Senate Privacy Digital Technologies And Consumer Protection Committee

Thank you. Good morning. I'm going to call to order the Senate Committee on Privacy, Digital Technologies, and Consumer Protection. Today will be our final hearing of this cycle and we have several bills on calendar. We have two bills that are proposed for consent, which we will take up at the appropriate time. That's file item 5, AB 2504, Bauer-Cahan, and file item 14, 2545 by Assemblymember Schiavo. And seeing as we don't have a quorum, we'll begin as a subcommittee and we do have an author present, Assemblymember Bauer-Cahan. Would you like to present AB 302?

and did I give you a promotion? No, I don't think so. The vice chair is merely noting, and I should have noted for the record as well, substituting today by order of the Rules Committee as our committee member and vice chair, Senator Sayarto in lieu of Senator Jones.

So it is a promotion. Congratulations, Mr. Sayarto.

Are there any tennis players, leadership class members or anyone else who should provide testimony on AB 302? If so, please come forward as lead witnesses. Okay, anyone else wish to register their support for the bill? And please share with us your name, affiliation, if any, but not your lobbying firm and your position on the bill.

Thank you, anyone else? Let's turn then to opposition. Does anyone wish to testify in opposition to AB 302? Does anyone wish to register their opposition to the bill? Seeing none, we'll turn to the committee for any questions, comments, or for motion. Senator Sayarto. Thank you, and thank you for your bill. My daughter was a high school tennis player. They managed to put together a pretty good team without all of that stuff being required. They all communicated well, and they all did well. So anyway, I'm pleased to support your bill when it comes up for a vote. Thank you, Senator. All right. Assemblymember Arcagan, would you like to close?

All right. We will ask for the motion when we have a quorum. At that time, the motion will be due pass as amended, and those are the amendments that the author agreed to in the Senate Education Committee that have been forwarded to us. Thank you. All right. With that, then, we'll turn to the next bill, which is AB 1705.

Did they get processed in time?

Thank you very much. All right, are there any lead witnesses in support? Does anyone wish to register their support for the bill?

Thank you.

Thank you.

Jezrelle Prado-English on behalf of the California Commission on the Status of Women and Girls in support. All right. Thank you. Are there any lead witnesses in opposition to AB 1705?

Good morning, Chair and members. Naomi Padron on behalf of the Computer and Communications Industry Association. We would echo the concerns raised by my colleague at TechNet.

Respectfully ask for your aye vote when the time is right. Thank you.

Thank you again. I'm proud to present AB 2007, a measure to safeguard children's privacy and ensure parents have a say in the way their children's information is used. And I'll be accepting the committee amendments on this bill as well. Youth programs are incredibly important to our children and to families every day. And currently, the way digital releases are set up is you get one form that signs your child up and releases their image likeness for marketing purposes. And so parents often do not have a choice over whether to give up that private information and allow for their child to be depicted online if they want their child to participate. In the last committee where this was heard last week, we had a witness who came forward who was a foster parent who couldn't release their foster child's image and likeness and was told, well, then they just couldn't participate in the activity. And so this bill is incredibly simple. It just says those have to be two separate releases to give parents a choice, whether their child's digital likeness will be used. And with that I respectfully ask for an aye vote.

Mr. Chair and members, Mitch Stiger with CFT, a union of educators and classified professionals in support.

I'm registering a concerns position, so we're a bit of a tweener. But I'm Caroline Grinder on behalf of the League of California Cities and the California Parks and Recreation Society. Just registering some concerns about implementation. We really appreciate the most recent set of amendments, which we think were a big step forward. but we're really looking forward to working with the author to address concerns about how we require cities and other park and recreation districts and counties to obtain this consent from parents. A little flexibility there would be really helpful, and then additionally some concerns around the civil penalties that might be levied against our local agencies. We know our local agencies are really doing a lot of work already to obtain this consent, so it's just a matter of how we implement this. Again really appreciate the author and the committee for working on this with us and looking forward to continuing those conversations Thank you All right Does anyone else wish to register opposition concern regret

If I may, Mr. Chair. So I appreciate that question. And honestly, upon introduction, I think the answer was yes. But we did take an amendment, I think in the prior committee, but I can't remember where, but it is in print here, that says that a covered entity means a program that requires a parent's signature consent form or other form to be signed. So if you were participating in an activity like that where you're not signing your child up, this would not apply. So it's only a camp, an after school program where you're actually signing forms. And then those forms right now contain that release within one form. And so we're working with the city design implementation, but really all the bill would require is through that process, which by the way, right now you are signing multiple forms. So you have a health form, you have your release form. This would just put the digital release as a separate form so that you could opt in or opt out and still participate. Okay.

With that, I respectfully ask for your aye vote when the time is right.

Good morning. So I'm happy to present AB 2212, the Higher Education AI Response Act, or the HEAR Survivors Act. This bill updates the definition of sexual harassment in post-secondary education code to account for the role that modern digital technologies play on college campuses. I appreciate the hard work of this committee, and I accept the committee's amendments, which remove a requirement for schools to update Title IX policies and make certain resources available to students in order to receive financial support from this state. As nudification apps become more widespread, we're seeing more tech-facilitated sexual harassment. As we know, our universities are often the first place that our young people are out on their own, and our universities take great steps to prevent in-person harassment from individuals, but they have not caught up with the times to ensure that there is no online or tech-facilitated harassment, and that's what this bill requires them to do. With me today are Jonika Rakesh, second year undergraduate at UCLA, and Yesenia Malagoza-Fernandez, an undergraduate in student life program at Analyst at Mission College. Welcome, and you'll each have two minutes.

Thank you and welcome to you.

Thank you. And thanks to both of you for coming to Sacramento today to share your stories, your perspectives and those of your colleagues on campus as well Thank you so much Are there other witnesses that would like to register their support for the bill

Ana Matias Santiago, policy intern with Ms. Everglick Group here on behalf of Cal State Student Association in support.

All right, thanks to all the witnesses in support. Are there any witnesses in opposition? Does anyone wish to register opposition to the bill? Seeing none, we'll turn to the committee for questions or comments.

Yeah. Thank you, Senator, for the question. And I appreciate your comment about what's happening online. And I think you and I have spoken deeply about how there's so much promise to what is happening online. And our students gain so much from access to online tools. and yet they can only achieve that promise if they're protected at the same time. And so what the bill does is actually incredibly simple. It updates the definition of sexual harassment. Currently it includes sexual exploitation and sexual violence, including sexual battery. This will add a third element to that, which is technology-facilitated sexual harassment, including but not limited to cybersexual bullying, cyber stalking, and doxing. And so it will imbue into the sexual harassment policies this element of sexual harassment. And so to the extent that they train on sexual harassment, they have policies around discipline on sexual harassment, this will have to be a part of it. Okay. And hopefully it will have a positive impact and sort of corral this. But again, we're going to have to continually update policies to give more and more protection for these. But we don't want to stifle innovation, so it's going to be a challenge.

Thank you.

I just want to reiterate your comment. Thank you.

And thank the students for their advocacy and showing up. They brought this bill to our office and asked us to update this code. And it has been an incredible partnership working alongside them. and showing up hearing after hearing, speaking for their colleagues, and it really is hopefully going to change things on campus. And with that, I respectfully ask for your aye vote when the time is right.

Thank you, Mr. Chair and members. First, I'd like to thank you to the chair and the committee staff for their hard work working with us on this bill. I'm pleased to present AB 1837, which extends the authorization for public transit operators to use camera enforcement technology to enforce parking violation in transit-only lanes and at transit stops for seven years. It also adds additional privacy protections into existing law and additional parameters on how the reports of privacy impacts must be evaluated. We know this technology works and has helped to address key issues of public transit efficiency and public safety by disincentivizing parking and stopping in transit lanes. In San Francisco, these cameras have cut transit delays by 20%. Agencies like LA Metro and my district have just started using these cameras and have been experiencing the same benefits. AB 1837 also ensures that the extensive privacy protections laid out in the authority can continue. Video evidence of violations must be destroyed 60 days after citation has been paid. Any video images that don't contain evidence must be destroyed after 15 days, and any video image can only be used for enforcing these parking violations. If we let the authority expire, our transit lanes will continue to clog up, backing up, reducing transit efficiency and public safety. It's essential that our buses continue to move efficiently and safely throughout our cities. AB 1837 ensures we can do just that. This morning, prior witness in support, Matt Robinson,

I'm happy to answer any questions.

Good morning, Mr. Chair and members. Sylvia Solis-Shaw here on behalf of the following. LA Metro, Monterey-Selinas Transit, Sunline Transit, the City of Santa Monica, the San Francisco Municipal Transportation Agency, SamTrans, City and County of San Francisco, CACTI, the California City Transportation Initiative, and the San Francisco Board of Supervisors, all in support. Thank you.

Thank you. Are there any witnesses in opposition? Does anyone wish to register opposition to the bill? Seeing none, we'll turn back to the committee for questions or comments.

Further comments or questions?

Yeah, and bus only lanes. So a lot of transit agencies will have dedicated roadway for them to operate their buses on. And so if you park in that, like San Francisco is a great example. LA is doing more of this. But you know when you go to the city of San Francisco, you'll see the red lanes in the street. Those are bus only lanes. And if someone were to park in those, they could be ticketed for parking in that lane. in that line it's very clearly marked for the use of the vehicle only so the I

All right.

A great question, and this also came up with the Assembly Transportation Committee. The cameras are merely the tool, but every image of a violation has to be reviewed by a parking enforcement officer in a room. So they don't send the tickets out automatically. They are looked at. There can be findings of hardship. There can be, as you said, like the sign that is required to be there that says, if you park here, you can get a camera ticket. If that's not clear or the trees have blown over it, they can decide not to issue the parking ticket. So those protections are in there. There's also the ability for the public to ask for forgiveness on the tickets if certain conditions can be met, just like your standard parking tickets. And then I just reiterate, we aren't creating any new violations. These are already going to be parking violations. And we have about a 60-day warning period where things have to be noticed and initial the first offense, so to speak, is a warning in that period. And so we've done our best to try to kind of thread the needle, if you will, and not go too far on one side or the other in terms of how we use those tools to help enforce the movement of those vehicles.

And I know, I mean, I'm just stepping into this committee to, but we did have this in transportation also, and I had those similar concerns. I'll say two things, and then, you know, hopefully that will answer or address your concerns. We have, when you look at the reports that have come in from the legislature, two things I'll point out. One is we have been asked to include a question on were there any complaints about privacy, about data breaches, et cetera. And all the programs that have run since 07, the answer's no, not a single one. The other thing is we see behavior change from the moment they get that first violation. There aren't a lot of repeat offenders in this program. So it is working and is having its intended outcome because it is deterring people from continuing to park in those areas. So hopefully, Senator, that's a little bit of a nugget on the reports and what they've shown. I would note that those reports are now required to be a bit more detailed in sort of how we come up with that data back to you all. And so the next round you will see, I think, a more involved privacy response data sharing response.

So thanks for the work on this, and I really appreciate the conversation in the committee. As you can tell, privacy is our first name here at this committee, So it is a very important protection that we're trying to pursue. I almost wish we didn't call this automated traffic enforcement because it's actually the enforcement part is not automated. This is automated transit sensing in the same way that an officer on the highway with a radar gun, the radar gun performs a function that the officer used to do, which is counting really quickly the car lengths and what have you, trying to estimate the speed in his or her head, doing some math in the moment, and that automates it. But then the officer still then says, okay, the radar gun says this, but here's how the rest of traffic is moving. Here's what the driver is trying to avoid or not. So there's still all the human judgment in the actual enforcement. It simply extends the capacity of law enforcement to be able to see what's happening to the benefit both of the driver, But I think as the vice chair has noted, has important implications for public safety. Because with both bike lanes and bus lanes, when there are vehicles parked in them, it does require bicyclists and buses to make abrupt movements into regular traffic, which is not safe for anyone. So it is not a victimless crime, essentially, to be engaging in that behavior. And most folks do it because they don't think they're going to get caught. And so this simply allows for law enforcement to use that information and then make exactly the judgment that they would have made with any other sort of information about the actual violation while protecting their privacy. So to me, this is a sensible way for, and it strikes the right balance, recognizing that there are very important public safety benefits, but also transit. I mean, all the work that we've been doing on transit-oriented development and public transit, one of the main reasons why people say they ride or don ride or stopped riding or were coming back to ride is am I going to get to my destination reliably and on time And one of the major factors why it not reliable or on time in many cases will be exactly this kind of parking in the street And so for our transit policy and therefore our housing policy and so much more, it is really critical that what sounds like a small issue is actually quite important for law enforcement, housing, and for transportation. And the human is still the one making the decisions. in the same exact way that they would have made. Otherwise, it's simply that their capacity to review these cases has gotten bigger as a result of the technology. Did you have further questions or comments on your own? Yeah, figuring it out. So I appreciate the work on this. When we have a quorum, the recommendation will be due passed. There are no amendments on this bill. Mr. Gonzalez, would you like to close? Just to have a couple of loose ends. So I represent downtown Los Angeles, Koreatown, Chinatown. And a lot of these areas are one of the most densest parts of the state. Remember Los Angeles is a city of 4 million. The county is 10 million. And those areas, because they're transitioning to more transit-friendly busing areas and for folks on bikes, we're reducing some areas to one lane. And when you do that, that does clog the streets. When you do that, we're also the home right now to the World Cup. And so there's a lot of designated bus lanes as well. And so this is a way to be more preventative to that. A couple of background pieces here. AB 917 Bloom from 2021 establishes the authority for all public transit agencies in the state to install forward-facing cameras on public transit vehicles. So we've already had that existing bill. Secondarily, AB 361 War 2023 gave a similar authority to install an automated forward-facing parking control device on city-owned or district-owned parking enforcement vehicles for the purpose of video imaging or parking violations occurring in bicycle lanes. So that's the second part of the history of how this is infrastructure has already existed. This existing authority for camera enforcement expires on January 1st of 2027. So we want to continue the progress that bill has made. And then just to reiterate some of the pieces here of this bill, it provides ways to reduce or waive any parking penalty with payment plans for community services. It's doing public outreach to provide information about the program for 60 days before issuing violations. and it allows the agency to decline issuing a ticket if there is a video evidence of hardship. So that's also part of this bill. An existing law also contains extensive privacy protections, which entails video evidence of violations can only be retained up to 60 days after the citation has been paid or at least six months after which images must be destroyed. Video images do not contain evidence that have been destroyed after 15 days, and video images can only be used for enforcing violations pursuant to AB 917. So this existing infrastructure we've already passed in this House, which is why there's not a lot of amendments on it, but we're already sort of on track to that. And so with that, this bill is simple. When buses move, our communities move. AB 1837 keeps it that way. There's no opposition to this bill, so let's not hit the brakes on progress. Thank you and respectfully ask for your aye vote. All right. We are one shy of a quorum, so when we do achieve a quorum, the motion will be made as a due pass recommendation. So thank you, Mr. Gonzalez. Assemblymember Fong has item number 8, AB 2392. Welcome and please begin when you're ready.

