Insurance & Commerce- House

Bills that we're taking representive Maddox is presenting those representative hawksbill seventeen sixty nine is being passed over. Then we are going to try and take up Rep senator Wallace is bill and then the hold for the and of Senator Dismang is the bill that Brian S. Evans representive Evans is going to be presenting so a representative Maddox when you are ready please introduce yourself for the record and your guests or your witnesses whether guests welcome. Thank you Mr chair John Maddox representative district twenty I allowed my guest to introduce themselves. Eric Munson commission Arkansas stirs Department. Karen Tierney attorney with the Arkansas securities department good morning everyone and you're recognized to present thank you. Mister shall begin with SP one forty nine these are as you stated these are all securities department bills there is no No questions no issues that I'm aware of and to give a brief overview and then allow them to to go to the more detail SB one forty nine the majority this bill is clean up it it does clean up language for language for clarity there are a few changes though that I do want to highlight section eleven and section nine this bill will require that companies establish written cybersecurity policies as well as compliance policies and procedures and will give the Commissioner of that story to make rules to allow loan officers to work from a location other than a license location this is the work from home or section eight amends the license link for initial loan officers this change or reduce the regulatory burden on loan officers who currently are required to renew a license received in November or December by December thirty first and the third one section ten amends the notification to the Commissioner on a change of name or address currently licensee as thirty days after a move to notify the commissioner this change will require notice prior to the change. And Mister chair I'd like to turn over to the witnesses to to I'm going to further detail absolutely you're recognized. Thank you Mr chairman members of the committee we consider this omnibus or cleanup legislation or more exact one The duties of the securities department is to regulate the non banking mortgage comes in the state as you know there's been a very a different environment with COVID and in the year but with the low rates that they've always gone up in these bills were fitted to the industry and also a record of us is regulatory body and we're also trying to mera other states in our fair mortgage lending Act of language and Karen tourney is here with me she is actually are turning on staff who handles the mortgages a letter safety words. Thank you commissioner and represent a matic said they both cover the high points of the bill but if there any specific questions on the provisions that happy to answer them okay thank you we do have a question from representive fielding you're recognized. Thank you Mr chairman of represent Maddox would you go back to explain that section you said that that was needed some changes in that you went through that front of pheasant and I have a question about. One of those section and I can I thought I have marked on the bill you go back to that please. Sure so they're worth it I went over three changes the first one okay the first one the first one amend section eleven and section nine is that is that the question is that the one you have an issue with. Thanks to our road it. So that that change my understanding is it will require that companies establish written cybersecurity policies is that that's really the change It gives the Commissioner little more thorny that's my understanding of the change to section eleven and section nine but if you have more detailed questions if I cannot answer them who who has that ability now. And can I ask you guys to step in on thank you currently the and are licensed non depository brokers bankers and servicers are not required to have a cyber security or compliance policies in place there are requirement of the federals but this is to make sure that when we go into review their cybersecurity that we can you know let them know if we have any problems that they need to enhance them anyway if you know if there's a problem we see to make sure that they work with us to increase that cybersecurity policies. All right thank you thank you Mr thank you members any other questions. Seeing none will turn to the audience is there anyone in the audience who wish to speak against the I think we have a one signed up. Anyone speak for. Representive you're recognized to a close for your bill thank you Mr thank you committee appreciate your listening to this and I would close my bill make a motion to pass okay members we have a motion do pass is there any discussion. If not the motion of do pass as on the floor all those in favor signify by saying aye. Any opposed say no. Congratulations you pass the bill. Thank you Mr chairman I present SB one fifty absolutely you're recognized. Thank you the primary focus of the changes to in this bill is changes to the money Services Act it brings Arkansas into conformity with other states on definitions background background checks permissible investments and exclusions to licensure is amended to reduce the regulatory burden on licensees the other man additions that virtual currency to the licensable activity of a money transmitter for the most recent quarterly data we have there are approximately three hundred seventy two thousand eight hundred and eighty eight. Three hundred seventy two thousand eight hundred eighty three virtual currency transactions initiated in Arkansas an amount of over eighty four million dollars. It's important understand the most virtual currencies or crypto currencies have no intrinsic value and no governmental institution backing them their monetary value comes from the people empowering them when it comes to people that invest in virtual currency there at least two kinds investors and speculators. And I would turn it over to my witnesses to further clarify. Thank you Sir Mr chairman members of the committee the crypto currencies you see the amount of investment the eighty four million dollars is that what I records could show from last quarter we we estimate that was more than that but again cryptocurrency is very new other states. Are all working we're all working together trying to set some guidelines what this bill does is at least the companies that sell the cryptocurrency we're asking them to register least we know their name and their location where they're out of if it's could be counted United States Canada China where what we what we'd like to try to summarize this basically that that we register and have at least a a physical address and who the company is it's kind the ground floor of this policy but process with regulation of the cryptocurrency hello Karen had a few comments. That's correct in addition to even know the name then if there's a consumer issue we can help that consumer contact the company investigate that problem there's a ash'ari bond requirement and net worth requirement so it's it's it consumer protection as well as knowing who is doing this in Arkansas. Yet right now there's no requirement Arkansas okay thank you members you have any questions. Representive Richardson. Thank you Mr chair of so my question is just there's no regulation regarding this right now you said other than of consumer protection what what else is that. Why is it so important to do this I mean I know we have to have things that are regulated but. I mean why. That's a great question M.. It It this is been expanding in many services space for seven years now at other states have been leading into licensing virtual currency and we felt it was time that we also licensed virtual currency since it is becoming larger and larger and so much more money is being spent Arkansans at their virtual currency so that we know what's happening Arkansas River to Richardson also part of the money services act that we regulate is like pay pal Western Union money transmitters and this fits into that in again. I think this is considered regulation releases a start we're trying lease get the name of the cryptocurrency company and their location domicile. The book someone has complained lease we contract that cut me down or find out where they are to help the in the Arkansas investor. Yes representive you're recognized thank you do you have do you already have a list of some of these companies are that you're already beginning to track and you know at the time I'm just curious are you already creating a list will pay pal and that pass and all those guys okay. Okay thank you members any other questions. If not turn to the audience is there anyone here to speak against the bill. Hello I don't believe anyone signed up anyone to speak for. If not representive Maddox you're recognized close thank you Mr chair closed and make a motion to pass okay we have a motion do pass is there any discussion by the committee. Seeing that will move to a vote all those in favor of do pass on this bill signify by saying aye. Any opposed say no. The Bill pass and you can move to the next one. You too for two thank you. Thanks chair SP one fifty one my last one thankfully majority this bill also is clean up section four a of this bill expands the protections of our vulnerable adults from financial exploitation including adding transactions these protections are for the industry to allow them time to investigate if they believe a client is at risk of being financially harmed the provision also expands the definition of a vulnerable adult so that a broker dealer or investment adviser can use these protections if they believe someone under sixty five is at risk. Now turn of my witnesses for further clarification. Thank you Sir Mr chairman of the committee this is that are Arkansas securities that clean up concerns omnibus legislation again as we discussed we work with other state securities commissions and work with the federal regulatory groups trying to get the best practices in best language The emphasis here though part of it is the vulnerable adult we've lowered the age there's lots of people there widowed before sixty five or people might have issues At a lower age and we're including that. Legislation that language in this to update our current security second I'd like care and and on that thank you and as representative Max said and and the commissioner this is we work with both industry and other state regulatory agencies to come up with this language that is a benefit to both consumers and to the industry. Okay. I know I know is mentioned but let me ask what what is the age you're lowering for the vulnerable adult to what age. It It N. well right now it and it's anybody's sixty five years of age or older subject to the supervision of an adult protective services or otherwise could at considers susceptible to financial exploitation and that's where it expands it you know if somebody and is newly widowed okay they they would be considered you know okay so I'm not changing the H. not changing the age but you know adding in that explosion that if somebody is considered and susceptible than these provisions could come into play okay thank you members any questions. Seeing none again will move to the audience any of here that would oppose this bill. Anyone here to speak for. If not representative you're recognized close thank you Mr chair thank you committee clothes make a motion to pass. We have a motion do pass. Senate bill one fifty one in the discussion. Will move to the vote then all those in favor of the do pass motion Senate bill one fifty one signify by saying aye. Any opposing no and they're not congratulations. Well I was told they were non controversial and you lived up to your words thank you very much. Yeah. let's see again we're passing over a house bill seventeen sixty nine we'll come back to Senate bill four seventy is senator Wallace here referred Senate bill two twenty nine or or or a House member senator okay. Do you have anyone else co presenting with you Senator. If you will recognize and identify yourself for the for the record Preciado. Good morning Sir members center Dave Wallace district twenty two K. you're recognized to present your bill. Members this is a very simple bill non controversial we've not had anybody say think about it. it it is a bill which will move back thirty days the reporting period for a burial associations for some of the reports they have a semi annual report due in February that they would like to get moved back to March and they have one that's due in the fifteenth of August that they would like to have moved back to fifteen September they give them senate five days versus forty five days the reports that they're doing if you remember your grandmother your mom and dad a lot of folks took out a burial policy for all of us my mom and dad did the typically you pay about five dollars a year is a five hundred dollar. Burial policy for you in the old days that covered the