California Legislature—2013–14 Regular Session

Assembly Bill No. 834

Introduced by Assembly Member Williams

February 21, 2013

An act to amend Sections 17203, 17204, and 17206 of, and to add Section 7110.05 to, the Business and Professions Code, relating to energy efficiency standards.

LEGISLATIVE COUNSEL’S DIGEST

AB 834, as introduced, Williams. Energy efficiency standards: unfair business practice.

(1) Existing law, the Contractors’ State License Law, provides for the licensure and regulation of contractors by the Contractors’ State License Board. Existing law prohibits certain actions by licensed contractors and subjects a licensee to discipline for a violation thereof. Existing law authorizes the board to issue a citation for a violation of the Contractors’ State License Law and to issue civil penalties. Existing law provides for the State Energy Resources Conservation and Development Commission (Energy Commission) within state government and requires the Energy Commission proscribe energy efficiency standards.

This bill would subject a licensee to discipline for the failure to comply with specified energy efficiency standards under the California Code of Regulations. The bill would require the board to submit an annual report to the Legislature with regard to any civil penalties assessed against a licensee or unlicensed person for a violation of those standards. The bill would require the Energy Commission to collaborate with the board to identify and investigate the failure of licensees and unlicensed contractors to comply with those standards.

(2) Existing law defines an act of unfair competition as including an unlawful, unfair, or fraudulent business act or practice, an unfair, deceptive, untrue, or misleading advertisement, and other specified conduct relating to representations made to the public. Existing law authorizes the Attorney General, certain local prosecutors, a private plaintiff with an injury-in-fact, or a plaintiff representative who meets certain standing requirements to bring an action against any person who engages, has engaged, or proposes to engage in unfair competition, provides for injunctive relief, and authorizes the court to make any order or judgment that is necessary to restore to any person in interest any money or property that may have been acquired by means of the unfair competition. Civil penalties may also be collected by the Attorney General and the local prosecutors, as specified. A portion of the civil penalties collected by the Attorney General are deposited into the Unfair Competition Law Fund, and, upon appropriation by the Legislature, are used to support investigations and prosecutions of consumer protection laws.

The bill would authorize the Energy Commission to bring an action under the unfair competition laws to enforce any statute or regulation that the commission is directed to adopt, implement, administer, or enforce. The bill would authorize the Energy Commission to collect civil penalties for a violation thereof and, upon appropriation by the Legislature, would authorize the expenditure of those moneys by the commission for purposes of enforcement.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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 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.

(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 without required permits. Contractors
operating in the underground economy are in flagrant violation of
California contracting law. In particular, these are contractors
operating without a license, and those, whether licensed or not,
that willfully and deliberately fail to obtain a building permit and
willfully and deliberately fail to comply with the building laws
and other laws of the state. 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. It has become critically important for the
board to send a strong, definitive message to those whose objective
is illegal financial gain at the expense of safe building practices
and energy efficiency. In particular, the board should not tolerate
illegal practices related to building energy efficiency standards.

(e) 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.  

(a) The failure of a licensee to comply with the
building energy efficiency standards specified in Part 6 of Title
24 of the California Code of Regulations constitutes a cause for
disciplinary action.

(b) (1) Beginning with the fiscal year commencing on July 1,
2014, and each fiscal year thereafter, the board shall compile the
essential data necessary to create a report identifying the number
of civil penalties that the board assessed during the previous fiscal
year against licensees and unlicensed contractors for failure to
comply with the standards described in subdivision (a) of this
section and subdivision (b) of Section 7028.7. This report shall be
submitted to the Legislature no later than the first business day in
October of each year.

(2) The report to be submitted pursuant to this subdivision shall
be submitted in compliance with Section 9795 of the Government
Code.

(c) The State Energy Resources Conservation and Development
Commission shall collaborate with the board 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 conduct an education and awareness
campaign to increase knowledge of permitting requirements among
contractors and consumers.

SEC. 4.  

Section 17203 of the Business and Professions Code
is amended to read:

17203.  

Injunctive Relief--Court Orders

Any person who engages, has engaged, or proposes to engage
in unfair competition may be enjoined in any court of competent
jurisdiction. The court may make such orders or judgments,
including the appointment of a receiver, as may be necessary to
prevent the use or employment by any person of any practice which
constitutes unfair competition, as defined in this chapter, or as may
be necessary to restore to any person in interest any money or
property, real or personal, which may have been acquired by means
of such unfair competition. Any person may pursue representative
claims or relief on behalf of others only if the claimant meets the
standing requirements of Section 17204 and complies with Section
382 of the Code of Civil Procedure, but these limitations do not
apply to claims brought under this chapter by the Attorney General,
begin delete or end delete begin insert by end insert any district attorney, county counsel, city attorney, or city
prosecutor in this begin delete state. end delete begin insert state, or by the State Energy Resources
Conservation and Development Commission to enforce any statute
or regulation that the commission is directed to adopt, implement,
administer, or enforce. end insert

SEC. 5.  

Section 17204 of the Business and Professions Code
is amended to read:

17204.  

