AN ACT relating to consumer protection.

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AN ACT relating to consumer protection. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 367 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in Sections 1 and 2 of this Act: 5
(a) "Beneficiary" means any one (1) of the following who is solicited by or 6
signs a contract with a solar energy salesperson or a solar energy contractor 7
for a residential or commercial solar energy system: 8
1. An owner or leaseholder of residential or commercial property; or 9
2. An owner or lessee of a solar energy system; 10
(b) "Dealer fee" means an amount paid by a solar energy contractor or solar 11
energy salesperson to a lender in order to offer a beneficiary credit to 12
finance the purchase and installation of a solar energy system; 13
(c) "Electric utility" means: 14
1. A municipal electric utility established under KRS Chapter 96; or 15
2. An electric utility subject to KRS Chapter 278; 16
(d) "Major system components" means any inverters, module -level power 17
electronics, solar panels, racking systems, or battery energy storage 18
equipment included in the solar energy installation; 19
(e) "Solar array" means a mechanically and electrically integrated grouping of 20
modules with support structures, including any attached system components 21
such as inverters or direct current -to-direct current converters and attached 22
associated wiring; 23
(f) "Solar energy contractor" means a person that: 24
1. Designs, installs, repairs, replaces, or maintains solar energy systems; 25
and 26
2. Is licensed as an electrical contractor under KRS Chapter 227A; 27
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(g) "Solar energy instal lation contract" means an agreement between a solar 1
energy contractor or solar energy salesperson and a beneficiary that 2
includes, in part, an agreement to install a residential or commercial solar 3
energy system for a total cost including labor and materia ls in excess of one 4
thousand dollars ($1,000); 5
(h) "Solar energy salesperson" means a person who solicits, negotiates, or 6
otherwise endeavors to procure a solar energy installation contract with a 7
beneficiary to install, repair, or replace residential or c ommercial solar 8
energy systems on behalf of a solar energy contractor or any other person; 9
(i) "Solar energy system" is any purchased, leased, or otherwise financed 10
system comprised of components, circuits, solar energy equipment, and 11
other equipment that in combination convert solar energy into electrical 12
energy; and 13
(j) "Solicit" means to make contact with a beneficiary for the purpose of 14
selling or installing residential or commercial solar energy systems 15
including but not limited to contact through any of the following methods: 16
1. Door-to-door contact; 17
2. Telephone contact or text messages; 18
3. Flyers left at a residence or commercial property; 19
4. Internet or social media advertisements; or 20
5. Other promotional advertisements that offer gifts, cash, or services if 21
the beneficiary contacts the solar energy contractor or solar energy 22
salesperson. 23
(2) (a) A person shall not advertise, offer to do work, submit a bid, engage in, 24
conduct, or carry on the business of designing, installing, repairing, 25
replacing, or maintaining residential or commercial solar energy systems 26
for a total cost including labor and materials in excess of one thousand 27
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dollars ($1,000) unless he or she is licensed as an electrical contractor 1
under KRS Chapter 227A. 2
(b) Any solar energy installation contract executed between a beneficiary and 3
an unlicensed person shall be void and unenforceable. 4
(3) A solar energy installation contract shall: 5
(a) Be made in writing using the same language and terms as were principally 6
used in any sales pr esentations made to a beneficiary including any 7
material contract terms from print or digital marketing material given to the 8
beneficiary; 9
(b) Be given to the beneficiary at the time the beneficiary signs the contract; 10
and 11
(c) Contain the following: 12
1. An itemized list of work to be performed including any known or 13
anticipated electrical system upgrades or utility equipment upgrades 14
that are necessary for installation; 15
2. Any loan financing, leasing, or purchase agreement that is 16
incorporated directly into the contract, included as a separate 17
attachment or component of the contract, and conforming to all 18
federal and state consumer credit protection statutes, regulations, an d 19
disclosure requirements, including terms and conditions, rents, 20
amount financed, finance charge, interest rates, total of payments, 21
