FEDERAL, STATE & LOCAL LEVEL.
AAF’s Government Affairs Committee is comprised of individuals with a interest and passion for government affairs and legislative issues surrounding the advertising industry. The committee meets monthly via conference call to discuss key legislation, supporting activities, and upcoming events. If you are interested in joining the committee, please contact Clark Rector.
Click the dates below for recent updates and activities.
MARCH 26, 2020
March 26, 2020
Ad Tax Bills
New York Targets
Privacy in the
A Special Message
from AAF President &
CEO, Steve Pacheco
Maryland Accepts/Rejects Ad Tax Bills
Before adjourning the legislative session due to the COVID-19 pandemic, the Maryland General Assembly approved a bill including the digital ad tax and has sent the measure to Governor Larry Hogan (R). The Governor has not commented specifically on the proposal, but has been vocal in his opposition to new taxes and is expected to veto the measure.
The Governor has until May 6, to veto or sign the bill into law. The General Assembly hopes to be able to return to session in late May to consider veto overrides and other business. All plans are currently tentative and subject to change based on current events.
AAF Baltimore President, Matt McDermott and AAF National EVP of Government Affairs, Clark Rector each testified against the tax before the legislative tax writing committees. AAF has asked the Governor to veto the measure and encouraged the members of our two Maryland advertising federations to do so as well. Should the bill ultimately be enacted into law, it is likely to face numerous legal challenges due to its violation of the Permanent Internet Tax Freedom Act and other constitutional challenges.
In better Maryland news, the introduced bill to reduce the sales tax rate but expand the tax to include many services, including advertising, was decisively rejected in a lop-sided bipartisan vote. AAF Baltimore VP, Ashlene Larson and AAF National EVP of Government Affairs, Clark Rector, both attended the Ways and Means Committee hearing to express opposition.
New York Targets Digital Ads
New York State Senator and Deputy Majority Leader Michael Gianaris has introduced a billvirtually identical to the Maryland proposal which would place a gross receipts tax on the digital advertising revenues of companies with global annual gross revenues exceeding $100 million. Immediate action is uncertain, but the AAF has weighed in with lawmakers against the proposal and will work with our local members and other allies to actively oppose the measure.
Privacy in the States
In Washington, the legislature adjourned without a final agreement on SB 6281 which dealt with the management and oversight of personal data. While AAF supports the state’s interest in protecting the privacy of its citizens, we believe a number of provisions in the bill would have undermined privacy protections for Washington residents and created undue burdens for businesses.
AAF and our allies continue to communicate with the California Attorney General urging him to delay enforcement of the California Consumer Privacy Act. Given current events, and the fact that implementing regulations have still not been finalized, we believe it will be inherently more difficult for businesses to meet the current July 1, 2020 deadline.
Privacy Fly-In Postponed
A Special Message from AAF President & CEO, Steve Pacheco
AAF Staff, AAF Members, AAF volunteers, AAF sponsors and supporters—they all have more than a few things in common.
They are passionate about Advertising, and the Advertising business.
- They are constantly curious & creative.
- They are smart and wise and intelligent.
- They are problem solvers and they love a challenge.
- They are almost always positive people with a positive outlook.
- They have been through lots of trials and tribulations.
- They are survivors.
- They have more than a few good stories.
And there’s probably a lot more that I left off, but I think you get the point. This group can handle whatever life throws at them. And life has thrown a few curve balls at all of us over the past few weeks. As someone once said, “it’s not what happens to you—it’s how you respond to it.” And we will respond to all of this as a community. The AAF network can be a great resource for you during these tough times. Call on your AAF friends and colleagues for help and support—they are a very resourceful group.
Keep this one thought in mind as you go through your days and nights—working from home—making conference calls—home schooling your kids—practicing Social Distancing…
We will all get through this together.
After all, we are “The Unifying Voice For Advertising”
I will submit to you that a combination of great leadership and authentic compassion will get us all through all of this.
And we will have a few more stories to tell.
Take care. Stay healthy. Be well.
MARCH 2, 2020
March 2, 2020
Maryland Ad Tax
Rebecca Snyder and Matthew McDermott (AAF Baltimore): Taxing digital advertising and services to pay for Kirwan will harm Maryland’s economy
Maryland legislators are proposing significant new taxes to pay for the Kirwin Commission’s education reform recommendations. Delegates and senators are mulling a new digital advertising tax (SB 2 / HB 695) and an expansion of the sales tax to include professional services (HB 1628).
