Legislature(2003 - 2004)

02/02/2004 03:25 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 339-TRADE PRACTICES                                                                                                        
                                                                                                                                
CHAIR ANDERSON  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 0985                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KEVIN MEYER,  Alaska State  Legislature, sponsor,                                                               
explained that HB 339 does two things.  He said:                                                                                
                                                                                                                                
     First of all,  it's going to make it  clear and concise                                                                    
     when  a business  uses either  free trial  practices or                                                                    
     negative  option marketing  practices.   It's going  to                                                                    
     require that the seller make  it clear and disclose all                                                                    
     the  material  items and  conditions  of  a free  trial                                                                    
     period. ...                                                                                                                
                                                                                                                                
     Any  consumer obligations  that  are  required will  be                                                                    
     clear and  will be known  by the consumer.   The seller                                                                    
     is  going  to have  to  describe,  in detail,  all  the                                                                    
     charges that  are going to  be made after the  ... free                                                                    
     trial  period, and  how these  charges are  calculated,                                                                    
     and how they are going to be paid.                                                                                         
                                                                                                                                
     Bottom line:  the seller  may not charge a consumer for                                                                    
     a good or service that  was provided under a free trial                                                                    
     period  unless  the  requirements ...  have  been  made                                                                    
     [and]  satisfactorily are  met  by the  business.   And                                                                    
     there's a  list of  all those  requirements ...  in the                                                                    
     bill itself for this free-trial-period plan.                                                                               
                                                                                                                                
Number 1200                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER continued:                                                                                                 
                                                                                                                                
     The  second  part ...  of  this  bill  has to  do  with                                                                    
     negative option plans.   And they're defined  as a type                                                                    
     of  arrangement  where  a   seller  provides  goods  or                                                                    
     services to  someone who doesn't necessarily  want them                                                                    
     or order them, but you just  receive them.  And then it                                                                    
     requires you to  take a proactive position  to ... say,                                                                    
     "I don't want these," or to stop the payment.                                                                              
                                                                                                                                
     Some  businesses have  used this;  they see  this as  a                                                                    
     successful  method to  get their  product out  there to                                                                    
     various consumers because, frankly,  we're all busy.  A                                                                    
     lot  of us  have  two,  three jobs,  kids,  and we  get                                                                    
     something in the mail, we  go, "OK, I don't really want                                                                    
     this, but  it's only 24  bucks; I'm going to  keep it."                                                                    
     And that's  what they're  ... hoping  for, is  that you                                                                    
     don't send it back.                                                                                                        
                                                                                                                                
REPRESENTATIVE MEYER  highlighted the  unfairness of  putting the                                                               
burden on consumers  to take action to get rid  of something that                                                               
they  don't necessarily  want  or  order.   And  it  can be  very                                                               
costly, he  noted, citing  an example  when he  was charged  $8 a                                                               
month and was  unable to recover the money from  a travel agency.                                                               
He continued:                                                                                                                   
                                                                                                                                
     This bill prohibits  the use of a  negative option plan                                                                    
     unless  certain disclosures,  again,  are  made to  the                                                                    
     consumer, ... and those disclosures  are listed in this                                                                    
     bill  too.   And  what  this bill  does  is, it  aligns                                                                    
     Alaska Statutes  more closely  to the  federal statutes                                                                    
     and  the  federal  rules dealing  with  negative-option                                                                    
     marketing.    And it  removes  any  uncertainty in  our                                                                    
     statute of  what role  and responsibility  business has                                                                    
     in  protecting a  consumer, so  when  people are  doing                                                                    
     business up here, it will be  clear as to what they can                                                                    
     and can't do.                                                                                                              
                                                                                                                                
Number 1217                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER  indicated the Department of  Law had worked                                                               
closely  with him  on  this,  and noted  that  Mr. Sniffen  would                                                               
testify via teleconference.  Referring  to the proposed committee                                                               
substitute (CS), he said the changes are fairly minor.                                                                          
                                                                                                                                
Number 1239                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO moved to adopt  the proposed CS, Version 23-                                                               
LS1265\I, Bannister, 1/29/04, for discussion purposes.                                                                          
                                                                                                                                
