Assembly Standing Committee on Judiciary

Good morning and welcome to the Judiciary Committee hearing. Due to late opposition, AB 1253 Maienschein will be pulled off the consent calendar and the bill will be presented. We have a long agenda today, so we will need to be efficient with our time. As a reminder, each side will be allowed two minutes or two main witnesses two minutes each. Additional witnesses should state their name and organization only. This allows all authors a fair chance to present their bills and all Members of the public an equal chance to have their position reflected in the record. As we proceed with our bill hearing, I want to make sure everyone understands our committee rules to ensure we maintain order and run a fair and efficient hearing.

In order to facilitate the goal of hearing as much from the public within the limits of our time, we will not permit conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of legislative proceedings. We will not accept disruptive behavior or behavior that incites or threatens violence, even veiled threats. The rules of conduct by members of the public include no talking or loud noises from the audience.

Public comment may be provided only at the designated time and must be limited to your name, organization, and support or opposition of a bill. No engaging in conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of this hearing. No engaging in personal attacks of members of this committee, authors, or staff. And please be aware that violation of these rules may subject you to removal or other enforcement processes. Kudos to this committee. We already have a quorum. So very proud of everybody here. I will ask the Clerk to please call the roll.

Maienschein. Here. Maienschein, here. Essayli. Connolly. Here. Dixon. Here. Haney. Kalra. Pacheco. Here. Papan. Here. Reyes. Here. Rivas. Sanchez.

So the committee is here, but zero authors. So I'll go ahead and present my bill.

Item number nine, AB 1253. Begin when you would like.

Thank you, Madam Chair and members, I want to begin by accepting the amendments as proposed in the analysis. AB 1253 protects victims of sexual assault from being forced to repeatedly relive their trauma in court. In 2021, a California Supreme Court ruling changed the way probable cause hearings are conducted during the sexually violent predator civil commitment process. The court ruled that without an express hearsay exemption in statute, hearsay contained in an expert evaluation report is inadmissible.

As a result, a victim of a sexual offense is forced to relive the worst moment in their life and testify to their survived victimization in order to provide the basis for an expert's opinion. Because of the nature and statutory timeline of SVP hearings, the victim is often forced to testify with minimal notice or preparation about crimes that happened years or decades prior.

This leaves no time or opportunity to use trauma-informed care with the former victims or to allow them to seek appropriate mental health care to help them prepare for their testimony. AB 1253 provides a narrow hearsay exemption to allow the following portions of a police report to be admitted in SVP probable cause hearings. A victim statement, a statement of an eyewitness to the offense, and the statement of a sexual assault medical examiner who examined the victim.

These items are only admissible if the report covers a prior sexual offense that resulted in a conviction. The victim and any witnesses will still be required to testify and be cross-examined during the SVP trial phase, where circumstances must be proved beyond a reasonable doubt. AB 1253 allows the state to use prior statements to meet the probable cause burden while relieving victims of the pressure of making a sudden and immediate decision to testify. I respectfully ask for your aye vote, and I don't see my witness here, but hopefully, they'll show up.

Any witnesses in support of AB 1253? Seeing none. Any witnesses in opposition? Seeing none. Let's bring it back to the committee. Any questions or comments from the committee? Seeing none. Would you like to close?

Thank you very much. Madam Chair, respectfully request an aye vote.

All right, let's take roll.

Motion is do pass as amended. Maienschein. Aye. Maienschein, aye. Essayli. Aye. Essayli, aye. Connolly. Connolly, aye. Dixon. Aye. Dixon, aye. Haney. Aye. Haney, aye. Kalra. Pacheco. Aye. Pacheco, aye. Papan. Papan, aye. Reyes. Aye. Reyes, aye. Rivas. Sanchez.

That bill is out. We'll leave it open for those who arrived late so they can add on.

Thank you. Now, looking for authors, we can take up the consent calendar. Do we have a motion? Motion from Ms. Reyes. Seemed like a tie. Ms. Pacheco beat him just by an instant. So we have a motion and a second. Ask the Clerk to please call the roll. Oh, yeah. The consent calendar includes item 8, 1139 Garcia. Item 10, AB 1376, Carrillo. Item 11, AB 1650 Patterson. Item 12, AB 1720 Bauer-Kahan. Please call the roll.

Maienschein. Aye. Maienschein, aye. Essayli. Aye. Essayli, aye. Connolly. Aye. Connolly, aye. Dixon. Aye. Dixon, aye. Haney. Aye. Haney, aye. Kalra. Pacheco. Aye. Pacheco, aye. Papan. Aye. Papan, aye. Reyes. Aye. Reyes, aye. Rivas. Sanchez.

Consent agenda is out. We are waiting on. We've made calls to Ms. Wicks, Ms. Bonta, Ms. Rubio, Mr. Wallis, Mr. Ta, and Mr. Gipson. How can we get this to 3 hours? How can we keep our record going if these authors will not cooperate? Thank you. Thank you, Ms. Rubio. Item number three, AB 1171. You may begin.

Thank you, Mr. Chair and members, for the opportunity to present AB 1171, which would empower the licensed cannabis market to seek injunctive relief against unlicensed operators. I want to begin by accepting the committee's amendments and thank the Chair and his wonderful staff. Thank you. Absolutely wonderful job for your assistance in ensuring this measure meets the intended goal. Over the years, myself and many authors present here, present here have sponsored, supported, and advocated for additional enforcement against illicit operators in the cannabis market.

Unfortunately, the illicit market has continued to grow despite the additional enforcement steps we have taken in the past years. There are several clear indicators of the toll it is taking on licensed operators. Currently, four out of five cannabis purchases made in California are made on the illicit market. In May of 2022, there were close to 1500 brands in the market. Less than a year later, only about 1000 remain.

This has led to the largest multistate operators characterizing California's operating conditions as brutal and the investment climate as hostile. This, in turn, devastates the unionized workforce of licensed operators and reduces the opportunities for workers in this space as the legal business leaves the state. As such, it is clear unique steps must be taken to further empower the legal market. AB 1171 provides that unique support by simply empowering licensed operators to seek injunctive relief against nonlicensed operators.

I do not take this type of legislation lightly, as many of you know. However, this industry is at a crisis point and we must provide them with the tools to ensure they can compete. This measure simply imposes additional pressure on illicit operators and encourages them to either seek a license or leave the market to legal operators. Amendments taken today ensure this process is not abused while also deterring further bad actors from entering the market. AB 1171 is a unique solution to an incredibly complex problem and as such, has no opposition. With me to testify in support is Kristin Heidelbach, on behalf of UFCW Western States Council and Alberto Torrico, on behalf of the San Diego Imperial County Joint Labor Management Committee. Thank you.

Thank you, Ms. Rubio. First witness, please.

Good morning. My name is Kristin Heidelbach, cannabis legislative advocate for UFCW Western States Council. I want to first thank the author for her tireless work in trying to reduce the number of illegal and illicit operators in the cannabis industry. UFCW has partnered with her in the past on this issue and we will continue to do so as long as such a need is present. UFCW represents over 6000 workers across the cannabis industry in California through bona fide and collective bargaining agreements.

And we are working to represent thousands more who work for employers that have signed labor peace agreements with various UFCW locals. One of the biggest challenges for licensed unionized cannabis employers is the fact that 60% to 70% of cannabis products can be traced to illicit or unlicensed operators. Unfortunately, state and local enforcement has been unable to keep up with the growing illicit market. Additionally, UFCW remains concerned about what workers must endure while working for bad actors.

We unfortunately have heard firsthand stories of workers falling into grinders, lack of PPE, robberies, and more. These workers experience the worst working conditions and have little to no resources to seek help. In short, more needs to be done to clamp down on the nefarious actors. AB 1171 will empower licensed operators to seek judicial relief against their illegal competitors by giving them standing in Superior Court to seek a permanent injunction against unlicensed operators. One final point, UFCW does not support further criminalizing unlicensed cannabis operators. We support AB 1171 because it is strictly civil remedy, which is much needed in order to protect and bolster licensed operators. We appreciate your time. Thank you very much.

Thank you. Next witness.

Good morning. Thank you, Mr. Chairman. Alberto Torrico, on behalf of the Joint Labor Management Committee between UFCW Local 135 and March and Ash. Want to begin by thanking the author for her continued efforts in this space. As mentioned by Ms. Heidelbach, we have partnered with her on this issue in the past. Want to thank you, Mr. Chairman, and your staff for the amendments and the assistance in getting this bill to a place where we've clarified the issue of standing.

We've enhanced the penalty, which will be a significant deterrent. I just want to say that the Joint Labor Management Committee, we believe is the first of its kind in the country between a cannabis employer and a union. It's very important for companies that are licensed are doing the right thing by their employees by joining a union, signing a collective bargaining agreement, paying excellent wages, and providing benefits, that we take significant steps to deter the illicit marketplace.

The CDTFA report reported last year that there was a significant drop in tax revenue for the State of California and as Ms. Heidelbach noted 50, 60, or 70% of the marketplace is currently completely unlicensed. The secondary problem is that there are licensed operators that operate a second parallel business in the unlicensed marketplace. We think this bill is going to help on both fronts and will elevate the industry and thereby elevating the standard of living for the workers in this space. Proud to be the co-sponsor of the measure. Respectfully asked for an aye vote.

Thank you very much. Further witnesses in support. Name and organization only, please.

Good morning, Mr. Chair and members. Elizabeth Espinosa, on behalf of the County Board of Supervisors in the County of Santa Barbara. Thank you.

Good morning, Mr. Chairman and members. Nicole Wordelman, on behalf of the California Cannabis Industry Association, also in support.

Any other witnesses in support? Seeing none. Witnesses in opposition? Seeing none. We have a motion from Ms. Reyes, second from Ms. Papan. Anybody wish to? Mr. Haney.

Yes.

Okay.

I want to thank the author and the sponsors. This is something that I've heard so much from our local cannabis operators. The taxes, the regulations, working and doing the right thing with labor, and yet they look right outside and folks are still being able to sell illegal cannabis blatantly without regard for the laws. And that's not fair. It's going to lead to the death of our legal cannabis industry if we don't act.

And unfortunately, a lot of local government and state government have stepped away from enforcement because we are encouraging the legal market. So we have to get creative about how we do enforcement. And I think this is a really important step in the right direction. And I appreciate the amendments, and I'm very strongly in support and would like to be added as a co-author. Thank you.

Any further questions or comments from the committee? Mr. Essayli.

Thank you. I'm shocked there's no opposition from the illicit operators. So I'm not a consumer, but it is legal. And I'm shocked that 60% of the industry is unlicensed. I mean, imagine if we had 60% of doctors practicing without a license. So I do support the bill. I do have a question, though. How do you identify the persons engaging in it? Because when I talk to cities, they say we try to shut them down. By the time we get through the court process, they've already reopened somewhere else under a new name. So how do you keep up with that Whac-A-Mole?

