Assembly Standing Committee on Privacy and Consumer Protection

And I'd like to note that we are accepting written testimony through the position letter portal on the Committee's website. A couple of items as we start. We have three bills on the agenda today, and the following Bill has been approved for consent. SB 793. The motion is due passed to the Insurance Committee, and I will entertain a motion on the consent calendar as soon as we establish quorum. So I see that we were in good shape.

I guess Mr. Essayli ducked out for a moment, so this is an invitation for our Republican colleagues to rejoin us. But why don't we go ahead and establish quorum. So, Madam Secretary, can you please establish quorum?

Gabriel. Gabriel, here. Patterson. Bauer-Khan. Bauer-Khan, here. Bennett. Bennett, here. Essayli. Essayli, here. Fong. Irwin. Irwin, here. Kalra. Oops. Lowenthal. Lowenthal, here. Papan. Papan, here. Wicks. And Wilson.

All right. Thank you, Madam Secretary. We have established a quorum, and so I will now entertain a motion on the consent calendar. That is SB 793. The motion is due passed to the Insurance Committee. Do we have a motion? A motion by Assemblymember Lowenthal. A second by Assemblymember Bennett. Madam Secretary, please call the roll.

On the consent calendar. The motion is due passed to the consent calendar. Gabriel. Gabriel, aye. Patterson. Bauer-Khan. Bauer-Khan, aye. Bennett. Bennett, aye. Essayli. Essayli, aye. Fong. Irwin. Irwin, aye. Lowenthal. Lowenthal, aye. Papan. Papan, aye. Wicks. Wilson.

We have seven votes, so the consent calendar passes. We will leave the roll open for absent Members to add on, and at this point, we will move to file item number one, SB 644. Senator Glazer.

Thank you, Chair Gabriel and Members. Thank you for taking the time to hear this Bill today. I also want to particularly call out my thanks to the staff for the superb analysis that's been done on the Bill. I appreciate the thoughtfulness that they put into it, and I think it makes a lot of the points that I'm going to make today. Members, I've had some sidebar conversation with some of you, but the question that I always ask is how many of you have made reservations for lodging on the Internet?

And most, I think, have done that, in fact, at town halls that I've done with Assemblywoman Bauer-Khan. I've asked that question to the audience and been surprised that about 80% of the hands go up, that they are using the internet for reservations. And of course, a lot of that is not just about directly with the hotel establishment, it's also through third party apps. And of course, this Bill is a result of the feedback that I've gotten, not only personal experience, but feedback that I've gotten that it's really easy to make mistakes on the internet when you're making these types of reservations.

In some cases, you get redirected to a site that you thought was the hotel and turns out not to be the hotel, and it's a third party app. In other cases, you're actually working through an established third party app. But if you ever make a mistake and you're not dealing directly with the establishment, it's a mistake that has no reversal to it in many cases. That that mistake means that whatever you committed to, if you weren't aware of the fees that were being charged until you got to the end, if you weren't aware of exactly who you had committed to, there's no recourse.

One minute after you've given them your credit card and that confirmation comes back, you have a problem. And that's really what this Bill is trying to do. It's trying to get at that inadvertent mistake that you make, sometimes weeks in advance, months in advance for a vacation where you thought you were doing something and turned out it wasn't. Under the provisions of this Bill, it simply says that if you decide that you've made that mistake, that 24 hours after you've made that reservation, you have the chance to get your money back. It's very similar to what's in place on the federal rules for airlines.

If you make a reservation, even a non-refundable airline reservation, under federal law, you can get your money back in 24 hours if you so indicate. And that's really what this Bill intends to do. I would note that we have had a lot of fruitful conversations in the last few days on this under the guidance of your Chair to try to, there have been some opposition from folks about it, and we've had some differences that we've been talking about over the last few months, and we have, I think, reached some agreements I'd like to share with you on this Bill today.

The first is that we've changed. It's never been my intention to allow for a gaming of the system, someone who's trying to take advantage of this 24 hours cancellation to do things that normally they would not be able to do. And so the focus of that problem has been rooms that have been unsold for weeks and months going into the last few days before it was available, that somehow, without a lot of notice, that you could reserve it and then cancel it.

And that's really been the heart of the differences that we've had. And in the Bill, it says that if you make the reservation 24 hours before you're actually going to be there, you can't cancel it. You don't get that privilege. But if it's 25 hours, you would get that privilege. And so it's trying to figure out that narrow problem in the scope of what this Bill is attempting to solve. And so I'm willing to change that limitation from a 24 hours before you are to occupy that lodging establishment to a 72 hours. 72 hours.

