Legislature(2007 - 2008)HOUSE FINANCE 519

02/18/2008 01:30 PM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 320 SEARCH & RESCUE: CERTIFICATION/WORK.COMP TELECONFERENCED
Moved CSHB 320(FIN) Out of Committee
+ HCR 13 EDUCATION FUNDING/COST FACTOR COMMISSION TELECONFERENCED
Moved CSHCR 13(FIN) Out of Committee
+= HB 65 PERSONAL INFORMATION & CONSUMER CREDIT TELECONFERENCED
Heard & Held
<Teleconference Listen Only>
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 65                                                                                                             
                                                                                                                                
     An  Act  relating  to  breaches  of  security  involving                                                                   
     personal  information, credit  report  and credit  score                                                                   
     security  freezes,  consumer credit  monitoring,  credit                                                                   
     accuracy,  protection of  social security numbers,  care                                                                   
     of  records,   disposal  of  records,   identity  theft,                                                                   
     furnishing  consumer credit  header information,  credit                                                                   
     cards, and  debit cards, and to the jurisdiction  of the                                                                   
     office  of administrative  hearings;  amending Rule  60,                                                                   
     Alaska Rules  of Civil Procedure;  and providing  for an                                                                   
     effective date.                                                                                                            
                                                                                                                                
REPRESENTATIVE  JOHN  COGHILL,   SPONSOR,  commented  on  the                                                                   
amendments to  the work draft \L version,  previously adopted                                                                   
by  the Committee  on 2/13/08.    He mentioned  the need  for                                                                   
discussion,  whether to  keep  the Permanent  Fund  reporting                                                                   
inclusion.  He preferred leaving it out of the bill.                                                                            
                                                                                                                                
Representative Coghill referenced  Amendment 1, the risk harm                                                                   
component  of reporting  located  on Page  4,  Line 3,  which                                                                   
creates a new subsection.                                                                                                       
                                                                                                                                
3:08:37 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED  to ADOPT Amendment 1.   (Copy on File).                                                                   
Representative Hawker OBJECTED.                                                                                                 
                                                                                                                                
     Page  4, after Line  3, inserting  a new subsection  (c)                                                                   
     "Notwithstanding  (a) of  this section, notification  is                                                                   
     not required,  if after an appropriate  investigation or                                                                   
     after  consultation  with  relevant federal,  state,  or                                                                   
     local  agencies  responsible  for law  enforcement,  the                                                                   
     person   or  government   entity   determines  that   no                                                                   
     reasonable  likelihood of  harm to  the consumers  whose                                                                   
     personal information  has been acquired has  resulted or                                                                   
     will result from the breach.   Such a determination must                                                                   
     be documented  in writing and the documentation  must be                                                                   
     maintained for five years."                                                                                                
                                                                                                                                
     Page  14, Line  28, after  "discovering", inserting  "or                                                                   
     notification of".                                                                                                          
                                                                                                                                
Representative Coghill explained  the proposed language would                                                                   
address concerns with a breach  of information, maintaining a                                                                   
notification  requirement.   Notification  could  attempt  to                                                                   
balance  risk and  harm.   The amendment  clarifies the  risk                                                                   
assessment.  There has been an  attempt to provide reasonable                                                                   
effort  when information  has  been compromised.   He  voiced                                                                   
support for the amendment.                                                                                                      
                                                                                                                                
3:11:43 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  concurred  with  the  appropriateness                                                                   
associated  with the risk  of harm  provision.  He  cautioned                                                                   
that the  language does  not accomplish the  intent.   One of                                                                   
two things which  must occur is an appropriate  investigation                                                                   
or a consultation with the agency.   He was not sure what "an                                                                   
appropriate  investigation"  was   or  who  would  make  that                                                                   
determination; the  burden of decision will be  vested to the                                                                   
information provider.                                                                                                           
                                                                                                                                
3:14:12 PM                                                                                                                    
                                                                                                                                
Representative Gara thought that  language stipulates a "good                                                                   
neighbor" aspect.   The bill  indicates that it  is mandatory                                                                   
to tell.  The companies came forward  saying that they do not                                                                   
want to always  tell; if a decision is made, no  one gets the                                                                   
information.  Representative Gara offered three choices:                                                                        
                                                                                                                                
   ·    If personal privacy is violated, they must be                                                                           
        informed.                                                                                                               
   ·    The companies want a standard indicating that if the                                                                    
        person finds  out  that  their information  has  been                                                                   
        breeched and  determine that  they have been  harmed,                                                                   
        then the company has  to notify them.   He commented,                                                                   
        the consumer might never find that out.                                                                                 
   ·    Middle ground: If the company determines that the                                                                       
        information was accidentally released and no one                                                                        
        will ever see it, as long as it is documented, they                                                                     
        would not have to send out the notices.                                                                                 
                                                                                                                                
