Legislature(2003 - 2004)
03/26/2004 01:10 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
March 26, 2004
1:10 p.m.
MEMBERS PRESENT
Representative Lesil McGuire, Chair
Representative Tom Anderson, Vice Chair
Representative Jim Holm
Representative Dan Ogg
Representative Ralph Samuels
Representative Les Gara
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 423
"An Act relating to accidents involving the vehicle of a person
under the influence of an alcoholic beverage; and providing for
an effective date."
- MOVED CSHB 423(JUD) OUT OF COMMITTEE
SENATE BILL NO. 299
"An Act relating to a charge for a bad check."
- MOVED HCS SB 299(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 533
"An Act relating to the state's administrative procedures and to
judicial oversight of administrative matters."
- MOVED CSHB 533(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 474
"An Act relating to civil liability associated with aircraft
runways, airfields, and landing areas."
- HEARD AND HELD
CS FOR SENATE BILL NO. 30(JUD) am
"An Act relating to information and services available to
pregnant women and other persons; and ensuring informed consent
before an abortion may be performed, except in cases of medical
emergency."
- SCHEDULED BUT NOT HEARD
SENATE BILL NO. 344
"An Act relating to the Uniform Probate Code and trusts,
including pleadings, orders, nonprobate assets, estates of
decedents, minors, protected persons, incapacitated persons,
guardians, conservators, trustees, foreign trusts, principal and
income, and transfer restrictions; relating to corporate voting
trusts; and providing for an effective date."
- BILL HEARING POSTPONED TO 3/29/04
PREVIOUS COMMITTEE ACTION
BILL: HB 423
SHORT TITLE: TAXICAB DRIVER LIABILITY
SPONSOR(S): REPRESENTATIVE(S) ANDERSON
02/02/04 (H) READ THE FIRST TIME - REFERRALS
02/02/04 (H) JUD
02/02/04 (H) STA REFERRAL ADDED AFTER JUD
02/09/04 (H) REFERRAL ORDER CHANGED
02/09/04 (H) STA, JUD
02/10/04 (H) STA AT 8:00 AM CAPITOL 102
02/10/04 (H) <Bill Hearing Postponed>
03/02/04 (H) STA AT 8:00 AM CAPITOL 102
03/02/04 (H) Heard & Held
03/02/04 (H) MINUTE(STA)
03/05/04 (H) STA AT 8:00 AM CAPITOL 102
03/05/04 (H) Heard & Held
03/05/04 (H) MINUTE(STA)
03/09/04 (H) STA AT 8:00 AM CAPITOL 102
03/09/04 (H) Moved CSHB 423(STA) Out of Committee
03/09/04 (H) MINUTE(STA)
03/12/04 (H) STA RPT CS(STA) NT 3DP 3NR 1AM
03/12/04 (H) DP: SEATON, HOLM, LYNN; NR: COGHILL,
03/12/04 (H) BERKOWITZ, WEYHRAUCH; AM: GRUENBERG
03/19/04 (H) JUD AT 1:00 PM CAPITOL 120
03/19/04 (H) Heard & Held
03/19/04 (H) MINUTE(JUD)
03/26/04 (H) JUD AT 1:00 PM CAPITOL 120
BILL: SB 299
SHORT TITLE: BAD CHECK CHARGE
SPONSOR(S): LABOR & COMMERCE
02/06/04 (S) READ THE FIRST TIME - REFERRALS
02/06/04 (S) L&C, FIN
02/17/04 (S) L&C AT 1:30 PM BELTZ 211
02/17/04 (S) Moved Out of Committee
02/17/04 (S) MINUTE(L&C)
02/18/04 (S) L&C RPT 3DP 1NR
02/18/04 (S) DP: BUNDE, SEEKINS, STEVENS G;
02/18/04 (S) NR: FRENCH
03/01/04 (S) FIN RPT 5DP 1NR
03/01/04 (S) DP: GREEN, DYSON, HOFFMAN, BUNDE,
03/01/04 (S) STEVENS B; NR: OLSON
03/01/04 (H) FIN AT 9:00 AM HOUSE FINANCE 519
03/01/04 (S) Moved SB 299 Out of Committee
03/01/04 (S) MINUTE(FIN)
03/04/04 (S) TRANSMITTED TO (H)
03/04/04 (S) VERSION: SB 299
03/08/04 (H) READ THE FIRST TIME - REFERRALS
03/08/04 (H) STA, JUD
03/24/04 (H) STA REFERRAL WAIVED
03/26/04 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 533
SHORT TITLE: IF UNREAS. AGENCY DELAY, COURT DECIDES
SPONSOR(S): STATE AFFAIRS
03/08/04 (H) READ THE FIRST TIME - REFERRALS
03/08/04 (H) JUD, FIN
03/24/04 (H) JUD AT 1:00 PM CAPITOL 120
03/24/04 (H) Heard & Held
03/24/04 (H) MINUTE(JUD)
03/26/04 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 474
SHORT TITLE: LIABILITY FOR AIRPORTS AND AIRSTRIPS
SPONSOR(S): REPRESENTATIVE(S) HOLM
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) JUD
03/26/04 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
JIM SHINE JR., Staff
to Representative Tom Anderson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided an update on HB 423 on behalf of
Representative Anderson, sponsor.
MICHAEL L. LESSMEIER, Attorney at Law
Lessmeier & Winters
Lobbyist for State Farm Insurance Company ("State Farm")
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
HB 423.
SENATOR CON BUNDE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 299 as chair of the Senate
Labor and Commerce Standing Committee, sponsor.
RONALD JORDAN
Anchorage, Alaska
POSITION STATEMENT: Characterized SB 299 as a bad idea and
responded to questions.
SCOTT KING
Cornerstone Credit Services, LLC
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 299 and
responded to questions.
CHRIS D. GRONNING, Attorney at Law
Bankston, Gronning, O'Hara, Sedor, Mills, Givens & Heaphey, PC
Anchorage, Alaska
POSITION STATEMENT: During discussion of SB 299 provided
comments on behalf of Cornerstone Credit Services, LLC.
PAMELA LaBOLLE, President
Alaska State Chamber of Commerce (ASCC)
Juneau, Alaska
POSITION STATEMENT: Provided comments during discussion of SB
299.
REPRESENTATIVE BRUCE WEYHRAUCH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Offered comments during discussion of SB
299; spoke as chair of the House State Affairs Standing
Committee, sponsor of HB 533.
TODD LARKIN, Staff
to Representative Jim Holm
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Responded to questions during discussion of
HB 474 on behalf of the sponsor, Representative Holm.
TOM GEORGE, Alaska Regional Representative
Aircraft Owners and Pilots Association (AOPA)
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 474 and
responded to questions.