If I may, and then I'll ask for more assistance. I think this is my fifth bill in the cannabis industry. And so we try to do one thing at a time. So last year we had a bill that was basically penalizing, aiding, and abetting illicit markets. So some landlords were leasing knowingly that these vendors were not legal. And so instead of trying to tackle that problem, we said to the landlords, if you aid and abet these folks, then the penalty is going to be on you.

So we're trying to shut down the Whac-A-Mole that you're talking about shut down the different avenues that they're skirting basically the law. So we have that bill, and I'm looking forward to actually working more in this space. But I would like some help from other folks so that we can come up with a comprehensive package. Because I'm doing one thing at a time, and I think a couple of others are doing one thing at a time.

And we can't keep up with the creative ways that the illegal or illicit market is getting by. But in this case, we did that for the actual building. So the landlords are on the hook if they rent to illegal operators. And so this gives the next-door neighbor basically the opportunity because they all know each other. Come on. We know that everybody knows each other. They all know each other, and so this gives them some remedy. But on how they're keeping up, that's not my pay grade. I think that's their way of. They can answer that question.

Mr. Chairman, if I may. Mr. Vice Chairman, a couple of things. First, identifying illicit operators. Actually, surprisingly simple. The Department of Cannabis Control has a website, and all the licensed operators are listed there. So you simply put in the name of the operation, if it doesn't show up, there's no license. That's an unlisted operator. Gives the cannabis stop per the amendments in the bill now, gives a cannabis shop down the street the ability to go into court and get an injunction and shut it down.

More importantly, on the deterrent effect. Excuse me, the penalty that's added in the bill with committee members today of $500,000 we think is going to be a very significant deterrent for operators to just shut down and then try to reopen with the risk of another $500,000 fine over their head if they do it again.

So is the litigation aimed at an individual or is it aimed at, like, ABC marijuana shop? Because it's like you could know what the name of the shop is, but it's hard sometimes to know who's behind it. Anyway, I'm just pointing out that there's still a lot of work to be done. I think you have bipartisan support on fixing this issue, and I'd also like to see more criminal enforcement and tax reform, because I do think the high taxes are creating a financial incentive for the black market. With that, I yield back.

Thank you.

Yeah, no, absolutely. If I may, Mr. Chair. And that's what I think a lot of us have been trying to do. I think the complaints that I hear from the cannabis industry is that we're not doing. You know, honestly, I'm one author, and I know that I think Mr. Kalra has engaged in this space as well. We're doing the Whac-A-Mole, and I think at some point we have to get together and come up with a package. I believe so that I work with UFCW on this issue all the time, and so we can figure out how we can pass more legislation that can help the legal market. So I'm asking for a yes vote today, but I'm also asking for some help.

And perhaps if any of you have ideas, we can set up some kind of a committee or a task force that we can all talk about how we move forward the following year and the year after that because the little things that we're doing is not helping. And so, again, they're very creative. We've known that forever. When we do one thing, they're doing five things.

And so I ask for your vote today, but I also ask if any of you are interested in working on a package, maybe next year, then I would love to partner up with all of you so that we can come up with different ideas. I'm in LA County. My issues are very different than Northern California and the Central Valley, and so would like some regional support, if you will, so that we can all sit down and talk about specific issues in this space.

Ms. Dixon.

Good morning. Thank you for your good work on this. I did not know the history. Tell me why local law enforcement is not working?

The resources. They don't have enough resources for the stated reasons, right? By the time they go and look for this cannabis shop, the next day, they're gone. And they don't have the resources to keep going back and back. City of LA actually partnered up a couple years ago with the Water Department, with the water people, and they have like a triage, if you will, where the water people are calling the city and saying, hey, there's too much water and there's too much power being used as this location, and we don't have a license. Now, they're doing it because it's important to them, but that's only one example of how we can do it. However, the resources are not available to us.

The City of LA has their own water and power department. In Sacramento, there's two or three different ones, and I know in Orange County there's two or three, so it's not a way to coordinate those efforts. So the enforcement part, obviously, the resources, and LA, for example, has so many other issues, but they've actually prioritized part of this as an issue. And I don't think all of these other communities are actually prioritizing this because they see it as a state problem, not necessarily a local problem.

And so that's what I believe. I don't know, but I think that's part of the reason. But I think the main reason is the lack of resources that they have to pay for the police to go keep going out. And to the point that Assemblymember Essayli was making is by the time they get there, they've already moved somewhere else. So they're chasing folks.

Well, okay, I get that. I'm just concerned how the court system, if they can't find them on the street, how are they going to go after them legally? How does that work?

Some of them stay, and if I may, can I speak?

You can't find them. Where are they?

Well, to kind of add to the points previously made, there has been some grace that we've asked law enforcement to give these operators. It's been a legal, operated, regulated structure since 2018, and that takes some hoops jumping through, getting everyone licensed. And so it really depends on the location. I personally at UFCW, we feel that enforcement should be a multi-pronged approach.

So you need activity from the State of California, you need the DCC to do their job of enforcing the laws that we already have on the books. And then you also need a coordinated effort from the locals in order to tap into that. And that based on the State of California, the size, and the different law enforcement agencies, they may have different feelings about cannabis.

And so I think that it's going to take, this is just another tool because we have operators that are unionized, they're paying good wages, they've got subsidized childcare for their folks, and yet they're competing with a shop down the street. All of them move around. It depends on the location in LA.

I agree, totally agree, and commend the enforcement aspect. That's not right for the legal operators, licensed operators. I'm just concerned about feeding this into the court system and how you identify them. And it's just how successful is that going to be in terms of holding them accountable in the court system? Just expanding that and for licensed firms is my understanding. Correct me if I'm wrong, it's the first time we've expanded the right to private legal action to license holders or non-license holders, or license holders. I guess it is. So I'm concerned about that. I think enforcement is necessary. I totally agree. It needs to be the steps that we are doing in other forms of legislation to tighten up the opportunity for legal entities to work successfully. I'm just concerned about the legal, the court system aspect of it.

Well, if I may, in this particular case, it's a civil action, right? So now we're taking some responsibility. The licensed operators are taking some responsibility, and we're not just depending on law enforcement to shut them down. The court system, I think, I know you're an attorney. I'm not.

No, I'm not. I'm married to one. Married to an attorney.

I forgot about that.

I guess I am.

Yes, you are. So you know that the impact on the legal system is what it is, regardless of what we add, again, in my opinion. And so giving the licensed operators the opportunity to basically turn in the illegal folks takes a little pressure off the cities. The enforcement part of it, the legal system, I think, is.

But if they can't find them, I just don't understand.

But I think they can find them, like we were stating. So they'll leave this location and like two blocks away they'll find another location so they don't leave the area because they also have to stay close to the license operators so that it's not a red flag for enforcement. So they're within the, again, in my area, they're within the area of where the licensed operators are because then they're not suspicious, right?

They look legal.

And then, like I said, they all know each other, right? And so we know who's doing it on the ground. The folks that are legal know who's doing it legally, giving them the ability to bring civil action. That helps us law enforcement, right, but it helps them at least try to remedy the local situation. But again, trying to find them. They're two blocks away.

Okay. Well, I appreciate that. Thank you. All right. No further questions.

Thank you. Any other questions or comments from the Committee? We have a motion and a second. We'll use that as your close, Ms. Rubio. Thank you for this bill. We're pleased we're able to work with you on this. This effort is an attempt to bring order out of chaos. So it's appreciated. Thank you to our friends in labor who are weighing in on this because I think it's important. It's always going to be problematic just because it's so lucrative for no other reason. So I appreciate this bill. Certainly pleased to support it. With that, we have a motion and a second. Ask the Clerk to please call the roll. And the motion is do pass as amended. Ask the Clerk to call the roll.

Maienschein Aye. Maienschein, aye. Essayli. Aye. Essayli, aye. Connolly. Aye. Connolly, aye. Dixon. Haney. Aye. Haney, aye. Kalra. Aye. Kalra, aye. Pacheco. Aye. Pacheco, aye. Papan. Aye. Papan, aye. Reyes. Rivas. Sanchez. Aye. Sanchez, aye.

Your bill is out. Thank you, Mr. Rubio. Mr. Ta, item number six, AB 1458. You may begin.

Thank you. Good morning Chair and Members. I'm here this morning to present AB 1458. This bill seeks to correct a recurring problem in Homeowners Association board election. I deeply appreciate the Committee staff thoughtful input and I accept the recommended Committee amendment. My remark will reflect this update language one-third of California homes in common interest development, also known as Homeowner Association or SOA. This SOA acts like de facto governments in regulating their communities elected war Rea policy, labor assessment and meet out punishment to homeowners.

California laws spell out how HOA elections are to be conducted. Many associations also have governing documents that in lieu of quorum for election. Unfortunately, many HOA are unable to hold election due to an inability to meet their minimum quorum requirement. This often results in board members in office for many years because of the HOA is unable to conduct an election. This is undemocratic and not the standard for most of the election.

For instance, there's no minimum voter requirement for election for the Legislator, City Council, or Congress as not in the Committee analysis. During the 2022 primary in Los Angeles County, only 14.45 percent of voters participate. AB 1458 seeks to remedy this problem by lowering the quorum requirement for follow up board election to 20 percent of homeowners in the event and Association is not able to read the required quorum in the first election.

This bill does not make any change to quorum requirements for election to change an HOA governing documents or to raise assessment. I have worked with the chair and Committee to address concerns regarding timely notification before a second election is held. These changes are reasonable and provide the transparency needed to ensure Association members are informed of the second election meeting. I have witnesses with me today from the Community Association Institute and the California Association of Community Manager. I humbly ask for your aye vote.

Thank you. First witness.

Thank you, Committee and Chair, Members of the Assembly Judiciary Committee. I am here speaking in sponsor of AB 1458 which allows an association to, after their Civil Code processed election, has failed to gain quorum to open their ballots with a reduction to 20 percent of the Members. I've been in the association industry for over 20 years in a lot of different capacities. I currently manage 12 different communities through Northern California.

Currently, elections are a minimum of 120 days of notices, reminders, continual ballots, and costs. The current process requires either a member to step up and be the inspector of elections or to go through a company to do the inspector work, which is $2,000 per election just for the inspector. Then you also have the cost of mailing and ballot materials. If you have to keep rescheduling to try to get responses, that's additional cost for that inspector of elections. You also have small associations.

Small associations are hard hit. My smallest association is seven members. I have wide ranges: 108, 160. We manage a lot in my office. However, everyone has hit the same. There are people who have not been able to hold an election because they can never get quorum of a minimum of 25 percent. This bill doesn't take away their rights to vote. It doesn't. They have all the power to do the process and go through the process.

All it does is take away the additional burden and cost that it would be to continuously send out mail to go nowhere. So it's especially significant when no one's even running to oppose. Most of my associations, it's the same people have been serving for 20, 30 years simply because they're the only ones that care. I have other associations that are very active and they're wonderful. So I really urge you to vote yes to stop this expense to the communities.

