BILL NUMBER: SB 962	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JULY 1, 2014
	AMENDED IN ASSEMBLY  JUNE 12, 2014
	AMENDED IN ASSEMBLY  JUNE 2, 2014
	AMENDED IN SENATE  MAY 5, 2014
	AMENDED IN SENATE  APRIL 9, 2014
	AMENDED IN SENATE  MARCH 24, 2014

INTRODUCED BY   Senator Leno
   (Principal coauthor: Assembly Member Skinner)
   (Coauthors: Senators DeSaulnier, Hancock, Pavley, and Wolk)

                        FEBRUARY 6, 2014

   An act to add Section 22761 to the Business and Professions Code,
relating to mobile communications devices.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 962, as amended, Leno.  Smart phones.  
Smartphones. 
   Existing law regulates various business activities and practices,
including the sale of telephones.
   This bill would require that any smartphone, as defined, that is
manufactured on or after July 1, 2015, and sold in California after
that date, include a technological solution at the time of sale,
which may consist of software, hardware, or both software and
hardware, that, once initiated and successfully communicated to the
smartphone, can render inoperable the essential features, as defined,
of the smartphone to an unauthorized user when the smartphone is not
in the possession of an authorized user. The bill would require that
the technological solution, when enabled, be able to withstand a
hard reset, as defined, and prevent reactivation of the smartphone on
a wireless network except by an authorized user. The bill would make
these requirements inapplicable when the smartphone is resold in
California on the secondhand market or is consigned and held as
collateral on a loan. The bill would authorize an authorized user to
 affirmatively elect to disable or  opt-out of the
technological solution  during the initial device set-up
process and to disable the technological solution  at any
time. The bill would make the knowing retail sale in violation of the
bill's requirements subject to a civil penalty of not less than
$500, nor more than $2,500, for each violation. The bill would limit
an enforcement action  to collect the civil penalty  to
being brought by the Attorney General, a district attorney, or city
attorney, and would prohibit any private right of action to 
enforce the bill's requirements   collect the civil
penalty  .
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) According to the Federal Communications Commission, smartphone
thefts now account for 30 to 40 percent of robberies in many major
cities across the country. Many of these robberies often turn violent
with some resulting in the loss of life.
   (b) Consumer Reports projects that 1.6 million Americans were
victimized for their smartphones in 2012.
   (c) According to the New York Times, 113 smartphones are lost or
stolen every minute in the United States.
   (d) According to the Office of the District Attorney for the City
and County of San Francisco, in 2012, more than 50 percent of all
robberies in San Francisco involved the theft of a mobile
communications device.
   (e) Thefts of smartphones in Los Angeles increased 12 percent in
2012, according to the Los Angeles Police Department.
   (f) According to press reports, the international trafficking of
stolen smartphones by organized criminal organizations has grown
exponentially in recent years because of how profitable the trade has
become.
   (g) In order to be effective, antitheft technological solutions
need to be ubiquitous, as thieves cannot distinguish between those
 mobile communications devices   smartphones
 that have the solutions enabled and those that do not. As a
result, the technological solution should be able to withstand a hard
reset or operating system downgrade, come preequipped, and the
default setting of the solution shall be to prompt the consumer to
enable the solution during the initial device setup. Consumers should
have the option to affirmatively elect to disable this protection,
but it must be clear to the consumer that the function the consumer
is electing to disable is intended to prevent the unauthorized use of
the device.
  SEC. 2.  Section 22761 is added to the Business and Professions
Code, to read:
   22761.  (a) For purposes of this section, the following terms have
the following meanings:
   (1) (A) "Smartphone" means a cellular radio telephone or other
mobile voice communications handset device that includes all of the
following features:
   (i) Utilizes a mobile operating system.
   (ii) Possesses the capability to utilize mobile software
applications, access and browse the Internet, utilize text messaging,
utilize digital voice service, and send and receive email.
   (iii) Has wireless network connectivity.
   (iv) Is capable of operating on a long-term evolution network or
successor wireless data network communication standards.
   (B) A "smartphone" does not include  a radio cellular 
 telephone commonly referred to as a "feature" or "messaging"
telephone,  a laptop, a tablet device, or a device that only has
electronic reading capability.
   (2) "Essential features" of a smartphone are the ability to use
the  device   smartphone  for voice
communications, text messaging, and the ability to browse the
Internet, including the ability to access and use mobile software
applications. "Essential features" do not include any functionality