ACTION NARRATIVE
TAPE 04-48, SIDE A
Number 0001
CHAIR LESIL McGUIRE called the House Judiciary Standing
Committee meeting to order at 1:10 p.m. Representatives
McGuire, Anderson, Holm, Ogg, and Samuels were present at the
call to order. Representatives Gruenberg and Gara arrived as
the meeting was in progress.
HB 423 - TAXICAB DRIVER LIABILITY
Number 0083
CHAIR McGUIRE announced that the first order of business would
be HOUSE BILL NO. 423, "An Act relating to accidents involving
the vehicle of a person under the influence of an alcoholic
beverage; and providing for an effective date." [Before the
committee was the proposed committee substitute (CS) for HB 423,
Version 23-LS1600\I, Luckhaupt, 3/17/04, which was adopted as a
work draft on 3/19/04.]
REPRESENTATIVE ANDERSON, speaking as the sponsor, requested that
his staff update the committee.
Number 0133
JIM SHINE JR., Staff to Representative Tom Anderson, Alaska
State Legislature, relayed that he and Mr. Lessmeier have
reviewed some proposed conceptual amendments, and noted that the
sponsor statement has been updated.
The committee took an at-ease from 1:15 p.m. to 1:16 p.m. in
order to distribute the aforementioned amendments.
REPRESENTATIVE HOLM highlighted the urgency of the bill. He
characterized it as a recognition of people taking
responsibility for their actions. He recalled being in Red
Deer, Alberta, where an establishment did something similar; in
fact, the bar owners and taxi companies acted in concert, and
the patrons paid nothing. Noting that Fairbanks can be
extremely cold at night and that people risk losing a vehicle or
having it freeze up someplace, he pointed out that people will
take the chance of either driving home, or going to their cars,
keeping the cars running to prevent freezing to death, falling
asleep, but still be considered drunk drivers, even without the
intention of driving. He concluded by characterizing the bill
as a marvelous piece of legislation.
Number 0390
REPRESENTATIVE SAMUELS drew attention to Amendment 1, a
handwritten, edited amendment, which read [original punctuation
provided]:
The auto insurance that covers the driver also covers
the taxi-cab driver that drives the car from the
licensed premises to the home or directed location of
the original driver.
REPRESENTATIVE SAMUELS offered his belief that under current
law, if [the owner of a car] expressly tells someone that he/she
may drive the car, that person is covered by the [owner's]
insurance. Thus the amendment is unnecessary.
CHAIR McGUIRE announced that Amendment 1 was withdrawn.
Number 0450
REPRESENTATIVE GRUENBERG moved to adopt Amendment 2, a
handwritten amendment that read [original punctuation provided]:
1. page 1 line 7 after "by" insert "or on behalf of"
2. page 2 line 12 after "person insert "or entity"
REPRESENTATIVE ANDERSON objected for the purpose of discussion.
REPRESENTATIVE GRUENBERG suggested bifurcating Amendment 2
because the two parts are quite different.
CHAIR McGUIRE labeled the first part Amendment 2a and the second
part Amendment 2b.
Number 0500
REPRESENTATIVE ANDERSON objected for the purpose of discussion.
REPRESENTATIVE GRUENBERG offered his understanding that a person
could have a policy that wasn't technically purchased by the
owner of the vehicle. If a vehicle is owned by a young person,
for example, the parent may purchase the insurance policy. He
noted that Mr. Lessmeier was nodding.
REPRESENTATIVE ANDERSON removed his objection.
Number 0545
CHAIR McGUIRE asked whether there were any further objections to
adopting Amendment 2a. There being none, Amendment 2a was
adopted.
Number 0550
CHAIR McGUIRE brought attention to Amendment 2b [text provided
previously].
REPRESENTATIVE ANDERSON objected for the purpose of discussion.
REPRESENTATIVE GRUENBERG explained that [page 2] line 12 talks
about a person that participates in making the arrangements. In
Anchorage, however, it isn't a person that does it, but an
entity, a group of taverns. He said he didn't know whether that
would technically qualify as a "person" under the general
definition in Title 1.
Number 0591
REPRESENTATIVE ANDERSON removed his objection.
CHAIR McGUIRE asked whether there were any further objections to
adopting Amendment 2b.
REPRESENTATIVE OGG remarked that "entity" assumes there is some
entity, and asked whether a group really is an entity.
Number 0614
MICHAEL L. LESSMEIER, Attorney at Law, Lessmeier & Winters,
Lobbyist for State Farm Insurance Company ("State Farm"), gave
his view that if it says "person or entity", it would be broad
enough to cover an "organization of people, whether it's
informal or formal."
REPRESENTATIVE OGG replied that he'd withdraw his objection as
long as "entity" [would be interpreted in that manner].
Number 0649
CHAIR McGUIRE again asked whether there were any further
objections to adopting Amendment 2b. There being none,
Amendment 2b was adopted.
Number 0682
REPRESENTATIVE GRUENBERG [made a motion to adopt] Amendment 3, a
handwritten amendment by Representative Gara that read [original
punctuation provided]:
A page 2 line 19, after "vehicle", insert "or other
applicable."
REPRESENTATIVE ANDERSON objected and asked to hear from Mr.
Lessmeier.
Number 0702
MR. LESSMEIER urged the committee to reject Amendment 3. He
said he believes it takes a bill that is now very clean in terms
of its intent and makes it messy. If this amendment is adopted,
he predicted there will almost be an issue of what is "other
applicable" insurance. He also said it seems to take away from
the original intent of the bill.
REPRESENTATIVE ANDERSON maintained his objection, saying he
tends to agree that it expands this beyond driver's insurance or
automobile insurance and goes too far to stay within the intent
of the bill.
REPRESENTATIVE GRUENBERG asked Mr. Lessmeier whether some other
kind of insurance such as homeowner's insurance might apply.
MR. LESSMEIER answered that it's really a complicated question
because most homeowner's insurance policies exclude anything
that arises out of driving a motor vehicle; that's what people
buy motor vehicle insurance for. He said the problem he has
with it is this: it's so broad that one could almost go back
and ask whether the taxicab company, the municipality that put
this together, or one of the people who participates in a group
to try to offer this service has "other applicable insurance".
He explained:
What happens in litigation is, there's always a search
for the insurance, and what we've tried to do is make
it clear as to where that search begins and ends with
this bill, and offer some coverage where there was no
coverage before. And so, I just think once we go down
that road, we go to areas that we can't foresee right
now and that ... I could almost guarantee you will be
litigated.
Number 0823
REPRESENTATIVE GRUENBERG asked whether technically, under the
current language of the bill, an umbrella policy would be
included; if not, then would Mr. Lessmeier object to having it
say "or applicable umbrella insurance coverage".
MR. LESSMEIER answered:
My view is that that is covered under subsection (a).
In other words, ... a person is not liable beyond the
limits of any applicable insurance policy purchased by
the owner of the vehicle for damages resulting from a
motor vehicle accident if the person was driving the
vehicle. Now, ... if that owner has a primary policy
on the vehicle and also an umbrella policy that would
cover the damages resulting from an accident for that
vehicle, then, in my view, ... it's already there.
