Legislature(1995 - 1996)

04/21/1995 01:15 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 161 - AIRCRAFT/WATERCRAFT GUEST PASSENGER LAW                            
 Number 218                                                                    
 CHAIRMAN DAVIS announced the next order of business was to hear               
 testimony on CSHB 161 and asked the prime sponsor's legislative               
 assistant, Ms. Patty Swenson to present her testimony on the                  
 committee substitute (CS) for HB 161.                                         
 PATTY SWENSON, Legislative Assistant to Representative Con Bunde,             
 indicated the only change they have made to the committee                     
 substitute before the committee is on page 2, Section (B).  This              
 includes the addition of limiting aircraft or watercraft owners'              
 liability, if they posted notice that they did not have insurance.            
 People would then have some warning before they rode with the pilot           
 of the boat or plane.  This was the only change Representative                
 Bunde made to the bill.                                                       
 CHAIRMAN DAVIS reminded the committee that a second version added             
 the wording "simple negligence" and this was then deleted, because            
 it would have made the whole bill unnecessary.  He said the effect            
 of the new wording...                                                         
 MS. SWENSON interjected that it would just limit the aircraft or              
 watercraft owner's liability, when they posted notice.  She                   
 explained it would then be similar to a person not having insurance           
 and that it would compensate a person being transported, as is                
 described in the first section of the bill under Section (a).  They           
 would have the same lack of liability in cases other than gross               
 negligence acts.                                                              
 Number 234                                                                    
 CHAIRMAN DAVIS asked for confirmation that this was just a notice             
 to the passengers.                                                            
 REPRESENTATIVE JERRY SANDERS asked if the form of notice was verbal           
 or written?                                                                   
 MS. SWENSON said it stated it was to provide notice to the person             
 being transported.  It does not specify the type of notice.                   
 REPRESENTATIVE SANDERS asked if it was a verbal notification and              
 not some kind of label on the door or display on the aircraft,                
 couldn't we get into a situation of "I said, he said, or you didn't           
 tell me" situation.                                                           
 MS. SWENSON explained it was her understanding that if something              
 were to happen and a notice was posted, then something happened to            
 the notice, there would still be the same problems.                           
 REPRESENTATIVE SANDERS said this situation would occur more                   
 frequently if the notice was not posted.  He said he supported the            
 amendment to this bill and encouraged it from the beginning, but it           
 did not seem to be definitive enough.                                         
 Number 269                                                                    
 REPRESENTATIVE JAMES responded to Representative Sanders' comment             
 that she has experienced similar situations.  She presented an                
 example of entering a mining area, where the people in charge                 
 require their guests to sign a piece of paper stating that the                
 guest understands any risks that might be involved.  She thought              
 that people will want to insure themselves, so they will put it in            
 writing that they are not responsible.                                        
 CHAIRMAN DAVIS presented a scenario where a pilot took someone for            
 a ride in their airplane, they crashed, and the passenger was                 
 killed.  Previous to the flight, the passenger was notified that              
 the pilot did not have insurance.  Chairman Davis indicated "he               
 can't give his word, I told him" so this type of situation seemed             
 to be a problem.                                                              
 REPRESENTATIVE SANDERS concurred with Chairman Davis and stated if            
 it was incorporated in this bill that there had to be in writing,             
 the terms of liability, he would then feel more comfortable with              
 it.  However, at this time it does not state this and he has no               
 reason to assume this would be carried out by the pilots.                     
 CHAIRMAN DAVIS indicated he would take testimony from Mr. Ray Brown           
 via teleconference from Anchorage.                                            
 Number 293                                                                    
 RAY BROWN, Attorney, Alaska's Academy of Trial Lawyers indicated he           
 did not hear the first part of the presentation and didn't know who           
 the speaker was who was talking about the amendments to the bill.             
