BILL NUMBER: SB 454 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 4, 2011
AMENDED IN SENATE APRIL 12, 2011
AMENDED IN SENATE MARCH 29, 2011
INTRODUCED BY Senator Pavley
FEBRUARY 16, 2011
An act to add Section 7110.05 to the Business and Professions
Code, to amend Section 25900 of, and to add Section 25402.11 to, the
Public Resources Code, and to amend Section 399.4 of the Public
Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 454, as amended, Pavley. Energy efficiency standards.
(1) Existing law establishes the State Energy Resources
Conservation and Development Commission and vests with the commission
jurisdiction over specified matters related to energy. Existing law
requires the Attorney General, upon the request of the commission, to
petition a court of competent jurisdiction to enjoin violations of
law that is within the subject matter of the commission. Existing law
requires the commission to prescribe, by regulation, appliance
efficiency standards.
This bill would authorize the commission to petition a
court of competent jurisdiction to enjoin a violation of the above
standards. The bill would authorize the commission to
establish an administrative enforcement process to enforce the above
standards. The bill would provide for the assessment of civil
penalties by the courts or administrative civil penalties by the
commission for a violation of the above standards. The bill would
require the civil penalties collected in
a civil action brought by the commission to be deposited in
the Appliance Efficiency Enforcement Subaccount, which this bill
would establish in the Energy Resources Program Account, and would
authorize the commission to expend the moneys in the subaccount, upon
appropriation by the Legislature, as specified. The bill would
require the court, upon granting of relief for a violation of the
above standards, to award the commission the reasonable
costs incurred by the commission in investigating and prosecuting the
action.
(2) Existing law requires the commission to prescribe, by
regulation, building design and construction standards, and energy
and water efficiency design standards for new residential and
nonresidential buildings.
This bill would require the commission and the Contractors' State
License Board to collaborate to identify and investigate the failure
of licensed and unlicensed contractors to comply with the above
standards and to obtain the necessary building permits, and to
conduct an education and awareness campaign for contractors and
consumers regarding the permitting requirements.
(3) Existing law provides that it is the policy of this state and
the intent of the Legislature that the commission administer
cost-effective energy efficiency programs authorized pursuant to
existing statutory authority. Existing law provides for the
regulation of public utilities under the Public Utilities Act. A
violation of the Public Utilities Act is a crime.
This bill would prohibit a public utility from issuing rebates or
incentives for energy efficiency improvements without the
requisite building permits unless the recipient of the
rebate or incentive certifies that a licensed contractor was used,
as appropriate, and the applicable permitting requirements were
followed, for the improvement or installation . Because a
violation of this provision would be a crime under the Public
Utilities Act, the bill would impose a state-mandated local program.
(4) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature to enact
legislation that maximizes the energy saved by the state's various
energy efficiency statutes, regulations, and programs.
SEC. 2. The Legislature finds and declares all of the following:
(a) California's building and appliance energy efficiency
standards, specified in Part 6 of Title 24 of, and Article 4 of
Chapter 4 of Division 2 of Title 20 of, the California Code of
Regulations, respectively, represent a state resource for
accomplishing increased energy efficiency in newly constructed
buildings, additions, and alterations to existing buildings, and in
appliances. These standards are recognized as leading the nation in
energy savings and serving as one of the primary energy policy tools
that has resulted in California's per capita energy use staying
essentially constant over the past 30 years while that of the rest of
the United States increased steadily by nearly 50 percent.
(b) The effectiveness of the building energy efficiency standards
is dependent on the conscientious efforts of licensed contractors in
California to build buildings and install components and equipment in
compliance with the standards.
(c) The Governor and the Legislature recognize that many buildings
are being retrofitted by unlicensed contractors and without required
permits. Contractors operating in the underground economy are in
flagrant violation of California contracting law. Unlicensed and
licensed contractors who market their services with these underground
practices engage in unfair competition, undercutting legitimate
contractors who endeavor to conscientiously comply with contracting,
building, and business laws. This underground activity denies state
and local governments license and building permit revenue,
diminishing the ability of state and local agencies to provide
enforcement services intended to protect consumers by ensuring
compliance with these laws. These practices particularly damage and
diminish the potential for conscientious compliance with the building
energy efficiency standards.
(d) The mission of the Contractors' State License Board is to
protect consumers by regulating contractors to promote the health,
safety, and general welfare of the public in matters related to
construction. As a part of fulfilling this mission, it is important
for the board's licensing program to include efforts to eradicate the
underground practice of performing construction work without
building permits and failing to comply with the building energy
efficiency standards.
(e) The State Energy Resources Conservation and Development
Commission is responsible for establishing energy efficiency building
codes and appliance standards in California. As such, that
commission has expertise in how to raise awareness and enforce these
standards. It has become critically important for that commission and
the Contractors' State License Board to ensure that all buildings
and appliances meet California's efficiency standards and send a
strong, definitive message to those whose objective is illegal
financial gain at the expense of safe building practices and energy
efficiency.
(f) The appliance efficiency standards deliver cost-effective
energy savings to consumers. They are an important component of the
state's programs to manage its energy consumption, conserve natural
resources, and improve the quality of life for all its citizens. The
Governor and Legislature recognize that significant quantities of
appliances are sold and offered for sale in California that do not
meet the state's energy efficiency standards. The products needlessly
consume resources and saddle consumers with hidden long-term costs
after the initial purchase. Furthermore, inadequate certification of
appliances sold in California undermines the state's ability to
ensure that products sold in California meet the state's efficiency
standards.
