Assembly Standing Committee on Privacy and Consumer Protection

To effectively manage our time, we'll be limiting testimony to two witnesses for support and two in opposition on each Bill, each witness will be allowed two minutes to present their testimony, four minutes total for each side. After the support witness, anyone else in the room who wants to share their support, name and organization will be invited up.

The same with the opposition. And we are only taking in person testimony, but we always invite folks to provide their comments on our portal. On our website. We do have a very robust consent calendar thanks to bipartisan cooperation. Thank you to my Republican colleagues. So we will talk about that when they get here.

I want to make one change clear on SB 785 by Senator Caballero. There is a change that is live in the analysis online, but was not in the original analysis. So we wanted to highlight for everyone today, again, that is online now if you want to follow up to read it.

But the change to the analysis in SB 785 is that. Number six in the summary of the analysis, the temporary exemption for series tickets has been removed. The updated analysis, as I said, is posted on the Committee website. And the author is continuing to work with the Committee to refine this exemption while it is in Assembly appropriations.

So the exemption, although imperfect, will likely come back in appropriations. That Bill is not being discussed now, but I didn't want to forget to mention it, so I decided just to do it at the top of the hearing. And look at that. Miss Dixon, thank you for being here.

That means we can start as a Subcommitee, so we will take up Mister Wiener's bills. Mister Wiener, do you want to start with SB 532 or you have two? SB 961? Mister Wiener, are we going with 532? Yes. Okay, thank you. So we'll hear SB 532.

Okay. Thank you very much, Madam Chair. Thank you for hearing the Bill and for working with us. And I'm happy to accept the Committee amendments on pages 4 and 5 of the analysis. These amendments were actually Transportation Committee amendments that were taken in, that we are taking in the Privacy Committee.

And so I appreciate that SB 532 modernizes parking payments by authorizing but not requiring a time limited pilot program for San Francisco to implement paid parking without having to incur the high cost of meter installation and maintenance. Current law, while not requiring that cash be accepted, that's not required under existing law.

A physical meter is required, and that requires spending precious transportation resources to purchase, install and maintain frankly outdated and expensive parking meter equipment. Last year, the San Francisco Municipal Transportation Agency, MTA, spent $26 million on the parking meter infrastructure, which is approximately half of the revenue that it got from those meters.

So we're seeing a lot of meter revenue instead of going into transportation projects just being consumed by the physical meter infrastructure. Also, they take up a lot of. They take up a lot of space on the sidewalks that cities could decide to use for different purposes. They get vandalized frequently.

And so SB 532 will create with the amendment a five year pilot program for San Francisco to pilot meterless parking payment zones, which will require signage about how people can make cash payments and also require the city to adopt a plan around equity and access.

And then at the end of the five years, the Legislature will be able to assess whether to retain or expand the program. So I respectfully ask for an aye vote. With me today to testify is Matt Silverling with the California Mobility and Parking Association and Reynell Cooper, residential parking policy manager at SFMTA.

Thank you. Two minutes each, when you're ready, Madam Chair Members.

Matthew Siverling, on behalf of the California Mobility and Parking Association here in strong support of the Bill, SB 532, again, as the Senator pointed out, this is taking an incremental and reasonable small step towards the future and the way that cities we all know and believe, will be enforcing parking at some point.

So to start off in a bite sized piece, to do it in the City of San Francisco and understand how this works, to educate people and normalize the procedure for paying for parking remotely, we think is important and strongly supported. So we urge your aye vote. Thank you.

My name is Raynell Cooper and I'm a parking policy manager at SFMTA, the San Francisco Municipal Transportation Agency. Thank you, Chair Bauer Kahan and Committee Members.

We appreciate Senator Wiener's leadership and introduction of SB 532, which would authorize a time limited pilot that would allow San Francisco to modernize the way we accept payment in paid parking zones and allow the city to save millions of dollars at a time when budgets are tighten.

Paid parking is the best tool that cities have to create parking availability, which benefits businesses, minimizes circling and double parking, reduces emissions, speeds public transit, and makes streets safer and more efficient. But parking meters are expensive the SFMTA spent close to $26 million last year to purchase, install, manage and maintain parking meters.

These meters are purposefully broken and vandalized to avoid payment and are targets for criminals looking to rip off the city or rip off Members of the public. State law currently prohibits mobile only payment, effectively requiring cities to use physical parking meters and pay stations to accept payment for parking.

SB 532, as proposed to be amended, would authorize San Francisco to pilot mobile only parking payment zones for a five year period after implementation of the first zone.

In addition, for people who don't have a bank account or don't have a phone, the legislation requires that San Francisco develop an accessible and equitable parking cash payment plan in mobile only payment areas. These would be created in consultation with local stakeholder groups and approved by our local governing body.

The legislation also includes a provision that would require San Francisco to study the option of sending mailed invoices for parking sessions that could be paid later through cash or other payment methods. We're also requiring signage within 100ft from any paid parking space that clearly states that payment's required and how it can be made.

Mobile payment for parking is not new. Cities all around the world have had mobile parking payment for over a decade, including San Francisco. So many motorists will already be familiar with paying for parking on a mobile device. You could also pay by calling in so you don't need a smartphone. You could pay with a phone call.

And with respect to privacy, cities already have mobile payment options that store credit card information securely and all of the requisite safeguards to protect an individual's identity and personally identifying information. For all these reasons, the city and County of San Francisco supports SB 532 and we respectfully request your aye vote thank you.

Thank you. Anybody else here in support of this measure, please come up.

Marc Vukcevich, on behalf of Streets for All in support, thank you.

Thank you. Anyone here in opposition to the measure? Support. More support.

Sorry about that. Sylvia Solis Shaw here on behalf of City and County, San Francisco Mayor Lyndon Breed in support, and also on behalf of CCTI, the California City Transportation Initiative, in strong support. Thank you.

Okay, and nobody got up when I said opposition, so I'm going to go with seeing no opposition. We will bring it back to that. Yeah, Miss Dixon.

Thank you, Senator. I went through it when I was on City Council in Newport Beach to transition from the parking meters to the kiosks. There was, during the public debate on it, there was a little bit of mild opposition because not everybody has a cell phone and various other reasons. They like parking meters.

So we did for economic reasons, financial reasons, and convenience reasons, and the shift and the technology made sense. So now we have the kiosks in Newport Beach. And so you want to go one step further. So I've not seen that. So if you could explain how that would work.

Sure. And then Mister Cooper may be able to add on to it. Yeah. So the kiosks are allowed. That's when you have, like, basically a group meter. Right. And those are even more expensive to install, as you know. Yeah.

And so this would be basically, you pay through your phone, although there will be required to be signage with a phone number you can call to do a payment if you don't have a phone.

Is there an app like Parkmobile or something like that?

Yeah. Right now, San Francisco uses an app called pay by phone. Cities can. There's multiple vendors out there in the market, and cities can work with whomever. Right now we use pay by phone in San Francisco. Yeah.

Yeah. And just one thing I should have mentioned before. There's been some polling or analysis on this. So 97% of people in the US have cell phones, 90% have smartphones. For people whose incomes are under $30,94% have cell phones, 79% have smartphones. And so there is just a growing trend towards people having this technology.

But we do have. There will be a phone number you can call if you don't have a smartphone.

So then the process is you just pull into the space and then what happens?

And then you go onto the app. oh, so it's.

Right. Just like having the kiosk, but you don't need to go to the kiosk. Cause it's right there.

Exactly. Or call the number. We also. This would not be the first city. There are various cities that are doing this. Miami, Galveston, Texas, Seattle. So other cities.

That makes sense. Yeah. I make a motion to support.

Thank you. Seeing no further conversation, as someone who loves San Francisco and lives nearby and dines and goes there a lot to enjoy everything that San Francisco has to offer, I just hope we go to one app, because it does drive me crazy.

In every city that it's a different app, I show up, I don't have the app. It happened to me recently. Luckily, I was with a friend and she just paid for my car because I didn't have time to download the app before I had to get to my appointment. But, you know, that would really be great.

Competition in the marketplace is great, but it's just so frustrating. So I hope that San Francisco ensures that people, this is easy, because we need San Francisco to be booming, which means you need all of us coming to dine in your restaurants and go to your theater. And we want to do that.

But with that, I am happy to support. So we are as a Subcommitee. So we're not going to take a motion? We can't yet, but we will when the time is appropriate. Would you like to close?

No, thank you very much. And I agree with you. Seamlessness is good. We did it with Clipper in the Bay Area, so hope Springs eternal. And our San Francisco's goal will be to do this well and provide a template for other cities. Respectfully, ask for an aye vote.

Perfect. Okay, Mister Wiener, we can move on to your. Thank you both. Thank you both. We'll move on to your second Bill, which is SB 532961. zero, wait, we just did that one. I lied. You're right. SB 961.

Thank you very much, Madam Chair. Colleagues, we are in a traffic safety crisis. More than 4000 Californians die every year on our roads, and that number has been going up, and that is true for the country as a whole.

About one third of all traffic fatalities in the state are speeding related, and speed is exponentially related to fatality risk in a vehicle collision.

SB 961 will require new cars, starting in 2030, manufactured or sold in California to implement existing technology that already is being deployed in some cars that will alert drivers if they exceed 10 miles an hour over the speed limit.

When this bill was first introduced, we were going to require technology that cars would be physically unable to go more than 10 miles over the speed limit. We heard loud and clear that that was not going to fly. And so, it is now a warning.

We know from various studies that have happened that this technology is effective at getting people to slow down. Sometimes people don't even realize how fast they're driving, especially with newer cars that are very smooth, and you don't even realize it. So, I do want to just note, AAA is supporting this bill.

The NTSB was a lead witness in Senate Transportation Committee. This is a bill that will save lives. And I respectfully ask for an aye vote.

With me today to testify is Marc Vukcevic, Director of State Policy at Streets for All, and Joe Martinez, who is a member of Families for Safe Streets, families who have been impacted by traffic violence. Thank you.

Thank you. Two minutes each, when you're ready, sir.

Great. Yes. Good afternoon, Assemblymember Bauer-Kahan. Members of the Privacy and Consumer Protections Committee, my name is Joe Martinez. I'm a member of Families for Safe Streets. It's a group I hope none of you will ever have to be part of.

We are people who have been directly affected by traffic crash, either as crash survivors or as people who have had a loved one hurt or killed in a crash. I came here from Fresno today. That's where I raised my son, Paul. As a single parent, Paul was an artist and a basketball player.

Even as a young man, Paul still loved going to church, believe it or not. Paul was my whole world. On June 5, 2013, it was late when the phone rang. When I answered, Paul's cousin was screaming into the phone that Paul had been hit. If you're a parent, just imagine that phone call for a moment.

Paul had already passed by the time I got to the hospital. I can still picture him covered in a white sheet as I crossed the room to be with him. I hugged him. I kissed his forehead for the last time. Paul was so excited about life, just like he should have been as a 21-year-old.

But Paul's life was taken away by a driver going 54 mph in a 40 miles per hour zone. The same year Paul was killed, in 2013, 1000 Californians lost their lives because of speeding. And every year since, that means more than 10,000 people have died since Paul did in speeding related crashes.

You can change that and make California a leader. And using technology to support safe speeds. Speed kills again and again. Please, please vote yes on SB 961. Thank you.

Thank you. Your second witness.

Good afternoon. Marc Vukcevich, Streets for All, sponsor of the bill; traffic violence has become the number one killer of all people aged five through 44 years old in California. Pedestrian deaths in this country have shot up 77% since 2010, and the number one factor is speed. And to be clear, this issue disproportionately affects communities of color.

And the public at a high level is aware of this. I believe if the public was asked if the legislature wants to tackle the number one killer of children, they would say yes.

The largest factors that parents give in allowing their children to walk to school, not whether their kid's gonna get kidnapped, it's whether they're gonna die getting hit along the way. The Insurance Institute for Highway Safety completed a survey of 1800 adults.

Over 60% of them agree to a system that alerts you at 1 mph over the speed limit. 80% of people agree to support it when it kicks in at 10 mph with a speed limit. And that's exactly what our bill does.

The public has a right to feel safe on our roadway, and I believe that the public contract is broken on a roadway. If you've driven on our roadways, it's crazy. People are driving like madness right now. The experience of driving has eroded.

