Legislature(1995 - 1996)

02/12/1996 01:08 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               HOUSE JUDICIARY STANDING COMMITTEE                              
                       February 12, 1996                                       
                            1:08 p.m                                           
 MEMBERS PRESENT                                                               
 Representative Brian Porter, Chairman                                         
 Representative Con Bunde                                                      
 Representative Bettye Davis                                                   
 Representative Al Vezey                                                       
 Representative Cynthia Toohey                                                 
 Representative David Finkelstein                                              
 MEMBERS ABSENT                                                                
 Representative Joe Green, Vice Chairman                                       
 COMMITTEE CALENDAR                                                            
 HOUSE BILL NO. 109                                                            
 "An Act relating to telephone directory listings and                          
      - HEARD AND HELD                                                         
 PREVIOUS ACTION                                                               
 BILL:  HB 109                                                               
 SPONSOR(S): REPRESENTATIVE(S) BROWN, Navarre, B.Davis                         
 JRN-DATE     JRN-PG                  ACTION                                   
 01/23/95       115    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/23/95       116    (H)   LABOR & COMMERCE, JUDICIARY                       
 01/26/95       148    (H)   COSPONSOR(S): B.DAVIS                             
 04/28/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/28/95              (H)   MINUTE(L&C)                                       
 05/01/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 05/01/95              (H)   MINUTE(L&C)                                       
 05/04/95      1849    (H)   L&C RPT  CS(L&C) 5DP 2NR                          
 05/04/95      1849    (H)   DP: KOTT, ROKEBERG, KUBINA, PORTER                
 05/04/95      1849    (H)   DP: ELTON                                         
 05/04/95      1849    (H)   NR: MASEK, SANDERS                                
 05/04/95      1849    (H)   ZERO FISCAL NOTE (DCED)                           
 02/12/96              (H)   JUD AT 01:00 PM CAPITOL 120                       
 WITNESS REGISTER                                                              
 REPRESENTATIVE KAY BROWN                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 517                                                    
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-4419                                                    
 POSITION STATEMENT:  Sponsor of HB 109.                                       
 ACTION NARRATIVE                                                              
 TAPE 96-19, SIDE A                                                            
 CHAIRMAN BRIAN PORTER called the House Judiciary meeting to order             
 at 1:08 p.m.  Members present at the call to order were                       
 Representatives Bettye Davis, Finkelstein, Vezey, Porter, Bunde and           
 Toohey.  Representative Green was absent.                                     
 Number 090                                                                    
 CHAIRMAN PORTER announced the committee would hear HB 109, "An Act            
 relating to telephone directory listings and solicitations."                  
 REPRESENTATIVE KAY BROWN, sponsor of HB 109, stated she first                 
 introduced this bill in 1993.  She noted in the committee member's            
 packets, there was a proposed committee substitute (CS) which                 
 incorporates some minor changes suggested by Senator Rieger.  She             
 noted that Senator Rieger had introduced a companion bill in the              
 REPRESENTATIVE BROWN explained HB 109 would give consumers the                
 opportunity to avoid intrusive, irritating, unwanted telephone                
 solicitations.  This is a totally voluntary program and would give            
 consumers the opportunity to purchase a marking in the phone book             
 which would identify them as someone who didn't wish to receive               
 commercial solicitations.  The intent is to discourage calls to               
 those people who don't wish to be called.  Representative Brown               
 said she believes this is truly a win, win situation, because                 
 telemarketers, under this program, will be able to eliminate from             
 their calling data base those people who don't intend to buy                  
 products via telephone and who don't wish to be disturbed, thereby,           
 giving them a better list to call from.                                       
 REPRESENTATIVE BROWN explained there are exceptions in the bill               
 noted as to which types of calls do not fall within this                      
 legislation beginning on page 2, line 21 of the work draft.                   
