BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1400|
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THIRD READING
Bill No: SB 1400
Author: Simitian (D)
Amended: 8/15/08
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE : 8-0, 4/7/08
AYES: Ridley-Thomas, Aanestad, Calderon, Corbett, Denham,
Harman, Simitian, Yee
NO VOTE RECORDED: Florez
SENATE JUDICIARY COMMITTEE : 5-0, 4/29/08
AYES: Corbett, Harman, Ackerman, Kuehl, Steinberg
SENATE FLOOR : 31-1, 5/8/08
AYES: Aanestad, Ackerman, Alquist, Ashburn, Calderon,
Cogdill, Corbett, Correa, Cox, Denham, Ducheny, Dutton,
Harman, Hollingsworth, Kehoe, Kuehl, Lowenthal, Machado,
Margett, Migden, Negrete McLeod, Oropeza, Padilla,
Perata, Romero, Scott, Simitian, Steinberg, Torlakson,
Wiggins, Yee
NOES: McClintock
NO VOTE RECORDED: Battin, Cedillo, Florez, Maldonado,
Ridley-Thomas, Runner, Vincent, Wyland
ASSEMBLY FLOOR : 61-16, 8/19/08 - See last page for vote
SUBJECT : Business: sweepstakes
SOURCE : Author
CONTINUED
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DIGEST : This bill recasts California's sweepstakes law
by requiring additional disclosures and consumer
protections.
Assembly Amendments add "solicitation materials selling
information regarding sweepstakes" to the provision of law
concerning solicitation materials containing sweepstakes
entry materials, prohibit the materials from representing
that a person has been specially selected unless it is
true, delete the definition of "sweepstakes materials,"
prohibits sweepstakes sponsor from charging a fee as a
condition of an individual receiving a monetary
distribution, and redefine the term "sweepstake sponsor."
ANALYSIS :
Existing Law
1.Defines "sweepstakes" to mean any procedure for the
distribution of anything of value by lot or by chance
that is not unlawful.
2.Prohibits sweepstakes solicitation materials from
representing that a person is a prize winner unless that
person has, in fact, won a prize.
3.Requires solicitation materials containing sweepstakes
entry materials to include a prominent "no purchase is
necessary" message and a copy of the "official rules,"
as specified. For purposes of this section, defines "no
purchase necessary statement" and "official rules" as
follows:
A. "No purchase necessary statement" as a language
that states no purchase is necessary as a
condition of entering the promotion sweepstakes.
B. "Official rules" as the formal printed
statement of the rules for the promotional
sweepstakes appearing in the solicitation
materials.
4.Prohibits sweepstakes entries that do not include an
order for products or services from being disadvantaged
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in the winner selection process for the sweepstakes
entered.
5.States that sweepstakes material shall not represent
that entries in the sweepstakes accompanied by an order
for products or services will be eligible for additional
prizes or will be more likely to win than entries from
individuals not purchasing a product or service.
This bill:
1. Adds solicitation materials selling information
regarding sweepstakes to the provisions of law
concerning solicitation materials containing sweepstakes
entry materials
2. Prohibits solicitation materials containing sweepstakes
entry materials or solicitation materials selling
information regarding sweepstakes from representing the
following:
A. That a person has been specially selected in
connection with a sweepstakes unless it is true.
B. That the person receiving the solicitation has
received any special treatment or personal
attention from the sweepstakes sponsor or any
officer, employee, or agent of the sweepstakes
sponsor unless the representation of special
treatment or personal attention is true.
C. That a person is being notified a second or
final time of the opportunity to receive or
compete for a prize, unless that representation
is true.
D. That a prize notice is urgent or otherwise
convey an impression of urgency by use of
description, phrasing on a mailing envelope, or
similar method, unless there is a limited time
period in which the recipient must take some
action to claim, or be eligible to receive a
prize, and the date by which that action is
clearly and conspicuously disclosed in the body
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of the solicitation materials.
3. Prohibits solicitation materials containing sweepstakes
entry materials or solicitation materials selling
information regarding sweepstakes from either of the
following:
A. Simulating or falsely representing that it is a
document authorized, issued, or approved by any
court, official, or agency of the United States or
any state, or by any lawyer, law firm, or
insurance or brokerage company.
B. Creating a false impression as to its source,
authorization, or approval.
4. Requires the official rules to disclose the date or
dates the final winner or winners will be determined.
