWA section 1411, the national primary 
drinking water regulations apply to public water systems (PWS) that 
have their own water source, treat, or ``sell'' water. EPA staff and 
program managers have previously issued memoranda stating that any 
building or property owner who meets the definition of a PWS and 
receives water from a regulated public water system, but bills tenants 
separately for this water, is ``selling'' the water and therefore is 
independently subject to SDWA's drinking water requirements. As a way 
to promote full cost and conservation pricing to achieve water 
conservation, the EPA now proposes to change its interpretation of 
section 1411 as it applies to a limited aspect of

[[Page 51778]]

submetering and direct billing of residential tenants. EPA believes 
this change in interpretation would not adversely affect public health 
protection for consumers served by these submetered systems.

DATES: Comments must be submitted on or before October 27, 2003.

ADDRESSES: Comments may be submitted by mail to: Water Docket, 
Environmental Protection Agency, Mail Code 4101T, 1200 Pennsylvania 
Ave., NW., Washington, DC 20460, Attention Docket ID No. OW-2003-0065. 
Comments may also be submitted electronically or through hand delivery/
courier by following the detailed instructions as provided in section 
I.C. of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: For more information please contact 
Ronald Bergman at [email protected].

SUPPLEMENTARY INFORMATION:

I. General Information

A. Draft Revised Policy

    If the revised policy is made final, the following statement will 
be announced by EPA Assistant Administrator for Water, G. Tracy Mehan 
III, to the Regional Administrators

Draft Memorandum

From: G. Tracy Mehan, III, Assistant Administrator, Office of Water
To: Regional Administrators Regions I-X
Subject: Applicability of the Safe Drinking Water Act to Submetered 
Properties

    Water conservation is an integral part of watershed protection, 
particularly in arid and drought-stricken areas. In recent speeches, I 
have called for full cost and conservation pricing to achieve water 
conservation. The use of water meters by which to measure consumption 
is a necessary prerequisite to using these price mechanisms. For those 
15% of Americans who live in apartments, submeters are needed if their 
water consumption is to be linked to prices. Throughout the country, 
submetering of apartment buildings has been found to be an effective 
but little-used tool to support water conservation.
    Some owners of multifamily housing, however, have expressed concern 
that, under EPA's current policy, the installation of submeters 
subjects them to the full regulatory requirements of the Safe Drinking 
Water Act (SDWA). In 1996, Congress also expressed concern about EPA's 
policy in this specific situation, and, in response, EPA agreed to 
reconsider the matter and issue further guidance.\1\ This memorandum 
represents the promised further guidance on this issue and sets out a 
revised policy with respect to residential properties such as apartment 
buildings that submeter for water.
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    \1\ H. Rep. 104-632 (104th Cong., 2d Sess.) at 55 and 134 
(1996).
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    Under the revised policy, a property owner who had not previously 
been (or would not be) subject to SDWA national primary drinking water 
regulations through SDWA section 1411, and who installs submeters to 
accurately track usage of water by tenants on his or her property, will 
not then be subject to SDWA regulations solely as a result of taking 
the action to submeter and bill. The water being provided would already 
meet drinking water standards because the water would be coming from a 
regulated public water system.

