Legislature(1993 - 1994)

04/08/1994 01:15 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  TAPE 94-58, SIDE A                                                           
  Number 000                                                                   
  Chairman Porter welcomed the sponsor of HB 360, Rep. Con                     
  HB 360 - AIRCRAFT/WATERCRAFT GUEST PASSENGER LAW                             
  Number 031                                                                   
  REP. CON BUNDE:  "This bill concerns the liability and the                   
  presumed shared liability in travelling in Alaska on both                    
  light aircraft or by small boat, that limits the civil                       
  liability that an owner or an operator of an aircraft or a                   
  watercraft would have for injuries to passengers when these                  
  aircraft or watercraft are not paid forms of transportation.                 
  This limited liability does not, however, cover gross                        
  negligence or reckless or intentional misconduct.  It's                      
  simply an attempt to encourage folks to be able to take                      
  passengers along and share their recreational opportunities                  
  without jeopardizing their entire estate over what could be                  
  I guess called `Act of God' accidents.  Though, certainly,                   
  as I have indicated, it does not disallow recovery for gross                 
  negligence or intentional misconduct."                                       
  Number 064                                                                   
  REP. JIM NORDLUND requested a definition of compensation in                  
  this context; would it include, say, a token payment                         
  contributed up front for gas?                                                
  REP. BUNDE replied that such a contribution would not be                     
  compensation, that is, would not be paying for                               
  transportation; rather, it would be sharing in expenses.                     
  REP. NORDLUND wondered if a definition of a token payment                    
  might be arrived at and concluded that would be up to the                    
  REP. BUNDE responded that, while he was not a lawyer, he                     
  would interpret it as there being no profit involved.                        
  REP. NORDLUND:  "Okay."                                                      
  CHAIRMAN PORTER:  "And there might not be anyway...but no                    
  intention of a profit."  Chairman Porter invited the next                    
  person to testify.                                                           
  Number 094                                                                   
  MIKE SCHNEIDER, Alaska Academy of Trial Lawyers, testified                   
  via teleconference in Anchorage with regard to HB 360.                       
  "Looking at this bill, I think you have a clear choice                       
  between attempting to encourage people to take passengers in                 
  their vehicles for free versus encouraging people to operate                 
  aircraft and watercraft safely, and I would encourage the                    
  latter, not the former.  I would discourage support for this                 
  "The rest of my comments, though, are going to assume that                   
  this bill is going to move forward, and they are going to be                 
  directed to how I think this bill could be improved to                       
  address concerns of the very constituency that I assume Rep.                 
  Bunde is interested in dealing with.  I happen to operate                    
  watercraft very occasionally, and aircraft, regularly.                       
  Under this bill I cannot, because nobody makes a market for                  
  this kind of coverage.  There is no nonfault based coverage                  
  out there for anything except possibly medical expenses.  I                  
  can't protect my family, and I can't protect my guest                        
  passengers, even if I want to, under this bill, if you pass                  
  it the way it is.                                                            
  "If you amend it such that I can be liable but only up to                    
  the extent of available insurance coverage, then I still get                 
  the immunity that Rep. Bunde is interested in.  In other                     
  words, I don't subject my entire estate or any part of my                    
  estate to liability, I only subject my insurance carrier to                  
  exposure to the extent of that which I contracted for and                    
  paid a premium for.  And then I can protect my family and my                 
  friends at least up to some minimal limit.  And at the same                  
  time by this bill the balance of my estate will be                           
  protected.  So if you pass this bill the way it is, not only                 
  are you discouraging people from being as careful as they                    
  possibly can when operating dangerous vehicles, but you're                   
  absolutely eliminating the ability of aircraft and                           
  watercraft operators to go out and protect their passengers,                 
  whom some of us would sure like to protect.                                  
  "My other concern is, I think people should appreciate that                  
  this bill may be a trap for the unwary."                                     
  Number  174                                                                  
  MR. JOHN GEORGE, lobbyist, National Association of                           
  Independent Insurers, testified regarding HB 360.  Mr.                       