Thank you. Next witness.

Mr. Chair, Members of the Committee, Louis Brown, here today on behalf of the Community Associations Institute, California Legislative Action Committee, co-sponsor the bill in support. Appreciate the Committee's work on the notification amendments. We do think that this helps make this bill much more transparent, as well as the ability for associations to hold effective elections and allow for members to serve that want to. Here for technical questions. If there are any, ask for an aye vote. Thank you.

Witnesses in support.

Mr. Chair and Members, Jennifer Wada, on behalf of the California Association of Community Managers, co-sponsor of the bill in support.

Any other witnesses in support? Seeing none, witnesses in opposition.

Good morning.

Good morning.

Members of the Committee. I am Marjorie Murray from the Center for California Homeowner Association Law. I am here with my colleague, Superior Court Commissioner Tom Sur. First of all, we want to thank the Committee for its fine and detailed analysis of the bill and for pointing out our many concerns about it. We look forward to working with Mr. Ta on resolving some of these concerns, particularly the notice issue.

Because this bill calls for a second Homeowner Association Board election without the safeguards already present in law that assure association elections are clean and fair, the notice issue is a primary concern to us. You know, we might well ask, well, who cares about association elections? What is the big deal here? Why have we come to Sacramento to petition the Legislature to make changes in statutes governing Homeowner Association elections? Well, it's a very simple reason. Homeowner associations, as entities, comprise another level of government.

The California courts over the last 40 years have made this crystal clear. Homeowner associations are another level of local government. They have extraordinary powers granted by the Legislature over the money, the property, the behavior of the people who live in them. So whoever sits on the Association Board has this extraordinary power vested in them. The difference between this form of government and the City Council or the Legislature is that there is no separation of powers. The board makes up the rules, decides who's broken them, brings enforcement action, et cetera.

Need you to wrap up.

Yes, I know. I'm sorry. I'm engaged in the issue, as you can tell, because there is so much abuse in association elections. Our concern about the bill is the quorum issue, because the quorum is meant to ensure that the elections are truly democratic and that there is sufficient participation by the membership. I will let my colleague Tom Sur talk about the specific concerns that we have about the bill.

Thank you. Next witness.

Thank you, Mr. Chairman and Members of the Committee. My name is Tom Sur. I'm a retired Commissioner and a Member of the Legislative Committee of the Center. As noted by this previous witness, the procedures for conducting an HOA election are extremely detailed, and this is in large part due to our work over the many years to address many, many abuses in this process that we have identified.

People have come to us with the most outrageous tales of how these elections are abused, so that what this bill allows is a second follow up election to take place in order to meet a quorum, but without most of the procedural protections that are in place for the first election. Some of these safeguards that are not in this bill include there's no provision for an inspector of elections who's going to run this second election in a neutral way.

Secondly, there's no provision for preparation for mailing of ballots. There's no mention of ballots. How do the voters get their ballot? In the first case, they would get it in the mail. In this case, there's no time for that. Third, there's no provision for individual delivery of the ballot or election operating rules. Third, by permitting only general notice in the second election, such notice can be made by as little as posting a written notice on a bulletin board somewhere within the development.

And finally, there's no provision for voting by mail. And so there's only one option. In the first election, you can vote by mail or you can show up at a meeting. In this election that's proposed, there's only one option. And so without a mailing ballot and very inadequate notice, the likelihood of getting even this number of voters that you had in the first place is greatly reduced. I would say that it would be almost for sure you're guaranteeing a lower turnout. And so, these provisions are in place to protect the integrity election and their absence is really tantamount to a denial of the vote.

I need you to wrap up, sir.

Thank you.

Thank you. Any other witnesses in opposition? Seeing none. Questions or comments from the Committee? Ms. Dixon.

So thank you, Chair. I've spoken with Assembly Member Ta and he knows of my comments I'm going to be making now. I would like to see some amendments. I am very familiar as a homeowner in an HOA, I actually served on an HOA board about 12 years ago. While I'm not an expert on all the bylaws and there are many protections, I've expressed this concern and I hope this can be an amendment.

I think after the first ballot to drop down to, as the gentleman just stated, these different process voting processes and down to a 20 percent quorum requirement. To me that's too steep of a fall. I wish there were a tiered, in fact, I use that word specifically, a tiered process. I understand in talking with Mr. Ta's representatives that there was a bill, I guess a few years ago in the Legislature and a person proposed that to have a tiered approach.

I actually support a tiered approach to go from current 50% maybe to 35 or 40% trying to get the votes and then down to maybe a different way. But I do believe that maybe there is an opportunity for compromise in working this out. It is hard to get the ballots. I just completed my own ballot and my own homeowner association a few weeks ago and they got the quorum on the first ballot.

Last year, it took two ballots and lots of communications and pounding on doors, but they got them in. I think it is because of property rights, and I'm a fervent believer in property rights, that we should protect that. And this would potentially, without this tiered approach established, that a small group of people in perpetuity control the Board of the Homeowner Association. And I think it is problematic.

I happen to live in one, that there are no bad actors, but there are bad actors in this industry, I'm sorry to say. So anyway, I hope to Mr. Ta, Assembly Member Ta, that we can talk about amendments because you're on the right track. I would just like to make sure we have protections on the efficacy of the voting and the integrity of the voting. So thank you.

Yeah, I really appreciate the comment from Assembly Member Dixon. But the last few weeks that the opposition have not contacted my office and have not asked for any meeting to come up with any compromise solution. I think this bill is--I think that it's really good thing and I think that and easy to ask for the second election, everyone could able to participate. I asked for aye vote and if you have any other concerns in any detail. So I have my witness here who would like to respond to all the concerns.

Any other questions or comments from the Committee? Seeing none. Do we have a motion? Motion for Mr. Kalra. Second from Mr. Haney. The motion is do pass as amended. Ask the Clerk to please call the roll.

Maienschein? Aye. Maienschein, aye. Essayli? Aye. Essayli, aye. Connolly? Connolly, aye. Dixon? Aye. Dixon, aye. Haney? Haney, aye. Kalra? Aye. Kalra, aye. Pacheco? Aye. Pacheco, aye. Papan? Aye. Papan, aye. Reyes? Rivas? Sanchez? Aye. Sanchez, aye.

Your bill is out. Next is Ms. Bonta. Item two, AB 1148.

Current California law mandates formerly incarcerated parents begin paying back child support 30 days after returning home from prison or jail. If unable to pay, they face punitive consequences which include suspension of driver's license, the inability to obtain a passport, and increased amount of fines associated with the child support that is owed. Thirty days sets people up for failure. It fails to recognize the many barriers' people reentering into society face, particularly in the difficulty in finding stable employment.

Rates of unemployment and earnings among formerly incarcerated people are low. Research shows that unemployment rate for formerly incarcerated people is nearly five times higher than unemployment rate for the General United States population. Formerly incarcerated Black women, in particular, experience severe levels of unemployment. Studies show it takes formerly incarcerated people at least six to eight months to find employment and typically 10 to 12 months for steady employment.

People in rural communities have difficulty finding employment and reaching economic security as they face a multitude of systems when returning home, it can take them much longer to find stable employment. Given the additional barriers they face. Providing a parent enough time to secure stable employment and get back on their feet ensures they can adequately support themselves and their families. AB 1148 will help support families in the following ways.

First, it expands the time to resume child support payments from 30 days after reentry to 10 months, allowing time for formerly incarcerated parents to secure stable employment. Second, it also uses a process under existing law called Automatic Administrative Adjustment to help adjust how much child support a person owes to account for their current income. This Bill is a mechanism for formerly incarcerated persons to find some financial stability and begin resuming financial obligations that will allow them to support themselves and their children.

I also want to just reiterate that we are focusing on people who are coming out of the system who are incarcerated. This is not broadly trying to redefine child support or the methodology used to be able to support child support for children, and I will also share that this comes from a deep place of knowledge from me being somebody whose parents got divorced when I was two years old and who had to deal with child support being a daily, weekly, monthly issue in our family.

So with that, I would like to have offer the testimony of Claudia Gonzalez with Root and Rebound to the sponsor of this Bill.

Go ahead, Mr. Chair, can you hear me? Yes, Members of the Committee. My name is Claudia Gonzalez. I am the policy associate at Root and Rebound, who is a legal nonprofit supporting incarcerated and formerly incarcerated people, and also the sponsor of AB 1148. I am here today in representation of our clients in the Central Valley. Formerly incarcerated women who have a really difficult time navigating multiple systems in impoverished communities and who are often unable to find employment.

These women are burdened with financial strains, including the inability to make ends meet or pay child support obligations. Our client, Felicia, is twenty-three thousand dollars in debt, expected to pay $650 a month. She had to choose between paying rent or paying child support. When she didn't make those child support payments, her license got suspended, and then she ultimately lost her job. Louise, another client of ours, got released in June of 2021. When she came home, she was already $4,000 behind. Her court ordered monthly payment was $765.

By the time she finally obtained employment, she had accrued a debt of eleven thousand dollars, negatively affecting her credit and creating additional barriers to finding housing and providing for her children. More than half of her paycheck was garnished every couple of weeks, leading to further instability. AB 1148 is not meant to be an all-encompassing solution to the child support issue. This Bill will ensure people like Louise and Felicia are able to find some financial stability before they are required to pay child support again.

Reentry is a very difficult journey, and we have to make sure that we understand the plight of people, including understanding that people do not have the same resources when they came home. And so because of these stories, I want to urge you to vote aye on 1148.

Thank you. Any other witnesses in support?

Good morning. Carmen Nicole Cox, California ACLU California Action. In support thank you.

Seeing no other witnesses in support, witnesses in opposition.

Good morning and thank you, Mr. Chair and esteemed Committee Members. My name is Gretchen Lichenberger, and I'm the Legislative Chairperson for the California Association of Judgment Professionals and also the owner of Justice Matters. And I've had a meeting with the author's staff, and I appreciate that. And I believe that the Committee made a very thoughtful analysis, and I appreciate that as well. But this measure remains flawed in that the DCSS, the Department of Child Support Services, does not control all child support orders.

They are focused primarily on people that have gotten public benefits. If you are a private citizen that's never gotten public benefits, you can go to DCSS and ask them and apply for them to enforce your child support order. But over 60% of child support orders are not in the hands of DCSS. So I shared the concerns with the author's staff about that. So there's a large portion of child support orders that are going to be affected by this Bill. This Bill has a broad brush.

It paints for all people are in a similar situation, and they're not. There's a lot of people that are incarcerated that don't have financial problems. Take Martha Stewart, for example. Not that she owes child support, but Martha Stewart had plenty of financial means to pay whatever Bill she had when she got out. So I think that there has to be some changes to the scope of the Bill and some tiered assessment of who it actually applies to.

And this measure puts all the onus on everyone but the person owing the child support. And that is my biggest issue with this Bill, the accountability. Everybody that owes child support, unlike a lot of judgments that are out there, they know they owe child support. They know they have an obligation to file something with the court if their circumstances change. They already have a mechanism to wrap up. And so I'm suggesting a form can be created that they can file upon being released.

