Assembly Standing Committee on Privacy and Consumer Protection

Good afternoon. Welcome to Assembly Privacy Consumer Protection Committee hearing. I know everybody here is probably happy to know the order of some of these bills, so hopefully that's benefit to all.

To effectively manage time stakes, we are on a tight timeline. Testimony will be limited to two witnesses in support, two in opposition, two minutes each. We will obviously be taking comment from those in the room. We will be starting the Committee as a Subcommitee. We do not yet have a quorum, and with that we will turn to the first Bill in our special order of business, AB 2829. Papen, when you're ready.

Thank you to the staff for their herculean effort with this bill. I really appreciate it. So I'm here today to present AB 2829 or the LIFES Act, which stands for Long Term Investments for Kids' Emotional Support. The internet has completely reshaped the 21st century. Over the last 30 years, the online world has grown tremendously, and with it, the platforms which have dramatically increased our use of tech in our everyday lives.

As the technological world has grown, so has our knowledge that the mental health and the use of technology are inextricably linked. The data is quite clear on how digital consumption is impacting mental health amongst our youth. Corresponding with the rise of tech, we have seen increasing rates of anxiety, depression and loneliness. These mental health challenges lead to everything from disordered eating to self-harm and even suicide.

Yet the demand for services has rapidly outpaced supply, leaving families without adequate resources to overcome the negative effects of technology. In fact, there's been reporting that in the next five years, the demand for mental health providers will be 40% more, 40% more than those available. The lack of resources is driven primarily by the lack of funding available to address the crisis, which has only been made worse by our current budget deficit.

So we have these large companies who have caused the problem but are not contributing to the solution. And in the process, they have been able to make super normal profits. Looking at the facts before me as it related to the challenges in regulating content and the harm being caused by tech, I think this policy is a practical compromise and it provides a tremendous opportunity for check to be a part of the solution.

AB 2829 will impose a tax of 5% on the advertising revenues generated in California by companies that generate more than $100 million in annual gross revenues and direct those funds to youth and mental health services. This policy is akin to the other syntaxes that we've been put in place to mitigate the harm caused by the product when product restriction really isn't feasible. For decades, we've taxed goods that impose greater costs on society than their price reflects.

The Supreme Court's recent wayfair decision highlights how a small state like South Dakota could go all the way to the Supreme Court to affect change as it relates to the internet. And that decision has opened the doors for this policy. And this idea may be so while this idea may be new as it relates to taxing digital service services, it's really not novel. Many states, in a bipartisan fashion, I might add, have had similar bills introduced and considered. We are not alone.

California is not the first, as much as we like to be. The question I want to leave you with, as I close is should tech, given the outsized role that they have had in the deterioration of the mental health of our kids, be a part of the solution? With me today, I am so honored to have Victor Ojakian, former Palo Alto mayor and a mental health advocate, as well as from my county, Nancy McGee, who is superintendent within the Office of Education. So with that, I'll turn it over to Mr. Ojakian and then to Ms. McGee, and thank you both for being here.

Great. Thank you for having us. Since I only have two minutes, I'll talk quickly. So, my name is Victor Ojakian. I've been labeled a suicide preventionist who is here representing only myself, though I've served on Federal Government, California State, Santa Clara County, and local committees and efforts. Some of my work has and still involves youth mental health.

I've encountered the adverse effect of social media on youth, particularly teen suicides. Remember, I'm from the City of Palo Alto, where we've had two teen suicide clusters. I've experienced that on several occasions. There's an abundance of studies going back more than a dozen years connecting digital media usage and youth mental health, adverse youth mental health and suicidality, including the recently released surgeon general's report and work by the American Psychological Association and some other articles which I list in my talk that I'll give you.

Government has had a long standing obligation to ensure safety. As with regulations for unsafe toys, transportation matters, and medication. Digital media usage should be no different. Companies have some capacity to address youth mental health and suicide prevention issues. I know that from my own personal experience. The only question is, will this matter continue to be ignored or dismissed, or will it be addressed? I commend Assembly Member Papan for taking on this action. The time for inaction and an apologetic talk has passed. It's time for solutions, and AB 2829 provides that opportunity. Thank you, and I'll turn my talk in this report in to whoever.

Good afternoon, my name is Nancy McGee. I'm a 40 year educator who has served as a teacher and district and county administrator. Elected county superintendent in 2018, I'm here to urge support for AB 2829, Assembly Member Papan's proposed legislation that would make a long term investment in the well being of youth. Most Californians agree we are experiencing a youth mental health crisis.

A recent Public Policy Institute survey showed 81% of adults responded as being concerned about students' mental health. Those surveyed cut across race, political party, and family income. The US Surgeon General, in his 2021 advisory declaring a youth mental health crisis, cited national surveys that showed one in three high school students and half of female students reported persistent feelings of sadness or hopelessness. This is an increase of 40% from 2009.

In 2023, the Surgeon General followed up with a second advisory on the effects of social media on youth mental health. He noted ample indicators that social media poses a risk of harm to youth. The question is not whether there is a youth mental health crisis, but what are we going to do about it? AB 2829 provides a fundamental solution to a serious problem that's consistent funding over the long term. This is exactly what youth serving agencies and schools need to tackle the challenge.

There is precedent. Prop 56, a voter approved in 2016, places an additional $2 tax on cigarettes. The California Department of Education receives 15% of those revenues for tobacco use prevention programs. The LIFES Act can be that story of success for addressing the youth mental health crisis. Today, I strongly urge your support for AB 2829 and I thank you for your time.

Okay, thank you, speakers and Assembly Member. It is now time for public testimony in support. Is there anybody here in support of this bill that wishes to speak?

Nora Lynn on behalf of Children Now in support.

Okay. It is now time for opposition testimony for the bill. Please come forward. Sir, these for primary witnesses in opposition. Are you one of the primary witnesses? You have two minutes each.

Good afternoon. Peter Blocker with the California Taxpayers Association on behalf of a broad coalition in opposition to AB 2829. First, I'd like to emphasize that although the discussion about this bill has focused on the large companies that will pay a digital advertising tax, the economic burden will surely fall on small businesses and consumers because the tax will increase costs that will be passed on through higher prices. But that is only true if this bill survives the inevitable legal challenges it will face.

AB 2829 is nearly identical to the Digital Ad Tax passed in Maryland in 2020, which is still mired in litigation as result of multiple lawsuits, the same lawsuits that this bill will face should have become law. With so much legal uncertainty, we do not think the Legislature should be considering the tax until those issues are resolved. As Maryland is experiencing, litigation can be costly, and it should be a priority for the state to avoid these costs while experiencing a budget deficit.

And the problems with this bill that are the focus of litigation in Maryland are substantial. The tax would be vulnerable to legal challenges under the First Amendment, the Commerce Clause and Equal Protection Clause of the US Constitution and, as the Committee's analysis highlights, for running afoul of the Internet Tax Freedom Act, which bars states from passing taxes that unfairly target online commerce.

The tax proposed by this bill is discriminatory and therefore illegal under the Internet Tax Freedom Act because only online platforms will be subject to the tax, while traditional forms of advertising, namely billboards or advertisements placed in newspapers, for example, would not be taxed. And then there are the administrative challenges with a tax of this kind, and questions like how would a company comply? How would revenue be sourced? What are the reporting requirements? What about refunds? Should there be a legal challenge?

Any guidance not in the bill would likely be taken up by CDTFA, and a regulatory process would be time consuming and costly, and especially if the tax is challenged and deemed unconstitutional.

A couple more seconds, if you wouldn't mind.

So finally, I'll just conclude by saying that until these legal uncertainties are finalized, we would ask that you urge no vote on this bill. Thank you.

Thank you.

Thank you, Mr. Chair and Members. Annalee Augustine here on behalf of the Family Business Association of California, a nonprofit dedicated to helping the 1.4 million family owned businesses survive and thrive in California. We echo the concerns raised by my colleague and are greatly concerned with the effects that this could have on businesses who rely on digital advertising to spread word about their products and services.

We fear this would increase costs on small businesses, not only those exceeding the global revenue limit, but those buying those digital advertising spots. Many Family Business Association members rely on digital advertising as an efficient and environmentally conscious method of advertising to their communities, and rising costs in one more area of operation could be detrimental or raise prices for consumers, which is something many of our members take great efforts not to do.

We sincerely appreciate the author's efforts to mitigate the mental health crisis faced by our youth. However, we do have concerns with the effects on our family owned businesses and respectfully oppose. Thank you.

Thank you. Are there any other witnesses in opposition? Please come up here. State your name and affiliation.

Good afternoon, Madam Chair and Members. My name is Chris T. Pierce and I'm here on behalf of the American Advertising Federation, but more importantly as an advocate for small businesses whom I help market and advertise.

Excuse me, sorry, we're only doing a name and affiliation now. Sorry about that.

Chris T. Pierce, Threefold Communications.

Thank you.

Ryan Allain on behalf of the California Retailers Association in opposition, thank you

Mr. Chair, Members. Steve Carlson for CTIA. We're the trade association for the wireless industry and the Association of National Advertisers, in opposition.

Jason Schmelzer here on behalf of Technet, in opposition.

Ronak Daylami, on behalf of Cal Chamber in opposition. Thank you.

Felipe Fuentes here on behalf of the Motion Picture Association in opposition.

Thank you. Hoping for more distractions, this Committee hearing. So are there any questions from. Thank you, Mr. Ward.

Thank you, Mr. Chair. Thank you to the author for introducing this bill. It is certainly past time that I think that we kind of look at real substantial ways to be able to address some of the mental health needs. Look, I think when we're thinking about tax questions, it's never easy. It's something that we have to be diligent and thoughtful on.

And for me, one thing that I always go straight towards is what is the nexus here? And are we looking at something that if there's going to be a new conversation around a new tax, is it necessarily connected to the thing that we're taxing and the thing that we are supposed we are trying to benefit? And if I dial back 10 or especially 20 years ago, we didn't have digital advertising. Certainly nowhere to the degree that we have today, we didn't have digital.

I'm sorry, because I got the construction noise behind us. We didn't have digital advertising. Right. So there's a lot of new revenue opportunity. We've taken advantage of it probably in our own campaign activities that we're trying to get some messaging out there. And so we know that this is a popular source of activity to be able to put out there and there's a lot of revenue going into it.

But we also know there is a very strong and growing link between social media activity and the mental health challenges that we have out there, especially for our youth and what are we going to do about that? Money's being, General Funds being tight that they are right now, I applaud you for trying to think about something that is nexus driven and trying to make that connection.

So for those reasons, I see an appropriateness here that I take very seriously some of the opposition's arguments that somehow this might hurt business activity or that this is going to stymie or fall on challenges for the consumers. But you also have to measure what the costs are for a lot of social media activity, new activity that's out there, being born on society, being born on our youth, and balancing those two.

I think it's an appropriate question to be able to put forward as you have done, and to be able to continue through the legislative process to work on some of the technical detail, whether it's those constitutional questions that we're studying closely or other factors that could go into a proposal. So it's a new space, but we are in a new time with a new product and a new issue that we're grappling with right now, and you're trying to link the two. So I would love to be able to see this continue. And I'm very, when I think the time is right, proud to support the item here today.

Thank you, sir.

Thank you. Mr. Lowenthal.

Yeah, I just want to thank the author so much for this very important legislation. Prior to joining the Legislature, I was the president of a company that did 100% of its customer acquisition via digital ads, to the tune of having 40 million global users on a monthly basis.

And it's critically important for those that are involved in the ecosystem that we know that users are out there, feel healthy, and are healthy, and that we're contributing to a healthy environment. And so I think it's, I encourage all of those that spoke in opposition to this bill to get on board and be part of the solution and figuring out what is the most healthy ecosystem that we can have.

I don't begrudge you for being in opposition to this bill because of the optics of what this can do financially for those that are paying for ad space. And so I certainly understand those concerns. But ultimately, we want people to be healthy. We want them to be online, consuming more, doing more things online, and they can only do that when we're not creating a mental health crisis in the process, which is undeniable. So thank you so much for bringing this forward.

Thank you.

Great. Thank you. Would you mind if we just establish a quorum before we go on to the next comments? Well, you're here, and who knows when people are bouncing out.

[Roll Call]

After this item, I'll take up the consent item. But, Ms. Dixon, and I wish they finished at work during Public Safety.

Yeah, I'll talk fast. Thank you, Assembly Woman, for bringing this forward. Obviously, it's an understood need in the country, is not only California. A couple questions. The voters just passed, narrowly passed Proposition One that provides significant funds for mental health. Do you know if youth, mental health programs for youth are included in that?

I think it goes only until, it goes 18 to 25. That's as high as that will go. So when we're talking about ages, say 13 to 18, not covered by Prop One.

And it's definitely not covered by Prop One?

That's my understanding.

And in the course of looking for available sources of funds to fund this important program, did you come up with another alternative other than taxing business, notwithstanding the fact that they're largely capable, but just another tax on business operating in California, did you come up with any other alternative source of revenue or funds?

Well, I felt that this one really had a good nexus between those that are in tech, that are with algorithms and whatnot, are really encouraging our youth to constantly be online. Those addictive qualities are undisputed, and so they make most of their profits through advertising. So for me, I really tried to get to be the closest nexus between helping those who are being harmed by those that are making a lot of money doing it in the process.

So one further, one final question. So the digital advertiser. So all forms of digital advertising, not just those targeted to young people, for example.

That's right. That's right. And the question came up about, well, are you discriminating between print advertising and digital advertising? And there is a growing body of thought that they are apples and oranges. Digital advertising is targeted. It has the opportunity for interactive use, if you will. Print ads, you buy them, you hope somebody sees them. It is a far different thing.

So there is a growing body that this would not be a discriminatory tax whereby you're not taxing all ad which is created equal. That is not the case anymore. Extremely targeted, which is a whole different ballgame.

Well, all digital ads. So. So everything.

To answer your question, yes.

Everything that's on your cell phone or computer, ipad, every digital ad, whether it's targeting young people or not.

Correct. That is correct. Okay. Cause there's no way of really distinguishing between.

Well, I know we've dealt with this, I mean, just in the last meeting, trying to deal with just internet programs that target children. It's very difficult. Anyway, well, thank you very much.

Of course, of course. Thank you for the questions.

Okay, we have a motion and a second. Mr. Lowenthal, additional comments.

Those were such wonderful questions, Assembly Member, and quite appropriate. And I would just like to give the metaphor, the example of smoking, where we have a health crisis related to smoking that we all have to pay for because of the drain is on our healthcare system as a whole, and creating a tax associated with those that are using cigarettes. Right. And the consumption associated with that lessens the burden on the rest of us. I shouldn't have to remind anybody in here that the end users in social media are the advertisers. The end users are not us, we're the product.

No, it's revenues in California. 5% on the revenues in California. But the threshold you must meet is $100 million worldwide. So you got to be one of the biggies.

Yes, of course.

Just a quick response. I appreciate that, Assembly Member Lowenthal. And the cigarette tax. I don't never smoke, so I do not know what percentage of the total cost, but I know it's pretty significant. I think it's been rising over the years. I don't think that equates to a 5% tax on $100 million businesses that do. So. Is it of total revenues?