 He said he didn't know if they added back language, but he knew               
 from the last time he testified on this bill, Mr. Bunde included              
 under Section B, the wording "negligent conduct."  He asked if that           
 had been taken out.                                                           
 CHAIRMAN DAVIS said yes.                                                      
 MR. BROWN continued to explain that HB 161 is creating a litigation           
 nightmare.  He referred to the issue of a notice requirement as               
 being problematic in and of itself.  He inquired as to who will               
 make the determination of whether or not notice was given as well             
 as determining whether or not someone was negligent, grossly                  
 negligent or reckless or intentional, after an aircraft has                   
 crashed.  He remarked this type of bill seems to carve out a                  
 special class of people that are being immunized from exposure,               
 based upon their conduct.  He said he was not aware of any other              
 class, other than attempting to do this in the medical field, where           
 there is an elite group of people, basically immunizing them from             
 negligent conduct.  He explained HB 161 when read in its entirety,            
 and without some sort of clarification, would probably immunize               
 people to some extent from reckless or grossly negligent conduct.             
 It potentially leaves the care of victims, their families and their           
 children, who if in the event both parents were killed without an             
 income provider, the state of Alaska and the federal government               
 could be responsible for covering the negligent acts of the pilots.           
 If a person is catastrophically injured, it leaves their health               
 care to the state and federal government because of the negligent             
 or reckless conduct of another person.  He said not only from an              
 attorney's standpoint, but from a citizen's standpoint, and in a              
 state where we have the highest per capita number of pilot error-             
 type crashes, he was amazed that a bill such as this would be                 
 passed, to immunize those persons.  He referred to Representative             
 Bunde's explanation that this bill was designed to protect pilots             
 from acts of God.  Mr. Brown stated if this was really the purpose            
 of the bill, there would be no need to pass it because under the              
 torte liability law, if there is no negligence and it is an act of            
 God, then there is no breach in the duty of care and no resulting             
 liability to begin with.  He indicated this is not the intent of              
 this bill, particularly with the deletion of the negligence wording           
 and it is not for the acts of God, but actually to protect                    
 negligent people for their conduct.  He referred to Section 2(b)              
 and said it was difficult for him to figure out from the bill                 
 itself, whether or not the language in subsection 2 (a) also                  
 applies to subsection 1(a).  If it does, then there are some                  
 obvious problems.  He mentioned it would encourage the property               
 owner to purchase the minimum of coverage.                                    
 MR. BROWN presented an example where someone with $3 million or $4            
 million in assets could engage in grossly negligent or reckless or            
 intentional misconduct and only be liable for the minimum amount of           
 coverage.  He stated he would assume that people would elect to               
 purchase the minimal amount of coverage, because for any amount               
 over that they would be immunized for regardless of their conduct.            
 He concluded it has the potential to work a great injustice on                
 innocent victims.  He felt that based on the wording of the                   
 statute, a person would be better off to be involved in an accident           
 with people who would be grossly negligent or intentional with no             
 insurance, so long as they had sufficient assets to cover an injury           
 or death.  He felt the statute discouraged adequate insurance and             
 is a boondoggle for a select few people who are pilots and aircraft           
 owners.  He added it will work a great injustice on innocent                  
 victims who happen to ride in an aircraft.                                    
 Number 363                                                                    
 REPRESENTATIVE BILL WILLIAMS asked Mr. Brown if he is an attorney.            
 MR. BROWN responded, yes.                                                     
 REPRESENTATIVE WILLIAMS said he was under the impression that this            
 bill catered to private parties who wanted to take their friends              
 along for a ride.  The way he viewed it and from what the attorney            
 said, is that we would be providing for an open season in the court           
 system.  That may be true if the operator of the boat or plane was            
 not going to take his friend for a ride.  He presented an example             
 where a friend of his goes for a ride with him in his boat and he             
 tells the passenger that he does not have insurance and he can ride           
 at his own risk.  The passenger has the choice to stay or go.  He             
 felt that was the intent of this bill.                                        
 MS. SWENSON stated Representative Williams is correct.  The purpose           
 of the bill was to be able to take friends and acquaintances on a             
 boat or plane...                                                              
 REPRESENTATIVE WILLIAMS interjected and stated the pilots are not             
 looking to make money...                                                      
 MS. SWENSON interjected that was specifically excluded, if it's a             
 nonpaying passenger, common carriers are excluded as well.                    
