Assembly Standing Committee on Privacy and Consumer Protection

All right, good afternoon, everybody. Welcome to the Assembly Privacy and Consumer Protection Committee. I'm going to extend an invitation for our Republican colleagues to join us, and in the meantime, we're going to go ahead and get some of our opening remarks out of the way. To effectively manage our time today, we will be limiting testimony to two witnesses for support and two witnesses in opposition on each Bill. Each witness will be allowed 3 minutes to present their testimony.

After the support witnesses conclude their testimony, the Committee will call up additional supporters. No further testimony will be permitted. Additional supporters may only state their name, affiliation, and position for the record. The same process will be followed after the opposition witnesses conclude their testimony. At that time, additional opposition will be called. They may only state their name, affiliation, and position for the record. For this hearing and until further notice, the Committee will be returning to in person testimony only as reflected in the file notice.

And I'd like to note that we are accepting written testimony through the position letter portal on the Committee's website. So any Member of the public may weigh in through that website. A couple of items I want to note at the beginning. Assemblymember Patterson will recuse himself from consideration on AB 1659 due to a potential conflict of interest.

So another Committee Member will preside during the presentation of the Bill, and I'd also like to acknowledge and welcome our dear friend Assemblymember Kalra, who will be replacing Assemblymember Wilson today. Thank you, Assemblymember Kalra, for joining us. We have five bills on the agenda today, and the following Bill has been approved for consent. AB 410. The motion is do pass as amended to add an urgency clause, and I will entertain a motion for this consent calendar as soon as we establish quorum. I see that we have a quorum present. So, Madam Secretary, please call the roll.

[Roll Call]

Thank you very much. We have a quorum present. At this point, I'm prepared to entertain a motion on the consent calendar. Move the consent calendar, second moved by assemblymember Bennett and seconded by Assemblymember Kalra. Madam Secretary, please call the roll.

Okay. On the consent calendars, do pass as amended to add an urgency clause with recommendation to the consent calendar. [Roll Call]

So.

The consent calendar has nine votes so that bill is out. We will leave the roll open for absent Members to add on. With that, we are going to turn to file item number one. AB 331. Assembly Member, Bauer-Kahan. Thank you.

Thank you, Mr. Chair and members. First, I want to express my gratitude to the chair, the Committee and the staff for their hard work on this very complex bill. And I want to say that I'll be accepting the amendments which are technical and clarifying. With that, I'm proud to present AB 331, which is modeled after President Biden's AI Bill of Rights. AB 331 protects individuals from algorithmic discrimination by requiring developers and users to assess automated decision tools for discriminatory biases and mitigate accordingly.

Artificial intelligence and ADTs have yielded astonishing insights. The intent of the bill is absolutely not to hinder innovation. In fact, I believe that with this bill, we may have the opportunity to create less bias in some of our most important areas of policy. It is crucial for this technology to be deployed in a responsible manner. Automated decision tools use statistical analyses to assess eligibility for benefit or penalty decisions that can have drastic impacts on individuals lives.

For example, ADTs are now used for employment insurance eligibility, healthcare decisions, housing decisions, lending decisions, the decisions that are integral to our society, our lives, and that our civil rights laws protect. Today, there is no accountability for unbiased datasets and a programmer's unconscious biases that can be embedded into the adts and the results can be detrimental and discriminatory. A study published in science in 2019 showed that a clinical algorithm used across hospitals for determining patient care was racially biased against black patients.

The algorithm used healthcare spending as a proxy for health needs and falsely concluded that black patients were healthier than equally sick white patients, depriving black patients from needed, high risk care. This is just one example. When you consider adts are being used to determine eligibility for employment, medical treatment, and even for parole or probation, it becomes apparent how life altering and consequential these decisions truly are.

Marginalization and discrimination will only become more entrenched unless we ensure that this technology doesn't propagate the bias that is held in each and every one of us. With me in support of the Bill is Taneicia Herring with the California Hawaii State Conference of the NAACP.

Yeah.

Good afternoon, chair and Members. I'm Taneicia. I'll be representing the California Hawaii State Conference of the NAACP. The California Hawaii NAACP's principal objective is to ensure the political, educational, social, and economic equality of minority citizens in California and eliminate race prejudice. We are proud to support AB 331 because it stands to protect individuals from algorithmic discrimination by requiring developers and users to mitigate and assess automated decision tools, or ADTs, that make consequential decisions.

ADTs are prominent in almost every facet of an individual's life, and it is essential that when they are deployed, they are used in a safe manner that will not result in discriminatory harm. Amazon attempted to develop a hiring algorithm using historical data for the selection of software engineering applicants. In conducting a contrasting impact analysis, it was found that these algorithmic results disproportionately rejected women. One widely used criminal risk assessment tool is the correctional offender management profiling for alternative sanctions.

Also known as compass, it's used within 47 states, including California. The program is used to identify high risk for violence, high risk for recidivism, and a high pretrial flight risk. Any judge seeking to use Compass as a judicial aid cannot at this moment understand fully how a compass risk assessment score is developed, nor how factors about the defendant's profile were weighted to arrive to the given risk score.

Not only does this prohibit judges from properly understanding a judicial tool meant to assist the process, but it might also deny the defendant the ability to identify a fair trial outcome should the judge base their final ruling in any way upon the score that they both cannot fully comprehend. Impact assessments provide a sense of accountability that makes it difficult for those who use adts to use them as tools of discrimination and oppression, whether in employment, housing, the criminal justice system, or any other facet of life.

If the livelihood of citizens is going to be placed in the hands of technology, it is imperative that developers and employers be transparent about the impact of that technology. Without impact assessments, there is reason to expect that more discriminating incidents, whether delivered or not, will occur. We thank Assembly Member of Bauer-Kahan for writing this crucial and critical legislation, and we hope that AB 331 will be a starting point for the marathon ahead of us to end discriminatory practices through the use of automated decision tools.

Thank you.

Thank you very much. We will now turn is there anyone else in the hearing room in support of the bill? Seeing that, seeing none, we will now go to testimony in opposition to the bill. Are there anyone in opposition to the bill?

Thank you, Mr. Chair Members Ronak Daylami on behalf of the California Chamber of Commerce, respectfully in strong opposition to AB 331. As it's currently in print. I'd like to start by saying that we are actually largely aligned with the author and principal, and we thank her and her staff for engaging with us on the bill.

Bias and discrimination are serious problems in our society, and our Members want to be part of the solution, but we also feel that a more measured approach is needed given the complexities involved with ADTs and their potential for positive impacts. They can, for example, enable quicker approvals and access to credit, and they can also protect against fraud by assisting in the quick identification of uncharacteristic account activity.

As currently drafted, we are concerned that the bill will lend to over regulation and create a chilling effect that substantially undermines the tool's utility and future improvement, starting with the private right of action. APRA is simply not feasible for such an important and growing technology, especially in light of the sweeping scope of this bill. Relatedly, we believe that greater clarity is needed on what constitutes a violation, especially with a $10,000 fine for each violation, without any need to demonstrate actual harm to any individual.

We are also concerned over the frequency and triggers for the required impact assessments. Many smaller businesses simply don't have the in house expertise or the resources to outsource for these assessments, let alone do so on a yearly basis. To ensure thoughtful assessments and prevent them from turning into litigation bait, we would also like to see confidentiality protections added, as well as guardrails around when these assessments get shared among agencies.

Finally, we're very concerned that providing notice and opportunity to opt out can, in some circumstances not be possible or lead to perverse outcomes. Imagine a hospital emergency room stopping life saving treatment of a patient to provide notice and opportunity to opt out of the use of a tool that can help triage cases. For these and other reasons, we respectfully oppose, but look forward to working with the author.

Thank you, Mr. Chair and Members Leah Nitake, Deputy Executive Director at Technet.

Technet is a national network of technology companies, and we are respectfully opposed to AB 331. I'd first like to align my comments with those of my colleague at the chamber, and in addition, I'd like to note that this bill is one of several that are looking at the issue at the moment, as are two regulatory bodies.

And with all of this activity on the topics of AI, automated decision systems, and the issue of bias, we're concerned about how these laws and regulations will align or conflict, and what the impact of that may be on businesses and consumers. The goal of this bill is an important one, and we look forward to working with the author moving forward to address our concerns. Thank you.

Thank you very much. We'll now invite for additional witnesses in opposition to the bill.

Good afternoon, Mr. Chair and Members. Kareem Drissi, on behalf of the California Association of Realtors, we do have an opposed, unless amended position. Certainly look forward to working with the author as the bill moves forward. However, is currently drafted and must respectfully request a no vote. Thank you so much.

Good afternoon. Debra Carlton with the California Apartment Association in opposition.

Afternoon. Carl Szabo, Vice President, General counsel of NetChoice, as well as Internet law Professor at George Mason Law School. We ask that you oppose.

Austin Heyworth on behalf of the Internet Works Coalition. We recognize the importance of the issue and are glad to be working with the author. We would just emphasize a further narrowing of a risk based approach.

Good afternoon. Shari McHugh, representing the consumer. Sorry, computer, and I knew I was going to do that. Computer and Communications Industry Association and the California Credit Union League in opposition. Thank you

Mr. Chair and Members Ben Ebbing, on behalf of the California League of Food Producers and the National Payroll Reporting Consortium, respectfully opposed.