That's just a lot of money. Okay, then that spurs another question in my mind. We saw this just with the voting results of Prop One. I understand that's not covered by this. People, in my opinion, have a large question of, and we see this in Unemployment Insurance and these other state managed programs. There's just homelessness.

Yet to be worked out. But we're going to make sure that it goes only towards children's mental health.

That just was cited a week ago in the state audit that there's a lot of money, $23 billion spent, and we still have homelessness. I think it's meritorious to provide some source of funding for mental illness. I just am very troubled or concerned by bringing it to the state. And how will that money be spent for children? How would that money be used?

I know, but through state programs, right?

We'll have to see. We'll have to see.

I just. It gives me a pause. But anyway, I appreciate the intent of what you're trying to do.

We don't want it to go into the General Fund in any event.

It's not going into the General Fund?

That's not what we're trying to gear it towards. Now, we do want it set aside, no matter what, for children's mental health. However that mechanism ultimately plays out, we shall see.

Okay. Well, I appreciate your intent. The motives are good. I'm just concerned about the taxation and then how these programs are going to be implemented throughout the state. I just honestly do not have confidence in the state managing and distributing these funds and managing mental health programs. But that's my own concern. All right. Thank you very much.

Great. Thank you. Well, I do appreciate your commitment to this. Usually when Members, particularly from the other side of the aisle, pull me aside and want to talk to me about a bill, I know it's an issue that they take very seriously because we're all doing a lot of bills, right. And you have to pick which ones you're going to talk to people about, because I hope you don't talk to me on every bill, and I won't talk to you on every bill I have either.

But this is obviously a very important issue to you. And also this impacts, I mean, this is right in your backyard in terms of the kind of companies that would be impacted by this. And so it is a pretty bold, this is really important to you. And last week, I supported a bill by one of my colleagues up here, obviously.

And I stated then that I recognize, and I believe that some of these platforms, some of these platforms are our contributors, I think, to our mental health issues that we have here. And I've been having these debates with one of my friends who works at a company.

And I said, well, when I was a little kid and I'd get home from school, I wanted to play video games, and I was kind of addicted to them, you know, and, you know, Super Mario Brothers or something a little bit different. But so I think that kids are people, and we're often addicted to things that, that keep us engaged in whatever we're doing, you know, I mean, whether it's video games or whether it's, I get home and I'm gonna eat some snacks or something.

But I think the difference now is, obviously, people have these in their pockets as opposed to having to go home and look at a screen. So I recognize the contribution. I think also that it's on all digital revenue. It's on all revenue, right. Not just like, and I understand it'd be hard to decipher but when you buy cigarettes, that's obviously just on whosever buying them, or presumably most people are smoking them. Right. When you're placing a digital ad, unless you're targeting it to children, then. But the tax is on everybody, is that correct? This tax would be on all digital ads, not just the youth ones?

Yes, all digital ads that a company generates revenue from.

Yeah. And not that I feel like you would be able to. That'd be hard to discern in the bill, you know, but I think that is a, that's a pretty big cause. A lot of the money isn't going to target ads to children. You know what I mean?

So that is a concern that I have with this legislation, and I don't know what the solution is. I want to solve this issue. I think as much. This Committee, I think, takes it very seriously. Concerned about this path, I'd be interested to see where it goes and what kind of negotiations you got into. But I think right now, it seems like it's pretty broad to attract a population of the people getting social media ads. You see what I'm saying? So if there's anything else, I mean, if you want to respond to that, great. But also, you're welcome to close.

Yeah. So while an ad may or may not be targeted to a child, number one, the child could see it, but number two, there are other things that these platforms are doing that do draw in children, and so. And then we deal with the effects of those. So I'm not sure I would necessarily say, well, it had to be an ad. Just focus on children.

Plus, you get in trouble by discriminating against online ads that way. I say you're not discriminating against between a print ad and a digital ad, but if you tried to discriminate between digital ads, you could get into trouble with discrimination. So that's why it would be hard to take that on. But I do see where you're trying to go with it. But I thank you for the opportunity to close.

I would say that while there may be litigation about other states trying to do this, we have co-equal branches of government, and I think oftentimes legislatures are sort of laboratories for democracy. And so I think we should go full speed out and try to make this work for our youth. It will take some work and some fortitude, but I think the Members of the Committee who, I know you get it, and I know that you get that we're in trouble here.

The word crisis cannot be underscored. And I sit here as a parent, because this is not easy, but it's not easy being from my district, which is a tech district. But I am committed to doing this. And I defy any parent in this room to come forward and say they haven't come home where their kid is having a lousy day because of what happened on social media. It is a tough, tough road as a parent. But in any event, I think we can do it.

And I thank the Committee for its dedication to giving me a shot. And we'll continue the conversation, but we owe it to our kids. And that's all I have. Thank you for your time.

Well, thanks. Just want to say congrats to everybody for keeping thoughts together, because I can't concentrate. But with that we can. And this is our important issues, by the way, and I can't even keep my mind right. Is that right? The Member closed. Is it about the bill because I think we closed already.

Oh, all right.

Okay. If you wouldn't mind taking roll, that'd be great.

Okay. Item number one, AB 2829 by Assembly Member Papan. The motion is do pass to Revenue and Taxation Committee. [Roll Call]

All right, it's four to two. We'll keep the roll open and we'll report back later. Thank you very much.

Thanks for supporting my great colleagues. Bill. Way back. Way back. Way back. So you got a good, good advocate. Yeah. Hi. Didn't even. Didn't even see you there. How are you? Good, good. Speak up for the spill. Good, good. Great to see you, Nancy. Good to see you again. Thank you for being here. Great to see you again. Apologies in advance for the feeling like you're getting a cavity filled. She's a pro. Are we sharing this? All right, well, Mr. Berman, AB 1831.

And God speed, getting through with this going on. Yeah. I would like to begin by thanking the Committee for your service this afternoon, because this is going to feel like the mouthful of cavities by the end of it. I'd like to begin by thanking Committee staff for their work on this important Bill. I will be accepting the Committee's amendments described in the analysis. AB 1831 would modernize our laws to ensure that AI generated sexually explicit images of children are illegal to possess, distribute, and create.

With the rapid advancement of AI, this technology is being used to create highly realistic images of child sexual abuse material which can be virtually indistinguishable from a real child. The creation of these AI generated images victimizes thousands of children, because an AI program must first learn what these images look like.

By using real images of children taken from the Internet, law enforcement in California are catching people with AI generated, sexually explicit images of children, but are not able to prosecute those people because of current loopholes in our laws. This is unacceptable. The abhorrent crime of possessing, creating, and distributing sexually obscene images of children must be illegal, no matter if it is AI generated or not. Therefore, it's critical we act quickly to stop child predators from abusing AI to perpetuate child exploitation.

We must ensure that our laws are keeping up with this emerging technology to protect children in California from this abuse. And here with me is the Ventura County deputy District Attorney, Racole Kelly, along with Kaylin Hayman, who is a survivor and victim advocate from Ventura County. Thank you very much. We'll have two minutes each. Thank you. Thank you. Thank you, chair Members. With the advancements of technology, we stand on the precipice of a looming crisis.

As the tidal wave of artificial intelligence generated child sexual abuse material, material gains momentum. The facts are stark and sobering. The Internet Watch foundation monitored one dark web website and found over 11,000 images of AI generated child sexual abuse material, or CSAM, in just 30 days. Over the course of seven months, one Southern California investigator amassed 74,000 AI generated CSAM images. But this isn't just for the sophisticated user. We've seen a rash of recent headlines of middle schoolers using this technology to torment their peers.

Now, these depictions are not just pixels on a screen. They represent the victimization of real children, kids who have endured unimaginable trauma. A recent study revealed that the computer generation models are trained on sexual depictions of real children. Thousands of those images are used to teach AI how to generate images, re-victimizing those live children into perpetuity and triggering their trauma again and again and again and again. But it goes even beyond victimization.

If we fail to act and regulate this technology, we create an investigative drain on resources and a loophole into existing legal framework. Possessing and viewing this type of technology or this type of imagery desensitizes people. It breaks down into psychological barriers, and it creates a gateway to further heinous acts of abuse. Now, it's my honor to introduce to you today a very courageous young woman.

Kaylin Hayman is the victim of this insidious crime, and her presence here today serves as a stark reminder of the human cost of inaction and the urgent need for legislative action. And I'd just like to thank you, Kaylin, for being. Being here today and sharing your story. Thank you chair and Members. My name is Kaylin and I am a 16-year-old girl born and raised in California. I was lucky enough to be a series regular on a Disney Channel show, Just Roll with It.

From the ages 10 to 13. Unfortunately, the 12-year-old version of myself became a victim of morph child pornography. On July 16, 2023, the living shield protecting my innocence broke when I got a phone call from the FBI saying that a man was in possession of images that were morphed to have my face on someone else's body participating in sexual acts, I felt violated and disgusted.

To think about the fact that grown men see me in such a horrendous manner while speaking about this topic is daunting. I know deep down I need to share my voice. I need to bring awareness and justice to those in my position. This is not only affecting children in the public eye, but also normal kids simply existing. These cases affect one's social life as well as being detrimental to mental health. It truly gives the feeling of being alone.

But to all other victims out there, I am living proof that you are not alone. Since my victimization, it is a constant thought that every man has malicious intent against me because I feel a lack of protection and privacy in my everyday life. These circumstances have made me feel uneasy and angry. The fact that grown men see me in such a horrendous manner is appalling. It is even worse that those are the people setting examples for young children.

The children growing up in this world are being exposed to harmful material, but that can be stopped. There is development going in a negative direction, but we can still change the ending. Not only is this going to help children all over the world, but it will protect their inner peace and innocence. California is a state with so much power and this is an opportunity arising for positive growth. This state is also home to the base of the entertainment industry.

This law would protect minors in the industry from being sexually exploited like they have been for decades. Normal kids would have to be susceptible to the feeling that they were not protected. Respectfully, I ask that you please support AB 1831. Well, thank you so much and thank you for being here today to share your story. I really appreciate that. Are there any other witnesses that would like to state their names and affiliations only, please. Good afternoon.

Elizabeth Espinosa here today on behalf of the Board of Supervisors in the County of Ventura and support. Thank you. Good afternoon. Mitch Steiger with CFT, a union of educators and classified professionals, also in sport. Good afternoon. Jason Schmeltzer here on behalf of Technet, strong support of the Bill. Good afternoon. Ronak Dalami with Cal Chamber, also in strong support. Thank you. Pat Espinoza, Samuel Kerry District Attorney's office in support. Thank you.

Mikey Houthi, on behalf of common Sense Media and the Children's Advocacy Institute, both co sponsors and support. Thank you. Thank you. Are there any primary witnesses in opposition? Seeing none. Any bills been moved and seconded? Any, are you? Primary opposition. Okay, other opponents? Rachel Bogwit with ACLU California Action. We're at an opposed, unless amended position and want to thank the author for working with us as we think through amendments. Thank you. Great. Thank you very much. Any comments from the Committee?

We have a question from Miss Dixon. Thank you, chair. I support the Bill. How are you going to implement it? How is it going to be enforced? And I see a number of law enforcement supporters, so they must have a means to do it. But we've been, as you know, talking about how we target this kind of illicit activity on the Internet and targeting children. So how can they, how do they feel that they can do it? Yeah, I'll defer to my expert in a second.

But, you know, this was brought to us by law enforcement and is because they were finding people who had this material and they weren't able to prosecute because of the loophole in the law. So it's closing the loophole which will give them the ability, they have the means now to find it or when they go after they scan the Internet. Yes. Law as it stands, existing law allows us to prosecute the possession of child sexual abuse material containing depictions of actual living minors.

There is a loophole that allows for this AI generated content or content that has the depiction of a child that is then modified to make it sexual. So we already have the means. We are already actively investigating and prosecuting CSAM crimes. This would now just close that loophole to allow us to prosecute crimes like those of which Caitlyn was the victim of.

And so whether that be in undercover operations, whether that be in the course of a regular investigation, there are various ways in which we come into contact with this type of media. Very good. Thank you. Thank you, Mister Lowenthal.

I want to thank the author for bringing this important Bill forward, but I really just want to thank you for your wonderful testimony today and how important it is for young people throughout the State of California to understand there is nothing wrong at all with that they've done to stand up, out and stand against this. And you just deserve a tremendous amount of credit for being here today. Thank you so much. Thank you. Thank you. Any other comments?

Well, thank you for letting me be a co-author on this legislation. I appreciate that. Happy to support it today. Obviously, you know, a lot of. And again, appreciate you for coming up. I mean, a lot of my Bill ideas come from people who, you know, something has happened to them or something that, you know, I learned about in the district. And so it's really important to have people that advocating for things that impact their life. So really appreciate that again.

And if you'd like to close, happy to hear it. Thank you, Mister chair. Also, just want to thank Deputy DA Kelly. I would. I would not want to be on the other side of you in a courtroom. And thank you, Kaylin, for your courage, your bravery, your advocacy, for coming up and making sure that nobody else ends up in the position that you did. We're seeing far too many reports of this.

There's a New York Times article about it yesterday about how this is happening in far too many states across the country. And we need to do everything that we can to push back on it. So thank you for your bravery, for speaking up and respectfully ask for your aye vote. So be it. Could we just do the motion second again? Because Wix Lowenthal. And third by Miss Dixon. So. Well, I'll let her get the next one. Thank you for that.

And if you wouldn't mind calling the roll item number two, AB 1831 by Assemblymember Berman. The motion is do pass as amended to the Appropriations Committee by our committee [Roll Call]. Ayes are five - zero. We'll leave the roll open and looking forward to this passing out pretty soon. Thank you very much. Appreciate it. Appreciate it. All right. Mister Mccarty, you have AB 2203, correct? Yes, aye do. All right.

We're ready when you are. Thank you. Just me. I'm the author and the star witness would. So first of all, I want to thank the Committee for working with us. And we will be accepting the Committee amendments. This measure, similar to the measure you're going to hear in a bit, is about purchasing tickets. We've all heard the stories about people flying hundreds of miles to try to get to a big show.

There was of course the Taylor Swift incident with the mom flying to Los Angeles, bought the tickets on StubHub, got there, never got to go, go. So, we're trying to remedy the situation and not have tortured concert goers. That was, of course, the playoff of the new album out there. But anyway, this issue actually happened to me as well. I tried to go to a soccer match. We bought our tickets on StubHub. We got there.

The tickets were supposed to be delivered an hour before the match. They weren't there. We called the hotline, didn't quite work, and so we lost out. So, it's not just missing out on going to the show. It's travel time, the expectations. So, if the consumer goes all out to travel a faraway distance to see a concert, a game, what have you, there should be some expectations. They'll receive the tickets at the end of the day.

