Legislature(2003 - 2004)

04/14/2004 05:45 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
        SB 311-INSURANCE & WORKERS' COMPENSATION SYSTEM                                                                     
[The  committee heard  SB 311  at its  April 14,  2004 8:00  a.m.                                                               
meeting,  at which  time  it  adopted version  D  of  SB 311  and                                                               
addressed Amendments 1-3.]                                                                                                      
SENATOR FRENCH distributed copies  of his proposed amendments and                                                               
moved to adopt Amendment 4, which reads as follows.                                                                             
                      A M E N D M E N T  4                                                                                  
OFFERED IN THE SENATE                   BY Senator Hollis French                                                                
     TO:  CS SB 311(JUD), Draft Version "D"                                                                                     
Page 40, line 30                                                                                                                
     Following "determining"                                                                                                    
          Insert: ","                                                                                                           
Page 41, line 1                                                                                                                 
     Following "witness"                                                                                                        
          Delete:  "who appeared in the hearing is"                                                                             
          Insert:  "are"                                                                                                        
Page 41, lines 2-3                                                                                                              
     Following "commission"                                                                                                     
          Delete:  ", but all other findings, including the                                                                     
     weight to be accorded medical testimony and reports, may be                                                                
     set aside by the commission"                                                                                               
SENATOR THERRIAULT objected for the purpose of discussion.                                                                      
SENATOR FRENCH  told members that  the first part of  Amendment 4                                                               
is a grammatical  correction. The second part deletes  ", but all                                                               
other  findings,  including the  weight  to  be accorded  medical                                                               
testimony and  reports, may  be set aside  by the  commission" so                                                               
that  the panel's  determination  on all  of  the other  findings                                                               
would also  be binding. He added  that the reason for  a trial is                                                               
to  let the  trier of  fact  set the  weight of  the evidence  as                                                               
necessary and to let the appellate body review questions of law.                                                                
MS. KRISTEN  KNUDSEN, Assistant  Attorney General,  Department of                                                               
Law (DOL), told  members that the grammatical change is  due to a                                                               
drafting preference by the legal  drafter. The change to page 41,                                                               
line  1,  is  a  conforming amendment  to  an  amendment  adopted                                                               
earlier. She  said the heart  of the issue, regarding  the weight                                                               
of  the evidence,  is  on  lines 10  through  14  of Amendment  4                                                               
[beginning "page 41, lines 2-3"]  and that subject was thoroughly                                                               
hashed out earlier today. She  repeated that a basic principle of                                                               
administrative  law   requires  that  the  higher   level  of  an                                                               
administrative body  be given the  rule of  conclusiveness, which                                                               
says  the  higher-level  body  is  permitted  to  reconsider  and                                                               
reweigh all of the evidence.                                                                                                    
MR. SCOTT NORDSTRAND, Deputy Attorney  General, Department of Law                                                               
(DOL), said  he did not feel  the need to reiterate  the argument                                                               
about the need for de novo  review. He clarified that courts give                                                               
deference to  administrative agencies for the  standard of review                                                               
they apply because  courts do not necessarily  have the expertise                                                               
in all  areas of  administrative law. He  noted a  Superior Court                                                               
judge's  job   is  to  be   a  generalist,  while   the  workers'                                                               
compensation  appeals  commission  consists of  very  specialized                                                               
people  who  are  the  most   experienced  people  in  government                                                               
adjudicating these  cases. He  thought it  would be  ludicrous to                                                               
have  the  commission defer  to  the  expertise of  those  below,                                                               
except on the issue of credibility.                                                                                             
SENATOR THERRIAULT  moved to divide  Amendment 4 into  two parts.                                                               
Amendment  4a would  consist  of lines  1-9,  while Amendment  4b                                                               
would consist of lines 10-14.                                                                                                   
CHAIR  SEEKINS  announced  there  was no  objection  to  dividing                                                               
Amendment 4.                                                                                                                    
SENATOR THERRIAULT moved to adopt Amendment 4a, which reads:                                                                    
Page 40, line 30                                                                                                                
     Following "determining"                                                                                                    
          Insert: ","                                                                                                           
Page 41, line 1                                                                                                                 
     Following "witness"                                                                                                        
          Delete: "who appeared in the hearing is"                                                                              
          Insert: "are"                                                                                                         
CHAIR  SEEKINS noted  that without  objection,  Amendment 4a  was                                                               
SENATOR FRENCH moved to adopt Amendment 4b, which reads:                                                                        
Page 41, lines 2-3                                                                                                              
     Following "commission"                                                                                                     
          Delete: ", but all other findings, including the                                                                      
     weight to be accorded medical testimony and reports, may be                                                                
     set aside by the commission"                                                                                               
SENATOR THERRIAULT objected  and said he tends to  agree with Mr.                                                               
