Legislature(1995 - 1996)

04/29/1996 09:25 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                         April 29, 1996                                        
                            9:25 a.m.                                          
                                                                               
  TAPES                                                                        
                                                                               
  SFC-96, #100, Side 1 and 2                                                   
  SFC-96, #101, Side 1 (000-218)                                               
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator Rick Halford,  Co-chairman, convened the  meeting at                 
  approximately 9:25 a.m.                                                      
                                                                               
  PRESENT                                                                      
                                                                               
  In  addition  to  Co-chairmen  Halford  and  Frank, Senators                 
  Phillips, Rieger, Sharp, and Zharoff  were present.  Senator                 
  Donley arrived as the meeting was in progress.                               
                                                                               
  ALSO ATTENDING:  Representative  Kay Brown; Barbara  Craver,                 
  office of the attorney  for the City and Borough  of Juneau;                 
  Reed Stoops,  representing MCI; Ray  Gillespie, representing                 
  AT&T/ALASCOM; Ken Erickson, aide to Senate President Pearce;                 
  Tom  Wright, aide to Representative Ivan  Ivan; and aides to                 
  committee members and other members of the legislature.                      
                                                                               
  ALSO PARTICIPATING VIA TELECONFERENCE  FROM ANCHORAGE:   Joe                 
  McKinnon,  Assistant  Attorney General,  Commercial Section,                 
  Dept. of Law.                                                                
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  HB 109 -  PHONE DIRECTORY LISTING/SOLICITATIONS/ADS                          
                                                                               
            Testimony  was  presented  by  Representative  Kay                 
            Brown,  Joe   McKinnon,  Reed   Stoops,  and   Ray                 
            Gillespie.   Amendments  1, 2,  3, 4,  and 5  were                 
            moved.    Amendments  1, 2,  and  3  were adopted.                 
            Amendment 4  failed, and  Amendment  5 was  before                 
            committee  when  the  meeting  was  recessed  with                 
            direction  from  the  chairman  that  the  sponsor                 
            develop new  language  relating  to  a  two-tiered                 
            approach.                                                          
                                                                               
  HB 493 -  INVOLUNTARY COMMITMENT:ALCOHOL/DRUG ABUSE                          
                                                                               
            Tom  Wright   and  Barbara   Craver  came   before                 
            committee   to   present   follow-up   information                 
            subsequent  to the previous  hearing on  the bill.                 
            Amendments 1 and  2 were  adopted.   SCS CSHB  493                 
            (Fin) was then  REPORTED OUT  of committee with  a                 
            $75.4  fiscal  note  from  the  Court  System,  an                 
                                                                               
                                                                               
            indeterminate note from  DOA(OPA), and zero  notes                 
            from DPS, DH&SS, DOA(PDA), and the Dept. of Law.                   
                                                                               
                                                                               
  CS FOR HOUSE BILL NO.  493(JUD) am                                           
                                                                               
       An  Act relating  to treatment  for  alcoholism or                      
       drug abuse.                                                             
                                                                               
  Co-chairman  Halford  directed  that  CSHB  493(Jud)  am  be                 
  brought  on  for discussion.    Senator Rieger  advised that                 
  discussion with the  sponsor indicates that the  sponsor has                 
  no problem  with amendments relating to the first two issues                 
  raised  at  yesterday's hearing  on  the  bill.   While  the                 
  sponsor has no problem  with the third item, he  pointed out                 
  that  language  relating  to   an  individual  who  wilfully                 
  initiates an  involuntary commitment petition  is very close                 
  to existing law which appears to be working.  Senator Rieger                 
  advised that he had prepared an amendment to cover the first                 
  two items.                                                                   
                                                                               
  Co-chairman  Halford referenced a  pending motion by Senator                 
  Zharoff for  adoption of Amendment  No. 1.   BARBARA CRAVER,                 
  Assistant  to  the  Attorney for  the  City  and Borough  of                 
  Juneau,  came  before  committee.   She  explained  that the                 
  amendment would add a  new section to allow a  public health                 
  facility to take custody and establish  an alcohol hold on a                 
  person for a  short period of time.  It would also allow for                 
  transfer of the individual to a public treatment facility as                 
  soon as the individual is medically stable.                                  
                                                                               
  In  response  to  questions from  Co-chairman  Halford,  Ms.                 
  Craver  said  the  amendment  would  not  change  time-limit                 
  provisions.   The public treatment facility  would use a 48-                 
  hour  hold  (existing  law  under   AS  47.37.180).    Under                 
  subsection  (c), the facility could  ask the court to extend                 
  that hold an additional  three days (a total of  five days).                 
  That would require court authorization rather than merely an                 
  administrative proceeding.   For the  initial 48 hours,  the                 
  health facility  could  hold  the  individual.    Hopefully,                 
  within that time the individual  could be transferred to the                 
  public treatment facility.   If the individual needed  to be                 
  held longer at either a public treatment or health facility,                 
  the public  treatment administrator would notify  a superior                 
  court judge  and request  that the  hold be  extended up  to                 
  three additional days.  That is usually done over the phone.                 
  Within that period  of time,  the public treatment  facility                 
  would have to determine whether to release the individual at                 
  the  end of  the  five  days or  file  a  petition with  the                 
  superior court for 30-day involuntary alcohol commitment.                    
                                                                               
