Legislature(1993 - 1994)

02/24/1994 03:00 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HB 300 - LIABILITY: COMMERCIAL RECREATION ACTIVITY                           
  Number 542                                                                   
  CHAIRMAN HUDSON brought up HB 300, sponsored by the House                    
  Labor & Commerce Committee, read the following sponsor                       
  statement for the record:                                                    
  The Adventure Travel Society estimates that adventure travel                 
  and ecotourism segments of the travel industry are growing                   
  at a rate of 20% a year.  The economic contributions of                      
  Alaska's wilderness based tourism, while undocumented, are                   
  undoubtedly important.  AWRTA estimates that there are over                  
  2,000 natural resource dependent tourism businesses in                       
  Alaska.  Although few of these businesses employ upwards of                  
  50 people, many are small, supporting or contributing to the                 
  income of only a few families.  They are, however, Alaskan-                  
  based and vital to local employment.  Unlike larger                          
  recreational outfits, these businesses keep their dollars in                 
  Alaska.  They purchase their goods here, employ local                        
  residents, remain in-state, and spend the dollars they make                  
  here, thus providing both economic  diversity and stability                  
  to many communities.                                                         
  Many of these small businesses, however, are facing an                       
  uncertain future due to the high costs associated with                       
  insurance premiums and operation of such businesses.  In                     
  order to encourage the continuance and survival of                           
  increasingly popular outdoor recreational activities, some                   
  kind of structure is needed to assure that both operators                    
  and participants become knowledgeable of, and assume                         
  responsibility for inherent risks.  House Bill 300 was                       
  introduced to establish the responsibilities of persons who                  
  operate and participate in commercial recreational                           
  activities.  HB 300 in no way relieves recreational                          
  businesses/operators from liability.  It simply establishes                  
  a framework that may help in the litigation process by                       
  stating that the state has recognized your responsibilities                  
  and sends the message that steps have been taken to educate                  
  both the operator and participant as to these                                
  responsibilities.  While insurance premiums are based on                     
  many factors, including one's history of claims, similar                     
  legislation in Colorado has had the effect of lowering                       
  insurance premiums 15 to 20 percent.                                         
  HB 300 establishes a balance of responsibility between                       
  operators and participants, without diminishing the                          
  responsibility of wither party.                                              
  Number 572                                                                   
  CHAIRMAN HUDSON stated there are three amendments to HB 300                  
  for consideration:                                                           
  1) Page 2, line 13, adds that participants are responsible                   
  for their children who are under the age of 18.  This                        
  amendment was is in response to concerns that there                          
  sometimes the assumption  on the part of parents that they                   
  are off duty because they are on vacation.  It would also                    
  clarify that operators responsible for ensuring the safety                   
  of all their clients does not absolve parents from their                     
  responsibilities as parents.                                                 
  2) Page 2, line 24, requires employees who are in contact                    
  with participants to be trained in CPR as a minimum standard                 
  of first aid which operators will be responsible.                            
  3) Page 3, lines 2 to 4, deletes the definition of premises.                 
  Number 594                                                                   
  BART HENDERSON, Chilkat Guides of Haines, testified in                       
  support of HB 300.  Mr. Henderson stated that not only are                   
  insurance premiums going up, but the number of carriers is                   
  decreasing rapidly.  He noted that his business is mostly                    
  rafting and there are only two choices in the United States                  
  of insurance carriers.                                                       
  MR. HENDERSON added that many of the ecotourism businesses                   
  rely on the cruise ships to pre-sell the trips.  Many of the                 
  frivolous cases brought against his type of business also                    
  name as many of the deep pockets they can find, like the                     
  cruise lines.  When this happens, the cruise line industry                   
  becomes hesitant to sell any trips on board that have                        
  inherent risk involved.                                                      
  Number 624                                                                   
  REP. GREEN asked Mr. Henderson if HB 300 passed did he have                  
  any information that would imply that insurance rates would                  
  come down.                                                                   
  TAPE 94-15, SIDE B                                                           
  Number 001                                                                   
  KAREN COWART, Alaska Visitors Association (AVA), testified                   
  in support of HB 300.  Ms. Cowart stated that the                            
  association is extremely concerned regarding the rising cost                 
  of liability insurance.  The AVA believes HB 300 is a win-                   
  win situation because it protects both client and business.                  
