BILL ANALYSIS
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THIRD READING
Bill No: SB 1834
Author: Bowen (D)
Amended: 4/1/04
Vote: 21
SENATE ENERGY, UTILITIES & COMM. COMMITTEE : 6-2, 4/27/04
AYES: Alarcon, Bowen, Dunn, Murray, Sher, Vasconcellos
NOES: Battin, Morrow
NO VOTE RECORDED: McClintock
SUBJECT : Radio frequency identification systems
SOURCE : Author
DIGEST : This bill addresses the privacy issues created
by radio frequency identification systems.
ANALYSIS : Current federal law prohibits video stores and
libraries from sharing or selling customer records without
first getting express consent from the customer.
Current state law prohibits financial institutions from
sharing or selling personally identifiable non-public
information with unaffiliated third parties without
obtaining a consumer's consent. Financial institutions
have to provide people with an opportunity to "opt-out" of
having their information shared with a marketing partners
and affiliates. [SB 1 (Speier), Chapter 241, Statutes of
2003, which takes effect July 1, 2004.]
Current state law prohibits stores with club card programs
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from collecting driver's license and Social Security
numbers on club card applications and prohibits them from
selling or sharing personal customer information. [SB 926
(Speier), Chapter 586, Statutes of 1999]
This bill prohibits any person or business from using radio
frequency identification (RFID) tags on store products and
from using RFID readers to collect personal information
about people unless the following conditions are met: (1)
the information is collected only to the extent permitted
by law, (2) the information is provided by a customer in
order to purchase or rent an item at a store, (3) no
information is collected before a customer actually
initiates a transaction to purchase or rent an item or
after the customer completes the transaction, and (4) the
information collected is about a customer who actually
presents the item for purchase and only in regard to that
item.
This bill prohibits libraries from using RFID systems
unless the following conditions are met: (1) the
information is collected only to the extent permitted by
law, (2) the information is provided by a library patron in
order to borrow an item at that library, (3) no information
is collected before a patron actually attempts to borrow an
item or after the patron completes the transaction to
borrow an item, and (4) the information collected is about
a patron who actually attempts to borrow the item and only
in regard to that item.
Comment
RFID tags are conceptually similar to, though much more
advanced than, bar codes found on most products people buy
and to the magnetic strips found on credit cards and
driver's licenses.
RFID tags are tiny electronic computer chips that can be
placed, for example, on pallets of factory-sealed products
to readily tell shippers the quantity, type, date
manufactured and destination as they pass through warehouse
doors that are equipped with an RFID reader (also called an
antenna). The tags can be read from 25-30 feet away and at
indirect angles, removing any need for a person with a
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hand-held scanner to read the product.
RFID tags are expected to replace bar codes on everything
from library books to groceries within the next decade,
allowing businesses to save millions of dollars by
automating their shipping and inventory processes. At
about 20 to 50 cents per tag and $1,000 per reader, RFID
systems are still too expensive for widespread use. Some
experts project, though, that as demand grows,
manufacturing costs will drop and within the next decade
the use of RFID technology will become much more prevalent.
NOTE: For a detailed discussion of the uses of RFID
technology and the focus of current law information
collection and tracking practices, please refer to
the Senate Energy, Utilities and Communications
Committee analysis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 4/28/04)
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OPPOSITION : (Verified 4/28/04)
California Chamber of Commerce
California Grocers Association
Consumer Specialty Products Association
Grocery Manufacturers of America
ARGUMENTS IN SUPPORT : The author's office argues that
the bill is seeking to address concerns about the privacy
and civil liberty issues raised by RFID technology.
ARGUMENTS IN OPPOSITION : Opponents argue that the use of
RFID technology is growing, but not widespread and they
feel the bill is premature.
NC:mel 4/28/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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