BILL ANALYSIS                                                                                                                                                                                                    


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                              UNFINISHED BUSINESS

          Bill No:  SB 657
          Author:   Steinberg (D), et al
          Amended:  8/20/10
          Vote:     21

           SENATE JUDICIARY COMMITTEE  :  3-2, 4/21/09
          AYES:  Corbett, Florez, Leno
          NOES:  Harman, Walters

           SENATE FLOOR  :  24-13, 1/28/10
          AYES:  Calderon, Cedillo, Corbett, Correa, DeSaulnier,  
            Ducheny, Florez, Hancock, Kehoe, Leno, Liu, Lowenthal,  
            Maldonado, Negrete McLeod, Oropeza, Padilla, Pavley,  
            Price, Romero, Simitian, Steinberg, Wiggins, Wolk, Yee
          NOES:  Aanestad, Ashburn, Cogdill, Cox, Denham, Dutton,  
            Harman, Hollingsworth, Huff, Runner, Strickland, Walters,  
          NO VOTE RECORDED:  Alquist, Wright, Vacancy

           ASSEMBLY FLOOR  :  44-24, 8/26/10 - See last page for vote

           SUBJECT  :    Human trafficking

           SOURCE  :     Alliance to Stop Slavery and End Trafficking

           DIGEST  :    This bill seeks to provide consumers with new  
          and easily accessible information made available by  
          specified large retailers and manufacturers about these  
          businesses' voluntary efforts to try to eradicate slavery  
          and human trafficking that could inadvertently be in their  


                                                                SB 657

          product supply chains.  Specifically, this bill (1)  
          requires, beginning January 1, 2012, every retailer and  
          manufacturer doing business in California and having more  
          than $100 million in annual gross receipts to disclose its  
          efforts to eradicate slavery and human trafficking from its  
          supply chain, require the disclosure to be posted on the  
          company's Web site and provided to consumers in writing if  
          the company has no Web site, require the disclosure to  
          include the extent to which the company (a) uses third  
          party verification to evaluate and address human  
          trafficking and slavery risks in product supply chains, (b)  
          conducts independent, unannounced audits of suppliers to  
          ensure compliance with company standards on trafficking  
          slavery, (c) maintains internal accountability for  
          employees and contractors failing to meet company standards  
          on slavery and trafficking, and (d) provides company  
          employees and management training on mitigating risks of  
          slavery and trafficking in supply chains; and (2) provides  
          the exclusive remedy for non-compliance with the provisions  
          of the bill is an injunction from the Attorney General.

           Assembly Amendments  (1) tombstone the bill as the  
          California Transparency in Supply Chains Act of 2010, (2)  
          make the provisions inapplicable to a retail institution  
          having less than $100 million in annual gross receipts, (3)  
          require the Franchise Tax Board to make a list of specified  
          retail and manufacturers available to the Attorney General,  
          (4) add clarifying language, (5) provide new definitions  
          and terms, and (6) add co-authors.

           ANALYSIS  :    Existing federal law establishes the crimes of  
          kidnapping in interstate or foreign commerce, peonage,  
          slavery and trafficking in persons, and provides for  
          criminal and civil penalties. 

          Existing federal law, the Victims of Trafficking and  
          Violence Protection Act of 2000, acknowledges the crime of  
          human trafficking, and delineates various federal actions  
          to combat trafficking, punish perpetrators, and provides  
          services to victims of trafficking.  

          Existing state law makes human trafficking a crime.  

          Existing state law, the California Trafficking Victims  



                                                                SB 657

          Protection Act, allows a victim of human trafficking to  
          bring a civil action for actual damages, compensatory  
          damages, punitive damages, injunctive relief, or any other  
          appropriate relief.  

          Existing state law generally regulates various business  
          activities and practices, including those of retail sellers  
          and manufacturers of products.  

          This bill: 

          1. Makes various legislative findings, including that it is  
             the policy of this state to ensure large retailers and  
             manufacturers provide consumers with information  
             regarding their efforts to eradicate slavery and human  
             trafficking from their supply chains, to educate  
             consumers on how to purchase goods produced by companies  
             that responsibly manage their supply chains, and,  
             thereby, to improve the lives of victims of slavery and  
             human trafficking. 

          2. Requires, after a one year "phase in" period, beginning  
             January 1, 2012, every retail seller and manufacturer  
             doing business in this state and having annual worldwide  
             gross receipts that exceed $100 million to disclose its  
             voluntary efforts to eradicate slavery and human  
             trafficking from its direct supply chain for tangible  
             goods offered for sale. 

          3. Requires this consumer disclosure to be posted on the  
             retail seller's or manufacturer's Web site with a  
             conspicuous and easily understood link to the required  
             information placed on the business' homepage.  In the  
             event the retail seller or manufacturer does not have a  
             Web site, consumers must be provided the written  
             disclosure within 30 days that the business receives the  
             consumer request. 

          4. Requires the disclosure, at a minimum, to disclose to  
             what extent, that the retail seller or manufacturer,  
             among other things, engages in verification of product  
             supply chains to evaluate and address risks of human  
             trafficking and slavery and provides company employees  
             and management who have direct responsibility for supply  



                                                                SB 657

             chain management training on human trafficking and  
             slavery, particularly with respect to mitigating risks  
             within the supply chains of products. 

