BILL ANALYSIS AB 57X ASSEMBLY THIRD READING AB 57X (Archie-Hudson) - As Amended: June 9, 1994 ASSEMBLY ACTIONS: COMMITTEE PUB. S. VOTE 5-0 COMMITTEE W. & M. VOTE 18-4 Ayes: Vasconcellos, Allen, Alpert, V. Brown, Burton, Campbell, Costa, Epple, Escutia, B. Friedman, Hannigan, Johnson, Katz, McDonald, O'Connell, Polanco, Quackenbush, Seastrand Nays: Aguiar, Andal, Pringle, Woodruff DIGEST Under current law: 1) The content and effect of home solicitation contracts, as defined, is regulated. Services includes among other things, services furnished in connection with the repair, alteration or improvement of residential premises. 2) It is a misdemeanor to willfully make or publish any false statement, spread any false rumor or employ any other false or fraudulent means or device with intent to affect the market price of any kind of property. This bill: 1) Makes it a misdemeanor to sell or offer to sell consumer food items, consumer good, as defined, goods used for emergency cleanup, emergency or medical supplies, home heating oil or gasoline or other motor fuels for a price that exceeds by more than 10% the price charged by that person for those goods or services immediately prior to a proclamation, as defined, unless that person proves specified conditions. 2) Makes it a misdemeanor to sell or offer to sell any repair or reconstruction services or any services used in emergency cleanup for a price that exceeds by more than 10% the price charged by that person immediately prior to a proclamation, as defined, unless that person proves specified conditions. 3) Provides the above offenses are punishable by up to one year in the county jail and/or a fine up to $10,000. - continued - AB 57X Page 1 AB 57X 4) Allows a local legislative body or the California Legislature to extend the provisions of this bill for additional 30 day periods if deemed necessary. 5) Revises the definition of services to also include services furnished in connection with the "restoration" of residential premises. 6) Provides that any home solicitation contract for the repair or restoration of a residence signed by the homeowner within seven days after the home is damaged by disaster is void, unless contact is first initiated by the homeowner at the seller's appropriate place of business. 7) Provides a contract shall not be void if solicited by the buyer or agent and that buyer solicitation includes a telephone call to the appropriate trade premises of the seller. 8) Provides that in addition to any other right to revoke an offer, a buyer has the right, within a seven business days, to cancel a home solicitation contract or offer for the repair or restoration of residential premises damaged by a disaster that was not otherwise void. 9) Specifies that the above provision shall not apply to a contract that is initiated by the buyer or his or her agent, and that is executed in connection with the making of prescribed emergency or immediate necessity repairs or services, among other conditions. 10) Contains legislative findings, as specified. FISCAL EFFECT According to the Assembly Ways and Means Committee analysis, minor costs to šlocal correction agencies for arrest, prosecution and incarceration are not šreimbursable; by expanding the definition of crime, this bill imposes a šstate-mandated local program. COMMENTS According to the author, following the January 17th Los Angeles earthquake, šthere were numerous instances of price gouging documented by the City of šLos Angeles. Following the 1992 civil unrest, Los Angeles passed a city šordinance which prohibited price gouging, yet no provisions of this nature šexist at the state level. FN 009078 - continued - AB 57X Page 2