Were you able to keep track of the new legislative changes that affect California businesses and business lawyers? Don’t worry, we did and here are some of the key statutory changes you need to know about.
- California’s cap-and-trade is set for the long haul. The goal of California’s cap-and-trade program is to ensure that statewide greenhouse gas emissions are reduced to at least 40 percent below the 1990 level by the year 2030. The program involves a variety of technical measures, among which is an exemption from sales and use tax for qualified personal property used primarily in the generation, production, storage, or distribution of electric power. This tax exemption, like the program itself, has been extended until 2030. See Stats 2017, ch 135, effective July 25, 2017. Learn more on this in Micheli, California’s Cap-and-Trade Bill Enhances Existing Tax Incentive in the September 2017 issue of the California Business Law Reporter.
- In response to the fraudulent account scandal, we now have the Wells Fargo anti-arbitration law. The Consumer Financial Protection Bureau found that from 2011 to mid-2016, Wells Fargo opened about 1.5 million bank accounts and 565,000 credit card accounts without customer consent. The resulting customer lawsuits against the bank were forced into binding arbitration under clauses in the customers’ original account agreements, which Wells Fargo argued should also extend to accounts created later. In response, the Legislature enacted a law making arbitration agreements in such situations unenforceable. See CCP §1281.2 (amended by 2017 Stats, ch 480, effective January 1, 2018). For more on enforcement of arbitration provisions, turn to CEB’s California Law of Contracts, chap 9.
- The State Board of Equalization is stripped of authority. As part of the California state budget process, the Legislature stripped almost all authority from the State Board of Equalization (SBE) and transferred the SBE’s duties and responsibilities to two new state departments: the California Department of Tax and Fee Administration and the Office of Tax Appeals. This move was the culmination of decades of complaints lodged against the elected members of the SBE. See Stats 2017, chs 14 and 16, effective July 17, 2017. These new laws are discussed in Micheli, 2017 Budget Deal Makes Significant Tax Changes in California in the July 2017 issue of the California Business Law Reporter.
- Consumers will get some protection from automatic renewals and continuous service agreements. A new law will require any automatic renewal offers or continuous service offers that include a free gift or trial period to include a clear and conspicuous explanation of the price that will be charged after the trial ends. Businesses will have to get the consumer’s consent before charging a consumer’s credit or debit card, or the consumer’s account with a third party, for an automatic renewal or continuous service that’s made at a promotional or discounted price for a limited period of time. And businesses will have to disclose how to cancel, and allow the consumer to cancel, before the consumer pays for the goods or services. See Bus & P C §17602 (added by Stats 2017, ch 356, effective July 1, 2018).
Get more of these key legislative updates in CEB’s free 2017 NewsFlash! Key Statutory Developments for Business Lawyers. To keep up with all developments in business law, subscribe to CEB’s OnLAW® Business Law Library—a virtual encyclopedia for business law, full of commentary, practice advice, and sample documents.
From all of us at CEB, we wish you a very happy and healthy new year!
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