This bill makes it unlawful during a declared state or local emergency — and for specified periods afterward — to raise prices for a defined list of essential goods, services, housing, and hotel rooms by more than 10 percent above pre-emergency prices. It creates a cost-pass-through defense that permits larger increases only when attributable to higher supplier or labor costs, and it prescribes special rules for contractors, rental housing, and sellers that had no prior price history.
The measure builds criminal penalties (misdemeanor up to one year in county jail and up to $10,000 in fines) and treats violations as unlawful business practices under California’s Unfair Competition Law, while directing the Department of Justice to partner with local prosecutors for enforcement. For professionals in retail, hospitality, housing, construction, and municipal government, the bill alters pricing flexibility during emergencies and establishes specific evidentiary and recordkeeping pressure points firms should plan for.
At a Glance
What It Does
The bill bars increases above 10% for a specified catalog of consumer goods and services for 30 days after a declared emergency (180 days for contractor repair/reconstruction services). It allows higher increases only if the seller proves the increase is directly tied to additional supplier or labor costs and remains limited to customary markup over the new cost base.
Who It Affects
Retailers and online sellers of food and emergency supplies, contractors licensed under the Contractors’ State License Law, hotel and motel operators, landlords of short-term and year-or-less rentals (including mobilehome spaces), towing/freight/storage companies, and entities offering transportation or fuel.
Why It Matters
The bill replaces broad market discretion with bright-line percentage caps and creates criminal and UCL exposure — shifting compliance from optional best practices to legally enforceable constraints during emergencies. That raises operational, contracting, and pricing decisions firms must document and defend quickly after an emergency is declared.
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What This Bill Actually Does
The bill specifies a default 10 percent cap on most price increases for an enumerated set of essentials during a declared state or local emergency and for short windows afterward. For consumer food items, emergency supplies, medical supplies, building materials, heating fuel, gasoline, transportation/freight/storage, and many related goods or services, the cap runs for 30 days following the proclamation or any date set in that proclamation.
Contractors who perform repair or reconstruction services licensed under California law are subject to a longer 180‑day period. Hotels and motels face a similar 30‑day cap tied to their advertised pre‑emergency rates.
Where a seller faces legitimately higher input costs during the emergency, the bill preserves a defense: a business may exceed the 10 percent cap if it proves the increase directly resulted from additional supplier costs or higher labor/material costs, and the resulting price is no more than 10 percent above the seller’s new cost plus the markup the seller customarily applied immediately before the emergency. If a seller had no prior price for the item, the law caps post‑emergency price increases at 50 percent over the vendor’s cost, using the statutory definition of “cost.”Housing receives distinct treatment.
For rental housing with initial lease terms of one year or less, the bill bars landlords from increasing advertised, offered, or charged rents by more than 10 percent for 30 days after the declaration (or any extended period). It provides detailed rules for calculating the baseline rental price — actual recent rent, the most recent offered rent within one year, or 160 percent of HUD fair market rent when no recent rental history exists — and contains special rules for mobilehome spaces and furnished units.
The bill also makes it unlawful to evict a residential tenant and then re‑rent at a price that would exceed what the evicted tenant could be charged under this law for 30 days after the emergency.Enforcement layers a criminal misdemeanor penalty (up to one year in county jail and up to $10,000 in fines) on top of civil remedies: the statute explicitly makes violations unfair competition under Section 17200 and allows cumulative remedies. The Department of Justice must partner with local district attorneys to enforce the statute, and local bodies may extend the prohibitions in 30‑day increments or authorize higher allowable increases in extensions.
The bill also preserves any local ordinances that are more protective or carry harsher penalties and includes narrow exceptions for previously contracted rates, seasonal adjustments, and some business situations documented in the text.
The Five Things You Need to Know
Default caps: The bill caps most emergency-era price increases for enumerated goods and services at 10% for 30 days after a state or local emergency, with repair/reconstruction contractors subject to a 180‑day cap.
Cost-pass-through defense: A seller may exceed the 10% cap if it proves the increase is directly attributable to higher supplier, labor, or material costs and the new price does not exceed the seller’s post‑cost amount plus its customary pre‑emergency markup by more than 10%.
No prior-price rule: If a seller did not charge a price before the emergency, it cannot charge more than 50% above its vendor cost (as defined in B&P Code §17026) for that item during the covered period.
Housing and evictions: The law limits rent increases for rental housing (initial term ≤1 year) to 10% for 30 days and prohibits evicting a tenant and immediately re‑renting above the capped amount during that period; when no prior rent exists, the baseline may be 160% of HUD fair market rent.
Enforcement and penalties: Violations are misdemeanors (up to 1 year in county jail and $10,000 fines), constitute unlawful business practices under Section 17200, and are to be enforced through DOJ partnerships with local district attorneys.
Section-by-Section Breakdown
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Legislative findings and liberal construction
This opening subsection frames the purpose: emergencies can disrupt markets and lead to exploitative pricing, so the statute should be construed liberally to prohibit ‘‘excessive and unjustified’’ price hikes for essentials. Practically, that language signals courts to interpret ambiguous provisions in favor of enforcement and gives regulators conceptual cover to apply the law broadly to prevent consumer harm.
30‑day, 10% cap for consumer goods and services; proof-based exception and 50% rule
Subdivision (b) lists covered items (consumer food, emergency supplies, medical supplies, building materials, heating oil, gasoline, transportation/freight/storage and related services) and sets the baseline rule: no more than a 10% increase over the seller’s immediately pre‑emergency price or the price specified in the proclamation. It creates a two-part safety valve: a seller may justify a larger increase only by proving the rise is directly attributable to higher supplier or labor costs, and the adjusted price remains capped at the seller’s new cost plus the pre‑emergency customary markup plus 10%. The provision also covers situations where the seller had no prior price, imposing a 50% cap over the seller’s cost as defined in the Business and Professions Code.
