BILL NUMBER: AB 1681	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Cooper

                        JANUARY 20, 2016

   An act to add Section 22762 to the Business and Profession Code,
relating to smartphones.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1681, as introduced, Cooper. Smartphones.
   Existing law requires that a smartphone 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.
   This bill would require a smartphone that is manufactured on or
after January 1, 2017, and sold in California, to be capable of being
decrypted and unlocked by its manufacturer or its operating system
provider. The bill would, except as provided, subject a seller or
lessor that knowingly failed to comply with that requirement to a
civil penalty of $2,500 for each smartphone sold or leased. The bill
would prohibit a seller or lessor who has paid this civil penalty
from passing any portion of the penalty on to purchasers of
smartphones. The bill would authorize only the Attorney General or a
district attorney to bring a civil suit to enforce these provisions.

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 22762 is added to the Business and Professions
Code, immediately following Section 22761, to read:
   22762.  (a) For the purposes of this section, the following terms
have the following meanings:
   (1) "Smartphone" has the same meaning as in Section 22761.
   (2) "Sold in California" has the same meaning as in Section 22761.

   (3) "Leased in California," or any variation thereof, means that
the smartphone is contracted for a specified period of time to an
end-use consumer at an address within the state.
   (b) A smartphone that is manufactured on or after January 1, 2017,
and sold or leased in California, shall be capable of being
decrypted and unlocked by its manufacturer or its operating system
provider.
   (c) Except as provided in subdivision (d), a seller or lessor that
sells or leases in California a smartphone manufactured on or after
January 1, 2017, that is not capable of being decrypted and unlocked
by its manufacturer or its operating system provider shall be subject
to a civil penalty of two thousand five hundred dollars ($2,500) for
each smartphone sold or leased if the seller or lessor of the
smartphone knew at the time of the sale or lease that the smartphone
was not capable of being decrypted and unlocked by its manufacturer
or its operating system provider. A seller or lessor who pays a civil
penalty imposed pursuant to this subdivision shall not pass on any
portion of that penalty to purchasers of smartphones by raising the
sales or lease price of smartphones.
   (d) (1) The sale or lease of a smartphone manufactured on or after
January 1, 2017, that is not capable of being decrypted and unlocked
by its manufacturer or its operating system provider shall not
result in liability to the seller or lessor if the inability of the
manufacturer and operating system provider to decrypt and unlock the
smartphone is the result of actions taken by a person or entity other
than the manufacturer, the operating system provider, the seller, or
the lessor and those actions were unauthorized by the manufacturer,
the operating system provider, the seller, or the lessor.
   (2) Paragraph (1) does not apply if at the time of sale or lease,
the seller or lessor had been notified that the manufacturer and
operating system provider were unable to decrypt and unlock the
smartphone due to those unauthorized actions.
   (e) A civil suit to enforce this section may only be brought by
the Attorney General, for the sale or lease of a smartphone in
California, or a district attorney for the sale or lease of a
smartphone in the county represented by the district attorney. A
seller or lessor shall not be subject to more than a single penalty
for each sale or lease of a smartphone.