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." SB 830 Page 2 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 Page 3 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