CHAIR  ANDERSON  announced  that   [Version  I]  was  before  the                                                               
committee  for  discussion purposes.    In  response to  members'                                                               
requests, he said [the committee aide] would distribute copies.                                                                 
                                                                                                                                
[Chair  Anderson  called  on  Mr.   Sniffen,  but  there  was  no                                                               
response.]                                                                                                                      
                                                                                                                                
Number 1319                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  said  she thinks  this  is  important,                                                               
especially  for  people  who  don't   understand  the  system  or                                                               
vulnerable, older  Alaskans.   She noted that  when she'd  had to                                                               
deal  with this  kind of  a situation  personally, the  burden of                                                               
proof was always  on her to make phone calls,  write letters, and                                                               
so forth.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  MEYER agreed  that the  elderly are  probably the                                                               
most  vulnerable  to these  marketing  techniques.   He  said  he                                                               
believes this  bill will clarify  what is required for  the State                                                               
of Alaska.   He added that  [the Department of Law]  can go after                                                               
in-state offenders,  and for  out-of-state ones,  federal statute                                                               
could be used as well.                                                                                                          
                                                                                                                                
REPRESENTATIVE  ROKEBERG referred  to Section  1 of  the original                                                               
bill and said  there seems to be a significant  change in Version                                                               
I with  regard to prohibiting  free trial periods.   He expressed                                                               
concern as  a small-business owner,   and asked  whether reaching                                                               
into one's pocket  and giving someone a free pass  to a gymnasium                                                               
would be subject to this, for example.                                                                                          
                                                                                                                                
Number 1429                                                                                                                     
                                                                                                                                
SUZANNE CUNNINGHAM,  Staff to Representative Kevin  Meyer, Alaska                                                               
State Legislature, responded, "No."   She paraphrased [Version I]                                                               
subsection (e), page 2, beginning at line 13, which read:                                                                       
                                                                                                                                
     This section  does not  apply to  a seller  who offers,                                                                    
     promotes,  advertises, or  otherwise  gives a  consumer                                                                    
     goods  or services  for  free if  the  seller does  not                                                                    
     impose any  obligations on a  consumer who  accepts the                                                                    
     free goods or services.                                                                                                    
                                                                                                                                
MS. CUNNINGHAM remarked,  "So, if you were to give  myself a free                                                               
pass to  your gym, and if  there's no obligation that  I join the                                                               
gym or pay $15 when I walk in  the door, then this does not apply                                                               
to it."                                                                                                                         
                                                                                                                                
Number 1500                                                                                                                     
CHAIR  ANDERSON  asked  about   AOL  [America  Online,  Inc.,  an                                                               
Internet service provider],  which costs perhaps $30  a month and                                                               
yet stores give  away [compact disks that provide]  the first 500                                                               
hours free.  He said he doesn't  use 500 hours a month, and noted                                                               
that AOL didn't give him free hours  when he signed up.  He asked                                                               
whether this  bill would affect that,  or whether it's more  of a                                                               
federal issue, since [AOL] transcends all states.                                                                               
                                                                                                                                
MS. CUNNINGHAM  said she believes it  would be more of  a federal                                                               
issue, but deferred to Mr. Sniffen to answer that.                                                                              
                                                                                                                                
REPRESENTATIVE GATTO  expressed a negative opinion  of businesses                                                               
that say  they're giving a free  month of a good  or service, but                                                               
not until  the third month, after  the consumer has paid  for the                                                               
first two months.                                                                                                               
                                                                                                                                
REPRESENTATIVE MEYER noted that he'd  been relying on Mr. Sniffen                                                               
[who wasn't  available on teleconference  yet] to answer  some of                                                               
these questions.  He added that  as long as it's disclosed and in                                                               
writing, and  the consumer is  fully aware of  what he or  she is                                                               
signing up for, the foregoing situation would be fine.                                                                          
                                                                                                                                
Number 1638                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO  asked whether this will  absolutely prevent                                                               
having a company  provide something like a  phone service without                                                               
the consumer's positive assent.                                                                                                 
                                                                                                                                
REPRESENTATIVE MEYER said yes.                                                                                                  
                                                                                                                                
