Legislature(2007 - 2008)CAPITOL 120
05/02/2007 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB207 | |
| HB65 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 65 | TELECONFERENCED | |
| + | HB 232 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 207 | TELECONFERENCED | |
HB 65 - PERSONAL INFORMATION & CONSUMER CREDIT 1:29:08 PM CHAIR RAMRAS announced that the final order of business would be 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." [Before the committee was CSHB 65(L&C).] 1:30:24 PM REPRESENTATIVE COGHILL, speaking as one of the bill's joint prime sponsors, remarked that at one point he didn't have a problem with giving out his social security number or his credit card number, but a couple of years ago his credit card number was used by someone else to buy $8,000 worth of prepaid phone calls. He then relayed that HB 65 does several things: Section 1 adds to AS 40.21.110 - Care of Records - a reference to proposed AS 45.48.500-550; Section 2 gives the administrative law judge jurisdiction over [violations of proposed AS 45.48.010-090]; Section 3 adds to Title 45 a new Chapter 48 - Personal Information Protection Act. He indicated that there will be several amendments intended to address issues raised by the different articles in proposed AS 45.48, issues such as accountability and the ability to perform. 1:33:54 PM REPRESENTATIVE COGHILL indicated that proposed Article 1 - Breach of Security Involving Personal Information - describes what a person who owns or uses personal information must do in case of a breach of information, mandates how notification of a breach of information must occur, and describes what constitutes an allowable delay in notification of a breach of information. Article 2 - Credit Report and Credit Score Security Freeze - addresses one's ability to get a security freeze placed on one's personal information. He mentioned that some forthcoming amendments will address aspects of Article 2, and that there is a forthcoming amendment that will delete Article 3 - Consumer Credit Monitoring; Credit Accuracy - adding that he is amenable to the latter amendment because existing federal law would take precedence over it anyway. He also indicated that Article 4 - Protection of Social Security Number - will have about five forthcoming amendments pertaining to it. REPRESENTATIVE COGHILL mentioned that there will also be forthcoming amendments to Article 5 - Disposal of Records; to Article 6 - Factual Declaration of Innocence after Identity Theft; Right to File Police Report Regarding Identity Theft; and to Article 7 - Consumer Credit Header Information. He then referred to Article 8 - Truncation of Card Information - and indicated that [proposed AS 45.48.750(f), under Section 4 of the bill,] stipulates that electronic printers of credit/debit card receipts may only print the last four digits of the card number, and that Section 8 of the bill gives that provision an effective date of 1/1/09. He noted that Article 9 contains general provisions, and that Sections 4-8 of the bill pertain to the bill's implementation. For example, Section 5 - proposed AS 45.50.471(b) - defines "governmental agency" and "information collector"; and Section 6 provides that the indirect court rule amendment brought about via adoption of proposed AS 45.48.640 shall be noted in uncodified law. [Following was a brief discussion regarding how the committee would be proceeding.] 1:43:33 PM CLYDE (ED) SNIFFEN, JR., Assistant Attorney General, Commercial/Fair Business Section, Civil Division (Anchorage), Department of Law (DOL) relayed that the DOL supports the concept of HB 65 and believes that it will do a lot to address the problem of identity theft. He mentioned that he would be offering further comments once discussion begins on the forthcoming amendments to Article 4 of the bill. 1:44:13 PM CRAIG E. DAHL, President & CEO, Alaska Pacific Bank; Alaska Bankers Association (ABA) mentioned that members' packets should contain a letter by the ABA indicating that the ABA supports the intention of HB 65 to protect customers' financial information. Furthermore, he remarked, the ABA believes that the bill should track federal regulation as closely as possible where appropriate and acknowledge the federal preemption for those operating under those regulations. Banks are currently required to comply with more than 20 federal laws intended to address the issues surrounding the transfer and protection of customer information, including the Gramm-Leach-Bliley Act (GLBA), the Fair and Accurate Credit Transactions Act of 2003, the Fair Credit Reporting Act (FCRA), the Electronic Fund Transfer Act, the Right to Financial Privacy Act of 1978, and the Telephone Consumer Protection Act of 1991. MR. DAHL, after referring to some of the provisions of those federal laws, said that the financial services industry is fully engaged in implementing those provisions, that customer confidence is key to the industry, and that the industry has made a commitment to protect customers' financial resources and privacy. He said that the ABA has reviewed HB 65 and recommends three changes, outlined in the aforementioned ABA letter that will enable financial institutions to protect customers' privacy while also providing responsible information transfers. The first recommended change pertains to Article 1, and the second and third recommended changes are addressed by forthcoming amendments. In conclusion, he urged the committee to accept those amendments, reiterated that the ABA is seeking to keep HB 65 in line with existing federal regulations, and said that the ABA supports HB 65. 1:50:14 PM MARIE DARLIN, Coordinator, AARP Capital City Task Force, relayed simply that the AARP supports HB 65 and hopes that the aforementioned forthcoming amendments will help the bill. 1:52:49 PM GAIL HILLEBRAND, Senior Attorney, West Coast Office, Consumers Union (CU), said that the CU has been assisting state legislatures across the country that have been grappling with the problem of identity theft and is pleased to see HB 65 [moving through the process] and is proud to support it. She relayed that 34 states now have a "notice of breach" provision similar to that encompassed in Article 1 of the bill, and characterized Alaska's proposed provision as a strong one and good in its current form. Furthermore, 33 states and the District of Columbia now have a "security freeze" provision similar to that encompassed in Article 2 of the bill, and about a dozen states have a provision regarding social security numbers similar to the provision in Article 4 of the bill. In response to questions, she indicated that the CU believes the bill is quite strong as currently written - adding that the CU's interest is based on a model the CU prepared several years ago after Congress passed the Fair and Accurate Credit Transactions Act of 2003 - and that the CU doesn't have any opposition to any of the amendments that will be brought forth by the bill's joint prime sponsors, though she may wish to comment on other forthcoming amendments once they are offered. 1:54:48 PM STEVE CLEARY, Executive Director, Alaska Public Interest Research Group (AkPIRG), relayed that the AkPIRG attempts to educate consumers on how to protect themselves against identity theft, and advocates for stronger protections such as are being offered via HB 65. He noted that 33 states and the District of Columbia have mandatory notification provisions in their laws, and that some 25 states have security freeze provisions in their laws. The other provisions of the bill, he remarked, are also good for consumer protection, adding that he may wish to speak to the forthcoming proposed amendments that would affect "Sections 1 and 2." In conclusion, he offered his hope that HB 65 will be adopted this year. 1:57:09 PM JOHN BURTON, Vice President, State Government Affairs, ChoicePoint Asset Company ("ChoicePoint"), after providing some information about ChoicePoint, said that ChoicePoint has had the opportunity to work with one of the joint prime sponsor's staff and has absolutely no opposition to the majority of the bill. However, ChoicePoint does have some technical concerns related to drafting and definitions, he relayed; furthermore, ChoicePoint does have a problem with "Section 7" but has been given to understand that one of the forthcoming proposed amendments will be deleting [that provision]. In conclusion, he indicated that he would like to provide comments later on "Sections 2 in combination with Section 9, dealing with the definitions, and ... Article 4 relating to the social security number provisions." 