 Currently the majority of aircraft owners do not have passenger               
 insurance because of the high costs.  The friends that ride with              
 the pilots are traveling at their own risk.                                   
 REPRESENTATIVE WILLIAMS said he had a friend who occasionally would           
 take him for a ride in his airplane, and he was under the                     
 impression the pilot had insurance.  Representative Williams said             
 this would bring to his attention, the concern that the pilot could           
 say I do not have any insurance and it is the passenger's choice to           
 ride along and the pilot would be covered.  He reiterated his                 
 comments on the fact the passenger has the choice to go or stay.              
 MS. SWENSON said this was correct.                                            
 Number 409                                                                    
 REPRESENTATIVE SANDERS stated there was more to this than just the            
 friends going along for rides.  He presented a scenario where                 
 Representative Williams was a pilot and took him flying.                      
 Representative Williams told Representative Sanders that he did not           
 have insurance.  He said he understood this and agreed not to sue             
 him in the event of a crash.  They then go flying, the plane                  
 crashes and Representative Sanders is killed, and his wife is left            
 without an income.  She would look to sue someone and deserves to.            
 REPRESENTATIVE JAMES disagreed with Representative Sanders'                   
 statement.  If a person was paying for a ride, that person would              
 expect that the beneficiary would receive compensation for the                
 incident.  She felt if it was a commercial flight, the company                
 would be required to cover all passengers.  This bill addresses the           
 issue of people going for rides for the fun of it and do not pay              
 for the rides.  She felt that the pilots would get someone to sign.           
 She proposed the situation where a waiver was signed, but both                
 family members were killed in a plane crash and everyone dies and             
 other people are not a party to that.  She felt that if someone did           
 sign the waiver, this would be seen as evidence of the fact the               
 passenger was informed.  She said the issue is taking passengers              
 for a free ride and of the passenger's will.  She explained the               
 insurance was expensive and it is a toy in many cases.  She                   
 indicated she did not have a problem with people having toys even             
 though they kill themselves with toys.  She commented anytime                 
 someone is negligent, they should be held responsible.                        
 Number 434                                                                    
 MR. BROWN stated the problem, as he understood it, was that we are            
 immunizing people for negligence.  He stated when he gets into an             
 airplane, car or boat, he hopes that the operator will not act in             
 a negligent manner.  He understands that he has no control over the           
 operator of the boat, plane or car.  He questioned why we would               
 want to isolate one pocket of society.  Whether it is called a toy            
 or not, he did not understand why someone would want to protect a             
 person from negligent conduct?  He remarked this is exactly what              
 this bill would be doing just by the mere recitation of a person              
 stating they do not have insurance.  He questioned who would be               
 responsible for the negligent conduct of an uninsured pilot even if           
 they gave notice, and added more than likely it would be the state            
 of Alaska.  He said fortunately we are in a state that does not               
 have a large tax base, but someone will pay for the negligent acts.           
 He commented on Representative Sanders' astute observations that              
 there will be family members that will suffer because of this                 
 conduct.  He reiterated his concerns for people wanting to immunize           
 a person that caused the negligent act at the expense of everyone             
 else.  He added he did not understand what the problem was with               
 requiring people to carry insurance to operate these toys.                    
 REPRESENTATIVE WILLIAMS stated the way he saw it, people can                  
 protect themselves to the hilt.  He said the subject of torte                 
 reform had come up and said this sounds similar.  He made the                 
 analogy of pedestrians crossing the street and assuming everyone in           
 a car has liability insurance.  He said the pedestrians are not               
 aware of who has insurance and who does not, but if they cross the            
 street, and are hit by a car...maybe this bill should include motor           
 vehicles as well.                                                             
 CHAIRMAN DAVIS said he had neglected to adopt the Committee                   
 Substitute, and asked if he could have a motion to adopt the                  
 Version /F, CSHB 161.                                                         
 REPRESENTATIVE JAMES motioned to adopt CSHB 161, Version /F.                  