And ask Mr. Calres, too.

He's asking.

And ask for the court to modify or suspend.

Thank you.

Thank you.

Thank you.

We asked for a no vote.

Thank you. Any other witnesses in opposition? Seeing none. Questions or comments from the Committee. Ms. Pacheco.

And I know the author and I spoke yesterday, but I also have concerns about the children, because it's the children that may be impacted if the parent who was incarcerated is released, and they have to wait 10 months before the child receives any kind of support. So, my concern is about the children, and I've always been very mindful about children. And so, my question is to the author.

My understanding, I know we had a conversation that normally the amount owed is $500 when a person is released from custody, and they begin to pay for child support. But my understanding of the Family Law Code section is that that amount can be suspended if the person does not have employment. Am I incorrect?

So, I'll just share that. I fundamentally want to support children as well. I think that children need financially stable parents who have the ability to actually engage with them. What we do know happens for children who are not, for reentering people and children, as our witness testified around, is parents are more likely to not try to reunify with the specter and burden of finances that are insurmountable standing between them and their child. So that impacts their ability to actually reunify with their children.

And they're also likely to recidivate because they engage in fast money as opposed to stable money. The reality right now is that the system is set up so that people are coming out of prison, expected to pay money that they don't have because they've earned $8.30 while they were in prison and are expected to pay. That is not a system that is set up to actually support the children right now. And this Bill seeks to change that.

With regards to your question around the ability to have access to modification hearings, the reality is, again, as the witness testified and alluded to, while this is something that is available, it is not actually used for people. It's one of the many different kinds of system entanglements that people who are formerly incarcerated, who are coming out and reentering, have to engage. It is a service and an opportunity that typically people are not notified about, do not have the ability to access and don't access.

And my comment about earlier, in our earlier conversation around it's an average amount of $500. Just to put that into perspective, somebody who is not getting a job up until 10 to 12 months outside of prison, who gets a salary on average of $15,000 a year, means that their monthly salary is about $1,750 a month and the average child support payment is $500.

The penalties that ensue when somebody has not the ability to not pay that, and the interests that go actually go to the state doesn't go to the child. So this Bill essentially attempts to correct some of the already existing challenges that are keeping children from being supported in the way that they should.

I had a question to the opposition as to maybe my understanding of the Family Law Code section is incorrect, but if someone is unable to pay for child support because they do not have employment, has there been times when the courts have suspended child support during that time period until the person is able to find employment?

Thank you for your question. Yes, that happens regularly. All it takes is for the person, the obligor, the person that owes the money is to file a form. And maybe we need to create a simpler process for that within this build of the form that's created. But it's very simple, because what can happen without even a hearing?

They can fill out a form requesting a suspension for financial reasons because they just got out of prison, they can't afford it, anything, and they submit that form and it comes with an order. And the court can just sign that order suspending it for the 10 months without even taking up court's time to have a hearing. We already have processes like that within family law and within civil law, so we could extend that here, and it would give everyone the opportunity.

One of the big problems is when formerly incarcerated people come out of prison or jail, what address do we serve them at? How do they provide an address? So if they were to file something right away, then they would be able to provide an address. Then DCSS, who is supposed to give notice, according to this Bill, or a private child support person who's owed money, would have a way to communicate with the obligor. So providing an address would be good.

So a form could happen that way.

So again, we have an instance where there are a lot of hypotheticals around what we hope happens when people reenter in society. Those things are not happening, which is why we have a broken system right now. Extending and deferring the child support payments to 10 months allows for people to actually get a job.

It allows for people to actually be able to reunify with their families, and it allows for people to actually not be burdened by interest and penalties associated with child support payment that they shouldn't actually have to be able, that they cannot pay right now.

Any other questions or comments from the Committee? Did you have a question, Mr. Haney? Okay, motion from Mr. Haney, second from Mr. Kalra. Ms. Bonta, you may close.

Thank you to the chair for his work on this Bill. I respectfully request an ivolt.

The motion is do pass as amended. Ask the Clerk to please call the roll.

Maienschein aye. Maienschein aye. Essayli, Essayli, no. Connolly. Connolly, aye. Dixon. Dixon, no. Haney. Haney, aye. Kalra. Kalra, aye. Pacheco. Pappin. Pappin, aye. Reyes. Rivas. Sanchez. Sanchez. No.

Your Bill needs one more vote. We'll keep the roll open, perhaps in Members. Thank you. Next, Mr. Wallace. And I'll ask Mr. Gibson and Ms. Wicks to please come to Committee. Motion for Mr. Sally. Second from Ms. Sanchez. Mr. Wallace, you can take that hint for what you want.

Good morning, Mr. Chair and Committee Members. I have before you today Assembly Bill 1448. AB 1448 will enhance local enforcement mechanisms for unlicensed cannabis activities. We'll skip through the rest of this. And just, I want to thank the Committee and the Chair for your work on this bill, and have with me today Sarah Dukett, Policy Advocate for RCRC, the sponsor of AB 1448.

Thank you. First witness, please.

Good morning, Chair and Committee Members. Sarah Dukett on behalf of the Rural County Representatives of California. Counties and cities are being inundated with unlicensed cannabis activities. In an investigative series published last year in the Los Angeles Times described the scale of the illicit market as immense. There's also been numerous articles in CalMatters talking about how prolific, especially when it comes to environmental degradation. The statutory penalties in the BNP code on the book act as a really important deterrent for this illicit activity.

Unfortunately, the way it's set up, 100% of the proceeds go to the state. So there's really not a mechanism for locals to use this and be able to recoup our full cost and reinvest. And local governments are doing the vast majority of the enforcement action across the state.

What this proposes to do is go back to what was originally envisioned in MAUCRSA with a 50/50 split. That would then allow the state to actually make revenue because locals aren't bringing these actions forward, as well as us to pay for our costs and reinvest into enforcement. The second section of the bill, which we appreciate the amendments and willingness to continue to work on, is really around code enforcement.

What we've done is really move from the criminal to civil, and one of the best mechanisms to do that at the local level is code enforcement. So cities and counties have really built these robust units to deal with it. Unfortunately, a traditional code enforcement for an unpermitted building, et cetera, was really not meant to address the scale and the commercial scale. And so a lot of times the people that are doing these violations are dragging out the process for 3-4 months. So really looking at mechanisms to streamline so we can shut down the business and abate and move forward. With that, I'm happy to answer any questions and we recommend your aye vote.

Thank you. Any other witnesses in support? Name and organization only, please.

Nicole Wordelman on behalf of San Bernardino County and the California Cannabis Industry Association in support.

Ada Welder on behalf of the California State Association of Counties in support.

Izzy Swindler on behalf of the Siskiyou Board of Supervisors in support. Thank you.

Any other witnesses in support? Seeing none. Witnesses in opposition? Seeing none. Questions or comments from the Committee? And before we go to. Oh, I see. I apologize. I didn't see you.

Thank you, Mr. Chair and Members. Anthony Helton with the California Land Title Association. Just wanted to note that we're neutral for the amendments removing the super priority lead from the bill. Thank you.

Good morning, Chair and Members. Naomi Padron on behalf of the California Credit Union League. Would echo the comments just made regarding the amendments. Thank the Committee for their work, and we'll be going neutral.

Thank you. And before I go to Mr. Kalra, Mr. Wallis, you accept the Committee amendments?

Yes. Happy to accept them.

Thank you. Mr. Kalra.

Well, with the acceptance of the Committee amendments, I think I also support the bill. Today, I think the Committee highlighted some legitimate concerns. I definitely support the intention. We had other bill earlier regarding the industry, and I think definitely more needs to be done. But I think that some of the concerns raised by the Committee are legitimate, and I'll definitely keep an eye as the bill moves forward. But I appreciate you working with the staff to take those amendments because I think it definitely, as we even heard from opposition moving to neutral, I think it addresses the major concerns and otherwise in support of the bill.

Any other questions or comments from the Committee? Ms. Dixon.

Here. I just want to clarify that super position lien situation. Has that been amended to clarify so that's clear? All right, thank you very much.

Any other questions or comments from the Committee? Seeing none. Mr. Wallis, you may close.

Thank you, Members of the Committee. I accept your amendments and respectfully request an aye vote.

Thank you. The motion is do pass as amended. We do have a motion and a second. Ask the Clerk to please call the roll.

Maienschein. Aye. Maienschein, aye. Essayli. Aye. Essayli, aye. Connolly. Connolly, aye. Dixon. Aye. Dixon, aye. Haney. Aye. Haney, aye. Kalra. Kalra, aye. Pacheco. Aye. Pacheco, aye. Papan. Papan, aye. Reyes. Rivas. Sanchez. Sanchez, aye.

Your bill is out. I've been told that our two witnesses are on the way. I guess we can go ahead and... We'll go ahead and do add ons right now. Start with the consent agenda. Ask the Clerk to open the roll.

Kalra. Kalra, aye. Rivas. Sanchez. Sanchez, aye.

We'll also do add ons to AB 1253, which is item number nine. Ask the Clerk to please call the roll.

Kalra. Rivas. Sanchez. Item nine. Sanchez, aye.

Yeah, Mr. Rivas is aye on AB 1253. He was walking down the road.

Rivas, aye.

Okay, we'll go ahead and start with the consent agenda. Ask the Clerk to call the roll.

Rivas. Rivas, aye.

Item two, lift the call on AB 1148, Bonta. Ask the Clerk to call the roll.

Reyes. Rivas. Rivas, aye.

That bill is out. Item three, AB 1171.

Reyes. Rivas. Rivas, aye.

Item five, AB 1448, Wallis.

Reyes. Rivas. Rivas, aye.

Item six, AB 1458, Ta.

Reyes. Rivas. Rivas, aye.

Good. You're picking up what I'm putting down. Good. Welcome.

Sorry. Get my kids to school. And the two year old had a lot of feelings this morning. Okay. Good morning, Members. Chair. I think first we'll present AB 1394. I want to thank the chair Members for the conversation.

Just to be clear, Ms. Wicks has two bills, so we'll start with item four, AB 1394.

Great.

Go ahead and proceed.

Okay. Child sex abuse material, commonly referred to as CSAM, is tragically pervasive on the Internet, and not only is it in its illicit corners on the so called dark web, but also on popular social media websites and applications that billions of people use every day. This tragedy is compounded by the fact that certain websites and applications are not only a convenient means for sharing such content, but arguably reduce its production. Since 2000, traffickers have recruited 55% of sex trafficking victims online.

Use of Facebook facilitates 65% of this trafficking. A Forbes review of hundreds of recent TikTok Live streams reveals how viewers regularly use the comments to urge young girls to perform sexually, rewarding those who oblige with TikTok gifts, which can be redeemed for money or off platform payments to Venmo, PayPal, or cash apps. AB 1394 holds social media platforms liable for knowingly, recklessly, or negligently facilitating, aiding, or abetting child sex trafficking and requires the platforms to prevent revictimization of child survivors.