Consider what your driving experience would be like if other people around you had this in their vehicles. This technology is already used in vehicles right now. Many major auto manufacturers already have this in new vehicles and an existing feature called adaptive cruise control. Don't let the opposition to tell you that this is a new or unimplementable technology.

The European Transport Safety Council estimated that the upcoming fitting of ISA on all cars, vans, buses will eventually cut road deaths by 20%. That's what the EU estimated.

In turn, though, this is gonna reduce wear and pair on your brake pads, it's gonna increase your fuel efficiency, it's gonna make you a better driver and ultimately save drivers money through insurance and maintenance. And it's gonna save your city's infrastructure money, too, by cars not crashing into light poles and destroying our roadways.

The legislature cannot pass a bill tomorrow to cut the rate of cancer in half, but the legislature can act on this. Thank you.

Thank you. Anyone else here in support of this bill? Come up and register your name, position, and organization, if you have one.

Hello. My name is Jenny Yu. I'm a member and founder of Families for Safe Street, San Francisco Bay Area. My mother was struck by a speeding driver in San Francisco almost 14 years ago. The crash took Judy away and left. Now our family, a mother.

Thank you.

Thank you.

Good afternoon. My name is John Lowell. I'm a senior member of San Francisco Bay Area chapter of Families for Safe Streets. I am a survivor of a collision from a speeding vehicle in San Francisco in 2012. After I got out of the hospital, $8.56 million were filed in claims on my health insurance. That's $21 million in 2024 cost analysis. Please pass this bill.

Thank you for your support.

Make sure to register support if you're in support of the bill when you come up. Name -

Hello, my name is Melina Mackey Cabada, and I represent Walk San Francisco, and I support Sb 961. Thank you.

Hi, my name is Whitney Erickson, and I represent the Marin County Bicycle Coalition and Safe Routes to School Marin, a program of that coalition, as well as the Bicycle Advisory Committee, and I support the bill.

Thank you.

Hello. My name is Bert Hill. I'm employed by my company, Bicycle Commuter Services. For 16 years, I managed San Francisco's safety classes for bicyclists, a program with national recognition. Professionally, I serve as an expert witness in bicycle related roadway litigation, speed kills. I support SB 961.

Thank you.

Hello. My name is Rebecca Rudolph. I'm in support.

Thank you.

Good afternoon. My name is Jodie Medeiros. I'm the Executive Director of Walk San Francisco, and we also organize Families for Safe Streets. We're co-sponsor for the bill and we support.

Thank you.

Yes, my name is Beckley Simpson, and I am in support of 961. I'm a member of Walk San Francisco.

Thank you.

Hi, Allie Geller, representing San Francisco Bay Area Families for Safe Streets and strong support of 961. Thank you.

Thank you.

Hi, I'm Laura Keenan, cofounder of Families for Safe Street San Diego. My husband and father to our 15-month-old son Matt, was killed by a speeding driver in 2021. 10 miles an hour would have saved his life. Thank you.

Thank you.

Hi, I'm Grandma Beverly. I'm the cofounder of SoCal Families for Safe Streets, and all of our members alive and dead, want you to support this bill. It's just a few beeps and it might save lives. Thank you.

Thank you.

I'm Kelly Dunlap with Bike East Bay. I'm in support of this bill.

Thank you.

Good afternoon. Alex Ramirez, Executive Director of Los Angeles Walks and representative of the Southern California Families for Safe Streets and we support this bill.

Hello, I'm Kate Fefelova, Vision Zero Network, national nonprofit, and support.

Thank you.

Hello. My name is Lori Markowitz, and I'm here on behalf of Families for Safe Street Southern California. My son Josh was killed by a speeding driver 100 mph. Please save lives. Thank you. I'm in support of this bill.

Thank you.

My name is Nancy Arbuckle. I'm a senior. I live in San Francisco. I'm a full-time pedestrian and I'm here in support of this bill. Thank you.

Good afternoon. In 2000, I bought a new car. It let me set a speed warning. It changed the way I drove. Paul Wormer, San Francisco resident and walker and I support this bill.

Thank you.

Hi, my name is Fiona Yim. I'm a San Francisco resident representing Walk San Francisco, which is the co-sponsor of this bill, and I am here in support.

Thank you.

In-betweener: Steve Wallach, on behalf of the Alameda Contra Costa Transit District; they have a support, if amended position. They do support the intent of this bill. The safety will provide for not only its bus riders, but pedestrians and other affordable road users. But they are concerned about the cost impacts on transit buses.

Transit buses have gone up in price, the suppliers have gone down, and so they're very sensitive about new requirements on these vehicles going forward. So, we do hope you take in consideration the impacts this would have on transit operators.

Thank you. Anyone here in opposition to the bill? When you're ready.

Good afternoon, Madam Chair and members of the committee. John Moffat, on behalf of the Alliance for Automotive Innovation, we support the goals of the bill. We support safe vehicles. We appreciate the stories that have been shared today. We.

Our opposition to the bill is primarily under the guise that, you know, there is a role for the states and there's a role for the Federal Government when it comes to vehicle safety.

And we believe mandating technology such as this on a vehicle is the role that the purpose for which we have, the National Highway Transportation Safety Administration. The author noted that the safety board made a recommendation to NHTSA, the regulatory agency, on this technology.

NHTSA, in April of this year, responded back to the board that they actually have two pilot programs going right now to see if this technology even works and has the intended effect that everyone hopes it might have. And NHTSA is not a do-nothing agency in this space. They are, you know, they have over 600 employees.

They have a $1.6 billion budget, and this is what they do.

One of the things that they mandated on vehicles and vehicle manufacturers this year, which, through their testing, they believe will have a positive impact on pedestrian safety, is the mandate for automatic emergency braking systems, which have to be put on cars under their edict by September of 2029.

And so, again, we appreciate the stories that were shared today. We appreciate the author and the sponsor's intent with the bill. But I think from our perspective, we believe that we should let NHTSA continue to do their work.

And if this is technology that proves to have its intended impact on drivers, they will mandate it on us, and we will do it for all 50 states, not just for the State of California.

Thank you. Additional opposition in the room? Come on up.

Thank you, Madam Chair. Matt Robinson, on behalf of the Specialty Equipment Market Association, SEMA. Just to echo the comments of the alliance, I was also asked to convey the opposition of Shasta County. Thank you.

Thank you.

James Lombardo, on behalf of the California Motorcycle Dealers Association and the ABETA California, a motorcycle rights and safety organization; not even in Europe does this apply to motorcycles. Thank you.

Lawrence Gaydon, on behalf of the California Manufacturers and Technology Association, respectfully opposed.

Kasha Hunt here with Nossaman. We oppose, unless amended to exclude motorcycles, on behalf of Motorcycle Industry Council.

Thank you. Seeing no additional testimony in the room on this bill, I'll bring it back to the dais. We do not have quorum yet. No, we're trying.

Well, Senator, I want to thank you, because, you know, we heard the opposition as we worked on this bill, and we all hope the Federal Government will do everything we need them to do to protect our communities.

But we also know the fundamental principle of states' rights is that we will go further to protect our communities where we believe the Federal Government is falling down on its job. And I want to thank you, sir, and everyone who showed up here to remind us of their loved ones. I know. Oof.

You couldn't have been more accurate when you said, when my kids walk to school or they're walking to their summer camp right now, I actually don't worry they'll be kidnapped.

But I worry every day that somebody is driving unsafely on the roads in my neighborhood, and then my little son, who's not so tall for a 10-year-old, won't be seen. And people, not only are they driving too fast these days, but they're also driving distracted on their cell phones. And it is really scary.

And so, I think this is an incredible, incredibly modest approach that goes, if it can save any one of these lives, it is worth it.

And as to the opposition of the counties, it is hard for me to take seriously a question about the cost to our counties when the lives that have been lost and were spoken for today are priceless.

But I know that we have the budget chair here today who obviously wants to look out for local government, having come from local government himself.

So, to the extent that that is a need, hopefully we can address it through the budget process to make sure that this safety technology is available to everyone and we're not putting an extra burden on our local governments, because I agree that our number one priority should be protecting our communities, and this bill does that.

So with that, would you like to close, Senator?

Thank you, Madam Chair. And I really want to thank all of the families for being here today. And I said this yesterday in transportation, I'll say it again, that when you have a devastating, permanently life changing loss, to be able to turn that devastating tragedy into advocacy so that other families don't have the same experience, I'm in awe of people's ability to do that. So, thank you, and I respectfully ask for an aye vote.

So we will take that up when we have a quorum. Thank you, Senator. Thank you, colleagues. Caballero. Yeah. Senator Caballero, I believe you are next with SB 785.

And since I'm remembering, I'll reiterate the change that we mentioned at the top of the hearing in the analysis that is online on SB 785, which is that the temporary exemption for serious tickets has been removed and the author is going to continue to work on that exemption as we move forward.

Again, that is live on our website if you want to see it. And with that, I actually, if you don't mind, Senator, before I have to go vote in judiciary, so I have to step out. But before you begin, I want to thank you for your partnership on this Bill and your sincere effort to protect consumers.

Let's wait for the room to clear. I know that first and foremost, you have put California's consumers first in this process, and it is a hard, hard issue to tackle, as we both have learned.

But I think that your work on this, your dedication is showing through this legislation, and I'm happy to be moving the bills as it stands today, hopefully through this Committee. I just want to thank you for your partnership on that. And with that, when you're ready, and I will be turning the gavel over.

Thank you very, thank you very much, Madam Chair and Members. I, too, want to thank the chair and the Committee staff for the work that they did on this issue and accept the Committee amendments at this time.

SB 785 is a consumer protection Bill that ends the predatory practices that currently plagues the live entertainment ticketing industry by enacting meaningful reforms that put consumers, venues, artists and teams first. I've heard countless stories from consumers who were misled during the purchase of live ticket events.

Consumers purchase tickets through secondary sellers only to discover they are invalid upon entry to the event venue. As a result, small, independent venues are left to deal with the consumer complaints, refund requests or disputes over ticket authenticity. These tickets are known as speculative tickets.

Speculative ticketing is the practice of listing tickets on secondary sites before a reseller owns or possesses the ticket. Speculative ticket sales constrain the relationship of venues with artists or promoters and erode trust in customers. When a consumer purchases tickets to live entertainment events, they care about two things. One is seat location and two, purchasing a real ticket.

SB 785 would ensure consumers know exactly what they pay for by requiring a ticket seller to disclose seat information. The Bill would enhance consumer trust and end speculative ticketing by requiring that a ticket seller own, possess or have a contractual right to the ticket at the time of the sale.

Furthermore, in an effort to effectively ban the practice of scalping and the use of bots, this Bill establishes serious penalties for the use of deceptive URL's that lure consumers into buying tickets at inflated prices and for employing bots that allow professional scalpers to hoard tickets and engage in large scale scalping, depriving consumers of access to face value tickets.

I have had productive conversations with the Committee chair and discussed concept, including caps on fees, caps on resale, and transferability. However, I will not be moving forward with any of those provisions in an effort to avoid affecting the ongoing lawsuit against Live Nation, the parent company of Ticketmaster.

Moreover, we received technical assistance from the Attorney General's Office to ensure that no provision in this Bill will be detrimental to the ongoing lawsuit. It's time to modernize California's ticketing statute in order to protect consumers from anti consumer practices and price gouging while preserving the rights of artists, entertainers, teams and venues.

With me today to testify and support is Gabriel Docto with the National Association of Independent Venues and Tim Lynch on behalf of the San Francisco warriors.

Thank you, Senator Caballero. Each of you have two minutes.

Thank you. My name is Gabe Docto. I'm with the National Independent Venue Association, California chapter. We represent hundreds of independent venues promoters in the State of California as well as across the country. On a national level, ticketing reform has been a priority of NIVA since the summer of 2022, predating to Taylor Swift debacle.

Today, our Members in the state are excited at the prospect of California taking the lead to ban speculative resale, require secondary market disclosures, and increase penalties from deceptive practices that trick fans into paying too much money for fake tickets.