burial but the option that doesn't but over the years and these reports still the role in an increase in the amount of questions that they're asking or burial associations they become more cumbersome so I burial associations would like an additional thirty days. And I stand by for your question Sir okay. The representative fielding. Thank you Mr chairman of senator Wallace on those. So borough so those products as they have been sold today I don't know the old account so the bill still sent a note there's there still active I just I just talked with the funeral director in the liable in they actually have one that was sold in nineteen thirty one that's still on the rolls so they they've they've not close those out yet Blake Shinn so they are not they are not selling in those old palaces all American very good to. New accounts that then I still selling those five hundred of the I will tell you it is my belief that. The they may still be selling them I know that they want to quit selling those of course it has nothing to do with the bill that I'm I'm hearing here but the burial associations would like to get out of that portion of its business I consider tell you that are no longer selling them but I do know that they're still having to server so as an example. my my good my mom and dad took out one All My Children so my there's probably another forty forty five years there. But for some of these policies expire. Okay and then this. You got some of or have an insurance department Mr chairman. I do not see anyone here from the insurance department. Now I would point out that this bill is me here is. well let's let's wait You're not with the Department okay but you would be a sweet I I can answer so well okay but what we'll get to you when we do the for and against. Is that it is OK representative Phil yes five okay the representative brown you have a question for senator. Thank you senator Wallace it's my understanding it very or policies are just basically a life insurance policy there's nothing more elaborate than that but These is this legislation would not slow down the pay out on one of those policies it would just give them a little more time to report that that that is my understanding as well and keep in mind all this. Bill does is change the day this change to the law it just changes the date from August fifteenth to September fifteenth and from February fifteenth to March fifteenth everything else is already in the law. Okay. Representive Allen you have a question. Thank you Miss Mr chairman. it thank you Rezaei while serving a meal what is the purpose for changing the date the reports have grown more cumbersome and so the bill so sessions would like to have an additional thirty days to complete the report. About fifty years ago forty years ago the reports or more simple than they are now now they're having to gather more information so this is something that the burial associations came to me and asked me to do okay thank you yes Sir. Okay thank you members any other questions. We may have a witness who can help clarify more of speaking on the bill is supposed for the bill okay you're recognized pleased to identify yourself for the record. Mr chairman Sylvester Smith I'm an attorney I represent several burial associations and so first of all I'd like to say the little small fewer homes I work with they would certainly appreciate the additional time because as he said those reports and much more cumbersome than they used to be twenty years ago had a lot of these folks a lot older than they were twenty years ago in managing these things on their own so that additional time would be helpful and represent a feeling to answer your question specifically yes these policies are still being sold. And I'd be happy to help and answer any other questions that I have the capacity to to answer thank you. Member members any questions for this witness a representative fielding. Thank you Mr chairman I feel that those palaces the what was was closed the year of the go there with the with Posnack the sole animal. But I know is that it did with the bill after I ask that question I apologize Mister chairman from or enough Wallace Wilson for a. So there are a there was a law changed and there are two different types of policies now that can be sold and there is there's those that were sold under the old law that you're correct a representative are no longer so but the what I heard you say was that burial insurance is no longer sold and so there is a updated law which a party can seal burials insurance under that new law and they are still being sold today and frankly most of the people to sell them or the small minority on fewer homes. Thank you thank you Mr chairman thank you. Any other questions for this witness if not thank you for clarification. Is there anyone here to speak against the bill. Anyone else to speak for. If not senator you are recognized to close for your bill Mr chairman closed. Okay members we have Senator Wallace is closed on Senate bill two twenty nine do we have a motion representive eleven. Do pass as soon okay we have a do pass motion is there any discussion. If not members we have a motion to do pass on Senate bill two twenty nine all those in favor say aye. Any opposed say no the Bill pass is congratulations senator thank you Sir and members as could be back in the House Committee see all my friends and house. Thank you very much complied to have you with this. Members of going to just make a brief announcmenet here that will maybe explain the next presentation I just received a call this morning that the Legislative Council is going to be meeting next Monday morning which will preempt us being able to meet of it so we our next meeting will not be until the Wednesday after the break I was not anticipating that So I have a bill that I am just going to present for informational purposes just briefly and then we're going to a lot the rest of our time to the Senate bill on a. On the internet US sales so if you will give me a moment to get down to the table and I mean if you're just enthralled with this bill we can move to a vote but but if not I'd like to wait for the insurance department to be with me on it. Represent while you're recognized to present HB eighteen oh two. Thank you Mr chair representative mark Lowry District thirty nine. This is a bill that of the idea has been brought to me by several principles involved with roofing companies you've probably seen many times in your neighborhoods I know I have an Maumelle after a hail storm all of a sudden number of homes start getting new roofs I had this happened several years back where it all of my neighbors are getting the rules replace I called a friend of mine who was in the roofing business very reputable asked him if he would take a look at my roof he did he said Rep mark I don't I don't see any damage here I don't so I mean I could use the business but I just don't see anything that's will then what what kind of strange hailstorm is that that it could damage every house around me but miss me and he goes well lot of these companies they they figured out a way to be able to tell consumers that they don't have to pay a deductible the way that they do that is if the consumer. If the consumer agrees to put a sign in their front yard advertising the name of the company they get a an advert and advertising discount. The problem with that is that the. Roofing company misrepresents many times to the insurance the insurance company what the price of replacing that roof is and so the insurance company Really rolls into their payment their their payment the cost of that advertising and the cost also of the homeowners deductible. What this bill does is it clarifies very clearly that for a roofing company to represent that they can cover the deductible for the homeowner that is an unfair trade practice and it would be investigated as such but it also requires a notice to the consumer and it would be in twelve point type at when they get the estimate that they are responsible to pay a deductible now why is that important why is it important that the homeowner pay the deductible rather than another party will it cuts down frankly on frivolous claims the homeowner if they know that they've got skin in the game and that they're gone I mean I think any of us if we know we get a brand new roof and not have to pay out of time we probably do it but a lot of time we times we don't recognize that there probably was such minimal damage to the to the roof that it didn't need to be replaced and so that's why you see this this explosion this proliferation of signs going up in yards and roofs being replaced so it's rebury simple it does not add any any penalties to the homeowner it just says to them that in that the notice that the is clarified here let me call the bill up real quick. The notice is on the the last page state law requires a person insured under property insurance policy to pay any deductible if applicable to a claim made under the policy it is a violation of state law and it would be insurance fraud for a seller of goods or well actually the seller would be committing an unfair trade practice for seller of goods or services that reasonably expects to be paid wholly or partly from the proceeds of a property insurance claim to knowingly allow the insured person to fail to pay or assist the the or the it's assist the insured person's failure to pay the applicable insurance deductible so this is a Frankly in in one respect it is a consumer protection bill because a lot of homeowners really do not know that to what is being committed is an unfair trade practice all they know is that someone's telling them we can get you a new roof and it's not gonna cost you a dime will cover your deductible so it's very it's a very important part of the insurance that the homeowner or in the case of auto insurance that they know that they're going to have to pay a deductible that's what really prevents a lot of frivolous claims or minimal claims or over inflated claims you know I ask the question to my friend the roofing company asset will surely the insurance company does not just take take for the absolute word what the roofing company says it's going to cost and frankly held as the if they are deducting if they're sending a checks for instance the roof replacements going to be ten thousand dollars that's the estimate that's been given and the insurance company uses and this is where I probably would need more assistance but they use a of a formula or computer modeling that looks at the square foot of you know they can take it a Google map picture basically of your role of see the amount of square footage and then they estimate. And they will deduct from the check that they send the thousand dollars. That is the that's the deductible but the insurance company. Skews me the roofing company then because they've made this agreement with the homeowner that they'll do it for for eight thousand dollars. They actually end up paying back the the insured the thousand dollars it was taken out of the initial check yes it will I ask the question will have with the insured know that that is happening I mean as far as they know they did pay the deductible they say well what happens is that the insurance company holds back a percentage of the check they don't send out the entire amount and they wait for a invoice to be sent to them to verify the cost of replacing the roof and that's where the unfair trade practice takes place is in the roofing company giving it a wrong estimate back to them so that they can recover the rest the money so I'll tell you as I said it if there are a number of questions that I can answer I'll be glad to wait to the insurance department can be with me I think none of us really expected we could get to this bill today but I'll I'll try to take any questions that you might have. Thank you represent Lowery do any questions by the committee. Okay so we have we have some folks some members who would like to have these address by the insurance company the insurance department apartments okay is there anyone who is physical at like tests **** Lowery any questions. Okay saying nine so would you like to hold the bill yes I just wanted to go ahead and get this rolling here and I think once the the department helped me craft this based on what's called storm chaser legislation in other states where you have these companies just swoop into a neighborhood and they're replacing roofs **** nilly the homeowner you know just things well I've got to got to have replaced and so it really make sure that we have a fair trade practices taking place so members thank you for giving me the time to at least get the ball rolling on this and next time we meet which will be Wednesday of next week I'll be sure that the insurance department is here and and possibly even a couple of roofing companies here to explain and someone will say that yes they per currently participate in this type of program of mainly because it's the only way they can compete but they really don't want to be doing that so thank