Bill Text: CA SB823 | 2011-2012 | Regular Session | Amended

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

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Bill Title: Consumer affairs.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2011-08-25 - Set, second hearing. Held in committee and under submission. [SB823 Detail]

Download: California-2011-SB823-Amended.html

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BILL NUMBER: SB 823	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 14, 2011

INTRODUCED BY   Senator Corbett

                        FEBRUARY 18, 2011

   An act to amend Section 1770 of the Civil Code,   and to add
Section 13985 to the Government Code,   relating to 
consumer protections   California products, and making
an appropriation therefor  .



	LEGISLATIVE COUNSEL'S DIGEST


   SB 823, as amended, Corbett. Consumer  protections.
  protections: Made in California Program. 
   Existing law makes unlawful certain acts identified as unfair
methods of competition and unfair or deceptive acts or practices
undertaken by any person in a transaction intended to result or which
results in the sale or lease of goods to any consumer.
   This bill would include in that list of acts representing a
product as made in California unless  certain criteria are
met, including that the company that manufactures the product is
headquartered in California, and primarily designs and manufactures a
physical product rather than a digital product or service 
 the product complies with standards adopted by the Governor's
Office of Economic Development, to the extent those standards are
adopted. The bill would establish the Made in California Program
within the   office, as provided, and would create the
continuously appropriated Made in California Fund as a special fund
in the State Treasury for that purpose. The bill would require the
office to report to the Legislature on January 1, 2013, and annually
thereafter, regarding expenditures and progress of the program 
.
   Vote: majority. Appropriation:  no   yes
 . Fiscal committee:  no   yes  .
State-mandated local program: no.


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

  SECTION 1.  Section 1770 of the Civil Code is amended to read:
   1770.  (a) The following unfair methods of competition and unfair
or deceptive acts or practices undertaken by any person in a
transaction intended to result or which results in the sale or lease
of goods or services to any consumer are unlawful:
   (1) Passing off goods or services as those of another.
   (2) Misrepresenting the source, sponsorship, approval, or
certification of goods or services.
   (3) Misrepresenting the affiliation, connection, or association
with, or certification by, another.
   (4) Using deceptive representations or designations of geographic
origin in connection with goods or services.
   (5) Representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits, or quantities
which they do not have or that a person has a sponsorship, approval,
status, affiliation, or connection which he or she does not have.
   (6) Representing that goods are original or new if they have
deteriorated unreasonably or are altered, reconditioned, reclaimed,
used, or secondhand.
   (7) Representing that goods or services are of a particular
standard, quality, or grade, or that goods are of a particular style
or model, if they are of another.
   (8) Disparaging the goods, services, or business of another by
false or misleading representation of fact.
   (9) Advertising goods or services with intent not to sell them as
advertised.
   (10) Advertising goods or services with intent not to supply
reasonably expectable demand, unless the advertisement discloses a
limitation of quantity.
   (11) Advertising furniture without clearly indicating that it is
unassembled if that is the case.
   (12) Advertising the price of unassembled furniture without
clearly indicating the assembled price of that furniture if the same
furniture is available assembled from the seller.
   (13) Making false or misleading statements of fact concerning
reasons for, existence of, or amounts of price reductions.
   (14) Representing that a transaction confers or involves rights,
remedies, or obligations which it does not have or involve, or which
are prohibited by law.
   (15) Representing that a part, replacement, or repair service is
needed when it is not.
   (16) Representing that the subject of a transaction has been
supplied in accordance with a previous representation when it has
not.
   (17) Representing that the consumer will receive a rebate,
discount, or other economic benefit, if the earning of the benefit is
contingent on an event to occur subsequent to the consummation of
the transaction.
   (18) Misrepresenting the authority of a salesperson,
representative, or agent to negotiate the final terms of a
transaction with a consumer.
   (19) Inserting an unconscionable provision in the contract.
   (20) Advertising that a product is being offered at a specific
price plus a specific percentage of that price unless (A) the total
price is set forth in the advertisement, which may include, but is
not limited to, shelf tags, displays, and media advertising, in a
size larger than any other price in that advertisement, and (B) the
specific price plus a specific percentage of that price represents a
markup from the seller's costs or from the wholesale price of the
product. This subdivision shall not apply to in-store advertising by
businesses which are open only to members or cooperative
organizations organized pursuant to Division 3 (commencing with
Section 12000) of Title 1 of the Corporations Code where more than 50
percent of purchases are made at the specific price set forth in the
advertisement.
   (21) Selling or leasing goods in violation of Chapter 4
(commencing with Section 1797.8) of Title 1.7.
   (22) (A) Disseminating an unsolicited prerecorded message by
telephone without an unrecorded, natural voice first informing the
person answering the telephone of the name of the caller or the
organization being represented, and either the address or the
telephone number of the caller, and without obtaining the consent of
that person to listen to the prerecorded message.
   (B) This subdivision does not apply to a message disseminated to a
business associate, customer, or other person having an established
relationship with the person or organization making the call, to a
call for the purpose of collecting an existing obligation, or to any
call generated at the request of the recipient.
   (23) The home solicitation, as defined in subdivision (h) of
Section 1761, of a consumer who is a senior citizen where a loan is
made encumbering the primary residence of that consumer for the
purposes of paying for home improvements and where the transaction is
part of a pattern or practice in violation of either subsection (h)
or (i) of Section 1639 of Title 15 of the United States Code or
subsection (e) of Section 226.32 of Title 12 of the Code of Federal
Regulations.
   A third party shall not be liable under this subdivision unless
(A) there was an agency relationship between the party who engaged in
home solicitation and the third party or (B) the third party had
actual knowledge of, or participated in, the unfair or deceptive
transaction. A third party who is a holder in due course under a home
solicitation transaction shall not be liable under this subdivision.