REPRESENTATIVE  DAHLSTROM noted  with  regard to  communications,                                                               
there was a specific ruling related  to that.  She added that the                                                               
Regulatory  Commission of  Alaska (RCA)  determines those  issues                                                               
with that industry.                                                                                                             
                                                                                                                                
REPRESENTATIVE GUTTENBERG  asked if undisclosed  balloon payments                                                               
are  covered  under  HB  339,  such  as  when  a  person  buys  a                                                               
television and the interest is deferred.                                                                                        
                                                                                                                                
REPRESENTATIVE MEYER  responded that  the consumer would  have to                                                               
sign a written  consent and clearly accept terms;  the onus would                                                               
then be  on the business to  prove it had disclosed  the terms to                                                               
the customer, and have this proof in writing.                                                                                   
                                                                                                                                
Number 1728                                                                                                                     
                                                                                                                                
CHAIR ANDERSON,  in the  absence of  testimony from  Mr. Sniffen,                                                               
directed the committee to pages  1-2 to discuss whether there was                                                               
discomfort with  the [disclosures].   He said he  was comfortable                                                               
with paragraphs (1) through (4), which read:                                                                                    
                                                                                                                                
               (1) any obligation by the consumer to                                                                            
     purchase a minimum quantity of  goods or services after                                                                    
     the free trial period ends;                                                                                                
               (2) a description of all charges that will                                                                       
     be made after the free  trial period ends and how those                                                                    
     charges will be calculated;                                                                                                
               (3) whether any charges for goods or                                                                             
     services will include postage;                                                                                             
               (4) any other obligations the consumer                                                                           
     assumes  by accepting  or using  the goods  or services                                                                    
     within the free trial period.                                                                                              
                                                                                                                                
Number 1756                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG asked  for  verification that  Section 1                                                               
relates  only to  consumer goods  or services,  rather than,  for                                                               
example, free rent for an apartment rental.                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER said that was his understanding.                                                                           
                                                                                                                                
[Representative  Rokeberg deferred  an additional  question until                                                               
after Mr. Sniffen testified.]                                                                                                   
                                                                                                                                
Number 1785                                                                                                                     
                                                                                                                                
CLYDE   (ED)   SNIFFEN,    JR.,   Assistant   Attorney   General,                                                               
Commercial/Fair  Business  Section, Civil  Division  (Anchorage),                                                               
Department of  Law, informed members  that in spite  of technical                                                               
problems, he'd listened to the  previous discussion.  He said the                                                               
department has  been working closely with  Representative Meyer's                                                               
office  to come  up  with  the language  in  the  bill, and  it's                                                               
intended to  address a lot of  the issues being discussed  by the                                                               
committee.  He continued:                                                                                                       
                                                                                                                                
     We did  have some  problems last year  with one  of the                                                                    
     utility companies  trying to get consumers  to agree to                                                                    
     pay  for  services that  they  had  no idea  they  were                                                                    
     paying for,  through a  negative option  plan.   And it                                                                    
     was  our position  that, essentially,  consumers should                                                                    
     never  have to  pay for  anything that  they don't  ask                                                                    
     for.  You  shouldn't just have luggage show  up on your                                                                    
     doorstep and  you get to  keep it,  if you want  it; if                                                                    
     you don't want it, send it  back.  And that's what this                                                                    
     bill does:  it prevents that exact kind of thing.                                                                          
                                                                                                                                
     Some  of  these  other  issues I  heard  the  committee                                                                    
     discuss  relating to  ... "buy  three  months, get  one                                                                    
     month free," other  types of offers, might  be a little                                                                    
     outside the scope  ... of this bill.   This bill really                                                                    
     targets two specific types of  conduct:  the free trial                                                                    
     period,  which is,  ... "Have  this merchandise  for 30                                                                    
     days and if  you like it, keep it and  we'll bill you."                                                                    
     Or another  sort of  twist on that  is, "Try  our cable                                                                    
     for 30  days, and  if you  decide to  watch a  movie on                                                                    
     this premium channel,  then you're automatically signed                                                                    
     up for  that unless you call  us and tell us  you don't                                                                    
     want it."  That's sort of  a mix of a free trial period                                                                    
     along with a negative option plan. ...                                                                                     
                                                                                                                                
