Legislature(1993 - 1994)
02/24/1994 03:00 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 airplane. 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 Committee. 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.