Amended in Assembly April 10, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 834


Introduced by Assembly Member Williams

February 21, 2013


An act to amendbegin delete Sections 17203, 17204, and 17206 of, and to add Section 7110.05 to, the Business and Professions Code,end deletebegin insert Section 25402.11 of the Public Resources Code,end insert relating to energy efficiency standards.

LEGISLATIVE COUNSEL’S DIGEST

AB 834, as amended, Williams. Energy efficiency standards:begin delete unfair business practice.end deletebegin insert administrative enforcement.end insert

begin insert

Existing law authorizes the State Energy Resources Conservation and Development Commission to establish an administrative enforcement process to enforce regulations establishing appliance efficiency standards. Existing law requires the commission to establish, by regulations, building construction and design standards and energy and water efficiency standards for new residential and new nonresidential buildings to increase the efficient use of energy and water.

end insert
begin insert

This bill would additionally authorize the commission to establish an administrative enforcement process to enforce regulations establishing the building construction and design standards and energy and water efficiency standards.

end insert
begin delete

(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.

end delete
begin delete

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.

end delete
begin delete

(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.

end delete
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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.

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

The people of the State of California do enact as follows:

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 25402.11 of the end insertbegin insertPublic Resources Codeend insert
2begin insert is amended to read:end insert

3

25402.11.  

(a) (1) The commission may adopt regulations
4establishing an administrative enforcement process for a violation
5of a regulation adopted pursuant tobegin delete subdivision (c) ofend delete Section
625402 and for the assessment of an administrative civil penalty
7not to exceed two thousand five hundred dollars ($2,500) for each
8violation. The process shall comply with the requirements of
9Chapter 4 (commencing with Section 11400) and Chapter 4.5
10(commencing with Section 11500) of Part 1 of Division 3 of Title
112 of the Government Code.

12(2) In assessing the amount of an administrative penalty, the
13commission shall consider all of the following factors:

14(A) The nature and seriousness of the violation.

15(B) The number of violations.

16(C) The persistence of the violation.

17(D) The length of time over which the violation occurred.

18(E) The willfulness of the violation.

19(F) The violator’s assets, liabilities, and net worth.

20(G) The harm to consumers and to the state that resulted from
21the amount of energy wasted due to the violation.

22(b) If the commission finds that a violation of the regulations
23adopted pursuant tobegin delete subdivision (c) ofend delete Section 25402 has occurred
24or is threatening to occur, the commission may refer the matter to
25the Attorney General to petition a court to enjoin the violation.
26The court may grant prohibitory or mandatory injunctive relief as
27warranted by issuing a temporary restraining order, preliminary
28injunction, or permanent injunction, and may assess a civil penalty
29not to exceed two thousand five hundred dollars ($2,500) for each
30violation, considering the factors specified in paragraph (2) of
31subdivision (a).

32(c) Penalties collected pursuant to this section shall be deposited
33into the Appliance Efficiency Enforcement Subaccount, which is
34hereby established in the Energy Resources Program Account.
35The moneys in the Appliance Efficiency Enforcement Subaccount
36may be expended by the commission, upon appropriation by the
37Legislature, for the education of the public regarding appliance
P4    1energy efficiency and for the enforcement of the regulations
2adopted pursuant to subdivision (c) of Section 25402.

3(d) An order imposing an administrative civil penalty shall be
4subject to judicial review pursuant to subdivisions (a) and (b) of
5Section 25534.2.

6(e) A person shall not be liable for a civil penalty pursuant to
7subdivision (b) if that person is subject to an administrative civil
8penalty pursuant to subdivision (a).

9(f) In a civil action brought on behalf of the commission
10pursuant to this section, upon granting relief, the court shall award
11to the commission the reasonable costs incurred by the commission
12in investigating and prosecuting the action.