 Representative Brown said that if a business calls someone who                
 purchased this marking in the phone book, they could be penalized             
 under the Unfair Trade Practices Act.  If there were a sufficient             
 number of these calls, the attorney general would bring suit                  
 against that company.  This legislation allows for a $5,000 fine              
 per violation.  The underlying bases for this is to try to protect            
 people's privacy.  The Alaska constitution does direct the                    
 legislature to be proactive in protecting people's privacy.                   
 REPRESENTATIVE BROWN stated that in 1991, there was legislation               
 enacted at the federal level, the Telephone Consumer Protection               
 Act.  She said she felt HB 109 is still needed even though there is           
 this federal law.  She said in many respects, the federal law                 
 doesn't really get to the point.  What it does is requires each and           
 every company to keep a separate "Do not call" list.  The consumer            
 would have to put up with presumably every telemarketing outfit and           
 every separate commercial enterprise that wishes to market by                 
 telephone contacting them.  There is no blanket way, currently, for           
 a consumer to remove themselves in the way that is provided in HB             
 REPRESENTATIVE BROWN referred to discussions with the Consumer                
 Protection Division in the Department of Law and said they are                
 currently pursuing a case under the registration portion of Alaska            
 law, in which a couple of years ago there was a bill passed that              
 required telemarketers to register with the state.  She explained             
 HB 109 is in no way intended to affect that registration                      
 REPRESENTATIVE BROWN referred to a letter from ATU                            
 Telecommunications which the committee members had before them and            
 said she would like to disclose that her husband is a lobbyist for            
 ATU Telecommunications.  She informed the committee that she had              
 not consulted with him or with ATU Telecommunications previously              
 about this matter.  Representative Brown explained that the letter            
 states ATU doesn't agree with the premise of this bill.  They felt            
 it would be an extremely costly process to accomplish.                        
 Representative Brown said in Oregon, which passed similar                     
 legislation in 1989, the costs that they charge consumers is about            
 25 cents per month to purchase this service.  The way it's                    
 envisioned is the telephone company would be able to charge                   
 whatever is necessary to recover their cost in providing this                 
 service and that would be approved by the Alaska Public Utilities             
 Commission (APUC).  The consumer could choose to purchase it or not           
 purchase it.                                                                  
 REPRESENTATIVE BROWN then read from the letter, "The committee                
 should also be aware that few telephone solicitation firms get                
 their numbers from the telephone directory."  She said she is sure            
 that most firms get the numbers from other sources, but the bill              
 does provide that this information would be provided in a computer            
 format.  She pointed out that what they're asking is, that those              
 telemarketing firms use the power of the computer to run names in             
 the local area against their list and eliminate those people who              
 don't wish to be called.  She said it's really not an issue that              
 people are not getting their solicitations directly from the                  
 telephone directory.                                                          
 REPRESENTATIVE BROWN continued to read from the letter,                       
 "Additionally, the customer database changes rapidly throughout the           
 year and it would also be inaccurate after a relatively short                 
 period of time."  She said the way HB 109 is written, is that it              
 allows for a person would be in violation if they call someone who            
 is identified in the directory.  Representative Brown said she                
 believes it would be feasible and appropriate to have an opening              
 for this service, like a window when people can sign up or not sign           
 up.  Then the directory would go to press and this would be in                
 effect until the next one was published.  She said she doesn't                
 envision a contemporaneous situation where someone could sign up at           
 any time and become immediately effective.                                    
 REPRESENTATIVE BROWN explained one of the amendments that had been            
 made in the Senate is of concern to her.  The Senate adopted an               
 amendment in committee that dealt with the phone number 411, where            
 someone could call directory assistance and find out if somebody is           
 on the exemption list or not.  This would imply a contemporaneous             
 note that she didn't think was a good idea.  She believed it would            
 be least costly and easiest to administer if they incorporated a              
 yearly sign up.  They would open the opportunity for membership               
 before the directory is published, close it and then it would be in           
 effect until the next opening.                                                
 REPRESENTATIVE BROWN said she believes the telephone companies are            
 totally protected.  In the early stages on hearings regarding HB              
 109, there were some objections.  She stated that she worked with             
 GCI and incorporated some amendments into the bills prior versions.           
