Assembly Standing Committee on Privacy and Consumer Protection

Welcome to Assembly privacy and consumer protection hearing. We'll call this hearing to order. We have eight bills on the agenda today with two bills on the consent calendar. AB 1571 by Assembly member Michelle Rodriguez and AB 1640 by Assembly member Stefani. We will take a a motion for the consent calendar once we have a quorum.

Oh, a fun announcement this morning. Slater Sharp, who is our former science fellow, has rejoined the committee as a senior consultant. So welcome back to the committee. Slater, I know, look, you got cheers from the audience, Slater. He hadn't gone far.

He was in my personal office, but we brought him back because he has incredible talent. To effectively manage our time today, testimony will be limited to two witnesses for support, two in opposition on each bill. Witnesses are allowed three minutes to present their testimony. We will track that to make sure everybody gets equal time. And then, of course, anybody in the room can register their support or opposition.

And as always, if you don't get to say everything you wanna say, the website does allow for written testimony, and we do read all the letters in the portal. So please write in. And so we are going to start as a subcommittee because there are only three of us, but the first bill is actually mine. And assemblymember Dixon's AB 1705 so I will hand the gavel off to Assemblyman Ward.

Which is your favorite chair?

I don't have a favorite chair. Should you sit on the left and I'll sit on the right?

Oh. Alright. Well, good morning, madam chair and assembly member Dixon. When you're ready, you may begin a presentation on AB 1705

Thank you, members of the committee, and I wanna thank staff for their work and collaboration on this bill. With that, we are proud to present AB 1705 the Reclaim Act. This is, a bipartisan effort. It started when my joint author was the vice chair of this committee.

And this is a really important bill, and I think it proves the point around the bipartisanship in this committee and the unanimity around issues that we see and hear in the way we wanna protect California. So AB 1705 was started last year by assembly member Dixon, and now I am doing it with her this year.

It establishes a meaningful accountability for platforms that are uploading videos and images to ensure that operators are getting consent for sexually explicit content before allowing for the upload of that content. Everyday, countless Californians, especially women and children are victimized by nonconsensual sexual imagery posted online without their knowledge or permission. The use of these images harass, humiliate, and harm women, and this predates the Internet, but the Internet is allowing it to spread faster and further than we ever thought possible when we were much younger.

Recent reporting has exposed how this can lead to intense harm for those that are put online. And generative AI, which is allowing for the nudification of images in a second, is making this even more profound. So this bill is really important because it stops for the spreading of images that nudify people.

And I was just yesterday in a conversation with someone where they said, well, of course, if you tore the clothing off of someone on the street, we know that that would be wrong and you would be held to account. And yet, we have these systems right now where you can put images of people that are nudified online and very little can be done to get them taken down and to remediate the harms.

And so AB 1705 is really a preventative measure to make sure people in California are protected from these harms. And with that, I wanna turn it over to my colleague Assemblymember Dixon who really brought this bill to be.

And with your encouragement, chair, thank you so much. I'm it's an honor to share this, table with you and share the authorship of this bill.

So good morning, chair and members of the committee. This is familiar. It is identical to just about identical to a bill that passed this committee unanimously last year as well as the assembly.

So we will move it forward again this year with with our partnership. And I believe that collaboration between assembly member Bauer Kahan and myself demonstrates that this is a bipartisan issue, importantly, a bipartisan solution. AB 1705 deals with an extremely sensitive issue, the nonconsensual sharing of sexually explicit media and sexually explicit content of minors to pornographic Internet websites. This bill is fundamentally about ensuring content is posted consensually and protecting minors.

With technological literacy and Internet usage at all time highs, it is far too easy for individuals to upload nonconsensual sexually explicit materials online.

And as many of us know, once explicit materials online. And as many of us know, once sexually explicit media is uploaded online, it is nearly impossible to remove it. The legislature has passed a number of worthwhile measures to provide protections for minors and victims by this committee too, who have had their sexually explicit content either recorded or shared online without their consent. However, a core issue which has not been addressed is the identification of the uploader and holding websites accountable for the content hosted on their sites.

In order to address these issues and protect Californians of all ages, AB 1705 does the following.

First, it would require that an uploader provide a statement certifying that any individuals depicted in the content provided consent provided consent to be recorded to the to the sexually explicit material being uploaded and that the depicted individual was not a minor at the time the content was create created. In other words, the subject of the images must consent to all of these aspects. Second, it would require that the statement provided by the uploader be signed under penalty of perjury.

And third, AB 1705 allows an individual who did not give consent or who was a minor at the time of the recording of sexually explicit content to bring civil action against the operator of the pornographic Internet website and the user who uploaded the content. AB 1705 represents an important step towards protecting our children and Californians from from the proliferation of non consensually excess sexually explicit material.

These protections are especially important for minors and victims of revenge pornography who often have little recourse once this type of content is uploaded to an adult website. By holding both the uploaders and the website operators accountable, This legislation allows victims to protect themselves from the heinous and predatory exploitation. I'm proud to be a joint author on this measure and respectfully request an aye vote. Thank you.

Thank you to the both of you. Are there any, witnesses in support for this bill?

No. We are well, Well, there may be in the audience, but not primary witnesses.

So we're not gonna have any testimony. Are there any members of the public who wish to register a position of support? Please approach approach the microphone and name, organization, and position.

Good morning, mister chair members. Ed Howard, senior counsel of the Children's Advocacy Institute at at the University of San Diego School of Law in strong support. Thank you.

Thank you.

Catherine Squire on behalf of the California Commission on the Status of Women and Girls in support.

Thank you.

Good morning, chair members. Matthew Gallagher on behalf of the California District Attorneys Association in strong support.

Thank you.

My name is Nerissa Dhar, and I am part of the American Association of University Women, and we support this bill.

Thank you.

Morning. I'm Kathleen Harper, speaking on behalf of the American Association of University Women of California, and we support this bill.

Thank you.

Thank you.

Kathy Van Austin, representing AAUW California in support.

Amy Hom, American Association of University Women, and we support this bill. Thank you.

Missy Maceyko, American Association of University Women, we support this bill.

Thank you.

Hello. I'm Jacqueline Lopez for the American Association of University of Women, and, we support this bill.

Thank you.

Sofia Gurrola. I represent the American Association of University Women, and we support this bill.

Thank you very much. And we have no registered opposition on file. Is there any members of the public wishing to register a position of opposition with us today? Alright. Seeing, none, we'll turn it back to the dais for any questions or comments.

Senator Lowenthal.

I simply wanna say how much we miss you on this, Dixon.

I wish I were sitting up there.

Truly.

Alright. Well, I would wanna commit that as well too. Just because committee assignments might change, doesn't mean you can't still be a leader on these bills. And so we're grateful for your continued leadership and not letting this go despite, how things sometimes go, under the under this dome. Critical bill.

Obviously, like, you know, very focused on making sure that, you know, really two things are crystal clear that we are we are actively monitoring. All partners here are actively monitoring for age, critically important to be able to protect our youth, as well as making sure that there's consent, an obvious factor that, you know, should, certainly be afforded for any imagery that is afforded online. And I wanted to underscore as well that this will cover not just a a true image, but also any artificially generated image.

Is that correct?

Yes. So any nude images, no matter how they're generated.

That's the definition. And I really appreciate you're taking that extra step too as well to be able to make sure that the user has liability here as well. So, you know, between the user, the, site provider that everybody has a role to play to make sure that, you know, consent was provided, that anything that is out there and available for, public use, is, you know, to to a degree appropriately uploaded, and that there is a recourse for making sure that that content is taken down.

So happy to be able to support this bill today when the time is ready and we have a quorum. Is there anything further you would like to close?

We respectfully ask for an aye vote.

And I just appreciate that this committee continues to be a bipartisan love fest. So thank you both for your comments. And, with that, we respectfully ask for your aye vote.

Thank you, madam chair. 1234.

Thank you.

We're still one short.

Yeah. Yeah.

I love that mister Schultz was here on time and ready. He gets an extra gold star. So we'll move to file item four, AB 1898 by Assembly member Schultz. When you are ready, mister Schultz.

Well, good morning, madam chair and members. Thank you for having me. I sure love to be early for a good fight. I'm kidding. I am pleased to present assembly bill 1898 today, which ensures transparency and accountability by requiring employers to give workers advanced notice before they implement artificial intelligence tools in the workplace.

Let me just say right out the gate that there will be a lot of bills, that come before this committee in the realm of artificial intelligence this year. I got some flack for it when I said it in the last committee, but I'm gonna repeat it again. I believe this to be a common sense measure to ensure that our workforce knows the conditions under which they are working. I absolutely believe there is a path forward.

I think the committee process works, and as I'll discuss more later, very appreciative to the committee and staff for the amendments that I think strengthen this bill and address at least some of the concerns raised by the opposition.

Please allow me to briefly describe what I see as the problem we're trying to solve with 1898. Artificial intelligence systems sold to employers are no longer just simple chat bots or search engines. Today, companies use a wide range of AI tools to monitor and manage workers, changing the modern workplace, if you will, and affecting millions of employees in the state of California.

Earlier this year, as just one anecdotal example, fast food chain Burger King announced that they would be testing AI powered headsets that can listen and track how friendly employees are with their customers. Other systems track workers using tools like keyboard monitoring, eye tracking, and biometric sensors that can predict fatigue.

Employers are also using automated decision making systems or ADS for short to automate oversight. ADS systems can set weekly schedules and even track, discipline, or fire employees, a practice recently reported in Amazon warehouses. Algorithmic firing is reportedly on the rise with recent figures estimating that more than one in five managers allow AI systems to make final firing decisions without their input.

This practice has invaded numerous industries such as, and I would argue, especially the gig economy, which often leaves rideshare drivers at the whim of AI driven deactivation. While employers continue to purchase and utilize these artificial intelligence powered systems, the vast majority of California workers are left in the dark about how these tools are being used to monitor or manage their day to day life at the work site.

Without an understanding of these systems in the workplace, I would submit that workers are unable to navigate workplace expectations. So let's talk briefly about what AB 1898 seeks to accomplish.