Where does that leave Marylanders?
Maryland citizens will be left footing the bill for these additional taxes. It is unrealistic to imagine that businesses can singlehandedly absorb substantial new taxes, on top of other recent legislative mandates, without passing along at least some of those costs to consumers. Of special concern is the focus on taxing ads and advertising services.
Advertising connects consumers to products and enables businesses to grow. Taxing advertising and advertising services will choke economic growth.
Look at Advertising
CA Do Not Sell
Maryland, Nebraska Look at Advertising Taxes
On January 29 the Maryland Senate Committee on Budget and Taxation held a hearing on SB 2 which would place a gross receipts tax on digital advertising. AAF Baltimore President, Matt McDermott and AAF EVP of Government Affairs, Clark Rector both testified against the proposal.
While the bill targets global companies with digital advertising revenues over $100,000,000 McDermott explained how the tax would ultimately also hurt Maryland businesses and consumers. Rector used the opportunity to remind Senators of the importance of advertising to Maryland and how digital advertising gives both small and large Maryland companies the ability to compete far beyond the state’s borders. Both received favorable coverage in the Baltimore Sun.
The next steps for the bill are uncertain, but because it is sponsored by the current and former Presidents of the State Senate it must be taken seriously.
Two ad tax bills have been introduced in the Nebraska legislature. LB 946 would extend the state sales and use tax to all services unless specifically exempted. No exemption for advertising is mentioned in the bill’s language. LB 989 would impose the sales and use tax to digital advertising. Because Nebraska has a very short legislative session this year, and the governor has pledged not to raise taxes, these bills are not expected to be enacted. However, many observers in the state believe that they could lay the groundwork for more serious consideration next year. In March, AAF Omaha and AAF Lincoln will host their annual joint legislative reception. The proposed ad taxes are sure to be a subject of discussion.
Privacy, Self-Regulation Update
AAF and our allied advertising associations have asked California Attorney General Xavier Becerra to delay enforcement of the California Consumer Privacy Protection Act. The new law went into effect on January 1 of this year with enforcement set to begin on July 1. Unfortunately, the final regulations have not been finalized, leaving thousands of covered companies in a state of uncertainty as to what exactly they will be complying with. The letter asked that the Attorney General delay enforcement actions until six months after the regulations are finalized.
While the industry waits for final rules, the Digital Advertising Alliance, in which AAF is a founding member, has created several new resources to help advertisers, publishers, agencies and ad tech companies in their compliance journey.
CA’s Do Not Sell My Info
With California’s “Do Not Sell My Personal Info” (DNS) mandate, DAA saw an opportunity to advance a privacy control experience for consumers that mirrors what’s been in market for the better part of a decade for opting out of data collection for interest-based advertising (IBA) with WebChoices and AppChoices.
DAA’s new DNS tools for California citizens—built into the latest version of its AppChoices mobile app, and browser-based “Opt Out Tool” that is similar to WebChoices—enables third parties (ad tech) to complement first parties (site and app owners) in their own opt-out “do not sell my personal information” regimes for consumers.
Overarching all of this is a new Privacy Rights icon that publishers can use on their sites and apps to extend transparency regarding their data “sales” practices—again mirroring the ubiquitous YourAdChoices icon they already see on footers and app settings for hundreds of companies and thousands of brands regarding data used for interest-based advertising.
While AAF strongly prefers a single national standard for data privacy, we are pleased to see these new CCPA-focused tools come to market. The goal is to help advertisers, agencies, publishers and ad tech companies manage this “new” privacy mandate and novel aspect of law. It is very possible other states could mimic what California has done.
DAA has rolled out a new Resources section related to the new Privacy Rights icon that publishers may use to convey their CCPA and “Do Not Sell My Personal Info” option(s) and disclosures on their digital properties and link to DAA’s DNS Opt Out Tool—both browser-based and app. Web forms to license the Privacy Rights icon and participate in DAA’s CCPA opt out-related tools are available there. The slides from the AAF/DAA privacy webinar are available there, with the full webinar available on the AAF website.
Meanwhile, as 50 states may further consider their own efforts to legislate in 2020—with new laws taking effect in California, Nevada and Maine as the last quarter and New Year passed—it’s paramount that we all work to manage the emerging patchwork. AAF and DAA are helping to drive the Privacy for America initiative to enact a comprehensive U.S. federal privacy law built upon a pragmatic, principled policy framework.