So with us here today with these amendments is a simple notion that when you purchase your tickets, there must be an electronic proof sent to you immediately delivered to the customer that can be utilized. If something goes wrong, those tickets don't work. So the event that the customer, the consumer, can't utilize those tickets at the event, the venue will be required to honor the proof of purchase and allow the person to enter the event. We think this is an artful solution to the issue.

And again, thank the Committee for working with us on this and respectfully ask for your. I vote it's my turn to be in charge. Great. Anybody here in support of the Bill? Just you. Okay. Anyone in opposition to the Bill? Come on up.

Two is we want to make sure that if the proof of purchase is being used in lieu of the ticket, we don't have two people accessing the same seat at the same time. And then three, I'd observe that in light of another Bill we're going to have a discussion on later, AB 2808. It highlights the importance of the relationship between the venue and their primary ticketing vendor to ensure that if this type of mechanism is in place, we can ensure the integrity of it.

So those are the things we'll be looking at as the Bill moves forward.

Thank you.

Thank you, Madam Chair Members. Sorry about that. Also a tweener, Erin Niemela, representing Stubhub. We are in support of the Bill in print, and we will just have to analyze the amendments offered in the analysis, but appreciate the original Bill in print. Thank you. Thank you. Any, no other folks in the room, so I'll bring it back to the dais. Mister Bryan?

Yeah, no, I. I definitely recognize the problem that's trying to be solved here. Right where you haven't gotten your, your ticket fast enough. I'm also thinking back to my, my younger poor days and how I'm curious if venues would also get an electronic copy that they can then verify that the one that I have matches what they have or could. Like me and my 12 siblings all, you know, send a screenshot of the same, of the same receipt and just stagger when we go in.

That's the question. Is there a way for the venue to check the authenticity, to prevent folks from sharing receipts of purchase in lieu of a ticket and still gaining access.

Thank you. I assume it's a hypothetical. It didn't quite happen.

I plead the fifth.

Yeah. So the issue that I think is the solution is a guarantee of the ticket. Like, I'm trying to go see Taylor Swift in Vancouver in a few months. I buy my ticket on stuff up. It says you'll get your ticket within a couple days. Well, now it's like 3, 4, 5, or 6 months out. I'd like to have it today. Better yet, maybe the day before. Better yet, the week before, because we're going to buy airfare, hotels and what have you.

I think there's some expectations that it shouldn't be up to the hour before the show, which happened to the Taylor Swift mom in LA. It happened to us going to the soccer match. So some of the issues raised here by the opposition, we'll look at that. And I spoke to the chair as well. And we know we're trying to end of the line here, which this Committee is all about, protect consumers.

They're going on a limb, spending a lot of their resources, and it's not even their money. They just want to get what they're trying to buy. And so we'll certainly engage and try to make sure that we answer the question and address the problem and don't create other issues for the venues.

Thank you. Yes. And let me just before, I will go to Miss Dixon and the Vice Chair. So I appreciate the author very much working with us.

We. You know, the intent here is, like he said, to have folks get the ticket right away. One of the concerns raised by the venues immediately was that that would make it easier to, you know, create fraudulent tickets. And so this was a solution that was in discussion with the folks who make sure people can get access to their seats, who we heard from today. And so we'll continue those conversations to make sure that the concerns were addressed.

And I know that the author has expressed his commitment to do the same. So to the extent that we're trying to get this right, and I know he will. Yes, Miss Dixon. Thank you, Madam Chair. Think this is a good idea? I mean, we've all experienced it. I remember when I bought electronic tickets to Elton John, it was two years in advance, and I never. I didn't get the ticket till maybe a couple days in advance. So that.

But you do get confirmation by email that you've purchased. Is that not sufficient? With the order number as terms of proof of purchase?

Yeah, I think that the Taylor Swift family and our example. Yeah, we got confirmation. The worst part about you saw it come out of your apple, pay. Like my money. It's like, okay, you got my money, I got the receipt. Didn't get the tickets.

Isn't that sufficient, though?

No, because that's not the actual ticket. They say that sometimes you won't get your ticket sent to you up until an hour before the show or the day before, and they wouldn't honor it if it's not shown on any apple.

Well, there are two hypotheticals. No, that's just by receipt. It's not the actual ticket. Right. And so there's. There's two examples. I know and one is. Is literally me firsthand that it happened to us going to a soccer match.

And they didn't honor it. No. Okay. Thank you. Yeah, Mister Vice Chair.

Great. Thank you. I mean, I think a lot of us have had this experience. I bought tickets to go see my favorite football team, the San Francisco 49 ers, and it was on a different platform. And I was just hoping, hoping to God on my drive there, I'd get the actual ticket delivered to me. It did come. So that's a good news. But how. How do you plan to address if there's, you know, 49 ers?

Sell out a lot, for example, so if there's two tickets or something, you know, you have the proof of purchase. Is that just something? You just keep the conversation going, which I'm fine with. I'm gonna support the Bill. I'm just wondering, if both people arrive at the gate, what's gonna happen? Yeah, we need to address that.

But I think the bigger thing too, and we're gonna hear some other bills, is that people sometimes will sell them, I think, and not deliver them, because maybe they sell them to you for a. They can sell them in the day before on Vivint for 1500. So why give them to you the last second when they can make more over here? So that's the issue. We want to make sure the person gets a delivery of it.

But the flip side, I know the venues say they want to hold on them for as long as possible, so they don't have more of the recycling of the tickets and jacking up the prices. So this is a problem, and we're working artfully for the solution. And so, yeah, we'll continue to work with the parties that just testified here to come up with a solution that works for the industry, but most importantly, the consumer. Like your example.

Thank you. Seeing no other comments, we have a motion from Miss Wicks and a second for Mister Lowenthal. Madam Secretary, please call the roll. Oh, wait. Would you like to close? Sorry. Apologize. With the drilling in my head, it's. Yep. Okay. Item number six, AB 2203 by Assemblymember Mccarty. The motion is do pass, as amended, to the Appropriations Committee. [Roll Call]

The consent calendar has six votes. zero, no, that was Mister Mccarty's Bill. Mister Mccarty's Bill has six votes, and it is out. But we'll leave it on call for absent Members. Do we have a motion on the consent calendar moved by Miss Wick, seconded by Mister Lowenthal. Madam Secretary, please call the roll on the consent calendar. zero, I should read the motions. I'm moving too fast today. There's too much going on. AB 2681. Assemblymember Weber.

Assembly Member Weber: the motion is do pass to the Appropriations Committee with recommendation to the consent calendar. AB 2777 by Assembly Member Calderon: do pass to Appropriations on the consent calendar. AB 2905 by Assembly Member Low: the motion is do pass to the Appropriations Committee on the consent calendar. AB 3207 by Assembly Member Joe Patterson: motion is do pass as amended to Appropriations with recommendation and consent. AB 3286 by the Committee: motion is do pass as amended with recommendation for the consent calendar.

On the consent calendar, [Roll Call].

Consent calendar has six votes. It is out. We will leave the roll open for absent Members. One note that I was supposed to make at the beginning that I did not is as many know, today's Committee hearing is a special hearing, and so vets, Military and Veteran Affairs will meet in here at 4:00 and we will reconvene if necessary at five, and given the length of our agenda, I imagine it will be needed. But if not, good news. And now I will present my bill. So let's hand the gavel--

All right, which bill's the first victim?

This is AB 3204.

All right, perfect.

These lovely ladies walked up, so we'll start there. Thank you, Mr. Chair and Members. I want to start by thanking Committee staff for their diligent work on this bill. They really are the best staff in the building, and I'm not biased. Artificial intelligence is an incredibly exciting and lucrative technology. In California, AI is being used to automate mundane tasks and enhance human abilities. In many cases, AI simply offers a more efficient way of doing familiar things, but in other cases, it does a lot more.

Earlier you heard a bill and we discussed that photos of children are being fed into AI models and used to generate deepfake child pornography. That is an example of AI gone horribly wrong. We learned in that conversation that some of the most common image datasets contain child sexual abuse materials. This is not an isolated issue. When it comes to AI, there's a culture of carelessness surrounding training data at some institutions, although not all.

As the New York Times recently revealed--exactly--they talked about how voracious the AI industry is when it comes to consuming data. Meta is able to scrape Facebook and Instagram to train its AI to a llama. Google can scrape Gmail, Google Drive, and YouTube to train Gemma and Bard. OpenAI has consumed nearly all of the English language media humanity has produced. New York Times investigation revealed how little is known or understood about the harms caused by these datasets.

That investigation focused on copyrighted materials, but this bill focuses on personal information, which to me and in my mind and hopefully in the view of the Committee is an even bigger issue. If you've ever posted a photo of your child to social media, you can be confident that their photo is now being used to train an AI model. We need to understand this industry better. AB 3204 creates a data digester registry for organizations that use personal information to train AI.

Upon registering, these data digesters would disclose which categories of personal information are in use. AB 3204 is modest. It is merely a disclosure requirement to allow the state to fully understand the way California's data is being used to train AI models. With that, I'd like to welcome two people here to speak with me: Tracy Rosenberg from Oakland Privacy and Samantha Corbin with the Electronic Frontier Foundation. Tracy.

Thank you. Okay. Good afternoon, Vice Chair Patterson and Members. My name is Tracy Rosenberg. I'm with Oakland Privacy. We are a regional coalition that advocates for safeguards and guardrails in the interests of privacy protections, civil rights, and community consent. AB 3204 is a transparency bill that will help Californians understand the scope of AI training and development. It is similar to the data broker registry that the Legislature put forward in 2018 to help Californians better understand that sector.

If you ask the average Californian, their understanding of where or when and how the personal data of themselves and their children and their families is being used to train AI, they don't know. When the CCPA was written, which was not that long ago, but things move fast, generative AI deployment as we see it now really wasn't anticipated, and the privacy rights, which are fundamental and are laid out in the CCPA, are going to be increasingly difficult to execute within these AI systems as they develop.

So AB 3204 is a foundation for California's privacy laws to meet the challenge of ongoing, newer technologies. A registry is not sort of be-all and a cure-all for everything, but it's a useful snapshot of the current state of play and a first step that we have to take in order to sort of iteratively develop our fundamental privacy rights laws so they will continue to operate and continue to protect us. Thanks.

Madam Chair, Mr. Vice Chair, Members, and what I hope are unionized construction employees, Samantha Corbin, on behalf of the Electronic Frontier Foundation, a San Francisco-based nonprofit that works to protect civil liberties in the digital age, here today in support of AB 3204, which would establish a registry for data digesters.

Artificial intelligence has existed since the 1950s and has been in regular use across many industries since that time, often without consumers even realizing the role that AI has played in delivering their product or service, much less how or with what information on what that AI was trained. In recent years, however, the growth and application of AI has been both rapid and expansive, creating new opportunities and challenges regarding its use and regarding the data on which it was trained.

It's undeniable that this dramatic expansion has created significant demand for more information to support the continued growth and more effective use of these AI tools. AB 3204 takes a positive step by increasing the transparency that consumers so often lack when interacting with businesses that use personal information to train artificial intelligence and related tools.

California already has a strong history as a national privacy leader, and it is only fitting that the state fulfills a similar role in regard to the unique consumer privacy challenges that artificial intelligence raises. Focusing on transparency around data used for training lays a smart cornerstone upon which we hope the state will be able to thoughtfully build additional protections.

It is at this key juncture where it is more possible for consumers to actually opt out or ask to have their information deleted, a difficult and sometimes impossible feat once models have already been trained on large data sets. For these reasons, we support AB 3204 and respectfully urge the Committee's aye vote. Thank you.

Thank you.

Motion by Ms. Wicks and a second--

He's thinking about it.

By Mr. Bryan.

Thank you.

All right, any other witnesses in support of this bill? All right, seeing none, any opponents to this measure?

Okay, you want to go? You missed my menopause bill. We're gonna take care of that.

Thank you, Mr. Vice Chair and Members. Ronak Daylami with CalChamber, respectfully in strong opposition to AB 3204. As we stated in our letter, we greatly respect this author and her general approach to legislation, writing not only strong laws, but doing so in a balanced way that avoids unnecessary harm. Unfortunately, we believe that this bill fails to strike that balance.

AB 3204 seeks to promote transparency and to better understand the degree to which consumer PI is being used to train AI systems by way of creating a central repository similar to the existing data broker registry. Fundamentally, we don't think a registry is warranted here. Reasonable disclosures around training of AI can be accomplished in the absence of a registry and the associated costs and burdens imposed on the state and businesses.

To be clear, we don't dispute that transparency can be beneficial, but it has to be done in a targeted way for specific purposes that can be reasonably be put into practice without requiring businesses to further invade the privacy of their customers and compromising their competitiveness and intellectual property along the way. To that point, we find the scope of AB 3204 to be extremely concerning. At a practical level, the bill requires an enormous number of businesses to register as a data digester.

Bear in mind, the utility of the data broker registry to the average consumer was questioned last year simply because it captured several hundred businesses. We're now talking about having thousands upon thousands of businesses register as data digesters and having them provide extensive, identifying details not only about high-risk AI, but low-risk AI as well.

While we appreciate that recent amendments indicate an openness to including a threshold that must be met for an entity to become a data digester, a 1,000-person threshold is too low to meaningfully change the scope of the entities covered under this bill.

Even more alarming is the fact that compliance will invariably require businesses to determine if they can feasibly trace back each piece of information used to train AI to a particular individual, and if so, review their medical records to determine if the individual's provided sensitive services. This applies regardless of whether the business operates in health care. Beyond being incredibly impractical, if not impossible, this is extremely privacy-invasive.

Moreover, it's extremely problematic that the level of granular data required under this bill will invariably force businesses to divulge trade secrets or other highly confidential information, helping their competitors to their own detriment. Because 3204 applies to companies doing businesses in California and not just those developing AI in California, it's highly unlikely that businesses would risk rolling out certain patented tools and algorithms in California altogether if this bill becomes law.

If you wouldn't mind--oh. Looks like you're wrapping it up.

Last note. And finally, we note that while the bill is clearly modeled on the data broker registry and relies on various terms defined under the CCPA, it fails to include any of the exemptions that are critical to both of those laws. So for these reasons, we must respectfully oppose. Thank you.

Great, thank you. Anybody else in opposition? Name and affiliation only, please. Thank you.

What? Just kidding. Jason Schmelzer, here on behalf of TechNet, in respectful opposition to the bill.

Emily Udell, on behalf of the California Credit Union League, in opposition.

Vanessa Lugo, on behalf of California Bankers Association. Opposition.

Khara Boender, the Computer and Communications Industry Association, in respectful opposition.

Ryan Allain, on behalf of the California Retailers Association, in opposition. Thank you.

We need a registry. Apparently retailers and bankers are making actuals.

Thank you. Any comments from the Committee? I'm just hoping to get the Health Committee as soon as possible, which I also sit on. I just have a question for the opposition, if you don't mind. I've noticed some--I caught about 20 percent of the statement. I'm gonna put in AirPods and listen to them on the--there were some financial institutions that oppose this measure. Is that just because they collect information? I don't really understand that. Could you help me?

