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S01580 Summary:

Add 399-zzzzz, Gen Bus L
Relates to a smart phone antitheft protection; establishes requirements for the acquisition and resale of wireless communications devices.
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S01580 Text:

                STATE OF NEW YORK
                               2017-2018 Regular Sessions
                    IN SENATE
                                    January 10, 2017
        Introduced  by  Sen.  AVELLA -- read twice and ordered printed, and when
          printed to be committed to the Committee on Consumer Protection
        AN ACT to amend the general business law, in  relation  to  smart  phone
          antitheft protection
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Legislative intent. The legislature finds that:
     2    (a) According to the Federal Communications Commission (FCC),  one  in
     3  three  robberies  in  the  United  States involves the theft of a mobile
     4  device, making it the number one property crime in the country. Many  of
     5  these  robberies  often  turn violent with some resulting in the loss of
     6  life.
     7    (b) The FCC estimates that between thirty to forty percent  of  United
     8  States  street  theft involves a mobile device. In fact, more than forty
     9  percent of all robberies in New York city involve smartphones and  other
    10  cell phones.
    11    (c)  Consumer  reports  projects  that 1.6 million Americans had their
    12  smartphones stolen in 2012.
    13    (d) According to the New York Times, one hundred thirteen  smartphones
    14  are lost or stolen every minute in the United States.
    15    (e)  Major cities are home to the highest concentrations of cell phone
    16  theft, and officials in New York and California have been pushing for  a
    17  cellphone kill switch in those states since April 2012. According to New
    18  York state attorney general, Eric Schneiderman, the United States Senate
    19  proposal  would force the mobile industry to "stop dragging its feet and
    20  join us in protecting consumers."
    21    (f) In April of 2012, U.S. senator Charles Schumer,  D-New  York,  and
    22  New  York  city  police  commissioner Ray Kelly announced that the major
    23  U.S.  cell phone carriers and the Federal Communications Commission have
    24  agreed to set up a national database to track  reported  stolen  phones.
    25  Senator  Schumer  also  introduced a bill called the mobile device theft
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 1580                             2
     1  deterrence act, which proposes a five-year prison sentence for tampering
     2  with the ID numbers of a stolen cell phone.
     3    (g)  According  to  press  reports,  the  international trafficking of
     4  stolen smartphones by organized criminal organizations has  grown  expo-
     5  nentially  in  recent  years  because  of  how  profitable the trade has
     6  become.
     7    (h) Replacement of lost and stolen mobile  devices  was  an  estimated
     8  thirty-billion-dollar business in 2012 according to studies conducted by
     9  mobile  communications security experts. Additionally, industry publica-
    10  tions indicate that the four  largest  providers  of  commercial  mobile
    11  radio  services  made  an  estimated seven billion eight hundred million
    12  dollars from theft and loss insurance products in 2013.
    13    (i) Technological solutions that render stolen  mobile  communications
    14  devices  useless  already exist, but the industry has been slow to adopt
    15  them.
    16    (j) In order to be effective, these technological solutions need to be
    17  ubiquitous, as thieves cannot distinguish between those  mobile  devices
    18  that  have the solutions enabled and those that do not. As a result, the
    19  technological solution should be able to withstand a hard reset or oper-
    20  ating system downgrade, and be enabled by default, with consumers  being
    21  given the option to affirmatively elect to disable this protection.
    22    (k)  Manufacturers  of  mobile  devices  and  commercial  mobile radio
    23  service providers should make efforts to protect  their  customers  from
    24  being targeted as a result of purchasing their products and services.
    25    (l) It is the intent of the legislature to require all smartphones and
    26  other mobile devices offered for sale in New York to come with a techno-
    27  logical solution enabled in order to deter theft and protect consumers.
    28    §  2. The general business law is amended by adding a new section 399-
    29  zzzzz to read as follows:
    30    § 399-zzzzz. Smart phone antitheft protection. 1.  For the purposes of
    31  this section, "smart phone" means  a  cellular  phone  or  other  mobile
    32  device  that: (a) is built on a smart phone mobile operating system; (b)
    33  possesses advanced computing capability; (c) enables network connectivi-
    34  ty; and (d) is capable of operating on a long-term evolution network and
    35  successor wireless data network communication standards. Capabilities  a
    36  smart phone may possess include, but are not limited to, built-in appli-
    37  cations, internet access, digital voice service, text messaging, e-mail,
    38  and  web  browsing.  "Smart  phone"  does  not  include a phone commonly
    39  referred to as a feature or messaging phone, a laptop computer, a tablet
    40  device, or a device that has only electronic reading capability.
    41    2. Any new smart phone manufactured on or after July first, two  thou-
    42  sand  eighteen,  sold  or  purchased in this state must be equipped with
    43  preloaded antitheft functionality or  be  capable  of  downloading  that
    44  functionality.  The  functionality must be available to purchasers at no
    45  cost.
    46    3.  Wireless  telecommunications  equipment  manufacturers,  operating
    47  systems  providers,  and  wireless  telecommunications service providers
    48  shall either individually or jointly, by January fifteenth, two thousand
    49  eighteen, submit a report to the chairs and ranking minority members  of
    50  the  legislative  committees with primary jurisdiction over telecommuni-
    51  cation issues. The report shall describe the principal  functions  of  a
    52  tool  that  manufacturers and operating system providers will utilize on
    53  new models of smart phones in order to comply with  subdivision  one  of
    54  this  section, and must describe the technology or functions included to
    55  ensure the baseline antitheft tool is  easily  operable  by  individuals
    56  with disabilities.

