BILL ANALYSIS Ó SENATE JUDICIARY COMMITTEE Senator Noreen Evans, Chair 2013-2014 Regular Session AB 890 (Jones) As Amended June 14, 2013 Hearing Date: June 25, 2013 Fiscal: No Urgency: No TH SUBJECT False Advertising DESCRIPTION Under existing California law, a product may not be sold in California as "Made in U.S.A." or "Made in America" when the product, or any article, unit, or part of the product, has been entirely or substantially made outside of the United States. This bill would provide that, for purposes of the California law described above, any merchandise has been substantially made, manufactured, or produced within the United States if it meets all of the following requirements: United States manufacturing costs constitute 90 percent of the total manufacturing costs for the merchandise; at least 90 percent of the components, parts, articles, or units of the merchandise were manufactured in the United States; no more than 10 percent of the total manufacturing costs for the merchandise were either incurred outside of the United States as a result of the unavailability of raw materials in the United States, or incurred as the costs of a component, part, article, or unit of the merchandise imported into the United States as a result of the unavailability of the same component, part, article, or unit of the merchandise from a domestic manufacturer; no more than 10 percent of the components, parts, articles, or units of the merchandise were manufactured outside of the United States as a result of the unavailability of raw materials in the United States, or the component, part, article, or unit of the merchandise was imported into the United States as a result of the unavailability of the (more) AB 890 (Jones) Page 2 of ? component, part, article, or unit of the merchandise from a domestic manufacturer; and the merchandise was last substantially transformed in the United States. BACKGROUND The Legislature has long considered consumer protection to be a matter of high public importance. State law is replete with statutes aimed at protecting California consumers from unfair, dishonest, or harmful market practices. The Consumer Legal Remedies Act (Civ. Code Sec. 1750 et seq.), for example, was enacted "to protect the statute's beneficiaries from deceptive and unfair business practices," and to provide aggrieved consumers with "strong remedial provisions for violations of the statute." (Am. Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 11.) Similarly, for over 70 years, California's Unfair Practices Act (Bus. & Prof. Code Sec. 17000 et seq.) has protected California consumers from "unlawful, unfair or fraudulent business act[s] or practice[s]." (Bus. & Prof. Code Sec. 17200.) Consumer protection regarding the labeling of products is no less a matter of fundamental public policy. Since 1961, California has expressly required that businesses meet certain standards in order to be able to claim that their products are "Made in the U.S.A." Specifically, California law prohibits a product from being labeled and sold in California as "Made in U.S.A." or "Made in America" when the product, or any article, unit, or part of the product, has been entirely or substantially made outside of the United States. California courts have construed this statute as requiring that component parts of a product be entirely or substantially made in the United States in order for a "Made in the U.S.A." claim to be permissible. (See, e.g., Colgan v. Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663.) California's "Made in the U.S.A." law protects consumers against false or misleading advertising while at the same time protecting businesses and ensuring that a company that engages in false or misleading advertising does not gain a competitive advantage by doing so. This bill would provide that, for purposes of California law, a product sold in California could carry the label "Made in U.S.A." if it was substantially made, manufactured, or produced in the United States as measured by the following criteria: at AB 890 (Jones) Page 3 of ? least 90 percent of the components, parts, articles, or units of the merchandise were manufactured in the United States; United States manufacturing costs constitute at least 90 percent of the total manufacturing costs for the merchandise; and the merchandise was last substantially transformed or assembled in the United States. This bill is nearly identical to SB 661 (Hill), which was held in this Committee on May 7, 2013. CHANGES TO EXISTING LAW Existing law protects consumers and competitors against unlawful, unfair or fraudulent business acts or practices and unfair, deceptive, untrue or misleading advertising. (Unfair Practices Act, Bus. & Prof. Code Sec. 17200 et seq.) Existing law makes it unlawful for any person, firm, corporation or association, or any employee thereof, to make or disseminate before the public in this state, in any newspaper or other publication or in any other manner or means whatever, any statement concerning personal property which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading." (False Advertising Law, Bus. & Prof. Code Sec. 17500 et seq.) Existing law provides that the following are unfair methods of competition and unfair or deceptive acts or practices: (1) using deceptive representations or designations of geographic origin in connection with goods or services; and (2) misrepresenting the source of goods or services. (Consumer Legal Remedies Act, Civ. Code Sec. 1770.) Existing law makes it unlawful for any person, firm, corporation or association to sell or offer for sale in this State