Legislature(2017 - 2018)BARNES 124

04/17/2017 03:15 PM House LABOR & COMMERCE

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Heard & Held
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Heard & Held
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Heard & Held
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+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved HB 195 Out of Committee
              SB  93-CREDIT REPORT SECURITY FREEZE                                                                          
4:04:32 PM                                                                                                                    
CHAIR KITO  announced that the  third order of business  would be                                                               
SENATE BILL NO.  93, "An Act relating to security  freezes on the                                                               
credit reports  or records of  incapacitated persons  and certain                                                               
4:04:47 PM                                                                                                                    
RYNNIEVA  MOSS,   Staff,  Senator  John  Coghill,   Alaska  State                                                               
Legislature,  on  behalf  of   Senator  Coghill,  prime  sponsor,                                                               
introduced SB 93.  She said  the bill looks familiar because last                                                               
year [Twenty-Ninth Alaska State  Legislature] the House addressed                                                               
Senate Bill  121, which created  a security freeze on  minors and                                                               
incapacitated  consumers,  or   protected  consumers,  which  are                                                               
consumers who may  be over age 16  or 18 but unable  to take care                                                               
of themselves.  She stated that  SB 93 takes up where Senate Bill                                                               
121  left  off.   In  the  last  hours  of last  year's  session,                                                               
Representative Claman tried  to add this language  to Senate Bill                                                               
121, but it was just too late in the process to happen.                                                                         
MS. MOSS  stated that  SB 93 would  set up a  system to  freeze a                                                               
minor's  or  incapacitated  person's  credit  report.    This  is                                                               
important, she pointed  out, because it is  never considered that                                                               
children  could be  victims of  identity theft  and that  is what                                                               
this  bill is  about.   About 1.3  million kids  in the  U.S. are                                                               
victims of  identity theft annually and  approximately 50 percent                                                               
of them are children six years  old or younger.  This addresses a                                                               
system to set this up because  it is much different than freezing                                                               
an adult's credit  report.  An adult already has  a credit report                                                               
and a  credit history.   A minor or incapacitated  person usually                                                               
doesn't, so there is nothing to freeze.                                                                                         
MS.  MOSS explained  that to  freeze a  minor's or  incapacitated                                                               
person's  credit  report  -  which  doesn't  exist  -  a  parent,                                                               
guardian, or legal  representative must go to  a credit reporting                                                               
agency and  request that freeze.   If there  isn't a record  or a                                                               
report, the credit-reporting agency will  create what is called a                                                               
credit record  and to  do that  the credit-reporting  agency will                                                               
have to  make verification on  many pieces of information.   When                                                               
an adult goes into a  credit-reporting agency this happens almost                                                               
instantaneously,  she  noted,  because  an  adult  has  a  credit                                                               
report.   However, she  continued, when dealing  with a  minor or                                                               
someone who doesn't have a  credit report, the credit report must                                                               
be  established.   This  is  done  by  the parent  or  [personal]                                                               
representative  asking   that  the  credit  report   be  secured,                                                               
reporting  certain information,  and proving  that they  have the                                                               
authority to make that request, which  could be a court order for                                                               
a   personal   representative   or  a   birth   certificate   and                                                               
identification  (ID) for  both the  minor  and the  parent.   The                                                               
consumer agency then creates a credit  record for a fee of $5.00.                                                               
This fee is under statute and is  the same fee that is paid by an                                                               
adult  to get  a  credit report  frozen.   The  placement of  the                                                               
freeze could  take up  to a  month for  a child  or incapacitated                                                               
person because of that verification and checking of the records.                                                                
MS.  MOSS pointed  out that  the  length of  the security  report                                                               
would last for  as long as the parent  or personal representative                                                               
requests.  It could  be lifted it at any time and  to lift it the                                                               
parent or representative  would have to verify who  they say they                                                               
are and that  they have the legal  authority to do so.   She said                                                               
the exception  to that would  be when a  minor turns 16  years of                                                               
age and  has a  job, a car,  or a cell  phone, and  has basically                                                               
created a  credit report, at which  point the minor can  lift the                                                               
freeze,  if desired.   Another  exception, she  stated, is  if an                                                               
