AB380 - Price gouging.

Amended IN Senate June 27, 2025 Amended IN Senate June 19, 2025 Amended IN Assembly May 29, 2025 Amended IN Assembly May 23, 2025 Amended IN Assembly March 12, 2025 Amended IN Assembly March 04, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 380 Introduced by Assembly Members Mark González and Gipson (Principal coauthors: Assembly Members Bryan, Celeste Rodriguez, and Schiavo) (Principal coauthors: Senators Durazo and Rubio) (Coauthors: Assembly Members Garcia, Harabedian, McKinnor, Quirk-Silva, Schultz, Solache, and Zbur) (Coauthors: Senators Menjivar and Smallwood-Cuevas) February 03, 2025 An act to amend Section 8588.8 of the Government Code, and to amend Section 396 of the Penal Code, relating to price gouging. LEGISLATIVE COUNSEL'S DIGEST AB 380, as amended, Mark González. Price gouging. 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 or 180 days, as specified, following the proclamation or declaration of emergency, it is a misdemeanor, punishable by up to one year in county jail, a fine of $10,000, or both that imprisonment and fine, for a person, contractor, business, or other entity to sell or offer to sell certain goods or services for a price of more than 10% greater than the price charged by that person immediately prior to the proclamation or declaration of emergency. This bill would instead make that misdemeanor applicable, for those provisions for which the misdemeanor is applicable for a period of 30 days following the proclamation or declaration of emergency, for a period of 90 60 days. The bill would, for an entity or person other than a natural person, make that misdemeanor punishable by a fine of $25,000. By expanding the scope of a crime, this bill would impose a state-mandated local program. Under existing law, as described above, it is unlawful to increase the rental price for housing by more than 10%, or evict any residential tenant of residential housing, upon the proclamation or declaration of emergency. Existing law defines “housing” for purposes of these provisions 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. The bill would make the prohibitions on increasing the rental price by more than 10% and eviction generally applicable to commercial real property. By expanding the scope of a crime, this bill would impose a state-mandated local program. 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. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Section 8588.8 of the Government Code is amended to read: 8588.8. Upon the proclamation of a state of emergency declared by the Governor, the Office of Emergency Services shall include, on an appropriate internet website information about Section 396 of the Penal Code, including information for property owners about the effect of the proclamation on rental price as defined in paragraph (11) of subdivision (l) of Section 396 of the Penal Code. SEC. 2. Section 396 of the Penal Code is amended to read: 396. (a) The Legislature hereby finds that during a state of emergency or local emergency, including, but not limited to, an earthquake, flood, fire, riot, storm, drought, plant or animal infestation or disease, pandemic or epidemic disease outbreak, or other natural or manmade disaster, some merchants have taken unfair advantage of consumers by greatly increasing prices for essential consumer goods and services. While the pricing of consumer goods and services is generally best left to the marketplace under ordinary conditions, when a declared state of emergency or local emergency results in abnormal disruptions of the market, the public interest requires that excessive and unjustified increases in the prices of essential consumer goods and services be prohibited. It is the intent of the Legislature in enacting this act to protect citizens from excessive and unjustified increases in the prices charged during or shortly after a declared state of emergency or local emergency for goods and services that are vital and necessary for the health, safety, and welfare of consumers, whether those goods and services are offered or sold in person, in stores, or online. Further, it is the intent of the Legislature that this section be liberally construed so that its beneficial purposes may be served. (b) Upon the proclamation of a state of emergency declared by the President of the United States or the Governor, or upon the declaration of a local emergency by an official, board, or other governing body vested with authority to make that declaration in any county, city, or city and county, and for a period of 90 60 days following that proclamation or declaration, it is unlawful for a person, contractor, business, or other entity to sell or offer to sell any consumer food items or goods, goods or services used for emergency cleanup, emergency supplies, medical supplies, home heating oil, building materials, housing, commercial real property, transportation, freight, and storage services, or gasoline or other motor fuels for a price of more than 10 percent greater than the price charged by that person for those goods or services immediately prior to the proclamation or declaration of emergency, or prior to a date set in the proclamation or declaration. However, a greater price increase is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, during the state of emergency or local emergency, and the price is no more than 10 percent greater than the total of the cost to the seller plus the markup customarily applied by that seller for that good or service in the usual course of business immediately prior to the onset of the state of emergency or local emergency. If the person, contractor, business, or other entity did not charge a price for the goods or services immediately prior to the proclamation or declaration of emergency, it may not charge a price that is more than 50 percent greater than the cost thereof to the vendor as “cost” is defined in Section 17026 of the Business and Professions Code. (c) Upon the proclamation of a state of emergency declared by the President of the United States or the Governor, or upon the declaration of a local emergency by an official, board, or other governing body vested with authority to make that declaration in any county, city, or city and county, and for a period of 180 days following that proclamation or declaration, it is unlawful for a contractor to sell or offer to sell any repair or reconstruction services or any services used in emergency cleanup for a price of more than 10 percent above the price charged by that person for those services immediately prior to the proclamation or declaration of emergency. However, a greater price increase is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, during the state of emergency or local