STAND. COM. REP. NO. 401

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 651
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 651 entitled: 

     "A BILL FOR AN ACT RELATING TO CONSUMER PROTECTION,"

begs leave to report as follows:

     The purpose of this measure is to make unsolicited or
misleading transmission of electronic mail messages or the
unsolicited transmission of facsimile messages an unfair or
deceptive trade practice.

     The Office of Consumer Protection of the Department of
Commerce and Consumer Affairs presented testimony in support of
the measure with proposed amendments.  The Direct Marketing
Association, Soc.Culture.Hawaii, and an individual presented
testimony in support of the measure.  Although not present, the
Pacific Information Exchange, Inc., and an individual, submitted
written testimony in support of the measure.  

     Your Committee finds that the number of unsolicited
electronic advertisements, including unsolicited bulk e-mail
(UBE) and unsolicited facsimile transmissions, have dramatically
increased in recent years.  Unlike traditional bulk postal
mailings, these advertisements shift the cost of the advertising
away from the advertiser, and onto the consumer, who indirectly
pays for the advertising through loss of time due to overloaded,
malfunctioning computer servers, or deteriorating and broken
facsimile machines.  


 
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                                   STAND. COM. REP. NO. 401
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     Unsolicited electronic advertising costs consumers in the
United States between one hundred million and one billion dollars
a year.  Even so, few states have taken action against such
advertising.  Your Committee finds that it is in the public's
interest to take action against unsolicited electronic
advertisement.

     Your Committee has amended this measure by deleting its
contents and adding language which:

     (1)  Establishes violations for misrepresenting information
          regarding point of origin or subject matter of an
          electronic message, or for using a third party's e-mail
          address (domain name) without authorization;

     (2)  Provides immunity to interactive computer services from
          liability for blocking transmissions which they
          reasonably believe violate this measure;

     (3)  Establishes violations for unsolicited facsimile
          machine transmissions;

     (4)  Provides that violations of this measure constitute an
          unfair or deceptive act or practice actionable under
          Section 480-2, Hawaii Revised Statutes; and

     (5)  Provides for trebel damages to any person suffering
          harm due to a violation of this measure. 

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 651, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 651, S.D. 1, and be referred to the Committee on Judiciary.


 
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                                   STAND. COM. REP. NO. 401
                                   Page 3


                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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