any merchandise on which merchandise or on its container there appears the words "Made in U.S.A." "Made in America," "U. S.A.," or similar words when the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States. (Bus. & Prof. Code Sec. 17533.7.) Existing federal law authorizes the Federal Trade Commission to regulate claims of U.S. origin pursuant to authority granted to it under the Federal Trade Commission Act, which prohibits "unfair or deceptive acts or practices." (15 U.S.C. 45.) AB 890 (Jones) Page 4 of ? Existing federal law requires that a "Made in U.S.A." label be consistent with orders and decisions of the Federal Trade Commission. (15 U.S.C. 45a.) Existing federal policy provides that a product may be labeled as "Made in U.S.A." if the product is all or virtually all made in the United States, however a product using such a label may contain-in a negligible amount-components made outside of the United States. (Federal Trade Commission, Enforcement Policy Statement on U.S. Origin Claims, 62 Fed. Reg. 63756, 63765 (Dec. 2, 1997).) This bill would provide that, for purposes of California's "Made in the U.S.A." law, any merchandise has been substantially made, manufactured, or produced within the United States if it meets all of the following requirements: United States manufacturing costs constitute at least 90 percent of the total manufacturing costs for the merchandise; at least 90 percent of the components, parts, articles, or units of the merchandise were manufactured in the United States; no more than 10 percent of the total manufacturing costs for the merchandise were either incurred outside of the United States as a result of the unavailability of raw materials in the United States, or incurred as the costs of a component, part, article, or unit of the merchandise imported into the United States as a result of the unavailability of the component, part, article, or unit of the merchandise from a domestic manufacturer; no more than 10 percent of the components, parts, articles, or units of the merchandise were manufactured outside of the United States as a result of the unavailability of raw materials in the United States, or the component, part, article, or unit of the merchandise was imported into the United States as a result of the unavailability of the component, part, article, or unit of the merchandise from a domestic manufacturer; and the merchandise was last substantially transformed or assembled in the United States. COMMENT 1. Stated need for the bill The author writes: AB 890 (Jones) Page 5 of ? The inconsistency between federal labeling laws and California law for "Made in America" products has resulted in difficulties for manufacturers because products legally labeled for sale in the other 49 states that find their way into California can't legally be sold here. This unfairly handicaps California businesses, places the retailer and manufacturer at risk, and increases costs to separately label products for sale in California. What is the standard for a product to be called Made in America without qualification? According to the Federal Trade Commission, for a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be "all or virtually all" made in the U.S. What does "all or virtually all" mean? "All or virtually all" means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no - or negligible - foreign content. Why did California establish different criteria? In response to foreign companies taking liberties with "buy American" campaigns, legislation was introduced in 1961 that required 100 [percent] of a product's parts be domestically made. While this was an effective tool in the last century, this is an impractical and discriminatory policy in today's global economy. How does AB 890 compare to the federal standard? AB 890 actually creates a more robust standard than the federal government, yet will provide needed flexibility for most modern companies that make products with many components, some of which are not available in the U.S. Some companies have been permitted to label their products as "Made in America" with just 75 [percent] produced domestically, yet AB 890 has a 90 [percent] criterion. 2. Ensuring consumers get the benefit of their bargain and assuring consumer confidence California law prohibits products from being sold as "Made in AB 890 (Jones) Page 6 of ? U.S.A." or "Made in America" when the product, or any article, unit, or part of the product, has been entirely or substantially made outside of the United States. This bill seeks to expand the use of the "Made in U.S.A." label by specifically allowing the label to be used when, in fact, only 90 percent of the product is made in the U.S.A. The proposed standard is nearly identical to SB 661 (Hill), which was held in this Committee less than two months ago due to concerns about weakening California's strong consumer protection laws. Those strong statutes on false advertising and misrepresentation are intended to protect consumers and competitors. The statutes promote fair competition and help to ensure that consumers have the information that they need to make informed purchasing decisions. Many consumers support American jobs and industry and are willing to pay more for a product if they know that it is made in the United States. The key in ensuring that consumers get the benefit of their bargain-i.e., they get what they pay for-is to make sure that a label stating "Made in U.S.A." is accurate and truthful. Consumers have indicated that this is important to them. For example, in 1997, when the Federal Trade Commission (FTC) considered revising its "Proposed Guides for the Use of U.S. Origin Claims" in a way that would have weakened the standard, numerous commenters indicated that labels matter. One commenter noted: If a product is only partially made in our Country, I want to know. I do not wish to purchase items made in other countries and falsely labeled "Made in America." I want the entire truth on the label. I don't want to be tricked into buying an item I think is made here when in fact it is not. Another commenter wrote, "The concept of 'Made in the U.S.A.' has been specific and definite for the last 50 years. Please leave it as it is. If manufacturers want to say an item is 'Made in the U.S.A.' then make sure it is exactly that. 