Legislature(2003 - 2004)

03/05/2004 08:04 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 516-BAD CHECK CHARGE                                                                                                       
                                                                                                                                
Number 0285                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that the  first order of  business was                                                               
HOUSE  BILL NO.  516, "An  Act  relating to  a charge  for a  bad                                                               
check."                                                                                                                         
                                                                                                                                
Number 0296                                                                                                                     
                                                                                                                                
TOM  WRIGHT, Staff  to Representative  John Harris,  Alaska State                                                               
Legislature,  presented  HB  516   on  behalf  of  Representative                                                               
Harris, sponsor.   He stated that the bill  simply would increase                                                               
the amount  for a bad  check to  $30.  He  noted that there  is a                                                               
companion bill  that just passed  the other body and  "we're just                                                               
trying to help move the process along a little bit."                                                                            
                                                                                                                                
Number 0338                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  stated his understanding that  "this was related                                                               
somehow to the requirement ...  to document costs associated with                                                               
checks,"  and  would  eliminate   the  language  regarding  costs                                                               
incurred, replacing it with a flat fee.                                                                                         
                                                                                                                                
MR.  WRIGHT answered  that's  correct.   He  explained that  this                                                               
would allow  businesses to recoup  costs related to a  bad check,                                                               
without going through a lot of bookwork.                                                                                        
                                                                                                                                
CHAIR  WEYHRAUCH related  having  unintentionally written  checks                                                               
when  there  wasn't enough  money  in  his  account and  that  he                                                               
received fees for NSF [nonsufficient  funds] and subsequently put                                                               
money in his  account and paid "the check."   He said, "So, let's                                                               
see, I get hit by the bank, and  then I get hit by the merchant -                                                               
sometimes -  although ...  sometimes if they  know you  they say,                                                               
'Just pay it.'"   He observed, "You still get  an NSF, it doesn't                                                               
deal  with that.   And  merchants still  then sometimes  have the                                                               
discretion to  charge you a $30  fee anyway; but this  just gives                                                               
them the legal authority to do that without question?"                                                                          
                                                                                                                                
MR. WRIGHT  answered that that's  his understanding.  He  said he                                                               
should  defer further  comment  to Scott  King,  but offered  his                                                               
understanding that there are 22  other states that have adopted a                                                               
$30 fee.                                                                                                                        
                                                                                                                                
Number 0451                                                                                                                     
                                                                                                                                
SCOTT  KING, Cornerstone  Credit Services,  L.L.C., testified  in                                                               
support of  HB 516.  He  said that historically, in  Alaska, "we"                                                               
have assumed  a $25 fee  on NSF  checks or checks  that returned.                                                               
The interpretation  of the law has  been, up to this  point, that                                                               
if a business can justify [charging]  the $25, as an operating or                                                               
business  practice, then  that has  been allowed.   He  indicated                                                               
that  that justification  is easily  done.   He  revealed that  a                                                               
recent  court ruling  in  Fairbanks has  "said  that it's  actual                                                               
cost," which  would require a merchant  to keep a ledger  of each                                                               
cost involved  in [getting  the money for]  the check,  and [that                                                               
merchant] would not be allowed to  collect that cost until it was                                                               
incurred.  Mr. King reviewed that  the bill would make two simple                                                               
changes  to  statute:    First,  it  would  remove  the  language                                                               
regarding the  actual costs  incurred.   Second, it  would change                                                               
the amount from $25 to $30.                                                                                                     
                                                                                                                                
MR.  KING  revealed  that  Cornerstone  Credit  Services,  L.L.C.                                                               
represents  approximately  2,000   merchants  throughout  Alaska.                                                               
Many of the businesses rely on  taking checks in order to conduct                                                               
business.  He offered to answer questions from the committee.                                                                   
                                                                                                                                
Number 0562                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH declared a conflict.   He explained that he has a                                                               
problem with  Cornerstone Credit  Services, L.L.C.,  because that                                                               
office has been  repeatedly calling him regarding a  bill that it                                                               
says is unpaid, but which Chair  Weyhrauch said has been paid for                                                               
a  long   time.     He  added,  "I've   been  quite   irate  with                                                               
Cornerstone."  He provided details.                                                                                             
                                                                                                                                
