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