you very much and I'll get back into the chair seat will take up the last bill emergent thank you thank you of our. Have Senator Dismang along with. Steve good from the Arkansas grocers retail merchants association join me at the table. Members this is Senate bill four seventy. I have represented as an eleven Senator Dismang and Steve good with the retail merchants and grocers. That right okay. With that work okay representive eleven if you want to kick off everything by just identifying yourself for the record and having other witnesses also identified themselves the record. I am members we do have handouts that are being distributed. Both for and against this proposal so we're gonna we're gonna take our time here to make sure that this is distributed so you have the materials. Okay representive eleven you're you're recognized to present thank you Mr chair. Colleagues I don't I don't want to over complicate this is I believe that this is really a simple bill that primarily offers for things for your constituents but I want to be thorough as I know that many of you have probably been bombarded over the weekend with some robo emails that was supplied by someone but I can assure you that that those that I receive as I responded back to each and everyone of those and ask them to contact me directly so I can answer their concerns not one call was returned This bill is here to protect small business is here to protect your constituents that are trying to supplement their incomes through online sales this bill primarily does four things number one provides consumer protection this will help our constituents answer that question that both each both your constituents and I know for myself and I believe you want to know and that's who I'm not doing business with seventy percent of all online marketplace sales are from areas outside of Arkansas on outside the United States. I want to know when I believe your constituents want to know if there legitimately buying from a real person or for buying these goods from overseas somewhere like China Malaysia Croatian. Number two it promotes fairness in the marketplace. This levels the playing field for our small business owners and provides fair competition. Your brick and mortar businesses back home are already at a disadvantage this will help protect them. Just last session the internet sales tax act was put into place to help the FAA identify those are collecting but not reimbursing our state we have seen in our state budget a great out take from that. Our small businesses need our help those that have brick and mortar businesses from having unfair advantages put on them through internet sales. It also helps them by not having to compete against all in counterfeit goods. I think that if representive brown owns a boutique and she selling designer purses she wants to know that she's got fair competition and selling a designer purse. Rather than someone the selling online a counterfeit good or a stolen good at a discounted price against what she is doing her brick and mortar business. Number three eight aids in the enforcement the bad players what this does is it puts another tool in the toolbox for our Attorney General to pursue those bad players in the online market place for price gouging. I thank each and everyone of you know someone who during the huge uptake of the pandemic fell victim to price gouging when it came to PP. When you could not go to one of your local merchants and find wipes or disinfectant or paper goods for your home's of your protection you couldn't find them in the stores but you could find them online in the prices that that you and your constituents were having to pay online for those were outrageous. It also helps the patent infringement notice representative Alan I believe representative fielding have air sanitizers air purifiers hanging around their necks today. Let's say hypothetically the representive Allen was the one who designed that contraction. They put a lot of time and effort investment into that and he designed that is out on the market place now making a difference in the lives of people. But yet some throw all for some defective product is being sold on the internet through some unregulated online market place at half the price of his and they don't work not only is that unfair price advantage to him but it's also not fair to him and his reputation of having a superior product. Four thing that this bill does is it helps those victims of stolen inferior defective goods I share with you the story and and quite onside do not mean for it to be humorous but I found it to be realized. The pandemic was that it's all as all time high. And you couldn't find these paper goods are these items of PP on the shelves I have a friend of mine who operates a wholesale trading company. He called me one day and he said what we're gonna do about this problem where there's no paper goods and I so I don't know man you need to find some they call me a few days later he said that you need to talk paper. I said well I think we're pretty good shape but I guess everyone could stand to spare role every now and then. In a civil manner I have found a tractor trailer load of toilet paper Mr really what did you find it because I found it online so what are you gonna do because I bought it he said it's going to be here in my warehouse in two days. Fabulous I said was expensive he said no I don't like I think I got a good deal on it. This will put me down for a case I'll share it with my family my friends my neighbors. When the product came in the roles were about this big around. And they were the texture of this yellow Manila folder and the label that was on it was in Chinese. In fair faith in practice he showed me the ad where he bought this tractor trailer load. Paper goods online it was completely and totally misrepresented there was no recourse he was hung several thousands of dollars investment just trying to do something good for his community by inferior goods at a deceptive trade practice. I want to give you some background personal information that I believe out of date some of the things that I share with you I know some of the testimony from the experts that are here will further provide this validation. For the past twenty eight years I have spent my career professional career in the supply chain logistics industry. Cargo theft has always been a huge risk in our world. Five to ten years ago if a load of goods were stolen in less than twenty four hours that trailer load of goods was across the border never to be seen again. Now that trend in the last five years has tremendously declined. Now those goods don't cross the border those good stay in the United States in a warehouse somewhere. And they're sold at discounted prices through online marketplaces. These are the things it's unfair to your constituents in your brick and mortar businesses in your communities. It used to be high dollar electronics and pharmaceutical still remain at high risk now it's personal health care items and home goods that are now huge targets. Just a couple years ago my company experienced a large cargo theft issue regarding a tractor trailer load of candles. You may ask yourself why would anyone want to steal twenty five thousand candles well I can tell you why. If you've ever gone to a hallmark hallmark store and bought a Yankee candle you probably paid somewhere around twenty four dollars for that candle. Those same candles are being sold online for nine ninety nine. That's unfair in the business world have. Stolen goods being sold at discount prices to your constituents and your businesses. I just saw report last week the state of Texas has increased in cargo thefts by two hundred and ten percent in two thousand twenty over two thousand nineteen why is that because the sale of counterfeit defective stolen goods through the online marketplace has escalated that are. But this is not just about freight. Just a year or so ago there was a ring of thieves that went through local I. doctor offices some in your cities stealing designer I frames off the shelf and selling them online hello to the reports just in central Arkansas alone twenty five hundred payer. A designer I frames were stolen online that were taken from our doctors just in this immediate area. So how does this bill help. The online marketplace facilitator will be required to collect six basic pieces of information. Business name business address. Business email business phone number tax ID number and bank account information now most all reputable facilitators will tell you that they already do this that's just how you do business therefore there should not be an issue with them. This is not red tape it's basic business information that every legitimate business can easily provide. They already provide this information to the secretary of state in the state of Arkansas you can look up any business and get this information through their website. Secondly the online marketplace facilitator would have to disclose to the consumer your constituent if it was a business page the following things the business name business address business email and business phone again these four simple common things that your constituents should have so that they know who they're doing business with these four items are not anything that is private information most every business owner that you know when you're communities as a business card with those for same items aren't that they gladly pass out to the public. Now if this was an individual page on the marketplace that only the state and country would have to be disclosed if I go online and I'm going to do some type of transaction with an individual the only thing that I would see would be the state that they're operating and selling out of in the country that they're in. The most important question and that the came through most of the emails this weekend was about who would be exempt who would be exempt from these regulations. This is why it doesn't hurt your constituents back home that operate small enterprises. Sellers of used goods such as cars clothes or furniture would be exam of representative brown wanted to clean out her closet in the spring sell a few of her dresses and blouses and shoes online she could do that and nothing would be disclosed that's not already been disclosed today her identity would be protected she would be exempt from these regulations secondly sellers in law and hobbyist with under two hundred transactions and five thousand dollars in sales over any twelve month period representive Ferguson is selling some wicker baskets out of a out of a little warehouse in her backyard that she's making or maybe representative flowers makes popery in her garage she wants to sell bags of that over the over the internet she's welcome to do that she would be completely exempt from these regulations as long as she didn't have over two hundred transactions or sales of five thousand dollars. Colleagues I believe this is a good consumer protection mechanism it aids in our local small business entrepreneurs and helps our state through our turning general's office to track down the bad players that I'll be happy to answer any questions. Thank you reserve eleven we do have questions when the city was first in the queue. Represent Ferguson you're recognized. Thank you Mr the representative this. A very simple question. Last year somewhere around March or April I like a lot of gadgets and I've been a life she bought me some gadgets and a couple of the items I bought didn't work. And we were trying to figure out where. We get them from the we traced it back to California some city in California. But actually it came from China cool from Hong Kong somewhere so but we never could find a place to return the items to get our money back so I think what you're telling me is that this bill. Would you please let us know where I could get my money back from. Or under the item because the item the mortgages fell apart certainly it would offer but we would provide you with a pathway to potentially get get your money back to what it would do on the front end is you would be able to see where you were buying that product from the beginning you would note that product was coming from from Hong Kong or China or if it was coming from somewhere in Arkansas and you might feel better about buying it that way with that the one one follow up this year yes you're recognized the address was in California I can't remember the city I think the city with industry California somewhere but the address was in California but as we get it as we looked at the item the item had the instructions written in Korean language maybe Chinese or Hong Kong I could understand instructions they may have been one of the biggest problems that but anyway the item did work so I guess what you're saying is even though they had an address in California. I wish to be able to track this item from California to where it actually came from you would know where that item originally came from but what this would also do is it would give the Attorney General better