1:58:36 PM LORI DAVEY, Owner, Motznik Information Services, Inc. indicated that she would be commenting on a forthcoming amendment pertaining to [a proposed new Section 2]. 1:59:05 PM KENTON BRINE, Manager, Northwest Region, Property Casualty Insurers Association of America (PCIAA), after providing some information about the PCIAA, relayed that the PCIAA believes HB 65 has improved as it's gone through the legislative process, and that the PCIAA still has some specific concerns with a couple of provisions in Article 2. In response to a question, he offered further information about the PCIAA. 2:01:40 PM GRETCHEN GUESS indicated that she would be speaking to the forthcoming proposed amendment as it pertains to permanent fund dividend (PFD) application records, adding that she'd sponsored a bill on that issue when she was a legislator. 2:02:46 PM CYNTHIA MINIER, speaking on behalf of herself, indicated that she would be commenting on Article 1 of HB 65 and on PFD [records]. 2:03:09 PM TOM HIPSMAN (ph), after mentioning that he is a private investigator, indicated that he would be commenting on the provision in HB 65 related to the PFD database. The committee took an at-ease from 2:04 p.m. to 2:08 p.m. 2:08:29 PM CHAIR RAMRAS made a motion to adopt Amendment 1, labeled 25- LS0311\E.12, Bannister, 5/1/07, which read: Page 1, line 1, following "to": Insert "the disclosure of permanent fund dividend applicant records," Page 2, following line 3: Insert new bill sections to read: "* Sec. 2. AS 43.23.017 is amended to read: Sec. 43.23.017. Applicant information confidential. Information on each permanent fund dividend application, except the applicant's name, is confidential. The department may only release information that is confidential under this section (1) to a local, state, or federal government agency; (2) in compliance with a court order; (3) to the individual who or agency that files an application on behalf of another; (4) to a banking institution to verify the direct deposit of a permanent fund dividend or correct an error in that deposit; (5) as directed to do so by the applicant; [AND] (6) to a contractor who has a contract with a person entitled to obtain the information under (1) - (5) of this section to receive, store, or manage the information on that person's behalf; a contractor receiving data under this paragraph may only use the data as directed by and for the purposes of the person entitled to obtain the information; and (7) as provided under (b) of this section. * Sec. 3. AS 43.23.017 is amended by adding new subsections to read: (b) The department shall disclose applicant information to a business that requests the applicant information if the business has a license under AS 43.70.020, the business, or an agent, an employee, or a contractor of the business, indicates that the business will use the applicant information only in the normal course of business, the person making the request provides proof of the person's identity, and the person making the request states that the business will use the applicant information only (1) as necessary to implement or enforce a transaction authorized by the applicant; (2) to obtain information from law enforcement agencies or self-regulatory organizations or for an investigation, if the business is the practice of law or includes the service of process; (3) in connection with a civil, a criminal, an administrative, or an arbitration proceeding, including the service of process, investigation in anticipation of litigation, executing on a judgment, enforcing a judgment, or complying with a court order; (4) for a legal or beneficial interest relating to the applicant, if the business holds the legal or beneficial interest; (5) on behalf of the applicant, if the business is acting in a fiduciary capacity on behalf of the applicant; (6) to verify the accuracy of information provided by the applicant, to prevent fraud by the applicant, or to pursue legal remedies against the applicant; (7) in connection with insurance claims, insurance investigations, or insurance anti-fraud activities, if the business is an insurer or a person who provides support services to an insurer; (8) to comply with federal, state, or municipal laws, regulations, ordinances, or other legal requirements; or (9) for bulk distribution to political candidates, nonprofit organizations, or persons taking polls. (c) In this section, (1) "applicant" means an applicant for a permanent fund dividend; (2) "applicant information" means name, mailing address, and birth year of an applicant; (3) "business" means a person engaging in business." Renumber the following bill sections accordingly. Page 30, line 24: Delete "sec. 3" Insert "sec. 5" Page 30, line 28: Delete "sec. 3" Insert "sec. 5" Page 30, line 30: Delete "sec. 4" Insert "sec. 6" REPRESENTATIVE COGHILL objected. 2:09:26 PM MS. DAVEY relayed that she is in favor of Amendment 1, which would authorize "re-access" to the PFD files for legitimate business purposes. She went on to say: House Bill 65 finally defines what constitutes personal information and the legal recourses for those who are negligently careless or criminally intent on misusing a person's information. As you may recall, we lost access to the PFD file in 2005; the bill was supposedly to stop stalkers from finding victims using the PFD files. The only person who testified at that time was a Melissa Wyatt from Washington who said she couldn't apply because her ex-husband could hunt her down and hurt her somehow, [but] when we looked at her record we found that she lived in Washington and didn't appear to be eligible for it. We also found out about this bill way too late to try to stop it. We talked to several people in the committees at the time but we were told that there would be time to correct this in the next session before it would become effective. After the session I received several letters from legislators who apologized for voting for the bill, saying they didn't realize they were turning off all access when they voted for this bill. When we lost [this file], we lost the best source for ... [a] comprehensive file for all Alaskans. It's now very difficult to locate people for legitimate business purposes and to differentiate criminals from non-criminals with common names. Criminals do not necessarily vote, register their vehicles, purchase hunting and fishing licenses, or own property, but they do get the PFD check. This is about accountability and ensuring that the average Alaskan citizen maintains their personal rights in society. The voter registration can still be updated by the PFD file; therefore, those addresses and names from the PFD file do become public for voters of Alaska. The only people we're protecting with the current law are the criminals who do not want to be found. MS. DAVEY continued: This amendment was drafted using the [Division of Motor Vehicles (DMV)] exemptions and "do-not-call" exemptions. This new version of a limited access PFD file would be administered in much the same way that we manage the current DMV file. Right now, the DMV file is more public than the PFD file, and we are able to manage to those standards of limited access, and we would do the same thing ... by reauthorizing access, for legitimate business purposes, ... [to] the PFD file, and it will ensure that all Alaskans are not erroneously denied employment or credit due to lack of verification procedures. We commonly have to use several different files to do background checks on people, and to differentiate the criminal from the individual. ... It's normal for employers and other creditors to run background checks. The criminal file for the state of Alaska has names and date of birth. We use a series of public files to cross reference and differentiate individuals with common names, to compare to the records of the civil, criminal bankruptcy, and recorder's office file. The best match is when you can corroborate a name and a date of birth. Reauthorizing the access to PFD for ... limited purposes ... ensures that people with a legitimate reason and a need to know will