02/16/1998 03:21 PM House L&C

HB 363 - DISCLOSURE OF SOCIAL SECURITY NO.                                     
                                                                               
Number 0048                                                                    
                                                                               
CHAIRMAN ROKEBERG stated the committee would take up HB 363, "An               
Act relating to social security numbers; providing for the                     
limitation of use of social security numbers; and making the                   
improper use of a social security number a prohibited unfair trade             
practice."  He noted the sponsor would present the bill.                       
                                                                               
Number 0071                                                                    
                                                                               
REPRESENTATIVE J. ALLEN KEMPLEN thanked the committee and noted he             
has personal experience with this issue.  He related during the                
interim he went to an Anchorage business to rent a musical                     
instrument for his son.  The business's form required a drivers'               
license number, major credit card for deposit, and social security             
number.  He said he did not think it was necessary to provide his              
social security number in order to rent an instrument, but he was              
told that was how the business tracked its accounts, and if he did             
not provide his social security number, he was not a welcome                   
customer.  Representative Kemplen stated he thought that was an                
invasion of privacy and did not rent an instrument.                            
                                                                               
Number 0233                                                                    
                                                                               
REPRESENTATIVE KEMPLEN said made him think about the whole issue of            
social security numbers, computers, the "information age."  He had             
thought Alaska was different because the right of individual                   
Alaskans to privacy was laid out in a clause of the state                      
constitution and "shall not be infringed."  Representative Kemplen             
noted he found, however, that there wasn't anything that really                
prohibited this business person from requiring his social security             
number.  His research showed there had been a big concern about                
privacy in the late 1960s, early 1970s.  He stated the Fair Credit             
Reporting Act was passed in 1970; it gave consumers a right to know            
what was in their credit files and to demand corrections for                   
errors.  The public response was that the government tells citizens            
what records it keeps on them while insisting that information be              
kept private unless it was required by law.  In the private sector             
each industry was pretty much allowed to create its own guidelines,            
which worked until personal computers (PCs) came on board.  He said            
it was not such a big issue with large mainframe computers but the             
rapid growth of PCs has changed things fairly remarkably.                      
Representative Kemplen stated that the growth of the Internet over             
the last three to five years has also changed things dramatically.             
He stated privacy is becoming a victim of this "information age."              
                                                                               
Number 0430                                                                    
                                                                               
REPRESENTATIVE KEMPLEN said it seems to him Alaska is unique, and              
he noted the state constitution has the strongest privacy clause of            
all of the state constitutions in America.  He said if any state               
stands up for individual privacy, it would be Alaska.  He stated               
that is the purpose of this legislation:  to stand up for the                  
rights of individual Alaskans.  It says that the individual demands            
a right of privacy, and someone who wants information about that               
individual, particularly as it relates to the social security                  
number, which is linked to so many databases, needs the                        
individual's written permission.  He stated that information cannot            
be mandated from an individual.                                                
                                                                               
Number 0510                                                                    
                                                                               
REPRESENTATIVE JOHN COWDERY stated he thought the social security              
document was a federal document, not a state one, and he noted                 
their medical insurance plan identification numbers were their                 
social security numbers.  He asked if Representative Kemplen                   
thought that would cause a disruption or inconvenience.                        
Representative Cowdery also noted a social security number was                 
requested when obtaining information by phone about an escrow                  
account, former bank, credit card, et cetera, and he asked about               
that impact.                                                                   
                                                                               
Number 0601                                                                    
                                                                               
REPRESENTATIVE KEMPLEN stated the only impact on insurance would be            
the necessity of obtaining an individual's written permission to               
use a social security number to track that person's accounts.  He              
said it put the power back into the hands of the individual, rather            
than in a big organization's.                                                  
                                                                               
Number 0638                                                                    
                                                                               
REPRESENTATIVE COWDERY stated that if use of the social security               
number was denied to insurance companies, then the number's use                
could be denied in all documents including the Internal Revenue                
Service (IRS) forms.                                                           
                                                                               
Number 0650                                                                    
                                                                               
REPRESENTATIVE KEMPLEN replied that the legislation as written                 
states, "Except where required by federal or state law."                       
                                                                               
Number 0663                                                                    
                                                                               
REPRESENTATIVE COWDERY noted he appreciated the privacy direction              
Representative Kemplen was going in, but he wondered if that was               
reality.  Representative Cowdery commented on the many places                  
social security numbers occurred, including drivers' licenses; he              
noted it is a "number world," as Representative Kemplen had said,              
and mentioned the current sophistication of computers.                         
                                                                               
Number 0706                                                                    
                                                                               
REPRESENTATIVE KEMPLEN brought up the concept of identity theft,               
noting that stealing someone's identity is a concern when social               
security numbers are increasingly required.  He said with all the              
information people, retail store clerks for example, have access               
to, including a social security number, someone can fill out a                 
credit application with all of an individual's relevant data and               
have a credit card in that individual's name sent to another                   
address.  Representative Kemplen noted that person can then use                
that individual's good credit to run up a comfortable lifestyle.               
He stated the notion of stealing someone's identity is something               
they need to be thinking about and acting to minimize.                         
                                                                               