It would require an employer to provide workers with an advance notice at least ninety days before an AI powered workplace tool is used to surveil or manage the workforce, and it would require employers note employer require employer notices to disclose the purpose of the AI tool, a description of the categories of worker data that would be captured by the tool, what employment related decisions might be affected by use of the AI tool, and a general description of the general locations where these tools would be used in the workplace.

I wanna note before I close that the bill does not prohibit the use of artificial intelligence in the workplace or surveillance technologies. What it does say is that workers have a right to know.

This bill is important because California workers deserve transparency and upon accountability when it comes to AI in the workplace. I would like to mention again that we have worked very closely with committee and the opposition to address at least some of their concerns, and I would refer all of you, if you haven't already done so, to look at page seven of the committee analysis to further describe what some of those concerns were that were addressed.

I will also emphasize that we understand that as we go to the legislative process, there's more work to be done, and there are more conversations to be had with the opposition. And you all have my full commitment that should this bill move out of committee today, we will continue to engage with the opposition to address those concerns. With that, at the appropriate time, madam chair, I will respectfully ask for your aye vote.

With me today, to testify in support of the bill is Yvonne Fernandez with the California Federation of Labor Unions and Shane Guzman with the California Teamsters Public Affairs Council.

Thank you, madam chair and members of the committee. Yvonne Fernandez of the California Federation of Labor Unions, proud cosponsor of AB 1898. AB 1898 is part of a package of bills the Labor Fed is sponsoring this year to update the labor standards for the twenty first century. While the technology that exists today, in in the modern workplace may be more powerful than ever before, the principles guiding the creation and the need for worker centered guardrails remain consistent.

And labor has been at the forefront of making workplaces safer and more humane for decades, and today is absolutely no different.

This committee has seen previous iterations of workplace AI bills, and we brought them back because we are at a junction point where we need to establish actual worker protections and establish best practices when you are bringing AI tools into the workplace. A few weeks ago, this committee held an informational hearing on surveillance broadly. During that hearing, Josh Black, an Amazon warehouse worker, described the stress he had and his colleagues felt by simply being unaware of how and when they were being watched by management.

Josh described the chilling effect a non transparent surveillance regime can have on a worker's decision to engage in protected activities such as joining a union. And even in a unionized workplace, the likelihood of a worker reporting any workplace violations decreases due to the lack of knowledge of surveillance.

And as noted by the assembly member, this is an issue that exists well outside of Amazon warehouses. Surveillance and the lack of transparency is proven to increase psychological distress amongst workers. The feeling of always being watched does not foster a healthy working environment, especially if you're always guessing how and when the boss is watching you. Now regarding automated decision systems, these tools, as the assembly member also described, are used to replace human decision making, especially when it comes to the management of workers.

While they're not capable of replacing human decision making, these tools are still used to set a worker's schedule, pay, and even determine whether or not that worker should be fired or disciplined.

Workers cannot realistically be expected to know how to operate within the workplace and fulfill their tasks if they can't describe who or what is managing them. These are the challenges workers across all industries are experiencing. As described by the assembly member, AB 1898 simply requires that employers provide notices before introducing any AI powered tool into the workplace.

It does not prohibit or limit an employer's ability to use an AI tool, and it is a necessary step to empower workers with the knowledge needed to operate in the modern workplace.

I respectfully urge your aye vote.

Thank you. Good morning. Shane Guzman on behalf of Teamsters California. Proud sponsor cosponsor this bill.

Along with the Amalgamated Transit Union, Unite Here, the Machinist Union, Utility Workers Union of America, and the Engineers and Scientists of California, all in support. What we have seen in the last few years is the use of AI technology, AI management tools, AI surveillance increase exponentially in the workplace across California and across the world. It can be very dangerous if not used in the correct way.

And as, the previous witness spoke about the testimony of the Amazon worker, that that is a common story, a common thread across many industries where workers are constantly monitored, constantly pressured by, by the technology, and and not really knowing what kind of decisions are gonna be made with the data that's collected on them. So that has created several phenomena in the workplace.

One is that it's unsafe. Workers are working faster because they don't know if the AI is going to fire them the next day for working too slow. They are distracted. They're stressed out. It's also led to a loss of privacy and dignity in the workplace.

Constant monitoring, in some instances, employers are using it to figure out if the employee is going to the bathroom and how long they're spending in the bathroom. That is in our view not a great use of the employer's technology. The other thing is that it's not perfect. We have seen that predictive AI looking at movements of a worker and predicting that the worker is tired or driving while distracted when these movements were innocent behaviors and led to employee discipline wrongfully.

So we see this bill as, was mentioned before as a best practice.

Let's open the black box and let workers and employers talk to each other again and talk about, what systems are being used to monitor and and hopefully lead to a workplace that is better and more productive rather than danger dangerous in creating a fearful environment. And for those reasons, we ask for your aye vote.

Thank you so much. I believe we have primary opposition. Oh, no. We need support first. I apologize.

Usually, our committee's in the afternoon. Now you're seeing what happens when I'm in the morning. Support, please come up. Name, organization, and position.

Good morning, madam chair, members of the committee. Navneet Perrier on behalf of the California School Employees Association in support.

Becca Kramer with Kaiser Advocacy on behalf of the Electronic Frontier Foundation and privacy rights clearinghouse in support.

Good morning. Samantha Gordon with Tech Equity in support. Thank you.

Good morning. Jason Haenel on behalf of AFSCME California in support.

Good morning. Scott Brent, Smart Transportation Division, Local 1201 in support.

Good morning, chair, members. JP Hanna on behalf of the California Nurses Association in support.

Morning, madam chair members. Louie Costa with the Safety and Legislative Board of Smart Transportation Division in support.

Thank you all. Now if the primary opposition wants to come up.

Move the bill.

Move a motion by mister Lowenthal and a second by miss Ortega. Oh, right. We can't take a motion. We don't have a quorum. So if you wanna text your friends, we need two more members before we can make the motion.

Oh, sorry.

Or after the opposition.

Well, we still need a quorum. Goodbye, darling.

Good morning, madam chair. Sorry to have my back to several of the members. Chris Micheli here on behalf of the Civil Justice Association of California in respectful opposition. We do appreciate, the author and sponsor working with us. We do continue to have a number of significant concerns.

If I can walk you through some of those and, pointing to the language. The first is, three of them are in the definitions. The first is the definition of an ADS. It uses, two things of particular concern, any, and used to assist or replace. Assist obviously has real really no threshold.

So no matter how little or how much that ADS, is assisting or replacing, there is no threshold there. The definition of worker in subdivision f includes both employees and independent contractors. Again, regardless of how much work they do or how brief a period, and we're obviously concerned with including an independent contractor in the definition of worker. The last definition one is workplace surveillance tool collecting or facilitating the collection. Again, very expansive.

We think it could apply to just about anything, whether it's email, data storage, tools, security readers, etcetera. The the next item is in subdivision B, the notice where it has to be given and to whom the worker likely to be directly or indirectly. Again, very expansive. And so this list requires just about anybody regardless of the amount of work or how long the engagement is. And I know that the notion of a notice seems rather simplistic.

But if you look at subdivision F, it has 11 additional par sub paragraphs. All that all those required, aspects of the notice. It is far more expansive than a simple notice to workers. And I'll note, last year in SB 7 by Senator McNerney that was vetoed by the governor, narrow with narrow narrower than this bill, we believe. And he talked about that even the most innocuous tools would be covered by the notices, and he also noted noted that it was overly broad in its restrictions.

We think the governor's veto message of SB 7 is perfectly applicable to this measure as well, madam chair. Thank you.

Thank you. And I'll just note that the bill has already moved out of the labor committee, and the question about workers and independent contractors is in the jurisdiction of that committee. So appreciate the comment, but will not be subject of this hearing.

Good morning, madam chair, members. Ashley Hoffman on behalf of the Cal Chamber. Appreciate discussions we've had with the author and the sponsor and continue to have those. I wanna turn to really the content of the notice and some of the outstanding concerns we still have with that provision in the bill. For example, the bill would still require for every single tool disclosure of the specific actual model and developer of that tool.

And we have concerns, especially when it comes to things like security tools, which would fit under the definition of a workplace surveillance tool primarily. The disclosure of specific system brands or models or platforms, but significantly increase potential for targeted exploitation identification of those security technologies.

And again, as mister Micheli mentioned, that information is going out not only to all employees, but also contractors no matter how briefly they are performing work, including the full list, which is required to be provided to everyone of tools used across the entire workplace as we read the bill. And if you think about things like social engineering attacks, phishing scams. Right?

The more that those folks know about exactly what systems you are using and how they work, the more that they are likely to be successful in getting information like passwords or what have you. There have been instances where by obtaining that kind of information that, unauthorized individuals, for example, have been able to access security footage and cameras across areas like school, health care facilities, and others.

And even though we do not profess to love every single word of the CCPA regulations on ADMT, even those pre use notice requirements do have exemptions in them where disclosure of certain information would undermine an employer's ability to prevent or investigate security breaches or things of that nature. Finally, we think some of our concerns are enhanced by the private right of action in the bill.

For example, you would have to disclose a high level summary of risk assessments that are required by law as part of your notice.

If you look, for example, the CCPA regulations, or other proposals, those are really intended to go to regulators or to be revealed to regulators as they ask for them.

My concern is former litigator, right, is is if you are being sued under the private right of action and plaintiff's counsel is trying to prove that your notice was insufficient or is missing things or the description wasn't accurate or what have you, they're gonna be propounding discovery to get access to some of these documents, and you're gonna end up having to try and defend, right, the confidentiality or proprietary information in a lot of this.

Just in addition to the cost of the bill as well, that's propounded by the private right of action in it. So thank you so much.

Thank you. With that, any other members of the public here in opposition, name your organization, and position?

Good morning, madam chair, members of the committee. Chris Walker on behalf of the California Craft Brewers Association as well as the California Association of Sheet Metal Air Conditioning Contractors in opposition. This is endless litigation. Door have been opened.

Thank you.

Good morning. Jacob Brim with California Retailers Association in opposition.

Thank you.

Good morning. Eileen Ricker with California's Credit Union Leagues in opposition. Thank you.

Thank you.

Good morning. Dorothy Johnson on behalf of the Association of California School Administrators and also the California Association of School Business Officials in respectful opposition. Thank you.

