HB 146 - LIABILITY FOR COMMERCIAL REC ACTIVITIES Number 1050 CHAIRMAN ROKEBERG announced the committee's next order of business is HB 146, "An Act relating to civil liability for commercial recreational activities; and providing for an effective date." Number 1075 KELLY SULLIVAN, Legislative Secretary to Representative Pete Kott, Alaska State Legislature, came forward to present HB 146 on behalf of the sponsor. Ms. Sullivan noted this is pretty straightforward: Alaska has its great outdoor experiences like big game hunting, sportfishing, kayaking and river rafting. There are a lot businesses in Alaska that provide these experiences to the public. Ms. Sullivan mentioned the tourism industry. House Bill 146 would establish the responsibilities of the commercial recreational businesses and the responsibilities of the participants in those activities. The legislation addresses specific guidelines operators and participants would follow in order to minimize the possibility of accidents. Should an accident occur, the legislation provides which party would be held liable. Current legal uncertainties result in high liability insurance costs that hurt a lot of Alaskan businesses, especially smaller ones. The intent of this legislation is the avoidance of unfair and unreasonable claims which make it difficult [for businesses] to provide these recreational activities. The desire is to encourage the continued availability of these recreational businesses. Ms. Sullivan noted there are a few witnesses to provide testimony. CHAIRMAN ROKEBERG indicated Representative Kott, the bill sponsor, had joined the committee at the table. Number 1188 MIKE WINDRED, Vice President, Marketing and Sales, Alaska Travel Adventures, came forward to testify in support of HB 146. He informed the committee that his company has several operations throughout the state. Mr. Windred thanked the sponsor for bringing the legislation forward, noting the bill has passed the House three times in recent years but has been held up in the Senate for various reasons. Mr. Windred believes one of the basic ideas behind this legislation is that participants in many of these activities assume some inherent risk when purchasing that recreational activity. However, he does not believe the legislation would absolve any of the operators from negligent actions. The bill establishes some basic performance standards the operators must adhere to that are not currently specified by Alaska Statute. The legislation would affect a business like Alaska Travel Adventures by requiring it to provide good training to its employees, maintain its equipment, and provide a good explanation of the inherent risks to participants. This is not currently set out and should increase the level of service within the industry. Number 1262 MR. WINDRED thinks the primary benefit to his business would be a reduction in the costs of what he termed "nuisance suits." Mr. Windred described that these nuisance suits would be lawsuits for damages specifically at the level of a company's insurance deductible - $10,000 for a business like his - so that the insurance company would not be involved, at least for "the first hit." He indicated these suits result in significant costs over the long term because it is less expensive for the business to settle them than risk lengthy litigation. Mr. Windred thinks the legislation gives his business some standing to respond that the participants had some amount of responsibility in undertaking the activity. He commented that at least the legislation would give the businesses a level playing field to begin with and he feels certain it would reduce the money they pay out-of-pocket each year for these nuisance suits. Mr. Windred described the example of a nature hiker stumbling on a rock on the beach, cutting his/her forehead. Mr. Windred's company would provide first aid, take the person to the hospital, make sure everything checked out okay, and six months later might be sued by that person for $10,000 to $20,000 because the person's vacation to Alaska had been ruined or for some other reason. He noted, "At the point that we've done everything in our ability to ... make that right in terms of paying a medical bill or treating them with first aid, et cetera. That would be a lawsuit that I would certainly think ... probably wouldn't be very valid, but at that amount, would be very difficult for us to fight legally." Number 1394 REPRESENTATIVE MURKOWSKI noted Mr. Windred's testimony that this legislation would not preclude lawsuits for negligence on the part of the tour company or operator. She noted the legislation does define some areas of responsibility for operators, but she expressed some doubt it covered, for example, a leaky raft. Someone put into that type of situation by an operator should be able to sue. MR. WINDRED agreed someone in that situation should be able to sue and indicated he thought that would be covered in the legislation by the operator's responsibility to maintain its equipment. He stated, "And in reality, that's probably almost more harmful to the operator the way this bill is written, which is a good thing in the industry, ... it'll ensure that as an operator, I don't send a faulty piece of equipment out on tour." REPRESENTATIVE HALCRO referred to the language, "explain to a participant", on page 2, line 23, under "Responsibilities of operators of commercial recreational activities.". He noted an example of a white water rafting situation where the risks were explained to the participants but someone was hurt and denied that he/she had been informed. Representative Halcro said his concern is with having some kind of a written disclosure. It does not look like the legislation provides for that. Number 1492 MR. WINDRED related participants in his company's river rafting sign a sheet before the activity which basically says the participant understands the safety precautions. These precautions and inherent risks are gone through verbally. If the person chooses not to sign that paper, or does not want to sign off on the risks, at that point he/she has the opportunity to return to town and not participate in the activity. Mr. Windred thinks if there was no documentation, it would be more difficult