REPRESENTATIVE  GRUENBERG  said, "I'll  object,  so  you have  to                                                               
vote.  So moved."                                                                                                               
                                                                                                                                
CHAIR  WEYHRAUCH said  he was  going to  ask to  be excused  from                                                               
voting,  but Representative  Gruenberg  had objected.   He  said,                                                               
"That's not going to get in the  way of dealing with this bill; I                                                               
just wanted you to know that."                                                                                                  
                                                                                                                                
MR.  KING offered  to discuss  the  issue in  private with  Chair                                                               
Weyhrauch.                                                                                                                      
                                                                                                                                
Number 0660                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM asked  if the changes made to  the bill would                                                               
theoretically  take  away  the  legal  problem  with  "having  to                                                               
support that you deserve the money."                                                                                            
                                                                                                                                
MR. KING  answered yes.   In  response to  a question  from Chair                                                               
Weyhrauch,  he  said the  aforementioned  case  in Fairbanks  was                                                               
resolved.  He said, "We'd end  up having to settle it through our                                                               
E&O [errors  and omissions] insurance  carrier.  I think  it's in                                                               
the process of being settled."                                                                                                  
                                                                                                                                
Number 0697                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG said  he  supports HB  516, because  it                                                               
would stop "all kinds of  ancillary litigation."  Notwithstanding                                                               
that,  he mentioned  a  problem and  the title  of  the bill  and                                                               
continued as follows:                                                                                                           
                                                                                                                                
     Lawyers, because of the unusual  canons of ethics, if a                                                                    
     client doesn't pay a bill,  they are not allowed to, in                                                                    
     any  manner, have  that fact,  through  an agency  like                                                                    
     Cornerstone  ...,  reflected  on  the  person's  credit                                                                    
     rating.   And  this, as  you know,  Mr. Chairman,  is a                                                                    
     very effective  way of getting a  legitimate bill paid.                                                                    
     And what  it does is  it requires lawyers to  sue their                                                                    
     clients,  or arbitrate,  rather  than  just going  very                                                                    
     informally, low key, to get the  bill paid.  And I went                                                                    
     to the bar  association to try to get  the ethical rule                                                                    
     changed.  And a number  of states have gone and changed                                                                    
     their ethical  rule -  some have not.   And  the ethics                                                                    
     committee wouldn't do  it, as I recall.  I  have a file                                                                    
     and  I'm  going  to  talk over  the  interim  with  the                                                                    
     industry.  But I would be  inclined to try to see if we                                                                    
     can  change   that,  because  ...  it   makes  it  very                                                                    
     difficult  for  lawyers  to   collect  bills  that  are                                                                    
     legitimately (indisc. - voice faded out).                                                                                  
                                                                                                                                
Number 0839                                                                                                                     
                                                                                                                                
PEGGY   GRADY,   Accountant,   Girl   Scouts,   Susitna   Council                                                               
("Council"), stated support  for HB 516.  She  told the committee                                                               
that  current  arrangements with  the  Council's  bank allow  NSF                                                               
[checks]  to go  directly to  the  collection agency.   When  the                                                               
check writer pays  the collection agency, the Council  is able to                                                               
recover 100  percent of the  cost of each  check.  Prior  to that                                                               
agreement,  she noted,  NSF checks  were either  written off,  or                                                               
attempts to  collect the debts were  made by staff members.   She                                                               
said  she thinks  it's  fair  to assume  that  if the  collection                                                               
agencies  with trained  professionals are  not able  to charge  a                                                               
flat fee  for their services on  behalf of the Council,  the cost                                                               
to collect the  debts would increase for the  Council, [which is]                                                               
a  not-for-profit  agency, or  worse,  the  burden of  collecting                                                               
these debts would fall back on "our agency."                                                                                    
                                                                                                                                