I think it's the level of detail that they have to provide in terms of what is provided on the registry. It's not just you register, it's that you have to comply with a host of requirements that are incredibly cumbersome, and it's not just for financial institutions, that's for all businesses.

That's the issue that we're having with this. Personal information under the CCPA isn't just information that is identifiable on its face, it's things that can be pieced together with other pieces of information to identify an individual, indirectly, even. And so now, based on some of the requirements in the bill, we feel like we have to now sit down and try and connect each piece of information we have to see if we can identify it belongs to Ronak Daylami or Sallie May and try and figure out if we need to comply with the bill.

Can you put the mic closer? It's just really hard to hear.

I'm sorry. I can't even hear myself or speak, and I really--

My thoughts are--

My thoughts are jumbled, so I apologize.

I don't know if anything we're saying influences anybody, but did the author want to respond to that because you were kind of--

Yeah, that would be great. Thank you so much, Mr. Vice Chair. So, a couple things. One is it only applies to--I mean, I think this might be helping my point because the bill only applies to data digesters, which as defined by the bill, are entities that design, code, or produce an artificial intelligence system or service, or modify such a service, that affects a certain number of individual households.

I don't think, as far as I know, the retailers or bankers are building AI models of that magnitude, but perhaps they are. I don't know why they're opposing it, but the only letter we have is a group letter. So--and I would say that one of the most important clarifications I'd like to make about the bill is that it is a very simple--we are not asking for every piece of sensitive information you train on.

All we're asking is for you to register and say I train on, and check a box. I train on sensitive information. I train on personal information, I train on CMIA data, education data. None of them, all of--I mean, none of them even apply, but just one of those things, depending on what it is you train on, we are not asking you to hand that data over to the government, nor would I want that. I believe that would be a very big privacy violation. So if the bill is unclear, and it is the opposition's position that we're asking you to turn over that data, that confuses me, but we're happy to clarify that.

I'm sorry, I'm not going to let you respond to the Chair again unless she wants to, but I'll get in trouble with that. Are there any other comments from the Committee? Okay, great. And we had a motion and a second. Was that on this bill? All right. Would you like to close?

Thank you. I mean, this really is a very simple bill that asks for transparency. It does nothing more than say, 'if you are training on California's personal information, you need to tell us that.' And then it gives California the tools to understand what these data digester--which that term is funny, I think it's gonna be law--but what these entities do, and for us to move forward in a way of understanding what they're using California data for. I don't think it's too much to ask. With that, I respectfully ask for an aye vote.

Great. Thank you. Would you mind taking roll?

Yes. Item Number Three: AB 3204 by Assembly Member Bauer-Kahan. The motion is 'do pass to the Appropriations Committee.' [Roll Call].

Currently has five votes. Thank you.

Thank you.

All right, and we have--

So we'll leave that on call, Mr. Vice Chair?

Yes, of course. Yes. I mean, if I said no, then when you came back up you could just reverse that. All right. We will move to AB 2877 is that correct?

Yes. Thank you, Mister chair. Perfect.

Chair. Before I start, I want to make sure to make clear I'm accepting Committee suggested amendments and today we have AB 2877 a measure which simply restricts the ability of companies to train AI systems using the personal data of children. As you are all aware, the pace at which AI is developing and growing into all facets of our lives is astonishing. We just talked about that in the prior Bill and the CCPA does an important thing, which is protect children's data.

This merely does the same by ensuring that we line up what is in the CCPA from using the personal data of children under 16 to train AI tools unless explicit authorization is given by the child's parent or guardian. With me today representing the sponsor of the Bill is Tracy Pizzo Freyzo. Pizzo Frey thank you. Everyone mispronounces my name, so I apologize of Common Sense Media. Hi everybody. Thank you for having me here today. And thank you so much to the Chairwoman for authoring this Bill.

I'm here to speak on behalf of AB 2877. My name is Tracy Pizzo Frey. I'm a senior advisor to common sense media on AI. I came to common sense media after spending 11 years at Google, including three years at Google for education. Relevant to this hearing in 2017, I created and subsequently ran all of Google Cloud's responsible AI work until March of 2022. AI is evolving at an unprecedented pace without sufficient guardrails to protect human rights and our democracy.

While AI presents many exciting opportunities for learning, discovery, innovation, and economic growth, the status quo presents significant challenges that put the safety and privacy of all Californians, but especially children and teens, at risk. Specific safeguards are needed when data ingestion and analysis is inherently part of a product or service, including in ways that are opaque to consumers. While there are significant benefits from AI products and services, among the many risks, one of them is the potential to weaken or evade data privacy protections for minors.

AB 2877 takes a simple but important step in ensuring that data collection used in the training of AI models is aligned with the California Privacy Protection Act. It is critical that all AI products are designed responsibly, and even more so.

As we've heard about for the earlier.

Bills today, for products used by miners, products built with ethics and responsibility by design should include assessing use by minors and the data that comes from them at the outset of product development. The result of this sort of responsible AI practice will serve to make these products both better for everyone, more beneficial to minors, and likely to be more successful for the organizations creating them.

It is not impossible for AI products to protect privacy, but in order to do so, they need to be designed with that goal from the beginning. Unfortunately, the vast majority of existing AI tools were not designed from the start with privacy in mind. Requiring express consent from consumers under the age of 16 for use of their data to train AI models, and further requiring the De identification and aggregation of that data is an important step in realizing the benefits of AI while mitigating the harms. Thank you.

Thank you. Are there any other witnesses in support? Good afternoon. Mikey Houthi with Common Sense Media in support of this measure. Thank you.

Brenna Sheehy representing Protection of the Educational Rights of Kids Advocacy in support.

Thank you. Any primary witnesses in opposition? Any non primary opposition?

Thank you. Ronak Delami, on behalf of Cal Chamber, we don't have a formal position on AB 2877 at this time, but we felt it was critical to speak on this Bill on process alone. I won't belabor the point, and I want to really convey our sincere respect for this Committee and the author and the chair, but we find it very concerning to see a Bill get gut and amended four days prior to hearing, particularly this early in the process.

We of course will be reviewing the Bill and look forward to engaging with her in the future on this, but we did feel it was critical to convey our disappointment. Thank you.

Thank you. Any comments from the Committee, Mister Bryan?

I think if you're gonna gut them in four days before hearing to do that in the first house, in the first hearing, I think there's plenty of public notice for everyone to weigh in and be a part of the process. And knowing the author, I have no doubt that everyone will be a part of the process. Kudos to your witness who laid this problem out pretty plain and the justification and rationale for this Bill. Thank you for bringing it.

Thank you Mister Bryan.

Any other comments? There's a motion by Miss Wicks in a second by Mister Lowenthal. I was just thinking about this. First of all, I totally agree with the intent, I'm gonna support the Bill. Just expressing a little bit, I think are people, it's kind of a hard, how do you nuance this?

But people under 16, maybe famous people, you know that voluntarily, and they want their information out there and maybe even use this part of these AI models so the AI models can tell you about, you know, that person being famous or whatever it is. So just thinking about that sitting here, but the intent of what you're doing essentially is my children, or your children, or anybody else's children who are, you know, just have their information on the World Wide webs.

And I had a Bill kind of like this, not like this, but a Bill with, on education platforms that came through this Committee. I think last year, maybe it was this year, it all runs together, but you know, it's the same concept is that when you put. We intuitively know that when people put their pictures of their kids online.

Honestly, we kind of, you know, we're admitting we know that that's going to go out to who knows where, but it still doesn't really make me comfortable that that's kind of like monetized and, you know, used for solutions and things like that. It's. But I do have some blame in that. But I like where you're going with the Bill personally, so I like to, you know, makes me a little nervous because there's only four days. Right. Or whatever it was.

But I think what you're trying to do is spot on. That's great. You know, our children should not be commodities. So would you like to close?

Thank you. I will take that as my close, Mister Chair.

Oh, that's good. I should author this Bill then. Exactly. You're welcome. As a co-author, I haven't read the whole. I'm just kidding, I'm joking. Don't quote me on that. Digital democracy, just because we can hear now.

We won't quote you on it. I know. Exactly.

My brain is all over the place right now. All right.

Item number four, AB 2877 by Assembly Member Bauer-Kahan. The motion is do pass as amended, to the Appropriations Committee. [Roll Call]

All right, that Bill is out seven to zero, and now we'll keep it open. And now that you're back, I am going to Health Committee.

Thank you. Moving right along, we are going to hear AB 2808 Wicks.

Thank you, Madam Chair, Members, staff who've worked on the Bill, I want to start off by saying I'm going to accept the Committee Members today, but with a caveat. Amendment 2B, I have concerns about. I think the intent is to bring the artists into the conversation, which I think is critical, and we should absolutely do that.

But I do share some of the concerns that some of my coalition have raised around the potential that it might undermine, or the language, as currently written, maybe isn't in the best interest of consumers. And so I want to make sure that we work together moving forward. I know that your goal is to protect consumers, as is mine, and so as the Bill, if it moves through Committee today, we can work collaboratively to ensure that that's the primary focus, is ensuring that our consumers are protected.

And so, as mentioned, I'll accept that. But really, one of obviously, bills change as they go through the process, but with specific focus on amendment 2B. The other thing I wanted to clarify, you know, the proposed Committee amendments in this Committee I don't think reflect the commitment I made to the Arts Chair. So, if the Bill moves forward today, I'm going to will continue to make changes to honor my commitment to the Arts Chair, which was to exempt sporting events.

And if we get the Bill out today, then I'll continue to do that. So I want to just be clear around those two specific items before we start. And with that, happy to present the Bill as is written in the Committee analysis today. As many of us remember, we used to take buying tickets to concerts and live entertainment venues at box offices, and we used to go into our community and be waiting in line, sometimes for hours, which actually had its own benefits, I think.

Obviously how tickets are sold has changed considerably. And now we know that we have one company, Live Nation Ticketmaster, that controls 80% of the ticket sales sold in this nation. In 2010, Ticketmaster merged with Live Nation despite antitrust concerns and now controls 80% of ticketing. They also control the career of hundreds of artists and nearly 80% of live entertainment venues. Since these companies became live, since these companies became one, live event ticketing prices have escalated 140%, adjusted for inflation, as the company's grip on the supply, location and price of events tightens.

The company now determines who wins and who loses, not just among consumers, but amongst artists and venues as well. This is not just a problem in California, as demonstrated last week when the Federal Department of Justice filed an antitrust lawsuit against Live nation Ticketmaster.

While it may take the Federal Government years to respond, the reality of this monopoly is a distorted marketplace in which few real people can access the ultra exclusive primary sales market and most people are forced into secondary market, also largely dominated by Ticketmaster, or where professional ticket purchasers thrive. Consumers deserve better, and AB 2808 is designed to address at the heart of the problem, the consumer's ticket buying experience. Again, the heart of the problem is the lack of competition at the point of sale.

And that is the thing that I am committed to working on and want to make sure that we hold close to us requiring more competition at the primary point of sale when the tickets are first distributed out. This Bill will make ticket retailers compete against one another for our business at the outset of that sale, just like we do now for hotels and airlines and all kinds of other retail experiences that we have online.

And in other words, just like every other industry in the United States. So, we know the Justice Department lawsuit is real. We also know that it's going to take time, but we know that Californians deserve choice now. Our consumers deserve choice now. And my ultimate goal with this Bill is to ensure that we are protecting consumers.

For those of you that know me, know that that is a really core value for the work that I do since I've been in this Legislature, since I've been politically active. And that is what I want to continue to do through the process with this Bill is ensure that our consumers have more choice because we believe that will drive down the ticket prices. I'll also say there's a lot to this whole space, and I know we've discussed this a lot last year in this Committee.

I know there's other bills in this space as well. But I do believe well-intended, smart people can get together and try to solve this problem, and we can do it together, even with the complexities of the politics of the ticketing space. And that is what I am committed to. With me here to testify in support is Executive Director of the Consumer Federation of California, Robert Herell.

Thank you, Madam Chair and Members. I'm Robert Herell, Executive Director of the Consumer Federation California, and my ears have just stopped ringing about 30 seconds ago. I'm sure yours are as well. We're the sponsors of AB 2808. I'd like to thank the author for bringing the Bill forward. The Consumer Federation of California has worked for a number of years on both anti-monopoly issues and also junk and hidden fee issues. AB 2808 represents a strong intersection of both those issues.

We're also a member of the National Ticket Buyer Bill of Rights, along with a number of other national organizations that fight for consumers. The reason we're here today on this Bill is because of a monopoly. The Live Nation Ticketmaster monopoly. This monopoly strangles competition, crushes minority entrepreneurs, and costs consumers dearly in a myriad of ways, from outrageous fees to ticket prices that have gone up astronomically, as you just heard from the author.

Madam Chair, as this Committee heard earlier this year in your informational hearing and in your analysis and comment number two, on pages 6 and 7 details. The monopoly directly represents hundreds of the largest artists, owns numerous venues across the country, has exclusive contracts with most venues of all sizes, controls 80% of the primary or initial ticketing market somewhere around, based on estimates, two thirds of the secondary or resale market through their own product that in many cases, the monopoly forces consumers to use if they want to resale a ticket.

The power extends to those in the live entertainment industry who aren't directly represented by the monopoly, to be clear. Your analysis also points this out very adeptly. Want to tour and use a venue not controlled by the monopoly? Good luck.

Want to use a ticketer other than Ticketmaster? Have fun playing your show in your friend's backyard patio, since no other venues your size will be available. That's monopoly market power in action. The robber barons, who in essence invented the American version of the monopoly in the 18 and 1900s, such as Vanderbilt, Carnegie Mellon, JP Morgan, and Rockefeller, would all be so proud of Live Nation and Ticketmaster. But we shouldn't be. These anti-consumer and anti competitive tactics also break the law.

So much so that last week the Wall Street Journal reported that the Federal Department of Justice is reportedly preparing a massive antitrust lawsuit against the monopoly as early as next month. History has shown us that two things usually have to happen to reduce monopoly power. The first is governmental antitrust action. This appears to be pending with the federal DOJ. Hopefully, California's AG will be part of that.

The second is for bodies like this to take strong action to protect consumers and encourage true competition, none of which is happening in a meaningful way in the current ticketing and live event industry. That's where AB 2808 comes in. The California Legislature should take strong action to restrict the power of the monopoly. This Bill attempts to do just that. It's never easy to take on a monopoly. Let's be clear.

They have other anti-layer organizations that defend their practices and serve as a bit of a shield for direct criticism of their tactics. If taking on a monopoly was easy, everybody would be doing it, but hardly anybody does it. But Assembly Member Wicks is with this Bill, and so should this Committee.

You should wrap up when you get a chance. Thanks.

I just wanted to finish, Madam Chair, just by noting that, as the author noted, we do have some concerns with the at the top of page 11 of the analysis, that 2B, we are committed to work with all stakeholders on that language. We just worry that it would have potentially the opposite impact of what the intended impact is. So, with that, we thank you, and on behalf of a number of other organizations that don't have lobbyists and aren't here, Si Se Puede, LULAC, etcetera, urge an aye vote. Thank you.

Thank you so much. Anyone else here in support of this Bill? Come on up.