Once you go beyond that, though, and say any umbrella
policy, then we run into these issues of "where do we
stop." And ... I can't sit here and tell you what
conceivable situations would come up, but ... I can
tell you that those situations would be litigated, and
that is exactly what you're trying to avoid with this
bill.
REPRESENTATIVE GRUENBERG replied that with in mind, he doesn't
support the amendment, which he'd offered on behalf of
Representative Gara, but relayed his belief that he didn't have
the authority to withdraw the amendment.
REPRESENTATIVE ANDERSON renewed his objection.
Number 0970
A roll call vote was taken. Representatives Ogg, Gruenberg,
Samuels, Holm, Anderson, and McGuire voted against Amendment 3.
Therefore, Amendment 3 failed by a vote of 0-6.
Number 0988
REPRESENTATIVE HOLM moved to report the proposed CS for HB 423,
Version 23-LS1600\I, Luckhaupt, 3/17/04, as amended, out of
committee with individual recommendations and the accompanying
[zero] fiscal notes. There being no objection, CSHB 423(JUD)
was reported from the House Judiciary Standing Committee.
SB 299 - BAD CHECK CHARGE
[Contains references to HB 516, the companion bill.]
Number 0999
CHAIR McGUIRE announced that the next order of business would be
SENATE BILL NO. 299, "An Act relating to a charge for a bad
check."
Number 1012
SENATOR CON BUNDE, Alaska State Legislature, speaking as the
chair of the Senate Labor and Commerce Standing Committee,
sponsor of SB 299, relayed that the bill comes at the request of
members of the business community. Current law permits those
who write bad checks to require that the businesses they've
written bad checks to document the cost of collecting the funds.
He opined that in some cases, it is more expensive to document
those costs than the actual costs themselves. Senate Bill 299
would allow business to assess a flat fee of $30 on each bounced
check it receives, and removes the necessity of having to
document the costs incurred while going through the collection
process. He opined that a flat fee will make collecting the
money from bounced checks less cumbersome.
SENATOR BUNDE offered his understanding that about 15 percent of
bounced checks are written by people unintentionally; about 40
percent are written by people who chronically write bad checks,
and it can take up to 90 days for businesses to recover those
funds; and that about 45 percent of bounced checks are never
recovered. He opined that SB 299 will act as a deterrent to
writing bad checks, and that the consequence of not passing this
legislation is that more and more businesses will stop accepting
checks altogether. He mentioned that HB 516, a companion bill,
has been amended in the House State Affairs Standing Committee,
but asked that the committee adopt the original version of SB
299.
CHAIR McGUIRE indicated agreement with Senator Bunde's
prediction that more business will stop accepting checks
altogether as it becomes more difficult to collect on bad
checks.
REPRESENTATIVE GRUENBERG mentioned that he'd offered the
amendment to HB 516 changing "beginning" and "begins" on lines 9
and 10, respectively, to "commencing" and "commences",
respectively. He explained that such language is consistent
with that found in Rule 3 of the Alaska Rules of Civil
Procedure, and indicated that he would be offering the same
amendment to SB 299.
SENATOR BUNDE relayed that he did not have any objection to such
a change.
CHAIR McGUIRE mentioned that in committee packets is a memo from
Representative Weyhrauch pertaining to HB 516 and the changes
made to that bill in the House State Affairs Standing Committee.
Number 1459
RONALD JORDAN said he is speaking on his own behalf as a former
business owner. He opined that the change proposed by SB 299
would not be for the betterment of anyone, that the increase
from $25 to $30 will only provide more profit for collection
companies, and that the bill will not deter people from writing
bad checks. He remarked that the way collection companies
operate and with the fees that banks charge, a $5 bad check
could wind up costing $70. He then characterized SB 299 as a
bad idea, relayed his experience with bad checks, and suggested
that the current law is sufficient. In response to a question,
he explained that he used to run a drug and alcohol testing
service.
REPRESENTATIVE GARA asked Mr. Jordan whether it would allay his
concerns to give business owners the flexibility to charge less
than the proposed fee of $30.
MR. JORDAN said yes and no, but reiterated his belief that SB
299 will only increase the profits of collection agencies and
will not result in more money going to businesses.
REPRESENTATIVE ANDERSON mentioned that a couple of businesses in
his district asked him to strengthen the laws pertaining to bad
checks. He asked Mr. Jordan whether he condones the writing of
bad checks.
MR. JORDAN said he does not, but remarked that he doesn't see
the point of SB 299 since most bad check situations can be
resolved with a phone call.
Number 1699
SCOTT KING, Cornerstone Credit Services, LLC, said he would be
testifying in support of SB 299. He relayed that his company's
more than 2,000 clients would be directly affected by this bill.
He elaborated:
We are one of the main collections agencies that
provide check recovery services to businesses who do
not wish to handle this problem on their own.
Businesses which do choose to collect bad debts
themselves are equally affected by this bill. I
believe the $30 charge is a reasonable and fair
amount, and, for the record, I'm the business owner
today, now, and I have to deal with today's costs.
MR. KING indicated that he has a concern with one of the changes
made to HB 516 - that of inserting language specifying that a
business owner may waive the fee - because the purpose of the
original legislation is to simplify AS 09.68.115(a). He opined
that this simplification will allow creditors to collect for bad
checks "without the fear of predatory litigation base on
ambiguous language." Should a similar change be made to SB 299,
he opined, it will put all business at risk and defeats the
purpose of the bill. He then noted that his company's legal
firm has provided a couple of memorandums regarding such a
change, adding that he supports the view expressed in those
memorandums. He said that according to his understanding, such
language as that added to HB 516 is not found elsewhere in
statute, and opined that there should be consistency throughout
the statutes.
MR. KING, in conclusion, offered his belief that "the greater
encompasses the lesser," and, thus, it is already the case that
a business is not required to charge the entire fee proposed or
even any fee if it doesn't want to. He thanked the committee
for considering SB 299, and urged the committee to support it.
CHAIR McGUIRE said she questions why adding the language that a
business may waive collection of the fee would confuse anybody,
since it is already the case that the business can waive
collection if it so chooses. What is the harm in adding
clarifying language?
Number 1871
MR. KING opined that doing so will raise a whole new set of
issues that [collection agencies] will have to deal with, adding
that less is best particularly if everyone agrees that leaving
the language as is will have the same result as changing it.
REPRESENTATIVE ANDERSON noted that current language specifies
that a person "may" recover damages, and suggested that such is
sufficient.
MR. KING concurred.
REPRESENTATIVE ANDERSON said he does not see the need for an
amendment on this issue.
CHAIR McGUIRE said she didn't see that adding clarifying
language on this issue would result in litigation against
business owners.