Good morning Chair and members, Austin Webster with WStrategies on behalf of the Academic Senate for California Community Colleges here in support. ASCCC recognizes that Gen AI has positive benefits to our faculty, our students, and our staff, including enhanced productivity, lesson planning, but its rapid deployment has outpaced institutional policies and created a documented gap between the usage and AI competency. As the author just mentioned, joint oversights hearing in 2025 highlighted significant concerns regarding the lack of upfront training and clear privacy policies with major AI initiatives that were launched across the public segments. Many students and faculty remain uncertain about acceptable use, the boundaries of academic integrity, and how private data and prompts are collected, stored, and used by AI providers. AB 2392's goals is to address these challenges. Training standards developed by the proposed workgroup will seek to clarify institutional and academic integrity policies, disclose data practices, and guide users on AI limitations, including the risk of inaccurate and misleading outputs. Additionally, the bill's procurement standards will help ensure that adopted Gen.AI systems meet strict protections regarding risk assessment, safety monitoring, data minimization, and labor standards. It also requires transparent written reporting to the legislature for any project that's already been adopted. By fostering a collaborative, intersegmental approach to AI governments, AB 2392 ensures that technical innovation does not come at the expense of privacy, academic integrity, or proper preparation for our faculty, our staff, and most importantly, our students. ASCCC would like to thank the author for his efforts on this bill and respectfully ask for your aye vote.

Here.

Here.

Here.

Here.

Ana y Matias Santiago with Ms. Averley Group here on behalf of Cal State Student Association in support. Thank you.

Hey, this sounds like a good idea. Thanks for bringing it forward. You know, AI is changing a lot of ways we're doing things, especially in education, and actually asking the university, this is basically a study, ask the universities in California and community colleges to put together a plan for how the students are trained in AI and how AI can be used in a beneficial way. I think that's going to be an important step in making the educational system adjust itself to the presence of this new technology. So I thank the author for bringing this forward. Thank you.

Thank you so much, Chair and Senators. We really appreciate the comments and insights here today. and we're really looking at trying to provide this work group with all three segments of higher education. We know that having all three segments to collaborate, to work together on this cutting-edge technology going forward, and so really make sure that we have training standards and to really make sure that we're keeping risk assessments and keeping everyone safe. So with that, I respectfully ask for your aye vote.

Aye.

McNerney, aye.

Padilla?

Aye. Cabaldon, aye.

Ochoa Bogg, aye.

Assemblymember Bauer-Cahan.

Senators Cabaldon?

McNerney?

Ochovo?

Is there a motion?

Aye. Cavalden, aye.

McNerney, aye.

Aye.

Senators Cabaldon?

Aye.

Ochoa Bogue?

Aye.

Aye.

Ochoa Vogue?

Aye. Cabaldon, aye.

Ochoa Bogue?

Ochoa Bogue, no.

Welcome Assemblymember Wilson and please begin when you're ready. Thank you. I'm pleased to present AB 1798. Now today more Californians than ever are turning to genetic testing to better understand their health. These tools allow individuals to detect risks early pursue preventative care and make informed medical decisions This is exactly the kind of proactive health behavior we should be encouraging But instead our current system creates risk and uncertainty And that is why my bill, AB 1798, prohibits life and non-healthy disability insurers from using non-diagnostic genetic information to deny coverage or increase premiums. The bill also addresses the growing role of direct-to-consumer genetic testing, which is considered non-medical and is not currently used in underwriting. It prohibits insurers from seeking or using genetic information that individuals obtain on their own, ensuring that consumers remain in control of deeply personal data they chose to explore for their own health. At the same time, AB 1798 is carefully balanced, and this type of policy is already being implemented in states like Florida. It does not prevent insurers from accessing medical history or asking about family history. It simply makes clear that genetic data, whether obtained directly or indirectly, cannot be used to make underwriting decisions. In other words, insurers can still evaluate the risks, but they cannot rely on the data that is uniquely sensitive, speculative in nature, and often uncertain. And I want to note, before I go into some amends, is that it's extremely important to know that genetic data is fundamentally different from traditional medical data. As emphasized by the American Medical Association, it often reflects only a possibility, not a diagnosis. Many genetic markers indicate risks that may never materialize. And in many cases, the science is still evolving or correlational, not causational. And so I'd like to thank both the chair and his committee staff for their collaboration on this bill and confirm I'll be accepting the committee amends. I recognize that we won't be able to take them in this committee, And so we're still working on the technical data. Sorry, the technical language. But basically the amends, the spirit of the amends note three things. At no point is the full genome ever available to insurers. That's extremely important given the fact that that is not only sensitive to the individual but to their entire family. and that when the insurers are doing medically underwritten policies with the insured consent, the insured can provide the results of genetic tests to the insurer to rule out an adverse finding based on the medical file and that adverse finding adverse underwriting. And I know this was important to the chair in considering that the point of privacy and consumer protections is having the person in control of their data. And if they're in control of their data, if they would like to share it, especially when it's to their benefit, being allowed to do that. And also removing the 1.5 cap from assembly that was given in assembly committee. And so, first of all, I thank the opposition for their continued engagement. They have been from the moment that we introduced this bill, and I'm thankful that we're in a better place through that conversation. And just noting that California law already limits what insurers can use when fairness demands it such as prohibiting using characteristics like race or sexual orientation even if statistically relevant because civil rights outweigh purely accrual considerations. I've never messed that up. I have as many times have I've ever been on this bill. That tells you I have not had enough caffeine today. Anyway, members, if we agree that people should not pay more or be denied coverage because of who they are, then we must also agree that they should not be penalized for what's written in their DNA. And so this bill is about and has always been about balance, recognizing that innovation is amazing and leads to great successful outcomes, and that genetic testing also can lead to better health. But at the same time, we as a state need to protect privacy, promote early detection, and reinforce trust in both our health care and our insurance system. I'd like to now introduce My two witnesses, Alex Meixner, Vice President of State Policy with ALS Association, and Josephine Figueroa, Deputy Commissioner for the California Department of Insurance. We also have someone here for technical questions as well. Welcome, and you'll each have two minutes.

I have to ask you to wrap up your two minutes and 40 seconds over.

Thank you.

