Legislature(2003 - 2004)
03/11/2003 08:00 AM House STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 15-TELEMARKETERS NO-CALL LISTS Number 0040 CHAIR WEYHRAUCH announced that the first order of business was HOUSE BILL NO. 15, "An Act relating to establishing the Alaska No-Call List, a data base of residential telephone customers who do not wish to receive telephonic solicitations; providing that the data base be compiled at no cost to the customers; requiring paid telephonic sellers to purchase the data base; requiring telephonic sellers to identify themselves; requiring telephonic solicitors who are otherwise exempt from registration as telephonic solicitors to file with the Department of Law and purchase the data base; and providing for an effective date." [In committee packets was a proposed committee substitute (CS), Version I, labeled 23-LS0058\I, Craver, 2/28/03.] Number 0219 REPRESENTATIVE HUGH FATE, Alaska State Legislature, sponsor, referred to Version I and said it provides an opportunity for people not to receive annoying telephonic solicitations. The new language puts into place a plan to allow Alaskans to submit their phone numbers to be placed on a list that will eliminate sales phone calls from professional solicitors. It would require companies involved in telephone soliciting to purchase that list and make every attempt to not call those numbers. This won't eliminate every phone call. Groups will still be permitted to contact their members, and companies and organizations that have done business with a customer within the last two years will still be permitted to contact homes and seek donations. REPRESENTATIVE FATE said this has support from the AARP. He noted that many telephone solicitor calls are directed toward seniors. He spoke of the fast-talking scam artists who make "too good to come true" offers, taking the life savings out of the pockets of many of those senior citizens. He opined that while [federal efforts in progress] will help, much of the authority must remain in the hands of the state. Noting that much of the language is based on Colorado's, he said that state is "receiving and not losing funds from the program." He told the committee this is an opportunity to improve the lives of constituents by ending "this fast-growing intrusion into our private lives." He mentioned an intention to reduce or eliminate the fiscal note. Number 0520 REPRESENTATIVE SEATON moved to adopt the proposed CS, Version 23-LS0058\I, Craver, 2/28/03, as a work draft. There being no objection, Version I was before the committee. REPRESENTATIVE FATE clarified that an annual fee of $5 [to be paid by the residential subscriber] is part of Version I. Number 0720 REPRESENTATIVE GRUENBERG offered Amendment 1, which [applied to Section 9 of the bill but] read as follows [original punctuation provided]: Section 2. AS 45.50.475(b) Page 8, line 14, change "engage a person in a telephone conversation repeatedly" to "repeatedly engage a person in telephone conversations." There being no objection, Amendment 1 was adopted. Number 0810 REPRESENTATIVE GRUENBERG offered Amendments 2(a) and 2(b). Amendment 2(a) read as follows [original punctuation provided]: Section 2. AS 45.50.475(b) Page 2, line 18, remove "of $750." Amendment 2(b) read as follows [original punctuation provided]: Section 2. AS 45.50.475(b) Page 2, line 18, remove "of $750." This provision allows the attorney general to set the access fee. REPRESENTATIVE GRUENBERG noted that Amendment 2(a) says it would be at least $750, and Amendment 2(b) allows [the attorney general] to set the fee. CHAIR WEYHRAUCH surmised that Representative Gruenberg was asking that the committee hold a policy discussion to decide whether the $750 should be removed or put as a "floor." REPRESENTATIVE GRUENBERG said he assumes [the committee] wants it to cover the cost. He suggested another option might be to change the word "must" on line 21 to "is intended to", for example. He said he'd just like to make sure these things mesh. Number 0983 REPRESENTATIVE BERKOWITZ asked how many solicitations occur in the state. He explained that the question is whether $750 will cover the cost, and that he was trying to understand the dimensions of the issue. Number 1030 JIM POUND, Staff to Representative Hugh Fate, Alaska State Legislature, said it depends on how many calls are made regionally. He surmised that in Alaska three or four [companies make solicitous in-state calls]; many calls are generated from Outside. He estimated that there are 15 to 20 companies in the Seattle area and 30 to 40 companies in Colorado. He added, "Anymore, they seem to be able to call from anywhere in the country." REPRESENTATIVE BERKOWITZ suggested that another alternative is to charge a fee each time the list is used, rather than allowing a subscriber to buy the list for a year. MR. POUND said he would interpret the $750 in the legislation as a one-time-only fee per year, much like a subscription. REPRESENTATIVE BERKOWITZ explained that his suggestion was in the context of Representative Gruenberg's proposal to have a policy discussion with regard to subsidizing the cost of maintaining the list. REPRESENTATIVE FATE posited that [having a per-use fee] could tend to