REPRESENTATIVE GARA said that adding language specifying that a
business may waive collection of the fee won't result in
litigation. "I think people are fearful of a legal argument
that a court would never uphold, and I think we've got to stop
making policy based on the fear that somebody might make a bad
legal argument," he added. Somebody might say that some sort of
equal protection problem would arise, but there is no equal
protection problem, he opined, adding that if a business doesn't
want to charge a fee, it doesn't have to.
REPRESENTATIVE GRUENBERG indicated that at one point, he didn't
think that adding language specifying that a business may waive
collection would generate litigation. However, he remarked,
after reviewing the aforementioned memorandums, he is no longer
sure either way.
Number 2105
CHRIS D. GRONNING, Attorney at Law, Bankston, Gronning, O'Hara,
Sedor, Mills, Givens & Heaphey, PC, after confirming that he'd
written the aforementioned memorandums to Cornerstone Credit
Services, LLC, said that he agrees with Representative Gara that
a court probably wouldn't uphold an equal protection argument
based on statutory language stating that a business may waive
collection of a fee. He elaborated:
I believe, at the end of the day, after thorough
litigation, that that would indeed be correct, that a
court would say, "The power to waive is there, in the
discretion of the plaintiff, and if the plaintiff
chooses not to exercise that power, that is the
decision of the plaintiff and we're not going to
inquire further." But I think the problem is in the
making of the argument and the costs that the business
incurs in defending against the argument, because I
can easily envision and think about this mechanically
in the manner in which these bad checks are collected.
A demand letter is normally sent out that says ...,
"You have written a check with insufficient funds,
here is the statute and the appropriate penalties at
appropriate stages; at this point you have the
opportunity to cure by giving us the amount of the
check and ... a fee of $30." I'm assuming that that
is the new law.
At that point, the person sends back a check, or
cashier's check, or comes in and pays the principal
amount, but says: "Well, I see in the statute that
... you have the opportunity to waive. Would you
please waive this?" And then the collection agency or
the business says, "No, we will not." And the dialog
develops: "Why will you not? I'm not prepared to pay
this fee until you've told me why you won't waive it
and whether you'll consider the arguments that I'm
going to give you for why you should waive it - all of
my hardships, all of my reasons - and then I want to
see whether you have a policy, internally, about when
you do or don't waive. And if you don't have a
policy, I want to know why you don't. And if you do
have a policy, I want to see whether it's a reasonable
one, and ... whether you're applying it properly or
fairly to me."
All of those arguments, I think, will eventually get
made in court pleadings, and will be expensive to
rebut. And I think an attorney, any defense attorney
who's fighting against a claim like this, is going to
send out a discovery request that asks to see the
policy, asks to schedule a deposition of the person in
charge of making these kinds of determinations, and
[will want] to see the history of waivers. So you're
going to run up a significant amount of cost and it
will be a repetitive problem as significant or more
significant than the current problem, which is simply
documenting, to a court's satisfaction, $25 of actual
incurred expense. So that is where I think the real
harm is to the business owners.
Number 2274
MR. GRONNING continued:
The converse side - what's the ... benefit to the
check writer whose check has been dishonored - ...
that person is put in no worse [a] position by not
including this language, because the business owner
always has the option of waiving the fee and can
always listen to a hardship case. And I suspect any
of these business owners and collection agencies will
tell you, there are a fair number of those hardship
cases that sufficiently tug at the heartstrings [such]
that these are waived. The fees can be waived under
the current statute without the language that is
proposed in the amendment. They can be waived under
the new statute, or the proposed change, without the
amendment. And having the amendment creates a
tremendous potential for litigation. ...
I have not seen any other statute ... where a remedy
is granted ... coupled with an express statement that
the ... remedy can be waived. That's always implied;
it's always understood. Anyone who has the power to
collect something has the power not to collect it. So
I don't think it's necessary ....
CHAIR McGUIRE pointed out, however, that in some instances it is
desirable to draw attention to a particular right that someone
has, for example, when a plain reading of a statute doesn't
elicit an understanding that that right exists. She said her
concern revolves around businesses and individuals that aren't
educated enough to realize that waiving collection of a fee is
an option.
TAPE 04-48, SIDE B
Number 2378
REPRESENTATIVE HOLM opined that the use of the word "may" in
existing statute is sufficient.
REPRESENTATIVE ANDERSON indicated agreement with the arguments
offered by Mr. King and Mr. Gronning.
REPRESENTATIVE SAMUELS, indicating agreement that the word "may"
is sufficient, further remarked, "If you don't want to take
their money, give it back to them."
SENATOR BUNDE indicated a preference for keeping the language in
the bill simple.
CHAIR McGUIRE surmised, however, that since the clarifying
language was added to HB 516 in the House State Affairs Standing
Committee, there must be some merit to the arguments in favor of
including it in statute.
REPRESENTATIVE GARA indicated that he didn't see the harm in
including the clarifying language, particularly since it appears
that everyone agrees that the courts will decide that a business
can waive collecting the fee if it so chooses. He added:
The whole idea that people who write bad checks are
then going to litigate them is undermined by this one
very important fact: if you lose a case in Alaska
state court, you have to pay 20 percent of the other
side's [attorney] fees and their costs. So if you're
sitting there in an attorney's office, in my office or
Mr. Gronning's office ..., I think both of us will
tell you: "I wouldn't push this because you're going
to have to pay your check, ultimately, and, the longer
you push this, the more money you're going to have to
pay because you're going to have to pay 20 percent of
the other side's [attorney] fees if you keep pushing
this, so does it make sense for you not pay your $100
check and instead challenge this in court where the
more arguments you make the more [attorney] fees
you're going to have to pay on the other side so you
ultimately have pay $5,000 or $10,000 or $15,000?"
I'm going to tell you not to take that case. Mr.
Gronning, I think, essentially admitted that he's
going to tell you not to take that case.
I guess there's a possibility that someday somebody
will take that case, but what can you do about that?
I mean, ... there are a certain number of people in
the community who sometimes don't make reasonable
decisions, and you can never stop that. So I don't
think it's going to start a floodgate of litigation;
if it does, it's going to start a floodgate of
litigation by people who are just going to decide to
pay even more money than they would have if they'd
just paid the check in the first place. ... And then
finally, this whole idea that a business can't charge
people differently, we do it all the time - it's
capitalism. You walk into a store and you pay $40 for
a garden hose, somebody else walks into the store
after you and maybe negotiates with the store owner
and says, "You know, ... what about $35?" and the
store owner says, "Okay, $35." I mean, it's
capitalism, so ... you just charge people based on
what you think you should charge people, and let's
just put it in the statute ....
Number 2099
REPRESENTATIVE GARA recommended that the committee amend SB 299
in the same fashion that HB 516 was amended: adding language
which clarifies that a business may waive collection of the fee.