13(g) The commission shall not initiate an administrative
14enforcement process pursuant to the regulations adopted pursuant
15to this section against an entity for the unlawful sale or the unlawful
16offer for sale of an appliance if both of the following apply:

17(1) The appliance fully complies with all of the requirements
18of the regulations adopted pursuant to subdivision (c) of Section
1925402.

20(2) The only basis for the commission’s potential enforcement
21action is that the appliance is not considered to be in compliance
22because of the commission’s delay in reviewing and processing
23information submitted to it that demonstrates full compliance.

24(h) In addition to the prohibitions specified in subdivision (g),
25the commission shall not initiate an administrative enforcement
26process pursuant to the regulations adopted pursuant to this section
27for a violation of a standard adopted pursuant tobegin delete subdivision (c)
28ofend delete
Section 25402 until both of the following occur:

29(1) No fewer than 60 days have elapsed since the date when the
30standard was published in the California Register.

31(2) No fewer than 30 days have elapsed since the date when the
32alleged violator received written notice of the alleged violation
33and date when the commission provided public notice of the
34standard.

begin delete
35

SECTION 1.  

It is the intent of the Legislature to enact
36legislation that maximizes the energy saved by the state’s various
37energy efficiency statutes, regulations, and programs.

38

SEC. 2.  

The Legislature finds and declares all of the following:

39(a) California’s building energy efficiency standards, specified
40in Part 6 of Title 24 of, and Article 4 of Chapter 4 of Division 2
P5    1of Title 20 of, the California Code of Regulations, respectively,
2represent a state resource for accomplishing increased energy
3efficiency in newly constructed buildings, additions, and alterations
4to existing buildings, and in appliances. These standards are
5recognized as leading the nation in energy savings and serving as
6one of the primary energy policy tools that has resulted in
7California’s per capita energy use staying essentially constant over
8the past 30 years while that of the rest of the United States
9increased steadily.

10(b) The effectiveness of the building energy efficiency standards
11is dependent on the conscientious efforts of licensed contractors
12in California to build buildings and install components and
13equipment in compliance with the standards.

14(c) The Governor and the Legislature recognize that many
15buildings are being retrofitted without required permits. Contractors
16operating in the underground economy are in flagrant violation of
17California contracting law. In particular, these are contractors
18operating without a license, and those, whether licensed or not,
19that willfully and deliberately fail to obtain a building permit and
20willfully and deliberately fail to comply with the building laws
21and other laws of the state. Unlicensed and licensed contractors
22who market their services with these underground practices engage
23in unfair competition, undercutting legitimate contractors who
24endeavor to conscientiously comply with contracting, building,
25and business laws. This underground activity denies state and local
26governments license and building permit revenue, diminishing the
27ability of state and local agencies to provide enforcement services
28intended to protect consumers by ensuring compliance with these
29laws. These practices particularly damage and diminish the
30potential for conscientious compliance with the building energy
31efficiency standards.

32(d) The mission of the Contractors’ State License Board is to
33protect consumers by regulating contractors to promote the health,
34safety, and general welfare of the public in matters related to
35construction. As a part of fulfilling this mission, it is important for
36the board’s licensing program to include efforts to eradicate the
37underground practice of performing construction work without
38building permits and failing to comply with the building energy
39efficiency standards. It has become critically important for the
40board to send a strong, definitive message to those whose objective
P6    1is illegal financial gain at the expense of safe building practices
2and energy efficiency. In particular, the board should not tolerate
3illegal practices related to building energy efficiency standards.

4(e) These violations result in a substantial financial loss to
5consumers who purchase energy efficiency goods and services,
6and represent unfair competition that dramatically impacts the
7economic viability of legitimate businesses. It is critical for
8California to maintain a business climate favorable to legitimate
9competition, so that conscientious contractors, manufacturers,
10distributors, retailers, Home Energy Rating System raters, and
11other businesses are able to sustain their businesses against unfair
12competition.

13

SEC. 3.  

Section 7110.05 is added to the Business and
14Professions Code
, to read:

15

7110.05.  

