BILL NUMBER: AB 1277 CHAPTERED 10/03/03 CHAPTER 662 FILED WITH SECRETARY OF STATE OCTOBER 3, 2003 APPROVED BY GOVERNOR OCTOBER 2, 2003 PASSED THE ASSEMBLY SEPTEMBER 11, 2003 PASSED THE SENATE SEPTEMBER 10, 2003 AMENDED IN SENATE SEPTEMBER 8, 2003 AMENDED IN SENATE SEPTEMBER 2, 2003 AMENDED IN SENATE JULY 22, 2003 INTRODUCED BY Assembly Member Cohn FEBRUARY 21, 2003 An act to amend Sections 14998.2 and 14998.4 of, to add Sections 14998.11 and 14998.12 to, and to add Chapter 1.4 (commencing with Section 15363.60) to Part 6.7 of Division 3 of Title 2 of, the Government Code, and to add Section 13848.8 to the Penal Code, relating to commissions and committees. LEGISLATIVE COUNSEL'S DIGEST AB 1277, Cohn. Commissions and committees. (1) Existing law, known as the Motion Picture, Television, and Commercial Industries Act of 1984 creates within the Technology, Trade, and Commerce Agency, the California Film Commission consisting of 26 members to encourage motion picture and television filming in California and the Film Office as the permitting authority for the use of state-owned property and state employee services for the purpose of making commercial motion pictures. Existing law also requires the commission to develop and oversee the implementation of a Cooperative Motion Picture Marketing Plan and establishes the Film California First Program which includes the Film California First Fund in the State Treasury for the purpose of reimbursing film costs incurred by a public agency. Existing law, that will become effective January 1, 2004, abolishes the Technology, Trade, and Commerce Agency and repeals these provisions as of that date. This bill would transfer the administrative authority of the act and the Film California First Program to the Business, Transportation and Housing Agency. (2) Existing law creates the High Technology Crime Advisory Committee, which was established for the purpose of formulating a comprehensive written strategy for addressing high technology crime and to advise the agency or agencies designated by the Director of Finance on the appropriate disbursement of funds to regional task forces. Existing law requires the appointment of specified members to the committee. The bill would require the executive director to appoint a designee of the Recording Association of America and a designee of the Consumers Union to the committee. (3) Existing law provides that, in formulating the comprehensive written strategy for addressing high technology crime throughout the state, the committee shall identify various priorities for law enforcement attention, including the apprehension and prosecution of criminal organizations, networks, and groups of individuals engaged in specified crimes, including robbery, counterfeiting of a registered mark, sale of goods with false identification of their manufacturer, receiving stolen property, removal of a manufacturer's identification, and unauthorized connections to video, cable, television, or like services. This bill would provide that the committee shall also identify as a priority for law enforcement attention the goal of apprehending and prosecuting criminal organizations, networks, and groups of individuals engaged in the crimes of misappropriation of recorded music for commercial advantage or private financial gain; the transportation of articles containing unauthorized recordings of live performances; the creation and distribution of pirated sound recordings or audiovisual works; and the failure to disclose the origin of a recording or audiovisual work. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 14998.2 of the Government Code is amended to read: 14998.2. (a) There is in the Business, Transportation, and Housing Agency, the California Film Commission consisting of 26 members. The Governor shall appoint 13 members, the Senate Committee on Rules shall appoint four members, the Speaker of the Assembly shall appoint four members, and five members shall be ex officio. The members of the commission appointed by the Governor may include representatives of state and local government, motion picture development companies, employee and professional organizations composed of persons employed in the motion picture industry, and other appropriate members of this or related industries. All members of the commission, except legislators who are appointed either by the Senate Committee on Rules or by the Speaker of the Assembly, shall serve at the pleasure of the appointing authority for a term of two years from the effective date of the appointment. (b) (1) One of the members appointed by the Senate Committee on Rules shall, and another one may, be a Senator and one of the members appointed by the Speaker of the Assembly shall, and another one may, be a Member of the Assembly. These persons shall be appointed for terms of four years. (2) Of the legislators appointed to the commission, no more than three legislators from the same political party may be appointed to or serve on the commission at the same time. (c) Any legislator appointed shall serve as a voting member of the commission, and shall meet with, and participate in the activities of, the commission to the extent that participation is not incompatible with his or her position as a Member of the