needed for the operation of the technological solution, nor does it
include the ability of the smartphone to access emergency services by
a voice call or text to the numerals "911," the ability of a
 device   smartphone  to receive wireless
emergency alerts and warnings, or the ability to call an emergency
number predesignated by the owner.
   (3) "Hard reset" means the restoration of a smartphone to the
state it was in when it left the  factory, and refers to any
act of returning a smartphone to that state, including  
factory through  processes commonly termed a factory reset or
master reset.
   (4) "Sold in California," or any variation thereof, means that the
smartphone is sold at retail from a location within the state, or
the smartphone is sold and shipped to an end-use consumer at an
address within the state. "Sold in California" does not include a
smartphone that is resold in the state on the secondhand market or
that is consigned and held as collateral on a loan.
   (b) (1) Any smartphone that is manufactured on or after July 1,
2015, and sold in California after that date, shall include a
technological solution at the time of sale, to be provided by the
manufacturer or operating system provider, that, once initiated and
successfully communicated to the smartphone, can render the essential
features of the smartphone inoperable to an unauthorized user when
the smartphone is not in the possession of an authorized user. The
smartphone shall, during the initial device setup process, prompt an
authorized user to enable the technological solution. The
technological solution shall be reversible, so that if an authorized
user obtains possession of the smartphone after the essential
features of the smartphone have been rendered inoperable, the
operation of those essential features can be restored by an
authorized user. A technological solution may consist of software,
hardware, or a combination of both software and hardware, and when
enabled, shall be able to withstand a hard reset or operating system
downgrade and shall prevent reactivation of the smartphone on a
wireless network except by an authorized user.
   (2) An authorized user of a smartphone may  affirmatively
elect to disable or  opt-out of  enabling  the
technological solution  during the initial device setup
process and may disable the technological solution  at any
time. However, the physical acts necessary to disable  or opt-out
of enabling  the technological solution may only be performed
by the  end-use consumer   authorized user 
or a person specifically selected by the  end-use consumer
  authorized user  to disable  or opt-out of
enabling  the technological solution.
   (c) The knowing retail sale of a smartphone in California in
violation of subdivision (b) may be subject to a civil penalty of not
less than five hundred dollars ($500), nor more than two thousand
five hundred dollars ($2,500), per  device  
smartphone  sold in  California.  
California in violation of this section.  A suit to enforce this
 section   subdivision  may only be
brought by the Attorney General, a district attorney, or a city
attorney. A failure of the technological solution due to hacking or
other third-party circumvention may be considered a violation for
purposes of this subdivision, only if, at the time of sale, the
seller had received notification from the manufacturer or operating
system provider that the vulnerability cannot be remedied by a
software patch or other solution. There is no private right of action
to enforce this  section.   subdivision. 
   (d) The retail sale in California of a smartphone shall not result
in any civil liability to the seller and its employees and agents
from that retail sale alone if the liability results from or is
caused by failure of a technological solution required pursuant to
this section, including any hacking or other third-party
circumvention of the technological solution, unless at the time of
sale the seller had received notification from the manufacturer or
operating system provider that the vulnerability cannot be remedied
by a software patch or other solution.  Except as provided in
subdivision (c), nothing   Nothing  in this
subdivision precludes a suit for civil damages on any other basis
outside of the retail sale transaction, including, but not limited
to, a claim of false advertising.
   (e) Any request by a government agency to interrupt communications
service utilizing a technological solution required by this section
is subject to Section 7908 of the Public Utilities Code.
   (f) Nothing in this section prohibits a network operator, device
manufacturer, or operating system provider from offering a
technological solution or other service in addition to the
technological solution required to be provided by the device
manufacturer or operating system provider pursuant subdivision (b).
   (g) Nothing in this section requires a technological solution that
is incompatible with, or renders it impossible to comply with,
obligations under state and federal law and regulation related to any
of the following:
   (1) The provision of emergency services through the 911 system,
including text to 911, bounce-back messages, and location accuracy
requirements.
   (2) Participation in the wireless emergency alert system.
   (3) Participation in state and local emergency alert and public
safety warning systems.