5. Prohibits a sweepstakes sponsor from charging a fee as a
condition of receiving a monetary distribution, or
obtaining information about a prize or sweepstakes.
6. Defines the following terms:
A. "No-purchase-or payment-necessary message" to
mean either the following statement or a statement
substantially similar to the following statement:
"No purchase or payment of any kind is necessary to
enter or win this sweepstakes.
B. "Specially selected" to mean a representation
that a person is a winner, a finalist, in first
place or tied for first place, or otherwise among a
limited group of persons with an enhanced
likelihood of receiving a prize.
C. "Sweepstakes sponsor" to mean either of the
following:
(1) A person or entity that operates or
administers a sweepstakes, as specified.
(2) A person or entity that offers, by means
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of a notice, a prize to another person in
conjunction with any real or purported
sweepstakes that requires or allows, or
creates the impression of requiring or
allowing, the person to purchase any goods or
services, or pay any money, as a condition of
receiving, or in conjunction with allowing the
person to receive, use, or obtain a prize or
information about a prize.
7. Specifies that a person or entity that merely furnishes
a prize in connection with a sweepstakes that is
operated or administrated by another person or entity
shall not be deemed a sweepstakes sponsor.
8. Makes technical, clarifying changes.
Background
California sweepstakes law was written in 1998, and aside
from minor, technical cleanup legislation, has not been
updated since. In 2000, a multi-state investigation of the
sweepstakes solicitations and misleading business practices
of the Publisher's Clearinghouse resulted in a 26-state $34
million settlement. In response to the scandal, other
states (Colorado, Oregon and Texas) have enacted more
stringent consumer protection measures, some of which have
been incorporated into this measure. Examples of their
protections are as follows:
Colorado : Defines "specially selected" as a representation
that a person is a winner, finalist, in first place or tied
for first place, or otherwise among a limited group of
persons with an enhanced likelihood of receiving a prize;
requires that if sweepstakes materials represent that a
person has been specially selected, the solicitation must
include a statement of the maximum number of persons in the
group, with the enhanced likelihood of receiving a prize
and prohibits sweepstakes sponsors from charging a fee as a
condition of collecting a prize.
Texas: Prohibits sweepstakes sponsors from charging a fee
as a condition of collecting a prize and sweepstakes
materials shall not represent that the person receiving the
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solicitation has received any special treatment or personal
attention from sweepstakes sponsors or their agents.
Oregon : Prohibits sweepstakes materials from representing
that a person has been specially selected, when more than
25 percent of persons receiving the sweepstakes materials
have the same chance of winning, and requires the
sweepstakes materials to disclose the date the final winner
will be determined.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/20/08)
AARP
AT&T
California Alliance for Consumer Protection
California Alliance for Retired Americans
California Senior Legislature
Congress of California Seniors
Consumer Action
Consumer Federation of California
Experian
Gray Panthers
Los Angeles District Attorney
Older Women's League of California
ARGUMENTS IN SUPPORT : According to the author's office,
this legislation is intended to update California's rules
and disclosure requirements for sweepstakes solicitations
to better protect consumers, particularly the elderly who
are disproportionately targeted and victimized, against
unfair or misleading advertising of sweepstakes.
ASSEMBLY FLOOR : 61-16, 8/19/08
AYES: Aghazarian, Arambula, Beall, Benoit, Berg,
Berryhill, Blakeslee, Brownley, Caballero, Charles
Calderon, Carter, Cook, Coto, Davis, De La Torre, De
Leon, DeSaulnier, Dymally, Emmerson, Eng, Evans, Feuer,
Fuentes, Furutani, Galgiani, Garcia, Garrick, Hancock,
Hayashi, Hernandez, Horton, Huffman, Jeffries, Jones,
Karnette, Krekorian, Laird, Leno, Levine, Lieber, Lieu,
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Ma, Mendoza, Mullin, Nava, Niello, Nunez, Parra, Plescia,
Price, Ruskin, Salas, Saldana, Solorio, Spitzer,
Strickland, Swanson, Torrico, Tran, Wolk, Bass
NOES: Adams, Anderson, DeVore, Duvall, Fuller, Gaines,
Houston, Huff, Keene, La Malfa, Maze, Nakanishi, Silva,
Smyth, Villines, Walters
NO VOTE RECORDED: Portantino, Sharon Runner, Soto
JJA:do 8/19/08 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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