annual percentage rate, the amortization schedule, late fees and 22
penalties, prepayment penalties, and information describi ng how the 23
loan financing is secured; 24
3. Disclosure of the exact amount paid, if any, by a solar energy 25
contractor or solar energy salesperson to any lender, lessor, or third -26
party financing company in the form of a dealer fee, commission, or 27
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other similar inducement to obtain financing, regardless of whether 1
financing is incorporated within the contract or in conjunction with a 2
third-party lender; 3
4. The total dollar amount of the contract; 4
5. The cost per watt calculated as the total contract amount, incl uding 5
labor and materials, for installing the solar energy system divided by 6
the total direct current nameplate rating of the solar energy system; 7
6. A detailed payment schedule based on project completion milestones 8
that explains when payments are due, th e beneficiary's right to cancel 9
the contract, and the cancellation fees due at each milestone in the 10
payment schedule; 11
7. The model and brand name of major system components to be 12
installed, and, in the case of a change in any major system 13
components throu ghout the duration of the contract, documentation 14
of those changes and the efficiency and warranty period of the new 15
major system components, and the agreement in writing by the 16
beneficiary to those changes; 17
8. The manufacturer's warranty period for each m ajor system 18
component of the solar energy system; 19
9. The solar energy system's first year annual production projections in 20
kilowatt hours, which: 21
a. Shall be based on site -specific considerations of each solar 22
array, including location of the installation, orientation and 23
angle of the panels, and on-site shading factors; 24
b. Shall not exceed optimal inverter performance identified by the 25
manufacturer of the inverter equipment identified in the 26
contract; and 27
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c. Shall be developed using nationally recognized, industry 1
standard tools and methodologies; 2
10. A provision detailing that if there is a change to the solar array that 3
reduces solar array production, the change order shall be submitted to 4
the beneficiary, and the beneficiary shall have a period of up to two 5
(2) weeks to cancel the contract; 6
11. The name, business address, email address, and phone number of the 7
primary solar energy salesperson, if different from the solar energy 8
contractor; 9
12. The name, business address, email address and license number o f the 10
solar energy contractor; 11
13. A statement identifying whether all of the work will be performed by 12
employees of the solar energy contractor and, in the case of any part 13
of the work being subject to subcontracting by or assignment from the 14
solar energy contractor to another person, the circumstances by which 15
the subcontracting or assignment will occur and a disclosure of how 16
the solar energy contractor will monitor and ensure that the work is 17
completed in a safe, timely, and professional manner; 18
14. A notice of the beneficiary's right to cancel, which shall be initialed by 19
the beneficiary acknowledging that he or she has read and understood 20
the following applicable notice, in twelve (12) point font or larger and 21
including the following terms: 22
a. For a re sidential property, a right to cancel notice that is 23
consistent with requirements of KRS 367.430; 24
b. For a commercial property, a rescission rights notice that reads 25
as follows: "IF THIS AGREEMENT WAS SOLICITED TO 26
YOUR COMMERCIAL PROPERTY AND YOU DO NOT 27
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WANT THE GOODS OR SERVICES, YOU MAY CANCEL 1
THIS AGREEMENT BY MAILING A NOTICE TO THE 2
SELLER. THE NOTICE MUST SAY THAT YOU DO NOT 3
WANT THE GOODS OR SERVICES AND MUST BE MAILED 4
BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY 5
AFTER YOU SIGN THIS AGREEMENT. THE NOTICE 6
MUST BE MAILED TO: 7
.................................................. 8
.................................................." 9
15. A statement of warranty that the solar energy contractor shall: 10
a. Install the solar energy system in compliance with: 11
i. The manufacturer instructions; 12
ii. The national electric code as enforced in the local 13
jurisdiction; 14
iii. Local building codes; and 15
iv. The applicable utility's interconnection standards; and 16
b. Correct or remedy any lack of compliance in the installation of 17
the system for at least one (1) year; 18
16. A statement fully and accurately describing the ability or inability of 19
the solar energy system to produce power during a grid outage, 20
including all applicable utility restrictions and conditions; 21
