Bill Text: CA AB2699 | 2015-2016 | Regular Session | Amended
Bill Title: Contractors' State License Board: solar energy systems companies: regulations.
Sponsorship: Partisan Bill (Democrat 2)
Status: (Failed) 2016-11-30 - From committee without further action. [AB2699 Detail]
Download: California-2015-AB2699-Amended.html
BILL NUMBER: AB 2699 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 13, 2016
INTRODUCED BY Assembly Member Gonzalez
(Coauthor: Assembly Member Weber)
FEBRUARY 19, 2016
An act to amend Section 7159.5 of, and to add
Chapter 2.4 (commencing with Section 18892) to Division 8 of
Sections 7169, 7170, and 7171 to, the Business
and Professions Code, relating to business.
LEGISLATIVE COUNSEL'S DIGEST
AB 2699, as amended, Gonzalez. Department of Consumer
Affairs: Contractors' State License Board: solar
energy systems companies: solar energy systems.
regulations.
Existing law provides for the licensure and regulation of various
professions and vocations by boards within the Department of Consumer
Affairs. Existing law, the Contractors' State License Law, provides
for the licensure and regulation of contractors by the Contractors'
State License Board. Existing law requires licensed contractors to be
classified and authorizes them to be classified as, among other
things, a solar contractor. Under existing law, a solar contractor
installs, modifies, maintains, and repairs thermal and photovoltaic
solar energy systems. Existing law prohibits a solar contractor from
performing building or construction trades, crafts, or skills, except
when required to install a thermal or photovoltaic solar energy
system.
This bill would, among other things, require a solar
company selling, financing, or leasing a solar energy system, as
defined, to provide each customer with would require,
on or before July 1, 2017, the board to develop and make available on
its Internet Web site a specified "solar energy system
disclosure document." The bill would also require the
Department of Consumer Affairs to adopt a regulation that includes a
specified "Department of Consumer Affairs solar energy system
disclosure document" informing customers of the risks and rewards of
solar energy system ownership and warranty issues, and protecting
those customers from unscrupulous or unfair business practices.
The bill would require these disclosures
this disclosure document to be provided by the solar
energy systems company to the customer
consumer prior to the completion of a
sale, finance, financing, or
lease of a solar energy system. The bill would make a
violation of these provisions by a solar company punishable by an
unspecified fine. The bill would also authorize a customer damaged by
a willful violation of these provisions to bring a civil cause of
action against a solar company for specified damages.
This bill would also declare the intent of the Legislature to
enact legislation that would require the Department of Consumer
Affairs to certify a solar company and establish an insurance pool
for customers to access in order to obtain compensation for solar
energy system claims, as provided.
Existing law requires a home improvement contract to contain,
as specified, a notice stating that the owner or tenant has the
right to require the contractor to have a performance and payment
bond.
The bill would require the board to establish through regulation
requirements for a contractor to maintain a blanket performance and
payment bond for the purpose of solar installation.
Existing law prohibits the downpayment for a home improvement
contract from exceeding $1,000 or 10% of the contract amount,
whichever is less. Existing law exempts from this restriction a
contractor who, among other things, furnishes a blanket performance
and payment bond.
The bill would subject a contractor for the installation of a
solar energy system to the restriction despite having those
performance and payment arrangements.
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. Section 7159.5 of the
Business and Professions Code is amended to read:
7159.5. This section applies to all home improvement contracts,
as defined in Section 7151.2, between an owner or tenant and a
contractor, whether a general contractor or a specialty contractor,
that is licensed or subject to be licensed pursuant to this chapter
with regard to the transaction.
(a) Failure by the licensee or a person subject to be licensed
under this chapter, or by his or her agent or salesperson, to comply
with the following provisions is cause for discipline:
(1) The contract shall be in writing and shall include the agreed
contract amount in dollars and cents. The contract amount shall
include the entire cost of the contract, including profit, labor, and
materials, but excluding finance charges.
(2) If there is a separate finance charge between the contractor
and the person contracting for home improvement, the finance charge
shall be set out separately from the contract amount.
(3) If a downpayment will be charged, the downpayment may not
exceed one thousand dollars ($1,000) or 10 percent of the contract
amount, whichever is less.
(4) If, in addition to a downpayment, the contract provides for
payments to be made prior to completion of the work, the contract
shall include a schedule of payments in dollars and cents
specifically referencing the amount of work or services to be
performed and any materials and equipment to be supplied.
(5) Except for a downpayment, the contractor may neither request
nor accept payment that exceeds the value of the work performed or
material delivered.
(6) Upon any payment by the person contracting for home
improvement, and prior to any further payment being made, the
contractor shall, if requested, obtain and furnish to the person a
full and unconditional release from any potential lien claimant claim
or mechanics lien authorized pursuant to Sections 8400 and 8404 of
the Civil Code for any portion of the work for which payment has been
made. The person contracting for home improvement may withhold all
further payments until these releases are furnished.
(7) If the contract provides for a payment of a salesperson's
commission out of the contract price, that payment shall be made on a
pro rata basis in proportion to the schedule of payments made to the
contractor by the disbursing party in accordance with paragraph (4).
