First Regular Session Sixty-sixth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 07-0696.01 Duane Gall HOUSE BILL 07-1303 HOUSE SPONSORSHIP Gagliardi, and Solano SENATE SPONSORSHIP (None), House Committees Senate Committees Business Affairs and Labor A BILL FOR AN ACT Concerning the ability of a person to refuse unwanted commercial mail, and, in connection therewith, enacting the "Colorado Junk Mail Opt-out List Act" containing exemptions for charitable nonprofit organizations, political organizations, and businesses with which the person has an established business relationship. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Adopts a junk mail opt-out list, similar in form and operation to the existing no-call list for telephone solicitations. Directs the Colorado public utilities commission to solicit bids and contract with a junk mail opt-out list administrator (designated agent) to maintain a list of addresses of persons who desire to reject all unsolicited commercial mailings (junk mail). Requires the designated agent to maintain a web site and a toll-free telephone number for the use of postal patrons who wish to put their address on the list. Requires all persons who wish to send junk mail to purchase an updated list of addresses and to remove those addresses from their own mailing list. Directs the designated agent to update the list periodically using information provided by postal patrons and by the United States postal service. Allows a person whose address is on the list and who receives junk mail to sue the sender and collect a $500 civil penalty. Allows the attorney general to bring actions against repeat offenders seeking civil penalties and injunctive relief. Exempts charitable nonprofit organizations, political organizations, and businesses with which a postal patron has an established business relationship. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Article 1 of title 6, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read: PART 12 JUNK MAIL OPT-OUT LIST 6-1-1201. Short title. This part 12 shall be known and may be cited as the "Colorado Junk Mail Opt-out List Act". 6-1-1202. Legislative declaration. (1) The general assembly hereby finds, determines, and declares that: (a) Unsolicited bulk mail ("junk mail") now represents a major portion of the budget and workload of the United States postal service, with over ninety billion pieces delivered per year, and, based on data supplied by the United States environmental protection agency and the national solid waste management association, annually accounts for over three hundred forty million pounds of trash in Colorado alone, requiring disposal at a cost of over four million dollars, and the destruction of one hundred million trees nationwide for paper pulp; (b) The proliferation of junk mail has included a sharp rise in the number of deceptively packaged commercial solicitations that have been used to perpetrate fraud against the elderly and the unsophisticated; (c) Many citizens of this state view junk mail as an imposition on their time, an invasion of their privacy, and an environmental sacrilege; (d) Individual rights and commercial freedom of speech should be balanced in a way that accommodates both individual choice and legitimate marketing practices; (e) Although small businesses and charitable and political organizations are exempt from this part 12 in order not to hamper the free flow of ideas in our democracy, the general assembly encourages such organizations to voluntarily comply with this part 12 when possible; and (f) It is in the public interest to establish a mechanism under which the residents of this state can decide whether or not to receive junk mail. 6-1-1203. Definitions. As used in this part 12, unless the context otherwise requires: (1) "Bulk mailer" means a person that sends, on behalf of itself or another person, substantially similar pieces of mail to twenty-five or more postal patrons. (2) "Conforming consolidated junk mail opt-out list" means any database that includes addresses of postal patrons that do not wish to receive junk mail, if such database has been updated within the immediately preceding thirty days to include all of the addresses on the Colorado junk mail opt-out list. (3) "Conforming list broker" means any person that provides lists for the purpose of bulk mailings, if every address that is included on the Colorado junk mail opt-out list has been removed from such lists at least every thirty days. (4) "Designated agent" means the party with which the public utilities commission created in section 40-2-101, C.R.S., contracts under section 6-1-1205 (2). (5) (a) "Established business relationship" means a relationship that: (I) Was formed, prior to the sending of junk mail, through a voluntary, two-way communication between a seller or bulk mailer and a postal patron, with or without consideration, on the basis of an application, purchase, ongoing contractual agreement, or commercial transaction between the parties regarding products or services offered by such seller or bulk mailer; (II) Has not been previously terminated by either party; and (III) Currently exists or has existed within the immediately preceding one hundred eighty days. (b) "Established business relationship", with respect to a financial institution, as defined in section 527 of the federal "Gramm-Leach-Bliley Act", Pub. L. 106-102, 113 Stat. 1388, as amended, or an affiliate thereof, includes any situation in which a financial institution or affiliate makes bulk mailings related to other financial services offered, if the financial institution or affiliate is subject to the