once again regain access and thereby [be] able to differentiate people ... [with] common names and ... make sure the right people are matched to the right identities. Thank you. 2:12:53 PM REPRESENTATIVE GRUENBERG said he has concerns about the language in Amendment 1 - proposed AS 43.23.017(b)(9) - that will allow a business to access PFD applicant information for bulk distribution to political candidates, nonprofit organizations, or persons taking polls. He suggested that proposed paragraph (9) ought to be changed to allow Alaskans who get a PFD to stipulate [on their PFD application] that they don't want their information distributed to political candidates or poll takers. CHAIR RAMRAS relayed that according to conversions he'd had with the Permanent Fund Dividend Division; it could accommodate such a change but at a cost of about $100,000 or more. REPRESENTATIVE GRUENBERG suggested that that cost should be paid by the businesses that are seeking access to PFD application information. REPRESENTATIVE SAMUELS offered his understanding that currently people can access fishing license records and other records that result from people filling out applications. He asked whether the PFD application file is the only file that currently can't be accessed. MS. DAVEY indicated that it is. REPRESENTATIVE SAMUELS questioned whether a change similar to what Representative Gruenberg is suggesting ought to made to all the statutes pertaining to items that people fill out applications for such as fishing licenses, hunting licenses, and pilot licenses. He added, "If you're going to do one, you would do them all, and that becomes far more cumbersome." REPRESENTATIVE GRUENBERG posited that maybe once it is done for one type of record, it could perhaps then be done for other types of records at a lower cost. REPRESENTATIVE HOLMES asked what type of information would be released under Amendment 1. REPRESENTATIVE GRUENBERG noted that Amendment 1 - proposed AS 43.23.017(c)(2) defines "applicant information" as being the applicant's name, mailing address, and year of birth. MS. DAVEY referred to Representative Gruenberg's concern regarding Amendment 1's proposed AS 43.23.017(b)(9), and indicated that the language therein simply [mirrors existing statutory] do-not-call exemptions. She added: Before we lost access to the PFD file, it was common for political candidates and pollsters to use the PFD file to poll and contact the largest group of potential voters in a certain area, and nonprofit organizations - we're talking about Little League and small schools - ... would try to contact people with families in order to get them ... to participate in different levels of sports. 2:18:39 PM MS. GUESS offered her recollection that when this issue was initially addressed via legislation four years ago, the legislation was engendered by a domestic violence (DV) stalking case. The victim in that case was an Alaskan resident who had pointed out [to Ms. Guess] that at that point in time anyone could get on the Internet and download the PFD database; the victim was worried about the safety of herself and her son. During discussion of that legislation, a greater policy question arose - that question being whether part of getting a PFD check ought to involve having one's name and address made public. The answer to that question via the adoption of that legislation was that one's name did have to become public but not one's address. Another example with a similar policy application, she offered, involves jury duty: does part of getting a PFD involve "going in the cycle" for jury duty? As a policy, the legislature has said that yes, being available for jury is part of getting a PFD. MS. GUESS noted that under current statute, one's address as listed in the PFD records doesn't have to be made public except for "public good" reasons as outlined in AS 43.23.017. She said she would not be speaking either for or against Amendment 1 because she views it as being a pure policy decision for the legislature to make regarding the PFD, privacy, and their nexus. Referring to Representative Samuels's question, Ms. Guess said: We did not discuss the other databases too much four years ago. We were comfortable with the inconsistency given that we saw that permanent fund dividends were different than fishing and hunting licenses, and [given] that special relationship that Alaskans have with the permanent fund and, some would say, being part of the owner state. MS. GUESS said that her one concern with [Amendment 1's] current language is that the exemptions outlined in its proposed subsection (b) are only available to a business. She noted that in drafting the existing exemptions outlined in AS 43.23.017, the legislature had not wanted someone seeking information under those exemptions to have to go through a business - one shouldn't have to buy information from some business if that information is already publicly available. She asked the committee to carefully consider whether one should have to go through a business to obtain the information, or whether anyone with the same reasons as outlined in proposed AS 43.23.017(b) should be able to access the information. MS. GUESS also asked the committee to be aware of situations in which it distorts the market and provides data to one group that may compete against another group. She elaborated: In this case, ... the one that jumps out at me ... was the nonprofit organization who may compete with a [for] profit organization. The permanent fund database is valuable. It ... [contains] the most recent name and address of every Alaskan, and I don't think the intent of [Amendment 1] ... or the intent of the [legislature] ... four years ago was to provide one group more accurate information when competing against another group. 2:23:54 PM MS. GUESS, in response to a question, said that four years ago, the legislature decided that the PFD database was different than the hunting license database or the fishing license database, and again offered her belief that it is up to this legislature to make its own policy decision on these issues. REPRESENTATIVE COGHILL offered his recollection that four years ago, the rationale was that of all the databases there were in Alaska, except for the database related to unemployment insurance benefits, the PFD database was the most accurate and up to date because everyone wanted to get their PFD. MS. DAVEY, in response to questions, explained that [before the law changed] four years ago, the PFD file was on the State of Alaska's web site in a downloadable access database for anybody to download - this was certainly unconventional in terms of how one would normally receive public files - so there was the potential for the PFD database to be more available than other databases. She went on to say: What we normally do with the files is not beyond somebody with probably above average database skills. Because the PFD file is so large, in order to manipulate it, you're going to have to be able to write sequel queries or at least use an access database view - which isn't necessarily going to be the average computer user. So I'd say that there is a little higher level of technicality needed to be able to manipulate it, but I don't see any reason why, if somebody had ... [a] legitimate reason to access the file, that they shouldn't be able to go to the State of Alaska's PFD office and purchase the file just as ... I'm proposing to do. When we use a file, we don't normally sell it to anybody in its entirety; somebody normally wants a small section of it, they want a piece of it. ... I'm ... certainly not opposed to saying that it could be available in bulk distribution to businesses as well as nonprofits. And we currently do ... have exemptions with the DMV file for [inspection and maintenance (I/M)] testing; we print out I/M reminders for people with I/M tests that are getting ready to expire, and those are going to private businesses, but we don't disclose the file to the businesses - we print the stuff or use a bulk mailer and it never really goes to the business in those cases. MS. DAVEY, in response to another question, said that in order to see whose I/M tests were about to expire, one must have a contract with the DMV, so a private citizen would not necessarily be able to access that information; furthermore, when one does have such a contract with the DMV, one must uphold certain standards and only release information for certain legitimate reasons. 