Legislature(2007 - 2008)BELTZ 211
02/22/2007 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HJR8 | |
| Briefing: Identity Theft | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SJR 2 | TELECONFERENCED | |
| + | HJR 8 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 22, 2007
1:37 p.m.
MEMBERS PRESENT
Senator Johnny Ellis, Chair
Senator Bettye Davis
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Gary Stevens, Vice Chair
Senator Con Bunde
COMMITTEE CALENDAR
CS FOR HOUSE JOINT RESOLUTION NO. 8(L&C) am
Opposing the enactment by the Washington State Legislature of a
bill proposing to impose a fee on the processing of shipping
containers in the State of Washington because of the negative
impact of the fee on the people and the economy of this state.
MOVED CSHJR 8(L&C) am OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 2
Opposing the enactment by the Washington State Legislature of a
bill proposing to impose a fee on the processing of shipping
containers in the State of Washington because of the negative
impact of the fee on the people and the economy of this state.
SCHEDULED BUT NOT HEARD
BRIEFING: IDENTITY THEFT ISSUES
PREVIOUS COMMITTEE ACTION
BILL: HJR 8
SHORT TITLE: WASHINGTON CONTAINER FEE
SPONSOR(s): REPRESENTATIVE(s) THOMAS
02/07/07 (H) READ THE FIRST TIME - REFERRALS
02/07/07 (H) TRA, L&C
02/15/07 (H) TRA AT 1:30 PM CAPITOL 17
02/15/07 (H) Moved CSHJR 8(TRA) Out of Committee
02/15/07 (H) MINUTE(TRA)
02/16/07 (H) L&C AT 3:00 PM CAPITOL 17
02/16/07 (H) <Bill Hearing Rescheduled to 02/19/07>
02/19/07 (H) TRA RPT CS(TRA) 5DP
02/19/07 (H) DP: DOOGAN, JOHNSON, KOHRING, SALMON,
NEUMAN
02/19/07 (H) L&C AT 3:00 PM CAPITOL 17
02/19/07 (H) Moved CSHJR 8(L&C) Out of Committee
02/19/07 (H) MINUTE(L&C)
02/21/07 (H) L&C RPT CS(L&C) 6DP
02/21/07 (H) DP: BUCH, GATTO, RAMRAS, NEUMAN,
LEDOUX, OLSON
02/21/07 (H) TRANSMITTED TO (S)
02/21/07 (H) VERSION: CSHJR 8(L&C) AM
02/21/07 (S) READ THE FIRST TIME - REFERRALS
02/21/07 (S) L&C
02/22/07 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
REPRESENTATIVE BILL THOMAS
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HJR 8.
EVERETT BILLINGSLY
Linden Companies
POSITION STATEMENT: Supported HJR 8.
ED SNIFFEN, Assistant Attorney General
Civil Division
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Presented overview on state identity theft.
GAYLE HILDEBRAND
Consumer's Union
POSITION STATEMENT: Commented on identity theft issues.
PAT LUBY, Advocacy Director
AARP
POSITION STATEMENT: Commented on identity theft issues.
ANN SEACREST
AARP
POSITION STATEMENT: Commented on identity theft issues.
STEVE CLEARY, Executive Director
Alaska Public Interest Research Group (AKPIRG)
POSITION STATEMENT: Commented on identity theft issues.
ACTION NARRATIVE
CHAIR JOHNNY ELLIS called the Senate Labor and Commerce Standing
Committee meeting to order at 1:37:00 PM. Present at the call to
order were Senators Hoffman and Ellis. The chair said that
Senator Davis would arrive momentarily and that the committee
would not be taking up SJR 2.
CSHJR 8(L&C) AM WASHINGTON CONTAINER FEE
CHAIR ELLIS announced CSHJR 8(L&C) AM to be up for
consideration.
REPRESENTATIVE BILL THOMAS, sponsor of HJR 8, related that the
Washington legislature has introduced SB 5207 that proposes to
levy a $50 tax on 20 ft. vans and a $100 tax on 40 ft. vans
leaving from and going into Washington. This will represents a
10 percent increase in freight cost of shipping goods to Alaska
- a $40 million to $50 million increase. He said that 97 percent
of goods that come to Alaska come in container vans from
Washington.
1:40:53 PM
SENATOR DAVIS arrived.
REPRESENTATIVE THOMAS said that the state of Washington is
targeting Japanese and Chinese exports and Alaska freight is
incidental. He hoped to get this resolution through the
legislature in time to keep the bill from being passed in
Washington. His district consists of primarily fishermen and its
related processing facilities, so this would be a
disproportionate increase for them. The cost of moving fuel to
Interior Alaska would increase as well.
He related that Alaska can take credit for about 103,500 jobs in
Washington and brings in about $4 billion worth of products
through its ports.
