Unlawful business practices: price gouging.

The definition of 'local emergency' no longer includes war. Previously, a local official could declare a local emergency for war and trigger price gouging protections. Now, war can only trigger protections through a state-level declaration by the President or Governor.

A new SEC. 1.5 amends the existing Penal Code Section 396 (the current price gouging statute) to read with the same restructured language used in this bill's new section. The digest states this incorporates changes proposed by SB 1365 and is operative only if both bills are enacted and SB 493 is enacted last.

Cost-justification exceptions for goods, contractor services, hotel rates, and rental prices were restructured from inline 'however' clauses into formal affirmative defenses with numbered subdivisions. This explicitly places the burden of proof on the defendant to demonstrate the price increase was justified by additional costs.

The rental price affirmative defense (subdivision e(2)) now requires that repair or addition costs were incurred within the year prior to the emergency, and adds a condition that the person must prove either the housing was rented or offered for rent when costs were incurred, or that intent to offer the housing for rent within six months already existed before the emergency.

War-related price gouging prohibitions now explicitly apply only upon a proclamation or declaration by the President of the United States or the Governor, rather than potentially being triggered by any local emergency declaration.

A new 30-day time limit is imposed on war-related prohibitions following the proclamation or declaration. This period may be extended for additional 30-day periods if deemed necessary.

Extensions of the war-related prohibition period may also authorize specified price increases that exceed the amount permissible during the initial 30 days, giving authorities flexibility to allow certain price adjustments during prolonged emergencies.

The definition of 'war' in subdivision (j)(13)(B) was narrowed from 'active military operations against any foreign power, state' to 'active military operations against any foreign state,' removing the term 'power.'

The legislative findings section was reworded for clarity, specifying that war is included in the definition of a 'state of emergency' and that the Attorney General's written opinion requirement applies to war-related price increases.

Entirely new Section 1 amending Penal Code Section 396 (price gouging) was added. It adds 'war' to the list of disasters that trigger price gouging protections, with a broad definition covering Congress-declared wars, active military operations against foreign powers, and UN-assisted armed force actions.

The state-mandated local program designation changed from 'no' to 'yes,' reflecting that the price gouging provisions impose obligations on local agencies.

A new no-reimbursement provision (Section 2) was added, stating that no reimbursement is required under Article XIII B of the California Constitution because the act creates a new crime or changes a penalty for a crime.

In the fair manager salary survey provision, 'federal, state, regional, and local positions' was narrowed to 'state, regional, and local positions,' removing federal positions from the comparison pool.

The funding source language for triggering the salary survey was simplified from 'nonstate funds from the California Emergency Response and Resiliency Venues and Fairgrounds trade association fair industry' to simply 'funds from the fair industry,' removing the specific organization name and the 'nonstate' qualifier.

The original Section 1 (fair compensation) was renumbered to Section 2 to accommodate the new price gouging section as Section 1.

New subdivision (j)(14) requires that for a state of emergency proclaimed due to war, the price-gouging prohibitions and penalties only apply to essential consumer goods or services for which the Attorney General has issued a written opinion (consistent with Government Code Section 12519) finding a sufficient nexus between the war and increases in prices of those specific goods or services.

The definition of 'war' in subdivision (j)(13)(B) was changed from 'any foreign power' to 'any foreign power, state,' adding 'state' as a separate category of entity the US could be engaged in active military operations against.

A typo was corrected in subdivision (f): 'evict any a residential tenant' was changed to 'evict a residential tenant.' Page numbers were updated from 94 to 93 throughout.

Entire Section 2 amending Section 4508 of the Food and Agricultural Code was removed. This section had established a new compensation framework for secretary-managers of district agricultural associations, including salary surveys every three years starting January 1, 2027, a single salary range set by the Secretary of Food and Agriculture, cost-of-living adjustments, merit increases up to 10 percent, and a 40 percent premium for managing multiple districts.

The bill title was narrowed from amending both Section 4508 of the Food and Agricultural Code (fairs) and Section 396 of the Penal Code (price gouging) to amending only Section 396 of the Penal Code.

Coauthors changed from Assembly Member Wilson and Senator Dahle to Senators Allen and Stern, indicating a shift in legislative sponsorship or coalition.

The state-mandated local program designation was corrected from 'no yes' to simply 'yes', confirming the bill imposes a state-mandated local program due to expanding the price gouging crime to cover war-related emergencies.

The source of nonstate funds for the salary survey was broadened from a single entity (the California Emergency Response and Resiliency Venues and Fairgrounds trade association) to the fair industry generally, including but not limited to trade associations, district agricultural associations, and county event centers.

Senator Dahle was added as a coauthor of the bill.

Fixed a duplicated word ('regional regional' to 'regional') and cleaned up garbled text in the digest regarding the funding condition for the salary survey.

A new subparagraph (C) requires that the salary survey be conducted only if the secretary receives nonstate funds from the California Emergency Response and Resiliency Venues and Fairgrounds trade association for that purpose. This makes the entire salary range adjustment mechanism contingent on external funding.

The previously unconditional requirement to conduct a salary survey by January 1, 2027 and every three years thereafter is now conditional on receiving specified nonstate funds, effectively making the survey optional unless that funding materializes.

Subparagraphs formerly labeled (C) and (D) were renumbered to (D) and (E) to accommodate the new funding condition provision. The bill summary was also updated to reflect the new condition and a drafting error ('recharacterizing renaming') was corrected to simply 'renaming'.

Assembly Member Wilson added as co-author of the bill.

The department's annual duty to maintain job descriptions changed from a separate description for each individual fair manager to a single job description for the secretary-manager classification.

Removed the requirement that the department annually report its findings to fair directors and fair managers (former subsection (c)).

The digest changed the term from 'recharacterizing' to 'renaming' when describing the transition of fair managers to secretary-managers, suggesting a simpler retitle rather than a fundamental change in role.