Legislature(2011 - 2012)BELTZ 105 (TSBldg)

03/15/2011 02:00 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Note: Meeting Times Have Changed --
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved SB 81 Out of Committee
                SB  40-USE OF RECORDED MESSAGES                                                                             
CHAIR EGAN announced SB 40 to be up for consideration.                                                                          
SENATOR PASKVAN moved  to bring CSSB 40(  ), labeled 27-LS0374\I,                                                               
before the committee.                                                                                                           
CHAIR EGAN objected for discussion purposes.                                                                                    
SENATOR MEYER, sponsor of SB  40, said [version I] would prohibit                                                               
some  kinds   of  "robocalls."  Several  constituents,   and  one                                                               
neighbor  in particular  complained  to him  about the  excessive                                                               
number of  robocalls they had  received during the  last election                                                               
process,  and  he  said  you  have  to  agree  that  these  calls                                                               
interrupt  the  tranquility  of  people's  homes.  SB  40  limits                                                               
robocalls but doesn't  prohibit all of them - just  the ones that                                                               
offer goods  or services for  things like refinancing  a mortgage                                                               
or getting a cheaper insurance  rate. It prohibits gathering data                                                               
or promoting a political campaign.                                                                                              
Should  SB  40  pass,  a   person  receiving  the  call  can  get                                                               
information on  something that has  been purchased;  for instance                                                               
its availability  and delivery schedule.  A robocall  could still                                                               
be used  if the caller initiated  an inquiry or needs  to receive                                                               
public  safety information  - like  a  school district  notifying                                                               
people  of a  snow  day. This  bill would  allow  people to  make                                                               
robocalls as long as the  person obtains permission of the called                                                               
party by  a live  operator before the  recorded message  is made.                                                               
The  last portion  of the  bill imposes  a penalty.  Other states                                                               
vary from  a fine of  $500 in Indiana to  $1500 in Montana  to 30                                                               
days  in jail  in  North  Carolina. Some  states  have done  this                                                               
successfully;  Wyoming  and Arkansas  don't  allow  them at  all.                                                               
About a dozen states have passed bills similar to this one.                                                                     
SENATOR MEYER  pointed out  that one  can filter  unwanted e-mail                                                               
advertisements, but for some reason  the phone companies have not                                                               
allowed filters  to be  set up to  filter unwanted  robocalls. He                                                               
said that  the election process  should be a time  of excitement,                                                               
civil  debate and  positive encouragement  to get  out and  vote.                                                               
Instead, people are  annoyed and while they may  not prevent them                                                               
from voting, these calls leave "a  bad taste in their mouth about                                                               
the whole election process."                                                                                                    
2:20:44 PM                                                                                                                    
SEAN  DAKIN, CEO  and founder,  Citizens for  Civil Discourse,  a                                                               
non-profit  organization, Washington,  D.C.,  said  they run  the                                                               
National Do  Not Call Registry. He  said voters on both  sides of                                                               
the aisle  and those in-between  are impacted by this  issue, and                                                               
while they don't support specific  legislative remedies, they are                                                               
very  encouraged by  SB 40.  These calls  are annoying,  but they                                                               
also can have a  big impact. A young mother wrote  that she has a                                                               
one-year old daughter,  and the phone rings when she  puts her to                                                               
bed, the worst  possible time. Another e-mail came  from a person                                                               
whose  Mom had  a stroke  and  doesn't understand  that they  are                                                               
automated  calls. They  have received  many e-mails  from seniors                                                               
who live in fear of  a health emergency occurring while robocalls                                                               
come in  and not being able  to call their doctor  as their phone                                                               
line is  tied up. The  attorney general from North  Carolina once                                                               
testified  that an  entire phone  system in  a hospital  was shut                                                               
down by  political robocalls because the  computer system decided                                                               
to call every single phone line there.                                                                                          
2:23:41 PM                                                                                                                    
MR.  DAKIN said  it's a  huge problem  nationally as  well as  in                                                               
Alaska. In  2006, according to the  non-partisan, non-profit, Pew                                                               
Research Center, nearly two-thirds  of registered voters received                                                               
calls;  that's approximately  90  million voters.  In 2007,  they                                                               
followed  up  and  found  a   clear  escalation  in  the  use  of                                                               
robocalls. In Iowa,  81 percent of voters  received robocalls; in                                                               
New Hampshire and South Carolina,  the percentages were 68 and 40                                                               