Number 0920                                                                                                                     
                                                                                                                                
JENNIFER  YORK,   Accounting  Manager,  Kaladi   Brothers  Coffee                                                               
Company, stated  support for  HB 516.   She  said the  bill would                                                               
help streamline the collection process.   She noted that, as with                                                               
the  previous testimony  [from Ms.  Grady],  the company's  [NSF]                                                               
checks  automatically  go to  the  bank  and are  forwarded  from                                                               
there.   She said the  company is able  to recoup 100  percent of                                                               
its NSF checks.  She continued as follows:                                                                                      
                                                                                                                                
     And  it  also  acts  as   a  deterrent  for  those  who                                                                    
     knowingly write  [bad] checks.   If they know  that the                                                                    
     fee can be  arbitrarily waived or $5 here,  $10 there -                                                                    
     they play the system.   And it's just a straightforward                                                                    
     fact:  it's simple,  it's straightforward, it cuts down                                                                    
     on  the  time.    That's  one of  the  reasons  why  we                                                                    
     outsource  our collection,  is we  spend  so much  time                                                                    
     trying to  document how  many phone  calls we  did, how                                                                    
     many  minutes  worked  doing   it,  going  through  the                                                                    
     telephone book  and going  through the  telephone bills                                                                    
     and itemizing  how many minutes  we spend  calling this                                                                    
     person or that  person.  And by the time  that we wrote                                                                    
     all of  our times  down, more than  often we  had spent                                                                    
     more  than $25  in trying  to collect  ... a  $5 check.                                                                    
     And  for  those  people who  accidentally,  erroneously                                                                    
     [bounce a  check] ...  a lot of  times I  even override                                                                    
     the decision and [say], "Okay,  well, I'll go ahead and                                                                    
     waive  the  30 dollars  -  just  come  in and  pay  the                                                                    
     check."  So,  we still have that option  of waiving the                                                                    
     fee.   It's  just  [that]  I use  [the  NSF  fee] as  a                                                                    
     deterrent to  stop the people from  writing bad checks.                                                                    
     ...  I myself,  ten years  ago, wrote  a bad  check for                                                                    
     $1.20 and it ended up costing  me $45.  I now make sure                                                                    
     that  I  balance my  checkbook  and  whatnot.   It's  a                                                                    
     learning experience.                                                                                                       
                                                                                                                                
Number 1032                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM noted  that Ohio has a $30 fee  or 10 percent                                                               
of the amount of the check, whichever is greater.                                                                               
                                                                                                                                
MS.  YORK responded  that the  same  amount of  work is  involved                                                               
collecting the  amount of  a $1  check or a  $5,000 check,  "if a                                                               
person does not want to pay the bill."                                                                                          
                                                                                                                                
REPRESENTATIVE  HOLM observed  that a  check of  a larger  amount                                                               
indicates  that  a  larger  purchase  was  made;  therefore,  the                                                               
merchant  has lost  the  ability  to resell  a  larger amount  of                                                               
inventory.  In many cases, he added, that's a huge expense.                                                                     
                                                                                                                                
MS. YORK  said, "The $25  isn't really to cover  the merchandise,                                                               
or whatever,  it's to  cover the  time and  effort it  [takes] to                                                               
collect on  these checks  that people  don't want  to pay."   She                                                               
noted that while  one person who has written a  bad check may pay                                                               
immediately,  another may  persistently  postpone  payment.   She                                                               
indicated the law  of averages and said that the  $25 flat fee is                                                               
to  cover  the  cost  for,   basically,  everyone.    She  added,                                                               
"Everyone knows  what the fee is;  you don't have to  worry about                                                               
anything else, and they know what it is."                                                                                       
                                                                                                                                
REPRESENTATIVE  HOLM suggested  that a  person who  knows that  a                                                               
$5,000  bad check  will cost  him/her $500  will probably  not do                                                               
that too many times.                                                                                                            
                                                                                                                                