REPRESENTATIVE GRUENBERG noted that when the chair of the House
State Affairs Standing Committee proposed the amendment to HB
516, it was adopted without much discussion and without
objection. Representative Gruenberg offered his belief that in
offering the amendment, the chair of the House State Affairs
Standing Committee felt it would be helpful.
REPRESENTATIVE HOLM concurred that no one objected to that
amendment to HB 516.
REPRESENTATIVE GRUENBERG pointed out that a third change was
made to HB 516 in the House State Affairs Standing Committee,
that of changing "$30" to "a $30 fee". Such a change clarifies
that this is a fee and just an arbitrary imposition.
SENATOR BUNDE suggested that if the language pertaining to
waiving the fee is added to SB 299, then the committee should
also consider whether it should be added to all statutes
pertaining to fees.
CHAIR McGUIRE said that is a good point.
Number 1950
PAMELA LaBOLLE, President, Alaska State Chamber of Commerce
(ASCC), said that the ASCC supports SB 299, and pointed out that
the current law has engendered litigation and thus it needs to
be simplified in the manner proposed. She opined that use of
the word "may" is sufficient and so there is no need to add
further language regarding the waiving of fees. She offered her
belief that business regularly make the determination of whether
to waive the fees associated with bad checks. She explained
that in one instance where the ASCC received a bad check, the
bank charged the ASCC $25 and it took about a month to get the
money for that bad check. She opined that if the waiver
language is inserted into SB 299, it will create difficulties
and costs for businesses who have to go to court to try and
collect for a bad check.
REPRESENTATIVE GARA pointed out, however, that if such cases do
continue to come to court for resolution, it won't be because of
the statutory language. The person who wrote the bad check did
not do so because he/she read the statute and determined that
he/she might get away with not being charged a fee for writing
the bad check. Instead such cases will arise because a business
loses patience and goes to court in order to collect the money
it's owed. The statute is not going to cause people to get
involved in litigation, though it may give someone another
argument once he/she is already involved in litigation.
MS. LaBOLLE mentioned that when sending out a letter demanding
payment for a bad check, the business typically cites the
statute giving the authority for that demand; thus people will
become familiar with the statute at that point. She
acknowledged, however, that most people who receive a demand
letter will go ahead and pay the money owed before going to
court.
REPRESENTATIVE ANDERSON asked whether the ASCC has ever received
calls from members wanting to know if collection of a fee can be
waived.
MS. LaBOLLE said that that kind of service is not what members
expect of the ASCC and so it has not received any calls such
calls. She opined that all business owners know that they may
charge a fee but are not required to do so.
CHAIR McGUIRE said that as a person who writes checks, she did
not know that businesses had the discretion to waive the fee.
REPRESENTATIVE ANDERSON remarked, "I say sock it to them because
it's costing the businesses fees, and I say don't give any more
fodder for ideas for litigation or to waive; it's known, and
don't codify it."
REPRESENTATIVE OGG remarked that the language in statute is only
a triggering device for the court case. In other words, a
plaintiff can go to court if [paragraphs (1) and (2)] apply, but
if the don't both apply, then there will be no court case.
Number 1469
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 1, to
change "beginning" on line 9 to "commencing", and to change
"begins" on line 10 to "commences". There being no objection,
Amendment 1 was adopted.
REPRESENTATIVE GRUENBERG asked Representative Weyhrauch to
comment on the addition, in the House State Affairs Standing
Committee's version of HB 516, of the word "fee".
Number 1386
REPRESENTATIVE BRUCE WEYHRAUCH, Alaska State Legislature,
instead explained his intention behind the amendment to HB 516
that he'd offered in the House State Affairs Standing Committee
regarding waiving collection of the fee. He opined that it
ought to be clear to all parties that collection of the fee may
be waived, adding that it would be simplest to just say so in
statute rather than relying on an attorney's memorandum.
REPRESENTATIVE OGG reiterated his comments about the language in
statute simply being a triggering device. He opined that adding
specific language regarding waiving collection of the fee will
cause ambiguity for the purpose of going to court.
REPRESENTATIVE WEYHRAUCH disagreed. He relayed, however, that
he didn't want to influence the House Judiciary Standing
Committee's policy discussion on this issue. He added, "I
simply ... thought it made sense to allow a business to have ...
clear discretion to waive a fee; that was simply the intent
here." In response to a question, he clarified that what could
be waived would be the fee, not the amount of the bad check.
CHAIR McGUIRE agreed that if waiver language is added, it would
only pertain to the fee, not the bad check.
REPRESENTATIVE WEYHRAUCH mentioned that it might be a good idea
if the bill refers to a specific fee rather than to just any
fee.
CHAIR McGUIRE indicated a preference for having the bill
specifically reference that it is the fee which is being
assessed as a penalty that can be waived, so as not to have it
be confused with any other costs associated with collection of
the bad check.
REPRESENTATIVE SAMUELS asked whether there is motion before the
committee.
CHAIR McGUIRE observed that a motion has not yet been made.
Number 0927
REPRESENTATIVE GRUENBERG made a motion to adopt Conceptual
Amendment 2:
[To] clarify that the plaintiff may recover the amount
of the check, the liquidated fee - which would not be
the court costs but the administrative fee of going
through anything that they might have had to do in the
collection effort - they would also, if the case went
to court, be entitled to get costs under [Alaska Rules
of Civil Procedure] Rule 79, plus [attorney] fees
under [Alaska Rules of Civil Procedure] Rule 82. But
I want it clear that the deletion of the term, "costs"
and the insertion of the term, "fee" means that you
would be entitled, if you didn't go to court, to
demand the $30 in addition to the amount of the check,
and, if you did go to court, you could demand the
amount of the check, the $30 fee, courts costs under
Rule 79, and [attorney] fees under Rule 82.
Number 0836
CHAIR McGUIRE asked whether there were any objections to
Conceptual Amendment 2. There being none, Conceptual Amendment
2 was adopted.
Number 0809
REPRESENTATIVE GARA made a motion to adopt Conceptual Amendment
3, to have the language from [lines 10-13 of CSHB 516(STA)]
replace the language on lines 10-12 of SB 299.
REPRESENTATIVE ANDERSON objected.
CHAIR McGUIRE, noting that SB 299 has already been amended,
suggested that Representative Gara restate his motion for the
purpose of clarifying that he is merely referring to the
language pertaining to the waiver.
REPRESENTATIVE GRUENBERG opined that it would be simpler if
Conceptual Amendment 3 were changed such that it adopted the
language in CSHB 516(STA), because doing so would incorporate
the amendments already made to SB 299.
CHAIR McGUIRE opined that there is really no need to do that,
adding, "I think we should be clear about what the policy is
[that] we're focusing on, which is the waiver itself."
Number 0703
REPRESENTATIVE GARA, after withdrawing Conceptual Amendment 3,
made a motion to adopt a new Amendment 3 to SB 299: after "$30"
on line 11, insert ", but the plaintiff may waive collection of
any fee."