Good morning. Lizzie Guansona here on behalf of California Moving and Storage Association and the state's largest public sector risk pool, Prism, in respectful opposition. Thank you.

Good morning. Martin Lanar with the California Restaurant Association. Appreciate, some of the amendments. Still in opposition. Thank you.

Thank you.

Good morning, chair and members. Naomi Padron on behalf of the California Manufacturers and Technology Association and also on behalf of Cal Broadband in opposition. Thank you.

Thank you.

Good morning. Sam Hood on behalf of the Security Industry Association, respectfully oppose the bill today. Thank you.

Good morning, Aaron Avery, California Special Districts Association, respectfully opposed.

Good morning. Robert Boykin with TechNet, respectfully opposed.

Ope.

Thank you.

Good morning. Jean Hurst here today on behalf of the urban counties of California and also the rural county representatives of California in respectful opposition.

Thank you, madam chair, members. Jason Schmelzer, lobbyist for Boeing, here today on behalf of our trade association, the Aerospace and Defense Alliance of California, who has federal conflicts with this bill and needs an exemption. Thank you.

Good morning. Eric Lohr on behalf of the California State Association of Counties in the League of California cities in opposition. Thank you.

Oh. Don't touch the mic too hard.

Good morning madam chair, privacy committee members, Tom Sheehy on behalf of the California Landscape Contractors Association in opposition to this measure. Thank you.

Thank you.

Good morning. Cody Boyles on behalf of the California Grocers Association in opposition.

Good morning. Jack Yanos on behalf of the California Fuels Convenience Alliance and the California Trucking Association respectfully opposed.

Thank you.

Good morning. Mark Farooq on behalf of California Hospital Association, opposed. Thank you.

Good morning. Matt Easley on behalf of the Associated General Contractors, both the California and San Diego chapters. In opposition.

Thank you.

Seeing no further opposition in the room, we will bring it back to the dais. Assemblymember Irwin looks like she has something to say.

Or or something something to ask. So we we saw this we saw this bill or or portions of this bill last year, and and I still have some of the same concerns. Certainly, mister Gusman talking about constant monitoring and the stress that it can create on employees where they're concerned that they're not being productive enough and then hearing that they're fired the next day. I I definitely have sympathy for all those arguments.

But some of the things that the opposition brought up are concerns that I had last year.

Year. Specifically, I'm very concerned about cybersecurity. And, what are the why would we need the higher level, information that you give to employees. If that information gets out, it certainly makes companies more vulnerable to hacking. So maybe you can explain why why does why do the tools need to why do you have to disclose the serial number and the information about tools that are being used to protect not only only employees, but the companies as well from cyber attacks?

Sure. Thank you very much, assembly member. With your permission, I'd like to first turn to our witnesses to provide that that labor perspective, if you will, and then I have a couple comments as well.

Thank you.

Sure.

Through the chair, thank you so much for that question. I'd like to make a few notes regarding cybersecurity. In the definition of automated decision system, we pulled that from government code that is an existing definition of ADS. And in that definition, it explicitly exempts, or does not include firewalls or antivirus software. So in instances where those tools are used for cybersecurity purposes, they would not be included.

So just wanted to make that note. Regarding surveillance definition, you know, we worked with committee to, really only capture tools that are surveillance tools that are used and have AI capabilities. That was our attempt to try to streamline and, like, hone in on the intent and the scope of the tools that would require a notice. When it relates to broader surveillance or broader cybersecurity tools, you know, we're open to, you know, really addressing that issue.

You know, we don't wanna lead to any, proprietary information leaking or in the issue, relating to, you know, what types of tools, we're open to to addressing some of those questions.

Yeah. And certainly, there's a array way beyond the cybersecurity tools that you that you mentioned. So I that I think that that's definitely something that would need to be addressed before before I would feel, comfortable. The other question is, tools that are directly used for surveillance and then the def kind of how do are you defining indirectly? Because that could be huge disclosure, required.

So, for instance, if you have a camera outside that's looking at the public and it happens that there might be an employee in the background, is is is that indirectly? Is that directly? How. Is there a way to narrow the indirectly or is the indirectly necessary?

I I think, it's sufficient to say that while there's still some concern about that balance of direct and indirect, I think that the benefit of time would allow us to have more conversations with the opposition to see if we can narrow it. I can tell you that while we have had conversations with among many of the opposition folks, the California Chamber of Commerce, my office is still waiting on proposed amendments from the California Chamber.

We'd like the chance to work with them and see if we can address some of those concerns. And that's what we're asking for today is the opportunity to do so.

Alright. And then thank you. I appreciate that. And I know that the amendments came very late so it's not really clear exactly to me if the opposition list is still as long as it was before.

I would argue that it isn't, however, I understand there are still concerns that they have as certainly expressed today.

Alright. And then, my understanding is if you let's say, talking about cameras again, if you why is it that you have to disclose the make and model? Because, again, if we are talking about threats of hacking, it it is much more likely if if you are disclosing, you know, very specific information about cameras.

Definitely.

Through the chair. Yeah. For us, from the labor federation's perspective, we wanna make sure that we're informing workers of certain AI tools as they're coming into the workplace and some of their developers. For example, you know, anthropic, ClearView, a lot of these tech developers that have been mentioned in committee in previous issues, they develop a lot of the tools that then come into the workplace.

We believe it's necessary for workers to know if these tech companies are gathering their information, especially as there is the concern around data privacy and where their data ends up leaking or seeping.

That being said, we've streamlined the notice to try to make it more broad to prevent some of these security issues that were mentioned by opposition and highlighted in your question. So if there is refinement needed to make sure where a specific serial number isn't mentioned, then, you know, we're open to those conversations.

Yeah. I the the that's if they're collecting data, certainly, I think that that should be, disclosed. But the serial number we we've seen we've seen a lot of instances of security cameras being hacked, and it seems that the more information that you're giving the bad guys, the more likely it is that those security cameras would be hacked. But Right. So the so I I agree with part of what you're saying.

I think that that would be a real concern and should be disclosed the information, being gathered, for these outside companies. But, but we also don't wanna create additional problems with, security and hacking. And and, so I I look forward to seeing, seeing your work with the opposition and if you can address some of these concerns.

Thank you, Assemblymember. We aim to do so.

And I'll make two points. One is, just so we all understand, the bill does not require public disclosure of any of this information. It is directly to the workers, so nothing says it has to be listed on a website or anything of that nature, which I think is an important distinction, although a lot of what you said could still get out.

The other thing, is I will say that, you know, the amendments are in print today, but this committee did work with, the author and the sponsors on amendments narrowing. For example, one of the issues the chamber had was about names of who received it.

They were very happy to remove that. We've generalized it. And so we've seen a willingness to, for sure, work and amend the bill, and I imagine the same will be true as in those words. So thank you to both of you for your willingness. Miss Wilson.

Thank you, chair. Thank you to the author for bringing this bill forward. You know, I think the intent is really centered around workers and protecting workers in the workplace, and then being aware of how they're being surveilled as well as, as well as, being able to know when that factors into a hiring decision. And I think that's key and paramount. At the same time as I support the overall intent I do think the language is still, even with the amendments, broad in nature.

And should be refined. I think some of the concerns around security are valid, whether it's security from cybersecurity or just being aware of what's happening in a workplace that other people can take advantage of, including workers. Right? And I do think that there's some federal, like as it brought up, some of the opposition, a federal, you know, federal factor associated with it. And so I think that should be taken into consideration.

I had the time I had the opportunity in a prior career to be a internal auditor, for a county. And, and this is definitely prior to the common use of AI. And I remember having to be charged with sensitive information as related to surveillance and things like that.

They were very different that another worker wouldn't see, but I as an internal auditor inspecting that would because there were things that we didn't want to that just in that environment, not the AI environment, that, if got out in any shape or form would be highly sensitive and put the county at risk. And so so that's why I think the refinement needs to be there because that was pre AI.

And I do recognize that when you walk into a building, most buildings where people work, it will say under surveillance. So we we do have already existing protections and saying that some that you're under surveillance when you go in. But now that we have AI that could actually very quickly digest that data and and do weird things with it, we need protections.

And so I'll be supporting, you know, the bill today, and I just ask that you continue refining, to make sure we're, like, we're balancing the needs of workers, which is paramount with the insurance that, we're not creating undue risk or harm, to the organizations that are employing those workers. And I think you can strike that balance, and so I support you.

Thank you.

You have my commitment for the record.

Thank you, miss Wilson. Mister Hoover?

Thank you, madam chair. Thanks for bringing this forward. You know, I think as has sort of been noted, I think there is a lot of agreement on the goal of this bill. Right? And so even in the opposition's letter here, you know, at the top, it says as a general manner manner, we do not object the concept of disclosing information about automated decision systems or surveillance technologies.

So so I think that's a really good starting point. And as, you know, my colleague just said, you know, I think it really is about striking a better balance. And so, I I guess I was I was just reading the governor's veto message from last year where he brings up a lot of the same concerns that are being raised here today. The bill imposes unfocused notification requirements. It also proposes overly broad restrictions on how employers use ADS tools.

And so how are you sort of looking to get to a place where maybe, you know, obviously, there's concerns from the governor who needs to sign this bill, can address some of the governor's concerns, strike a better balance, and sort of address well, I I realize maybe amendments haven't been provided. I mean, the letter that has been provided is pretty thorough on sort of what I think would strike a better balance. So just curious where you plan to go next on this.

Absolutely. After I give my comments, if my witnesses have anything to add, please feel free through the chair, of course. But look, I I believe there is a path forward. And with nothing but absolute respect to mister Micheli, the veto message on s p seven is not entirely applicable to this bill. They are different approaches and different bills.

I could go on and on about how SB 7 prohibited the use of certain tools in the workplace. This bill does not seek to do that. We believe that the current version of the bill, while not perfect and certainly need more work, is already more focused than some of the requirements in SB 7. Our invitation to the governor's office is that if he and his team do not feel that it's focused enough, we want to work with them as we want to work with the opposition.

We believe there's a path forward here.