Legislature, but shall only serve in that capacity while concurrently serving as a Member of the Legislature. Whenever a legislator vacates an office, the appointing power shall appoint another person for a new full term. (d) Six of the 13 members appointed by the Governor shall be as follows: (1) One shall be a person who is a member or employee of a union or guild of motion picture artists. (2) One shall be a person who is a member or employee of a union or guild representing motion picture craftsmen, technicians, or photographers. (3) Two shall be from major motion picture studios. (4) One shall be a member of the city council or a member of the county board of supervisors of a city or a county with a population of at least two million people. (5) One shall be a member of the city council or a member of the county board of supervisors of a city or a county with a population of less than two million people. (e) The Director of Transportation shall serve as an ex officio nonvoting member. (f) The Director of Parks and Recreation shall serve as an ex officio nonvoting member. (g) The Commissioner of the California Highway Patrol shall serve as an ex officio nonvoting member. (h) The State Fire Marshal shall serve as an ex officio nonvoting member. (i) The director of the commission shall serve as an ex officio nonvoting member. SEC. 2. Section 14998.4 of the Government Code is amended to read: 14998.4. (a) The commission shall meet at least quarterly and shall select a chairperson and a vice chairperson from among its members. The vice chairperson shall act as chairperson in the chairperson's absence. (b) Each commission member shall serve without compensation but shall be reimbursed for traveling outside the county in which he or she resides to attend meetings. (c) The commission shall work to encourage motion picture and television filming in California and to that end, shall exercise all of the powers provided in this chapter. (d) The commission shall make recommendations to the Legislature, the Governor, the Business, Transportation and Housing Agency, and other state agencies on legislative or administrative actions that may be necessary or helpful to maintain and improve the position of the state's motion picture industry in the national and world markets. (e) In addition, the commission shall do all of the following: (1) Adopt guidelines for a standardized permit to be used by state agencies and the director. (2) Approve or modify the marketing and promotion plan developed by the director pursuant to subdivision (d) of Section 14998.9 to promote filmmaking in the state. (3) Conduct workshops and trade shows. (4) Provide expertise in promotional activities. (5) Hold hearings. (6) Adopt its own operational rules and procedures. (7) Counsel the Legislature and the Governor on issues relating to the motion picture industry. SEC. 3. Section 14998.11 is added to the Government Code, to read: 14998.11. The Film Office shall perform the following functions and activities: (a) Provide staff for the California Film Commission. (b) Implement the Cooperative Motion Picture Marketing Plan. (c) Provide services necessary to increase the amount of filming within California. SEC. 4. Section 14998.12 is added to the Government Code, to read: 14998.12. (a) (1) The California Film Commission shall develop and oversee the implementation of a Cooperative Motion Picture Marketing Plan. The plan shall increase the marketing efforts of the commission, and offer state resources to local film commissions and local government liaisons to the film industry for the purpose of marketing their locales to the motion picture industry. (2) In addition to paragraph (1), the resources offered under the plan for marketing shall be used to recruit local government participation in, and development of, local film commissions. (3) For purposes of this section, resources offered to local film commissions and local government liaisons to the motion picture industry shall include all of the following: (A) Grants for partial or full funding of the cost to develop or participate in workshops, trade shows, seminars, or meetings that assist local governments to promote and market the use of their locales by the motion picture industry. Eligible meetings shall also include those called or approved by the Director of the Film Office to further the purposes of the Cooperative Motion Picture Marketing Plan. (B) The services of a professional photographer, including material and expenses, to take still photographs of motion picture locations for inclusion in the location resource library established pursuant to subdivision (c) of Section 14998.9. Whenever possible, the photographer shall be hired from the local area participating in the Cooperative Motion Picture Marketing Plan. (C) Appropriate promotional and informational materials for the purpose of mailing or distributing to the motion picture industry. The materials shall include, but not be limited to, brochures, print ads, and direct marketing materials which state the benefits and advantages of producing motion pictures within the state or the locales participating in the Cooperative Motion Picture Marketing Plan. (b) Any resource requested under the provisions of the Cooperative Motion Picture Marketing Plan not specified in this section shall be subject to the approval of the California Film Commission. (c) The California Film Commission shall expand and upgrade the location resource library through the use of a librarian, a computerized catalog system, and a professional photographer. (d) As a condition of eligibility for the use of resources pursuant to this section, a local government shall demonstrate substantial compliance with the model process for granting film permits described in Section 14999.20. (e) The commission shall adopt additional guidelines as needed for the implementation of the plan. (f) The purpose of the Cooperative Motion Picture Marketing Plan is in no way to discourage, limit, or impede the participation of local governments in the Film Liaisons in California, Statewide, commonly referred to as F.L.I.C.S. (g) As used in this section, "motion picture" shall include, but not be limited to, production in film, video, television, commercial, and still photography. SEC. 5. Chapter 1.4 (commencing with Section 15363.60) is added to Part 6.7 of Division 3 of Title 2 of the Government Code, to read: CHAPTER 1.4. FILM CALIFORNIA FIRST 15363.60. This chapter shall be known and may be cited as the Film California First Program. 15363.61. (a) The Legislature finds and declares as follows: (1) The entertainment industry is one of California's leading industries in terms of employment and tax revenue. (2) While film, television, and commercial production in California has expanded over the years, other states and countries actively compete for California production business. It is generally acknowledged that certain segments of the industry, mainly film and television production, are especially hard hit in California. The Legislature finds that this is due to assertive efforts of other states and countries, offering various incentives for filming outside of California. As a result of increased marketing efforts by other states and countries, unemployment in certain film industry sectors and a reduction of film business has occurred within California. (3) Recognizing the vital role the entertainment industry plays in California's economy, legislation enacted in 1985 created the California Film Commission within the Business, Transportation and Housing Agency to facilitate, retain, and attract filming in California. (4) In order to stop the decline of California film production, it is necessary and appropriate to assist in the underwriting of actual costs incurred by production companies to film in California and to provide opportunities for production companies and other film industry companies to lease property owned by the State of California at below market rates. (5) Providing the funds designated under this program, and leasing property owned by the State of California at below market rates is in the public interest and serves a public purpose, and providing incentives to production companies and other film industry companies will promote the prosperity, health, safety, and welfare of the citizens of the State of California. (b) It is the intent of the Legislature that, commencing with the 2002-03 fiscal year, funding for the program from the General Fund shall not exceed the General Fund funding level for the prior fiscal year. 15363.62. For purposes of this chapter, the following meanings shall apply: (a) "Agency" means the Business, Transportation and Housing Agency, which includes the California Film Commission. (b) "Film" means any commercial production for motion picture, television, commercial, or still photography. (c) "Film costs" means the usual and customary charges by a public agency connected with the production of a film, limited to any of the following: (1) State employee costs. (2) Federal employee costs. (3) Federal, state, University of California, and California State University permits and rental costs. (4) Local public entity employee costs. (5) Local property use fees. (6) Rental costs for equipment owned and operated by a public agency in connection with the film. (d) "Fund" means the Film California First Fund, established pursuant to Section 15363.74. (e) "Production company" means a company, partnership, or corporation, engaged in the production of film. (f) "Program" means the Film California First Program established pursuant to this chapter. (g) "Public agency" means any of the following: (1) The State of California, and any of its agencies, departments, boards, or commissions. (2) The federal government, and any of its agencies, departments, boards, or commissions. (3) The University of California. (4) The California State University. (5) California local public entities. (6) Any nonprofit corporation acting as an agent for the recovery of costs incurred by any of the entities listed in this subdivision. 15363.63. (a) (1) Except as provided in paragraph (2), the Business, Transportation and Housing Agency may pay and reimburse the film costs incurred by a public agency, subject to an audit. The director of the commission shall develop alternate procedures for the reimbursement of public agency costs incurred by the production company. The Business, Transportation and Housing Agency shall only reimburse actual costs incurred and may not reimburse for duplicative costs. (2) Notwithstanding paragraph (1), the Business, Transportation and Housing Agency shall not reimburse costs at rates exceeding those in effect as of January 1, 2002. (b) Notwithstanding any other provision of law, the Controller shall pay any program invoice received from the agency that contains documentation detailing the film costs, and if the party requesting payment or reimbursement is a public agency, a certification that the invoice is not duplicative cost recovery, and an agreement by the public agency that the Business, Transportation and Housing Agency may audit the public agency for invoice compliance with the program requirements. (c) (1) Not more than three hundred thousand dollars ($300,000) shall be expended to pay or reimburse costs incurred on any one film. (2) In developing the procedures and guidelines for the program, the commission may, in consultation with interested public agencies, establish limits on per day film costs that the state will reimburse. A consultation and comment period shall begin on January 1, 2001, and shall end 30 days thereafter. (d) (1) Upon receipt of all necessary film costs documentation from a public agency, the Business, Transportation and Housing Agency shall transmit the appropriate information to the Controller for payment of the film costs within 30 days. (2) Public agencies shall be entitled to reimbursement for certain administrative costs, to be determined by the director of the commission, incurred while participating in the program. The reimbursement for administrative costs shall not exceed 1 percent of the total amount of the invoices submitted. Reimbursement shall have an annual cap imposed of not more than ten thousand dollars ($10,000) per public agency participating in the program. Contracted agents working on behalf of two or more public agencies shall have a cap of not more than twenty thousand dollars ($20,000) annually. (e) The commission shall prepare annual preliminary reports to be submitted to the Joint Legislative Budget Committee in regard to the program prior to the adoption of the annual Budget Act. The reports shall include a list of all entities that received funds from the program, the amounts they received, and the public services that were reimbursed. The commission shall prepare and submit a final report to the committee no later than January 1, 2004. (f) The commission shall, in consultation with the Department of Industrial Relations and the Employment Development Department, contract with an independent audit firm or qualified academic expert, to prepare a report to be submitted to the Joint Legislative Budget Committee no later than January 1, 2004, that identifies the beneficiaries of expenditures from the Film California First Fund, and determines the impact of these expenditures on job retention and job creation in California. 15363.64. (a) The Film California First Fund is hereby established in the State Treasury. (b) The following moneys shall be paid into the fund: (1) Any moneys appropriated and made available by the Legislature for the purposes of this chapter. (2) Any other moneys that may be made available to the agency for the purpose of this chapter from any other source, including the return from investments of moneys by the Treasurer. 15363.65. Procedures and guidelines promulgated to clarify and make specific provisions of the program established pursuant to this chapter, or of any other film assistance program within the agency, shall be exempt from the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 for a period of 36 months after the effective date of this chapter. Following the 36-month exemption, the commission may adopt regulations concerning the implementation of this chapter as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1. The adoption of these regulations is an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare within the meaning of subdivision (b) of Section 11346.1. Notwithstanding subdivision (e) of Section 11346.1, the regulations shall not remain in effect for more than 180 days unless the commission complies with all provisions of Chapter 3.5 (commencing with Section 11340) of Part 1, as required by subdivision (e) of Section 11346.1. SEC. 6. Section 13848.8 is added to the Penal Code, to read: 13848.8. (a) The executive director of the agency or agencies designated by the Director of Finance pursuant to Section 13820 shall also appoint the following members to the High Technology Crime Advisory Committee established by Section 13848.6: (1) A designee of the Recording Association of America. (2) A designee of the Consumers Union. (b) The High Technology Crime Advisory Committee, in formulating a comprehensive written strategy for addressing high technology crime throughout the state, shall identify, in addition to the various priorities for law enforcement attention specified in subdivision (b) of Section 13848.6, the goal of apprehending and prosecuting criminal organizations, networks, and groups of individuals engaged in the following activities: (1) Violations of Sections 653h, 653s, and 635w. (2) The creation and distribution of pirated sound recordings or audiovisual works or the failure to disclose the origin of a recording or audiovisual work.