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F I S C A L   I M P A C T   R E P O R T

 

 

SPONSOR:

Senate Floor

 

DATE TYPED:

3/17/03

 

HB

 

 

SHORT TITLE:

Consumer No-Call Act

 

SB

573/SFlS

 

 

ANALYST:

Wilson

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

 

 

See Narrative

 

 

 

SOURCES OF INFORMATION

 

Responses Received From

 

Attorney General’s Office (AGO)

 

SUMMARY

 

     Synopsis of Bill

 

The Senate Floor Substitute for Senate Bill 573 is a Do-Not-Call bill establishing a registry of New Mexico residents who do not want to receive calls from telemarketers.

 

The bill uses the Do-Not-Call database to be set up and maintained by the Federal Trade Commission (FTC) as the New Mexico no-call registry. The FTC will allow New Mexicans to register their home numbers at no cost by either calling a toll free number or by logging on to a special internet site.  The bill will, with certain limited exceptions, prohibit telephone solicitations of New Mexico residents on the FTC no-call list.  The list of New Mexicans on the FTC no-call database is updated quarterly and those who make telephone solicitations may obtain it directly from the FTC at no charge.

 

The bill also requires disclosure of the fact that the call is a telephone solicitation within 15 seconds of a call being answered, prohibits the misrepresentation of the purpose of a call and blocking or circumventing caller identification devices, and makes violating the Do-Not-Call provisions of the bill a violation of the Unfair Practices Act (UPA)     

 

The bill contains a contingent repeal clause that repeals the sections of the bill creating a New Mexico Do Not Call registry in the event that the Federal Communication Commission’s (FCC) proposed national Do-Not-Call registry does go into effect.  The FCC’s registry, if implemented, will be applicable to almost all telemarketing activity affecting New Mexicans.  The FTC no-call rule, in contrast, does not apply to intrastate calls or to many industries generating a significant proportion – if not the majority – of telemarketing calls.

 

     Significant Issues

 

  • State Do-Not-Call registries have been around for several years and currently exist in at least 27 states.   In the past 14 months both the FTC and the FCC have proposed the creation of a national Do-Not-Call registry, and the FTC has formally approved such a registry.  These proposals represent a significant departure from past federal policies regarding telephone solicitations, and reflect the conclusion by both agencies that those policies had not adequately protected the privacy interests of residents in their own homes.

 

  • In 2002, the New Mexico Legislature passed Senate Joint Memorial 4, which directed the AGO to conduct a study of telemarketing in New Mexico.  As part of its study, the office commissioned a scientific poll of residents’ attitudes about telemarketing. The office also conducted a town hall meeting on the subject.   In both instances, residents voiced their dislike of unsolicited telephone solicitations, and expressed strong support for a state Do-Not-Call registry.

 

  • Courts have long recognized the interest of government in protecting the privacy rights of persons in their home.  However, telephone solicitors have challenged some state Do-Not-Call registries, and most recently, the FTC’s Do-Not-Call rule, on the ground that such laws abridge free speech rights guaranteed by the 1st Amendment to the U.S. Constitution.  The fact that the protections against unwanted telephone solicitations afforded by Do-Not-Call laws and SFLS/SB 573 apply only to residents who request that the government place their number on a no-call list, distinguishes these challenges from most other 1st Amendment challenges to government regulation.   This remains a somewhat unsettled area of the law.

 

  • The FTC approved amendments to its Telephone Sales Rule in December of 2002 creating a national Do-Not-Call registry.  Companies subject to the jurisdiction of the FTC and are not otherwise exempt, are prohibited from calling phone numbers on the national registry.  The FCC is expected to rule on its Do-Not-Call proposal by the end of 2003.  If adopted, the FCC Do-Not-Call rule would apply to most if not all of the telephone solicitations outside the scope of the FTC no-call rule.   

 

  • The creation and maintenance of do-not-call databases has proven to be expensive in other states. By utilizing the FTC registry, this bill allows the state to avoid these expenses and to also avoid the need to assess fees to both residents who want their telephone numbers placed on the pro-posed state no-call list, and telephone solicitors who must obtain the list.   The FTC, has reported that there will be no charge for consumers to register their phone number on its Do-Not-Call registry, and no charge to businesses or others to obtain the registered numbers from one area code.

 

ADMINISTRATIVE IMPLICATIONS

 

The bill requires the AGO to promulgate rules to implement the provision of the bill creating a state Do-Not-Call list.   DW/njw