Bill
SB 1365
SB 1365 strengthens price gouging laws with broader enforcement, including large-city prosecutors, and tightens emergency price rules for housing and essentials.
Title: Unlawful business practices: price gouging
Sections: Amends multiple provisions of the Business and Professions Code (16750, 16750.2, 16752, 16753, 16754, 16754.5, 16755, 16755.1, 16758, 16759, 16760) and amends Penal Code Section 396.
Purpose and intent
- Strengthen and expand California’s framework against price gouging and unlawful business practices, including actions by state and local prosecutors (Attorney General, district attorneys, city attorneys in large cities) and the ability to pursue civil and criminal remedies.
- Clarify and broaden emergency-related price controls and expand the definition of “housing” and other terms relevant to price gouging during declared emergencies.
Key provisions and changes
1) Expanded enforcement authority and cost recovery (Business and Professions Code)
- City attorneys of cities with populations over 750,000 gain authority to prosecute price gouging and unlawful business practices on behalf of the city, or affected residents, similar to the Attorney General and district attorneys.
- Local prosecutors may exercise powers previously reserved for the Attorney General, including investigations and related authority under Government Code provisions.
- Allows the prosecuting office to retain specified portions of proceeds or penalties (for investigation and prosecution, as applicable), with distribution rules similar to existing antitrust provisions.
- Establishes conditions for cooperation and coordination among the Attorney General, district attorneys, and city attorneys; includes notice requirements before filing actions and prior notice to the Attorney General for certain actions.
- Civil and criminal actions may be brought in superior court where the offense occurred, where the offender resides, or where the defendant does business.
- Expands authority for class actions and parens patriae actions (state on behalf of natural persons) to obtain monetary relief and injunctive relief, with detailed allocation of collected penalties.
2) Emergency price gouging adjustments (Penal Code and related sections)
- Price gouging during emergencies is retained as a criminal offense, but thresholds and definitions are adjusted:
- In the event of a proclaimed state of emergency or local emergency, it remains unlawful to raise prices for essential goods/services by more than 10% from pre-emergency levels, with certain exceptions.
- The bill revises the criteria for allowable price increases by tying them to directly attributable additional costs for labor or materials, and to costs incurred as a result of the emergency event.
- The “housing” definition is broadened to include all rental housing, regardless of initial lease term, for purposes of emergency price protections.
- The calculation for daily rental price after emergency declarations is clarified (one-thirtieth rule for daily rates not previously charged at a daily rate).
3) Housing and price setting specifics during emergencies
- Definitions expanded:
- “Housing” includes any rental housing without regard to lease term.
- “Rental price” and related calculations are adjusted to accommodate changes in occupancy status, furnishing, and other lease characteristics.
- Price restrictions for housing, goods, and services in emergencies remain, with additional clarifications to allow price adjustments only when directly attributable to emergency-related costs, subject to caps (e.g., 10% thresholds) and cost-plus markup considerations.
4) Remedies, penalties, and distribution of funds
- Civil penalties: Up to $1,000,000 per violation in civil actions.
- Consideration factors for penalties include: seriousness, persistence, duration, willfulness, and the defendant’s financial status and cooperation.
- Monetary relief in parens patriae and district attorney actions is allocated to state and local treasurers, courts, and relevant antitrust accounts, with detailed distribution rules.
- Court may grant both prohibitory and mandatory injunctions to restore fair competition.
5) Administrative and constitutional provisions
- Includes findings and disclosures related to public access to meetings and open records where applicable, and notes about potential local program costs.
- No mandated local reimbursement for certain costs (consistent with some price-gouging reforms).
Who would be affected
- Consumers and residents, especially in emergency situations, who may be protected from excessive price gouging for essential goods and housing.
- Businesses engaged in selling essential goods, emergency services, housing, building materials, gasoline, and related goods/services during declared emergencies.
- Local government entities (cities with populations over 750,000) and their prosecutors (city attorneys) who gain expanded enforcement authority.
- State and local prosecutors (Attorney General, district attorneys, city attorneys) with enhanced tools and potential cost-recovery mechanisms.
Key timelines and procedures
- Provisions align with emergency declarations by the President/Governor or local authorities.
- Price gouging protections are triggered for defined periods (e.g., 30 days, with potential extensions), and penalties apply per violation with civil and criminal avenues available.
- Notice and coordination requirements among prosecutors are specified prior to initiating actions.
Overall impact
- SB 1365 broadens and strengthens California’s tools to deter and remedy price gouging and unfair pricing practices, especially during emergencies.
- It enhances enforcement capacity at the city level in large cities, clarifies emergency price rules for housing and essential goods, and expands remedies and penalties to deter unlawful practices and restore fair competition.
Compiled from official sources — confirm details with the bill’s official record.
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