Legislature(2007 - 2008)BELTZ 211

03/13/2008 01:30 PM Senate LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled
Including But Not Limited to:
+= HB 65 PERSONAL INFORMATION & CONSUMER CREDIT TELECONFERENCED
Heard & Held
= SB 293 ELECTRONIC COMMUNICATION DEVICES
Moved CSSB 293(L&C) Out of Committee
= SB 160 MANDATORY UNIVERSAL HEALTH CARE
Moved CSSB 160(L&C) Out of Committee
            SB 293-ELECTRONIC COMMUNICATION DEVICES                                                                         
                                                                                                                                
1:37:31 PM                                                                                                                    
CHAIR ELLIS announced SB 293 to be up for consideration.                                                                        
                                                                                                                                
TREVOR  FULTON, staff  to  Senator McGuire,  sponsor  of SB  293,                                                               
recapped  that  this is  a  consumer  protection bill  protecting                                                               
personal privacy  and preventing theft of  personal identity. The                                                               
state  currently doesn't  have any  regulation on  the books  and                                                               
this  brings  state  statutes  up   to  date  with  this  growing                                                               
technology.                                                                                                                     
                                                                                                                                
CHAIR  ELLIS  asked  him  to   explain  the  concerns  that  were                                                               
expressed since the last hearing.                                                                                               
                                                                                                                                
1:38:51 PM                                                                                                                    
SENATOR BUNDE joined the committee.                                                                                             
                                                                                                                                
MR.  FULTON responded  that  the proposed  CS  addressed some  of                                                               
those concerns.  In response to Senator  Bunde's question whether                                                               
SB  293 was  a proactive  bill or  addressed current  problem, he                                                               
reported  that  Ed  Sniffen,  Assistant  Attorney  General,  said                                                               
identity  theft as  a result  of  radio frequency  identification                                                               
(RFID)  would  be difficult  to  prove,  but  he thought  it  had                                                               
probably  already happened.  Senator Bunde's  second concern  was                                                               
how  SB  293 would  affect  the  use  of federal  documents  like                                                               
passports.  Mr. Fulton  said Legal  Services decided  it wouldn't                                                               
affect federal  regulations regarding  those types  of documents,                                                               
but the  CS excludes passports and  other government-issue travel                                                               
documents.                                                                                                                      
                                                                                                                                
A third question  came up through public  testimony about whether                                                               
similar laws exist  in other states. The short answer  is no, but                                                               
RFID has only been on the  public radar for the last three years.                                                               
It surfaced in 2005 and since  then 50 pieces of legislation have                                                               
been introduced in 27 states about it.                                                                                          
                                                                                                                                
SENATOR BUNDE said that addressed his concerns.                                                                                 
                                                                                                                                
SENATOR ELLIS asked Mr. Fulton to go through the CS.                                                                            
                                                                                                                                
1:41:55 PM                                                                                                                    
MR.  FULTON  said  that  after   discussions  with  the  Attorney                                                               
General's  office,  the  bill  drafter,  the  Electronic  Privacy                                                               
Information  Center   and  Dr.  Oliver  Hedgecut,   Professor  of                                                               
Logistics  at  UAA,  the  sponsor   decided  to  incorporate  the                                                               
following changes into  the draft CS. The first change  is in the                                                               
title that adds  violations of this act to a  long list of unfair                                                               
trade practices already in statute.                                                                                             
                                                                                                                                
The second  change is  on page  1, line  7, and  deletes "active"                                                               
that was  used in the  RFID industry as  a very specific  term to                                                               
differentiate between  an active RFID  device and a  passive one.                                                               
It  wasn't used  in  that sense  and they  didn't  want to  cause                                                               
confusion so it was deleted. The  third change is on page 1, line                                                               
10,  and  a couple  of  other  places and  replaces  "universally                                                               
accepted   symbol"  with   "industry   recognized  symbol".   The                                                               
reasoning  is there  is no  "universally  acceptable symbol"  out                                                               
there   and  several   different  industries   use  the   symbols                                                               
differently.  They  also  wanted  to accommodate  those  who  are                                                               
already willingly labeling their products  with some sort of RFID                                                               
symbol.                                                                                                                         
                                                                                                                                
