Legislature(2001 - 2002)
04/26/2001 01:43 PM Senate TRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 127-AVIATION & AIRCRAFT EMERGENCY EQUIPMENT
CHAIRMAN COWDERY announced that the committee discussed the Senate
version [SB 100] of HB 127 at a previous hearing.
SENATOR WARD moved to adopt SCS CSHB 127(TRA), Version F, as the
working document of the committee. There being no objection, the
motion carried.
The committee took a brief at-ease.
CHAIRMAN COWDERY called the meeting back to order and took public
testimony.
MR. JOHN MANLEY, staff to Representative Harris, prime sponsor of
HB 127, told committee members that Representative Harris's
original intention was to make it easier for private pilots who
take off from Alaska and land in Canada to do so legally.
According to recent federal legislation in Canada, a person must
get a permit to bring in a firearm, meaning a rifle or shotgun.
Handguns are not allowed. Alaska statutes require private pilots
to carry a firearm to take off from Alaska. The new Canadian
legislation creates a situation where Alaskan pilots would be
acting illegally if they took off without a firearm and illegally
if they landed in Canada with one.
HB 127 exempts private pilots flying under an FAA flight plan into
Canada from carrying a gun. A few other changes regarding
emergency equipment to be carried were made in the House.
MS. JULI LUCKY, staff to Senator Rick Halford, sponsor of SB 100,
explained that most of the provisions of SB 100 were added to SCS
CS HB 127(TRA) but it differs from SB 100 in the following ways. A
section regarding survival rations was removed; provisions related
to communications were removed as no reference to communications
was made in the title of HB 127; and new language was added to the
civil liabilities section (Section 11), which Senator Taylor worked
on.
Number 2005
SENATOR TAYLOR expressed concern about lessening the life, health,
and safety aspects of the law. He pointed out that a flight from
Fairbanks to Dawson covers a significant distance and pilots will
be less well-equipped to deal with difficulties with this bill. He
said he understands the reasons for the compromise but he is
frustrated that it has to be done.
SENATOR DONALD OLSON told the committee that this bill will affect
two air taxi businesses he owns. He has been a pilot since 1969
and has had to make about 14 or 15 forced landings during his
flying career; he has needed the emergency gear he carries various
times. He noted that during the past 30 years, the air taxi
business has changed. Airlines used rudimentary Cessna 180s
whereas now multi-engine turbine aircraft are used. Regarding
searches, emergency locator transmitters were not required in the
early 1970s so searches could take months. Now that they are
required for air taxi businesses and private aircraft, search time
has been dramatically reduced. For those reasons, he supports this
bill. Senator Olson pointed out that some pilots are reluctant to
carry all required emergency gear, such as handguns, because of
vandalism.
MR. PAUL BOWERS, Director of State Aviation for DOTPF, agreed that
vandalism is a problem. He said that requiring pilots in Nome to
carry firearms onboard a flight might cause problems if Russian
airspace is opened up to private flights. He suggested making the
firearm requirement an optional part of emergency equipment or
rewording the bill so that it applies to any international flight
instead of Canada only. Mr. Bowers also suggested exempting large
airlines from Section 1 as they are already exempted by the FAA.
Regarding signaling devices, he suggested listing a small mirror as
an alternative device.
CHAIRMAN COWDERY announced that an error was made when adopting the
previous committee substitute and asked that a member move to adopt
the correct version.
SENATOR TAYLOR moved to adopt SCS CSHB 127(TRA), Version L, as the
working document of the committee. There being no objection, the
motion carried.
CHAIRMAN COWDERY continued to take public testimony.
MR. CARL SIEBE, airports engineer for the Statewide Aviation
Division of DOTPF, made the following comments. The current
statutes create enforcement problems for DOTPF by requiring it to
do selective enforcement. Foreign pilots fly into Alaska every
year and try to get their book rating, yet under federal law
foreign visitors to the United States are prohibited from carrying
weapons. In addition, licensed pilots with a felony conviction are
prohibited by other statutes from carrying weapons. Last, business
aircraft often stop in Alaska for a "pit stop" on their way to
other countries.
