BILL ANALYSIS Ó
AB 1581
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Date of Hearing: March 27, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 1581 (Wieckowski) - As Introduced: February 2, 2012
SUBJECT : Advertising: business location representations:
floral businesses.
SUMMARY : Prohibits a floral business from misrepresenting the
geographic location of its business, as specified.
Specifically, this bill :
1)Prohibits a floral business from misrepresenting the
geographic location of its business by:
a) Listing a local telephone number in any advertisement,
unless the advertisement identifies the true physical
address, including the city, of the floral business.
b) Representing the geographic location of the floral
business as "local," "locally owned," or as being
physically located in this state if the floral business is
not physically located in this state and:
i) The name of the floral business specified in the
advertisement is a fictitious business name or an assumed
business name that would lead a reasonable consumer to
conclude that the floral business is physically located
in this state;
ii) The advertisement uses the name of or any form of
contact information for another floral business that is
physically located in this state in a manner that would
cause a reasonable consumer to believe that the floral
business is physically located in this state;
iii) A telephone call to the telephone number listed in
the advertisement for purposes of contacting the floral
business routinely forwards or transfers the caller to,
or terminates in, a physical location that is outside of
this state; or,
iv) The advertisement would otherwise lead a reasonable
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consumer to conclude that the floral business is
physically located in this state.
2)Limits the provisions of this bill to floral businesses, as
defined.
3)Exempts from the provisions of this bill:
a) A person who has as an ownership interest in another
floral business that is physically located in this state;
b) A service mark licensee of a service mark of another
floral business that is physically located in this state,
regardless of whether the service mark is registered under
state or federal law;
c) A franchisor of a floral business that is physically
located in this state;
d) A person engaged in floral business at a geographical
location outside of this state that discloses this
information in a clear and conspicuous manner, as
specified;
e) A publisher of a telephone directory or other
publication or a provider of a directory assistance service
publishing or providing information about another business;
f) An Internet Web site that aggregates and provides
information about other businesses;
g) An owner or publisher of a print advertising medium
providing information about other businesses;
h) An Internet service provider; and,
i) An Internet service that displays or distributes
advertisements for other businesses.
4)Defines the following terms:
a) "Advertising medium" means any of the following:
i) Telephone directory or other directory assistance
database;
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ii) Television;
iii) Radio;
iv) Newspaper, magazine, flyer, brochure, or other print
medium;
v) Billboard, sign, or poster;
vi) Facsimile;
vii) Electronic mail or other electronic form of
communication; or,
viii) The Internet and services available by means of the
Internet.
b) "Advertisement" means any oral, written, or graphic
statement or representation made while engaging in floral
business regardless of the medium of communication for the
purpose of inducing, directly or indirectly, the purchase
of floral arrangements, plant arrangements, and related
merchandise and services by a resident of this state or for
delivery to a resident of this state.
c) "Floral business" means a business that engages directly
or indirectly in the retail sale of floral arrangements,
plant arrangements, and related merchandise and services
that are purchased by a resident of this state or for
delivery to a resident of this state, including, but not
limited to, the sale, offer for sale, marketing,
distribution, order gathering, and advertisement of floral
arrangements, plant arrangements, and related merchandise
and services.
d) "Local telephone number" means a specific telephone
number (area code and prefix) assigned for the purpose of
completing local calls between a calling party or station
and any other party or station within a designated exchange
or all of its designated local calling areas. The term
"local telephone number" does not include long distance
telephone numbers or 800, 888, or 900 exchange telephone
numbers listed in a local telephone directory.
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e) "Physically located" means having a place of business
that is a physical geographic presence in this state at a
location designated by a post office mailing address in
this state.
EXISTING LAW provides for the regulation of advertising and
makes certain advertising practices unlawful.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author, "At its core,
this bill is about combating consumer deception. Local
consumers are misled when orders are routed to non-local
business locations because fees and commissions are usually
taken out of the order price.
"These non-local fees and commissions are not normally paid when
the consumer places a floral order directly with a truly local
florist, as intended. Ironically, oftentimes the non-local
telemarketer who falsely represents himself as a local florist
simply re-routes the order to a truly local florist for
processing. In these cases, the consumer paid a higher price,
and received less value, while the local florist was subjected
to sharing their profit with an unnecessary and non-local third
party.
