BILL ANALYSIS Ó
SB 272
Page 1
Date of Hearing: June 25, 2013
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Richard S. Gordon, Chair
SB 272 (Corbett) - As Amended: May 7, 2013
SENATE VOTE : 37-0
SUBJECT : Advertising and solicitations: government and
military endorsements.
SUMMARY : Restricts the use of military or government terms,
symbols, and content that reasonably could be interpreted or
construed as implying connection, approval, or endorsement of
any product or service. Specifically, this bill :
1)Declares it unlawful, unless otherwise specified, for any
person, firm, corporation, or association that is a
nongovernmental entity to use a seal, emblem, insignia, trade
or brand name, or any other term, symbol, or content that
reasonably could be interpreted or construed as implying any
federal, state, or local government, military veteran entity,
or military or veteran service organization connection,
approval, or endorsement of any product or service, including,
but not limited to, any financial product, goods, or services,
by any means, including, but not limited to, a mailing,
electronic message, Internet Web site, periodical, or
television commercial disseminated in this state.
2)Permits any person, firm, corporation, or association that is
a nongovernmental entity to advertise or promote any event,
presentation, seminar, workshop, or other public gathering
using a seal, emblem, insignia, trade or brand name, or any
other term, symbol, or content, if the person, firm,
corporation, or association that is a nongovernmental entity
has an expressed connection with, or the approval or
endorsement of, a federal, state, or local government,
military veteran entity, or military or veteran service
organization, as specified.
3)Recasts provisions permitting any person, firm, corporation,
or association that is a nongovernmental entity to solicit the
purchase of or payment for a product or service, or solicit
the contribution of funds or membership fees, by any means,
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including, but not limited to, a mailing, electronic message,
Internet Web site, periodical, or television commercial
disseminated in this state, using a seal, emblem, insignia,
trade or brand name, or any other term, symbol, or content
implying the connection, approval, or endorsement of any
federal, state, or local government, military veteran entity,
or military or veteran service organization, if either;
a) The nongovernmental entity has an expressed connection
with, or the approval or endorsement of, a federal, state,
or local government entity; or,
b) The solicitation provides specified disclosures.
4)Permits the use of a government or military-style indicator in
a television commercial in California if the solicitation
conspicuously displays the following disclosure at the top of
the television screen for the entire duration of the
television commercial:
"THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED OR ENDORSED BY
ANY GOVERNMENTAL AGENCY, AND THIS OFFER IS NOT BEING MADE BY
AN AGENCY OF THE GOVERNMENT."
5)Prohibits, for purposes of the provisions related to
solicitations, the use of seals, emblems, insignia, trade or
brand name, or any other term, symbol, or content of the
United States Department of Veterans Affairs, the Department
of Veterans Affairs, the federal and state military, military
veteran entities, and military or veteran service
organizations.
6)States that no reimbursement is required by this act pursuant
to Section 6 of Article XIIIB of the California Constitution
because the only costs that may be incurred by a local agency
or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the
meaning of Section 17556 of the Government Code, or changes
the definition of a crime within the meaning of Section 6 of
Article XIIIB of the California Constitution.
7)Makes other clarifying and technical amendments.
EXISTING LAW :
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1)Prohibits any person, firm, corporation or association that is
a nongovernmental entity to solicit information, or solicit
the purchase of or payment for a product or service or to
solicit the contribution of funds or membership fees, by means
of a mailing, electronic message or Internet website that
contains a seal, insignia, trade or brand name or any other
term or symbol that reasonably could be interpreted or
construed as implying any federal, state or local government
connection, approval or endorsement, unless:
(Business and Professions Code (BPC) 17533.6)
a) The nongovernmental entity has an expressed connection
with, or the approval or endorsement of, a state or local
government entity, if permitted by law;
b) The solicitation meets the following requirements:
i) The solicitation conspicuously displays the
following notice: "THIS PRODUCT OR SERVICE HAS NOT BEEN
APPROVED OR ENDORSED BY ANY GOVERNMENT AGENCY, AND THIS
OFFER IS NOT BEING MADE BY AN AGENCY OF THE GOVERNMENT;"
ii) In the case of a mail solicitation, the
envelope or outside cover or wrapper in which the matter
is mailed conspicuously displays the following notice:
"THIS IS NOT A GOVERNMENT DOCUMENT;"
iii) The disclosures in i) and ii) above are not
preceded, followed or surrounded by symbols, terms or
other content that make them inconspicuous;
iv) The solicitation does not use a title or trade
or brand name that could be interpreted as implying any
federal, state or local government connection;
v) The solicitation does not specify a date or time
period when payment is due; and,
vi) The solicitation does not state that payment is
mandatory.