TAPE 01-14, SIDE B
MR. SIEBE said an aircraft cannot land in those countries with a
weapon so they typically do not carry weapons. He noted that
clarification of the original legislative intent of that provision
would help DOTPF to administer the statute. Regarding the survival
gear statutes in general, he pointed out the U.S. Air Force
survival school has excellent guidelines for survival gear, many of
which differ from Alaska's statutes. The Air Force requires that
survival gear be simple enough to be carried on the person. He
informed the committee the revised [1999] Canadian aviation
regulations require pilots to carry shelter, signaling equipment
and equipment to make potable water. He asked that whatever is put
forth in statute be reasonable and enforceable.
CHAIRMAN COWDERY said when he was flying in Alaska he carried a
sealed metal container filled with survival gear that could only be
used, under penalty, for an emergency. He asked if that same
concept could be applied to this bill.
MR. SIEBE said his first concern with that approach would be
enforceability. DOTPF aviation staff are extremely limited and the
State Troopers are also limited as far as what they can do.
CHAIRMAN COWDERY said most pilots want to conform so a random check
should suffice.
MR. SIEBE said the FAA doesn't want to get into the requirement for
carrying survival gear on small aircraft. If an annual inspection
was required, someone in DOTPF would have to enforce that statute.
CHAIRMAN COWDERY asked the next testifier his opinion of the
concept of a sealed packet of survival gear.
MR. BUTCH HALFORD said he is not well-versed on that element of the
proposed legislation.
SENATOR TAYLOR asked Mr. Halford to comment on the need for a
proposed amendment regarding occupancy related contracts and leases
at airports.
MR. HALFORD said the issue is one of liability. The Division of
Risk Management has recently required that anyone who enters into
an agreement with the state, whether it be through a contract or a
lease, must indemnify the state against any liability less than 100
percent of sole responsibility of the state. He pointed out if the
state was 99 1/2 percent responsible for a problem, the person who
entered into the lease would have to assume 100 percent of the
liability. He felt that is not reasonable and it is not common.
It would be far more reasonable to adopt a position of comparative
fault so that each party shares in the liability to the degree of
fault.
Number 1984
SENATOR TAYLOR informed committee members he has submitted a
proposed amendment (Amendment 1) to take care of part of that
problem. The amendment does not cover as broad a scope as Mr.
Halford would like on all liability issues, but it does adopt a
comparative fault policy on DOTPF-owned airports with lessees,
permittees and concession owners. He moved to adopt Amendment 1.
There being no objection, the motion carried.
CHAIRMAN COWDERY proposed to delete on page 5, line 17, of SCS CSHB
127(TRA) the reference to AS 02.35.110(b).
SENATOR TAYLOR so moved Chairman Cowdery's proposed amendment as
Amendment 2. There being no objection, the motion carried.
MR. TOM CRAFFORD, representing the Alaska Miners Association (AMA),
made the following comments about the civil liability provisions in
SCS CSHB 127(TRA). He noted he is a geologist by training. The
concerns of the AMA relate to the civil liability exposure of a
miner who, out of necessity, maintains an airstrip to support his
operations in rural Alaska. Under existing law, the miner may not
close the airstrip for public use, even though it is intended
solely for the support of the mining operations. As a consequence,
this opens the miner up to certain liability issues. The
provisions of Section 11 seek to provide some limitations of that
liability exposure to the operator of the airstrip but it still
leaves a paid employee, perhaps a grader operator, open to
liability. He pointed out that section does extend liability
protection to damage to an aircraft, which was suggested by the
AMA. He felt it would be appropriate to further extend that
protection to the contents of the aircraft.
MR. CRAFFORD explained that Section 11(b) extends the right to the
owner or operator of an airstrip located on private land to close
that airstrip by placing a large X on it that is readily visible
from the air. The AMA supports the concept but would like that
provision to apply to airstrips on public land also. Most miners
operate on mining claims and leases from either the federal
government or the state so the airstrips associated with those
operations are not located on private land. In addition, the
limitation on liability in subsection (b) should also be extended
to the contents of the aircraft.
