Unlawful business practices: price gouging.

Plain English Breakdown

The official source material does not provide specific information about penalties for breaking these rules, enforcement costs, or the effective date of the bill.

Rules Against Price Gouging

This law allows city attorneys in large cities to sue businesses for unfair pricing practices during emergencies and expands protections against rent increases.

What This Bill Does

• Expands the ability of city attorneys in cities with over 750,000 people to sue businesses for unfair pricing practices.
• Changes rules about when it's okay to raise rents during emergencies. It now allows higher rents if repairs were needed because of an emergency or made within a year before one.
• Expands the definition of housing that can't have rent increases during emergencies to include all rental homes, not just those with short-term leases.

Who It Names or Affects

• Businesses and landlords who might charge unfair prices or raise rents too high during emergencies.
• City attorneys in large cities like Los Angeles, San Francisco, and others with over 750,000 people.
• People looking for housing during emergencies.

Terms To Know

price gouging

Charging much higher prices than normal for goods or services, especially during an emergency when people need them more.

state of emergency

A situation declared by the government where special rules apply to help deal with a crisis like a natural disaster.

Limits and Unknowns

• The bill does not specify what happens if someone breaks these new rules.
• It's unclear how much it will cost cities to enforce this law.
• There are no details on when the law will start or end.

Official Summary Text

SB 1365, as amended, Allen.
Unlawful business practices: price gouging.
(1) Existing law, commonly known as the Cartwright Act, generally regulates trusts, defined as a combination of capital, skill, or acts by 2 or more persons for certain purposes, including to create or carry out restrictions in trade or commerce. Existing law makes every trust unlawful, against public policy, and void, except as provided. Under existing law, a violation of these provisions is a conspiracy against trade and is punishable by fines or imprisonment, or both, as specified.
Existing law authorizes any person who is injured in their business or property by reason of any violation of these provisions to file a lawsuit, as provided, and to recover 3 times the damages sustained, plus interest and other relief, as specified. Existing law deems the state and any of its political subdivisions and public agencies as a
person for purposes of these provisions.
Existing law authorizes the Attorney General, or the district attorney of any county, subject to specified notice requirements, to initiate civil actions or criminal proceedings for violation of these provisions, and authorizes the Attorney General or the district attorney to initiate an action against a corporation or association, including a foreign corporation or foreign association, for specified remedies.
This bill would similarly authorize the city attorney of any city with a population in excess of 750,000 to initiate and prosecute those actions on behalf of the city or any public agency or political subdivision located wholly within the city, or on behalf of natural persons residing in the city.
Under existing law, an Attorney General or district attorney who initiates an action is entitled to retain a specified amount from the
proceeds, if any, for expenses for investigation and prosecution, and to retain a specified amount from the collection of a fine or civil penalty, as provided.
This bill would similarly entitle a city attorney of any city with a population in excess of 750,000 who initiates an action to retain similar amounts.
Existing law grants to a district attorney who reasonably believes that there may be a violation of these provisions all of those powers granted to the Attorney General as a head of a department for purposes of specified laws relating to investigation and prosecution, and subjects the district attorney to other specified laws relating to financial privacy.
This bill would similarly grant those powers to a city attorney who reasonably believes that there may be a violation, and would subject the city attorney to those specified laws relating to financial privacy.
The bill would make other related changes.
(2) Under existing law, upon the proclamation of a state of emergency by the President of the United States or the Governor, or upon the declaration of a local emergency by the executive officer of any county, city, or city and county, and for 30 days following the proclamation or declaration of emergency, it is a misdemeanor for any person, business, or other entity, to increase the rental price advertised, offered, or charged for housing, to an existing or prospective tenant, by more than 10%. Existing law exempts an increase from these provisions if the person can prove that the increase is directly attributable to additional costs for repairs or additions beyond normal maintenance that were amortized over the rental term that caused the rent to be increased greater than 10%.
This bill would
instead exempt an increase
if the increase was directly attributable to additional costs for repairs or additions beyond normal maintenance and the costs were incurred as a result of the event that triggered the proclamation or declaration of emergency, or,
if the increase was directly attributable to additional costs for repairs or additions beyond normal maintenance incurred within the year prior to the proclamation or declaration and either the housing was rented, advertised for rent, or offered for rent at the time the costs were incurred or the person can prove that within a year before the proclamation or declaration, the intent to offer the housing for rent within 6 months of the repair or addition already existed.
Existing law defines housing for these purposes as any rental housing with an initial lease term of no longer than one year.
This bill would expand the definition of “housing” to include any rental housing without regard to the length of the initial lease term.
Existing law defines the rental price of housing advertised, offered, or charged at a daily rate at the time of the proclamation or declaration of emergency that is advertised, offered, or charged on a periodic lease agreement after the declaration or proclamation of emergency as being 160% of the fair market rent established by the United States Department of Housing and Urban Development, which may be increased by 5% if the housing is offered for rent fully furnished.
This bill would define the rental price of housing advertised, offered, or charged at a daily rate following a declaration or proclamation of emergency, but that was not advertised, offered, or charged at a daily rate in the year prior to the declaration or proclamation of emergency
as being
1
/
30
of the amount above.
By expanding the scope of a crime, the bill would impose a state-mandated local program.
The
(3) The
California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no
reimbursement is required by this act for a specified reason.
(4)Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
(5)The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that
amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.
This bill would make legislative findings to that effect.

Current Bill Text

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