Number 1200                                                                                                                     
                                                                                                                                
JILL JAECKEL,  Legal Assistant,  Spenard Builders  Supply, stated                                                               
that "we"  handle the  collections for  all the  branch locations                                                               
throughout  the state.    She stated  support for  HB  516.   She                                                               
stated her  belief that a  $5 increase in the  fee is not  in any                                                               
way outrageous and  barely covers the cost  that businesses incur                                                               
from  habitual [bad]  check  writing.   She  said  that the  bank                                                               
charges  a fee  when the  checks come  back and  the $30  doesn't                                                               
begin  to  cover  the  loss   of  profit  that  occurs  in  those                                                               
instances, whether it  be a large or small check.   She suggested                                                               
that clearing up the language would be beneficial for everyone.                                                                 
                                                                                                                                
CHAIR  WEYHRAUCH said  he  endorses what  Ms.  Jaeckel is  saying                                                               
regarding the problem of dealing with these checks.                                                                             
                                                                                                                                
Number 1306                                                                                                                     
                                                                                                                                
REPRESENTATIVE   HOLM  asked   Ms.  Jaeckel   the  aforementioned                                                               
question regarding  [the $30 fee or  10 percent of the  amount of                                                               
the check].                                                                                                                     
                                                                                                                                
MS. JAECKEL answered as follows:                                                                                                
                                                                                                                                
     As far  as the fees go,  when we have large  checks, we                                                                    
     tend to  file suit  with the  civil penalties  that are                                                                    
     allowed through  the Alaska Statute, and  that is three                                                                    
     times the amount  of the check or  $1,000, whichever is                                                                    
     greater.  And  when you sue an  individual with several                                                                    
     civil  penalties, you  waive your  NSF fee  altogether.                                                                    
     So, ... as far as a  fee that would be posted for those                                                                    
     people [who] accidentally write  a [bad] check, I don't                                                                    
     think that there would be  very many vendors that would                                                                    
     actually go  out of their  way to charge 10  percent of                                                                    
     the check  over the $30  ....   It would cover  more of                                                                    
     the  cost,  but  it  would alienate  a  huge  group  of                                                                    
     customers that  accidentally write a bad  check.  Those                                                                    
     would be the ones that you  would be able to collect it                                                                    
     from, I think.                                                                                                             
                                                                                                                                
Number 1385                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  said  he  wants  to  know  that  it's  not  the                                                               
intention of  the bill that a  merchant who receives a  bad check                                                               
would be bound to charge a fee.                                                                                                 
                                                                                                                                
Number 1402                                                                                                                     
                                                                                                                                
MR.  WRIGHT  stated  his  understanding   [that  that's  not  the                                                               
intention].                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  directed  the   committee's  attention  to  the                                                               
language on page 2, lines 10-11, which read as follows:                                                                         
                                                                                                                                
               (2) the defendant fails to tender, before                                                                        
     the action  begins, an amount  equal to [AT  LEAST] the                                                                    
     amount  of the  check plus  $30 [COST  INCURRED BY  THE                                                                
     PLAINTIFF UP TO A MAXIMUM OF $25].                                                                                         
                                                                                                                                
CHAIR WEYHRAUCH suggested that it  could be interpreted that that                                                               
fee has  to be charged.   He asked if  that is the intent  of the                                                               
bill.                                                                                                                           
                                                                                                                                
Number 1455                                                                                                                     
                                                                                                                                
MR.  KING  explained  that  the  current  language  in  the  bill                                                               
explains  what  can  be  charged,   but  is  not  required.    He                                                               
clarified, "The  statute taken as  a whole is something  that can                                                               
be enforced  but is  not required  to be  enforced."   He related                                                               
that he  knows of many cases  where merchants waive NSF  fees for                                                               
those who just write one bad check.                                                                                             
                                                                                                                                
MR.  KING, in  response  to examples  posed  by Chair  Weyhrauch,                                                               
reiterated that the statute does not  require [the NSF fee] to be                                                               
charged;  it is  an  option.   He  added,  "If we  go  back to  a                                                               
language that would  talk about incurred cost or talk  to 'up to'                                                               
a maximum, then  we would be back  in the same boat,  and we'd be                                                               
arguing again with  attorneys and judges about what  does it mean                                                               
by 'up to.'  And that's why  we removed that part of the language                                                               
to remove any arguments that we would face in the future."                                                                      
                                                                                                                                