(8) A Except as provided by
Section 717 1, a contractor furnishing a performance
and payment bond, lien and completion bond, or a bond equivalent or
joint control approved by the registrar covering full performance and
payment is exempt from paragraphs (3), (4), and (5), and need not
include, as part of the contract, the statement regarding the
downpayment specified in subparagraph (C) of paragraph (8) of
subdivision (d) of Section 7159, the details and statement regarding
progress payments specified in paragraph (9) of subdivision (d) of
Section 7159, or the Mechanics Lien Warning specified in paragraph
(4) of subdivision (e) of Section 7159. A contractor furnishing these
bonds, bond equivalents, or a joint control approved by the
registrar may accept payment prior to completion. If the contract
provides for a contractor to furnish joint control, the contractor
shall not have any financial or other interest in the joint control.
(b) A violation of paragraph (1), (3), or (5) of subdivision (a)
by a licensee or a person subject to be licensed under this chapter,
or by his or her agent or salesperson, is a misdemeanor punishable by
a fine of not less than one hundred dollars ($100) nor more than
five thousand dollars ($5,000), or by imprisonment in a county jail
not exceeding one year, or by both that fine and imprisonment.
(1) An indictment or information against a person who is not
licensed but who is required to be licensed under this chapter shall
be brought, or a criminal complaint filed, for a violation of this
section, in accordance with paragraph (4) of subdivision (d) of
Section 802 of the Penal Code, within four years from the date of the
contract or, if the contract is not reduced to writing, from the
date the buyer makes the first payment to the contractor.
(2) An indictment or information against a person who is licensed
under this chapter shall be brought, or a criminal complaint filed,
for a violation of this section, in accordance with paragraph (2) of
subdivision (d) of Section 802 of the Penal Code, within two years
from the date of the contract or, if the contract is not reduced to
writing, from the date the buyer makes the first payment to the
contractor.
(3) The limitations on actions in this subdivision shall not apply
to any administrative action filed against a licensed contractor.
(c) Any person who violates this section as part of a plan or
scheme to defraud an owner or tenant of a residential or
nonresidential structure, including a mobilehome or manufactured
home, in connection with the offer or performance of repairs to the
structure for damage caused by a natural disaster, shall be ordered
by the court to make full restitution to the victim based on the
person's ability to pay, as defined in subdivision (e) of Section
1203.1b of the Penal Code. In addition to full restitution, and
imprisonment authorized by this section, the court may impose a fine
of not less than five hundred dollars ($500) nor more than
twenty-five thousand dollars ($25,000), based upon the defendant's
ability to pay. This subdivision applies to natural disasters for
which a state of emergency is proclaimed by the Governor pursuant to
Section 8625 of the Government Code, or for which an emergency or
major disaster is declared by the President of the United States.
SEC. 2. Section 7169 is added to the
Business and Professions Code , to read:
7169. On or before July 1, 2017, the board shall develop, and
make available on its Internet Web site, a "solar energy system
disclosure document" which a solar energy systems company must
provide to a consumer prior to completion of a sale, financing, or
lease of a solar energy system. The "solar energy system disclosure
document" shall include the following information:
(a) The amounts and sources of financing obtained.
(b) The total cost and payments for the system, including
financing costs.
(c) The calculations used by the home improvement salesperson to
determine how many panels the homeowner needs to install.
(d) The calculations used by the home improvement salesperson to
determine how much energy the panels will generate.
(e) Any additional monthly fees the homeowner's electric company
may bill, any turn-on charges, and any fees added for the use of an
Internet monitoring system of the panels or inverters.
(f) The terms and conditions of any guaranteed rebate.
(g) The final contract price, without the inclusion of possible
rebates.
(h) The solar energy system company's contractor license number.
(i) The impacts of solar energy system installations not performed
to code.
(j) Types of solar energy system malfunctions.
(k) Information about the difference between a solar energy system
lease and a solar energy system purchase.
(l) Information on how and to whom consumers may provide
complaints.
SEC. 3. Section 7170 is added to the
Business and Professions Code , to read:
7170. The board shall establish through regulation requirements
for a contractor to maintain a blanket performance and payment bond
for the purpose of solar energy systems installation.
SEC. 4. Section 7171 is added to the
Business and Professions Code , to read:
7171. Notwithstanding paragraph (8) of subdivision (a) of Section
7159.5, a contractor installing a solar energy system shall be
subject to the down payment restrictions in paragraph (3) of
subdivision (a) of Section 7159.5.
SECTION 1. (a) The Legislature finds and
declares that the Governor set a goal of one million solar rooftop
systems installed by 2018. As of November 2015, this state leads the
nation in the installation of residential and business distributed
solar projects with approximately 438,250 solar projects.
(b) It is the intent of the Legislature to enact this act to
ensure that prospective solar customers are provided accurate, clear,
and concise information to make an informed decision about solar
energy system installation, and to ensure that new solar energy
systems continue to reliably provide clean power to millions of
Californians for many years.