17. A statement authorizing the solar energy contractor to interact as 22
necessary with the beneficiary's electric utility on the beneficiary's 23
behalf to provide any required information to and obtain any 24
necessary approvals from the electric utility prior to, during, and 25
following construction and initial operation of the solar energy 26
system; and 27
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18. A statement fully and accurately describing the solar energy 1
contractor's affiliation or lack of affiliation with the beneficiary's 2
electric utility. 3
(4) (a) If a beneficiary finances the purchase of the solar energy sy stem with a 4
financed sales contract or leases the solar energy system, the financed sales 5
contract or lease shall state the beneficiary's: 6
1. Prior year mean electric bill; 7
2. Estimated monthly electric bill after the solar energy system begins 8
operation; 9
3. Monthly finance costs or rent after the solar energy system begins 10
operation; and 11
4. Total monthly bill for electricity and finance costs or for electricity 12
and rent after the solar energy system begins operation. 13
(b) The statement required in this subs ection shall be initialed by the 14
beneficiary acknowledging that he or she has read and understood the 15
statement. 16
(5) If a beneficiary exercises any of the rescission rights as described in subsection 17
(3)(c) of this section, the solar energy contractor shal l not enforce the terms of 18
the contract against the beneficiary, including any claims for labor or materials, 19
and shall terminate any security interest and release any statutory lien created 20
under the transaction within twenty (20) days of receiving writte n rescission of 21
the contract from the beneficiary. If a beneficiary exercises the rescission rights 22
via email or a certified letter postmarked within the three (3) day window to the 23
contacts listed in the solar energy installation contract, even if the sol ar energy 24
contractor or solar energy salesperson has not responded, the solar energy 25
contractor is prohibited from enforcing the terms of the contract and shall not 26
charge any cancellation fees. 27
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(6) The solar energy contractor or beneficiary shall ensure t hat all required review 1
and approvals, as dictated by the appropriate net metering or qualifying facility 2
application process, are obtained from the beneficiary's electric utility prior to 3
energizing the solar energy system. 4
(7) A beneficiary is under no o bligation to begin monthly payments on a financed 5
solar energy system until the beneficiary’s system has been granted permission to 6
operate by the applicable local or state inspection authority. 7
(8) If the scope of work in the solar energy installation con tract includes roofing 8
work, the solar energy contractor shall provide the beneficiary separate invoices 9
for the roofing work, and the solar energy installation contract shall separately 10
itemize and identify the cost of any roofing tear-off and replacement. 11
(9) A person that purchases or is otherwise assigned a solar energy installation 12
contract is subject to all claims and defenses with respect to the contract that the 13
beneficiary could assert against the solar energy contractor. A person, firm, 14
partnership, corporation, or other entity which sells or otherwise assigns a solar 15
energy installation contract shall include a prominent notice of the potential 16
liability under this section. 17
(10) A person shall not solicit using any statement or representation with regard to the 18
costs, financing, terms, or conditions of purchase or installation of residential or 19
commercial solar energy systems that is deceptive. 20
(11) A solar energy contractor or solar energy salesperson who fails to substantially 21
comply with the req uirements of this chapter is liable to the beneficiary for any 22
actual damages sustained by the beneficiary as a result of the failure. This 23
section does not limit any other cause of action or remedy available under KRS 24
Chapter 367. 25
SECTION 2. A NEW SECTION OF KRS CHAPTER 367 IS CREATED TO 26
READ AS FOLLOWS: 27
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(1) Any person may maintain an action to enjoin the continuing of any act in 1
violation of Section 1 of this Act, and if injured may also maintain an action for 2
the recovery of damages. 3
(2) If the court finds based on evidence presented by the plaintiff that the defendant 4
is violating or has violated Section 1 of this Act, the court shall enjoin the 5
defendant from continuing the violations. 6
(3) Actual economic damages shal l not be required to be alleged or proved by the 7
plaintiff in order for the court to enjoin violations. 8
