BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1479
                                                                  Page  1

          SENATE THIRD READING
          SB 1479 (Pavley)
          As Amended  August 6, 2012
          Majority vote

           SENATE VOTE  :36-0  
           
           PUBLIC SAFETY       5-1                                         
           
           ----------------------------------------------------------------- 
          |Ayes:|Knight, Cedillo, Hagman,  |     |                          |
          |     |Mitchell, Hall            |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Ammiano                   |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           
          SUMMARY  :  Provides that in music or video piracy cases, 
          restitution shall include the value of pirated works that were 
          seized from the defendant, but not actually sold.  Specifically, 
           this bill  :      

          1)Specifies that for purposes of restitution involving crimes of 
            music and video piracy, the possession of non-conforming 
            devices or articles intended for sale constitutes actual 
            economic loss to an owner or lawful producer in the form of 
            displaced legitimate wholesale purchases.  

          2)Requires a restitution order in music and video piracy cases 
            to be based on the value of legitimate copies of the works 
            illegally possessed by the defendant had that number of works 
            been legitimately purchased at the wholesale price.

          3)Contains double jointing language to SB 1177 (Leno) to avoid 
            chaptering out issues.

           EXISTING LAW  : 

          1)States it is the unequivocal intention of the people of the 
            State of California that all persons who suffer losses as a 
            result of criminal activity shall have the right to 
            restitution from the persons convicted of the crimes for 
            losses they suffer.  Restitution shall be ordered from the 
            convicted persons in every case, regardless of the sentence or 








                                                                  SB 1479
                                                                  Page  2

            disposition imposed, in which a crime victim suffers a loss, 
            unless compelling and extraordinary reasons exist to the 
            contrary. 

          2)Requires full victim restitution for economic losses 
            determined by the court.  

          3)States that economic losses include, but are not limited to, 
            the following:  full or partial payment for the value of 
            stolen or damaged property; medical expenses; mental health 
            counseling expenses; wages or profits lost due to injury 
            incurred by the victim, and if the victim is a minor, wages or 
            profits lost by the minor's parent, parents, guardian, or 
            guardians, while caring for the injured minor; wages or 
            profits lost by the victim, and if the victim is a minor, 
            wages or profits lost by the minor's parent, parents, 
            guardian, or guardians, due to time spent as a witness or in 
            assisting the police or prosecution; noneconomic losses, 
            including, but not limited to, psychological harm, for felony 
            violations of Penal Code Section 288; interest at the rate of 
            10% per annum; actual and reasonable attorney's fees and other 
            collection costs; relocation expenses incurred by an adult 
            victim; expenses to install or increase residential security; 
            expenses to retrofit a residence or vehicle, or both, to make 
            the residence accessible to or the vehicle operational by the 
            victim, where the victim suffers permanent disability as a 
            direct result of the crime; and, expenses to monitor and 
            repair the  credit report of a victim of identity theft.  

          4)Defines a "victim", for purposes of restitution, as including 
            any of the following: 

             a)   The immediate surviving family of the actual victim; 

             b)   Any corporation, business trust, estate, trust, 
               partnership, association, joint venture, government, 
               governmental subdivision, agency, or instrumentality, or 
               any other legal or commercial entity when that entity is a 
               direct victim of a crime; and, 

             c)   Any person who has sustained economic loss as the result 
               of a crime and who satisfies any of the following 
               conditions:

               i)     At the time of the crime was the parent, 








                                                                  SB 1479
                                                                  Page  3

                 grandparent, sibling, spouse, child, or grandchild of the 
                 victim;

               ii)    At the time of the crime was living in the household 
                 of the victim;

               iii)   At the time of the crime was a person who had 
                 previously lived in the household of the victim for a 
                 period of not less than two years in a relationship 
                 substantially similar to a relationship listed above;

               iv)    Is another family member of the victim, including, 
                 but not limited to, the victim's fiancé or fiancée, and 
                 who witnessed the crime; or, 

               v)     Is the primary caretaker of a minor victim.  

          5)Provides that a person is guilty of a crime when he or she 
            knowingly attempts to sell, rent or manufacture, or possess 
            for these purposes, an illicit audio recording or audiovisual 
            work.  The essence of this crime is that the defendant failed 
            to disclose the true name and address of the manufacturer and 
            the name of the artist.  The crime is punishable as follows:

             a)   A violation involving at least 100 copies of an audio 
               recording or an audiovisual work is an alternative 
               felony-misdemeanor, punishable by imprisonment for up to 
               one year in the county jail, or in state prison for two, 
               three, or five years, or a fine of up to $500,000, or both.

             b)   A first violation involving less than 100 copies is a 
               misdemeanor, punishable by up to one year in county jail, 
               or a fine not exceeding $50,000, or both.

             c)   A subsequent violation involving less than 100 copies is 
               an alternative felony-misdemeanor, punishable by up to one 
               year in county jail, 16 months, two years, or three years 
               in state prison, or a fine not exceeding $200,000, or both. 
                