Madam Chair and Members Erin Niemala, representing Stubhub. In support of the Bill in print, we have concerns about 2B as well. Thank you.

Thank you.

Madam Chair and Members, James Jack here on behalf of the Coalition for Ticket Fairness We remain in support and thank the author and sponsor for their leadership.

Thank you. Do we have a tweener? Come on up. This is your moment.

Madam Chair. Courtney Jensen, on behalf of SeatGeek and TickPick. We don't have a formal position on the Bill, but are concerned about the amendment 2B listed in the analysis.

Thank you, Tweener. Okay, so I know what we're doing.

Julie Baker, California Arts Advocates representing the nonprofits. Thanks to the author and to the Committee for working with us on Amendments. We are still in opposition until we have a chance to really review them. I did want to make one quick point, though, around UCs and CSUs that have operate performing arts on their campuses that are not recognized, 501 C3s to consider them also as exempt. Thank you.

Thank you.

Hello, everyone. Wendy Pacheco with the Youth Leadership Institute, an organization that amplifies youth voice, and I am in support of this Bill. Thank you.

Thank you.

Hello. Andrea Gill, constituent and I am in support of this Bill.

Thank you.

Good afternoon. Carlos Singer on behalf of the Los Angeles Philharmonic. We are a nonprofit organization that operates the Hollywood Bowl, the Ford Theater, and the Walt Disney Concert Hall in Los Angeles, all of which are not owned by us as a nonprofit, but are operated by us. So, we're hoping to see the language once it actually becomes available. And so, we are articulating an opposition until we see such amendments. Thank you.

Thank you. Okay. Any principal witnesses in opposition join us at the table.

Two minutes each. You can go and whatever order you so choose.

Good afternoon, Madam Chair and Committee Members. My name is Prashant Kumar. I'm an artist manager and consultant based in the East Bay Area. I serve as a business partner, manager and consultant to artists from Creation to Promotion. So, I'm working with them in the studio, with distribution, marketing, and also with their touring. I'm here today with the music Artists Coalition to speak about how this Bill affects artists and their fans.

First, I'd like to thank the chair and the author for their continued work on respecting artists rights. And while we are still opposed, we look forward to the continued discussion. I know this Bill was written with the best intentions, but as someone who is on the front lines with the creatives, this Bill is still creating more problems for the fan experienced than the current system. As an artist representative, I care about the music fans, the artists and their teams.

The biggest problem we're facing for fans and artists is unregulated for profit, resale and the secondary platforms who benefit the most from outlandish prices and also lack of consumer protections. But we don't see a dime artist. We don't see any money from the high prices. All the secondary sources do. There needs to be a better relationship between the artists and the ticketing vendors and or third parties, not just the venue.

While I know that the Committee and author are working to address our worries, the system proposed will create too much chaos for artists and fans and not address the real issues that we are facing. Respectfully, I ask that we continue working on this Bill.

Chair and Members Alex Torres here on behalf of the National Independent Venue Association of California. We represent approximately 500 independent brick and mortar venues and festival promoters in the state. We are opposed. We were opposed unless significantly meted in the bill's previous iteration. Want to express a thank you to the author's willingness to work with us and to yourself and your team. Madam Chair, a few points of concern here. First, the capacity question mark, which is addressed in the analysis.

Neva California's membership has a variety of ticket providers to choose from. We often have multiple platforms, etix, dice, lite, tixer, competing to service our venues. On the size of the venues, this measure should apply should apply to we want to make sure we protect independent venues that rely on exclusive contracts with techet sellers to provide necessary revenue and technical infrastructure. As the analysis correctly points out.

We also continue to advocate for language to provide similar protections for music festivals and spaces that are not inherently venues that might fall into this system. System of down and deftones are doing a show at Golden Gate park in August and is promoted by an indie Bay Area based promoter. We want to make sure we have the ability to do shows like that with a trusted ticketing provider and not place additional burden on indie promoters who have smaller staffs and less resources.

Otherwise the whole competitive piece of this is thrown out. Otherwise larger promoters will just do the work that indie promoters can't afford to do with those resources. Second, we have some questions on logistical applications of the Bill for our indie promoters. If there are multiple primary ticketing providers for a large venue that creates venues might have to have dedicated entrances for different providers because scanning devices differ between platforms. How would the venue and promoter deal with refunds?

Because each provider has different refund policies and I want to talk about the artist empowerment provision of the Bill enshrining in state law the rights of artists to control their own work product. Only suggestion is to continue the work there to make sure artists we talk about the terms and conditions there to make sure it balances. The artist needs what the artists like to do, as well as the venue's ability to actually deliver on that and work with the artists.

Lastly, the definition of consumer as proposed to be amended is critical. The consumers are the reason independent venues are in business and that makes it clear the consumer is an actual person intending to go to a show, not a platform or a person in the business of reselling a ticket. And this is a battle independent venues are continuing to fight across the nation to make sure that is abundantly clear.

So with that said, I do want to thank the author, again, thank the Committee staff and look forward to the conversations to come on this important measure. Thank you.

Thank you. Anyone else in opposition, come on up. Name organization opposition, please. Crystal Straight, on behalf of the Music Arts Coalition, again, thank you for two b. We really appreciate the chair and the author and look forward to working as you continue on. Thank you. Melissa Cortese, on behalf of the San Francisco 49 ers, respectfully in opposition.

Hope we can continue to work wit the author on this.

Tim Lynch, on behalf of the Golden State warriors, in continued opposition. And just two quick observations. One I made in the last Committee relative to the sports exemption is that we do more than sports. That's only 30% of what happens at Chase center, so disentangling those two is nearly impossible. And then we'll be focused on the exclusivity provisions of the Bill, which we opposed in SBA 29. Wilk.

Mckay Carney on behalf of the San Jose Sharks, respectfully in opposition.

Madam Chair Members Awad Kidani, representing the Los Angeles Clippers and the Los Angeles Rams, appreciate the author's diligence in this matter and willingness to work with us. We continue to have concerns with the Bill, but look forward to working with her through this process.

Madam Chair Members, Carl London, on behalf of the Recording Industry Association of America, standing in coalition with our artist partners.

Thank you.

Thank you. I'll take a moment of personal privilege and say that we had an incredible informational hearing where the teams opted not to show up and provide their thoughts on ticket egg. I think that absence is clear today. So in the future, when folks are invited to provide information to this Committee, I advise you to show up. Any questions or comments from the.

Yes, Mister Bryan, I'm going to support the Bill today. A lot of love and respect for the authority. This is a very complicated issue. You mentioned hotels in your opening, and I was sitting and thinking about it and I was like, all right, well, that makes sense. You've got Expedia and Orbit and all these competing people putting hotel rooms up.

The difference is, though, once I book my night at the Citizen, there's no secondary market for me to sell that room for 2, 3, 4 times x. So even if I have competition at the primary source, someone can still go through all of the platforms, buy up the competing prices, and create the new second or third day market.

It's especially relevant to me today because I was looking for fat ham tickets to surprise my fiancé in Los Angeles, only to see that they're sold out and only on the secondary market at four hundred dollar a piece. So, we're not going. I think also, while I recognize kind of the monopolistic characteristics of Live Nation and Ticketmaster and that entanglement, I think there's definitely a lot to unpack there.

I know that the artists feel like they have more control in this relationship than they might otherwise, and that's what's forced new technologies like the lottery systems and other things that have allowed them to control, you know, the pathways for their true fans to gain access.

I know I've, again, personal experience benefited from Adele's Vegas residency, where tickets went online and there was a lottery software that was created that allowed for kind of the true fans to be able to get in there before they sold out in minutes. And so I trust that you're going to work through all of this and actually have full confidence, but incredibly inspired to see you take on such an incredibly complicated and righteous issue. So thank you for leading that fight.

And again, you have my support today.

Thank you, Mister Bryan, Ms. Irwin.

Thank you very much. And I do share the concern that we heard from a lot of the speakers that potentially some of the consumer protections are undermined with the amendment because of the current structure, the current ticketing infrastructure. We had a very good oversight hearing I worked on with Assemblymember Friedman on ABA. And it is extremely complicated issue.

And I know that you have a lot of different stakeholders to listen to, but it is, once you deal with the issues of one group, then another group is not happy. So it's quite a balancing act to get through. But I'm sure if you continue to work with the chair of the Committee that we hopefully can resolve this issue and really make sure that the consumer has the experience that they should.

Thank you Mister Irwin. Miss Wilson, thank you to the author for trying to attack, to address is the word I meant to use, address this issue. And you know, it is complicated, as is noted from my colleagues, as was definitely noted from the analysis, and for me as just a consumer and only being able to really look at this Bill over the last 24 hours in various iterations of such, still find it quite confusing and complex.

And so my guiding principles is looking at this, is the difference between a competitive advantage and an unfair competitive advantage. And trying to how do you then thread the needle to address an unfair competitive advantage? Not saying that exists, but that was what I was looking through is if not just because I don't think as a Legislature it's in our position to address competitive advantages that is essential to the market.

But if there is an unfair one through lack of regulation, then let's weigh in on there. And so my concern, looking at the one that's in my book, in my pad and then some of the amendments later, is I don't know if we hit that, had that space yet. And through, you know, I didn't get to hear the first part of your testimony, my apologies, was in another Committee.

But I also, I don't personally and I don't know if I'll be supporting today, but I'm interested in the dialogue from the rest of my colleagues is I don't know if there's enough Runway in this legislative session to, I'm sorry, while it's in our house to address all the concerns that have been brought up, because as was noted from my colleague, is that addressing one person's concerns creates issues for another. And it is a complicated issue.

And I would love to see more robust conversations with all the stakeholders so that the initial Bill that's introduced is just tweaks to fine tune based on perspectives not understood, versus trying to craft it as you go. And so that's the concern that I have. And so I'll ask a question, as the final of my statements is just where do you see in your language where you feel like you are addressing the. The only part that I'm concerned about is if there's an unfair competitive advantage.

Yeah, thank you. And I think this might speak to also maybe Mister Bryan's remarks as well, and Miss Irwin's. You know, I see a clear unfair competitive advantage with Ticketmaster Live Nation. You know, Ticketmaster Live Nation controls both the vertical and the horizontal of the industry across the board. The managers, the promoters, the venues, the ticket distribution, and the primary market and the secondary market across the board. It's very difficult. And 80% of the venues, for instance, in this country, are live nation Ticketmaster.

Plus, they control the ticket sales. I mean, and there's been numerous Senate hearings on this and investigations. Obviously, the antitrust lawsuit that was issued last week by the Department of Justice, I think, is going to try to get to some of these issues around the unfair competitive advantage, as you mentioned. So, to me, that's pretty clear that that exists. The question is, then what do we do about it? And I think there's also valid concerns that have been raised around the secondary market.

I mean, I think all of these things are really important, but I also think part of the concerns around the secondary market come because there is no competition in the primary market. So you have to, I think, tackle all of these things together. You know, as noted, Senator Caballero has a Bill that's focused on the secondary market. My Bill is focused primarily on the primary market.

And my hope is that we can get into a place where we can create, I don't know if I want to call it a package of bills, but complimentary bills that seek to really tackle this holistically, that address that, so that ultimately, in the end of the day, there's fairness for consumers, there's more agency for artists, that the connection of those two entities is stronger because there's a lot of folks in the middle.

And I also recognize those lot of folks in the middle are needed to pull off big concerts and promote them the right way and do all that sort of stuff. That's part of the business of music specifically. But my hope is that we can craft something that really benefits consumers, because that's where my focus is, which is why I've been very specifically dedicated to ensuring competition at the primary point of sale. So that's the piece that we're still working through.

I'll also say we're in our first house of origin, where it went to, it was in what? Judiciary? No, arts, sorry, arts Committee last week. You know, we have chair in the Arts Committee who has opinions on this that are very valid and important, chair of privacy who also has specific opinions.

So from my perspective, working with the chairs, who the Bill has been in those committees, making sure that they are also comfortable with what we're crafting here because I want to respect their authority in this process and their level of expertise in this process is part of it. Having said all that, I recognize this is a very complex issue, as Senator Erwin can attest to, as well as Miss Friedman.

But that's the goal, is to create an overall complementary bills with the Senator Caballero that will hopefully put reforms both on the primary market and the secondary market.

The chair, one follow up you noted, and thank you for mentioning it. The investigation, given that there is investigation that would determine whether any antitrust laws have been violated, and of course, through that process, there would be actual action if it is true. Right. Cause the investigation can't say it is. It's an allegation. Right. So wouldn't then trying to navigate in this space be premature?

Well, it could take years. You know, I mean, these investigations take a long time. So, you know, we could wait for the Federal Government on a lot of things. And.

No, very true. But I'm just noting the fact that there is an active investigation that's brought out, that there is concern, allegations. There's. And through that investigation, there is expertise that is involved where they have much at their disposal to be able to properly investigate and really thread the needle, to be able to protect everyone in theory. And so since it's such a complicated issue and the way it's being dealt with is pretty complex, it's not trying to incrementally do anything.

It's trying to tackle the whole. So that is a cause of concern that it may be premature as well. But thank you. I appreciate the work that you're doing in the space, for sure.

I appreciate that. And my hope is to get this Bill out of Committee today so that we can continue those conversations, work with Senator Caballero, work with all the stakeholders that are a part of this. I mean, and there are a lot, it's a very complicated Bill so that we can keep fleshing out and having real dialogue and hopefully landing on some solutions here that work for everyone.

Thank you, Mister Hoover.

Thank you. First of all, I just want to thank the Committee staff for your work on this Bill. Bill, obviously, very complex issue. I know you've been working very hard on it and I've been wrestling with it, honestly. It is very complicated, but I get the kind of frustrations and difficulties between primary, secondary, all of that. I think my question and where my concern remains today and why I'm struggling with the Bill is really the concern from the artists.

I was wondering if you could speak to that briefly on just like what you think can be done to address those concerns. Because really, I think it's important that artists maintain their flexibility and their freedom in this process as well.

Sure, I'm happy to opine, but I also wouldn't mind hearing from the artists on that, but I'm happy to give you my opinion on it as well.

It'd be great as well, but I'd love both, honestly.

Yeah, I mean, I think, and specifically around two b, that specific amendment. I think some of the concerns that were raised by the, well, first of all, let me back up and say I think the intent of that amendment is to ensure that the artists have a seat at the table here in a serious way, which I agree with the intent of that.

I think some of the concerns have been raised by the consumer groups, and obviously Robert should jump in here with the pleasure of the chair, is that as currently written, the language doesn't put the consumer first and foremost in the process, because a large majority of the artists are still, you know, essentially underemployment by live nation Ticketmaster. And so I think that's part of the concern. Obviously, the consumer group should speak out to that more specifically. But I think that's part of the challenge.

And so how do we tether together ensuring that artists have real rights in the Bill while also honoring the consumers is, I think, where I'm trying to make this plane land, which is what my goal is coming out of this. Once we get the Bill out of this Committee.

Through the chair, if I might briefly, please.

Yeah, we have to be out of here.