 CHAIRMAN DAVIS asked if there was any objection.  Hearing none,               
 CSHB 161, Version /F was adopted.                                             
 REPRESENTATIVE SANDERS commented on the distinction between cars              
 and boats, and said with cars there is no law saying you do not               
 need insurance and the same applies to boats.  Representative                 
 Sanders said he did not see why airplanes should be different.  He            
 felt a person should have insurance.  He was not going to be party            
 to making a law that states that insurance is not needed.                     
 Number 499                                                                    
 REPRESENTATIVE TOM BRICE added to Representative Sanders' comments            
 that this was the intent of HB 161.  It does not imply "my good               
 friend, Jerry, come on my boat with me and we'll have fun," rather            
 HB 161 indicates a person won't buy insurance because, if they do,            
 they will be held liable, but if they don't buy the insurance, then           
 they are off the hook.  This was his concern with the fact it is a            
 negative incentive to obtain insurance to help out in the situation           
 where simple negligence is a factor.  A person is still liable if             
 they commit a grossly negligent act, but a person is not liable if            
 they commit a negligent act.  He suggested the possibility of                 
 lowering the standard to ease some of the concerns among members of           
 the committee.  As the bill is written, it says "don't buy                    
 insurance because it is a waste of time and money.  The people that           
 get hurt will be taken care of by the state."  Representative Brice           
 said that was his concern.                                                    
 REPRESENTATIVE EILEEN MACLEAN stated she had similar concerns, but            
 added this should not be exclusive to air and watercraft guest                
 passengers.  She asked to make it all inclusive of other modes of             
 Number 522                                                                    
 CHAIRMAN DAVIS stated it was his intent to address a motion on the            
 CS for HB 161 to move it out of the House Transportation Committee.           
 REPRESENTATIVE JAMES made a motion to move CSHB 161(TRA) out of               
 CHAIRMAN DAVIS asked if there was objection.                                  
 REPRESENTATIVE MACLEAN objected for discussion on CSHB 161(TRA).              
 REPRESENTATIVE BRICE proposed an amendment on page 1, line 13,                
 delete the word "gross" and negligence or reckless or intentional             
 misconduct are not exempt under this.                                         
 REPRESENTATIVE JAMES objected to Representative Brice's proposed              
 CHAIRMAN DAVIS questioned the legal definition of the wording                 
 "reckless misconduct."  He expressed concern for the legal                    
 interpretation of this.  He would interpret this as being similar             
 to simple negligence, but was not sure.  He then announced there              
 was a motion to delete the word "gross" on page 1, line 13, that              
 had been objected to for the purpose of discussion.                           
 REPRESENTATIVE JAMES explained her objection was with the wording             
 "negligence."  She stated it was not possible for anyone to live              
 without it.  She said we are not perfect and any time someone does            
 something that injures someone else, it can be construed as                   
 negligent.  If someone does do something and nothing happens, it is           
 not negligent.  She explained there has to be some admittance to              
 the fact that there is an inherent risk of living and people cannot           
 be held responsible for everything people do that can be addressed            
 as negligent.  If people could place negligence in terms of degrees           
 of a negligent act that a person did something intentionally....              
 She then presented an example of someone driving into a ditch and             
 saying "I could have avoided that by doing this or this or this"              
 and the person admits that they were negligent.  It is not possible           
 to go through life without having some sort of negligent accidents.           