  Co-chairman  Halford inquired  regarding  the standard  that                 
  would apply should an individual  file civil charges against                 
                                                                               
                                                                               
  having been held.   Ms. Craver guessed that the  claim might                 
  be false  imprisonment.  She  said that has  never happened.                 
  The individual would have to prove that  the application was                 
  made in bad  faith or on  insufficient grounds.  Ms.  Craver                 
  stressed  that  authorization  to  hold  would  be  provided                 
  through the courts.  She noted that in making application to                 
  hold, the administrator of a facility  would have to provide                 
  the  court with  a  physician's  certificate  for  extension                 
  beyond 48  hours.   The  certificate  consists of  a  signed                 
  statement from the physician citing the facts upon which the                 
  physician  believes   the  individual  is   intoxicated  and                 
  incapacitated by alcohol  or drugs.   While the  certificate                 
  does not constitute sworn testimony, it provides the kind of                 
  evidence upon which the court would rely.                                    
                                                                               
  Co-chairman  Halford called for  objections to Amendment No.                 
  1.  No  objection having  been raised, Amendment  No. 1  was                 
  ADOPTED.                                                                     
                                                                               
  Senator Rieger moved  for adoption of  Amendment No. 2.   He                 
  explained  that  the amendment  addresses  potential  for an                 
  unintentional  increase  in  liability.    Addition  of  new                 
  language at page  5, line   9, deleting "shall provide"  and                 
  inserting "must  be capable  of providing,"  is intended  to                 
  ensure  that individuals  will  be assigned  to  appropriate                 
  facilities.                                                                  
                                                                               
  The second change at page 7,  line 18, is intended to ensure                 
  that facility administrators and peace  officers will not be                 
  held criminally or civilly liable for detaining, "or failing                 
  to detain," or releasing an individual.  Co-chairman Halford                 
  called for  objections to  Amendment No.  2.   No  objection                 
  having been raised, Amendment No. 2 was ADOPTED.                             
                                                                               
  Co-chairman Halford queried members regarding disposition of                 
  the bill.  Senator Sharp MOVED that SCS CSHB 493 (Fin)  pass                 
  from committee with accompanying fiscal notes.  No objection                 
  having been raised, SCS  CSHB 493 (Fin) was REPORTED  OUT of                 
  committee with a $75.4 fiscal note from the Court System, an                 
  indeterminate note  from the Dept. of  Administration (OPA),                 
  and zero notes  from the  Dept. of Public  Safety, Dept.  of                 
  Administration (PDA), Dept. of Law,  and Dept. of Health and                 
  Social Services.                                                             
                                                                               
                                                                               
  CS FOR HOUSE BILL NO. 109(JUD)                                               
                                                                               
       An  Act  relating   to  telephone   solicitations,                      
       advertisements, and directory listings.                                 
                                                                               
  At the direction of Co-chairman Halford,  CSHB 109 (Jud) was                 
  brought on for  discussion.   REPRESENTATIVE KAY BROWN  came                 
  before committee to speak  to her bill.  She  explained that                 
                                                                               
                                                                               
  while  telemarketers believe  that federal  law  relating to                 
  telephone soliciting is sufficient, she  does not share that                 
  belief and feels that the proposed bill  is complementary to                 
  and  not  in   conflict  with   federal  provisions.     She                 
  acknowledged  that  questions  had  been  raised   regarding                 
  whether it  is possible  for Alaska  to regulate  interstate                 
  calls.   Research by  the Dept.  of Law  indicates that  two                 
  federal acts  govern the issue.   The most  recent indicates                 
  that states are free to legislate in this area.                              
                                                                               
  Representative Brown  noted that Assistant  Attorney General                 
  Joe McKinnon  was available  to testify  via teleconference.                 
  She  further  directed   attention  to  backup   information                 
  containing his remarks before the House Judiciary Committee.                 
                                                                               
                                                                               
  The sponsor next referenced an amendment to include language                 
  conforming  to legislation  sponsored  by Senator  Rieger as                 
  well as  clarification of costs and who  will pay them.  She                 
  agreed  that the  list should  "be a  reasonable charge,  an                 
  incremental cost .  . .  to telemarketers."   Representative                 
  Brown  noted  that  she  asked  that  Amendment  No.  1  (9-                 
  LS0424\G.1, Cramer, 3/12/96)  be drafted  at the request  of                 
  the Alaska Newspaper Association.   It provides that "people                 
  who  have a program have  a good faith exception  or . . . a                 
  good faith defense."   She further  advised that she had  no                 
  objection  to Amendment No.  2  proposed  by Senator Pearce.                 
  While the second amendment is "a  little bit off the subject                 
  of  this   bill,"  it  fits   within  the  context   of  the                 
  legislation.  She pointed to possible  constitutional issues                 
  surrounding establishment  of penalties for improper  use of                 
  telephone  polling.    However,  the  amendment  is narrowly                 
  tailored and reflects  a reasonable  attempt to address  the                 
  problem.                                                                     
                                                                               