percent  respectively. His  members represent  a fraction  of the                                                               
millions of voters who receive  hundreds of millions of robocalls                                                               
each election cycle.                                                                                                            
MR.  DAKIN quoted  others  of their  200,000  members around  the                                                               
country who have  been harassed and get woken  up consistently by                                                               
either automated  or in-person calls  for political  reasons. One                                                               
was  from a  person who  couldn't be  reached by  someone in  the                                                               
hospital because  his phone was  busy with calls; another  from a                                                               
gentleman who worked at night and  received five to seven calls a                                                               
day asking him for  his vote while he was trying  to sleep and he                                                               
is worried about losing his job because of it.                                                                                  
Of course, automated  phone messages are annoying,  he said. It's                                                               
phone  harassment, and  being automated  you can't  tell them  to                                                               
stop calling. The  caller ID reads zeros and you  can't call them                                                               
back.  He has  rarely met  anyone who  likes receiving  robocalls                                                               
unless it happens to be a robocall vendor.                                                                                      
SENATOR PASKVAN asked  if the Do Not Call Registry  is a national                                                               
registry, so someone could call  from Alaska and effectively keep                                                               
their number from being used by national robocalls.                                                                             
MR. DAKIN  replied that  the Federal  Do Not  Call Registry  is a                                                               
national   registry    and   you   get   there    by   going   to                                                               
"donotcall.gov;". Registering prevents  commercial robocalls from                                                               
calling citizens.                                                                                                               
2:27:20 PM                                                                                                                    
SENATOR PASKVAN asked  if someone in Alaska  calls that registry,                                                               
will that solve this problem.                                                                                                   
MR.  DAKIN  replied it  only  solves  the  problem if  this  bill                                                               
passes.  The  federal   legislation  specifically  exempts  three                                                               
categories of  calls: market research, non-profit  and charitable                                                               
and political  calls. That  is why  there are  a number  of state                                                               
regulations, and this would be in addition to that.                                                                             
SENATOR PASKVAN asked if SB 40  applies to calls from outside the                                                               
state as well as from within.                                                                                                   
MR.  DAKAN replied  that he  isn't a  lawyer, but  a similar  law                                                               
exists in Indiana  that has successfully stopped  inter and intra                                                               
state robocalls;  it makes no  difference if they  are political,                                                               
commercial  or  charitable. He  didn't  know  the specific  legal                                                               
2:29:21 PM                                                                                                                    
SENATOR MENARD said when she was  on the school board there was a                                                               
lot of controversy  over robocalls and asked if  the Matsu school                                                               
district  could still  put  out  a call  that  a  dance has  been                                                               
cancelled or the weather is too bad.                                                                                            
SENATOR MEYER answered that is correct.                                                                                         
SENATOR MENARD congratulated him for bringing this bill forward.                                                                
SENATOR GIESSEL asked who gets fined.                                                                                           
SENATOR MEYER  answered whoever is  making the call  or whoever's                                                               
name is getting advertised.                                                                                                     
SENATOR GIESSEL  asked if the  company making those calls  is out                                                               
of state, would Alaska level fines across state lines.                                                                          
SENATOR  MEYER  replied that  fine  would  be levied  on  whoever                                                               
authorized the call,  himself for instance. So,  whoever is hired                                                               
to do it should know it's against  the law in Alaska, but if they                                                               
are still willing to do it, he would be the responsible one.                                                                    
SENATOR GIESSEL  asked if  this would  also cover  automated text                                                               
SENATOR MEYER answered no, but they  would be coming soon to cell                                                               
phones and texting.                                                                                                             
2:32:07 PM                                                                                                                    
CHAIR EGAN asked him to explain  the differences in the version I                                                               
CHRISTINE MARASIGAN,  staff to Senator Meyer,  explained that the                                                               
version  I  committee  substitute  has three  main  changes  from                                                               
version M. The  first and second changes are  because the drafter                                                               
found  that  a  section  was  repealed in  2004  and  things  got                                                               
renumbered. So, the applicable sections  2 and 3 (lines 12-24 and                                                               
lines  26-30 on  page  2, respectively)  that  referred to  those                                                               