2:29:33 PM REPRESENTATIVE GRUENBERG, on the issue of allowing PFD applicant information to be distributed to persons taking polls, noted that there are legitimate polls and then there are "push polls," which are really attempts to influence people. He said he would like to see that point addressed. He then referred to the language in Amendment 1 wherein proposed AS 43.23.017(b)(2) uses the term, "self-regulatory organizations", and offered his belief that that term is meant to refer to the private investigator industry; however, since that term is not actually defined anywhere, he questioned whether it should be. He also questioned whether the phrase, "for a legal or beneficial interest to the applicant" - as used in proposed AS 43.23.017(b)(4) of Amendment 1 - ought to be defined, and whether the language of proposed AS 43.23.017(b)(7) could be used as a loophole to investigate anybody in the world. MS. MINIER, on the issue of Amendment 1, relayed that she is a paralegal who uses the PFD database in a legitimate business context to locate witnesses and clients. She said: I understand the concern that the permanent fund information may be used by stalkers, but I believe they have many other sources. So I guess basically I'm in favor of [Amendment 1], I believe restricted access to the permanent fund information should be allowed. REPRESENTATIVE GRUENBERG asked Ms. Minier whether she would be using the PFD database to seek out new clients. MS. MINIER indicated that she would be using it to locate existing clients whose addresses have changed; for example, in working for a law firm that specializes in insurance defense, if the insured has moved, the law firm has had to hire a private investigator to locate the insured because the law firm no longer has access to the PFD database. 2:33:00 PM MR. HIPSMAN relayed that he is a fraud investigator, and that he is an advocate of reinstating access to the PFD database. Taking away access to that database has essentially created another group of victims because when someone brings a fraudulent action against a person, that person has the right to a defense and the PFD database was one of the tools that could have been used in his/her defense. He suggested that if there is a concern about abuse of the database, then mandatory prosecution of such ought to be established. MS. HILLEBRAND, on the issue of Amendment 1, said that the CU is not qualified to speak on issues related to the PFD database. 2:35:23 PM JERRY BURNETT, Director, Administrative Services Division, Department of Revenue (DOR), relayed that the DOR has some concerns regarding how Amendment 1 would be administered, and declined to comment on the policy issues it raises. He referred to the language of Amendment 1's proposed AS 43.23.017(b), and said it is not clear to the DOR what the intent is. Would anybody with a business license be individually allowed to request specific applicant information, and would the DOR have to enter into a contract with one or more such businesses? He also indicated that the DOR is not sure what the cost of administering Amendment 1 would be, but surmised that the DOR would be entering into specific contracts with anybody that fit the criteria outlined in Amendment 1. MR. BURNETT, in response to a question, said that the DOR would have to obtain legal advice from the Department of Law (DOL) regarding the definition of the term "self-regulatory organizations" as used in Amendment 1's proposed AS 43.23.017(b)(2). REPRESENTATIVE GRUENBERG asked what the phrase, "for a legal or beneficial interest relating to the applicant" as used in Amendment 1's proposed AS 43.23.017(b)(4) means, and whether it is just another loophole. He then said that the language of Amendment 1's proposed AS 43.23.017(b)(7) doesn't seem to be limited to an insured who's given permission to release the information, and said he questions how that provision will be regulated. He reiterated that he has questions about the language of Amendment 1's proposed AS 43.23.017(b)(9). MR. SNIFFEN said he would speculate that the term "self- regulator organizations" means organizations outside of the state's oversight system - in other words, those organizations that don't require professional licensure. REPRESENTATIVE GRUENBERG asked whether the department would then have to adopt regulations defining terms and setting parameters. He expressed concern that under Amendment 1 as it is currently written two people could simply get together and form a "self- regulating organization". MR. BURNETT said that the DOR would be looking at adopting regulations to implement "this chapter." REPRESENTATIVE GRUENBERG asked whether "this subject" is defined anywhere. MR. SNIFFEN said he is not aware of any existing definitions, and so regulatory action would be required, both for the term "self-regulating organizations" and for the phrase, "for a legal or beneficial interest". REPRESENTATIVE GRUENBERG referred to Amendment 1's proposed AS 43.23.017(b)(7), and said this language would seem to allow an insurance company to investigate anything it wants. MR. SNIFFEN concurred, and acknowledged that the department might need to define the terms in that provision via regulation. MR. BURNETT noted that the DOR does have fairly broad regulatory authority "in this section." 2:41:26 PM REPRESENTATIVE HOLMES asked what kind of burden Amendment 1 would place on the Alaska Permanent Fund Corporation (APFC) or the Permanent Fund Dividend Division. MR. BURNETT surmised that the DOR, via the Permanent Fund Dividend Division, would release the information in its "sequel server database format," adding that the DOR is not sure how many business, under the definition provided in Amendment 1, would be requesting applicant information. He assured the committee that the DOR intends to adopt whatever regulations are necessary, assuming that it has sufficient regulatory authority to do so, and reiterated that the DOR would be entering into specific contracts with anybody that fit the criteria outlined in Amendment 1, though the DOR is not sure how much staff time would be required to provide the requested information. In response to a question, he indicated that the DOR would be able to produce a determinate fiscal note before the bill passes the House. REPRESENTATIVE LYNN, referring to Amendment 1's proposed AS 43.23.017(b)(9), relayed that when he gets "a voter list" from the Division of Elections, he must sign a form stating that he will only use the list for electioneering purposes and not for business or other purposes, whereas proposed AS 43.23.017(b) stipulates that the PFD applicant information will be released to a business. If that information gets released to a campaign consulting business, for example, those candidates who use such a business would have an unfair advantage over those candidates, such as himself, who don't. He surmised that under Amendment 1, he would have to employ such a business in order to acquire PFD applicant information. MR. BURNETT concurred that Representative Lynn would have to employ such a business unless he himself has a business license. REPRESENTATIVE LYNN surmised that his campaign organization wouldn't qualify as a "business." REPRESENTATIVE COGHILL noted that a person's date of birth can be used to differentiate people with the same name, and relayed his nescience regarding whether other databases provide that information. He asked Mr. Burnett how many databases were under the DOR's purview. MR. BURNETT said the DOR controls a number of databases, most of which contain completely confidential information. In response to a question, he noted that unemployment insurance database is handled by the Department of Labor & Workforce Development (DLWD). REPRESENTATIVE COGHILL surmised that with the PFD applicant database and another database, one could cross reference information to "guess who's who and what." MR. BURNETT said that one unique feature of the PFD applicant database is that it contains the names, addresses, and dates of birth of all children in Alaska [whose parents have applied for a PFD]. REPRESENTATIVE COGHILL [referring to Amendment 1] relayed that he would be offering an amendment to add phone numbers to the information that's released, and an amendment to delete the year of birth from the information that's released. 