  Representative  Brown  voiced lack  of  support for  the GCI                 
  amendment  which  would  not  apply  proposed state  law  to                 
  companies  regulated under  federal 47  CFR, part  64.   She                 
  stressed that the amendment would  "essentially gut the bill                 
  with respect to interstate regulation" and apply it only  to                 
  intrastate  calls  within Alaska.    That application  would                 
  drive businesses out  of the  state.  The  sponsor said  she                 
  would rather "not  have the  bill than  have that  amendment                 
  attached to it."                                                             
                                                                               
  Representative Brown explained that under the proposed  bill                 
  a customer could  purchase, for a reasonable  fee, a marking                 
  in the  phone book which says, "Don't call  me."  It is then                 
  the responsibility of telemarketers to  obtain that list and                 
  run it  against computerized files.  The result will provide                 
  telemarketers with listings of people who are more receptive                 
  to telephone solicitations.                                                  
                                                                               
  Senator Randy Phillips  asked why pollsters are  exempt from                 
                                                                               
                                                                               
  the bill.    He  noted that  polling  entities  are  profit-                 
  oriented  businesses  that  directly  solicit  opinions  via                 
  telephone.   He  then asked  why they  should be  considered                 
  separately from other  telemarketers.  Representative  Brown                 
  voiced  support for  the  exception,  advising that  polling                 
  plays  a  role in  democracy.    Those covered  by  the bill                 
  solicit  money  by phone.    Senator Phillips  stressed that                 
  pollsters are paid  to extract  opinions via the  telephone.                 
  He  said  that he  did not  see  a clear  difference between                 
  polling  and  other  telephone  solicitations that  generate                 
  profits.  Representative  Brown noted that pollsters  do not                 
  solicit money from  people.   They ask for  an opinion,  and                 
  that  opinion  is  aggregated with  other  opinions  to give                 
  groups or policy makers a reading on public opinion.  It  is                 
  a valuable tool by which  policy makers and candidates "find                 
  out what the  electorate thinks."   It is thus important  to                 
  distinguish  between that type of phone  call and those made                 
  to solicit business or money from people.                                    
                                                                               
  Senator Phillips voiced  his belief the proposed  bill would                 
  appeal  to  those  seeking  to guard  their  privacy  to the                 
  utmost.  He then questioned  whether those individuals would                 
  want to  receive phone  calls from  either telemarketers  or                 
  pollsters.  Representative Brown noted that those wishing to                 
  avoid all  telephone solicitations  can presently  do so  by                 
  obtaining an unlisted number.   The proposed bill represents                 
  "a middle ground that allows you to have a listed number but                 
  put  solicitors on  notice that  you don't  wish  to receive                 
  calls in your home."  It would not prohibit friends, family,                 
  and others from  easily obtaining  your number and  calling.                 
  Those  who  want ultimate  privacy  will continue  to obtain                 
  unlisted numbers.                                                            
                                                                               
  Senator Rieger voiced  his belief  that a  large segment  of                 
  people might not want commercial calls but wish  to continue                 
  to express opinions to pollsters.  He further suggested that                 
  polling  might be less objective,  bias, and defeated if the                 
  pool is too restricted.                                                      
                                                                               
  Co-chairman Halford asked if polling is conducted by random,                 
  numerical  dialing  and suggested  that  an unlisted  number                 
  would   not    provide   protection   from    those   calls.                 
  Representative  Brown  acknowledged  that  unlisted  numbers                 
  continue to receive randomly generated calls, but the volume                 
  is much lower than for those with publicly listed numbers.                   
                                                                               
  Co-chairman Halford asked if the  bill would prohibit random                 
  numerical  selection because  of notations in  the telephone                 
  book.  Senator Rieger voiced his understanding that it would                 
  prohibit   random   selection   since   it   will   be   the                 
  responsibility of the telemarketer to obtain the list of "do                 
  not  calls"  and  screen  out  those numbers.    Co-chairman                 
  Halford  advised of his hope that  unlisted numbers would be                 
  incorporated   within   the   list  of   "do   not   calls."                 
                                                                               
                                                                               
  Representative Brown voiced her  understanding that unlisted                 
  numbers are  not given out.   "Do not call"  numbers will be                 
  published  in  the  phone  book,  but  they   will  have  an                 
  identifying  mark  indicating they  do  not wish  to receive                 
  commercial solicitations.   The  telemarketer can  obtain an                 
  electronic copy of "do not call"  numbers for the purpose of                 
  matching it against the telemarketer's  numbers, so that "do                 
  not calls" are not solicited.  Co-chairman Halford  asked if                 
  there  was a way  to ensure that  mechanical dialing devices                 
  will treat unlisted  numbers as "do not  calls." Representa-                 
  tive Brown  responded that  nothing would  prohibit a  local                 
  telephone  company from  asking unlisted  customers if  they                 
  wish  to  be  included  within  "do  not  call"  lists   for                 
  telemarketers.                                                               
                                                                               
  Co-chairman  Frank   advised  of   difficulties  in   making                 
  distinctions between  polling calls,  commercial calls,  and                 
  charitable calls.   He pointed specifically to  the practice                 
  of  "push  polling."   He  suggested that  there  is nothing                 
  "pure" about polling relative to  the public process, and he                 
  proposed that perhaps two asterisks could identify those who                 
  wish  to  receive  neither  commercial  nor  polling  calls.                 
  Senator Rieger  noted that Amendment No. 2 by Senator Pearce                 
  addresses that issue.   Co-chairman Frank voiced  his belief                 
  that there should be no exception for polling.  It should be                 
  "lumped" in with everything else.                                            
                                                                               