And I'll also note just briefly before I turn it over to them, this is what we did in the course of one week, one week of conversations between the last committee and this committee. There was a concern about the workers having the ability to effectively veto the use of the technology. That was addressed in the course of the week. We refined the definition of workplace surveillance tool, perhaps not to the satisfaction fully of the opposition, but I would refer you all to section 1600 /.

That we did in the course of a week.

We also addressed at least tried to address some of the concerns about the leakage of proprietary information, and we broadened it to include the categories of of data collected as opposed to specific data collection. The point I'm trying to make is that's what we had an opportunity to do in one week. What we're asking the may the committee to do today is to give us the chance to continue working with the opposition to do it and to bring it full circle assembly member.

We want the governor to be involved in this too. We don't want him to wait for this to land on his desk.

If he has concerns, let's work together now.

Through the chair, I completely agree with the assembly member. I'd also like to note as a sponsor of SB 7 last year, there were multiple other provisions, relating to how ADSs are used in the workplace. As the assembly member mentioned, this bill is just streamlined and focused on notices. We took that veto, and wanted to have the streamlined approach. And as we've indicated today, we know we're more than willing to work and continue the conversation.

I I don't know if my witnesses have anything else they'd like to add.

Thank you so much.

Yeah. Sorry. I'll just Sorry. Close here then. Appreciate that.

And I I will say, I do appreciate the direction things are moving in terms of, you know, addressing, I think, that veto power. I think that was a really fantastic amendment.

But, you know, I I will just point out that while I do agree with you that this bill doesn't explicitly ban, right, the use of technology, I think the current broad nature of it and the current litigation risks that that it would create, sort of, indirectly would prohibit the use of a lot of these technologies because, it would really make employers, particularly small businesses. Right? But but even large employers, you know, unwilling to want to take those risks.

And and so I think when we're when we're talking about the idea of balance, certainly, we'll not be able to support the bill today, but would love to get to a point where I could at some point in the future.

I think that just today, this current version does not does not strike the right balance and would love to see a a, a bill that really allows the use of a AI as a tool because I think we all agree it can be a very useful tool, but that also protects workers from maybe some of the more harmful aspects. So appreciate it. Thank you.

Thank you.

Thank you, Assemblymember. See oh, yep. Mister Lowenthal.

Yeah. I just wanna thank the author for bringing this bill forward. I think it's critically important. It's, one of the great problems of our time. I say that as a business owner.

You know, worker morale is one of the critical things that we think about on a regular basis as business owners. In in terms of optimizing our business, increasing product productivity in in every single way. So thank you so much for doing this. And I'm I align myself with my my colleague actually from Sassoon. I I feel there's areas that need to be worked on even further, and I'm confident that you will be doing those things.

I wanted to ask you about two questions. One is about optimizing inventory, and you and and having those tools, which really isn't about workers, but is really about inventory, and and what your thoughts are. And I'd love to hear both proponents and opposition, you know, thoughts about that and worker safety and and things around those fronts. Not everything is anti worker, you know, as it relates. There are lots of pro worker, management, out there.

And so we don't wanna throw the baby out with the bathwater. And so I wanted to get your feelings on those topics.

Absolutely. I'll just offer a brief comment, and then I think hearing from all the witnesses might be most beneficial. But I would agree with you, assembly member. You know, there are valid re AI can be a helpful tool in some instances. And certainly, when we're trying to advance workplace safety, inventory management, perhaps there's a place for it.

That's why this bill does not seek a ban or a prohibition on the use of tech those technologies. It is trying to strike that balance about having an informed and educated workforce. So with that, I'd like to turn it over to our witnesses, and we'll see if anyone else has anything to add.

Through the chair, regarding the inventory, that requirement is of AI tools as required in under the disclosure and of the notice. So we're just trying to capture all these tools that we are trying to get the notification of, so it's just that ongoing inventory. Anything outside of the scope of the initial disclosure would not be included in that inventory, so wanted to bring that forward. Regarding safety, you know, our affiliates represent the workers, and our goal is always to make sure that the workplace is safe.

If there's not a safe working environment, we have failed as, you know, of labor federation or as a union to ensure that workers have the best environment to to operate and to work.

So for us, safety is paramount. That's why in our language of the disclosure, we're requiring the general locations of certain surveillance equipment or tools, and that provides a lot of discretion to employers to make sure that they're not, you know, leaking any safety issues or making it so specific to a point where you understand or a person who is a malicious actor can understand how to operate or move through a work a workplace to

So to to that end, what if if I may, Madam Chair. So to that end, the disclosure process isn't necessarily a pain point. It's not necessarily a pain point. The disclosure process is not necessarily a pain point. It's informative where there may be a and management alike.

Is that correct?

I'd agree.

Correct.

Yes. But yeah. I think I understand that question correctly on the inventory type tools. It sounds like that would be required to be disclosed to workers, and those kinds of tools are being used. I think part of our concern is at what point do you know, are tools like that versus something that more directly impacts workers' potential adverse actions against workers or things adverse actions against workers are being required to be disclosed.

And at what point do you have an odor over noticing problem, right, in the volume of the number of tools that we have to give this 11 piece notice about? I think that's some discussion that we should have as far as refining some of those definitions, if I understand your question. And then, yes, workplace safety for us is paramount as well. And that's been a big focus of ours, especially these last two years on some of these bills. You know, I I also handle workers compensation.

And so the more conferences I go to about risk management and workers comp, there's a lot of tools out there that are actually reducing workplace incidents and assisting with risk management. And so we wanna make sure that, of course, employees are, as we discussed, you know, generally aware of some of these tools being used.

But we want to make sure that nothing is deterring the use of these tools or that we are not giving so much information that they are able to be evaded in some sort of way. And so again, striking that balance as we move forward.

Thank you.

Okay. Thank you. Seeing and hearing no other questions, you can sort of okay. I wanna thank again thank the author and the opposition sponsors, of course, for their engagement on this bill. You know, the the analysis itself notes that we aren't sure that it really does narrow as much as maybe it should to make the notices meaningful to the worker.

I think part of what you're trying to achieve is that workers understand, and I think, Mr. Gusman did a good job of explaining this. If I'm a driver in a car and it's watching my every move, I should know that. You know, you I had a conversation last year with the Chamber of Commerce about tools that when somebody walks into a worksite, make sure the PPE is all on properly.

Isn't as if to say, I don't believe the author thinks that's a bad tool, but the worker absolutely has a right to know that's happening. And, you know, I'm of the belief that this is actually something that we can, by the end of the legislative process, see agreement on because in order for these notices to be meaningful, they can't be so expansive that the workers like, you know, everything in California causes cancer.

Right? That's sort of where we are with some of our warnings these days, and so we all ignore that. We know that. And that's not what we want for this. We want this to be the tools that are really, that are surveilling workers, that are affecting workers every day and that they understand that, that they are engaging in a way that, is understanding that they've in some ways can, you know, enter the job understanding what these tools are.

I know there are other bills that will address other aspects of AI surveillance, but this is really a knowledge piece. And so, again, I think that, we, you know, we all believe that some of these tools, may make sense in the workplace, but that workers have a right to know. And so I think that is where the author is trying to go. And I do believe you can get there. And again, thank you for the amendments that you've taken here today.

I was personally concerned about the, the rights of workers to not sign and then the tools would not be able to be used and you'd address that like that. So I, you know, like I said, I see your willingness to address it and I think you will continue to do this so that at the end of this process, these are meaningful to everybody, including the worker. And with that, would you like to close?

Just very briefly. I would mention first that the bill received bipartisan and unanimous support in the previous committee, and we're hoping to see something akin to that today. It just sends a message. May not be possible, but I gotta ask. Number two, I would say, look, what we're asking for in my view is not that controversial.

I wanna throw out one more point to close the conversation. In 2022, as noted in the committee analysis, the White House Office of Science and Technology released the blueprint for an AI bill of rights. This is what we should be doing. We're trying to codify best standards, best practices. And so my invitation to the opposition should it get out of committee as we're waiting to see those proposed amendments.

We want to work with you. My ask of the committee today is give us the chance to do so. If it doesn't pass out of committee today, you're you're you're silencing the conversation. This is far too important. It should have an opportunity to move forward.

And with that, through the chair, I respectfully and humbly ask for an aye vote.

Thank you. We'll take a motion, which I know we have. As soon as a quorum, this is like a comedy show. One person walks out, the next walks in. So we have yet to achieve a quorum, but hopefully, we will soon.

Thank you.

Thank you. Thank you.

And mister Wardleff. So mister Lowenthal, are you ready? We will move to ab 2076 by mister Lowenthal, and I will, begin this presentation by expressing my immense gratitude to mister Lowenthal on working with the committee, on the amendments that I think are being taken today

or they are in print, the amendments that are in print. Look, this committee is so good. I really appreciate your willingness to work with us on this.

Madam chair, it's quite the opposite. I want to thank the chair and the committee staff for the thoughtful work and the recent amendments to the bill, and and if I could quote my staff hello. Hello. If I could if I could quote my staff, they all said, man, the bill looks so much better now. Really makes sense.

So thank you. AB 2076 does two things. It adds nitrous oxide to the list of products requiring age verification for online purchase under the California Parents Accountability and Child Protection Act, and it strengthens enforcement by increasing penalties for large sellers who fail to comply. Nitrous oxide, which is commonly known as laughing gas or whippets, is increasingly ending up in the hands of young people.

What was once primarily a medical and culinary product can now be ordered online by a teenager with a few clicks and a prepaid gift card.

It is cheap, it is easy to find, and it is being delivered straight to doorsteps with little to no barrier. And the health consequences are severe. Regular and recreational use can cause nerve damage, vitamin b twelve deficiency, and in severe cases, paralysis or death. In fact, it is so dangerous that everybody knows the high one gets from a whippet, their brain cells dying right then and there.

California already has a framework in place to keep dangerous products out of children's hands, but we know it isn't working.

Just this past fall, the Children's Advocacy Institute at the University of California San Diego School of Law investigated whether major online retailers are actually complying with the Parents Accountability and Child Protection Act. The findings were alarming. I believe mister Howard is here. Researchers were able to purchase restricted products using prepaid gift cards with minimal age verification. In one test, a researcher submitted a false driver's license and a birthday to buy a BB gun, and the order went through anyway.