2:47:49 PM MS. DAVEY said that such amendments to Amendment 1 would not work for her company because it doesn't differentiate people by phone number. She elaborated: In the criminal file, what we have is the first name, last name, and a date of birth. What I'm asking for [via Amendment 1] is just a birth year, so that [for] people with common names you could tell the difference between their criminal records. We also have date of birth in the occupational license file and the hunting and fishing license file, ... but those aren't comprehensive ... in the same way that the PFD file is. So ... I don't know that "phone number" is going to get us any closer to ... differentiating who's really who. MS. DAVEY, in response to a question, listed some of the other databases that her company has access to. In response to another question, she relayed that when her company had access to the PFD applicant database and was trying to determine which particular person was the one who'd committed a crime, her company would first look at everybody with that same first and last name, and, of those, at everyone living in a particular location during a specific year, and then, of those, at everyone with the date of birth that matches the criminal file. She added that she is not sure what the repercussions are when her company is unable to definitively say that a particular person is the one her clients are interested in. REPRESENTATIVE COGHILL said he wants to ensure that personal information is protected, and thus those who are given such information must be held accountable for keeping it confidential. He indicated that he is not sure how well HB 65 and Amendment 1 mesh with each other, and so he will be researching that issue further. 2:52:55 PM CHAIR RAMRAS expressed a preference for having Amendment 1 adopted. REPRESENTATIVE HOLMES said she has a concern in that the bill pertains to protecting personal information but Amendment 1 appears to go in the opposite direction by allowing such information to be distributed. CHAIR RAMRAS indicated that in the past he has used Ms. Davey's service in his election campaigns, adding that if he has to mail out 3,000 pieces of mail to constituents, he would prefer to send that mail to real, current addresses. Although there are many different ways to access the personal information of Alaskans, the PFD applicant list is probably a more comprehensive and up to date list. He then said, "I would like for us to call the question on [Amendment 1]." REPRESENTATIVE GRUENBERG, indicating that he still has concerns regarding "executing on judgments and businesses and things like that," asked that the committee delay voting on Amendment 1. 2:55:26 PM CHAIR RAMRAS relayed that Amendment 1 would be set aside [with the motion of whether to adopt it left pending]. REPRESENTATIVE COGHILL made a motion to adopt Amendment 2, labeled 25-LS0311\E.6, Bannister, 4/30/07, which read: Page 7, line 5: Delete "AS 45.48.160(b)" Insert "AS 45.48.160(c)" Page 10, line 15: Delete "(b) or (c)" Insert "(b), (c), or (d)" Page 10, following line 20: Insert a new subsection to read: "(b) A consumer credit reporting agency may charge a consumer $2 for placing a security freeze." Page 10, line 21: Delete "(b)" Insert "(c)" Page 10, line 27: Delete "(c)" Insert "(d)" Page 11, line 8: Delete "at no charge" Insert "for $2" REPRESENTATIVE HOLMES objected. REPRESENTATIVE COGHILL explained that Amendment 2 will require a $2 fee to be paid when a consumer requests a security freeze. 2:59:07 PM MEAGAN FOSTER, Staff to Representative Les Gara, Alaska State Legislature, relayed on behalf of Representative Gara, one of the bill's joint prime sponsors that Representative Gara believes that "we should charge the consumer ... $2 for placing a security freeze, for each time a security freeze is placed." This would help make the consumer accountable for the number of times he/she is placing a freeze, so that the system is not abused. She noted that this charge is not mandatory because the change proposed by Amendment 2 to page 10, following line 20, of the bill says that the consumer credit reporting agency "may" charge $2. REPRESENTATIVE COGHILL said he doesn't object to Amendment 2. REPRESENTATIVE SAMUELS asked whether $2 would be the maximum amount that could be charged. MS. FOSTER said yes, adding that currently, nationwide, there are many different fee amounts being charged for placing a security freeze - from no charge to victims of identity theft, to $15. She said she would be willing to provide further information regarding what each state allows consumers to be charged. MS. FOSTER, in response to a question, indicated that under Amendment 2, a consumer could be charged the fee each time he/she requests an agency to place a security freeze. Currently under the bill, after the second removal of a security freeze, the consumer is charged $2, so the first two security freeze requests are free. In response to another question, she explained that once a security freeze is placed, the consumer credit reporting agency won't let companies requesting a person's credit information have that information; security freezes help protect a person against fraudulent uses of his/her credit. 3:03:35 PM MS. HILLEBRAND offered that the proposed fee of $2 is in line with other states, nearly all of which have a provision ensuring that no fee - either for placing a security freeze or for removing one - is charged to victims of identity theft. She recommended that a similar provision be included in HB 65. REPRESENTATIVE SAMUELS, in response to a question, pondered whether the fee that's authorized via Amendment 2 should instead reflect the actual cost of placing a security freeze. [Chair Ramras turned the gavel over to Vice Chair Dahlstrom.] MS. HILLEBRAND offered that Montana law authorizes a $3 fee, but that Indiana law currently doesn't authorize a fee, although many states have chosen a number in the $5 range. However, she added: The bureaus have already built out this system, they're already providing it to a number of states, and there are already state laws, [so] they'll have to do it for 33 states plus the District [of Columbia]; the cost of adding Alaska is going to be negligible, and the bureaus have the ability to continue to make money on the ... credit file in other ways. MS. HILLEBRAND went on to explain, for example, that consumer credit reporting agencies can still sell access to the credit file to anyone that the consumer has authorized to see it by lifting the freeze, and can still sell it to the consumer's existing creditors that are monitoring his/her file to ensure that he/she is still a good credit risk. 3:06:27 PM MR. BURTON added that the existing fee structure nationwide is a patchwork, with most fees falling into the $10 range and that the process of placing a freeze or lifting a freeze is still a manual process. [Vice Chair Dahlstrom returned the gavel to Chair Ramras.] CHAIR RAMRAS made a motion to amend Amendment 2 such that the fee it authorizes is $10. REPRESENTATIVE HOLMES objected. A roll call vote was taken. Representatives Dahlstrom, Coghill, Samuels, Lynn, and Ramras voted in favor of the amendment to Amendment 2. Representative Holmes voted against it. Therefore, the amendment to Amendment 2 was adopted by a vote of 5-1. 3:08:07 PM REPRESENTATIVE HOLMES removed her objection to Amendment 2, as amended. CHAIR RAMRAS announced that Amendment 2, as amended, was adopted. REPRESENTATIVE COGHILL made a motion to adopt Amendment 3, labeled 25-LS0311\E.9, Bannister, 4/30/07, which read: Page 10, line 2: Delete "certified" Page 10, line 8: Delete "certified" Page 12, line 16, following "mail.": Insert "Under some circumstances, the consumer credit reporting agency may charge you $2 to temporarily lift the freeze." REPRESENTATIVE COGHILL explained that Amendment 3 is technical clean up language which removes the requirement to use certified mail when requesting the lift of a security freeze, because the person is given a personal identification number (PIN) so it is not necessary for him/her to use certified mail. CHAIR RAMRAS made a motion to amend Amendment 3, to delete "$2" and to insert "$10" in order to be consistent with Amendment 2. CHAIR RAMRAS announced that there being no objection, the amendment to Amendment 3 was adopted. CHAIR RAMRAS determined that Mr. Burton and Mr. Brine did not wish to testify on Amendment 3, as amended. MS. HILLEBRAND recommended not doubling up on the fees to place or lift the freeze because the $10 fee should cover both fees. She noted that while these fees vary, more recently, some states have chosen a much lower fee, in the $5 range. CHAIR RAMRAS made a motion that the committee rescinds its action in adopting the amendment to Amendment 3. There being no objection, Amendment 3 was returned to its un-amended form. CHAIR RAMRAS announced that there being no objection, Amendment 3 was adopted. 