Assemblymember, it's an excellent question, and I would just note that for the consumer federation in California, the heartburn on two b isn't the intent behind it, because we believe that artists should have more control. The problem is, is that as a practical manner, this language begins to look a lot like a provision in the Caballero Bill that CFC has been opposed to for about a year, which is to say you can do whatever you want.

In those terms and conditions, I would assert that that's not a real choice the consumer has. The choice is I either click the box and I go to the show, or I don't click the box and I stay home. That's not a real choice in our opinion. And so, for example, when the Taylor Swift fiasco happened, there were some lawsuits filed.

The monopoly immediately said, oh no, no, you can't sue because you all agreed to go to binding arbitration when they clicked the box to be able to go to the show, period. So that's some of the challenges here. I would just note for Assemblymember Wilson's question, the investigation has been going on by the Federal Department of Justice for about a year and a half. It is not brand new. It actually predated the Taylor Swift fiasco. Normally we don't know that, but in this case we do.

The lawsuit appears to be eminent, based on triple source reporting from the Wall Street Journal. And I can guarantee you that based on the history of antitrust lawsuits, based on also comments that I saw from Ticketmaster and Live Nation's own employees, that they will fight it vigorously and this will take years.

Thank you. I think you were addressing Mister Hoover's point. Thanks. Yeah.

And just, I don't know if anyone representing the artist wants to share. I apologize if I missed it, but how you feel about the amendment, specifically that to be amendment? I don't know if anyone has any thoughts, but. Well, we appreciate the fact that they've been working toward creating more opportunity and more options for the artist, but still it leaves us very limited. You know, we're the ones that do all the work.

The artists are the ones that do all the work, do all the promotion, are out on the forefront in the face. And we actually care about our fans. You know, we won't want the fans to get ripped off or overcharged. That's not really set up, not the way we're setting things up, but there's no benefit to us at all. You know, it goes to another market, we have no control. If it goes through the. Through the venue, we still don't really have control.

And it just leaves too much on the table. Thank you.

Thank you. Through the chair, if I may respond to that.

I think that we got both sides. I think we're good on that. Seeing no additional. We have a motion. Do we have a second? Is that Mister Bryan who seconded it? Yeah. Thank you. So I will say I want to thank the author. I think that she has led across industries, relates to ensuring that consumers are protected from antitrust monopolies. And this is just another example of her willing to really take that on. And I think that is incredibly important to consumers.

And I know that she and I and the Committee share the same goal here, which is Californians first and consumers first. This is a consumer protection Committee. So it's in the name of the Committee who is centered in our discussions. I think that I would agree that the Committee did a really incredible job in artfully rethinking the Bill to try to figure out a path forward to protect consumers. By no means do we feel like it's done.

You've heard that from the author, you're hearing it from me. And I think that as we move forward on this Bill and on the Caballero Bill, which also sits in our Committee, that will be who guides us. And I think, you know, we took a step further in trying to support the artists who are also important to California's ecosystem. Not even the artists seem to like that.

So we will continue to put the consumers first, and hopefully we can make the rest of the ecosystem work around ensuring that fans get the experience they want. And I really want to highlight one thing, which I think was key, which we heard from actually the opposition, was the definition of consumer, which was placed both in this Bill and in the Mccarty Bill.

I will note, because it was important to us that that be consistent across legislation, to start to center those consumers, the people who intend to show up.

And then, in part, is because we, as a Committee, think one of the largest problems in this is not necessarily even the monopoly at the front end, although the primary market is a huge problem, but it's the brokers in the middle and the brokers who are buying up the tickets and leading to a lot of the problems that Mister Bryan is experiencing the marketplace.

And so by talking about consumers as the fan that tends to show up, it really draws that distinction between the brokers that are buying up the tickets and the consumers that want to actually attend. And so that, I think, is a really good step forward in this conversation, and one that I think will guide it going into its next Committee, which I know is yours, Miss Wicks, if it makes it out of here today.

So that gives us the opportunity to really continue to work on this and ensure that we are allowing fans to have the opportunity that they want. So with that, we have a motion in a second. Would you like to close?

I just appreciate the chair's work, the conversations from colleagues. I know this is not an easy issue. And I genuinely welcome dialogue from the opposition, as I always do want to get it right. Also know that we have the opportunity to get it right here, and I'm committed to making sure we work with all of our staff stakeholders towards that end on a very complicated Bill. And with that, respectfully ask for an aye vote.

Thank you, Madam Secretary. Please call the roll. Yes. Item number five. AB 2808 by Assemblymember Wicks. The motion is do pass, as amended, to the Appropriations Committee. [Roll Call]. The Bill has six votes. It is out. We will leave it on call for the absent Members. We are going to call the roll on two bills before I step out for Pesach. So, the first is AB 28. 29. Papen. We'll call the roll for ABC Members. Item number one. The motion is do pass to the Revenue and Taxation Committee. The vote is four - zero. The chair. Vice Chair.

[Roll Call] Item number one.

[Second Roll]. So it is out. But we'll leave the roll open for absent Members. We'll call the roll-on AB 30. I'm not wearing my glasses. 1831 bourbon. Item number one, the motion is do pass as amended, to the Appropriations Committee. The vote is fired. The Vice Chair voting aye. [Roll Call]. That one has a lot of votes.

Nine votes. It is out. Will we throw open prize members and Miss Carrillo, you will present 2355 when you're ready. Thank you.

Thank you. Thank you, Madam Chair and Members, I'm proud to present AB 2355 which will require a disclosure with generative AI is used in electoral advertising to substantially alter existing media or create content that would falsely appear to be authentic to a reasonable person. And I want to thank the chair, as well as the Committee staff, for working with mine to make sure that the intent of the Bill is what we want it to be, as well as being the more direct policy as possible.

The availability of tools to Doctor images, video and sound is not new. However, rapid improvements in artificial intelligence, or AI, and large language models, or LLM's, that are capable of generating sound, images, and text have already resulted in the creation of materials that are likely to pass off as convincingly real when they are indeed fake.

In January of this year, a robocall using the AI generated voice of President Joe Biden told New Hampshire voters to save their vote for November rather than vote in the states primary election. The individual who created the audio told NBC News that it took less than 20 minutes and cost only $1. As this technology becomes cheaper, faster and easier for public use and is embraced by candidates and political campaigns, its effect on democracy requires us to act.

There is a risk not just in falsities being passed off as real, but also the spread of cynicism and voters becoming coming to believe that nothing is in fact real in this new environment. Sensible regulations that protect free political expression and speech are vital to get ahead of this technology. The Legislature will be evaluating a number of bills this year that aim to get ahead of the impacts of generated AI and large language models will undoubtedly have our society and in our daily lives.

These conversations are necessary because we know we want to be intentional and not be caught off guard when it comes to the impact of improving technology. I'm proud to say that the Bill enjoys bipartisan support, and here to address more on the need for this Bill is Tracy Rosenberg with Oakland privacy.

Good afternoon everyone. Still Tracy Rosenberg with Oakland Privacy we are asking for your support for AB 2355 which seeks to help voters who are trying to distinguish between what is real and what is not as they make up their minds how to vote. The Bill requires that mostly or totally synthetic paid political advertisements be labeled as such. This provision is structured in very much the same manner as other longstanding laws about paid political advertisements, including disclosure laws like who paid for an ad, for example.

If the labeling doesn't happen, then any voter can seek an injunction. But, and this is important, they have to go to a judge. So decisions with First Amendment ramifications are made by a trained judge with experience in interpreting and applying constitutional law, not a tech company. With all due respect to my friends at the companies, we think that it's important that decisions with ramifications that are central to our democracy be done by trained entities and not corporations.

We also appreciate the focus in 2355 on trying to solve the problem rather than assessing fines and penalties and fees after the fact. So we hope that you will that support AB 2355.

Thank you, assemblymember and Miss Rosenberg. Are there anybody in the public that's here to speak in favor of this Bill?

Good afternoon, chair Members Naomi Pitron on behalf of the computer and Communications Industry Association, we have a support if amended position and look forward to working with the author. Thank you.

Good afternoon. Ronak Yalam with Cal Chamber. We also have a supportive amendment position. Thank you.

Okay, seeing no others, are there any speakers here, primary principal speakers, in opposition to the Bill? Seeing none. Are there any Members of the public here to speak in opposition to the Bill or me toos? Seeing none. We'll bring it back to the Committee. Anyone on the Committee? I have a motion. And do I have a second? A second. Okay, I have a motion from Miss Dixon, a second from Mister Ward.

You know, I would simply say to the author, I can't envision a world that we'd be going into without this legislation, especially with the lack of trust that exists between the electorate right now and the policymaking process as a whole and politics as a whole. So I applaud you for bringing this very important legislation forward, and I look forward to supporting it. And with that, would you like to close?

Thank you, Mister chair. And thank you to the Members. I'm just really glad for all the conversations that have taken place in the variety of, in the several committees as well as folks interested in the space. AI is new, and I think as the impact that it has on elections, not only in the state, but across the country, it's important that we just get ahead of it.

We all want clear, clean elections that actually help encourage voters to come out and be participants in our democracy and truth must prevail. And I think AI just has an opportunity to mark the waters. And so the faster that we act on how we protect our electoral process and our campaigns, we are in a better position.

And again, I just want to thank the Committee staff, the chair, and all the conversations related to how do we make this Bill, what we intend it to be, and protect our democracy in the process. With that respectfully request and I vote.

Okay, we have a motion and a second. Madam Secretary, please call the roll.

Item number seven, AB 2355 by Assemblymember Wendy Carillo. The motion is do pass to the Judiciary Committee. [Vote].

Okay, we're gonna keep the roll open for that. For the many Members coming in and out testifying Committee today. We will be on recess for the next from 4 to 5 oclock and we will reconvene at 5:00 p.m., okay, we'll reconvene at 5:00. And in the meantime, yes, we certainly can. Can we open the roll for pass votes, please.

Yes.

Let me finish this announcement really quickly. There will be another Committee convening in here during that time, so we will all need to leave.

Are we going to continue until four?

We're going to finish after this right now, and we'll reconvene at 05:00.

Okay. On the consent calendar [Roll Call], seven - zero. Item number three, AB 3204, by Assembly Member Bauer-Kahan, it's five - zero. Chair, voting aye, Vice Chair, not voting [Roll Call], six - zero. Item number four, AB 2877 by Assembly Member Barra Cahan, it's seven - zero chair and Vice Chair, voting aye [Roll Call], eight - zero. Item number six, AB 2203, by Assemblymember Mccarty. The motion is do pass as amended, to the Appropriations Committee.

The vote is six - zero chair and Vice Chair, voting aye. [Roll Call]

We're adjourned.

We're in recess.

We're in. What I meant to say is we're in recess.

It.

Assembly Member Arambula, we are ready for you, and I believe you have two bills today.

Thank you Madam Chair.

All right, if we can have it quiet back there, please. Thank you very much. Hopefully your witnesses have stuck around and please start whenever you're ready. We are starting with AB 2390.

Thank you Madam Chair and Members. Children and adolescents who use social media should be safe from harm. AB 2390 will address the mental health impacts happening now that are the results of intentionally addictive design of social media platforms. The promise of social media was to build virtual communities that would bring people together to share information and ideas, and in many ways, this promise has been fulfilled. Some platforms have billions of users and act as a digital thread connecting friends and families.

Unfortunately, social media companies have abused their position as facilitators of some of the most personal human interactions by prioritizing screen time and profits over the mental health of their users. Social media's addictive design exacerbates compulsive and obsessive behaviors, detracting from real world, in person engagement and contributing to social isolation. A 2022 survey found that 35% of teenagers report using one of the five major social media platforms several times a day.

Children and adolescents who spend more than 3 hours a day on social media doubled their risk of mental health issues, including anxiety and depression. Because children and adolescents are the most heavily impacted, it is important to me that this effort be led by the voices of those who are on the front lines of this epidemic. AB 2390 establishes a peer-to-peer pilot program to develop methods to mitigate the harm to youth and adolescents caused by modern social media platform design.

I trust that the kids know what they need. This Bill will provide them the space to act. With me testifying in support of AB 2390 is Doctor Flo Cofer, senior Director of Policy at Public Health Advocates, and Nancy Aguilar, who's a youth participant at Youth Leadership Institute.

Welcome.

Thank you. Good evening. My name is Doctor Flojaune Cofer and I'm the Senior Director of Policy for Public Health Advocates. AB 2390 Social Media Harm Reduction Pilot Program up to engage peer-to-peer programs in developing and evaluating a curriculum to create healthy social media habits and K-12 online safety standards. Social media is a new technology that exists in, and also has contributed to a major restructuring of our social engagement, and we want to state plainly that it does a lot of good.

It allows people to find niche communities to support their identities and interests, and the majority of people, including young people using social media, have a positive experience. However, there are also risks. Youth spend a lot of time on social media, an average of around 5 hours per day, and through a combination of the content they encounter and the social media replacing or competing with other activities, many young people describe social media as a major and direct contributor to depression and anxiety.

And similar to how the vast majority of people in vehicles who travel from point a to b do so safely, we can both appreciate the benefits of efficient transportation and their harms, pollution and vehicle crashes. And so, this Bill is intended to help youth maximize the benefits and minimize those harms. Parental support is high and bipartisan.

There is almost a desperation among parents for help in navigating appropriate, safe and online habits, and this Bill focuses on the leadership of young people, young people who actually use social media and who know the difference between TikTok and tic-tac-toe to help develop the safety standards to keep themselves and their peers safe. And for those reasons, we really urge you to vote yes.

Thank you.

Yes. Good evening. My name is Nancy Aguilar and I'm part of the healthy online platforms for Everyone, HOPE Youth Coalition, a program under Youth Leadership Institute. In HOPE, we are working towards holding online platforms accountable for the harm youth receive while uplifting healthy, positive messages. So, our social media feeds are full of content we enjoy or are currently trending and pushed by algorithms.

I've seen the spaces youth turn to for enjoyment and community have caused great harm, with youth comparing themselves to others or the harmful content promoted and ads shown on our feeds. An alcohol ad appeared on my feed when I'm not even 21 yet. I don't want to see this on my feed and I know I'm not alone. It's worrying to think about the harm that could come from exposing vulnerable young people to these ads.

I've seen youth deactivate after receiving harassment and death threats or had their information doxed, which made them lose their sense of safety online and offline. No one knows if they're coping in a healthy way or not. I talked about these online youth experiences in HOPE. We did a study to understand the relationship between youth and social media and created youth centered recommendations for the platform's designs and coming up with these ideas on making these platforms a healthy space.

I also talked about my experience as an older sibling dealing with my brother wanting to use social media at 11 years old already, and useful screen time controls for managing his game usage as well. Implementing AB 2390 will help youth like my younger brother learn about the harms of social media. They can learn good habits and healthy online use. Learning this before reaching the platform's minimum age requirement is needed so they can be prepared and safe.

