NOTE: As provided in LFC policy, this report is
intended only for use by the standing finance committees of the
legislature. The Legislative Finance Committee does not assume
responsibility for the accuracy of the information in this report when used for
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F I S C A
L I M P A C T R E P O R T
SPONSOR:
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Senate Floor
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DATE TYPED:
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3/17/03
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HB
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SHORT TITLE:
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Consumer No-Call Act
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SB
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573/SFlS
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ANALYST:
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Wilson
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APPROPRIATION
Appropriation
Contained
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Estimated
Additional Impact
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Recurring
or
Non-Rec
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Fund
Affected
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FY03
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FY04
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FY03
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FY04
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See Narrative
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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