BILL ANALYSIS
SB 623
Page 1
SENATE THIRD READING
SB 623 (Wiggins)
As Amended June 18, 2008
Majority vote
SENATE VOTE :Vote not relevant
BUSINESS & PROFESSIONS 7-2 APPROPRIATIONS 11-4
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|Ayes:|Eng, Carter, Hayashi, |Ayes:|Leno, Davis, DeSaulnier, |
| |Hernandez, Price, | |Furutani, Huffman, |
| |Torrico, De Leon | |Karnette, Krekorian, |
| | | |Lieu, Ma, Nava, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Horton, Maze |Nays:|Walters, Emmerson, La |
| | | |Malfa, Nakanishi |
| | | | |
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SUMMARY : Requires each retail dispenser used to dispense motor
fuel to provide adequate notice to consumers of price
differentials or discounts in accordance with regulations
adopted by the California Department of Food and Agriculture
(CDFA), Division of Measurement Standards. Specifically, this
bill :
1)Makes numerous legislative findings and declarations,
including the following:
a) Californians consume about 16 billion gallons of
gasoline per year;
b) As of May 2008, the average price of a gallon of
gasoline has topped $4 per gallon in California;
c) The average price of gas in California has risen 69%
during the past year;
d) Some gasoline stations are offering different prices for
gasoline based on the method of purchase;
e) Some gasoline stations discount the price per gallon for
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cash transactions; and,
f) Price differentials for fuel purchases are not
adequately disclosed to the public.
2)Provides that adequate notice of price differentials or
discounts shall be provided at each fuel dispenser in
accordance with regulations adopted by the CDFA, Division of
Measurement Standards.
EXISTING LAW regulates the manner in which the price for motor
fuel must be displayed in advertisements. Any violation of
these provisions is an infraction.
FISCAL EFFECT : According to the Assembly Appropriations
committee analysis:
1)Minor absorbable costs for CDFA to adopt the regulations.
2)Likely minor non-reimbursable costs to local governments for
enforcement, offset to some extent by fine revenues.
(The bill amends a section of the Business and Professions Code
governing the manner in which the price for motor fuel must be
displayed in advertisements. A violation of these provisions
constitutes an infraction, subject to a $100 fine.)
COMMENTS : According to the author, "Drivers should be clearly
shown what they're paying, particularly with prices at the pump
rising meteorically. Gas station owners must do a better job of
telling consumers that they will pay a lower price for gas if
they fill up using cash instead of plastic.
"SB 623 is a consumer disclosure measure. The intent behind the
legislation is to provide the public with the information needed
in order to make the best decision at the pump. People should
be given the information about what they're paying, especially
when there might be different prices."
According to information provided by the author, "Some gasoline
stations are offering different prices for gasoline based on the
method of purchase. Some gasoline stations discount the price
per gallon for cash transactions. Credit cards can add about
two to three percent to the cost of the transaction. This extra
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cost is passed on to the customer in higher prices at the pump
for the convenience of using a credit card. The notice to the
public of the price differentials and discounts for fuel
purchases need to be adequately disclosed to the public."
According to a June 6, 2006, USA Today article, "With gas prices
high and profit margins low, gas station owners are trying to
encourage customers to pay cash to reduce the amount in
mandatory fees the stations have to pay banks that issue credit
and debit cards.
"Retailers are doing anything they can to try to figure out how
to reduce their credit card expenses," National Association of
Convenience Stores spokesman Jeff Lenard says. Although there
are no official statistics, Lenard says more stations are
offering cash discounts than in recent years. He notes some
stations are even refusing to accept credit cards.
"More than three-quarters of the gas pumped in the USA is sold
at convenience stores. In 2005, 58% of gas was bought using
credit and debit cards. Retailers say that number has been
climbing in 2006, Lenard says.
"Merchants pay banks that issue credit and debit cards a
percentage of the sales paid with plastic. Gas station owners
pay 1.5% to 3% of credit and debit card sales in fees, says
David Robertson, publisher of The Nilson Report, a newsletter
about credit and debit cards.
"When gas prices go up, the amount paid to banks increases. For
example, a gas station owner paying a 2% fee would pay 4 cents a
gallon when gas is $2 a gallon and 6 cents a gallon when gas is
$3."
Analysis Prepared by : Josefina Ramirez / B. & P. / (916)
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319-3301 FN:
0005994