Bill Text: CA AB524 | 2009-2010 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Privacy.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 449, Statutes of 2009. [AB524 Detail]

Download: California-2009-AB524-Introduced.html

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BILL NUMBER: AB 524	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Davis

                        FEBRUARY 25, 2009

   An act to amend Sections 1812.50, 1812.51, 1812.52, 1812.53,
1812.54, 1812.55, 1812.56, 1812.57, 1812.59, 1812.60, 1812.63,
1812.64, 1812.65, and 1812.67 of, and to amend the heading of Title
2.4 (commencing with Section 1812.50) of Part 4 of Division 3 of, the
Civil Code, relating to contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 524, as introduced, Davis. Contracts: acting schools.
   Existing law regulates contracts for dance studios and other
services, defined to include ballroom or other types of dancing, and
lessons and other services, whether given to students individually or
in groups, as provided.
   Existing law also provides that every contract for dance studio
lessons shall be in writing and shall not require payments or
financing by the buyer over a period in excess of one year. Existing
law allows for the cancellation of dance studio contracts, as
provided.
   Existing law provides that any person who violates the provisions
relating to dance studio contracts is guilty of a misdemeanor.
   Existing law requires a dance studio to maintain a bond issued by
a surety company and filed with the Secretary of State.
   This bill would add acting schools to these provisions.
   Because this bill would impose additional requirements on acting
schools, the willful violation of which would be a crime, it would
impose 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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The heading of Title 2.4 (commencing with Section
1812.50) of Part 4 of Division 3 of the Civil Code is amended to
read:

      TITLE 2.4.  CONTRACTS FOR DANCE STUDIO  AND ACTING SCHOOL
 LESSONS AND OTHER SERVICES


  SEC. 2.  Section 1812.50 of the Civil Code is amended to read:
   1812.50.  (a) The Legislature finds that there exists in
connection with a substantial number of contracts for dance studio
 or acting school  lessons and other services, sales
practices, and business and financing methods which have worked a
fraud, deceit, imposition, and financial hardship upon the people of
this state; that existing legal remedies are inadequate to correct
these abuses; that the dance studio  and acting school 
industry has a significant impact upon the economy and well-being of
this state and its local communities; and that the provisions of this
title relating to these contracts are necessary for the public
welfare.
   (b) The Legislature declares that the purpose of this title is to
safeguard the public against fraud, deceit, imposition, and financial
hardship, and to foster and encourage competition, fair dealing, and
prosperity in the field of dance studio  and acting school 
lessons and other services by prohibiting or restricting false or
misleading advertising, onerous contract terms, harmful financial
practices, and other unfair, dishonest, deceptive, destructive,
unscrupulous, fraudulent, and discriminatory practices by which the
public has been injured in connection with contracts for dance studio
 or acting school  lessons and other services.
  SEC. 3.  Section 1812.51 of the Civil Code is amended to read:
   1812.51.  As used in this title, "contract for dance studio 
or acting school  lessons and other services" means a contract
for instruction in ballroom or other types of dancing, and includes
 acting school lessons, and  lessons and other services,
whether given to students individually or in groups. This title does
not include contracts for professional services rendered or furnished
by a person licensed under Division 2 (commencing with Section 500)
of the Business and Professions Code, or contracts for instruction at
schools operating pursuant to the Education Code.
  SEC. 4.  Section 1812.52 of the Civil Code is amended to read:
   1812.52.  Every contract for dance studio  or acting school
 lessons and other services shall be in writing and shall be
subject to this title. A copy of the written contract shall be given
to the customer at the time he or she signs the contract.
  SEC. 5.  Section 1812.53 of the Civil Code is amended to read:
   1812.53.  (a) No contract for dance studio  or acting school
 lessons and other services shall require payments or financing
by the buyer over a period in excess of one year from the date the
contract is entered into, nor shall the term of any contract be
measured by the life of the buyer. However, the lessons and other
services to be rendered to the buyer under the contract may extend
over a period not to exceed seven years from the date the contract is
entered into.
   (b) All contracts for dance studio  or acting school 
lessons and other services that may be in effect between the same
seller and the same buyer, the terms of which overlap for any period,
shall be considered as one contract for the purposes of this title.
  SEC. 6.  Section 1812.54 of the Civil Code is amended to read:
   1812.54.  (a) Every contract for dance studio  or acting
school  lessons and other services shall provide that
performance of the agreed-upon lessons will begin within six months
from the date the contract is entered into.
   (b) A contract for dance studio  or acting school 
lessons and other services may be canceled by the student at any time
provided he or she gives written notice to the dance studio  or
acting school  at the address specified in the contract. When a
contract for dance studio  or acting school  lessons and
other services is canceled the dance studio  or acting school
 shall calculate the refund on the contract, if any, on a pro
rata basis. The dance studio  or acting school  shall refund
any moneys owed to the student within 10 days of receiving the
cancellation notice, unless the student owes the dance studio  or
acting school  money for studio lessons or other services
received prior to the cancellation, in which case any moneys owed the
dance studio  or acting school  shall be deducted by the
dance studio from the refund owed to the student and the balance, if
any, shall be refunded as specified above. A dance studio  or
acting school  shall not charge a cancellation fee, or other
fee, for cancellation of the contract by the student.
   (c) Every contract for dance studio  or acting school 
lessons and other services shall contain a written statement of the
hourly rate charged for each type of lesson for which the student has
contracted. If the contract includes dance studio  or acting
school  lessons that are sold at different per-hour rates, the
contract shall contain separate hourly rates for each different type
of lesson sold. All other services for which the student has
contracted that are not capable of a per-hour charge shall be set
forth in writing in specific terms. The statement shall be contained
in the dance studio  or acting school  contract before the
contract is signed by the buyer.
   (d) Every dance studio  or acting school subject to
Sections 1812.64 and 1812.65 shall include in every contract for
dance studio  or acting school  lessons or other services a
statement that the studio is bonded and that information concerning
the bond may be obtained by writing to the office of the Secretary of
State.
  SEC. 7.  Section 1812.55 of the Civil Code is amended to read:
   1812.55.  No contract for dance studio  or acting school 
lessons and other services shall require or entail the execution of
any note or series of notes by the buyer which, when separately
negotiated, will cut off as to third parties any right of action or
defense which the buyer may have against the seller.
  SEC. 8.  Section 1812.56 of the Civil Code is amended to read:
   1812.56.  No right of action or defense arising out of a contract
for dance studio  or acting school  lessons and other
services which the buyer has against the seller, and which would be
cut off by assignment, shall be cut off by assignment of the contract
to any third party whether or not he or she acquires the contract in
good faith and for value unless the assignee gives notice of the
assignment to the buyer as provided in this section and, within 30
days of the mailing of notice, receives no written notice of the
facts giving rise to the claim or defense of the buyer. A notice of
assignment shall be in writing addressed to the buyer at the address