On page  2, lines  16-31, a paragraph  was deleted  that required                                                               
consumers to pay costs associated  with the deactivation of RFID.                                                               
It was  thought putting that  burden on the  consumer's shoulders                                                               
was unreasonable.  A new paragraph  says "a provider  must delete                                                               
any  personal information  on a  reactivated  RFID." They  didn't                                                               
want   to  discourage   reuse  of   the  devices,   but  personal                                                               
information had to be purged first.                                                                                             
                                                                                                                                
The fifth  change was on page  3, line 1, that  replaced "coerce"                                                               
and "coercion" with "require" and  "requirement". "Coercion" is a                                                               
stronger term and  more open to interpretation,  which could make                                                               
proving a  violation of this  section more difficult. On  page 3,                                                               
lines 15-16, "remote" was deleted  because it is superfluous; all                                                               
RFID devices scan and read remotely.                                                                                            
                                                                                                                                
On page  4, lines  12-14, the  "Enforcement" section  was deleted                                                               
because when  this was added  to the Unfair Trade  Practices Act,                                                               
there   was  no   longer  any   need  to   specifically  identify                                                               
enforcement  procedures. A  new section  was added  in its  place                                                               
entitled  "Exemption"   which  is   where  passports   and  other                                                               
international travel  documents were  exempted. On page  4, lines                                                               
16-18,  the definition  of "active"  was deleted  and definitions                                                               
for "activate" and "activated" were inserted.                                                                                   
                                                                                                                                
1:47:48 PM                                                                                                                    
This next  section had  the most  substantive change,  Mr. Fulton                                                               
said.  On  page 4,  lines  28-29,  "that transmits,  receives  or                                                               
stores  personal  information"  was   added  after  "item".  This                                                               
language narrows the focus of the  bill only to RFID devices that                                                               
transmit,  receive  or   store  personal  information.  "Personal                                                               
information"  is  defined to  include  the  types of  items  that                                                               
consumers tend  to be  most sensitive about  (listed on  page 5).                                                               
They  didn't   want  to  unnecessarily   burden  all   the  other                                                               
industries,  particularly  supply  chain  management  and  retail                                                               
industries that use RFIDs quite a bit.                                                                                          
                                                                                                                                
The final change in  the CS is on page 6, lines  2-3, where a new                                                               
section was inserted  entitled "Section 2" that adds  this act to                                                               
the list of Unfair Trade Practices.                                                                                             
                                                                                                                                
1:49:07 PM                                                                                                                    
CHAIR ELLIS asked if all concerns had been addressed.                                                                           
                                                                                                                                
MR. FULTON replied yes.                                                                                                         
                                                                                                                                
DR.  OLIVER  HEDGECUT,  Professor  of  Logistics,  University  of                                                               
Alaska Anchorage,  supported SB 160.  He stated that  Alaska does                                                               
lead in this  area and started its RFID research  at UAA with the                                                               
military. "For  that very  reason we  are a  good Petrie  dish to                                                               
experiment with, not only technology,  but with laws and I'm very                                                               
proud  to be  Alaskan  and see  that we  are  talking about  this                                                               
today." He approved of the suggested changes.                                                                                   
                                                                                                                                
ED  SNIFFEN,   Assistant  Attorney  General,  said   making  data                                                               
protection  and privacy  a violation  of the  Consumer Protection                                                               
Act was a good move.                                                                                                            
                                                                                                                                
SENATOR ELLIS  said he supported  narrowing the bill  to personal                                                               
privacy.                                                                                                                        
                                                                                                                                
1:52:37 PM                                                                                                                    
SENATOR  STEVENS  moved  to  adopt  CSSB  293(L&C),  version  25-                                                               
LS1509\C. There were no objections and it was so ordered.                                                                       
                                                                                                                                
1:53:02 PM                                                                                                                    
SENATOR  STEVENS moved  to report  CSSB  293(L&C) from  committee                                                               
with individual recommendations and  attached fiscal notes. There                                                               
were no objections and it was so ordered.                                                                                       

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