SEC. 2. Chapter 2.4 (commencing with Section
18892) is added to Division 8 of the Business and Professions Code,
to read:
CHAPTER 2.4. SOLAR COMPANIES
18892. (a) As used in this section, the following terms have the
following meanings:
(1) "Customer" shall include any person, firm, corporation, or
other entity that is solicited by, inquires about, or seeks the
services of a solar company for the purchase, financing, or lease of
a solar energy system.
(2) "Department" means the Department of Consumer Affairs.
(3) "Solar company" means any company and its broker, brokers, or
agents that sell, finance, or lease solar energy systems.
(4) "Solar energy system" has the same meaning as set forth in
paragraphs (1) and (2) of subdivision (a) of Section 801.5 of the
Civil Code.
(b) (1) Prior to completion of a sale, financing, or lease of a
solar energy system to a customer, a solar company shall provide each
customer with a "solar energy system disclosure document," which
shall include all of the following information:
(A) A list of current residential or business electric rates by
kilowatthour, as established by the applicable Public Utilities
Commission tariff or other regulatory rate document.
(B) If a payback calculation for the solar energy system is
provided, the calculation must be based on the customer's current
electric rate, which shall be disclosed to the customer.
(C) A notification that electric rates are subject to change in
the future and that estimates of savings are based on today's
electric rates. If a payback calculation is included, the
notification shall be located immediately next to the payback
calculation.
(D) A link to a page on the customer's electricity provider's
Internet Web site that provides information about the electrical
provider's filings regarding future rates.
(E) A description of the solar company's contractor's license
issued pursuant to Chapter 9 (commencing with Section 7000) of
Division 3, license number, and name of the license qualifier for
each of the solar company's licenses for solar system installation.
(F) Valid, current certificates of insurance for the solar company'
s commercial general liability and workers' compensation insurance
policies.
(G) A description of the average level of electricity per month
that would be produced by the solar panels planned for installation
given the actual physical limitations and conditions specific to the
customer.
(H) A notification that, when renewable energy attributes are
retained by the solar company, the customer is not buying solar
power, nor buying renewable energy.
(I) A notification that the balance of any financing or lease
arrangement is payable to the solar company in the event of the death
of the customer during the term of the agreement.
(J) An estimate of the cost of removing and reinstalling solar
panels in the event that the roof material beneath solar panels is
replaced.
(K) An explanation of the potential change in electricity
production of a solar energy system if the panels become dirty or
covered with debris, and instructions on how to maintain the solar
energy system.
(L) An explanation that if a solar system installation is financed
by a loan that requires a superpriority lien on the homeowner's
mortgage, the homeowner may be unable to refinance his or her
mortgage because of this financing.
(M) A notification that customer bill credits are compensated by
other customers of the electricity provider.
(2) A solar company that sells, finances, or leases a solar energy
system to a customer primarily in Spanish, Chinese, Tagalog,
Vietnamese, or Korean, whether orally or in writing, shall be
required to provide the disclosure document in paragraph (1) in that
same language.
(c) Subject to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code), the department shall adopt a regulation that
includes a "Department of Consumer Affairs solar energy system
disclosure document" informing customers of the risks and rewards of
solar energy system ownership and warranty issues, and protecting
those customers from unscrupulous or unfair business practices. The
solar company shall provide this disclosure document developed by the
department at the same time that the disclosure document in
subdivision (b) is provided to the customer. The disclosure document
developed by the department shall include, but shall not be limited
to, information about all of the following:
(1) Solar energy system malfunctions.
(2) Installations not performed to code.
(3) Roof intrusions and related structural concerns.
(4) Bankruptcy, insolvency, default, takeover, or closure of a
solar company with existing customers, especially with respect to
solar companies who lease systems.
(5) Loss of warranty on solar energy systems caused by bankruptcy,
insolvency, default, takeover, or closure of a solar company or a
solar manufacturer.
(d) It is the intent of the Legislature to enact legislation that
would (1) require the department to certify a solar company and (2)
establish an insurance pool for customers to access in order to
obtain compensation for solar energy system claims, the funds for
which shall be raised yearly from all solar companies actively doing
business in this state at the time of assessment.
(e) When marketing its services to customers, solar companies
shall not use the trade dress of other energy providers such that it
creates a likelihood of confusion that an affiliation or connection
exists between a solar company and the electrical corporation, unless
the solar company has express authorization from the electrical
corporation to do so.
(f) A violation of this section by a solar company is punishable
by a fine of not less than ___ ($___) and not more than ___ ($___),
which shall be in addition to any other punishment imposed for a
violation of this section. All fines collected by the department
pursuant to this subdivision shall be deposited in the Professions
and Vocations Fund described in Section 205, and these fines shall be
subject to appropriation by the Legislature.
(g) (1) In addition to the authority granted to the department in
subdivision (f), a customer damaged by a willful violation of the
provisions of this chapter may bring a civil cause of action against
a solar company for damages, including, but not limited to, general
damages, special damages, and punitive damages.
(2) The court in an action pursuant to this section may award
equitable relief, including, but not limited to, an injunction,
costs, and any other relief the court deems proper.
(3) The rights and remedies provided in this chapter are in
addition to any other rights and remedies provided by law.