The BB gun was then left unattended in a shared apartment courtyard. No adult signature, no ID check, just dropped and left. And that is the system that exists today. And nitrous oxide, whip it's easily searchable, cheaply purchased, and deliverable to any doorstep, fits squarely into that gap. The current penalty of $7,500 per violation is not a meaningful deterrent for large scale sellers, and frankly, is not an enticing number for prosecutors to pursue either.

When the cost of litigation can easily exceed the potential recovery, enforcement becomes impractical. AB 2076 addresses this in a targeted and proportionate way. To protect small businesses, the enhanced penalties only apply to sellers with more than 25,000,000 in annual gross revenues. For those large sellers, courts will have discretion to impose penalties of up to $250,000 per violation when necessary to deter future violations.

The punishment should fit the scale of the violator, and a b twenty seventy six gives courts the tools to make that happen.

No parent should have to worry that their child has can order nitrous oxide cartridges as easily as ordering a book. AB 2076 closes that gap and gives the parents accountability and the Child Protection Act the enforcement power it is always needed. I'm so pleased to be joined by Kristen Heidelbach speaking in her role as a parent, and Matthew Gallagher, the deputy deputy DA from El Dorado County, both here to testify in support of BA 2076.

I was wondering in what capacity she was here, but I'm here for it. Okay.

I I'm speaking in my capacity as

a parent too, madam chair.

Let's be clear. We always are whether we say it or not. So three minutes in the test.

Good morning, chair and committee members. My name is Kristen Heidelbach. I'm here on behalf of my children. As a parent, I I unfortunately had terrible experience of my 16 year old using Amazon to procure hemp cigarettes that were marketed as an herbal alternative. I had no idea that she opened an Amazon account.

She was able to do this, had the product delivered, and as I got ready to testify on AB 8, a bill that would have at least reined in some of some of the hemp discussions that we were going through, she walked into my room and apologized and said, I'm sorry that I bought this. I didn't realize what I was buying, but I noticed on the side that it has THC and CBD percentages, and she gave me the box.

So kudos to Charlotte for giving it to me, but I immediately asked her how she was able to obtain this particular product. And she told me that she went to the grocery store and bought a gift card using her Apple Pay, which I used to pay her for certain chores that she gets done, and she was able to buy hemp cigarettes. Sadly, the problem is not going away.

She's also shared with me. She's got friends who have been able to procure tattoo guns on Amazon. So when we have this unchecked power and really, we have certain profitability versus being able to actually hold the business accountable. So thanks.

Chair members, Matthew Gallagher, deputy attorney with El Dorado County. By way of what I do, I specialize in the prosecution of narcotics. Unfortunately, we have seen a mass explosion in the use of nitrous oxide not only by adults, but especially by juveniles. In El Dorado County, we've seen an increase of 400 percent with nitrous oxide cases. And all too often, it's just not the use of nitrous oxide.

It's domestic violence. It's driving under the influence. It's assault with a firearm. It's not just the possession of nitrous oxide. It's the crime that results of it.

And El Dorado is not alone. In San Diego County, they had 75 cases just in 2025 alone, and seventy percent of those involved, people driving. And that resulted in numerous deaths, one that killed, a young 19 year old driver, a police officer, and another wife that was unfortunately lost.

But what brings it to this committee is the fact that these people are able to buy them online. They're able to buy them in smoke shops. A survey of 300 stores in San Diego County smoke shops all sold this. In El Dorado County, at least 85% of smoke shops sold nitrous oxide. And when I spoke to an undercover narcotics detective, he said all too often, they sell it to minors.

It just happens. It's happening every day. With that said, we thank the committee for their thoughtful analysis and amendments. We thank the author for his leadership, and we respectfully urge an eye vote. Thank you.

Thank you. Anyone else here in support of this bill? Name, position, and organization?

Good morning, madam chair, members. Ryan Sherman with California narcotic officers in support. Also in support, we got our letter in late. There's a number of police officer associations around the state also in strong support of the bill.

Thank you.

Madam chair, members, Sarah Flock, California Federation of Labor Unions in support.

Thank you.

Nora Angeles with Children Now in support.

Madam chair, members, Ed Howard, Children's Advocacy Institute at the University of San Diego School of Law. Proud to cosponsor the bill and proud support.

Thank you. Do we have any witness primary witnesses in opposition here today?

Brief comments.

Great. We love brief comments.

Yeah. Good morning, Chair and Members. Robert Boykin with TechNet. We appreciate the work with the committee, the Chair, and the author on this bill so far. The amendments are moving in the right direction and address some of the concerns you raised. And we are currently still reviewing them, but look forward to continuing to work with you and your office or anyone else. Thank you.

Thank you. Look at that.

Thank you, Madam Chair and Members. Annalee Augustine here on behalf of the Civil Justice Association of California. Also very much appreciate the amendments and the direction this bill is moving. Still in an opposed position as we review those further. Thank you.

Ryan Allain with the California Retailers Association. We're in an opposed unless amended to the previous version. Looking at the amends, and we appreciate working with the author's office. Thank you.

Good morning, Madam Chair and Members. Robert Moutrie, California Chamber of Commerce. Again, appreciate the amendments. Opposed not to the whippits portion, but some of the other changes made by the bill. Thank you.

Good morning, Chair and Members. Naomi Padron on behalf of the Computer and Communications Industry Association. We would align our comments with that of TechNet. Thank you.

Thank you. Bringing it back to the committee. Yeah. Ms. Petrie-Norris.

Good morning, Assembly Member. I just wanna say thank you for bringing this measure forward. So important. You know, would love to move the bill at the appropriate time and would love to be added as a co-author.

One more, team. Ms. Wilson.

Thank you to the author for bringing this forward and, you know, need to protect kids. And also taking advantage of the fact that new things should be added to this list when we see that they're a problem. One of the concerns or the actually the only concern I really had about the bill was centered around preventing purchasers from using a gift card.

And I wanted to make sure I understood that clearly because it sounds like it's for all the products that are listed because this is just being added to a list, and it sounds like no matter the age. Is that an accurate reading of the bill?

Yeah. Madam Chair, do you mind if Mr. Howard answers technical questions in regards to the bill?

Yeah. That's fine. Thank you.

Madam Chair and Members. Ed Howard, Children's Advocacy Institute, University of San Diego School of Law. The gift card prohibition would only apply to the items that are the most potentially injurious to children that are purchased online.

That would include BB guns, BB ammunition, tobacco products, e cigarettes, and what is called in the law a less lethal weapon. We're talking about there are large Bowie knives. So the gift card prohibition for purchases online would not prohibit the purchase of the other items, but would prohibit them.

And just if you could stay for one moment, just make to answer the other thing, it's no matter who it's purchasing, not just children.

That's correct.

Okay. And then, and so could you explain why we're limiting consumer choice to use that mode of purchasing in comparison to a debit card or a credit card because all of those don't require ID when you're purchasing them online.

I think that's something that we can take a look at, Assembly Member, closely. So we're happy to take a look at that. Thank you for pointing that out.

Okay. So that is, I think that's a big flaw with it. I think that takes something that is really goal and then take away a choice. Because the assumption is, as I heard even from the testimony, that the person had access to a way to pay and then use the prepaid card to hide the purchase. Right? And so an adult can purchase these things.

When you use your debit card, there's no ID required online. When you use your credit card, there's no ID required online. And so you're limiting someone's ability, adult, to purchase goods using a prepaid gift card.

And I remind people prepaid gift cards are not just, you know, the Visa and Mastercard, but also a Lowe's card, a Michael's card, places that sell these types of things. So I just wanted to be mindful of that.

Assembly Member, this is worthy of discussion. I appreciate you bringing it forward. I think one of the components about a gift card is there is a name attached. Excuse me, a credit card, there's a name attached to. A gift card, there's not. Madam Chair.

Nobody move. We have a quorum. If you don't mind, Mr. Lowenthal. Can we call attendance?

[Roll Call] We have a quorum.

We have a quorum. You can move now.

I'd love, Madam Chair, if you could comment on this, but I think these were in the amends taken, Assembly Member. And I think that the concern here is that when you have a gift card, you're, since it can typically be anonymous, there's no way to verify age whatsoever. Is that was the concern of committee I believe.

So we honestly narrowed the bill significantly.

Oh, I understand. Thank you for doing that.

So in so doing, we tried to get at, and I do wanna express my gratitude to, we worked with one of the largest online sellers in having these conversations and understanding how they do their work. And one of the things that the study that the author and his team showed us was a study that showed that the way kids are buying these things, exactly what you heard here today, is that they are not buying them.

I mean, I guess they could be buying them on their parents' Amazon account, if you will. There's no way to know that is the child versus the parent. There's no way for anyone to ever decipher that. But to the extent that they are doing it in a way that hides it from their parents, they're doing it with gift cards.

And prepaid cards because they don't have, in most cases, a debit or a credit card. And if they do, again, it's not anonymous. Right? You have to in order to get one of those cards, you have to have shown identification and your name is attached to that. And so

To get one of those? Wait.

To get a credit card or a debit card. Right? To receive one.

But if you're not doing verification of age for that purchase, then I don't see how it matters what tender you're using.

Because well, because the liability does land on the seller in this bill. And so the sellers will have the motivation to make sure that they are not selling to children for the most dangerous things. And that is why we limited that piece to the things that clearly we believe and you heard today we're focused on in the bill.

And so we thought it was the way to get at what the author was trying to achieve here, which was to stop youth from buying that since the study showed that almost in every case, when a youth is buying these things, it is through a gift card.

And we didn't believe we were limiting adult choice that much because it is, again, a very narrow list of things that they can't use that gift card on. They obviously can still use the gift card for anything else sold on these online sellers.

And so we believed it was a narrow way to get at this problem that, again, still allowed people to use those cards in a vast majority of ways. So it was really an attempt to, while narrowing the bill, achieve the goals of the author, and we believe that it takes a huge step forward.

And I will tell you that, you know, especially with the way gift cards are handled in California, which means you don't lose that money. Right? I mean, we have a lot of protections around gift cards here in California. We're not concerned that that would hurt adults.

I would say, beg to differ. I think that adults should have choice in how what tender they use for whatever purchases. And I think that putting the liability on the seller to verify age for these products makes perfect sense, including if you use an anonymous gift card that doesn't have a name attached.