This measure proposes to address these challenges in two ways. First, the Bill would require social media platforms to provide a mechanism for users to report this content and these images in which they are depicted. Platforms would then generally have 30 days to verify that the material is in fact harmful and block it from reappearing. Second, the Bill would provide victims of commercial sexual exploitation the right to sue social media platforms for deploying features that were a substantial factor in causing their exploitation.

Regarding damages, the Bill already says that the ceiling of 250,000 is to be reserved for the worst offenders. In determining the amount of a civil penalty pursuant to this paragraph, a court shall consider the willfulness and severity of the violation and whether the social media platform has previously violated this section or Section three. Three44.2.

The Committee analysis notes that a safe harbor provision that allows a social media company to remove a feature that they become aware of has been used to facilitate the distribution of the images. We are currently working on amendments that will address this issue. I also want to say my joint author, Assembly Member Heath Flora, couldn't be here today, but he and I have had a lot of conversations about this, and we'll be working on that particular measure. In particular, and specifically.

With me here to testify in person is Ashlie Bryant, the founder and Executive Director of Three Strands, and Ed Howard, Senior Counsel at the University of San Diego School of Laws Children Advocacy Institute. To answer technical questions, respectfully, ask for an aye vote.

Thank you, ma'am, you have two minutes.

Thank you very much. Chair and Committee Members, 3 Strands Global foundation has been combating all types of human trafficking through prevention work for 13 years. To date, we have served 838 survivors and at risk individuals and educated 767,000 students and 110,000 adults. We have seen firsthand this public health crisis and the toll that it has taken on our children, and I ask you to support AB 1394 strongly.

Human trafficking, a crime where individuals profit from the exploitation of our most vulnerable populations, is among the world's fastest growing criminal enterprises and is estimated to be 150,000,000,000 a year. Global industry with more than 25 million victims since 2001, child sexual abuse material, or CSAM reports from the National Center of Missing and Exploited Children have increased by a factor of 206,000. To put that in perspective, in 2001, Nick Mick received just 421 CSAM reports. By 2021, that number had increased to almost 85 million.

Today, as technology advancements continue to make our lives easier, more enjoyable, more connected, and more fun, we find ourselves at this difficult crossroads in the fight to defend our children from sexual abuse. With the explosion of the Internet, online communication and social media, human traffickers have found a new pathway to exploit individuals. Social media platforms in particular have created more opportunities for perpetrators. Even when a child is removed from an abusive situation, their abuse lives on forever, making recovery difficult or impossible.

These individuals are re victimized with every viewing and are often even recognized in public, in job interviews and in their personal lives. From their online abuse material, every digital platform where you can upload a photo can be used to share CSAM. This has created this public health crisis. According to the United Nations Office on Drugs and Crime, the Internet is used by traffickers as digital hunting fields, allowing them access to both customers and potential victims.

With children being targeted by traffickers, this Bill, AB 1394, would help permanently block reported material from being viewable on any social media platform and hold these platforms liable for playing a part in trafficking children. I ask for your aye vote.

Thank you. Next witness.

Mr. Chairman, Members Ed Howard, Senior Council at the University of San Diego School of Laws Children's Advocacy Institute, pleased and honored to co sponsor this important measure with Common sense Media and pleased to answer any questions you may have. Thank you. Thank you, Ms. Chowd. Any other witnesses in support?

Rebecca Marcus, on behalf of Common Sense Media, in support.

Mr. Chair and Members Kathy Van Austin, on behalf of the American Association of University Women California in Support.

Any other witnesses in support? Seeing none. Witnesses in opposition.

Thank you, Mr. Chair and Members. Dylan Hoffman, on behalf of Technet. And we are respectfully opposed to AB 1394. And first, I just want to say we couldn't agree more with the intent of this Bill. Our platforms very aggressively go after child sexual abuse material and human traffickers on our platforms.

Not only do our rules prohibit that type of content, but we've developed new technologies to aid in our ability to identify, remove, and block it, as well as developed partnerships not only with nonprofits, but law enforcement, so that the reports that we provide to those partners actually turn into prosecutions. Obviously, there is much more work to be done in this space, but we stand ready to be a partner in that solution.

However, I don't think our platforms believe that liability is a good way to solve that. I think there are a lot more unintended consequences from liability, and I'm limiting my comments to the liability provisions, as that's primarily the jurisdiction of this Committee. I think the reporting aspects, there may be some clarifications that we're looking for that maybe make that more workable, but primarily the liability is what I'll speak to today.

I think the massive statutory damages of between a million and $5 million will lead to a lot more litigation in this space. I think there are some ambiguities around what a substantial factor is. I think we have a different interpretation of whether that is a high or a Low bar. We think it's a pretty Low bar to cover.

The California civil jury instructions identify a substantial factor as a stand in for the but for test for causation, that is, but for the defendant's actions, that harm would not have happened to the plaintiff. I think what we're getting at here is the difference between General and specific knowledge with regards to this type of harm. We know this happens on our platforms, and we're doing everything that we can to stop it.

But I think plaintiffs attorneys, and plaintiffs in particular, will claim that any amount of our knowledge is sufficient to hold us liable in this instance. So we're ready to talk about alternatives that avoid liability. I think, as noted, there may be some issues around preemption with this Bill. We're happy to talk about alternatives that avoid those entirely. So we greatly appreciate the intent of this Bill. But believe there will be numerous unintended consequences. For that reason, respectfully opposed.

Thank you. Any other witnesses in opposition?

Good morning, Mr. Chair and Members, Shane La Vigne with capital advocacy on behalf of NetChoice. And I'd like to align my comments with Mr. Hoffman. Thank you.

Thank you. Any other witnesses in opposition?

Samantha Corbin with the Electronic Frontier Foundation, in respectful opposition. Thank you.

Ronak Daylami Cal Chamber, respectfully, in opposition. Thank you.

Seeing no other witnesses in opposition. Any questions or comments from the Committee? Ms. Dixon?

Thank you, Chair. Just to clarify the situation between the industry that's opposed and the advocates for this, where's the gap some sexual abuse is getting through? I guess this is where we are. Could you just describe, I mean, despite their best efforts, which I commend you, and I appreciate your comments conceptually in support, but there still is a problem. Could you just describe that more clearly?

Yeah, I think that when I said that there were 421 CCM reports in 2080, 5 million today, it really illuminates the problem we have. And the problem is that we need to do something to actually end this public health crisis. And I think part of it is putting a stake in the ground and being able to say, we know you do your very best effort. We know that you try to make it so this doesn't happen, but it's still happening.

And so how are we actually going to make it happen? And also, just for the victim, the user, is that the victim or the person who's portrayed online? Just curiously, is this their only recourse? I mean, if they discover that they're on multiple platforms, I guess they have to do their own personal research on this. And shockingly, they discover this. Is this their only way is to seek a remedy this way? Is there other ways to seek a remedy?

The survivors that we serve, it is really difficult to be able to get this off the Internet. It is one of the worst, not only for finding a job, to be able to be able to go through on with their life. It's just constant barrier after barrier. So that's what we see with survivors we serve. All right, thank you. I will be supporting the Bill. Thank you.

Thank you. Any other witness? Ms. Pacheco.

Just a brief comment. So I want to thank the author for bringing this Bill forward. I know you're going to continue working with the opposition, but I really commend you for bringing this forward and just for the conversations that we had as well. Thank you.

Any other questions or comments from Ms. Sanchez?

Thank you for your work on this Bill. I know from our conversations your intent is very good. That being said, I know you will work hard with the opposition to address any and all concerns, and I look forward to supporting this postcard. Thank you.

Any other questions or comments from the Committee? Seeing none. Ms. Wicks, I know we've had a number of discussions on this Bill. I know you're continuing to work with it. A complicated topic. I appreciate the efforts you've taken on this really important matter. It's difficult. It definitely gets in the weeds pretty quickly. But thanks for your work on this, and I'm pleased to support it today. With that, you may close.

I appreciate that. I'm eager to meet directly with the platforms, and always, I think we get stronger bills when we meet with opposition. So would respectfully ask for an aye vote to keep the process going.

Thank you. Do we have a motion? Motion from Ms. Pacheco. Second from Ms. Dixon. And the motion is do passed. Clerk to please call the roll.

Maienschein.

Aye.

Maienschein aye. Essayli. Connolly.

Aye.

Connolly aye. Dixon.

Aye.

Dixon aye. Haney.

Aye.

Haney aye. Kalra.

Aye.

Kalra aye. Pacheco.

Aye.

Pacheco aye. Papan.

Aye.

Papan aye. Reyes. Rivas.

Aye.

Rivas aye. Sanchez.

Aye.

Sanchez aye.

Your bill is out.

Thank you.

Thank you. Next is item one, AB 886. Ms. Wicks, you may begin.

Thank you. And I'll have my witness come here. But I will just start in the desire to move this quickly along. The fastest Judiciary Committee hearing I think we've seen today. With that, Mr. Chair and Members and staff and others, I want to talk a little about journalism today.

And my bill, AB 886, the California Journalism Protection Prevention Act provides a lifeline for news outlets and journalists in print, digital, and broadcast media that bear the cost of gathering and reporting news, while large Internet platforms bear none. California has lost more than 100 newspapers in the last decade. As news consumption has moved online, community news outlets have been downsized and closing at an alarming rate. It's not that no one reads or watches news anymore.

It's that dominant tech platforms, both search engines and social networks, have such unrivaled market power that newsrooms are coerced to share the content they produce, which the tech companies sell advertising against, providing almost no compensation in return. Borrowing from similar, though not identical, legislative efforts in Europe, Australia, Canada, and our own federal Congress here, AB 886 requires large tech companies to pay a fee for accessing and featuring journalism content on their platforms.

Vitally, the California legislation also requires that 70% of the funds derived from the bill be spent on journalists, ensuring that funds are reinvested in the newsroom. Critics have put forth numerous arguments of which you will hear today. I want to take a moment just to respond to those directly. Argument one, tech platforms don't make money off the backs of journalists. If anything, it's the other way around.

My response, If tech platforms were not making money off of news, if it did not have a value that tech essentially monetized, then it would not be present as a feature of its product. Tech platforms, at their essence, compete for our attention, and access to journalism gives them vital content that keeps users engaged. That is why in other countries where similar laws have been passed, tech has not abandoned its use of news on the platform. Argument two, this bill violates the First Amendment.

This bill was written to withstand First Amendment challenges, and under its provision, platforms are not forced to display any content. They remain free to implement their terms of service and other moderation practices. If a covered platform finds a news organization's content distasteful, they can continue to choose not to include it on their site. This was also noted in the analysis. If you turn to page five, there's a whole section with the headline.