Thank you. All right. Thank you both. Does anyone wish to register support for the bill? So please approach the stand-up mic and share with us your name, your affiliation, if any, but not your lobbying firm, and your position on the bill. Chloe King on behalf of the Children's Specialty Care Coalition in support. Thank you. Chris Kahn representing the ALS Network in support. Brooke Benetti in support on behalf of Oakland Privacy. Gilbert Lara on behalf of BioComm in support. All right. Thank you to the witnesses in support. Are there any lead witnesses in opposition? Please come. There are two witnesses in opposition. If you would provide them with the witness table. Welcome, and you will each have two minutes as well. Thank you very much. Good morning, Mr. Chair and members. Matt Powers with the Association of California Life and Health Insurance Companies. I'm here today in opposition to 1798, but I want to thank you, Mr. Chair, your staff, the Assemblywoman, her staff the sponsors for continuing to engage with us on the proposal Appreciate the conversation around amendments We haven seen any of those so I going to limit my comments to the bill in print We're certainly not opposed to the idea that genetic information is sensitive. We absolutely believe that information should be treated with the strictest confidentiality. But in the life and disability insurance context, genetic information is not fundamentally different from other medical information with predictive value, such as cholesterol, EKG, HIV status, or family history. We also strongly push back on the idea that making predictions is somehow unfair. Prediction is the basis of insurance. For medically underwritten policies, everything we consider is predictive. Genetic testing clearly has predictive value. Otherwise, doctors would not recommend lifestyle changes, additional monitoring, or follow-up testing based on those results. That said, carriers must follow the science. More importantly, I want to focus on the arguments that you have heard about fears of insurance discouraging people from participating in genetic research. The reality is that many people are deeply confused about the role of genetics in insurance. In many of these largely hypothetical surveys, the main reason people decline genetic testing are fear of the results themselves and the logistical barriers. General fear of discrimination rates lower, and in many studies there's no clear distinction between general discrimination and insurance discrimination. But rather than litigate this, we propose amendments to completely remove the research results from insurance consideration. As drafted, the bill still allows those results to be considered for policies above $1.5 million. That means even if this bill passes, as it is in print, Californians may still receive a generalized disclosure before participating in research, stating that participation in the study could affect their insurance. Given that much of the concern around this bill is focused on not discouraging groundbreaking research, we agreed that research results should be completely off the table. However, when a consumer is choosing a medically underwritten policy, we need to know what the patient's doctor knows. This is critical. But if consumers are concerned about fully opening their medical file, there are other options, including accelerated underwriting, guaranteed issue products, and group coverage, where there is no traditional medical underwriting. I do have to ask you to come to a close. Sorry. I'll turn it over to my colleague here. Just respectfully ask for amendments to this to allow access to the medical file. You're also over, but within one bill, we try to provide reciprocal. But if you're listening for another bill, we're not going to 240 for everybody. But thank you very much. All right. To the second witness. Thank you. I hope to provide today a unique and balanced perspective because I've spent almost equal time in my career as head of underwriting, chief medical officer for an insurer, but also as a practicing neurologist taking care of patients for over 10 years. At the heart and beginning of the life insurance application process is the process of informed consent. This gets to the very basic principles of life insurance underwriting. The first is that this is an entirely voluntary process to purchase a financial instrument that may be worth millions of dollars. The second is that the very basics of pricing the product are based on an individual's life expectancy. And the most important principle, which has lasted for 200 years, which this bill would completely upend, is that life insurance underwriting is based on a free, open, transparent exchange of information between applicant and the insurer. Why is this aspect so critically important? One, it's the basis of the affordability of the product. How much should we be charging you? How much should we be reserving if we have no idea what medical information that you are withholding? Second, it gives us confidence to offer policies that are larger in nature to protect the entire amount that a family may have earned throughout their course. But perhaps most importantly to me it allows us to be fair in our risk assessments You see when I look at applications I see that individual with genetic conditions but right next to that application is a mother of three with multiple sclerosis or a police officer with a spinal cord injury. None of these individuals asked for their condition. None of these individuals is that condition now reversible. It's a part of them. Under what system would it be possibly fair to charge these individuals who all have the same life expectancy wildly different premiums? And what's even worse is that those individuals who were open, honest, and disclosed that information in the life insurance process would now bear the burden of the premium for all of these conditions that we are now carving out, not only for California, but every individual who decides to come to California to purchase a policy which would be deemed unsustainable and unfair in every other state in the union. For the very first time that I'm aware of, California would be establishing different classes and tiers of medical privacy in life insurance underwriting. We'd be telling individuals with mental health conditions, with prior substance abuse, with dementia, that your level of privacy is now somehow worth less than an individual with a medical condition. At the heart of an informed consent is the principle that a consumer owns their own medical information. This bill would strip that from the individual California consumers. In particular, how so? If we had an individual there who ended up, because of a concerning test, had it been negative genetic testing, they would not be allowed to bring that to the process. Thank you. All right, are there other witnesses who wish to register their opposition to the bill? Again, name, affiliation, if any, no lobbying firm, and your position. Good morning. Sherry McHugh, representing the National Association of Insurance and Financial Advisors. We are opposed unless amended and look forward to continuing to work with the author to see if we can address our concerns. Thank you. Good morning. Megan Loper on behalf of the American Council of Life Insurers. Similarly, opposed unless amended, but look forward to reviewing the amendments discussed today. All right. Thank you. If there are no other witnesses, then we'll turn to the committee for questions or comments. Mr. Insurance Committee Chair, would you like to lead us off? Thank you, Mr. Chairman, and thank you for your work on this and the committee's work on this, and to the author for bringing the bill and for your willingness to accept the principled amends taken here in committee. One of the things that we grapple with, with the advent and the benefit of the application of new tech and the insights that it brings, is also the challenge that from a policy and equity and justice standpoint and from a social responsibility and moral standpoint, that we get the balance right. And it isn't just purely due respect to the concerns legitimately raised by the opposition from an operational standpoint. They're simply not rote and they're simply not clinical, right? There are other broader considerations here that have to be put together in context to make sure that we get this right. There are concerns, and I argued this, you know, certainly in my own committee. There are distinctions, and you could apply it in the realm of privacy. To the prior and existing practice of evaluating and medically underwriting, whether or not to how you price risk and how you price a policy, that has dramatically changed, and it impacts privacy rights, right? We have a window that is broader and prospectively much broader, even potentially abusive if we don get this right there is a place for this to be available to inform folks but there is also a place to protect the individual liberties and privacy and reasonable expectation thereof of anybody who is waiving and consenting to their medical chart to be examined. So I think that the amends that are suggested here are appropriate and responsible, and I think the bill should move forward. Thank you, Mr. Chairman. Thank you. Senator McNerney. Well, I thank the author for bringing this forward and for working with the committee. I want to tell you a little bit about an experience I had about a decade ago. I was in the House of Representatives, and we were debating the Affordable Care Act, and it was very controversial. One of the issues was, do we want to include pre-existing conditions? So are people that are suffering from diabetes, are they going to be excluded from health insurance? And if not, how do you price that so that it's fair? And the way to price this is to make the pool of people bigger and bigger. And that passed. We passed that bill. It had an incredible effect on American ability to have health insurance. But we paid a huge political price for that decision. and we still do. I see this in a similar light. You mentioned genetic data is very different from other health data, and it is. If you already have a pre-existing condition, then that's taken into account in your life insurance policy, as it should be. But genetic data is different than that, in my opinion. Does it imply risk? Does it imply that when does it exclude the opportunity for new advances in medical technology and medical science? And I think it would. So I appreciate that the author is still open to amending if there's ideas that help the bill, but I'm going to be supporting this at this point. Thank you. All right. I have had extensive conversations about the author, and this comes from a great deal of expertise and experience. And I also want to say a lot of what the opposition said, probably most of it, I think is maybe right. I'm not sure it's right now, though, and that's part of the challenge that we're facing here. I wasn't early. Sign up for Ancestry.com. I just uploaded my genetic data, all kinds of other things. And I'm not sure I agree in the long term that genetic data is necessarily more sensitive than the STD test I might have taken, you know, after a night out of the club. There's a lot of things in our medical records I don't want to be shared. So I'm not sure, like categorically, it's more sensitive. And the prediction issues, I think, are still to be resolved. If an MRI or a CT scan shows a tumor and we don't know if it could turn malignant, then that's probabilistic. It's probabilistic. It's not for sure one way or the other. And it may differ in the percentages compared to a genetic test. But it's not fundamentally different. So I could certainly imagine a world in which this information, some of it, not the full genome, and not some of the other genetic tests that are out there, could be useful even on the life insurance side. At the same time, though, this is a societal question. And yes, the information could be helpful, but we're going to hear another bill later. And I don't know if it's appropriate for, I mean, would life insurance be rated slightly more? More precisely, if you knew that I wasn't breaking properly in my vehicle, and couldn't life insurance benefit just a little bit more if it had my telematics data? If the life insurance company had access to another bill that we're going to have up later, a couple on ticketing for concerts, and knew I was attending a lot of concerts late at night, which might suggest there's a fear of being overrun by a crowd or not sleeping enough. Is that relevant? So there's no, this isn't the insurance committee, but it is a committee about how much of our privacy should we be giving up, and that is a policy choice, and it is one that evolves over time. And there are things in the life insurance data that 20 years ago people said, absolutely not. Now they're normal. This may be that in a few years from now, but it isn't today, and it does matter because that anxiety about it is leading some people to not test. in ways that would be potentially very important for their own health. And so I personally think that there is, as I said, some value to what the opposition is arguing in many ways, actually. But this requires social and cultural change as well, as well as examining the tradeoffs about which data, how perfect is my life insurance record compared to my privacy rights. Society is not ready for genetic information to be a primary determinant. I think also just more technically, the reason why the genome language is in there is that level of genetic information is never necessary for this purpose and encourages fishing expeditions and relative matching and other sort of things I didn't think enough about when I signed up for Ancestry myself. So the genomic information more generally isn't appropriate. And we're still learning even in the industry and in medicine about things like polygenic risk scores that can be for a specific condition, but they can also be for general lifestyle recommendations, both of which would appear in a medical record. We just don't have the tools, the definitions, the protections that are there at a scale to do really anything but what the Assemblymember is proposing to do on this bill. And so I intend to support it today. Of course, encourage, you know, continue to work with the industry to help us get down that path over time. But this seems to me a well-tailored, well-balanced solution to where we and society and patients are right now and what the need is for folks to get out and get the testing that can help to save their lives and make their lives better. So with that, is there... Assemblymember Wilson, would you like to close? Thank you, Chair. I appreciate your comments both to you for this committee as well as Chair Padilla. Noting that something that the opposition noted that I want to bring up, because one, I appreciate the dialogue that we've had. This is an important industry that really is there for families at a dark time at the loss of a loved one. And one of the things that was noted was about multiple sclerosis or spinal cord injury or other things. Those are about disclosure. And I would say if somebody had some type of testing that was a diagnosis, even before they got the chart, they would be required to disclose. And so nothing in our bill, both the current language or proposed amended, would change that. And so here we are standing at the intersection of innovation and policy. And the choice we make today will shape how Californians experience the future of medicine California has always led the nation in recognizing that innovation must be matched with responsibility As genetic technology advances, so too must our safeguards. And as the chair accurately noted, as it advances, it also evolves in our relationship to it, including our policy relationship to it. And so AB 1798 is balanced. It ensures a future of trust, access, and protection, not fear. And with that, I respectfully ask for your aye vote. Thank you. Thanks to all the witnesses. Is there a motion on the bill? It's been moved by Senator Padilla. The motions do pass. The amendments will be worked out on the way to the Appropriations Committee. Please call the roll. Motion is due passed to appropriation. Senators Cabaldon? Aye. Cabaldon, aye. Sayarto, Gonzalez, McNerney? McNerney, aye. Ochoa Bogue, Padilla? Padilla, aye. Reyes, Umberg, Weiner. Three to zero. Three to zero, we'll place that measure on call. All right, we're continuing in file order. with file item six, AB 1349 by Assemblymember Bryan. I think he wants to go 1883. Oh, sorry, we're gonna take 1883 up first, which is file item seven, due to the tribal timing for a witness, I believe. So AB 1883, Mr. Assemblymember Bryan, please proceed when you're ready. Thank you, Mr. Chair and Senators. I'm proud to present AB 1883, a bill we've been working on for two years, which will prohibit the use of the most invasive forms and potentially discriminatory surveillance systems in the workplace. Before I begin, I want to thank the chair and the committee consultants for working with me and my team, happily willing to accept the amendments. Workplace surveillance is not a recent phenomenon, but today's workplace surveillance tools differ in their scale, their speed, and invasiveness. Employers used to have to monitor video feeds to track workers, now AI and tech advancements allow them to compile massive amounts of data points and analyze them in real time. Current technology includes devices to monitor worker speech, collect neural data, and systems that use emotional recognition. Employers can use this surveillance data to predict behavior. And at times, punish workers for exercising their protected rights. Employer surveillance takes various forms. Call center workers, for example, may be required to use tools that employ emotional recognition and generative AI to analyze interactions. These systems send constant nudges to alter worker behavior and provide data to supervisors for corrective measures. Workers face risks of bias, discrimination, and error, usually without knowing they are being monitored in this way or how the algorithms assess their tone, their accent, their word choice. This bill prohibits the use of the most unreliable and potentially discriminatory tools of surveillance, emotion recognition tools, and surveillance tools that collect neural data. Joining me to testify are Yvonne Fernandez with the California Labor Federation and Nicole Pion, a Teleservice Care Representative at Kaiser Permanente. Welcome and you'll each have two minutes. Hello, Mr. Chair and members of the committee. Yvonne Fernandez with the California Federation of Labor Unions, a proud co-sponsor of AB 1883. The surveillance technology that exists today in today's workplace is clearly more powerful than ever before, but the principles guiding the creation and the need for worker guardrails remain consistent and labor has been at the forefront of making workplaces safer and more humane for decades And today is absolutely no different The assembly member just described how emotion recognition methods are conducted on call center workers at MetLife and at Humana And shortly my colleague will share her lived experiences dealing with these often inaccurate tools. But unfortunately, these tools do exist outside of call center workers. Developers such as MorphCast and Hume AI sell emotion recognition software products capable of monitoring Zoom meetings and worker interactions to provide managers with a real-time analysis of a worker's positivity or excitement throughout the day. And not only are these practices invasive, but they are likely to discriminate workers who fail to meet arbitrary and potentially racially biased communication standards. And as we know, these tools are not free of biases, yet employers still deploy them in workplaces across the state with a false sense of confidence and perceived accuracy. In addition to monitoring worker emotions, employers also have access to tools that purportedly are capable of analyzing neural data to determine if a worker is tired, concentrating, or if they're stressed. Developers like Emotive sell hardware to allow employers to understand a worker's true mental and cognitive state, all for the purposes of improving ROI and supposedly improving and supporting worker morale. These surveillance methods rely on questionable tools to make bold claims of a person's mental state, and the likelihood of an inaccurate reading is very high. Yet, despite these questionable outcomes, workers are still susceptible to employers claiming they can understand their emotional and mental state. With recent amendments, AB 1883 prohibits employers from using these AI-powered tools. AB 1883 does not prevent employers from using actual surveillance methods and tools for safety purposes. Tools that provide interpretations of a worker's emotional state does not create a safe working environment. It creates an invasive and dystopian workplace. And for these reasons, I respectfully urge your aye vote at the appropriate time. Thank you. Thank you. And welcome. Thank you. My name is Nicole, and I'm a full-time TSR Teleservice Care Team Representative at Kaiser Permanente AACC Advice and Care Center in Sacramento. And I have been there for four years. I'm here today to testify in support of AB 1883. My colleagues and I are one of the first critical line links between patients and medical care systems. Our number one top priority is high quality patient care for all. We promote access to care in everything we do, which is essential and critical to preventive care and early detection, chronic disease management, and promoting overall health equity. We as a whole, as TSRs, are concerned about Kaiser's recently released emotion recognition software that is designed to help agents as myself identify areas for improvement with empathy and sympathy in which you are scored on each and every call. It's a clear barrier to the high quality of patient care that we provide. In my experience, I have a naturally hoarse voice my entire life, as I'm sure you guys can tell me speaking now. I provide top-notch care and have a great rapport with patients, but the software continuously responds to my voice tone by telling me that I lack emotional empathy and give suggestions on how I can correct it throughout the call with pop-ups. I feel it is very discriminatory, but it also seems almost impossible to avert the real-time feedback from an AI program. I know I provide superb care to every patient. This makes it so frustrating, not to mention very distracting, when you are on with a member and distracted that you can miss pertinent information that they give to you that can ultimately cause a delay in care. Imagine if that was your loved one or if that was yourself. It is so disheartening the fact that I being judged by artificial intelligence for something beyond my control my natural born voice since a child Emotion recognition software does not serve California's health care needs. It is a clear barrier to high quality patient care and it's destructive to the work environment. Thank you. Thanks for being with us today. Are there other witnesses who wish to register their support for the bill? So please come to the stand-up mic and share with us your name, your affiliation, if any, not your lobbying firm, and what your position on the bill is. Thank you. Mitch Steiger with CFT, a union of educators and classified professionals, in strong support. Navneep Puryear on behalf of the California School Employees Association, in support. Good morning, Chair and members. Connor Gussman on behalf of Teamsters California, proud co-sponsor of the bill, as well as here on behalf of the engineers and scientists of California, Unite here at the Utility Workers Union of America, the California Conference Board of Machinists, and the Amalgamated Transit Union, all in support. Thank you. Violet Swidler expressing support on behalf of Tech Equity Action. Thank you. Good morning, Chair and members. Tracy Rosenberg, expressing support on behalf of Oakland Privacy. Good morning, Mr. Chair and members. Janice O'Malley with AFSCME California and strong support. Thank you. Hi, I'm Brooke Benetti in support on behalf of Electronic Frontier Foundation and the Privacy Rights Coalition. Mr. Chair and members, Brandon Chu on behalf of SEIU California in support. Thank you. Good morning. Eric Paredes with the California Faculty Association in support. Good morning, Mr. Chair and Senators. Doug Zubers on behalf of the California Professional Firefighters and the Omidyar Network in support. Thank you. Good morning, members. Carmen Balber, Executive Director of Consumer Watchdog in support. Anyone else in support? All right. Witnesses in opposition. We have space for two lead witnesses at the witness table. Welcome, and you each will have two minutes. Good morning. I am Andrea Lynch on behalf of the California Chamber of Commerce and respectful opposition to AB 1883. While I appreciate the author taking amendments, there are still considerable concerns with the bill. I want to raise three specific problems with the bill. First, AB 1883 defines worker to include independent contractors. I want to again reemphasize that independent contractors are not employees. They are not part of the employer's workforce in a way this bill assumes, and applying an employee style surveillance restrictions to a contractual, arms length business relationships creates confusion about who owes what duty to whom. This rewrites the terms of private contracts the legislature was never a party to, relationships parties freely entered into and freely negotiated. Second, the bill includes a private right of action. That means it's not regulators making case by case joint judgment calls, it's plaintiff's attorneys and possibly tens of thousands of cases deciding what counts as a violation. Compined with the bill's vague definitions, that is a recipe for costly, unpredictable litigation, not compliance, particularly for small businesses. Third, consider what this bill actually bans in practice. Under SB 553, employers are required to have effective means to alert employees to a threat in real time for workplace violence prevention plans. Many use AI enabled security systems that detect raised voices, distress, escalating aggression, and facial recognition in workplaces or parking lots in order to trigger an alert before a situation turns violent. This is precisely the kind of emotional inference AB 1883 prohibits. This bill would ban the exact safety mechanisms SB 553 requires employers to have. For these and other reasons, we urge your no vote. Hi, Chair Cabaldon, members of the committee. I'm Jake Parker with Security Industry Association. Our members include more than 200 companies based in California, provide safety and security products in workplaces throughout the state like schools, hospitals, transit facilities, and others. We appreciate the amendments made so far intended to continue to allow technologies to be used for safety purposes, but even with the latest amendment, it still outright bans certain technologies, while the language also suggests there are certain safety technologies that do not qualify for the exception. This really just defeats the purpose of it. Specifically, we're concerned that with the breadth of the ban on any technology that makes inferences about an individual's emotional state, that this can encompass AI-driven workplace safety technologies that are widely deployed. Modern security systems include smart sensors and video features that can provide alerts to staff when a potential emergency situation is happening. This allows proactive responses versus just simply recording video. Here are some examples of things that can be configured to trigger alerts. a distress call for help, especially in an unattended area like a parking garage or a college campus, aggression against nursing staff in a hospital room, fiscal violence against an employee, a fight starting in a school hallway, and also detecting visual signs of medical distress like heat exhaustion or falls. Even though these technologies may be considered to detect emotional indicators, there is a very clear and important difference between these that are designed solely for safety and security purposes and used in areas where workers are combined with employees or others and you can't really separate them, versus others that might measure indicators of performance of individual employees at their output in general disposition, all the things the proponents have mentioned concerns about. So we appreciate the recognition of the importance of safety tools. However, the bill must be clarified to ensure that no tools addressing workplace safety issues or preventing workplace violence are prohibited. This way you could actually address this exception and fix this issue without changing any of the stated intent of the bill in any way. We urge you not to advance the bill unless those issues are addressed. Thank you to you both. Are witnesses wishing to register their opposition to the bill? Good morning, Mr. Chair. Chris McKaylee here on behalf of the Civil Justice Association of California. C-Jack is respectfully opposed unless amended. Thank you, Mr. Chair. Jim Lights on behalf of the California Airports Council. We are also opposed unless amended. Good morning. Betsy Armstrong on behalf of the County Health Executives Association. Respectful opposition. Good morning. Kendra Bagley on behalf of the California Association of Recreation Parks Districts and City of San Marcos in opposition. Good morning or early afternoon, Chair and members. Melissa Kosuchuk with Western Growers and we align our comments with those provided by Cal Chamber in opposition. Looking forward to seeing how this amends shape up. Thank you. Good morning, Mr. Chair. Matt Robinson on behalf of the California Moving and Storage Association as well as the California Transit Association in opposition and look forward to continuing our conversations with the author and sponsors. Good morning, Chair and members. Robert Boykin with TechNet in opposition. Good morning Chair and members Eric Lair on behalf of the California State Association and Counties Currently opposed appreciate the amendments by author and sponsor and continue to look at it Thank you Jean Hurst here today on behalf of the Urban Counties of California I like to align my comments with my colleague at CSAC Sarah DeKett on behalf of the Rural County Representatives of California. Align my comments with CSAC. Good morning, Chair and members. Jacob Brent with the California Retailers Association in respectful opposition. Good morning, Mr. Chair.