Sarah Pollo Moo, California Retailers Association, respectfully opposed.

Voleck Taing with the Silicon Valley Leadership Group, respectfully opposed.

Scott Governor, on behalf of the California Financial Services Association, in opposition.

Jamie Huff, with the Civil Justice Association of California, respectfully opposed. Thanks.

Thank you very much. We'll now bring it back to the committee for questions or discussion. Mr. Kalra.

Thank you, Mr. Chair. I want to thank the author for bringing this forward. This is clearly a very difficult, challenging issue to take on, but a very, very important one. At the same time, I do think that there needs to be more firm guardrails, especially given the pervasive impact that especially the consequential decisions can have on individuals lives. And so I think that technology and the use of automated decision making tools provides a great benefit for society, a great benefit for Californians.

But there has to be protections in place. And so I'm happy to move the bill and appreciate your work on this.

Thank you.

Thank you very much, Mr. Bennett, very much.

And I will be stepping out to go to present a bill, but I wanted to point out that democracies usually wait for a problem to happen before there's enough energy to solve the problem. And so I really applaud the author, and I'm grateful for the fact that the opponents indicate that they're conceptually in support of trying to attack an issue. You talked about. If technology is going to become critical to our quality of life, it already is critical to our quality of life.

So to attack this particular problem at the beginning and I think you have a much better chance of making this a workable way to both address the civil rights concerns and the other privacy concerns, et cetera, and still have this be workable. And so I applaud the author for her openness to doing that and the industry and the opposition willingness to work with her to do that. So I'll second the motion. I'll be on record for an I vote if you need me. But they're calling.

Good luck with your presentation. Thank you, Mr. Bennett.

Thank you, Mr. Bennett.

Any other members of the committee? Mr. Essayli?

Yeah, I just want to clarify. I mean, existing law makes it illegal to discriminate based on sex, age, race, currently. So even if an algorithm, it doesn't matter if it's a human or algorithm doing the discrimination, it's still unlawful, isn't it?

This makes it very clear that companies have to be proactive in ensuring that the automated decision systems that they are putting into the world do not discriminate. In order to bring a civil rights claim like that, you have to have, as you know, serious, disparate impact and have a knowledge that this has happened to you.

And what this does is it says, and that's why I opened in my opening, talking about how I think that if we do this right, we actually have the potential to have less bias in these critical decisions. Because if on the front end, we're looking at them and doing these impact assessments and correcting for bias, the opportunity is there to have hiring decisions where instead, know what we saw here, where Amazon was hiring less women based on an algorithm.

You could see how because there's so much bias in hiring today, when humans make that decision, you might actually be able to get more women into these underrepresented fields. And so what we're trying to do here is ensure that the laws catch up and make sure that we don't have to wait until we know that someone is being seriously discriminatory in housing practices, etc. But instead, we're putting ADTs into the world that are not discriminatory and ensuring that the practices are fair to every Californian.

And I understand that. I commend your intent. I think you're approaching this in good faith. My concern is just the mechanism and creating a new private right of action. I think the example you gave with Amazon is actionable. I think they could be sued right now under current law. So I would just encourage you to work with the opposition. I'd love to get to a place where I can support it. But just as currently written.

I do have some concerns, but I appreciate you answering the questions.

Of course.

Thank you, Mr. Vice Chair. Great.

Thank you very much. Look, I sit in committee meetings all the time where people appreciate the intent and then vote no on my bill. But everybody's sincere when they say that. But I think that this is a very good. What you're trying to do is important. I mean, you see a lot more automated decisions being made, and I don't think we've really even grappled.

I mean, I think that the fire just got started on the kinds of things that we're going to see and the technologies, and now we basically have competitions between companies that are going to try to make better tools and things like that. And, I mean, I think there is significant risk to biases, and I don't think it's intentional.

And that's where I kind of, like, struggle with the private right of action, where this technologies and these things, I don't want to say they're new, but the evolution of them is becoming beyond my capabilities to understand. I'm going to go to some functions now. I actually wrote a press release using Chat GPT, for example, just so everybody knows. But the decisions and the things that they're able to make are beyond my capability to understand.

And we're trying to create a law on something that we're still just really getting started going. And so my unfortunate opposition to this right now, and I do, too want to get to a place where I export, is just because I want to see us make sure that this isn't happening. But I don't think we can really perfect that yet. Unfortunately, humans still do it after billions of years of the earth being here and hundreds of millions of years of being here.

So we want to do it. We have to get there. I think it's really important, and I think for a lot of the reasons you've said, but I think it's a little too much to have this liability in there right now because the technologies are just so, they're still in their infancy. And so I get concerned about that.

But I hope anybody that does have these biases, as Assemblymember Essayli said, I think there are actionable abilities out there right now that exist, and I think people should take advantage of those. Thank you.

Mr. Lowenthal.

Yeah. First of all, I'm extremely proud to support this bill, and I thank you so much for bringing it forward. It is sorely needed. I say this not only as member of the Committee, but as somebody who's administered and run and been the president of the company that had 40 million monthly users online. And with great respect to my colleagues who were just bringing up the points in regards to this isn't perfect, as we implement it, it's never going to be perfect.

Let's make sure that we're clear about that. And for all my favorites from the third house that actually came and spoke it, some of my real favorites are out there right now. This is going to be a work in progress forever. It will never, ever be completely perfected. And that's because the technology itself will be in a constant source of optimization. The source code that's going to be utilized by so many of these entities is going to change over time.

I hope that the author is open to mechanisms whereby there's the ability for companies to correct themselves once they're notified of it. Because I can tell you that's what everybody wants to do. And I think that's the spirit of the things you were saying. We are never going to be able to get this to a place where it's totally and completely optimized out of the gate.

And hopefully even someday maybe the industry will come to the table and say, let's not just self regulate this, but let's come out with a mechanism where we're scoring it ourselves for the public the same way, like we score movies, motion picture association and so forth. And so the industry itself is doing things like that. And I hope that happens over time. Thank you for bringing this bill forward.

If I may, please.

Yeah, I just wanted to address a couple of things. First of all, I want to thank the opposition. They have concerns with the bill, and I don't want to minimize those. But I do want to thank them for coming to the table, for having constructive conversations. Those are ongoing. There's already one thing that caught that we just didn't catch that was we had put, we're technical in one part, but not the other. And so everything is being fixed that we can.

And I do appreciate their intent to really want to get this out. And I do want to point out that you heard from a lot of industries that don't want to do this. That's clear. There are companies that are doing it. We are working with many companies that are already doing these impact assessments that are helping us learn how they do it and make sure that we're doing this in a way that is feasible for technology.

And so I do want their voice to be at the table, too, because there are a lot of companies that want to put out a product that improves on discrimination that is existing today, as everyone has pointed out. And then I will say we have two places in the bill where you actually, I mean, the impact assessment itself is a corrective mechanism, right? You do the impact assessment.

And we don't expect, actually, we think in its first form most of the time it probably will be discriminatory because people build these things and the whole goal is there to catch it and fix it. And that's what the bill asks you to do. And so that is sort of a built in corrective mechanism to get this software to a better place. And then there is currently, as it relates to the injunctive relief, an off ramp.

But I know that the opposition would like to see more of that, and we're in conversations about that.

Thank you very much, any other members of the committee. So with that, I will also thank the author. I want to thank first my colleagues for a very thoughtful discussion about all of this and good questions. And I want to thank you, Assemblymember, for bringing forward this bill. It is a very consequential one with some very significant impacts. And I think that's reflected by all of the people that have come forward in this hearing room to testify in support or in opposition of it.

And I'm really glad that we're doing a bill in this area. It's very, very important that California have a leadership role in this area and take the steps that are necessary to address these issues and to do so in a thoughtful way that balances innovation and also the need to protect against potential harms.

I guess my confidence in supporting the bill today is with the author having had the opportunity, maybe, as some of my colleagues haven't, to see you work, to watch you work, to see the thoughtful way that you approach things, appreciate what so many in the opposition said about a shared sense of purpose here, maybe a larger alignment on the vision and the need to work through some of the details. And I just have tremendous confidence that you're going to do that over the coming months.

This is the first committee hearing, and certainly I think all of us bring forward bills where there are opportunities to learn and to grow and to do all that. So super important issue. This is a great bill that I think is going to make a big difference and really help folks. And I'm looking forward to watching you work and watching the conversations with opposition and so proud to support the bill today. And with that, we'll invite you to close.

Thank you, Mr. Chair, for your remarks. I should just take them as my close. I want to say this is a very big effort we're undertaking, but I also think that I appreciate the acknowledgment of how important it is. As the analysis pointed out, 50% of companies are now using these automated decision tools to make consequential decisions. This is happening today in many sectors that affect people's lives. And so we need to move forward. We're not ahead of the ball. We're already behind the ball.

And so making sure that we move forward again in a way that allows California to be the innovation center of this country and allows us to do right by Californians and hopefully beyond. Because, again, I really, truly believe that if we strike the right balance here, these tools can actually make things better for marginalized communities. And with that, I respectfully ask for an ivote.

Thank you very much. Assembly Member. The motion on the bill is do pass as amended, to the Judiciary Committee. And with that, Madam Secretary, please call.

