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AB-1136 Property Assessed Clean Energy program: enforcement: ancillary relief.(2021-2022)



Current Version: 02/18/21 - Introduced         Compare Versions information image


AB1136:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1136


Introduced by Assembly Member Luz Rivas
(Coauthor: Senator Roth)

February 18, 2021


An act to amend Section 22690 of the Financial Code, relating to financial institutions.


LEGISLATIVE COUNSEL'S DIGEST


AB 1136, as introduced, Luz Rivas. Property Assessed Clean Energy program: enforcement: ancillary relief.
Existing law, known commonly as the Property Assessed Clean Energy (PACE) program, authorizes a public agency, by making specified findings, to authorize public agency officials and property owners to enter into voluntary contractual assessments to finance the installation of distributed generation renewable energy sources or energy or water efficiency improvements that are permanently fixed to real property.
Existing law, the California Financing Law (CFL), provides for the licensing and regulation of PACE program administrators by the Commissioner of Financial Protection and Innovation and prohibits a person from engaging in the business of a PACE solicitor unless that person is enrolled with a program administrator, as specified. The CFL authorizes the commissioner to bring certain actions against a PACE solicitor or a PACE solicitor agent if the commissioner has cause to believe that the PACE solicitor or the PACE solicitor agent is violating the CFL, as specified.
This bill would additionally authorize the commissioner to, after appropriate notice and opportunity for a hearing, as specified, order a PACE solicitor, PACE solicitor agent, or both to pay ancillary relief, including damages and restitution, to a person injured by the conduct or practice of that solicitor or solicitor agent.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 22690 of the Financial Code is amended to read:

