BILL ANALYSIS Ó SB 272 Page 1 SENATE THIRD READING SB 272 (Corbett) As Amended July 1, 2013 Majority vote SENATE VOTE :37-0 BUSINESS & PROFESSIONS 13-0 APPROPRIATIONS 17-0 ----------------------------------------------------------------- |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 SB 272 Page 2 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. SB 272 Page 3 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 SB 272 Page 4 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) SB 272 Page 5 319-3301 FN: 0001889