CHAIR  WEYHRAUCH  reiterated  that  he just  doesn't  want  well-                                                               
meaning  people  who want  to  get  along  to  say that  the  law                                                               
requires that they  [have to charge the NSF fee].   He added that                                                               
he may  just want to  clarify that when the  bill ends up  on the                                                               
House floor.                                                                                                                    
                                                                                                                                
Number 1572                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG stated  that he  could see  that that's                                                               
not the intent of the statute.   Notwithstanding that, he said he                                                               
could see  that that's how  the statute could  be misinterpreted.                                                               
He  suggested  a   sentence  could  be  added   for  purposes  of                                                               
clarification.                                                                                                                  
                                                                                                                                
CHAIR WEYHRAUCH said he may offer  that when the bill is heard in                                                               
the House Judiciary Standing Committee.                                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked Mr.  Wright if he  has a  list of                                                               
states that charge less than $30.                                                                                               
                                                                                                                                
Number 1639                                                                                                                     
                                                                                                                                
MR.  WRIGHT answered  that  there  are a  number  of states  that                                                               
charge less than  $30, which is shown on a  list in the committee                                                               
packet.   In  regard to  the aforementioned  discussion regarding                                                               
how  the statute  may be  interpreted,  he pointed  out that  the                                                               
language  uses  the word  "may",  not  "shall".   Notwithstanding                                                               
that, he  said he  thinks the  sponsor would  not have  a problem                                                               
with adding a sentence to clarify that.                                                                                         
                                                                                                                                
Number 1660                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  stated  his  support of  the  bill  as                                                               
written, but said  he sees it doing two things:   First, it would                                                               
eliminate  the requirement  for a  proof of  cost, which  he said                                                               
would  be  "administratively tough  to  do."   Second,  it  would                                                               
increase [the  NSF fee] from $25  to $30.  He  mentioned the cost                                                               
of living and  said he thinks it's been awhile  since the statute                                                               
was enacted.                                                                                                                    
                                                                                                                                
MR. WRIGHT answered that is his understanding.                                                                                  
                                                                                                                                
Number 1684                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  noted that Representative  Holm owns  a business                                                               
that deals with lots of checks.   He asked Representative Holm if                                                               
he would consider the $30 a fee or a surcharge.                                                                                 
                                                                                                                                
Number 1700                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM  said it  is  a  fee.    On that  point,  he                                                               
referred to  previous consideration  of "10 percent  or whichever                                                               
is greater."  He indicated  that might be an additional deterrent                                                               
and said it piqued his interest  that there may be something that                                                               
"might make it have a little more  teeth to it."  He related that                                                               
sometimes people will  write a bad check and then  bring back the                                                               
merchandise, which  is in worse  condition than when it  left the                                                               
store.                                                                                                                          
                                                                                                                                
Number 1775                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  suggested a  possible [Amendment  1] to  page 1,                                                               
line 11,  which would change the  language to read:   "plus a $30                                                           
fee,  but  the   defendant  in  its  discretion   may  waive  the                                                               
collection of that fee."                                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG  said he  hopes that amendment  would be                                                               
offered in  this committee  [rather than waiting  to offer  it in                                                               
the House Judiciary Standing Committee].                                                                                        
                                                                                                                                
Number 1794                                                                                                                     
                                                                                                                                
MR.  KING  responded that  he  believes  that amendment  "further                                                               
states the  already stated intent  of the statute."   In response                                                               
to a previous insinuation that  the statute is not challenged, he                                                               
noted that it  is actually challenged all the time;  a lot of law                                                               
suits  are   regularly  filed  and  the   court  system  "battles                                                               
regarding this  statute."  He  added, "That's why  this Fairbanks                                                               
statute came  out; there's a  lot of very creative  attorneys out                                                               
there who are very smart and  have a great way of interpreting or                                                               
- in my  opinion - misinterpreting what the intents  are of these                                                               
different  statutes."    He opined  that  simplification  of  the                                                               
statute is imperative.                                                                                                          
                                                                                                                                