     The target  of this kind  of legislation is  really ...                                                                    
     the bigger utility companies  and national chain stores                                                                    
     who  might already  have your  business.   You  already                                                                    
     have cable,  you already have  phone service,  and they                                                                    
     want  to get  you to  sign up  for additional  services                                                                    
     that they offer that you may or may not actually want.                                                                     
                                                                                                                                
     And  a  lot  of  these  are  small-dollar  things  that                                                                    
     consumers just won't blink an  eye about. ... It's $2 a                                                                    
     month; it's $4 a month. ...  You get a notice with your                                                                    
     billing:   "Oh, by the  way, we've decided to  sign you                                                                    
     up for  this extra ...  voice calling plan, and  if you                                                                    
     don't want  it, you  have to  tell us."   And  we think                                                                    
     federal legislation prohibits that.                                                                                        
                                                                                                                                
Number 1877                                                                                                                     
                                                                                                                                
MR. SNIFFEN continued:                                                                                                          
                                                                                                                                
     We  have  some  consumer  protection  language  in  our                                                                    
     current   consumer   protection   Act   that   probably                                                                    
     prohibits that,  but it's  not nearly  as clear  ... as                                                                    
     this bill.   So  we certainly support  this, and  see a                                                                    
     need  for  it in  Anchorage.    And  I don't  think  it                                                                    
     imposes an incredible burden on  businesses at the same                                                                    
     time.                                                                                                                      
                                                                                                                                
MR. SNIFFEN concluded by saying  it's simply a disclosure type of                                                               
legislation,  with  the  need  to   get  the  consumer's  consent                                                               
beforehand.                                                                                                                     
                                                                                                                                
Number 1908                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG  referred  to page  1  [lines  10-11],                                                               
"shall  clearly and  conspicuously  disclose all  material".   He                                                               
also referred  to page 2 [lines  7-8], "The form for  the written                                                               
consent must  be prepared by the  seller".  He asked  if there is                                                               
any standard for the form in terms of format and clarity.                                                                       
                                                                                                                                
MR. SNIFFEN said  that's an excellent question.   The language in                                                               
the bill  just requires it  to be "clear and  conspicuous", which                                                               
he surmised  would be  on a  case-by-case basis.   He  noted that                                                               
there  aren't any  definitive standards  as  to the  size of  the                                                               
type,  for example,  but  said "clear  and  conspicuous" gives  a                                                               
little more  room to look  at the  circumstances.  He  cited auto                                                               
dealers as an  example, and suggested that most  people know what                                                               
"clear and conspicuous" is.                                                                                                     
                                                                                                                                
Number 2010                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG   paraphrased  the  first   sentence  of                                                               
Section 1, subsection (c), which read:                                                                                          
                                                                                                                                
     Before offering,  promoting, advertising,  or otherwise                                                                    
     giving a  consumer goods or  services for a  free trial                                                                    
     period, a  seller shall obtain express  written consent                                                                    
     from the consumer to the free trial period.                                                                                
                                                                                                                                
REPRESENTATIVE  ROKEBERG  asked  how  that would  be  done  in  a                                                               
general advertising campaign.   He inquired, "Are  you making the                                                               
assumption that the  consumer would send for, or  consent to, the                                                               
free trial period  concurrent with the offers to  accept the free                                                               
trial period?"                                                                                                                  
                                                                                                                                
MR. SNIFFEN said it's an excellent  question.  Noting that he was                                                               
reading  it   as  Representative   Rokeberg  was,   he  suggested                                                               
rewording would be possible.  He added:                                                                                         
                                                                                                                                
     I think what you're suggesting  is a business should be                                                                    
     able to run  an advertisement that said,  "Come on into                                                                    
     our store and sign up  for a free 30-day trial period."                                                                    
     And you  shouldn't have to get  written permission from                                                                    
     a consumer to run that  ad.  I understand that concern,                                                                    
     and there  may be a way  we can rework that  language a                                                                    
     little bit to clarify that.                                                                                                
                                                                                                                                
MR.  SNIFFEN suggested  a possible  solution  for subsection  (c)                                                               
purposes only, to say "before  offering or giving a consumer" and                                                               
then delete the "promoting or advertising" language.                                                                            
                                                                                                                                
