BILL ANALYSIS �
SB 823
Page 1
Date of Hearing: June 21, 2011
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
SB 823 (Corbett) - As Amended: May 31, 2011
SENATE VOTE : 23-13
SUBJECT : Consumer protections: Made in California Program.
SUMMARY : Authorizes the Governor's Office of Economic
Development (OED) to issue, develop and adopt standards for
compliance with, and market the Made in California (MIC) label.
Specifically, this bill :
1)Makes it unlawful for anyone to engage in the unfair method of
competition or unfair or deceptive act or practice to sell or
lease, or intend to sell or lease, a product using a MIC label
to a consumer, unless the product complies with standards
adopted by OED.
2)Authorizes OED to develop and adopt standards that permit a
company to represent that a product is made in this state.
Those standards may include the following:
a) The company primarily designs and manufactures a
physical product, rather than a digital product or
service;
b) The company manufactures one or more products in this
state; and,
c) The company has a California-based workforce and has the
desire to grow that workforce over time.
3)Authorizes OED to issue a marketing agreement, including, but
not limited to, the issuance of a MIC label, and to be advised
by those California businesses willing to participate in the
program on a voluntary basis via funding or in-kind
contributions, as defined under the agreement.
4)Requires OED to submit a report to the Legislature on January
1, 2013, and annually thereafter, regarding the MIC program's
expenditures, progress, and ongoing priorities.
SB 823
Page 2
5)Establishes a MIC Fund.
6)Exempts the Buy California Program (BCP) within the Department
of Food and Agriculture (DFA) from the MIC program and
standards.
7)Defines "manufacture" to mean the process of taking raw
materials or components and adding value to those materials
and components in order to create a final, recognizable
product. "Manufacture" does not include the process of
completing a final assembly from subassemblies made elsewhere,
or the act of packaging a product.
EXISTING LAW :
1)Makes unlawful certain acts identified as unfair methods of
competition and unfair or deceptive acts or practices
undertaken by any person in a transaction intended to result
in or which results in the sale or lease of goods to any
consumer.
2)Establishes the BCP, a public and private collaboration within
DFA, to encourage consumer nutritional and food awareness and
to foster purchases of high-quality California agricultural
products.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "Local
businesses are the backbone of California's economy. Small
businesses in California employ more than half of all private
sector employees who work in the state. These California-based
companies design and manufacture products for consumers and
produce specialty products for other industries.
"SB 823 allows for a marketing agreement between the state and
those companies seeking to use a MIC label. It will establish a
self-supporting and voluntary MIC marketing program to promote
California businesses."
Background . According to the author's office, "California's
unemployment rate has increased to 12.4%, one of the highest in
SB 823
Page 3
the nation. Non-farm payroll jobs decrease by 33,500 each
month, according to the California Employment Development
Department? Our economy cannot be sustainable without products
made in California, and our consumer market will continue to be
sluggish until we increase the state's employment rate. Our
main source of employment in the state continues to be local and
small companies.
"Local manufacturers understand the pride of place that comes
from actually making a product within a defined geographic,
social, and historic region. California plays an integral part
in the overall value of these companies, their brand, and their
products.
"The California Grown Program is a good example of how companies
can benefit from collaboration with other businesses and the
state. Sales of California Grown produce increased by 7.2%
after the start of that marketing campaign and generated $897
for California's businesses, workers, and economy."
This bill mirrors the provisions of the BCP, also known as the
California Grown Program.
Support . According to the co-sponsor, Small Business
California, "SB 823 would state intent standards for a product
to be labeled MIC? This bill will also authorize the OED to
partner with interested businesses that are willing to
participate in this voluntary program through a marketing
agreement to develop a program similar to the California Grown
Program. SB 823 would effectively start a true public-private
partnership that will effectively promote California
manufacturers."
According to the co-sponsor, California Small Business,
"Recognizing products MIC will stimulate jobs and the economy.
It will also promote the intent of the legislature and state
government to support these businesses that grow our economy."
Double-referred . This bill is double-referred to Assembly
Judiciary Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
SB 823
Page 4
California Small Business Association (co-sponsor)
Small Business California (co-sponsor)
American Federation of State, County and Municipal Employees
California Conference Board of the Amalgamated Transit Union
California Conference of the Machinists
California Labor Federation
California Metals Coalition
California Official Court Reporters Association
California Teamsters Public Affairs Council
Engineers and Scientists of California
International Longshore and Warehouse Union
Professional and Technical Engineers, Local 21
Service Employees International Union, California State Council
Tesla Motors, Inc.
UNITE HERE!
United Food and Commercial Workers - Western States Conference
Utility Workers Union of America, Local 132
Opposition
None on file.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301