Number 0649
CHAIR McGUIRE made a motion to amend Amendment 3, "to say 'the
$30 fee'."
REPRESENTATIVE GARA said, "I wouldn't object."
Number 0641
REPRESENTATIVE ANDERSON objected.
[Although the objection to amending Amendment 3 was not
addressed or withdrawn, Amendment 3 was treated as amended.]
REPRESENTATIVE OGG asked why a business would continue a suit in
court if it was simply going to waive the fee.
REPRESENTATIVE GARA opined that such would not happen. He
added:
But what you're doing [currently] is saying that just
so we can protect the person's right to go to court,
we're also going to require [that] the $30 fee be
charged to all people we don't go to court against.
And that was the whole purpose of the amendment [as
amended]: for the bulk of cases, you don't want to
charge the $30 fee ... if you have a good relationship
with a customer, and we want to make sure the statute
isn't interpreted by businesses to think that they
have to charge the $30 fee against a customer that
they don't want to charge that fee against. So you
make a decision, as a business, that you're going to
waive the fee or not waive the fee; it's totally up to
you.
REPRESENTATIVE OGG argued, however, that the statute won't apply
if someone isn't being taken to court.
CHAIR McGUIRE offered an example illustrating why a business
should still have the ability to take someone to court to
recover the amount of a bad check even if a fee is never
charged, and opined that Amendment 3 [as amended] provides for
that ability. She noted that current language stipulates that
the demand for payment must be in writing, and offered her
belief that the language without Amendment 3 [as amended] would
also stipulate that a fee must be charged.
REPRESENTATIVE GRUENBERG offered his belief that under current
statute, a business may always sue for the amount of the check,
and pointed out that AS 09.68.115(a) - the statute being amended
via SB 299 - simply provides a business with the ability to
claim treble damages up to $1,000; therefore, the triggering
mechanisms in SB 299 simply pertain to collecting damages, not
the right to collect on debt owed. Additionally, he remarked
that SB 299 and the statute it amends appear to only apply to
checks written for a small amount; he suggested that perhaps the
committee could look into what to do about checks that are
written for large amounts.
MS. LaBOLLE suggested that perhaps that issue could be addressed
at another time, adding that it was a recent court decision that
raised concerns about the current language in AS 09.68.115(a)
and engendered SB 299 and HB 516.
REPRESENTATIVE GRUENBERG observed, however, that SB 299 will not
be helpful in instances wherein bad checks for large amounts are
written.
Number 0057
A roll call vote was taken. Representatives Gara and McGuire
voted in favor of Amendment 3, as amended. Representatives Ogg,
Gruenberg, Samuels, Holm, and Anderson voted against it.
Therefore, Amendment 3, as amended, failed by a vote of 2-5.
Number 0039
REPRESENTATIVE ANDERSON moved to report SB 299, as amended, out
of committee with individual recommendations and the
accompanying zero fiscal [note]. There being no objection, HCS
SB 299(JUD) was reported from the House Judiciary Standing
Committee.
HB 533 - IF UNREAS. AGENCY DELAY, COURT DECIDES
TAPE 04-49, SIDE A
Number 0001
CHAIR McGUIRE announced that the next order of business would be
HOUSE BILL NO. 533, "An Act relating to the state's
administrative procedures and to judicial oversight of
administrative matters." [Before the committee was the proposed
committee substitute (CS) for HB 533, Version 23-LS1833\D,
Bannister, 3/24/04, which was adopted as a work draft on
3/24/04.]
Number 0030
REPRESENTATIVE BRUCE WEYHRAUCH, Alaska State Legislature, as
chair of the House State Affairs Standing Committee, sponsor of
HB 533, relayed his appreciation with regard to the Department
of Law's comments at the last hearing. He also noted that he
has been provided with a copy of some proposed changes and has
no objections to them.
Number 0105
REPRESENTATIVE GRUENBERG moved that the committee adopt
Amendment 1, a handwritten amendment which read [original
punctuation provided]:
page 2 line 14 delete "15" insert "30"
page 2 line 15 delete "provide" and insert "filed in"
page 2 line 15 delete "with" and insert "a"
REPRESENTATIVE ANDERSON objected.
REPRESENTATIVE GRUENBERG recalled that the DOL had expressed
concern with the 15-day provision to file the notice and
suggested that 30 days would be more appropriate.
Representative Gruenberg said he agrees with the aforementioned,
particularly if the private party is another part of state
[government]. He highlighted that Amendment 1 also incorporates
a language change that specifies that the [notice] is filed in
the agency.
REPRESENTATIVE WEYHRAUCH reiterated that he has no objection to
Amendment 1.
REPRESENTATIVE ANDERSON withdrew his objection.
CHAIR McGUIRE, upon determining there were no further
objections, announced that Amendment 1 was adopted.
Number 0197
REPRESENTATIVE ANDERSON moved to report the proposed CS for HB
533, Version 23-LS1833\D, Bannister, 3/24/04, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 533(JUD) was
reported from the House Judiciary Standing Committee.
HB 474 - LIABILITY FOR AIRPORTS AND AIRSTRIPS
Number 0247
CHAIR McGUIRE announced that the final order of business would
be HOUSE BILL NO. 474, "An Act relating to civil liability
associated with aircraft runways, airfields, and landing areas."
REPRESENTATIVE HOLM, speaking as the sponsor, noted that members
have a proposed committee substitute (CS) in their packets.
Number 0299
CHAIR McGUIRE moved to adopt the proposed CS for HB 474, Version
23-LS1745\D, Bullock, 3/23/04, as the work draft. There being
no objection, Version D was before the committee.
REPRESENTATIVE HOLM said that HB 474 proposes to make minor
changes to AS 09.65.093. It will remove the word "natural" so
that "person" will include "a corporation, company, partnership,
firm, association, organization, business trust, or society, as
well as a natural person", which is currently the definition of
"person" given in AS 01.10.060(a)(8). With regard to civil
liability, the law currently only protects individuals who
maintain airstrips without compensation; HB 474 will allow "a
greater range of people and organizations to provide this
service for free." Also included are changes intended to make
the statute more comprehensive and clear, he relayed. The goal
is to allow volunteer organizations and good corporate neighbors
to provide some services that might otherwise fall to the state.
If a company or organization or individual spends their own time
and money to maintain or construct an airstrip that others are
free to land upon, they should not be sued for "this kind act,"
he concluded, noting that HB 474 is [supported] by the Aircraft
Owners and Pilots Association (AOPA).
REPRESENTATIVE GARA asked if proposed subsection (b) is supposed
to apply to people who voluntarily provide or maintain an
airfield.
REPRESENTATIVE HOLM indicated that that is his intent.
REPRESENTATIVE GARA remarked, however, that as written,
subsection (b) appears to apply to all airfields, even those
that are "run for profit." He suggested adding a specific
reference, in subsection (b), to the airfields described in
subsection (a).