REPRESENTATIVE ROKEBERG referred  to advertising, subsection (b),                                                               
and the "for disclosure" language.  He asked about fine print.                                                                  
                                                                                                                                
MR.  SNIFFEN responded,  "It  would  just need  to  be clear  and                                                               
conspicuous,  and if  we saw  something in  ultrafine print  that                                                               
required  a magnifying  glass  to read  or  understand, we  would                                                               
consider that to be a violation."                                                                                               
                                                                                                                                
Number 2130                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG  said he  thought it important  that this                                                               
be  clear.    He  said  the  committee  doesn't  want  to  remove                                                               
legitimate, free opportunities for the consumer.                                                                                
                                                                                                                                
Number 2150                                                                                                                     
                                                                                                                                
MR. SNIFFEN,  in response to  Chair Anderson,  offered conceptual                                                               
language to  be substituted  in subsection (c),  page 2,  line 5,                                                               
along with an explanation:                                                                                                      
                                                                                                                                
     Remove the terms "promoting  and advertising" from that                                                                    
     line, so  the ...  section would read  "before offering                                                                    
     or otherwise giving a consumer  goods or services", and                                                                    
     then  continue  with that  paragraph.    That would  at                                                                    
     least allow advertising  for a free trial  period, in a                                                                    
     certain  manner,  before  the consumer  would  have  to                                                                    
     enter into a written agreement.                                                                                            
                                                                                                                                
Number 2183                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG  moved that  the foregoing be  adopted as                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
Number 2185                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAHLSTROM objected for  purposes of discussion and                                                               
asked the sponsor to comment.                                                                                                   
                                                                                                                                
REPRESENTATIVE MEYER agreed  with Amendment 1, but  noted that it                                                               
might also apply to page 1, line 9.                                                                                             
                                                                                                                                
MR. SNIFFEN said he didn't  believe it would harm the legislation                                                               
to make that change as well.                                                                                                    
                                                                                                                                
REPRESENTATIVE ROKEBERG  said he  wasn't certain about  doing the                                                               
same  amendment there,  however, because  of the  desire to  make                                                               
sure  that  the  promotion  and advertisements  still  have  some                                                               
sideboards.  He suggested a need to look at it.                                                                                 
                                                                                                                                
Number 2223                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD began  discussion of  what later  became                                                               
Amendment 2.  He proposed  that changing "before" to "when" would                                                               
make more  sense.  He  asked how  those things would  be provided                                                               
before advertising.                                                                                                             
                                                                                                                                
MR. SNIFFEN responded:                                                                                                          
                                                                                                                                
     I don't know that  there's really a semantic difference                                                                    
     between "before"  and "when"  offering.  The  intent, I                                                                    
     think, of the  legislation here is to  say, "Before you                                                                    
     engage in this kind of  activity, we want to give these                                                                    
     kinds of disclosures to the  consumer." ... If you say,                                                                    
     "Before  you advertise,  for example,  you  have to  do                                                                    
     these  things,"  I  think  Representative  Crawford  is                                                                    
     correct:   it  would happen  at  the same  time as  the                                                                    
     advertisement, or  the advertising would  include these                                                                    
     kinds of  disclosures.  And  I read this to  mean that,                                                                    
     but  I  can see  how  a  different reading  could  mean                                                                    
     something different.                                                                                                       
                                                                                                                                
REPRESENTATIVE MEYER said he thought  that if the recommendations                                                               
that   Representative   Rokeberg    had   proposed   were   made,                                                               
Representative Crawford's concerns would  be rectified.  He asked                                                               
whether Amendment  1 needed  to be made  in both  subsection (b),                                                               
page l, and subsection (c), page 2.                                                                                             
                                                                                                                                
MR. SNIFFEN referred  to the proposed changes  in subsection (b),                                                               
page  1,  line  9,  and remarked  that  removing  "promoting  and                                                               
advertising" would  allow a  seller to  advertise or  offer, even                                                               
though [the consumer]  would be required to go into  the store to                                                               
find out more details.  He added:                                                                                               
                                                                                                                                
     But when you actually went  into the store and actually                                                                    
     signed  up  for the  deal,  before  you signed  on  the                                                                    
     dotted  line, [the  business] would  have  to make  the                                                                    
     disclosures, as required, under this statute.                                                                              
                                                                                                                                