for the operator to win in that case. REPRESENTATIVE HALCRO thinks some kind of written agreement would probably be important in this legislation. REPRESENTATIVE CISSNA noted she did not see anything in the legislation regarding some kind of an assessment the operator might need to perform when, for example a participant is intoxicated and should not be allowed to engage in the activity. She questioned if that is something that should ever be addressed in something like this. MR. WINDRED answered he thinks that would definitely be a gray area and is probably a battle that would occur in court. He indicated it would certainly behoove such an operator to inform a person the operator feels the person is not prepared to take the inherent risk or is a safety problem. Mr. Windred further indicated he thinks there is some responsibility on the part of the participant to evaluate his/her own fitness level for the activity. Number 1677 STEVE BEHNKE, Executive Director, Alaska Wilderness Recreation and Tourism Association (AWRTA), came forward to testify in support of HB 146. Mr. Behnke noted his organization represents a couple hundred of the types of companies Mr. Windred spoke about. AWRTA members feel this kind of legislation is necessary to protect small businesses in this arena. The organization's members depend on providing experiences that have inherent risks. The kinds of measures proposed by the legislation that help encourage safer operations are major improvements over the current situation. Mr. Behnke said it seems like a balanced approach to protect the interests of AWRTA's members while also protecting the interests of the participants. REPRESENTATIVE MURKOWSKI pointed out the legislation limits recreational activity to outdoor activity. She asked if there is any specific reason for this, commenting she has done great damage with a bowling ball. She noted the question might be best addressed to the sponsor. MR. BEHNKE responded he is the wrong person to ask because his organization's members are all [outdoor] outfitters and operators providing activities with obvious inherent risks. He said most operators do currently require some of the kinds of steps in the legislation, but it would apply to a broader range of companies and help encourage them to be safer and more responsible operators. Number 1817 REPRESENTATIVE BRICE mentioned that indoor climbing walls are increasing in popularity, noting there are opportunities to perform these kinds of formerly outdoor activities inside. CHAIRMAN ROKEBERG commented the committee seems to have a question about the limitation on outdoor activities vis-a-vis other rather dangerous indoor pursuits. He asked if there is a reason for the limitation. REPRESENTATIVE KOTT indicated there was no intent to distinguish the two, other than the fact that the visitor businesses who primarily need this measure generally offer outdoor activities within the category. He has no problem changing it to include both, noting there are some climbing walls even he wouldn't attempt to go up, given the constraints he has. Referring to bowling, however, he noted, "If you get into establishing various types of recreational activity and requiring each of the operator[s] to provide some kind of documentation to be signed, then you have to get into that whole quandary of whether or not when I go bowling the operator there should have me sign a disclosure or some kind of form understanding the problems and potential dangers." Number 1989 CHAIRMAN ROKEBERG asked if Representative Kott had considered establishing a new "prudent man rule" for sports activities, noting he is half-joking but really half-serious. REPRESENTATIVE BRICE asked if they simply redefined recreational activity to mean "an activity usually undertaken outdoors for the purpose of exercise", deferring to the lawyers on the committee. REPRESENTATIVE HALCRO suggested simply the deletion of "outdoor". REPRESENTATIVE MURKOWSKI answered if "outdoor" is deleted, this would be "an activity for the purpose of exercise or education". She could go to a seminar on throwing pots or grant-writing; she does not think that is the intended direction of this definition. Representative Murkowski thinks where the definition needs to go is "those inherently dangerous activities", indicating there are certain things like being on the water, ice climbing, et cetera, that are inherently more dangerous than bowling. She indicated that perhaps the discussion would occur in the next committee of referral, the House Judiciary Standing Committee (Judiciary). CHAIRMAN ROKEBERG mentioned contributory negligence in the case of fishing and being "hooked" by a fellow fisherman. Number 2136 REPRESENTATIVE HALCRO appreciates the intent of the legislation but commented the Surgeon General's warning has been on cigarette packs for almost 30 years and it hasn't stopped people from suing tobacco manufacturers. CHAIRMAN ROKEBERG questioned if it was Representative Kott's intention to insert contributory negligence as a defense here. REPRESENTATIVE KOTT replied that it was at least some extent. There is some inherent risk to just about any activity. Certainly, when a person is engaging in outdoor activities in Alaska, the risk is a little more inherent, because of Alaska's terrain, than perhaps in some of the other states. He noted Alaska's good tourist population, small state population, and the medium-sized group of what he would term "mom-and-pop" commercial operators who provide these types of environments for the state's visitors. Representative Kott indicated he thinks these operators need some assurance of protection from expensive lawsuits brought by people who ignored the inherently risky nature of the activity they were participating in. Number 2266 TINA LINDGREN, Executive Director, Alaska Visitors Association (AVA), came forward to testify in support of HB 146. As Mr. Windred had said, this is legislation the AVA has supported and the House has passed at least three times that she is aware of. It has taken different forms because people start identifying other kinds of recreational activities. At one time equine activities were been included, another time skateboarding. Ms. Lindgren indicated the number