"The consumer has the right to know and choose when he wants his
floral dollars and sales taxes to leave his local community and
state. This will provide interested consumers relevant
information about the location of a floral retail business and
prevent unscrupulous floral retailers from parasitical
advertising activities on existing community based local flower
shops.
"This bill will add Internet websites, print advertisement,
radio and other advertising mediums to the business listing
wherein a person may not misrepresent the geographical location
of a business selling flowers or floral arrangements and by what
standard the listing would be considered a misrepresentation.
The Internet has provided new retail business opportunities but
also opportunities to misrepresent the physical location of a
business.
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"This bill only requires floral retailers who use local phone
numbers to include their address and notice of their place of
business in their advertisements and for retailers who use a
local name to also include their address in their
advertisements."
Background . This bill is substantially similar to AB 2076
(Salas) of 2010, which makes it unlawful for a floral vendor to
misrepresent the geographic location of its business. AB 2076
was vetoed. In his veto message, the Governor stated, "In
today's global economy, it is unreasonable to limit out-of-area
businesses from using local names and telephone numbers. In
virtually every aspect of the economy, consumers are accustomed
to purchasing products from around the world via many methods."
Support . The California State Floral Association states, "AB
1581 is intended to provide interested consumers relevant
information about the location of a business and prevent
unscrupulous retailers from parasitical advertising activities
on existing local flower shops. This measure has a very low
threshold for compliance. This bill only requires floral
retailers who chose to use local phone numbers to include their
address and notice of their place of business in their
advertisements and for retailers who chose to use a local name
to also include their address in their advertisements.
"Besides informing consumers and preventing inappropriate
advertising activities, this measure will also result in
increased sales tax revenues and job creation and retention.
Studies from the Buy California marketing program show
California consumers prefer to purchase from local retailers and
California Grown product. This bill will provide those
consumers who believe they are purchasing from a local floral
retailer the information necessary to make an informed
decision."
Oppose . The Direct Marketing Association writes, "California
florists benefit from improved efficiency in flower advertising
and marketing brought about by national companies and networks -
particularly the connection with local area customers that media
like the Internet has produced. Those businesses thrive thanks
to referrals from national florists. The language in AB 1585
upsets those relationships by placing conditions on the
advertising and marketing done by national companies and the
network set up by the national companies to fill orders through
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California companies.
"Prescriptive and punitive legislation like AB 1581 will cause
online retailers to rethink the cost and benefit of local
relationships. This may well cause them to bypass local
relationships and ship directly to the customer which would have
a significant negative economic impact on local florists that
have business relationships with online companies."
Previous legislation . AB 2076 (Salas) of 2010, makes it
unlawful for a provider or vendor of floral or ornamental
products or services, as defined, to misrepresent the geographic
location of its business, as specified. This bill was vetoed.
AB 1282 (Salas) of 2007, AB 1375 (House) of 1999, and AB 1074
(Nakano) of 2001, were substantially similar bills that were
also consequently vetoed.
REGISTERED SUPPORT / OPPOSITION :
Support
A to Z Wholesale Floral Supply
Baron Paper Company, Inc.
Blooms & Bears
California Small Business Association
California State Floral Association
Calla Co.
Designs Unique
Fremont Chamber of Commerce
Fremont Flowers
From the Garden Enterprises
Hart Floral
Jasmine Creek Florist
King's Flowers
Lizio Inc.
Mission Hills Florist
Monarch Florist
National Federation of Independent Business
Overend Designs Inc.
Simi Valley Chamber of Commerce
Society of American Florists
Society of American Florists
Tempel's of Carmel Florist
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Opposition
Aloha Florists
Angels Flower and Gifts
Brisas Flower Shop
Conroy's Flowers, Long Beach
Conroy's Flowers, Westminster
Conroy's, Santa Ana
Country Shelf Florist and Gifts
Daisy Florist
Direct Marketing Assocation
Flowers by Fairytales
French Florist
From the Heart Florist
Gaetas Flowers and Gifts
Happy Valley Florist
Internet Alliance
Maranatha Flowers
May Flowers
Monica's Florist
North Beach Florist
Oak Creek Florist
Oakbrook Florist
Oceanside Florist
Riverside Blossoms
Romance Flowers
Royal Fleur
Royal Florist
San Bruno Flower Fashions
San Francisco Floral Exchange
San Marino Flowers
SF Floral Exchange
The Floral Gallery
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301