numbers had to be changed.  The third, and substantive, change is                                                               
the addition of a  penalty on page 3, line 15,  and for this they                                                               
looked at what other states do.                                                                                                 
2:34:01 PM                                                                                                                    
CHAIR EGAN asked if the $500 fine is per call.                                                                                  
SENATOR  MEYER  replied  his  intent  is  to  apply  it  to  each                                                               
occurrence.  One robocall  made a  thousand times  would get  the                                                               
$500 fine.  He said they  started with  the minimum of  $500, but                                                               
the committee could change that.                                                                                                
CHAIR EGAN stated that paying a  $500 fine would be a small price                                                               
to pay for making a state-wide robocall.                                                                                        
MS. MARASIGAN said the penalty  seems miniscule in looking at the                                                               
number  of companies  that make  these calls.  She had  asked the                                                               
drafter what  kind of  penalty there is  if this  section weren't                                                               
put in and was told that all  a person could do would be complain                                                               
to the attorney general (AG).                                                                                                   
2:36:44 PM                                                                                                                    
SENATOR MENARD said she thought the fine should be more.                                                                        
SENATOR MEYER replied  they thought long and hard  about the size                                                               
of the fine.  If you're running a campaign, it  would be breaking                                                               
the  law, and  he didn't  think anyone  would want  to be  caught                                                               
doing that while campaigning.                                                                                                   
2:39:21 PM                                                                                                                    
BRIAN  KANE,  Legislative  Legal  Attorney,  Legislative  Affairs                                                               
Agency, Alaska  State Legislature,  explained that  currently the                                                               
applicable statute, AS 45.54.075(a)(1)(2)(3),  has no fine. There                                                               
is a possibility  for an attorney general's  investigation and an                                                               
option for civil  penalties if a private person  brings an action                                                               
against the person making the  prohibited calls, but no automatic                                                               
SENATOR PASKVAN asked  if a violation of (a)(4)  [lines 1-4, page                                                               
2], includes those penalties plus the potential of a $500 fine.                                                                 
MR. KANE replied  that it is in addition to  "any other penalties                                                               
provided by the chapter."                                                                                                       
2:41:30 PM                                                                                                                    
CYNTHIA DRINKWATER,  Consumer Protection Division,  Department of                                                               
Law (DOL), Juneau, AK, said  her understanding of how the penalty                                                               
provision  in subsections  (a)(1)(2)(3) of  SB 40  would work  is                                                               
that it would apply to the  Consumer Protection Act (CPA). And if                                                               
the AG brought a lawsuit, they  could obtain a minimum penalty of                                                               
$1000 up  to $25,000 per  violation. The  CPA also has  a private                                                               
right of  action and that  would allow private parties  to obtain                                                               
treble damages or $500, whichever is greater, per violation.                                                                    
SENATOR PASKVAN asked  what type of enforcement has  been made in                                                               
the last six years relative to those sections.                                                                                  
MS.  DRINKWATER replied  that  the DOL  gets  about 400  consumer                                                               
complaints  per year.  Typically,  they send  a  letter with  the                                                               
complaint to the business or  industry the complaint is about and                                                               
ask  for their  response.  Once the  response  is received,  they                                                               
evaluate  whether or  not a  violation  has occurred  or if  more                                                               
information  is  needed  before making  that  determination.  The                                                               
department looks  for patterns or  practices of  illegal conduct,                                                               
because they  can't access private  attorneys for  all complaints                                                               
and they  can't even investigate  every complaint that  they get.                                                               
They  get a  fair number  of telemarketing  complaints. It  seems                                                               
like most of them have focused  on the auto warranty industry and                                                               
the debt settlement  industry (where people are  offered to lower                                                               
their interest rates by signing  up for a debt settlement). Those                                                               
complaints  have fallen  off  a  little in  the  last few  years,                                                               
because  the   FCC  has  started  to   aggressively  enforce  the                                                               
applicable federal law, but that  doesn't pertain to political or                                                               
charitable calls.                                                                                                               
2:46:50 PM                                                                                                                    
SENATOR  PASKVAN  asked  if   Alaska's  Consumer  Protection  Act                                                               
applies to political campaign messages.                                                                                         