  Co-chairman  Frank  further  spoke   to  situations  whereby                 
  charities hire a telemarketing firm  to conduct polls and/or                 
  solicitations.                                                               
                                                                               
  Senator Donley  asked if  legal opinions  had been  prepared                 
  regarding   constitutional   free  speech   implications  of                 
  different levels of  regulation.  Representative  Brown said                 
  that the issue had not been researched except in relation to                 
  Amendment  No. 2 by  Senator Pearce.   Review indicates that                 
  regulation should be  as narrowly tailored  as possible.   A                 
  supreme  court  decision  found that  anonymous  fliers  are                 
  permitted.  The requirement that  "people disclose things is                 
  not a proper  regulatory tool."   Further discussion of  the                 
  decision  relating to fliers followed.  Representative Brown                 
  stressed   that  the   federal   government  has   regulated                 
  commercial speech over the telephone.   There is no question                 
  about  state  ability  to  do  so  in  a reasonable  manner.                 
  Political speech is highly protected under the constitution.                 
  The  proposed  amendment  is narrowly  drafted  in  terms of                 
  effect  and  enforcement.    Representative  Brown  directed                 
  specific attention to the four items listed on page 2 of the                 
  amendment,  and  noted  that  all  have  to  be  present  to                 
  constitute telephone campaign misconduct.                                    
                                                                               
  Senator Donley referenced page 1, line  19, of Amendment No.                 
  2  and noted  lack  of a  complete  sentence following  (b).                 
  Senator Rieger suggested that language be added to read:                     
                                                                               
                                                                               
       The court  may award  damages, including  punitive                      
       damages, for a violation of this section.                               
                                                                               
  Senator Donley concurred.                                                    
                                                                               
  Senator Zharoff pointed to file material entitled "FTC News"                 
  and                                                                          
  referenced  information indicating that  the new  rule which                 
  became effective December 31,  1995, prohibits telemarketers                 
  from calling before 8:00 a.m. and  after 9:00 p.m., and from                 
  calling  consumers  who have  said they  do  not want  to be                 
  called.  Representative  Brown explained that  under federal                 
  law each telemarketer can  call a person independently.   If                 
  the consumer states he or she does not wish to be  called in                 
  the  future,  each company  maintains  a separate  list.   A                 
  consumer  could   thus  receive  many  calls--each   from  a                 
  different company.  The difference between that approach and                 
  the proposed bill  is that unwanted  calls could be  stopped                 
  with a  single act.   The  proposed bill  goes further  than                 
  federal law since the federal  approach does not effectively                 
  reduce the number of calls.                                                  
                                                                               
  Senator Donley referenced file  material from MCI indicating                 
  that  Alaska  is  prohibited  from  extending state  law  to                 
  interstate  telephone  solicitations.   Representative Brown                 
  cited two acts whereby the  federal government has regulated                 
  the activity.  The most recent states:                                       
                                                                               
       Nothing  contained  therein   shall  prohibit   an                      
       authorized state official from proceeding in state                      
       court on  the basis of an alleged violation of any                      
       civil or criminal statute of such state.                                
                                                                               
  JOE McKINNON, Assistant Attorney General, Dept. of Law, next                 
  spoke via  teleconference from  Anchorage.  He  acknowledged                 
  that  the  issue  in  question  represents  a  "gray  area."                 
  Separate  federal acts  address  the issue.    The 1991  Act                 
  speaks  to automatic  dialing  devices and  artificial, pre-                 
  recorded  voice systems.   It provides  for FCC  adoption of                 
  rules   regarding  "do  not  call"  regulations.    Pursuant                 
  thereto,  the  FCC adopted  regulations  which  require each                 
  company to maintain a list of those who have asked not to be                 
  called.     Three   years  later,   Congress   enacted   the                 
  Telemarketing and Consumer Fraud and Abuse Prevention Act of                 
  1994--a more comprehensive act dealing with telemarketing in                 
  general.    It  requires  disclosures  to  be  made,  places                 
  restrictions  on hours,  sets  record keeping  requirements,                 
  etc.  Regulations  adopted by  the Federal Trade  Commission                 
  also include "do not  call" rules which are essentially  the                 
  same as the  1991 Act.  Gray  areas stem from the  fact that                 
  each  law  takes  a  slightly  different approach  to  state                 
  preemption.   The 1991 Act specifically  states that it does                 
  not preempt  any state  law which  imposes more  restrictive                 
                                                                               