          5. Provides that the exclusive remedy for a violation of  
             this bill shall be an action brought by the Attorney  
             General for injunctive relief, and that nothing in the  
             bill shall limit remedies available for a violation of  
             any other state or federal law. 

          6. Provides that the bill's provisions shall not take  
             effect until January 1, 2012, to provide the designated  
             retail sellers and manufacturers substantial time to  
             comply with the bill's disclosure requirements. 

          7. Requires the Franchise Tax Board to make available to  
             the Attorney General, a list of retail sellers and  
             manufacturers required to disclose efforts to eradicate  
             slavery and human trafficking pursuant to Civil Code  
             Section 1714.43 based on tax returns filed for taxable  
             years beginning on or after January 1, 2011. 

          For the purposes of this bill, the following definitions  
          shall apply:

          1. "Doing business in this state" shall have the same  
             meaning as set forth in Section 23101 of the Revenue and  
             Taxation Code.

          2. "Gross receipts" shall have the same meaning as set  
             forth in Section 25120 of the Revenue and Taxation Code.

          3. "Manufacturer" means a business entity with  
             manufacturing as its principal business activity code,  
             as reported on the entity's tax return filed under Part  
             10.2 (commencing with Section 18401) of Division 2 of  
             the Revenue and Taxation Code.

          4. "Retail seller" means a business entity with retail  
             trade as its principal business activity code, as  
             reported on the entity's tax return filed under Part  
             10.2 (commencing with Section 18401) of Division 2 of  
             the Revenue and Taxation Code.



                                                                SB 657

           Prior Legislation
          SB 1649 (Steinberg), 2007-08 Session, was substantively  
          similar to this bill.  The bill passed the Senate with a  
          vote of 23-15 on May 15, 2008, but died in the Assembly  
          Appropriations Committee.   

          SB 180 (Kuehl), Chapter 239, Statutes of 2005, established  
          the California Alliance to Combat Trafficking and Slavery  
          (California ACTS) Task Force.

          AB 22 (Lieber), Chapter 240, Statutes of 2005, established  
          civil and criminal penalties for human trafficking and  
          allowed for forfeiture of assets derived from human  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  8/26/10)

          Alliance to Stop Slavery and End Trafficking (source)
          California Teamsters Public Affairs Council
          California Labor Federation 
          Coalition for Humane Immigrant Rights Los Angeles
          Coalition to Abolish Slavery and Trafficking
          Consumer Federation of California
          Free the Slaves
          Polaris Project
          International Justice Mission
          Not for Sale Campaign
          Services, Immigrants Rights, and Education Network
          Vital Voices

           OPPOSITION  :    (Verified  8/26/10)

          California Chamber of Commerce
          California Grocers Association
          California Manufacturers and Technology Association
          California Retailers Association

           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          the primary goal of this bill is to highlight the existence  



                                                                SB 657

          of slave-labor and human trafficking throughout California,  
          and to create an opportunity for California retailers and  
          manufacturers to demonstrate leadership in eradicating  
          human trafficking from their supply chains.  Additionally,  
          with the information required of businesses, this bill  
          empowers consumers to reward companies that proactively  
          work to eradicate slave-labor and human trafficking.

           ARGUMENTS IN OPPOSITION  :    The California Grocers  
          Association writes:  "While grocers do not support slavery,  
          human trafficking or abusive treatment of workers, the bill  
          poses several difficulties.  SB 657 would require all  
          companies to develop policies with regard to its entire  
          supply chain, which can include entities far outside the  
          borders of California or the United States.  Grocers do not  
          have the resources to monitor supplier employment  
          practices, nor do they have the authority to enforce state  
          or federal labor law with regard to suppliers.  Further,  
          the bill requires posting of policies on a company's  
          internet web site but provides no details as to what  
          constitutes compliance with the requirement or how it  
          applies to retailers that do not have an internet web  

           ASSEMBLY FLOOR  : 
          AYES:  Ammiano, Arambula, Bass, Beall, Block, Blumenfield,  
            Bradford, Brownley, Carter, Chesbro, Coto, De La Torre,  
            De Leon, Eng, Evans, Feuer, Fong, Fuentes, Furutani,  
            Galgiani, Gatto, Hall, Hayashi, Hernandez, Hill, Huffman,  
            Jones, Lieu, Bonnie Lowenthal, Ma, Mendoza, Monning,  
            Nava, Portantino, Ruskin, Salas, Saldana, Skinner,  
            Solorio, Swanson, Torlakson, Torrico, Yamada, John A.  
          NOES:  Adams, Anderson, Bill Berryhill, Tom Berryhill,  
            Conway, Cook, DeVore, Fuller, Gaines, Garrick, Hagman,  
            Harkey, Jeffries, Knight, Logue, Miller, Nestande,  
            Niello, Nielsen, Norby, Silva, Smyth, Audra Strickland,  
          NO VOTE RECORDED:  Buchanan, Caballero, Charles Calderon,  
            Davis, Fletcher, Gilmore, Huber, V. Manuel Perez, Torres,  
            Tran, Vacancy, Vacancy



                                                                SB 657

          RJG:mw  8/27/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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