The roll AB 331 by Assembly Member Bauer Cahan. The motion is do pass as amended, to the Judiciary Committee. [Roll Call]

All right, that bill is out 72, and we will leave the roll open for absent members. Thank you very much. At this point, we only have three bills left. Assemblymember Wicks has asked me to go first, so I will do that. I'm going to turn the gavel over.

I understand that our Vice Chair has recused himself from AB 1659, so let's do AB 1546 first, and then, if you'd like, you can turn the gavel over to Ms. Erwin, who's very seasoned and experienced, and she can share the committee.

All right. AB 1546 Mr. Chairman.

Thank you Mr. Vice Chair and colleagues. I am proud today to present AB 1546, which will ensure that our Attorney General can robustly enforce our privacy laws and would ensure that the Attorney General has exactly the same amount of time to bring a civil action to enforce the California Consumer Privacy Act. The CCPA that the California Privacy Protection Agency has to bring an administrative enforcement action under the same law.

As we all know, California is a national leader in ensuring consumer privacy protection for all of its residents, first when the Legislature enacted the CCPA in 2018 and next when the voters passed Proposition 24, the CPRA, in 2020. Under the CCPA, only the Attorney General is authorized to bring civil enforcement that is suing court for violations, absent exceptions, for a private right of action for data breaches. Proposition 24 created the privacy agency and gave it a five year statute of limitations to bring administrative enforcement action.

Unfortunately, due to a drafting oversight, Proposition 24 does not specify that the Attorney General also has five years to bring a civil enforcement action. Under California law, if there is no statute of limitations specified in the law, the Attorney General has only one year to initiate a lawsuit for civil penalties. One year is far too short a time to develop a case under a law as complex as the CCPA and the alternative to passing this Bill is to leave the one year statute of limitations in place, which means one of two things will happen.

First, the AG might quickly file suit before the one year period expires in order to preserve the right to sue. Meaning that businesses will have to quickly defend themselves in court, even though further investigation might have shown that no lawsuit is necessary.

Or alternatively, the Attorney General will file suit alleging non CCPA privacy violations and the privacy agency will bring a parallel administrative action for violations, meaning that businesses will have to defend against two different actions at the same time. Contrary to what the opposition claims, this Bill would add no additional administrative burden and create no new risk of data breaches for businesses.

Companies covered by the CCPA already have to preserve records and data for five years in case the privacy agency brings an investigation or enforcement proceeding at that time. To testify in support, I have with me two witnesses from the California Department of Justice. Stacey Schesser is the supervising Deputy Attorney General for the Privacy Unit and Anthony Lew is the Deputy Attorney General with the Office of Legislative Affairs. Thank you and with that, would respectfully request an I vote.

Thank you. Testimony in support.

Hi, good afternoon. My name is Anthony Lew. I'm a Deputy AG for the Office of Legislative Affairs and AG Bonta is the proud sponsor of this legislation. We want to thank Assembly Member Gabriel for his leadership in authoring AB 1546, did a great job of summing it up. It's a fairly simple bill before you, would simply amend the CCPA to expressly permit DOJ to file a civil action within five years of a violation, instead of the current one year statute of limitations.

In doing so, the bill would align civil enforcement of CCPA by the Attorney General with the five year statute of limitations for administrative enforcement provided to the California Privacy Protection Agency. And importantly, it would enhance DOJ's ability to carry out its duty to enforce CCPA, California's landmark consumer privacy law. Simply put, the one year statute of limitations for civil enforcement is unreasonably short, and it limits DOJ's ability to enforce CCPA and protect the public.

As described in the excellent Committee analysis, this conspicuous discrepancy between the one year statute of limitations for civil enforcement by DOJ and the five year statute of limitations for administrative enforcement by the privacy agency makes little sense as public policy. So, we respectfully ask for I vote today on AB 1546, and I'd like to introduce Stacy Schesser, our subject matter expert from DOJ, to deliver further remarks about the Bill. She'll also available to answer technical questions about the Bill. Thank you.

Good afternoon. My name is Stacey Schesser, and I am the Supervising Deputy Attorney General for the Privacy Unit in the Consumer Protection section of DOJ. My job includes supervising the team of attorneys tasked with civil enforcement of CCPA, which we have been doing since inception in 2020. The current one year statute of limitations is insufficient. Privacy enforcement cases are complex and present nuanced legal and factual issues that require an understanding and analysis of technical issues. To determine if the law is being violated

we typically examine and test data flows, work with expert technologists, interview key witnesses, review legal and business arrangements governed by statute, regulation, contracts, privacy policies, and terms of use. If we are in the midst of a formal investigation, we have the authority to issue subpoenas, which may be litigated in court if targets do not comply, adding further time to our investigations.

In addition to the practical reality of civil enforcement, the voters approved the CPRA amendments that set forth a key dynamic between the privacy agency and the Attorney General. Section 1798.199.90 reinforces the AG's constitutional role as the chief law enforcer because it expressly provides that the AG can stay the agency's administrative action. A one year statute of limitations fundamentally misreads this dynamic and renders this language without the effect that the voters intended.

The voters approved a law that provided consumers with the strong protection by both the privacy agency's administrative enforcement authority and the AG's robust civil enforcement authority. Limiting the AG's direct enforcement of the CCPA also impacts the amount of civil penalties earmarked for the Consumer Privacy Fund, which, among other things, provides grants to educate children in the area of online privacy. The AG would also be limited from obtaining heightened civil penalties for intentional violations and violations that involve minor children.

Opponents claim that extending the statute of limitations for the AG increases risk, going so far to say that a five year statute contravenes pro-privacy and data minimization principles and exposes both businesses and consumers alike to risks associated with data breaches because businesses have to retain personal information. This makes no sense. Businesses already face risk of agency action up to five years and need to retain data for that five years in order to address any investigation by the agency.

Extending the statute of limitations is actually pro-business because robust enforcement sets a level playing field for businesses that are spending resources to comply. Giving the AG the same amount of time to bring a civil action is better for businesses because it avoids the scenario in which we have to rush to sue a target to preserve the timeliness of our claims. Rushing straight to the courthouse drains everyone's resources, including the courts, whereas additional time to thoroughly investigate and even explore negotiated resolutions is efficient for all.

For these reasons and more, I urge you to pass AB 1546, which will provide much needed alignment of civil enforcement by the AG and administrative enforcement by the privacy agency under the same standard of five years for the statute of limitations. Thank you.

Thank you very much. Are there any other witnesses in support from the public? Any me too's?. All right. Seeing none. Any witnesses in opposition?

Thank you, Mr. Chair Members. Ronak Daylami again with the California Chamber of Commerce, respectfully in opposition to AB 1546. I think fundamentally there's just a difference of opinion here, both in terms of interpreting the voter's intent as well as the need for the Bill. First, we believe the voter's silence on the AG statute of limitations is intentional.

They intentionally divided responsibilities for administrative and civil enforcement actions and specifically stated that administrative actions must be commenced within five years of the date on which the violation accrued. To us, this is not indicative of a drafting error or an oversight. Second, we're concerned that the Bill is unnecessary and untimely, focusing on enforcement on the back end when we're still waiting for regulations that are necessary for us to understand how to comply on the front end.

Furthermore, we're unaware of any actual cases where the AG was time barred from pursuing actions for a violation of the CCPA. To the contrary, we believe that there has been robust enforcement of the law with the shorter statute of limitations and we worry that the extension will merely allow penalties to accrue for five years before an action is commenced, even if it could have been brought in year one. Ultimately, we feel that timely actions better serve all parties.

It places businesses on notice of a potential violation, which can in turn mitigate potential harms to consumers. If one year is too short, I think we can all agree that five years is too long, at least we feel that way. Thank you so much.

Good afternoon again, Jamie Huff with the Civil Justice Association of California, respectfully opposed to the Bill. We believe the Bill is an unnecessary and premature extension of the statute of limitations under CCPA and could actually undermine the state's privacy goals. Increasing the statute of limitations fourfold before the underlying law even has a chance to be fully enforced is hasty.

This extension would force businesses to hold onto data for a longer period of time, thereby increasing the likelihood of data breaches and the subsequent liability for businesses that would naturally flow. Also, forcing businesses to hold on to this data longer than necessary does not align with the state's data minimization principles.

The enforcement stage of the CCPA is still in its infancy and the Attorney General's Office has been clear that they intend to vigorously enforce the law. So, there's no reason to extend the enforcement window unless and until there is evidence of the necessity to do so. We don't believe the benefits of retaining consumer information for four additional years outweighs the privacy risk, following the liability risk, in doing so. For these reasons, we must respectfully oppose. Thank you.

Thank you very much. Are there any oppositions or any other people opposed? Name and affiliation, please?

Mr. Chair and Members, Ben Ebbink, on behalf of the California League of Food Producers and the National Payroll Reporting Consortium, respectfully opposed.

Great, thank you.

Sarah Polomo, California Retailers Association, respectfully opposed.

Shari Mc Hugh, representing the Computer and Communications Industry Association and the California Credit Union League in opposition. Thank you.

Lia Nitake with Technet, respectfully oppose.

Great, thank you. Are there any questions or comments from my colleagues? Never been accused of being short of words here. I have a couple of questions. I just met with the enforcement agency, just a couple of days ago. It's always fun to hear about it, but in my private life before this, we obviously got very educated on CCPA because people I worked with had to comply with it. But the types of actions that you can bring are different than the enforcement agencies, correct?