Actions for Injunctions by Attorney General, District
Attorney, County Counsel, begin insert City Attorneys, or the State Energy
Resources Conservation end insert and begin delete City Attorneys end delete begin insert Development
Commission end insert

Actions for relief pursuant to this chapter shall be prosecuted
exclusively in a court of competent jurisdiction by the Attorney
General or a district attorney or by a county counsel authorized
by agreement with the district attorney in actions involving
violation of a county ordinance, or by a city attorney of a city
having a population in excess of 750,000, or by a city attorney in
a city and county or, with the consent of the district attorney, by
a city prosecutor in a city having a full-time city prosecutor in the
name of the people of the State of California upon their own
complaint or upon the complaint of a board, officer, person,
corporation, or association, or by begin insert the State Energy Resources
Conservation and Development Commission, or by end insert a person who
has suffered injury in fact and has lost money or property as a
result of the unfair competition.

SEC. 6.  

Section 17206 of the Business and Professions Code
is amended to read:

17206.  

Civil Penalty for Violation of Chapter

(a) Any person who engages, has engaged, or proposes to engage
in unfair competition shall be liable for a civil penalty not to exceed
two thousand five hundred dollars ($2,500) for each violation,
which shall be assessed and recovered in a civil action brought in
the name of the people of the State of California by the Attorney
General, by any district attorney, by any county counsel authorized
by agreement with the district attorney in actions involving
violation of a county ordinance, by any city attorney of a city
having a population in excess of 750,000, by any city attorney of
any city and county, or, with the consent of the district attorney,
by a city prosecutor in any city having a full-time city prosecutor,
begin insert or by the State Energy Resources Conservation and Development
Commission to enforce any statute or regulation that the
commission is directed to adopt, implement, administer, or enforce, end insert
in any court of competent jurisdiction.

(b) The court shall impose a civil penalty for each violation of
this chapter. In assessing the amount of the civil penalty, the court
shall consider any one or more of the relevant circumstances
presented by any of the parties to the case, including, but not
limited to, the following: the nature and seriousness of the
misconduct, the number of violations, the persistence of the
misconduct, the length of time over which the misconduct occurred,
the willfulness of the defendant’s misconduct, and the defendant’s
assets, liabilities, and net worth.

(c) If the action is brought by the Attorney General, one-half of
the penalty collected shall be paid to the treasurer of the county in
which the judgment was entered, and one-half to the General Fund.
If the action is brought by a district attorney or county counsel,
the penalty collected shall be paid to the treasurer of the county in
which the judgment was entered. Except as provided in subdivision
(e), if the action is brought by a city attorney or city prosecutor,
one-half of the penalty collected shall be paid to the treasurer of
the city in which the judgment was entered, and one-half to the
treasurer of the county in which the judgment was entered. The
aforementioned funds shall be for the exclusive use by the Attorney
General, the district attorney, the county counsel, and the city
attorney for the enforcement of consumer protection laws. begin insert If the
action is brought by the State Energy Resources Conservation and
Development Commission, the penalties collected under this
section, upon appropriation to the commission by the Legislature,
shall be used by the commission to enforce any statute or
regulation that the commission is directed to adopt, implement,
administer, or enforce. end insert

(d) The Unfair Competition Law Fund is hereby created as a
special account within the General Fund in the State Treasury. The
portion of penalties that is payable to the General Fund or to the
Treasurer recovered by the Attorney General from an action or
settlement of a claim made by the Attorney General pursuant to
this chapter or Chapter 1 (commencing with Section 17500) of
Part 3 shall be deposited into this fund. Moneys in this fund, upon
appropriation by the Legislature, shall be used by the Attorney
General to support investigations and prosecutions of California’s
consumer protection laws, including implementation of judgments
obtained from such prosecutions or investigations and other
activities which are in furtherance of this chapter or Chapter 1
(commencing with Section 17500) of Part 3. Notwithstanding
Section 13340 of the Government Code, any civil penalties
deposited in the fund pursuant to the National Mortgage Settlement,
as provided in Section 12531 of the Government Code, are
continuously appropriated to the Department of Justice for the
purpose of offsetting General Fund costs incurred by the
Department of Justice.

(e) If the action is brought at the request of a board within the
Department of Consumer Affairs or a local consumer affairs
agency, the court shall determine the reasonable expenses incurred
by the board or local agency in the investigation and prosecution
of the action.

Before any penalty collected is paid out pursuant to subdivision
(c), the amount of any reasonable expenses incurred by the board
shall be paid to the Treasurer for deposit in the special fund of the
board described in Section 205. If the board has no such special
fund, the moneys shall be paid to the Treasurer. The amount of
any reasonable expenses incurred by a local consumer affairs
agency shall be paid to the general fund of the municipality or
county that funds the local agency.

(f) If the action is brought by a city attorney of a city and county,
the entire amount of the penalty collected shall be paid to the
treasurer of the city and county in which the judgment was entered
for the exclusive use by the city attorney for the enforcement of
consumer protection laws. However, if the action is brought by a
city attorney of a city and county for the purposes of civil
enforcement pursuant to Section 17980 of the Health and Safety
Code or Article 3 (commencing with Section 11570) of Chapter
10 of Division 10 of the Health and Safety Code, either the penalty
collected shall be paid entirely to the treasurer of the city and
county in which the judgment was entered or, upon the request of
the city attorney, the court may order that up to one-half of the
penalty, under court supervision and approval, be paid for the
purpose of restoring, maintaining, or enhancing the premises that
were the subject of the action, and that the balance of the penalty
be paid to the treasurer of the city and county.