'Made in the U.S.A.' should mean that an item is 100 [percent] manufactured in the United States of America and not in another country." In January 2011, the California Supreme Court further described the importance of truthful and accurate claims of origin, stating: AB 890 (Jones) Page 7 of ? In particular, to some consumers, the "Made in U.S.A." label matters. A range of motivations may fuel this preference, from the desire to support domestic jobs, to beliefs about quality, to concerns about overseas environmental or labor conditions, to simple patriotism. The Legislature has recognized the materiality of this representation by specifically outlawing deceptive and fraudulent "Made in America" representations. . . . The object of section 17533.7 "is to protect consumers from being misled when they purchase products in the belief that they are advancing the interests of the United States and its industries and workers." (Sen. Holmdahl, sponsor ? letter to Governor Brown, May 23, 1961) ['There are many Americans who feel that American-made articles are of higher quality, and who rely on the "Made in U.S.A." label'].) . . ." The Legislature evidently recognized some companies were using or might be tempted to use inaccurate "Made in America" labeling, that some consumers might be deceived by and rely on it, and that consumers and competitors who honestly made their wares in the United States and marketed them as such were being or would be harmed. (Kwikset Corp. v. Benson (2011) 51 Cal.4th 310, 329; citations omitted.) The policy question, thus, raised by this bill is whether, by adopting a weaker standard that could result in less truthful and less accurate "Made in U.S.A." labels, the bill would impair a consumer's ability to rely on labels and to make fully informed decisions. In opposition, the Consumer Federation of California (CFC) writes: As amended on June 14, AB 890 deleted the requirement of California law that any product or product unit advertised for sale in California bearing a "Made in USA" or similar label must be substantially manufactured in the United States. It replaces this truth in advertising standard with a new standard allowing a product to be lawfully offered for sale in our state bearing a "Made in USA" or "Made in America" label if 90 [percent] of the cost of the product's content is domestic and if the final transformation of the product occurred in the USA. This would represent a substantial weakening of California's "Made in the USA" law, which requires products offered for sale in our state as "Made in America" or "Made in the USA" to meet stringent domestic content requirements. California's law has protected consumers from bogus claims that products are made in the USA when, in fact they are partially made in the USA and include AB 890 (Jones) Page 8 of ? non-domestic content. . . . It would be false advertising to offer a product for sale with a "kosher" label if 10 [percent] of the product is pork, or as "vegan" if 10 [percent] of the product is meat or cheese, or as a particular year and vintage of wine if 10 [percent] of the content were grapes of another year and another region. We believe that it is equally false advertising to label a product as "Made in the USA" if 10 [percent] of the product's content or value is not American. The Kwikset Court pointed out that an economic loss to a consumer occurs if the consumer relied on the truthfulness of the label in deciding to purchase a product that he or she would not have purchased had it borne an accurate content label. Accordingly, the practical effect of this bill is to allow a company to claim that a product is "Made in the U.S.A." when that statement is not entirely true. SHOULD CALIFORNIA'S CONSUMER PROTECTION LAWS BE WEAKENED? 3. Bill would adopt weaker standard for "Made in U.S.A." claims Existing federal law requires that a "Made in U.S.A." label be consistent with orders and decisions of the Federal Trade Commission (FTC), which provides that a product may be labeled as "Made in U.S.A." if the product is all or virtually all made in the United States. The FTC, in its Enforcement Policy Statement on U.S. Origin Claims, rejected adopting a percentage benchmark approach to determining whether a product is all or virtually all made in the United States, and declined to craft any specific "bright-line" standard for evaluating U.S. origin claims, stating instead that "[g]iven the complex and varied factual scenarios that present themselves in this area, and the wide range of product for which U.S. origin claims may be made, there are necessarily issues that will continue to be more appropriately resolved on a case-by-case basis." (Federal Trade Commission, Enforcement Policy Statement on U.S. Origin Claims, 62 Fed. Reg. 63756, 63765 (Dec. 2, 1997).) This bill would provide that, for purposes of California law, a product sold in California could carry the label "Made