grass being able to help you track that information back to where it came from California one of the things that we do in my business is is is we contract with transportation companies all over the United States and one of the very first things we do is we look at that address we pull up on like Google maps and we look at that address and see exactly where that company is located if that address that trucking company is a a freight yard somewhere and they have a shop a lot of trailers and trucks will that tells me they're probably a legitimate business but if that address goes back to an apartment complex somewhere in the middle of some metropolitan city that I know that I'm probably not dealing with a reputable company that's going to stand behind or service hi thank you SJS thank you for the question representative flowers you're recognized for your question. Thank you Mr I love the concept but do have a few questions Eight I've always been aware that there is federal regulations that you order through the mail useful to have thirty days to return. Something and that's one of the reasons that I think that that is conceptually this is good for all the reasons you and representative Ferguson just mentioned but. Can you shed some light on the. The bank account information disclosure that would go to and talk about you know privacy in terms of any of this information being shared with it with me as a consumer because. If I'm selling some things I'm I'm concerned and I go to serve at two hundred you know transaction threshold who then gets my phone number address and I'm a. I'm still sort of a small level person so can you talk about privacy as it relates to your smaller entrepreneurs as well as that bank account information is certainly a great question so you as it is now when you set up an account with one of these online marketplaces Civil taters depending on if if they're paying you directly they're gonna be collecting the the the the or the price for the transaction of the sale the goods For that money is going to be divestiture Russo a service such as PayPal or Venmo or something like that and so you're already providing that information to them that that marketplace is still there already is going to have that information you would not be disclosing that information to someone that you would be doing an individual transaction within. Follow up yes you're recognized so I'm assuming that. As it stands right now I. If I am someone in. Another country I don't have to give that information I can I can I. I can operate maybe through a fourth party for the transaction or something I don't know how that works but. can you talk can you let us know whether or not this would apply to service providers like someone who owns You know a car that they sell through this I just got on it today this service where you can rent out your car or Airbnb or you know one of those providers online providers of services with that would it would apply to service providers I think you would I think conceptually that's that's the same the same idea when when you set up your account with any online facilitator whether it's for for goods or services. Most all of them are already going to ask you for that information you're going to supply that information already that's really not what this bill is about is is the supplying of your information Civil tater it's more important that that that the consumer your constituents have the ability to know through those four basic principles of name address email and In business phone your business name business address business email a business phone they have access to that information so they know exactly who they are having that transaction with date being Airbnb You know Even a. Yes fine yes Walmart whoever is pushing your product out on their site. This means that. The the seller has to provide all this information to that online site not to me the customer who's ordering through eBay you don't have to give me that you're giving that to the current line site correct. Okay thank you thank you representive Alan you're recognized thank you thank you Mr chairman of thank you represent eleven bring bills thank you sent of this thing but I do have a question how difficult is will this be for the state of Arkansas to enforce it. I thought the Attorney General's office about the bill they believe they have the staff and everything in place to be able to enforce the bill I think there were some concerns in Oklahoma we're a version of this bill was filed but I think it actually put a lot more of the duties on the Attorney General but again our our attorney general things that they have everything they need in place to help enforce and I would like to speak to it verification is really what's important here and goes back to representative Ferguson and and I think one of his questions about will you know you thought you were buying from someone in California but turns out you may have been buying from someone in who knows where but you had no really what we know real way to prove all you're doing is asking these facilitators Hey verified these people say who they you know they say they are that they are operating at the place that they say they're operating that's a huge benefit to law enforcement in general Attorney General's office actually it it helps speed up the process for them so for instance let's just say that you feel like you've been a victim of price gouging a take the attorney general's office in prior to without this bill what I was told on a specific case was well in fact we can't we we don't have the ability that's a third party he is the seller now that was a facilitator that was actually doing the transaction so Amazon or Walmart what are we have a place to go but it is too difficult to obtain the information be able to track down who these folks are this would allow the Attorney General a law enforcement on the federal or or state level to go in and look and say Hey let's just Google the address all this is a desert out in the middle of a I mean that's just a part of this ruling out errors on a clearly there's something not correct about this or to his point Hey there's a you know a a you know. At shed or whatever maybe they're at least operating some type legitimate business or appears that they are and then you have to follow up with a phone call also that those individuals in law enforcement to make just to call and say Hey would you pick up the baby formula can you mind letting us know who your supplier is a you don't have a supplier or is part of a bigger issue but it it helps with the verification I think streamlines the process for the attorney general's office as they're looking into these types of consumer issues thank you. Representative ray you're recognized for your question. Okay thank you Mr chairman I guess my first question would be so. A very similar or almost nearly identical version this has been filed in Congress Congresswoman Jan Schakowsky from Illinois is filed this. Why are we getting ahead of the federal government on this. I mean and I guess in a way not my answer would be why would we take the lead why would we try to protect are consumers here in this state protect our small business owners from this fraud this being son of Paul them upon them right now we can't amend if if you've still good sell online your basis is zero our small business owners have a true basis in that product they're trying to resell and as far as and I think probably what you're speaking to is will wiring involved in this to begin with right and and it goes back to I was I mean my wife's not gonna appreciate the testimony but back during the pandemic we we have an aunt needs child or are of high risk child I should say and so we've been extra careful at home and so we we bought plenty of Clorox wipes and low behold you go he could find Clark's whites anywhere on the shelves and so my wife start buying from the facilitator through for the the third party seller and that I recognize don't recognize a deal on the bank account one day and I think it's seventy nine dollars or something like that I go back and look and lo and behold we have bought three canisters of Lysol wipes for seventy dollars because that was the only place that she could find it and in reference to what I was talking about the AG's office not that we're going it was going to ask them to pursue I just made a phone call to say Hey what do we do about this price gouging that's happening right now we can't do anything like I said earlier because it's too hard to track it down if it is a third party seller and the other reason that a look at this is I feel like we had an issue with forty. But it turns out and so I was looking in general what would a bill look like if we were trying to deal with warding right now I mean you don't want to limit with these folks can sell and how much they can sell the completes themselves but what's really happening here what I found out was we're not competing with my you know next door neighbor the other consumer what was in fact happening was people are buying it to resell at much higher inflated prices four people were stealing that product because there was such a demand for it on a black market essentially or through a market place is still tater so that's reasonably became involved this I noticed there was something happening on the federal level I think we've taken that bill and a lot in to try to remedy some of the personal information issues that that have been raised that sort of thing but that that's the origin of the bill for me. Represent yes you're recognized okay so what I appreciate the anecdote that you provided and and that representive eleven provided I guess I would say and this may be more of an observation but I'll transition into a question with the this bill has been filed in several states or some variation of it. So it to me. It looks like this is basically an attempt by. This is an industry leading out for basically I'm and I would disagree on a personal level is not an industry led effort and we have legislation up go ahead I'm sorry sure sure that's okay statements well that was more of an observation but I'll I'll transition to my question and you can address that. I'm not not attorney but I what can can either of you speak to the constitutionality of this because obviously kamer says the authority to regulate interstate commerce the states don't I don't see anything in this bill that limits it specifically Arkansas. And can either be speak to that. What I do think it I mean I don't know but I assume it is something that in less facilitators go along or agree with the legislation ultimately that will be litigated and how that plays out again I'm not an attorney either I do think this is the right thing for Arkansas consumers and and proudly stand behind the bill. And I would just say also for your from your initial observation you know no this is not seven necessarily industry led to me was something conversation Senator Dismang I had and when he shared his personal story with that it touched on me how my business have been affected by this through cargo theft I've got a shipment setting right now in some storage buildings get fifty something thousand dollars for the pet food settings and storage buildings in Oklahoma right now being held hostage and I know what's going to end up with that product it's going to be so it's going to be sold through some online marketplace for a decrease value and and then I have my customer who's got their name on a product that's out there on the street being sold under valued and with no quality control on it and and for for the consumer who setting at home that that scouring through the internet and they see this large discounted price on their favorite label of pet food they're going to be the ones going to fall victim to this because they're not have any idea really where this product came from. Okay that's far as the on constitutionality of it I think the constitution United States backs what what what things when the right and and right is right and wrong is wrong and and and in my opinion this is right any time that we're protecting consumers from fraud protecting our small business owners from from having a good style and selling counterfeit prices I believe that we're doing the right thing. Share that address that last question here about now the yes you I'm not an attorney either the this doesn't prevent the sales in Arkansas at all it basically just provides information in the event there is a fraudulent sale so it doesn't prevent any of the sales it just it is a collection of infirmity it's a collection of information for in the event that the sales were far joint counterfeit or something along those lines okay thank you for the clarification representative of what you want I was just gonna say I have some more questions okay I will put you back in the queue that's okay representative brown. Thank you Mr chair this. Brings this discussion brought up that recollection I have of purchasing a pair of sandals that were advertised on