Political Ads: Required Disclosures
January 1, 2020, marked another milestone for DAA: its Political Ads transparency and accountability program is now enforceable by DAA’s independent Accountability Partners. As we enter a Presidential Election year, we have a responsibility to make sure online “express advocacy” ads for state and federal offices deliver transparency to voters—by helping to ensure these political ads we see are placed by valid, registered campaigns.
Using the Political Ads icon—which is free to license (subject to qualification)—and the associated disclosures that must accompany such digital political ads, we can help promote integrity in our elections.
In short, political ads need to be transparent and accountable. And already several ad tech companies are making sure that the DAA Political Ads icon and disclosures are deliverable—and much the same way they facilitate the YourAdChoices icon with interest-based ads.
And to voters, the DAA team continues to keep a campaign-lookup data base up to date, always-on, and connected—a click or two away for voters to use to see if a particular campaign is actually registered in their home state.
AAF Supports National
State Privacy Update
Senators Target DTC
Senate Bill Would
Limit Tobacco Ad
AAF Supports National Privacy Law
AAF President Steve Pacheco has joined other association leaders of the Privacy for America coalition to call on Congress to enact federal privacy legislation. Given the recent enactment of the California Consumer Privacy Act (CCPA), and likely consideration of similar measures in other states (see below), a strong federal privacy law that protects all American consumers and provides for a single set of standards for businesses in every state to follow is more important than ever.
The members of Privacy for America support legislation that removes consumer
s burden by creating a standard of clear and enforceable requirements for businesses to collect and use data responsibility, better inform consumers how their data is being used and outlaw harmful data practices.
Legislation should make plain what data uses are forbidden. For example, companies should not be allowed to use someone’s personal information, unless specifically permitted by federal or state law, to deny them a job, credit, insurance or health care.
Similarly, the most sensitive types of personal information—such as medical, financial or biometric information—must not be used without the consumer’s explicit permission.
Companies should be barred from sharing a consumer’s personal information with third parties, unless they have enforceable contracts ensuring the data will be secured and used lawfully.
To insure that regulators have the necessary resources to investigate and punish bad actors, Privacy for America supports the creation of a new Data Protection Bureau at the Federal Trade Commission, including additional staff and resources to fulfill the mission.
The letter is timely as the Senate Commerce Committee is said to be planning a December 4, hearing on privacy and data issues. In addition, Senate Democrats recently released principles for a privacy and data protection framework.
State Privacy Update
Not all potential action is at the federal level. AAF has heard reports of possible data and privacy legislation in Maryland, New Jersey, New Mexico, New York, Oregon and Washington during the 2020 legislative sessions. Other states are likely to join the list.
In October, California Governor Gavin Newsom (D) signed into law a measure requiring “data brokers” to register with the state attorney general. The measure is an amendment to the CCPA. AAF and our industry partners wrote to the governor opposing the bill because we believe the definition of data broker is so broad that it would include businesses conducting routine activities such as analytics and fraud detection, resulting in numerous problems for consumers, the attorney general and businesses.
California Attorney General Xavier Becerra (D) has announced a series of public forums across the state the week of December 2, to take public comment on the regulation released to enforce the CCPA.
The AAF supported Digital Advertising Alliance (DAA) has announced a cross-industry tool for publishers, brands, agencies and adtech in the digital advertising supply chain to provide consumers a mechanism to opt out under the California Consumer Privacy Act.
The DAA tool enables publishers to display a CCPA-mandated text link and a unique icon to California users. Clicking on the link directs users to publisher information and options, including access to the CCPA Opt-Out Tool, if third parties collect and sell data from the property.
The CCPA Opt-Out Tool, consistent with the existing DAA Choice Tool, gives consumers broader privacy control than required under the CCPA by allowing them to opt out of the sale of personal information across all of the DAA participating companies integrated into the new tool from a single website.
AAF Plans Privacy Webinar
The AAF will be hosting a webinar on December 9 to provide members with more information on privacy issues, including:
- the forthcoming California Consumer Privacy Act as well as other state laws that have been enacted
- the prospects for a pre-emptive federal privacy law as enveloped in the Privacy for America initiative, and a
- review of political ad transparency initiatives, namely the DAA About Political Ads program, with tips on how to implement as campaign season for the 2020 Election begins.