1)Provides that a violation of these solicitation requirements is
a misdemeanor punishable by up to six months in jail, a fine
of up to $2500, or both. (BPC 17533.6)
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2)Provides a private right of action to any person harmed as a
result of a violation of these solicitation requirements.
(BPC 17533.6)
3)Defines "conspicuous" disclosure or "conspicuously" displayed
as not less than 12-point boldface font type in capital
letters that is at least 2-point boldface font type sizes
larger than the next largest print on the envelope, outside
cover or wrapper and in contrasting type, layout, font or
color in a manner that clearly calls attention to the
language. (BPC 17533.6)
4)Provides that any person who falsely represents himself or
herself as a veteran or ex-serviceman of any war in which the
United States was engaged, in connection with the soliciting
of aid or the sale or attempted sale of any property, is
guilty of a misdemeanor. Provides that any person who falsely
claims, or presents himself or herself, to be a veteran or
member of the Armed Forces of the United States, with the
intent to defraud, is guilty of a misdemeanor. (Penal Code
(PC) Section 532b (a) and (b))
5)Provides that any person who solicits or attempts to solicit or
receives money or property of any kind for a charitable,
religious or eleemosynary purpose and who, directly or
indirectly, makes, utters, or delivers, either orally or in
writing, an unqualified statement of fact concerning the
purpose or organization for which the money or property is
solicited or received, or concerning the cost and expense of
solicitation or the manner in which the money or property or
any part thereof is to be used, which statement is in fact
false and was made, uttered, or delivered by that person
either willfully and with knowledge of its falsity or
negligently without due consideration of those facts which by
the use of ordinary care he or she should have known, is
guilty of a misdemeanor, and is punishable by imprisonment in
the county jail for not more than one year, by a fine not
exceeding five thousand dollars ($5,000), or both. (PC
532(d))
FISCAL EFFECT : Unknown
COMMENTS :
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1)Purpose of this bill . This bill expands and clarifies
existing law restricting the use of government and military
symbols in advertising and solicitation, with the aim of
reducing misleading communications to consumers. This bill is
sponsored by the California Advocates for Nursing Home Reform;
AMVETS-Department of California; Veterans of Foreign Wars
(VFW)-Department of California; and Vietnam Veterans of
America-California State Council.
2)Author's statement . According to the author, "SB 272 is
needed because [as] our service men and women return from
deployment and our veteran population increases, some
unscrupulous businesses and nongovernmental entities are
targeting veterans and increasingly trying to sell their
products or services or promote events by appearing to be
connected to the military. They establish the connection by
featuring military emblems or military department insignias,
or both, on their promotional materials and Internet Web sites
without receiving permission from the U.S. Navy, Marines, and
Coast Guard or Department of Defense and Department of
Veterans Affairs."
3)Scams targeting veterans and servicemembers . This bill seeks
to protect consumers in general, and servicemembers and
veterans in particular, from potentially being misled or
defrauded into purchasing services or goods based on the use
of certain identifying seals and emblems that falsely imply a
connection to a military or veterans group.
According to the Census Bureau, California has two million
former servicemen and women, the highest number of any state
in the country, and scams targeting older adults and veterans
are on the rise. The Better Business Bureau has recently been
alerting service members, veterans and their families to the
following scams:
a) High-priced loans - Purveyors of loans may make
guarantees, promise instant approval or say their loans are
available without credit checks, but the loans often
include hidden fees or extremely high interest rates.