Background

    Section 1401 of SDWA defines a public water system (PWS) as a 
system that provides water through pipes or other constructed 
conveyances to the public for human consumption, if the system has at 
least 15 service connections or regularly serves at least 25 people. 
Under SDWA section 1411, the SDWA national primary drinking water 
regulations apply to PWSs that have their own water source, treat, or 
``sell'' water. EPA staff and program managers have issued several 
memoranda stating that any building or property owner who meets the 
definition of a PWS and receives water from a regulated public water 
system without adding further treatment, but bills tenants separately 
for this water, is ``selling'' the water and therefore is independently 
subject to SDWA's drinking water requirements. Today's memorandum 
reflects a change in EPA's interpretation of section 1411 as it applies 
in the specific context of submetering and direct billing of tenants.
    The EPA memoranda referenced above were based on a single statement 
in the 1974 legislative history for the SDWA in which Congress 
explained its intent in enacting section 1411. In that legislative 
history, the Committee report states that it ``intends to exempt 
businesses which merely store and distribute water provided by others, 
unless that business sells water as a separate item or bills separately 
for water it provides.''\2\ Under EPA's interpretation to date, an 
apartment building or similar residential property that is exempt under 
section 1411 but that merely installs a submeter and bills the tenants 
for the water, or simply begins billing tenants (even without a 
submeter), would become a fully regulated public water system, even 
though there had been no other change relevant to the delivery or 
potential health concerns associated with the water. This application 
of the legislative history has been cited as a discouragement to 
submetering and, as a result, to water conservation measures.
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    \2\ H. Rep. 93-1185 (93rd Cong., 2nd Session), reprinted in A 
Legislative History of the Safe Drinking Water Act, Committee Print 
Serial 97-9 (1982) at 549.
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    After further review, we no longer believe that Congress intended 
the legislative history to be applied in this manner for the following 
reasons:
    [sbull] The legislative history from 1974 does not specifically 
address the submetering of apartment buildings for water conservation 
purposes. Rather, the legislative history was one Committee's attempt 
to explain broadly what the term ``selling'' water in section 1411 
might mean. The statute itself does not define the term ``selling'' or 
suggest an interpretation that any billing of water would automatically 
trigger full SDWA regulation.
    [sbull] A Congressional committee expressed its concern that this 
application of SDWA might discourage the practice of submetering, as 
owners of a multifamily housing property (e.g., apartment buildings 
and/or complexes, mobile home parks) would become subject to national 
primary drinking water regulations if they billed separately for water. 
Congress asked that EPA review its guidance on this matter to prevent 
unnecessary requirements that do not further public health protection 
and that might inhibit water conservation efforts.\3\
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    \3\ H . Rep. 104-632 at 55 (1996)
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    [sbull] EPA's approach in previous memoranda--simply applying the 
concept of ``sell'' to every billing transaction--may have created a 
disincentive to water conservation, which can undermine water quality 
over the long term.
    [sbull] Finally, it makes no sense, as a matter of statutory 
interpretation, health protection, or SDWA implementation policy, to 
subject an entity to the full suite of SDWA requirements simply as a 
result of a decision about who sends a water bill, especially when the 
water is already coming from a regulated public water system. As a 
result, we no longer consider that the blanket approach to defining 
``sell'' as meaning any type of billing in any circumstance is 
appropriate.

[[Page 51779]]

Revised Policy

    Consistent with Congressional requests to reconsider this matter, 
we now believe that, if a property owner, who had not previously been 
(or would not be) subject to PWS national primary drinking water 
regulations, installs submeters to accurately track usage of water by 
residential tenants on his or her property, that owner should not then 
be subject to regulations solely as a result of taking the action to 
submeter and bill. Likewise, a property owner who does not submeter, 
but charges tenants for water based on a ratio utility billing or other 
apportioning system, would also remain exempt from full SDWA 
requirements.
    The addition of a submeter, or direct billing, should not in any 
way change the public health protections provided to water consumers on 
the property, as they are still subject to plumbing codes and provided 
water from a PWS that is fully regulated by SDWA. The PWS providing 
water to the property is still responsible for providing public 
notification under 40 CFR 141.201(c) (or approved State equivalent) to 
consumers and making ``good faith'' efforts to provide the tenants with 
the annual Consumer Confidence Reports under 40 CFR 141.155(b). A 
submetered property would still be considered a PWS under SDWA section 
1401, hence States and EPA would retain the ability to take corrective 
action under SDWA's emergency powers authority (section 1431) if public 
health risks arise.
    Although EPA is not requiring that submetered systems be tracked, 
each State has flexibility to determine whether, and how, to best track 
multifamily residential properties that submeter. For example, in 
Alabama, the State defines a submetered property as a ``segmented 
public water system'' and requires that it have access to a certified 
operator. Texas requires that submetered properties allow access to the 
property by the public water system providing water, register with the 
Texas Commission on Environmental Quality and follow regulations for 
submetering. Other States may place submetered properties under the 
jurisdiction of public utility commissions.
    While submetering and billing for water usage may positively induce 
water conservation actions, States may still want to take other steps 
to ensure that apartment owners convert to water efficient fixtures and 
appliances. For example, Texas requires that apartment buildings have 
water-efficient plumbing fixtures and appliances as a condition of 
approval of a submetered billing system.
    This memorandum clarifies EPA's policy change and reconfirms our 
strong interest in advocating water conservation. Any previous EPA 
statements or policy memoranda on this issue are superceded by this 
memorandum.