                                                                               
  intrastate  requirements.     That   seems  to  imply   that                 
  interstate jurisdiction is  federal.  However, the  1994 Act                 
  specifically authorizes state officials to proceed under any                 
  state civil or  criminal statute.  The  National Association                 
  of Attorney  Generals interprets that as a statement of non-                 
  preemption  as  did  the  Federal  Trade Commission  in  its                 
  regulations.  It thus appears that  the two federal statutes                 
  conflict on the issue of state preemption.  The Alaska Dept.                 
  of  Law  has  concluded that  since  the  1994  Act is  more                 
  detailed,  more  comprehensive,  and more  recent  in  time,                 
  courts would look  to it to  determine whether or not  state                 
  preemption  exists.  If  a court challenge  were brought, it                 
  would  start  with  the presumption  that  Congress  did not                 
  intend to preempt  state law;  that federal jurisdiction  is                 
  limited.   Based on the interplay of the two statutes, it is                 
  believed that the court  would give more weight to  the more                 
  recent  statement of Congress, given the  fact that the 1991                 
  Act  is fairly ambiguous.   Mr. McKinnon  advised that while                 
  this is  indeed a gray area, the  Dept. of Law has concluded                 
  that the state  would more than likely  prevail in asserting                 
  jurisdiction.                                                                
                                                                               
  Senator Donley asked if other states had exercised authority                 
  in the  area.   Mr. McKinnon  voiced his  understanding that                 
  Florida and  Oregon have  enacted statutes  similar to  that                 
  proposed for  Alaska.   There have  been no  court tests  of                 
  those statutes.                                                              
                                                                               
  REED STOOPS  came before  committee on  behalf of  MCI.   He                 
  distributed correspondence and  an attached legal memorandum                 
  from  western  counsel  which  speaks  to  applicability  of                 
  proposed  legislation  to  interstate  telemarketing.    Mr.                 
  Stoops also distributed a summary  of the telephone consumer                 
  protection act, FCC regulations adopted pursuant to the act,                 
  and FTC advisory bulletins on the same subject.                              
                                                                               
  Mr. Stoops explained that  in addition to the "do  not call"                 
  list  required  to  be  kept  by  each  individual  company,                 
  adherence to hours  during which  calls are prohibited,  and                 
  prohibition against  auto-dialers, an industry list  is also                 
  purchased by most  of the 3,600 major  interstate marketers.                 
  While there is a mandatory "do not call" list, there is also                 
  a voluntary  industry vehicle  by which  individuals may  be                 
  identified  without  having  to  talk  with each  individual                 
  company.                                                                     
                                                                               
  MCI concerns relate  to belief that the  state is prohibited                 
  from adopting regulations of this sort in  conflict with the                 
  telephone consumer protection act.  Testimony before the FCC                 
  focused on the  balance between the rights  of telemarketers                 
  to conduct interstate commerce versus the right of consumers                 
  to protect their privacy.                                                    
                                                                               
  END:      SFC-96, #100, Side 1                                               
                                                                               
                                                                               
  BEGIN:    SFC-96, #100, Side 2                                               
                                                                               
  If  every state was  allowed to adopt  provisions similar to                 
  those  in the  proposed  bill, national  telemarketers would                 
  annually have to consult every phone directory in the United                 
  States to determine who is on the "do not call" list.   That                 
  is too burdensome and too expensive.  For MCI, telemarketing                 
  was one means by which the  company grew to a size where  it                 
  could compete with AT&T.                                                     
                                                                               
  The  amendment  suggested  by  MCI  would  exempt  companies                 
  regulated by and in compliance  with federal law.   Adoption                 
  would not "gut the bill" in that it would  continue to apply                 
  to   nonprofits,   in-state   marketing,  and   out-of-state                 
  companies   that  are   not  in   compliance   with  federal                 
  regulations.                                                                 
                                                                               
  In his closing remarks, Mr. Stoops noted that new technology                 
  incorporated  within   the  "caller   I.D.  service"   being                 
  implemented  by  telephone companies  in  Alaska will  allow                 
  consumers to screen calls coming into their homes.                           
                                                                               
  RAY  GILLESPIE  next  came  before  committee on  behalf  of                 
  AT&T/Alascom.  He  voiced support for consumers  who wish to                 
  avoid unwanted  phone calls.   However, given  comprehensive                 
  federal  laws   and  regulations,  AT&T/Alascom   feels  the                 
  proposed bill is  unnecessary since  it duplicates and  goes                 
  beyond federal requirements.   It would  also be costly  and                 
  burdensome.  Mr. Gillespie attested to difficulties involved                 
  in  dealing  with  different  requirements  in 50  different                 
  states.                                                                      
                                                                               
  Existing federal law  is tough.   Violation can result in  a                 
  $10,000 penalty.  The federal act specifically empowers each                 
  state attorney general to enforce federal law in each state.                 
  Mr. Gillespie concurred in earlier comments that federal law                 
  would preempt HB  109 provisions  which purport to  regulate                 
  interstate  telemarketing.     The   FCC  rejected   use  of                 
  specifically  marked  telephone   directories  and   instead                 
  ordered industry based, company specific "do not call" lists                 
  for the following reasons:                                                   
                                                                               
       1.   It was  the most  effective and  efficient way  to                 
  permit         telephone  subscribers   to  avoid   unwanted                 
                 telephone solicitations.                                      
                                                                               
       2.   Company specific "do not  call" lists would impose                 
  the       cost  of   protecting  consumer  privacy   on  the                 
            telemarketer rather than on telephone exchanges.                   
                                                                               
       3.   Specific "do not call" lists are more likely to be                 
            accurate  than  a  national data  base  because  a                 
            single party is responsible.                                       
                                                                               