requirements regarding privacy of Title V of the federal "Gramm-Leach-Bliley Act", Pub.L. 106-102, 113 Stat. 1388, as amended, and the financial institution or affiliate regularly conducts business in Colorado. (6) (a) "Junk mail" means any printed matter sent by mail for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services. (b) Notwithstanding paragraph (a) of this subsection (6), "junk mail" does not include communications: (I) To any postal patron with that postal patron's prior express invitation or permission; (II) By or on behalf of any person with whom a postal patron has an established business relationship; (III) By or on behalf of a small business; (IV) By or on behalf of an entity organized under section 501 (c) (3) of the federal "Internal Revenue Code of 1986", as amended, while such entity is engaged in fund-raising to support the charitable purpose for which the entity was established; (V) By or on behalf of a political party, political committee, campaign committee, candidate committee, or entity organized under section 527 of the federal "Internal Revenue Code of 1986", as amended, while such entity is engaged in political speech or fund-raising for political purposes; or (VI) By a natural person responding to a referral, or working from his or her primary residence, or a person licensed or registered in Colorado to carry on a trade, occupation, or profession who is setting or attempting to set an appointment for actions relating to that licensed trade, occupation, or profession within Colorado or counties contiguous to Colorado. (7) "Postal patron" means any person having a mailing address in Colorado, as shown by records of the United States postal service. (8) "Small business" means a business entity with three or fewer employees. 6-1-1204. Unlawful to send junk mail to postal patrons on the Colorado junk mail opt-out list - requirements for junk mail generally. (1) (a) No person shall send or cause to be sent any junk mail to the address of any postal patron who has added that address to the Colorado junk mail opt-out list in accordance with rules promulgated under section 6-1-1205. (b) A person that sends junk mail to the address of any postal patron shall register in accordance with section 6-1-1205 (3) (b) (II). (2) On or after January 1, 2008, or upon the initial availability and accessibility of the Colorado junk mail opt-out list, whichever is earlier, a person that desires to send junk mail shall update the person's copy of the Colorado junk mail opt-out list, conforming consolidated junk mail opt-out list, or a list obtained from a conforming list broker within thirty days after the beginning of every calendar quarter. 6-1-1205. Establishment and operation of a Colorado junk mail opt-out list - rules - registration. (1) The Colorado junk mail opt-out list program is hereby created for the purpose of establishing a database to use when verifying postal patrons who have given notice, in accordance with rules promulgated under paragraph (b) of subsection (3) of this section, of such postal patrons' objection to receiving junk mail. The public utilities commission shall administer the program. (2) Not later than January 1, 2008, the public utilities commission shall contract with a designated agent, which shall maintain the web site and database containing the Colorado junk mail opt-out list. If no more than one entity bids on the contract, the public utilities commission may award such contract at its discretion. (3) (a) Not later than January 1, 2008, the designated agent, using the designated state internet web site, shall develop and maintain the Colorado junk mail opt-out list database with information provided by postal patrons. (b) The public utilities commission shall establish, by rule, guidelines for the designated agent for the development and maintenance of the Colorado junk mail opt-out list so that the junk mail opt-out list can easily be accessed by persons desiring to send junk mail and by state and local law enforcement agencies. As soon as practicable, the public utilities commission shall promulgate rules that: (I) Specify that there shall be no cost for a postal patron to provide notification to the designated agent that such postal patron objects to receiving junk mail; (II) Specify that there shall be an annual registration fee of not more than five hundred dollars for persons or entities that wish to send junk mail or otherwise access the database of addresses contained in the Colorado junk mail opt-out list database. The public utilities commission shall determine such fee on a sliding scale so that persons or entities with fewer than five employees shall pay no fee. In addition, there shall be no fee charged to conforming list brokers or nonprofit corporations, as defined in section 7-121-401, C.R.S. The maximum fee shall be charged only to persons with more than one thousand employees. Moneys collected from such fees shall cover the direct and indirect costs related to the creation and operation of the Colorado junk mail opt-out list. Moneys from such fees shall be collected by and paid directly to the designated agent. The public utilities commission annually adjust the fees below the stated maximum based on revenue history of the fees received by the designated agent. The designated agent shall provide means for on-line registration and credit card payment of fees charged pursuant to this subparagraph (II). Each such person shall provide a current business name, business address, email address if available, and telephone number when initially registering for the junk mail opt-out list. This information shall be