As independent venue operators, we deal directly with the consumer, De escalating frustration and anger caused by fraudulent tickets that we have no Association or control over. Fans show us fake tickets on a nightly basis that come from secondary platforms where a dollar 30 ticket is inflated to 150, even if the show is not sold out.

Fans often blame us for the practices of bad actors, leaving our reputations tarnished and our patrons trust tattered. This dynamic is disheartening and threatens our already challenging margins, destabilizing our businesses and leaving them vulnerable to corporate acquisition. Don't take my word for it.

On June 8, the Sonoma Press Democrat article titled Sonoma, Napa County venues are warning concert goers about uptick in inflated ticket prices, offered a snapshot of what our venue members do deal with on a nightly basis.

The venue featured in the article is Nevada's Hotmap Tavern. Bill DeCarli, the venue's Director of music, and he's here with us in support on this measure today. I want to be clear. This measure is not a giveaway to live nation or Ticketmaster and does not strengthen monopolistic power. As the opponent suggests.

Indie venues and promoters have been advocating across the nation for reforms contained in this Bill since 2022, SB 785 takes necessary steps to truly protect not only the fans, but the artists and the venues who depend on the fans attendance and trust to make a living. For those reasons, NIVA and our Members in California are in strong support of this measure and urge an aye vote today. Thank you.

Thank you.

Good afternoon. Tim Lynch on behalf of the Golden State Warriors and we echo the comments of our friends at NIVA. And regardless of the size of the venue, the issues are the same. We are the front lines that face the consumers that come to the venue every single day.

And if we don't give them a positive experience, whether it's through our own product, the warriors on the floor, or the dozens and dozens of other events that come through the chase center, we have no product. Without the trust of the fans, we cannot be successful.

We thank the author and the Committee for Focusing this Bill on three essential consumer protections around bots, deceptive URL's, and speculative ticketing. Just by way of example, in the lead up to this hearing, I did a little searching for warriors tickets.

You'll find that the official NBA site through which we sell our tickets and link through our tickets ends up fourth or fifth or 6th when you search due to manipulation of search or deceptive URL's. Further, when you click through on some of those sites to look for tickets for warriors tickets, you'll find tickets for sale for an October event that does not yet exist. We do not have our schedules yet and that does not exist.

When you click through that, the website further prompts you along by telling you tickets for this event are selling fast or tickets are going quickly for this event, encouraging consumers to buy a product that is speculative at best. So we thank the Committee, we thank the author for her hard, focused work with this Bill and we encourage your support.

Thank you very much. Do we have any other supporters in the room.

Apologies. Priscilla Quiroz, here on behalf of the California Arts Advocates. We just want to quickly thank the author for the amendments that she's taken. Thank you.

Hi. Patrick Malone, Sonoma County resident, 20-year event producer and promoter in support of SB 785.

Yeah, my name is Bill DeCarli. I'm Director of HopMonk Presents. We work with HopMonk Tavern, produce all the shows. I am wholeheartedly in support of 785.

Madam Chair and Members, Awet Kidane, representing the Los Angeles Rams. Strong support. Thank you to the author.

Madam Chair and members, Alex Torres, here on behalf of a few folks with the indulgence of the chair venues who couldn't make it today. That includes Jim Cornett, owner-operator of Harlow's and President of NIVA California, representing any venues in the Capital region like Goldfields, Hotel Folsom Boardwalk and Torch Club.

Los Angeles venues the Bellwether, Terra Grand Ballroom, Moroccan Lounge and the legendary Troubadour in Santa Monica. San Diego venues, Music Box and Brick by Brick. Lastly, also voicing support for another Planet Entertainment, headquartered in Berkeley, that manages the Greek Theater, Bill Graham, Outside lands and more.

Madam Chair and Members, Eloy Garcia, for Live Nation Entertainment, in support.

Good afternoon. Jordan Curley, on behalf of the Music Artists Coalition, in support.

Good afternoon. Josh Lieberman, general manager of August Hall and a proud member of NIVA California also in support.

Thank you, Chair and Members. Chris Scroggin, with the Pran company on behalf of AEG and Subsidiary Access in support.

Hi, I'm Graham LeBron from Cafe Du Nord in San Francisco. I'm an independent venue operator, member of NIVA and I'm in support.

I'm John Gunton. I'm the general manager of the Independent in San Francisco and the General manager of the newly being built venue in Sacramento, Channel 24. And I am also in support.

I'm Daniel Romandia, the marketing director and talent buyer for Harlow's in the Starlet Room, as well as a co-owner of Cafe Colonial right here in Sacramento. And I am in strong support of this bill.

Good afternoon. My name is Chaez Boswell. I represent Soul Blue Music Festival. I also represent ENT Legends, which is a concert touring company. And I also represent The Ring Studios, which is a local music venue here. And I'm in support.

McKay Carney, on behalf of the San Jose Sharks, in support.

Andrew Governor on behalf of San Francisco 49ers, in support. And on behalf of California's five baseball teams, who are still working on a position, but we appreciate the amendments and working with the author. Thank you.

Thank you. Do we have primary witnesses in opposition? Good afternoon.

Thank you. It's an honor to address the Committee today. I'm Diana Moss, vice president and director of competition policy at the Progressive Policy Institute. Live Nation Ticketmaste is the subject of a long awaited antitrust case, yet continues to deploy all means to protect its monopoly. Live Nation has turned to backing legislation that would impair competition in the resale market.

This market is the last frontier of competition in ticketing and poses an ongoing threat to the live nation monopoly. PPI supports legislative initiatives that promote resale, ticket transferability and transparency. But, many consumer protection bills include provisions that will act to stifle competition in resale and steer ticket buyers back to Ticketmaster.

These bills all share a misplaced focus on ticket scalping, bots and speculative tickets. These are the exception and not the norm. Indeed, some studies show that over 50% of resale tickets are sold below face value.

A well functioning competitive resale market works efficiently to match up more teams and artists with more fans at prices that reflect the dynamics of supply and demand. There are major downsides to bills that interfere with competition and resale. They hand live nation more market power.

SB 785's restrictions on URL's classifying a ticket as a license and any potential price or fee caps would impair competition to the detriment of fans and artists. Such bills also create conflicts with antitrust enforcement.

Regulation of resale in the midst of a DOJ case to which California has signed on could create a moving target in litigation or even immunize future antitrust actions involving ticketing. PPI urges the Committee to hit the pause button on SB 785 while the DOJ case runs its course.

We also urge you to examine the evidence on the benefits of resale and how the bill tilts the scales to the Live Nation monopoly. Thank you, and I look forward to any questions.

Good afternoon, Madam Chair and Members. Robert Herrell, executive director of the Consumer Federation of California, respectfully opposed to SB 785. Let me just start broader, bigger picture, and then I'll drill down a little bit.

First of all, I appreciate the Senator, who I'm sure has learned now over the past couple of years, as have others, what a quagmire it is to get involved in this public policy issue. But it's a worthwhile conversation to have and an important one to have.

Big picture, we feel, at the Consumer Fed of California with this massive antitrust case that you heard previewed in this Committee and committees last year that it was coming. And here it is, the US Department of Justice, 29 states, including such progressive bellwethers as Wyoming, Texas, Florida, West Virginia, I believe Arkansas. And I'm missing some.

Those are some of the 29 states plus DC. I actually, having read the complaint, and it is quite a read, you should all read it, I think, because we know those cases will take years. The over under is 5 to 6 years, and I'll bet the over, pun intended.

I think that is really an invitation to state legislatures to take action that clips the wings of the monopoly. This bill only clips the wings of those who compete against the monopoly overwhelmingly.

That is not to say, with all due respect to the Senator and her supporters, which include the Chamber of Commerce, noted strong consumer advocates from the California Chamber of Commerce and the very monopoly that's being sued right now by the Federal Government in support of the bill, that there is a conversation to be had about spec ticketing.

There is a conversation to be had about deceptive URL's, and we're willing to have that conversation. This probably isn't the language that we would land on, and things have been moving very quickly. And while I was in the hallway, I heard an additional exemption. I couldn't hear over the tin of the hallway.

I don't know what that is, but I guess we'll find out. Drilling down just a little bit to close my comments, there are a few provisions here that we worry about unintended consequences that do wind up unintentionally strengthening the hand of the monopoly. I'll give you one example.

There have been some situations where seasoned ticket holders who release some of their seats to the secondary market have been, there's been retribution against them by the teams of which they are seasoned ticket holders.

Because when you get specific on spec ticketing or on some of the provisions, you now have identified what the seat is, which I think for a fan is a good thing, but it also has potential unintended consequences to punish the seasoned ticket holder who released those tickets. That concerns me.

That came up in Maryland, and that's a provision, just one of many, that concerns me. So we respectfully oppose the bill. We're happy to have a conversation with the author. We have not done so in a while, but we look forward to that. And we think this bill still needs a lot of work.

And the focus should not just be on those competing against the monopoly, but it also ought to include monopolistic practices that harm consumers. Thank you.

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

Madam Chair, Members, James Jack, on behalf of the Coalition for Ticket Fairness, associate my comments with my colleague from the Consumer Federation we're still opposed to the measure. Thank you.

Madam Chair and Members, Courtney Jensen, on behalf of Seatgeek and Tickpic, in an opposed unless amended position. Appreciate the author working with us, but still do have significant concerns with the bill. Thank you.

Hi, everyone. Tish Rylander, on behalf of Vivid Seats and we are opposed unless amended. Thank you.

Madam Chair and Members, Erin Niemela, representing Stubhub. We still have an opposed position, but we appreciate the author's open door and we'll continue working with her. Thank you.

Chair and Members, Heather Lamberg, on behalf of Si Se Puede, Latin Business Association, Hispanic 100, and the Central Valley Latino Mayors and Elected Officials Coalition, we are respectfully in opposition.

Robert Singleton, Chamber of Progress, also respectfully opposed.

All right, I would like to just call the roll real quick.

Bauer-Kahan? Patterson? Bryan? Dixon? Dixon, here. Hoover? Irwin? Irwin, here. Lowenthal? Lowenthal, here. Ortega? Ortega, here. Ward? Ward, here. Wicks? Wicks, here. Wilson. We have a quorum.

All right. Do we have questions or comments from the Committee? Assemblymember Wicks?

Thank you, Madam Chair. First of all, as many of you know, I dove deep into this issue this year, and it is indeed a thorny one. So I think everyone who came up to express support or opposition I met with multiple times, as I know you have as well over the past year and a half.

So I'm in your club here and trying to fix this very vexing challenge. I can't imagine a better author to work on this than you. And I assume the bill's going to move out of Committee today. I share some of the concerns that the opposition has raised.

The opposition that has raised these concerns is the coalition I was working with on my bill. I'm going to lay off today. But the bill, I think, will get out. And I want to work with you as we head into appropriations because I think you and I have a history of landing some tough planes.

So I would love to be a thought partner with you as this bill moves forward in its process and see if we can land this in a place where we can have something, you know, coming out of that process that we can all agree to. But I look forward to the conversations.

I know you'll dive in, roll up your sleeves and jump on in and are someone who's very thoughtful and engaging with opposition and so would love to work with you on if the building's out of Committee today.

Sounds good. Thank you. Any other comments? I will. I'll just make some comments, too. We heard Assemblymember Wicks' bill earlier this year. And it is quite a balancing act with all these different groups that have concerns.

And as you know, last year we were the co-authors on AB 8 with Assemblymember Friedman, and we really did see what, you know, what a difficult balance it is. And then in addition, you have the lawsuits going. But I am concerned about making sure that we don't.

I mean, everything that the opposition talked about, not stifling competition, making sure that we are really doing a very pro consumer bill, I think that's the most important thing. And I am going to support the bill today.

But I would really encourage you to work with the appropriations chair and see if we can get to a place that, as I said, looks at these critical areas that are not covered in your bill yet.

Thank you very much. I appreciate that.

All right. And, yes. Assemblymember Lowenthal.

Yes. Just very briefly, I want to commend the author for bringing this forward. I want to echo the comments of my colleagues who underscore the complexity of the issue.

I'll tell you what makes this easier to make a determination on is when mail is sent into our communities, dumbing down the issue to constituents, purporting to be consumer oriented mail. That is clearly, you know, one aspect of the industry who stands to gain a lot by determination in the bill.