It's just in terms of the nature of the action, the posture of it. The agency brings administrative actions, so it brings its cases before, for example, an administrative law judge who provides a reasoned decision, and then the board issues a final decision on whether, based on if it agrees with the findings in the record. We pursue civil enforcement, which is what you would think of as the typical litigation course where you're in a state court before a judge and you're litigating that case, in that respect.

All right, thanks. There was one point brought up about.

I'm sorry to interrupt. Just one more minor nuance is that the agency is tasked with administrative enforcement of the CCPA. The AG is tasked with enforcement of all the laws and so our cases might be more complex. They might involve not just a cause of action under CCPA for direct enforcement, but it could also involve an additional civil claim in terms of if the entity violated other laws as well. And so we would bring a case that potentially could also involve additional theories of violations. Just to clarify.

Yeah, thank you for that and there was an interesting point that I hadn't thought about. If somebody was violating this, either intentionally or unintentionally. And Mr. Chair, if I should direct my questions to you, I will, and you can turn it over to the witnesses. But to the extent that this continues for 3-4 years, unknowingly, right and then now we have several violations that have occurred over that five years.

That is kind of a concern that I have that I hadn't thought about until today, and I was just wondering if there was any response to that?

Yeah, I certainly have thoughts about it, but I want to defer to the experts here, but anything you want to add about that?

Right. Having a longer statute of limitations would allow us to be able to reach back and assess whether or not they're liable going back five years and so that's why we would require a longer time. In terms, of being able to thoroughly investigate and be able to reach back to hold a business liable, whether they're intentionally or unintentionally violating the law. That's what our, we're always focused on whether or not the law has been violated.

Thank you, Assembly Member. It's a good question. I think the way that I would think about this is, with a one year statute of limitations, you almost preclude meaningful action by the Attorney General. It is such a short window to investigate a complex set of facts, to interview witnesses to acquire the data you need to maybe serve subpoenas. I think we've all become aware of how complicated subpoenas could be in the context of litigation at the federal level and how long those can take to enforce.

And so with a one year statute of limitations, you essentially are taking AG action off the table, unless, they were to do something exceptionally hasty. So I understand the point from the opposition about, well, we'd like to know right away, but actually what they're doing, I think, is boxing the Attorney General into a posture where there is no meaningful remedy.

And I think what a lot of us came to appreciate in law school and in private practice and other things is that protections or rights mean very little without a remedy. And as currently being interpreted with a one year statute of limitations, it severely diminishes the Attorney General's ability to safeguard the privacy rights of all Californians. And so these are things that we need to balance.

We think the current know is so far off in terms of taking the AG out of the game that this is something that we need to correct.

Well, I didn't have that in law school because I didn't go to law school, but points well taken there. But no, I think the thing that I was trying to point out is that, let's say there's something that goes on in year one, and then because there's no action, and it continues through year two and year three.

And this whole time there's been an investigation going on, and the violator may not know about it because the regulations are pretty new and people are setting up entire compliance departments to figure out how to do this. So you have five years, potentially, of violations, potentially unknowingly and then there's a civil action brought on year five when it could have been remedied in year one. You see what I'm saying? So four additional years of violation.

I do appreciate that very much. I think the flaw in that argument is that the privacy agency still has five years. So, they are still subject to administrative enforcement through the privacy agent for all of those years and as I think we've tried to point out, you may still have AG action under different privacy statutes or other laws.

And so you could have companies would be forced into this very weird and uncomfortable position where they're simultaneously litigating some of those claims with the privacy agency, some of them in state or federal court with the Attorney General and it just doesn't make sense, when a lot of this is arising from the same facts, the same context and everything else. So I understand the point as a theoretical one.

I think as a practical matter, in terms of how litigation works, it just doesn't make a lot of sense.

Well, thanks. I'll just make this one thing. I really appreciate it. I do think one year is pretty condensed time period to bring a complex lawsuit. I think these laws are very complex already. People are trying to figure out how to comply and I will say my final concern is that it's just premature because there are a lot of people trying to, I mean, in good faith, trying to comply with these laws.

I went to, like, 100 sessions on this last year and still don't really understand it. But with that, I really appreciate you bringing this and I do agree one year is too short, but five years does at this stage seems kind of premature for me. Are there any other? All right, well, with that, is there a motion? A second and closing statement.

I would just, respectfully, request an I vote. Thank you.

Well, thank you. Take roll.

All right. AB 1546 by Assembly Member Gabriel. The motion is do passed to the Assembly, I'm sorry, to the Judiciary Committee. Gabriel.

Gabriel, aye. Patterson.

Aye.

Patterson, no. Bauer-Kahan. Bennett? Essayli?

No.

No.

Essayli, no. Fong? Fong, no. Irwin? Irwin, aye. Culra? Lowenthal?Lowenthal, aye. Papan? Papan, aye. Wicks? Wicks, aye.

Okay, thank you. You're in charge now.

I think we're going to.

The vote is five to three, and we'll keep it open.

Thank you very much, Mr. Vice Chair. With that, we are going to turn to file item number four, AB 1394. And I want to welcome Mr. Flora to the Committee. Thank you for joining us, and Assemblymember Wicks, the floor is yours.

Thank you. Sorry, give me 1 second. Okay. I want to thank the Chair, Members, and the Committee Staff, especially the Committee staff, for all of their work on this Bill. And we will be taking the Committee amendments. Child Sexual Abuse Material, commonly referred to as CSAM, is tragically pervasive on the internet, and not only is it in illicit corners on the so-called dark web, but also on popular social media websites and applications that billions of people use every day.

This tragedy is combined by the fact that certain websites and applications are not only a convenient means for sharing CSAM, but arguably induce its production. Since 2000, traffickers have recruited 55% of sex trafficking victims online. Use of Facebook facilitates 65% of this trafficking.

A Forbes review of hundreds of recent TikTok Live streams reveal how viewers regularly use the comments to urge young girls to perform sexually regarding those who oblige with TikTok gifts, which can be redeemed for money or off-platform payments to Venmo, PayPal, or cash app accounts. AB 1394 holds social media platforms liable for knowingly, recklessly, or negligently facilitating, aiding or abetting child sex trafficking, and requires that platforms prevent revictimization of child survivors. This measure proposes to address these challenges in two ways.

First, the Bill would require social media platforms to provide a mechanism for users to report CSAM in which they are depicted. Platforms would then generally have 30 days to verify that the material is CSAM and block it from reappearing. Second, though the Bill would provide victims of commercial sexual exploitation the right to sue social media platforms for deploying features that were a substantial factor in causing their exploitation. Regarding damages, the Bill already says that the ceiling of 250,000 is to be reserved for the worst offenders.

And I know I've had conversations with folks on the dais about some of this and some of my other colleagues around the statutory damages and what those will entail. I also want to say that Assemblymember Heath Flora, who's next to me, has agreed to come on as a joint author, and I'm committed to continuing to work with him, particularly on the private right of action component of the Bill, which I view is important.

But also I am committed to figuring out a way that we can both come to agreement on what we think could be fair as well. As I know the Vice Chair, you and I have also had conversations to this end around certain specific components of the Bill.

And I just want to say, in this particular issue, I view it really important to work in a bipartisan fashion, because I think many of us come to this issue simply as parents, and we want to create a safer experience for my kids. So I'm very committed to that, and I'm excited to have Mr. Flora's support here with me to testify in support is Cammie Peirce with Common Sense Media and Kathy Van Osten from American Association of University Women to provide a story of a survivor.

And we also have Ed Howard, Senior Counsel at the University of San Diego School of Law's Children Advocacy Institute, to answer technical questions. But before we get to them, I'd like to allow Mr. Flora to say a couple words.

Thank you very much. It's a pleasure to be with you. And this is a very important issue. I mean, I don't think there's anybody in this room that wants this to continue. When we talk about the exploitation of our children, it has to end, and we need to do everything we can to fix that. There might be some disagreements on how to get there. And I'm encouraged by our conversations with the author and her commitment to continue to work with us.

And I think we're going to get in a place that is, quite frankly, beneficial for everybody. And I'm excited about that. So I appreciate you asking me to come on. And we do. We've got a lot of, quite frankly, subject matter experts on this dais, federal prosecutors, and I think we're going to be leaning on all of you to fix this in a way that fixes the problem but doesn't have overly punitive damages for some of the platforms that are. There's a, there's a happy medium for all of this. So I thank you for your time.

Thank you. And with that, we will go to our first witness in support. Cammie Peirce with Common Sense Media.

Good afternoon, Chair and Assembly Members. My name is Cammie Peirce, State Policy Associate with Common Sense Media. Thank you for this opportunity to address you in support of AB 1394 on behalf of the Coalition Protect California Kids online. We are proud co-sponsors of AB 1394 and commend Assemblymember Wicks for authoring such critical legislation to address the soaring rates of child sexual exploitation and trafficking online by holding social media platforms accountable to survivors.

According to our most recent research, adolescent girls spend over 2 hours per day on TikTok, YouTube and Snapchat, and more than 90 minutes on Instagram and messaging apps. These social media companies are aware that sexual abuse, exploitation and trafficking of children are originating on their platforms. Even Facebook's internal research found our platform enables all three stages of the human exploitation lifecycle, recruitment, facilitation, and exploitation. The average age of child sex trafficking victims is 13 to 14.

The average life expectancy of an exploited child is seven years. Child sexual abuse and trafficking takes a terrible toll on a child's overall health, increasing the risk for depression, anxiety, substance abuse, post traumatic stress disorder, and suicidal ideation. California has an obligation to address this problem given that three of the nation's 13 high intensity child prostitution areas, as identified by the FBI, are located in California. That's Los Angeles, San Francisco, and San Diego.

The National Human Trafficking Resource Center Hotline received the highest number of reports on victims of human trafficking from California. Our state Legislature must hold social media platforms accountable and build a safer digital ecosystem for kids and teens. Thank you for your consideration.

Mr. Chair and Members. Kathy Van Osten, representing the American Association of University Women California. We have an awful lot to say about this, but I think turning to somebody who's lived the experience and sharing their story is really much more impactful. This is from a young girl named Maya. She's out of Oakland. She says, when I was 14, I was 14 when I got my first phone from a foster mom.

I had been in and out of group and foster homes, never having the ability to buy my own phone or pay the monthly fees. I was excited to feel like all the other kids and was now able to text with my bio brother. One of the first things I did was get onto social media. I was on it all. I felt connected and no longer lonely. Posting photos, getting love from everyone. I was getting comments from people I didn't know, but just figured it was harmless.

One of these commentators threw me more compliments than others and after a few weeks, he slid into my direct messages. We started talking. He asked me to send photos of myself. What was the harm? And he made me feel good about myself. I didn't realize at the time he was grooming me. He began to monitor my social media accounts and began to sell my photos to his friends. That led to him selling me first to his friend and then advertising on Facebook.

At first I went along with it. I mean, this guy loves me, so he really wouldn't hurt me. Right then I was confused and then numb. Maybe after five months. After maybe five months, I'm sorry. I was assaulted by one of the men I was with. That was when I finally woke up and decided to run away. He had gotten lazy and didn't think I would ever leave.

I slept on the streets for a few weeks, made money selling myself, but at least I was in control. I got connected back up with some former foster sibs and they helped me to find a place to live. I still made some money on the streets. That's where I finally got help. I got picked up. They connected me with some. Sorry, with some services, and I was lucky that I hadn't turned to drinking or drugs yet.

But it would have been easier to forget this all happened four years ago. I am slowly starting to trust people again, but unsure how I will make a life for myself. I'm damaged. I didn't get to finish high school. I know there are still horrible pictures of me on the Internet. Anything I can do to stop this from happening to someone else, I'll do.

They didn't quite finish that sentence and I do want to note that in particular, foster youth are targeted by groomers because they are so vulnerable. So I just wanted to underline that point. That's an area that we care an awful lot about. So it's a sad story, but unfortunately very common.

Thank you very much and thank you for giving voice to some of the folks who have experienced this firsthand. With that, I will invite anyone else in the hearing room in support of this Bill to come up and testify. Seeing none, we will now take witnesses in opposition.

Good afternoon, Mr. Chairman, Members. Ed Howard, Senior Counsel of the Children's Advocacy Institute at the University of San Diego School of Law, honored to co-sponsor this important measure for our kids. Thank you.

Thank you.

Afternoon. My name is Carl Szabo. I'm Vice President, General Counsel of NetChoice. I'm also a Professor of Internet Law at the George Mason Law School. And that story is horrible and one of the most horrible things to come out of the story you just told. I didn't hear a single one of those criminals go to jail. I didn't hear a single one of those bad actors in handcuffs or in prison. That's what we should be talking about here. I've got two kids.

My wife's a child therapist. She is on the front lines of these issues every single day. We need to address this. And I appreciate the intent of this legislation. I just worry that it is going to cause harmful unintended consequences. Now, I've seen the latest amendments and I do appreciate the substantial changes we've seen previously. And what I saw as of yesterday was a requirement to provide notices to victims who want to see it every seven days of action being taken.

The challenge I know is that victims, every time they see that, they are reminded of their trauma and they are retraumatized every single time. So while they may want it initially, being reminded every seven days of some of the worst moments in your life may not be a good outcome. Simultaneously, we work with groups like stop child predators. I've worked on FOSTA-CESTA to stop these horrible actions that was responsible for.

And also we support the Department of Justice's taking down a backpage right now with statutory damages in this legislation, we are going to see a ham fisted approach by businesses. It is not going to be in the best interests of victims and it's not addressing the fundamental problem of putting bad actors behind bars. I will close this with just two quick statistics.

In just six months, some of the largest businesses on the planet took down, in the US alone 52 million examples of CSAM and reported it to the National Center for Missing Exploited Children. That maps out to over 300,000 a day. We do not have a reporting problem. We have an action problem. We need more criminals in jail, more bad actors off the streets.

And that's where I would like to see the efforts, the intent go make it easier for law enforcement to put these bad actors away and provide the resources to these support groups to make that possible. We respectfully ask that you not move forward with this legislation right now. But we are happy to work the sponsors as it goes forward. Thank.

You. Thank you, Mr. Chair and Members Lia Nitake with TechNet, and we are respectfully opposed to AB 1394. But first, I'd like to acknowledge the experience that was shared by the previous speaker. It is terrible and tragic, and I thank you for sharing it here today. Technet strongly supports the author's efforts to eradicate online sex trafficking and the distribution of Child Sexual Abuse Material, or CSAM, and we thank the author for her conversations with us on the Bill thus far.

Our industry takes this issue very seriously, and we've worked for decades to be a part of the solution. We innovate new technologies to aid in its reporting and removal, and partner with nonprofits like the National Center for Missing and Exploited Children and law enforcement agencies across the country and across the world. We greatly appreciate the amendments proposed by the Committee and accepted by the author. Our members are still reviewing, and we hope to provide more substantive feedback shortly.

But I'll quickly highlight a few issues that still remain despite amendments excluding standalone encrypted direct messaging services, many platforms have encrypted direct messaging as part of their service. The bill's provisions and liability for the use of any feature that's a substantial factor in the exploitation of a minor creates a strong incentive for platforms to monitor and moderate direct messaging on their platform, and even to roll back encryption further.

The massive statutory damages and the uncertainty of which features are considered a substantial factor creates significant legal risk for platforms. Platforms are arguably liable for any harm that results from creating a feature that's used by a predator to victimize a minor. So, for example, any platform that allows users to connect with one another could inadvertently connect a teen user with a predator. Any forum where users can interact with each other could be used by a predator to connect with potential victims.

These features are central to the primary functions of social media platforms. So even if a platform completely disables any designs, features, or affordances that could be misused by a trafficker, that still may not be enough to avoid liability. And that leaves the options of seizing operations or banning anyone under the age of 18 from accessing the platform altogether. This regulation of content serving features likely runs afoul of First Amendment principles and is preempted by federal law.

We look forward to productive conversations with the author moving forward, but for these reasons, we respectfully oppose AB 1394. Thank you.

Thank you. Any further witnesses in opposition?

Thank you. Ronak Daylami with the California Chamber of Commerce. I'll align my comments with those of my colleague from TechNet. Thank you.

Jamie Fljack respectfully opposed. Thanks.

Thank you very much. With that, we will bring it back to the Committee for questions. Comments? Mr. Essayli.

Thank you, Mr. Chair. First of all, let me just commend you for taking action on this issue. It is a serious issue. Children are being exploited online. They are being targeted and victimized. It doesn't happen in neighborhoods anymore. It's happening online. That's where kids are spending their time and that's where the predators are.

And I know that having worked on these cases, I want to clarify a few things, and then the goal is hopefully to get this Bill in shape where we can support it, really. So here, CSAM has a definition. It has two categories for small child porn, which is not really debatable. That's what it is. But the second one is more, I think, potentially subjective, and that's minors engaging or simulating sexual contact or conduct.

I think that's what you're referring to, that some of these actors, they get these minors to do things, encourage them. So it's a little bit more subjective. And my concern is that the current mechanism, the notification requirement and the penalties might create an incentive for litigation and not really accomplish really what we're trying to do, which is, in my view, prevent this from ever happening in the first place. I don't want payouts for victims. I don't want victims to begin with.

So I think it's really important that this remained bipartisan, that we work on this and to big tech. The day is coming. There's a reckoning coming. I do not believe kids should be on social media. It is way too destructive for minors. It is addictive. It's harmful and potentially fatal for a lot of minors who have not fully mentally developed and are not able to handle the pressures and the consequences of being in that type of environment. This is new stuff.

Humans are not designed to be on social media all the time, especially minors. And I think we need to treat this more seriously than we treat tobacco. You cannot order tobacco without extensive age verification. So while I have concerns about this, I'll probably lay off today, but I want to work with you on this. I mean, I have worked on child exploitation. It's awful.

And I don't think big tech is the bad guy. They're the medium that's being used by the bad actors. And I agree, we need to lock those guys up. You're not going to hear any qualms from me on that. But I just want to point out some of those things. And I think there needs to be something built in here to better communicate with NCMEC. NCMEC is really the clearinghouse for these types of reports and making sure there's one clearinghouse that's working on these.

Simply notifying the reporter about the action, I think, is not enough. We want consequences for this as well. I guess I don't really have any questions for you. Just want to make some comments if you want to respond.

Sure, go ahead. Sure. Well, I appreciate that. Would love your support today, if you want to give that. But also understand, and I am, as I've mentioned here with my colleague from the other side of the aisle, absolutely committed to figuring out, I think the Bill needs more work. I think we need to refine some of the definitions. I think the Committee amendments made it, I think, more specified, but I think there's more work. And I've spoken with many of you on the Committee about that.

I already have a ton of different ideas on how we can do that. I'm also seeking outside help in terms of technologists who can help us understand the technology a little bit better and what is actually available in terms of ensuring that this content is removed quickly, as well as legal counsel. And the goal here is not just a bunch of lawsuits all over the place. The goal is to stop the actual predatory behavior.

And everyone, including the social media companies, need to take responsibility in that process. And so that's what this Bill really is about, is to ensure that they do. And I've met with a lot of the companies. I met with Snap today. I've met with TikTok, obviously, the trade associations as well. And frankly, when I sit down with opposition, I learn a lot about how can we actually make this a Bill that can be implemented?

Again, the goal is that we create an environment where the Internet is safer for our children. That's the ultimate goal, which means it has to be something that's functional in the real world that can be achieved. And so I welcome you in this if you want to work with me on it. We need all the help we can get. And I do also think it's very important that this is bipartisan.

I think it's one of the last remaining sort of sadly, like places of bipartisan work that we can do. Maybe housing, too, right? Mr. Patterson, puppies. And I represent probably one of the most progressive districts in the country, and I work with Republicans often in this space. So I'm committed to continuing conversations.

I appreciate that. Thank you so much.

Please, Assemblymember Papan.

So I want to thank the author for the bell. As the mother of a 17-year-old, who has certainly lived through my share of social media trauma, not the likes of which is criminal by any stretch of the imagination. But I just have a question for you, because I want to make sure I understand in my own mind there are penalties for the failure to remove. That's one category, right? And then the other category is facilitating, aiding or betting a certain technology that would allow predators to do what they might do nefariously online, right?

That's correct.

Okay. And there are different damages for either one?

That's correct.

So the 250 is a max for the failure to remove, once reported. And then you can go 1 million to 5 million for actually having these systems that might somehow say promote, but that's yet to be defined, and that's where you sort of need the technology expertise.

Well, yeah and also, just how do you determine that threshold? I think more language on understanding one to five is big. Are those the right numbers? I think there's still more conversations around what that looks like. I know Mr. Flora has opinions about that as well. So we will be working collaboratively on kind of giving more specificity to those specific damages in particular.

Yeah, I mean, mine really is. Those are pretty broad definitions of a design feature. I just don't know what that means.

Well, I think one example could be, do we need 55 year old men, direct messaging, 13 year old girls that are not part of their network? You could turn off direct messaging in that situation as an example. I don't know if that's the right answer, but that could be a place where you could land. And again, that's where, from my perspective, having a better understanding of the technology, I think is really important. But I think there are things that you can do guardrails that you can put in place to help keep these products safer.

Got it. Okay. That's where my confusion came into being. No expert, but okay. I appreciate that you're going to go forward and define that a little further, but I do appreciate the work, I got to tell you. Thank you so much. Thank you.

Any other Members of the Committee? Mr. Patterson.

Great, thank you. I really appreciate Assemblymember Wicks. We've had the opportunity to agree on too many items and looking forward to more of that happening in housing and in this Committee, actually. So it's been really great to work with you on these, and it's always good to work with Assemblymember Flora, of course. He keeps me in line a lot of things.

Another reason why I really appreciate it is because we can all count to 41 here, and you probably don't need my vote, but your desire to make it bipartisan means a lot to me personally. I know of several issues that occur on various platforms. We all know, and I've personally had some Frank conversations with those companies. And the reality is, unintentional as it may be, the platforms are being used for really bad things. In several instances, I saw lethal drugs being openly sold.

Families made reports of this occurring, and nothing. And that was disappointing. And so I know more needs to be done on this. On the other hand, I do believe that none of the platforms want this to happen, but we all know. I just want to talk a little bit about, and this isn't about this Bill, but the sale of fentanyl is often occurring on some of these platforms, and we know it's happening.

And I know it's happening because I've met with the families of the victims and some of them live in my neighborhood and I have legislation to address some of those things. And so when I hear from a platform that they're working on it, I'm happy. And I actually genuinely believe that. But then again, I'm dismayed by the fact that it's continuing to happen. And I don't think it's just because kids are evading these safety measures or something like that. I think there's a systemic issue there.

So what do we do? And I personally like the process outlined. I really don't think the process is too cumbersome in some of the platforms right now. You can make a report and get a response, like in a day. I do have some concerns with the liability, and I think you've committed to working on that. I might lay off this right now, but trust me, I am inclined at the end of the day to support this.

And I'm glad you're working with my Republican colleague over here. I think we'll get this all ironed out. But one last thing. We do want to make sure that we're holding accountable the people or platforms if there's intentional things occurring. I think we all agree on that. I don't really think that's a thing, but also negligence where it's occurring and we know about it. And also, hey, plug for, let's lock up the people who are committing this.

And by the way, I had a Bill to do that as well for sexualized human trafficking, if I can give a plug there. But I'm really encouraged by this Bill. I'm looking forward to working with you on it. I might lay off today just because we're still working on the amendments, but I feel pretty good. But we'll get there by the time we're at the floor. So thank you.

Thank you, Mr. Fong.

Thank you, Mr. Chair. A real quick question. I certainly applaud the author for her bipartisan approach. Certainly, you have a great reputation in that. And I look forward to the final product as this moves forward. I'm just trying to understand the gap. So under federal law, an electronic service provider has to report child sexual abuse material to a tip line.

And this Bill requires social media platforms to provide a mechanism for users to report child sexual abuse material in which the user is depicted as information flows to the platform and maybe either to author or to supporters or to the opponents. What's the next step? How does that information get to the point where either law enforcement or something is an actual item going forward in. Terms of just the actual process? Yeah, just process moving forward. Anyone can answer.

Thank you. So today, under federal law, if a platform becomes aware that there is child sexual abuse material, they become strictly liable for that content. They immediately assume all liability as soon as they are notified. Now, federal law, in an effort to encourage them to do the right thing, allows them to report this to NCMEC, at which time they no longer have that strict liability. So it's a carrot approach to getting that information over to the National Center for Missing Exploited Children.

When I talk with the National Center, one of their main concerns and complaints is, as I mentioned, just based on our quick analysis of publicly available data from the businesses, they get about 300,000 instantiations reported daily. That's the number that, and I've got a report where I can give you all that data, about 300,000 a day. Their staff is probably about 20 some odd fees. We just heard about the Department of Justice having challenges analyzing stuff over five years. They are way overloaded on complaints simultaneously.

They also operate under a statute of limitations period, where if they don't take action within, I don't have the exact number on hand, within a couple of months, they actually have to purge those complaints. They have to purge that data. That means those complaints, they can't by law, even take action on. So that's where the disconnect is falling. Platforms are reporting a lot because they are financially incentivized to do so.

The funnel, the limiting reagent, is actually NCMEC because they are basically way understaffed and way underfunded. And many of my Members do provide funding to them, but they don't have enough. They can always use more to actually take those reports and then get them over to Department of Justice and get them over to your law enforcement to take actions and enforce against. So that's where the disconnect is happening.

Yes and I'll also direct you to page six of the analysis. The key difference between this Bill and the federal law is that under this Bill, social media platforms would be required to block reported material from reappearing once it is verified to be CSAM. There is currently no such requirement under federal law.

Okay. So there is a requirement on the federal side to report to National center of exploited children. And there seems to be kind of a gap there in terms of actionable items. This Bill creates a reporting mechanism but also has a requirement for that information to be taken down or to be blocked.

Correct, and you'll hear of victims who are very frustrated because the material keeps circulating throughout the Internet and there's horrific stories of parents getting notified two or three times a week for years on end that this material is still out there of their children who were abused 10 years ago or whatever. The other piece of this too is a lot of the victims feel like the companies aren't being responsive to them. Thus, that's why we've put in the Bill the requirements that the companies respond to the victims and give them regular updates on what's on the, and I.

Think that's what I'm trying to kind of get to the bottom of is the actionable item. The victim, I think, certainly wants information taken correct down, but they also probably want to ensure that law enforcement or some actions being taken. And so that second component maybe not addressed in this Bill. Maybe that's what I'm trying to kind of get at and trying to gauge the scale and scope of this issue. Is, is there a problem?

Because this Bill creates an additional reporting mechanism in the state side which I just doesn't necessarily have any issue with. It's just what are people doing with information? And maybe one of your sports just came to sat down, may want to answer or provide information.

Good afternoon Assembly Member. Ed Howard, Children's Advocacy Institute, University of San Diego School of Law. I think you've got it exactly right. I think that the Bill has two components. The first part is trying to hold social media platforms accountable when they're actually participating, if they ever do, in the underlying sexual trafficking and sexual exploitation of children. But the other part that you're talking about does have two components is the analysis.

A terrific analysis, by the way, and I can't thank your Committee staff enough for the work they did on this Bill, as amended. The Bill requires upon the request of a survivor who is specifically identifying, specifically identifying images and videos to block that from being circulated. As your analysis correctly points out, there is no requirement of federal law on that at all. That's, I think, the gap that you're talking about, assemblymember. There is also the federal requirement of reporting to NCMEC for a law enforcement purpose.