 Representative Brown said the bill gives the phone companies the              
 ability to recover whatever costs they incur by providing the                 
 REPRESENTATIVE BROWN said one other question that has come up that            
 she wanted to address was, "What are charities?"  Charities are one           
 of the exempted groups.  In consulting with legal counsel, they               
 decided that one approach would be to outline that charities are              
 groups who have tax exempt status or are those charities under the            
 501C3 provision.  Representative Brown said she believed the                  
 committee should have a highlighted version of the bill before them           
 with words to be added accordingly, in the proposed committee                 
 Number 734                                                                    
 REPRESENTATIVE CON BUNDE said, agreeing with the premise that it              
 would be advantageous to a business to not call people who would be           
 upset with the call, but why not include charities?  People who               
 get unsolicited calls, whether they be for a commercial product or            
 a charity, could have the same level of irritation.  Some people              
 would appreciate not being called period.                                     
 Number 770                                                                    
 REPRESENTATIVE BROWN said that was a good point.  She said she                
 thinks anyone soliciting on behalf of a charity would certainly be            
 well advised to pay attention to the markings.  The federal law               
 does exempt charities in this manner.  Representative Brown said              
 she doesn't want to regulate these telephone calls so tightly that            
 the telephone becomes extinct as a means of communication.  By                
 recognizing charities as a different category from commercial                 
 enterprises, she felt it was appropriate to give them that                    
 Number 815                                                                    
 REPRESENTATIVE CYNTHIA TOOHEY asked if fishing license lists are              
 given to anybody that wants them.  CHAIRMAN PORTER said within the            
 qualification of residency they are.  Representative Toohey                   
 suggested adding to fishing licenses, "No unsolicited calls."                 
 Chairman Porter said he understands what Representative Toohey was            
 saying, but the bill should have a single subject rule.                       
 Number 859                                                                    
 REPRESENTATIVE AL VEZEY referred to his experience with                       
 telemarketing and said if they took out charitable organizations,             
 they're getting down to an insignificant number of phone calls.  He           
 said he doesn't really think the public would support cutting off             
 this method of fund raising for charitable organizations.                     
 Representative Vezey asked what the problem was with hanging up if            
 someone receives an unwanted phone call.                                      
 REPRESENTATIVE BROWN said this was always an option and that is how           
 people currently handle this problem.  She referred to articles in            
 the national press which indicate that there is an increasing                 
 reliance on this method of solicitation.  Representative Brown said           
 she became interested in this issue because she personally doesn't            
 like to receive these kinds of calls.  She also got involved as a             
 result of interactions with constituents who wish not receive these           
 calls as well.  Many people would like to have this option.  This             
 legislation would be a balance between a private unlisted number              
 and a public number.  Currently if someone truly doesn't want to be           
 bothered with calls, they can get an unlisted number and pay extra            
 for that service.  This is a way to maintain a public number, but             
 screen out some level of intrusion into your home.                            
 Number 986                                                                    
 REPRESENTATIVE BUNDE said from personal experience, a majority of             
 unsolicited business calls he receives are national in origin.  He            
 asked if this bill would have an effect on that.  REPRESENTATIVE              
 BROWN indicated it would.  These companies would be obligated to              
 obtain this list and use it to screen the calls that they're                  
 making.  REPRESENTATIVE Bunde referred to companies getting random            
 lists and said if they get a computer list from wherever they get             
 it, he asked if it would be flagged.  Representative Brown said her           
 belief is they will be able to get a computer readable list of                
 people who do not wish to be called.  They can then match it                  
 against the list they're calling from and eliminate those people              
 who do not wish to be called.                                                 
 Number 1065                                                                   
 CHAIRMAN PORTER said there is nothing in the bill that requires a             
 telephone company to generate this computer list, that would be the           
 expectation for meeting these requirements.                                   