 She stated she would feel very vulnerable if every negligent action           
 that she has is subject to a lawsuit.  She reiterated her concerns            
 on addressing the issue of an inherent risk of living.  This is why           
 she objected to the term negligent.                                           
 Number 558                                                                    
 REPRESENTATIVE BRICE disagreed and explained that before this would           
 happen there should be testimony from attorneys who understand the            
 term negligence.  He felt the immediate discussions were stretching           
 the term way beyond its intent.  He presented an example where he             
 was just involved in a car accident on March 1, 1995.  The driver             
 crossed the yellow line and ran into him.  As far as he is                    
 concerned, the other driver was negligent.  Unfortunately, the                
 lawyers are blaming the icy roads so she was found not to be                  
 negligent.  He suggested that before every mishap that occurs is              
 deemed a negligent act, there should be an understanding of a                 
 legally recognized and defined term for negligence.  He reiterated            
 his concerns on having someone from Legislative Legal Services                
 confront this issue.  He concluded by saying it would ease the                
 concerns of a lot of people because unlike driving, snow mobiling             
 or unlike any other type of activity, the operation of aircraft and           
 watercraft are probably the two most unforgiving forms of                     
 transportation.  Not only unforgiving in case of accidents, but               
 also unforgiving in terms of various conditions of the outdoor                
 elements.  The potential for serious injuries is much higher than             
 driving or walking.                                                           
 MS. SWENSON asked the maker of the amendment if his intent was to             
 delete the term gross negligence and add negligence?                          
 REPRESENTATIVE BRICE said yes.                                                
 MS. SWENSON asked for confirmation on adding the word negligence to           
 the bill and not holding people liable for gross negligence acts...           
 REPRESENTATIVE BRICE interjected that it would be lowering the                
 standard to "negligence."                                                     
 CHAIRMAN DAVIS said he would speak in favor of the motion and                 
 suggested to move the bill to the Judiciary Committee, where                  
 further legal action could be discussed.                                      
 REPRESENTATIVE JAMES reminded the committee that these passengers             
 are riding for free and for the fun of it.  The passengers in this            
 case should assume some portion of the responsibility.                        
 Number 612                                                                    
 REPRESENTATIVE MACLEAN said she viewed it differently and presented           
 an example of someone needing to be transported out of a village              
 for medical reasons.  The pilot is not being paid to transport the            
 person out of the village.  She asked how would this impact the               
 CHAIRMAN DAVIS said the pilot would be contracted to transport the            
 passenger.  This would be seen as a business transaction through              
 whatever company the pilot is affiliated with.  He questioned                 
 whether a private pilot using his own plane to medivac someone out,           
 would not be covered and the passenger may not be covered.                    
 REPRESENTATIVE MACLEAN stated she was referring to a situation                
 where someone from Hoonah or Petersburg ws going to be transported            
 in an emergency situation and they were not paying, how would this            
 legislation impact this particular situation.                                 
 Number 617                                                                    
 MS. SWENSON explained if there was an accident while transporting             
 this person, the pilot would not be held liable.  Many people would           
 not be able to be transported if a pilot did not have passenger               
 insurance.  Pilots would be afraid that something might happen to             
 them in flight that was beyond their control.  As a result, the               
 pilot may choose not to transport the person that needed to be                
 CHAIRMAN DAVIS asked to vote on the motion.  He reminded the                  
 committee the motion was to move the amendment to delete the word             
 "gross" on page 1, line 13.  He then asked for a roll call on                 
 Representative Brice's amendment.  Representatives Brice, Masek,              
 Davis, Sanders, Williams and MacLean voted in favor of the                    
 amendment. Representative James opposed the amendment.  Chairman              
 Davis asked if there was further discussion.  Hearing none, the               
 amendment passed.                                                             
 REPRESENTATIVE WILLIAMS made a motion to move CSHB 161(TRA) as                
 amended out of the House Transportation Committee with zero fiscal            
 REPRESENTATIVE SANDERS objected.                                              
 CHAIRMAN DAVIS asked for a roll call vote.  Representatives Brice,            
 James, Davis, Masek and Williams voted in favor.  Representatives             
 Sanders and MacLean voted no.  Chairman Davis announced that CSHB
 161(TRA), as amended was moved out of the House Transportation                

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