3:10:33 PM REPRESENTATIVE COGHILL made a motion to adopt Amendment 4, labeled 25-LS0311\E.3, Bannister, 5/1/07, which read: Page 1, line 2: Delete "consumer credit monitoring, credit accuracy," Page 15, line 29, through page 18, line 23: Delete all material. Page 18, line 24: Delete "Article 4" Insert "Article 3" Page 22, line 21: Delete "Article 5" Insert "Article 4" Page 25, line 22: Delete "Article 6" Insert "Article 5" Page 27, line 31: Delete "Article 7" Insert "Article 6" Page 28, line 16: Delete "Article 8" Insert "Article 7" Page 29, line 13: Delete "Article 9" Insert "Article 8" REPRESENTATIVE HOLMES objected for the purpose of discussion. REPRESENTATIVE COGHILL explained that the Alaska Bankers Association (ABA) indicates that Article 3 - Consumer Credit Monitoring; Credit Accuracy - is not necessary in state law because the federal FCRA is totally responsible for enforcing the provisions for consumer credit monitoring and credit accuracy. REPRESENTATIVE HOLMES removed her objection. CHAIR RAMRAS announced that there being no further objection, Amendment 4 was adopted. 3:11:49 PM REPRESENTATIVE COGHILL made a motion to adopt Amendment 5, labeled 25-LS0311\E.2, Bannister, 5/2/07, which read: Page 25, lines 10 - 16: Delete all material and insert: "(4) "personal information" means (A) an individual's passport number, driver's license number, state identification number, bank account number, credit card number, debit card number, other payment card number, financial account information, or information from a financial application; or (B) a combination of an individual's (i) name, address, or telephone number; and (ii) medical information, insurance policy number, employment information, or employment history;" REPRESENTATIVE HOLMES objected for the purpose of discussion. REPRESENTATIVE COGHILL explained that Amendment 5 was suggested to him by Representative Gara, a joint prime sponsor of HB 65. Amendment 5 would define and make more explicit the definition of personal information. The definition in Amendment 5 is more factual and is supported by the agencies affected and the joint prime sponsors of HB 65. REPRESENTATIVE HOLMES withdrew her objection. CHAIR RAMRAS announced that there being no objection, Amendment 5 was adopted. 3:13:19 PM REPRESENTATIVE COGHILL made a motion to adopt Amendment 6, labeled 25-LS0311\E.13, Bannister, 5/2/07, which read: Page 25, line 30, following "theft": Delete ";" Insert "by the victim; and" Page 26, line 10: Delete "shall" Insert "may" Page 26, lines 11 - 18: Delete all material. Insert "determine that a petitioner under AS 45.48.600 is factually innocent of a crime if the court finds beyond a reasonable doubt that (1) the petitioner is a victim of identity theft; (2) the petitioner did not commit the offense for which the perpetrator of the identity theft was arrested, cited, or convicted; (3) the petitioner filed a criminal complaint against the perpetrator of the identity theft; and (4) the petitioner's identity was mistakenly associated with a record of conviction for the crime." Page 26, line 25: Delete "deleted, sealed, or" Page 26, line 30: Delete "or fraudulent material" Insert ", omission, or false information" RESENTATIVE HOLMES objected for the purpose of discussion. REPRESENTATIVE COGHILL explained that Amendment 6 pertains to legal issues of factual innocence, and that he considers this matter to be a work in progress. 3:14:02 PM ANNE CARPENETI, Assistant Attorney General, Legal Services Section-Juneau, Criminal Division, Department of Law (DOL), explained that Article 6 - Factual Declaration of Innocence after Identity Theft; Right to File Police Report Regarding Identity Theft - provides a victim of identity theft a procedure to declare himself/herself factually innocent of a crime. Since that process does not involve an adversarial proceeding - in that there are not two opposing parties involved, with a judge making a final decision - the DOL had concerns about exactly how to change a record in a non-adversarial proceeding. The bill does not have a standard to guide a court in how to determine whether the person listed is factually innocent. But, the DOL examined Title 12 and found that AS 12.62.180 sets up a procedure that allows for correction with respect to mistaken identity, and requires a person to prove beyond a reasonable doubt that he/she is not the person described in the criminal record. The DOL suggests Amendment 6 helps ensure that manipulative criminals cannot alter their criminal records. REPRESENTATIVE COGHILL, in response to a question, explained that Amendment 6 provides a proactive means for victims of identity theft to petition the court for discovery. An identity theft victim is in the precarious position of defending himself/herself. MS. CARPENETI gave an example of a person who steals a driver's license, then drives drunk, is arrested, but gives the stolen driver's license as identification, so the result is that the charge of driving under the influence (DUI) is tagged to the victim's driver's license. She indicated that HB 65 allows a victim of identity theft to refute the DUI charge by petitioning the court using documents, for example, an affidavit by the police officer that asserts he/she was not the driver of the vehicle, to clear the charge from the victim's record. The standard, under the bill, is meritorious. The DOL suggests that the standard of beyond a reasonable doubt be used to determine the victim did not commit the DUI. And she suggested the bill not use the words "deleted" or "sealed", but instead use the term "label" because the record exists, and the court needs to preserve the record not destroy or seal the record, because the victim may later need access to the record. Instead, the record should be preserved and labeled to reflect the action and to make it clear that the crime was not committed by the victim of the identity theft, and that there has been a judicial determination in the matter. The victim would also receive a certificate to that effect. 3:20:19 PM REPRESENTATIVE DAHLSTROM asked about the value a certificate or order of innocence would have for the victim, and how such a certificate would be used, for example, in an instance of identity theft, where the victim petitioned the court and the court determined his/her innocence and issued him/her a certificate. She asked if the victim gave the certificate to a business, whether the business would be required to honor the certificate and to release the debt. REPENTATIVE COGHILL related an instance where his staff member had his/her social security number (SSN) used to obtain credit cards and charge debt, and has not been able to obtain a legal instrument, a certificate, or written proof of the identity theft in order to clear the debt. He offered that Amendment 6 could help provide a legal instrument to clear up bad debt or adverse action taken on a victim of identity theft. REPRESENTATIVE DAHLSTROM expressed her concern for identity theft victims. MS. CARPENETI clarified, in response to a question, that the DOL wants to set the burden of proof standard at "beyond a reasonable doubt." REPRESENTATIVE COGHILL added his empathy for the identity theft victim, who is adversely economically impacted until his/her name is cleared. MS. CARPENETI offered that proposed AS 45.48.600-690 deals with how one changes criminal records, and she did not specifically know how the bill would work regarding debt but opined that the victim could obtain the document to take to any business involved. MS. CARPENETI indicated that the DOL supports Amendment 6. REPRESENTATIVE HOLMES removed her objection. CHAIR RAMRAS announced there being no further objection, that Amendment 6 was adopted. 