incapacitated person  becomes self-sufficient and can  prove with                                                               
a court  record that  they are no  longer incapacitated  and then                                                               
the freeze  could be lifted.   Another exception to  lifting that                                                               
freeze, she noted, would be if  the information that was given to                                                               
the  credit  reporting  agency was  misrepresented,  which  would                                                               
allow  the credit  reporting agency  to lift  the freeze  itself.                                                               
Lifting the freeze would cost  $5.00, she continued, except there                                                               
would be no fee in the case  of identity theft for which a police                                                               
report or court document can be produced.                                                                                       
MS.  MOSS added  that there  are a  few exceptions  in the  bill.                                                               
There are people  who collect data secondhand;  they don't create                                                               
that  data.   That would  be, say,  a government  agency that  is                                                               
collecting  back  taxes  or  child support  or  a  department  of                                                               
revenue, and they would not  be required to freeze credit reports                                                               
because they  do not create  credit reports, they  collect credit                                                               
4:10:41 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD asked  what  prompted the  bill;                                                               
for example,  whether something happened  when someone  turned 18                                                               
and tried getting credit cards  but couldn't because their Social                                                               
Security number had been compromised.                                                                                           
MS.  MOSS  replied  that  the   credit  reporting  agencies  have                                                               
requested  this.   She  said  27 states  other  than Alaska  have                                                               
adopted these  statutes because identity  theft in children  is a                                                               
growing concern.   Children  are easy  targets and  it is  a very                                                               
easy  way for  people  who create  false  credit, collect  credit                                                               
cards  under false  credit, or  file false  tax returns  with the                                                               
Internal Revenue Service using minors' Social Security numbers.                                                                 
4:11:53 PM                                                                                                                    
REPRESENTATIVE  BIRCH stated  he likes  this idea.   He  inquired                                                               
whether Social Security numbers are nowadays assigned at birth.                                                                 
MS. MOSS  responded that there  are exceptions; for  example, her                                                               
children  didn't get  their Social  Security  numbers until  they                                                               
were  13 years  old.   However,  she continued,  she thinks  most                                                               
people do get a Social Security number at birth.                                                                                
CHAIR KITO opened invited testimony.                                                                                            
4:13:12 PM                                                                                                                    
CARLIE  CHRISTENSEN, Director  of  Government Relations,  Equifax                                                               
Inc., testified  that Equifax  supports SB  93.   She said  SB 93                                                               
would  specify  the  manner  in   which  a  protected  consumer's                                                               
representative  must  submit  a  request to  a  credit  reporting                                                               
agency,   including  sufficient   proof  of   identification  and                                                               
authority  to  act on  behalf  of  the  protected consumer.    By                                                               
incorporating  these  specific  requirements  into  the  existing                                                               
Alaska credit report security  screen statute, affected consumers                                                               
will  be more  protected  from  the risk  of  their freeze  being                                                               
either unduly  placed on their  credit file or unduly  removed by                                                               
someone  who   isn't  authorized  to   act  on  behalf   of  that                                                               
individual.   This would bring Alaska  law more in line  with the                                                               
other states  that have minor  freeze statutes specifying  how to                                                               
handle these requests and to do it consistently, she added.                                                                     
4:14:34 PM                                                                                                                    
REPRESENTATIVE BIRCH  offered his  recognition that Equifax  is a                                                               
private entity  and asked whether  Equifax or others in  the same                                                               
business of credit scoring keep  digital copies of things such as                                                               
proof  of identification  authority, Social  Security, and  birth                                                               
certificates.   He further  asked whether Equifax  has a  copy of                                                               
his birth certificate.                                                                                                          
MS. CHRISTENSEN  answered that if  it is something for  placing a                                                               
security freeze on behalf of a  minor, Equifax may have to retain                                                               
that.   But, she added, she  doesn't know the exact  specifics of                                                               
Equifax retaining  that information  or if  it something  that is                                                               
just presented to  Equifax.  She said she would  have to get back                                                               
to the committee with the specifics.                                                                                            