Doing, requiring that they affirm their age or affirm who they are, like, you can't check out as a guest, so to speak, which is allowable in most commercial places is good. But I do think preventing the use of gift cards, using this as a way to prevent the used cards does impact adults.

I'll be supporting the bill because overall, a 10 is good. I just think that seems glaring of why we would limit consumer choice for adults as it when there are other ways to get at verifying those types of purchases and making sure that they're of legal age and not doing it by form of tender. Thank you.

And I will note that we did work have a conversation with the author that he was amenable to using Assembly Member Wicks' age signaling bill. The problem is today the bill does not apply to websites.

And so there was still gaping holes if we were to use that technology. She's working on updating that. And so in the future, if that were technically possible, we could look at that. But at this time, this was the cleanest way of doing it. Yeah. Ms. Irwin.

Yeah. I will definitely be supporting the bill, and it happens I'm doing a bill also trying to ban certain items from online sales. But I just, I do have some concerns that are similar to what Assembly Member Wilson said.

And it's a completely different part of the age range. My mother is 86, and she thinks that the only way she can buy off Amazon is with a gift card. And then I said, well, just put your credit card on there.

And she says, well, I don't want Opa to see what I'm buying. And so she goes to the grocery store, buys a gift card, and uses that for her purchases. So just there might need to be a little nuance on that. I don't think...

She's not in the whippits, is she?

She's not gonna be buying whippits or some of these other things, but she might... She may be. She's 86. Who knows? But there's an, I didn't hear the list of other items. But I understand how it's a solution because there's with credit cards, you have to have a name attached, but there is there there could be some complications.

This is tricky. Yeah. I appreciate your points. Assembly Member, if it might if it be okay with you, Mr. Howard, would you mind reading through the list again for on the Assembly Member's behalf?

Of course. Morning, Assembly Member. And through the Chair. It is weapons, BB guns, ammunition, tobacco products, e cigarettes, and, quote, less lethal weapons, which as defined in current law commonly means things like Bowie knives or hunting knives.

Well, you know, she does have her vapes, and so I don't know if that would be if she wouldn't be able to, my 86 year old mother. So it just might, it just, there just might need to be a little bit of nuance.

This committee always takes turns that just surprise me. But thank you, Assembly Member Irwin. Anybody else have any questions?

I think, to both my colleague from Suisun and my colleague from Thousand Oaks, I would say that we will continue to have discussions on these. And if there are ways, we will be happy to explore any ways that could be tightened that we're not thinking of right now as this bill moves through. And I appreciate you both for bringing these up.

Amazing. With that, it seems we have no further questions, and we can entertain a motion and a second. So we have a motion and a second, and we will call the roll.

Item number five, AB 27...

Did I let him close? Did you wanna close?

Respectfully ask for your aye vote. Thank you.

Thank you, Mr. Lowenthal. I agree with my colleagues that this is a really important effort to protect kids, and I appreciate the witness is being here to describe that. With that, we'll call the roll.

Okay. AB 2076 by Assembly Member Lowenthal. The motion is do pass to the Judiciary Committee. [Roll Call]

That bill has seven votes. We'll leave it on call for absent Members. Thank you. If anyone wants to entertain a motion on the consent calendar. We have a motion and a second. We'll call the roll on the consent calendar.

On the consent calendar, item number two, AB 1571 by Assembly member Michelle Rodriguez. The motion is do pass. Item number three, AB 1640 by Assembly member Stephanie. The motion is do passed to the Judiciary Committee. So on the consent calendar, do passed to the consent calendar. [Roll Call]

And I know that we had an attempted motion by mister Lowenthal, miss Ortega on the Schultz bill. Did you wanna make a motion? No. K. This is on ab 1898. Well, I just did that one. Sorry. Schultz is Schultz 1898.

[Roll Call]

if do we have a that bill is six votes. It is on the call for absent members. We have a motion on ab 1705.

So moved.

Motion by mister Ward. Do we have a second? Second by miss Wilson. Call the roll.

[Roll Call]

Thank you. First aye of the day for mister DeMaio for me.

[Roll Call]

That bill has eight votes. It is out, but we'll leave it on call for absent members. And now thank you, mister Ward, for your patience while we did that. We will move to ab 2564.

Thank you, madam chair. Members, this bill is a reintroduction of a bill this committee passed out last year in a b four four six with, significant improvements that we worked on, with a number of stakeholders, during that bill's lifetime. So I'm proud to be able to introduce to you a b twenty five sixty four, which will continue the work that we need to do on an issue that is affecting every consumer, and that is something called surveillance pricing.

Now right now, you know, companies are using personal identifiable information, which are collected on a consumer, like your age, gender, marital status, geolocation, or online search history, or any of these attributes, to adjust the price of goods or services based off of their perceived willingness to pay. Simply put, companies are using what they know about you, who you are, where you are, where you like to shop, how much you spend, even your location to decide how much to charge you.

Now at a time when prices for basic necessities are rising across the board, it is more critical than ever to ensure that people are not being unfairly charged higher prices due to their actual or perceived characteristics. And let's be clear. This practice hits hardest on lower income individuals and those with limited shopping options. Now while these practices are incredibly hard to track due to lack of transparency in pricing, we've been able to document them.

Last year, an investigation by consumer reports revealed that grocers created detailed profiles on shoppers based on inferences from data collected through loyalty programs and purchase search histories.

In January 2025, the Federal Trade Commission released a preliminary study indicating a wide range of personal data being used to set individualized consumer prices with the initial findings revealing details like a person's precise location or browser history can be frequently used to target consumers with different prices for the same goods or services. Unfortunately, with the change in administration, it seems that the FTC and the federal government have abandoned this issue, and it's very unlikely that congress will take any meaningful action.

So that's why California, in addition to a number of other states this session, are acting to be able to prevent surveillance pricing before it becomes an industry standard, and in fact, setting the best standard for this issue. Right now, legislatures are waking up over 30 bills have been introduced this year alone in both red and blue states. California has always been a leader in consumer protections, and we must ensure that we're not left behind at the expense of our constituents.

AB twenty five sixty four will put a stop to this practice to ensure that consumers are protected from predatory and discriminatory and discriminatory practices designed to maximize consumer spending. I understand, we will talk about some concerns for retailers or business owners whether discounts and loyalty programs are affected. We worked hard over the last year on exemption language to ensure that consumer friendly programs are protected, and we're gonna continue to commit to work to that, to further refine that language.

We want to ensure fair fairness in pricing because it's not just about economic justice. It's about preventing a new form of digital exploitation.

We believe that fair pricing should not be a privilege. It should be a right, and that's why we bring this bill back before this committee here today. With me in support, I have Becca Kramer Mowder from the Consumer Reports and Samantha Gordon with Tech Equity. When the time is appropriate, I respectfully request your aye vote.

Thank you, mister Ward. Moving to witnesses when they're ready.

Becca Kramer with Kaiser Advocacy on behalf of Consumer Reports, proud sponsors of AB twenty five sixty four. Ab 2564 would make California a leader on affordability by prohibiting surveillance pricing or the practice of discriminating against consumers by providing different prices to each of us based on what information the company knows, guesses, or has bought about us. Surveillance pricing undermines the concept of a uniform price.

Not long ago, before the rise of online shopping and mass data collection, we could shop anonymously, confident that the price tag we saw on the shelf wasn't influenced by the store's knowledge of our families, our shopping habits, our online browsing ability, ability to pay, or any other particular situation that could increase our urgency to purchase a particular product. That is no longer the case.

With surveillance pricing, the price that you see may not be the price that someone else sees, and you usually have no idea. Surveillance pricing hurts consumers in several ways, including by discriminating in prices based on who we are, pushing us to pay the most that we are individually willing to pay, taking advantage of us in moments of desperation when our willingness to pay increases, and driving up prices by hampering our ability to comparison shop.

Retailers only feel the need to compete to offer the best price if consumers can comparison shop with ease, identify the best price, and make a decision based on that knowledge. Ab 2564 will prohibit surveillance pricing while still allowing discounts that are generally available and transparent. In doing so, ab 2564 will help level the playing

Good morning, madam chair and members of the committee. My name is Samantha Gordon. I'm with Tech Equity. I wanna make just really two kind of broad points. First is, you know, I think in this bill, we often get deep into the details of the policy, and I'd like us to pull out and just have perspective about what's happening in the economy.

Right? As a woman going into a car dealership, there's a long standing trope. Right? I will often overcharged or pressured to pay more. I've never bought a car without a man with me, to be frank.

Right? So we know that that's something that can happen whether or not it happens to every single car salesperson, probably not. Right? But that's a thing that we carry in as a risk, right, with our gender to going to buy a car. Now think about this practice being spread all over the economy, right, in a way that we cannot see, we cannot feel, we don't know what data is being used to set prices for each of us.

And I think that's really the situation that Americans and Californians are responding to is to not wanna be in that type of economy, where whether or not it's happening is an open question. If I'm being priced differently because of my gender, if I'm being priced differently because of what I paid in the past. Yesterday, I was shopping for, you know, something, and I decided not to buy it. And then four hours later, it was more expensive when I went to buy it again.

So is that just because the supply went down, or is that because they knew I was shopping and debating about it?

So I think that's one big piece. The second is obviously the discounts, which I know have been a core question on this bill. The bill's been redrawn to carefully exempt long standing discounts like things for veterans, seniors, students, making sure that those discounts are individualized discounting.

And one piece I wanna bring up in this puzzle is something that often doesn't get discussed, which is what some did fictitious pricing, where retailers inflate the advertised price of a product and then offer a discount on top of it, constantly moving the baseline price.

A study last year found 25 major retailers did advertise discounts, not as special prices are in savings, but really all retailers were bumping up the reference price and then artificially discounting that so that you never actually knew the price you were paying.

And the investigation found that 12 of the 25 companies, shoppers found more than half the items tracked were offered at these kind of false discounts every week or almost every week that it was checked. So I think it's important that discounts don't become a misnomer for constantly moving the baseline price. What consumers are asking for is one product, one price, and making sure we're prohibiting practices that use technology to artificially inflate all of our costs, and we respectfully ask for an aye vote.