        S. 1580                             3
     1    4.  For  the  purposes of this section, the following terms shall have
     2  the following meanings:
     3    (a)  "CMRS  provider" means a provider of commercial radio service, as
     4  defined in United States Code, title 47, section 332, and  includes  its
     5  authorized dealers.
     6    (b)  "Internet  marketplace"  or  "online  platform" means a digitally
     7  accessible platform that  facilitates  commercial  transactions  between
     8  buyers  and  community-rated  sellers where the operator or the platform
     9  does not take possession of, or title to, the goods bought or sold.
    10    (c) "Law enforcement agency"  or  "agency"  means  a  duly  authorized
    11  municipal, county, campus, transit, park, state, or federal law enforce-
    12  ment agency.
    13    (d)  "Repair  and refurbishment program" means a program, offered by a
    14  CMRS provider, manufacturer, or retailer who is not primarily engaged in
    15  purchasing personal property of any type from a  person  who  is  not  a
    16  wholesaler,  through  which  used  or previously owned wireless communi-
    17  cations devices are restored to good working order.
    18    (e) "Trade-in program" means a program offered  by  a  CMRS  provider,
    19  manufacturer,  or  retailer  who  is not primarily engaged in purchasing
    20  personal property of any type from a person who  is  not  a  wholesaler,
    21  pursuant to which used wireless communications devices are accepted from
    22  customers  in  exchange for either: (1) a noncash credit usable only for
    23  the purchase of goods or services from the CMRS provider,  manufacturer,
    24  or  retailer; or (2) a rebate from a manufacturer on the purchase of one
    25  of the manufacturer's wireless communications devices.
    26    (f) "Wireless communications device dealer" or "dealer" means an indi-
    27  vidual, partnership, limited  partnership,  limited  liability  company,
    28  corporation,  or other entity engaged in the business of buying or sell-
    29  ing used wireless communications devices.
    30    (g) "Wireless communications device  manufacturer"  or  "manufacturer"
    31  means an individual, partnership, limited partnership, limited liability
    32  company,  corporation,  or other entity engaged in the business of manu-
    33  facturing wireless communications devices.
    34    5. (a) Every  wireless  communications  device  dealer,  including  an
    35  agent,  employee,  or  representative of the dealer, but not an internet
    36  marketplace, shall keep a written record at the time of each purchase or
    37  acquisition of a used wireless communications  device  for  resale.  The
    38  record shall include the following and may be kept in electronic form:
    39    (1)  an accurate account or description of the wireless communications
    40  device purchased or acquired;
    41    (2) the date, time, and place or  the  online  platform  the  wireless
    42  communications device was purchased or acquired;
    43    (3) the name and address of the person selling or delivering the wire-
    44  less communications device;
    45    (4)  the  number  of the check or electronic transfer used to purchase
    46  the wireless communications device;
    47    (5) the number of the seller's driver's license, New York state  iden-
    48  tification card number, or other identification number from an identifi-
    49  cation  document  issued by any state, federal, or foreign government if
    50  the document includes the person's photograph, full  name,  birth  date,
    51  and signature; and
    52    (6)  a  statement  signed  by  the  seller,  under penalty of perjury,
    53  attesting that the wireless communications device is not stolen  and  is
    54  free  of  any liens or encumbrances and the seller has the right to sell
    55  it.

