Bill Text: CA AB2820 | 2015-2016 | Regular Session | Chaptered
Bill Title: Crimes: price gouging: states of emergency.
Spectrum: Bipartisan Bill
Status: (Passed) 2016-09-26 - Chaptered by Secretary of State - Chapter 671, Statutes of 2016. [AB2820 Detail]
Download: California-2015-AB2820-Chaptered.html
BILL NUMBER: AB 2820 CHAPTERED
BILL TEXT
CHAPTER 671
FILED WITH SECRETARY OF STATE SEPTEMBER 26, 2016
APPROVED BY GOVERNOR SEPTEMBER 26, 2016
PASSED THE SENATE AUGUST 23, 2016
PASSED THE ASSEMBLY AUGUST 29, 2016
AMENDED IN SENATE AUGUST 19, 2016
AMENDED IN SENATE AUGUST 1, 2016
AMENDED IN ASSEMBLY MARCH 15, 2016
INTRODUCED BY Assembly Member Chiu
(Principal coauthor: Assembly Member Wilk)
FEBRUARY 19, 2016
An act to amend Section 396 of the Penal Code, relating to crimes.
LEGISLATIVE COUNSEL'S DIGEST
AB 2820, Chiu. Crimes: price gouging: states of emergency.
Under existing law, upon the proclamation of a state of emergency
resulting from an earthquake, flood, fire, riot, storm, or natural or
manmade disaster declared by the President of the United States or
the Governor, or upon the declaration of a local emergency resulting
from an earthquake, flood, fire, riot, storm, or natural or manmade
disaster by the executive officer of any county, city, or city and
county, and for a period of 30 days following that declaration, it is
a misdemeanor with specified penalties for a person, contractor,
business, or other entity to sell or offer to sell certain goods and
services for a price that exceeds by 10% the price charged by that
person immediately prior to the proclamation of emergency, except as
specified.
This bill would revise the definitions of a state of emergency and
a local emergency to mean a natural or manmade emergency resulting
from an earthquake, flood, fire, riot, storm, drought, plant or
animal infestation or disease, or other natural or manmade disaster
for which a state of emergency has been declared by the President of
the United States or the Governor of California or for which a local
emergency has been declared by an official, board, or other governing
body vested with authority to make such a declaration in any city,
county, or city and county in California, respectively. The bill
would include towing services in the provisions described above. The
bill would also specify that housing means any rental housing with an
initial lease term of no longer than one year for purposes of these
provisions. The bill would make other clarifying and conforming
changes, including, among others, a specification that these
provisions apply to both a state of emergency and a local emergency,
and would make certain additional findings by the Legislature. By
expanding the scope of an existing crime, this bill would create a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 396 of the Penal Code is amended to read:
396. (a) The Legislature hereby finds that during a state of
emergency or local emergency, including, but not limited to, an
earthquake, flood, fire, riot, storm, drought, plant or animal
infestation or disease, or other natural or manmade disaster, some
merchants have taken unfair advantage of consumers by greatly
increasing prices for essential consumer goods and services. While
the pricing of consumer goods and services is generally best left to
the marketplace under ordinary conditions, when a declared state of
emergency or local emergency results in abnormal disruptions of the
market, the public interest requires that excessive and unjustified
increases in the prices of essential consumer goods and services be
prohibited. It is the intent of the Legislature in enacting this act
to protect citizens from excessive and unjustified increases in the
prices charged during or shortly after a declared state of emergency
or local emergency for goods and services that are vital and
necessary for the health, safety, and welfare of consumers. Further,
it is the intent of the Legislature that this section be liberally
construed so that its beneficial purposes may be served.
(b) Upon the proclamation of a state of emergency declared by the
President of the United States or the Governor, or upon the
declaration of a local emergency by an official, board, or other
governing body vested with authority to make such a declaration in
any county, city, or city and county, and for a period of 30 days
following that proclamation or declaration, it is unlawful for a
person, contractor, business, or other entity to sell or offer to
sell any consumer food items or goods, goods or services used for
emergency cleanup, emergency supplies, medical supplies, home heating
oil, building materials, housing, transportation, freight, and
storage services, or gasoline or other motor fuels for a price of
more than 10 percent above the price charged by that person for those
goods or services immediately prior to the proclamation or
declaration of emergency. However, a greater price increase is not
unlawful if that person can prove that the increase in price was
directly attributable to additional costs imposed on it by the
supplier of the goods, or directly attributable to additional costs
for labor or materials used to provide the services, provided that in
those situations where the increase in price is attributable to
additional costs imposed by the seller's supplier or additional costs
of providing the good or service during the state of emergency or
local emergency, the price represents no more than 10 percent above
the total of the cost to the seller plus the markup customarily
applied by the seller for that good or service in the usual course of
business immediately prior to the onset of the state of emergency or
local emergency.