                                                                               
  The  FCC  concluded  that the  option  of  special marketing                 
  directories  combines the disadvantages  of maximum costs to                 
  all  participants with  the minimum  potential effectiveness                 
  and is, therefore, not a suitable means of accomplishing the                 
  goals of federal law.                                                        
                                                                               
  Mr. Gillespie voiced  support for the amendment  proposed by                 
  GCI and MCI.                                                                 
                                                                               
  Senator Rieger said he  had no objection to Amendment  No. 1                 
  (9-LS0424\G.1) which he explained creates  a duty of care on                 
  a  company conducting  telephone solicitations  but includes                 
  hold harmless provisions if the company has an employee  who                 
  inadvertently  makes  an  improper  telephone  solicitation.                 
  Senator  Zharoff  raised  a   question  regarding  how   the                 
  amendment   reads.      Representative   Brown  voiced   her                 
  understanding that  a company would  not be in  violation of                 
  standard reckless  disregard provisions if  it complied with                 
  the requirements set  forth in subsections (1)  through (4).                 
  There is a similar provision  in federal law.  Telemarketers                 
  indicated they would  feel more  comfortable with  standards                 
  spelled out in state law as well.                                            
                                                                               
  Co-chairman  Frank   attested  to   need  to   add  language                 
  indicating  that  "corrective disciplinary  action  has been                 
  implemented."    Senator Donley  moved  for adoption  of the                 
  following new language as an amendment to the amendment:                     
                                                                               
       Between Lines 13 and 14 add a new subsection (5):                       
                                                                               
            (5)   the person  has taken  corrective action  to                 
  prevent             continued violations.                                    
                                                                               
  Co-chairman Frank noted  need to  indicate that the  problem                 
  has been brought  to the employer's attention.   Co-chairman                 
  Halford concurred in  need for the  employer to be aware  of                 
  the problem before corrective action can be taken.                           
                                                                               
  Senator Rieger suggested that reference to corrective action                 
  be included  as additional  language within  subsection (1).                 
  Senator  Donley  withdrew  his  proposed  amendment  to  the                 
  amendment.  Senator  Rieger then moved to  add the following                 
  language to subsection (1) at line 7:                                        
                                                                               
       After "section," add:                                                   
                                                                               
            including corrective actions, where appropriate;                   
                                                                               
  Co-chairman Halford called  for objections to the  amendment                 
  to Amendment No.  1.  No  objection having been raised,  the                 
  amendment to Amendment No. 1 was ADOPTED.                                    
                                                                               
  Co-chairman Halford then called for objection to adoption of                 
  Amendment No. 1.  No objection having been raised, Amendment                 
                                                                               
                                                                               
  No. 1 was ADOPTED.                                                           
                                                                               
  Senator  Rieger  MOVED  for  adoption  of  Amendment  No.  2                 
  (Senator   Pearce's   amendment,   9-LS0424\G.3)  with   the                 
  following change at page 1, line 19:                                         
                                                                               
       Following the word "damages," add:                                      
                                                                               
            for a violation of this section.                                   
                                                                               
  Senator Donley raised  a question  regarding citation of  AS                 
  15.56.110(b)  at line 22  of the  amendment.   KEN ERICKSON,                 
  aide to Senator Pearce, came before committee.  He explained                 
  that the citation lists actions of a governing body.  If one                 
  is found guilty of violation of  this section, it lists what                 
  would happen thereafter.   The governing body, in  this case                 
  the legislature, would hold a vote, and the individual would                 
  be expelled from his or her seat by a two-thirds vote.                       
                                                                               
  Senator Randy  Phillips  suggested  that  provisions  within                 
  Amendment No. 2  appear more appropriate to  campaign reform                 
  legislation.  Co-chairman Halford  noted that the  amendment                 
  would require a title change for HB  109.  He voiced support                 
  for the intent of the amendment  but suggested that "a title                 
  amendment may not do this bill any  good at this point."  He                 
  then asked if  the amendment would  fit within the title  of                 
  legislation dealing with campaign reform.  Co-chairman Frank                 
  expressed reluctance  to effect  a title  change that  might                 
  jeopardize passage of  the bill.  Senator  Rieger concurred,                 
  advising that he  would abide  by the wishes  of either  the                 
  sponsor or the Co-chairman as to  whether they wished to add                 
  the amendment to a different vehicle.                                        
                                                                               
  Co-chairman Frank voiced support for the thrust of Amendment                 
  No. 2 but  raised a question  regarding language at page  2,                 
  lines 9 and  10.  He suggested that  subsection (4) would be                 
  difficult to prove.   Ken Erickson explained that the intent                 
  was to make language mirror  slander statutes.   Co-chairman                 
  Frank  raised  concern that  the  language might  render the                 
  amendment  ineffective  in  application because  it  is  "so                 
  complicated .  . .  and vague  that it  can't be  enforced."                 
  Determination should rest merely upon whether statements are                 
  true or false.   That is the easier standard to  prove.  The                 
  damaged candidate should  not have to prove  that statements                 
  damaged his  or her  reputation for  honesty, integrity,  or                 
  qualifications.  Proving that statements  by an opponent are                 
  false should be sufficient.   The Co-chairman suggested that                 
  subsection (4) be removed from the amendment.   Mr. Erickson                 
  cautioned that the  result of removal  would be to  "protect                 
  candidates more than the average person."  Co-chairman Frank                 
  noted that the situation involves two candidates running for                 
  office rather than  private individuals.   The integrity  of                 
  the  electoral  process  is  at   stake.    The  Co-chairman                 
  suggested that  the same  high test for  slander should  not                 
                                                                               