Legitimate lenders generally will not guarantee a loan
before application, and loans that require upfront fees are
usually scams.
b) Veterans' benefits buyout plans - Cash payments may be
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offered in exchange for a disabled veteran's future
benefits or pension payments. However, the cash is just 30
to 40 percent of what the veteran is entitled to.
c) Fake rental properties - Stolen photos of legitimate
rental properties may be used in ads that promise military
discounts or other incentives. Service members must pay
security payments or fees via wire transfer to obtain a
key. In the end, they receive nothing.
d) Phony jury duty summons - A caller claiming to work for
the local court system tells the service member that he or
she did not show up for jury duty and now has a warrant out
for their arrest. When the victim says they never got a
summons, the caller will ask for a credit card number or
Social Security number to clear up the matter.
e) Misleading car sales - Websites posting classified ads
will offer false discounts for military personnel or claim
to be from service members who need to sell their vehicle
fast since they are being deployed. Payment will be
requested via wire transfer, but either no vehicle arrives
or it has undisclosed problems.
f) Expensive life insurance policies - Members of the
military often are targets of high-pressure sales pitches
that offer unnecessary, expensive life insurance policies.
Solicitors may also make false statements regarding the
benefits that these policies offer.
SB 272 would make it unlawful for nongovernmental entities
without a valid connection to the government or military from
falsely claiming or implying a military or veterans
organization endorsement or connection.
4)Suggested Committee amendment . The current version of the
bill is constructed such that it imposes a broad ban on the
"use" of specified symbols or names that could be interpreted
or construed as implying a connection, approval or endorsement
by a government entity or veterans' group, and then provides
exemptions to that ban for advertising and promotion of public
gatherings, as well as certain kinds of solicitations, when
there is an expressed connection between the user and the
governmental or veterans entity. However, because the broad
ban itself does not contain an exemption where there is an
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expressed connection, it is possible that situations could
arise where one might legitimately wish to use those
military/veteran symbols or names for reasons other than
advertising, promotion or solicitation - such as licensing
deals for the production and sale of branded merchandise.
The author may wish to consider adding the following
"expressed connection" exception to the broad ban added by
this bill, similar to that created in subdivision (b):
Amend Section 1 (BPC 17533.6(a) to read: "(a) Except as
described in subdivisions (b) and (c), it is unlawful for
any person, firm, corporation, or association that is a
nongovernmental entity to use a seal, emblem, insignia,
trade or brand name, or any other term, symbol, or content
that reasonably could be interpreted or construed as
implying any federal, state, or local government, military
veteran entity, or military or veteran service organization
connection, approval, or endorsement of any product or
service, including, but not limited to, any financial
product, goods, or services, by any means, including, but
not limited to, a mailing, electronic message, Internet Web
site, periodical, or television commercial disseminated in
this state , unless the nongovernmental entity has an
expressed connection with, or the approval or endorsement
of, a federal, state, or local government, military veteran
entity, or military or veteran service organization ."
5)Previous legislation . SB 1170 (Leno) Chapter 653, Statutes of
2012, expanded consumer protections governing the sale of
insurance to any person 65 years of age or older and added
specific protections for senior veterans.
SB 1184 (Corbett) Chapter 222, Statutes of 2012, prohibited an
insurance agent from providing assistance to a senior in
obtaining veterans benefits through government programs,
unless the agent maintains procedural safeguards designed to
ensure that the agent or broker transacting insurance has no
direct financial incentive to refer the policyholder or
purchaser to any government benefit program.
SB 180 (Corbett) Chapter 79, Statutes of 2011, prohibited a
person from charging or receiving an unreasonable fee to
prepare, aid, or advise certain persons in procuring,
maintaining or securing public social services, including
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activities and functions administered or supervised by the
United States Department of Veterans Affairs or the California
Department of Veterans Affairs, including pension benefits.
AB 75 (Hill) Chapter 269, Statutes of 2011, specified
disclosure requirements for solicitations that could be
construed or interpreted as involving a governmental entity.
REGISTERED SUPPORT / OPPOSITION :
Support
AMVETS - Department of California (sponsor)
California Advocates for Nursing Home Reform (sponsor)
VFW - Department of California (sponsor)
Vietnam Veterans of America - California State Council (sponsor)
American Legion-Department of California
California Association of County Veterans Service Officers
California Commission on Aging
California Long-Term Care Ombudsman Association
California State Commanders Veterans Council
Consumer Federation of California
Opposition
None on file
Analysis Prepared by : Sarah Huchel / B.,P. & C.P. / (916)
319-3301