BILL NUMBER: AB 2667	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 18, 2014
	PASSED THE ASSEMBLY  AUGUST 19, 2014
	AMENDED IN SENATE  AUGUST 13, 2014
	AMENDED IN SENATE  JUNE 15, 2014
	AMENDED IN ASSEMBLY  APRIL 24, 2014
	AMENDED IN ASSEMBLY  MARCH 27, 2014

INTRODUCED BY   Assembly Member Bloom

                        FEBRUARY 21, 2014

   An act to amend Section 1812.622 of, and to add Section 1812.650
to, the Civil Code, relating to electronic devices.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2667, Bloom. Rental-purchase agreements: electronic devices:
monitoring technology.
   Existing law, the Karnette Rental-Purchase Act, provides for the
regulation of rental-purchase agreements, as defined. Existing law
requires rental-purchase agreements to contain specified notices,
including, among other things, information on costs and terms of
payment. Existing law makes it a misdemeanor to willfully violate the
provisions regulating rental-purchase agreements.
   This bill would add to these provisions regulating rental-purchase
agreements provisions requiring a lessor to provide clear and
prominent notice to a consumer and obtain express consent from the
consumer at the time the lessor and the consumer enter into a
rental-purchase agreement for an electronic device if that device has
geophysical location tracking technology installed by the lessor and
would prohibit a lessor from installing the technology without
providing clear and prominent notice and obtaining express consent
from the consumer. The bill would prohibit a lessor from using,
selling, or sharing geophysical location tracking technology on an
electronic device for any purpose other than the repossession of the
electronic device when there is a violation of the rental-purchase
agreement, pursuant to the law, or when requested by the consumer.
The bill would prohibit a lessor from using or installing monitoring
technology on an electronic device for any purpose other than to
provide remote technical assistance when requested by the consumer.
The bill would provide for the expiration of and notification related
to geophysical location tracking technology.
   Because a willful violation of these provisions would be a crime,
this bill would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