raise administrative costs. Number 1230 REPRESENTATIVE SEATON reported that his study of the fiscal note showed that at $750, it would be a $103,000 fiscal note in the first year, which would take approximately 125 subscribers to offset. Referring to the numbers of companies in and out of the state previously alluded to by Mr. Pound, he said he was trying to figure out how the bill would be enforced. Number 1326 REPRESENTATIVE FATE responded that he thinks there was previous discussion regarding that point. He said there are ways of enforcing it, but there will also be "some slippage"; for instance, some solicitors change phone numbers and addresses every week. Regarding the others, he recalled that "there were ways in which the state could stop those kinds of solicitors, or force them to buy the list." CHAIR WEYHRAUCH asked about charging a fee that would pay for the cost of the program, and leaving it up to the agency. REPRESENTATIVE GRUENBERG indicated that's essentially the intent of Amendment 2(b). REPRESENTATIVE FATE explained that the fiscal note had not yet been changed to reflect the effects of the $5 per-person charge. He added, "That was to have changed this fiscal note and to have, if not completely covered the cost, to have come very nearly to covering the cost." Number 1433 MR. POUND, in response to a question from Representative Seaton, said the phone company will have nothing to do with the fees. The company involved with the fees will be that with which the Department of Law has contracted, because that is where the data base will be created. Number 1476 REPRESENTATIVE DAHLSTROM told Representative Fate she didn't understand how the state could manage this without the phone company's involvement. She asked if he'd engaged in conversations with the various local exchange carriers and if they are able and willing to step up to the plate with regard to the enforcement that will go along with this. REPRESENTATIVE FATE said several states do this very nicely. He deferred to Mr. Pound. MR. POUND responded that he'd held a conversation with GCI, whose biggest concern was with the management of telephone lines and the associated costs. He noted that the $5 fee and annual renewal requirement would eliminate GCI's concern. He said, essentially, a person's number would come off the list if that person didn't automatically renew and pay the $5 each year. In further response, he reiterated that no money would go to the phone company; it would go to the contractor that would be contracted with through the Department of Law. It would be a matter of people's asking to be on the list, regardless of what phone company they used. Number 1648 REPRESENTATIVE BERKOWITZ said it seems charging people $5 to assert their privacy rights is a tad peculiar. He asked if there was any reason not to drop that provision. REPRESENTATIVE FATE answered that there is probably no reason, but Alaska hasn't had any experience [with a no-call list]. He also mentioned the state's current population base. The $5 is necessary in order to pay for the program, he opined; however, that doesn't mean that provision can't be dropped in the future, once there is some experience in the program. REPRESENTATIVE BERKOWITZ said he can't imagine that the number of people who would register for this service would exceed 20,000-50,000. In that range, he said, the cost of administering the $5 fees would take most of what income might result from administering those fees. He added, "I hate to go to people and say, 'You need to pay in order to be let alone.' I think that sends a real mixed message." Number 1760 MR. POUND responded that people already have to pay a phone company for unlisted telephone numbers. A $5 user fee would cover [the state's] expenses. He said, "If we do not charge a $5 user fee and there is no ability to cancel out a telephone number, the telephone company is going to consider that additional cost on their end, and they're going to end up charging the fee and they'll get the $5." REPRESENTATIVE BERKOWITZ said it seems [the legislature] could see that costs are covered by having the amount be more than $750. He explained that if people want to pay money to bother him at home, he is quite willing to let them do that; however, he doesn't think he should have to pay to tell them to leave him alone. He stated his belief that the burden is on [those companies] to gain access to his information, not on him to tell them to stay away. MR. POUND told Representative Berkowitz that the "black dot" list - which the program under discussion has been equated to - is basically a "pay" service. REPRESENTATIVE BERKOWITZ emphasized that it's a [service] with the phone company. He said there is an important difference between requiring the government to be an agent of pay, as opposed to a private entity. Number 1859 REPRESENTATIVE SEATON referred to page 5, beginning on line 23, which read: (4) calls on behalf of the person that result in violations of this section occur not more than twice in a 30-day period [AS 45.50.475 ARE INFREQUENT]. He said the way that reads to him is that a solicitor could call once a month - basically, several times a year - and not have a violation. Number 1900 MR. POUND explained