You don't get the 24 hours cancellation anymore under this Bill. Okay. The second thing that I've tried to be responsive to, there are services that are offered to consumers where they don't disclose the name of the establishment. For whatever reason, they're willing to get a discount if you don't really know where you're reserving. A common example of that is Hotwire, I think Priceline, something similar. And believe me, I'm very familiar because I've used them dozens of times. I like the discount. I think I know where I'm going to be.

And so it's an eyes open agreement. It's an eyes open agreement. I understand that this 24 hour cancellation does interfere with that business model. I think that there is an easy workaround, which is that you don't disclose the establishment until 24 hours after you've gotten payment for it. But I still appreciate that there are issues in that model that this Bill would interfere with. So I'm agreeing to exempt opaque rates. Opaque rates. So Hotwire is the example of that.

And language is still to be finalized, but I've seen draft language, and I think it's very close to, I think we have an agreement on. And finally, to deal with this change in business operations and the disruption that that may create, I've agreed to delay implementation of this Bill until July 1st of 24, giving an additional six months to make sure that there's no issues. So I want to thank the Chair for his encouragement in these conversations.

And I certainly want to thank all the business partners that I know we'll hear from in a few minutes, because they do provide a good service, and all we're trying to do is provide a consumer friendly element of it for those who inadvertently make mistakes. That's the Bill before you today. And with that, I respectfully ask for your aye vote.

Thank you very much, Senator. I appreciate that. And thank you for all of your hard and diligent work and for explaining to the Committee all of the negotiations you've had and the conversations you've had. And I do want to compliment you, and I'll do that more later, but for the constructive way that you've approached this. Do we have any witnesses in the hearing room in support? All right, seeing none. Do we have any witnesses in the room in opposition?

Yeah. Thank you, Mr. Chair and Members. I'm Julee Malinowski-Ball. I represent the California Hotel and Lodging Association. Just a reminder, CHLA represents the big brands down to the little airbnbs and everything in between. As of maybe four minutes ago, I did get permission to say with these amendments, we are going to go to neutral. So we thank you very much to the Committee and the author for working with us. We hope it's actually not the end of the conversation.

There are still some other minor technical issues that we believe need to be resolved in light of the new amendments. But again, we've gone neutral, removed our opposition, and we thank everyone else for their efforts on this.

Thank you.

Robert Moutrie for the California Chamber of Commerce. We also really appreciate these discussions, and we will be going neutral-based on these changes. Thank you.

Hi, Chair and Members. Emellia Zamani with the California Travel Association. Thank you to the author and the chair for the hard work on resolving some of the industry's issues. California Travel Association has more than just hotels, of course. We're still looking at addressing the travel package issue, but with the amendments that you've discussed today, I think once I go back to my Members, hopefully we can get to a place of agreement. Thank you so much, and I'll follow up with you when we know more.

Thank you.

Good afternoon, Chair and Members. Sabrina Lockhart with the California Attractions and Parks Association. Align myself with the comments made with my colleague from Cal Travel. I really appreciate the work so far. Hope we can work out some issues related to packages. Thank you.

Wonderful. Thank you very much. With that, we will bring it back to Members of the Committee. Questions? Comments? Mr. Lowenthal, and then Assemblymember Bauer-Khan.

Compliments to you, Senator, and to you, Mr. Chair, on the work done to get everybody aligned on this. And I find myself supportive of this Bill. Can you help me understand better or define better what opaque pricing is?

Certainly. It's where you know the dates and you know the locations in which you want to find a lodging establishment, but you don't know the name of the lodging establishment. You may know qualities. How many stars? Three stars, two stars, four stars? You may know the location in a jurisdiction, so you know it's downtown, not out in Folsom. And the commitments, that the negotiations that allow these sites to offer these rates are based on the agreement that you won't disclose the actual hotel until after the reservation is made and paid for.

So there's no advertising of a discounted rate for the Hyatt. You may go and see on the website that the Hyatt is $250 a night, and you may find a discount packaging site that may sell it for $180 a night. But you may see a four star on Hotwire for $120, and it'll describe a four star in the downtown area, but you don't know whether it's the Sheraton, whether it's the Citizen, whether it's the Kempton, or whether it's the Hyatt, if there's four or four stars in downtown. So it's only upon payment of that $120 is using an example that they will then disclose that you have. Congratulations, sir. You've gotten the Hyatt.

In future iteration of the Bill will define this?

