Legislature(1993 - 1994)
03/09/1994 01:15 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
Number 660 HB 300 - LIABILITY: COMMERCIAL RECREATION ACTIVITY CHAIR PORTER stated that HB 300 would be taken up next. Number 665 REP. BILL HUDSON, Chair of the House Labor & Commerce Committee, sponsor of HB 300, said the bill was developed upon the request of small tourism based businesses and other recreational organizations/businesses. REP. HUDSON said that HB 300 would establish a balance of responsibility of those operating the activities, as well as those who participate in commercial recreational facilities. (Rep. Hudson read from a sponsor statement.) For further clarification he quoted Section 2 from the sectional analysis. REP. HUDSON said that passage of this bill would reduce insurance premiums as well as reduce accidents. REP. HUDSON added that he had four amendments for the committee's consideration. Number 785 KAREN COWART, Alaska Visitors Association, testified in support of HB 300. She said it is imperative for the recreational industry to allow growth and development. Currently, she said costs are rising greatly because of nuisance litigation, inhibiting the growth and expansion of businesses. The passage of HB 300, by clarifying responsibility of the individual as well as business, would alleviate the high cost of liability insurance. Number 800 NANCY LETHCOE, President, Alaska Wilderness Recreation and Tourism Association, testified in support of HB 300 and the additional amendments offered by Rep. Hudson. MS. LETHCOE said that adventure travel and ecotourism businesses are growing at a rate of twenty percent a year. She went on to say that passage of HB 300 would guarantee a basic standard and professional expertise when working with clients. REP. NORDLUND said he supported HB 300 because he felt that it would help make operations safer and help clarify the inherent risk involved in some of the stated recreational activities. He asked if passage of HB 300 will help decrease insurance cost. Number 866 MS. LETHCOE responded yes and further stated that it was requested by the insurance company that her organization pursue legislation with regard to liability. She went on to say that in other states with similar legislation studies show a decrease of 15-20% in insurance rates. TAPE 94-36, SIDE A Number 010 REP. NORDLUND asked Ms. Lethcoe if she would follow up with him in the next year to see if passage of HB 300 did Affect insurance rates. REP. PHILLIPS commented on the high insurance rates she experienced as a private business owner. Number 028 MS. LETHCOE added that many entrepreneurs have researched a potential business, have the professional training and financial capabilities to open and operate a business, but the cost of insurance is prohibitive. CHAIR PORTER asked for a motion to adopt CSHB 300(JUD). Rep. James moved the motion. CSHB 300(JUD) was adopted. REP. HUDSON discussed the amendments as follows: on page 2, line 10, after "learn about" add "and expressly accepts" to more specifically state that someone not only learns about but accepts. Number 129 The committee discussed whether the wording should be "accept" rather than "accepts." It was decided that "accept" was acceptable. Number 184 REP. NORDLUND asked what the exact meaning of "expressly accept" and aired a concern that perhaps this wording would create more litigation than it would discourage. He asked if it meant a written statement. Number 202 REP. HUDSON said it was state of the art expression. With no objection, Amendment 1 was adopted. REP. HUDSON continued with Amendment 2, page 2, line 24, insert after (A) "fundamental." This was a recommendation from outfitters and guide associations, the two underwriters of liability. Rep. Hudson said that line 2 would read "fundamental and inherent risks." It would be impossible to explain all the inherent risks and by inserting fundamental would recognize that fact. Number 216 Amendment 2 was moved and adopted without objection. Number 229 REP. HUDSON offered Amendment 3, page 2, line 25, delete "safely." He said that it was brought to his attention that though an organization may make every effort to make a particular activity safe, safety can not be guaranteed. With Amendment 2 it clarifies the language in case of litigation. Number 250 REP. GREEN objected to the amendment for purposes of discussion. He aired a concern regarding the potential shifting of responsibility to the operator. Number 270 REP. NORDLUND shared Rep. Green's concern. He commented that removing "safely" did not really change anything. Number 294 REP. HUDSON said there is inherent risk involved in the type of activities addressed in HB 300. A business or organization can educate and inform participants but cannot guarantee that the individual could "safely" participate. He further noted that if "safely" were left in, it may encourage litigation rather than discourage it. REP. JAMES supported the amendment and said that an individual could have all the appropriate equipment and skill but the activity could still be unsafe. Number 312 REP. GREEN noted that in the bill it says that an organization or business only has to "explain" the risks, not guarantee safety. Number 320 REP. JAMES, CHAIR PORTER and DANIELLA LOPER agreed with the concerns of Rep. Hudson. REP. GREEN maintained his objection to Amendment 3. A roll call vote was taken. Amendment 3 was adopted. Number 360 REP. HUDSON introduced Amendment 4, which lists types of activities that pertain to HB 300. Number 396 REP. JAMES asked if "adventure" could be included to cover types of activities. Number 405 MS. LETHCOE requested that "llama trips" be added to the list. Number 419 REP. NORDLUND pointed out that the statement "...but not limited to" does not remove the legal problem. He further noted that by establishing a listing, that listing elevates those activities to a greater level of validity and that by having a listing, it invites more potential litigation than it deters. Number 432 REP. HUDSON asked the committee to address the amendment as written including the requests by Nancy Lethcoe to add "llama treks and dog sledding." REP. GREEN commented that the amendment was getting into specifics and when doing that it creates exclusion. He suggested the committee leave the listing out. REP. KOTT agreed with Rep. Green's comments. MS. COWART asked if those participating in unsupervised activities would be included in the bill. CHAIR PORTER said they would be included. MS. COWART agreed that exclusion is better because of the fact that there are a growing number of new businesses with varying kinds of activities that may not be included in the list and thereby potentially forcing them to pay higher insurance rates because they would not be included in this legislation. REP. PHILLIPS reiterated that the bill states "...includes but not limited to." Number 504 CHAIR PORTER said he felt there was enough on record describing the kinds of activities the bill addresses. He further suggested the committee not adopt Amendment 4. Number 510 CHAIR PORTER asked if there was further discussion. Hearing none, he asked if there were objections. Number 520 REP. GREEN maintained his objection. A roll call vote was taken and Amendment 4 failed. Number 526 CHAIR PORTER asked if Rep. Hudson had any further comments on HB 300. Number 528 REP. HUDSON said he was satisfied with the work the committee had done with HB 300. Number 537 REP. JAMES motioned to move CSHB 300(JUD) with individual recommendations and zero fiscal note. Without objection, it was so moved. Number 565 CHAIR PORTER announced that the committee would take up the continuation of HB 292 on Friday; and on Saturday, March 12, the committee would continue with the Friday schedule. CHAIR PORTER adjourned the meeting at 3:40 p.m.