     It  really is  a policy  call on  whether you  want the                                                                    
     advertisements to include the  conditions of the offer,                                                                    
     or  are you  going to  let the  advertisement bait  the                                                                    
     consumers  into  the  store,   and  then  -  when  they                                                                    
     actually sign on  the dotted line -  have that document                                                                    
     disclose the terms of the offer.                                                                                           
                                                                                                                                
MR. SNIFFEN  recommended that the advertisement  at least contain                                                               
some elements of the offer so  people aren't being lured into the                                                               
store when they  wouldn't have gone if they'd  known the details.                                                               
He  said  that's the  main  difference  he  sees in  having  that                                                               
language in subsection  (b), as opposed to  having the "promoting                                                               
and advertising" language on page 2, line 5, subsection (c).                                                                    
                                                                                                                                
Number 2370                                                                                                                     
                                                                                                                                
CHAIR  ANDERSON asked  if  there was  any  objection to  adopting                                                               
Amendment 1,  deleting "promoting  and advertising" from  page 2,                                                               
line 5.  There being no objection, it was so ordered.                                                                           
                                                                                                                                
REPRESENTATIVE  ROKEBERG agreed  with Representative  Crawford on                                                               
the use of "before" in subsections (b) and (c).                                                                                 
                                                                                                                                
TAPE 04-7, SIDE B                                                                                                             
Number 2385                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG commented,  "You couldn't  have 'before'                                                               
and  'concurrent' or  'concurrently'. ...  Maybe 'when'  would be                                                               
better."                                                                                                                        
                                                                                                                                
CHAIR  ANDERSON asked  Mr. Sniffen  whether that  makes sense  to                                                               
have "when offering" on page 1, line 9, and on page 2, line 5.                                                                  
                                                                                                                                
MR. SNIFFEN said he didn't see any problems with it.                                                                            
                                                                                                                                
Number 2357                                                                                                                     
                                                                                                                                
REPRESENTATIVE   GATTO  proposed   perhaps  substituting   "after                                                               
offering".                                                                                                                      
                                                                                                                                
MR. SNIFFEN countered that it might  allow too much leeway to the                                                               
prospective sellers  to make a pitch  and trap the consumer.   He                                                               
restated the bill's  purpose:  to bring disclosures  out before a                                                               
consumer is obligated to do anything.                                                                                           
                                                                                                                                
REPRESENTATIVE GATTO asked about "upon offering".                                                                               
                                                                                                                                
MR.  SNIFFEN agreed  this would  work, or  "when offering"  would                                                               
also work.                                                                                                                      
                                                                                                                                
Number 2311                                                                                                                     
                                                                                                                                
CHAIR  ANDERSON  interpreted   Amendment  2  from  Representative                                                               
Crawford's previous suggestion:   On page 1, line 9,  and on page                                                               
2, line 5, delete "before" and insert "when".                                                                                   
                                                                                                                                
CHAIR ANDERSON asked whether there  was any objection to adopting                                                               
Amendment 2.  There being no objection, it was so ordered.                                                                      
                                                                                                                                
Number 2291                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG  referred to [Section 1]  subsection (b),                                                               
paragraphs (1) to  (4).  He asked whether it's  correct that when                                                               
[a  business]  is  advertising,  these   terms  must  be  in  the                                                               
advertisement.                                                                                                                  
                                                                                                                                
MR. SNIFFEN emphasized the need  to address the four [paragraphs]                                                               
of  subsection (b).   Although  there are  no specific  terms, he                                                               
said the  material terms need  to be  included in some  clear and                                                               
conspicuous way in the offer.   In further response, he said, for                                                               
example, that if  the charges for the goods  or services required                                                               
paying  for  postage  to  receive   them,  there  could  be  some                                                               
disclosure that the  offer doesn't include free  postage, or that                                                               
the consumer is responsible for those charges.                                                                                  
                                                                                                                                
REPRESENTATIVE ROKEBERG noted that  [paragraph (3)] says "whether                                                               
any charges will be included", not "if".                                                                                        
                                                                                                                                
MR. SNIFFEN agreed, suggesting either  could be used.  In further                                                               
response, he said  this language comes straight  from the federal                                                               
statute that is very similar to HB 339.  He added:                                                                              
                                                                                                                                