3:24:51 PM REPRESENTATIVE COGHILL made a motion to adopt Amendment 7, labeled 25-LS0311\E.14, Bannister, 5/2/07, which read: Page 1, line 4: Delete "furnishing consumer credit header information," Page 27, line 31, through page 28, line 15: Delete all material. Page 28, line 16: Delete "Article 8" Insert "Article 7" Page 29, line 13: Delete "Article 9" Insert "Article 8" REPRESENTATIVE HOLMES objected for the purpose of discussion. REPRESENTATIVE COGHILL explained that this amends the consumer credit header information and that ChoicePoint has testimony to give on Amendment 7. 3:25:53 PM MR. BURTON said he supported Amendment 7 on two grounds. The data in the subject of Article 7 - Consumer Credit Header Information - is already highly regulated by the federal FCRA and the GLBA, which establish permissible uses and restrictions on how businesses obtain and use the data. The consumer credit header data [SSN, maiden name of the mother of the consumer, the birth date of the consumer, and other personally identifiable information, except the name, address, and telephone number of the consumer] is the lifeblood of the search tools used by investigative and law enforcement agencies. This data is invaluable information that is updated and used by organizations such as the child support services division (CSED), or by financial institutions to ensure compliance with the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 ("USA PATRIOT Act"). The data is also used by retailers to combat fraud, and by insurers to combat insurance fraud. ChoicePoint supports Amendment 7 to remove Article 7 from HB 65. REPRESENTATIVE HOLMES removed her objection. CHAIR RAMRAS announced there being no further objection, that Amendment 7 was adopted. The committee took an at-ease from 3:27 p.m. to 3:30 p.m. 3:30:23 PM REPRESENTATIVE COGHILL made a motion to adopt Amendment 8, labeled 25-LS0311\E.4, Bannister, 5/1/07, which read: Page 1, line 5: Delete "Rule 60" Insert "Rules 60 and 82" Page 22, line 16: Delete "and court costs and attorney fees" Insert "court costs" Page 22, line 17, following "court": Insert ", and full reasonable attorney fees" Page 30, line 24: Delete "AMENDMENT." Insert "AMENDMENTS. (a)" Page 30, following line 27: Insert a new subsection to read: "(b) AS 45.48.480(b), enacted by sec. 3 of this Act, has the effect of changing Rule 82, Alaska Rules of Civil Procedure, by changing the criteria for determining the amount of attorney fees to be awarded to a party in an action under AS 45.48.480(b)." REPRESENTATIVE HOLMES objected for the purpose of discussion. REPRESENTATIVE COGHILL explained that Amendment 8 applies to Rule 60 and 82 of the Alaska Rules of Civil Procedure and allows an individual who has been harmed to recover court costs and full and reasonable attorney fees. MR. BURTON stated that he did not believe that he has an objection to Amendment 8 at this time, but said he would let the committee know if he discovers an issue. 3:32:14 PM REPRESENTATIVE DAHLSTROM asked whether Amendment 8 allows for full and reasonable attorney fees once a determination that fraud has occurred has been made and whether the allowable fees would also include time spent working with other companies to resolve the unlawful credit card charges or debt. REPRESENTATIVE COGHILL responded that Amendment 8 sets out a civil penalty that can't exceed $3,000, and allows individuals to collect court costs and full reasonable attorney fees. REPRESENTATIVE HOLMES removed her objection. CHAIR RAMRAS announced that there being no further objection, Amendment 8 was adopted. 3:33:43 PM REPRESENTATIVE COGHILL made a motion to adopt Amendment 9, labeled 25-LS0311\E.5, Bannister, 5/1/07, which read: Page 19, following line 28: Insert a new paragraph to read: "(2) if the person is engaging in the business of government and (A) is authorized by law to request or collect the individual's social security number; or (B) the request or collection of the individual's social security number is required for the performance of the person's duties or responsibilities as provided by law;" Renumber the following paragraphs accordingly. Page 20, following line 23: Insert a new paragraph to read: "(2) the person is engaging in the business of government and (A) is authorized by law to disclose the individual's social security number; or (B) the disclosure of the individual's social security number is required for the performance of the person's duties or responsibilities as provided by law;" Renumber the following paragraphs accordingly. REPRESENTATIVE HOLMES objected for the purpose of discussion. REPRESENTATIVE COGHILL explained that Amendment 9 allows government staff who are authorized by law to request or collect SSNs to do so and to release it when required to disclose it. The request came from the DNR to provide an exemption for the DNR State Recorder's Office, and for other purposes such as allowing the revolving loan fund to serve the public. 3:34:59 PM MR. SNIFFEN testified that the purpose of Amendment 9 is to address an issue the DNR State Recorder's Office has because it is required to accept documents that may contain personal information, including SSNs, and to record them without questioning the information listed on documents. Amendment 9 would also apply to other agencies that are required to collect and dispense information. REPRESENTATIVE COGHILL mentioned that a subsequent amendment will be made to add an effective date of 2008 to cover agencies like the DNR State Recorder's Office. REPRESENTATIVE HOLMES removed her objection. CHAIR RAMRAS announced that there being no further objection, Amendment 9 was adopted. REPRESENTATIVE COGHILL made a motion to adopt Amendment 10, labeled 25-LS0311\E.15, Bannister, 5/2/07, which read: Page 22, lines 15 - 16: Delete "or $5,000, whichever amount is greater," REPRESENTATIVE HOLMES objected for the purpose of discussion. 3:37:47 PM FRANK BAILEY, Special Assistant, Legislative Liaison/Communications, Office of the Commissioner, Department of Administration (DOA), explained that Amendment 10 would absolve state agencies, and eliminate class action lawsuits due to the language in CSHB 65(L&C) that caps damages at $5,000. He stated the DOA supports [Amendment 10]. CHAIR RAMRAS noted that the text that remains would then read in part, "and may recover actual damages" and questioned whether the state is liable for actual damages but would be relieved of the $5,000 burden. MR. BAILEY responded yes. MR. SNIFFEN also responded yes. He explained that the state would always be responsible for actual damages, for example, if a person slides off the road because the road is not plowed correctly, and the state is sued. He explained that even without the language in HB 65, the state is still responsible. He suggested that the committee consider inserting one other limiter which would say that that civil action can only be brought to recover actual economic damages, as opposed to all actual damages. He went on to explain that there are economic and non-economic damages recognized in the statute, and non- economic damages pertain to things like pain and suffering, loss of enjoyment of life, and are very subjective and always go to a jury because there isn't agreement on the definition of those items. He opined that the state spends a lot of money defending those types of claims. The actual economic damage is something that can be documented, so the state is willing to pay back to consumers harmed by this conduct, but non-economic damages are more problematic, and the committee would need to consider that as a policy call. REPRESENTATIVE COGHILL spoke in favor of Amendment 10. He expressed a preference to leave Amendment 10 intact because of the potential damage to a person's reputation. He said he did not know what other hardships might be included in non-economic damages, but pointed out that the condition of "knowingly violate" sets up a standard of proof. He spoke in opposition to Mr. Sniffen's suggestion to limit Amendment 10 to economic damages. REPRESENTATIVE HOLMES removed her objection. REPRESENTATIVE SAMUELS questioned the type of standard of proof and asked whether an employee at DNR who knowingly released a SSN would be held civilly liable. MR. SNIFFEN responded that the standard "knowingly" is set out in Title 11, and that that definition means that an individual must be aware of his/her conduct. He related an instance where an employee knows that he/she is releasing a SSN but he/she does not know that he/she is not supposed to release it. He offered that the standard of proof is somewhat vague so the person might not have knowingly committed fraud because he/she thought the action taken was appropriate. 