(4) In addition to injunctive relief and any other relief the plaintiff may be entitled to 9
under this section: 10
(a) The plaintiff shall be entitled to re cover from the defendant two (2) times 11
the amount of any actual economic damages sustained; and 12
(b) The court may award the plaintiff reasonable attorney's fees and costs. 13
(5) In addition to the remedies provided under this section, all remedies, powers, a nd 14
duties provided to the Attorney General under KRS 367.110 to 367.300, and the 15
penalties provided in KRS 367.990, any other applicable remedies, powers, and 16
duties provided under applicable law shall apply with equal force and effect to 17
any act declared unlawful in Section 1 of this Act. 18
(6) The Attorney General may recover a civil penalty of five thousand dollars 19
($5,000) per violation against any person who violates Section 1 of this Act. 20
(7) An electric utility shall not be held liable for any violation of Section 1 of this Act 21
unless it is acting in the capacity of a solar energy contractor or solar energy 22
salesperson. 23
(8) This section shall not prohibit the Attorney General or any other pers on from 24
pursuing the recovery of damages, penalties, restitution, disgorgement, or 25
injunctive relief afforded elsewhere under the law. 26
Section 3. KRS 227.480 is amended to read as follows: 27
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(1) (a) A city, county, urban -county government, charter county, or consolidated 1
local government or the state shall, according to the Uniform State Building 2
Code as it pertains to the plan review and inspection responsibilities of local 3
governments or the state, require any person to o btain a permit before 4
commencing construction, alteration, or repairs of any electrical system. 5
(b) The city, county, urban -county government, charter county, or consolidated 6
local government or the state shall require all inspections that are deemed 7
necessary by the department for the safety of life and property. The 8
department shall promulgate administrative regulations to describe the 9
circumstances where inspections are required. 10
(2) A city, county, urban -county government, charter county, or consolidate d local 11
government or the state shall not issue a permit unless the applicant submits proof 12
of being licensed as an electrical contractor under KRS Chapter 227A or of acting 13
on behalf of a licensed electrical contractor. However, the provisions of this 14
subsection shall not apply to: 15
(a) A homeowner or farmer who does construction, alteration, or repairs of any 16
electrical system on his or her own premises or any other person exempt from 17
licensing under KRS 227A.030 or 227A.150; 18
(b) Electrical work performed by the Commonwealth of Kentucky, a city, county, 19
urban-county government, charter county, or consolidated local government, 20
or any subdivision thereof; 21
(c) A company with a recently deceased licensed electrical contractor, which 22
shall be granted an interim period of up to one hundred eighty (180) 23
continuous calendar days by the city, county, urban -county government, 24
charter county, consolidated local government, or state to allow the company 25
to utilize the license of the deceased electrical contractor if: 26
1. The company effectuates and documents all necessary bonding and 27
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insurance policies required by KRS Chapter 227A; and 1
2. Ensures that the bonding and insurance policies remain in effect for the 2
entirety of the interim period of time extended; or 3
(d) A disaster response business as defined in KRS 141.010. 4
(3) A city, county, urban -county government, charter county, or consolidated local 5
government shall appoint and may fix the compensation of city, county, urban -6
county government, charter county, or consoli dated local government electrical 7
inspectors, and may by ordinance fix reasonable fees and establish other 8
requirements for the conduct of electrical inspections within its boundaries. All 9
electrical inspectors shall be certified under KRS 227.489. 10
(4) Reasonable standards for the construction, alteration, and repair of any electrical 11
system shall be those adopted in the Uniform State Building Code, as promulgated 12
by the department, and shall have as a minimum standard the requirements of the 13
National Elect rical Code, which may include Kentucky amendments. These 14
standards shall be used by the electrical inspector in making his or her inspections. 15
(5) Local standards and fees for inspection of any solar energy system, as defined in 16
Section 1 of this Act, shal l be applied in a nondiscriminatory manner consistent 17
with the treatment of comparable facilities. 18