Number 0793                                                                    
                                                                               
REPRESENTATIVE COWDERY stated he understood the comfortable                    
lifestyle situation, but commented some people think getting caught            
and going to jail would be a lifestyle improvement.                            
                                                                               
Number 0812                                                                    
                                                                               
REPRESENTATIVE JOE RYAN stated he appreciated this bill and asked              
if Representative Kemplen was aware that, in order to require a                
person's social security number, a disclaimer was required by                  
federal law.  He said he has notified several branches of the                  
state's government that they are not in compliance, noting he had              
called the Division of Retirement and Benefits and the health                  
people, asking them who had given them the authority to use his                
social security number as a medical number.  He received the                   
response that they have always done it as a (indisc.), to which he             
replied he had caught them and did not want them to continue the               
practice.  Representative Ryan noted he hasn't been successful so              
far, but feels he will be able to convince them it is not a good               
thing for them to do in his case.  He stated he liked this kind of             
legislation, and noted when he was a child a lot of people came                
from Europe with numbers tattooed on their arms - they had been                
reduced to a number - and he did not like being reduced to a                   
number.                                                                        
                                                                               
Number 0885                                                                    
                                                                               
CHAIRMAN ROKEBERG noted the absence of any supporting background               
from state business-type organizations in the submitted bill                   
package, and asked Representative Kemplen if he had investigated               
whether or not this legislation would have any kind of negative                
impact on commerce in the state of Alaska.                                     
                                                                               
Number 0915                                                                    
                                                                               
REPRESENTATIVE KEMPLEN answered he had not.                                    
                                                                               
Number 0928                                                                    
                                                                               
CHAIRMAN ROKEBERG stated it was one of the committee's purviews and            
charges to ensure that, when it does pass legislation, the                     
legislation meets muster, doesn't create undue burdens, or impact              
job creation and the economic health of the state.  Chairman                   
Rokeberg commented that the committee had received a call the                  
previous week from an organization in Washington, D.C., opposing               
this type of legislation; unfortunately the committee has not been             
able to reestablish contact with that organization.  He said, in               
terms of his own comfort, he would like to make sure that the issue            
received a full hearing before the committee took final action.                
Chairman Rokeberg suggested Representative Kemplen make inquiries              
to organizations like the Alaska State Chamber of Commerce, the                
Anchorage Chamber of Commerce, the National Federation of                      
Independent Business (NFIB), and other business-type organizations             
that might have opinions.  He commented Representative Kemplen                 
might find support from these organizations, and he noted there was            
certainly a lot of merit in the thrust of the bill.  Also, Chairman            
Rokeberg asked if it might be necessary to check with the Division             
of Insurance regarding insurance forms and things of that nature,              
referring to Representative Cowdery's comment that even their own              
group-administered health plan used social security numbers.  He               
also noted the state government was basically exempted as the bill             
was drafted, and he asked if that was fair, questioning whether it             
was one of those deals where Congress and the legislature can get              
away with it but everybody else can't.                                         
                                                                               
Number 1035                                                                    
                                                                               
Representative Kemplen answered that if a business is required to              
collect social security numbers, as a federal or state requirement,            
that would not be affected by this legislation.                                
                                                                               
Number 1054                                                                    
                                                                               
CHAIRMAN ROKEBERG asked if Representative Kemplen knew of instances            
where that was the case.                                                       
                                                                               
Number 1061                                                                    
                                                                               
REPRESENTATIVE KEMPLEN said his intuition told him there certainly             
were instances where social security numbers are required by                   
federal or state statute, but none came immediately to mind.                   
                                                                               
Number 1086                                                                    
                                                                               
CHAIRMAN ROKEBERG commented, "Besides IRS forms...."                           
                                                                               
Number 1087                                                                    
                                                                               
REPRESENTATIVE RYAN stated they had passed SB 154, last year for               
child support enforcement [SB 154, Child Support and Paternity,                
misstated as HB 154 on tape], and it required any kind of license              
received in the state of Alaska to have a social security number:              
drivers', hunting, fishing, occupational, et cetera.  He said a                
social security number had to be given so (indisc.) be in                      
compliance with the federal statute.  Representative Ryan noted he             
had not voted for the bill, and disliked it, but said that was the             
situation they were currently in.  He also referred to one of                  
Chairman Rokeberg's previous comments about the exemption of state             
government, "the king can do no wrong," and said he "couldn't buy"             
that exemption, noting he did not think this government was that               
wise.                                                                          
                                                                               
Number 1130                                                                    
                                                                               
REPRESENTATIVE COWDERY asked about things like union pension plans             
which were required by federal law to use social security numbers.             
                                                                               