REPRESENTATIVE HOLM replied:
I think the reason is ... that private or public
airfields would fall underneath this release of
liability. And the reason being is that there are
public airfields that are maintained by private
individuals without compensation, and ... we didn't
want to limit the ability of somebody to assist the
state and feel that their liability is increased.
REPRESENTATIVE GARA said he agrees that those individuals
volunteering their services should not be held liable. He
opined that such would be clarified if, on page 1, lines 12-13,
the words were changed to say in part: "A person who is the
owner or operator of an aircraft runway, airfield, or landing
area described in subsection (a) ...".
REPRESENTATIVE HOLM said he would accept such as a friendly
amendment to Version D.
Number 0552
REPRESENTATIVE GARA made a motion to adopt Amendment 1, to add
to page 1, line 13, after "landing area" the words, "as
described in subsection (a)". There being no objection,
Amendment 1 was adopted.
REPRESENTATIVE GRUENBERG suggested that the language currently
in proposed subsection (b)(1) would exclude a person from
liability - even if the act or omission constitutes gross
negligence, recklessness, or intentional misconduct - as long as
the runway is not marked with a large "X."
Number 0706
TODD LARKIN, Staff to Representative Jim Holm, Alaska State
Legislature, in response to questions about a possible
duplication of language in proposed subsections (a) and (b),
relayed that proposed subsection (a) essentially covers
"groomers," whereas proposed subsection (b) is "an additional
consideration for owners who are already covered under" proposed
subsection (a). He said that it is possible in Alaska for
someone - for example, a gold miner or a corporation like
Alyeska [Pipeline Service Company] ("Alyeska") - to actually own
an airstrip privately and not charge any fees but be on public
land. Currently, such persons would be liable to whoever lands
on the airfields they maintain even though they receive no
compensation. He went on to say:
[Proposed subsection] (b) ... specifically speaks to
... negligence and recklessness; if you're that owner
or operator [and] you're not charging the fee, that's
the important part. And [say you] need to dig a
utility ditch across your airstrip ..., you will be
grossly negligent or reckless if you don't put an X
[on the strip] and notify the FAA [Federal Aviation
Administration] that that strip is closed. Now,
everybody who wants to land there who's in trouble can
go ahead and land, but if they see a big X or read in
FAA that you've said your strip is closed, and they
crash, that owner who dug a ditch across their
[airstrip is] ... not going to be liable: the strip
was closed - you landed at your own risk.
REPRESENTATIVE OGG offered his understanding that proposed
subsection (a) pertains to open airstrips, whereas proposed
subsection (b) pertains to closed airstrips.
Number 0850
REPRESENTATIVE GRUENBERG disagreed. He offered his
understanding that proposed subsection (b) applies to owners,
and that "the rule is you're not civilly liable for one of these
types of airfields." He surmised, however, that "even if the
owner was grossly negligent, the field would have to marked for
[he/she] to be liable."
MR. LARKIN opined that if the owner closes the field through the
two methods listed in paragraphs (1) and (2), then there is no
opportunity for gross negligence of recklessness.
REPRESENTATIVE GRUENBERG asked, "How about if the ... field is
not closed but it is open?"
MR. LARKIN replied, "If you have not received compensation,
again, without gross negligence or recklessness, you're not
liable."
REPRESENTATIVE SAMUELS said he assumes that the people who work
on the runways for Alyeska Pipeline Service Company are paid,
and thus do not fall under the category of not having received
compensation.
MR. LARKIN said that in the case of Alyeska using its employees
to do the work, those employees would be considered assets of
Alyeska, and thus would not be liable as individuals because
Alyeska would be simply using its assets to improve/maintain its
airfield.
REPRESENTATIVE SAMUELS referred to the Red Dog Mine, and asked,
"If somebody works for Cominco [Alaska] and they go out there
and they tell you the breaking action is fine, and Alaska
Airlines slides off the runway because the breaking action was
nil, is anybody accountable for their actions?"
Number 1060
MR. LARKIN said he would defer the question of whether such
action constitutes gross negligence to those with legal
experience.
REPRESENTATIVE SAMUELS said:
That would be considered maintaining the runway, but I
don't think -- I assume that you're getting after
little mining strips here and there, or [if] some guy
owns a lodge and gets a bulldozer and he plows a
runway, and if some guy happens to land there and he
flips over his [plane] ... he can't sue [the lodge
owner]. I assume that's what you're trying to get at.
But when you said Alyeska Pipeline [Service Company],
if you look at Coldfoot and all the pump stations up
the line, that's a little different story.
REPRESENTATIVE OGG surmised that "compensation" refers to things
like landing fees. "But if these folks had [an] airport for
their own business and other people landed on it and they're
just negligent, they're not liable, but if they're grossly
negligent, then they are liable," he suggested, adding his
belief that "the same thing" applies under proposed subsection
(b): "you're not liable for just negligence, but if you have
gross negligence, you're liable even if you marked [the
airstrip]."
Number 1141
TOM GEORGE, Alaska Regional Representative, Aircraft Owners and
Pilots Association (AOPA), said that the AOPA's interest is in
preserving a healthy aviation infrastructure, including
backcountry airstrips. He relayed that the AOPA supports HB
474, which, he opined, broadens the current statute limiting
civil liability on aircraft runways, airfields, and landing
areas. The primary goal of [the proposed statutory changes], he
suggested, is to protect the backcountry airstrips that [the
AOPA's members] rely on for access to Alaska's remote locations;
HB 474 should help protect the companies, corporations, and
organizations that devote their time and resources, without
compensation, to maintaining airstrips across the state.
MR. GEORGE said that currently, the statute only applies to an
individual person, and the AOPA feels it is necessary to use the
broader definition of person so that entities such as mining
companies, lodges, and aviation associations are included. He
offered that the other changes encompassed in Version D will
clarify what activities and situations "this protection" applies
to. The AOPA thinks HB 474 is a good step towards protecting
airstrips that provide access primarily to public lands, and
that protection from liability should help the AOPA find support
for keeping those airstrips open and usable in years to come.
In conclusion, Mr. George thanked Representative Holm for
sponsoring the bill, and relayed that he would be happy to
answer any questions from the committee.
Number 1219
REPRESENTATIVE GARA, after noting that he'd made a mistake
regarding Amendment 1, moved that the committee rescind its
action in adopting Amendment 1. There being no objection, the
committee rescinded its action.
REPRESENTATIVE GARA asked whether it is the intent of the bill
to extend the limitation on liability to someone who operates a
business and orders supplies, thereby requiring that a delivery
plane land on an airstrip being maintained by the business
owner. In such a situation, the delivery plane would not be
paying a landing fee.