in U.S.A." if it was substantially made, manufactured, or produced in the United States, and meets all of the following requirements: United States manufacturing costs constitute at least 90 AB 890 (Jones) Page 9 of ? percent of the total manufacturing costs for the merchandise; at least 90 percent of the components, parts, articles, or units of the merchandise were manufactured in the United States; no more than 10 percent of the total manufacturing costs for the merchandise were either incurred outside of the United States as a result of the unavailability of raw materials in the United States, or incurred as the costs of a component, part, article, or unit of the merchandise imported into the United States as a result of the unavailability of the component, part, article, or unit of the merchandise from a domestic manufacturer; no more than 10 percent of the components, parts, articles, or units of the merchandise were manufactured outside of the United States as a result of the unavailability of raw materials in the United States, or the component, part, article, or unit of the merchandise was imported into the United States as a result of the unavailability of the component, part, article, or unit of the merchandise from a domestic manufacturer; and the merchandise was last substantially transformed or assembled in the United States. The California Retailers Association, in support, writes: California's statutory 100 percent standard disadvantages California-based companies who are making every effort to meet the state's stricter labeling standard but circumstances such as the unavailability of the component parts has prohibited them from doing so. AB 890 contemplates some of the challenges in the law and proposes a reasonable change to our standard that will level the playing field for California-based companies. The "Made in USA" label can serve as a valuable marketing tool for consumers who want to support domestically based companies and jobs. All states, except for California, require an "all or virtually all" standard, allowing "Made in USA" labels to be used if the product's total [foreign] manufacturing costs are negligible and are insignificant parts of the final product. California has a unique standard that exceeds that of all 49 other states. An unintended consequence of California's strict standard is that it has robbed California-based companies of the opportunity to utilize these labels and compete with out-of-state companies. This has created a perverse incentive for companies to relocate to other states which rather than supporting AB 890 (Jones) Page 10 of ? locally-based jobs, would have the opposite effect of driving that activity to another state. Staff notes that the practical effect of this bill is to permit products sold in California to be labeled as "Made in the U.S.A.," when, in fact, that statement is not 100 percent true. It should also be noted that the proposed standard may not even satisfy the federal standard, which, as stated above, does not include a specific percentage of U.S. and foreign-made parts as a measurement benchmark. In fact, when the FTC reviewed the merits of providing a domestic content safe harbor in 1997, it rejected the idea and decided at that time to retain the "all or virtually all" standard, observing that "[t]he vast majority of those commenting, including, significantly, a large number of individual consumers as well as a number of U.S. manufacturers, opposed the proposed standard, perceiving it, contrary to the Commission's intent, as significantly weakening the standard for "Made in USA" claims." (Federal Trade Commission, Enforcement Policy Statement on U.S. Origin Claims, 62 Fed. Reg. 63756, 63764 (Dec. 2, 1997).) The policy question raised by this bill is whether it is appropriate to provide a lesser standard under California law for products labeled "Made in U.S.A." than that used in federal law. In general, the legislative preference has been to ensure that California laws are strong and sufficiently protect consumers, in this case, against unfair and deceptive business practices, including false or misleading advertising. The effect of the new standard created by this bill would be to essentially define California law in a way that may be less protective of consumers than federal law. 4. Bill could have the effect of increasing the percentage of foreign labor or foreign materials in goods and products that have the "Made in U.S.A." label As noted in Comment 3, supporters of this bill state that existing law disincentivizes companies from making their products in the United States, and California in particular, because the standard is so strict. However, staff notes that because the "Made in U.S.A." label can have such marketing significance, existing law arguably incentivizes companies to make their products here in the United States, thus creating domestic jobs. As the California Supreme Court noted in the Kwikset case, "[s]imply stated: labels matter:" AB 890 (Jones) Page 11 of ? The marketing industry is based on the premise that labels matter, that consumers will choose one product over another similar product based on its label and various tangible and intangible qualities they may come to associate with a particular source. An entire body of law, trademark law (see, e.g., 15 U.S.C. § 1051 et seq. [Lanham Act]), exists to protect commercial and consumer interests in accurate label representations as to source, because consumers rely on the accuracy of those representations in making their buying decisions. (Kwikset Corp. v. Benson (2011) 51 Cal.4th 310, 328; citations