Legislature(2007 - 2008)BELTZ 211

03/04/2008 01:30 PM Senate LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 289 HOME ENERGY CONSERVATION TELECONFERENCED
Heard & Held
*+ SB 293 ELECTRONIC COMMUNICATION DEVICES TELECONFERENCED
Heard & Held
+ HB 65 PERSONAL INFORMATION & CONSUMER CREDIT TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
+= SB 147 WORKERS' COMP EMPLOYER LIABILITY TELECONFERENCED
<Bill Moved Out of Committee 2/28/08>
            SB 293-ELECTRONIC COMMUNICATION DEVICES                                                                         
                                                                                                                                
2:11:12 PM                                                                                                                    
CHAIR ELLIS announced SB 293 to be up for consideration.                                                                        
                                                                                                                                
TREVOR  FULTON, staff  for Senator  McGuire, sponsor  of SB  293,                                                               
said  this measure  would  regulate the  use  of Radio  Frequency                                                               
Identification (RFID) in the state of  Alaska. SB 293 is really a                                                               
consumer, personal and  privacy protection bill that  aims to nip                                                               
the potential for identify theft in the bud.                                                                                    
                                                                                                                                
MR. FULTON informed them that  RFID is a wireless technology that                                                               
typically includes  three elements -  a tag which has  an antenna                                                               
and  is capable  of transmitting  data, a  reader which  receives                                                               
data transmitted by the tag and  a database that stores the data.                                                               
Examples are employee access passes like  the cards we use to get                                                               
into the  capitol, passes on a  toll way, and implanted  dog IDs.                                                               
He said a less obvious use  of RFIDs is implanting ones in humans                                                               
that contain patient  records for use in hospitals.  He said that                                                               
many uses are very beneficial to businesses and people.                                                                         
                                                                                                                                
The  convenience  of  using  RFIDs  could come  at  the  cost  of                                                               
security,  however.  Private  information  -  like  bank  account                                                               
numbers,   social  security   numbers   and   health  records   -                                                               
transmitted  by  RFID tags  and  stored  in databases  can  leave                                                               
consumers vulnerable to  identify theft. SB 293  aims to minimize                                                               
that vulnerability  and protect personal and  consumer privacy by                                                               
regulating the use of RFID technology in Alaska.                                                                                
                                                                                                                                
MR.  FULTON said  as RFID  use becomes  more widespread,  it will                                                               
become increasingly  important that consumers know  what products                                                               
carry RFID tags and what  businesses are using RFID technology in                                                               
order  to  obtain consumer  consent  and  adopt minimum  security                                                               
standards  for  RFID  use like  prohibiting  scanning  or  remote                                                               
reading  of  an   RFID  tag  without  consent.   It  will  become                                                               
increasingly important  that enforcement measures for  the misuse                                                               
of RFID devices are established.  He said SB 293 accomplishes all                                                               
of these  things and  he urged  that it's  important to  help the                                                               
regulations to keep pace with this useful growing technology.                                                                   
                                                                                                                                
2:16:04 PM                                                                                                                    
SENATOR BUNDE  asked if  Alaska has actual  problems or  are they                                                               
being proactive.                                                                                                                
                                                                                                                                
MR. FULTON  answered that he  wasn't aware of a  current problem,                                                               
but evidence  in other states  shows that RFIDs have  been hacked                                                               
and information has been stolen.                                                                                                
                                                                                                                                
SENATOR BUNDE said  the cell phone industry said this  would be a                                                               
problem.                                                                                                                        
                                                                                                                                
MR. FULTON responded that he had  been talking to one of the cell                                                               
phone providers here who is  encouraging that dialogue with their                                                               
engineers  to  make  sure this  bill  doesn't  needlessly  impact                                                               
whatever plans they have for RFID use in the future.                                                                            
                                                                                                                                
SENATOR BUNDE said  current passports have RFIDs and  asked if SB
293 would somehow affect those.                                                                                                 
                                                                                                                                
MR. FULTON  replied that  he wasn't  a lawyer,  but there  are no                                                               
federal regulations  on RFID devices.  He would look into  how it                                                               
would affect passport use in Alaska.                                                                                            
                                                                                                                                
2:18:08 PM                                                                                                                    
ED SNIFFEN,  Assistant Attorney General, Consumer  and Anti-trust                                                               
Protection, Department of Law (DOL),  Anchorage, responded to the                                                               
question about  problems in Alaska  by saying he doesn't  get any                                                               
direct  complaints  about this  technology,  but  he wouldn't  be                                                               
surprised  if some  identity  theft victims  in  Alaska have  had                                                               
their identity stolen as a result  of new technology that is able                                                               
to  remotely  scan  and  get information.  He  said  he  supports                                                               
consumer  protection  bills  like   this  that  will  inform  the                                                               
consumer about the issue as well.                                                                                               
                                                                                                                                