Yes, we'll define what an opaque service is.

I'm so far away. I just want to thank the Senator and the opposition for coming together on what is really important. I think protections for Californians, like the Senator said, we've all been in a situation where we've made a mistake online and want that cancellation and when you're booking an airline, you're now protected. And so it's important that we have protections broader, but also ensuring that some of the discounts that allow some Californians to travel in ways that they otherwise wouldn't are also protected.

So I think amazing work coming to what appears to be an agreement that everyone could come to. I think that's what we should do in every Committee. So thank you, Senator, for being a part of that.

Assemblymember Bennett.

Appreciate the conversation that I had with you last evening, Senator, and appreciate your modifications. I'm just going to say this for the record, which is sort of a repeat of the things that I mentioned to you, but with these high-end hotels, et. cetera. They can oftentimes, as you say, if they have rooms that have been sitting vacant for a long period of time, that's not the issue. But I have a fair amount of experience constantly going to soccer tournaments and trying to organize all the parents in those soccer tournaments.

And many of them do wait till the last week, and then they do check with the more high priced hotels, and when they find out they're full, that's when they go to. So, just in the interest of trying to protect those smaller mom and pop hotel locations, I appreciate you moving it, because I think that it puts a distinct disadvantage. They are people who book up a lot of their rooms in the last four or five days that are out there.

So I appreciate the modification. The one thing that I asked, since we don't have the language in front of us, is you just said something. You said if you book 24 hours in advance with your old language, you wouldn't get this. But if you book 25 hours in advance, you would be able to lock that room up all the way until 1 hour before you were supposed to get there. I think that, again, would have been a tremendous disservice, but I hope you don't put that language in. What I think is appropriate is 72 hours in advance. The establishment no longer has to worry about the 24 hours notice, which is a little bit different.

Somebody books 73 hours in advance, they can cancel up to 72 hours in advance. Somebody that books four days in advance, they've got the full 24 hours. So I hope you would consider that, because, again, for the small mom and pop places, somebody makes a reservation on Wednesday morning, 73 hours or whenever, 73 hours in advance of arrival. That's a pretty critical time for them. So that's my request. But I certainly going to support the Bill, and I really appreciate the conversation that we had and your willingness to compromise and to bring on all of the opponents into a neutral position. Thank you.

Assemblymember Essayli.

Thank you, Mr. Chair. I just wanted to thank the Senator for working diligently on this and the opposition as well. I think you raise a legitimate consumer protection issue, but as with most legislation, it's a delicate balance, and I appreciate you engaging in that back and forth. We want to protect consumers, but also recognize it's an extremely difficult business to be in. It's very cutthroat and they do a great service of bringing in money to the state and tourism.

So I really appreciate you working with them. And devil's always in the details. So I look forward to hopefully supporting this fully on the floor. So thank you, Senator.

Let's go with Assemblymember Wicks and then Assemblymember Fong.

Hi, Senator. Sorry to have missed your presentation, but I did get debriefed on the amendments, and you and I had a chance to talk this morning as well. I think you've landed in a really good place. Appreciate you pushing forth on the consumer protections that I do think are warranted, while also working with the opposition to ensure that we're taking all the different unintended consequences into account.

It's my hope that with these amendments, that opposition will come off and there won't be any kind of moving of the goalposts. But I appreciate your thoughtfulness on this, and I'm happy to support the Bill today.

Assemblymember Fong.

Thank you, Mr. Chair. Actually, before I ask some questions or comment, may I ask what the amendments are, so that we know that what was agreed to?

Yeah, do you want to, Senator? You want to give the quick version?

The short version is that we've moved the window where cancellations wouldn't be allowed from 24 hours to 72 hours three days in advance. Second is that I've committed to exempting the websites that are opaque, in other words, where you don't really know the lodging establishment by name. That business model would not be included in the requirements of the Bill. That's like a Hotwire or a Priceline.

And finally, that I've agreed to delay implementation for six months to allow any kind of retooling that would be required to adhere to the requirements of this Bill to July 1st of 2024.

Thank you very much. I certainly want to compliment you. I appreciate the time you gave me talking through this Bill. I know that I think you've addressed a lot of those concerns. While I haven't seen the amendments in print, we'll definitely look forward to, on the floor, won't lay off the Bill today, but certainly we'll look forward to the amendments when they are finalized. Thank you very much, Senator.

We have a motion from Assemblymember Papan, a second from Assemblymember Bauer-Khan. I do thank Assembly Member Lowenthal and then the Vice Chair.

