A proposed law in Minnesota, designed to protect consumers and the secondary ticket market by regulating paperless ticketing in the state, received approval from two legislative committees today, March 9, inching the matter closer toward adoption.

The state Senate Commerce and Consumer Protection Committee voted 10-4 to move SF425 onto the Senate Judiciary and Public Safety Committee, but when that committee will take it up was not immediately known. The state House Commerce and Regulatory Reform Committee also voted overwhelmingly to approve a similar bill, HF0657, but it may also receive further House review in the near future.

At their core, both bills prohibit the use of restrictive paperless tickets, if those tickets are used to prohibit transfer or resale. Paperless ticketing technology, which requires fans to swipe or scan a credit card or other piece of identification at the gate to gain entry into an event, is being promoted by Live Nation’s Ticketmaster and others as a way to thwart the resale of tickets on the secondary market.

Several venues and promoters, in addition to all four of the Minnesota’s major professional sports teams, opposed the proposed bill because they believe it protects ticket brokers and resellers at the expense of fans.

But, Republican Sen. Chris Gerlach, chairman of the Commerce and Consumer Protection Committee and lead sponsor of the Senate bill, said he believes the law will protect consumers’ rights to do whatever they want with the events tickets they buy.

“I think that the central issue here is about whether a ticket is a private property right or a lease. I’m saying that it’s not absolutely either, that it’s in the middle,” Gerlach said during today’s meeting, adding that the primary ticket seller has the right to certain restrictions, such as setting the date and time a person is allowed to see the event, or require that fans behave in an acceptable manner at the venue.

“However, I believe the owner of a ticket has a property right interest, and if they want to give or sell that ticket to somebody else, unfettered, for whatever the price they can agree to and have a meeting of the minds over, then that should be allowed and should not be aced out by restrictions. The bill doesn’t eliminate [paperless tickets], it just says you can’t use that technology to restrict the transfer of that ticket.”

Opponents argued that passing the bill could have far-reaching effects on the state’s live entertainment market. But, New York passed a similar bill last summer and has not seen any drop off in the number of artists willing to perform in the state. Connecticut is also contemplating similar legislation.

“We have to be careful,” said Sen. Dan Sparks, “because if we do pass some of these laws there’s a possibility that some acts might not even come to the state of Minnesota.” Sparks, a Democrat, was one of the four committee members to vote against legislation.

“I think this is a proposal that really needs a lot of scrutiny by the legislature,” said Sen. Ann Rest, who said she was voting in favor of the bill but had some reversations. “I hope that a lot of people become engaged.”

Last Updated on March 10, 2011 by By Alfred Branch Jr.