BILL ANALYSIS Ó
SB 550
Page 1
Date of Hearing: August 17, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 550 (Padilla) - As Amended: August 15, 2011
Policy Committee: Business and
Professions Vote: 8 - 0
Public Safety 7 - 0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill authorizes law enforcement officers to search the
premises of commercial optical disc manufacturers to verify
compliance with optical disc identification law without
providing prior notice of the inspection or obtaining a warrant.
Specifically, this bill:
1)Authorizes law enforcement officers to search the premises of
optical disc manufacturers without first obtaining a warrant.
2)Defines optical disc as a disc capable of being read by a
laser or other light source on which data is stored in digital
form, including, but not limited to CDs, DVDs, or related
mastering source materials. This definition does not include
blank optical discs.
3)Prohibits a person who manufactures optical discs for
commercial purposes from possessing, owning, controlling, or
operating manufacturing equipment or any optical disc mold
unless it has been adapted to apply the appropriate
identification mark or unique identifying code.
4)Prohibits a person who manufactures optical discs for
commercial purposes from making, possessing, or adapting any
optical disc mold for the purpose of applying a forged, false,
or deceptive identification mark or identifying code.
5)States that any manufacturing equipment, optical disc mold, or
production part found on the premises of a commercial
manufacturer shall for the purposes of this chapter, be deemed
SB 550
Page 2
to be in the possession of the manufacturer.
6)States that any manufacturer of optical discs found to be in
violation of this section is guilty of a misdemeanor and shall
be subject to a fine of not less than $500 and not more than
$25,000 for a first offense, and shall be subject to a fine of
not less than $5,000 and not more than $250,000 for a second
or subsequent offense.
FISCAL EFFECT
Potential minor nonreimbursable costs to counties for
prosecution and incarceration related to violations of the
bill's provisions, offset to some extent by fine revenues.
COMMENTS
1)Purpose . The intent of this legislation is to increase the
fines and penalties associated with pirating music and movies.
According to the author, "The crime of illegal mass
reproduction of music and movies is a serious problem in
California. Last year alone, more than 820,000 illegal discs
were seized by law enforcement authorities in California. In
a 2007 report, The Los Angeles Economic Development
Corporation estimated the economic losses in Los Angeles
County to all industries exceed $5 billion annually. Music
and movie losses make up more than half of that number. The
result of pirating is a loss of nearly half a billion tax
dollars a year to state and local governments."
2)Constitutional Concerns re Warrantless Searches . It is unclear
whether this bill, which allows law enforcement to search
private property without a warrant, would stand up to a
constitutional challenge. The Fourth Amendment of the United
States Constitution protects against unreasonable searches and
seizures. Generally, a warrant is required before government
agents, including law enforcement can enter into private
property.
The Assembly Public Safety Committee analysis includes a
discussion of this concern, essentially concluding that myriad
rulings involving exigent circumstances, closely regulated
industries, high risk of illegal conduct or of serious danger
to the public, reasonableness, substantial governmental
interest, furtherance of a regulatory scheme, and scope of
SB 550
Page 3
search, are interrelated and inconclusive.
3)Opposition . The American Civil Liberties Union notes, "SB 550
would allow the warrantless searches of businesses that create
CDs, DVDs, or other optical disks that contain music, films,
computer programs, and other expressive content, activity
which is protected by the First Amendment. In general, the
First Amendment looks with suspicion on laws like this one
that single-out publishers and impose burdens on them that are
not equally imposed on other businesses.
"In addition, this bill authorizes law enforcement officials
to seize any disks that they believe were manufactured in
violation of the statute. This violates the fundamental First
Amendment principle that the government cannot confiscate more
than a single exemplar of expressive materials without a final
judgment that the materials are unprotected by the First
Amendment."
4)Related Legislation . AB 819 (Calderon), Statutes of 2010,
increases the fines for intellectual property piracy.
AB 568 (Lieu), Statutes of 2009, allows law enforcement to
declare any non-residential property unlawfully used for the
manufacture, sale, or possession of counterfeit goods, a
nuisance.
AB 2750 (Krekorian), Statutes of 2008, requires a court to
order persons convicted of specified crimes relating to music
piracy to pay restitution to persons who have suffered
economic loss as a result of the illegal activity, as
specified.
AB 64 (Cohn), Statutes of 2006, makes the possession or sale
of at least 100, rather than 1,000, audio recordings
punishable as an alternate felony/misdemeanor.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081