Good morning. Matt Easley on behalf of the California Chapters of the Associated General Contractors in opposition. Thank you. Good morning. Ophelia Segetti with the California Special Districts Association in opposition, respectful opposition. And I've also been asked to register in opposition on behalf of the Association of California School Administrators.

opposition. Thank you. Good morning. Sherry McHugh representing California credit unions respectfully oppose the bill. Thank you. Mr. Chair and members, Don Gilbert on behalf of San Francisco International Airport, opposed unless amended to exclude commercial airports. Thanks. Megan Loper on behalf of the California Distributors Association in opposition Good morning, Michelle Gil on behalf of California Association of School Business Officials We appreciate the amendments, we'll be reviewing it, but currently opposed. Thank you Good morning, Mark Farouk on behalf of the California Hospital Association in opposition. Thank you Good morning, Chair and members. Apologies, I missed the support testimony Just wanted to register the support from California Nurses Association in support of this bill. Thank you Seeing no further testimony, let's turn to the committee. Let me first though just to summarize the amendments that the authors agreed to accept that will be taken in the Labor Committee, which if the bill passes out of this committee, the amendments will be processed there just due to the timing of multiple committees this week. And those amendments do substantially narrow the bill as the author has indicated to remove several of the prohibitions in the bill to focus it specifically and exclusively on inferences or predictions about an individual's emotional state or collecting neural data. All the other provisions related to facial recognition and other limitations would not be in the bill any longer, as well as some tightening of the language on the federal contracts and federal laws. Those are the principal amendments that are in the package today. So with that, members of the committee, questions or comments? Or a motion? All right, it's been moved by Senator Padilla. Senator McNerney. Well, I thank the author. I have a bill that's similar to this in many ways. And it's important to have the technology sort of corralled and useful to provide benefits, not to provide surveillance and workplace potential harassments. I can't, I'm going to have to support this bill. I appreciate the author. And that you're willing to take amendments also, I think, is very important. This is the process by which we approve our bills. Thank you. Further discussion or questions? All right. I'm also going to support the bill today. I think there remain some of the outstanding questions about this relationship to other laws that the legislature has enacted with respect to safety. My hope and expectation is the author and the sponsor will continue to work on those issues They are not trivial They are important But the bill has come a long way and it really focused on this important area We have a lot of these kind of bills in committee where there may be something different in a few years, but this is a period where we are passing other legislation telling AI agents to not be so sycophantic because too many of them can't seem to function in the world without excessively complimenting and praising and telling us whatever we want to hear. I don't think the general public is in the place where they feel that they can trust AI at this point to be able to accurately and without discrimination assess for actionable purposes the emotional state of a human being. And so this is a very narrow measure. I should also add the amendments also apply this only to artificial intelligence tools, not to all surveillance. So it's intended to be in that spot where both the technology and the culture and society are changing. And it could be a different story in several years from now. But as of now, the technology isn't there to be able to accomplish this. Hope the author will continue to work on the safety issues. If there is a fight on the floor, you don't need somebody's emotional state if their punch is being thrown in order to determine that you need to take some action. And so let's be as precise about what the potential challenges are, but appreciate the author's work on the bill. I'm going to support today as well. We have a motion by Senator Padilla. Please call the roll. Brian, would you like to close? Absolutely. And listening to the opposition, I'm reminded of a Benjamin Franklin quote, which was something along the lines of those who would give up essential liberty under the guise of temporary security deserve neither. This bill has been narrowed to prohibit the use of the most invasive, least reliable, and most discriminatory tools available today. It is about protecting people and keeping workers safe and therefore keeping all of our privacy safe. And I respectfully ask for your aye vote. Please call the roll. Motion is due pass to Labor, Public Employment and Retirement. Senators Cabaldon? Aye. Cabaldon, aye. Sayarto? Gonzalez? McNerney? Aye. McNerney, aye. Ochoa Bogue? Padilla? Aye. Padilla, aye. Reyes? Umberg? Wiener? The vote is 3-0, I'll place that measure on call and proceed next to item 6 by Assemblymember O'Brien, AB 1349. For witnesses purposes, we are having passed the hour of 11 a.m. just to maintain our progress on the hearing. If I could please ask all witnesses to not make good morning, oh, I mean good afternoon jokes. Let's use all the time on policy issues if you don't mind. Assemblymember Brian, welcome. Thank you, Mr. Chair and Senate colleagues. I'm here to present AB 1349. I first want to begin by thanking the committee consultants for their incredible work on this bill, in addition to the Department of Justice, who provided amendments over the weekend and met with us for hours on hours on hours to make sure that we got them right. After, literally after meeting with the DOJ, I went to a concert at the Hollywood Bowl, the Roots Picnic. I saw De La Soul The Roots T Bun B and Nas some of my favorite rap artists And I reflected on when we bought the tickets for this show When my friends and I were buying tickets to the Roots picnic at the Hollywood Bowl we checked online we saw how much they cost and then it freaked us out And then we saw somewhere else that they actually weren't on sale for another week. And we did some investigating and found out that this was a deceptive website selling speculative tickets. Tickets they did not have yet for a concert that had not gone on sale yet at a price greater than what they would eventually go on sale for. This bill bans that practice. It essentially bans that practice. It's a harmful practice for consumers. It's also harmful for venues because in the most extreme cases, fans show up to venues believing that they'd bought in a ticket, leaving especially the small venues on the hook for having to turn them away because that ticket isn't real. AB 1349 also bans websites that mimic official event platforms and confuse consumers by using terms like sold out before tickets have even gone on sale. It increases the penalties for violators to make sure that consumers are always at the front of mind. This bill prioritizes transparency. It protects consumers. It supports fans and artists and the experiences that we all share. With me to testify is Trevor Swenson, the founder of Dynamic Talent International, and Joe Rinaldi, managing partner of the Music Box in downtown San Diego. Welcome to you both, and you'll each have two minutes. Chair members, I'm Joe Rinaldi, president of the National Independent Venue Association's California chapter, representing more than 650 independent venues, promoters, festivals, and the small businesses that make California's independent live entertainment economy possible. Is the microphone on? First, I'd like to thank the Chair of the Committee, the Assemblymember Bryant, and his team for the many hours of thoughtful engagement on this bill, including conversations over the weekend. We sincerely appreciate the opportunity to continue working through these issues together. I also want to be clear about who we are. Our members are not Live Nation or Ticketmaster. We're independent venues, independent promoters, and independent festivals in the communities across California. We are the local theaters, music halls, clubs, and event spaces that compete every day against the largest players in our industry. Our members have consistently advocated for more competition, more transparency, and stronger consumer protections because that's what allows independent businesses to thrive. We are proud to support AB 1349 because speculative ticketing and deceptive resale practices continue to harm consumers, artists, and independent venues alike. But we also know these platforms have become incredibly sophisticated. Their business models often rely on technology and practices that make enforcement difficult and allow bad actors to stay one step ahead of regulators. We've already seen why that matters. Arizona enacted HB 2194 to prohibit speculative ticketing. The sale of tickets a seller does not actually possess, yet despite that prohibition, platforms such as StubHub continued to face criticism over speculative listings, prompting Arizona lawmakers to publicly call on resale platforms to comply with the state's consumer protection laws and stop exploiting loopholes that undermine enforcement. That experience is instructive to California. As this bill continues to move forward, we believe there are several provisions, including those related to transferability and other implementation details that deserve continued collaboration. Our goal was to make sure California gets it right the first time and closes the kind of loopholes that have limited the effectiveness of similar laws elsewhere. I see you're up. I think I'm hearing the magic words at the end, but just to be sure. We appreciate the author's willingness to continue working with all stakeholders, and we respectfully ask for your aye vote so we can continue advancing this important consumer protection measure. Thank you. Thank you. Welcome to the members. My name is Trevor Swenson, and I am the CEO of Dynamic Talent International, and we do have offices here in Sacramento, California. We're a boutique agency that books everything from small little venues all the way up to stadium-level artists. I am pro-capitalism in support of companies making revenue with great ideas through innovation in the marketplace. Speculative thickening has become a problem since starting my journey in the entertainment industry, and the outlines of the current bill, AB 1349, is crucial to control over handing in the end of that situation. When a secondary platform allows sellers to list inventory that they do not actually hold, consumers suffer. Just look at what happened last two weeks with the World Cup. It's been an absolute tragedy with that. The bill says one thing. You cannot sell a seat until you actually have it. It targets the scheme. When an event goes on sale or is about to go on sale, the practice of holding the tickets that has not even been purchased is removing them from the inventory should be stopped. The artists, groups, and the event doing the work are creating the buzz that generates the ticket revenue. And then when the entity steps in, takes the tickets, holds the tickets, the artist and the entity does not receive that actual revenue of the upsell of that event. The major genre that my agency works with is Japanese and Korean markets, where in those markets, scalping is illegal. It's a highly regulated aspect where they can't actually do it in those countries, and it's been very well controlled and received by the public. We appreciate the committee's work on this bill, and we look forward to continuing the work with the rest of this. And again, thank you, everybody, for having me. Thanks to you both. Is there anyone that wishes to register support for the bill? Please come forward to the mic. Hello, Kendra Bagley on behalf of the City of Thousand Oaks in support. Mr. Chair, members, James Jack on behalf of the Coalition for Ticket Fairness. We removed our opposition based on the amendments currently in print and now support. Thank you. Jordan Curley on behalf of the Music Artists Coalition in deep appreciation to the author and the chair for their work. Jim Cornette, owner of Harlow's, the Starlight Room and Cafe Colonial Small Cap Capacity Independent Venues, in support. Randy Nichols from the National Independent Talent Organization, in support. Connor Gussman on behalf of SAG-AFTRA, in support. Gabriel Docto with the San Francisco Venue Coalition, in support. John Gunton of the Independent Venue, Channel 24, in support. Alex Torres here on behalf of Hot Monk Tavern in Novato and Sonoma, as well as San Diego Venues, the belly of Pinsvano Beach, in support. Thank you. Ross Buckley on behalf of the City of Sacramento, in support. Clifton Wilson on behalf of the California Arts Advocates, in support. Thank you. With that, we'll turn to opposition. Are there two lead witnesses in opposition to AB 1349? Welcome, and each of you will also have two minutes. Chair and members thank you for having us My name is Juanita Martinez and I here today on behalf of California Live Events Equity Alliance CLIA is a consumer organization whose members support affordable access to live events and fair competitive ticket marketplace California continues to play a leading role in ongoing antitrust litigation involving the ticketing industry, and the governor has recently proposed additional resources for the Attorney General to continue their important work. For that reason, we believe all ticketing legislation should be evaluated through the lens of how it may affect ongoing litigation and future remedies. As policymakers, we should be careful not to inadvertently codify business practices that are currently being challenged or undermine California's consumer protections and antitrust enforcement efforts. Based on the recent amendments, CLIA believes the bill is moving more into a consumer-friendly direction. We are particularly encouraged by provisions addressing speculative ticketing sales and fraud while preserving important consumer protections. We also appreciate the addition of Section 22502.6, which protects ticket buyers and resellers from retaliation. Those protections are essential to promoting competition in a highly concentrated market. Today, states such as New York, Utah, and Virginia provide similar protections for resellers, and several states also protect consumers from retaliation for purchasing tickets on the secondary market. One of the current problems we are seeing with the World Cup is a delay by the primary ticket seller in allowing tickets to be transferred, sometimes not until the day of the game or even after the game has begun. We believe there is still an opportunity to further strengthen this section by ensuring tickets are transferred, which is what the state of New York does, and to require this to happen within 24 to 72 hours of purchase. Together, giving consumers a clear right to transfer their tickets and guaranteeing their customers receive them before an event begins would empower buyers and sellers with greater flexibility and access to the full marketplace. We appreciate the chair, the committee staff, and the author for their thoughtful engagement and look forward to continuing to work with all stakeholders on this bill. Thank you. Mr. Chair and members, Austin here with on behalf of Internet Works, we have an opposed and less amended position on AB 1349. We're supportive of the ban on speculative ticket sales in the bill and deeply appreciative of the work that the Senate B&B committee has done and the authors agreed to, which would remove the provisions that would have codified Ticketmaster's terms and conditions into California law. Ticketmaster, which currently controls approximately 80% of the primary and over half of the resale marketplace, has pushed those same provisions in 25 states ever since the lawsuit brought by the Biden administration and 40 state AGs. That lawsuit was ultimately continued and won by California and 30 other state attorneys general and promises to remake the event ticketing marketplace after the remedies phase ensues early next year. It can't happen too soon. Internet works will continue to work during the remaining process on the technical clarification such as clarity between actors and the definitions and to make sure that the URL provisions in the bill are consistent with existing trademark law to ensure that there are penalties consistent with the marketplace's actual control. The bill as amended in Senate BMP would also prohibit retaliation against a lawful transfer of ticket. We would like to see the term defined since there is no right to a lawful and much less a timely transfer under California law as there is in other states such as New York. Thank you. Thank you both. We'll now turn to anyone that wishes to register their opposition to the bill. Robert Boykin with Tech Nye in opposition. Thank you. Christopher Sanchez on behalf of the Consumer Federation of California respectful opposition And Jamie Minor registering on behalf of our colleagues over at Game Time Seat Geek and Tick Picks Thank you Seeing no other witnesses, we'll turn to the committee. Any questions or comments? Senator McNerney. Okay, this is kind of a feel-good bill, really. You don't like seeing people taking advantage of technology to extort higher prices. So what are the chances that this is actually going to work? I mean, suppose this gets passed and signed into law. Is it going to be something that can be enforced, or is it going to be another law in the books that doesn't really do anything? No, I think this will absolutely be enforced, and I think that is why the opposition is still here. although many have peeled off. I also am committed to this issue. So if loopholes are exploited and there are gaps that are proven like has happened in Arizona, where they find creative ways to continue to allow this practice to continue, then you and I will be right back here having a conversation on how we close those loopholes. All right, well, that was my major concern. We are trying to get it right the first time, and so we've spent a lot of hours with this committee. We went through three policy committees on the Assembly side. We're going to go through the gauntlet on the Senate side. In addition, with the opposition's conversations about the DOJ and their antitrust litigation, I personally spent hours and hours with the DOJ on this bill, including as recently as Saturday night. And so we are putting the work in to make sure that this is done right. All right. Thank you. Senator Padilla. I think the bill is moving in the correct direction. I appreciate the work is articulated and the author taking amends and moving it forward. I'm happy to move the bill. Senator, when this committee was created, I was getting all suited up to be able to save the world from AI and robots taking everything over. And the first five meetings I had were on ticketing for De La Soul and Taylor Swift. and so I was going to say I appreciate the bill being here but I know there will be more later and more next year. You know, I've spent the, since last week when the bill arrived at our desk, just full disclosure, I'm the actual professor in the Senate so I read every single referee journal article on ticketing around the world for the last five days, all 72 of them since 2022, to trying to make sense of all the claims and all the prior legislative efforts and what they all mean. And I didn't walk away with a whole lot of optimism and hope around the larger set of issues, in part because it also has become clear to me that a lot of this is art, it's cultural, and it's a problem for us. Like Japan and Korea, France, they have laws that match their cultural norms, which are almost never enforced because they don't have to be. where in many places folks don't, their preference is that ticket prices be cheap, but it's a lottery whether you get to go or not. Here, we want them to be cheap, but we also absolutely want to go no matter what. And therefore, it's acceptable here in a way that it isn't in many other countries for this entire secondary market and bidding and everything else to occur. And so the laws are really a reflection of their culture and so it very difficult to assess are they working compared to us because people it just very much frowned upon in many of these other countries to offer a ticket for sale above face price or to buy one That not our norm here Our norm is in some sense quite the opposite Let's get, you know, I'm going to this concert, come hell or high water. Or I'm going to sell it and I want to make as much money as possible. That's a challenge for our legal structure and for enforcement. And we do have a lot of laws, actually on many of the topics that are in this bill. That, as to Senator McNerney's point, you know, folks find ways around them. They are hard to enforce, and that's why the bill is before us. I am going to support the bill today. I hear the issues around the legal market and the lawful right to transfer and all of that. Those are important questions. They're not this bill, though, and I would encourage folks to – well, actually, no, I don't encourage you. But if you do another bill on that topic, we will see it here, and we'll get its fair hearing and debate as well. But that would be a major change to this bill for it to become about establishing a legal right to a ticket transfer and to timeliness and all of that that's not here. So we have paid close attention at the committee to the relationship between this legislation and its potential relationship to the ongoing litigation. to try to assure, and as the author has as well, to assure that there are no conflicts, that we're assuring that we're still maximizing the scope of the potential litigation to the extent that the results are what are largely anticipated. But given that, the author's done a lot of work in order to advance that as well. So there are a set of amendments that are proposed here. They would be taken if the do pass motion prevails today. The bill will go on to the Judiciary Committee, and the amendments will be taken there. simply because the committee meets tomorrow and we don't have time to process them in between. And so with that, I'm recommending an aye vote as well. We have a motion from Senator Padilla. And Assemblymember Bryan, would you like to close? Absolutely. I first want to say in the six sessions I've been here, I don't know that I've ever testified with opposition witnesses who I respect more greatly than the both who are sitting here. And many of the concessions that have been offered in this bill to date are in part because of their effective advocacy in communicating what is a difficult and complex issue. I will say when we introduced this bill to ban speculative ticketing, three weeks later the President of the United States did an executive order banning speculative ticketing. He copied me, but it brought Donald Trump and Isaac Bryan together, which was crazy. And then we moved this bill out of the Assembly floor. And that afternoon, Governor Gavin Newsom tweeted out that he and Kid Rock both agree on this issue. I will say up until this point, it has brought Isaac Bryan, Donald Trump, Kid Rock, Gavin Newsom, Drake, and Kendrick Lamar, the Dodgers and the Giants, all together around a singular issue. And I respectfully ask your aye vote. All right. With that, I certainly would encourage you, Mr. Bryan, to have some other bill ideas then for you. But I appreciate that. If there's no further debate, then please call the roll on AB 1349 to pass. Motion is due passed to Judiciary. Senators Cabaldon? Aye. Cabaldon, aye. Sayarto? Gonzalez? McNerney? McNerney, aye. Ochoa Bogue? Padilla? Aye. Padilla, aye. Reyes? Aye. Reyes, aye. Umberg, Wiener? Four to zero. The vote is four to zero. We'll place that measure on call. Thank you. Thanks to everyone, all the witnesses on this item. All right. Assemblymember Haney is next in file order. We'll keep it on theme here. Welcome. So we're on file item 10, AB 1720. And Mr. Haney, please proceed when you're ready. All right. More ticketing. Good morning, Mr. Chair and members. AB 1720 is the California Fans First Act, which will protect fans from excessive ticket price gouging by capping resale prices at no more than 10% above face value, including fees for concerts and other live entertainment events at independent venues. California is the number one state for live events in the nation. These events generate billions of dollars in economic activity, support hundreds of thousands of jobs, and bring culture, community, and connection to our state. For decades, fans could access events in a really simple way. They would line up at the box office and buy tickets for some of the biggest acts for reasonable prices or for their favorite performer at community venues. But the shift to online sales has fundamentally changed the system. Ticket scalping has become a highly profitable industrialized scheme that is pricing fans out of the market and hurting independent venues and artists. If what's happening online today happened in person, it would be absolutely unacceptable and in many cases already illegal. Imagine if you went to the show and lined up at the box office and the person in front of you bought up a large number of tickets at a reasonable price that you were willing to pay, and then immediately started going down the line and selling the few remaining tickets at five or six times the price they actually paid. We would never tolerate it. In some cases, that person would be arrested. And unfortunately, that is exactly what is happening today online at a much larger scale. Professional scalpers purchase large volumes of tickets. the moment they go on sale and immediately list them on secondary platforms. They have no intention to attend the event. They are speculating and gambling on these ticket prices, expecting them to drive up in price so that they can pocket the profits, in many cases creating scarcity that actually leads those tickets to increase in price. As a result, over 90% of resale tickets are sold by these professional scalpers, and fans are paying on average over 200% above face value for tickets on the secondary market. In San Francisco, we recently had a 12-show residency at the Castro Theater, which had opened with Sam Smith. They wanted to make sure that this was affordable and accessible for fans, so the tickets were sold and listed at a face value of $120. Most of those tickets were immediately purchased and then listed on secondary sites for $600 or $700. That difference of $400 or $500 $500 went in the pockets of professional scalpers, many of whom are out of state and who contributed nothing to that live event. They do not build venues, they do not employ workers, and they do not create art, that they are extracting profit directly from fans and leeching off of the work and art of those who create these venues and create the art. I do want to say, because I know that this has come up, that we also have to address the powerful monopoly of Live Nation and Ticketmaster. There is a case that will decide significant steps that need to be taken for that. But a key conclusion from the Assembly Privacy Committee's informational hearing on ticketing was that the current ongoing efforts to break up Live Nation are separate from reforming the secondary market and both can coexist. It is also important to underscore here that this bill now is limited to independent venues that are under 3,000 person capacity. These independent venues are the competition to Live Nation and they support this bill they sponsor this bill and they desperately need it in order to survive and compete with Live Nation There are more than a dozen states attempting to cap resale tickets prices this year including New York Wisconsin Washington and Vermont bill was recently signed into law This is something we can do for fans, for venues, and for artists, and it is critical for our economy and for our culture. and we cannot continue to allow folks to scam the system, drive up prices, and hurt venues and artists. With me to testify in support of this bill are Randy Nichols, the artist manager at Fly South Music, and a board member of the National Independent Talent Organization, and Alex Torres on behalf of the National Independent Venues Association. All right, welcome to you both. You only have two minutes. Karen, members, Alex Torres here on behalf of the National Independent Venues Association of California. We represent over 650 independent venues, festival promoters, non-profit stages throughout the state. And I'll have to admit as we've sat through multiple committee hearings, it's a bit perplexing in this debate and the committee analysis will note. We hear from business organizations, chambers of commerce, who say they speak for small businesses. They all oppose this bill, but I sit here representing 650 independent California small businesses that overwhelmingly support it. So I can't help but ask, if not these small businesses, then who are these organizations speaking for? No one has spent more time competing against Live Nation than the venue owners supporting this bill. Many of them, the same venue owners, came before this legislature during COVID to fight for their businesses and the California Venues Grant Program. They testified about liens on their homes, mortgages tied to their businesses, and the possibility of losing cultural institutions that define their communities. We've also heard that a resale price cap somehow helps Live Nation Ticketmaster. Independent venues have again been the strongest advocates in the country for breaking up Live Nation Ticketmaster. So why would the businesses leading that fight suddenly support legislation that protects them? And to emphasize the assembly members point, the US Senate Subcommittee on Investigations report released by Senator Richard Blumenthal reached the