(g) These violations result in a substantial financial loss to
consumers who purchase energy efficiency goods and services, and
represent unfair competition that dramatically impacts the economic
viability of legitimate businesses. It is critical for California to
maintain a business climate favorable to legitimate competition, so
that conscientious contractors, manufacturers, distributors,
retailers, Home Energy Rating System raters, and other businesses are
able to sustain their businesses against unfair competition.
SEC. 3. Section 7110.05 is added to the Business and Professions
Code, to read:
7110.05. The State Energy Resources Conservation and Development
Commission and the board shall collaborate to identify and
investigate the failure of licensees and unlicensed contractors to
comply with the building energy efficiency standards and to obtain
building permits, and to conduct an education and awareness campaign
to increase knowledge of permitting requirements among contractors
and consumers.
SEC. 4. Section 25402.11 is added to the Public Resources Code, to
read:
25402.11. (a) (1) The commission may adopt regulations
establishing an administrative enforcement process for a violation of
a regulation adopted pursuant to subdivision (c) of Section 25402
and for the assessment of an administrative civil penalty not to
exceed two thousand five hundred dollars ($2,500) for each violation.
The process shall comply with the requirements of Chapter 4
(commencing with Section 11400) and Chapter 4.5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code.
(2) In assessing the amount of an administrative penalty, the
commission shall consider all of the following factors:
(A) The nature and seriousness of the violation.
(B) The number of violations.
(C) The persistence of the violation.
(D) The length of time over which the violation occurred.
(E) The willfulness of the violation.
(F) The violator's assets, liabilities, and net worth.
(b) If the commission finds that a violation of the regulations
adopted pursuant to subdivision (c) of Section 25402 has occurred or
is threatening to occur, the commission may , or
refer the matter to the Attorney General upon the
request of the commission shall, to petition a
court to enjoin the violation. The court may grant prohibitory or
mandatory injunctive relief as warranted by issuing a temporary
restraining order, preliminary injunction, or permanent injunction,
and may assess a civil penalty not to exceed two thousand five
hundred dollars ($2,500) for each violation, considering the factors
specified in paragraph (2) of subdivision (a).
(c) (1) Civil penalties collected pursuant to this section in a
civil action brought by the Attorney General shall be deposited into
the General Fund.
(2) Civil penalties collected pursuant to this section in a civil
action brought by the commission shall be deposited into the
(c) Penalties collected pursuant to this section shall be
deposited into the Appliance Efficiency Enforcement Subaccount,
which is hereby established in the Energy Resources Program Account.
The moneys in the Appliance Efficiency Enforcement Subaccount may be
expended by the commission, upon appropriation by the Legislature,
for the education of the public regarding appliance energy efficiency
and for the enforcement of the regulations adopted pursuant to
subdivision (c) of Section 25402.
(d) An order imposing an administrative civil penalty shall be
subject to judicial review pursuant to subdivisions (a) and (b) of
Section 25534.2.
(e) A person shall not be liable for a civil penalty pursuant to
subdivision (b) if that person is subject to an administrative civil
penalty pursuant to subdivision (a).
(f) In a civil action brought on behalf of the commission pursuant
to this section, upon granting relief, the court shall award to the
commission the reasonable costs incurred by the commission in
investigating and prosecuting the action.
SEC. 5. Section 25900 of the Public Resources Code is amended to
read:
25900. Except as provided in Sections 25402.11 and 25531, if the
commission finds that any provision of this division is violated or a
violation is threatening to take place that constitutes an emergency
requiring immediate action to protect the public health, welfare, or
safety, the Attorney General, upon request of the commission, shall
petition a court to enjoin the violation. The court may grant
prohibitory or mandatory injunctive relief as warranted by way of
temporary restraining order, preliminary injunction, and permanent
injunction.
SEC. 6. Section 399.4 of the Public Utilities Code is amended to
read:
399.4. (a) (1) In order to ensure that prudent investments in
energy efficiency continue to be made that produce cost-effective
energy savings, reduce customer demand, and contribute to the safe
and reliable operation of the electric distribution grid, it is the
policy of this state and the intent of the Legislature that the
commission shall continue to administer cost-effective energy
efficiency programs authorized pursuant to existing statutory
authority.
(2) As used in this section, the term "energy efficiency"
includes, but is not limited to, cost-effective activities to achieve
peak load reduction that improve end-use efficiency, lower customers'
bills, and reduce system needs.
(b) (1) Any rebates or incentives provided
by any public utility for energy efficiency improvements
improvement and installation of energy efficient
components, equipment, or appliances in buildings shall be provided
only if required building permits are obtained
the recipient of the rebate or incentive certifies that a
licensed contractor was used, as appropriate, and any applica
ble permitting requirements were followed, for the improvement
or installation .
(2) This subdivision does not imply or create new authority or
responsibility, or expand existing authority or responsibility, of
the public utilities for the enforcement of the building energy and
water efficiency standards adopted pursuant to subdivision (a) or (b)
of Section 25402 of the Public Resources Code, or appliance
efficiency standards and certification requirements adopted pursuant
to subdivision (c) of Section 25402 of the Public Resources Code.
(c) The commission, in evaluating energy efficiency investments
under its existing statutory authority, shall also ensure that local
and regional interests, multifamily dwellings, and energy service
industry capabilities are incorporated into program portfolio design
and that local governments, community-based organizations, and energy
efficiency service providers are encouraged to participate in
program implementation where appropriate.
SEC. 7. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.