Number 1144                                                                    
                                                                               
CHAIRMAN ROKEBERG commented that most military personnel are on                
military reservations and federal property, and are therefore                  
exempt from state statute, but said he would be concerned because              
the military currently uses social security numbers instead of the             
previously used serial numbers.  Chairman Rokeberg stated this                 
change occurred after he had left the military, noting he had been             
a US (ph), a draftee, not an RA, regular army, person, and those               
distinctions have now been lost because of the military's switch to            
social security numbers.  Chairman Rokeberg asked if that use of               
social security number would have any impact, giving the example of            
a credit granting business.  He asked if it would not be                       
appropriate for that business to ask for an active duty military               
member's serial number as part of the individual's personal                    
information.                                                                   
                                                                               
Number 1205                                                                    
                                                                               
REPRESENTATIVE KEMPLEN agreed, but said all the bill does is allow             
the business to get permission through the individual who is                   
requesting that credit.  He noted it moves something from a                    
mandatory type of situation to a voluntary situation, and it gives             
the individual the discretion to decide whether or not the                     
individual wants to give his or her social security number.  If the            
individual wants the credit card, all he or she has to do is sign              
the written permission saying, "Here is my social security number."            
                                                                               
Number 1251                                                                    
                                                                               
CHAIRMAN ROKEBERG referred to page 2, subsection (c) which reads               
"(c) A person may not offer or accept an offer for goods or                    
services, for sale or lease, on the condition that a consumer                  
provide consent to the use of the consumer's social security number            
for identification."  Chairman Rokeberg asked if that meant the                
closing of a sale could not be made contingent on the granting or              
giving of the social security number.                                          
                                                                               
Number 1286                                                                    
                                                                               
REPRESENTATIVE KEMPLEN answered in the affirmative.                            
                                                                               
Number 1288                                                                    
                                                                               
CHAIRMAN ROKEBERG clarified, "So they can't withhold their sale                
without a person coming forward with the number."                              
                                                                               
Number 1298                                                                    
                                                                               
REPRESENTATIVE RYAN stated, if memory served him right, other than             
the various things that were included under subsequent federal                 
statutes like the child support enforcement, an individual is not              
required to give a social security number, or the number cannot be             
used under the federal statutes, except for purposes of income                 
reporting to the IRS, and there are related federal statutes.                  
Representative Ryan stated, "Everybody ... kind of blows it off and            
doesn't pay any attention, 'cause everybody and his brother found              
that a common data base -- we get your social security number, we              
link you into all kinds of things -- and it's easier to keep track             
of you, and to build up files on you, and make sure you get a lot              
of junk mail."                                                                 
                                                                               
Number 1340                                                                    
                                                                               
CHAIRMAN ROKEBERG commented, "If that were the case, then why is               
there in the bill package from the sponsor, federal legislation on             
this very topic?  Or are you making a public assumption about                  
what's required?"                                                              
                                                                               
Number 1354                                                                    
                                                                               
REPRESENTATIVE RYAN noted he had stated he was speaking from                   
memory.                                                                        
                                                                               
Number 1356                                                                    
                                                                               
CHAIRMAN ROKEBERG asked if Representative Kemplen could shed any               
light on this matter.                                                          
                                                                               
Number 1360                                                                    
                                                                               
REPRESENTATIVE KEMPLEN noted that the federal legislation was a                
proposal introduced last year in Congress because of the concern               
being raised, in a number of different places, about the increasing            
use of a social security number as a unique identifier, and the                
number being mandated by a number of different organizations and               
entities because of convenience.  Representative Kemplen said there            
is also growing concern that technology is making it so easy to                
cross-check on people that it is really becoming an invasion of                
their privacy, and this concern has moved up to the congressional              
level.  He noted Alaska, because of the very strong privacy clause             
in its state constitution, really has legitimate cause to be in the            
forefront of action on this issue at the state level.                          
                                                                               
Number 1423                                                                    
                                                                               
CHAIRMAN ROKEBERG said he would like to give Representative Kemplen            
the opportunity to generate some support, particularly from the                
business community, noting he did not think anyone in the committee            
would not want to pass this bill out, but needed to be convinced               
that this would not be a burden on business.  Chairman Rokeberg                
commented that, perhaps, if there were some witnesses who could                
testify to that effect, and the committee was provided with some               
documentation, the committee would be happy to move this bill                  
along.  However, the Chairman said he thought they would not be                
doing their job, given the brevity of testimony and support of this            
bill, in passing the bill until they were convinced.  Chairman                 
Rokeberg asked Representative Kemplen if he had any problems with              
that.                                                                          
                                                                               
Number 1458                                                                    
                                                                               
REPRESENTATIVE KEMPLEN replied he did not, he thought that was a               
very prudent course of action.                                                 
                                                                               
Number 1463                                                                    
                                                                               
CHAIRMAN ROKEBERG indicated HB 363 would be held.