BILL NUMBER: AB 819	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Charles Calderon

                        FEBRUARY 26, 2009

   An act to add Chapter 5.8 (commencing with Section 13849) to Title
6 of Part 4 of the Penal Code, relating to intellectual property
piracy, making an appropriation therefor, and declaring the urgency
thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 819, as introduced, Charles Calderon. Intellectual property
piracy.
   Existing law establishes various crime prevention and prosecution
programs.
   This bill would establish the Intellectual Property Piracy
Prevention and Prosecution Program to fund grants for local law
enforcement and district attorneys for purposes of preventing and
prosecuting intellectual property piracy, as specified.
   The bill would establish the Intellectual Property Piracy
Prevention and Prosecution Fund, which would be continuously
appropriated and which would be funded by private and state sources,
including, contingent on the enactment of an unspecified Assembly
bill, an annual appropriation from the General Fund to bring the
balance in the fund to $50 million.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Chapter 5.8 (commencing with Section 13849) is added to
Title 6 of Part 4 of the Penal Code, to read:
      CHAPTER 5.8.  INTELLECTUAL PROPERTY PIRACY PREVENTION AND
PROSECUTION ACT OF 2009


   13849.  (a) This act shall be known and may be cited as the
Intellectual Property Piracy Prevention and Prosecution Act of 2009.
   (b) The Legislature finds and declares the following:
   (1) According to a 2007 study by the Institute for Policy
Innovation, intellectual property piracy, meaning the theft of
movies, music, software, and video games, costs the United States
economy fifty-eight billion dollars ($58,000,000,000) each year.
   (2) The problem of intellectual property piracy continues to grow
worse. A 2005 Gallup study found that 5 percent of Americans had
purchased, copied, or downloaded counterfeit music in the preceding
year. By 2007, this number had jumped to 9 percent. The percentage of
respondents that admitted buying a pirated movie rose from 3 percent
in 2005, to 6 percent in 2007. At the same time, once robust DVD
sales have flattened over the past few years, while CD shipments to
retailers have plummeted.
   (3) The effect of intellectual property piracy on California and
its citizens is particularly dire. Intellectual property piracy
adversely affects the California economy, eliminates jobs, and
damages industry. According to the Business Software Alliance, in
2003, software piracy alone cost the California economy more than
13,000 jobs, over eight hundred two million dollars ($802,000,000) in
wages and salaries, over one billion dollars ($1,000,000,000) in
retail sales of business software applications, and roughly two
hundred thirty-nine million dollars ($239,000,000) in total tax
losses.
   (4) This act will send a strong signal that California is
committed to protecting the intellectual property created by
California's innovation and entertainment industries.
   (5) By creating a technical advisory committee, California will be
able to draw upon the expertise and insight of those on the front
lines of the antipiracy effort.
   (6) Grants awarded pursuant to this act will be used to foster
innovation and to provide local law enforcement and prosecutors the
tools they need to effectively fight intellectual property piracy.
   (7) Finally, by safeguarding the legitimate sale of intellectual
property, California will increase its tax base, and stimulate the
economy.
   (c) Funds provided under this program are intended to ensure that
law enforcement and prosecutors are equipped with the necessary
personnel and equipment to combat successfully intellectual property
piracy, which includes piracy of movies, music, software, and video
games.
   13849.1.  (a) There is hereby established in the Department of
Justice, a program of financial assistance for law enforcement and
district attorneys' offices, designated the Intellectual Property
Piracy Prevention and Prosecution Program. All funds appropriated to
the Department of Justice for the purposes of this chapter shall be
administered and disbursed by the Attorney General in consultation
with the Intellectual Property Piracy Prevention and Prosecution
Advisory Committee as established in Section 13849.3 and shall, to
the extent feasible, be coordinated with funds derived pursuant to
Section 13849.3 and private grants or private donations that are made
available for these purposes.
   (b) All funds designated for use for purposes of this chapter
shall be deposited in the Intellectual Property Piracy Prevention and
Prosecution Fund, which is hereby established. The fund shall be
under the direction and control of the office of the Attorney
General. Notwithstanding Section 13340 of the Government Code, moneys
in the fund are hereby continuously appropriated for the purposes
specified in this chapter.
   (c) The advisory committee shall review grant applications and, on
a majority vote of the membership, submit those applications to the
Attorney General for formal approval.
   (d) The advisory committee shall monitor and audit the use of
grant funds.
   (e) Grant money shall be used exclusively to combat intellectual
property piracy within the state. Grants shall be made on an annual
basis, and may not be used to pay existing staff, absent
extraordinary circumstances and approval by the Attorney General.
Grant recipients may receive funding for no more than three years
without submitting another grant application. Grants shall only be
made to applicants with an existing budget dedicated to fighting
intellectual property piracy.
   (f) In order to receive a grant, prospective recipients shall
agree in writing to the following terms, as conditions of receiving a
grant:
   (1) The recipient is authorized to accept grant funds under all
applicable state and local laws.
   (2) The recipient will vigilantly safeguard grant funds and ensure
that use of the grant funds fully comports with the purposes
specified in the application for the grant funds, as approved or
modified by the advisory committee.
   (3) Grant funds shall be used to augment, but shall not be used to
supplant, a grant recipient's budget.
   (4) If the grant funds are used for the purpose of investigation,
litigation, or prosecution, any remedy, settlement, judgment, or
restitution award shall provide for full reimbursement to the
Intellectual Property Piracy Protection and Prosecution Fund of all
grant funds used for that investigation, litigation, or prosecution.
   (5)  The recipient shall notify the advisory committee in writing
of litigation or prosecution results, including any settlement,
judgment, or other resolution, within 30 days.
   (6) The recipient shall notify the advisory committee in writing
of the status of all outstanding investigations, litigation, or
prosecutions funded in whole or in part by the grant six months after
the funds are disbursed, and every 12 months thereafter until all
disbursed funds have been expended and reported on.
   (7) The recipient shall fully cooperate with the advisory
committee and its agents in providing all information and documents
concerning the use of grant funds.
   (8) Except as otherwise expressly agreed by the advisory
committee, within 60 days after the conclusion of the investigation,
litigation, or prosecution, training, or other activity for which the
disbursement was awarded, the recipient shall return all unused
funds to the advisory committee by check made payable to the
Intellectual Property Piracy Prevention and Prosecution Fund.
   (9) If grant funds are used for the production of any materials,
the recipient shall permit the Attorney General's office and the
advisory committee to use and distribute those materials without
restriction, for their intended purposes.
   (10) The advisory committee is authorized to audit, review, and
inspect the recipient's activities, books, documents, papers, and
records during the project and thereafter for three years following
the final allocation of funds.
   13849.2.  (a) The Intellectual Property Piracy Prevention and
Prosecution Advisory Committee is hereby established for the purpose
of formulating a comprehensive written strategy for addressing
intellectual property piracy prevention and prosecution throughout
the state, and to advise the Attorney General on the appropriate
disbursement of funds to local law enforcement agencies and district
attorneys' offices.
   (b) In formulating that strategy, the committee shall identify
various priorities for law enforcement attention regarding the
following:
   (1) The apprehension and prosecution of criminal organizations,
networks, and groups of individuals engaged in the theft of,
counterfeiting of, or unauthorized distribution, sale, or
reproduction of, the following types of intellectual property:
   (A) Movies.
   (B) Music.
   (C) Computer software.
   (D) Video games.
   (2) The investigation and prosecution of violations of criminal
and civil provisions of law, including, but not limited to, Sections
653h, 653s, and 653w.
   (3) The advising of local law enforcement and district attorneys
regarding current aspects of intellectual property piracy, in order
to respond quickly to the most serious threats of piracy.
   (c) The advisory committee, which shall meet at least four times
per year, shall consist of 10 members, of whom six shall be appointed
by the Governor, two by the Speaker of the Assembly, and two by the
Senate Committee on Rules. Members shall be paid a one hundred dollar
($100) per diem for each meeting, as well as all necessary travel
expenses. The advisory committee shall be composed of the following
members:
   (1) At least two representatives of the general public.
   (2) At least one representative with demonstrable knowledge of the
movie industry.
   (3) At least one representative with demonstrable knowledge of the
music industry.
   (4) At least one representative with demonstrable knowledge of the
computer software industry.
   (5) At least one representative with demonstrable knowledge of the
video gaming industry.
   (6) At least one representative with experience in law
enforcement, specifically relating to intellectual property piracy
offenses.
   (7) At least one representative with experience prosecuting
intellectual property piracy offenses at the local, state, or federal
level.
   (d) In deciding which grant applications to fund, the advisory
committee shall consider the following factors:
   (1) The purpose for which the funds are sought.
   (2) The proposal's specificity, including whether the proposal
identifies anticipated costs, along with materials and personnel to
be used.
   (3) The anticipated public benefit.
   (4) The ability of the advisory committee to audit the use of the
funds.
   (5) The number, amount, and use of previous grants awarded to the
prospective recipient, if any.
   (e) Members of the advisory committee shall be entitled to the
same immunity from liability that is provided to public employees.
   13849.3.  (a)  All defendants convicted of committing an
intellectual property piracy offense shall, in addition to any other
punishment and restitution order, be required to pay an additional
penalty of ____ dollars ($____) which shall be payable to the
Intellectual Property Piracy Prevention and Prosecution Fund.
   (b) The fund may also accept private donations.
   (c) (1) On July 1, 2010, and every July 1, thereafter, the
Legislature hereby appropriates from the General Fund to the
Intellectual Property Piracy Prevention and Prosecution Fund sum
sufficient to bring the balance in the Intellectual Property Piracy
Prevention and Prosecution Fund to fifty million dollars
($50,000,000). In no event shall an annual appropriation from the
General Fund be made if the fund has a balance of fifty million
dollars ($50,000,000) or more.
   (2) This subdivision shall be contingent upon the enactment of AB
____ of the 2009-10 Regular Session.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to ensure public peace against the accelerating problem
of intellectual property piracy, it is necessary for this act to take
effect immediately.