Representative Gara  supported Amendment 1, which  he thought                                                                   
would provide reasonable middle ground.                                                                                         
                                                                                                                                
Representative Coghill added,  it would accompany acquisition                                                                   
of information.   He  differed from  ideas of  Representative                                                                   
Gara  regarding  the  companies'  responsibility  during  the                                                                   
assessment  process.   He realized  the  risk in  information                                                                   
taken, which requires an investigation  and consultation with                                                                   
the  enforcers.    There  also   would  be  a  need  for  the                                                                   
reasonable  likelihood   of  harm,  which  is   the  standard                                                                   
language.                                                                                                                       
                                                                                                                                
3:17:10 PM                                                                                                                    
                                                                                                                                
Representative Coghill pointed  out that Section B provides a                                                                   
similar  standard making  exposure of  time possible  without                                                                   
unreasonable  delay.  There  are ways  to determine  that the                                                                   
companies  did  not  take  reasonable   efforts;  i.e.,  soft                                                                   
standards.                                                                                                                      
                                                                                                                                
Representative Hawker WITHDREW  his OBJECTION to Amendment 1.                                                                   
There being NO further OBJECTION, Amendment 1 was adopted.                                                                      
                                                                                                                                
3:19:31 PM                                                                                                                    
                                                                                                                                
Representative  Gara   MOVED  to  ADOPT  Amendment   2,  #25-                                                                   
LS0311\L.3, Bannister,  2/18/08.   (Copy on File).   Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
     Page 6,  Line 16,  following "however" inserting  "(1)";                                                                   
     Page 6, Line  19, following "$50,000", inserting  "; and                                                                   
     (2) damages that may be awarded  against the information                                                                   
     collector under (A) AS 45.50.5311  are limited to actual                                                                   
     economic  damages that do  not exceed  $500; and  (B) AS                                                                   
     45.50.537 are limited to actual economic damages".                                                                         
                                                                                                                                
Representative  Gara advised  that  there  had been  concerns                                                                   
regarding  the actual  economic damages.   Legislative  Legal                                                                   
wrote the bill  to clarify that the person  could not receive                                                                   
non-economic  damages,  however,   left  out  the  limitation                                                                   
needed on Page 6.                                                                                                               
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, Amendment 2 was adopted.                                                                                     
                                                                                                                                
3:20:14 PM                                                                                                                    
                                                                                                                                
Representative Nelson MOVED to ADOPT Amendment 3, #25-                                                                          
LS0311\K.2,   Bannister,   2/07/08.       (Copy   on   File).                                                                   
Representative Hawker OBJECTED.                                                                                                 
                                                                                                                                
     Page 1,  Line 1, deleting  "the disclosure  of permanent                                                                   
     fund  dividend  applicant  records,";  Page  2,  Line  4                                                                   
     through Page 3, Line 18,  deleting all material and then                                                                   
     renumber the following bill  sections accordingly:  Page                                                                   
     29,  Line 17,  deleting "sec.  5",  inserting "sec.  3";                                                                   
     Page  29, Line 21,  deleting "sec.  5", inserting  "sec.                                                                   
     3";  Page  29, Line  24,  deleting "sec.  5",  inserting                                                                   
     "sec.  3";   Page  29,  Line  26,  deleting   "sec.  6",                                                                   
     inserting "sec. 4".                                                                                                        
                                                                                                                                
Representative  Nelson  commented  that  the  Permanent  Fund                                                                   
Dividend  (PFD)  application being  distributed  to  business                                                                   
owners  was counter-intuitive  to the  bill.  She  maintained                                                                   
that  Alaska   should  not  need   be  in  the   business  of                                                                   
distributing personal information.                                                                                              
                                                                                                                                
Vice-Chair Stoltze  added that the amendment  seeks to return                                                                   
the State to  the policy of privacy for  dividend application                                                                   
information;  he did not  think the  request should  be stuck                                                                   
inside  a privacy  bill  and  recommended other  avenues  for                                                                   
delivery by considered.   He mentioned concerns  expressed by                                                                   
victims of  domestic violence.   He thought  that would  be a                                                                   
worthy discussion.                                                                                                              
                                                                                                                                