same conclusion. The report calls for breaking up Live Nation and Ticketmaster and recommends Congress enact a statutory cap on secondary ticket resale prizes to reduce extreme markups and discourage industrial level ticket reselling and scalping. These recommendations aren't contradictory, they're complementary. Breaking up a monopoly in the primary market promotes competition. A reasonable resale cap in the secondary market protects consumers from excessive speculation. Our small businesses don't make any profit when tickets are resold for three, four, five times face value. That means less shows in communities, less bartenders, security, janitors. It impacts our ability to continue generating economic growth throughout California communities. However, the resale platforms clean up, they make billions in profit, while fans, small businesses, and artists take the loss. We respectfully urge your aye vote. Thank you. Thank you. I'm Randy Nichols. I'm an artist manager and a board member of the National Independent Talent Organization. NITO represents agents and managers working with over 7,500 artists who perform in venues from Harlow's in Sacramento to SoFi Stadium in LA. We want to be crystal clear. AB 1720 has nothing to do with the Ticketmaster Live Nation monopoly. If AG Bonta and partner states move to break up that monopoly, we stand in full support. The secondary market will claim their Ticketmaster's competition. They're lying. They compete with the fans. Here's how it works. Bots buy tickets faster than you can Then scalpers sell you the tickets you couldn get at a massive markup Then you have astroturf organizations like Sports Fan Coalition who will claim that these bills hurt consumer choice They won tell you that StubHub funded them Recently within the past week, thousands of families have been scammed by StubHub with World Cup tickets. The Sports Fan Coalition? Silent. Scalpers will claim 1720 drives businesses underground to unregulated markets. Where are they now? On platforms like StubHub, where hundreds of California consumers are complaining every day. The secondary market brags about a 1% or less failure rate. When you buy from an actual ticket seller, that rate is zero. When families don't receive their tickets, they're forced into arbitration claims. Bradford Clements is filing those claims on on behalf of buyers right now. StubHub has changed the arbitration notice address six times in the past year, six times. That's a shell game. Blame Ticketmaster, blame FIFA, blame the event producer, deny everything and make counter accusations. Never admit the consumer damage from the secondary market or how much they are extracting from hard work and Californians every single show. AB 1720 removes the arbitrage opportunity for these speculators. It's been proven no other measure works. Please vote yes. All right, thank you. Anyone wish to register support for the bill? So please come forward to the stand up mic and share with us your name, affiliation if any, not your lobbying firm, and your position on the bill. Joe Rinaldi on behalf of Music Box San Diego, the San Diego Independent Venue Association in strong support of AB 1720. Connor Gussman on behalf of SAG-AFTRA in strong support. Thank you. Hello, Kendra Vigley on behalf of the City of Thousand Oaks in support. Jim Cornette Harlow's the Star of the Room of Cafe Colonial in support. Gabriel Docto with the San Francisco Venue Coalition in strong support. Clifton Wilson on behalf of the California Arts Advocates in support. Thank you. Jordan Curley on behalf of the Music Artists Coalition in support. I'd say no other witnesses in support. Are there two lead witnesses in opposition? Welcome and welcome back. You'll each have two minutes. Thank you, Mr. Chair and members. Lila Clay here on behalf of the California Live Events Equity Alliance, which is a consumer facing organization made up of fans and equity groups across the state, we respectfully oppose AB 1720. We appreciate the author's goal of trying to focus on ticket affordability. However, CLIA believes addressing broader marketplace concerns and increasing competition for ticket sales is the most effective way to decrease prices. The resale or secondary market only represents about 9 to 10% of overall ticket sales globally. while the primary ticketing market is dominated by one company. Ticketmaster was just determined to be a monopoly in a lawsuit led by California's Attorney General. Ticketmaster also represents about 30% of the secondary market. Because of this massive consolidation, AB 1720 will only further solidify that monopoly. By jumping ahead of the remedies phase of the lawsuit this bill will cripple Ticketmaster competition on the precipice of the company being potentially broken up The fact is skyrocketing costs in the primary and secondary markets ultimately keep real fans from being able to experience the joy of attending a show But price caps don't curb consumer demand. They just push ticket selling activity underground where consumers have a higher likelihood of being scammed. In Ireland we've seen both of these dynamics when price cap laws went into effect. Major secondary marketplaces disappeared, Ticketmaster's market share is now well over 95%, and ticket fraud has increased dramatically. Further, AB 1720's piecemeal application and the lack of data interoperability between platforms will make it extremely confusing for consumers to know which events are subject to price caps and whether they are in fact paying the right amount for a ticket. We need more transparency, more competition, and safer ways to buy and sell tickets, and for these reasons, we urge a no vote on AB 1720. Thank you. Good morning, Chair and members. Austin Hayworth here on behalf of Internet Works and respectful opposition to AB 1720. Internet Works represents middle tech companies shaping a safer, more innovative internet rooted in trust, opportunity, and user protection. From that perspective, our concern is straightforward. This bill creates a compliance obligation that only one company in the marketplace is capable of meeting. AB 1720 requires resale marketplaces to verify that a ticket is being resold for no more than 110% of its original purchase price. That sounds simple, but in today's ticketing market, it simply is impossible. Secondary marketplaces do not know what a customer actually paid for a ticket. They don't receive that information from the primary seller, and in today's marketplace, there often isn't a single face value. Most tickets are dynamically priced. Two people sitting next to each other may have paid completely different prices. Tickets may be sold through pre-sales, fan clubs, VIP packages, or bundled promotions. The resale marketplace has no legitimate way to verify which price is correct, even if it requires the consumer to list the price they bought it for. Only the original ticket seller has that information. And today, for the overwhelming majority of major events, that seller is Ticketmaster. So this bill effectively says if you are not Ticketmaster and you do not receive Ticketmaster's proprietary data, you cannot confidently comply with California law. That doesn't promote competition. It reinforces the very monopoly the California AG is currently asking a federal court to break up. Technology policy works best when compliance standards are objective, verifiable, and available to every market participant equally. AB 1720 fails that test. This is also why almost every state across the country rejected this bill this year, and we even saw states like Massachusetts repeal their price cap laws because it was found to be ineffective and unenforceable. We respectfully urge a no vote. All right, if anyone wish to register their opposition to the bill, please come to the stand-up mic. Mr. Chair, members, James Jack on behalf of the Coalition for Ticket Fairness in opposition. Robert Boykin with TechNet in opposition. Christopher Sanchez on behalf of the Consumer Federation of California in respect for opposition. Erin Neumann on behalf of our colleagues at Game Time, SeatGeek, and TickPix, also in opposition. All right, with that, we'll return it to the committee for questions or discussion. Senator Padilla. I just have some comments. May or may not have a question. I'll defer to members if they have questions prior to that. All right, Senator Gomez-Reyes, do you have a question or a comment? I have comments and questions. Senator Abidia. Thank you, Mr. Chairman. I think it's an interesting dynamic. I appreciate the dialogue. First, specifically, market averages and prices are known broadly. You don't need to take, download proprietary market information or data, understand a market. Markets would not be markets if that were not the fact case. I'm having difficulty being convinced that we could characterize some of the exploitation that occurs in the secondary market as competition. I'm not at all sold on that particular premise. I would just say I think it's ironic, right? I mean, primary promoters actually love the secondary market to some extent because it soaks up residuals and unclaimed, you know, they are guaranteed at some point that they're going to sell 100% of all their individual elements of value every ticket. So that's good. The problem is, I think that's interesting here, is that that often is exploitive to the average ticket purchaser who's seeking to be participating in a fair market, and most importantly of all, having access to the experience, right, and to the artistry. And so it's ironic in that it also sort of, in my view, could shortchange artists who are primarily driving, really are the, you know, they're the units of value. They are providing the value here. so I think there is room for discussion about what's occurring regardless if it's 10 or 30, whatever the argument is about the percentage of the overall market what's occurring is a little bit of exploitation and exclusion for people who are seeking to get into a market to purchase access to that experience and to enjoy it and so I appreciate the author bringing it up I know it is not as simple as all of that as well. I know there are some subtleties and there's some more work perhaps to be done, but I do appreciate the author bringing the bill. Senator Gomez-Reyes. Thank you so much. When we're talking about ticket affordability, we're all on board. We're talking about a secondary market and trying to find a limit as to how much over they can charge without civil penalties. I think generally we're all on board. And I appreciate Harlow's also being here to say this is something that they want. This is something that's beneficial to them. So we're talking about smaller venues and I think that's important. Something that was brought up by the opposition is when you have fan tickets or VIP tickets so the price is different, how do you How do you determine what the price is to then show what the 10% over that would be? It's what they paid for it, inclusive of fees, they can charge 10% over that and they have to demonstrate, they have to upload actually the ticket itself and to show what they paid for it. So if they pay, and the price could change of course, but what they paid for it, they can sell it for 10% over that. Okay, something that, and I would like to ask the chamber, we talked about more transparency, more competition. Help me please to understand the part about the competition. So I think in terms of competition, what our point is, is that as we are waiting for the courts to make a decision about the remedies phase of the Ticketmaster breakup It really is an incredible opportunity for companies to sort of jump into the primary ticketing space and change the current dynamic of the way that the marketplace is set up I think, you know, our organization would agree that there's plenty of stuff happening in the secondary market that is terrible for consumers, but we also kind of see a real opportunity and sort of light at the end of the road right now, where there's a lot happening and we don't want to jump into a space, particularly what we've seen in other marketplaces, where ticket caps were instituted greater fraud and greater marketplace consolidation by Ticketmaster. So for us, it really is primarily a timing issue about how the marketplace is going to change in pretty short order here. I would just add briefly, Senator, we're talking about competition in the secondary marketplace. There's only one market participant that participates in the secondary marketplace. is that there's also the primary seller in almost every circumstance. So there's natural compliance advantages there that are not competitive. And I think something that was, you talked about the potential breakup. I think it's, I mean, Live Nation directly manages more than 400 musical artists, controls over 60% of concert promotions at major concert venues across the country. They own or control more than 265 concert venues in North America, including more than 60 of the top 100 amphitheaters in the U.S. Tell me how that part has to do with the competition that we're talking about. How Live Nation, Live Nation's monopoly? If we're talking about competition for the secondary market, tell me how that has to do with the potential breakup. Right. So the secondary market feeds off of the primary marketplace, right? Correct. And so the primary marketplace we've seen since Live Nation and Ticketmaster joined up, a massive increase in the basic prices of tickets. Austin talked about the dynamic pricing and a number of different things that Ticketmaster does, and this was found in lawsuit, to increase the price of tickets in the primary marketplace. All of that sort of flows into the secondary marketplace as well. And so from our perspective, we want to see overall marketplace changes. Like I mentioned before, the secondary market is only about 9% to 10% of overall ticket sales. So it really is relatively a small piece. I know there's a lot of terrible stuff happening in that marketplace, but it's a relatively small piece of the overall market. And so from our perspective, sort of dealing with the live nation, just like you talked about, their massive consolidation in so many different areas that needs to be sort of disrupted and distributed, that creates an opportunity to completely change the secondary market. To the author, what is your response to the issue of competition as presented by CalChamber? So the sub hub and seat geek and the secondary market has exploded over the past few decades. At the very same time, the Ticketmaster Live Nation has grown dramatically and become a monopoly. So if the secondary market, as we heard, I think it was perfectly stated, feeds off the primary market. It doesn't compete with the primary market. It feeds off of it in a way that actually increases prices both in the secondary and primary market. Because what they do is when you have these huge bulk purchases, bought purchases, that creates scarcity, including in the primary market, which then increases prices that people have to pay up front if they're going to purchase directly and also increases prices in the secondary market. So they feeding off of each other in a way that increases prices both in the primary and secondary and puts money in the pockets of the folks who want to speculate and profiteer from it not in the venues and artists And I want to be clear it interesting that the folks keep on bringing up competition to Live Nation and Ticketmaster. I'm sitting with the competition to Live Nation and Ticketmaster. It's not the Stubhubs who are saying maybe someday they might want to get into primary direct ticket sales. Great. They haven't done it yet. They should. And we fully encourage that. They should get into that. The competition to Live Nation is the independent venues who are being screwed over by the way that this system, yes, does in some cases benefit the big players, the Live Nations, the Ticketmasters, the secondary platforms, and the speculators. The venues are the ones getting screwed. The fans are the ones being screwed. And the competition to Ticketmaster and Live Nation I'm sitting with, and they're saying in order for them to be able to compete with the monopoly, They need to be able to break up this system that is benefiting speculators and scalpers and not venues and fans. The bill in print also only applies to three. Through the chair. Yeah, right. This bill now currently only applies to independent venues that are under 3,000 capacity. These folks want this bill, and they're saying they need it in order to compete with the monopoly. And if StubHub and others want to get into the primary direct sale, fantastic. They should do that. There's nothing about the remedies in the court case that could apply to what our bill applies to because this doesn't apply to Live Nation at all, this bill. So if they have remedies as part of the court case, these venues are not party to that case. They couldn't extend it to them. If they want to do ticket caps for Live Nation venues, I actually think that would be helpful, and I would support it. But that's not in this bill. So I don't see how this could possibly conflict with any remedies that could come as a result of that court case, because that court case couldn't lead to any of these remedies, because these venues are not party to that lawsuit in any way. Thank you. I was simply just going to emphasize what the Assemblymember was saying. Very good. All right. Because we go through our chair. He's in charge. All right. Thank you, Mr. Chair. Yieldback. Thank you. Thank you, Senator Gomez-Rey. Senator McNerney. Well, I thank the author, and I appreciate that you take amendments. I mean, that's how we improve our bills. When I was a juvenile, I scalped tickets. I would go to the local college football game, ask for people if they had spare tickets, and they did, and I'd turn around and sold them for 100% profit. One night I hit the jackpot and made $40. So I sympathize a little bit with the scalpers. I think 10% is draconian. It should be a little higher than that maybe. But, I mean, my concern is, like I said in the prior ticket issue, how are we going to enforce this? How is it going to be, how are we going to make it work? And is it going to be something that's on the record and on the books and doesn't do anything? Is it going to want to be rescinded? I mean, we're talking about real issues here. And my last question is, who are we protecting? Are we protecting venues? Are we protecting people that want to pay $500 or $1,000 for a ticket? I mean, I'm a little gray on these things. So if you want to address that. Sure. Well, first and foremost, we're protecting fans who want to attend the shows. If you purchasing a ticket to see a live entertainment performance or a concert it should be because you intend to attend it It shouldn be setting up a system of industrialized speculation gambling which is what it has become And so that a system that is benefiting those who are pocketing huge profits If all we were seeing is what you're describing, what you said you did as a juvenile, that would be a lot less of a problem than what we see now. What we're seeing now is tickets go on sale for $50 a pop because the venue wants to get people in the doors and they want to have it be accessible to fans. And so folks go, I bet you those will go for $200 if I buy as many of them as possible, create scarcity that actually drives the prices up generally, and then that forces a fan now to pay three, four, five times as much. That is happening at scale by design, by hugely organized, industrialized speculators. So the main thing we're doing is protecting those fans. At the same time, you can also see how the artists and the venues are getting screwed by that. All of that money that fans are paying as a markup is not going to the artists who created the songs and play the music or the janitors who cleaned the bathrooms or the folks who invested. It's all going into the pockets of folks who just got there first by design and speculated off of what they believe would be an opportunity for a massive markup. So the venues are struggling, the artists are struggling, and in some cases the venues will tell you the result of that system is they have shows where they sold all the tickets, but the theater is 30%, 40% full because the secondary market scooped up all the tickets but then actually didn't sell them on the secondary market because their interest is in profits, not in filling the theater. The theater and the band wants the theater full because they also buy concessions, they go on to support the artists in various other ways. So there's a mismatch in really what should be you purchase a ticket because you want to go to a show, not because you want to buy low and sell high, which screws over fans first and foremost. But it also screws over the people who are actually making the arts and building the venues and working at them. And it's working for the people who are taking advantage of this system. In terms of enforcement, the enforcement is actually, I think, in many ways, better than what we have now, which is that consumers will have clearly outlined and articulated rules that protect them, which is, it will be clear, in order to sell a ticket on the secondary market online on one of these platforms, you have to upload the ticket, and you can't sell it for more than 10% of what you paid for it. That's consumer protections that don't exist right now, and the enforcement would be by the Attorney General focused on these industrial sellers, these large secondary platforms. And it would be pretty clear and obvious if they're selling tickets that are way above what somebody paid for them. Actually, there's a lot of transparency to it that don't exist right now and clearer rules in terms of enforcement for consumer rights that right now consumers don't have. Well, when I was in juvenile enforcement, it was by the bigger kids. But I'm concerned that the Attorney General is going to want to spend his resources going after ticket scalpers. So I'm kind of neutral on this at this point. I like the idea, but I don't see it being real. So at any rate, I'll yield back. Thank you, Senator. I also have mixed feelings about this. The objective I 100% support both for fans and for independent venues and for this. As I indicate on the prior bill, I'm now an expert economist on this topic. And I mean, if you ask economists in this space to look at the evidence, it's not what we would always expect. The impacts of price caps on what consumers are paying for tickets in general, accounting for other factors and what have you, generally don't change the prices for fans. They redistribute who is benefiting from the fact that there are people that are willing to spend a lot more from the secondary market to the primary market, which can be a good thing for all the reasons that the author indicated, the janitors, the artists and everyone else, which is what you want. The challenge in the overall market here though is that Ticketmaster and Live Nation exist in both places. Much of the economic analysis that shows some benefits depends on there being a strict separation between the primary market and the secondary market. And in addition to every other antitrust problem that Ticketmaster and Live Nation face, one of them is that they occupy both places. And in those cases, the economic research suggests that the big winner is not by name, but it is the player in the market that is both primary and secondary simultaneously, They're able to artificially price the primary ticket lower in order to capture the benefit through the secondary market, which they are a significant player in. And so the consequences here are just really hard to figure out who wins and who loses. And I'm also concerned about just that we do need to have a secondary market survive at least until the end of this case so we know what's going to emerge out of the ashes of whatever the courts rule. and 10% does seem like a potentially disabling level in terms of the ability of some of the secondary market providers to stay in the business. That's offset to a large extent by the scope narrowing that occurred in the office of the suspension of the assembly. So recognizing that it applies to the smaller venues only. So I'm still struggling with this myself. I'm probably not going to cast a vote either way. There's no chair's recommendation on this bill. Do appreciate the effort. And there's no amendments that the committee has proposed either. I think it's a straightforward bill, and everyone's got to figure out their own view on it. So I get the problem, get the issue. If we didn't have the case, it might be a different issue. If it was applied to all venues of all types, all sizes, and every event, I would probably be a no vote. But it doesn't, and I'm open to it. But for today, I think I'm likely to not be a vote either way. But again, there's no chair's recommendation on this issue. Mr. Haney, would you like to close? Yes. Again, this bill was narrowed to apply solely to independent venues. It does not apply to Live Nation venues because some of the concerns that were raised there. These are folks who are competing with Live Nation Ticketmaster and are struggling to do so because of the way that folks are coming in and taking advantage of a system that is working for people who want to speculate and gamble on ticket prices. We don't allow speculating and gambling in many different sectors for a good reason, and that's what this is. Folks are pricing a ticket at a certain price so that someone who actually wants to come and experience that can do so, And in doing so, provide the benefit to those who actually did the work, made the art who we should be supporting here And instead we set up a system that screws over all of those folks except for the people who want to make profit off of speculation The idea that somehow we have a responsibility to pad the profits of StubHub here in order for them to maybe someday get into the primary market is ridiculous. They've had decades to get into the primary market, and they have chosen not to because the secondary market is so profitable to them. Why would they? And so if we were to sit here and say, we're not going to support the fans who are being priced out of shows, the folks who are making the art because we're worried about maybe cutting down the secondary platform. StubHub is a massive international company, not based in California, and they make millions and millions and millions of dollars. This bill doesn't include sports. It doesn't include big events. This is just for the folks in our communities, theaters in our communities, who are begging for this, who are closing down because they're being taken advantage of here and the fans in the process. I think it would be a shame if we said, again, as I understand it, our interest here is to make sure StubHub can make enough money to maybe someday enter the primary market. I don't think that that would be a good reason to kill this bill. And I do think it's an important thing for us to do just for these small venues, independent venues, who are begging us to back them up so that they can provide our community culture and our residents can access it, which right now we've set up a system that makes it a lot harder to do so because we've set up a system that allows for speculation and gambling rather than folks who want to actually see a show. With that, respectfully ask for your aye vote. Thank you, Mr. Haney. Is there a motion by Senator Gomez-Reyes? Please call the roll. The motion is due passed to Judiciary Senators Cabaldon, Searto, Gonzalez, McNerney, McNerney aye, Ochoa Bogue, Padilla, Padilla aye, Reyes, Reyes aye, Umberg, Wiener. It's 3 to 0. The vote's 3 to 0. We'll place that measure on call. Next, we're going to turn to file item 11, AB 311 by Assemblymember McKinner, who has been with us for several hours. Welcome. Good morning. Is it still morning? No, good afternoon. Good afternoon. Okay. Welcome and whenever you're ready. Yes. And just for members of the public, it's 12.02, which means every witness starts off with good morning. I mean good afternoon. Let's just devote our time to the committee. No jokes, except for you, Assemblymember Kenderson, whatever you wish, but welcome. Thank you. Thank you, Mr. Chair and members. I would like to begin by accepting your committee's suggested amendments and sincerely thank you and your consultants for the work on this bill. I'd also like to let you know that I am working closely with the California Department of Insurance on their amendments that they gave me in the insurance committee. And I would also like to thank the insurance chair for working with us as well and working with the stakeholders Senators AB 311 puts vehicle users in the driver seat to improve safety on our roads and highways by creating an optional and more accurate way to determine vehicle insurance rates through the use of telematics technology. This bill also contains nation-leading driver data protections and prohibits driver data from being used for any other purposes other than for automobile insurance. Telematic technology is not new. It is currently being used in 49 other states across the nation and in nations around the world except for California. Senators, California's nearly 40-year-old Prop 103 has not reduced vehicle accidents and has not prevented unintended injury or death on California roadways. And I have some data to share with the committee. According to the Safe Transportation Research and Education Center at the University of California at Berkeley, there were 1,303 people killed in speeding-related traffic crashes in 2023, including 299 traffic-related fatalities, 1,124 traffic-related serious injuries in Los Angeles County alone, and a reported total amount of 315,508 police stops as of December 31st, 2025 by the Los Angeles Police Department. I also reached out to the Los Angeles Police Department for some local data. In 2025 alone, the LAPD issued 22,531 speeding tickets in the city, with 26 motorists ticketed for driving in excess of over 100 miles per hour and 86 tickets issued for speeding on a bridge or tunnel. Furthermore, the