MS. DRINKWATER answered no.                                                                                                     
SENATOR GIESSEL said  the language in SB 40 refers  to a "person"                                                               
who  violates  this  law,  and  asked  if  that  would  apply  to                                                               
organizations as well.                                                                                                          
SENATOR MEYER answered yes.                                                                                                     
SENATOR GIESSEL commented that  these are sometimes multi-million                                                               
dollar  organizations,  and this  fine  would  be negligible  for                                                               
2:48:29 PM                                                                                                                    
JOELLE HALL, Political  Director, Alaska AFL-CIO, asked  if SB 40                                                               
envisions covering  robocalls originated by membership  groups to                                                               
their membership on political issues.                                                                                           
MS. MARASIGAN replied  no. It says specifically that  a person is                                                               
not  liable for  a  violation of  this section  if  they use  the                                                               
robocalls  for   "(A)  informing   purchasers  of   the  receipt,                                                               
availability for delivery, delay  in delivery, or other pertinent                                                               
information on the status of  any purchased goods or services" on                                                               
page 3  (h). She explained that  to her, that means  a membership                                                               
organization whose  members pay a  fee could provide  services to                                                               
their group.                                                                                                                    
MS. HALL said  she wants to make sure their  right to communicate                                                               
with their  members, whether  it's through a  robocall or  a live                                                               
call or  through the  mail, is  protected. Other  advocacy groups                                                               
and  potentially political  parties  will have  gone through  the                                                               
work of collecting  the phone numbers and have a  donor pool, and                                                               
have  basically opted  in. She  asked  that language  on page  3,                                                               
(h)(1)(a) be more explicit about  the rights of membership groups                                                               
who  use  this method  to  communicate  with their  members.  She                                                               
wanted it  clear to  the public that  membership groups  would be                                                               
empowered  to  use  robocalls  to  dispense  or  share  political                                                               
2:52:08 PM                                                                                                                    
SENATOR MEYER said it is his  intent that groups can do robocalls                                                               
within their memberships.                                                                                                       
2:53:00 PM                                                                                                                    
JEFFRY  MITTMAN, American  Civil Liberties  Union (ACLU)  Alaska,                                                               
said  the   ACLU,  with  respect  to   any  constitutional  civil                                                               
liberties  issues, doesn't  take a  position with  regard to  the                                                               
substance  of the  bill, but  is working  with the  sponsor on  a                                                               
minor  technical issue  on  page 2,  lines  3-11(e). Because  the                                                               
First Amendment generally provides  fairly robust protections for                                                               
political  speech  and because  of  the  way the  legislation  is                                                               
currently drafted,  it specifically includes political  speech as                                                               
a prohibited communication. They  recommend deleting the language                                                               
on lines  3-11 on page 2,  so the bill would  essentially ban all                                                               
robo-communications   and    exempt   things    like   membership                                                               
organizations, public safety announcements, etc.                                                                                
CHAIR EGAN said he had to  leave the meeting and handed the gavel                                                               
to Vice-Chair Paskvan to continue.                                                                                              
2:55:23 PM                                                                                                                    
RANDY RUEDRICH,  representing himself  and the  Alaska Republican                                                               
Party, said  that the characterization  of automated  calls being                                                               
offensive is  highly overstated. He  has gathered data  for years                                                               
on  these  types of  calls  and  found  that  in some  cases  the                                                               
principle  complaint  was,  "I wish  the  individual  would  have                                                               
called me personally." and that  others were simply ill-timed and                                                               
a result  of "poor management."  Calls made to Alaskans  before 6                                                               
in the  morning generate more activity.  He said this is  a great                                                               
device  for  communicating  with   citizens,  and  he  wanted  to                                                               
encourage  anyone  using  these  calls  to  make  them  succinct,                                                               
meaningful, targeted, and timely.                                                                                               
2:59:14 PM                                                                                                                    
VICE-CHIAR PASKVAN  closed public testimony  and held CSSB  40 in                                                               
committee.  Finding  no  further  business  to  come  before  the                                                               
committee, he adjourned the meeting at 2:59 p.m.                                                                                

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