BILL ANALYSIS Ó AB 2820 Page 1 ASSEMBLY THIRD READING AB 2820 (Chiu) As Amended March 15, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Public Safety |7-0 |Jones-Sawyer, | | | | |Melendez, Lackey, | | | | |Lopez, Low, Quirk, | | | | |Santiago | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |19-1 |Gonzalez, Bigelow, |Obernolte | | | |Bloom, Bonilla, | | | | |Bonta, Calderon, | | | | |Chang, Daly, Eggman, | | | | |Gallagher, Eduardo | | | | |Garcia, McCarty, | | | | |Holden, Jones, Quirk, | | | | |Santiago, Wagner, | | | | |Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ AB 2820 Page 2 SUMMARY: Revises the definition of state of emergency and local emergency for purposes of criminal price gouging. 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. Includes the transportation of persons and towing services in the criminal price gouging during a declared emergency. Specifically, this bill: 1)Revises the definition of a state of emergency to mean a natural or manmade disaster or emergency caused by conditions such as, but not limited to, air pollution, earthquake, fire, flood, storm, epidemic, riot, drought, sudden and severe energy shortage, plant or animal infestation or disease, for which a state of emergency has been declared by the President of the United States or the Governor of California. 2)Revises the definition of a local emergency to mean a natural or manmade disaster or emergency caused by conditions such as, but not limited to, air pollution, earthquake, fire, flood, storm, epidemic, riot, drought, sudden and severe energy shortage, plant or animal infestation or disease, for which a local emergency has been declared by an official, board, or governing body vested with authority to make such a declaration in any city, county, or city and county in California. 3)Applies the definitions above, throughout the criminal price gouging statute. 4)Includes the transportation of persons and towing services in the crime of price gouging during a declared emergency. 5)Specifies that criminal price gouging during a declared emergency includes any rental housing with an initial lease term of up to one year. EXISTING LAW: AB 2820 Page 3 1)Provides that upon the declaration of a state of emergency resulting from an earthquake, flood, fire, riot, storm, or natural or manmade disaster declared by the President of the United States or the Governor, or 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, contractor, business, or other 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, transportation, freight, and storage services, or gasoline or other motor fuels for a price of more than 10% above the price charged by that person for those goods or services immediately prior to the proclamation of emergency. 2)States that upon the declaration of a state of emergency resulting from an earthquake, flood, fire, riot, or storm declared by the President of the United States or the Governor, or upon the declaration of a local emergency resulting from an earthquake, flood, fire, riot, or storm by the executive officer of any county, city, or city and county, and for a period of 180 days following that declaration, it is unlawful for a contractor to sell or offer to sell any repair or reconstruction services or any services used in emergency cleanup for a price of more than 10% above the price charged by that person for those services immediately prior to the proclamation of emergency. 3)Specifies that upon the proclamation of a state of emergency resulting from an earthquake, flood, fire, riot, storm, or other natural disaster declared by the President of the United States or the Governor, or upon the declaration of a local emergency resulting from an earthquake, flood, fire, riot, AB 2820 Page 4 storm, or other natural disaster by the executive officer of any county, city, or city and county, and for a period of 30 days following that proclamation or declaration, it is unlawful for an owner or operator of a hotel or motel to increase the hotel or motel's regular rates, as advertised immediately prior to the proclamation or declaration of emergency, by more than 10%. 4)Specifies that, a greater price increase for the goods and services, mentioned above, is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed by specified circumstances. 5)Provides that time frame prohibiting specified price increases may be extended for additional 30-day periods by a local legislative body or the California Legislature, if deemed necessary to protect the lives, property, or welfare of the citizens. 6)States that the conduct described above is a misdemeanor punishable by imprisonment in a county jail for a period not exceeding one year, or by a fine of not more than $10,000, or by both that fine and imprisonment. 7)Specifies that the conduct described above shall constitute an unlawful business practice and an act of unfair competition. 8)Defines "State of emergency" as "a natural or manmade disaster or emergency resulting from an earthquake, flood, fire, riot, or storm for which a state of emergency has been declared by the President of the United States or the Governor of California." AB 2820 Page 5 9)Defines "Local emergency" as "a natural or manmade disaster or emergency resulting from an earthquake, flood, fire, riot, or storm for which a local emergency has been declared by the executive officer or governing body of any city or county in California." 10)Defines "Housing" as "any rental housing leased on a month-to-month term" for purposes of criminal price gouging. 11)States that except as specified, in all leases of lands from week to week, month to month, or other period less than a month, the landlord may, upon giving notice in writing to the tenant, in the appropriate manner, change the terms of the lease to take effect, as to tenancies for less than one month, upon the expiration of a period at least as long as the term of the hiring itself, and, as to tenancies from month to month, to take effect at the expiration of not less than 30 days, but if that change takes effect within a rental term, the rent accruing from the first day of the term to the date of that change shall be computed at the rental rate obtained immediately prior to that change. 12)Specifies that the notice, when served upon the tenant, shall in and of itself operate and be effectual to create and establish, as a part of the lease, the terms, rents, and conditions specified in the notice, if the tenant shall continue to hold the premises after the notice takes effect. 13)States that all leases of a residential dwelling, or of any interest therein, from week to week, month to month, or other period less than a month, the landlord may increase the rent provided in the lease or rental agreement, upon giving written notice to the tenant, as follows, by either of the following procedures: AB 2820 Page 6 a) By delivering a copy to the tenant personally; or b) By serving a copy by mail under the procedures as specified. 14)States that for an increase in rent greater than 10%, the minimum notice period required pursuant to that paragraph shall be increased by an additional 30 days, but does not apply to an increase in rent caused by a change in a tenant's income or family composition as determined by a recertification required by statute or regulation. FISCAL EFFECT: According to the Assembly Appropriations Committee, as violation of the above is a misdemeanor, minor nonreimbursable costs for incarceration, offset to a degree by fine revenue. COMMENTS: 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 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." Analysis Prepared by: David Billingsley/ PUB. S. / (916) 319-3744 FN: 0002886 AB 2820 Page 7