 REPRESENTATIVE BROWN referred to page 2, line 6, "If possible and             
 if requested by the person who engages in telephone solicitation,             
 this list shall be provided in computer readable format."  She said           
 it is her belief that telephone directories today are almost                  
 universally created in electronic format.  This information should            
 be accessible in electronic format to the telephone companies                 
 without a huge amount of expense.  The technology definitely exists           
 for those lists to be matched and eliminate those people from the             
 call list that the solicitors would be using, between those people            
 who do not wish to be called.                                                 
 Number 1145                                                                   
 CHAIRMAN PORTER indicated he had concern about the charities.  He             
 said if they're going to do this they ought to do it and not just             
 go halfway.  He referred to the language related to charities and             
 said that charities weren't given a total exception to the                    
 requirement of finding out who doesn't wish to be solicited, but              
 they may solicit regardless of this designation only for those                
 people are members of their charity or have previously given.                 
 Number 1196                                                                   
 REPRESENTATIVE DAVID FINKELSTEIN said that these folks just can't             
 be regulated because they actually have a relationship with the               
 charity.  They're a member or a donor.                                        
 CHAIRMAN PORTER said that they certainly can regulate it because              
 they'll regulate this particular method of solicitation.                      
 REPRESENTATIVE FINKELSTEIN said that in the area of narrowing it              
 down to what is the most legitimate or most appropriate, it seems             
 that this example is one that is closest to someone who has a tie             
 to the organization.  They got the name through their own method.             
 CHAIRMAN PORTER asked if this would mean if he gave to the United             
 Way and designated it to go to the Salvation Army, that it gives              
 the Salvation Army the ability to harangue his telephone when he              
 has said he doesn't want to be called.  He said he thinks it does             
 and that wouldn't make him happy.                                             
 Number 1257                                                                   
 REPRESENTATIVE BROWN said she agreed with the way Chairman Porter             
 stated his interpretation of it.  She referred to the language on             
 page 2, line 25, and said telephone solicitation does not include,            
 calls made by a charitable organization, a public agency, or                  
 volunteers on behalf of them to members of the organization or                
 agency or people who have previously made a donation or expressed             
 an interest in making a donation.  She said she didn't believe she            
 had stated this correctly earlier when she said charitable                    
 organizations were exempted.  These charities would not be in                 
 violation if they solicited their own members or people who have              
 expressed some interest, but they wouldn't be able to do the "cold            
 Number 1297                                                                   
 CHAIRMAN PORTER referred to the situation he previously mentioned             
 and said that then they would be able to call him.  He stressed               
 again the example he had used when expressing an interest in their            
 charity because he designated them in his United Way contribution.            
 REPRESENTATIVE BROWN said she would agree with this interpretation.           
 REPRESENTATIVE FINKELSTEIN said he had some concerns about how far            
 they were going here.  He said that there are situations where it             
 is appropriate for charities to be calling their own members.                 
 CHAIRMAN PORTER asked Representative Brown if she had considered              
 cell phones or fax machines.                                                  
 REPRESENTATIVE BROWN said she had read about these regulations.               
 She referred to cell phones and said she isn't clear exactly how              
 those would be any different than a regular phone because the                 
 person receiving the call isn't going to know whether its a                   
 cellular phone or some other kind of phone.                                   