emergency, and the price represents no more than 10 percent greater than the total of the cost to the contractor plus the markup customarily applied by the contractor for that good or service in the usual course of business immediately prior to the onset of the state of emergency or local emergency. (d) Upon the proclamation of a state of emergency declared by the President of the United States or the Governor, or upon the declaration of a local emergency by an official, board, or other governing body vested with authority to make that declaration in any county, city, or city and county, and for a period of 90 60 days following that proclamation or declaration, it is unlawful for an owner or operator of a hotel or motel to increase the hotel or motel’s regular rates, as advertised immediately prior to the proclamation or declaration of emergency, by more than 10 percent. However, a greater price increase is not unlawful if the owner or operator can prove that the increase in price is directly attributable to additional costs imposed on it for goods or labor used in its business, to seasonal adjustments in rates that are regularly scheduled, or to previously contracted rates. (e) Upon the proclamation of a state of emergency declared by the President of the United States or the Governor, or upon the declaration of a local emergency by an official, board, or other governing body vested with authority to make that declaration in any city, county, or city and county, and for a period of 90 60 days following that proclamation or declaration, or any period the proclamation or declaration is extended by the applicable authority, it is unlawful for any person, business, or other entity, to increase the rental price, as defined in paragraph (11) of subdivision (l), advertised, offered, or charged for housing, to an existing or prospective tenant, by more than 10 percent. However, a greater rental price increase is not unlawful if that 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 percent or that an increase was contractually agreed to by the tenant prior to the proclamation or declaration. It shall not be a defense to a prosecution under this subdivision that an increase in rental price was based on the length of the rental term, the inclusion of additional goods or services, except as provided in paragraph (11) of subdivision (j) with respect to furniture, or that the rent was offered by, or paid by, an insurance company, or other third party, on behalf of a tenant. This subdivision does not authorize a landlord to charge a price greater than the amount authorized by a local rent control ordinance. (f) Upon the proclamation of a state of emergency declared by the President of the United States or the Governor, or upon the declaration of a local emergency by an official, board, or other governing body vested with authority to make that declaration in any city, county, or city and county, and for a period of 90 60 days following that proclamation or declaration, it is unlawful for any person, business, or other entity, to increase the rental price, as defined in paragraph (11) of subdivision (l), advertised, offered, or charged for commercial real property, to an existing or prospective tenant, by more than 10 percent. However, a greater rental price increase is not unlawful if that 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 percent or that an increase was contractually agreed to by the commercial tenant prior to the proclamation or declaration. It shall not be a defense to a prosecution under this subdivision that an increase in rental price was based on the length of the rental term, the inclusion of additional goods or services, except as provided in paragraph (11) of subdivision (l) with respect to furniture, or that the rent was offered by, or paid by, an insurance company, or other third party, on behalf of a tenant. This subdivision does not authorize a landlord to charge a price greater than the amount authorized by a local rent control ordinance. (g) It is unlawful for a person, business, or other entity to evict any residential tenant of residential housing and rent or offer to rent to another person at a rental price greater than the evicted tenant could be charged under this section after the proclamation of a state of emergency declared by the President of the United States or the Governor, or upon the declaration of a local emergency by an official, board, or other governing body vested with authority to make that declaration in any city, county, or city and county, and for a period of 90 60 days following that proclamation or declaration, or any period that the proclamation or declaration is extended by the applicable authority. It shall not be a violation of this subdivision for a person, business, or other entity to continue an eviction process that was lawfully begun prior to the proclamation or declaration of emergency. (h) It is unlawful for a person, business, or other entity to evict any commercial tenant of commercial real property and rent or offer to rent to another person at a rental price greater than the evicted tenant could be charged under this section after the proclamation of a state of emergency declared by the President of the United States or the Governor, or upon the declaration of a local emergency by an official, board, or other governing body vested with authority to make that declaration in any city, county, or city and county, and for a period of 90 60 days following that proclamation or declaration. It shall not be a violation of this subdivision for a person, business, or other entity to continue an eviction process that was lawfully begun prior to the proclamation or declaration of emergency. (i) The prohibitions of this section may be extended for additional periods, as needed, by a local legislative body, local official, the Governor, or the Legislature, if deemed necessary to protect the lives, property, or welfare of the citizens. Each extension by a local legislative body or local official shall not exceed 30 days. An extension may also authorize specified price increases that exceed the amount that would otherwise be permissible under this section. (j) (1) A violation of this section by a natural person is a misdemeanor punishable by imprisonment in a county jail for a period not exceeding one year, by a fine of not more than ten thousand dollars ($10,000), or by both that fine and imprisonment. (2) A violation of this section by any entity or by a person other than a natural person is a misdemeanor punishable by fine of not more than twenty-five thousand dollars ($25,000). (k) A violation of this section shall constitute an unlawful business practice and an act [Text truncated for display. Full text available on Congress.gov.]