that the intent is to allow for two mistakes. The [language] is not designed so that if a solicitor calls someone who is on the list, he or she can immediately be thrown into jail; it is designed to eliminate as many solicitous phone calls as is practicable. He added, "And if it becomes a problem under the harassment section, then it becomes a felony." REPRESENTATIVE SEATON reiterated that his interpretation of the language is that a solicitor could call once a month without being in violation. MR. POUND said that is the language of the Department of Law and that he doesn't think Representative [Fate] would object to eliminating that section. REPRESENTATIVE FATE stated, "You sometimes have to make allowances for mistakes." He said he thinks the language simply allows for two mistakes in a 30-day period. Number 2015 REPRESENTATIVE SEATON said he doesn't think it was anybody's intention to allow a telemarketer to call a person on the no- call list once a month. He asked if he might be misinterpreting the language. MR. POUND said he interpreted the language to say that the solicitor would not be allowed to make more than two mistakes "out of their data base" in a 30-day period. Number 2030 REPRESENTATIVE GRUENBERG referred to [page 5], beginning on line 12, which read as follows: (d) A person who employs individuals to engage in telephonic [TELEPHONE] solicitations is not liable for the violation of this section [AS 45.50.475] if an employee solicits a residential telephone customer who is identified in the data base [TELEPHONE DIRECTORY] as not wishing to receive telephonic [TELEPHONE] solicitations if the person established that (1) the person has adopted and implemented written procedures to comply with (a) of this section including corrective actions where appropriate; (2) the person has trained its personnel in the procedures established under (1) of this subsection; (3) the call that violated this section [AS 45.50.475] was made contrary to the procedures and policies established by the person; and (4) calls on behalf of the person that result in violations of this section occur not more than twice in a 30-day period [AS 45.50.475 ARE INFREQUENT]. REPRESENTATIVE GRUENBERG said the way he reads that, a solicitor can make two calls to a person on the [no-call] list in any 30- day period and get away with it; a solicitor who makes three or more is in violation. He said he could understand the goal from [the Department of] Law, because [the deleted original language using] the word "infrequent" is vague, which could result in a constitutional challenge. He said the question is to decide what the standard ought to be. Number 2155 CHAIR WEYHRAUCH reminded the committee that there were still proposed amendments pending. He remarked that Representative Fate had addressed the fiscal note, but it was based on the original bill. He acknowledged that it would be any sponsor's concern to have a low fiscal note, but said, "The fiscal note had not addressed these fee changes." He agreed with Representative Berkowitz that he doesn't want to have to pay to have someone not call him, which is like paying [racketeers] for protection. He said he also thinks [the legislature should] charge the people who want to take advantage of the consumer by calling at all hours to pay the cost of the program. Transferring the burden of the cost to the callers might result in a zero fiscal note. Number 2265 REPRESENTATIVE HOLM asked if the purpose of the bill is to protect people from getting the [solicitous] calls; if so, why would someone want to pay a $5 fee every year? He emphasized, "I don't want them to call ever." He asked how the committee might present an option for people to put their names on a list so that they'd never be called. He said Representative Berkowitz brought up an interesting point about rights. Representative Holm said, "I'm not sure when you get a phone that you have a right not to have somebody ring it." He stated his understanding that there is machinery currently on the market for approximately $30 that prevents people from automatically dialing one's number. He asked for guidance. He clarified that he wants to know if this bill will stop people from calling or only stop them from calling for a year because the $5 fee has been paid. Number 2366 REPRESENTATIVE FATE responded that [HB 15] is not a bill to protect. He said people would make the choice whether to be on the list. REPRESENTATIVE HOLM responded that he never chose to be called to begin with. REPRESENTATIVE FATE asserted that the ability to call people is simply freedom of speech. He said HB 15 may not prevent one or two calls from slipping through, because there are "renegade solicitors" who make a business of this. He reiterated that similar programs have been successful in other states. He said [the legislation] would reduce and, in many cases, eliminate those solicitations that are unwanted. Number 2474 REPRESENTATIVE DAHLSTROM asked who would have the burden of proof that a solicitous phone call was made. She also referred to page 5 [line 24] and proposed a change from the 30-day period to no more than two call in a 365-day period. She added a suggestion to put everyone on the no-call list and let those