California Highway Patrol reported that from the years of 2021 through 2025, there were 3.2 million speeding citations issued in the state. California drivers may not change these dangerous driving patterns on their own, so AB 311 incentivizes safer good driving behavior through the use of telematics technology. People often tell friends and loved ones to be safe on the road, given the many hazards and challenges of traveling by automobile. And I am authoring AB 311 today because three close personal friends of mine died in vehicle accidents that could have been prevented through the use of telematics. Some of you may know my friends, John Vigna, who worked right here in this building, Peggy Moore and Hope Wood, some Democrats that we loved across the state. All of these people were in their 40s and had a bright future ahead of them and were killed by speeding wrong-way drivers just a few years ago. Their deaths devastated me, and I committed then to work with other families who have lost loved ones in vehicle accidents to make our streets and roadways safer. Telematics is a tool to do just that. It is time for California to join 49 other states and give drivers the option to use modern, available technology to improve safety on the roadways and to save money on their vehicle insurance. I respectfully ask for your aye vote My witnesses are Pastor Patricia Strong Vargas of Mount Salem New Wave Christian Fellowship South Los Angeles and Danny Weissner Founding Director MIT Internet Policy Research Initiative at the MIT Computer Science and Artificial Intelligence Lab and from 2011 through 2012 he served as the United States Deputy Chief Technology Officer for Internet Policy in the White House under President Barack Obama. Thank you. Thank you, Assemblymember. Welcome to the two witnesses, and you'll each have two minutes. Thank you. Good afternoon, committee. Again, my name is Pastor Patricia Strong-Forgas. I'm the pastor of Mount Salem Church in South Los Angeles. And I'm also chair of Faith for Safer Streets, which comprises hundreds of churches, along with thousands of congruent members of churches. The question today, why am I here? I'm here because it's important for people to know that we need a tool to have safe streets. We need a tool to save lives. Again, Assemblyman McKenna says that in 2023, there was 1,124 serious injuries and deaths that go along with our statistics. But do we realize that every morning when we wake up, there's a serious injury, death on our public streets and our highways? that's serious that's important why am I here because streets are serious is serious either they're running the lights feeding our distracted drivers how do I know that for the past six in the past six months I got hit twice in the back and I can't walk like I used to. Why is it important? It's important because we need to save lives. Why is it important? Some say that it's biased with policing. Some say that our minority neighborhood is being ticketed too heavy. Well, this tool, this AB 311, this measure, driving itself, will only be measured. Which is race-neutral and strips that bias out of the program. Why am I here? It's important that this bill will help our economic bottom line reduce the rate of insurance. In fact, Consumer Reports in 2024 survey said— Is my time up? Okay, just my last point. I'm here. I get there. I urge your support. It's important that we save lives and have our brothers and sisters and family at our kitchen table in the morning. Thank you. Thank you so much for being with us and for your testimony. Next witness, you'll have two minutes. Thank you, Chairman Cabaldon, for inviting me. And thank you very much to Member McKinner for the opportunity to contribute to your work on this very important issue. My name is Danny Weitzner. I want to just put this issue in context, if I could, in the context of the various privacy issues that we face. I think that telematics poses a particular kind of privacy challenge as part of a whole new class of services that we're seeing where individuals actually want to be able to share personal information in one way or the other to get specific benefits. We have fitness information we want to share. We have health information we want to share. We have financial information we want to share because we want to learn things. We want to leverage that information. And we need help from third parties in order to do that. But it is, I think, an imperative responsibility for the government to make sure that when consumers choose to share information, we know that that information won't be misused and we know that it will be handled fairly. So that's the challenge, I think, that is faced by the telematics question. I know that the bill's sponsors in this committee have been working with privacy advocates and others to strengthen the privacy provisions of this bill. And as a result, I think this legislation is on its way to establishing itself as the leading privacy protective framework for telematics in the United States, just as California has done for so many other privacy issues. I'd like to just highlight a couple of key points that I think the bill really does quite well. It begins, of course, with very strong consent rights to make sure that individuals can choose to participate and also can choose not to participate and that are not penalized for that participation. Very importantly, there are strong collection limitations in this bill. Only data that is needed to detect four features, speeding, abrupt braking, full stop when required, and frequent lane changes can be collected. There's strong usage. Unfortunately, this digital device has indicated that you have sped past the time. Well, then I have to respect it. I'm not a citizen of your state, so I don't really feel I can urge you to vote aye, but I do support the effort and really appreciate all the work you've done. Thank you. Thank you very much. Anyone in the audience wish to register support for the bill? Please come forward to the stand-up mic. Good afternoon, Allison Ady, on behalf of the Personal Insurance Federation. Happy to support this. We've been providing technical support, and I am available for any questions. Good afternoon. Sherry McHugh, representing the Pacific Association of Domestic Insurance Companies, and on behalf of the American Property Casualty Insurance Association, in support of the bill. Thank you. Mark Vuksovich, on behalf of Streets Roll, urging a strong eye on this bill. Thank you. Mr. Chair and members, Christian Antonio Nunez on behalf of Streets Art for Everyone with strong support for the bill. All right. Any other witnesses in support? We're now at the time for one or two witnesses in opposition to the bill. Please come forward to the witness table. Welcome. And you will also each have two minutes. Thank you. Becca Kramer speaking both as someone who is hit while walking home from advocating before this legislature and also on behalf of Privacy Rights Clearinghouse in respectful but strong opposition. AB 311 would authorize an opaque surveillance pricing infrastructure for a product Californians are legally required to purchase Californians have a constitutional right to privacy and should not have to choose between exercising that right and affording a mandatory product Similar to other constitutional rights, such as the right to vote, our right to privacy is not a commodity that can be bought or sold. Putting a price tag on privacy gives lie to the idea that it is a right and preys on individuals at the economic margins. Telematics programs systematically penalize lower-income communities, communities of color, and immigrant communities. For example, a Consumer Reports investigation found that telematics companies often score drivers on factors that correlate strongly with race and income. Additionally, privacy organizations have warned for years about the impossibility of de-identifying location data and the likelihood that data brokers will purchase supposedly de-identified data sets and re-identify them. The bill creates the collection infrastructure and leaves an open backdoor for nominally anonymized data to flow to data brokers and telematics exchanges who have the means and incentive to re-identify it. Current law prevents this risk in the only reliable way by prohibiting the collection of it in the first place. The bill's privacy protections are built on undefined terms and standards unlikely to be enforced, allows collection of sensitive location information after a consumer revokes consent, would allow companies who historically have had higher data breach rates than the general business population to collect this information and has many other problems. We urge the committee to vote no. Thank you, Chair and members. Carmen Balber, Executive Director of Consumer Watchdog, also a survivor of an accident as a pedestrian. But unfortunately, the dangerous drivers that proponents are talking about are not going to be the ones signing up to be tracked in their automobiles. In California, auto insurance has to be rated on drivers actual driving history, not the product of an unverified algorithm or AI system predicting future driving. And I will be very clear, the state's leading insurance company and the largest telematics providers are putting hundreds of billions of dollars into AI telematics. So we're definitely talking about AI. The bill forces drivers to stay in the program for the length of their policy, so that prevents immediate deletion of their data, even if they call to delete it. And that's in conflict with the CCPA. Insurance companies currently have to disclose precisely how driving safety record impacts price and this bill would make that impossible if algorithms set price. Telematics are truly not voluntary because offering a discount to one group for agreeing to telematics necessarily means everyone else who chooses privacy has to pay more, has to pay for that discount. So if you choose privacy, you'll be penalized. As Becca said, the loopholes in the bill's definitions and the lack of oversight of telematics models critically will allow companies to use any potentially discriminatory data that an insurer wants to argue is related to driving. And geolocation is routinely tracked by telematics, which means that'll be open to any government agency with subpoena power. No insurance company has publicly proven that telematics are related to risk. And in fact, a consumer reports investigation found breaking speeds that the telematics companies were calling dangerous were in fact considered safe by consumer reports and a sign of an alert driver. And finally this bill would allow each insurance company to create a different definition of what a good driver is meaning that good drivers who choose privacy would pay more than worse drivers who agree to be tracked and I urge your no vote Thank you All right thank you to you both There are other folks in the audience that wish to register their opposition to the bill. Hello, Brooke Bonetti in opposition on behalf of Privacy Defense Alliance and Privacy Rights Coalition. Hello, Tracy Rosenberg with Oakland Privacy. We are in respectful opposition to the bill. Christopher Sanchez on behalf of the Consumer Federation of California, in respectful opposition. Good afternoon, Chair and members. Symphony Barbee on behalf of the ACLU CalAction, in respectful opposition. Thank you. Good afternoon, Chair and members. Violet Swidler, expressing respectful opposition on behalf of Tech Equity Action. Thank you. All right. Seeing no one else, we'll return it to the committee. Senator Padilla. I know this isn't simple, and I appreciate the author's persistence in working with certainly my own committee in insurance and then certainly on the privacy question. And I think what I'm grappling with, you know, given that this is consensual and requires an affirmative opt-in, as I understand it, I don't know the reasonable expectation problem or the equal protection problem. I understand that there's a debate around the nature of the data and what that shows and what it is measuring. And I think that's worthy of continuing discussion here as to the exact method by which the data is applied in the context of both underwriting but also really in protecting people's reasonable expectation of privacy. But I'm hearing the strains of that, but I'm not hearing a basis for it on its own. In absence of some information I may be missing, I would be happy to, Mr. Chairman, with your permission, love the author and expert witness to maybe address some of these concerns that we have heard and certainly follow up. It's an opt-in. And this has been around since 1996, and it's always been opt-in. And as far as we talk about minorities, everybody knows me. I fight for minorities, and I fight for the underserved. And so if we look at insurance right now, I'm going to say my car. I drive a Mercedes Benz, and I live in Englewood. But Englewood, 25 years ago, was a community that was kind of crime-written, and it had some things going on. But it has improved itself. And I still get charged a lot of money because of my address. And so when we talk about, when I first saw telematics before my friends had passed away, I looked at it as being fair. Because the same car that I'm driving, a woman, 61-year-old woman, black woman, in Beverly Hills pays cheaper insurance than I pay in Inglewood. So when we talk about insurance, when we talk about when we're going to bring up minorities and unfair pricing, we have to look at the whole picture. And so I'll let you finish this. I just maybe add a couple points. I think there's a concern expressed, obviously, about potentially unverified or unsubstantiated rating models. I think that is the province, obviously, as you well know, Mr. Padilla, the province of the CDI, to make sure to review the applications are presented. There's nothing automatic here, as I understand. Models would have to be presented and scrutinized I think that the evidence from states that have studied this even some of the more critical reports as you may know for example from the Maryland Insurance Commission, found that there was a pretty wide variety of some drivers saw rate decreases, some stayed the same, and some saw rate increases, and I think that's what you want. There was a marginal increase. Those who saw decreases actually outnumbered those who saw increases. And I'd also say that other studies, peer-reviewed studies, have shown to the equity point that the cost savings are neutral as to race and other demographic factors and really appear to be based on behavior. Just one last. And with respect to the testimony about the concerns around post-relocation collection of data. I think we could you want to address that? I'll just point out that that is one of the issues that's in the amendments that the authors agree to take, which is that upon revocation of consent to participate, data collection, telematics collection would cease. Thank you, Mr. Chairman, for the clarification. Thank you. If I could just speak to that question of- No question was posed to you, I'm sorry. Just asking. All right. Okay, thank you very much to all the witnesses and to the author. Mr. Vigna was a friend and a volunteer on my very first campaign and a fine human being, I wish he were with us today and maybe in some sense he is. I just wanted to review the amendments that are proposed for today, that there would be committee amendments that we would put into final drafting form following the hearing and across them at the same time as the report to second reading from the committee goes to the floor. And they do address some of the issues that the opposition has raised, not all of them by any means. They are just at the top level, they are informed by the notion that privacy, the constitutional right to privacy is fundamentally the constitutional right to control your data. It is not a bar on the commercialization of data, but it is a requirement that the individual has control over their own choices. And then in a highly data commoditized economy, that it cannot be the case that only consumers don't have the right to ever use their data. Everybody else can make money and benefit except for the consumer. And so that's part of the motivation for what the amendments I'll describe in a moment. And the other, in this case, maybe not uniquely, but in this case, it's very clear that the agreement that's being entered into is an agreement with the assistance of the telematics provider. It is the driver, the consumer, that is producing the data. The companies are not collecting data that's not out in the world somehow, just sort of randomly in some way by immaculate conception. The driver is agreeing to produce a set of data, and that gives the driver more, at least in the chair's view, more, I'm not going to use, I don't want to suggest a legal term, but more ownership and right to benefit from that data than data that would just be collected out into ether on their own. And so let me just summarize the amendment issues that we've described. First is that the bill proposes, the core of the bill is that the telematics data could be used to establish the driving safety record. That currently the only option for establishing that is through the DMV database. That is a, the DMV database is not dependent on your insurance provider. And so we've agreed that the bill would be amended to provide Consumers, the portability of the relevant telematics driving record following their switch to a different insurance provider. The objective data used to establish the driving safety record would be portable at the consumer's option to the next provider, so they are able to switch without the pressure to stay with a single provider forever. So we're talking here specifically about the data elements that are used to establish the driving record, not the models, the algorithms, or others, just the raw data that a different provider could then use in order to generate an immediate driver safety record if the consumer chooses to change insurance providers. Second is that the main policy idea here is that the telematics will improve driving. It's not mainly about changing the insurance issues, although that's an important part of it, but that the telematics will be used then by the driver to drive more safely to their benefit and to the rest of others on the road and to pedestrians as well. And so the second is in the area of the ability of the driver to use the information first to improve their driving so that when a standard but not in the bill, a practice of 30 days of data collection, that the consumer would first get the data report that says, Mr. Kapriski, you break too hard and you don't stop at lights, that he would have the opportunity to improve his driving at his option before it's used by the company before him. And so the second area of amendments is in assuring that the consumer has the ability to use the information in the telematics to improve their driving before it's used by the company to rate their insurance if they so choose. In addition, the deletion of the data that has been described here, that the retention would only be for the purposes of facilitating portability or complying with law and regulations and commission approved rating plans and for fraud prevention, regulatory examination, and other legal obligations. Next is a restriction on other data collection inside the car and outside of the car. So prohibiting collection of screen captures except for the purpose of distracted driving determinations as well as other connected vehicle information. So for example, what songs are you listening to heavy metal or De La Soul on your Spotify. Maybe somebody might think that's relevant to your driving. It's not relevant under this bill and the companies would be prohibited from collecting any of that data. So the data is only for the purposes of the authorized driver behavior data to form the driving safety record. That as was indicated earlier, consumers can revoke participation at any time. The data collection will cease when they leave the telematics program. And the data itself could be retained to the extent necessary by the provisions I just outlined a moment ago. And then that disclosure of the data would be pursuant only to lawful legal processes This committee has been doing a lot of work with respect to administrative subpoenas from the Department of Homeland Security and other instruments that are of questionable enforceability So the amendments would require that these be subject not just to any subpoena but only to those legal instruments that are enforceable And that the allowance in the bill for de-identified and aggregated information to be used by state and local government entities, which is critical for roadway safety and traffic analysis, that even de-identified aggregated information would not be available to be provided by any company to a federal agency. Again, even if it is de-identified. And then finally, to assure that insurers exercise appropriate oversight over third-party telematics providers by applying a new or reasonably should-have-known standard for violation by those providers to the insurance companies themselves. So those are the set of amendments that have been agreed to and then our staff would be drafting immediately following the hearing for report out to the floor. I will also note that there are other amendments that are also pending relevant to the insurance committee that we are not proposing to do that are not part of these, but our separate would be considered at another point in the process. So, and I want to thank the author and her team for an extensive amount of work. And I will say this later at the end of the hearing, but I really want to say thank you to Mr. Kropuski that you've consulted the committee and to Ben, who have put in an enormous amount of time and a very quick time period in order to try to get there. I personally do believe in the potential of this technology and the power of it to increase safety for everyone. And at the same time, it's important at the outset to get the privacy issues as right as possible, both because it's constitutionally required, it's the right thing to do, and also because this technology, like many of the others that we've talked about today, innovation requires trust. And it requires, and most consumers and citizens expect the government will have set appropriate guardrails so that it's safe for them to engage with that innovation. And innovation is always dependent on regulation, and the amendments in the bill attempt to try to accomplish that. So with those amendments, I'll be supporting the bill today as well. And Assemblymember McKenna, would you like to close? Yes, I'd like to, again, thank the chair and the consultants for the staff for all the hard work you did to get this bill here. We want to make sure that we have the best bill we can have on telematics. again, the reason why I did this is because we want to see safer streets. Losing my friends, I knew I had to do something and I know I can hear John Vigna telling me not to give up and to keep fighting and so you see him when you say he's probably here with us. Yes, he is and he's pushing me to continue to fight but to incentivize people to slow down, I think that's a good thing and with that, I ask for your aye vote. Thank you. Thank you. Is there a motion on the bill? Mr. Chairman, yes, thank you out there and move the bill. All right, it's been moved by Senator Padilla. Please call, and the motion is do pass as amended to appropriations. Please call the roll. Senators Cabaldon? Aye. Cabaldon, aye. Sayarto, Gonzales, McNerney, Ochoa-Bogue, Padilla? Padilla, aye. Reyes, Umberg, Wiener, 2-0. Thank you. Overwhelming vote of 2-0, we will place that measure on call. Thank you We are going to take a brief like less than four minute recess and then return I know Assemblymember Borteg has been patiently waiting. Half this committee is on the budget committee, and I'm the final person to go vote. And there's no one else here at the moment. But so we're going to recess for a moment when Senator Padilla returns, which will probably be before I do. He will be taking the gavel to get us started to make sure we can help the assembly members get to presentation and passage as soon as possible. So the committee will stand in brief recess and then we will reconvene momentarily. All right, welcome back. Thank you for your patience. We'll reconvene the committee that takes us to file item number 12, AB 2575 by Assemblymember Ortega. Welcome. Witnesses, feel free to approach. I will not have any joke. Welcome. Thank you. Proceed when ready. Thank you, Chair, for the opportunity to present AB 2575 today. AI may offer promise and healthcare workers are relying on it more and more, but what happens when AI gets it wrong? Knowing this, the Pew Research Center found that most Americans are more concerned than excited over AI. This is because in the real world, clinical judgment relies on more than data inputs. Healthcare workers use sight, sound, touch, and smell to make the right call. AI models can generate false alarms, miss serious conditions, and reflect the same biases that exist in the data they were trained on. AI is a new rapidly developing technology that we are still experimenting with. Many AI developers don't know how these black boxes work, let alone the healthcare workers that use it to save lives. AB 2575 would provide guardrails to ensure these high risk tools used to save human lives have human oversight. With me to testify in support is Kathy Kennedy, President of the California Nurses Association, and Sarah Flots from the California Labor Federation. Thank you, welcome, you'll each have two minutes. Well, good afternoon, as she mentioned, my name is Kathy Kennedy, I'm a registered nurse, President of California Nurses Association, and co-sponsor of AB 2575. With more than 46 years as a registered nurse, I know that safe patient care is It's never just about what is on the computer screen or in a chart. Patient care is about understanding the person that's in front of us, combining the nursing process with holistic hands on care. So when healthcare employers ask nurses to rely on technology that we cannot meaningfully evaluate or override, our patient safety is at risk. Nurses using all of our senses skills and clinical expertise frequently can identify conditions in our patients that AI tools cannot capture So for example when a patient presents with some epigastric pain near their upper abdominal area AI may say and think that it was a stomach issue. However, nurses can observe that a patient's skin may also be clammy, their skin tone is pale, and would question, maybe this is cardiac-related, possibly a heart attack. In these moments when our patients' lives are on the lines, nurses need to be able to use our professional judgment to care for our patients. And that means we need to be able to question, override inappropriate AI outputs when our patient's safety requires it. It also means that as clinicians we should have information about AI technology being used in our facilities and hospitals. And tech developers should not be able to escape responsibility of unsafe AI systems just because a clinician is somewhere in the loop. This is not a debate about technology. We use it every day. It saves lives. AB 2575 simply ensures that nurses can still question, intervene, and protect our patients when there's something wrong with the tools our employers are asking us to use in patient care. So I want to thank you, and I respectfully ask your aye vote. Mr. Chair, Sarah Flox, California Federation of Labor Unions. We are also a co-sponsor of this bill. And we agree AI is a powerful tool that has the potential to improve the health care system but also poses great risks. So AB 2575 is essentially a very simple bill. It puts in place the oversight and regulations to make sure that AI tools maximize the benefits equitably to patients and the public and minimize harms. And that is something that has existed in health care since the beginning, making sure that tools are in place to improve care, but have human oversight. And that's what this bill does. I want to go into something that the excellent analysis says, which is around the opposition to this bill, that argue that this bill is, quote, protecting any worker who provides direct patient care from reprimand or discipline and essentially creates a new protected class of workers. That is not what this bill does or intends to do. It really is around can a health care worker override a AI tool or comply with an AI tool without being disciplined when they're providing patient direct patient care. This is so that AI is treated like every other tool in health care and not a licensed professional, which it is not. And so that is what the intent of the bill. It is. It's not to upset what the existing protocols are and operations are in a health care system. So we urge your aye vote. Thank you both for your testimony. Are there any individuals or organizations wishing to register support for the bill? Please approach. State your name and affiliation. Hi there. J.P. Hanna with the California Nurses Association, sponsor of this bill. I've also been asked to provide support on behalf of health access. Thank you. Thank you. Mitch Steiger with CFT, a union of educators and classified professionals, also in strong support. Navneep Puryear on behalf of the California School Employees Association in support. Good afternoon. Violet Swidler on behalf of Tech Equity Action expressing support. Thank you. Hello. I'm Trish. Casey Rosenberg on behalf of Oakland Privacy in support of the bill. Eric Paredes with the California Faculty Association in support. Ramon Costa Blanc, California Alliance for Retired Americans in strong support. Janice O'Malley, AFSCME, California in strong support. Thank you. Connor Gussman on behalf of Teamsters California and engineers and scientists of California in proud support. Thank you. Thank you. All right, we'll move to primary witnesses in opposition to the bill. Please approach. Welcome. State your names again for the record. You'll each have two minutes.