        S. 1580                             4

     1    (b) Records required to be maintained under this subdivision shall  be
     2  retained  by  the  wireless communications device dealer for a period of
     3  three years.
     4    (c)  The  record,  as  well  as  the  wireless  communications  device
     5  purchased or received, shall at all reasonable times  be  available  for
     6  inspection by any law enforcement agency.
     7    (d)   No  record  is  required  for  wireless  communications  devices
     8  purchased from merchants, manufacturers, or wholesale dealers having  an
     9  established  place  of business, but a bill of sale or other evidence of
    10  open or legitimate purchase of the wireless communications device  shall
    11  be obtained and kept by the wireless communications device dealer, which
    12  shall be shown upon demand to any law enforcement agency.
    13    (e)  Except  as  otherwise  provided  in  this subdivision, a wireless
    14  communications device dealer or the dealer's agent, employee, or  repre-
    15  sentative  may  not  disclose  personal information received pursuant to
    16  paragraph (a) of this subdivision  concerning  a  customer  without  the
    17  customer's  consent  unless  the  disclosure  is  made  in response to a
    18  request from a law enforcement agency. A wireless communications  device
    19  dealer  shall implement reasonable safeguards to protect the security of
    20  the personal information and prevent unauthorized access to  or  disclo-
    21  sure  of  the  information.  For  purposes  of this paragraph, "personal
    22  information" is any individually identifiable  information  gathered  in
    23  connection with a record under paragraph (a) of this subdivision.
    24    6.  A  wireless  communications  device  dealer,  including  an agent,
    25  employee, or representative of the dealer, shall not:
    26    (a) make any false entry in the records of  transactions  involving  a
    27  used wireless communications device;
    28    (b) falsify, obliterate, destroy, or remove from the place of business
    29  the records, books, or accounts relating to used wireless communications
    30  device transactions;
    31    (c)  refuse to allow the appropriate law enforcement agency to inspect
    32  records or any used  wireless  communications  device  in  the  dealer's
    33  possession during the ordinary hours of business or other times accepta-
    34  ble to both parties;
    35    (d)  fail  to  maintain  a record of each used wireless communications
    36  device transaction for three years; or
    37    (e) purchase a used wireless communications device from a person under
    38  eighteen years of age.
    39    7. A wireless communications device dealer shall pay for purchases  of
    40  all  used  wireless communications devices by check mailed to a specific
    41  address or by electronic transfer.
    42    8. (a) Whenever a law enforcement official from any agency has  proba-
    43  ble  cause  to  believe  that  a  wireless  communications device in the
    44  possession of a wireless communications device dealer is  stolen  or  is
    45  evidence  of  a  crime and notifies the dealer not to sell the item, the
    46  dealer shall not: (1) process or sell the item; or (2) remove  or  allow
    47  its removal from the premises. This investigative hold must be confirmed
    48  in  writing  by the originating agency within seventy-two hours and will
    49  remain in effect for thirty days from the date of initial  notification,
    50  until  the  investigative  hold  is  canceled or renewed, or until a law
    51  enforcement notification  to  confiscate  or  directive  to  release  is
    52  issued, whichever comes first.
    53    (b)  If a wireless communications device is identified as stolen or as
    54  evidence in a criminal case, a law enforcement official may:

