Amended in Assembly March 27, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2667

Introduced by Assembly Member Bloom

February 21, 2014

An act to begin delete add Sections 1802.22, 1802.23, 1802.24, 1802.25, 1803.12, and 1803.13 to end delete begin insert amend Section 1812.622 of, and to add Section 1812.650 to, end insert the Civil Code, relating to electronic devices.

LEGISLATIVE COUNSEL’S DIGEST

AB 2667, as amended, Bloom. begin delete Retail installment contracts: end delete begin insert Rental-purchase agreements: end insert electronic devices: monitoring technology.

Existing law, the begin delete Unruh Act, end delete begin insert Karnette Rental-Purchase Act, end insert provides for the regulation of begin delete retail installment contracts, end delete begin insert rental-purchase agreements, end insert as defined. Existing law requires begin delete retail installment contracts end delete begin insert rental- end insert begin insert purchase agreements end insert to contain specified notices, including, among other things, information on costs and terms of begin delete repayment end delete begin insert payment end insert . Existing law makes it a misdemeanor to willfully violate the provisions regulating begin delete retail installment contracts. end delete begin insert rental-purchase agreements. end insert

This bill would add to these provisions regulating begin delete retail contracts end delete begin insert rental-purchase agreements end insert provisions requiring a begin delete retail seller end delete begin insert lessor end insert to provide clear and prominent notice to a begin delete buyer end delete begin insert consumer end insert and obtain express consent from the begin delete buyer end delete begin insert consumer end insert at the time begin delete of sale of end delete begin insert the lessor and the consumer enter into a rental-purchase agreement for end insert an electronic device if that device has begin delete monitoring technology or end delete geophysical location tracking technology installed and would prohibit a begin delete seller end delete begin insert lessor end insert from installing the technology without providing clear and prominent notice and obtaining express consent from the begin delete buyer. end delete begin insert consumer. end insert The bill would prohibit a begin delete seller end delete begin insert lessor end insert from using begin delete a monitoring technology or end delete geophysical location tracking technology on an electronic device for any purpose other than to prevent fraud. begin insert The bill would prohibit a lessor from using monitoring technology on an electronic device. end insert

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.

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

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 1802.22 is added to the Civil Code, to
read:

1802.22.  

“Electronic device” means a desktop or laptop
computer, handheld device, tablet, smart phone, 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.

SEC. 2.  

Section 1802.23 is added to the Civil Code, to read:

1802.23.  

“Clear and prominent notice” means notice presented
in an understandable language and syntax, in the predominantly
used language for that communication, and that:

(a) In textual communications, the required disclosures are 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.

(b) In communications disseminated orally or through audible
means, the required disclosures are delivered in a volume and
cadence sufficient for an ordinary consumer to hear and
comprehend.

(c) In communications disseminated through video means, the
required disclosures are in writing in a form consistent with
subdivision (a) of this definition and appear on the screen for a
duration sufficient for an ordinary consumer to read and
comprehend them, and in the same language as the predominantly
used language for that communication.

(d) 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 subdivision (a), in addition to any audio or video presentation.

SEC. 3.  

Section 1802.24 is added to the Civil Code, to read:

1802.24.  

“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 a computer or other item, the WiFi signals available to or
actually used by a computer to access the Internet, the
telecommunication towers or connections available to or actually
used by a computer, the processing of any reported data or
information through geolocation lookup services, or any
information derived from any combination of the foregoing.

SEC. 4.  

Section 1802.25 is added to the Civil Code, to read:

1802.25.  

“Monitoring technology” means any hardware,
software, or application utilized in conjunction with a computer
that can cause the computer to capture, monitor, record, or report
information about user activities by recording keystrokes, clicks,
or other user-generated actions, capturing screenshots of the
information displayed on a computer monitor or screen, or
activating the camera or microphone function of a computer to
take photographs or record audio or visual content through the
computer’s Internet Webcam or microphone.

SEC. 5.  

Section 1803.12 is added to the Civil Code, to read:

1803.12.  

It shall be unlawful for a seller to fail to provide clear
and prominent notice to a buyer and obtain express consent from
the buyer at the time of sale of an electronic device if that device
has monitoring technology or geophysical location tracking
technology installed or to install monitoring technology or
geophysical location tracking technology on an electronic device
without first providing clear and prominent notice to the buyer and
obtaining express consent.

SEC. 6.  

Section 1803.13 is added to the Civil Code, to read:

1803.13.  

It shall be unlawful for a seller to use monitoring
technology or geophysical location tracking technology on an
electronic device for any purpose other than the prevention of
fraud.

end delete

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1812.622 of the end insert begin insert Civil Code end insert begin insert is amended
to read: end insert

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.

begin insert

(m) “Electronic device” means a desktop or laptop computer,
handheld device, tablet, smart phone, 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.

end insert begin insert

(n) “Clear and prominent notice” means notice presented in
an understandable language and syntax, in the predominantly used
language for that communication, and that:

end insert begin insert

(1) In textual communications, the required disclosures are 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.

end insert begin insert

(2) In communications disseminated orally or through audible
means, the required disclosures are delivered in a volume and
cadence sufficient for an ordinary consumer to hear and
comprehend.

end insert begin insert

(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, and in
the same language as the predominantly used language for that
communication.

end insert begin insert

(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.

end insert begin insert

(o) “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 a computer or other item, the WiFi signals available to or
actually used by a computer to access the Internet, the
telecommunication towers or connections available to or actually
used by a computer, the processing of any reported data or
information through geolocation lookup services, or any
information derived from any combination of the foregoing.

end insert begin insert

(p) “Monitoring technology” means any hardware, software,
or application utilized in conjunction with a computer that can
cause the computer to capture, monitor, record, or report
information about user activities by recording keystrokes, clicks,
or other user-generated actions, capturing screenshots of the
information displayed on a computer monitor or screen, or
activating the camera or microphone function of a computer to
take photographs or record audio or visual content through the
computer’s Internet Webcam or microphone.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 1812.650 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 1812.650. end insert   

(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. A lessor shall not install
geophysical location tracking technology on an electronic device
without first providing clear and prominent notice to the consumer
and obtaining express consent.

(b) A lessor shall not use geophysical location tracking
technology on an electronic device for any purpose other than the
prevention of fraud.

(c) A lessor shall not use monitoring technology on an electronic
device for any purpose.

end insert

begin delete SEC. 7. end delete
begin insert SEC. 3. end insert   

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.