  George said he felt Mr. Schneider offered "an interesting                    
  idea, sort of a voluntary liability system...."  He said he                  
  did not foresee objections to such a system.  Mr. George                     
  discussed the overt and more subtle pressures on boat and                    
  plane owners from people wishing to just come along, or                      
  catch a ride... "And," Mr. George remarked,  "you're just                    
  crazy to take someone along if you don't have specific                       
  insurance to cover that.  Because in airplanes and boats,                    
  the potential for a serious accident is always there.                        
  Hypothermia and hitting the ground from 5,000 feet generally                 
  are fairly serious events.  And so, you just can't take the                  
  chance.  So you either have to go out and buy insurance -                    
  and then the question is, how much do I buy?  If I buy                       
  $100,000 and they sue me for $500,000, I'm still $400,000 in                 
  the hole."                                                                   
  MR. GEORGE concluded, "I think Mr. Schneider has an                          
  interesting and innovative idea, and I think we would have                   
  no objection to that concept... where, if you want to buy                    
  the coverage, you certainly can, but if you fail to, or you                  
  only buy, say, $25,000 worth, then that's the amount that                    
  you're exposed to.  So you can protect your passengers if                    
  you deem that appropriate.  If you don't, then tell them you                 
  don't have any and they take their own risk."                                
  REP. NORDLUND said he had prepared an amendment after                        
  speaking the previous day with Mr. Schneider and was                         
  prepared to pass it out when amendments were being                           
  REP. BUNDE:  "I think Mike presents a reasonable alternative                 
  to all-or-nothing, and I believe the amendment would                         
  strengthen the bill."                                                        
  CHAIRMAN PORTER:  "If there are no further questions, let's                  
  hear the amendment.  For the purposes of identification                      
  let's mark this Amendment #1."                                               
  Number 237                                                                   
  REP. NORDLUND:  "Mr. Chairman, I move Amendment #1."                         
  CHAIRMAN PORTER:  "Amendment #1 has been moved.                              
  REP. NORDLUND presented his amendment, which imposed a limit                 
  on the liability of private individuals with regard to                       
  accidents that might occur on their planes or boats.  If the                 
  individual chose to buy insurance to cover guests or family                  
  members he would not be liable for civil damages exceeding                   
  the amount of insurance he had voluntarily purchased.                        
  CHAIRMAN PORTER:  "Mike, are you still on the line?  I'm a                   
  little confused.  I thought that I heard you say that there                  
  was not insurance available."                                                
  MR. SCHNEIDER explained that if HB 360 were to be passed as                  
  is, without Rep. Nordlund's amendment, there would be no                     
  appropriate insurance available to these boat or plane                       
  owners, because with the exception of medical insurance,                     
  coverage was fault-based.  "But," he said, "with the                         
  amendment, I could still go buy my identical policy that                     
  gives me $200,000 a seat, inadequate though it may be; I                     
  could provide my passengers with that much protection and my                 
  estate would be immune from anything beyond that."                           
  CHAIRMAN PORTER:  "Any further discussion on Amendment #1?                   
  Is there objection?  Seeing none, Amendment #1 is adopted.                   
  What is the wish of the committee?"                                          
  REP. JEANNETTE JAMES:  "I would move that we pass out the                    
  Labor and Commerce committee substitute, as amended, which                   
  will then be the Judiciary CS, with zero fiscal note and                     
  individual recommendations."                                                 
  CHAIRMAN PORTER:  "We have a motion to move, as amended, the                 
  bill with individual recommendation and zero fiscal note.                    
  Is there discussion?  Objection?  The bill is moved."                        
  REP. BUNDE thanked the committee.                                            
  There was a brief discussion on how long it would take to                    
  prepare the CS and transmit the bill to the next committee;                  
  Chairman Porter assured Rep. Bunde this would be                             
  accomplished as soon as possible.                                            
  Number 345                                                                   
  The next bill to have been considered was HJR 60; however,                   
  the sponsor, Rep. Vezey, was not yet present to present his                  
  testimony.  The committee continued with SB 321.                             

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