Legislature(2003 - 2004)
03/31/2004 01:20 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 339 - TRADE PRACTICES Number 0618 CHAIR McGUIRE announced that the next order of business would be HOUSE BILL NO. 339, "An Act relating to negative option plans for sales, to charges for goods or services after a trial period, and to acts that are unlawful as unfair trade practices." Number 0662 SUZANNE CUNNINGHAM, Staff to Representative Kevin Meyer, Alaska State Legislature, testified on behalf of Representative Meyer, sponsor of HB 339. She explained that on March 26, 2004, committee members received the latest version of HB 339, Version 23-LS1265\U, Bannister, 3/26/04, as well as memorandums from Legislative Legal and Research Services and Representative Meyer. She explained that Version U encompasses the amendments discussed at the bill's last hearing. Number 0767 REPRESENTATIVE SAMUELS moved to adopt the proposed committee substitute (CS) for HB 339, Version 23-LS1265\U, Bannister, 3/26/04, as the working document. There being no objection, Version U was before the committee. MS. CUNNINGHAM relayed that [Representative Meyer's] memorandum accompanying Version U outlines the changes encompassed in that version. In response to Representative Gruenberg, Ms. Cunningham pointed out that Version U incorporates a definition of "seller." REPRESENTATIVE GRUENBERG surmised, "I gather that's not quite the same as the UCC [Uniform Commercial Code] because it deals with services also." MS. CUNNINGHAM answered in the affirmative. REPRESENTATIVE GARA turned attention to subsection (e) on page 2 of Version U, and noted his appreciation for incorporating the change he had requested. He explained that if someone offers something for a free trial period, then that [person or entity] will have to send out an invoice before charging the consumer. The invoice would provide instructions with regard to cancellations. However, Version U specifies that this invoice has to be provided at least 15 days before charging the consumer's account rather than the 30 days he requested. He opined that 15 days aren't enough. He likened [the 15-day requirement] to how credit card bills arrive and are due relatively soon after arrival, which results in people missing the due date. Representative Gara requested changing the timeframe to 21 days. MS. CUNNINGHAM offered her belief that the Department of Law changed the timeframe from 30 days to 15 days in order to be more in line with the requirements of the Federal Trade Commission, which requires 10 days. She viewed the matter as a policy decision for the committee. Number 0943 REPRESENTATIVE GRUENBERG highlighted that [Version U] changes "express written consent" to "express verifiable consent", and inquired as to the reasoning behind that change. MS. CUNNINGHAM answered that the Department of Law made that decision. She recalled that there was conversation with regard to mandating that the entire conversation of telephonic sales be recorded. There was also conversation with regard to Representative Gara's amendment requiring [the seller] to send a form on which the consumer checks a box that he/she understands and will meet all the obligations specified for the free trial period. The Department of Law's perspective with regard to "express verifiable consent" was that the seller will always have the burden of proving that consent was obtained from the buyer. REPRESENTATIVE GRUENBERG remarked that the law often favors written documents because of the ease of proof, particularly in consumer matters. He inquired as to how the consent that isn't in writing will be verified. Number 1062 REPRESENTATIVE KEVIN MEYER, Alaska State Legislature, sponsor, said that he'd had the same question. He noted that Clyde (Ed) Sniffen, Jr., Assistant Attorney General, Commercial/Fair Businesses Section, Civil Division (Anchorage), Department of Law, had wanted the "express verifiable consent" language. He offered his belief that the Department of Law is comfortable with the "express verifiable consent" language, which is used elsewhere in statute. MS. CUNNINGHAM informed the committee that under the federal telemarketing sales rules, there are requirements for the express oral authorization for telephonic sales to be recorded. Therefore, she characterized [the "express verifiable consent" language] as a compromise. REPRESENTATIVE GRUENBERG said that he didn't know whether "express verifiable consent" is a legally defined term. CHAIR McGUIRE announced her desire to report this legislation from committee today. She pointed out that there will be an opportunity to speak with Mr. Sniffen before HB 339 reaches the House floor. She mentioned that she trusted Mr. Sniffen immensely. REPRESENTATIVE GRUENBERG pointed out that "seller" is defined twice [in Version U]. The definition of "seller" on page 3, [lines 2-4], includes "... a person who engages in ... arranging for a free trial period for goods and services." However, the definition of "seller" [on page 3, line 31, through page 4, line 1] doesn't include the aforementioned language. He inquired as to why that is. MS. CUNNINGHAM explained that the definition under AS 45.45.920 pertains to the "seller" in the free trial period, whereas the "seller" definition under AS 45.45.930 refers to the opt-out marketing plans. The [definition of "seller" is included in both] in order to be clear. REPRESENTATIVE GRUENBERG returned to his earlier question with regard to the "express verifiable consent" language. He informed the committee that Black's Law Dictionary has two definitions of "verify", one of which is a verification as is in AS 09.63. However, the other definition of "verify" is as follows: "To prove to be true; to confirm or establish the truth or truthfulness of; to check or test the accuracy or exactness of; to confirm or establish the authenticity of; to authenticate; to maintain; to affirm; to support". He surmised that the language "verifiable" means provable. Number 1221 REPRESENTATIVE HOLM moved to report CSHB 339, 23-LS1265\U, Bannister, 3/26/04, out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, CSHB 339(JUD) was reported from the House Judiciary Standing Committee.