1:43:28 PM
EVERETT BILLINGSLY, Linden Companies, said he strongly supported
HJR 8. Linden is also actively working with the Washington
legislature to make sure this issue doesn't go anywhere. He said
the goal of the tax was to get money to improve Washington
infrastructure and to tax the large container lines bringing
massive quantities of cargo in to the US from Asia. The impact
on Alaska was an unintended consequence. Alaskans have few
alternatives to using Washington ports and because most
containers return from Alaska empty, the tax will effectively
double on a typical Alaska Marine Lines (AML) container. He said
that last year Linden Transport and AML together moved
approximately 124,000 20-foot containers between Alaska and
Washington. This tax would have resulted in more than $6.2
million in additional costs for shipping customers.
He also mentioned that the sponsor is coordinating this bill
with another one in California and that Hawaii is also
considering similar legislation. Last year it did pass the
California legislature, but Governor Schwarzenegger vetoed it.
He might not be able to do it again.
1:46:42 PM
CHAIR ELLIS closed the public hearing and pointed out a zero
fiscal note and said that no one had come forward with any
amendments.
1:47:22 PM
SENATOR DAVIS moved to pass CSHJR 8(L&C) am from committee with
individual recommendations and zero fiscal note. There were no
objections and it was so ordered.
^BRIEFING: Identity Theft
CHAIR ELLIS announced that the committee would next take up the
hearing on identify theft.
ED SNIFFEN, Assistant Attorney General, Civil Division,
Department of Law (DOL), said his duties include the enforcement
of Alaska consumer protection and anti-trust statutes. He
related background on identity theft issues in Alaska and how
his office deals with them. He said that ID theft is primarily
prosecuted under criminal statutes and, if someone is caught, he
is sent to the Criminal Division for prosecution. Unfortunately,
while Alaska doesn't have many of those, it has a lot of
Alaskans being preyed upon by thieves from outside the state.
But it is difficult to go outside of our borders to catch and
prosecute these situations. A lot of consumers are referred to
the Federal Trade Commission (FTC), which is the federal
authority with the primary responsibility for monitoring and
prosecuting these things on a national level.
In Alaska, identity theft is the number one reported consumer
fraud to the FTC in 2006. An alarming number of people were
victims of identity theft and it will probably get worse.
MR. SNIFFEN suggested the state think about ways to make it
easier for victims to undo the harm that has been done to them
and make it more difficult for identify thieves to get a hold of
the types of personal information they need to have to commit
this crime. He related that Congress has been dealing with
proposed national identity theft legislation, but it hasn't made
a lot of progress. Other states have enacted legislation aimed
at stopping the dissemination of personal information as well.
1:51:35 PM
MR. SNIFFEN acknowledged that a way to identify people is needed
and that historically social security numbers have been used for
that. Protecting those numbers would be a good start to cut down
on identity theft, but another number would need to be used. He
urged people to guard their personal information and to perhaps
help victims by making it a little easier for them to repair
their credit reports.
1:52:40 PM
MR. SNIFFEN offered to answer questions.
CHAIR ELLIS said he appreciated his commitment to consumer
protection over the years and he knows that his department has
been under-funded. He asked what he knew about a large identity
theft ring around North Pole.
MR. SNIFFEN said he didn't know how that had turned out, but
efforts are continuing to help those folks.
CHAIR ELLIS asked about the status of the federal legislation on
this issue.
MR. SNIFFEN replied that he had worked on legislation for
Senator Stevens, but he didn't know what happened to it.
Congress might have a proposal within a couple of years.
1:54:56 PM
GAYLE HILDEBRAND, Consumer's Union, said the Union is a non-
profit organization that publishes consumer reports. Its mission
is to test, inform and protect and she is with the protect part
of the organization. She wanted to share with them information
about the scope and cost of identify theft and to talk about
three approaches in the legislation before them that will help
to reduce it.
She said between 8.4 million and 10 million Americans become
victimized by this crime every year; that's 16 - 19 new victims
every minute. The federal government estimates the cost to
business and consumers to be about $52 billion a year; more
recent industry studies indicate about $49 billion a year. This
doesn't take into account family stress and the social cost.
Recent reports out of Oregon, Washington and Alberta, Canada,
link identity theft to methamphetamine use.
One of the two main types of identity theft and one that is most
difficult to discover is new account fraud, which accounts for
about 30 percent of fraud. It takes about three times longer to
discover and about twice as many hours for the consumer to fix
it. New account fraud involves a real consumer's name, a real
social security number, and a fake address with the thief's
address. It is facilitated by a compromised social security
number and a credit reporting system that will okay people as
good credit risks based on essentially just the name and the
social security number.
The other type of identity theft is existing account identity
theft, sometimes called account takeover. This can range from a
simple unauthorized charge on a person's credit card all the way
up to a stolen debit card number and even draining of bank
accounts.
1:57:04 PM
MS. HILDEBRAND said three approaches can help reduce these forms
of identity theft. The first two are directed to the social
security number and new account frauds. Once a social security
number (SSN) has been stolen, 26 states make it harder to turn
it into cash through a security freeze. This doesn't stop the
stealing of the SSN, but it stops the issuance of new credit,
new cell phone or whatever based on someone pretending to be
you.
She emphasized that the SSN is financial front door for
individuals, but the security freeze is a dead bolt. An
individual can choose to put that extra security on his file and
the credit bureau will give him a PIN or password to access it.
The person uses that extra lock to use his own credit.