The 60-minute webinar will discuss the current state of regulation/self-regulation—and how marketing data users in advertising need to be prepared.
The webinar will be December 9, at 2:00 pm Eastern (1:00 pm Central, 12:00 noon Mountain and 11:00 am Pacific). Participants can register for the webinar here.
Senators Target DTC Advertising
Senators John Cornyn, R-Texas and Richard Blumenthal, D-Conn., have written legislative language requiring pharmaceutical advertising to include the price of the advertised drug. In the past, they tried unsuccessfully to attach the language to an omnibus appropriations bill and have indicated they may do so again. AAF is skeptical about the measure on First Amendment grounds, and in part because drug pricing, insurance, subsidies and other factors, are rarely straightforward and the disclosures would unlikely reflect what consumers actually pay for medications.
Senate Bill Would Limit Tobacco Ad Tax Deduction
Senator Jean Shaheen, D-NH has introduced a bill that would deny the tax deductibility of the advertising for E-cigarette and tobacco advertising. AAF opposes the measure because the First Amendment prohibits banning or taxing commercial speech based on the content of the speech. No action has been scheduled on the measure.
AAF Grassroots in Action
AAF grassroots are hard at work representing their members and the advertising industry before state lawmakers. AAF ad clubs in Texas and Florida recently conducted Days in their state capitols. Here are two recent reports.
On Tuesday October 22nd, Kevin Couch, AAF Dallas Government Chair organized the first ever Texas Capitol visit for the AAF District 10 Chapters. Participation from several chapters such as AAF Austin, AAF Corpus Christi, Ad 2 Dallas, AAF San Antonio is what made this day have such a tremendous impact on our efforts to advance our organization with policy makers at the State Capitol.
The days topics were really focused on our National AAF policy stance on the Data Privacy Standards—of which a Texas lawmaker introduced a bill in the previous session to have a “Texas Version” of CCPA. We were successful in making our views known and developing relationships.
There are plans in the works for a strategic conversation with both Republican and Democratic caucuses preceding the next session, and that will have tremendous impact because we will be talking directly to the legislators and their Chiefs of Staff at those meetings!
Kevin Couch, AAF Dallas Government Chair
Members of the AAF’s Fourth District held another successful Advertising Day at the Capitol recently on November 5th in Tallahassee. Over 40 members from across Florida participated in the annual event offering one-on-one meetings with House and Senate members to discuss issues of interest to the advertising community.
Topping their list of concerns was the need to continue the existence and funding for Visit Florida, a public-private partnership dedicated to tourism marketing for the Sunshine State which has been under fire in recent years. Members also lobbied for a new tax rebate program designed to attract film and digital entertainment production in hopes of filling the void created when lawmakers decided to end funding for Florida’s film incentive programs several years ago.
“It’s definitely one of the most important events we hold as a district each year,” said District 4 Gov. Mike Weber. “And I have yet to hear anything but positive comments from our members who give up a day of their time to better understand a day in the life of an elected official.”
Jack Herbert, AAF Fourth District Lobbyist/Government Relations
Coalition Oppose DTC
The California legislature has adjourned for the year, meaning there will be no more opportunities to amend the California Consumer Privacy Act before it goes into effect on January 1, 2020. While this is a California law, it will have a nationwide impact as it has implications for any company that does business in that state.
The CCPA applies to all businesses in California that have gross revenues over $25,000,000; buys, sells or shares the personal information (PI) of 50,000 or more consumer, households, or devices; or derives 50% or more of its annual revenue from selling consumers’ personal information. The bill also grants consumers specific rights, including:
- The right to be informed about a business’ practices regarding a consumers’ personal information and of the specific PI held by the business
- The right to request that a business or services provider delete any PI held, except in certain circumstances
- The right to direct a business that sells consumers’ PI to no longer sell their PI
- A business cannot discriminate against a consumer for exercising any of these rights.
Many questions about the enforcement of the law will not be answered until the Attorney General issues regulations or guidance for businesses. The Attorney General’s office has released a Standardized Regulatory Impact Assessment which demonstrates the potential scope of the new law.
According to the document the law will cover between 15,643 and 570,066 businesses in California and the costs for businesses to comply with the regulations will be between $467 million and $16.454 billion over the next decade depending on the number of businesses impacted. The report does not consider the impact of the CCPA on businesses outside of California.