          6)Prohibits transferring any recording for purposes of sale 
            or financial gain, or transporting such recordings for 
            financial gain.  An offense involving at least 1,000 
            units is an alternate felony-misdemeanor, with a county 
            jail term of two, three or five years and fine of up to 








                                                                  SB 1479
                                                                  Page  4

            $500,000.  An offense involving less than 1,000 units is 
            a misdemeanor with a fine of up to $50,000.  A second 
            conviction for fewer than 1,000 units is a straight 
            felony, with a maximum fine of $200,000.  

          7)Prohibits selling or offering for sale, etc. illegally 
            transferred recordings.  A first offense involving at least 
            100 units is a misdemeanor, with maximum one-year jail term 
            and maximum $20,000 fine.  A second conviction is an alternate 
            felony- misdemeanor, with maximum $50,000 fine.  A first 
            offense involving less than 100 units is a misdemeanor, with 
            maximum 6-months jail term and a maximum fine of $10,000.  A 
            second offense involving less than 100 units is a misdemeanor, 
            with maximum one-year jail term and maximum $20,000 fine.  A 
            third offense involving less than 100 units is an alternate 
            felony-misdemeanor, with maximum $25,000 fine.  

          8)Prohibits the unauthorized recording of live performances for 
            purposes of sale or financial gain.  An offense involving at 
            least 1,000 units is an alternate felony-misdemeanor, with a 
            county jail term of two, three or five years and fine of up to 
            $500,000.  An offense involving less than 1,000 units is a 
            misdemeanor with a fine of up to $50,000.  A second conviction 
            for fewer than 1,000 units is a straight felony, with a 
            maximum fine of $200,000.  

          9)Prohibits transporting unauthorized recording of live 
            performances for financial gain.  An offense involving at 
            least 1,000 units is an alternate felony-misdemeanor, with a 
            county jail term of two, three or five years and fine of up to 
            $500,000.  An offense involving less than 1,000 units is a 
            misdemeanor with a fine of up to $50,000.  A second conviction 
            for fewer than 1,000 units is a straight felony, with a 
            maximum fine of $200,000.  

          10)States that a person who violates a disc manufacturing 
            statute, as specified, is guilty of a misdemeanor, punishable 
            by a fine of between $500 and $25,000 for a first offense.  A 
            subsequent offense is punishable by a fine of between $5,000 
            and $250,000.  

          11)States that any person who buys, sells, receives, transfers, 
            or possess for purposes of sale or rental an optical disc 
            knowing that the disc was manufactured in California without 
            the required identification mark, or with a false mark, is 








                                                                  SB 1479
                                                                  Page  5

            guilty of a misdemeanor, punishable by imprisonment in county 
            jail for up to a year, a fine of up to $10,000, or both.  

          12)Makes it is a misdemeanor to knowingly remove, deface, cover, 
            alter or destroy the required identification mark on an 
            optical disc.  The crime is punishable by a jail term of up to 
            one year, a fine of up to $10,000, or both.  

          13)Makes it a crime for any person to willfully manufacture, 
            intentionally sell, or knowingly possess for sale any 
            counterfeit mark, punishable as follows:

             a)   When the offense involves less than 1,000 articles, with 
               a total retail or fair market value less than that required 
               for grand theft, and if the defendant is an individual, the 
               crime is punished by a fine of not more than $10,000, or by 
               imprisonment in county jail of up to one year, or by both.  
               If the defendant is a business entity, the maximum fine is 
               $200,000;

             b)   When the offense involves 1,000 or more of the articles, 
               or has a total retail or fair market value equal to or 
               greater than that required for grand theft, and if the 
               defendant is an individual, the crime is punished as an 
               alternate felony misdemeanor, or a fine not to exceed 
               $500,000, or by both; or, if the defendant is a business 
               entity, by a fine not to exceed $1 million; and,

             c)   For a subsequent conviction if the defendant is an 
               individual, are punished as an alternate felony 
               misdemeanor, or by a fine of not more than $100,000, or 
               both that fine and imprisonment.  For a subsequent 
               conviction of a business entity, the crime is punished by a 
               fine of not more than $400,000.  

           FISCAL EFFECT  :  Unknown.  This bill is keyed non-fiscal by the 
          Legislative Counsel.

           COMMENTS  :  According to the author, "SB 1479 seeks to provide a 
          clear standard for restitution in cases involving pirated music 
          and movies.   We need adequate deterrents to combat this growing 
          epidemic. 

          "SB1479 strengthens our piracy laws by making it clear that 
          restitution is appropriate in cases involving the possession of 








                                                                  SB 1479
                                                                  Page  6

          fraudulent recordings intended for sale.  The bill also provides 
          clarification to the courts on how restitution is calculated. 

          "In 2011, more than 600,000 illegal CDs and DVDs were seized in 
          California.  In 2007, the LA Economic Development Corporations 
          cited that the music industry lost $851 million due to 
          counterfeiting, while the movie industry lost over $2 billion.  
          State and local governments also lost significant revenue 
          because of lost sales. 

          "The actions of media pirates are decimating what have long been 
          California-based, treasured industries.  We need adequate 
          deterrents to reflect the severity of the crime."

          Please see the policy committee analysis for a full discussion 
          of this bill.  


          Analysis Prepared by  :    Sandy Uribe / PUB. S. / (916) 319-3744 


                                                                FN: 0004446