(a) The failure of a licensee to comply with the
16building energy efficiency standards specified in Part 6 of Title
1724 of the California Code of Regulations constitutes a cause for
18disciplinary action.

19(b) (1) Beginning with the fiscal year commencing on July 1,
202014, and each fiscal year thereafter, the board shall compile the
21essential data necessary to create a report identifying the number
22of civil penalties that the board assessed during the previous fiscal
23year against licensees and unlicensed contractors for failure to
24comply with the standards described in subdivision (a) of this
25section and subdivision (b) of Section 7028.7. This report shall be
26submitted to the Legislature no later than the first business day in
27 October of each year.

28(2) The report to be submitted pursuant to this subdivision shall
29be submitted in compliance with Section 9795 of the Government
30Code.

31(c) The State Energy Resources Conservation and Development
32Commission shall collaborate with the board to identify and
33investigate the failure of licensees and unlicensed contractors to
34comply with the building energy efficiency standards and to obtain
35building permits, and conduct an education and awareness
36campaign to increase knowledge of permitting requirements among
37contractors and consumers.

38

SEC. 4.  

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

40

17203.  

Injunctive Relief--Court Orders

P7    1Any person who engages, has engaged, or proposes to engage
2in unfair competition may be enjoined in any court of competent
3jurisdiction. The court may make such orders or judgments,
4including the appointment of a receiver, as may be necessary to
5prevent the use or employment by any person of any practice which
6constitutes unfair competition, as defined in this chapter, or as may
7be necessary to restore to any person in interest any money or
8property, real or personal, which may have been acquired by means
9of such unfair competition. Any person may pursue representative
10claims or relief on behalf of others only if the claimant meets the
11standing requirements of Section 17204 and complies with Section
12382 of the Code of Civil Procedure, but these limitations do not
13apply to claims brought under this chapter by the Attorney General,
14by any district attorney, county counsel, city attorney, or city
15prosecutor in this state, or by the State Energy Resources
16Conservation and Development Commission to enforce any statute
17or regulation that the commission is directed to adopt, implement,
18administer, or enforce.

19

SEC. 5.  

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

21

17204.  

Actions for Injunctions by Attorney General, District
22Attorney, County Counsel, City Attorneys, or the State Energy
23Resources Conservation and Development Commission

24Actions for relief pursuant to this chapter shall be prosecuted
25exclusively in a court of competent jurisdiction by the Attorney
26General or a district attorney or by a county counsel authorized
27by agreement with the district attorney in actions involving
28violation of a county ordinance, or by a city attorney of a city
29having a population in excess of 750,000, or by a city attorney in
30a city and county or, with the consent of the district attorney, by
31a city prosecutor in a city having a full-time city prosecutor in the
32name of the people of the State of California upon their own
33complaint or upon the complaint of a board, officer, person,
34corporation, or association, or by the State Energy Resources
35Conservation and Development Commission, or by a person who
36has suffered injury in fact and has lost money or property as a
37result of the unfair competition.

38

SEC. 6.  

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

40

17206.  

Civil Penalty for Violation of Chapter

P8    1(a) Any person who engages, has engaged, or proposes to engage
2in unfair competition shall be liable for a civil penalty not to exceed
3two thousand five hundred dollars ($2,500) for each violation,
4which shall be assessed and recovered in a civil action brought in
5the name of the people of the State of California by the Attorney
6General, by any district attorney, by any county counsel authorized
7by agreement with the district attorney in actions involving
8violation of a county ordinance, by any city attorney of a city
9having a population in excess of 750,000, by any city attorney of
10any city and county, or, with the consent of the district attorney,
11by a city prosecutor in any city having a full-time city prosecutor,
12or by the State Energy Resources Conservation and Development
13Commission to enforce any statute or regulation that the
14commission is directed to adopt, implement, administer, or enforce,
15in any court of competent jurisdiction.