CHAIR WEYHRAUCH explained  he thinks the intent  of the committee                                                               
is to "take this and just make it  sure that - boom:  you write a                                                               
bad check; you're  paying a $30 fee; we're  waiving the necessity                                                               
of requiring that you prove what  costs are in collection of that                                                               
fee;  and, by  golly, if  you want  to waive  it, that's  in your                                                               
discretion.  We're  giving that discretion to  the defendant ...;                                                               
this is  not up to the  plaintiff to decide whether  they want to                                                               
waive the justifications of cost or not."                                                                                       
                                                                                                                                
Number 1845                                                                                                                     
                                                                                                                                
MR. KING responded that he doesn't  want to end up in a situation                                                               
where a debate ensues over  why one defendant was discretionarily                                                               
excused  [from  paying  the  fee], while  another  was  not,  and                                                               
whether  or not  a merchant  is  being fair  in his/her  business                                                               
practice.                                                                                                                       
                                                                                                                                
CHAIR WEYHRAUCH offered to broaden the language.                                                                                
                                                                                                                                
MR.  KING  stated,  "I  think  as  soon  as  we  allow  the  word                                                               
discretion, we open up for discrimination."                                                                                     
                                                                                                                                
Number 1860                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH recrafted [Amendment 1] to read as follows:                                                                     
                                                                                                                                
     Page 1, line 11                                                                                                            
                                                                                                                                
     Between "plus" and "$30"                                                                                               
     Insert "a"                                                                                                                 
                                                                                                                                
     After "$30"                                                                                                            
     Insert the following:                                                                                                      
                                                                                                                                
     "fee,  but the  plaintiff may  waive the  collection of                                                                    
     any fee."                                                                                                                  
                                                                                                                                
CHAIR WEYHRAUCH  reiterated that  he doesn't  want anyone  to say                                                               
he/she has to charge [the fee].                                                                                                 
                                                                                                                                
REPRESENTATIVE HOLM suggested  [Mr. King] made a  good point that                                                               
"you  then would  lay yourself  open for  discrimination, because                                                               
you may or may not."                                                                                                            
                                                                                                                                
Number 1942                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG, on that  point, indicated that a person                                                               
can always  find fault with a  merchant, and he said,  "You can't                                                               
guard against that."                                                                                                            
                                                                                                                                
MR. KING added the following:                                                                                                   
                                                                                                                                
     We  have  gone  to  great  lengths  to  determine  what                                                                    
     language  changes ...  we would  make or  how we  would                                                                    
     perceive  this  through  our experience  in  the  court                                                                    
     systems.    And  the  words that  are  in  the  statute                                                                    
     currently do  read, "the plaintiff may  recover".  That                                                                    
     specific statement  right there  ensures that  there is                                                                    
     no requirement  to recover those costs  and, therefore,                                                                    
     no language change would be necessary.                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH noted that it  doesn't say that the plaintiff may                                                               
"waive it too."                                                                                                                 
                                                                                                                                
MR. KING  noted that by simply  saying that "it may  not recover,                                                               
it may not recover."  He  urged that the committee not change the                                                               
language.                                                                                                                       
                                                                                                                                
Number 1982                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  indicated  that   he  agreed  with  Chair                                                               
Weyhrauch.  He  said he would like to see  clarification that the                                                               
merchant has the ability to waive  the fee, which would be better                                                               
than  trying to  interpret  "where the  'may' is  in  this."   He                                                               
offered examples.                                                                                                               
                                                                                                                                
Number 2055                                                                                                                     
                                                                                                                                
MR.  WRIGHT  directed  the committee's  attention  to  [paragraph                                                               
(1)], beginning on page 1, line 8, which read as follows:                                                                       
                                                                                                                                
          (1) the plaintiff makes a written demand for                                                                          
     payment of the check at least 15 days before beginning                                                                     
     the action; and                                                                                                            
                                                                                                                                
MR. WRIGHT  said that  if a  plaintiff decides  not to  send that                                                               
letter, then in actuality the  plaintiff is saying that he/she is                                                               
waiving the fee.                                                                                                                
                                                                                                                                