1. Request for Comments

    While comments will be accepted on any portion of the draft revised 
policy, EPA would specifically appreciate comments on the following 
issues:
    i. Should the parent public water system be required to have access 
to submetered properties for the purposes of monitoring, inspection, 
repair, etc., to assure compliance with SDWA?
    ii. Are there public health risks raised by this submetering policy 
that EPA has not taken into consideration?
    iii. Should EPA maintain the limitation of the draft revised policy 
to residential properties such as apartment buildings, or is it 
appropriate to extend the SDWA exemption for submetering to other 
property types?
    iv. Does data exist that indicates submetering may present a 
disincentive to landlords to convert to water efficient fixtures and 
appliances, or could this approach impact other methods that promote 
water conservation?

B. How Can I Get Copies of This Document and Other Related Information?

    1. Docket. EPA has established an official public docket for this 
action under Docket ID No. OW-2003-0065. The official public docket 
consists of the documents specifically referenced in this action, any 
public comments received, and other information related to this action. 
Although a part of the official docket, the public docket does not 
include Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. The official public docket 
is the collection of materials that is available for public viewing at 
the Water Docket in the EPA Docket Center, (EPA/DC) EPA West, Room 
B102, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket 
Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Water Docket is (202) 566-2426). For access to docket materials, please 
call (202) 566-2426 to schedule an appointment.
    2. Electronic Access. You may access this Federal Register document 
electronically through the EPA Internet under the ``Federal Register'' 
listings at http://www.epa.gov/fedrgstr/.
    An electronic version of the public docket is available through 
EPA's electronic public docket and comment system, EPA Dockets. You may 
use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public 
comments, access the index listing of the contents of the official 
public docket, and to access those documents in the public docket that 
are available electronically. Once in the system, select ``search,'' 
then key in the appropriate docket identification number.
    Certain types of information will not be placed in the EPA Dockets. 
Information claimed as CBI and other information whose disclosure is 
restricted by statute, which is not included in the official public 
docket, will not be available for public viewing in EPA's electronic 
public docket. EPA's policy is that copyrighted material will not be 
placed in EPA's electronic public docket but will be available only in 
printed, paper form in the official public docket. To the extent 
feasible, publicly available docket materials will be made available in 
EPA's electronic public docket. When a document is selected from the 
index list in EPA Dockets, the system will identify whether the 
document is available for viewing in EPA's electronic public docket. 
Although not all docket materials may be available electronically, you 
may still access any of the publicly available docket materials through 
the docket facility identified in section I.B.1.
    For public commenters, it is important to note that EPA's policy is 
that public comments, whether submitted electronically or in paper, 
will be made available for public viewing in EPA's electronic public 
docket as EPA receives them and without change, unless the comment 
contains copyrighted material, CBI, or other information whose 
disclosure is restricted by statute. When EPA identifies a comment 
containing copyrighted material, EPA will provide a reference to that 
material in the version of the comment that is placed in EPA's 
electronic public docket. The entire printed comment, including the 
copyrighted material, will be available in the public docket.
    Public comments submitted on computer disks that are mailed or 
delivered to the docket will be transferred to EPA's electronic public 
docket. Public comments that are mailed or delivered to the Docket will 
be scanned and placed in EPA's electronic public docket. Where 
practical, physical objects will be photographed, and the photograph 
will

[[Page 51780]]

be placed in EPA's electronic public docket along with a brief 
description written by the docket staff.