As these youth grow older, they can talk about their social media experience with each other. It's a wonderful opportunity to connect with each other and discover shared experiences, whether positive or negative. Having a space to talk about this is needed when it's a big part of our lives. A healthy and safe space with a youth community is what youth need. This is what the HOPE Youth Coalition provides, what similar pee-to-peer programs do.

It's what social media should be, but it's not at that place yet. Together, we can start a path towards that now. Thank you.

Thank you very much. You did a great job. Do we have any other witnesses in support?

Good evening. Kim Lewis, representing Children Now in support.

Hello. My name is Ileta Aguilar. I'm a part of the Hope Youth Coalition, and I am here in support.

Hello. My name is Andrea Gill. I am a Senior Program Coordinator for the Hope Youth Coalition. I'm here in support and alongside with our partner, Daily City Youth Health Center, in support.

Thank you.

Hi, my name is Alexandra Chavez. I'm a program manager of YLI, Youth Leadership Institute, also in support.

Hello, everyone. Wendy Pacheco, senior trainer and consultant with the Youth Leadership Institute. And on behalf of YLI and the Social Changery, I am in support of this Bill. Thank you very much.

My name is Samantha Vigil. I'm a PhD student at UC Davis in the Department of Communication in support.

Hello. Emily Rivas, director with Youth Leadership Institute in support.

Thank you very much. Do we have any principal witnesses in opposition? All right. And nobody in the room that wishes to register their opposition? Any discussion from the Members? Assembly Member Dixon.

We're seeing a lot of these kinds of bills because we're trying to remake so much law that affects such an important part of our society and young people especially. I commend you for your excellent testimony, and the author, too. Thank you for bringing this forward. I like the idea that it is a pilot program. Let's see what's going on. Is this, to my knowledge, is this the only one to really test impacts in a pilot, any Bill that's currently going through the process?

Addressing social media, I believe so. But there is a peer-to-peer program for mental health through the Department of Healthcare Services, as well as an 80-year history of evidence-based approaches with peer--to-peer through alcoholic anonymous as an example.

I think this is essential. So, thank you very much for doing it. Thank you.

Would you like to second the Bill?

Yes.

All right, so we have a motion by Assembly Member Ward. A second by Assembly Member Dixon. Would you like to close?

I respectfully ask for an aye vote.

All right. Can I please have the secretary to call the roll?

Yes. Item number nine, AB 2390 by Assembly Member Arambula. The motion is do pass to the Appropriations Committee. [Roll call]

All right, four votes. And we will wait for the absent Members. And why don't you go ahead with your next Bill. And that is AB 2657.

Thank you, Madam Chair and Members. In my previous presentation on Assembly Bill 2390 I explained that we needed to provide something of a lifeline for children and adolescents who are currently at risk or already in crisis. My motivation for introducing AB 2657 is the same, but we are looking upstream instead.

Social media's addictive design exacerbates compulsive and obsessive behaviors and prevents users from experiencing real world, in person engagement. This has led to a litany of issues, but one statistic has hit me especially hard, and that was that in 2021, 23.6% of all teenage girls had a suicidal plan. As a father of three daughters, I find that absolutely terrifying.

Because of the risks of harm that are associated with social media use, the Office of the Surgeon General cannot conclude that social media is safe for children and adolescents. It's time that California move away from playing whack a mole with our attempts to regulate social media, while technology companies continue to experiment on our children. AB 2657 will establish a Commission that will investigate the methods used by social media companies to maximize screen time at the expense of mental of health.

Comprised of specialized subcommittees, the Commission will recommend a holistic regulatory framework intended to mitigate future negative impacts resulting from social media on the mental health of our children and adolescents. Testifying in support of Assembly Bill 2657 is Doctor Flo Cofer, Senior Director of Policy at public health advocates, and Samantha Vigil from the Department of Communication at the University of California at Davis.

Welcome back, Doctor.

Thank you. Again, I am Doctor Flo Cofer, the Senior Director of Policy for Public Health Advocates. And as mentioned, AB 2657 establishes a social media commission to create recommendations to protect youth mental wellbeing. And as mentioned, social media is this new technology that has restructured social engagement, and it also has benefits and risks. As the risks are being highlighted, there's momentum to pass legislation to protect youth. As assemblymember Dixon mentioned, there are lots of these bills moving forward, in particular because peer reviewed studies show that social media is a major and direct contributor to the youth mental health crisis.

And 37% of young people say social media is a primary cause of poor mental health compared to family and community expectations, social pressure, and even bullying. And so the State of California does have a responsibility to develop evidence informed policy, and young people may be at particular risk because the brain regions involved in resisting temptation and reward are not yet fully developed. But it's important that as we consider legislation to regulate and ensure safety in California young people, we do so with input from young people who use social media, as well as educators, parents and experts, and with the full consideration of existing research. And for these reasons, we urge you to vote yes on on this Bill.

Thank you.

Hello. My name is Samantha Vigil. I'm a Doctor - sorry - I'm a doctoral student in the Department of Communication at UC Davis, where I research adolescent social media use as it relates to facets of human development such as mental health and well being, with a specific emphasis on informing and examining public policy in this area.

In the academic sector, we often think of social media as a tool, one that is not inherently good or bad, but may have either positive or negative uses and outcomes depending on the individual user. With this, we sometimes find that social media is a tool which adolescents are not developmentally well equipped to wield safely on their own.

Adolescents tend to place an increased importance on things such as peer belonging and social comparison, and are still developing crucial skill sets such as emotion regulation and time management, all of which may lead to poorer outcomes as a function of their social media use. As incongruencies between social media design and what is best for children and adolescents become clearer, a greater push for regulation has emerged on both a national and global scale. In places such as South Korea and the UK.

Legislation which places a duty of care onto social media companies to protect the safety of underage consumers already exists. In the US, over 25 states, including California, have proposed or enacted some version of legislation aimed at regulating social media for minors. The word I would like to emphasize here is version. In order to call attention to the wide variety of methods each of these Bills has employed, things such as age verification, regulating the use of algorithms, and so on.

A Commission, as proposed in AB 2657 would allow for experts across sectors to parse through existing work, highlighting and emphasizing the important work that has already been done while proposing informed recommendations, allowing California to be a national leader in the protection of minors on social media. Thank you.

Very good. Any other witnesses in support.

Kim Lewis with Children Now in support.

Nancy Aguilar with ... in support

Andrea Gill with Youth Leadership Institute and Daily City Youth Health Center in support

... in support

Alexandra Chavez, Youth Leadership in support

Wendy Pacheco, Youth Leadership Institute and The Social Changery in support

Emily Rivas, Director with Youth Leadership Institute in support

Thank you. Any witnesses in opposition? Questions or comments from the Committee? I guess I have one question. I mean it seems like this is something that we should very obviously do. Are there no commissions at the state level that are already looking at this issue?

No. I've spoken with Doctor Ghaly, who oversees our Health and Human Services Department, and what was impressive to me was his wanting to bring urgency to this issue. That's the same comment that we're hearing from so many parents. And while we're not having an urgency clause in here, I believe it's important for us to make sure to pass this as a state. I feel a responsibility when many of these companies originate here in California, that the solutions are also coming here from our state. With that, I respectfully ask.

I just want to thank the author for this very critical piece. We need a centralized location to be a repository for families and stakeholders in the State of California to be able to go, to be heard and understand that all that information is being synthesized in one place that's reflective on how we feel collectively as a state and create a roadmap going forward. And so this is exactly what we should be doing as legislators is creating that avenue. So thank you for bringing this forward and very enthusiastically going to support today.

Would you like to move the Bill with that?

I'd like to move the Bill.

All right, so we have motion by Assemblymember Lowenthal, a second by Assemblymember Ortega, and the Bill - the motion is due passed to Appropriations. Can we please call the roll?

Okay. Item number 12, AB 2657 by Assemblymember Arambula. The motion is due passed to the Appropriations Committee. [Roll Call].

Thank you.

All right, and the vote is 8 to 0. Your Bill is out and we're going back to file order. Assemblymember Ta with AB 1856 please. Whenever you are ready.

Yes, I'm ready, Madam Chair. Thank you, Madam Chair and Members of the Committee. First I want to start by accepting the amendment from the Committee. I also like to thank the Committee staff for their work on the analysis and working with my office.

And I'd like to thank my joint author, Assembly Member, even Low, for his leadership and collaboration effort for this Bill. AB 1856 would make it a misdemeanor for a person to knowingly distribute, artificially generate sexual image and video an identifiable person without a person's consent. Artificial intelligence programming, or AI, is a useful tool in the right circumstance. However, it can also be used to aid deep fake computer generate image and video of people that appear genuine.

Deep fake technology has become more widely accessible in recent years and can be used to quickly create realistic that it's difficult to tell if it is real or not. Pornographic images of innocent persons are not on the Internet permanently and are on Internet permanently and can destroy a victim's life. It is virtually impossible to prove that images are not real. The opposition to this Bill will state that this Bill may be unconstitutional.

I like to say that the First Amendment does not protect someone for destroying another person reputation and well being. Another argument that the opposition is making is that it is unnecessary as assistant law allow for civil lawsuit to be filed. I disagree with that. Assistant law does allow individuals to take civil lawsuit. However, that action is not accessible to most people, particularly Low income people who don't have the large resources required to file civil lawsuit.

As with the new innovative technology, artificial intelligence can improve people's lives. However, the effect makes it possible to fabricate harmful pornographic digital measures without concern. It poses a serious threat to the health, reputation, and financial and mental stability of target individuals. New York passed a similar law last year, but I believe that California should be the forefront of this issue. I'd like to introduce Mark Berman with organization for social media septic, and Kim Stone with California District Attorney Association to certify and support.

Thank you. Oh, you'd like to move the Bill? Okay, you're the first one to move the Bill there, Miss Dixon.

Good afternoon. Kim Stone. Kim Stone of Stone advocacy on behalf of the California District Attorney's Association. My talking points were prepared by Ivy Fitzpatrick, an actual deputy District Attorney who had to catch a flight to go back home. As you know, AI has proliferated in recent years. And while it's certainly a useful tool, the potential for negative implications are great.

And the law is just now catching up to the reality. AI, as you know, can be used to create deep fake, computer generated images and videos of people that appear genuine. These images can be created cheaply, quickly, and with the use of the Internet, proliferated and distributed nearly instantaneously. Those of you who were here earlier this afternoon heard Kaylin, one of the victims of this, testify in support of 1831, the Berman Bill that applied to this kind of materials.

But for minors, this Bill is about adults. There's an increasing online trend of posting pornographic photos and videos of people without their knowledge and consent. You can imagine the long term consequences of such actions. The images are so realistic that it's nearly impossible for the person to prove it's not them. And then these images have proliferated so quickly online, they can literally ruin a person's life, their reputation, their financial well being, their mental health, causing lasting trauma and distress.

Many times, these victims are young people with their lives ahead of them. The law already and appropriately criminalizes revenge porn. But there's a gap for AI generated pornography, which is equally destructive to a victim's life. And as this Committee is aware, while AB 602 in 2019 created a civil cause of action for the creation and distribution of unauthorized AI images, not all victims have the means to file a civil case.

Legislation has certainly taken steps in the right direction, but more must be done to protect victims and to deter this behavior from the outset. AB 1856 would make it a misdemeanor for a person to knowingly distribute without the individual's consent. AI generated sexual images that appear authentic to a reasonable observer.

While the creation of the images in and of itself is disturbing, it is important to note that this Bill only criminalizes the distribution of the act, and that distribution has to be knowing that is what causes the greatest and lasting harm to victims, and that distribution is an action not protected by the First Amendment. Hopefully, with enhanced enforcement, we can prevent this behavior from the outset and most importantly, give victims added legal protections.

On behalf of CDAA and Ivy's employer, the Riverside County District Attorney's office, we would ask for your support.

All right, thank you.

Hello. My name is Mark Berkman. I am the CEO of the Organization for Social Media Safety, the leading consumer protection organization focused exclusively on social media. We're proud to stand in support and sponsor AB 1856, which responds to the new and frightening danger created by deepfake technology, specifically in this case, malicious, pornographic deepfakes.

As the Bill sponsor, this Emma Member noted, deepfakes are forged videos created via artificial intelligence, where a person's likeness, including their face and voice, is realistically swapped with someone else's. To be clear, deepfakes look real. This is not an ability we have seen before outside of Hollywood. And because of this hyper realism of deepfake technology, we have been deeply concerned by its potential for cyberbullying, harassment, and sexual exploitation. And there is evidence for this concern.

Since the introduction of deepfakes in late 2017, they've already been used extensively to insert women's likenesses into pornographic films without consent. We sponsored Seminole legislation back in 2019, warning about the future harm this technology would cause. Well, tragically, that harm has now been inflicted on Californians. As the Committee analysis notes, a third school in Southern California has been hit with allegations of digitally manipulated images of students circulating around campus.

16 8th grade students were identified as being very victimized, as well as five egregiously involved 8th graders. According to Beverly Hills Unified School District Superintendent Michael Bregge, AB 1856 is a necessary policy response to real significant threats posed by new technology. It is a narrowly tailored, constitutionally compliant response to a new danger that will protect vulnerable women and girls, especially across California. The organization stands in strong support and asks for your I vote.

Very good. That was exactly two minutes. Good timing. Anybody else in support?

Madam Chair, Members of the Committee, Shane Gusman, on behalf of SAG AFTRA, in support.

Thank you. Any witnesses in opposition? All right, comments from the Committee or questions? Okay, thank you. Assembly Member Brian.

I guess my question is just to the question about, you mentioned 16 8th graders or a number of 8th graders. So if we pass this law, the idea is then to hit 8th graders with misdemeanors.

I think it's a necessary deterrent. And what happened was federally, those children were prosecuted under current federal law. So we need this deterrent because the level of harm is so severe right now. And this was in, I know, near your district and near us as well. We're seeing it all over. And I think it's very easy to dismiss it as not being a real video or real assault, but this is real assault that's occurring.

So I guess my General concern is that I recognize the problem, and it's definitely a problem. And new technology, it's amongst the worst times ever to be a kid. But I don't know that the proliferation of this kind of content that's flowing through our schools is because the students are unaware of the penal code. Right. And that new statutes to criminalize this behavior would actually deter their behavior. I actually think it might lead to some children being prosecuted with men and misdemeanors and others not.

And that's kind of my General concern with the point you made about it in its relation to young people. I think as a broader concept, I agree with the author and the intents of this Bill. I'm just deeply concerned about its application, especially because we know a lot of this is happening in our school settings and that disparate punishment already takes place. And in instances where criminalization is part of that punishment scheme, it's impacting certain students, certain districts, and certain populations in a different scale.

I would imagine the students in Beverly Hills probably aren't going to get hit with this misdemeanor for the same type of behavior, but students in a different school, in a different district just might end up in handcuffs.

Can we have an answer from the district attorneys? Is the idea to prosecute children under.

Well, any misdemeanor or, I mean, any criminal law violation could also be brought against juveniles. It would be brought as a juvenile case for juvenile adjudication and would follow the rules as applies to juveniles. So, yes, I mean, it's not designed to go after 8th graders who do this. It's designed to go after adult young men who do this to other young people. And then the prosecutors in those cases would use their discretion to decide whether to bring cases.