And so I, you know, caution industry in these types of situations, when you're dumbing it down for something that is so complex, it doesn't make the situation easier for us to try and resolve. So with that, I will be supporting the bill today.

Thank you very much.

All right. Anybody else? Would you like to close?

Would you like to close? Well, I appreciate the comments of the Committee. This is one of those situations where every time you think you've got a solution, something else blows up. And in the end, I had a bunch of moving pieces that I thought was going to deal with each one of the industries.

That's a little bit different. What happens in football is different than what happens in baseball. It has to do with whether you own the facility or you don't own the facility. Right. It's not an easy task.

But what I can say is I'm really happy that the appropriations chair has dipped her fingers in this particular issue because she understands from a really practical position what the challenges are, that we have. We basically narrowed it down to the bots of URL and the speculative and then checked with the AG to make sure that our bill would work with the litigation and be very clear about that.

I'm not interested in doing anything that's going to affect or make that litigation look bad. And so I will continue to work with their office, and I promise that I will work with the chair of appropriations to try to come up with the best Bill that we can get. If it's this one, great.

If it's some additional things, I'm more than happy to look at it. So, with that, I would respectfully ask for your aye vote.

All right, very good. And then just for the comment from the Consumer Federation on the amendment, it's one change in the analysis. Number six, in the summary of the analysis, the temporary exemption for series tickets has been removed. The updated analysis is posted on the Committee website.

And with that, can I have the secretary please call the roll? I'm sorry? Oh, a motion. All right, that was a motion by Assemblymember Ortega, a second by Assemblymember Ward, and the motion is do pass to appropriations, as amended. Do pass, as amended to appropriations.

Okay, item number two, SB 785 by Senator Caballero. The motion is do pass, as amended, to the Appropriations Committee. Bauer-Kahan? Patterson? Bryan? Dixon? Dixon, aye. Irwin? Irwin, aye. Hoover? Lowenthal? Lowenthal, aye. Ortega? Ortega, aye. Ward? Ward, aye. Wicks? Wicks, not voting. Wilson? Ok, five votes.

Yeah, that bill needs one more vote, and we will hold the roll open. And we are going out of order because Senator Smallwood-Cuevas has another obligation. So we're going to be hearing SB 1446 right now.

Thank you very much, Madam Chair and Assembly Members. Good to be with you. Good afternoon. I am pleased to present SBA be 1446, the retail theft Prevention and Safe Staffing act. zero, you got some acoustics in here. Can you hear me okay, should I get closer?

I'm gonna just start by saying I will be accepting the Committee amendments which clarify our definition of consequential workplace technology and also clarifies how notice of these technologies must be given. And I want to thank Committee staff for your help with this.

SB 1446 will protect workers and consumers by ensuring safe staffing levels at stores which utilize self checkout and ensure workers and consumers are notified when employers adopt consequential workplace technologies, as amended.

This Bill would require large retailers and grocery stores to enact safe staffing ratios when utilizing self checkout kiosk and requires employers to notify their workers and consumers when they adopt technologies that automate, eliminate, or electronically monitors and alters a workers core functions.

From a consumer protection standpoint, SB 1446 ensures the public and workers have noticed when technologies are being deployed that electronically monitor them or utilize AI in a way that significantly impacts their core job functions.

Recent developments in technology like security cameras with facial recognition, body cameras that can be worn by retail staff, smart carts, and more will continue to rapidly change workers and the consumer experience. We want to make sure privacy is protected, and it's crucial that our laws keep pace with this rapidly changing industry and technology.

In recent years, we have seen automation in our retail, grocery and drug stores drastically cut workers, and that also contributes to other issues and concerns in our communities as we relate to poverty and trying to hold a safety net that can hold all of these workers.

The cutting of the workforce also leads to chronic understaffing in our stores, which create some unsafe working conditions. Loan frontline clerks are forced to serve customers while monitoring self checkout stands, leaving these stores easy targets for theft and workplace violence. Many retailers have themselves acknowledged the challenges of self checkout and have either limited or removed them altogether.

I want to give a quote from a CEO of Dollar General which removed all of their self checkout from thousands of their stores. And the quote says, there is truly no substitute for an employee presence at the front end of the store to greet customers and to provide excellent customer service, including at the checkout.

Also want to note that there have been studies that show that 20 million Americans have stolen from self checkout, and when asked, you know, more, almost half of them said that they're planning to do it again.

So these kiosks alone cause about four times more shrinkage of merchandise than traditional cashier checkouts, about $10 billion that the industry has reported in lost revenue. And beyond theft, self checkout kiosks have also created challenges for consumers who need extra assistance in stores.

And we know how important it is for our stores to have a good shopping experience. As we're competing with online brands, we want to make sure folks continue to come to our big box stores.

Older adults and particularly individuals with disabilities may need assistance bagging items, helping to navigate some of the screen, and the technology needed for self checkout, and can be a struggle again for the lone worker who is trying to manage all of this at self checkout and for off too often alone.

I will close by saying that more workers in stores mean more people employed who spend their dollars in our communities and help to grow our thriving economy. And it's better for service when we ensure that we have a handle on emerging technologies and can integrate these two things, workers and technologies, in safe and fair ways.

Also with us today is Alex Quezada a grocery store worker in Alameda County who will be a witness, as well as Sara Flocks with the California Labor Federation. Jassy Grewal is here for with UFCW is here for technical questions if you all have them.

Thank you very much. Witnesses.

Good afternoon. My name is Alex Quezada. I am a grocery store worker at Luckys and a former Safeway employee. Other grocery workers like myself and I have witnessed firsthand the reduction in staffing due to self checkout and the increase in workplace violence. Personally, I have been attacked by a customer before.

Whenever I've worked self checkout alone, I've been responsible for supervising not just the self checkout machines, but the entire like, checkout area myself, which means that I monitor the self checkout stations while also performing other tasks like running the cashier kiosk, performing manager duties, selling lotto tickets, processing money orders, running backup customer service for refunds, writing rain checks, price checks, also liquor lockup and cabinet or handling customer service phone lines and answering the many questions that customers have in the process.

It's going like a million miles per hour. Customers already have tons of issues using the machines as they are because they are very sensitive and sometimes those alerts need to be removed, some of which can only be cleared with manager approval. And then when they lock up, more customers have to wait and they just get irritated.

I've had them yell at me for being too slow. I've had them complain at me that the purchasing system sucks and sometimes that's caused customers to get physical. When I've left self checkout unattended, some customers have just stopped scanning their items altogether and just walk away, or some will scan some items while leaving some items unscanned.

And I believe in order to be for the self checkout area to be properly managed, there needs to be more than one worker at least, too. I think having additional workers in the self checkout area ensures more safety for us and will lead to less violence. And we as workers are able to provide better service. The company is putting us in harm's way because they are choosing not to safely set off the store. Just having that, I think, would make the stores a lot safer.

Thank you.

Miss Madam Chair Members. Sara Flocks, California Labor Federation. We're a proud co sponsor of this Bill. It is actually part of a package of five bills to put worker centered guardrails on the deployment of technology in the workplace.

And I'm going to talk about one part of this Bill, which goes back to Alex's story, which is that when self checkout was put into use in grocery stores. I don't think there was a lot of thought by either the developers of the product or by retailers of what the impact would be of what frustrated customers would do to checkers, of what the opportunity for theft would be.

And that lack of consideration led actually to UFCW and California Labor Federation to support the Assemblymember Ma Bill, which banned the use of self checkout for alcohol and tobacco because that was one area where we saw there could be abuse of this system. And so this Bill really looks at, there's the staffing aspect, but the other is about the notice of the use of consequential workplace technology.

And really the goal of this is to have employers think about what this technology is and then give workers and customers notice of any kind of technology they're going to put, they're going to use that automates or eliminates job functions or uses electronic monitoring of job functions. And what's this technology we're talking about?

We're not talking about, like the office says, refrigeration. I think that was very well outlined in the analysis. This is technology like digital smart carts that are being tested at Whole Foods in San Mateo. It's about the Amazon just get up and go technology.

It's about the robots they already have to stock and to do customer service: Tally, Marty Nivee, badger that do facial recognition, computer vision, retinal scanning, all kinds of data collection, automating of tasks. These are already in grocery stores.

And what we want this notice to do is let customers know, let workers know in advance of this putting in the store. And we hope because it's not an impact assessment, but that it's a small step towards retailers thinking about who's going to be advantaged by this, who's going to be disadvantaged.

What about the unbanked seniors, the disabled, non English speakers, youth who might have credit cards? What are all of the impacts? Think about it. Are we creating a two tier system where some people can breeze through and others are standing in line because you have to go to the grocery store?

We actually want people to go to the grocery store and not go online. So we think this is a very important Bill. It's a very important first step, and we urge your AYE vote. Thank you.

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

Good afternoon. Glenn Backes for the Prosecutors Alliance, proud co-sponsors as a crime prevention measure. Thank you.

Catherine Bracy, Tech Equity Collaborative in support

Mariko Yoshihara on behalf of the California Coalition for Worker Power in Support.

Tiffany Whiten with SEIU California in support.

All right, thank you. How about primary witnesses in opposition?

Madam Chair Members Margaret Gladstein, Capitol Advocacy, here in opposition on behalf of the California Retailers Association. We oppose this Bill, and unfortunately, we do not think the amendments address our concerns. I would note that the author made a wonderful observation, which is that the market is already helping stores, or stores are already adapting their self checkout policies based on what each store demands and what each brand wants to do. We think that's the appropriate place to do it.

Even with the amendments, the Bill will still require, will still limit retailers adoption of new technology in our stores. In California, we don't require law firms, lobbying firms, or even ticket sellers to provide the type of notice that this Bill would require. SB 1446 is overly prescriptive in other ways as well.

Limiting the number and type of items that can be purchased at self checkout will be difficult to enforce and will only frustrate customers. In one store, they may be able to buy certain cosmetics through self checkout, and the other store, they won't be able to. Same is true.

It will confuse our employees because the items they can buy will be different from store to store. It's also overplaced. The staffing requirement is also unworkable. Retailers currently offer self checkout lanes in a manner that reflects the clientele of that location. We're a customer focused industry, and we recognize that there's no one size fits all approach.

Setting a specific ratio of employees to self checkout line undermines that flexibility that stores need and must have to meet the needs of their customers and their employees. And for these reasons, we ask for a no vote. Thank you.

Good afternoon. Daniel Conway with the California Grocers Association, here to express our strong opposition to SB 1446. As my colleague made clear, there's numerous concerns that we have with this Bill. Fundamentally, just the way that it looks to regulate our store operations, we think is unnecessary.

As was mentioned, there's really no one size fits all approach from location to location, let alone over the course of the business day. The needs of our customers change, and so we want to be able to run our stores in a way that reflects that.

I think more importantly, some of the comments that were made by the gentleman in support of the Bill, I think highlight a lot of the concerns that we have, frankly, which is already, we face concerns in our stores around retail theft, around conflicts with customers, because, frankly, it is getting harder and harder to run a grocery store in the State of California.

I was in here 5 hours ago this morning talking about a series of retail theft bills that were going to, I think, help solve that problem. Unfortunately, this Bill was never a part of that package, and I don't think it does anything to meaningfully address those concerns in a way that's going to have any kind of real impact on our stores.

Ultimately, at the end of the day, what this does is this will codify some of the worst things we saw from COVID where our employees are asked to enforce the law on our customers. So we're already hearing about conflict in stores. I think this bill's only going to lead to more conflict, particularly with the limits on the number of items you can get and the types of items you can get. I don't want our employees to have to explain to a parent why they have to go into a different line because they bought baby formula.

Last thing I'll say. I do appreciate the amendments from the Committee. They did a lot to kind of narrow and clarify the Bill. But unfortunately, again, I think it just highlights how overreaching and troubling this Bill is. And frankly, it's overly narrow. It's focused on grocery and pharmacy. We are a late adopter industry.

We don't invest in technology unless we're absolutely sure it's going to benefit our employees and our customers. So to be focusing on us, I think, is not the best use of this body's time. Thank you.

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

Laura Bennett on behalf of the California Chamber of Commerce in opposition.