Yeah. Just very quickly, Senator, a few questions just occurred to me as we were thinking. This is regarding properties located in the State of California, not the location where the bookings are taking place, correct?

That is correct. The properties are in California. The Bill is written, is intended to apply just to the properties in California.

Just for the properties physically located in California. And then the second question that I had for you is, what I've noticed is that so many booking sites now are actually booking for personal stays as well. So for example, orbits. If you go on orbits, in a hotel stay, will go beyond the actual hotels and book in a way that an airbnb would.

I'm not sure I'm following you.

It's booking private residences. Hotels are booking for private residences the way that airbnb does right now.

Right. So there is a definition in the Bill for who this applies to. Is that what you're getting at? Does this apply to those?

It is. So it's not the booking sites themselves?

I think we define it as short-term rentals. That would be covered by that example, I believe so. I can't tell you for sure. But that's the intention is to include the short-term rental community in this so that there's an equal playing field for everyone.

Okay.

Thank you, Senator, for bringing this Bill. And actually I was booking last night not in California, but a vacation rental in Oregon and it's for July and the website says when you book there's no refunds because it's within 30 days, you know? And so this was at like 10:00 at night. So I texted my wife, who's already sleeping. She's got a real job. Just kidding, everybody. Don't get offended by that. So she didn't check it. She checks it this morning and she says, yeah, no, that's right.

But concerned me, obviously, I wanted to double check that, that she was right on that on our dates and everything. So I had to make sure she was okay. So I totally appreciate where you're going with this and I am supportive of it. I do prefer to see the amendments, obviously, in writing and all that. If we don't have. I want to see this move out of Committee. I'll just say that. So I have to be there. I will. But my preference would be to see it in writing and supporting it on the floor, but I don't want it to get held up today. So if I got to be there, I will. So thank you.

All right. Any other Members? If not, we have a motion and a second. Just a few housekeeping items. I do want to confirm, Senator, that you're going to accept the amendments that are in the Committee analysis?

Yes.

Okay, wonderful. And I would just ask if you're open to it to allow the privacy Committee consultants to just be involved as you're ironing out the language of these amendments. Wonderful. Thank you. So I want to pick up where Assemblymember Bauer-Khan left off and compliment both you and the opposition on this. To me, this is sort of common sense consumer protection here, and we certainly want to accentuate the benefits of that.

While we can minimize any unintended consequences here, and we certainly are very, very proud of our tourism economy here in the State of California and love welcoming visitors. It supports a lot of jobs, a lot of industry here in California. And I think that the business community raised some important points for us to consider about their business models, about how these things work, about some undetected consequences, perhaps on the margins. And I want to compliment you. I would say, of course, expectedly, we're sensitive and receptive to those.

I know you're very sensitive to concerns of the business community and just compliment you all for the way that you had those conversations. I think you've arrived at amendments that preserve the really important consumer protection benefits of this Bill, but also address some of those things, and as we heard today, have removed a lot of the opposition, and maybe all of it once folks have an opportunity to go back and check in with their members. So kudos to you, kudos to Mr. Moutrie and everyone in the folks representing industry for helping to get us to this point. I think this is how the process is supposed to work. I'm happy to support the Bill and would invite you to close.

Thank you, Chair, and thank you for your support and encouragement and assistance in the Bill. I would say this, that I don't usually legislate in this space for those who know, finished my 8th year in the Senate. But I do try to act responsibly in places in which there is potential harm to the good business folks, that we want to operate and create good jobs here in our state. So I think that the balance is here, and I appreciate your consideration today. Would respectfully ask for an aye vote.

Okay. Thank you very much, Senator. So we have a motion and a second. The motion is due pass as amended to the Judiciary Committee. Madam Secretary, please call the roll.

Item number one, SB 644 by Senator Glazer. The motion is due pass as amended to the Judiciary Committee. Motion won by Assemblymember Papan, second by Bauer-Khan. Gabriel. Gabriel, aye. Patterson. Patterson, not voting. Bauer-Khan. Bauer-Khan, aye. Bennett. Bennett, aye. Essayli. Essayli, not voting. Fong. Fong, not voting. Irwin. Irwin, aye. Lowenthal. Lowenthal, aye. Papan. Papan, aye. Wicks. Wicks, aye. Wilson.

Your Bill has seven votes. It is out. Congratulations. We will leave the roll open for absent Members to add on.

Thank you so much.