2:20:01 PM                                                                                                                    
ALLISON  FLEMING,  EPC  Global,  said  EPC  is  a  not-for-profit                                                               
standards  organization working  on  international standards  for                                                               
radio  frequency  identification  applications.  Industries  that                                                               
participate   in  the   standards  development   process  include                                                               
aerospace,   retail,   entertainment,   defense,   health   care,                                                               
chemical,  pharmaceutical,  transportation and  logistics.  These                                                               
industries  use something  called  the  electronic product  code,                                                               
which as an RFID application. The  EPC is a unique number that is                                                               
used to identify  a specific item in a supply  chain similar to a                                                               
string of numbers on a bar  code. This unique number is stored on                                                               
an RFID  tag which combines a  silicon chip and an  antenna. Once                                                               
the  EPC is  read from  the tag  it can  be associated  with data                                                               
stored in a secure database  where other information can be found                                                               
like the date of its production  or where it originated. EPC RFID                                                               
tags   don't   carry   an  individual's   personal   identifiable                                                               
information.                                                                                                                    
                                                                                                                                
MS. FLEMING  said RFID technology is  in its infancy now.  In the                                                               
short term it  will be at the container, case,  and pallet level.                                                               
In a retail supply chain it  is used to mechanically read the EPC                                                               
on items  as diverse as computer  printers or a case  of diapers.                                                               
An EPC gives more information about  a product than a typical bar                                                               
code and in the future  could expedite supply chain applications.                                                               
It  can  help  reduce  counterfeiting in  a  variety  of  product                                                               
categories  from toys  to electronics.  It has  the potential  to                                                               
save  lives  to  help  prevent counterfeit  drugs  from  reaching                                                               
consumers by tracking products from their source.                                                                               
                                                                                                                                
2:23:01 PM                                                                                                                    
She said  consumer privacy  and trust are  very important  to the                                                               
adoption  of any  new technology.  She noted  further that  their                                                               
consumer guidelines include giving  consumers clear notice of the                                                               
presence  of an  EPC  on  a product  and  informing  them of  the                                                               
choices they  have to  discard or  remove or  disable an  EPC tag                                                               
from a  product. They will  have access to information  about EPC                                                               
and its applications as well  as the companies that use, maintain                                                               
and protect records generated through  the EPC in compliance with                                                               
all applicable laws. These guidelines  are flexible and allow for                                                               
enhancements  and modifications  as the  technology continues  to                                                               
evolve. The  next years will  be crucial for this  technology and                                                               
laws  should  not  stifle  innovation   or  delay  the  potential                                                               
benefits for consumers  and businesses in Alaska.  She urged them                                                               
to be prudent  and pragmatic in considering  measures to regulate                                                               
EPC or RFID technology.                                                                                                         
                                                                                                                                
2:24:03 PM                                                                                                                    
SENATOR BUNDE asked her if this bill was prudent.                                                                               
                                                                                                                                
MS.  FLEMING  answered  no,  not at  this  point.  Requiring  the                                                               
specific type of notice, written  consent and deactivation at the                                                               
point  of  sale  could  hurt the  technology  as  it's  currently                                                               
evolving.                                                                                                                       
                                                                                                                                
CHAIR  ELLIS asked  the status  in  other state  with regards  to                                                               
statutes along this line.                                                                                                       
                                                                                                                                
MS. FLEMING answered that Washington  State has a bill that would                                                               
just  affect the  illegal  use or  scanning of  an  RFID tag  for                                                               
fraud.  SB 293  is comprehensive,  and she  hasn't seen  anything                                                               
like it adopted.                                                                                                                
                                                                                                                                
2:25:29 PM                                                                                                                    
BEN  ADERSON,  American  Electronics  Association  (AEA),  echoed                                                               
EPC's testimony.  Their concerns about  SB 293 are  very similar;                                                               
it goes  well beyond  banning bad behavior  and restricts  a very                                                               
beneficial  technology. It  provides  enormous security.  Hacking                                                               
hasn't happened even though there are claims it has.                                                                            
                                                                                                                                
MR.  ADERSON said  this would  be landmark  legislation, but  the                                                               
reason  other  states have  not  enacted  it is  the  detrimental                                                               
affect it can have on  small businesses. Generally information is                                                               
used from warehouse to warehouse.                                                                                               
                                                                                                                                
2:29:18 PM                                                                                                                    
TERRY  BANNISTER,  Department of  Law,  was  available to  answer                                                               
questions.                                                                                                                      
                                                                                                                                
CHAIR ELLIS said he would hold SB 293 for further work.                                                                         
2:30:06 PM                                                                                                                    

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