Madam Chair. Chris Micheli. On behalf of the Los Angeles Area Chamber of Commerce in respectful opposition. Thank you.

Good afternoon. Jamie Huff. On behalf of the Civil Justice Association of California, respectfully opposed. Thanks.

Madison Dwelley Pigozzo with Political Solutions. On behalf of Target in opposition.

Dylan Hoffman. On behalf of TechNet, respectfully opposed.

Good afternoon. Stephanie Morwell. On behalf of the Consumer Technology Association in opposition.

Good afternoon. Dominic Di Mare here. On behalf of the San Diego Regional Chamber of Commerce, in opposition.

Hi. Madam Chair. Out of order was in Senate Judicial. Robert Harrell with the Consumer Federation of California in strong support of this Bill.

Thank you. All right. Do we have questions or comments from the Committee? Assembly Member Wicks.

Thank you, Madam Chair. I just want to thank the author for bringing the Bill forward. Really appreciate it and your sponsors and would love to make a motion to move the Bill.

Thank you, Madam Chair. I appreciate what you do. I saw you earlier today, judiciary. You're concerned about the workers, and I understand where you're coming from, as I'm sure we all have experienced self checkout. And this reminds me of maybe many years ago, I don't know how many people remember?

But when ATM machines were developed and introduced, there was a lot of adaptation issues. People. I mean, change is hard for some people, and particularly technology, and we live in rapid technological change every moment, every day. I can say that I can empathize with those who may have been frustrated at first.

Know you bring your own bag, and then it tells you to move the bag. And I would say help. And I was glad, and I still am glad that there is a person standing there to correct my ways. But technology in this case is a good thing, if not in many cases. And I think it allowed me. I just used it this weekend at a grocery store, and it was faster than the regular checkout line, and I was in and out with my 10 items and no time. So I think convenience and change is sometimes difficult.

I have often spoken in these kinds of hearings where we're imposing more rules, more regulations, more constraints on business today, and I just think it's going in the wrong direction. I actually think from a labor standpoint, to consider, while business has to operate, be successful, and grocery store profit margins are very thin, and so they're always looking at ways to keep food costs low and pass those savings on to consumers.

If we're going to be requiring, adding more people to handle the self checkout, I just think that that is probably counterproductive. So I can't support this. I support that you're trying to make sure that our workers in our stores, retail, wherever, have safe working conditions, and I encourage you to do that.

I don't think this is a safety factor. I think it's a constraint factor, and it's one more encumbrance on doing business in California. And when you see grocery stores, Albertsons and whatever, it was a Safeway. Just recently announced a consolidation. Stores have to consolidate because costs are going up for all businesses, and so they consolidate.

And that's not something you like, none of us like, because some workers are losing their position. So be mindful of. My own recommendation is, but you're trying to protect your workers, but the long term, be careful. What you wish for is those jobs may just go away at some point when the grocery store goes away. So that's. I support worker conditions being safe, but I also support technology to make our lives convenient and efficient. So thank you.

Thank you, Assembly Member Patterson.

Great. Thank you. Well, my wife was a Member of UFCW, actually, here locally, and I would often hear, you know, some. Some interesting things about, you know, being on the job, and it's definitely not as it's not an easy job at times, for sure. But also we are blessed with four children, one of who's with me here today, making things a little bit more complicated. But one of the things we really value, I think, is our time when we're busing our kids around, because now we're just basically free labor for them.

We need employment law, by the way, for that, but, you know, bussing them around and our time is really important to us. And I think going into a store, like any store, and being able to have options for us to basically get in and out as soon as possible is great. I'm actually excited about being able to just put things in your cart. And actually there's things like at, I think, some of the sports stadiums where you just put it up there and it scans it and then you just pay.

I'm personally excited about that, but I just want to say two anecdotes, and then I have one question or one more anecdote, and then I have a question. I was meeting with a Mcdonald's franchise owner yesterday, and we were just, I just was happened to ask him about how technology has changed the operation of his businesses.

And he owns several, and one of them, you know, they each have about 60 employees each. And I was asking him how the technology really changed his business, and he said, well, really it hasn't. We have more jobs than we used to, actually. We just redeploy them other places to make the customer experience better. And I thought that that was an interesting point.

But the other thing, I just wonder in terms of warehouse stores, and I'm always in support of exempting as many people as possible out of a Bill, but what was the thought process of, and you might have said it, I came in kind of late about exempting the warehouse stores.

So, and I'll have Jassy speak to it. We did exempt. Warehouses are not in this Bill. We're focusing on grocery retail stores that are over 15,000 sqft. But I'll have Jassy speak to that warehouse piece.

Yeah. So I believe your question is regarding membership stores. So it's a totally different model. I think if you look at your Safeway or Albertsons, there's no membership to come in. It's a very open and public place. Oftentimes a lot of folks congregate within grocery stores.

But when you look at like a Costco or Sam's club, it is a membership model. Folks are checking receipts on the way out. So it's a different model than your typical Safeway or Albertsons but they aren't exempt from the technology notice piece. So they are still covered under any technology or notice that is required.

Okay. I actually think when you, well, at least the Costco that I go to on many occasions when people walk in there, it just seems like, you know, a whole new attitude and being, go over them and, you know, as they're rushing to get their groceries and stuff.

So, so I just think, you know, it's, I understand the model, but if, you know, again, it makes sense to exempt, you know, certain businesses in all sorts of laws. I've talked about it before. You can make a public policy for it. But I think it, it does concern me that we're targeting really some of the grocery stores. And does this apply also? It's a certain amount of chains, right. Certain number of locations?

Well, not a certain number of locations, but a certain definition of what we mean by grocery store and what we mean by superstores based on square footage.

Square footage. Okay, great. Well, great. Well, thank you. Thank you for the presentation, and I'll report back to my wife on the outcome.

So thank you, Assembly Member Lowenthal.

Thank you to the author for bringing this very important legislation forward. And I cannot recall if I had asked already when I sat through and spoke in Labor Committee if I had asked to be a co author. And if I have not, I would like to be added if you would have me as a co author on this Bill. I would like to ask the good chairperson from Hayward my forgiveness to have to listen to my comments once again, since I was a guest in the Labor Committee when this was presented.

And I want to thank my colleague from Rockland, because every time he speaks, I learn something more about his family and what an interesting family they are. You know, I invite you to join me at the Laker game anytime. On me. Would love to have you down. And when we're at the crypto.com arena, we will go into the Amazon stores that exist right now that have around 200 transponders on the ceiling that are monitoring your every move.

Since I know privacy is an important thing to you, and the most salient thing to notice there is that the prices in those stores are no different than the prices elsewhere where you have checkouts inside the arena. And so what that is, my friend, is wealth consolidation. There is no consumer benefit at all.

There is only a lack of labor associated with this. And finally, to my colleague from Newport Beach, I challenge you on saying that technology is a good thing. Technology overall can be a good thing when it's implemented and utilized properly.

I'm very much concerned, as are so many Californians and dare I say outside the state, about how automation is being implemented and what it's doing to the fabric of communities. This Bill is about safety. Thank goodness that they are bringing up the safety component because that is real. But there are also other components.

What is it doing to the fabric of a community when you don't have people working there? What is it doing to the economy when you have less workers? I disagree completely that grocery stores are operating on a very thin margin, as a matter of fact, for the very tough thank you.

That grocery store workers had for being frontline workers and getting Covid and bringing Covid back to their homes. There was a $4 billion gain by Kroger in that year, as a matter of fact, and did a $1 billion stock buyback. Instead of creating better working conditions for their employees and instead implementing more automation.

We are going to continue to have problems in the State of California until we have a plan on automation. Point blank, we don't have a plan. And so until we have a plan, we're going to continue to see bills like these that I will co author and support or carry all day long until we have a plan.

And that plan has to be very intentional in studying what are the impacts on communities, what are the impacts on economy, what is the impact on worker safety and neighborhood safety, and the lack of that plan. And this affects more than grocery workers in my district.

It's a big, big issue as far as the ILWU and the longshoremen and the goods movement sector and truckers and so forth. And this is all woven together. And we have to consider that it is. That's not to discount the very, very, very important tenants of this Bill, very specific to this Bill.

But again, we are going to continue to play defense in this state and have to react to these individual situations until we throw down and actually create a plan on automation where we identify jobs that are apparel and what it will cost all of us to take those jobs off the grid and where we should be intentional about putting jobs on the grid. I will be supporting this Bill. Thank you.

Thank you. Thank you very much. You'd probably like to second the Bill too, right? Oh, did you? Okay, I'm sorry. I'm afraid not. We are going to allow the Senator to close, please.

Thank you very much, Assembly Member, ma'am, chair, and thank you to my dear colleagues in the Assembly. I absolutely appreciate all the comments that have been made said here. This is a really tough job, and it's getting tougher by the day where workers are encountering these new technologies. And unfortunately, all of these issues are colliding. Right.

This issue of worker safety, workplace violence, the issue of retail theft, and the issues of how do we ensure that as we're integrating technology, that we are not displacing our community Members, who we rely on to have a safe and thriving community who pay sales tax, property tax, income tax, all of the things that a machine just simply doesn't do.

We have to put the workers first. And workers have pointed out these issues. They've asked us to address it. The first self checkout came in the 1990s. We haven't really had a substantive conversation about it now, and we're having it now because these issues are colliding that we have to deal with.

We are always happy to work with the opposition on this. I think we continue to work on it. You know, appreciate the amendments that have been made thus far. But this is about making sure that our communities are safe, our workers are safe, and that we're looking at retail theft upstream. Right.

And downstream, we know we're working on safer communities and there are going to be communities of color that are going to carry the burden of those bills.

And if we have 16 more times theft, retail theft, happening at our self checkout, we need industry to look at that and to look upstream and figure out how to be part of the solution with all of us. So with that, I thank you for your comments, and I respectfully ask for your aye vote.

Thank you very much. And if I could have the secretary please call the roll.

[Roll Call]

That Bill has four votes, and we will keep the roll open. Thank you very much. All right, we are. While we have Senator Padilla coming up, if we could please call the roll for the three bills we missed and the consent calendar. I think we have two. We have two Wiener bills and Caballero.

Oh, no, just two of the Wiener. Okay, so we have a motion by Assembly Member Wicks and a second by Assembly Member Ortega. And this is for the Wiener Bill. And is this. We have SB 532 and SB 961. So the motion is do pass as amended to appropriations.

Do pass as amended for 532.

Okay, all right, so let's do the roll call on 532 then. Okay.

[Roll Call]

That's 70, and that Bill is out. And then let's move over to SB 96. Move. A motion by Assembly Member Wicks, a second by Assembly Member Ortega, and the motion is do passes amended to appropriations. To appropriations.

[Roll Call]

That Bill is out, and consent calendar is motion by Assemblymember Wick.

SB 961 has five votes, so we need six for it to be out.

Oh, okay. So SB five votes. We will leave the roll open. Thank you.

[Roll Call]

Okay, that vote is seven to zero, and that Bill is out, but we will keep the roll open. Senator Padilla, we are going to start with SB 893, please.

Thank you very much, Madam Chair. And Members. I want to begin by thanking the Committee for working at my staff, and we will be accepting Committee amendments.

Senate Bill 893 would require the government operations agency, the governor's Office of Business and Economic Development, and the Department of Technology to collaborate with academic institutions across the state and establishing the California Artificial Intelligence Research hub.

California AI Research Hub would further the research, development, deployment, and application of AI technology for the public good by facilitating access to computing resources and data for academic institutions, as well as developing workforce development opportunities. Certainly, our actions will have a direct impact on a tool that stands to change our world in ways we haven't seen since the dawn of the Internet age.

At the same time, it's important that research and development around AI is guided by strong principles and guardrails that protect privacy, advance security, and address risks and potential harms to society. Today, private companies such as Google, Microsoft, Meta have led the research and development of AI technology.

This is because this development requires vast amounts of resources and capital that are not available at comparable scale to any single entity alone. There is no way for them to match the financial might of corporations working on the frontier of this technology.

However, this state has the world's premier institutions of higher learning, led by some of the greatest minds in their fields. Their talent is formidable, divided. Imagine just what breakthroughs they could pioneer if their efforts were united. California, with our vast network of institutions generating research for the public good, can be at the forefront of development and research of AI technologies and ensure that we maximize benefits to the public good.