 CHAIRMAN PORTER asked if telephone numbers for cell phones are in             
 the phone book.  He said he hadn't seen cell phone numbers in the             
 phone book.                                                                   
 REPRESENTATIVE BUNDE said as he understands the bill, it would be             
 a listing in the phone book and if it says, "Do not solicit,"                 
 whether it's a cell phone, fax, etc., then there should be no                 
 solicitation.  He noted he wasn't aware that cell phone numbers               
 were listed, but noted that someone could probably ask for such a             
 Number 1530                                                                   
 REPRESENTATIVE BROWN said we're talking residential, private                  
 individuals and not that they were business calls.  She said some             
 of the cell phone users she is familiar with have them for the                
 purpose of business.  Representative Brown noted HB 109 does not              
 propose to regulate faxes.  She referred to the provisions in the             
 federal law and said they did place limits on the use of automated            
 facsimile machines.  There is an FCC rule banning unsolicited                 
 advertisements sent via facsimile machine.  No person may transmit            
 an advertisement describing the commercial availability or quality            
 of any property, goods or services to a telephone facsimile machine           
 without prior expressed permission or invitation of the party                 
 receiving the fax.                                                            
 Number 1605                                                                   
 REPRESENTATIVE TOOHEY asked if there was anyway to include in the             
 bill that the telephone books also carry a little stamp, such as a            
 little telephone with a zero and a line through it.  This would               
 indicate no soliciting.  An unidentified speaker informed                     
 Representative Toohey that is what the bill would do.                         
 REPRESENTATIVE BROWN referred to the language on page 1, lines 10             
 and 11, and said these individuals must be identified in the                  
 directory.  She noted she didn't know what symbol they would use,             
 but they must come up with a method to identify people.                       
 Number 1668                                                                   
 REPRESENTATIVE BUNDE referred to the companion bill in the Senate             
 that addressed some other issues and asked if the House CS                    
 incorporates some of these Senate changes.                                    
 REPRESENTATIVE BROWN explained that the work draft before the                 
 committee incorporates the bill as it was introduced by Senator               
 Rieger.  A subsequent committee then made some changes that she               
 isn't in support of.  She said in particular that it was                      
 unnecessary to let people sign up every day of the week for this              
 exemption.  Once a year would be sufficient to make it a program              
 that can be administered without a lot of cost.                               
 Number 1705                                                                   
 CHAIRMAN PORTER asked if it would be beneficial to define "charity"           
 within the bill.  REPRESENTATIVE BROWN said she wouldn't object if            
 the committee wished to define this term.                                     
 CHAIRMAN PORTER said charities should be charities, the people that           
 provide this charitable service as opposed to people who raise                
 money for these people.  He noted something about a "501C3."                  
 Number 1761                                                                   
 REPRESENTATIVE VEZEY informed the committee that a 501C3 is a                 
 nonprofit entity that has tax deductible status with the IRS, not             
 just tax exempt - they have tax deductible status.  There are many            
 charities that do not have tax deductible status and there are many           
 nonprofits that are not tax deductible.                                       
 REPRESENTATIVE BROWN said an organization would know if it                    
 considers itself a charitable organization.                                   
 CHAIRMAN PORTER said the organization would have to file and get              
 that status by the IRS before they would be a charitable                      
 organization.  He said either you are one or you aren't.                      
 CHAIRMAN PORTER referred to the letter from ATU and said the last             
 sentence in the third paragraph says, "That being the case, HB 109            
 would, again, have no impact."  He said as he understands the bill,           
 that this wasn't really an accurate statement.                                
 REPRESENTATIVE BROWN agreed with Chairman Porter.  She said she               
 assumes they don't understand correctly how the bill would work.              
 The bill would have an impact in this situation because it would              
 discourage people from mailing solicitations to people who don't              
 wish to receive them.  That would now be against the law - this is            
 an  unfair trade practice.  She believed that this would have an              
 Number 1860                                                                   
 CHAIRMAN PORTER asked if there was a mechanism for going after the            
 national solicitors who violate this statute.                                 