But while we, if we ever are able to entice law enforcement to take these cases, in the meanwhile, if we don't prevent these images from remaining online or don't prevent them from popping up again and again and again, that in and of itself, that uncertainty, fear, is a form of victimization for these people. And that's the reason for that part of the Bill.

Sir, did you want to say something?

Yes, thank you. Thanks Representative. So to be crystal clear today, under existing law, if any website has or participates in the creation or development of CSAM material, you can sue them, you can send them to court, you can take them down today. That's exactly what happened to Backpage. Backpage was taken down under existing law because they participated in the creation, development of that horrible content. When platforms are notified, they also remove that image and report it to NICMIC. That's part of the federal requirement.

So that image comes down. Part of the challenge is that other people can try to put it back up in different places. And that seems to be the concern the Assembly Member is raising, and rightfully so. The challenge is how do we operationalize that? Because one of the complaints we've heard is that it will pop up on different sites across the Internet. A business can only control what happens on its own website. It cannot control what happens on other sites.

Now, once again, I think we do need better way to address this. One of the ways to do it is to find better ways for NCMEC to get those hash values out to platforms so that they can begin removing the content as it pops up on their platforms as well. But that's a different conversation on a.

Different piece, and I appreciate that. And then my final question to the author is, so there's the federal reporting and the state reporting. How does this reporting different from the federal, is it similar information? Is there different reporting requirements or are they similar?

Well, they're similar insofar as they both deal with unlawful content, pictures and videos of child rape and trafficking. But beyond that, they are not similar. And again, going back to your analysis, there's a difference between blocking and removing content. The reason why the Bill uses blocking as opposed to removing is that if you remove something entirely, you can't catch it, but it comes back again.

So the reason why the Bill requires the blocking of the content, again, as reinforced by your analysis, is there is no federal requirement for that. There is also no federal requirement of a dialogue or a conversation between the platforms who may be hosting that content, hopefully inadvertently, of course, and the survivor to be able to take that down.

That's part of the stories that you've heard over and over and over again about the fact that survivors don't know where to even start with Facebook, for example, or any of the other major platforms to try and find a real person or a real entity to try and make sure this stuff gets taken down. So that's the gap that's plugged by this Bill at some point.

Sure. I appreciate it, and I think that's what I'm trying to drill down, is certainly if there's already requirements on the federal level, we'll make sure those are effective and that if they're not effective, we don't want to create a state reporting requirement that is just as ineffective as the federal, or maybe it is effective, but there's a gap that needs to be addressed, those actual items. So I think that's what I'm trying to get at.

I certainly want to see this Bill more fleshed out and want to see what happens there. But if there is something that needs to be more actionable based on the data that's being collected through this mechanism, then I think that is something that we're going to have to address maybe within this Bill or another Bill. So thank you very much appreciate you. Thank you, Mr. Chair.

Thank you very much, Assemblymember Bauer-Kahan.

Thank you, Mr. Chair. And I apologize I wasn't here for the whole presentation. I was in another Committee, and I'm kind of glad I wasn't. It is baffling to me what this country is allowing right now as an Assembly Member, but more as a mom. We have decided as a nation, these platforms get to profit off of postings and sharings and likes and the attention economy and our children and their attention, and yet they're not responsible for any of it.

And every time we try to hold them responsible for the most abhorrent behavior one could ever possibly imagine, they come in here and say, how can we be responsible for this? Well, you're profiting off of it, so you got to be responsible for it. And it is not too much to ask to protect our most vulnerable humans, our children, to be protected from the worst possible kind of exploitation that could happen to anybody.

And just a few years ago, law enforcement sat a few of us moms down, I remember, and said, we're concerned because as encryption gets more and more sophisticated, platforms may not be able to identify this. As the images are encrypted, they won't be able to identify it and report it in the ways they do today. And they didn't believe that the encryption was happening because the platforms didn't want to report it.

But as we moved in this direction of privacy, it was going to harm the children. And they wanted us to understand that. And yet we continue to allow things to go in the direction of not giving a damn about our children being harmed. And I'm sick of it. And I know it's hard, and I know we're asking you to do more, but yes, you need to do more.

And I have no more to say than that because our kids deserve better than any single political body in this nation has done for them. And I want to thank you for your leadership on this issue because we as parents, our kids are the test case right now, and they're literally dying because we're not doing more and they're being sexually exploited.

And we can do more and we can expect more and we can hold these platforms accountable for what they are doing to allow that harm and that exploitation to our children. So keep it up. I would love to become a co author, and if the Bill hasn't been moved, I'll move the Bill.

Thank you very much. We have a motion by Assemblymember Bauer-Kahan. We have a second, we have a second by Assemblymember Lowenthal. Any other Members of the Committee want to thank you. First of all, let me just say, want to align myself with the comments of my colleague from Miranda, who I think said it so beautifully. And I would also be honored to be added as a co-author. And I want to thank, first, I want to thank you, Assemblymember Wicks.

I know that you approach so many of these issues. First and foremost, as a parent, as a mom, you have been a real leader in protecting kids and particularly in protecting kids online. And that is some of the most important work that we have to do here. And I also want to thank you for your efforts to do that work in a bipartisan fashion.

And I think one of the things that I am most proud of in terms of the work that we have done as a Privacy Committee is that so much of the work that we have done in protecting young people has been bipartisan work where we have worked together across the aisle to say, let's put aside differences of opinion on other issues to stand up and protect our kids. And so I want to thank you, Assemblymember Flora, for adding your voice here.

I think it's a really important one, and I have tremendous confidence that the two of you working together, knowing the respect that both of you have in your respective caucuses and also in our body as a whole, will be able to develop a Bill that hopefully should pass with unanimous bipartisan support. I don't think that there should be a single Member of the Legislature that should feel comfortable not supporting this Bill, given the gravity of the subject matter.

And I know that there are some comments about the remedies issues here. This Bill is double referred. It's going to judiciary next. And so I like to be narrow in the way that we understand our jurisdiction to not step on the toes of other committees. So I know that there will be a fulsome opportunity to discuss the remedy after this Bill gets out, hopefully today, and goes to the Judiciary Committee. I will just say I do want to address one thing.

I was a little bit baffled by some of the comments. With all due respect from the Professor who spoke in opposition, saying that we should focus on this purely as a criminal matter, I couldn't disagree more strongly. And I think almost any parent that you ask in the State of California would say we should do absolutely everything possible, use all tools at our disposal to protect young people.

And I think even in his testimony, we noted some of the weaknesses and deficiencies of the criminal justice system in holding these people accountable and protecting young people. So I think the answer is that we need to do more. There's clearly a shortcoming with the law as it is on the books. I think that these platforms absolutely have a responsibility to come to the table and be part of the solution.

These are some of the richest, most powerful, most successful companies on the planet, and I think that they have a moral obligation to be part of the solution here. They have a moral obligation to be part of protecting our young people. So I just think this is a wonderful Bill. I want to thank the author.

I know that in the sponsors for working closely with my staff to craft amendments to meet the demands of Section 230, the Communications decency Act of the First Amendment, to make sure that we are in a strong and firm constitutional and legal position. I think that's been done well. I do want to also thank the staff for their excellent analysis that folks have commented on. And finally, I just want to say thank you again, this is a challenging issue.

It is hard to listen to some of this testimony to me, it is shameful that California leads the nation in some of this exploitation and we all collectively have a responsibility to our children to do a lot better. So thank you for taking on this vitally important issue. I am happy to support this Bill today. And with that, the motion is do passed to the Judiciary Committee as amended and we have a motion and a second so, Madam Secretary, please call the. Roll.

Assembly Bill 1394 by Assembly Member Wicks the motion is do passed to the Judiciary Committee [Roll Call].

All right, that Bill has five votes we will leave the roll open for additional Members to add on. Yeah search would take a 10 minute. We are going to take a five minute recess. Thank you.

All right, we are. Attention, please. More attention. We are on our last bill as the chair will be presenting. Okay, great. Everybody's anxious, so let's be swift. AB 1659, you may begin when you're ready.

Thank you, Madam Chair and members, I want to start by accepting the amendments from my own committee and thank them for their thoughtful feedback and assistance. AB 1659 would establish a universal charging interface for small electronic devices that would reduce electronic waste, lower prices for consumers, and provide greater consumer choice and freedom, with consumers no longer locked into proprietary charging technology. I think most Californians are no strangers to the junk drawer or bin full of random chargers and cables, many of which eventually find their way into a landfill. Many of us have also been in situations where the charging cables we have access to do not match that of our device. The waste that is produced by these charging cables and secondary adapters has led to harmful and toxic materials polluting our environment.

This bill seeks to follow the lead of the European Union and India and adopting USB-C as the universal standard for charging interfaces on small electronic devices. By making these changes, we can protect our environment, lower prices for consumers, and finally eliminate the junk drawer. With me today to testify in support of the bill is Doug Kobold, Executive Director of the California Product Stewardship Council. With that, I would respectfully request your aye vote.

Thank you. Good afternoon.