As the fourth largest economy in the world, California can see, can use the power and influence of our market to lead the development of ethical and responsible AI technology that centers the public's interest. By addressing the gap in computing resources, facilitating access to data, and harnessing the power of our world class network of research institutions.

By harnessing the power of our academic institutions through a California AI research hub, California can lead the democratization of this space of AI research and development with public service and public good at its heart.

We cannot afford to cede the frontier to states like New York, Maryland and others who have put forth similar proposals after the introduction of our legislation. The research hub is an exciting blend of our incredible academic talent, groundbreaking advancements in this space already happening here, and the financial heft of our state.

This hub can become a tool to foster innovation that we cannot even dream of. Yet it is up to us to make sure the public remains at the heart of this effort. With me today is Daniel Zhang, senior manager with the Stanford Institute for Human Centered Artificial Intelligence.

Thank you. You may start.

Madam Chair and Members of the Committee, thank you for the opportunity to speak in support of SB 893. Government academic partnerships have historically driven American innovation. Public investment in long term, curiosity driven research at universities has led to critical technologies in GPS, Mris, and the Internet.

California's universities, in particular, have been pivotal in developing new technologies, including AIH. However, AI has created shift in where research into technology is occurring. The latest AI models require significant investment in compute power and access to quality data set, which at the moment only private companies have the resources to obtain.

Our latest AI index report showed that in 2017 it cost Google $930 to train its transformer model, while five years later it cost nearly 200 million to train its latest model, Gemini Ultra. This trend risks concentrating the future of AI in the hands of a few well resourced players.

While in this research is one needed perspective, expanding the capacity of academic institutions to conduct AI research is vital for ensuring that AI benefits all of humanity. This is why Stanford HAI has championed for public investment AI research since I accepted five years ago, including on the federal level.

National AI Research Resource or NAIRR, a partnership between academia, government, civil society and industry to expand equitable access to computational data and training resources for researchers. While the federal efforts are important, more public investment is needed.

California, home to four of the top 10 national universities in research spending, is uniquely positioned to lead in public investment in AI research. Critical investment from the state holds the potential to catalyze even more AI research here. For this reason, Stanford supports SB 893, Senator Padilla's proposal to create a California AI research hub.

This Bill would direct the state government to make essential investment, including providing compute power and greater access to state data for researchers. It recognized California's strength and is a positive step towards ensuring California continues to lead in developing responsible AI. I'm hopeful the Committee will move this proposal forward. Thank you.

All right, do we have other witnesses in support?

Catherine Bracy, Tech Equity Collaborative in support.

Dylan Hoffman, on behalf of Technet in support.

Naomi Padron on behalf of the Computer and Communications Industry Association, we're pleased to support the Bill in print, but we are reviewing the amendments that are listed in the analysis.

Thank you, Mario Guerrero. On behalf of the University of California in support.

Thank you. Do we have any opposition to this Bill? No. Look at that. Good work, Mister Padilla. Seeing no opposition, we'll bring it back to the dais. Any questions, concerns, comments? Miss Dixon,

I think this is an important Bill and I will support it. So thank you. Senator. Quick question of the chair. We're all experiencing many AI related pieces of legislation. Can we look at this in a whole? I think this is a holistic type Bill, so I'm supportive. But there's so many pieces of this.

Maybe we could talk about an information session once we see all these bills are overlapping, duplicative or maybe not. I mean, I don't know if any of us sitting in this room, except for this gentleman here from Stanford, knows exactly what were the pieces that we are individually assessing and good or bad.

And so again, in the spirit of technology, this is something that I believe we all need to understand better and I hope we can be more informed. I mean, this is excellent and this is a good Bill. I haven't seen another Bill like this for the research...

Oh, my goodness.

So I just wonder if that makes any sense as we go forward. How do we group them together and so we address the similarities.

Yeah, I appreciate the question. It's a really important one. And I will take a point of personal privilege, as I've done before, and give a huge shout out to Committee staff, both on this Committee, Slater and Josh, but also Christian and Senate judiciary, who is focused as well on artificial intelligence legislation, who we have been in constant contact with.

As the bills sort of get to their final stage, which is where we are in the legislative process. One of the things that is happening in coordination with the Senate is figuring out, for example, from a regulatory perspective, they all started out in different agencies, for example. And that doesn't make a ton of sense to your point.

And so we are working hard as committees to make sure we're lining them all up in ways that make sense that there's not overlap. You know, some of that as, for example, we had three watermarking bills that moved through this Committee.

I want to give a huge shout out to our staff who worked really hard to make sure they were consistent and aligned, because that is critically important to the innovation that is happening that I think all of us support, although we also want to make our community safe. And another Senate kudos here.

I am an Assembly Member giving lots of Senate kudos to Senator Wiener, whose Bill that we heard last week, 1047, also includes an academic hub in a different way. So not inconsistent with this one, but also focused on how we use UC Berkeley to create innovation as well.

And so there are a couple bills that do this similar piece focused in different areas, but we are paying attention to all of that, making sure they line up, making sure California is driving this bus in the right direction. And they know that the Governor would expect no less.

And when they get to his desk, if they are not in such condition, we will not expect good results. So that's the goal. Miss Ortega,

To your Assembly Member Dixon, to your point in terms of having information and information session, I would like to offer one that is going to be happening jointly with Labor Committee and privacy Committee, just to talk about labor and technology and what we're seeing in the workforce and how that's going to have an impact on the bills today and in the future.

So when we come back into session, we have a little bit more information to go on and maybe revisit some of this stuff that we've talked about in this Committee and that.

And that's August 7, just to finish the. Yeah, and we've done two. One was a General informational hearing that was focused mostly actually on academics, which I think was great because it was a real deep dive into AI.

I know the Senate did the same in Mister Dodd's Committee and we also did one with the entertainment Committee on the effects in the entertainment industry, but it's something we should continue to do because it's a very, we are not experts in artificial intelligence, I'll say for myself, and we do need to know enough to get this right. So I appreciate the inquiry and all the love for your Bill in the inquiry. Mister Padilla, any other questions, comments? Mister Patterson,

I suspect we'll have conflicting language we might have to work on when we're both on the floor because I have legislation that came through this Committee on the use of private information by government agencies. Actually the Information Practices act is referenced in there. So we'll looking forward if we have to work together to figuring those out when it gets to the floor. Hopefully knock on Wood, both of them.

So great seeing no additional comments or questions. Mister Padilla, would you like to close?

Thank you Madam Chair Members, for the conversation. I do as well. Assemblymember, hope the same and I would respectfully ask for an aye vote we.

Do have a. I think we got a quorum while I was gone. Oh, so we need a motion. Motion. Miss Dixon moves, and Miss Ortega seconds. Call the roll.

[Roll Call]

We have four. So we'll put it on call for the absent members. We will move to your next bill, SB 892, when you're ready.

Thank you very much. Thank you very much, Madam Chair and members, I want to begin by thanking you and your staff for working with us on this Bill, by indicating that I'll accept the committee amendments with the understanding, I think that we both have, that we will continue working together closely.

And I would love to work side by side with you on drafting to address two critical pieces, the definitions utilized on this bill so that it better aligns with the governor's executive order and delaying the development of the procurement standard after the adoption of regulations by the privacy agency or of adoption of a statewide framework.

These two points are critical, I think we agree, as we seek to develop a standard that safeguards and protects the risks associated with technology, while also ensuring that the standards we develop are actually implementable. And I appreciate your agreement to do so, Madam Chair.

Thank you.

SB 892, as proposed to be amended, requires the Department of Technology to develop and adopt regulations to create a procurement standard for the acquisition of automated decision making tools. Specifically. First, it would require the development and adoption of procurement standard that includes risk assessment, appropriate risk controls, an equity assessment, and adverse incident monitoring when procuring such systems.

Second, it would require engagement and consultation with a diversity of stakeholders, including those most affected by government use of these systems, such as public trust and safety experts, community based organizations, civil society groups, workers, and academic researchers.

As you well know, AI technology that is procured and deployed responsibly has the opportunity to revolutionize not just how we administer government services, but also our entire economy.

This technology can also pose significant risks to the safety, privacy, and civil rights of Californians, especially when the technology is used to assist or replace human decision making in critical sectors such as housing, employment, and healthcare.

In order to deploy automated decision making tools responsibly, it is critical that we diligently analyze the risks of these systems posed prior to their deployment, procurement and deployment. As the applications of these systems will be varied, the risk assessment and subsequent risk controls must be tailored and be unique to the technology in question.

This step is a critical step as we determine what AI products are safe for government use. Not only will this strict scrutiny protect the state from liability, but it will also help assure the public that the technology has been assessed with their safety in mind.

Indeed, we need to implement these risk assessment tests as soon as possible, as issues with this technology have already occurred. In 2022, an LAO report found that California's Employment Development Department procured an automated review software that flagged 1.1 million claims as fraudulent, meaning workers stopped receiving their benefits critical to themselves and to their families.

Ultimately, as you well know, more than half of these claims were confirmed as illegitimate, as legitimate. Excuse me. The hardship that these erroneous flags created could have been foreseen and avoided through the proper risk assessment prior before it was granted access to control a lifeline to millions of California families.

By enacting safeguards proposed in 892, California can set a national standard that drives innovation of AI tech and services while protecting the public from risks posed by automated decision making systems. I'm pleased to welcome with me Catherine Bracy, CEO and co founder of Tech Equity Collaborative.

Thank you Senator Padilla and members of the committee for inviting me to speak about SB 892 and the importance of setting standards for public sector procurement of AI systems. I'm Catherine Bracy, founder and CEO of TechEquity.

TechEquity is a research and policy advocacy organization focused on ensuring that tech is responsible for building prosperity for all and is held accountable for the harms it creates in our communities.

We're proud to support SB 892 to ensure that as California considers the adoption of AI systems, we established common sense guardrails around the use of this technology. The state government is rightly focused on reducing backlogs and improving services for our communities. Technology can be a useful and important tool to achieve those efficiencies, as Miss Dixon said earlier.

But we also think it's important to learn from several examples where the rapid adoption of technology, often without serious input from public sector workers and communities, created massive delays, wrongful denials, and problems that negatively impacted constituents seeking services, leaving taxpayers to bear the brunt of fixing these costly mistakes.

Senator Padilla mentioned the issues with the system that EDD employed, flagging over half of the recipients inaccurately as fraudulent. This experience was not isolated to California. The same algorithm has been sold to 42 states and is now the subject of a complaint filed at the FTC.

Without the guardrails that SB 892 provides, California may be taking a step backward in the quality of service delivery when using AI. What distinguishes the public sector from private actors who develop and sell this technology is that the public sector is responsible for providing services to everyone and ensuring that those services are provisioned safely and fairly.

That's why it is common that we have specific en heightened procurement standards for public contracts. People count on the state in some of the most difficult moments of their lives. The public's trust in government's ability to deliver these critical services has never been more important.

SB 892 recognizes this reality and recognizes California's ability to set a world leading standard for the use of AI systems in emerging technology and high risk environments. For these reasons, we ask for your aye vote today. Thank you.

Any additional witnesses in support of SB 892?

Good afternoon. Danny Kando-Kaiser on behalf of the Electronic Frontier Foundation in support thank you.

Hi, Yari with Oakland privacy in support.

Rachel Bhagwat with ACLU California Action word of support if amended position. Thank you.

Anyone in opposition to this bill?

It's okay. You're on a roll today.

I'm gonna do my best impersonation of Ronak Daylami today, but Courtney's going first.

Madam Chair and members Courtney Jensen and on behalf of TechCA. TechCA's members span from small businesses to global ones that contract with state for various IT related projects.

Prior to this committee, TechCA did not have a formal position on SB 892 and had provided the author's office with some feedback on the right balance between regulations and state contracting of ADTAE. We did not oppose the setting of standards.

Unfortunately, because of the committee amendments beginning on page nine, we will now be moving into an opposed position. We appreciate the comments that the author started with and the agreement with committee to continue discussing the procurement ban in this bill and the broad definitions and the commitment to continuing to work.