  Number 050                                                                   
  BOB ENGELBRECHT, Temsco Helicopters, testified in support of                 
  HB 300.  He stated HB 300 basically clarifies what the                       
  responsibilities are for participants and operators.  Mr.                    
  Engelbrecht dittoed Mr. Henderson's testimony regarding the                  
  inherent risk in the ecotourism business.                                    
  MR. ENGELBRECHT noted that sometimes a claim against his                     
  company is not high enough for the insurance industry to                     
  fight, so they settle and raise premiums.                                    
  Number 103                                                                   
  NANCY LETHCOE, President, Alaska Wilderness Recreation and                   
  Tourism Association (AWRTA), testified via teleconference in                 
  support HB 300.  She said HB 300 establishes the                             
  responsibilities of tour operators and participants.  It                     
  increases the safety of commercial recreational activities                   
  through better preparedness on the part of tour operators to                 
  respond to a medical situation and increased awareness by                    
  trip participants of the inherent risks.  The bill reduces                   
  the likelihood of frivolous suits, which are becoming a                      
  significant problem in the industry elsewhere.  At AWRTA's                   
  annual meeting last year, a representative from AWRTA's                      
  group insurance company gave several examples of insurance                   
  scams that "tourists" are running in other states.                           
  MS. LETHCOE said other states, including Wisconsin and                       
  Colorado, have passed similar legislation.  It has resulted                  
  in significant reductions in insurance premiums.  Insurance                  
  premiums in Alaska are extremely high for small tour                         
  operators.  Alaska Wilderness Sailing Safaris pays about $10                 
  a day per person in insurance costs for guests to walk in                    
  the Chugach National Forest.  This is in addition to                         
  insurance for the time they spend sailing.  For Alaskan                      
  commercial recreation businesses to remain competitive                       
  price-wise with other states, they must have comparable                      
  insurance rates.                                                             
  MS. LETHCOE added that her organization advocates an                         
  amendment to the bill on page 3, Section 3, that the                         
  definition of recreational activity be expanded to include                   
  hunting, dog sledding and long trips.                                        
  On behalf of their 230 business members, MS. LETHCOE                         
  encouraged the committee to pass this bill out of committee                  
  as soon as possible.                                                         
  Number 207                                                                   
  CHAIRMAN HUDSON advised that the staff attorney has informed                 
  the committee that they should resist the temptation of                      
  expanding the definition.  He noted that it may be better to                 
  not list anyone so as not to preclude anyone.                                
  CHAIRMAN HUDSON added that he had received a suggestion that                 
  the committee amend the section to read, "a supervised                       
  commercial outdoor activity, undertaken for the purpose of                   
  exercise, relaxation or pleasure."                                           
  Number 237                                                                   
  PETE BUIST, professional member of the Big Game Commercial                   
  Services Board, representing himself, testified via                          
  teleconference in support of HB 300.  He thought the new                     
  definition suggested above would include hunting.  Mr. Buist                 
  added that the hunting/guiding business has had relatively                   
  few accidents, but the legislature in 1988 required the                      
  hunting guides to carry a relatively high and expensive                      
  level of liability insurance.  Mr. Buist noted that at that                  
  time his insurance went from $800 a season to over $2,500 a                  
  season while guiding three or four clients and not using an                  
  Number 290                                                                   
  ERUK WILLIAMSON, a registered guide/outfitter, represents                    
  hunting and sport fishing on the board of directors of the                   
  Alaska Wilderness Recreation and Tourism Association,                        
  addressed the committee via teleconference and strongly                      
  urged passage of HB 300.                                                     
  MR. WILLIAMSON believed HB 300 would clarify what the                        
  responsibilities are between client and operator and would                   
  result in insurance companies lowering liability premiums.                   