REPRESENTATIVE SEATON said he interprets  it to mean that "you're                                                               
waiving recovery  of the money -  of the amount of  the check, as                                                               
well."   He indicated  that his  problem is that  the use  of the                                                               
word "may"  is "covering both  sections and not  clearly allowing                                                               
the merchants to waive the fee."                                                                                                
                                                                                                                                
Number 2087                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  brought attention  to [page 1,  line 4]                                                               
and the language, "a check that  is dishonored".  He noted that a                                                               
person could  conceivably have a check  that's dishonored through                                                               
a fault of the bank, rather than a fault of the customer.                                                                       
                                                                                                                                
MR. KING  confirmed that that  happens, but the bank  absorbs the                                                               
fee in many instances because  it wants the consumer [to continue                                                               
banking there].                                                                                                                 
                                                                                                                                
[Discussion of Amendment 1 was momentarily set aside.]                                                                          
                                                                                                                                
REPRESENTATIVE GRUENBERG turned attention  to page 1, lines 9-10,                                                               
where it  reads "beginning the  action" and "action begins".   He                                                               
said  "beginning"  an action  could  be  subject to  a  different                                                               
interpretation.                                                                                                                 
                                                                                                                                
Number 2150                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  offered  [Conceptual Amendment  2]  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Page 1, line 9                                                                                                             
                                                                                                                                
     Delete "beginning"                                                                                                         
     Insert "commencing"                                                                                                        
                                                                                                                                
     Page 1, line 10                                                                                                            
                                                                                                                                
     Delete "begins"                                                                                                            
     Insert "commences"                                                                                                         
                                                                                                                                
REPRESENTATIVE   GRUENBERG    clarified   that    this   language                                                               
specifically speaks  to the filing  of the lawsuit.   In response                                                               
to a  request for further  clarification, he said he  would leave                                                               
it to  the drafters whether  to say on  line 10 that  "the action                                                               
commences" or "the action is commenced".                                                                                        
                                                                                                                                
Number 2210                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH   announced  that  there  being   no  objection,                                                               
[Conceptual Amendment 2] was adopted.                                                                                           
                                                                                                                                
Number 2234                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  moved  to  adopt  Amendment  1  [text  provided                                                               
previously].  He  asked if there was any objection.   He told Mr.                                                               
King, "By  the time  this gets to  [the House  Judiciary Standing                                                               
Committee], if you have an issue,  pick that up there with them -                                                               
they can 'lawyer it'."                                                                                                          
                                                                                                                                
[The committee treated Amendment 1 as adopted.]                                                                                 
                                                                                                                                
Number 2252                                                                                                                     
                                                                                                                                
REPRESENTATIVE  LYNN  returned  to   the  previous  comment  that                                                               
sometimes banks make the error and  some banks absorb [the fee in                                                               
that case].   He said,  "This is a  case where neither  the check                                                               
payor or  the merchant is at  fault, but it's a  burden on both."                                                               
He asked  if there is anything  that can be done  to mandate that                                                               
the bank would absorb this charge.                                                                                              
                                                                                                                                
CHAIR WEYHRAUCH  responded that  he is  not certain  whether that                                                               
would  fall under  the banking  statutes, or  where [it  would be                                                               
addressed].  He suggested that it  may be beyond the scope of [HB
516] to get into that issue.                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  indicated that  he would not  oppose an                                                               
amendment addressing  the issue [of  ensuring that the  bank pays                                                               
the fee when it is at fault].   He commented that the bill has "a                                                               
ways to go."                                                                                                                    
                                                                                                                                
CHAIR WEYHRAUCH asked  that the committee "not deal  with that in                                                               
this bill."                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  indicated  that he  would  pursue  the                                                               
issue [in the House Judiciary Standing Committee].                                                                              
                                                                                                                                
Number 2313                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  moved to report  HB 516, as amended,  out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal  note.  There  being no objection, CSHB  516(STA) was                                                               
reported out of the House State Affairs Standing Committee.                                                                     
                                                                                                                                

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