Good afternoon. Thank you, Chair and also committee members, appreciate the opportunity to come in here and express the support of CPSC. That's our affectionate name is CPSC, California Product Stewardship Council. Just a quick note on California Product Stewardship Council, we are an advocacy organization for mostly local governments about extended producer responsibility and consumer responsibility under the umbrella of product stewardship. And part of that, one of those tenets is the waste hierarchy.

And at the top of the waste hierarchy is source reduction, which also means waste reduction. And so, as the assembly member has pointed out, we all have junk drawers full of cables from all these devices we've had over the years. And so I just wanted to cover a few points on what we're seeing. And so most of the electronic devices that we buy nowadays come with a plug. They come with a cord. There are a variety types of plug adapters.

As the handout I handed out to you would indicate, there are a variety that are used. There's millions of these sold every year. Typically, the cords actually outlast the device. And so if it's an odd type of plug, what do we do with it? And maybe years later, you pull up this cord and you have no idea what it was for, because you probably got rid of the device years ago, and so now it's going to end up as in a bad place.

Many of our new devices that we buy, like our laptops, our desktop PCs, our battery backups, actually come with a USBC type of connection so that you don't have to rely on these other odd connections. If you want to charge your phone, say you have a phone that has a USBC to USBC type of cord. You can then plug right in and charge up your phone or plug it into your computer.

As the handout indicates, there are 10 different types of connections that are typically out there. Three of them are really just USB-A type connections, either the original USB speed, type one or type two. So there are categories there for speeds. Then there is the female type of that for connecting up other USB cables just to make them longer. And then finally there's a USB three type speed, which is in 3.1 and 3.2 as well, and that's the latest and greatest USB-A type connections.

So pretty complicated how this, and you can see it's complicated. Why are we so complicated on our connections? One of the things that is clear is if you go back to 1987, the Ethernet connections we use to connect up our computers to the Internet, the network cables, they use an RJ 45 connection type that has never changed in all this time. There's never been a change to that. That is a standard.

It shows that this can be standardized, that all devices could have the same type of connection and still work properly. And with the evolution of the USB cables themselves and what speeds they're able to carry, there should no longer be a reason to have different types of connections at the end of these cables because they are carrying that same capacity. There's been over 100 fold change in the speed over the years. We've gone from 100 megabits per second now to 20 gigabits per second.

That's 20,000 megabits. So it's a lot of huge difference in the speed. The other thing is, as the assembly member pointed out, these things are becoming obsolete. There's connections that we don't use, they end up in the junk drawers. And then finally the limiting of the types of connections will actually stop a lot of this waste that we have. Because here's one of the problems that happens, is you go through that junk drawer, you find those cables, what do you do with them?

They're supposed to go to an e-waste processor. How many of those are available? How easy are they to get to? What happens with the majority of these cables is they go into the trash and now they're a wasted resource. Or worse, they get into the recycle bin because folks think that they're recyclable. And what happens is when those get to the material recovery facilities, they wind up in the machinery and they can cause binding in the facilities and actually can ignite fires.

And so not only with our lithium-ion battery bill from last year where we were trying to tackle this and did, it is the same thing with the cables, they can also produce these same issues, and I would appreciate some of them, Irwin's joint authorship of our bill, our two bills last year for batteries. With that, I'll conclude my comments.

All right, very good. Do we have any speakers in opposition? Principal speakers in opposition? All right. Do we have any speakers in support?

Thank you. Liv Butler, Californians Against Waste, in support.

Speakers in the audience in opposition? Yeah, no, not, thank you.

Lawrence Gayden, on behalf of the California Manufacturers and Technology Association with a tweener position of concern, just citing the small electronic device definition, including watches. Looking forward to talking with the author in its office some more, just concerning that piece of the language as well. Thank you.

All right, thank you. Questions or comments from the Committee? Assembly Member Papan.

My question, and you may have came in late, so I apologize. I'm all for it. But in the interim, what am I to going do with the cords I have? So my question to you is, is there something that we can do about the connector cables to use the ones we have until they go out of fashion or style or mandate, as it were?

Absolutely. If you understand what type of connection you have, the Internet, Google, Amazon, full of connectors, adapters, that will actually translate that for you and at the speed you may want.

Assembly Member, was that, that was it, okay. Assembly Member Wicks.

I've never thought about this, but it makes so much sense. Thank you, Mr. Gabriel. Why do we have 85 different options here?

Because the manufacturers obviously want to design for their own capabilities, as was just pointed out in the opposition about the smallness of the devices. Absolutely. A C connection may not be the best for a really small watch, but it may be. I think that, unfortunately, what we found at CPSC is we found that the design engineers don't always look at the end of life and how these things can be reused and used over and over and over again.

They're worried about just being able to sell it. Also, Apple, my understanding, was one of the only ones who opposed the European Union's approach to standardizing these connections because they sell their lightning cables and they can sell more cables. They're very expensive. If you want to buy a lightning cable, it's very expensive. And so why would you not need to buy, you want to buy more of them.

And so that is one of the problems because I would love to be able to take my one device that may have died, take the cables and use it on my next device and not have to buy additional cables. But when I've changed from Apple to Android, I had to buy all new cables for my car, for connecting it to my computer, so I didn't have to have one cable and worry where it was all the time.

And furthermore, if you're out and about and you don't have your cable, you forgot it and you were traveling, wouldn't it be nice to be able to just have a spare one sitting in your suitcase and you don't have to worry about buying one at one of those kiosks.

All right, Assembly Member Essayli.

I just had a couple of questions. So why do they use the lightning right now? Does it have an advantage over the USB C?

Not to my knowledge.

Not to your knowledge? It's just their proprietary charging thing.

I think it has to do with them being able to sell more things and make more money.

Which they don't even include it anymore. You have to buy it separately, which I know. So as a consumer, I think I agree, I just, to me, the European Union is not a selling point, but that's just a personal grievance. But I agree that this makes sense for consumers if there's no legitimate reason for having a different kind of charging station. So what happens to innovation? What if there's a better technology that comes out than USB-C? How does the market deal with that and incorporate that as a uniform?

Yeah, it's a great question, and I think it's something. There's a lot of that in the analysis. The idea here is that we will simply have to update law. We don't want to stifle innovation. And so right now, if someone did come up with a proprietary technology that was better, they could build that into their device. They would just have to make it so that it could still be charged with a USB-C.

And I think you see that in the European Union, where there's 450,000,000 people, where they've done this, in India, where there's 1.4 billion people, where they've done this by regulation but not by statute in both of those locales as well. As technology matures and changes and we get more innovative solutions, if we move towards something else, then the market in all of these places will coalesce around something else. So there is an opportunity for folks to innovate.

This is just giving a slight nudge to everybody and saying, much of the globe has already moved to USB-C. Let's get there, too. It's good for consumers and it's good for the environment.

So they could sell a new technology and just have, like, an adapter that allows USB C, they'd be able to do that?

Correct

This would probably solve itself because we're going to all this wireless charging, too. Anyway. Okay. Sounds like a good bill.

Thank you.

Do we have any other comments?

I would just make one comment, and that is if back in the days when they started putting plugs into electric appliances, if they weren't standardized, imagine what would happen. And imagine if somebody said back then, well, you'd be stifling innovation if you came up with a standard plug. I mean, think how many things have changed. And yet, as old as I am, I'm still plugging in things with the same, except a grounded plug. But outside of that, everything is the same going forward. The same thing can happen with this computer technology.

Thank you.

That is really frustrating. You update your phone, and all the older cords become obsolete, but they do end up staying in your drawer because you don't know how to recycle them, which, obviously, we should be doing more education on that. But Assemblymember Essayli said it, too. I think you're probably moving pretty quickly to wireless, and I assume that that's why companies like Apple aren't here in opposition, because they're moving to the next thing.

Just what I would assume, because nobody is that wound up about this bill. So, with that, do I have a motion? All right, a motion by Assembly Member Fong and a Second by Assemblymember Lowenthal. And if we could please do the roll.

AB 1659 by Assemblymember Gabriel. The motion is do passed as amended to Judiciary Committee. [Roll Call]

Okay, we have nine votes, four with one abstention. We will leave the roll open for absent members. I think at this point, it would be prudent to open the roll so folks can do some add ons. So let's go first to the consent calendar. Madam Secretary, can you call the role.

On the consent calendar. [Roll Call]

Okay, that is out 10-0. Go next to file item one. AB 331. Bauer Kahan.

The motion is do pass. Is amended to the Judiciary Committee. [Roll Call]

Okay, and that is out nine to two. We'll next go to file item number two. AB 1546.

The motion is do pass to the Judiciary Committee. [Roll Call] Okay, I'm sorry. We thought I was not voting from before. Okay, you're.

That Bill is out 73. And we will leave the roll open for Assembly Member Bauer Kahan. And let's go to AB 1394. Wicks, file item four.

The motion is do pass to the Judiciary Committee, 1394. Sorry. [Roll Call]

That Bill is out eight to zero.

All right, let us go ahead and open the roll on AB 1546.

AB 1546 by Assembly Member Gabriel. The motion is do passed to the Judiciary Committee. [Roll Call]

That Bill is out eight to 3 Now we will open the roll on AB 1659

By Assembly Member Gabriel. The motion is do passed as amended, to Judiciary Committee. [Roll Call]

That Bill is out 10 to zero. And with that, the hearing is adjourned.