Thank you. All right, we will now move to our final Bill of the day. Welcome, Senator Umberg. This is file number two. Move the Bill and second by the Committee, I will take the motion from Assemblymember Fong and the second by Assemblymember Bauer-Kahan. Senator?

Yeah. I've been a litigator, so when the judge issues a tentative in my favor, I try to be smart enough not to ruin it. But if you have questions, I'll be happy to respond. Do let me thank your consultant. Jith has been very helpful, and I appreciate your work on this Bill and other bills. You probably cringe when you see my name on a Bill, but thank you for your help.

Thank you. And likewise, we always enjoy working off of the good analysis that are put up by your Committee consultants. So thank you for that. It sounds like there's a lot of excitement about this Bill among the Committee, but I will just ask, are there any witnesses in the room in support of the Bill, any in opposition? Seeing none, we will bring it back to the Committee. Any questions, comments from Members of the.

Committee just since I moved the Bill, and I agree with you. Stop at a yes, but I would like to be out as a co author. I think it's a great Bill, if you.

All right, thank you very much, Assemblymember. Assembly Member Wicks.

I just want to thank the Senator for bringing this Bill forward. I think we need to do everything we can to ensure that social media companies in particular are being responsible actors, particularly as it pertains to our children. I've done a lot of work in the space as well, and I selfishly care about it.

As the mom of a six and a two year old, my hope is that when they get a little bit older, we'll have created more guardrails and better framework and more accountability and required them to be more responsible actors. So I just appreciate your work in the space, and I would love to be added as a co author as well.

All right, thank you very much. So, Member Bennett, same request.

I'd love to be honored as a co author.

Thank you. Thank you so, Member Bennett, thank you. Hopefully they all go like this. Any other questions? Comments?

Vice Chair, Senator, thank you very much for the work you're doing in this area. It's something very important to me. Unfortunately. I've had constituents pass away from receiving drugs online. Actually, I've learned a lot in that process, including people's ability to sort of circumvent things that are out there. And sometimes I think that the platforms could do a better job. And in some of these cases. We shouldn't really have to go get a court order to have this.

There's one particular instance right now, people can go online and watch a person ship drugs. It's very obvious what they're doing. And this particular platform has not removed the material. Of course, I could probably get involved and get it removed, but Joe Patterson parents should be able to get it removed from the platform without seeking a court order. So I totally support this Bill 100%. Obviously, I want to see more aggressive action on this in defense to the platforms.

I do think that they're not wanting to be bad actors in this space, so I want to be very clear on that. But this is a big problem. This is how kids are getting fentanyl in my district, unfortunately, and I think around the state. So appreciate your work in this area, and I look forward to supporting it. Thank you.

Thank you. All right, seeing no further comments, I just want to add my voice to the chorus. Senator Umber, thank you for your work in the space. I think, as you know, protecting folks online, particularly children and young people, has been a top priority for this Committee, for a lot of Members of this Committee. We've a lot of that work in a bipartisan fashion. I know that you've been an important partner in that, and I think this is an important effort. So we're very grateful for your work. Happy to support the deal and would invite you to close.

Well, thank you. Thank you for your work in this area. This is patterned on a Bill that some of you saw last year concerning those who post violent threats online and gives them the opportunity to have them removed.

I agree with you, summary Member Patterson, that I would hope that the social media platforms would take it down once they've been notified, not requiring a court order, and I think that they will actually. But if they don't, then we have a tool to incentivize them or sanction them if they fail to do so. This is a challenge that we're all facing.

It's a challenge that is increasing, and I'm hoping this is one of many tools in this area to address the epidemic of drug overdoses and drug poisoning in California. Thank you.

Thank you very much, Senator, seeing we have a motion in a second, so, Madam Secretary, please call the roll.

Itam number 2, SB 60 by Senator Umberg. First motion made by Assembly Member Fong and a second by Bauer-Kahan. Gabriel, aye. Patterson, aye. Bauer-Kahan, aye.Bennet, aye. Essayli, aye. Fong, aye. Erwin, aye. Lowenthal, aye. Pappin, aye. Wicks, aye. Wilson.

That has 10 votes your bills out. Thank you very much, Senator.

I think Assembly Member Wilson is going to be a while.

So I've heard. Thank you. Alright, at this point, I know that we had a few folks. We're going to open it up for add ons on the consent calendar. So, Madam Secretary, can you call the role in the consent calendar?

The consent calendar. The motion is do pass to the consent calendar. Patterson? Patterson, aye. Fong? Fong, aye. Wicks? Wicks, aye.

The consent calendar is now 10-0.

Alright, this hearing is adjourned.