Thank you both. Anyone else here in support of this measure? Name, organization, and position. Yeah. I know. It's. Everyone wants to touch the mic, but it's horrible.

Mariko Yoshimura. Registering support for Consumer Federation of California, Oakland Privacy, Privacy Rights Clearing House, American Federation of Musicians, Local 47, Secure Justice, Western Center on Law and Poverty, Courage Campaign, and Equal Rights Advocates asking for support.

Thank you.

Mitch Steiger with CFT, a union of educators and classified professionals, also in support.

Navnit Puryear on behalf of the California School Employees Association in support.

Good morning. Beth Mamowski, the SEIU California in support. Thank you.

Good morning. Scott Brent, SMART local 1201 in support. Thank you.

Good morning. Jason Haenel on behalf of AFSCME California in support.

Yvonne Fernandez at the California Labor Fed in support.

Tasia Stevens on behalf of UDW, AFSCME Local 3930 in support.

JP Hanna on behalf of the California Nurses Association in support.

Madam chair, members, Louis Costa on behalf of the safety and legislative boards, Smart Transportation Division in support.

Thank you.

I just want to start early.

No. I appreciate that, and we will wait. We are patient people.

That's all. Yeah. Oh, thanks. Appreciate it.

Now that everyone's comfortable, when you are ready, go ahead.

Good morning, Chair of Committee. My name is Ryan Elaine, Vice President of Government Relations with the California Retailers Association speaking in opposition to 2564. I wanna start by saying that we've been in communication with the author, staff, sponsors, committee, and those conversations will continue. First thing I'd like to say that this bill compared to a b four four six from last year has a major difference as this bill only applies to retailers of tangible goods and not services.

And just wanna highlight that a few of the examples that were of surveillance pricing in the analysis were actually considered services and therefore not covered under this bill.

The main issue that we have with this bill is how it applies to using personal information to raise and lower prices. While there are some exemptions for certain, types of discounts, we believe that if the fundamental concern is about using personal data to raise prices for consumers, then the focus of the bill should solely address raising prices.

For example, part of the conditions that would allow retailers to offer discounted prices include listing available discounts, which change frequently, and one wrong listing could be an that could be an unintentional oversight, would be in violation and result in a penalty up to $12,500 per violation. This liability adds to the compliance burden that retailers would face under this bill and ultimately risk the availability of discounts for Californians.

Again, as I mentioned, unfortunately, this bill is not limited to preventing higher prices, targeting discounts, and unlimited circumstances where discounts are permitted.

The bill sets forth those per, burdensome compliance requirements. This combination of civil penalties with burdens and compliance requirements may create a scenario where the number and types of these discounts are severely limited. For example, be prohibited to preemptively offer a dis a consumer discount on a matching pair of shoes after they purchase the dress. That consumer purchase address is personal information, and this discount does not meet the limited circumstance where discounts based on personal information are permitted.

Another example would be, permitted, that would be prohibited to offer consumer discounts on groceries to encourage them to continue to shop at specific grocer.

That consumer that the consumer dropped shopped at a grocery in the past is personal information. That discount does not meet the limited circumstance where discounts are based on personal information are permitted, and loyalty discounts are only permitted where the consumer has a firmly purchased or signed up for the program, in addition to posting all available discounts online.

I could provide more examples, but I could never provide a complete list, and I don't believe any list would be complete because pricing competition is at the core of the competitive nature in the retail industry. Retailers are constantly searching for ways to reach consumers with incentives that matter, which is a win win for consumers and retailers. So the question that follows, why not just target price increases?

One also thing I would like to mention is that fictitious discounts were mentioned earlier. Those are currently illegal under current law. There is established case law as well that back that up that you can't say something as a discount if there's no reference to a price within the past 33 months. Thank you.

Okay. Didn't wanna interrupt, but making comments about my staff is one thing that will go remarked on in this committee. So since you threw shade at the analysis, I will note that the analysis specifically said the list was given by the sponsors. Moving on to the second witness.

Thank you, Madam Chair and Members. Robert Moutrie, California Chamber of Commerce. We are opposed to AB 2564 as a cost driver. For the core reasons flagged on my colleague, Mister Lane, that we see it as creating potential liability for us around the discounts that exist. I know the committee is familiar from last year's discussion too.

I just wanna highlight a couple of key pieces. First, to be clear, we not do certainly do not support personally targeted prices. I'd like to note that a number of examples given relating to gender and others are thankfully covered by existing discrimination law. I wanna just touch on two examples that have been given by the, by the sponsors, that have been flagged publicly. And, actually, given time, I'll probably only have time to get to one.

But I wanna touch on one that's been repeated often and show that we do not see evidence that these that this is happening, but we think the misunderstanding is gonna create liability for our members. Specifically, this is an SFGate article from 2025 referenced around the idea that online business was charging people different prices for the same room depending on the location you booked from. What actually happened here is that the author of the article did not include screenshots.

What appears is he looked at the California price booking in early twenty late twenty twenty four, actually. And because California had all in pricing laws in effect at the time, right, the price demonstrated if you book from California was the price of multiple nights with all fees, and so it looked higher.

Right? The states which he looked from, in addition, this was, Missouri and Arizona, did not have all in pricing laws in effect at the time. Subsequently, federal regulations came into effect which changed this and made federal then all states now do that. But the point is his research really discovered a difference in price disclosure laws and not a difference in surveillance pricing, though it's been cited that way. I won't have time to touch on the other examples just because I wanna respect the committee's time.

One other piece I wanna flag that we've discussed over the years is, over the last year, I should say, is vagueness concerns around some of the terminology in the bill. This comes up particularly in the context of definition of electronic surveillance technology. This was flagged the analysis. I think we will disagree slightly, but, electronic surveillance technology is, as an example, defined only by what it quote includes. Right?

The definition does not give you terms that you could define going forward. This would be like saying defining the term neighbors as saying this includes the house next to me. But does it include three houses down? Does it include the next street? Right?

A definition that only says this includes something does not help you predict going forward what is covered. Right? So that's some of the vagueness concerns we have had on the bill. I I think we have differed with analysis on that point, but I wanna flag that as where I think our concerns come from. There's a lot to say here, obviously, but in respect to committee's time, I thank you for the time.

Obviously, glad to continue to meet with authors and sponsors, but at this moment, we are still strongly opposed as a cost driver. Thank you.

Thank you. We have a motion. We have a second. With that, we will take additional opposition in the room. Name, organization, and position, please.

Hello, Chair and Members. Sophia Quach on behalf of the Chamber of Progress in opposition. Thank you.

Thank you, Chair and Members. Annalee Augustine on behalf of the Civil Justice Association of California in opposition.

Good morning, Chair and Members. Robert Boykin with TechNet in respectful opposition.

Cody Boyles on behalf of the California Grocer Association in opposition.

Jack Yanis behalf of the California Fuels Convenience Line, respectfully opposed.

Chair and Members, Matt Marietta on behalf of the Association of Action Advertisers in opposition.

Thank you. With that, seeing no additional opposition in the room, we'll bring it back to the dais. I'm gonna look on this side first this time.

Mister Patterson.

Well, hello.

Well, thanks for this bill. You know, I opposed a similar bill last year, and I think, you know, just wanted to I I I know what you're trying to get at and appreciate it. And even though I I don't necessarily think all the things that were identified are an issue. I mean, I I do know of retailers that have intentionally higher prices and then mark them down. That's kinda like their deal, you know, and everybody kinda knows that.

I don't so I don't know if that's really a problem in and of itself, but, you know, I I do have the the idea of surveillance pricing does concern me, but I don't think I'm we're quite ready to legislate on that yet because there could be so many benefits to it.

And I know you're not trying to stop those benefits, but they get kinda lumped in just the way the the statute has to be written and how it's defined and, you know, mention the ambiguous terms and things like that. But I I I like your intent. I just I don't think we're quite there. I'm not quite there yet.

The legislature maybe, but many times the legislature goes in a different direction than what Joe Patterson is ready for. But, but and feel free to obviously respond to my comments if if you'd like. But, again, I I don't like just the idea surveillance pricing. Surveillance, I hate it. You know?

It's it's it's terrible. But also, like, I the examples, you're kinda like, yeah, I don't really wanna regulate those. You know? And so, again, feel free to respond, but I I don't think I'm my position has changed from last year, at least, as of yet. So thank you.

Is what makes the legislature an amazing thing. Takes a majority. Do anything.

I'll, I'll respond when I close.

Do you want you respond. Okay. Anybody else have any questions? Okay. Mister De Maio, you can go and then we'll take miss Petronorz.

Like Mister Patterson, I also opposed the bill last year. And and the, I understand your intent, but I think the point can also be made that, various technologies can reduce the price of a product to someone. And we certainly don't wanna limit that. The state of California has applied so many onerous regulations to consumers and to small businesses and large businesses and retailers that we're a toxic environment for people to buy and sell.

And I think this bill, while well intentioned, just adds so many onerous regulations that can be hurtful to consumers and businesses alike.

So I think we have to go back to the drawing board. It's a good issue for us to be evaluating, but it almost smacks of price controls. And, we know from economics price controls don't work. It creates more scarcity and higher costs. And now we're getting into price regulation when the market is probably the best place, still better than government.

Are there flaws? You bet there are flaws. Are there benefits? Absolutely. But getting more government involved, I think, will have more negative consequences and positive impacts.

So with that, I I will continue to oppose. Although, I do appreciate the fact that you're interested in this issue and you're trying to make refinements in your bill.

Thank you, mister DeMaio. Miss Petrie-Norris?

Okay. Good morning. So before I I ask a couple questions, I I wanna just, I think, take a little bit of a step back. And I think just think philosophically about what it means for us in this committee to make any new requirement on a business. And for us all to all recognize that anytime we are placing a new mandate or requirement on a California business, that's not free.

That costs businesses money. Those costs ultimately filter down to California consumers. So I think that when we're looking at proposals before the committee, it's really, really important for us to make sure that there is going to be a consumer benefit that makes that, you know, inevitable consumer cost worthwhile. And, you know, as I shared with the author, I continue to have concerns about the proposal before us because I'm not actually sure that this is going to result in in any benefit for California consumers.

