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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