05/01/1993 10:40 AM Senate FIN

                                                                               
  CS FOR HOUSE BILL NO. 113(FIN)                                               
                                                                               
       An Act regulating the solicitation  of contributions by                 
       charitable  organizations and  paid solicitors  and the                 
       solicitation of sales by telephonic means; and amending                 
       Alaska Rules of Civil Procedure 79 and 82.                              
                                                                               
  Co-chair Pearce directed that CSHB  113 (Finance) be brought                 
  on for  discussion and  noted interest  in the  bill by  the                 
  Cancer Society.   Senator Kerttula attested to  instances in                 
  which  individuals   have  lost   money  to   telephonically                 
  conducted scams.   Co-chair  Pearce observed  that the  bill                 
  would provide a "cooling off" period for telemarketing.                      
                                                                               
  [Recording problems were  corrected at  this point in  time.                 
  The remainder of the minutes reflect tape transcription.]                    
                                                                               
  REPRESENTATIVE RON  LARSON, sponsor of the legislation, came                 
  before committee.   Senator Rieger  asked if the  bill would                 
  provide  for   notations  in   phone  directories   advising                 
  customers  that they  could  choose no  to  be solicited  by                 
  phone.  Representative Larson  explained that that provision                 
                                                                               
                                                                               
  was contained within legislation sponsored by Representative                 
  Brown.   While inclusion  within HB  113 was  discussed, the                 
  provision was not added.                                                     
                                                                               
  Senator Kelly referenced the $5,000  limitation and asked if                 
  those seeking to raise over that  amount would be subject to                 
  provisions  of  the bill.   Representative  Larson responded                 
  affirmatively.   JUDY MATHIS, aide to Representative Larson,                 
  added that reporting requirements merely consist  of filling                 
  out a registration form for filing with the Dept. of Law.                    
                                                                               
  As background information,  Representative Larson  explained                 
  that the bill originated  as a result of a  national meeting                 
  of the American Cancer Society.  Concern was raised, at that                 
  time,  that "look  alike organizations"  were  "ripping off"                 
  legitimate charities.  The proposed  bill is patterned after                 
  legislation enacted in  several other states to  address the                 
  problem of telephonic solicitation by  illegal means.  Under                 
  the bill,  the Dept.  of  Law would  be given  the power  to                 
  extradite illegal telephonic solicitors from out of state to                 
  Alaska for  trial.   Senator  Kelly voiced  support for  the                 
  thrust of the  legislation.  He expressed  concern, however,                 
  regarding the $5,000 limit,  suggesting that it is not  high                 
  enough.   He  spoke to  possible adverse  impact on  smaller                 
  charities  that  might not  have  the wherewithal  to become                 
  knowledgeable   of   state   regulations    and   additional                 
  bookkeeping  associated with  reporting  requirements.   Co-                 
  chair Frank concurred and questioned  whether there was need                 
  for a threshold.                                                             
                                                                               
  Senator Rieger referred to language at page 10, lines 20 and                 
  21,  and  advised  of his  understanding  that  a  church or                 
  religious organization would be  exempt from the legislation                 
  and able to  raise any  amount it  chooses.   Representative                 
  Larson concurred.                                                            
                                                                               
  Co-chair Frank inquired concerning the "cooling  off" period                 
  for  telemarketing contracts.   Judy  Mathis explained  that                 
  under bill provisions  a telemarketer  would be required  to                 
  send  a contract to  the purchaser of goods.   The sale does                 
  not become valid until the purchaser signs the contract.                     
                                                                               
  End, SFC-93, #71, Side 1                                                     
  Begin, SFC-71, Side 2                                                        
                                                                               
  A telemarketer may  not simply obtain the  customer's credit                 
  card number  over the  phone and  conclude the  transaction.                 
  This  provides  a  cooling  off  period for  purchasers  who                 
  subsequently feel they  were pressured  by the  telemarketer                 
  into buying something they did not want.                                     
                                                                               
  Both  Senator  Kelly  and  Co-chair  Frank voiced  need  for                 
  testimony from  staff at the  Dept. of  Law and  Legislative                 
  Legal Services regarding the effect of Alaska Rules of Civil                 
                                                                               
                                                                               
  Procedure  changes contained  within  the  bill.    Co-chair                 
  Pearce advised that  the meeting would soon  be recessed for                 
  majority  and  minority  caucuses.    She suggested  that  a                 
  teleconference  be  scheduled  with  Jim  Forbes,  Assistant                 
  Attorney General, Fair  Practices Section, Dept. of  Law, in                 
  Anchorage and that he testify  before committee later in the                 
  day.                                                                         
                                                                               
  Co-chair  Frank  posed   an  additional  question  regarding                 
  "prohibited presentations" at page 3.  Representative Larson                 
  explained  that   the  language  is   intended  to  prohibit                 
  telemarketers  from  listing  licenses, qualifications,  and                 
  other credentials  intended  to  entice  the  customer  into                 
  buying.  Co-chair  Frank suggested  that if the  credentials                 
  and representations are valid, there should be no problem in                 
  presenting  them.    Representative  Larson noted  instances                 
  where false or misleading information is given in  an effort                 
  to establish legitimacy.                                                     
                                                                               
  In response to  a question from Senator  Rieger, Judy Mathis                 
  explained  that  the legislation  relates  to calls  made by                 
  telemarketers  to  customers.     It  would  not   apply  to                 
  situations  whereby  the customer  calls  to obtain  a price                 
  (airline fares were used as an example) or purchase an item.                 
  Senator Rieger  questioned whether  language at  page 1  was                 
  clear on that issue.                                                         
                                                                               
  RECESS                                                                       
                                                                               
  Co-chair  Pearce  directed  that  the  meeting be  recessed,                 
  subject to a call of the chair.  The meeting was recessed at                 
  approximately 11:10 a.m.