Nordstrand that  the commission  is comprised  of experts  in the                                                               
field with legal  backgrounds in labor and  management issues. He                                                               
thought the commission  will be the group to  develop the highest                                                               
level of expertise in the entire system.                                                                                        
SENATOR  OGAN said  his understanding  is that  contention arises                                                               
around the  fact that if  the specialist hired by  the commission                                                               
[to give a second medical  opinion] continually rules in favor of                                                               
the employee, that  specialist will no longer be  hired. He asked                                                               
for feedback on that perception.                                                                                                
MS.  KNUDSEN said  the  commission does  not  hire experts;  that                                                               
would  be done  prior to  the hearing  by the  director's office.                                                               
Those specialists  come from  a panel, but  have no  contract and                                                               
are not  paid for  by the  Department of  Labor. She  pointed out                                                               
that when weighing the evidence, the  board is going to look at a                                                               
lot of  things besides level  of expertise. For example,  in some                                                               
cases, familiarity  with the patient  will be more  important. In                                                               
other  cases  that involve  a  rare  disease, the  physician  who                                                               
specializes  in that  disease may  be given  greater weight.  She                                                               
said the  determination of weight  varies depending on  what kind                                                               
of question  is before the  panel, the relevancy of  the evidence                                                               
and other factors.                                                                                                              
SENATOR  OGAN said  from his  discussions  with constituents,  he                                                               
suspects that most claimants who go  to a doctor appointed by the                                                               
agency for a second opinion  believe that doctor's opinion may be                                                               
MS.  KNUDSEN   said  that  two   types  of   independent  medical                                                               
examinations take place;  Amendment 4b would not  change that. An                                                               
employer can  order an independent  medical examination  after 90                                                               
days. The  second type is  known as a second  independent medical                                                               
evaluation and is done by a  panel selected by the director, with                                                               
input from employer  and employee attorneys. She  said the second                                                               
independent medical evaluation will  not be affected by Amendment                                                               
SENATOR THERRIAULT  referred to  Sec.23.30.128 beginning  on page                                                               
40 and asked what the actual  impact would be if Amendment 4b was                                                               
MS. KNUDSEN  said the  language in Amendment  4b was  included in                                                               
version D  as a failsafe redundancy  to specify the weight  to be                                                               
accorded  medical testimony.  She  asked that  Mr. Lisankie  also                                                               
address that question.                                                                                                          
MR.  PAUL   LISANKIE,  Director  of  the   Division  of  Workers'                                                               
Compensation,  told members  that  he agrees  with Ms.  Knudsen's                                                               
SENATOR THERRIAULT  asked, "Is it a  - Mr. Chairman -  you'd like                                                               
to have but not a gotta have?"                                                                                                  
MS. KNUDSEN  said it would  be a "like  to have" but  because the                                                               
final sentence will  remain in that section,  the commission will                                                               
continue  to have  the power  to set  aside the  findings of  the                                                               
hearing panel.                                                                                                                  
CHAIR SEEKINS asked if objection  to Amendment 4b was maintained.                                                               
Hearing none, he announced that Amendment 4b was adopted.                                                                       
CHAIR SEEKINS asked Mr. Giuchici to comment.                                                                                    
MR. GIUCHICI  said his  only concern  was how  the weight  of the                                                               
medical records and testimony was  going to be addressed and what                                                               
the commission would set aside.  As a workers' compensation board                                                               
member for many  years, he said the panels have  always wanted to                                                               
have  as much  information as  possible to  reach a  decision. He                                                               
feels it is  contrary to have a newly  created appeals commission                                                               
over the  hearing panel that  may or  may not consider  the facts                                                               
and decisions  reached by the  hearing panel, which is  closer to                                                               
the  players.  He  noted  people   have  spoken  of  the  appeals                                                               
commission as the  panel of experts, but their  only dealing with                                                               
workers'  compensation  will be  slanted  one  way or  the  other                                                               
because  not many  attorneys represent  both sides.  He felt  the                                                               
interpretations  will   change  over   time,  depending   on  the                                                               
administration that appoints them. He  believes the system now is                                                               
a happy  medium with  one industry  and one  labor representative                                                               
and a fairly neutral hearing officer.                                                                                           
CHAIR SEEKINS  asked Ms. Knudsen  to describe how the  members of                                                               
the  appeals  commission  are  selected   and  the  criteria  for                                                               
MS.  KNUDSEN said  they will  be  appointed by  the governor  and                                                               
confirmed  by the  legislature.   They  must have  five years  of                                                               
experience in the field of  workers' compensation and admitted to                                                               
practice law  in Alaska.  They are appointed  for five  years and                                                               
can be removed for cause. [Page 8-9 of version D.]                                                                              
CHAIR SEEKINS  asked if  there is any  requirement to  appoint an                                                               
attorney who has  represented plaintiffs and an  attorney who has                                                               
represented defendants.                                                                                                         
MS. KNUDSEN  said yes, in  Sec. 23.30.007(b). That  language came                                                               
from the State of Illinois.                                                                                                     
MR. NORDSTRAND  said, in response  to Mr. