BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 830
                                                                  Page  1

          Date of Hearing:   August 4, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 830 (Wright) - As Amended:  August 2, 2010 

          Policy Committee:                             Public  
          SafetyVote:7-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill expands the definition of a "recording" for the  
          purposes of prosecuting persons trafficking in pirated  
          recordings for financial gain, to include memory cards, flash  
          drives, hard-drives, or data storage devices. 

           FISCAL EFFECT  

          1)Unknown annual GF costs, potentially in excess of $150,000,  
            for additional state prison commitments. In 2009, 33 persons  
            were committed to state prison under the section this bill  
            would expand. If the proposed expansion or clarification in  
            this bill results in three additional three-year mid-term  
            commitments at current per capita costs, the annual cost would  
            be about $175,000.   

          2)Unknown nonreimbursable local incarceration costs, offset to a  
            degree by increased fine revenue. 

           COMMENTS  

           1)Rationale  . The author contends this bill updates existing law  
            to account for newer modes of media piracy. 

            According to the author, "California has a serious problem  
            with intellectual property piracy. Nearly one-half billion  
            dollars in revenue were lost by the state and local  
            governments due to counterfeited goods, including music and  
            movies. The state's existing statute to protect against music  
            piracy has not kept pace with latest downloading technologies  
            such as memory cards, flash drives, and data storage devices."








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           2)Support  . According to the Recording Industry Association of  
            America (RIAA), this bill clarifies current law with respect  
            to technological advances. According to RIAA, "Physical music  
            piracy has historically involved the unauthorized manufacture  
            and sale of single records on traditional media such as vinyl  
            records, tapes, and compact discs (CDs). However, clever music  
            pirates have started to take advantage of more powerful  
            storage media, such as memory sticks and computer hard-drives,  
            to create a new breed of fraudulent music product containing  
            hundreds, if not thousands, of unauthorized sound recordings  
            made available for one low price.  For example, a recent  
            Craigslist posting in Los Angles is offering the sale of new  
            Western Digital External Hard-drives, pre-loaded with over  
            80,000 songs from the 1960s to the present, for just $300. The  
            unauthorized sale of such items displaces multiple legitimate  
            retail sales, thereby damaging the businesses of the many  
            labels, artists, retailers, and legal music distributors that  
            call California home.

            "Though California has a state statute designed to protect the  
            entertainment industry and general public against the crime of  
            music piracy, the applicable provision should be amended to  
            clarify that music pirates dealing in hard-drives, flash  
            drives, memory cards, and other digital storage devices filled  
            with unauthorized sound recordings, may not avoid criminal  
            prosecution under state law."  

          3)Current law  provides that a person is guilty of failure to  
            disclose the origin of a recording if, for financial gain, a  
            person knowingly advertises, offers for sale or rent, or sells  
            or rents, any recording, the cover or label of which does not  
            clearly disclose the true name and address of the manufacturer  
            and the actual artist. 

            Recording is defined as "any tangible medium upon which  
            information or sounds are recorded or otherwise stored,  
            including, any phonograph record, disc, tape, audio cassette,  
            wire, film, or other medium on which information or sounds are  
            recorded or otherwise stored." 

            Recording piracy is punishable as follows: 

             a)   If the offense involves at least 100 articles, by up to  
               one year in county jail and/or a fine of up to $25,000, or  








                                                                  SB 830
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               by two, three, or five years in state prison and/or a fine  
               of up to $250,000. 

             b)   Any other violation is punishable by up to one year in  
               county jail and/or a fine of up to $25,000 for a first  
               offense. A subsequent conviction is punishable by up to one  
               year in county jail, or 16 months, two, or three years in  
               state prison and/or a fine of up to $100,000. 

           4)Is this bill necessary  ? The current definition of recording -  
            "any tangible medium" - appears to cover flash drives, hard  
            drives and other data storage devices.   
           
          5)This bill is a gut and amend; it has not been heard in this  
            form in the Senate  . This bill passed the Senate as a minor  
            horse-racing bill. 

           

          Analysis Prepared by  :    Geoff Long / APPR. / (916) 319-2081