The constitutional concerns raised by the opponents seem mostly overstated, which is clearly outlined in the analysis. Argument three, the bill would incentivize clickbait, and that's something that you hear the opposition say. This was also noted in the Privacy Committee analysis in the Committee last week. And the fact of the matter is that right now, our news publications are trying to do everything they can to get eyeballs on their platforms. It's difficult because of the power of, on their sites.

It's difficult because of the power of these platforms, and they're not going to do anything that they haven't already tried. And in fact, this is quoted from the Privacy Committee Analysis, one could make the opposite argument. It is conceivable that with financially sound books and healthier newsrooms, more engaging and investigative reporting will lead to quality stories based on real events in city halls, school boards, and communities across the state. This will lead to more clicks because there will be a higher quality of content, not less.

Argument number four, the entire premise of the bill is flawed. It is simply that the Internet itself is responsible for the decline in journalism, and traditional journalism has to die in order for something else to be reborn. My response, the economies which support quality journalism and the technological advances that impact its vitality have never been ignored by the American government, whether adapting to telegraph, radio, broadcast television, and now the Internet.

Our fourth estate has always had the help of lawmakers to bolster its standings because of our shared belief that a free press is vital to our democracy. Allowing rank and file journalism to continue to atrophy or die off has never been our country's approach when journalism has faced challenges. We've always made space for the fourth estate in our discourse because without it, our civic health is at risk.

There was an article a couple weeks ago in the LA Times discussing the newsroom in Salinas, the Salinas Californian, which is a newspaper that currently has no more reporters left in it because of the decline of what we're seeing in our newsrooms. The LA Times noted last month, quote, the only original content from Salinas now comes from the form of paid obituaries, making death virtually the only sign of life at an institution once considered a must-read by many Salinas.

And this is true in communities all across California, particularly in our more rural communities that cannot support these newsrooms. A thriving press, diverse press is the backbone of a healthy, vibrant democracy. And that's why I'm doing this bill. I've spoken with almost, I think, actually every single one of you here on the Committee, as well as the Committee last week. It's a tough issue, but one that I think is important.

I believe that our democracy rests on our ability to have thriving newsrooms, which is why I'm doing this. We are meeting with opposition. We are going to continue to meet with opposition. There are going to be amendments to this bill. But I really want this conversation to keep moving forward because I think it's imperative for our democracy that it does.

With me here to testify in support is Troy Masters, publisher of the Los Angeles Blade and Hal Singer, professor of economics at the University of Utah and Managing Director of Econ One. Also, Danielle Coffey's here to help answer any technical questions when we get to that section.

Thank you. First witness, please.

Good morning, Mr. Chairman, Members of the Committee. My name is Troy Masters. I'm publisher of the Los Angeles Blade. We're the only LGBT media outlet for Los Angeles and the largest one in California. We print a weekly print edition newspaper, and we're visited by about 500,000 visitors online per month. We're the nation's only LGBTQ. I have trouble with those acronyms myself, something.

We're the nation's only LGBTQ media outlet, member of the White House Press Corps, and we also publish the Washington Blade in DC. I'm also publisher of Gay City News, which is the gay and lesbian paper for LGBTQ newspaper for New York City. We provide coverage of local, national, and international news and events that provide uniquely granular coverage of the places that we're in operation in Los Angeles region and all of California. What we provide, I believe, is healthy, is critical to the health of our community.

In the past year alone, more than 600 anti-LGBTQ bills have passed in assemblies around the nation. And that's had a devastating impact on our community in more than 40 states. In most of those states, there is no strong LGBT local media that exists, in part because it's become nearly impossible to survive in this current media environment. Many have failed. As we just noted, New York Times reported that, just since the pandemic, more than 400 newspapers, mainstream newspapers, have failed across the country.

So it's not just a problem of California, just not LGBT or a niche. It's a general problem that has created news deserts all across the country, including many here in California. The failures are caused in large part because of marketer flight to social media. They're rapidly moving away from direct marketing relationships with local media and national newspapers, and even local TV to social media. Social media essentially offers local businesses free marketing, enabling them to build robust community pages of their own.

Marketers can boost their pages for even more engagement as part of big tech's strategy to further monetize itself. But it's increasingly less popular, and for most small local businesses, it's sufficient marketing for themselves. Big tech has also spent hundreds of millions of dollars training these people, how those local businesses, how they can elevate their brands on social media and other platforms. So that's all to say that.

Sir, I need you to wrap up.

Okay. Yeah. Essentially, I'm here to support the bill because I believe that we are a super provider of content, and we provide them with eyeballs that are monetized to our detriment.

Thank you. Next witness, please.

Thank you. I'd like to just make three points. First, the newspaper industry is in crisis. Market forces are failing to provide adequate resources, and an intervention to address the power imbalance between dominant platforms and news publishers is badly needed.

The dominant online platforms appropriate the value added of news publishers by reframing articles in rich previews containing headlines, summaries, and photos. This reframing deprives newspapers of clicks and of subscription revenues. The effect of shrinking newspaper advertising revenues is less cash flow to support journalists, a clear employment effect flowing from the exercise of monopsony power by the dominant platforms. Employment among newspaper employees fell from 71,000 in 2008 to 31,000 in 2020. Declining ad revenues doesn't reflect a broken business model of legacy newspapers.

New digital media entrants are equally harmed by the power imbalance. Just last month, BuzzFeed shut down its news division, VICE is reportedly heading for bankruptcy, and Protocol shut down in November. In reporting on this calamity, DealBook of the New York Times noted that, quote, networks like Facebook and Google ended up keeping most of the available ad dollars and are increasingly favoring content formats that yield less money for publishers. Second, the proposed intervention in this bill is modest.

News publishers are simply asking for a neutral arbitrator operating under the auspices of the state to hear their assessment of the annual value being appropriated by the platforms, alongside the presumably lower assessment by the dominant platforms of the same value, and to make a determination as to which of the two assessments comes closest to approximating fair market value. Third, and finally, the California bill is an improvement on the federal bill that seeks to offer relief nationwide in several ways.

But critically, an eligible digital journalism provider is required to spend at least 70% of funds received pursuant to this bill on news journalists. The bill would thus slow, and hopefully reverse, the decline in employment among newspapers immediately. I thank you for your time, and I look forward to answering your questions.

Thank you. Any other witnesses in support? Seeing none. Oh, are you in support or? Support? Okay.

Good morning, Mr. Chair and Members of the Committee. Brittney Barsotti on behalf of the California News Publishers Association in strong support. As well as the American Economic Liberties Project, Burbank Leader, Glendale News-Press, Media Alliance, Media Guild of the West, National Newspaper Association, National Press Photographers Association, Ojai Magazine, Ojai Valley News, Outlook Pasadena, Outlook Valley Sun, Picket Fence Media, Radio Television Digital News Association, San Fernando Valley Sun, San Francisco Chronicle, San Marino Tribune, South Pasadena Review, the Authors Guild, and the LA Times, and San Diego Union-Tribune. Thank you.

Mark Powers, on behalf of the California Broadcasters Association and all the radio and television stations in your district asking for your support.

Thank you. Any other witnesses in support? Seeing none. Witnesses in opposition.

Hi, Mr. Chair, Members of the Committee. Matt Schruers, President of the Computer and Communications Industry Association, a trade representing information, communications, and technology firms. Few dispute that objective and reliable journalism is critical to an informed electorate.

But the question here today is whether a healthy news sector is best achieved by chaining its fate to subsidies from a handful of firms that are rooted in an unprecedented mandatory arbitration scheme that turns on hyperlinks, the building block of the Internet. Now, taxes and fees on links would upend the basic architecture of our connected economy and open the door to other tolls and fees and taxes on the free and open Internet.

This scheme is inconsistent with both the First Amendment, and I'm happy to discuss more of that if you have questions, and also with deliberate, chosen policy objectives made by Congress in federal copyright law. Now, copyright protects articles of journalism, but it does not reach mere facts or ideas or quotations, or, critically, headlines and hyperlinks. This bill contravenes all of that by compelling companies to pay merely by accessing portions of news publishers content and then directing billions of monetizable links to that content.

And if digital services opt out, this bill labels that retaliation, that makes it must carry and must pay. Now other countries have experimented unsuccessfully with link taxes. Just by way of example, US government reports have concluded that the Spanish link tax hurt smaller news publishers before being superseded by an EU directive. Under the French link tax, a misinformation provider is currently litigating with Google, saying that its COVID-19 falsehoods should have better search visibility. In Canada, we're seeing similar issues.

And just to conclude, the offsighted Australian news media bargaining codes platform designation process for triggering arbitration, which is frequently cited, has never been used. These are not examples of success, but failure. I'm happy to discuss those further, and thanks for your time and patience.

Thank you. If you could just move the microphone. Thank you.

Mr. Chair and Members, my name is Samantha Corbin. I represent the Electronic Frontier Foundation, here today in opposition to 886. I'd like to thank the author for the time that she has spent meeting with us. However, we remain concerned that AB 866, 886, excuse me, is unconstitutional, will not resurrect local news, and rewards clickbait and misinformation as a revenue scheme. This bill does violate the First Amendment rights of online platforms by requiring them to carry content from all covered news organizations that request it.

We respectfully believe the stance in the analysis on One A misses the mark. The issue is inherent in the definition of retaliation, which in essence compels a platform to publish content, lest they be liable for retaliation in failing or refusing to do so. AB 886 will not encourage the development of new local independent news. Instead, it benefits media conglomerates that have been responsible for downsizing newsrooms and selling off assets.

These firms will comparatively dominate negotiations with tech platforms, collecting the lion's share of payments mandated by this bill. This concern is shared by many working journalists who've expressed their opposition to similar federal legislation. Put another way, this bill would create a system that benefits conglomerates like Fox News, who produce great volumes of content and are better positioned to negotiate, while marginalizing smaller independent organizations such as CalMatters.

The retaliation provision in this measure will have the unintended consequence of protecting clickbait and misinformation from being removed by platforms. The driving incentive to increase the usage fee will not be content that informs the public, but rather that that promotes engagement, sharing of links, and public outrage. At a time when California is moving away from arbitration use for sensitive matters, AB 886 grants anonymous arbitrators the right to rank the value of speech, societal, financial, and otherwise. Imagine this system operating in Florida or Texas. What speech might arbitrators there determine is valuable? And with that, I'll end my testimony. Thank you, Mr. Chair.

Thank you. Any other witnesses in opposition?

Dylan Hoffman, on behalf of Technet, respectfully opposed.

Ronak Daylami, California Chamber of Commerce, respectfully opposed. Thank you.

Paquado, on behalf of Chamber of Progress, opposed.

Tobias Wolken with the California Taxpayers Association, in opposition.

Shane Lavigne with Capital Advocacy, on behalf of NetChoice, in opposition. Thank you.

Any other witnesses in opposition? Seeing none. Ms. Papan.

So I want to thank the author for your generosity of time in discussing this matter offline with me. As I mentioned in privacy, we very much agree about the purpose of the bill and the importance of the bill, especially as it relates to local journalists and the pivotal role that they play in democracy, in city government, state government. And I believe that's what really impacts people's daily lives.