(c) Upon the proclamation of a state of emergency declared by the
President of the United States or the Governor, or upon the
declaration of a local emergency by an official, board, or other
governing body vested with authority to make such a declaration in
any county, city, or city and county, and for a period of 180 days
following that proclamation or declaration, it is unlawful for a
contractor to sell or offer to sell any repair or reconstruction
services or any services used in emergency cleanup for a price of
more than 10 percent above the price charged by that person for those
services immediately prior to the proclamation or declaration of
emergency. However, a greater price increase is not unlawful if that
person can prove that the increase in price was directly attributable
to additional costs imposed on it by the supplier of the goods, or
directly attributable to additional costs for labor or materials used
to provide the services, provided that in those situations where the
increase in price is attributable to the additional costs imposed by
the contractor's supplier or additional costs of providing the
service during the state of emergency or local emergency, the price
represents no more than 10 percent above the total of the cost to the
contractor plus the markup customarily applied by the contractor for
that good or service in the usual course of business immediately
prior to the onset of the state of emergency or local emergency.
(d) Upon the proclamation of a state of emergency declared by the
President of the United States or the Governor, or upon the
declaration of a local emergency by an official, board, or other
governing body vested with authority to make such a declaration in
any county, city, or city and county, and for a period of 30 days
following that proclamation or declaration, it is unlawful for an
owner or operator of a hotel or motel to increase the hotel or motel'
s regular rates, as advertised immediately prior to the proclamation
or declaration of emergency, by more than 10 percent. However, a
greater price increase is not unlawful if the owner or operator can
prove that the increase in price is directly attributable to
additional costs imposed on it for goods or labor used in its
business, to seasonal adjustments in rates that are regularly
scheduled, or to previously contracted rates.
(e) The provisions of this section may be extended for additional
30-day periods, as needed, by a local legislative body, local
official, the Governor, or the California Legislature, if deemed
necessary to protect the lives, property, or welfare of the citizens.
(f) A violation of this section is a misdemeanor punishable by
imprisonment in a county jail for a period not exceeding one year, or
by a fine of not more than ten thousand dollars ($10,000), or by
both that fine and imprisonment.
(g) A violation of this section shall constitute an unlawful
business practice and an act of unfair competition within the meaning
of Section 17200 of the Business and Professions Code. The remedies
and penalties provided by this section are cumulative to each other,
the remedies under Section 17200 of the Business and Professions
Code, and the remedies or penalties available under all other laws of
this state.
(h) For the purposes of this section, the following terms have the
following meanings:
(1) "State of emergency" means a natural or manmade emergency
resulting from an earthquake, flood, fire, riot, storm, drought,
plant or animal infestation or disease, or other natural or manmade
disaster for which a state of emergency has been declared by the
President of the United States or the Governor of California.
(2) "Local emergency" means a natural or manmade emergency
resulting from an earthquake, flood, fire, riot, storm, drought,
plant or animal infestation or disease, or other natural or manmade
disaster for which a local emergency has been declared by an
official, board, or other governing body vested with authority to
make such a declaration in any county, city, or city and county in
California.
(3) "Consumer food item" means any article that is used or
intended for use for food, drink, confection, or condiment by a
person or animal.
(4) "Repair or reconstruction services" means services performed
by any person who is required to be licensed under the Contractors'
State License Law (Chapter 9 (commencing with Section 7000) of
Division 3 of the Business and Professions Code), for repairs to
residential or commercial property of any type that is damaged as a
result of a disaster.
(5) "Emergency supplies" includes, but is not limited to, water,
flashlights, radios, batteries, candles, blankets, soaps, diapers,
temporary shelters, tape, toiletries, plywood, nails, and hammers.
(6) "Medical supplies" includes, but is not limited to,
prescription and nonprescription medications, bandages, gauze,
isopropyl alcohol, and antibacterial products.
(7) "Building materials" means lumber, construction tools,
windows, and anything else used in the building or rebuilding of
property.
(8) "Gasoline" means any fuel used to power any motor vehicle or
power tool.
(9) "Transportation, freight, and storage services" means any
service that is performed by any company that contracts to move,
store, or transport personal or business property or that rents
equipment for those purposes, including towing services.
(10) "Housing" means any rental housing with an initial lease term
of no longer than one year.
(11) "Goods" has the same meaning as defined in subdivision (c) of
Section 1689.5 of the Civil Code.
(i) Nothing in this section shall preempt any local ordinance
prohibiting the same or similar conduct or imposing a more severe
penalty for the same conduct prohibited by this section.
(j) A business offering an item for sale at a reduced price
immediately prior to the proclamation or declaration of the emergency
may use the price at which it usually sells the item to calculate
the price pursuant to subdivision (b) or (c).
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