We are specifically concerned about the broad definition of ADT and the amendment banning the state from procuring broadly defined ADT until regulations are completed by the privacy agency enforcing CDT regulations to essentially mirror privacy agency regulations. This means that if the bill were to pass, the state would not could not procure technology that today is making government more efficient and it is allowing agencies and departments to respond to your constituents in a faster, more accurate manner. This ban presupposes that any procurement of ADT is concerning, which is simply not true.

The language also makes it unclear if an ADT contract previously entered into by the state could be renewed prior to regulations being completed. The amendments will stop procurement of ADT projects for the state for at least a year, probably longer, given the historical delays and regulations of the privacy agency.

The addition of the privacy agency and requiring some mirroring of CDT regulations with the agency is also incredibly concerning. Privacy agency is an independent consumer privacy agency focused on private business in interaction with consumers.

They are not an expert on state procurement and to now put them in a position of somehow overseeing or regulating state procurement of ADT is confusing. Agencies and departments and businesses contracting the state are used to working with dgs, govops, CDT regulations and guidelines. We often interact with these agencies and departments to ensure appropriate and safe contracting.

So we strongly urge this committee to reconsider those amendments. Appreciate the commitment to continuing to work together. Believe there is a time and a place that these ADT projects need to continue moving forward in appropriate and safe ways to ensure that we're using technology that is to the benefit of California constituents. So thank you.

Good afternoon, chair and members Laura Bennett on behalf of California Chamber of Commerce. Senator Padilla, we did not have a position on the former bill in print, but like TechCA, with the amendments taken in committee today, we do have to take an opposed position. We want to again align our comments with Tech CA.

We have concerns in our that were addressed in 2930 as it relates to the definitions of consequential decisions, ADT and substantial factor. Those do pull over to this bill.

With that alignment, I want to also kind of back up the statement by Courtney that says that we've been waiting for regulations by the privacy agency since July 1 of 2022. We are concerned that this alignment with, with those regulations will further delay those regulations and also have CDT align their regulations.

As Courtney said, it could be every year to do that. We just want to make sure that we can still do procurement projects with the safety in mind and we oppose your bill.

Anyone else here in opposition to the bill? Wait, hold on. There you go.

Dylan Hoffman on behalf of TechNet, apologies for the late opposition. Align my comments with TechCA and Cal Chamber in opposition.

Thank you. Seeing no further opposition, we'll bring it back to the dais. Questions? Comments? Concerns? Seeing none. So I think, I mean, I will say one point just to highlight, which is the privacy agency has already released regulations. This bill will not become law, if all goes well, until January. And we anticipate those regulations being finalized.

They were supposed to be late spring, so they're coming relatively soon, which is why we felt confident that this was not some new regulatory setup that we're beginning. Actually, it's something that is well into the progress for those who are tracking the privacy agency, which I know the opposition is since we've discussed it.

So I think that's an important thing to note about wanting to align with that, because I think the goal of the privacy agency regulations is to protect California consumers, which is what we as a government should be doing with our purchasing of adts, as well the alignment that's happening here. And with that, would you like to close?

Thank you very much, Madam Chair and members. Again, just to reiterate, I think it is vitally important to get it right and to address the delivery of government safeguards and services and operations in this space.

That said, I also look forward and appreciate the chair's willingness to engage directly on trying to continue dialogue on these two points of concern. In terms of the drafting, I will note, I proud of the fact that heretofore, this bill has enjoyed wide bipartisan support and no opposition.

So I'm hoping that we can continue working forward and get to a place where we can do. We can implement a policy that benefits and protects all Californians. And with that, I would respectfully ask for an aye vote.

Great. Do we have a motion? Motion and a second. Let's call the roll

Item number three, SB 892, by Senator Padilla. The motion is do pass as amended, to the appropriation committee. [Roll Call]

Thank you, Mister Padilla it is on call. We need more members. Mister Umberg, and I have heard you have already moved through 50 bills in your committee, sir. So you set a standard for the rest of us to follow.

No, what we're trying to do is we're trying to compete for the most uncomfortable hearing room and.

Oh, I'm winning.

No, you don't win. You got to come see us, and you'll see Mister Lowenthal was there. He knows how uncomfortable that hearing room is. So, a couple other comments. Thank you very much for your assistance, Madam Chair, and for the assistance of the ever talented, extremely well educated Josh Tosney for his help on our bill. Here's what this is.

SB 918, for anyone watching.

It is SB 918. Yes. Yes, SB 918. It requires social media platforms to have a telephone hotline available at all times for law enforcement agencies to make a timely request for information. It also compels social media platforms to compel to comply with search warrants within 72 hours if a search warrant is provided.

The platform by law enforcement agency and the subject of the search warrant has an account on the social media platforms. And here's why.

Here's why this is so important is because when there's an injury, a fatality, God forbid, a fatality in connection with, for example, a crime, and in particular a poisoning, a drug poisoning or overdose, that law enforcement can act quickly to do two things.

One, to find and potentially arrest the perpetrator, but also to prevent additional harm, so that if there's a person who's distributing, for example, oxycodone that's laced with fentanyl, we want to stop that right away. And so that's the purpose. The purpose is so that they are attentive and so they respond.

Here with me, actually, sadly, it is Mister Samuel Chapman of the Parent Collective. Mister Chapman has his own personal narrative as why this bill is so important. And I would ask that you forward an opportunity to testify.

Yes. And just before we move on, Senator, are you accepting?

We accept all the amendments. Thank you. Thank you.

I knew your glowing remarks about Josh must.

Yes, I was hoping he wasn't here so his head wouldn't swell, but it was unavoidable.

Thank you, sir. When you're ready.

Yes. Hi. Thank you. This is my son, Sammy. He passed away at 16. He was on Snapchat and the algorithm drove a drug dealer to him, offered him a counterfeit drug, said that he delivered at the bottom, and the lethal dose was delivered to our house like a pizza.

After we were asleep, we found our son dead on the floor the next day, tried to resuscitate him and failed. The MTs came and the firemen, and they failed. Then the coroner and the police, and we said to the police, let's call Snapchat and find out about this profile and go arrest this person.

We were in Santa Monica at the time, which is the same police force that Snapchat has, because they're in Santa Monica. And Detective Paul now of the Santa Monica police force told me that they don't bother calling anymore because Snapchat doesn't return their calls and doesn't help with these crimes. And that's why this bill is so important.

He told us, a family of a dead child, that they'd be back in three months when the toxicology report came back, if it showed anything. And that was the way our case had to be handled, because the information that was needed is on a platform that doesn't cooperate.

I since found out from other parents in my situation, that this is the case with local police all over the country, and that Snapchat and other platforms throw up hurdles, they do not help the police, and that's why this is so important.

Parents like me who have lost a child, were having our subpoenas delayed or kicked back for missing a middle initial. The protections afforded these platforms under the First Amendment and section 230 C of the Communications Decency act should not extend to frustrating law enforcement efforts. This bill should not even be necessary.

But it is, and California is leading the way in technology and has a special responsibility to our citizens to keep them safe from any dangers our companies may be facilitating. We are also leading the way in fentanyl poisoning, and social media is the main delivery mechanism for that.

The leading cause of death in the United States for our young people. Parents like me have been through the worst human experience, losing a child. Social media companies must take responsibility for facilitating law enforcement activities and returning valid subpoenas promptly.

I want to thank the Assembly for hearing Sami's story and for making the lives of those harmed by social media a little bit easier.

Thank you for telling us Sammy's story. Anyone else in support of this bill? Name, organization, and position.

I know it's unorthodox, but I'm here to back Sam up, and Laura and their family carried Sammy's law. We're going to get that done in the future. But Senator Humber is making a huge stride here, so respectfully ask for your aye vote.

Thank you.

Marc Berkman with the Organization for Social Media Safety in support.

Thank you. Seeing no additional support in the room, opposition. Come on up when you're ready.

Thank you, Madam Chair, committee members, Dylan Hoffman on behalf of Tech Net, we are respectfully opposed to SB 918 and fully understand and appreciate the impetus for this bill. I think it's a problem that our association, our members have been working very hard to come up with and craft solutions.

We worked on one such bill last year, AB 1027. We want to continue to. Yeah, sorry, apologies. Is that better?

Yeah. Thank you.

We've worked on a number of bills before this legislature, this committee, to try to address this problem, just to restate AB 1027.

Last year, we worked very diligently with the author to preserve more information related to fentanyl related and drug related content to ensure that law enforcement was able to access that type of information so that they could have more successful prosecutions. However, we're concerned with this bill and the requirement to comply with these requests within 72 hours.

We believe that that could potentially weaken user privacy, could compromise the security of users data, but also represents a concerning weakening of due process, specifically for social media users. So first and foremost, our platforms do comply with legal process when they're served with subpoenas, with search warrants.

But prior to complying, platforms verify that this process they've received is valid, that they have access and control of the information that is the subject of the warrant or process, and in some cases provide required notice to the user.

We believe that 72 hours timeline in this bill overemphasizes compliance rather than validating and ensuring that users and their information is protected. Due to their size.

Many platforms do receive a number of these types of requests for information across many jurisdictions in this country, and so SB 918 would create a separate due process right for our users than for users of any other online platform. Furthermore, we fully agree with the intent to create a system and an ease of use for law enforcement.

We believe of our platforms are already required to provide a contact process as required by penal code Section 1546.4. So we believe that this bill's requirements, around a telephone number in particular, are a little bit redundant. But I believe that is an issue that we can continue to resolve.

And so under Cal ECBA, we believe our platforms already fall under that requirement. And so many platforms do have an online portal where law enforcement can reach out to our platforms directly, receive responses, serve process through that portal, and seek to, to obtain that information that way.

So for those reasons, we are regrettably and respectfully opposed to SB 918. Thank you.

When you're ready.

Hello, chair and members. My name is Rachel Bhagwat. I'm a legislative advocate at ACLU California Action. I want to thank the Senator for bringing thisbBill forward, and thank you for sharing your family's story. We do share concerns with this bill with tech net.

People of all ages rely on social media platforms for everything from accessing information and connecting with others, to seeking information on sensitive topics like gender affirming care or abortion, to paying for goods using transportation, getting work done, and speaking out about issues of the day.

The vast stores of info that social media platforms hold about people are subject to some of the strongest privacy protections under the law, and for good reason. Rules that accelerate the handing over of this private information to the government do raise concerns.

This bill adds strict time limits for responding to government requests, but ensuring that people's rights are protected takes time. When a platform receives a search warrant, they must carefully review the warrant, perform a reasonable search for responsive material, and understand the scope of those records in order to determine whether the warrant is tailored as law requires.

The platform should also notify the target of the search to allow the person to take action to protect their rights, the platform will need to ensure that the warrant does not cover information the legislature has said should not be shared out of state, such as info about someone seeking or providing abortion, abortions or gender affirming care.

The platform might also communicate with law enforcement about the scope and breadth of the warrant and seek and obtain legal advice from counsel regarding the breadth of the search warrant. It might also be necessary for the platform or the target of the warrant to seek relief in court to void or modify that warrant.

All these steps cannot be completed if the platform must respond within 72 hours, and for that reason, we are opposed to this bill. Thank you.

Thank you. Any other opposition to this bill.

Chair and members Austin Heyworth with on behalf of the Internet Works Association, we're still opposed, but appreciate the amendments. It's definitely moving the right direction.

Seeing no further opposition, we'll bring it back to the dais. I just want to start by saying that I just continue hearing after hearing to be perplexed by the social media companies who put out ads saying that they want regulation, that they come in and oppose the most basic of laws that are put forward.

And as someone who used to represent corporations in criminal actions, I know that most folks don't even get 72 hours, but they show up with the warrant and they get what they want.

And so 72 hours, when you have over a million users, you have lawyers on speed dial, and you can get those answers and you can get them the information to save more lives.

I really, really urge the tech industry to step up and to actually start to be our partners in protecting our communities, because what Senator Umberg is proposing here is eminently reasonable. And if you can't support this, I just don't know what to think anymore.

Kids like Sammy are dying, and he's asking you to respond to a search warrant, which, let me be clear, requires a judge to sign on to with probable cause. So all of those concerns are addressed by the process already in existence to get the warrant in the first place.

With that, I will turn it over to Mister Lowenthal.