shown on the contract and shall identify the contract and inform the
buyer that he or she shall, within 30 days of the date of mailing of
the notice, notify the assignee in writing of any facts giving rise
to a claim or defense which he or she may have. The notice of
assignment shall state the name of the seller and buyer, a
description of the lessons and other services, the contract balance,
and the number and amount of the installments.
  SEC. 9.  Section 1812.57 of the Civil Code is amended to read:
   1812.57.  (a) Every contract for dance studio  or acting
school  lessons and other services shall contain a clause
providing that if, by reason of death or disability, the person
agreeing to receive lessons and other services is unable to receive
all lessons and other services for which he or she has contracted,
the person and his or her estate shall be relieved from the
obligation of making payment for lessons and other services other
than those received prior to death or the onset of disability, and
that if the buyer has prepaid any sum for lessons and other services
so much of that sum as is allocable to lessons and other services he
or she has not taken shall be promptly refunded to the buyer or his
or her representative.
   (b) Notwithstanding the provisions of any contract to the
contrary, whenever the contract price is payable in installments and
the buyer is relieved from making further payments or entitled to a
refund under this section, the buyer shall be entitled to receive a
refund or refund credit of so much of the cash price as is allocable
to the lessons or other services not actually received by the buyer.
The refund of the finance charge shall be computed according to the
"sum of the balances method," also known as the "Rule of  78"
.   78." 
  SEC. 10.  Section 1812.59 of the Civil Code is amended to read:
   1812.59.  Any contract for dance studio  or acting school
 lessons and other services which does not comply with the
applicable provisions of this title shall be void and unenforceable
as contrary to public policy.
  SEC. 11.  Section 1812.60 of the Civil Code is amended to read:
   1812.60.  Any contract for dance studio  or acting school
 lessons and other services entered into in reliance upon any
willful and false, fraudulent, or misleading information,
representation, notice, or advertisement of the seller shall be void
and unenforceable.
  SEC. 12.  Section 1812.63 of the Civil Code is amended to read:
   1812.63.  Any person who violates any provision of this title
relating to dance studio  or acting school  contracts is
guilty of a misdemeanor. Any superior court of this state has
jurisdiction in equity to restrain and enjoin the violation of any of
the provisions of this title relating to dance studio  or acting
school  contracts.
   The duty to institute actions for violation of those provisions of
this title, including equity proceedings to restrain and enjoin
violations, is hereby vested in the Attorney General, district
attorneys, and city attorneys. The Attorney General, any district
attorney, or any city attorney may prosecute misdemeanor actions or
institute equity proceedings, or both.
   This section shall not be deemed to prohibit the enforcement by
any person of any right provided by this or any other law.
  SEC. 13.  Section 1812.64 of the Civil Code is amended to read:
   1812.64.  Every dance studio  or acting school  shall
maintain a bond issued by a surety company admitted to do business in
this state. The principal sum of the bond shall be 25 percent of the
dance studio's  or acting school's  gross income from the
studio business in this state during the studio's last fiscal year,
except that the principal sum of the bond shall not be less than
twenty-five thousand dollars ($25,000) in the first or any subsequent
year of operation.
   A copy of the bond shall be filed with the Secretary of State,
together with a declaration under penalty of perjury signed by the
owner of the studio stating the dance studio's  or acting school'
s  gross income from the dance studio  or acting school
 business in this state during the last fiscal year. The
information contained in the declaration shall not be subject to
public inspection. If the person in whose name the bond is issued
severs his or her relationship with the bonded dance studio  or
acting school  , the new owner shall, as a condition of doing
business, notify the Secretary of State of the change of ownership
and of proof of compliance with Sections 1812.64 and 1812.65.
  SEC. 14.  Section 1812.65 of the Civil Code is amended to read:
   1812.65.  The bond required by Section 1812.64 shall be in favor
of the State of California for the benefit of any person who, after
entering into a contract for dance studio  or acting school 
lessons and other services with the dance studio  or acting
school  , is damaged by fraud or dishonesty or failure to
provide the services of the studio in performance of the contract.
  SEC. 15.  Section 1812.67 of the Civil Code is amended to read:
   1812.67.  (a) Sections 1812.64 and 1812.65 do not apply to any
dance studio  or acting school  which requires or receives
less than fifty dollars ($50) in advance payments from or on behalf
of each student for dance studio  or acting school  lessons
or other services which are to be rendered by the studio in the
future and such advance payments are not required or received by the
studio from each student more frequently than once every 30 days.
   (b) Sections 1812.53, 1812.54, 1812.64, and 1812.65 do not apply
to a dance studio which only offers instruction in ballet, modern,
jazz, tap dance, or any combination thereof, to persons under 21
years of age pursuant to a contract for dance studio lessons that
provides all of the following: (1) a total payment of less than five
hundred dollars ($500), (2) that all agreed-upon lessons will be
offered within four months from the date the contract is entered, and
(3) that the contract may be canceled and all money paid for
instruction not yet received will be refunded within 10 days of
cancellation, if the dance student cancels within three days after
receiving the first lesson, or if the dance student cancels at any
time after moving his or her residence to a location more than 15
miles from the location of the dance studio.
   (c) Sections 1812.53, 1812.54, 1812.64, and 1812.65 do not apply
to any organization that has qualified for a tax exemption under
Section 501(c)(3) of the Internal Revenue Code and which receives a
direct grant of funds from the California Arts Council.
  SEC. 16.  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.