And in fact, I am rather persuaded by, I think, some of the arguments highlighted in the analysis.

So I think in but not the committee's arguments, but the arguments in opposition. So as noted in the analysis so I think surveillance pricing sounds really, really bad and scary and, you know, a lot of people wouldn't want it. But in per in is the analysis notes. In practice, personal pricing looks like this. Personalized coupons.

Your grocery store's app sends you a $2 off coupon for the cereal you buy every week or a deal on diapers because you have a baby at home. So, like, that would be banned under this provision. But, sorry, if this bill becomes law, that would no longer be allowed.

We would disagree, but I'm happy to answer Okay.

Maybe inside.

Or, you know, win back offers. You haven't ordered from your favorite restaurant in two months, they send you a 20% off coupon to come back. Card abandonment discounts, you put a pair of shoes in your online cart, but don't check out. The retailer emails you a 10% off code to complete the purchase. Like, those don't sound like bad things, and I think you know, I know that that certainly for the sponsors, I think your starting point is that retailers are using this for nefarious purposes.

I think in practice, retailers use this kind of personal personal pricing to I drew a little drew a little chart. Sorry. But this is so, you know, so this is supply and demand. Right?

Oh, boy.

So as That's a e-commerce. Right.

So let's say this is the price and this is

We we might actually have to take a vote on this. Price to a real price.

Price of an item goes up. Uh-huh. Like, a supply like, a supplier is willing to supply more of it. As the price of an item go up, there's fewer and fewer consumers that are willing to buy it. So this is the price point that becomes the, like, you know, that's the the price that's gonna be offered in the grocery store.

But the reality is that there's a lot there's a lot more demand under this curve where retailers are actually willing to sell if somebody you know, and and it's at a lower price. Yeah.

So by this discriminatory or just, you know, discriminatory surveillance pricing, I think what retailers are usually using that for is to scoop up that surplus, demand at a lower price point. So I I think I have a fundamental, I think, philosophical or just sort of, premise disagreement with the sponsors, and I'm not sure, like I said, because of that, I really don't think this is gonna save customers money, and I think it's gonna end up costing them.

And happy for, you know, the author or sponsors to respond.

Thank you. No. I want do you have a chart you wanna show us?

Oh, I'm about to to.

Would you like to respond or

I'd just a few things, actually. If I summarize, you know, from Mister Patterson, Mister DeMaio, Mister, Miss Petrie-Norris, a couple of things that are threatened here. One, I wanna recognize that, you know, some of the evolution that we've had on this bill when it was a b four four six to where we are here today, we worked on some of the enforcement issues already that I know you had concerns with last year.

Those have been improved upon, but we haven't heard a lot this morning or maybe we're sort of, like, dancing in the space about issues that we had. There was literally the central theme last year around discount for our programs, loyalty programs.

Those improvements, those amendments were taken over last year. Text was removed that we thought, even though it was explicitly carved out, would not be offended or not be captured by the implementation of this bill. Other text that was within the bill also led the potential for sort of a backdoor to, really capture, you know, the same. And so we've worked on that as well too.

You know, I would say with regard, to a few things, I'm just gonna go down kind of my list of notes here.

One, you know, I you know, we we heard about this, you know, being accused of that something is, like, you know, another mechanism for price controls or price, you know, price manipulation or something. This really is just trying to return us to an era of fair pricing.

And fair pricing is a concept in law that we wanna make sure that we are holding on to right now because other practices are creating distortions, in how people are being charged, and that is being charged according to a new individualized pricing, phenomena. I I have to underscore that there are four requirements that must be met considered a four point test that must be met for something to be considered as surveillance pricing. One, you have to be actually engaging and customizing the price of a good.

Two, you have to be that that customization would be good for one consumer or one group of consumers. Three, it must be based on personal information. And four, it must be obtained through electronic surveillance. Right? So if none of those are satisfied here, then this issue doesn't apply here when we're thinking of defining surveillance pricing, which, by the way, again, 30 states are working on this issue right now through their legislatures.

We would like to be able to set the standard and may be sort of a good national model because the federal government isn't, and they should take up this issue as well too. But we are all in collaboration and talks with the other states as well to see how we are all defining this and how we are working on this. I think we're ahead of the curve, and I think California continues to lead on this.

You know, with regard to, you know, what is happening here in pricing of setting of the, pricing, yes. I know that chart very well.

But the problem is is that for you, because you live in Orange County, which has a higher area median income than most, who live in The US, you go online and you go to the checkout cart, and you're actually paying something up here because it knows something about you. This is specific to you. This has nothing to do with what a natural sup price point should be for a good.

This is something that is using your own information against you, and this is where I think we've jumped the shark. And that is why we're trying to be able to define it, and we're continuing to work on this definition since it's the biggest challenge of this committee in any of the work that we do, and make sure and I think to the point of whether or not we're creating more burdens on businesses, this didn't exist a couple of years ago.

Right? And so just because we have a new phenomena coming in here that is solely about raising profits and that is memorialized in the McKinsey study as well, They've calculated how much by using algorithmic, pricing models and everything can use to be able to inflate your profit share. That is what we're trying to be able to do is say, like, this kind of a practice here has jumped the shark.

It shouldn't it wouldn't have any impact on businesses because we just want the consumer business relationship to go back to the way it always has been, and that is one of a very healthy balance that allows dynamic pricing, that allows other kind of ways that we price consumer services that we've always come to know. So I think that's some responses to some of your questions.

I I might have a couple other elements in my close as well, but happy to answer any more questions you have and, through the chair.

Thank you. I just wanna know if this was the first committee with dueling ad hoc charts because it brought me such great joy that I hope it happens more often. Assembly member Erwin.

As a data democrat. Right? I'm gonna be supporting the bill today because, obviously, we don't you know, we we we should be against discriminatory pricing, but the same issues that I raised last year, it is I I look at the opposition letter, and I am concerned that the the the liability will, potentially decrease the discounts that are being offered to consumers.

So we really wanna make sure this is a tool used for good to lower prices for consumers and not to and and obviously to deal with discriminatory pricing. So I will see what the bill looks like on the floor, but we'll support it today.

Thank you, Miss Irwin. I think miss Wilson.

Thank you to the author for for bringing this back and and trying again and and trying to find the right balance in between it. And I appreciate, the work that you were doing last year, was on as a co author and and shared my concerns, and I'll just note them here as you continue to work on it because I think discounts are important. I I have I am a regular Raley shopper. That is the grocery store in my community, the closest to my house.

I love opening my little app, and it telling me my personalized offers and reminding me that I need to go in and then buy a whole bunch more stuff.

Right? And so, I think, you know, people like getting discounts. And I think to my colleague's point, discounts that entice us to purchase Are really great, and and should exist and without additional burden. But paying more shouldn't exist where I'm paying more and there's no other difference between me and another person, but I just happen to pay more, should not.

And so I think that, given your work last year and trying to navigate and thread the needle and when you couldn't, you on you yourself pulled it back, to make sure that it wasn't watered down and that you could thread the needle and that you're back now.

You know, I think we all should give you the opportunity to continue to do that type of work and ensure that people can take advantage of discounts, be enticed to purchase, but not unfairly be discriminated against and be made to pay more, in comparison to someone else for no other valid reason. So thank you. Thank you. Do we already have a motion in all this upon this?

I don't remember now. Yes. We have a motion in a second. Thank you. So for miss Ortega.

I, wanna thank the author for working and bringing this back again. I wanna thank Assemblymember Erwin for reminding us about the fact that discriminatory pricing is happening. Whether we you know, it's it's now different. It's different from the example you gave at the very beginning. You know, as a woman, you know, when I was younger, I would never go into a dealer and without a man.

Right? Because that's what we were dealing, and it was very in your face. Today, it's not. Today, we're being surveilled everywhere we go, and discriminatory pricing is happening. And so I just wanted to bring that back to it just looks different because we can't see it.

We can't see it. It's not in our faces like it was, even ten years ago. So, you know, I I appreciate, the steps that have been taken forward by the author and look forward to voting for it today. Thank you.

Thank you, miss Ortega. Anybody else? K. I think that might be it. So I just wanna say, I really appreciated this conversation because I think we as a caucus, have said that affordability for Californians needs to be a top priority.

And, you know, we said that before gas prices got as high as they are today. And so I do think we should be diving in deep to figure out the actual impact of this. And so these conversations are really important. And I think I have seen since we saw it in this committee last year, because it did get far beyond this committee, that the author did work on the question of discounted pricing.

And and I think he will you will continue to, as you have mentioned here today because everybody loves a good deal, and Californians should be protected in getting that deal.

But on the other hand, you know, we we also know that there are examples of people who are getting prices raised on them based on surveillance online. Honestly, the real answer here is privacy. So, fundamentally, if we had better privacy online, we would be able to avoid the surveillance that is causing these manipulations. We have not as hard as California has tried, we've not succeeded and the surveillance continues, and now it's being used to manipulate prices in a way that does harm some Californians.

And so I trust that, this bill will continue to be a work in progress to ensure that at the end of the day, it is a cost savings for Californians, and that that remains top of mind for all of that.

And so with that, would you like to close?

Thank you, madam chair. And I as well, really appreciate, your chair, your leadership, your staff's, you know, really, close attention to this. And really the conversation through this committee is because, yeah, we are, you know, in a new frontier and we are trying to get issues like this correct. And, we've got, you know, one shot and then hopefully sooner rather than later, taking that shot to be able to really set that standard for not just our state, but hopefully the country.

I would close by just acknowledging a couple of things that do need to be worked on.

This bill actually did clear the assembly last year, made it through the senate. And I think because of the work that we do in this policy space, you know, things can go sideways there, so much so that it left us something to the surprise of myself, opposing stakeholders, others are certainly our supporters as well. And so we we don't want something to be, kinda completely, upended. We we wanna get this right, and that's why this, subject is back here in new bill form, before you today.

A couple of things that I know need to be worked on as we are, working together with, all stakeholders.

One is is that, you know, you we we so far have, you know, had to, underscore the issue that, you know, should this not just be, something or should we only codify something about, you know, a condition where we're seeing prices raised? Well, the challenge there is that there is nothing in statute about the standard pricing issue. So we need to be able to continue to work on that.