22690.
 (a) A program administrator is subject to an inspection, examination, or investigation in accordance with Section 22701.
(b) If, in the course of an inspection, examination, or investigation of a program administrator, the commissioner has cause to believe that the program administrator, the PACE solicitor, or the PACE solicitor agent may have committed a violation of this division or any rule or order thereunder, or the commissioner seeks to obtain or provide information necessary to the commissioner in the administration of the division, with respect to a matter related to a PACE solicitor or PACE solicitor agent, and either this information is not available directly from the program administrator or the commissioner seeks to validate the information obtained from the program administrator, the commissioner may do the following:
(1) Inspect, examine, or investigate any and all documents, records, files, and communications of the PACE solicitor or PACE solicitor agent that are relevant to the violation or the matter. For purposes of the inspection, examination, or investigation, the commissioner and his or her the commissioner’s representatives shall have access to the records of the PACE solicitor or PACE solicitor agent related to assessment contracts associated with the violation or matter.
(2) Require the attendance of witnesses and examine under oath all persons whose testimony he or she the commissioner requires relative to the violation or matter.
(c) If, upon inspection, examination, or investigation, the commissioner has cause to believe that a PACE solicitor or PACE solicitor agent is violating any provision of this division or any rule or order thereunder, the commissioner or his or her the commissioner’s designee shall exhaust the procedure set forth in paragraph (1) before bringing any action authorized under paragraph (2).
(1) (A) The commissioner shall issue a report to the program administrator, the PACE solicitor, and, if applicable, the PACE solicitor agent, documenting the commissioner’s findings and, if applicable, requesting corrective action or a cessation of any violation of this division or any rule or order thereunder.
(B) The program administrator, PACE solicitor, and, if applicable, PACE solicitor agent, or any combination thereof, shall have the opportunity to provide a written answer to the report submitted pursuant to subparagraph (A) within a reasonable period and shall document in its written answer any voluntary corrective action or other actions taken or planned to address the commissioner’s request. The commissioner shall shorten the period of time to provide a written answer to no greater than five business days if he or she the commissioner has reasonable grounds to believe that a person is conducting business as a PACE solicitor or PACE solicitor agent, or both, in an unsafe or injurious manner.
(C) If following the process outlined in subparagraphs (A) and (B), the commissioner believes further action is necessary or appropriate, the commissioner may do any of the following, in any combination:
(i) Demand a corrective action by the program administrator, PACE solicitor, PACE solicitor agent, or any combination thereof.
(ii) Demand the program administrator, PACE solicitor, PACE solicitor agent, or any combination thereof, stop violating the division, rule, or order.
(iii) Demand the PACE solicitor or PACE solicitor agent, or both, discontinue engaging in the business of soliciting property owners to enter into assessment contracts related to any or all program administrators, or demand the program administrator deauthorize the PACE solicitor or PACE solicitor agent, or both, for a defined period not exceeding 12 months, or indefinitely.
(2) (A) The commissioner may, upon exhaustion of the procedure in paragraph (1), bring an order against a PACE solicitor, PACE solicitor agent, or both, as provided in this paragraph. However, the commissioner shall, upon exhaustion of the procedure in paragraph (1), bring an order against a PACE solicitor, PACE solicitor agent, or both, as provided in this paragraph, following either of the following:
(i) The issuance of a demand pursuant to pursuant to clause (iii) of subparagraph (C) of paragraph (1).
(ii) The issuance of a demand pursuant to clause (i) or (ii) of subparagraph (C) of paragraph (1) involving a violation of Section 22161, when the commissioner believes that the public’s interest will be served by the public nature of the order.
(B) The commissioner may order a PACE solicitor or PACE solicitor agent, or both, to desist and refrain from engaging in business as a PACE solicitor or PACE solicitor agent, or further violating this division, or the rules thereunder, in accordance with clause (i) and (ii) of this subparagraph. This paragraph does not authorize the commissioner to restrict the ability of a PACE solicitor or PACE solicitor agent to engage in any business that does not involve soliciting a property owner to enter into an assessment contract.
(i) If the order addresses unsafe or injurious behavior by a PACE solicitor or PACE solicitor agent, or both, the order shall be effective immediately. All other orders shall be effective once final.
(ii) If, within 30 days of the receipt of the order, the PACE solicitor or PACE solicitor agent, or both, fails to request a hearing, the order shall become final.
(iii) If, within 30 days of the receipt of the order, the PACE solicitor or PACE solicitor agent, or both, requests a hearing, the hearing shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(C) The commissioner may, after appropriate notice and opportunity for a hearing, order a PACE solicitor, PACE solicitor agent, or both, to pay ancillary relief to a person injured by the conduct or practice of that solicitor or solicitor agent. The ancillary relief may include, but is not limited to, refunds, restitution, disgorgement, and payment of damages.
(i) Within 15 days from the date of a notice of intention to issue an order pursuant to this subparagraph, the person subject to the notice may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code).
(ii) Upon receipt of a request submitted pursuant to clause (i), the matter shall be set for hearing to commence within 30 days after the commissioner receives the request pursuant to clause (i) unless the person subject to the notice consents to a later date.
(iii) If a hearing is not requested within 15 days after the mailing or service of the notice of intention described in clause (i), and the commissioner does not order a hearing, the right to a hearing shall be deemed to be waived.

(C)

(D) The commissioner may, after appropriate notice and opportunity for a hearing, by order, censure or suspend for a period not exceeding 12 months, or bar any natural person from directly or indirectly soliciting a property owner to enter into an assessment contract, in accordance with clause (i) to (iv), inclusive, of this subparagraph. This paragraph does not authorize the commissioner to restrict the ability of a natural person to engage in any business that does not involve soliciting a property owner to enter into an assessment contract, or being employed by a PACE solicitor in a capacity that does not involve soliciting a property owner to enter into an assessment contract.
(i) Within 15 days from the date of a notice of intention to issue an order pursuant to this subparagraph, the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code).
(ii) Upon receipt of a request submitted pursuant to clause (i), the matter shall be set for hearing to commence within 30 days after the commissioner receives the request pursuant to clause (i), unless the person subject to the notice consents to a later date.
(iii) If no a hearing is not requested within 15 days after the mailing or service of the notice of intention as described in clause (i), and the commissioner does not order a hearing, the right to a hearing shall be deemed to be waived.
(iv) Upon receipt of a notice of intention to issue an order pursuant to this subparagraph, the person who is the subject of the proposed order is immediately prohibited from directly or indirectly soliciting a property owner to enter into an assessment contract.
(d) An order brought under paragraph (2) of subdivision (c) shall be public.
(e) A PACE solicitor or PACE solicitor agent subject to this section shall not be subject to Chapter 4 (commencing with Section 22700).
(f) The commissioner shall not be bound to the provisions of this section in connection with his or her the enforcement of this division with respect to a program administrator.