     However the seller  wants to address that  postage - if                                                                    
     there isn't  any, sometimes  silence can  be confusing.                                                                    
     But  to say  that the  offer includes  all postage  and                                                                    
     handling  charges, for  example, here  in Alaska,  that                                                                    
     could be  important because that could  consume a large                                                                    
     part of the cost of the goods or service. ...                                                                              
                                                                                                                                
     Of  course, it's  up to  the committee  if you  want to                                                                    
     only have  to disclose that  if there is  an obligation                                                                    
     on the  consumer, or ...  you can  let it be  silent if                                                                    
     there  is not  an  obligation on  the  consumer.   That                                                                    
     would be the effect of changing ... the word "whether"                                                                     
     to "if".                                                                                                                   
                                                                                                                                
Number 2202                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO began discussion  of Conceptual Amendment 3.                                                               
He  asked Mr.  Sniffen whether  "postage" is  too focused,  since                                                               
there are different ways of transporting goods.                                                                                 
                                                                                                                                
MR.  SNIFFEN said  that's an  excellent point  and that  he'd not                                                               
object to amending that to just say "includes shipping charges".                                                                
                                                                                                                                
REPRESENTATIVE ROKEBERG suggested "shipping and handling".                                                                      
                                                                                                                                
Number 2165                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO moved  to adopt Conceptual Amendment  3:  On                                                               
page  2,  line 2  [paragraph  (3],  delete "postage"  and  insert                                                               
"shipping" or "shipping and handling".                                                                                          
                                                                                                                                
CHAIR  ANDERSON   announced  that  it  would   be  "shipping  and                                                               
handling".  He asked whether Representative Meyer objected.                                                                     
                                                                                                                                
REPRESENTATIVE MEYER said he had no objection.                                                                                  
                                                                                                                                
CHAIR ANDERSON asked whether there  was any objection to adopting                                                               
Conceptual  Amendment 3.   There  being no  objection, it  was so                                                               
ordered.                                                                                                                        
                                                                                                                                
Number 2146                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG  reiterated Representative  Guttenberg's                                                               
issue  with small  print,  and  asked Mr.  Sniffen  if there  are                                                               
regulations on this issue.                                                                                                      
                                                                                                                                
MR. SNIFFEN said  there are no regulations on the  size of print,                                                               
although  the  [department]  could  certainly adopt  some.    The                                                               
requirement under this  language is simply that it  must be clear                                                               
and  conspicuous, which  could be  dealt with  on a  case-by-case                                                               
basis.    He  added  that "clear"  and  "conspicuous"  have  been                                                               
judicially defined  in a variety of  circumstances, and suggested                                                               
the department could probably "make  a run" at violations dealing                                                               
with small print.                                                                                                               
                                                                                                                                
Number 2111                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG   asked  if  there  were   any  issues                                                               
concerning interstate commerce.                                                                                                 
                                                                                                                                
MR. SNIFFEN  responded that  he didn't  believe so  and remarked,                                                               
"We don't  have a problem  here with  a lot of  outside companies                                                               
engaged  in this  practice."   As  an example,  he cited  Borders                                                               
Bookstore in Anchorage and explained:                                                                                           
                                                                                                                                
     Well, Borders is a national  chain, and they're subject                                                                    
     to a lot of federal regulation.   And to the extent ...                                                                    
     they  are   complying  with  the   federal  regulation,                                                                    
     nothing in our statute here  ... would change that.  So                                                                    
     I don't  think there's a burden  on interstate commerce                                                                    
     through  this  language,  that  doesn't  already  exist                                                                    
     through other federal statutes.                                                                                            
                                                                                                                                
CHAIR ANDERSON asked  whether anyone else wished to  testify.  He                                                               
then closed public testimony.                                                                                                   
                                                                                                                                
Number 2049                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  recalled   stating  an  objection  [to                                                               
adopting Version I] and removed it.                                                                                             
                                                                                                                                
Number 2038                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG moved  to report  CSHB 339,  Version 23-                                                               
LS1265\I, Bannister,  1/29/04, as amended, out  of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being  no objection,  CSHB 339(L&C)  was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                

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