Representative Hawker  indicated his opposition  to Amendment                                                                   
3,  which  seeks  to  remove  language  added  in  the  House                                                                   
Judiciary  Committee  following  extensive  discussion.    He                                                                   
reiterated that  it would be  inappropriate to treat  the two                                                                   
databases  of the  registered  voters in  a different  manner                                                                   
than the Permanent  Fund database.  There was  language added                                                                   
placing an appropriate sidebar  around access and utilization                                                                   
of that data.  He encouraged that  the Committee consider the                                                                   
protection of  individuals as  well as presumptive  evidence.                                                                   
He wanted to see the language of the bill preserved.                                                                            
                                                                                                                                
3:25:15 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze  stated  that   the  information  on  the                                                                   
Permanent  Fund  Dividend  (PFD)   is  the  most  current  by                                                                   
necessity.   It is  not as  common to  update information  on                                                                   
one's  driver's license  or voter  registration card  because                                                                   
the  nature  of  the dividend  is  that  applicants  want  to                                                                   
receive  their checks.    He maintained  the  need for  extra                                                                   
effort to protect individuals.                                                                                                  
                                                                                                                                
3:26:38 PM                                                                                                                    
                                                                                                                                
A roll call vote  was taken on the MOTION to  ADOPT Amendment                                                                   
3.                                                                                                                              
                                                                                                                                
IN FAVOR:      Nelson, Stoltze, Thomas, Gara                                                                                    
OPPOSED:       Hawker, Kelly, Meyer                                                                                             
                                                                                                                                
Representatives  Joule, Crawford,  Harris  and Chenault  were                                                                   
not present for the vote.                                                                                                       
                                                                                                                                
The MOTION FAILED (4-3).                                                                                                        
                                                                                                                                
Representative  Nelson requested  the amendment  be HELD  for                                                                   
RESCIND  at  the  next  meeting,   when  enough  members  are                                                                   
present.                                                                                                                        
                                                                                                                                
Representative  Thomas asked if  the social security  numbers                                                                   
listed in  the PFD  information, would  be distributed.   Co-                                                                   
Chair  Meyer   remembered  that  was  optional   information.                                                                   
Representative   Nelson  pointed   out  that   Representative                                                                   
Coghill  has   sponsored  numerous   pieces  of   legislation                                                                   
attempting to protect individual's social security numbers.                                                                     
                                                                                                                                
Representative  Hawker  requested clarifying  testimony  from                                                                   
authorities.                                                                                                                    
                                                                                                                                
3:29:07 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  MOVED  to  ADOPT  Amendment  4,  #25-                                                                   
LS0311\K.1,   Bannister,   1/20/08.       (Copy   on   File).                                                                   
Representative Nelson OBJECTED.                                                                                                 
                                                                                                                                
     Page 2, Line 22, following "information" inserting                                                                         
     "except applicant information about individuals who are                                                                    
     under 18 years of age".                                                                                                    
                                                                                                                                
Representative Hawker  explained that the  amendment provides                                                                   
language determined by the Department  of Revenue and another                                                                   
interested  party's   to  resolve   concerns  of   access  of                                                                   
children's information.   He  understood that the  Department                                                                   
of Revenue fully supports the amendment.                                                                                        
                                                                                                                                
Representative  Kelly asked if  the sponsor was  in supported                                                                   
the amendment.  Representative Coghill affirmed.                                                                                
                                                                                                                                
Representative  Nelson WITHDREW her  OBJECTION.   There being                                                                   
NO further OBJECTION, it was adopted.                                                                                           
                                                                                                                                
3:30:22 PM                                                                                                                    
                                                                                                                                
Representative   Gara  recommended   that   Amendment  3   be                                                                   
addressed on the House Floor.   Representative Nelson did not                                                                   
agree, maintaining her request.                                                                                                 
                                                                                                                                
Representative  Kelly  anticipated an  answer  to the  social                                                                   
security question  relative to  Amendment 3.   Representative                                                                   
Coghill  recommended   that  the   Permanent  Fund   Dividend                                                                   
representative address that issue.                                                                                              
                                                                                                                                
3:31:57 PM                                                                                                                    
                                                                                                                                
JERRY   BURNETT,   DIRECTOR,   DIVISION   OF   ADMINISTRATIVE                                                                   
SERVICES,  DEPARTMENT  OF  REVENUE, responded  to  the  query                                                                   
regarding  whether or  not social security  numbers  could be                                                                   
released  with PFD  information  under the  bill as  written.                                                                   
The answer is that the bill limits  information to only names                                                                   
and  addresses  not social  security  numbers.   There  is  a                                                                   
limitation in  the bill regarding what  applicant information                                                                   
can be distributed.                                                                                                             
                                                                                                                                
HB 65 was HELD in Committee for further consideration.                                                                          

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