BILL ANALYSIS
AB 2076
Page 1
Date of Hearing: April 13, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2076 (Salas) - As Introduced: February 18, 2010
SUBJECT : Advertising: business location representations:
floral and ornamental products and services.
SUMMARY : Makes it unlawful for a provider or vendor of floral
or ornamental products or services, as defined, to misrepresent
the geographic location of its business, as specified.
Specifically, this bill :
1)Makes it unlawful for a provider or vendor of floral or
ornamental products or services to misrepresent the geographic
location of its business by either:
a) Listing a local telephone number in any advertisement or
listing if both the following criteria are met:
i) Calls to the telephone number are routinely forwarded or
otherwise transferred to a provider's or vendor's
business location that is different from the geographic
location of the business indicated in the advertisement
or listing; and,
ii) The advertisement or listing does not identify the true
physical address, including the city and state of the
provider's or vendor's business.
b) Listing a fictitious business name or an assumed businesses
name in any advertisement or listing if both of the
following criteria are met:
i) The name of the business misrepresents the provider's or
vendor's geographic location; and,
ii) The advertisement or listing does not identify the true
physical address, including the city and state, of the
provider's or vendor's business.
2)States that this bill does not create or impose any duty or
obligation on a person other than a vendor or provider, as
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specified.
3)Defines the following terms:
a) Floral or ornamental products or services to mean floral
arrangements, cut flowers, floral bouquets, potted plants,
balloons, floral designs, and related products and
services.
b) Local telephone number to mean a specific telephone number
(area code and prefix) assigned for the purpose of
completing local calls between a calling party or station
and any other party or station within a designated exchange
or all of its local calling areas. The term "local
telephone number" does not include long distance telephone
numbers or 800, 888, or 900 exchange telephone numbers
listed in a local telephone directory.
EXISTING LAW provides for the regulation of advertising and
makes certain advertising practices unlawful.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office,
"California floral shops are often locally owned community based
businesses that rely on localized marketing to attract business.
They often use local names consistent with the communities they
serve such as 'Lodi Florists'. Flower buyers are unique as
well. They often call remotely and order and establish an
amount they are willing to spend or they order a set item (i.e.
'Please give me a bouquet for $50' or 'I would like a dozen
roses') purchased sight unseen. The local flower shop has
advertised and promoted and their business is relying on trust
and quality because often the purchase is sight unseen.
"Out of state call centers are taking advantage of this business
model to the detriment of California consumers and local floral
shops by advertising as a 'local' shop, often using similar
names as the locally established shop and piggybacking on their
advertising and community relationships (i.e. A New Jersey based
company advertising as 'Lodi Floral and Gift') with no local
presence except an ad in the phone book and an internet website
with a local phone number. Originally, this phenomena was
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occurring in telephone advertising only but has now spread to
the internet. The result is consumers believe they are buying
from their local shop and receiving $50 worth of flowers, when
they are actually purchasing from a New Jersey based call center
for $50, the call center takes a cut, the wire service takes a
cut and the consumer gets $30 worth of flowers.
"To add insult to injury, often dissatisfied customers come into
the local community based shop and complain about the poor
quality or skimpy order because they thought they purchased from
'Lodi Florists.' The local florist has to handle an unsatisfied
customer and not even get the benefit of the sale. This bill
establishes a simple compliance requirement that any floral
retailer that uses a local phone number provide address in the
advertisement."
Background . This bill is a reintroduction of AB 1282 (Salas) of
2007 which was vetoed. In his veto message, the Governor
stated, "This bill would make it illegal for a floral business
to list or advertise a local telephone number if the phone calls
are routinely routed to a location that is different than the
geographical location of the number advertised. It would also
make it illegal to list or advertise a business name if the name
misrepresents the business' geographical location.
"In today's global economy, it is unreasonable to limit
out-of-area businesses from using local names and telephone
numbers. In virtually every aspect of the economy, consumers
are accustomed to purchasing products from around the world via
many methods."
Support . The sponsor of this bill, the California State Floral
Association, states, "Besides educating consumers and preventing
inappropriate advertising activities, this measure will also
result in increased sales tax revenues and job creation and
retention. When an unsuspecting consumer purchases a $50
bouquet from an out of state call center, studies show that on
average $29 flows back in to the local flower shop that makes
the delivery after the call center and wire service take their
portion. Even though the California consumer initiated a $50
retail transaction, current sales tax law assesses sales tax
collection on the 429 transaction from the call cent to the
local floral shop. This results in a 42% reduction in sales
tax. Additionally, that $21 leave the local floral industry
resulting in decrease of jobs and job retention."
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Previous legislation . AB 1282 (Salas) of 2007 makes it unlawful
for a provider of floral or ornamental products or services to
misrepresent the geographic location of its business. The bill
was vetoed.
AB 1375 (House) of 1999 and AB 1074 (Nakano) of 2001 were
substantially similar bills that were also consequently vetoed.
REGISTERED SUPPORT / OPPOSITION :
Support
California State Floral Association (sponsor)
Opposition
None on file.
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301