Number 1730
SENATOR TAYLOR commented that, in his opinion, there is no risk of
liability whatsoever because no one has ever been sued in the
history of the state for negligence on the maintenance of one of
these remote airstrips. He explained that one lawsuit was brought
against a person who parked a large vehicle in the middle of a
runway and did not move when told to do so. A pilot had to make a
landing and damaged the aircraft. The pilot sued the vehicle owner
and won.
SENATOR TAYLOR said that since there is no risk of liability, he
structured this section so that it would only apply to a person who
had grossly acted. That section applies to the boss and any
employees, even though an employee was paid. The boss was not
being compensated for operating the airfield. Regarding the
ability to close the runway, that subsection was structured to be
limited to private landowners with the understanding that there are
operators who work off of public land that do not have the
authority to close a runway on public land. That is why two
separate subsections were created.
CHAIRMAN COWDERY asked Mr. Crafford if Senator Taylor's explanation
satisfied his concerns.
MR. CRAFFORD said it does in large part but the AMA is also
concerned about whether painting an X on a runway is sufficient to
close a runway. He noted the placer miners want to be able to
restrict access to a runway when they are absent during the winter
season to prevent vandalism. He agrees that it is arguable that
closing a runway with an X will be an effective deterrent.
SENATOR TAYLOR responded that litigation against private landowners
on access roads and trails did not occur until private landowners
tried to close them off. Instead of closing them off in a
reasonable fashion, 99 percent of those landowners strung a 1/2
inch diameter steel cable across the road and someone hit the
cable. He suggested that putting an X on the runway should keep 99
percent of pilots from landing. He added that this section will
not provide protection if a runway operator set up a "booby" trap.
MR. CRAFFORD said the AMA does not believe any operators should
obstruct a runway in a dangerous fashion but with this bill a miner
is prohibited from closing a runway with an X because the runway is
not on private land.
CHAIRMAN COWDERY asked if this bill has a referral to another
committee.
MS. LUCKY answered this is the last committee of referral before
the Senate Rules Committee. She explained that the previously
mentioned topics were considered by the sponsor. Regarding closing
a runway on public lands, the public's right to access must be
balanced with the problem of private property being vandalized.
The problem with obstructing runways on public lands is that they
may need to be used for emergency access. Another concern is that
people are not charting these runways because of the fear of
liability. Senator Halford wanted to give those people who are
maintaining runways but have not charted them because of the fear
of liability a little more incentive to do so.
SENATOR TAYLOR said he knows there was some concern about Amendment
1 and he hopes it does not burden the problem.
MS. LUCKY said the sponsor has no problem with Amendment 1.
SENATOR TAYLOR said one issue remains that could be addressed by
this legislation, and that is the Lake Hood/DOTPF problem of who
gets tie-downs. He hopes that Commissioner Perkins will address
that problem through regulation but, if not, this would be an
appropriate vehicle to deal with it.
SENATOR WILKEN noted that Amendment 1 seems to be a common sense
thing that people take at face value. He asked that someone from
the Division of Risk Management address Amendment 1 and tell the
committee why it has not been done before. He also asked to hear
from aircraft owners on Amendment 1.
CHAIRMAN COWDERY said due to a lack of time, he would hold the bill
and asked Mr. Thompson to address the committee.
MR. BRAD THOMPSON, Director of the Division of Risk Management,
said his division advises DOTPF as to contract terms of insurance
and indemnity. He noted he has been involved in negotiations for
the user agreement at the Anchorage international airport, as well
as the rural airports. Many discussions have taken place over the
allocation of fault. Comparative fault was a term used at the
Anchorage international airport negotiations. The state attempted
to revise and follow a form that was used by other airports in
other jurisdictions. The insurance requirements are very difficult
in Alaska today because of problems with the availability and
affordability of insurance for air carriers. The state has
negotiated a user agreement with comparative fault at the Anchorage
international airport and he intends to do the same at the rural
airports. SCS CSHB127(TRA) will force the state to do so.
The second section of the bill will require the state to evidence,
in regulation, the type and limit of insurance coverage required of
each class of aviation-related lease, permit and concession
contract. That's a difficult challenge. It is not something he is
trying to avoid, but the differences and disparity between the
users of the Anchorage international airport and lessees at the
rural airports is large. The state has tried to use general terms
in the past on comprehensive public liability so that it can tailor
the specific lease contract or the certificate of insurance used as
evidence for public liability to respond to individual activities.