16(b) The court shall impose a civil penalty for each violation of
17this chapter. In assessing the amount of the civil penalty, the court
18shall consider any one or more of the relevant circumstances
19presented by any of the parties to the case, including, but not
20limited to, the following: the nature and seriousness of the
21misconduct, the number of violations, the persistence of the
22misconduct, the length of time over which the misconduct occurred,
23the willfulness of the defendant’s misconduct, and the defendant’s
24assets, liabilities, and net worth.

25(c) If the action is brought by the Attorney General, one-half of
26the penalty collected shall be paid to the treasurer of the county in
27which the judgment was entered, and one-half to the General Fund.
28If the action is brought by a district attorney or county counsel,
29the penalty collected shall be paid to the treasurer of the county in
30which the judgment was entered. Except as provided in subdivision
31(e), if the action is brought by a city attorney or city prosecutor,
32one-half of the penalty collected shall be paid to the treasurer of
33the city in which the judgment was entered, and one-half to the
34treasurer of the county in which the judgment was entered. The
35aforementioned funds shall be for the exclusive use by the Attorney
36General, the district attorney, the county counsel, and the city
37attorney for the enforcement of consumer protection laws. If the
38action is brought by the State Energy Resources Conservation and
39Development Commission, the penalties collected under this
40section, upon appropriation to the commission by the Legislature,
P9    1shall be used by the commission to enforce any statute or regulation
2that the commission is directed to adopt, implement, administer,
3or enforce.

4(d) The Unfair Competition Law Fund is hereby created as a
5special account within the General Fund in the State Treasury. The
6portion of penalties that is payable to the General Fund or to the
7Treasurer recovered by the Attorney General from an action or
8settlement of a claim made by the Attorney General pursuant to
9this chapter or Chapter 1 (commencing with Section 17500) of
10Part 3 shall be deposited into this fund. Moneys in this fund, upon
11appropriation by the Legislature, shall be used by the Attorney
12General to support investigations and prosecutions of California’s
13consumer protection laws, including implementation of judgments
14obtained from such prosecutions or investigations and other
15activities which are in furtherance of this chapter or Chapter 1
16(commencing with Section 17500) of Part 3. Notwithstanding
17Section 13340 of the Government Code, any civil penalties
18deposited in the fund pursuant to the National Mortgage Settlement,
19as provided in Section 12531 of the Government Code, are
20continuously appropriated to the Department of Justice for the
21purpose of offsetting General Fund costs incurred by the
22Department of Justice.

23(e) If the action is brought at the request of a board within the
24Department of Consumer Affairs or a local consumer affairs
25agency, the court shall determine the reasonable expenses incurred
26by the board or local agency in the investigation and prosecution
27of the action.

28Before any penalty collected is paid out pursuant to subdivision
29(c), the amount of any reasonable expenses incurred by the board
30shall be paid to the Treasurer for deposit in the special fund of the
31board described in Section 205. If the board has no such special
32fund, the moneys shall be paid to the Treasurer. The amount of
33any reasonable expenses incurred by a local consumer affairs
34agency shall be paid to the general fund of the municipality or
35county that funds the local agency.

36(f) If the action is brought by a city attorney of a city and county,
37the entire amount of the penalty collected shall be paid to the
38treasurer of the city and county in which the judgment was entered
39for the exclusive use by the city attorney for the enforcement of
40consumer protection laws. However, if the action is brought by a
P10   1city attorney of a city and county for the purposes of civil
2enforcement pursuant to Section 17980 of the Health and Safety
3Code or Article 3 (commencing with Section 11570) of Chapter
410 of Division 10 of the Health and Safety Code, either the penalty
5collected shall be paid entirely to the treasurer of the city and
6county in which the judgment was entered or, upon the request of
7the city attorney, the court may order that up to one-half of the
8penalty, under court supervision and approval, be paid for the
9purpose of restoring, maintaining, or enhancing the premises that
10were the subject of the action, and that the balance of the penalty
11be paid to the treasurer of the city and county.

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