180‑day rule for licensed contractors' repair and reconstruction services
Contractors licensed under the Contractors’ State License Law face a longer compliance horizon: the bill prohibits increases over 10% for repair and reconstruction services for 180 days after an emergency declaration. The same proof‑of‑cost exception applies, requiring contractors to trace price hikes to new supplier or labor costs and to show customary pre‑emergency markups when justifying higher charges; this recognizes the longer-tail nature of construction and rebuilding work following disasters.
Hotel and motel rate caps tied to advertised pre‑emergency rates
Owners and operators cannot increase published regular rates by more than 10% for 30 days after a declaration. The text allows greater increases when attributable to higher operating costs, seasonal rate schedules, or previously contracted rates — carving out common hospitality business practices while keeping advertised rates as the operative baseline for enforcement.
Rental price limits, baseline calculations, and eviction protection
The bill restricts rental price increases for short‑term and year‑or‑less housing to 10% for 30 days, supplies a layered scheme for determining the rental baseline (recent paid rent, most recent offered rent within the prior year, or 160% of HUD FMR when none exists), and creates special mobilehome rules tied to local rent control where present. It bars evicting a tenant and immediately re‑renting the unit at a higher price than the evicted tenant could have been charged under the statute during the covered period, though ongoing eviction actions lawfully begun before the proclamation may proceed.
Extensions, local authority, and sale‑price adjustments
Local legislative bodies, local officials, the Governor, or the Legislature may extend the prohibitions in 30‑day increments and may authorize specified price increases beyond the statutory caps during extensions. The section explicitly preserves more protective or harsher local ordinances (no preemption) and allows businesses that had temporarily reduced prices immediately prior to an emergency (sale prices) to use their normal pre‑sale price to calculate permitted post‑emergency pricing, preventing manipulable baselines.
Penalties, cumulative remedies, enforcement partnerships, and definitions
Violations are misdemeanors punishable by up to one year in county jail and/or fines up to $10,000 and are expressly designated as unlawful business practices under Section 17200, making civil penalties and injunctive relief available in addition to criminal prosecution. The Department of Justice must partner with local district attorneys to enforce the statute. The definitions subsection supplies the operative meanings — from ‘‘state of emergency’’ to ‘‘rental price’’ and ‘‘goods’’ — and contains specific rules (e.g., HUD FMR reference, furniture adjustments) that practitioners must consult when calculating baselines or preparing defenses.
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Explore Economy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Renters and short‑term tenants in affected areas — the 10% cap and eviction‑reentry restriction prevent sudden post‑disaster rent spikes and limit landlords’ ability to exploit vacant units.
- Consumers purchasing essentials (food, water, medical supplies, gasoline) — the bright‑line caps and criminal/UCL exposure create enforceable ceilings during acute supply shocks.
- Municipal emergency response officials — the statute provides a legal tool to deter exploitative pricing that can complicate relief operations and public safety efforts.
Who Bears the Cost
- Retailers and online sellers of covered goods — they must document pre‑emergency prices, cost increases, and customary markups to rely on defenses, adding compliance and recordkeeping burdens during chaotic periods.
- Contractors and construction firms — the 180‑day cap reduces pricing flexibility during the lengthy rebuilding phase, pushing them to absorb short‑term supply cost volatility or justify increases under the statute’s evidentiary standard.
- Landlords and hospitality operators — the rent and hotel‑rate caps constrain revenue management during demand surges and expose operators to misdemeanor risk and UCL suits if they fail to establish permissible exceptions.
Key Issues
The Core Tension
The central dilemma is protecting consumers from opportunistic price exploitation during emergencies while preserving sellers’ ability to pass through legitimate, often rapid, cost increases and to maintain supply; the bill solves for consumer protection with bright‑line caps and criminal enforcement but transfers significant evidentiary and economic risk to sellers, potentially reducing supply or prompting defensive pricing strategies that can undermine both relief and market functioning.
The bill presents several implementation and enforcement challenges. First, the statute relies on a seller’s ability to prove that price increases were ‘‘directly attributable’’ to supplier, labor, or material cost increases and to identify the ‘‘customary markup’’ used immediately prior to the emergency.
Those concepts can be fact‑intensive: firms will need contemporaneous invoices, historical markup calculations, and documented pricing policies, but emergencies often disrupt recordkeeping and supply chains, complicating compliance and defenses. Second, the baseline rules (most recent offered price, HUD fair market rent for blank‑slate units, exceptions for sale prices) invite disputes over which price snapshot applies, and online marketplaces with algorithmic pricing may struggle to identify the ‘‘price charged by that person immediately prior’’ if listings change frequently.
Third, the criminal misdemeanor penalty alongside civil UCL exposure raises strategic questions for prosecutors and regulated businesses. Prosecutors may face heavy caseloads and evidentiary burdens proving ‘‘unjustified’’ hikes, while businesses face the risk of both criminal and civil penalties from the same conduct.
Finally, the law risks unintended behavioral effects: suppliers or sellers might withhold inventory, ration sales, or shift to informal/black‑market distribution to avoid price ceilings, or they may preemptively raise advertised baseline prices ahead of proclamations. Local authorities’ ability to extend or loosen caps in 30‑day increments adds variability that can create a patchwork of rules across jurisdictions and uncertainty for firms operating regionally.
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