BILL ANALYSIS �
AB 858
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Date of Hearing: April 12, 2011
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 858 (Jones) - As Introduced: February 17, 2011
SUBJECT : False advertising.
SUMMARY : Provides that a product that is made all or virtually
all in the United States (U.S.), as defined by the Federal Trade
Commission (FTC), shall be deemed made within the U.S., as
specified. Specifically, this bill :
1)Provides that a product that is made all or virtually all in
the U.S., within the meaning of the Enforcement Policy
Statement (EPS) on U.S. Origin Claims issued by the FTC �62
Fed. Reg. 63756 (Dec. 2, 1997)], shall be deemed merchandise
that has been entirely or substantially made, manufactured, or
produced within the U.S.
2)States legislative intent.
EXISTING LAW makes it unlawful for any person, firm,
corporation, or association to sell, or offer for sale,
merchandise that advertises itself as being made or manufactured
in the U.S. when any article, unit, or part of the merchandise
has been entirely or substantially made, manufactured, or
produced outside of the U.S.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal.
COMMENTS :
Purpose of this bill . According to the author's office,
""Currently, there is an inconsistency between federal labeling
laws and California laws for 'Made in America' products. This
inconsistency has resulted in difficulties for manufacturers
because products legally labeled for sale in the other 49 states
that find their way into the California marketplace may not
legally be sold in the state. This places the retailer and
manufacturer at risk, increases costs to the manufacturer to
separately label products for sale in California, and deprives
California consumers of the right to know which products they
are considering for purchase were 'Made in America.'
AB 858
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Background . On December 1, 1997, the FTC announced an EPS on
U.S. Origin Claims outlining the factors the FTC considers in
determining whether a U.S. origin claim is deceptive. FTC
concluded that "Made in USA" advertising and labeling claims
would continue to be held to the "all or virtually all" standard
that traditionally has been applied by the FTC. Under this
standard, voluntary, unqualified U.S. origin claims must be
substantiated by evidence that a product is "all or virtually
all" made in the U.S. In order to provide further guidance with
respect to its policy, the FTC issued an Enforcement Policy
Statement, which outlines the factors the Commission will
consider in determining whether a U.S. origin claim is
"deceptive."
This bill aligns California law to the FTC standard for
determining if a product is "Made in America."
Support . The California Manufacturers and Technology
Association (CMTA) writes in support, "CMTA supports AB 858 to
conform with federal law the California definition of what it
means to be 'Made in America.' Having multiple standards makes
product labeling complicated, could lead to consumer confusion,
and could lead to lawsuits for accidental sale in California of
products designed and labeled in other states.
"California has no legitimate interest in maintaining its own
standards for determining what is 'Made in America.'
Manufacturers should be able to rely on the federal standard in
all states, including California."
Previous legislation . ABX6 8 (Beall) of 2010 provides that a
product that is made all or virtually all in this state, within
the meaning of a specified policy statement of the Federal Trade
Commission, shall be deemed made within the United States, as
specified. This bill was held in the Assembly.
REGISTERED SUPPORT / OPPOSITION :
Support
Vinturi (sponsor)
California Manufacturers and Technology Association
California Retailers Association
AB 858
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Opposition
None on file.
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301