Facebook. And I'm curious if Facebook would be considered one of these facilitators the sandals I purchased. They were so cute online. Get them. And I opened the plastic bag they came in and the fumes from the synthetic material they were made from not natural leather and Cork and stuff like that was so overwhelming I had to get it away for me and I knew I did not want it touching my skin but I was unable to find out how to return them unable to contact the a retailer my emails bounced back phone calls so we're wrong numbers and I'm just wondering what this protect us for our purchases on Facebook representative brown I'm sorry did you fell victim to that is exactly what this protects I I. Stevie I think you've got a list since you brought up for where you you've got a very good story about the to view like share that. You know representative brown to your story I have an antidote a story as well I had a family member that a couple Christmases ago there's a particular style of uggs boots and you gentleman may or may not know what those are and all you ladies know what those are and very popular the it you know in Dillard's recalls are built that particular Christmas I would've gone for about a hundred ninety nine dollars probably in this particular family member again at an online market place found a great pair great by those boots for ninety dollars and and pretty much almost identical when the uggs boots came in you know I think there were spelled correctly you know you G. GS but beyond that they were obviously counterfeit and no recourse no no no phone number that that worked no email emails bounce back and so again what this bill does is it provides the the information for the and you to go out and track down actually who that was it makes those online marketplaces verify those six bits of information so there are is recourse for Arkansas consumers. Thank you Sir thank you representive Lundstrum. I like this bill I was at lunch on Saturday we're talking about what bills are coming up and I said no this is really interesting bill coming up and immediately of course we talk politics twenty four seven and within my family as well one of the questions that came up was will you know when you go on eBay or Facebook you take your life in your own hands why do we why we get in the middle of this This Is Your you shop at Walmart because you know Walmart's gonna take it back you know they're going to back it up product why are we get in the middle of this and to your point your wife is obviously sophisticated this is not our first rodeo. You make those decisions all the time where you shop and they compete because. They know what they're doing so can you answer that well it in to be honest it is very confusing so me Google it you know searching of facilitators market place anything you want to some of those are going to be through you know the facilitator directly or more directly some of our third party sellers and it is very difficult in my opinion to tell the difference we have from one to the other in fact if you click on we'll just use Amazon example you click on most of the information for the reputable sellers pops up there's an address there's a business name there's a phone number and then occasionally there's an email it just depends but if it again and on the other sellers if you don't know to look for you don't click and look that information is half there maybe not there that doesn't mean that it's verified this bill required to be verified but at yes sophisticated not it is still very difficult in my opinion even for me to understand exactly who I'm doing you know business with and who might transactions going through I didn't realize on loan. I want to buy products from sellers United States I want to support my small business owners and if I've got the option to buy a product from Merion Arkansas or one from China I'm going to pick Marianna every single time even if it costs a few Bucks more and I want to know that there's a legitimate address there than I am transacting business with folks that are repealed so I'd I'm supporting my neighbor or someone else in the small business community follow up you're recognized I'm. I've gotten a bit just like representative brown has and I've called my credit card company and said cancel that transaction and they have so there is some recourse I don't know that we want everybody call the attorney general's office I want them tracking down sex trafficking or some of that that I get where we're going on this I like it but is this an over reach into people's are we becoming in any state can you answer that I mean it I don't believe so because I think we're trying to level the playing field number one or trying to make for educated consumers and in my opinion I think we have a right to know who were transacting business with it should be clouded when we're we're trying to make educated purchases also of products are stolen and then being rope resold on third mark a bark third and they that by a third party seller through the market place then I think that should be remedy and I think law enforcement should have and be able to have the ability to pursue that and so I know I don't believe it's an overreach because it is so basic what you're asking for and ask them to verify the facilitators to tell us that they verified anyway so that you're not creating an additional burden there and less that's not correct and there is not a verification and as far as that information is required to be presented we could all if it's a reputable business and they've registered with their state like they're supposed to like we do here in Arkansas a quick Google search is going to give you some that same information but it's only good if it's verified so and in my opinion is not an over reach its information that's already out there it's readily available for the most part we're protecting you know that if the individual that selling the wicker baskets at home the only is gonna show up is there You if they wanted to the anything can show up but is there state home as again that we're we're not encroaching on their personal lives or anything like that we in in just requiring that one simple step thank you thank you for we're gonna move back to representative for a moment but I had a lot of questions no there's more to this bill that and making sure that stolen product is not resold and that in. Someone can call me down for not being germane in my question but I'm really concerned about when I hear of retailers or or employees that work at retail outlets whether it's the apple store Dillard's or maybe even Walmart where they're told just be. Look the other way when they're shoplifting okay you we don't want she it and we hear the stories of the grab and run that takes place where someone just walks in and they just rake a bunch of. Polo shirts into a bag and then run. I you know I would really like to see more done on the front end on that I to I take it very seriously I take it very personally we're allowing people to come in and just steal just because they can get away with it what are retail outlets doing to make sure on the front end rather than coming you know reacting be proactive about retail theft yeah I mean I think it's probably best if that comes from someone that's you know operating in that field I would assure you that the doing everything that they can because the last thing they need is you know to have inventory missing and not being able to resell that cuts in their profits increases overhead again out from over the. Good. Senator Dismang is exactly correct there I mean yes so there's of the a major effort on the front end to to keep that from happening I can tell you even from the smallest mom and pop to the largest retailer in the world has brick and mortar facilities we all try to prevent theft on the front end unfortunately organized crime has gotten into this and and and because you Senator Dismang talked about earlier if if I buy something as a retailer. And turn around and sell it I have a gross margin. That is then offset by expenses which creates my net margin and that net margin those pennies or what I put in the bank if I'm organized crime. And I've got bands they're going around stealing items you know what my basis is just a little bit a labor for the people that I've hired to go out and steal and it happens all the time unfortunately you know I can assure you I haven't bought in this online but you don't want the hottest things right now for for organized crime to go into a big box stores Walmart CVS Walgreens target and steel is rogaine. I get representative Alan nor myself we we have in mind that we represent about. But but the reality is you know what when organized crime goes in and very quickly cleans off the entire shelf you know you can't be everywhere all the time in a retail outlet. With laws with loss prevention but if they go in and they hit those that hit that and then they go out and sell it online now there can be competing against legitimate online sellers. And they they're going to be made us hands down because they have no cost in it at all so I agree with you but we can't as retailers I can't have a loss prevention person on every aisle because if I do then your cost goes up as the retail consumer. And I understand that I just wish we were seeing more proactive I get tired of hearing people say well it's only property now it's a big deal to us it's a reading I feel that me too because those those costs get passed on to the US with a do representive ray. Mr for the for the question at a because I had had this conversation representative ray earlier this morning and he brought up the the fact is thank you he'd seen in Senate testimony Mister good about the rogaine but you know I can tell you not was too awful long ago that I was in my local Walgreens to buy razors and razor blades are under lock and key right now. And and I know representative ray made a point of rogaine is getting stolen while they just put on a lock and key will. Are we gonna put everything under lock and key to keep you know keep keep staff from walking out those doors I mean yeah road games is a very you know very expensive product but razors or something that that is being stolen left and right sold on the black market you can go to you can go to online marketplaces and find discounted prices on on men's razors and I notice now just recently that the dollar shave club and and Herries razors which are big online marketed products are now in our local retail stores. Those will be walking out the door so the black market as well this will help prevent that. Representive right. Okay I appreciate that Mister chairman I want to ask about the the threshold for the reporting requirements because two hundred transactions is not very much just if you if you had somebody who's selling online at basically as a hobby business and they just sold one item a day that would put on at nearly double the threshold to be reporting I mean I think of you know my mother in law during the when the pandemic started she started so when masks at home people do that and sell it online and I imagine you could sell two hundred pretty quickly just as a hobby business why why would. And why is the threshold so low. Tweet in so it's two hundred transactions and five thousand dollars in sales so you have to meet both of those red thresholds I mean I would say if you're selling two hundred items in a given year or having to enter transactions is a better way to put that uh then you're no longer operating a hobby that would be by our as iris you know guidelines or DFA for that matter there's got to be a threshold somewhere Blake two hundred dollars or two hundred transactions it's a pretty fair one especially with the additional limitation of five thousand dollars okay I'm looking on page two line thirteen I don't see and I see or. It looks to me like it's two This would be a violation of these these Requirements would amount to a violation of the fair trade practices act and you know I guess it doesn't spell out what would happen so who is the onus on in terms of what would happen you know. With the AG's office penalizing you for not doing this would be me the third party seller would be made the third party sellers and you know the company that was providing me the portal to serve the customers had what would that look like thank you. Back on the first question on if you're selling as an individual I mean you're going to have to provide your social security number anyway because there is reportable income that you're generating through the third market you know or the the the facilitators so I mean that that's that's reportable you're gonna paid on your tax return if you've got income coming in your an offset with your expenses and so I don't think that that would change that function with the exception of verification which is just the the ID for the individual and then. In. Was the second. The the the market place is going to be the ones is responsible for the the collection the market place the industry the market