First of all, I want to thank the author for bringing forth such an important bill, such a thoughtful bill. The most important thing I can say is to you, sir, I'm so sorry for your loss.

I know how hard it must be for your family to live through it, much less to stand in front of complete strangers and talk about your story. But suffice to say, telling this story is making an impact. It certainly gives energy to the author and all of us who know this is the right thing to do.

So thank you for giving us that strength. And thank you to Sammy as well. I have a question for the author. Before I provide any comments. The question is the concern of the ACLU. The most salient concern that I heard was this 72 hours window.

The response that has to take place from the 72 hours window, is that a definitive response, or can it be any response whatsoever? What does that response need to be?

That's a great question. Typically, a response to a search warrant has to be complete. So yes, if they simply don't use what would be a good faith effort to do a search, then they would not be in compliance.

And theoretically there could be greater enforcement action but one of the things I wanted to mention is that there's this new tool called artificial intelligence, and it's something very strange to the tech industry, apparently. I'm sorry about that. What, what, what?

When you say you need to analyze a search warrant, I mean, as the chair pointed out, you can analyze a search warrant fairly quickly and with artificial. And I'm not actually, I'm prone to sarcasm, not being sarcastic right now.

With artificial intelligence, you can train the model, you can train the model to figure out what are the necessary requirements for a search warrant, and you can literally feed that search warrant in and see if that meets the criteria that's been trained upon.

And you can even analyze the facts to see whether the facts go with the law and get an output. Now, I don't know. I'm not sophisticated enough to know whether 72 hours is sufficient. We've been wrestling with that.

We've chosen 72 hours, frankly, because it seemed reasonable, as the chair points out, too, that businesses, when they get a search warrant, they comply immediately, because they get folks that are actually in their premises and producing things.

And a subpoena, dependent upon what kind of subpoena and what the timelines are usually can be complied with fairly easily now or quickly, especially if your business is technology. So I have confidence. I have confidence in our tech industry. I have confidence in the way we develop artificial intelligence, that we can do the job that's required.

Now, one other component of the bill is that there be a human, and I know that sounds a little 1980 ish, that you'd be an actual human. But any of us who've ever tried to call a platform can attest to the fact that it takes sometimes a lot.

We all view our job through the prism of personal experience. My wife had a problem with one of the platforms last Friday. She's still waiting for a callback. Today is Tuesday.

So that's why I included a human in this equation, so that law enforcement can actually talk to a human and ask that human to do whatever's necessary to be able to comply. So I know that's more than you'd asked for.

Assembly Member Lowenthal, I appreciate your comments concerning Mister Chapman's passion and taking that passion and turning it into positive outcome.

Yeah, I'd like to first respond to what you had to say and then make my overall comments, if that's okay. First of all, I was the President of freeconference call.com comma, 40 million monthly users.

We had all the time, search warrants and so forth brought to our attention based on calls, a lot of issues around terrorism, a lot of issues where law enforcement needed to know precisely who was on calls, so forth.

We had no problem turning those around in short order without artificial intelligence for an entity of that size, including call detail, records and the like. And I don't see this being problematic for the industry whatsoever. Now, I'm gonna make my comments, so actually, I take that back.

The first thing I'm gonna do is commend Dylan and both the opposition for the very, very difficult jobs that you have in standing up for something that all of us emotionally connect with and all of us can identify with as it relates to tragedy going on in our community.

And that's why the chair is so emphatic about why it's so important for industry to stand up to this, because it affects all of us.

Now, there's a recurring theme that we hear over and over again, which is the wall that tech is putting up, whether it's law enforcement, whether it's cyberbullying, whether whatever the issue is, has to come down, period.

I was able to say this in the Chairman's committee only an hour ago or 2 hours ago when presenting a similar topic of bill that had to do with harm caused to children and having school officials, the school psychologists, being able to escalate things as it relates to social media platforms and having a human response within a certain period of time.

The costs are de minimis. The contact center that could be employed for this could actually be the contact center for all of these bills that we're seeing simultaneously. The amount of profit that big tech is making is unbelievable. If you will allow me for one quick moment. Meta made a profit last year.

Meta made $39 billion in profit in 2023, which is a 69% increase from the year before. Alphabet Google, which operates YouTube, which is also part of this, made $42 billion last year in profit, a 40% increase from the year before. Sorry, Dylan, don't mean to be directing this all at you.

What I'm trying to say is this isn't going to affect shareholder value. This is going to provide an unbelievable amount of relief to communities in a great deal of pain, communities whose residents are being monetized every time they go online.

We demand a response that's appropriate for the level of pain and difficulty that you hear from this family and any family that gets the opportunity to speak on this issue. Mister Chairman, I hope that you would consider me to be a co author on this bill. Very proud supporting committee today.

Thank you. I think Miss Dixon and then, Miss Ortega.

Thank you, chair. Thank you, Senator. Certainly. My heart goes out to you. And you're here to fight the fight in your son's name.

We've seen too many parents here in Sacramento at various hearings and press conferences, fighting for changes in our laws to ensure that our children are safe. And I commend you for being here and advocating for your son. And, Senator, thank you. Thank you for carrying this bill and other bills related to public safety, frankly, in our community.

Did this go through public safety in the Senate?

No.

Maybe that's good. So I commend you. We need to address these heinous factors that are affecting our children on social media and elsewhere related to fentanyl, related to drugs that are illegal, illicit, that are fed into the illicit drug market. So I commend you, Senator, for fighting this good fight.

I do notice proudly that our Orange County Sheriff Department is behind this. I don't know if there's any law enforcement here to support. I'm sure they are supportive of just the challenges to get a search warrant.

And just as the chair said, it has to go through a judge at any 247 to approve a search warrant. I think 72 hours is generous. It should be instantaneous when you have a grieving family, family of the victim, trying to get some answers quickly.

But in any event, I take it from the Newport Beach police and a lot of Orange County police departments are in support. So thank you. I commend you for doing this. And of course, I will support it. I'd love to be a co author as well.

I also wanted to thank you and Sam and Senator for bringing this bill forward. I actually sat on the fentanyl oversight hearing committee, several of them. I actually had a bill really focused on youth and access to fentanyl and saving lives.

And through those hearings, there was one quote that stood out to me, and I still think about it every night, which is drug dealers of today are not those that we knew of the eighties or nineties. The drug dealers of today are on our social media platforms and they're killing our children with temporary and disappearing posts.

How are we supposed to find them?

And so I really commend you for taking this on as a way to modernize how we go after drug dealers as we try to play catch up with not just AI or social media, but even our cell phones, and knowing what we know now, which we would have done before when it comes to our children.

So I want to thank you. Would also love to be on and on as a co author. And thank you for being here.

Thank you, Miss Ortega, Mister Vice Chair.

Great, thank you, Senator Umberg, appreciate this legislation and also very sorry for your loss, sir. And thank you for the comments you shared with me up here. You know, I didn't know what I've said this before, but I had no idea what fentanyl was for 2019.

When I was mayor of Rockland, one of my neighbors, Zach Didier, died from fentanyl poisoning. And unfortunately, I've met too many victims of fentanyl poisoning since that time and almost talk with one of them on a daily basis over something that we're working on. And, you know, it's not something I enjoy at all. And.

But, you know, if I can advocate for you or any of them, you know, that's always been a top priority of mine, you know, but the pattern that we do see in my district, and I'm always careful to just say that, look, it's all the responsibility. We talked about this in this c=ommittee on other bills.

I mean, the responsibility isn't entirely on the social media platform, but it definitely is a tool that the drug dealers are using to traffic this in the community.

We obviously know people who are dying of drugs in the streets and things, and that's really, in those circumstances, if they're investigated at all, there's no impediment to continuing that investigation. There's people to talk to. But unfortunately, you know, they are two different dynamics.

But I mean, the people in my community dying from fentanyl are dying from getting it, obtaining it online. I mean, that's just the reality of the situation. And I think, you know, Mike, actually, I've shared this before up here. Mister Lowenthal, if you haven't heard it, you're gonna learn something else about my family.

My cousin passed away from fentanyl poisoning as well, young man. And so, you know, we have to. I think it's. It is kind of crazy to me to think that if there's an investigation, I think 72 hours, honestly, is pretty generous.

I mean, if the police show up at my door with a search warrant, you know, I don't know if I'm going to be like, hey, you know, you know, give me 72 hours and I'll get back to you. Right? I mean, they're going to, they're going to come in and start investigating.

So I think 72 hours is a pretty reasonable standard to start turning things over, you know, and I hope judges will use discretion like we ask them to do, right? Now under all search warrants, so. And as the Chairman, are you still Chairman of the Judiciary Committee? At least till the end of the week? Okay, that's good.

I was appointed to the Assembly Judiciary Committee and I have that much more respect for you after today. So. But anyways, you know, I think the downside to what's going on right now, and I think we're seeing the frustration from our chair, is that we do have a lot of these sorts of bills coming through.

And I think we do need, I think, a more global approach on how we're going to address and work with the stakeholders, including social media companies, on, you know, what is their responsibility. But what's my responsibility as a parent as well? Right. And, but these disappearing messages, things like that, I mean, it's, it's crazy.

You know, there's just a lot of crazy things going on out there. So I'm happy to support the bill and you know, if the time comes to add co authors, if you'd have me, I definitely would like to be on as a co author. And I really appreciate what you're doing in this avenue as well.

On fentanyl, just globally, on all sorts of issues. It's really 110 people are dying every week from fentanyl. Some of them from over their fentanyl users, but they deserve help and treatment as much as the people who are being poisoned from obtaining it online. But thank you and look forward to supporting it.

Thank you Assemblymember Patterson, could I interject one of the. So if I can ask. Madam Chair, Mister Chapman has to leave for the airport, I'm informed. So if there's questions for Mister Chapman now, perhaps if we could direct those questions now so that he could depart, that would be great.

Yeah, I don't know there's any more questions for Mister Chapman. I'll just reiterate what my colleague said, which is such gratitude. I'm a mother myself, as are many of the people on the dais. And the idea of losing a child is all of our worst nightmare. And you're turning that loss into saving other kids lives.

And I know Sammy would be so proud of you and so grateful, and we all are. So thank you sir, for being here. I also want to clarify one other point, which is if a search warrant is overbroad, which at times they are. I mean, the truth is, judges don't always get it right.

That's the job of the lawyers, is to go back to the judge and argue the breadth of the search warrant to get it narrowed. The 72 hours will absolutely give these attorneys the time to do that. This is what lawyers do every day, all day. They do it well.

The defense attorneys that represent these companies do it exceptionally well. These are high paid lawyers, generally speaking. And so I just am confident, again, having practiced in this area of law, that what is being provided here is not overburdensome, that it is absolutely within and will protect the users that the companies want to protect from overbroad warrants.

Which is something that I appreciate you guys advocating for. I think it's important, and I know the Senator agrees too. Our criminal justice system has to work, and part of that is protecting people from overbroad or unnecessary warrants. But again, there's processes to do that. They will have time to do that.

Usually it is done much faster than 72 hours in my experience, and judges are on call to do this, that's what they do. So I appreciate this bill greatly, because I think, I mean, it's so simple. The bill starts with, you need a phone, you're going to answer right again.

I mean, a web portal that God knows where in the ether those requests go isn't the same as having someone that police officers can actually talk to to get answers when it is possible. Other kids could die from a batch of fentanyl that is being delivered across Santa Monica.

Like that is an urgent crisis that needs action and this enables them to do it. So I really appreciate it. And with that, would you like to close, Senator?

Yes. Thank you. Thank you, Madam Chair. And thank you, Mister Chapman. As I said at the outset, this has touched so many people's lives, and thank you for your passion and taking that passion and turning into a positive for so many people. So I appreciate that, number one.

Number two, I was a bit flippant at the beginning of this hearing, and I want to echo the comments of Assemblymember Lowenthal. It is tough, it is tough to come and impose something like this where the challenges are technical. But I do believe we can meet those technical challenges.

In a former life, I was a federal prosecutor, actually quite familiar with search warrants and subpoenas. And indeed, if a search warrant is over broad, if you get a search warrant and you are fill in the blank platform that says please produce all messages related to drugs, that is on its face, over broad.