Fiscal Note & Local Impact Statement

124 th General Assembly of Ohio

Ohio Legislative Service Commission

77 South High Street, 9th Floor, Columbus, OH 43266-0342 ˛ Phone: (614) 466-3615

˛ Internet Web Site: http://www.lsc.state.oh.us/

BILL:

Sub. S.B. 65

DATE:

October 23, 2001

STATUS:

As Passed by the Senate

SPONSOR:

Sen. Mumper

LOCAL IMPACT STATEMENT REQUIRED:

No —

Offsetting savings

 


CONTENTS:

Provides immunity from tort liability

 

State Fiscal Highlights

 

·        No direct fiscal effect on the state.

Local Fiscal Highlights

 

LOCAL GOVERNMENT

FY 2002

FY 2003

FUTURE YEARS

Counties

     Revenues

Potential decrease

Potential decrease

Potential decrease

     Expenditures

Potential savings

Potential savings

Potential savings

Political subdivisions that are owners of public water systems

     Revenues

- 0 -

- 0 -

- 0 -

     Expenditures

Potential increase offset by potential savings

Potential increase offset by potential savings

Potential increase offset by potential savings

Note: For most local governments, the fiscal year is the calendar year. The school district fiscal year is July 1 through June 30.

 

·        Because the bill protects water suppliers from tort liability under specified conditions, the adjudicatory burdens on the courts of common pleas where tort liability matters are filed would likely be decreased. This may result in both a loss in revenue from court costs, and savings in administrative and personnel costs.

·        Public water systems may be owned by political subdivisions, such as the City of Cleveland, for example. Under certain circumstances, therefore, political subdivisions could be protected from tort liability and would be spared legal expenses associated with civil suits being filed against them. However, the bill stipulates that water suppliers who acquire ownership of existing public water systems are only protected from tort actions if they enter into written agreement with Ohio EPA to bring their water systems into compliance with drinking water standards. The costs associated with doing so may offset any savings brought about by civil immunity.

 


 


 

 

Detailed Fiscal Analysis

 

Background

The bill protects water suppliers that acquire ownership of an existing water system from tort liability allegedly caused by the previous owner’s failure to comply with established drinking water standards. The protection exists so long as the acquiring owner enters into a written agreement with Ohio EPA to bring the system into compliance, and then does so.

The bill also protects all water suppliers from tort liability allegedly caused by the consumption of water from a public water system so long as the water supplied meets all applicable drinking water standards, the water supplier has not been found to be in significant non-compliance with drinking water standards, and the claim to damages was allegedly caused by a substance for which drinking water standards have been established.

 

Public Water Systems

The following information was taken from Ohio’s Public Water Systems Annual Compliance Report for Calendar Year 1999:

In Ohio, a Public Water System (PWS) is defined as a system that provides piped water for human consumption to at least 15 service connections or serves an average of at least 25 people for at least 60 days each year. There are three types of public water systems: community (such as towns); non-transient, non-community (such as schools or factories); or transient, non-community (such as rest stops or parks).

In Ohio in calendar year 1999, 5,901 public water systems served approximately 10.9 million people daily with an average production of approximately 1.7 billion gallons of water per day. This yields an average water use of 154 gallons per person, per day. Most of Ohio’s population is served by a relatively few number of large systems. The following table summarizes the total number of public water systems per type with the corresponding total population served daily:

 

PWS Category

Number of PWSs

Total Population Served Daily

Community

1,421

10,147,233

Non-transient, non-community

1,098

275,143

Transient, non-community

3,382

541,251

Total

5,901

10,963,627

 

Local Fiscal Effects

Court Costs

Because the bill protects water suppliers from tort liability under the conditions mentioned above, the adjudicatory burdens on the courts of common pleas where tort liability matters are filed would likely be decreased.

An estimate of the number of civil actions typically filed against acquiring water suppliers is not available, though it is likely that the number would be small. It is worth noting that the bill provides for successor immunity, but does not speak to the possibility of bringing civil action against a previous water supplier for damages allegedly caused by that supplier’s failure to comply with drinking water standards. It is assumed that persons wishing to file suit against a previous water supplier would have the option of doing so.

The number of existing water suppliers protected from tort liability under the second set of conditions (i.e., when the water meets applicable standards, the supplier is predominantly within compliance, and when drinking water standards exist for a substance) may be slightly higher than the number of acquiring water suppliers protected, however information related to the frequency of cases filed under these conditions is not available.

Political Subdivisions

Public water systems may be owned by political subdivisions, such as the City of Cleveland, for example. Under certain circumstances, therefore, political subdivisions could be protected from tort liability and would be spared legal expenses associated with civil suits being filed against them. In the case of acquiring water suppliers, however, the bill stipulates that suppliers are only protected from tort actions if they enter into written agreement with Ohio EPA to bring their water systems into compliance with drinking water standards, and then do so. The cost associated with bringing a public water system into compliance will depend upon the type and extent of work the agreement specifies should be done. It is likely, however, that any savings resulting from a protection from tort liability will be offset by the cost of required repairs.

 

 

 

 

LSC fiscal staff: Kerry Sullivan, Budget Analyst

 

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