C. How and to Whom Do I Submit Comments?

    You may submit comments electronically, by mail, or through hand 
delivery/courier. To ensure proper receipt by EPA, identify the 
appropriate docket identification number in the subject line on the 
first page of your comment. Please ensure that your comments are 
submitted within the specified comment period. Comments received after 
the close of the comment period will be marked ``late.'' EPA is not 
required to consider these late comments. However, late comments may be 
considered if time permits.
    1. Electronically. If you submit an electronic comment as 
prescribed below, EPA recommends that you include your name, mailing 
address, and an e-mail address or other contact information in the body 
of your comment. Also include this contact information on the outside 
of any disk or CD ROM you submit, and in any cover letter accompanying 
the disk or CD ROM. This ensures that you can be identified as the 
submitter of the comment and allows EPA to contact you in case EPA 
cannot read your comment due to technical difficulties or needs further 
information on the substance of your comment. EPA's policy is that EPA 
will not edit your comment, and any identifying or contact information 
provided in the body of a comment will be included as part of the 
comment that is placed in the official public docket, and made 
available in EPA's electronic public docket. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment.
    i. EPA Dockets. Your use of EPA's electronic public docket to 
submit comments to EPA electronically is EPA's preferred method for 
receiving comments. Go directly to EPA Dockets at http://www.epa.gov/edocket, and follow the online instructions for submitting comments. To 
access EPA's electronic public docket from the EPA Internet Home Page, 
select ``Information Sources,'' ``Dockets,'' and ``EPA Dockets.'' Once 
in the system, select ``search,'' and then key in Docket ID No. OW-
2003-0065. The system is an ``anonymous access'' system, which means 
EPA will not know your identity, e-mail address, or other contact 
information unless you provide it in the body of your comment.
    ii. E-mail. Comments may be sent by electronic mail (e-mail) to [email protected], Attention Docket ID No. OW-2003-0065. In contrast to 
EPA's electronic public docket, EPA's e-mail system is not an 
``anonymous access'' system. If you send an e-mail comment directly to 
the Docket without going through EPA's electronic public docket, EPA's 
e-mail system automatically captures your e-mail address. E-mail 
addresses that are automatically captured by EPA's e-mail system are 
included as part of the comment that is placed in the official public 
docket, and made available in EPA's electronic public docket.
    iii. Disk or CD ROM. You may submit comments on a disk or CD ROM 
that you mail to the mailing address identified in section I.C.2. These 
electronic submissions will be accepted in WordPerfect or ASCII file 
format. Avoid the use of special characters and any form of encryption.
    2. By Mail. Send three copies of your comments to: Water Docket, 
Environmental Protection Agency, Mail Code 4101T, 1200 Pennsylvania 
Ave., NW., Washington, DC 20460, Attention Docket ID No. OW-2003-0065.
    3. By Hand Delivery or Courier. Deliver your comments to: 
Environmental Protection Agency, EPA Docket Center, (EPA/DC) EPA West, 
Room B102, 1301 Constitution Ave., NW., Washington, DC. Attention Water 
Docket ID No. OW-2003-0065. Such deliveries are only accepted during 
the Docket's normal hours of operation as identified in section I.B.1.

D. What Should I Consider as I Prepare My Comments for EPA?

    You may find the following suggestions helpful for preparing your 
comments:

1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide any technical information and/or data you used that support 
your views.
4. If you estimate potential burden or costs, explain how you arrived 
at your estimate.
5. Provide specific examples to illustrate your concerns.
6. Offer alternatives.
7. Make sure to submit your comments by the comment period deadline 
identified.
8. To insure proper receipt by EPA, identify the appropriate docket 
identification number in the subject line on the first page of your 
response. It would also be helpful if you provided the name, date, and 
Federal Register citation related to your comments.

    Dated: August 22, 2003.
G. Tracy Mehan III,
Assistant Administrator, Office of Water.
[FR Doc. 03-22053 Filed 8-27-03; 8:45 am]
BILLING CODE 6560-50-P