   (24) (A) Charging or receiving an unreasonable fee to prepare,
aid, or advise any prospective applicant, applicant, or recipient in
the procurement, maintenance, or securing of public social services.
   (B) For purposes of this paragraph, the following definitions
shall apply:
   (i) "Public social services" means those activities and functions
of state and local government administered or supervised by the State
Department of Health Care Services, the State Department of Public
Health, or the State Department of Social Services, and involved in
providing aid or services, or both, including health care services
and medical assistance, to those persons who, because of their
economic circumstances or social condition, are in need of that aid
or those services and may benefit from them.
   (ii) "Unreasonable fee" means a fee that is exorbitant and
disproportionate to the services performed. Factors to be considered,
when appropriate, in determining the reasonableness of a fee, are
based on the circumstances existing at the time of the service and
shall include, but not be limited to, all of the following:
   (I) The time and effort required.
   (II) The novelty and difficulty of the services.
   (III) The skill required to perform the services.
   (IV) The nature and length of the professional relationship.
   (V) The experience, reputation, and ability of the person
providing the services.
   (C) This paragraph shall not apply to attorneys licensed to
practice law in California, who are subject to the California Rules
of Professional Conduct and to the mandatory fee arbitration
provisions of Article 13 (commencing with Section 6200) of Chapter 4
of Division 3 of the Business and Professions Code, when the fees
charged or received are for providing representation in
administrative agency appeal proceedings or court proceedings for
purposes of procuring, maintaining, or securing public social
services on behalf of a person or group of persons.
   (25) (A) Representing that a product is made in California, unless
 all of the following apply:  
   (i) The company that manufactures the product is headquartered in
California.  
   (ii) The company primarily designs and manufactures a physical
product, rather than a digital product or a service. 

   (iii) The company manufactures one or more products in California.
 
   (iv) The company has a California-based workforce and has the
desire to grow that workforce over time. 
    (B)     For purposes of
this paragraph, "manufacture" means the process of taking raw
materials or components and adding value to those materials and
components in order to create a final, recognizable product.
"Manufacture" does not include the process of completing a final
assembly from subassemblies made elsewhere, or the act of packaging a
product.   the product complies with standards adopted
by the Governor's Office of Economic Development. This paragraph
shall only be operative if standards to that effect have been adopted
pursuant to Section 13985 of the Government Code. 
   (b) (1) It is an unfair or deceptive act or practice for a
mortgage broker or lender, directly or indirectly, to use a home
improvement contractor to negotiate the terms of any loan that is
secured, whether in whole or in part, by the residence of the
borrower and which is used to finance a home improvement contract or
any portion thereof. For purposes of this subdivision, "mortgage
broker or lender" includes a finance lender licensed pursuant to the
California Finance Lenders Law (Division 9 (commencing with Section
22000) of the Financial Code), a residential mortgage lender licensed
pursuant to the California Residential Mortgage Lending Act
(Division 20 (commencing with Section 50000) of the Financial Code),
or a real estate broker licensed under the Real Estate Law (Division
4 (commencing with Section 10000) of the Business and Professions
Code).
   (2) This section shall not be construed to either authorize or
prohibit a home improvement contractor from referring a consumer to a
mortgage broker or lender by this subdivision. However, a home
improvement contractor may refer a consumer to a mortgage lender or
broker if that referral does not violate Section 7157 of the Business
and Professions Code or any other provision of law. A mortgage
lender or broker may purchase an executed home improvement contract
if that purchase does not violate Section 7157 of the Business and
Professions Code or any other provision of law. Nothing in this
paragraph shall have any effect on the application of Chapter 1
(commencing with Section 1801) of Title 2 to a home improvement
transaction or the financing thereof.
   SEC. 2.    Section 13985 is added to the  
Government Code   , to read:  
   13985.  (a) There is within the Governor's Office of Economic
Development a public and private collaboration known as the Made in
California Program. The purposes of the program are to encourage
consumer product awareness and to foster purchases of high-quality
products manufactured in this state.
   (b) (1) The office may develop and adopt standards that permit a
company to represent that a product is made in this state. Those
standards may include any of the following:
   (A) The company primarily designs and manufactures a physical
product, rather than a digital product or service.
   (B) The company manufactures one or more products in this state.
   (C) The company has a California-based workforce and has the
desire to grow that workforce over time.
   (2) For purposes of this section, "manufacture" means the process
of taking raw materials or components and adding value to those
materials and components in order to create a final, recognizable
product. "Manufacture" does not include the process of completing a
final assembly from subassemblies made elsewhere, or the act of
packaging a product.
   (c) The program and the standards shall not apply to those
agricultural products subject to the Buy California Program described
in Section 58750 of the Food and Agricultural Code.
   (d) Pursuant to Section 58789 of the Food and Agricultural Code,
and in accordance with the provisions of Chapter 1 (commencing with
Section 58601) of Part 2 of Division 21 of the Food and Agricultural
Code, the office may issue and make effective a marketing agreement,
including, but not limited to, issuance of a Made in California
label, and be advised by those California businesses willing to
participate in the program on a voluntary basis via funding or
in-kind contributions in a manner defined under the agreement.
   (e) (1) Notwithstanding Section 10231.5, the office shall report
to the Legislature on January 1, 2013, and each successive January 1,
regarding its expenditures, progress, and ongoing priorities with
this program.
   (2) The plan submitted to the Legislature pursuant to paragraph
(1) shall be submitted pursuant to Section 9795.
   (f) The Made in California Fund is hereby created as a special
fund in the State Treasury consisting of the revenues contributed
pursuant to this section, and, notwithstanding Section 13340, is
continuously appropriated for purposes of this section.