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