updated when changes occur. (III) Specify that the method by which each postal patron may give notice to the designated agent of his or her objection to receiving junk mail, or may revoke such notice, shall be exclusively by entering the address of the postal patron directly into the database via the designated state internet web site or by calling a designated statewide, toll-free telephone number maintained by the designated agent as a part of the Colorado junk mail opt-out list; (IV) Specify that the date of every notice received in accordance with subparagraph (III) of this paragraph (b) be recorded and included as part of the information in the junk mail opt-out list; (V) Require the designated agent to provide updated information about the Colorado junk mail opt-out list program on the designated state web site, subject to supervision by the public utilities commission; (VI) Prohibit the designated agent or any person collecting information to be transmitted to the designated agent from making any use or distribution of names or addresses contained in the junk mail opt-out list except as expressly authorized under this part 12; (VII) Specify the methods by which additions, deletions, changes, and modifications shall be made to the Colorado junk mail opt-out list database and how updates of the database shall be made available to persons desiring such updates. Such methods shall include provisions to remove from the Colorado junk mail opt-out list, on at least an annual basis, every address away from which the original postal patron has moved. (VIII) Require the designated agent to maintain an automated, on-line complaint system for postal patrons to report suspected violations over the internet web site. The automated, on-line complaint system shall have the capability to collect, sort, and report suspected violations to the appropriate state enforcement agency electronically for enforcement purposes. (IX) Specify that the junk mail opt-out list shall be available on line at the Colorado junk mail opt-out list web site to a person desiring to send junk mail if the person has registered in accordance with subparagraph (II) of this paragraph (b). The list shall be available in a text or other compatible format, at the discretion of the public utilities commission, but shall allow bulk mailers to select and sort by specific zip codes. (X) Specify such other matters relating to the database as the public utilities commission deems necessary or desirable. (c) If the federal government establishes one or more official databases of postal patrons who object to receiving junk mail, the designated agent is authorized to provide appropriate data from the official Colorado junk mail opt-out list exclusively for inclusion in an official, national do-not-mail database. To the extent allowed by federal law, the designated agent shall ensure that the Colorado junk mail opt-out list includes that portion of an official national do-not-mail database that relates to Colorado. (4) The state shall not be liable to any person for gathering, managing, or using information in the Colorado junk mail opt-out list database pursuant to this part 12 and for enforcing the provisions of this part 12. (5) The designated agent shall not be liable to any person for performing its duties under this part 12 unless, and only to the extent that, the designated agent commits a willful and wanton act or omission. (6) As soon as practicable, the designated agent shall update the database, on an ongoing basis, with information provided by postal patrons and the United States postal service. (7) No person shall place the address of another person on the Colorado junk mail opt-out list without the other person's permission. 6-1-1206. Enforcement - penalties - defenses. (1) On and after January 1, 2008, violation of any provision of this part 12 constitutes a deceptive trade practice under section 6-1-105 (1) and may be enforced under sections 6-1-110, 6-1-112, and 6-1-113. No state enforcement action under this part 12 may be brought against a person for fewer than three violations per month. (2) Notwithstanding subsection (1) of this section, it shall not be a violation of this part 12 if: (a) The person has otherwise fully complied with this part 12 and has established and implemented, prior to the violation, written practices and procedures to effectively prevent the sending of junk mail in violation of this part 12; or (b) The violation resulted from an error in transcription or other technical defect, not the fault of the person or equipment or software within its control, that caused the information in the junk mail opt-out list as received by the person to differ from the information that was or should have been included in the junk mail opt-out list as transmitted by the designated agent. (3) The remedies, duties, prohibitions, and penalties of this section are not exclusive and are in addition to all other causes of action, remedies, and penalties provided by law. (4) No provider of address information or address lists shall be held liable for violations of this part 12 committed by other persons. SECTION 2. 6-1-105 (1), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH to read: 6-1-105. Deceptive trade practices. (1) A person engages in a deceptive trade practice when, in the course of such person's business, vocation, or occupation, such person: (yy) Violates any provision of part 12 of this article. SECTION 3. Effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution, (August 8, 2007, if adjournment sine die is on May 9, 2007); except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.