BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2820


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          Date of Hearing:  May 4, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2820 (Chiu) - As Amended March 15, 2016


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:


          This bill revises the definition of state of emergency and local  
          emergency for purposes of criminal price gouging to include  
          various other natural and manmade disasters.  It specifies that  
          criminal price gouging includes rental of any housing with an  
          initial lease of up to one year for purposes of criminal price  
          gouging. And it includes the transportation of persons and  
          towing services in the criminal price gouging during a declared  








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          emergency.  


          FISCAL EFFECT:


          As violation of the above is a misdemeanor, minor  
          nonreimbursable costs for incarceration, offset to a degree by  
          fine revenue.


          COMMENTS:


          1)Background.  Current law provides that upon the declaration of  
            a local emergency resulting from an earthquake, flood, fire,  
            riot, storm, or natural or manmade disaster by the executive  
            officer of any county, city, or city and county, and for a  
            period of 30 days following that declaration, it is unlawful  
            for a person, or entity to sell or offer to sell any consumer  
            food items or goods, goods or services used for emergency  
            cleanup, emergency supplies, medical supplies, home heating  
            oil, building materials, housing (month to month),  
            transportation, freight, and storage services, or gasoline or  
            other motor fuels for a price of more than 10 percent above  
            the price charged by that person for those goods or services  
            immediately prior to the proclamation of emergency.   However,  
            the increase in price may be allowable if the providers can  
            demonstrate their cost was also increased as result of the  
            circumstances.


            Violation of current law is a misdemeanor and is punishable by  
            up to one year in county jail and/or a fine of up to $10,000. 


          2)Purpose.  According to the author, "Following the devastating  
            Aliso Canyon gas leak, unscrupulous individuals took advantage  
            of a tragic loophole in current law and raised the prices of  








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            housing and services.  AB 2820 updates current law to ensure  
            that whether the disaster prompting the declaration of a state  
            of emergency is natural or manmade, familiar or totally  
            unprecedented, consumers across the state will be protected  
            from excessive price increases.  Disaster victims should not  
            be victimized twice."

            The existing statute has different definitions of what  
            constitutes a triggering emergency depending on the type of  
            goods or services being sold.  For example, the prohibition  
            against increasing hotel or motel prices more than 10% does  
            not apply if the emergency is a result of a manmade disaster.   
            In contrast, the prohibition on price increases for goods such  
            as food, medical supplies, housing, or gasoline includes both  
            natural and manmade disasters.  This bill provides a  
            consistent definition of emergency throughout the statute,  
            including both natural and manmade disasters.  AB 2820 bill  
            applies the definitions consistently within the existing  
            statute prohibiting price gouging during a declared emergency.  
             

          3)Support.  According to The Consumer Attorneys of California,  
            "The need for this bill is highlighted by the aftermath of the  
            Aliso Canyon gas leak.  Following the devastating leak,  
            unscrupulous individuals took advantage of a traffic loophole  
            in current law and raised the prices of short-term rentals.   
            Current law protects those with month-to-month leases, but  
            does not apply if the initial lease is longer than 30 days.   
            It also does not apply to hotel and motel operators if the  
            disaster is man-made rather than natural, leaving families  
            vulnerable to exploitation. 



          Analysis Prepared by:Pedro Reyes / APPR. / (916)  
          319-2081











                                                                    AB 2820


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