Amended in Senate January 6, 2014

Amended in Senate April 29, 2013

Amended in Senate April 2, 2013

Senate Bill No. 661

Introduced by Senator Hill

February 22, 2013

An act to amend Section 17533.7 of the Business and Professions Code, relating to advertising.

LEGISLATIVE COUNSEL’S DIGEST

SB 661, as amended, Hill. False advertising.

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 begin delete or manufactured end delete in the United States when any article, unit, or part of the merchandise has been entirely or substantially made, manufactured, or produced outside of the United States.

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This bill would eliminate the requirement that any article, unit, or part of the merchandise also be substantially manufactured in the United States in order for the merchandise to advertise that it is made in the United States. The bill would further provide that any merchandise has been substantially made, manufactured, or produced within the United States if specified requirements are met, including that United States manufacturing costs constitute 90% of the total manufacturing costs for the merchandise and the merchandise was last substantially transformed in the United States. The bill would also create a rebuttable presumption that the merchandise has been substantially made, manufactured, or produced within the United States if an independent 3rd-party verification organization certifies that the merchandise meets all of these requirements.

end delete begin insert

This bill would establish an exception to these provisions by authorizing a person, firm, corporation, or association to sell or offer for sale in this state any merchandise labeled as being made in the United States if the merchandise is made, manufactured, or produced in the United States and has an article, unit, or part from outside of the United States that cannot be obtained within the United States, as specified, and constitutes only a negligible part of the final manufactured product.

end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 17533.7 of the end insert begin insert Business and Professions
Code end insert begin insert is amended to read: end insert

17533.7.  

begin insert (a) end insert begin insert   end insert It is unlawful for any person, firm, corporation
or association to sell or offer for sale in this begin delete State end delete begin insert state end insert any
merchandise on which merchandise or on its container there
appears the words “Made in U.S.A.” “Made in America,” “U.
S.A.,” or similar words begin delete when end delete begin insert if end insert the merchandise or any article,
unit, or part thereof, has been entirely or substantially made,
manufactured, or produced outside of the United States.

begin insert

(b) (1) Subdivision (a) shall not apply to merchandise made,
manufactured, or produced in the United States that has an article,
unit, or part from outside of the United States, if both of the
following apply:

end insert begin insert

(A) The manufacturer of the merchandise certifies that it can
neither produce the article, unit, or part within the United States
nor obtain the article, unit, or part of the merchandise from a
domestic source.

end insert begin insert

(B) The article, unit, or part of the merchandise obtained from
outside the United States constitutes only a negligible part of the
final manufactured product.

end insert begin insert

(2) The determination that the article, unit, or part of the
merchandise cannot be made, manufactured, produced, or obtained
within the United States from a domestic source shall not be based
on the cost of the article, unit, or part.

end insert

begin delete

SECTION 1.  

Section 17533.7 of the Business and Professions
Code is amended to read:

17533.7.  

(a) It is unlawful for any person, firm, corporation,
or association to sell or offer for sale in this state any merchandise
on which merchandise or on its container there appears the words
“Made in U.S.A.,” “Made in America,” “U.S.A.,” or similar words
when the merchandise has been entirely or substantially made,
manufactured, or produced outside of the United States.

(b) For purposes of this section, any merchandise has been
substantially made, manufactured, or produced within the United
States if it meets all of the following requirements:

(1) United States manufacturing costs constitute 90 percent of
the total manufacturing costs for the merchandise.

(2) No more than 10 percent of the total manufacturing costs
for the merchandise were either incurred outside of the United
States as a result of the unavailability of raw materials in the United
States, or incurred as the costs of a component, part, article, or unit
of the merchandise imported into the United States as a result of
the unavailability of the same component, part, article, or unit of
the merchandise from a domestic manufacturer.

(3) The merchandise was last substantially transformed in the
United States.

(c) Certification by an independent third-party verification
organization that the merchandise meets all of the requirements
of subdivision (b) shall create a rebuttable presumption, affecting
the burden of producing evidence, that the merchandise has been
substantially made, manufactured, or produced within the United
States.

end delete