The second major area for reducing new account identity theft is
to reduce the proliferation of SSNs in all records both private
and public. She said the measures before committees include
reduction in the collection of SSNs and Alaska would be one of
the first states to do that. It also has provisions that do many
things they have been recommending to get the SSN out of the
mailbox, out of the wallet, off the Internet, out of the
marketplace for sale and out of the trash can.
In addition to reducing the collection and sale of SSNs, it's
important when sensitive information is compromised, that the
victim has a chance to find out about it. One thing they have
learned is that no matter how careful you are about your own
personal mail and records, your information can be stolen from
someone else. Many of the measures include notice to
constituents that there has been a breach. When a breach has
been noticed, a constituent can do a few things to help protect
himself. He can choose to place the freeze, he can choose to
exercise federal rights that are not as strong as the freeze but
are available now, he may choose to change his pins or account
numbers depending on what was taken and he can choose to read
his statements more carefully. The sooner identity theft is
discovered, the better chance a person has of stamping it out
with less time and less headache.
2:00:39 PM
CHAIR ELLIS clarified that there was no specific legislation
relating to this issue now, but some would probably be
forthcoming. He said he had heard of identity breaches from
government sources as well as the private sector and asked if
she had a sense what proportion that would be.
MS. HILDEBRAND replied that both are sources as well as
universities, both public and private. The Privacy Rights
Clearinghouse at privacyrights.org maintains a running list
containing a summary of each of the breaches over the last two
years. It has resulted in about 109 million records being
compromised. The two largest were the Veterans Administration
with 26 million records and the other was card systems
consisting of 40 million credit and debit card numbers. The
problem is coming from both government and private.
CHAIR ELLIS asked if she was recommending that legislation
should be written addressing both facets.
MS. HILDEBRAND replied yes, particularly focusing on notice of
breaches and standards for when an SSN can be asked for.
CHAIR ELLIS asked if any approaches sound good, but are dead
ends.
MS. HILDEBRAND answered yes. When looking at the notice of
breach issue, some folks don't want to require notice until it's
known the breach caused harm. However, the problem with that
approach is that in most cases when there is a breach in a
timely fashion no one is going to know what the risk of harm is.
It is a huge debate being waged in other states and Congress.
She recommends when there isn't enough information about the
breach to tell the consumer so he can make his own choice about
what to do.
2:04:10 PM
CHAIR ELLIS said California passed an identity theft law with a
provision in it that let a number of Alaskans know they had been
the subject of identity theft from a private clearing house of
information. That spurred interest in this issue.
PAT LUBY, Advocacy Director, AARP, added when an older victim
suffers from identity theft, research indicates it not only
causes psychological harm, but victims are prone to have a
higher illness rate as well. It is one of their top concerns.
2:06:04 PM
ANN SEACREST, AARP, said identity theft is the fastest growing
crime in the US. In October 2002, 36 percent of the respondents
to an AARP survey said they were extremely concerned about
identity theft as a form of consumer fraud. A survey from
October 2006 indicated that the number has grown to a total of
77 percent - 47 percent saying the issue should be given top
legislative priority and 30 percent saying it should be given a
high priority.
She said that AARP has joined forces with the Division of
Banking and Securities to do statewide campaigns called the
Alaska Campaign for Safe and Wise Investing in 13 workshops. The
first five have been well-attended and she often hears stories
from people who never thought they would be a victim.
She said, "ID thieves are equal opportunity thieves." When it
happens to an AARP member, it affects the entire family. The
thieves target anyone who is vulnerable and once a person is on
the "mooch list" that list is bought and sold between thieves.
CHAIR ELLIS commented that some of the saddest stories he hears
are from senior citizens and folks who thought all they needed
was a shredder. "And that's not the case." He asked her to
provide any information to the committee that would establish a
record for the need of legislation.
2:10:19 PM
STEVE CLEARY, Executive Director, Alaska Public Interest
Research Group (AKPIRG), said they are committed to teaching
Alaskans how to be better consumers and how to protect their
personal information. It is critical that it is followed up with
strong consumer protection legislation, which he hoped would
come out this session. Federal Trade Commission data indicates
in 2005 Alaska was number one in fraud complaints. The good news
on that front is that in 2006, Alaska went down to number five
with about 500 fewer complaints. The sad news is that those
people who did take the time to file with the FTC paid an
average of $3,847, which is up quite a bit from what was paid in
2005, which was more in the range of $1,000. That's about $3.5
million stolen from Alaska consumers as well as their time and
emotion. Estimates indicate it takes a consumer anywhere from 40
- 175 hours "to get back their good name and their credit."
MR. CLEARY pointed out that increasingly a consumer's credit
report reaches into many aspects of life including employment
and insurance, as well as further credit and loan information.
2:12:12 PM
He related a story about a Juneau woman whose neighbors stole
her identity that illustrated the grief identity theft can
cause. He supported legislation addressing mandatory
notification when a security breach happens and giving consumers
the choice to freeze their credit report to protect them from
further damage.
CHAIR ELLIS thanked him for his comments and said his intent
today was to establish a record of the problem and the need of
identity theft legislation. He adjourned the meeting at 2:14:07
PM.
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