omitted.) Given that this bill would allow companies to use up to 10 percent foreign-made components and still derive the benefits of a "Made in U.S.A." label, this bill would reduce the current incentive for manufacturers to find a way to source 100 percent of their components in the United States, thus increasing the percentage of foreign labor or foreign materials in these goods and products. A key policy question, therefore, is whether California should use its truth in advertising laws to incentivize businesses to manufacture products domestically, or whether it should relax labeling standards and officially embrace a certain threshold of foreign-sourced components in "Made in U.S.A." products. Creating percentage exemptions of the sort envisioned in this bill might undercut existing market incentives that drive domestic production and keep businesses from surrendering to cheap foreign labor costs or lax regulatory environments, and, for those products that are not or have not historically been produced in the United States, might defeat market pressure to innovate and start such production domestically. 5. Existing unfair competition laws protect businesses as well California's laws against false and deceptive advertising also protect businesses by ensuring that unfair and deceptive business practices do not take hold in the marketplace. As a result, the laws incentivize businesses to engage in truthful and accurate advertising, which is critical to ensure that businesses play on a level playing field. This bill would potentially upend that playing field so that a business that found a way to make 100 percent of their product in the United States would be at a competitive disadvantage with a competitor who decided to outsource ten percent of their product's components. AB 890 (Jones) Page 12 of ? Furthermore, this bill is potentially more confusing and deceptive for businesses relying on the new California standard because their products may be held in violation of the federal standard. Although the author argues that this bill is intended to provide uniformity for companies selling products in all 50 states, this bill would create a standard different from that of the FTC, on which other states may be relying. Finally, this bill would not give California businesses a competitive advantage based on labeling costs any more so than existing law. As the Consumer Federation of California, in opposition, states: California's labeling law creates a level playing field for all domestic manufacturers, and creates no disadvantage to manufacturers located in our state. The law applies to every product "offered for sale" in our state, regardless of the location where the product was manufactured. A business manufacturing products in Nevada, Mississippi or another state that does not have a comparable labeling law gains no labeling advantage over a California-based manufacturer, should that out-of-state manufacturer offer its products for sale in California. Similarly, a California manufacturer has no labeling disadvantage if it is manufacturing products that will be offered for sale only outside our state. 6. Existing law already permits businesses to label their products with a qualified claim The author asserts that the need for this bill arises because a business may manufacture nearly all of its product in the United States but if one component of that product is made outside of the United States, California law would prohibit the "Made in U.S.A." label. The author writes: The inconsistency between federal labeling laws and California law for "Made in America" products has resulted in difficulties for manufacturers because products legally labeled for sale in the other 49 states that find their way into California can't legally be sold here. This unfairly handicaps California businesses, places the retailer and manufacturer at risk, and increases costs to separately label products for sale in California. Although the author correctly asserts that a product not meeting AB 890 (Jones) Page 13 of ? California's high standard for labeling it "Made in the U.S.A." could be required to adopt separate labeling for products sold in the state, it is important to note that there is nothing in existing law which would preclude these businesses from employing a truthful qualified claim for its products which contain some foreign parts. As the Consumer Attorneys of California, in opposition, state: Claims that truthfully say "90 percent Made in the U.S.A.," "Assembled in the U.S.A.," "Assembled by California workers" are all fine. Existing California law only prevents the dilution of the pure "Made in U.S.A." brand . . . A plethora of alternative labels can be used such as "Assembled in America," "Proudly Made in USA from Domestic and Globally Sourced Component Parts," "Built in America," etc. Qualified claims made under existing law accurately inform consumers that, although the product was mostly made in the United States, parts of the product were made outside the country. A manufacturer that labels their product with a qualified claim is able to gain the advantage of advertising the degree to which their product was truly "Made in the U.S.A." without deceiving the consumer. Further, a qualified claim would arguably satisfy both California and federal law, allowing a manufacturer to uniformly label a product offered for sale in all 50 states. 