places it will be on the AG's office to make sure that that's collected so there will be no additional you know no red tape or anything there and and quite frankly testimony in other states these marketplace services are claiming that they're already collecting this information anyway so if they truly are there should be no additional you know red taper or any added regulation even for the. That answer that for you what will follow yes you're recognized so just to be clear the violator. If you know if I don't. Submit a correct address so you have everything you have my banking information because I wanna be sure to get paid. You have my name and phone number I'm I mean my name because that has to comport with the banking information in order for me to get paid. you have my email address because we have to communicate in order for me to get paid but what if my address it is deemed to not be correct and that doesn't come out until somebody has a problem with my you know my. Product then who who does the job Attorney General's office Dan who's in violation me or the marketplace the marketplace facilitators so because again they're very they're telling us already that they're gathering that information and verifying it anyway so if they indeed all our young if they're not verifying it the then they're misleading us that they are if they are verifying if they already know ahead of time and you know sometimes people move okay that's is that going to be a violation because I moved and I forgot to let my market place know that I've changed addresses no I mean you have to have common sense and regulation but but it's on that market place is not on the seller I mean the seller should provide the correct information but if they do then the market place is just going to facilitate just want to have to verify that it is in the correct. You may a bit look let me just you can kind of give give a caution to members I appreciate that you're being thorough but by having it an extended period of time with a for advocate we're for maybe not being fair to the against okay but I mean all that means still that representative Devin Senator Dismang would be able to to close together but we want to make sure we do have some witnesses we want to get. The representative Deborah Ferguson. The thank you okay I I do have some of the same concerns a representative right yet I see this more as a federal interstate commerce international trade issue. I don't see why I don't see how the Attorney General have recourse. More in Arkansas for things that are truly fraudulent I gave an example about a bracelet from China. And by the time I realized I had not received it they had taken the company day on on eBay didn't exist anymore and I was able to have recourse because I paid with PayPal but I don't see that the Attorney General will have any more leverage in enforcing those kind of companies which are really the problem. Then they do now I guess explain that to me. You saying how are they going to I mean if there's more information be made available in and maybe they can't pursue all these and I'm not saying that they will be able to but at least those that are domestic will be they will be able to pursue and in my opinion or lease gives them the ability to see if something's real or not real based on that phone call where is right now for going to track down a legitimate you know if someone's legitimate seller or not their address is correct if it's there if it's not there and all those types of things my understanding that's a you're gonna subpoena that information which make sure that nothing happens at that point because of the burden is so heavy to be able to accomplish that but at a minimum the Attorney General can look into it make phone calls I mean pull up Google maps C. for operating the illegitimate location and have some basic information available for they take that second step two you know the and say Hey we have something here when you're looking to make that phone call to the facilitator in my opinion. Follows the funds okay representative brown. Thank you Mr chair in response to representative raise questions We're just talking about people using third party facilitators were not talking about people just selling something like about. Cabot mask from somebody locally not imagine she made well over two thousand masks. That's that's not the issue here thank you que representa Boyd. Thank you Mr chairman and I apologize I had to run out to another committee so you might have answered these but I'll just ask very quickly so is the market place the internet or is it a place on an inter internet such as eBay or Amazon and then if you'll indulge me go make give the second question there's some argument that a seller has to disclose other sellers on it as well so like if I sell masks then I have to list all the other places that sell the same mask or something like that somewhere clarity on that thank you. I think I heard this question before in a meeting or is in a meeting I had are you saying that the threshold is applied for selling multiple marketplaces it in no it I mean it's it's per facilitator at so as to an entrance actions five thousand dollars uh per facilitator so we we can expect to know or or somehow cross lines between someone selling both on Amazon or on eBay it's per facilitator just clarity requip beyond just the disclaimer so the market place then is Amazon or eBay not just an internet website that is correct that's correct and that's on page two line nine ha ha it's it's where the definition of hobbling third party seller means a participant in an. and so that's per facilitator not cumulative. Okay. Representative for that answer your question. Partially it did but if if I may just very quickly again I have something that from the opposition that says an online market place would have to disclose other sellers listing the same product could you briefly address whether that's true or not true or maybe true I don't need a long disputation of the quick. I'm not sure if I understand other sellers selling the same product. I mean if you're a third party seller selling more than two hundred items or five and five thousand dollars then you're required to disclose just like any other sellers I I'll ancestral understand the. Yeah. Okay representive rate. Okay I know I've asked a lot of questions assume MLS one of us. What how many other states regulate. Of these online sellers in this manner. To my understanding there's not anyone else that has legislation in place at this point. To your question. Representive fielding. Your question. Both of a. Okay all right. Okay are there any other questions of members. Representative fielding it can you give me an idea of your motion. Okay at the proper time then okay thank you all rights will we will now move to the for and against and if. You will indulge me since we've had a considerable time for we will move to the against first and the first a person signed up is Sylvester Smith NFIB. Please identify yourself for the record and then you are welcome to present your arguments. Mr my name Sylvester Smith I'm speaking today on behalf of the national federation of independent business and R. four thousand small firms we represent here in the state of Arkansas first of all I do want admit that there are some challenges out there and I do appreciate the leadership that these members of the General Assembly have brought forth to try to address this very complicated issue the main point for us is that this is over regulation and it is a complicated regulation and it's going to impact honest people who just have that same dream and drive this Sam Walton had all those years ago with Walton's five and dime and I don't believe that it the that is the time for the legislature to come in and and Stein me that entrepreneur spirit at this time I do but also believe that the thresholds are too small a representative brown you made a good point about someone with a mask and so if I'm making these little mask and I'm seldom on Facebook market place it's not hard to have two hundred transactions especially when I'm selling these mascot twelve dollars a pop and people really need them and I've got a nice design well now I've got to provide this information of Facebook my address my phone number except except yeah I know that the sponsors communicated that will if you're a small mom and pop in you doing this out of your house your information is not going to be shared with online it'll just say will this mass coming from Arkansas however I think it's important you look look at page six of this section that deals with that regulation you know one of the primary things that they teach us about interpretative interpreting legislation is is it a may or is it a shall we'll when it comes to what's disclose it says market place may and so that doesn't prohibit the market place from interpreting interpreting this aggressively in making it a show and sharing that information and in providing that. Address into the marketplace and so I think that this is going to cool commerce especially for a lot of the small female entrepreneurs I work with who may lead level low. If you live alone you don't want to take a risk that your address is going to be disclosed on the internet for the entire world to see them. The worst thing that I'll say about this and I want to be very clear I just got this a couple days ago and again I appreciate what they're trying to do I believe that this is a noble intention but I I just think that we're moving a little fast and we're being a little bit more aggressive than we should so if you look at the enforcement mechanism it is says under four ninety one nineteen this on page seven violation of the deceptive trade practices act enforcement this will be violated as an unfair or deceptive trade act as defined under four eight eight one a one all remote rent room remedies penalties and authority granted to the AG under four eight eight one oh one shall apply now I am an attorney and maybe not a good one but I do play a better one on TV and I will tell you that you should take a look at four eight eight one oh three which according to my required quick review online says that one of the penalties for deceptive trade act is a Class es misdemeanor. And so do we want to potentially have criminal liability for person that unintentionally doesn't provide some information now the other thing about this and I would be open to working with the sponsors on some potential amendments if you look at this. On page three you have twenty four hours to provide information. And if you don't then I guess they're supposed to take your ad down or whatever twenty four hours I mean that's just in the entirely too aggressive time frame to require a little small business person is got a gig deal that they're doing to have to provide some information and so I think if there's parts of this to be could be cleaned up to make it better but I'll say this fundamentally about it If I were somebody that the main deal is to get these criminals right and I and we see this a lot we want to punish criminals we here's the thing about criminals the criminals they don't follow the law and so if I had a criminal intent behind this is what I do I'd make an ID I get my body to make a fake ID and represent Brown everybody's been picking on you so I'm going to join in the course okay I I give my body to make a fake ID and based on my reading of this the market place test except my copy of my ID as proof and it's verify it so I get a copy of my ID that has a picture of reserve Alan because he's far more handsome than I am it has your address and so I scanned the heck out of everybody and I see all these fake toilet paper rolls that are really made out of copy printer paper and I say I'm right here represents brown's address when they come in they track you down and they harass you because again that's what criminals do they're not going to provide accurate information there are fraudsters and so they're gonna keep prodding so I don't believe again I respect the intent but I just do not believe that this I think it's an over reach and I don't believe that it will achieve the desired goal and to represent of raise questions I do believe that there are some commerce calls. Commerce Clause implications and so basically the Commerce Clause senses you can only do anything to burn conduct commerce to the extent that Congress doesn't have something that conflicts with or prohibits it and so I am concerned that there may be some Commerce Clause implications that we keep this from being enforced period so I'm happy to try to take any questions but those are concerns okay members of there any questions for this witness. If not thank you very much for your testimony. Next speaking for the bill would be Michael Lynsey with a Walmart he may be in the overflow areas so we'll give them a moment to get here. Okay. Thank you Mr lens if you will identify yourself for the record and then you are recognized for your testimony thank you Mr Michael into director public affairs and