        S. 1580                             5

     1    (1) physically  confiscate  and  remove  the  wireless  communications
     2  device  from  the  wireless  communications device dealer, pursuant to a
     3  written notification;
     4    (2)  place  the  wireless  communications device on hold or extend the
     5  hold under paragraph (a) of this subdivision, and leave  the  device  at
     6  the premises; or
     7    (3) direct its release to a registered owner or owner's agent.
     8    (c)  When  an item is confiscated, the law enforcement agency doing so
     9  shall provide identification upon request of the wireless communications
    10  device dealer, and shall provide the name and telephone  number  of  the
    11  confiscating agency and investigator, and the case number related to the
    12  confiscation.
    13    (d) A wireless communications device dealer may request seized proper-
    14  ty be returned.
    15    (e)  When  an  investigative  hold or notification to confiscate is no
    16  longer necessary, the law enforcement official or designee shall  notify
    17  the wireless communications device dealer.
    18    (f)  A  wireless  communications  device  dealer may sell or otherwise
    19  dispose of the wireless communications device if:
    20    (1) a notification to confiscate is not  issued  during  the  investi-
    21  gative hold; or
    22    (2) a law enforcement official does not physically remove the wireless
    23  communications  device  from  the  premises within fifteen calendar days
    24  from issuance of a notification to confiscate.
    25    (g) If a wireless communications device dealer is required to  hold  a
    26  wireless  communications  device at the direction of law enforcement for
    27  purposes of investigation or prosecution, or if the device is seized  by
    28  law enforcement, the wireless communications device dealer and any other
    29  victim  is  entitled  to  seek  restitution, including any out-of-pocket
    30  expenses for storage and lost profit, in  any  criminal  case  that  may
    31  arise  from  the investigation against the individual who sold the wire-
    32  less communications device to the wireless communications device dealer.
    33    9. (a) Each wireless communications device dealer  shall  install  and
    34  maintain  at  each  physical  location video surveillance cameras, still
    35  digital cameras, or similar devices positioned to record or photograph a
    36  frontal view showing a readily identifiable image of the  face  of  each
    37  seller  of  a  wireless  communications  device  who enters the physical
    38  location.
    39    (b) The video camera or still digital camera shall be kept in  operat-
    40  ing  condition  and  must be shown upon request to a properly identified
    41  law enforcement officer for inspection.   The  camera  must  record  and
    42  display  the  accurate  date and time. The video camera or still digital
    43  camera must be turned on at all times when the physical location is open
    44  for business and at any other time when wireless communications  devices
    45  are purchased or sold.
    46    (c)  Recordings  and images required by paragraph (a) of this subdivi-
    47  sion shall be retained by the wireless communications device dealer  for
    48  a minimum period of 30 days and shall at all reasonable times be open to
    49  the inspection of any properly identified law enforcement officer.
    50    10.  A  wireless communications device dealer, or the agent, employee,
    51  or representative of the  wireless  communications  device  dealer,  who
    52  intentionally violates a provision of this section is guilty of a misde-
    53  meanor.
    54    11. (a) This section shall not apply with respect to a wireless commu-
    55  nications device returned to the store where it was originally purchased

        S. 1580                             6

     1  pursuant  to  the  return policies of the wireless communications device
     2  dealer, CMRS provider, manufacturer, or retailer.
     3    (b)  This  section  shall  not apply with respect to wireless communi-
     4  cations devices acquired by a: (1) CMRS provider as part of  a  trade-in
     5  or  a  repair  and  refurbishment program; (2) manufacturer as part of a
     6  trade-in program; or (3) retailer whose trade-in program: (i) reports to
     7  other national or regional transaction reporting database  available  to
     8  law enforcement; or (ii) reports as required by local ordinance.
     9    §  3.  This  act  shall take effect January 1, 2018 and shall apply to
    10  smart phone sales made on or after that date.
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