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

  SECTION 1.  Section 1812.622 of the Civil Code is amended to read:
   1812.622.  As used in this title:
   (a) "Advertisement" means a commercial message in any medium that
directly or indirectly solicits or promotes one or more specific
rental-purchase transactions, excluding instore merchandising aids.
This definition does not limit or alter the application of other
laws, including Chapter 5 (commencing with Section 17200) of Part 2
and Chapter 1 (commencing with Section 17500) of Part 3, of Division
7 of the Business and Professions Code, to rental-purchase
transactions.
   (b) "Consumer" means a natural person or persons who rent or lease
personal property from a lessor pursuant to a rental-purchase
agreement or to whom a lessor offers personal property for use
pursuant to a rental-purchase agreement.
   (c) "Lessor" means any person or entity that provides or offers to
provide personal property for use by consumers pursuant to a
rental-purchase agreement.
   (d) "Rental-purchase agreement," except as otherwise provided in
this subdivision, means an agreement between a lessor and a consumer
pursuant to which the lessor rents or leases, for valuable
consideration, personal property for use by a consumer for personal,
family, or household purposes for an initial term not exceeding four
months that may be renewed or otherwise extended, if under the terms
of the agreement the consumer acquires an option or other legally
enforceable right to become owner of the property. A rental-purchase
agreement is a lease subject to Title 1.5 (commencing with Section
1750) and Title 1.7 (commencing with Section 1790).
   "Rental-purchase agreement" shall not be construed to be, nor be
governed by, and shall not apply to, any of the following:
   (1) A retail installment sale, as defined in Section 1802.5.
   (2) A retail installment contract, as defined in Section 1802.6.
   (3) A retail installment account, as defined in Section 1802.7.
   (4) A lease or agreement that constitutes a security interest, as
defined in Section 1201 of the Commercial Code.
   (5) A consumer credit contract, as defined in Section 1799.90.
   (e) "Cash price" means the price of the personal property
described in the rental-purchase agreement that the consumer may pay
in cash to the lessor at the inception of the rental-purchase
agreement to acquire ownership of that personal property.
   (f) "Cost of rental" means the difference between the total of all
periodic payments necessary to acquire ownership under the
rental-purchase agreement and the cash price of the rental property
that is subject to the rental-purchase agreement.
   (g) "Fee" means any payment, charge, fee, cost, or expense,
however denominated, other than a rental payment.
   (h) "Appliance" means and includes any refrigerator, freezer,
range including any cooktop or oven, microwave oven, washer, dryer,
dishwasher, or room air-conditioner or air purifier.
   (i) "Electronic set" means and includes any television, radio,
camera, video game, or any type of device for the recording, storage,
copying, printing, transmission, display, or playback of any sound
or image, but does not include any item that is part of a computer
system.
   (j) "Computer system" means a computer processor and a video
monitor, printer, and peripheral items primarily designed for use
with a computer. Audio and video devices, which are commonly used for
entertainment and into which data may be downloaded from a computer,
are not part of a computer system.
   (k) "Lessor's cost" means the documented actual cost, including
actual freight charges, of the rental property to the lessor from a
wholesaler, distributor, supplier, or manufacturer and net of any
discounts, rebates, and incentives.
   (  l  ) "Total of payments" means the total amount of
periodic payments necessary to acquire ownership of the property that
is the subject of the rental-purchase agreement if the consumer
makes all regularly scheduled payments.
   (m) "Electronic device" means a desktop or laptop computer,
handheld device, tablet, smartphone, or other electronic product or
device that has a platform on which to download, install, or run any
software program, code, script, or other content.
   (n) "Geophysical location tracking technology" means hardware,
software, or an application that collects and reports data or
information that identifies the precise geophysical location of an
item, including technologies that report the GPS coordinates of an
electronic device, the WiFi signals available to or actually used by
an electronic device to access the Internet, the telecommunication
towers or connections available to or actually used by an electronic
device, the processing of any reported data or information through
geolocation lookup services, or any information derived from any
combination of the foregoing.
   (o) "Monitoring technology" means any hardware, software, or
application utilized in conjunction with an electronic device that
can cause the electronic device to capture, monitor, record, or
report information about user activities with or without the user's
knowledge.
   (p) "Remote technical assistance" means collaborative access by
the user and technician to connect to an electronic device for the
purpose of providing technical support to the user.
   (q) "Express consent" means the affirmative agreement to any use
or installation of geophysical location tracking technology or remote
technical assistance. Express consent does not include consent given
when either option is highlighted or preselected as a default
setting.
  SEC. 2.  Section 1812.650 is added to the Civil Code, to read:
   1812.650.  (a) A lessor shall provide clear and prominent notice
to a consumer and obtain express consent from the consumer at the
time the lessor and the consumer enter into a rental-purchase
agreement for an electronic device if that device has geophysical
location tracking technology installed by the lessor, and at any time
the geophysical location tracking technology is activated or used by
the lessor.
   (b) For purposes of this section, "clear and prominent notice"
means notice presented in an understandable language and syntax, in
the predominantly used language for that communication, and that:
   (1) In textual communications, the required disclosures are
separate and apart from a privacy policy, data use policy, terms of
service, end-user license agreement, lease agreement, or other
similar document, and of a type, size, and location sufficiently
noticeable for an ordinary consumer to read and comprehend in print
that contrasts highly with the background on which they appear.
   (2) In communications disseminated orally or through audible
means, the required disclosures are unavoidable and delivered in a
volume and cadence sufficient for an ordinary consumer to hear and
comprehend.
   (3) In communications disseminated through video means, the
required disclosures are in writing in a form consistent with
paragraph (1) and appear on the screen for a duration sufficient for
an ordinary consumer to read and comprehend them.
   (4) In communications made through interactive media, including
the Internet, online services, and software, the required disclosures
are unavoidable and presented in a form consistent with paragraph
(1), in addition to any audio or video presentation.
   (c) A lessor shall not use, sell, or share geophysical location
tracking technology on an electronic device for any purpose other
than the repossession of the electronic device when there is a
violation of the rental-purchase agreement, pursuant to law, or when
requested by the consumer.
   (d) Clear and prominent notification shall be displayed on an
electronic device if geophysical location tracking technology is
activated or used by the lessor. This notification requirement shall
be suspended if the consumer or lessor reports that the electronic
device has been stolen and has filed a police report stating that the
electronic device has been stolen. For purposes of this subdivision,
"filing a police report" means the filing of a consumer's or lessor'
s complaint with the police department in any form recognized by that
jurisdiction.
   (e) A lessor shall provide that any geophysical location tracking
technology that has been installed by the lessor on an electronic
device, or can be activated by the lessor, expires upon the first
instance the electronic device connects to the Internet after
completion of the purchase of the electronic device.
   (f) A lessor shall not use or install monitoring technology on an
electronic device for any purpose other than to provide remote
technical assistance when requested by the consumer.
   (g) A lessor shall provide clear and prominent notice to a
consumer and obtain express consent from the consumer for the
installation or use of any software that allows the lessor to provide
remote technical assistance and upon the activation and deactivation
of any remote technical assistance when requested by the consumer.
   (h) A lessor shall not acquire any data when providing remote
technical assistance beyond what is necessary to provide assistance
to the user and beyond what the user has consented to. Any data
acquired during the period of consumer consented technical assistance
shall not be retained, used, or sold for any purpose.
   (i) This section shall not be interpreted to require a lessor to
enter into a rental-purchase agreement with any consumer who does not
provide express consent to the above-described provisions of the
rental-purchase agreement.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.