of bills on the subject is a strong case that the legislation is needed. She emphasized a strong point of HB 146 is that it sort of covers all of the outdoor activities. She thinks the suggestion of including some indoor activities may be good and perhaps this can be examined in Judiciary. Ms. Lindgren noted the legislation is before the committee primarily at the request of small businesses concerned about the cost of insurance and nuisance lawsuits from people "who through their own activity have caused some injury." She commented it is very similar to the skiing reform bill passed several years ago. House Bill 146 has participants agreeing to accept some level of risk and operators agreeing that they have to provide a safe environment. Ms. Lindgren stated AVA wholeheartedly supports the legislation. REPRESENTATIVE MURKOWSKI questioned if this would really lower insurance rates for the "mom-and-pops." MS. LINDGREN replied she does not know - that is the hope. It would be a tool companies could use. She does know that companies currently are targeted by a lot of frivolous lawsuits from people seeking financial gain. Number 2471 REPRESENTATIVE BRICE referred to subsection (1)(B) on page 2, beginning on line 26, "(B) the skills or equipment required to participate in the commercial recreational activity that are not apparent to an inexperienced participant;". He stated, "'The skills or equipment required' rather than 'the skills...'" [TESTIMONY INTERRUPTED BY TAPE CHANGE] TAPE 99-38, SIDE A Number 0001 REPRESENTATIVE BRICE continued, "...conjunction word." CHAIRMAN ROKEBERG asked if Representative Brice wished to make a conceptual amendment. REPRESENTATIVE KOTT stated he has no objection. Number 0025 REPRESENTATIVE BRICE moved Conceptual Amendment 1 to replace "or" with "and". There being no objection, Conceptual Amendment 1 was adopted. Subsection (1)(B) on page 2, beginning on line 26, as amended by Conceptual Amendment 1, reads: (B) the skills and equipment required to participate in the commercial recreational activity that are not apparent to an inexperienced participant; Number 0050 REPRESENTATIVE HALCRO offered two friendly conceptual amendments. He moved the addition of "and condition of health" on page 2, line 13, after "act within the limits of the person' abilities". Representative Halcro indicated he thinks a negative incident during an activity resulting from a person's health condition would be the responsibility of the participant, because only the participant knows his/her condition of health. He used the example of someone with a bad heart. Representative Halcro noted his conceptual amendment 3 would be on page 2, line 23, after "explain to a participant", inserting "in writing", if that is acceptable to the sponsor. Representative Halcro said he thinks that protects all involved, even if it is just a sign-off sheet. CHAIRMAN ROKEBERG stated the committee would address Amendment 2 first. The chairman expressed his approval, terming it "the fat guy amendment." He indicated if a person is too out-of-shape to be participating in an activity, the person should not be doing it. REPRESENTATIVE KOTT noted he considers it a friendly amendment and does not object. He thinks it is contained in the bill's original language but it is fine to add that and clarify. Number 0166 CHAIRMAN ROKEBERG questioned if there were any objections to Conceptual Amendment 2, adding "condition of health" on page 2, line 13. There being none, Conceptual Amendment 2 was adopted. Subsection (2) on page 2, line 13, as amended by Conceptual Amendment 2 reads: (2) act within the limits of the person's abilities and condition of health; REPRESENTATIVE HALCRO moved Conceptual Amendment 3, adding "in writing" on page 2, line 23. CHAIRMAN ROKEBERG objected for purposes of discussion. He asked if the sponsor wished to comment. Number 0201 REPRESENTATIVE KOTT answered he would defer to Ms. Lindgren since she is probably closer to these issues. He indicated he can potentially see some problem in a situation where a previously unforeseen risk is being explained. CHAIRMAN ROKEBERG noted it can be problematic. REPRESENTATIVE KOTT agreed it could be. CHAIRMAN ROKEBERG commented he thinks it is warranted in certain circumstances but perhaps not universally; that is his only concern. REPRESENTATIVE HALCRO withdrew Conceptual Amendment 3. CHAIRMAN ROKEBERG noted that was his only concern there. The chairman expressed that he would actually like to see a two-tier thing here, indicating he was referring to a differentiation between very risky activities and those of a more sedate nature. Number 0287 REPRESENTATIVE MURKOWSKI posed a conceptual amendment concerning children and dogs. On page 2, subsection (4), beginning line 16, she recommended the use of "any minors under the participant's control" to replace "the participant's children". She noted whenever she goes out with her children she also always has other people's children. On page 2, subsection (4), Representative Murkowski indicated it is also her intention to include animals under the participant's control, like a dog, not just animals the participant might be using, like a horse. CHAIRMAN ROKEBERG stated, "Any equipment, devices, or animals the participant is using or under the participant's control." REPRESENTATIVE MURKOWSKI spoke over, "or under the control of the -- or animals under the control of the participant." She noted this would include a person's dog. CHAIRMAN ROKEBERG asked if there were any objections to Conceptual Amendment 4, which includes everything on page 2, lines 16 and 17. There being none, Conceptual Amendment 4 was adopted. According to the above discussion, subsection (4) on page 2, beginning on line 16, as amended by Conceptual Amendment 4, reads: (4) maintain control of the participant's person, any minors under the participant's control, and any equipment, devices, or animals the participant is using or animals under the control of the participant; Number 0453 REPRESENTATIVE BRICE made a motion to move HB 146, as amended, out of committee with accompanying zero fiscal notes and individual recommendations. There being no objection, CSHB 146(L&C) moved out of the House Labor and Commerce Standing Committee.