There is no such animal as a comprehensive public liability
insurance policy. That term was used in a prior regulation but the
diversity of operations at a state airport in Alaska is so great
that it is a difficult challenge to put into regulation something
that will apply to everyone.
Number 960
SENATOR WILKEN asked if some airports in Alaska are maintained by
DOTPF.
MR. THOMPSON said they are.
SENATOR WILKEN asked if a grader was left on a runway and caused an
accident, whether DOTPF would be responsible for any portion of the
liability under current law.
MR. THOMPSON said it would.
SENATOR WILKEN asked for clarification as he thought Amendment 1
allowed for apportionment of liability where there is none today.
MR. THOMPSON explained that the former use agreement at the
Anchorage international airport did have a comparative fault
allocation as a term of the contract. Typically, the state does
not identify in detail in statute or regulation the terms and
conditions that will be used in negotiated contracts. The state
has responded to events when it is legally liable. If the state
has a contract with comparative fault, the state will participate
to the extent of its fault. He noted the state did suggest and
propose language so that the state would not begin to participate
unless it was at least 60 percent at fault. Many times the
proximate cause of an accident is the use and operation of
aircraft. Often, through creative pleading, allegations are made
against any party involved, including the state.
SENATOR WILKEN asked if Amendment 1 will have a fiscal impact.
MR. THOMPSON said any change to the state's risk is incorporated
into the overall state risk management program. The Division of
Risk Management does not submit a fiscal note when it has a slight
variation. The division is funded on a pay-as-you-go basis on its
self insured program because it too speculative to suggest a fiscal
note.
SENATOR WILKEN asked Mr. Thompson if he would like more time to
analyze the impact of Amendment 1.
MR. THOMPSON said Amendment 1 will create a significant challenge
since the Division of Risk Management will have to specify, in
regulation, the type and limit of insurance coverage required of
each class of aviation-related lease, permit and concession
contract.
SENATOR WILKEN questioned the need for Amendment 1.
Number 564
SENATOR TAYLOR asked if the lessee is now asked to indemnify the
state for all risk.
MR. THOMPSON answered that in a rural airport lease, the language
in regulation in the past required the lessee to assume liability
for certain things resulting from or arising out of any act,
commission, or omission by the lessee, his agents, employees, or
customers arising from or out of lessee's occupation or use of the
premises or privileges granted.
SENATOR TAYLOR asked if the lessee had to indemnify the state
against any liability for any of his activities.
MR. THOMPSON said yes, for any activities arising from the lessee's
use and operation.
SENATOR TAYLOR clarified that this legislation will only require
the Division of Risk Management to identify levels of risk against
levels of aircraft, users or lessees and to provide that the
division provide for apportionment of fault, as opposed to saying
the state will only step up to the plate and be responsible if,
after the lessee has gone to court, the lessee can prove that the
state is more than 60 percent liable.
MR. THOMPSON said the 60 percent apportionment was a proposed
allocation method in a contract negotiation that was not adopted.
He noted that most international airports require the users to have
strict indemnity and that major airlines that land in Alaska sign
similar terms and conditions in other locations. That is why the
division tried to pattern the proposed language in the Anchorage
international airport use agreement with provisions used in other
locations.
Number 295
SENATOR WILKEN said his concern lies with the smaller airports,
such as Fort Yukon.
MR. THOMPSON said if there is a loss involving the use of aircraft
arising from the state's responsibility, the state has paid for its
responsibility. The state is liable for activities performed by
its own employees and its contractors.
SENATOR TAYLOR noted the real issue is what the division requires
users of state airports to have in insurance policies regarding
state indemnification. He noted the state is self-insured while
the users have to buy an insurance policy. He said the level of
the risk the state is requiring the user to indemnify the state for
is what is in question.