                                                                               
  necessarily be applied in this instance since motivation for                 
  private individuals to defame one another is not the same as                 
  in the  political arena.   He  said he  was not  necessarily                 
  focusing upon damage to the individual candidate so much  as                 
  damage  to the  electoral process  through manipulation  and                 
  distortion.  The  process is  destroyed if false  statements                 
  are  allowed  to go  unchallenged and  unprosecuted.   If an                 
  individual makes a false statement, he or she should be held                 
  accountable,  regardless  of whether  or  not it  destroys a                 
  candidate's integrity.                                                       
                                                                               
  Representative Brown said she could  live with the amendment                 
  either  way.   She voiced support  for the  higher standard,                 
  noting that the amendment ventures into a gray area in terms                 
  of attempts  to regulate  political speech  which is  highly                 
  protected under the constitution.   Public officials are not                 
  subject  to  slander  with  respect  to public  records  and                 
  reputation.   As  an  example,  she  cited  a  school  board                 
  association flier which listed numerous people who the flier                 
  indicated voted against education because  of final votes on                 
  the budget.   What may be true or  false is not always clear                 
  cut.   While members voted  against the  bill, it was  not a                 
  fair  statement  to  characterize the  vote  as  one against                 
  education.                                                                   
                                                                               
  In  developing  Amendment No.  2,  the drafter  attempted to                 
  craft  narrowly tailored language that serves the legitimate                 
  interest  of the  state.   Removal of  subsection  (4) would                 
  broaden language that attempts to achieve a balance.                         
                                                                               
  Ken Erickson  cautioned against inclusion of  more stringent                 
  protections  for  candidates  that  make  them  appear  more                 
  protected than the average citizen.                                          
                                                                               
  Co-chairman Frank formally MOVED to delete subsection (4) at                 
  page 2, lines 9 and 10, of Amendment No. 2.   Senator Donley                 
  objected,  saying  that  criminal  law  involves   "a  whole                 
  different  standard  of specificity  . .  .  ."   It  may be                 
  appropriate to include subsection (4) language.  Co-chairman                 
  Halford  called  for a  show  of  hands on  adoption  of the                 
  amendment to Amendment No. 2.  The motion carried on  a vote                 
  of 4 to 3, and the amendment to Amendment No. 2 was ADOPTED.                 
                                                                               
                                                                               
  Senator   Zharoff   referenced  application   to  municipal,                 
  borough,  state  legislative,  and  gubernatorial races  and                 
  asked  why  it would  not  apply  to statewide  races.   Mr.                 
  Erickson   responded  that  federal  law  would  preempt  in                 
  congressional races.                                                         
                                                                               
  Senator Randy  Phillips  again asked  whether  the  proposed                 
  amendment   should   be   placed   within  campaign   reform                 
  legislation.  Co-chairman Halford asked if House support for                 
  HB 109 was  sufficient so that a title change would not mean                 
                                                                               
                                                                               
  it would fail  to pass.   Representative Brown said she  saw                 
  both advantages and disadvantages to inclusion  of Amendment                 
  No. 2.                                                                       
                                                                               
  Co-chairman Halford called for  a show of hands on  adoption                 
  of Amendment No. 2 as amended.   Amendment No. 2 was ADOPTED                 
  on  a vote of  6 to 0 (Senator  Sharp was temporarily absent                 
  from the meeting).                                                           
                                                                               
  Senator  Rieger MOVED for adoption  of Amendment No. 3 which                 
  he said clarifies  that the charge  to the consumer for  the                 
  cost of identification as a "do not call" will be subject to                 
  review   and  approval   by  the  Alaska   Public  Utilities                 
  Commission.  No objection having  been raised, Amendment No.                 
  3 was ADOPTED.                                                               
                                                                               
  Co-chairman  Halford voiced  a preference  for a  two-tiered                 
  system   which identifies  those who do  not want commercial                 
  calls and those who wish to avoid all solicitations.                         
                                                                               
  Co-chairman Frank directed attention to page 3,  lines 2 and                 
  3, of  CSHB 109(Jud) and suggested that  subsection (iii) be                 
  deleted so  that polling  is "lumped  in with  solicitations                 
  that a  person can choose  not to receive."   He  voiced his                 
  belief that polling  should not remain an  exception, saying                 
  that   if   people   are   not   interested   in   receiving                 
  solicitations, they are  probably not interested  in opinion                 
  polls as well.  He then  formally MOVED to delete subsection                 
  (iii).  Representative Brown  voiced opposition to  removal.                 
  She reiterated her view that failing to provide an exception                 
  for polling  would make  it  impossible to  get an  unbiased                 
  sample since fewer people would be included.  She added that                 
  language relating to  soliciting the expression of  ideas or                 
  opinions or votes  goes beyond polling.   The Representative                 
  noted that she had called individuals in her district to ask                 
  for their vote and evaluate opinions.   That is an important                 
  part of an  elected representative's ability to reach out to                 
  his  or  her constituency.    Representative Brown  voiced a                 
  preference for the approach embodied  within an amendment by                 
  Senator Sharp which would  "take the nonprofits . .  . [and]                 
  put them into the  category that are not covered,  as well,"                 
  rather than removing the exception for polling.                              
                                                                               
