05/03/1993 02:50 PM Senate FIN

                                                                               
  CS FOR HOUSE BILL NO. 113(FIN)                                               
                                                                               
       An  Act regulating the solicitation of contributions by                 
       charitable organizations  and paid  solicitors and  the                 
       solicitation of sales by telephonic means; and amending                 
       Alaska Rules of Civil Procedure 79 and 82.                              
                                                                               
  Co-chair  Pearce directed that CSHB 113  (Fin) be brought on                 
  for  discussion  and  referenced a  TELECONFERENCE  link  to                 
                                                                               
                                                                               
  Anchorage.                                                                   
                                                                               
  Senator Rieger asked if the  proposed bill would impact  the                 
  credit card  purchase of airline tickets by  telephone.  JIM                 
  FORBES, Assistant Attorney General, Fair Practices  Section,                 
  Dept. of Law,  responded via teleconference  from Anchorage.                 
  He explained that the  bill would not apply  to transactions                 
  where the  customer initiates  the telephone call,  provided                 
  that  it is not in  response to a  specific request that the                 
  customer initiate the call.                                                  
                                                                               
  Co-chair Frank  directed attention  to a  proposed Amendment                 
  No.    1    relating   to    language    under   "Prohibited                 
  Representations" at page  3, lines 13  through 19.  He  then                 
  noted   that   present   language  appears   to   prevent  a                 
  telemarketer  from  presenting facts  that  are true.   That                 
  appears to overreach a  bit in light of other  "cooling off"                 
  provisions within the  bill.   Mr. Forbes acknowledged  that                 
  the question represents  a policy call.   He explained  that                 
  existing  language  would be  most  helpful in  the consumer                 
  protection context.  He pointed  to the high-pressure nature                 
  of telephonic sales and advised that the wording is based on                 
  legislation in other states.   Ability of a telemarketer  to                 
  advise  that  his   or  her  organization  is   licensed  or                 
  registered with the state inspires a degree of confidence in                 
  the customer  that is  unwarranted under  the circumstances.                 
  While proposed language  in Amendment No. 1 does  not "kill"                 
  the effectiveness of the bill, it waters it down.                            
                                                                               
  Extended discussion of the issue followed between Mr. Forbes                 
  and Co-chair Frank.  Mr. Forbes  stressed that the intent of                 
  the drafter was to  ensure that a telemarketer does  not use                 
  registration  with   the  state  as  leverage   against  the                 
  purchaser.                                                                   
                                                                               
  Co-chair  Frank advised that  he was seeking  to ensure that                 
  contractors and other persons and businesses licensed by the                 
  state  are  not precluded  from  advising customers  of that                 
  fact.  Mr. Forbes responded that presentments by contractors                 
  and other licensed  businesses would not be  precluded under                 
  the proposed legislation.  He acknowledged that perhaps that                 
  fact could  be more  clearly stated.   Co-chair  Frank asked                 
  that  Mr.  Forbes draft  language that  could be  offered in                 
  Rules Committee or  on the floor of the Senate.   Mr. Forbes                 
  directed  attention  to  page  3,  line  15,  and  suggested                 
  addition of "by  reason of registration under  AS 45.65.010"                 
  after "seller" and before "a license."                                       
                                                                               
  Representative  Larson  voiced  his  understanding that  the                 
  contractor  used  in  the  foregoing  example would  not  be                 
  covered by the bill.  Mr. Forbes directed attention to pages                 
  4 and 5 and  noted eighteen listed exemptions.   He stressed                 
  that it is  not the  intent of the  legislation to  restrict                 
  individuals  or   businesses  that  are   already  otherwise                 
                                                                               
                                                                               
  licensed or registered by the state, regulated by the state,                 
  or governed by a board  or commission with existing consumer                 
  protection remedies.  The bill seeks to  cover entities that                 
  are not presently registered, such as telemarketers.                         
                                                                               
  Co-chair Frank said  he would withdraw Amendment  No. 1 with                 
  the assurance that only telemarketer-type registration would                 
  be covered  by the  "Prohibited Representations" section  of                 
  the bill.   Mr. Forbes concurred  in that intent.   Co-chair                 
  Frank asked that the intent be put in writing.                               
                                                                               
  Senator Sharp asked if the  proposed legislation would apply                 
  to television channels marketing goods  for sale. Mr. Forbes                 
  said that home shopping channels have not been the source of                 
  fraud.  The  proposed legislation seeks to  cover telephonic                 
  sales and instances  in which an  individual is informed  by                 
  mail that he or  she has won a prize and is  asked to call a                 
  phone number  to claim  it.   Generally, when  that call  is                 
  made,  the  customer  is pressured  into  sending  a certain                 
  amount of cash to  secure the prize and in  doing so becomes                 
  the victim of fraud.                                                         
                                                                               
  Co-chair Frank MOVED that CSHB 113 (Fin) pass from committee                 
  with individual recommendations  and the accompanying fiscal                 
  note.  No objection  having been raised, CSHB 113  (Fin) was                 
  REPORTED  OUT  of  committee  with  a  unanimous  "do  pass"                 
  recommendation and zero fiscal note from the Dept. of Law.