7. Ambiguity in proposed amendments to California's "Made in the U.S.A." law Through this bill, the author intends to set out certain "bright-line" standards in California law establishing with reasonable certainty when a product can or cannot lawfully bear a "Made in the U.S.A." label. According to the author: AB 890 asserts that a product can qualify as "Made in America" if 90 [percent] of the components of the merchandise were made in the United States, and if the manufacturing costs constitute 90 [percent] of the total manufacturing costs. The bill stipulates that no more than 10 [percent] of the components of the merchandise can be manufactured outside the U.S. and this must result from the unavailability of domestic raw materials. Also, parts of the merchandise imported into the United States must result from the unavailability of said parts. The bill makes an AB 890 (Jones) Page 14 of ? important specification that would prohibit a manufacturer from potentially achieving the 90 [percent] benchmark, but then securing 10 [percent] of the components from outside the U.S, even if domestically available. Despite this assertion, it does not appear that this bill establishes clear standards for assessing when these "bright-line" standards have been met. As the Del Mar Law Group states in opposition, "the term 'manufacturing costs' is not defined . . . [f]or example, a company could include its general overhead, CEO salary, etc. as a per unit calculation of manufacturing costs," thereby allowing more foreign manufacturing costs to be calculated into the 10 percent benchmark. Staff similarly notes that the provision stating that 90 percent of components must be made in the United States in order to label a product "Made in America" is also ambiguous. It fails to specify both whether this measurement is taken by weight, volume, or total number of components in the final product, as well as how far this benchmark extends back in the manufacturing process, leaving unclear whether the standard would require 90 percent of raw materials to be domestically produced, or some lesser standard based on intermediate domestically sourced materials. The ambiguity that comes with adopting "bright-line" standards for evaluating "Made in America" claims is precisely what prompted the FTC to shy away from articulating such standards and opt instead for a "case-by-case" approach in its Enforcement Policy Statement on U.S. Origin Claims, "[g]iven the complex and varied factual scenarios that present themselves in this area, and the wide range of product for which U.S. origin claims may be made." (See Federal Trade Commission, Enforcement Policy Statement on U.S. Origin Claims, 62 Fed. Reg. 63756, 63765 (Dec. 2, 1997).) 8. Pending litigation In the past, this Committee has raised concerns about bills that interfere with pending litigation. Any such interference could result in a direct financial windfall to a private party, prevent a court from deciding an action based upon the laws in place at the time the cause of action accrued, or create a situation where the Legislative branch is used to circumvent the AB 890 (Jones) Page 15 of ? discretion and independence of the Judicial branch. The Committee has received notice of at least five pending litigation matters against various out-of-state defendants that allegedly falsely labeled products for sale in California as "Made in the U.S.A." in violation of existing state law. This bill does not specify how it would impact pending litigation. Support : Bulldog LED Lighting; California Retailers Association; Lifetime Products, Inc.; National Federation of Independent Business Opposition : California Conference of Machinists; California Labor Federation; California Teamsters Public Affairs Council; Consumer Attorneys of California; Consumer Federation of California; Del Mar Law Group; United Food and Commercial Workers Union, Western States Council HISTORY Source : Author Related Pending Legislation : SB 661 (Hill) would amend California's "Made in the U.S.A." law to make it lawful to advertise a product as made or manufactured in the United States if United States manufacturing costs constitute 90 percent of the total manufacturing costs for the merchandise, and if the merchandise was last substantially transformed or assembled in the United States. This bill would also create a rebuttable presumption that merchandise was made or manufactured in the United States if it were so certified by an independent third-party verification organization. This bill was held in the Senate Judiciary Committee. Prior Legislation : AB 858 (Jones, 2012) would have amended California's "Made in the U.S.A." law to specify that merchandise has been entirely or substantially made, manufactured, or produced within the United States if the merchandise is a product that is made all or virtually all in the United States, within the meaning of the Enforcement Policy Statement on U.S. Origin Claims issued by the Federal Trade Commission (62 Fed.Reg. 63756 (Dec. 2, 1997)). This bill failed passage out of the Senate Judiciary Committee. ABX6 8 (Beall, 2010) which was identical to AB 858, was AB 890 (Jones) Page 16 of ? introduced in the Sixth Extraordinary Session but was never referred to committee. SB 1004 (Holmdahl, Ch. 676, Stats. 1961) codified California's "Made in the U.S.A." law, making it unlawful for any person, firm, corporation, or association to sell or offer for sale any merchandise that advertises itself as being made or manufactured in the United States when any article, unit, or part of the merchandise has been entirely or substantially made, manufactured, or produced outside of the United States. Prior Vote : Assembly Committee on Business, Professions and Consumer Protection (Ayes 7, Noes 1) Assembly Floor (Ayes 50, Noes 18) **************