government relations for Walmart I could be here this morning what a great testimony this morning appreciate everybody's engaged on this issue and excited to be here to represent Walmart in our fifty thousand associates here in Arkansas and explain why words very strongly in support of this bill this is an important piece of legislation that increases transparency and accountability in on an online market places it sorely needed to address our concerns the stolen the counterfeit merchandise so the mark of market places to our consumers here in Arkansas we found it the department of homeland security has estimated the counterfeiting party goods never upset more than five hundred billion dollars in sales last year the US border patrol has seized more than thirty three thousand incidents in twenty nineteen of stolen falsely labeled substandard material that does not meet safety regulations. Well pretty both bricks mortar and online market places in the United States we believe this bill requires seller disclosure verification of best practices that we employ for Walmart dot com. The bill doesn't harm law abiding sellers just makes it harder for bad actors to compete with us lawful sellers and helps us stop deceiving defrauding customers in your state. We think the federal laws are in place we also don't want to rely on the good the federal government to come in and help us reductions issue and we can do it on our on our own here in Arkansas. So does some specific examples. I'm in Arkansas we have had more than one hundred and fifty instances of people coming to our stores stealing merchandise and selling them online in one specific instance a very organized retail group came in is still more than two hundred fifty thousand dollars the mobile phones in various apple devices sold them through online sought through online sites around the country we say this is a tremendous problem and we think this bill will help stop that on the front end by preventing people from registering sites without the verification we don't think that there's enough incentive for them to sell these items online so we appreciate a possible to yes. Okay thank you members of there any questions for this witness representative brown. Thank you Mr Lindsey and do you does Walmart sell anything through For or or. Per function as of a market place for for a third party sellers yes ma'am we have thousands of third party sellers at Walmart dot com and. Follow up. Yes you're recognized I am aware probably dangerously just not enough information but I know that major corporations that use like third party vendors to process payrolls and things they have they are required to perform audits of that information and how it's transmitted back and forth and whether it's protected and things like that do you have anything similar for. Any similar to excuse me similar type of process or verification that you would go through for your third party vendors that's absolute have a third party verification system prepared that they can do this easily from the first soldier standpoint from at Walmart standpoint it's something we're very thank technically savvy companies so this is not a burden for us to verify who are sellers are for any there's no number on us to do this verification for us. We would use a third party for our own associates could conduct a verification. Okay representative image okay representative. Richardson. Thank you Mr chair so you guys without this bill you guys could do this already we we could we could. Thank you. Okay thank you any other questions members for this witness representative Alan. Thank you so to come in thank you Mr are are you all the only big box of company this supporting as well as some of the other big box company or are they all in favor of it because I know that if this bill is implemented or passed you all will be directly impacted so I'll see you for so what about the of the big box companies on the against it or what well I I can speak for whose for we know for sure that Walgreens is for home depot Best Buy I believe the support of this I think there a lot of large retailers that are very much in support of this bill and see it as a way to help make sure that everybody's playing by the same rules and we're not allowing those criminals to sell online okay. Thank you all right thank you members any additional questions. Thank you Mr Lynsey thank you Mr chairman that's money of next speaking against the bill would be dust in Brighton. Please identify yourself for the record and you're free to. Keep your part of your testimony yes Sir my name is Dustin Brighton thank you Mr chairman I'm here on behalf of eBay Inc today. That when addressed the members of the committee thanks for allowing me to be here eBay as opposed to Senate bill four seventy hi this is I'm president legislation that would impose substantial new requirements for online Arkansas small businesses and sellers who use online marketplaces to reach their customers you should have a letter dealing with our concerns are detailing our concerns on Senate bill four seventy I joining eBay on that letter several other online platforms including at sea Macario offer up Poshmark and first dibs you also have something that the committee was good enough to allow to be submitted which outlines that eBay works very closely with brand names and law enforcement officials in stopping any are and trying to curtail any a late legal activity on their platform. EBay enables thousands of small businesses throughout Arkansas to reach customers down the street around the world the small businesses have been instrumental during the COVID nineteen crisis in helping customers receive essential goods while sheltered in place while the intent Senate bill four seventy is indeed laudable now is not the time we don't think to be putting onerous new regulations on the small businesses and no doubt they will be burdensome on small businesses here in Arkansas specifically we are concerned with SB four seventy it because it undermines online small businesses at a time they can least afford it sets overly prescriptive information collection requirements it poses significant privacy risks due to the mandated disclosure of personally identifiable information for our Kansans who sell on the market place and it disregards a substantial existing efforts that are already in place to protect consumers deployed by online marketplaces such as eBay at sea at cetera right owners and law enforcement rather than hastily moving forward with legislation that unnecessarily disadvantages small online businesses and risks the privacy of our Kansans who sell on the online platform we would encourage further dialogue with online marketplaces third party sellers and other relevant stakeholders to provide stronger consumer protections and prevent illegal activities I know there were several other companies who wanted to be here today but due to not being able to travel and travel restrictions with COVID you get me it should be noted that no other state has passed legislation like this and we strongly urge Arkansas against moving down this path I would. Like to point out some of the problems of the concerns that we see in this bill the public disclosure of information is number one and we need to be reasonable with regard to the safety issues it a lot of laws the privacy laws and regulations don't allow eBay to disclose sellers addresses and things such as the six pieces of information that we're going to fight earlier Americans that sell on third party platforms I shouldn't have to ship share their P. either personally identifiable information if they do some of them may stop using eBay which is a responsible market place they could take their transactions offline and start selling goods offline where we cannot manage any communication process or be of assistance while shopping with eBay I you know that you are interacting with a third party seller it's not hidden a couple clicks away like on some of the blended marketplaces eBay is not the blended market place in other words we are not selling information excuse me we are not selling products eBay does not own inventory such as some of our competitors out there on the online market places like eBay have also provided economic opportunities during this time and we feel that this bill again at with its provisions. Our problem the verification requirements are an issue eBay already works very closely with law enforcement as I said earlier through the program proact program they also have worked with the Attorney General to stop price gouging an article that came out on that just a couple years ago. And it the the bank account information another problem is a lot of sellers on eBay use pay pal or a third party payment managers that that requirement I believe that my colleague from United I'd be mentioned and they need longer than twenty four hours to to verify I would ask where did the twenty four hour threshold come from with we're not sure also at the annual certification by a seller of their information if they don't respond within three days there can that be suspended. Also the high volume third party seller threshold definition I believe this is already been addressed so I won't spend too much time on it but two hundred transactions and five thousand dollars we think it needs to be at least twenty five to fifty thousand for annual sales I mean if you look at that trying to transact and five five thousand dollars that breaks down to forty four transactions at ninety six per week so again we feel like it is not a good idea to burden our Kansans of people such as my mother who lives in my mail that may want us may want to sell products online I know she's not going to want her information being divulged unless it's required I would also add that this isn't new legislation it's been brought up a couple times today I would agree this is a national bill eBay will have to put out there information for every seller in the world because all listings may be viewed by shopper in Arkansas so if somebody like say and I'm just using hypothetically organised selling and I to the state the enforcement is going to have to be on the seller in Oregon if our cans and looks at that it's going to be a violation I believe that there was some discussion on the definition of a violation what would constitute a violation I believe the deceptive trade practices acts as its every occurrence. So if our cans in clicks thirty five times. That seller may be subject to ten thousand per occurrence so thirty five times time ten thousand three hundred and fifty thousand dollars and I was asked the question does Arkansas have the authority to regulate the seller in or again or tech company in California for now I realize that our cans it there there are Commerce Clause restrictions I realized our Kansans deserve to have their information protected that's why he based trust in the safety department is there to help if there is illegal activity we will continue to work with law enforcement and I thank you very much for your time today thank you thank you Mister prime and you've raised an issue that. I know you pro give the same disclaimer we've heard before that you're not attorney but in Arkansas we held up on or at least many of us did held up on voting for internet sales tax because there was a pending case a federal case I think it was the quill decision. is there a parallel here that we may be getting ahead of the Interstate Commerce and the need to see this at the national level of rather than us implementing it in a way that frankly to as you said we may not be able to enforce across state lines. Yes Sir I would say that there there is an issue there I'd say there's a parallel and I'd hate to see Arkansas be the first state to pass something that hurts citizens in this regard small business is the backbone of this country as we know and I sure wouldn't want to see that impeded here in my home state all right thank you representive brown here first up to ask questions. Thank you Mr chair Mr I can't read my own writing Brighton yes ma'am I. I have heard this concern expressed about divulging personally identifiable information in emails and texts and now from you and I've read the bill and I do not see anywhere in the bill where personally identifiable information defaults to shoppers my personal home phone number my personal address my personal bank account information would not be divulged so I don't I don't understand why this claim is being made what's being developed involves to eBay the online marketplace but beyond that I mean if you're not using a bay or something like that I would say that if you're selling something online third another third party platform that maybe doesn't have as a robust protections is eBay that that information is going to to to possibly be at rest and again with the day we work with law enforcement of subpoenas required will respond but frankly in some states the privacy law structure is different so even though it might be Arkansas this law if it were to pass it was duplicated