MR. THOMPSON said the state does purchase airport insurance. It
self-insures for the first $250,000, but purchases excess liability
coverage to protect the state's assets and operations for a large
loss in excess of that amount. In the past, the regulation for a
lessee at a rural airport required: property damage coverage
arising from one accident in a sum of not less than $50,000; and
personal injury or death liability insurance not less than $100,000
per person and $300,000 per accident. Those sums were revised in a
regulation requiring limits of $1 million for each occurrence. He
pointed out there is subjective language for additional limits to
be required, depending upon the level of activity and the location.
MR. THOMPSON said the division is asking for a greater sum at the
Anchorage international airport. The insurance required in 1986
for all users was characterized on a per seat basis and was set at
$1,000,000. Minimum limits for propeller aircraft were set at $10
million and for jet aircraft at $20 million. Those requirements
were for Anchorage only.
SENATOR WILKEN asked if this bill with the amendment will help the
small air carriers and, if so, whether it will cost the state
anything to help them.
MR. THOMPSON said he does not think it will significantly affect
the state's risk or the state's cost. It may in the future with a
comparative situation. Regarding whether it helps the small
operator, he thought the division will be challenged with the task
of developing a matrix to address, in regulation, all of the types
and varied operations.
SENATOR WILKEN asked if an air cargo business will be able to show
this new law to its insurance company and expect its rates to be
lowered.
MR. THOMPSON said he does not believe any relief will be provided
to the aircraft owner/operator because of this bill. The division
checked with the markets as to the difference in rates depending
upon the use agreements; the users will get no extra premium or
relief if they sign something with a less favorable location.
SENATOR TAYLOR said with the exception of those that may be large
enough to be self insured.
MR. THOMPSON responded that is true of anyone who insures for the
first layer.
SENATOR TAYLOR said what they are talking about is that the state
self insures to $250,000, but it is requiring the other parties it
is dealing with to indemnify the state to $1 million. That also
provides another layer between the state and the liability. He
asked if that becomes another step between the state and the
potential claimant that the state will have to pay.
MR. THOMPSON said he thought Senator Taylor was confusing the
indemnity and the insurance. The indemnity is the hinge pin as to
allocating responsibility between two defendants. Whether one of
the defendants does or does not have the ability to pay their
obligation is a separate issue.
TAPE 01-15, SIDE A
MR. KIP KNUDSEN, ERA Aviation, informed the committee he sat on the
negotiating committee for the operating agreement at the Anchorage
and Fairbanks international airports. He said the issue of
comparative versus sole proximate cause has been an ongoing one.
The airlines that operated at those two airports up until now have
benefited from a comparative fault clause, which is fair. During
the negotiations, the state's position has been that it will
transfer all of its contracts over to a sole proximate cause
standard.
SENATOR WILKEN asked if all airports, other than Anchorage and
Fairbanks, will be excluded.
MR. KNUDSEN said regarding the rest of the state's airports, the
same language, regarding sole proximate cause, is contained in
draft regulations for Title 17. If those regulations are
promulgated, an operator working out of Venetie, for example, will
have to bear the financial burden of sole proximate cause if the
state is 99 percent responsible for that airport. Currently, most
leases contain an apportioned or comparative fault clause. He
explained that the Anchorage and Fairbanks airports are self-
financed; airlines pay the fees to pay the bill. If going to a
comparative fault system costs the airport system more money, the
airlines will pay it. Every one of the airlines involved in the
negotiations has come to the table saying it wants comparative
fault and will pay the burden because it will give them a break on
their insurance rates. Some airlines sign sole proximate cause
contracts at other airports but a majority of them have comparative
fault contracts.
Number 322
SENATOR WILKEN asked if the state will change the contracts from
comparative fault to sole proximate cause, which is the reason for
Amendment 1.
MR. THOMPSON said his role with DOTPF is advisory. His
understanding is that the state is trying to be consistent in both
the rural and Anchorage and Fairbanks airports. The state did
attempt to move to a stricter indemnity standard but he was told
the state is now moving to a comparative standard, which is
effectively the same standard that is proposed in the bill.
SENATOR WILKEN questioned whether the state will have to use the
apportioned standard under Amendment 1.
MR. THOMPSON said that is correct.
There being no further testimony, SENATOR TAYLOR moved SCS CSHB
127(TRA) as amended from committee. There being no objection, the
motion carried.
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