Legislature(2003 - 2004)

05/01/2004 05:12 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            HB  15-SOLICITATIONS/CONSUMER PROTECTION                                                                        
REPRESENTATIVE HUGH  FATE, sponsor  of HB 15,  said the  issue of                                                               
written agreements  was raised at  the last hearing and  that Mr.                                                               
Pound would elaborate on that.                                                                                                  
CHAIR SEEKINS asked  if the committee is to look  at a negotiated                                                               
agreement this afternoon.                                                                                                       
REPRESENTATIVE  FATE  said  that  is  correct  and  that  he  has                                                               
reviewed and supports it.                                                                                                       
CHAIR  SEEKINS  indicated  the  committee  has  been  working  on                                                               
version W.                                                                                                                      
SENATOR  OGAN  moved  to  adopt  Amendment  1a,  which  reads  as                                                               
                      A M E N D M E N T 1a                                                                                  
1. Page 8, lines 13-19, delete all material and insert:                                                                         
     (10) by a  person who is primarily  soliciting the sale                                                                    
     of  a [MAGAZINE,  PERIODICAL,] sound  recording or  [,]                                                                
     (A) if the person                                                                                                      
          (1) has no minimum purchase requirements,                                                                         
          (2) provides written notice of the buyer's right                                                                  
          to cancel at any time, and                                                                                        
          (3) allows the buyer to return the sound                                                                          
          recording or book and obtain a full refund, or                                                                    
     (B)  through a  [,OR] membership  in a  book or  record                                                                
          (1) [(A)] where the club provides the buyer with                                                                  
     a form that the buyer may  use to instruct the club not                                                                    
     to ship the offered merchandise; and                                                                                       
          (2) [B] that is regulated by the Federal Trade                                                                    
     Commission as  a negative option  plan under  16 C.F.R.                                                                
     [CFR] 425;                                                                                                                 
2. Page 8, following line 31, add the following:                                                                                
     (C) the provisions of subparagraph (11)(B) do not apply to                                                             
     a sale of a magazine subscription                                                                                      
          (i) where the telephone call is made to a customer to                                                             
     solicit a subscription renewal; or                                                                                     
          (ii) when the telephone call is initiated by the                                                                  
     buyer, payment is made by  credit card, and a telephone                                                                
     number  to cancel  the subscription  is  on the  credit                                                                
     card statement description line for that charge;                                                                       
SENATOR FRENCH objected for the purpose of discussion.                                                                          
CHAIR SEEKINS asked what Amendment 1a will do.                                                                                  
MS. SUSAN  BURKE, representing  the Direct  Marketing Association                                                               
and the Magazine  Publishers of America, explained  that during a                                                               
previous discussion on  HB 15 in committee,  members talked about                                                               
book and  record club memberships versus  a solicitation received                                                               
in the  mail for  a single  book or a  single item.  Amendment 1a                                                               
addresses that  problem. The  first section  deals with  a single                                                               
sale and says that a company  retains its exemption if no minimum                                                               
purchase is  required. It also  requires a written notice  of the                                                               
buyer's  right to  cancel  at  anytime and  allows  the buyer  to                                                               
return the item  for a full refund. She stated,  "And the rest of                                                               
it is just the way it was in the original bill."                                                                                
SENATOR  FRENCH asked  how the  written  notice of  the right  to                                                               
cancel on the sale of a single item would work.                                                                                 
MS. BURKE  said the buyer  would receive  the notice in  the mail                                                               
and could cancel the agreement  by returning the item and getting                                                               
a refund.                                                                                                                       
SENATOR  OGAN thought  it offensive  that such  a law  would even                                                               
have to be enacted to protect consumers from themselves.                                                                        
SENATOR FRENCH  asked for an  explanation of how the  second part                                                               
of the amendment would work.                                                                                                    
MS. BURKE said a new section 11  was added on page 8 of version W                                                               
with introductory  language and an  A and B section;  those would                                                               
not  change. Amendment  1a  adds  a new  subsection  that says  a                                                               
company does  not have to  provide written notice under  two very                                                               
limited circumstances. The first  instance is where the publisher                                                               
is  contacting an  existing customer  and  soliciting a  magazine                                                               
renewal. The  second instance  would be when  the seller  sends a                                                               
postcard and the buyer initiates  the contact and payment is made                                                               
by credit card.                                                                                                                 
TAPE 04-57, SIDE B                                                                                                            
6:00 p.m.                                                                                                                       
MS.  BURKE  said  the  credit   card  statement  will  contain  a                                                               
telephone  number to  call  to cancel  the  subscription. All  of                                                               
those things  would have  to apply to  negate the  written notice                                                               
requirement.  She  acknowledged  that   the  amendment  does  not                                                               
address all of  the Department of Law's concerns  but through the                                                               
negotiating process  both parties  determined they can  live with                                                               
these changes.                                                                                                                  
MR.  DAVID MARCUS,  legislative  liaison  and assistant  attorney                                                               
general, DOL, affirmed that Amendment 1a is satisfactory.                                                                       
REPRESENTATIVE  FATE  said he  also  finds  the amendment  to  be                                                               
SENATOR  FRENCH withdrew  his objection,  therefore Amendment  1a                                                               
was adopted.                                                                                                                    
SENATOR  OGAN   moved  SCS  CSHB  15(JUD)   from  committee  with                                                               
individual recommendations and its attached fiscal notes.                                                                       
The motion  carried with  Senators Ogan,  French, and  Seekins in                                                               
CHAIR SEEKINS thanked participants and announced an at-ease.                                                                    

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