Clearing A Runway For Planemakers

North Dakota Governor Edward T. Schafer was encountering a lot of turbulence in the air. On a recent flight across the vast rural state, his pilot, Roger Johnson, was haranguing him about the skyrocketing cost of flying, due largely to liability insurance. "He's a maniac about this," says Schafer, who flies around the state often.

Naturally, Schafer, a Republican, was interested when a group of academics and legislators came up with a scheme to attract airplane manufacturers to the state and mollify his pilot at the same time. But what really excited him was the bait. Instead of offering the typical package of tax breaks and cheap electricity, the North Dakotans proposed luring manufacturers with liability relief. Last month, North Dakota's House passed bills to limit aircraft makers' liability. Now, with approval expected from the Senate, the state is on the brink of enacting some of the most creative tort legislation anywhere. "We're out in front on this one," says Schafer.