4:16:20 PM                                                                                                                    
SARAH LASHFORD,  Manager of  Government Relations,  Consumer Data                                                               
Industry Association (CDIA), testified in  support of SB 93.  She                                                               
said CDIA is  an international trade association  founded in 1906                                                               
with more than  130 corporate members.  Its mission  is to enable                                                               
consumers, media,  legislators, and regulators to  understand the                                                               
benefits  of  responsible use  of  consumer  data, which  creates                                                               
opportunities for consumers and the  economy.  She explained that                                                               
the  members of  CDIA provide  businesses with  the data  and the                                                               
analytical tools necessary  to manage risk and  that CDIA members                                                               
help  ensure   fair  and  safe  transactions   for  consumers  to                                                               
facilitate  competition  and  expand  consumer's  access  to  the                                                               
market,  which is  innovative and  focused on  their needs.   She                                                               
stated that the products of CDIA  members are used in more than 9                                                               
billion transactions each year.                                                                                                 
MS. LASHFORD said  SB 93 would provide  additional protection for                                                               
identity  theft.   She recounted  that in  2016 the  Alaska State                                                               
Legislature passed Senate  Bill 121 to offer a  credit freeze for                                                               
the consumer records  of minors.  Providing  protection for those                                                               
exposed to the dangers of identity  theft was a step in the right                                                               
direction.   However, she advised,  by placing  the authorization                                                               
in the  same section of statute  as that for adults,  the statute                                                               
lacks  additional  protection  that  27  other  states  have  now                                                               
adopted.   These  additional measures  help to  safeguard against                                                               
fraud  and identity  theft as  well as  ensure consistency.   She                                                               
said SB  93 provides  clear guidance  and standards  for handling                                                               
minors' credit.   She offered CDIA's belief that  SB 93 maintains                                                               
the  original  intent  of  the   2016  legislation  while  adding                                                               
uniformity and  consistency with other  states' laws.   She urged                                                               
committee members to  support SB 93 to provide the  same level of                                                               
protection as the other 27 states  that have adopted a freeze for                                                               
minors and incapacitated adults.                                                                                                
4:18:35 PM                                                                                                                    
REPRESENTATIVE  BIRCH stated  that SB  93  appears to  be a  good                                                               
measure and offered his appreciation  for learning more about how                                                               
to protect children with this opportunity.                                                                                      
4:19:07 PM                                                                                                                    
CHAIR KITO kept public testimony  open after ascertaining that no                                                               
one else wished to testify on the bill at this time.                                                                            
CHAIR KITO held over SB 93.                                                                                                     
REPRESENTATIVE BIRCH asked why the chair is holding the bill.                                                                   
CHAIR KITO replied  that he typically likes to  have two meetings                                                               
for  each bill  that  is  before the  committee  so  there is  an                                                               
opportunity to address any questions  that are not fully answered                                                               
and to give an opportunity for amendments to come forward.                                                                      

Document Name Date/Time Subjects
HB222 Fiscal Note DCCED-DCBPL 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Supporting Document Bev Harper 04.10.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Supporting Documents-DCCED Letter to Manicurists 4.10.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Supporting Documents-Fortier and Mikko Letter 4.10.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Supporting Documents-HLAC 4.10.15 Minutes 4.10.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
SB064 Sectional Analysis version J 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Fiscal Note DNR-MLW 2.24.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Fiscal Note DEC-SPAR 2.24.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Sponsor Statement 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents - DEC Fact Sheet 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents - DOD Response 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents - Uniform Law Commission 4.11.17.PDF HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents-Letter of Opposition 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents-Letters of Support 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB093 Sponsor Statement version O 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Fiscal Note DOL-CIV 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Sectional Analysis version O 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Supporting Documents-CDIA Summary Statutes of Select States 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Supporting Documents-Letters of Support 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Supporting Documents-Power Point 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB064 Supporting Documents-DEC Response to DoD Supplemental 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents-DoD Supplemental 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
HB222 Supporting Documents-HB131 29th Legislature 4.17.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Sponsor Statement 4.16.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222