2005 California Business and Professions Code Sections 17020-17031 Article 2. Definitions

17020.  The definitions in this article shall be used in construing
this chapter.
17021.  "Person" includes any person, firm, association,
organization, partnership, business trust, company, corporation or
municipal or other public corporation.
17022.  "Sell" includes selling, offering for sale or advertising
for sale.
17023.  "Give" includes giving, offering to give or advertising the
intent to give.
17024.  "Article or product" includes any article, product,
commodity, thing of value, service or output of a service trade.
   Motion picture films when licensed for exhibition to motion
picture houses are not articles or products under this chapter.
   Nothing in this chapter applies:
   (1) To any service, article or product for which rates are
established under the jurisdiction of the Public Utilities Commission
of this State and sold or furnished by any public utility
corporation, or installation and repair services rendered in
connection with any services, articles or products.
   (2) To any service, article or product sold or furnished by a
publicly owned public utility and upon which the rates would have
been established under the jurisdiction of the Public Utilities
Commission of this State if such service, article or product had been
sold or furnished by a public utility corporation, or installation
and repair services rendered in connection with any services,
articles or products.
17025.  "Vendor" includes any person who performs work upon,
renovates, alters or improves any personal property belonging to
another person.
17026.  "Cost" as applied to production includes the cost of raw
materials, labor, and all overhead expenses of the producer.
   "Cost" as applied to distribution means the invoice or replacement
cost, whichever is lower, of the article or product to the
distributor and vendor, plus the cost of doing business by the
distributor and vendor and in the absence of proof of cost of doing
business a markup of 6 percent on such invoice or replacement cost
shall be prima facie proof of such cost of doing business.
   "Cost" as applied to warranty service agreements includes the cost
of parts, transporting the parts, labor, and all overhead expenses
of the service agency.
   Discounts granted for cash payments shall not be used to reduce
costs.
17026.1.  (a) (1) Notwithstanding the provisions of Section 17026,
commissions or rebates regularly earned by the retailers of cellular
telephones may be used to reduce cost, provided, that in no event
shall the reduction exceed the greater of the following:
   (A) Ten percent of cost, as defined in Section 17026.
   (B) Twenty dollars ($20).
   (2) Consistent with the provisions of subdivision (d) of Section
17050, providers of cellular services shall be permitted to sell
cellular telephones below cost, provided that sales below cost are a
good faith endeavor to meet the legal market prices of competitors in
the same locality or trade area.
   (b) In each retail location, all retailers of cellular telephones
shall post a large conspicuous sign, in lettering no smaller than
36-point type, that states the following:  "Activation of any
cellular telephone is not required and the advertised price of any
cellular telephone is not contingent upon activation, acceptance, or
denial of cellular service by any cellular provider."
   The sign shall be prominently displayed and visible to consumers
and located in that area in each retail location where cellular
telephones are displayed and purchased.
   (c) No retailer of cellular telephones shall refuse to sell a
cellular telephone to any customer solely on the basis of the
customer's refusal to activate the telephone with the provider of
cellular service for whom the retailer is an agent.  Nothing herein
shall preclude a retailer from limiting the number of cellular
telephones that he or she is otherwise required under this
subdivision to sell to any single customer.
   The intent of this subdivision is to reaffirm the Legislature's
support for the Public Utilities Commission's policy that makes
illegal the act, or practice, of "bundling," as defined and described
in relevant decisions and orders of the commission.
   (d) The Public Utilities Commission may adopt rules and
regulations to fully implement and enforce the provisions of this
section.
   (e) Nothing in this section shall be interpreted to reduce, alter,
or otherwise modify the authority of the California Public Utilities
Commission to regulate, in any manner, or prohibit, the payment of
commissions or rebates to distributors or vendors of cellular
telephones.  The provisions of this section shall be effective only
to the extent that they do not conflict with any applicable
regulations, rules, or orders promulgated or issued by the Public
Utilities Commission.
   (f) This section shall become operative on January 1, 1994.
17026.5.  Notwithstanding the provisions of Section 17026, regular
term discounts granted to distributors by manufacturers of cigarettes
for cash payment customarily offered to distributors without
discrimination may be used to reduce cost.
   This section shall not apply to any anticipatory or special
discount for cash that may be offered by the manufacturers of
cigarettes.
17027.  In establishing the cost of a given article or product to
the distributor and vendor, the invoice cost of the article or
product purchased at a forced, bankrupt, closeout sale, or other sale
outside of the ordinary channels of trade may not be used as a basis
for justifying a price lower than one based upon the replacement
cost as of the date of the sale of the article or product replaced
through the ordinary channels of trade, unless the article or product
is kept separate from goods purchased in the ordinary channels of
trade and unless the article or product is advertised and sold as
merchandise purchased at a forced, bankrupt, closeout sale, or by
means other than through the ordinary channels of trade.
   Such advertising shall state the conditions under which the goods
were purchased, and the quantity of the merchandise to be sold or
offered for sale.
17028.  "Ordinary channels of trade" means those ordinary, regular
and daily transactions in the mercantile trade whereby title to an
article or product, in no way damaged or deteriorated, is transferred
from one person to another.
   "Ordinary channels of trade" does not include sales of bankrupt
stocks, closeout goods, dents, sales of goods bought from a business
or merchant retiring from business, fire sales and sales of damaged
or deteriorated goods, which damage or deterioration results from any
cause whatsoever.  This listing is not all inclusive but as example
only.
17029.  "Cost of doing business" or "overhead expense" means all
costs of doing business incurred in the conduct of the business and
shall include without limitation the following items of expense:
labor (including salaries of executives and officers), rent, interest
on borrowed capital, depreciation, selling cost, maintenance of
equipment, delivery costs, credit losses, all types of licenses,
taxes, insurance and advertising.
17030.  "Loss leader" means any article or product sold at less than
cost:
   (a) Where the purpose is to induce, promote or encourage the
purchase of other merchandise; or
   (b) Where the effect is a tendency or capacity to mislead or
deceive purchasers or prospective purchasers; or
   (c) Where the effect is to divert trade from or otherwise injure
competitors.
17031.  Locality discrimination means a discrimination between
different sections, communities or cities or portions thereof, or
between different locations in such sections, communities, cities or
portions thereof in this State, by selling or furnishing an article
or product, at a lower price in one section, community or city, or
any portion thereof, or in one location in such section, community,
or city or any portion thereof, than in another.