Good afternoon, Chair and members. George Storridge of the California Medical Association. We're here in opposition to AB 2575 by Assemblymember Ortega. Physicians strongly support the principle that clinical judgment, not artificial intelligence, must guide patient care. However, this bill creates new administrative burdens and liability concerns for physicians while undermining accountability and creating uncertainty regarding responsibility for medical decisions. This bill requires extensive disclosure and information sharing regarding clinical decision support systems, including inventories of AI systems and explanations of how those systems generate outputs. While transparency is important, many AI tools are embedded within electronic health records and are continuously updated by vendors, requiring physicians to maintain and disclose this information may be impractical, may quickly become outdated, and could expose sensitive information without meaningfully improving patient care. Additionally, this bill risks creating unnecessary privacy concerns. Physician practices and health facilities should remain focused on protecting patient information under existing state and federal privacy laws. New operational requirements governing AI systems should not inadvertently increase access to sensitive information or require unnecessary documentation that expands the handling of protected health care information. Finally, this bill adds significant administrative burdens on physicians and health care organizations that are already struggling with workforce shortages and a mountain of documentation requirements. Every hour spent complying with new reporting and disclosure mandates is an hour taken away from direct patient care We encourage the legislature to pursue AI policies that promote transparency while preserving patient privacy protecting innovation and allowing physicians to exercise independent medical judgment without unnecessary administrative burdens. For these reasons, we are opposed to AB 2575 and encourage your no vote today. Thank you.