who want to receive solicitous phone calls pay the fee. REPRESENTATIVE FATE responded that arbitrarily saying that a solicitor may call nobody may be unconstitutional because of the freedom of speech amendment. Number 2544 CHAIR WEYHRAUCH said everyone is angry about getting solicitous phone calls and [HB 15] needs to move. REPRESENTATIVE FATE noted that he has received [numerous] public opinion messages [in support of] the legislation. Number 2588 REPRESENTATIVE BERKOWITZ, in regard to Representative Holm's previous questions about the propriety of banning people from making phone calls, said people put "no trespass" signs on their doors. He said he honors those when he campaigns and hopes the other legislators do too. He said he is weighing in with those who previously said the $5 fee should not be passed, but that cost should be passed on to the solicitors. He asked that [the sponsor] make sure that [automated calls] are addressed as well, since they aren't live calls from people and are "way more annoying than they ought to be, even when they are political ones from the President." CHAIR WEYHRAUCH stated his intent to pass the bill out of committee by Thursday [March 13, 2003] as a committee substitute that would speed through the House Finance Committee. REPRESENTATIVE FATE said he would appreciate the assistance of the committee. REPRESENTATIVE BERKOWITZ noted that the $5 issue is a policy call for this committee to make, whereas working on the fiscal note is the job of the House Finance Committee. CHAIR WEYHRAUCH said he thinks the focus of the committee is to have "as much of the burden of the program pass to those who would take advantage of the consumer." Number 2717 REPRESENTATIVE GRUENBERG stated a need for either an interstate compact or federal legislation. He suggested adding a provision to the bill requesting the federal government to legislate in this area, because these companies are not Alaskan companies. REPRESENTATIVE FATE related his understanding that there is pending federal legislation. Number 2804 STEVE CLEARY, Executive Director, Alaska Public Interest Research Group (AKPIRG), let the committee know that he would be available whenever HB 15 is scheduled again. He said he was in Colorado recently, and his relatives [lauded] the program there. He said, "The fact that it's more than paying for itself speaks to how worthy this program is." Number 2869 MARIE DARLIN, AARP Capital City Task Force, testified in support of HB 15, noting that the committee had a letter of support from [AARP's] state office in which it addressed the fact that there is currently proposed federal legislation. Notwithstanding that, she said AARP's members strongly feel that [Alaska] needs to have its own law, because the [pending] federal law does not go far enough and doesn't preclude states from having "stronger bills." She noted that the "black dot" program costs $5 to $8, depending on a person's phone company's rates. She said probably two-thirds of seniors [in Alaska] would pay $1, if that amount were offered, in order not to be called [by solicitors]. Number 2946 REPRESENTATIVE HARRY CRAWFORD, Alaska State Legislature, cosponsor HB 15, said the amount of $750 was set in an effort to establish a self-supporting program, after looking at other states' programs, which were between $300 and $800. TAPE 03-19, SIDE B Number 2996 REPRESENTATIVE CRAWFORD said the program should be paid for by the people who want to make money with it; consumers shouldn't have to pay to be left alone. He referred to the current "black dot" list and said, in some places in rural Alaska, it costs up to $50 to get on it. He noted that only 2 percent of subscribers in Alaska get on that list, whereas in other states that have a do-not-call list, the number of subscribers is 10 to 20 percent. He offered his belief that $750 would be an adequate amount to attract third-party contractors to administer the program at no cost to the state. Number 2917 REPRESENTATIVE BERKOWITZ asked Representative Crawford if he knows if other states have a mandatory fine for violation of the provisions. REPRESENTATIVE CRAWFORD answered, "It's all over the board as to what becomes a violation." He said he thinks two calls per month is probably the most lax. He noted that [the sponsor] had used much of the language from the Colorado bill, but added, "We left that part out." REPRESENTATIVE BERKOWITZ said it seems that if there were mandatory sanctions for violations, those sanctions would help offset the cost of the program. He added, "There's unscrupulous solicitors out there, and we ought to be dinging them for the cost of this, rather than the people of the state." Number 2878 REPRESENTATIVE CRAWFORD said the State of Oregon is making more money back on the program with its prosecutions than it ever put out. It is a positive fiscal note once the program gets under way. He informed the committee that when Louisiana [adopted] a do-not-call list, 50,000 people signed up in the first week. REPRESENTATIVE FATE mentioned including the Department of Law in discussions of HB 15 [that would take place between this meeting date and the next hearing on March 13, 2003]. CHAIR WEYHRAUCH announced that HB 15 would be held over.