MR. GEORGE suggested that the issue is whether the operation of
the airstrip is commercial; in other words, is somebody being
paid, either by the government or through landing fees, to
operate the airstrip. He noted that there are approximately 260
airstrips that the Department of Transportation & Public
Facilities (DOT&PF) supports, and those would not be covered by
HB 474. Thus it wouldn't matter whether the people landing on
the airstrip are doing it as private individuals or as
commercial operators. He pointed out that there are FAA
regulations regarding what class of aircraft can use what kind
of airport, adding that these regulations "would deal with that
issue."
REPRESENTATIVE GARA asked whether the intent of the bill is to
extend the limitation on liability to those who run a commercial
airstrip but don't charge landing fees; for example, the Red Dog
Mine airstrip. "Assuming that they're not charging any landing
fees, do we want to extend this limitation to an airstrip that
knows that supply planes are going to come in for a commercial
operation," he asked.
MR. GEORGE replied:
I would argue that we would want to extend it because
they are providing a service that the state is not
having to pay for. So ... limiting their liability
would hopefully be an incentive for them to continue
to provide that service. And ... the same case is
covered with Alyeska Pipeline [Service Company], where
they're operating airports on, as I understand it,
public lands, but they're totally paying the cost of
maintenance and operation, yet those are open to the
public to land on. So I think limiting liability ...
in a balanced way ... is a reasonable way to ...
[provide] an incentive to continue doing that
maintenance function.
REPRESENTATIVE SAMUELS asked: "What's the standard that the
state follows? ... Is it gross negligence?"
REPRESENTATIVE GARA said it is negligence.
Number 1475
REPRESENTATIVE HOLM, in response to further comments by
Representative Samuels, said that the size or type of the
business does not matter; the intent of the bill is to limit
liability for those who [maintain airstrips] without
compensation, and thereby provide incentive for them to
continue. He suggested, however, that if a business makes an
assertion that an airstrip is maintained in a certain condition
and that is not true, then there might be [a cause of action].
REPRESENTATIVE SAMUELS said that he could understand limiting
liability for those who provide this service without
compensation. However, companies like Alyeska Pipeline Service
Company are getting paid: "that's their job, is to plow the
runway or make sure the lights are working or what ever it is
[they're] doing - they are being compensating." He offered his
belief that such a company should not be liable for any airstrip
it built but then abandoned, but it should be liable if it is
paying somebody to plow an airstrip or maintain its lighting or
approach.
REPRESENTATIVE OGG surmised that if a company like Alyeska is
maintaining a runway, it then becomes a "person" and so the
limit on liability extends to any of its employees because they
are a part of the company. The compensation being referred to
in the bill, he also surmised, is probably a landing fee, not an
employee's paycheck.
Number 1625
REPRESENTATIVE GRUENBERG said that when considering whether
there has been compensation, the question becomes: compensation
for what? For example, is it somebody who is compensated
specifically for maintaining the runway? Or is it somebody who
is compensated for maintaining the facility? Or is the entity
doing the maintaining a profit-making business? The question of
what the legislature means by the term, "without compensation"
will become the subject of some litigation, he predicted.
REPRESENTATIVE HOLM pointed out that the language on page 1,
lines 6-7, says in part: "who without compensation constructs,
maintains, or repairs an aircraft runway, airfield, or landing
area".
REPRESENTATIVE GRUENBERG noted, though, that the bill also
refers to the owner of "an aircraft runway, airfield, or landing
area", and surmised that the target will be the owner of the
airfield. Current law refers to situations involving private
land, but HB 474 could conceivably refer to situations involving
any airfield anywhere, he remarked, and opined that such is much
broader than would be good public policy. The bill proposes to
immunize airfield owners, and could conceivably be considered
precedent for immunizing owners of docking facilities or people
who maintain private roads, he added.
Number 1769
REPRESENTATIVE GARA said he did not mind limiting liability for
those who do something on a volunteer basis, and surmised that
that is the goal of the bill. With that in mind, subsection (a)
is written fine, he remarked, but coming up with the right
language so that subsection (b) has the same effect could be
problematic. He added:
I would assume that we're essentially trying to get at
airfields that are run by noncommercial entities, and
for which nobody is receiving compensation. ... I
assume we don't want to extend the liability
[limitation] to an airfield that a supply plane has to
use because they've got a contract with the business
that's running the airfield, even though they're not
charged a landing fee; I think the supplier should
have an expectation that that's a responsibly-run
airfield. ... So maybe we can say "a noncommercial
airfield operated without compensation".
REPRESENTATIVE GARA asked Representative Holm to describe the
circumstances that he'd like HB 474 to apply to and which ones
he doesn't want it to apply to.
REPRESENTATIVE OGG asked whether the definition of "person"
could be interpreted to mean state agencies or state
corporations.
CHAIR McGUIRE noted that "person" is defined in AS
01.10.060(a)(8) as: "a corporation, company, partnership, firm,
association, organization, business trust, or society, as well
as a natural person".
REPRESENTATIVE GRUENBERG offered his belief that none of the
members object to having that definition of "person" apply in
the bill. However, the bill also eliminates the phrase, "that
is located on private land".
REPRESENTATIVES OGG and HOLM offered their understanding that
that phrase only pertains to closed airports.
Number 1947
MR. GEORGE - with regard to the phrase, "that is located on
private land", in subsection (b) - said that part of the problem
is that most of Alaska is still public land, and so a lot of
backcountry airstrips are operated - to the extent that they are
operated at all - by miners and lodge owners, and so if they
didn't do it, either there wouldn't be access or there would be
pressure put on the state to do it. He went on to say:
The second part of this bill is about extending that
protection from liability in the case where the
airfield needs to by closed, and showing how to go
about doing that closing. So I guess I think that is
a reasonable thing to do and I don't think it takes
the lid off Pandora's box in terms of wildly extending
the coverage provided by the statute.
CHAIR McGUIRE, in response to questions, highlighted the changes
proposed by subsection (b) of the bill.
REPRESENTATIVE GARA offered his belief that proposed subsection
(b), as written, applies to both open and closed airfields,
specifically that everything after "a person" on page 2, line 1,
applies to closed airfields, and everything up to and including
"a person" applies to open airfields. He suggested that the
committee should add language to the bill that would limit its
effect to airfields that are not part of some sort of commercial
operation. Another alternative, he remarked, would be to leave
subsection (b) applying only to a "natural person", because that
would maintain the current policy that a person who owns an
airfield would not be held liable, but corporations that own an
airfield could be held liable.
CHAIR McGUIRE relayed that HB 474 would be held over for the
purpose of allowing the sponsor to address the issues raised.
REPRESENTATIVE HOLM offered his understanding that proposed
subsection (b) applies strictly to closed airfields, but agreed
to look into the issue further.
REPRESENTATIVES OGG and SAMUELS agreed with Representative
Holm's interpretation of proposed subsection (b).
CHAIR McGUIRE suggested that any forthcoming amendments be in
writing.
[HB 474 was held over.]
ADJOURNMENT
Number 2130
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:30 p.m.
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