So I have a profound and personal interest in making sure that those endeavors of journalism survive beyond just a mere paywall. But as I mentioned in privacy, still have some concerns. And you and I talked yesterday about the differences in different types of tech. Not all tech is created equal. Some scrape articles, others just repurpose them. And I know you're working on trying to get some language there, so I appreciate that. If you want to give us an update, that's good, too.

Second, I do have concerns about this money. I appreciate the 70% figure. I really do want to see it get in the hands of journalists. I think they are remarkably underpaid. There's a lot of big journalist outfits, though, or publishing outfits that aren't desperate for money by any means. But I do want to see it get in the hands of journalists. I want to promote their professionalism. And I think that that pay is one of the ways that we ensure that.

And I know you know that this is nothing new that I haven't commented on about the bill and its inner workings. The other thing that does concern me is this arbitration. I won't call it a scheme, but the arbitration procedures. And one of the things I was curious about that we haven't talked about and we didn't talk about in privacy is are there appeal rights to it? And I don't think that's been fully vetted when we talked yesterday. So I don't know how that works. But if you get a panel of three folks and they're making decisions on what fees will be, then you have no right to appeal. It has this impact on the ability to do business, which is there might be some due process issues. I don't know. So anyway, we talked about it yesterday. I know I was the only one.

Bring it up if you can as you go through this process, figure out how that works its way through, I would very much appreciate it, but I commend your openness to continue to work with it because the devil's in the details on this. Nobody disagrees that newspapers have taken a big hit and they play a crucial role in democracy. That said, we got to work through some of this stuff, and I know you're trying, and I just don't really have a question other than to convey my concerns and then the arbitration one, if we got to talk a little further about that, too.

Sure.

Thank you.

Do you want me to address some of that now or I can also wait if you want.

You want to wait and do it in your close. Sure, Mr. Haney.

And there might be others.

Yeah, that's why I was thinking it would kind of probably come back up.

I also want to appreciate the author and certainly the challenges that publishers and newspapers, media outlets are facing is a critical concern for our democracy. And some of, I think there are absolutely solutions that need to be found in this space. I actually had two of the same questions and concerns that I hope that you can address.

One is this issue of the differences between the platforms, and obviously, there are some platforms where individual users are sharing it and what the consequences of that will be, as opposed to a platform that aggregates it on their own and how that's reflected in the bill. And then also I have deep respect, as we all do for our journalists, and I appreciate the work to focus the revenue on investments in journalists and investments in newsrooms.

I have questions about how that's going to be enforced, what the oversight is. How do we actually make sure that this isn't simply profits handed from one big company to another big company and actually gets into the not even necessarily company investments and folks are focused on venture firms and such. So how do we make sure that this actually helps newsrooms and media companies and have enforcement around that? And again, appreciate your ongoing work on this and your commitment to a very tough issue, and I'm confident that you'll be able to work all these things out.

Ms. Wicks, did you want to respond?

I'll just do it all.

You do it all at once. Okay. Any other questions or comments from the committee? Mr. Essayli.

Thank you. And I do commend the author for your work on this and your leadership. It's a really important issue. Some questions for the opposition. You're with the Electronic Frontier Foundation, correct? I think I asked this last time, but I never got a clear answer. Are you funded by Google? Facebook?

No, not in any way.

Your funding is very obscure on your website. It's not clear you've raised $15 million last year.

The organization has over 40,000 independent donors in the State of California.

And you mentioned one of your concerns is you were speaking on behalf of Cal Matters. You referenced them as one of the organizations you were worried about. Are you aware that Cal Matters gets over $500,000 from Facebook?

I'm not. I'm just aware that they're in opposition to this measure as well, and that in juxtaposition to Fox News, one would argue that they are much smaller.

They are smaller, I agree, but they are getting money from big tech, so I'm not sure that they're an objective player in this. I would just say this. I don't see how you can deny that big tech is profiting off of journalism. You guys scrape information from their articles, you summarize them and you feed them to your users, and it disincentivizes people from actually clicking on the link to monetize their website and their platforms.

We've all seen this, where we search for an issue or topic and Google gives it to us at the very top. Full summary, I don't even have to click the link, and I never really thought about it before, but the more I think about it, it is a disservice to the content providers. Google doesn't create content in this space. It uses other people's content.

So while I agree, I do not believe in corporate welfare, I don't believe in transferring wealth, but I also don't believe in unjust enrichment. And I do think big tech is being unjustly enriched off the backs of journalists. Now with that said, I think Google scraping is different from, as we've talked about, Ms. Wick's social media, in which news publishers are voluntarily putting their content on there. And I do think there's some culpability there for journalists. You guys do receive a benefit from that.

It's essentially free marketing and it's getting your content out to readers who wouldn't otherwise have seen it. Now, I do think there is some monetization that's still happening, but to Ms. Papan's point, Google and social media should be treated differently. And Ms. Wicks, I know you're committed to getting this right and working on it. So with that, I'd like to add on as a co-author today and continue to work with you to get this right. And I think you're going to get there.

I think we can't underestimate the importance of free press. It's our First Amendment. It's the very First Amendment. We have to have a vibrant and diverse press to hold the government accountable. You look in this room today, I don't think there's a single reporter other than those at the table. The press is dying. And what is the Washington Post quote? Democracy dies in darkness. It's dark right now. So with that, I look forward to continuing to work with you, and I hope we can get this right.

Ms. Reyes.

Thank you. I also want to thank you for being creative and trying to solve something that we all recognize as an issue. I want to associate my comments with my colleague, Assemblymember Papan. The issue brought up by Ms. Corbin, I think, is an important one, whether or not we're dealing with an issue that may be deemed unconstitutional, and it is something that clearly has to be addressed. And I know that that's something that you're working on.

All of these issues that have been discussed by my colleagues are extremely important. And so working on trying to find the best balance, but doing exactly what you are intending to do, I think, is important. Making sure that if we recognize that our newspapers, our journalism are necessary, are important to our democracy. Finding ways that we don't have somebody who is unjustly enriched, but still being able to provide the information that we all need. Yes, it is convenient to click and see Google and provide it for us, but if they are being unjustly enriched, then something does need to happen. Somebody created that content and it should not be usurped without proper compensation. Thank you.

Ms. Dixon.

Yes, we're all, I think we're all in agreement that something needs to change. I actually have a personal interest. Both my parents are journalists and own newspapers many years ago. They probably would be out of business today because they were community newspapers. Interestingly, and I'm fully supportive, but as you work through this, I think it's important to recognize the intellectual property issues that are at stake here that are created.

We call it content today, but it's intellectual property that is created by the news organization that is, and the reporter that, I guess the news organization owns the copyright on the content, but I think that's all you have is the content of what you create, and it's a great concern to me. One question I have, though on, and I know you're working on a lot of really critical issues. Could you just explain how the arbitration process would work?

Yeah, I'll actually let Danielle speak to it, who I think can articulate it better.

Thank you.

So he's an arbitrator. He actually negotiates for a living. He'd actually be the one arbitrating this. So I do think Hal would actually be best to.

Right. So what would happen is we would go in with an economist, evaluation expert, and the other side, say Google or Facebook would have their own, and we would present to the arbitration panel what we think the valuation is. By the way, we've already done some studies on our own based on consumer surveys. We ask consumers, what's the reason why you're going to these websites? Like, is news important? And how less frequent would you go to these sites if news wasn't on the site?

And we get these percentages of time, percentages of value. I just want to make it clear. I realize I'm going to get back to this notion that it's a link tax is a complete misnomer. Our valuation metrics have nothing to do with the number of links. When we ask consumers in these surveys, why are you going to Facebook, why are you going to Google? How much less time would you spend there without the news?

It has nothing to do with an accounting or counting up or summation of links. When he uses the word link tax, it's an intentional misnomer, misleading as to how value is going to be determined at the arbitration panel. When I'm done speaking, Google or Facebook is going to put up their valuation expert.

I'm sure he's going to say some not very kind things and he's going to then put forward, or she's going to put forward their own estimation of the value added that newspapers or news publishers bring to that platform. At that point, the arbitration panel will be looking at two different valuations. And under baseball style arbitration, they can't split the baby. They have to instead decide and determine which of the two estimates closest approximates the fair market value of what's being appropriated or conferred by the news publishers to the platforms. At that point, the process ends.

Who would appoint the arbitration panel?

It's under the guidelines of the American Arbitration Association, and it also follows the guidelines as articulated in the bill. So you'd pick from, and this is how it's typically done in the marketplace where you don't have a government entity, is it happens in the marketplace. You pick a panel of three from the AAA, different AAA, and then you follow the guidelines of what you submit, sharing of documents that abide by federal rules of civil procedure, so on and so forth.

You share the documents with the other parties and then within a time frame that's specified in the bill, you have to put forward the final offer. Each side puts forward the final offer, and it follows this set of guidelines, and it's enumerated so that there's guardrails so that there's a process and a format that you have to follow so that there's a fair and speedy conclusion to negotiations.

Well, I commend what you're doing, Ms. Wicks. I think this sets a high standard. And just for journalism across the country in California, being on the leading edge of this, because just to get our arms around it is very complex. And I know you're working through all this. I just commend you. I mean, as coming out of local government, where there used to be people who would follow local City Council meetings and boards of supervisors, as Mr. Essayli says, you really don't see people.

They get it secondhand off a blog somewhere. I think all that is good, and it furthers people's information. But I think the people that need to be protected in the creation of content, and I hope it seeps, I guess this is my point. I hope it seeps down to the local level. That's what's critical to our local democracy. It's just not being covered, and we all agree. So I'm sure the Washington Post will survive, and the New York Times and the Wall Street Journal, although they have very powerful digital walls. But I really want to see this benefit local newspapers, local journalism, for the furtherance of democracy. So thank you so much.

Any other questions or comments from the committee? Yeah. Ms. Papan.

I think the question was, how do you select the arbitrators? So I'm assuming there's a panel at AAA from which to select, and each side would select one, and then those two, correct me if I'm wrong, maybe I'm reading too much into the bill, but those two would then select the third. Is that what you're envisioning? Because, remember, this is why I asked about the rights of appeal because selecting the arbitrators is almost just as important as perhaps a right to appeal. But usually that's how it goes when you got three. But you may want to clarify.

Yes, and that is exactly right the way that you just outlined it. It's kind of like a veto process, if you will, that you would encounter in picking a jury in federal court the way that you outlined it is absolutely correct. And again, there's a set of guidelines in the different AAA rule of procedures by which you go about with the other party picking and a set of vetoes that you get over each of the three panel of arbitrators. We followed that.

And one of the things you might ask is should they have a certain set of expertise and criteria. And we thought about that. The bill is so cumbersome and the more you get into these intricacies about how the arbitration panel is picked and so forth. But that's something we have thought about as far as having them have some experience, too. So that's another thing that we've considered.