the person that the personal unit but identified by fiable information and privacy concerns I mean again it it it's gonna it would spill over and become a multistate problem and again I really just want to see Arkansas be the first state and possibly open themselves up to lawsuits thank you okay representive Richardson Europe. Thank you Mr chair you mentioned in your testimony that this would be cumbersome for the seller can you tell me what would this eBay require right now for people to sale on eBay yeah that those six pieces of information for sure and address another thing about the address to if I could Sir a lot of small sellers they use their home address as their business address and I'm sure they're somewhat consider their somewhat reluctant to just give that out okay so just to clarify you're already getting everything that the bill is asking you to get it so it's not adding anything to the seller's coming eBay bill doesn't really address what the responsibilities are the for the marketplace facilitator and again there are restrictions in other states that would prevent us from getting that information okay but again to be clear we're get we're collecting okay thank you okay thank you representive ray. Okay thank you Mister chair Mr Brighton I guess. Okay the sponsors of the bill and others have brought up the point that this is basic business information is being asked to be provided by sellers. I know you touched on this but. Help me understand why that is burdensome I mean you could argue that name address phone number bank account why is that why is it so burdensome to provide I think it's more the risk I would say that some of the blended market places it's a little bit easier for them to get that information and disclose it it's a little bit harder for eBay I mean like in our cans in Arkansas alone there's forty seven thousand registered users it will take some time frankly to disclose that information if we're getting asked to provide that at breakneck speed so would be it would be burdensome if that you know somebody is selling two hundred I don't two hundred items in its after their facilitator transactions it five K. minex NO you're triggering again it's a low threshold so you're triggering Law responsibility for the R. cans and who is never gonna be able or several would not be able to compete with the big box retailers it's kind of putting them at a disadvantage okay follow up Mr yes you're recognized On a separate but related topics. I I mean I I sympathize with some of the stories that are shared about people acquiring stolen goods and using. That forms like eBay and others to to to resell those products what does can you give me an overview of what eBay does R. and you may not be able to speak to other platforms both but with the bank what does eBay do to prevent that type of fraud. Sure I would have to go back to eBay and get back to you on that to see exactly what they're doing again they've got a very robust trust and safety department internally that interacts with the sellers and buyers they can contact eBay who can help mitigate and in such instances again now I think it's it's a little harder for a small business person really understand what's what's happening when their businesses are being are being that they're being told you're you're in violation of this new statute that would come to the bay and ask for help on that I would also say that and I'm somewhat reluctant to say this but I'm going to because this is I know this was that back in two thousand nine again these bills were being discussed back in two thousand nine and again nothing's passed yet but back then I heard stories where their studies being done and that is far stolen goods appearing on third party marketplaces such as eBay a vast majority of that was because of internal employee theft with a large retailer somebody walking into a store grab and something out from the back room I know that like with the razor blades they are locked up not sure what's happened in the back room though because again a lot of the employees that has resulted in items that are online and if they do in the retailer calls us and works with us. We'll be glad to take a look at the situation and mitigated or even I will I know that. Have any anything else represent bring. Of net next we have representive Alan. Thank you Mr chairman of you mentioned that if your mother won't the sale something that she couldn't do it under this bill so I would like for represent eleven to address that because I think he addressed it earlier. When he gave his presentation and he said that it would not impact. person is selling under five thousand dollars is that correct. That is correct. So. You tell me yeah I mean my mother would be able to conduct business but again the the problem as the bill would prevent her from doing that I represented it would that would require her to give some information to others that she might not want to to do so she's elderly I'm I'm glad to clear clarified that because early and you did say it would prevent her. And I'm a few minutes spoke in a wet but now I'm sorry if I gave the impression again it was more about that this would be burdensome it's it's not red tape as much as the bird okay thank you yes Sir. Representive board. Thank you Mr thank you Mr chair so I want to go back to weather for Arkansas can regulate this or not and so I'm just trying to understand so. The board of pharmacy regulates mail order pharmacies that don't have that don't exist physically within the state of Arkansas they regulate it based on where the consumers located so can you help me understand that legally how we could regulate this entity but all of a sudden we couldn't regulate some other brick and mortar or something being mailed into the state yeah thank you you bet represent Boyd again I'm I'm not an attorney so I wouldn't be able to answer that that question I'm sure there are some differences between the responsibilities in the regulation on the pharmacist and it is from a person that's just a small business man or woman that's trying to make a few extra dollars that I wouldn't be able to speak to that but will definitely get back to you. Okay thank you members any additional questions for this witness. yes represent Pilkington I have a motion. Okay your motion motion do pass the motion to me to consideration. Okay I'm not gonna recognize that motion because it would preempt representative eleven from closing for the bill but I'll come to you or representative fielding for the do pass motion at the appropriate time. Thank you Mr Brighton. Okay I'm going to turn to you now representive eleven allow you to close on your bill thank you I believe also Senator Dismang we have some closing comments as well but. I'll start out first one address couple of points that Mr Smith who is representing a small independent businesses made. I don't believe that providing information to legitimize my business is quite as it is he put it squashing the entrepreneurial spirit. I think if I am a legitimate small business and I'm not afraid that I should not be afraid to put my business name my business address my business phone in my business email out there. I just find that that is is bad representation of the people that he supposedly representing. Also to state here and to testify that he really just got this thrown on him over the weekend I mean this bill is filed on March the fourth went through the Senate Committee on Mar sixteenth on on the Senate floor on Mar seventeenth there was no dissent and Senate Committee the vote on the Senate floor was thirty three in favor with two voting on president the voted are they voted present just out of disclosure because of business is that they operate. Mr Brighton's points. Represent about your correct when he testifies his mother would not be allowed to do this. He also made statements saying that this would be substantial new requirements in this would be burdensome and that this would impede small business I find it hard to understand how we would be impeding small business by putting for things such as your name your address your email and your phone number out there for people to see that you are a legitimate business. yes there are things in federal and federal law right now that are working each and everyone of us that we know how long it takes things to get through the federal system we have the opportunity for Arkansas to be the first to take this step towards consumer protection and help in this case. Senator Senator Dismang it comments. I mean it and really just ask yourself I mean I mean you read the bill you person the arguments against I mean I'm sure you all got the text messages I I truly don't understand NFIB representing small business owners wanting to create a level playing field how they could possibly be opposed to this bill. It supports our small businesses there is nothing in this bill that you look at ago while that's just too much it is the basic core things that are required to conduct business in Arkansas we're not asking for more and it's Amendment minimal disclosure. Even those things are gonna be presented to the public if your person to your point because the the last you know witness this spoke against the bill clearly hadn't read the bill he repeatedly talked about disclosure of personal information your disclose any information you can get paid. Yes this bill. What we're trying in something that it's not it is consumer protection it helps a small business owners it creates a level playing field all things that I think we want to do here in the state of Arkansas proudly stand behind and appreciate a good vote. Okay. Thank you. I will now of recognized I believe representative fielding you had a motion. Okay we have a motion to pass is there any discussion by the members. Representative flowers. If I didn't say before I want to reiterate that I'm very supportive of this concept I think it really should apply across other dimensions and commerce as well to protect consumers. I do want to say that I will be voting for the bill but I do have a couple of concerns that I'll share with Senator Dismang to make it stronger and address maybe some of the concerns that were expressed today on thank you for bringing the bill thank you okay. Any additional discussion by members representive ray. Yeah thank you Mr chair I'm not saying that. I would always be I know on this but I today I'm going to be a no on this for for a couple of reasons as I was reading over this last night it It sparked more questions than I think I I have answers to first. I'll say there's a bill that's nearly identical to this that is pending in Congress. And I don't know that it's prudent of us to get ahead of the federal government on this particularly when there's no other state that is adopted a similar regulatory framework. The second thing I would mention is. I'm not a constitutional lawyer but. I don't think anybody was really able to address the Commerce Clause concerns in a way that I found satisfactory so. My antenna always perks up a little bit when I think we might be doing something that could be a potentially unconstitutional. third I'm concerned that. That will the fact that NFIB as opposed to the bill their their the the voice of small business in the state. there are a lot of small businesses that operate using these third party platforms. And so I worry that there could be unintended consequences this is it this is an area of commerce that. It's really a burgeoning area of commerce it is flourishing and a lot of people not only not only do consumers use it and like it as evidenced by the fact that it's there's so many of them and it's popular but also In a lot of people a lot of small businesses. People are making a living using these platforms and I understand that there are there are bad actors I'm not I'm not convinced that there are not other avenues to hold those bad actors accountable rather than putting in place more regulation and I know the the supporters of the bill would. Disagree with the characterization of this of red tape but it's circuit eve even if you don't consider red tape it certainly regulation I mean it's or seven pages here and I just did a word search the word requires mentioned twelve times the word shall as mentioned fifteen times so it clearly is regulation. at any rate I've not seen clear and convincing evidence that there is just a massive online problem with these market places that we have to solve here today So. Anyone with that I may be the only one but the those are my concerns and that's why the voting no today. Thank you any other members. Wish to sound in. No okay well we do have a motion on the floor do pass all those in favor signify by saying aye. All those opposed say no. I think that was pretty clear. But good try representive ray congratulations bill passes thank you committee may members that the completes our attended as I mentioned we will not be meeting next Monday because there is a ale C. meeting so our next meeting will be Wednesday of next week have a good break.