If it was children doing this to other children, which is particularly horrible and sympathetic for both the children doing it and the children being victimized, you're completely right about that.

Assembly Member Wilson was next. And then we'll call.

Thank you to the author for this Bill. This came up in public safety, and there was lots of conversation around. Just that particular issue is minors. And one of the things that I had asked, you know, if you would consider amendments related to minors, you did do some technical amends and clarifying through the work of the Committee.

And one thing that had changed my mind in terms of how I vote today, you know, last time in public safety was more related to courtesy, is the fact that the existing law, as it relates to, to an actual person, their head and their body being the same, which is defined or in public as revenge porn, so to speak, doesn't have a carve out for, there's not a different punishment for youth. It's just that lower level misdemeanor.

And so because of that, even though I do share those concerns about minors, because the law related to actual images doesn't have that carve out. And this is just as devastating when you have using an app like nudification, which could pretty much mimic someone's body at a time, especially for young people, at a time when it could be a lot of shame around what your body looks like. Anyway.

So with that, I am going to support the Bill today, given our conversation last time as you were going through public safety, recognizing that you are being consistent in application of the law where there wasn't a carve out for minors in that law, not allowing a carve out for minors in this one. So thank you for just continuing to work on this.

I really appreciate your comment. And we all aware right now that AI continue to grow. So, I mean, if we don't have anything in place that going to become a more serious issue in the future. So I think that my measure is I think really fair for everyone. And I think that right now, we regarding. We lie or we don't lie, you know, or AI issue out there, and, you know, the whole country, we discuss about AI and, you know, that continue to be like the issue the more we go issue in the future. Yeah. Thank you.

Assembly Member Lowenthal.

Thank you, Madam Chair. I want to thank the author for bringing this legislation forward. This is a serious problem confronting the state, confronting the nation and the world, and we're catching up to it, and we're behind, and we need to get out in front of this. So I applaud you for taking this on. I've known you for many years, and I know, you know how you look at policy through the lens of families and how things impact families. And so I really want to appreciate that.

I want to echo the concerns of my colleague from Los Angeles just brought forward. I'm myself on a learning odyssey right now about understanding how disproportionate impacts to specific communities within the State of California and the application of the law and how we need to be mindful of that as we're creating policy going forward.

And I will also be supporting the Bill today with the hope and the expectation that there can be some bifurcation between when youths are doing this versus adults doing this, because, let's face it, physiologically, anatomically, young people, their brains are not fully developed, and we have to make a differentiation in that regard as to their own futures and what's going on with them. Want to implore you to look at that seriously. And I'm gonna be looking back at that as this reaches the floor.

I do have a few questions as well. I'd like to ask for the experts or the assemblymember themselves, if you could explain to me, again in the context of I'm already supporting the Bill, but just so I can understand a little bit better what constitutes distribution and what constitutes consent.

So, legally, distribution is relatively limited. It could be posting it. It could be emailing it to someone. There was a Bill that we did on revenge porn through this house a couple years ago.

That was a guy who took pictures of his.

Is talking about it distribution?

No, no, no, no. He took pictures of his ex girlfriend's naked body and plastered it on the side of his car and parked the car in front of her place of work and her family, and that was not considered distribution. So we changed the law so that it was. Because that's, like, just as bad as putting it on Facebook. Are students in a. In a group chat? On Snapchat, is that distribution?

Probably. I mean, I don't know if that's been legally answered yet. So I gotta be a disclaimer here, but any problems-

- students that are in a group chat that are not reporting this, are they conspirators to.

I don't know if they're conspirators, but it's probably distribution.

Okay. So I think we really need to understand how young people are using the Internet today and what this can actually mean in application, specifically with the concerns that my colleague brought forward in his comments.

Those are deeply concerning, and we have time to work these things out to make sure that it works for all Californians. The last thing that I want to say is, this is really important legislation. We're. We're looking at one side, which is the stick, which is the bite, how we go about this. But we are missing in a few other areas in California that this Bill shouldn't address.

Assembly Member Patterson.

Hey, thank you very much, assemblymember Ta. Thought I just saw you in the last Committee. We were at five minutes ago. So, you know, I think my good friend, Assemblymember, Brian, concerns are more systemic than on this Bill, the ones he expressed, and then to my colleague, Mister Lowenthal from Long beach. Right, okay, good. Just making sure. I had to hear as much hair as you did when I got elected, by the way.

But I'm just kind of saying this to everybody at large, which is we're behind in digital literacy, way behind in understanding and teaching young people, in particular, what's right, what's wrong. Responsibility and collective individual behavior. And collective behavior. Collective behavior is so critical. And then the other thing that we're behind in is we're behind with our legal system, in specialization, on how we expeditiously take things back from the digital ether. We're behind. We don't have that specialization right now in our legal system.

And this is just proliferating to the extent that we're coming out with all these bills to protect us. But once things are out there, we need to have a much, much better mechanism to bring that back. So, I hope that we can all recognize that and complement this type of legislation with things that we need to do future. Thank you again, assemblymember.

But I think in my community, there have been cases of sextortion with youth involved, and sexual images going out now, not using AI, but I'm just saying that this is something, unfortunately, that youth are participating in. And it scares me to death thinking of my children, who, they're gonna get older eventually. God, willing, and they're gonna, you know, be on social media and things like that.

But I think, you know, it's a. I think when I look at law enforcement and the prosecution generally, I think this Legislature has spoken loudly, but also I think our law enforcement communities for the most part, have gotten it. I'm always interested to the discussions like, hey, look, we don't wanna ruin this kid's life for the rest of their life because of a mistake that they made. But also I think that there is a deterrent factor.

I was way more scared of police as a child and, you know, and, oh, my gosh, like, I gotta be careful if I do this, you know, I think that deterrent factor really does. Children think about that. Kids think about that. And. But I also think that law enforcement isn't out there thinking, hey, look, we got a, you know, 15.

I'm not saying it doesn't happen, not saying it doesn't happen, but we do have to create a deterrent for this kind of activity because it is going to grow. And I think your Bill is a good first step to that. I think some concerns outlined. I would be concerned if we said, hey, look, kids, there will be no accountability for youth. But I think. Keep that conversation going.

But I do think we need a deterrent for them, too, because that is where we're seeing, I don't even know what snapbook is or, you know, face Google is, you know, but the kids are using them and they tell me that it's a big deal. And so we do have to make sure that there's some accountability there. But I do agree. Look, I don't want some 16 year old kid going to jail for six months because they made a really dumb mistake. And.

But I think we. I do trust our prosecutors with that kind of discretion, especially given what the Legislature has told them. So I'm looking forward to supporting this Bill, and I'm glad that you're going to continue the conversations with my colleagues up here. So, thank you.

Yes, I really appreciate the concerns from Assemblymember Bryan. So I think that might be the first step because, you know, we all aware that all the young people right now, they're using AI.

And if we don't have any, we don't have any law, we don't have any Bill, if we don't have any measure initiated in place. So we do not. We haven't provide any tool for our law enforcement. I understand my viewers only intend to make sure that the young people, they understand so they do not come up with the deep fake technology to harm the young people. That's my intention.

Because, you know, if we don't have anything, so the young people, they continue to re AI image to harm their friends or the other young people. And that what we do not want to see.

Yeah, yeah. And I just want to kind of bring my thoughts full circle. Now, having heard everybody else, I think my colleague from Rocklin is right in that I am thinking about this from kind of a systemic lens, including the, the current revenge porn statue.

I think the fact that it doesn't have kind of clarity around young people, that doesn't, for me, provide a justification of why we should continue to go down that route. It means we might have missed the first pass at getting this right and really thinking through the framework. I know plenty of DA's who have felt terrible about the fact that they have to charge middle schoolers with revenge porn statutes because they've shared content, but also the discretion potentially not to in some cases.

And it's that wiggle room that makes me nervous, especially when we're talking about distribution. This Bill isn't about the creation of the images. Right. And it certainly doesn't go after the kind of platforms that allow you to create the deep fake images to begin with. So we are literally going about the young people, many of whom didn't even create it, probably had it sent to them, who then sent it one more time. And I think that is a very kind of dangerous and slippery space.

So I'm going to lay off today just so we continue to ask questions. But I think you're going to be successful through this Committee, and I think you have the right kind of passion and heart for this work to really wrap your hands around this issue. So thank you for bringing it forward.

Thank you.

Assembly Member Ortega.

I think my colleague from the LA area hit the nail on the head when it comes to platforms. You know, I am very concerned about penalizing youth, and I don't want to repeat what's been said, but I do want to highlight the fact that platforms are allowing this to happen. And if we're going to criminalize youth, we should really think about penalties and criminalizing those that are allowing this to happen.

I just sat in another hearing when it comes to drug use and fentanyl and youth accessing drugs on the streets, where a pediatrician was quoted in the hearing saying, you know, these sites are our new drug dealers, our new generation drug dealers. So I have concerns. I'm going to support it today because I want to continue that conversation.

But I also want to highlight that we could potentially be looking at the wrong, you know, looking at this and not looking at the whole picture and going after the platforms.

Thank you.

All right, so we have a motion by Assemblymember Dixon and a second by assemblymember Ortega. Would you like to close?

I want to thank you, Committee staff, and I want to thank the chair for working with my office. And I respectfully ask for your I vote.

Very good. Can we do the roll call, please?

Yes. Item number eight, AB 1856 by assemblymember Ta, the motion is do pass as amended to appropriations. [Vote].

Okay, the vote is 7-0. That Bill is out.

Thank you.

All right, next we have Assembly Member Villapudua with AB 2453. Whenever you are ready.

All right, thank you. Madam Chair Members, I'm proud to present AB 2453 which clarifies the routine maintenance tasks that do not impact the EV charging station's metrological function, do not require additional testing. The current system unintentionally disintegrates routine maintenance and repair tasks for more than more EV chargers. Currently, EV charger stations must be retested and placed back into service by registered service agent RSA every time maintenance on repairs are conducted. This could include some as small as replacing the conductor clip or the whipping wiping down the screen.

Due to the overlap of RSA's, the testing equipment that can cost anywhere between 45,000 to 50,000 cost incurs by charging station owners and operators can range from 400 to 500 per port, with many stations have multiple charging ports. Importantly, none of these charges in this Bill will restrict counties ability to enforce device accuracy requirements. With me to testify today is Justin Wilson, senior Director of regulatory policy and program at Chargepoint.

Madam Chair, Members of the Committee, Justin Wilson, Senior Director of regulatory policy and programs at Chargepoint, first want to thank the author for introducing this important measure. As he explained, AB 2453 is a Bill that will help streamline the process to conduct routine repair and maintenance on EV charging stations.

Currently, any repair or maintenance that is conducted on an EV charging station requires the station to remain offline until a registered service agent can come out, inspect the charging station, test to ensure that the meter is operating correctly, and then place the charging station back in service. This testing requirement also applies today to routine repair and maintenance that do nothing to impact the station meter accuracy, including, but not limited to replacing a connector clip or simply removing Graffiti or stickers from the charging station.

This is an unnecessary added expense and keeps the station offline longer than necessary. Additionally, due to the lack of registered service agents and the cost of the testing equipment, which, as noted, is anywhere between 45,000 and $50,000, individual tests to station owners are about $500 per port, and many stations have multiple ports. AB 2453 will exempt routine repairs and maintenance that do not impact the station's accuracy. This will help bring repaired stations back online quicker, and it will help incentivize owners to repair their equipment.

California has been a leader in the rollout of EV's, and it's imperative that we remove barriers that impede people from repairing broken stations. We respectfully request your. I vote on AB 2453.

Next witness.

Hi there. Megan Meckleberg here. On behalf of the EV charging Association, I want to thank Member Villapudua for introducing this Bill, which will help streamline and repair maintenance for EV charging stations. California has a commitment to transitioning to zero emission vehicles.

As many of you know, to accomplish this, we need a robust amount of EV charging. According to the CEC, California needs to install approximately 1.1 million chargers by 2030 to meet the estimated 7.1 million lights duty plug in EV's that are anticipated to be on the road that year. That equates to approximately 359 chargers per day that would need to be installed between now and 2030.

AB 2453 will help streamline the process of routine repair and maintenance by removing the requirements to retest the equipment in cases that don't impact the meteorology of the charging station from being correct. At present, charging stations are required to be tested every time, as I think you've heard thus far. Importantly, AB 2453 maintains the county's authority to require tests of any charging stations that they deem necessary, wherever they wish to do so.

This Bill is an important step to remove unnecessary testing and uphold consumer protection. I also just want to take this opportunity to register a few me, too. Supports on behalf of Calstart, Valley clean Air now and flow EV charging. Thank you for your support in advance.

Thank you. Do we have any other witnesses in support?

Good evening. Timothy Burr, on behalf of Rivian, in support.

Clifton Wilson on behalf of Tesla, in support. Thank you.

All right, any witnesses in opposition? Questions or comments from the Committee?

Motion? All right, we have a motion by Assembly Member Lowenthal, a second by Assemblyman Member Dixon, and the motion is do pass to appropriations. Can we just. Would you like to close?

Yeah. It's directly asked for an aye vote.

All right, thank you.

Item number 10, AB 2453 by Assemblymember Villa Pudois. The motion is do pass to the Appropriations Committee. [Vote].

Eight to zero. That Bill is out. Thank you, Assemblymember Kalra, you are up next.

Thank you so much, Madam Chair. I'd like to start by thanking the Committee staff for their work on this Bill, and I'll be accepting the Committee's amendments. AB 2602 would require performers informed consent and proper representation when executing a contract for any transfer. Thank you. Thank you. For any transfer of rights to that individual's likeness or voice.

Amidst the rise of the digital age, performers across the entertainment industry have inadvertently been signing away the rights to their digital selves through clauses that can look like standard copyright language. Specifically, individuals are unknowingly authorizing studios to use their voice and likeness in all media by all current and future technologies, in perpetuity and with no additional compensation. AB 2602 strikes the balance between industry progress and protecting performers rights to their digital self and livelihood.

This bill does not outright prohibit the use of digital replicas, but rather ensures that if performers agree to license out their digital self, that they are fully aware of the extent of and the intentions for that use. I've been working with the opposition and in response to their concerns, have taken amendments that address retroactivity and clarifies. This bill is intended to target new performances by a digital replica that would have otherwise been performed by a live actor.

Here to testify and support Shane Gusman on behalf of SAG AFTRA, and Ivan Fernandez, legislative advocate with the California Labor Federation.

Good evening. Shane Gusman, on behalf of SAG AFTRA and on behalf of our 160,000 members that are performers across all different lines of media. With the rapid development of technology, particularly AI and digital replicas, there's a growing concern with our members that it could have a negative impact on their profession. They feel like it's the right time to build in some guardrails.

As the Assemblymember said, we're not outlawing the technology. We just think there needs to be some fair guardrails, so people's professions are unfairly impacted. We'd like to thank the Committee staff and the Committee in working with us with the amendments. I think it makes it a better bill.