3:42:58 PM REPRESENTATIVE SAMUELS asked if a party released the SSN but did not know they should not do so, whether the state would be held liable. MR. SNIFFEN concurred that the state would be held liable. REPRESENTATIVE SAMUELS asked what the personal liability standard is for an individual who deliberately releases information that he/she knows is confidential, and his/her personal liability in doing so. MR. SNIFFEN responded that the state would be responsible for that employee's conduct to the extent that the employee was acting within the scope of his/her employment, but not if the employee was stealing information and attempting to sell the information, because he/she was acting outside the scope of his/her duties. REPRESENTATIVE SAMUELS asked for further clarification of employees acting in a malicious manner. MR. SNIFFEN responded that in this case he did not think due process would apply because the employment contract spells out the responsibilities of the employee. REPRESENTATIVE HOLMES questioned whether proposed [AS 45.48.480] applies to both the state and private businesses. MR. SNIFFEN responded yes. REPRESENTATIVE COGHILL asked whether this section for penalty provisions falls under an administrative procedure or a civil court action. MR. SNIFFEN indicated that the provision applies to a civil court action and the party would have the right to a jury trial, unless the person waived his/her right to a jury trial. CHAIR RAMRAS related that one of his restaurants has antiquated software that prints out the customer's full SSN. He asked if one of his employees knowingly steals and uses that information, would he, as the private sector employer, incur liability. He speculated that the business would incur significant exposure since the employer knowingly uses antiquated software. 3:46:28 PM MR. SNIFFEN responded that the employer might be held liable for the release of the SSN, and while acknowledging that he cannot give legal advice, surmised that the employee probably was not acting within the scope of his/her employment. CHAIR RAMRAS asked to set Amendment 10 aside, and without objection, Amendment 10 was set aside [with the motion of whether to adopt it left pending]. MR. SNIFFEN explained that if one has employees that are acting on instructions by the employer, the employer would probably be exposed to some liability. REPRESENTATIVE COGHILL made a motion to adopt Amendment 11, labeled 25-LS0311\E.7, Bannister, 5/1/07, which read: Page 20, following line 17: Insert a new subsection to read: "(c) A person who knowingly violates (a) of this section is guilty of a class A misdemeanor. In this subsection, "knowingly" has the meaning given in AS 11.81.900." Page 22, lines 18 - 20: Delete all material. Reletter the following subsection accordingly. REPRESENTATIVE HOLMES objected for the purpose of discussion. REPRESENTATIVE COGHILL offered that Amendment 11 was suggested by Representative Gara, and that Amendment 11 would add a new subsection making a person who violates this subsection guilty of a class A misdemeanor, and he referred to the "knowingly" standard as set out in AS 11.81.900(a)(2). 3:49:09 PM MS. FOSTER relayed that Representative Gara had concerns that a person could be found guilty of a class A misdemeanor simply by asking for a person's SSN. She stated that Representative Gara felt more comfortable that a person should be charged with a class A misdemeanor only when he/she profited from the sale, lease, loan, or rental of a SSN, which is prohibited under the bill. REPRESENTATIVE SAMUELS asked whether a person who does not personally profit but releases information to [a third party] who subsequently profits from selling SSNs could be charged with a misdemeanor. MS. FOSTER responded that she is not sure, and, in response to another question, explained that if a state employee was to ask for an SSN, but was not authorized to do so, he/she could be charged with a class A misdemeanor under the current bill; however, under Amendment 11, the same employee could not be charged with a crime. REPRESENTATIVE SAMUELS asked for an example to put Amendment 11 in context. MS. FOSTER relayed that in private industry, many businesses will ask for a SSN, but under HB 65, the employees could not ask for the SSN unless the business is exempt, such as a bank. REPRESENTATIVE DAHLSTROM advised that the Office of Children's Services (OCS), Department of Health and Social Services (DHSS), and some other agencies are also allowed to collect SSNs. MS. FOSTER concurred, and clarified that state employees can ask for SSNs if they are authorized under state or federal law to use the SSNs. REPRESENTATIVE COGHILL stated that if the SSN is not required by law, the employee should not ask the party for the SSN information. REPRESENTATIVE HOLMES removed her objection. 3:52:46 PM REPRESENTATIVE GRUENBERG asked whether there was a criminal penalty for violation of proposed AS 45.48.420, the section which prohibits a person from selling SSNs to a third person. MS. FOSTER responded that the proposed Amendment 11 would make it a Class A misdemeanor. REPRESENTATIVE GRUENBERG offered his understanding that the effect of deleting the penalty provision under proposed AS 45.48.480(c) would be to also delete the penalty for proposed AS 45.48.420. REPRESENTATIVE COGHILL offered his understanding that Amendment 11 would target individuals who profit from selling SSNs, but if an employee was exempt from disclosure that there would not be a penalty imposed. REPRESENTATIVE GRUENBERG offered that HB 65 sets out new provisions, but that the only section that has a class A misdemeanor penalty attached to it is proposed AS 45.48.430. He expressed concern that the penalty provisions would not apply to the other sections of the bill. He related that person "A" could create false identification for immigration or other purposes, and sells the SSNS to person "B", a forger who could then create the false identification. Under Amendment 11, that crime would no longer be a class A misdemeanor. REPRESENTATIVE HOLMES pointed out that the penalty provision in Amendment 11 applies only to proposed AS 45.48.420. REPRESENTATIVE GRUENBERG argued that a person violating other sections of the bill should also be guilty of a class A misdemeanor. MS. FOSTER responded that Representative Gara was concerned that people might ask for a SSN when not required to because they did not know that merely asking for the SSN would result in criminal charges. REPRESENTATIVE HOLMES removed her objection. CHAIR RAMRAS asked if there any further objections to Amendment 11, and, hearing none, relayed that Amendment 11 was adopted. 3:56:25 PM REPRESENTATIVE COGHILL made a motion to adopt Amendment 12, labeled 25-LS0311\E.8, Bannister, 4/30/07, which read: Page 20, line 4: Delete "or" Page 20, line 7, following "benefits": Insert "; or (5) if the disclosure does not have independent economic value, is incidental to a larger transaction, and is necessary to verify the identity of the individual" CHAIR RAMRAS announced that Amendment 12 was before the committee and that Representative Holmes has objected. Representative Coghill advised that the Alaska Bankers Association (ABA) asked for Amendment 12 so that when fraud is suspected a bank would have the ability to ask for a SSN to verify identification. MR. BURTON stated that ChoicePoint has severe concerns with many of the provisions in Article 4 - Protection of a Social Security Number. He asked for guidance in the timing of his testimony. [Following was a brief discussion regarding how the committee would be proceeding with regard to HB 65, its proposed amendments, and public testimony.] 4:01:45 PM REPRESENTATIVE HOLMES removed her objection. CHAIR RAMRAS asked if there were any further objections, and hearing none, relayed that Amendment 12 was adopted. [CSHB 65(L&C), as amended, was held over with the motions to adopt Amendment 1 and Amendment 10 left pending.]
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