  MR. WILLIAMSON added that he also supports the deletion of                   
  specifically naming the types of recreational activities                     
  mentioned by the chairman earlier.                                           
  Number 311                                                                   
  JACK KREINHEDER, representing himself as a consumer,                         
  testified in support of HB 300.  He noted the amount of                      
  insurance the providers of recreational opportunities have                   
  to pay ultimately gets passed on to the consumer.  He said                   
  HB 300 would be beneficial to both consumer and provider.                    
  Number 335                                                                   
  CHAIRMAN HUDSON asked the committee to consider adoption of                  
  the three amendments he mentioned earlier:                                   
  Amendment 1:  on page 2, line 13, after "person" insert                      
  "participants children;" and on page 2, line 31, insert a                    
  new paragraph to read, "Children means persons under 18                      
  years of age" and renumber the paragraphs.                                   
  No objections were heard, it was so ordered.                                 
  Amendment 2:  on page 2, lines 24 and 25, delete "basic                      
  first aid" and insert "CPR."                                                 
  REP. PORTER suggested that the committee add the requirement                 
  of CPR to the requirement of basic first aid not in lieu of.                 
  Number 370                                                                   
  MS. LETHCOE stated that her group would like to keep the                     
  basic first aid requirement, but understood the importance                   
  of CPR for certain types of activities.                                      
  Number 390                                                                   
  MR. HENDERSON stated that "basic first aid" should really be                 
  called Red Cross Basic First Aid as that was a title that                    
  you could be certified in.  He said these programs have a                    
  required number of hours of study to receive certification.                  
  Number 425                                                                   
  REP. PORTER suggested that the committee add CPR to basic                    
  first aid or define it further.  If the committee does not                   
  define it further, then the issue will get litigated.                        
  CHAIRMAN HUDSON suggested a modification to the amendment to                 
  just add CPR to the requirement of basic first aid.                          
  Number 446                                                                   
  REP. PORTER stated that requiring all employees to have this                 
  kind of training might be overkill.                                          
  Number 453                                                                   
  REP. MULDER believed that the language "first aid training"                  
  and "CPR" training would give a general background and a                     
  specific background that would cover most circumstances.                     
  Number 486                                                                   
  REP. PORTER suggested using "basic first aid" as a minimum,                  
  because it is definable as a minimum.  He expressed concern                  
  that by taking the word "basic" out it might be expected                     
  that a more advanced level of training is necessary                          
  depending on the circumstances.                                              
  Number 495                                                                   
  MICHAEL JOHNSON, staff to Rep. Sitton, stated that a working                 
  group on HB 300 met and had trouble with this issue as well.                 
  He stated that one particular standard you set may not be                    
  available or appropriate in all areas.                                       
  Number 500                                                                   
  REP. PORTER suggested that the committee leave the language                  
  at "basic first aid" and work it out in the Judiciary                        
  Number 505                                                                   
  REP. MULDER moved Amendment 2 as amended.  No objections                     
  were heard, it was so ordered.                                               
  Number 510                                                                   
  REP. PORTER moved Amendment 3, page 3, lines 2 to 4, and                     
  delete all the material in between.  No objections were                      
  heard, it was so ordered.                                                    
  Number 522                                                                   
  CHAIRMAN HUDSON asked the committee to consider Amendment 4:                 
  on page 3, line 6, after the word "pleasure" delete language                 
  until line 9.  The concern is that by listing the activities                 
  as it is in the current bill the legislation might                           
  inadvertently exclude something.                                             
  Number 531                                                                   
  REP. PORTER expressed concern that the language in this                      
  section might not include hunting and fishing.                               
  Number 564                                                                   
  REP. PORTER expressed concern with the term "supervised"                     
  that appears on line 5.  He felt that if a client is not                     
  under immediate observation by the guides and something                      
  happens, it could be litigated.                                              
  CHAIRMAN HUDSON read Amendment 4 as amended - "recreational                  
  activities means a commercial outdoor activity undertaken                    
  for the purpose of hunting, sport fishing, exercise,                         
  relaxation or pleasure."  No objections were heard, it was                   
  so ordered.                                                                  
  Number 590                                                                   
  REP. MULDER moved HB 300 as amended, with fiscal notes and                   
  individual recommendations.  No objections were heard, it                    
  was so ordered.                                                              

Document Name Date/Time Subjects