Usually people will pick those that have that background by nature. But how do you get the third one was kind of where I was coming from. Yes sir.

If I may. I mean, it's unprecedented that the government would outsource this kind of decision-making to a non-article three party with no appellate mechanism coming out of it. Generally, parties agree to arbitration, and here it's being forced on them by the government with no clear appellate path. And this is around something where there is no adjudicated right because federal copyright has dictated the boundaries of what these rights are and where news publishers' content that is protected by copyright is being used. Licensing does occur and digital services license millions, hundreds of millions of dollars of content through various products here. But what we're talking about are links and hyperlinks and quotations that are not covered by federal law.

Any other questions or comments from the committee?

I would just say, I don't want to belabor this, but there is actually tremendous precedent for arbitration panels taking place in the marketplace. I mean, they take place.

Just briefly, because I think it's been answered. But go ahead. You can.

I can do it in 15 seconds.

Yeah. Then go ahead.

The notion is unprecedented is also false. I've testified in front of the US Copyright Tribunal where there are disputes over distant royalty fees between sports programmers and cable operators. So the notion that this is unprecedented is false.

Thank you. Any other questions or comments from the committee? Seeing none. Ms. Wicks, before you close, as you know, and you're hearing from the committee, it's a tough bill. Everybody recognizes it's complicated. The devil, as Ms. Papan said, the devil's in the details on this. I think all of us just hearing the sense on both sides of the know lament what is certainly has been in some sense the death of journalism. There's complicated societal reasons for that.

This bill obviously will not solve all those, even once it gets to the finish line, when and if it gets to the finish line, but because there's so much that has gone into this. We weren't talking about the internet. That wasn't that long ago. And it wasn't that long ago that probably all of us in this room went out and got the paper off your driveway that a high school kid threw there. I mean, that's long gone. So these community newspapers, same thing.

I think all of us who came out of local government remember seeing the same reporters, probably you, at the Chamber of Commerce meeting or high school, that covered local government well, and that's gone too. We see it up here. There's very little coverage for any of us, maybe certainly in Southern California, maybe more so. And probably you too, Ms. Wicks, from the local papers who don't have a presence up here in Sacramento, that it's too far away.

And so all of these issues, I think, and there's no simple answer to that. How do you fix that? Maybe it will never get fixed. Maybe that ship has sailed. I don't know. I don't think any of us know where this is going to land a year from now, 10 years from now, 20 years from now, where this is all headed.

I think we all see the problems inherent in it, that when the public isn't aware of the decisions being made, isn't aware of what their government does, it just further alienates people further makes people feel like they don't want to vote or don't need to get involved. So there's a lot on the plate here to try to get at. I appreciate your efforts on this. I'll be supporting it today. Glad to hear. I know you and I in particular have worked together on a number of complicated bills, so I know you'll continue to work. I look forward to you doing that. But with that, Ms. Wicks, you may close.

Thank you. Appreciate it and appreciate all the comments and the conversations I've had with all of you here today. Just to sort of, I think, touch on a couple things that were raised. One, and the committee analysis, I think does a good job laying out some of these challenges as well. On the difference between Google and Meta, I agree there's a difference, and we had a very productive meeting with Meta yesterday. I think they need to be treated differently.

How you put that into statute is the question, but I'm committed to sort of figuring that out. I think Meta and Facebook still gets value from newspaper published content. It's different than Google's. And so delineating that I think is going to be really important, and I'm committed to that. On the question about sort of the 70% and ensuring that the money goes to journalists that Mr. Haney raised and others, this is of particular importance to the two unions who are supporting the bill, the journalism unions in California, the two main ones, they care a lot about that. I care a lot about that. I'm not interested in lining the pockets of the hedge fund managers who manage some of these publications. I'm not interested in a Mark Zuckerberg versus name your corporate CEO of publishers. That's not a fight I'm trying to wage here.

I want more money in the pockets of journalists so that they can have long and illustrious careers holding us accountable. That's what they should do. That's their job. That's what we need more of. And if you look at the impact and what has happened, it's decimated journalism. And so this is complicated. But what, we also have to understand the value. I mean, think about how the MeToo movement started, what happened with Harvey Weinstein.

It was reporters who got to the bottom of that, dogged reporters who were trying to understand the corrupt nature of what was going on there. When you look at bills that I know many of us have run, it's because we read about it in our paper. We say, this is injust. We have to fix this problem. Think about the USC gynecologist who was sexually assaulting women for decades. It was reporters who figured that out. We ran laws on that.

So that's why this is important and it is complicated, and I know that, and I'm living and breathing it every day and taking on a pretty tough fight. But I think we have a lot of smart people on both sides of this issue who I think do agree with the premise of the problem. And it's trying to land some of these planes, which I'm cautiously optimistic we can do.

And we will have amendments before this gets to the floor because I also understand I'm getting some goodwill from colleagues here to keep the conversation going forward. And I'm committed to finding solutions to some of these problems and also appreciate your co-authorship and your partnership. And with that, respectfully ask for an aye vote.

Thank you. We need a motion. Mr. Essayli moves. Mr. Connolly seconds. The motion is do pass. Ask the Clerk to please call the roll.

Maienschein. Aye. Maienschein, aye. Essaily. Aye. Essayli, aye. Connolly. Aye. Connolly, aye. Dixon. Aye. Dixon, aye. Haney. Aye. Haney, aye. Kalra. Aye. Kalra, aye. Pacheco. Aye. Pacheco, aye. Papan. Aye. Papan, aye. Reyes. Rivas. Rivas, aye. Sanchez.

Your bill is out.

Thank you.

Thank you. Mr. Gipson. Welcome, Mr. Gipson, we have a motion from Mr. Kalra, second from Ms. Pacheco. Mr. Gipson.

I get the hint.

Thank you very much, Chairman Maienschein and Vice Chair Essayli. And to the Committee, thank you for allowing me to present AJR 5. And I'll just summarize. This is, I think everyone saw what transpired in Tennessee. California being such a large state, we cannot be silent on our democracy. We cannot be silent on the things that matter. What transpired in Tennessee should not happen in any legislative body in the United States of America. And what this AJR 5 simply does it.

One, it puts California on record to making sure we denounce the actions that were taken and also making sure that this never happens, because again, many of you and I don't need to convince you, many of you in this room know how other states watch California. California. Because this erodes our democracy. What transpired needs to make sure that we go on record denouncing it, but also making sure that this never happens again. I respectfully ask, for an aye vote.

Thank you. Witnesses in support seeing none. Witnesses in opposition seeing none. Questions or comments from the Committee. Mr. Kalra, just want to thank the author.

I know there's a number of us here that are already co authors. I think it's really important for us to not remain silent when we see this kind of atrocious behavior and activities that are happening on other legislative bodies. I think the rest of the world saw that happen, and the rest of the world looks to California as much as the rest of the nation does for us to speak up and stand up against that kind of behavior. So I appreciate the offer.

Thank you, Mr. Essayli. Thank you, Mr. Chair.

And thank you, Mr. Gibson. I was hoping to hopefully speak with you about this before because I agree with the conclusion of the resolution. I don't agree with the factual basis, and I'll briefly explain why it suggests that they were disciplined or expelled for exercising their right to protest or their constitutional rights to protest. The conduct they actually engaged in was using a bullhorn on the floor and leading in a protest. Do I think that warrants expulsion? Absolutely not.

So my point is, I think this is an example of an abuse of power by a supermajority rather than a constitutional violation. I also can't ignore the race element in it where three people accused of breaking these rules, the only two expelled were African Americans and the third person was not. So I can't ignore that either.

I do think that's a serious issue and a problem I don't know if you're willing to change any of the stuff to accurately reflect what occurred and to condemn it, absolutely. I do think there's a racial animus, a part of it, that motivated the expulsion. I don't disagree with that. But I don't think they were expelled for simply protesting. It was for violating the rules politically. There's some comments in there about the mass shootings.

It doesn't denounce the shooter who is this allegedly trans shooter who was upset with this Christian church. It doesn't denounce gun violence in General. I would say most gun violence is not mass shooting. Most gun violence is one on one. And we know the majority of those victims are minorities. So, some of it's a little political. I don't know if you're willing to work on the language, but I absolutely agree with the conclusion.

And so that's why it's putting me in a difficult place on this Bill. I don't know if you wish to respond to any of that, but I do respect you and I do respect the intent. Any other questions or comments from the Committee? Mr. Gibson, I really appreciate you bringing this. I think it is. My opinion is it is factually correct.

It's unprecedented what happened to those individuals, while there may have been a breach in decorum on some sort of small level, certainly didn't rise to level of expulsion. And I do think you accurately characterize that. Could you include every single fact in the history of tenant except that it would be 50 pages long and it would be something that would really lose some of its meaning. So, I do believe you accurately captured the actions that occurred in Tennessee. I'm certainly pleased to support this.

If I'm not already a co author, I would like to be one and definitely appreciate you bringing this Bill. So with that, we do have a motion. We do have a second. Mr. Gibson, you may close.

Thank you very much. Appreciate the dialogues thus far. And I just want to say, Chairman Maienschein, you're absolutely correct in terms of, if I chronicled everything that transpired, it'll be a very extensive document. And so we tried to hit the highlights that was raised and elevated. And you are absolutely right. Jones was born and raised in Oakland, California. He's a Californian, even though he's in Tennessee. And certainly we do believe there was racially motivated to have two expelled.

And the third, Johnson actually indicated the reason why she was not expelled as well. And again, California is too big for us to remain silenced on these things. And I think just by this AJR, with both Houses participating and to thank the joint and the co-authors of this. I think it sends a clear message that, again, we cannot erode our democracy. Whether you're Democrat or Republican, this kind of behavior cannot be supported or tolerated. Again, I respectfully ask, for an aye vote.

Thank you. We have a motion. And the motion is be adopted. And a second. I'd ask the Clerk to please call the roll.

Maienschein aye. Maienschein aye. Essayli. Connolly. Connolly. Aye. Dixon. Haney. Haney. Aye. Kalra. Kalra. Aye. Pacheco. Pacheco. Aye. Pappin. Aye. Pappin Aye. Reyes. Rivas. Rivas. Aye. Sanchez, your Bill.

It's out. Okay. Thank you very much.

Thank you very much, Mr. Gipson. So that will conclude, we will do add ons and everyone else has added on. We're just waiting on Ms. Reyes. So everybody is free to go. And we'll keep the roll open for Ms. Reyes. If somebody could please contact her office. Thank you. Yeah.

Okay. We will open the roll on items one through seven. Item number one, AB 886, and ask. The Clerk to call. Item two, AB 1148.

Reyes. Reyes aye.

Item three, AB 1171. Reyes aye. Item four, AB 30. Item five, AB 1448.

Reyes aye.

Item six, AB 1458

Reyes aye.

Item seven, AJR 5.

Reyes aye.

Thank you. And that concludes today's Judiciary Committee meeting.