 REPRESENTATIVE BROWN explained this mechanism would provide for the           
 Department of Law to gather enough complaints to bring a case, just           
 as they did in the case of Distributal when receiving complaints            
 from consumers.  She said she wasn't positive as to whether or not            
 they were national, but that was the method.  She explained that              
 people usually complain to the Attorney General and when there is             
 enough of a case and specific examples, they are able to bring a              
 CHAIRMAN PORTER referred to the interstate nature of this example             
 and asked whether or not there was a bar to limit such cases.                 
 REPRESENTATIVE BROWN said that this bill would create jurisdiction            
 because the national telephone solicitors are operating in the                
 state of Alaska and they must operate under the laws of the state.            
 Number 1912                                                                   
 REPRESENTATIVE VEZEY said the bill needs a lot of work.  He                   
 explained that he doesn't think many, if any, telephone solicitors            
 have gotten his name or phone number from the phone book.                     
 Representative Vezey said he believes companies are using targeted            
 lists such as fishing and hunting licenses, business licenses, and            
 other things that someone puts their phone number on.  These lists            
 aren't included in the bill.  He said he doesn't think anybody                
 could be held liable for using another list that isn't the phone              
 REPRESENTATIVE FINKELSTEIN explained that people rarely have the              
 ability to go and get the information directly from the state.                
 They go to a vendor.  He noted the biggest vender in the state is             
 Bob Mosek's company.  They actually cross these lists with the                
 phone book ahead of time.  So when someone calls and request lists,           
 such as in the form from people's fishing licenses, he said the               
 list has already been crossed and connected to the phone book.                
 Number 2056                                                                   
 CHAIRMAN PORTER said that this was a question that the committee              
 needed to have answered.  He said if he is correct, the emphasis of           
 the legislation is on the out-of-state solicitation network which             
 is most onerous in this area of irritation.                                   
 REPRESENTATIVE BROWN pointed out that if the Department of Law                
 brings suit against a company and says, "You are in violation," and           
 if they're found to be in violation, the remedy is a $5,000 fine              
 per violation.                                                                
 CHAIRMAN PORTER said that this would be the remedy if they are able           
 to get jurisdiction over the defendant, but if they can't get                 
 jurisdiction then this is a problem.  He questioned how they could            
 get jurisdiction over the defendant.                                          
 Number 1224                                                                   
 REPRESENTATIVE VEZEY said he would also like to know what the U.S.            
 Department of Justice's opinion is on this because it reaches into            
 an area which is regulated by the FCC.  He said he was uncertain as           
 to how much regulatory authority they would give a state over an              
 interstate phone call.                                                        
 Number 2130                                                                   
 REPRESENTATIVE BETTYE DAVIS said that this should be an easy answer           
 to get since other states have adopted a similar law.                         
 REPRESENTATIVE BROWN referred to a registration requirement that              
 the legislature passed, which said people who do telephone                    
 solicitation must register under Alaska law.  This provision                  
 reaches beyond the state.  She said by having this law on the books           
 would serve the purpose of jurisdiction.  It puts the burden on the           
 telemarketer to operate in Alaska.                                            
 CHAIRMAN PORTER said he wasn't comfortable with passing this bill             
 out of committee until he had a firm answer to this question.                 
 REPRESENTATIVE BROWN said to her knowledge, there was no                      
 prohibition that kept them from regulating commerce in Alaska in              
 this manner.  The federal government sets a minimum level of                  
 requirement and Alaska can set a greater level if they wish to.               
 CHAIRMAN PORTER said they probably can, but is it enforceable?                
 There is an expectation that if Alaska establishes this law, then             
 the state can do something about these unsolicited phone calls.  He           
 questioned this process.                                                      
 REPRESENTATIVE BROWN said that many of the consumer protection laws           
 would be a lot more enforceable if they had more resources to                 
 enforce them.                                                                 
 CHAIRMAN PORTER said the committee would hear the bill again the              
 following Wednesday at 1:00 p.m.                                              
 CHAIRMAN PORTER adjourned the House Judiciary Committee Meeting at            
 1:50 p.m.                                                                     

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