Olivia Herrera on behalf of the California Children's Hospital Association in opposition. Thank you.

Thank you, Mr. Chairman. I would just appreciate the ongoing dialogue, appreciate the author. I'm not convinced that the suggested language as of this point is something that discourages the beneficial use of the supplied technology, technology but is rather qualifying it in a way that I think lends itself to long-term benefits, both to the operator, administrators, and certainly to clinicians in this context, never mind patients. So I think the bill should continue moving forward, and I'm happy to move it.

Thank you very much, Mr. Chair and member and staff. We're very happy that you're here, too. I want to thank the committee staff for all of their hard work, and the chair, of course. And after various conversations, I am happy to accept the committee amendments today, so thank you very much. California's children are growing up with access to an online world that was not built with them in mind. While we cannot and should not keep kids off the internet, we must craft policies that protect them while they're online. Last year, my bill, AB 1043, took a step in that direction by establishing California's Digital Age Assurance Act, which created a knowledge standard framework that uses age signals to send a user's age range from a device operating system to developers when an app is downloaded and launched. The Digital Assurance Act was intended to balance privacy and usability while helping to protect kids online. AB 1856 will help further these goals by clarifying the age assurance framework. Specifically, this bill clarifies that age signal bracket data pertains to the primary user of the device. specifies that the bill only applies to operating systems that have an account set up feature, provides guidance on what internal information can be used as, quote, clear and convincing evidence when there are conflicting age signals, prohibits covered entities from prompting a user to provide different age information, and integrates websites into the Digital Age Assurance Act. Nicole Rocha is here to present on behalf of Children Now, And I'll just say, and you'll appreciate this, Mr. Chair, because I know you were always on top of everything. We passed this bill last year and then realized we had some cleanup work to do. And so this is the result of that, of various different stakeholders who came forward once the bill was actually signed into law and said, wait a second, what about this, that, and the other? We want to be mindful of all of those conversations. And so this is cleanup so that we're actually creating policy and law that can be implemented and implemented effectively. So with that, I'll ask my witness to opine.

Let's turn now. Does anyone wish to register their support for the bill? And if so, please come forward to the mic and share with us your name, your affiliation, but not your lobbying firm, and your position on the bill. Thank you. Good afternoon. I'm Sia Patel here with three strands and full support of this bill. Thank you. Good afternoon. Abby Copeland, representing Three Strands Global Foundation policy team in support of the bill.

Thank you. Ed Howard, Children's Advocacy Institute, University of San Diego School of Law, in support. Thank you. Let's turn next to witnesses in opposition. Does anyone wish to provide lead witness testimony? If so, you'll have two minutes.

All right, thank you. Another witness in opposition? Good morning, or afternoon still.

All right, thank you to you both. Others wishing to register their opposition to the bill? Aye, I'm Brooke Benetti in opposition unless amended on behalf of the Electronic Frontier Foundation. Aye, Robert Boykin with TechNet in a respectful opposition. Hi, I'm Tracy Rosenberg with Oakland Privacy. We're not actually opposed to the bill. We have some concerns, and we had a question the same as the opposition witness regarding clarification on what the amendments are. We think they likely could address our concerns. We just don't know for sure. Hi, I accidentally missed the opportunity to express support for the bill, but I'm actually here in support on behalf of the Survivor Advisory Board with Three Strands Global in strong support. Thank you. All right, with that then, let me just summarize what the amendments are, the core of the amendments are. They apply the bill not to all internet website operators, but to developers across all platforms of an application and point of access of the application for the device. And secondly, impose penalties on websites that are not required to use age signals, but request them anyway. And the bill I just want to salute the author for this Last year legislation was a beautifully elegant solution to a very complicated problem that does involve trade with some privacy but at the minimum level necessary That's simple and doesn't depend on children typing in their birth date or everyone else having to show an ID online in order to participate in the digital world. It's a really powerful and important innovation in this space, and I appreciate the author spending the effort to keep following up on stuff, and not just issue a press release and say goodbye, but to really dig in to make sure that we're getting this correct. And, I mean, last year's bill took advantage of essentially the, I know this is a sensitive term, but the walled garden of the app stores and the fact that the devices have the ability to construct an age signal and that they also have a relationship through their app stores with those developers that have applications. And therefore, it's not an unlimited universe, but that they have other tools by which to not accept or to accept or demand changes when applications are uploaded. So there's an existing relationship between Apple or the Google store that is unique in this case. And with the amendments, that's what this bill continues to focus on. are those in which the two major app store operators continue to have the ability to work directly with companies and developers that they already have a relationship with. So it does not apply to every website on the planet. It doesn't apply to anything that's not in that much narrower pocket. and instead it closes a loophole in the bill from before which dealt with the application itself, but not necessarily in all cases, or at least not as clearly as some people would like with the associated websites that go with those applications. So just for clarification, and so let's turn to the committee for any questions or comments. Senator Badia?

Any other questions or comments? If not, then we're going to invite the Assemblymember Wickst, if you'd like to close.

I thank you. We have a motion by Senator Padilla and the motion is do pass as amended to the Committee on Appropriations Please call the roll Senators Cobaldin Aye Cobaldin aye Sayarto Gonzales McNerney McNerney, aye. Ochoa Bogue, Padilla. Padilla, aye. Reyes, Umberg, Weiner. Three to zero. Votes three to zero. Place that bill on call and proceed to file item 16, which is AB 1946, Assemblymember Wicks, whenever you're ready. Thank you.

All right. Welcome. to both witnesses and you will each have two minutes. Good afternoon, my name is Nicole

Ed Howard, University of San Diego School of Laws, Children's Advocacy Institute. With gratitude first for what I think is a superb and properly unflinching analysis and mindful that the companies that we're talking about here are the world's experts in user interfacing, I'd like to make four brief points, if I may. The first is that Mehta's former head of well-being himself testified under oath for the need for this bill when he testified, quote, Mehta made its reporting flow intentionally complicated to reduce reports that it had to look at, end quote, the result being that only 1% of people who began reporting under Instagram material, such as the one we're talking about today, actually completed a report.

Christian?

Yeah.