  Co-chairman Halford  noted  that subsection  (iii) does  not                 
  merely relate to  polling.  It includes solicitation  of the                 
  expression of ideas or opinions as  well.  He suggested that                 
  "polling" and "or votes" could  be removed from the language                 
  so as to retain ability for legislators to call constituents                 
  and ask opinions, etc.  Co-chairman Frank agreed that it was                 
  not his  intent to limit  a legislator's ability  to contact                 
  constituents and seek opinions.   He further noted, however,                 
  that those who do not wish to be solicited also  seek relief                 
  from pollsters.                                                              
                                                                               
                                                                               
  END:      SFC-96, #100, Side 2                                               
  BEGIN:    SFC-96, #101, Side 1                                               
                                                                               
  Co-chairman Halford voiced  his belief that there  should be                 
  two levels  of identification.   One  for those  who see  to                 
  avoid all  solicitations and  another for  those who  do not                 
  mind calls from pollsters and charities.   The two standards                 
  are:    marketing  versus information  and  charities.   The                 
  public should have the right to say no to both if it chooses                 
  to do so.                                                                    
                                                                               
  Senator Phillips reiterated his view that both pollsters and                 
  telemarketers  receive  payment for  calls  they place.   He                 
  advised that he did not see the distinction between the two.                 
                                                                               
                                                                               
  Co-chairman Halford  voiced support  for elimination  of the                 
  polling portion  of subsection (iii).   Discussion  followed                 
  between  Co-chairmen   Halford  and   Frank  regarding   the                 
  difference  between   polling  and   soliciting  ideas   and                 
  opinions.  Co-chairman Halford called for a show of hands on                 
  the  motion for  deletion of subsection  (iii).   The motion                 
  (Amendment No. 4) failed on a vote of three to four.                         
                                                                               
  Co-chairman  Frank  moved  that  language within  subsection                 
  (iii) be amended (Amendment No. 5) by removing  "polling or"                 
  and "or votes" so the subsection would read:                                 
                                                                               
       calls limited  to  soliciting  the  expression  of                      
       ideas or opinions.                                                      
                                                                               
  In the  course of subsequent  discussion, Co-chairman  Frank                 
  concurred in  need for  a two-tiered  identification system.                 
  He  then  asked  that  the  sponsor develop  that  language.                 
  Representative Brown expressed a preference  for the bill in                 
  its present form but agreed to work with the drafter on  new                 
  language.                                                                    
                                                                               
  Speaking to  the suggested change  within subsection  (iii),                 
  the  sponsor   stressed  that  polling  is   different  than                 
  soliciting votes by telephone.   She noted that solicitation                 
  of  votes by phone is much less intrusive than going door to                 
  door.  She  further attested to  the positive reception  her                 
  past  phone solicitations had  received.   Co-chairman Frank                 
  said he had no objection to calls from candidates.  Problems                 
  stem from calls  from volunteers of charitable  or political                 
  organizations.                                                               
                                                                               
  Co-chairman  Halford  noted  the  approaching  Senate  floor                 
  session and asked that the sponsor  work on the issue within                 
  subsection  (iii)  as  well as  two-tiered  provisions.   He                 
  raised concern that it would appear to be "very self-serving                 
  to leave in the ability to poll and take out the ability for                 
  charities  to fund raise, unless we're going to separate the                 
                                                                               
                                                                               
  categories."  The  sponsor voiced support for  withdrawal of                 
  Amendment  No. 5  and adoption  of a  proposed amendment  by                 
  Senator  Sharp,  instead.    The bill  would  then  apply to                 
  commercial calls and not attempt to limit other calls.                       
                                                                               
  Senator Rieger  noted that charitable  organization language                 
  within the bill is narrower than most people realize in that                 
  charitable staff or  volunteers could  only call members  of                 
  the  organization or others if they have made a contribution                 
  in the last  24 months.   It  is intended to  apply only  to                 
  those who are certain to be  favorably disposed to the call.                 
  Senator Randy Phillips suggested that the diminishing nature                 
  of  the  list,  as  people  move  or die,  would  render  it                 
  unworkable.   He voiced support for the amendment by Senator                 
  Sharp  which  would   widen  opportunities  for  non-profit,                 
  charitable  organizations.   Co-chairman  Halford reiterated                 
  the inconsistency  involved in  protecting a  political tool                 
  while  not  protecting charitable  fund  raising.   He again                 
  stressed  need for a two-tiered  system.  Senator Sharp said                 
  that  language in  subsection (ii) would  allow professional                 
  solicitors  "to  hustle charitable  organizations  to  get a                 
  piece of  the action."  He  noted that he was  attempting to                 
  curtail that activity.                                                       
                                                                               
  Senator  Zharoff  cautioned that  senior  citizen, veterans'                 
  groups, and  political organizations which  encourage people                 
  to vote should not be impacted by narrow language.                           
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 11:05 a.m.                        
                                                                               

Document Name Date/Time Subjects