BILL ANALYSIS
AB 819
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Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 819 (Calderon) - As Amended: May 6, 2009
Policy Committee: Public
SafetyVote: 7-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill creates the Intellectual Property Piracy Prevention
and Prosecution Program (IPPPPP) to provide grants for local law
enforcement and district attorneys to prevent and prosecute
intellectual property piracy, which includes piracy of movies,
music, software, and video games. Specifically, this bill:
1)Creates within the Department of Justice (DOJ), the IPPPPP, a
program of financial assistance for law enforcement and
district attorneys' offices.
2)Creates a continuous appropriation from the GF of an
unspecified amount to maintain the IPPPP Fund, administered
DOJ, at $50 million at the start of every fiscal year.
3)Requires grant money to be used exclusively to fight
intellectual property piracy within California. Grants shall
be made on an annual basis, and may not be used to pay
existing staff, absent extraordinary circumstances. Grant
recipients may receive funding for no more than three years
without submitting another grant application. Grants shall
only be made to applicants with an existing budget dedicated
to fighting intellectual property piracy.
4)Establishes the IPPPP Advisory Committee, as specified, to
formulate a comprehensive strategy for addressing intellectual
property piracy prevention and prosecution in California, and
to advise DOJ on the appropriate disbursement of funds to
local law enforcement agencies and district attorneys'
offices.
AB 819
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5)Is contingent upon the enactment of AB 711 (Calderon), which
attempts to recoup use tax from businesses operating in
California. AB 711 states the Legislature's intent that the
revenues paid by qualified purchasers that are deposited into
the General Fund be annually appropriated to the Intellectual
Property Piracy Prevention and Prosecution Fund, as created by
AB 819. AB 711, a majority vote bill that could raise an
estimated $600 million, is also contingent upon enactment of
AB 819.
FISCAL EFFECT
1)Ongoing continuously appropriated GF costs in the range of $50
million. The bill creates a continuous appropriation from the
GF to the IPPPP Fund that requires the Fund to maintain a
minimum $50 million balance on July 1 of every year.
Undetermined annual GF costs for grants, presumably in a
similar range.
(It is not clear how the continuous GF appropriation in this
bill relates to the provision in AB 711 specifying legislative
intent that "revenues deposited into the GF" - presumably all
revenues related to AB 711 - "be annually appropriated to the
IPPPP Fund.")
2)Administrative costs to DOJ and the advisory committee, which
is authorized to audit and review grantee activities and
records, would likely be in the range of 5% of the grant
program.
COMMENTS
Rationale. The author's intent is to provide law enforcement
with funding to enforce entertainment piracy.
According to the author, "California remains the capital of the
motion picture and television industry as well as a center for
the recording and software industries. In terms of economic
activity, television and movies generated a total of $42.2
billion, split almost equally between payroll expenditures and
payments to vendors. Approximately 266,000 people were directly
employed in the motion picture and television industry in
California, with an average salary of $80,600. When indirect
employment resulting from the industry is factored in, the
number of people working in California as a result of television
AB 819
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and movies totals over 500,000.
"Although piracy is a global problem, a recent study by the Los
Angeles County Economic Development Corporation (LAEDC) notes
that it affects the L.A. region disproportionately due to the
concentration of the entertainment industry there. LAEDC
estimates that in 2005 losses to the motion picture industry
from piracy were $2.7 billion; the sound recording industry $851
million; software publishing $355 million.
"Not only is digital piracy a direct threat to the industry, but
its effects are felt by state and local government in the form
of lost tax revenues.
"According to the same LAEDC study, piracy affecting the
entertainment industry just in LA cost nearly $134 million in
state income taxes; $63.5 million in sales taxes; $2 million in
LA City Business Taxes.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081