BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                 SB 272
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         SENATE THIRD READING
         SB 272 (Corbett)
         As Amended  July 1, 2013
         Majority vote 

          SENATE VOTE  :37-0  
          
          BUSINESS & PROFESSIONS     13-0 APPROPRIATIONS      17-0        
          
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         |Ayes:|Gordon, Jones, Bocanegra, |Ayes:|Gatto, Harkey, Bigelow,   |
         |     |Campos, Dickinson,        |     |Bocanegra, Bradford, Ian  |
         |     |Bonilla, Hagman, Holden,  |     |Calderon, Campos,         |
         |     |Maienschein, Mullin,      |     |Donnelly, Eggman, Gomez,  |
         |     |Skinner, Ting, Wilk       |     |Hall, Holden, Linder,     |
         |     |                          |     |Pan, Quirk, Wagner, Weber |
         |     |                          |     |                          |
          ----------------------------------------------------------------- 
          SUMMARY  :  Restricts the use of military or government terms,  
         symbols, and content that reasonably could be interpreted or  
         construed as implying a 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, by any means  
           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.

         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  








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           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,  
           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 California 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 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, changes the  
           penalty for a crime or infraction, or changes the definition of  
           a crime.









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         7)Makes other clarifying and technical amendments.

          FISCAL EFFECT  :  According to Assembly Appropriations Committee,  
         there are no significant costs associated with this legislation. 

          COMMENTS  :   

          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  








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              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  
              offered in exchange for a disabled veteran's future benefits  
              or pension payments.  However, the cash is just 30-40% 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 - Web sites 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.

           This bill 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. 


          Analysis Prepared by  :    Sarah Huchel / B.,P. & C.P. / (916)  








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         319-3301 


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