Before adjourning, the legislature passed legislation requiring “data brokers” businesses to register with the state Attorney General’s office. Data brokers are defined as businesses that “knowingly collects and sells to third parties the personal information of a consumer with whom the business does not have a direct relationship.”
AAF and our association partners opposed the legislation and have written a letter to California Governor Gavin Newsom asking him to veto it. We are concerned in part that the definition of data brokers is overly broad and may include ad networks and other businesses not normally considered data brokers.
AAF continues to work with other members of Privacy for America to advocate for a federal privacy law that would protect consumers while allowing businesses to engage in responsible online data collection and use.
AAF, Advertising Coalition Oppose DTC Pricing Amendment
The Advertising Coalition, of which AAF is a founding member, sent a letter to the leaders of the Senate Appropriations Committee opposing a proposed amendment to the Labor and Health and Human Services Appropriations bill that would have required wholesale acquisition cost information for prescription drugs to be included in direct-to-consumer advertising of pharmaceuticals. The scheduled committee “mark-up” of the bill was postponed leaving no opportunity for the amendment to be introduced. Committee consideration of the bill has not been rescheduled as of this writing.
Privacy Act Update
Texas Enacts Privacy Law
Federal “Do Not Track”
AAF Supports Adequate
Funding for Census
HHS Requires DTC
California Consumer Privacy Act Update
California legislators continue to consider legislation to implement the California Consumer Privacy Act by the January 1, 2020, deadline. Concurrently, advertising industry representatives are working with lawmakers to ensure the final law and regulations will not unnecessarily hamper businesses ability to responsibly use data to help market products and services to California consumers.
The situation remains fluid with changes occurring on a seemingly daily basis. Legislative leaders hope to have all changes finalized before their summer recess begins on July 12, with final votes occurring when they return in August.
Texas Enacts Privacy Law
Prior to adjourning for the year, the Texas legislature passed legislation that strengthens notification requirements in the event of a data breach affecting sensitive personal information. The new law also creates the Texas Privacy Protection Advisory Council which is charged with studying the privacy laws in Texas and other jurisdictions and making recommendations about prospective changes to Texas law. AAF will monitor the actions of the Council once it has been formed and provide comments and take other action as appropriate.
Federal “Do Not Track” Bill Introduced
Multiple federal privacy bills have been introduced, including a recent one by Sen. Josh Hawley, R-Mo., that would establish a Do Not Track registry for online data collection similar to the Federal Trade Commission’s Do Not Call list which allows people to say they do not want to receive telemarketing calls. The bill would allow consumers to opt out of companies collecting data beyond what is “necessary” for the services to run.
As has been reported in previous newsletters, AAF is supportive of the enactment of a national privacy standard. We joined in a letter to the Federal Trade Commission supporting the concept and have been participating in meetings of the Privacy for America Coalition, consisting of with many allied associations and companies, to flesh out the specifics of what a national privacy law might look like. In general, AAF and our allies support legislation that would
· Protect consumers nationwide
· Establish new prohibitions on certain data practices, including eligibility, discrimination, assisting and facilitating fraud, and sensitive data
· Create a New Data Protection Bureau at the Federal Trade Commission
· Grant enhanced rule-making authority to the FTC
· Ensure responsible advertising practices
· Require strong data security protections, and
· Authorize strict penalties for violations.
AAF will continue to work with our industry members and partners to advocate for a strong national privacy law that protects both consumers and industry.
AAF Supports Adequate Funding for Census
Recognizing that a reliable demographic information about the U.S. population is critical for advertising and business, in addition to governmental representation and operations, the AAF has joined other leading business organizations on a letter to the leadership of the House and Senate Appropriations Committees asking for sufficient funding for the upcoming 2020 census. Accurate information is essential so that advertisers can make informed decisions when allocating marketing resources.
HHS Requires DTC Price Disclosure
The U.S. Department of Health and Human Services has enacted a rule requiring that direct-to-consumer advertising of prescription medications include the whole acquisition cost (WAC or list price). Three pharmaceutical companies and the ANA have challenged the rule on free speech grounds. AAF shares the concerns that compelled speech violates the First Amendment. We also believe that the information is likely to cause confusion since few patients pay the list cost since the majority is covered by insurance or government health programs. The suit seeks a declaratory judgment invalidating the rule, which is due to go into effect in July. No matter the ruling of the initial court, an appeal by the losing side seems likely. AAF will considering weighing in with an amicus brief if and when such action is appropriate.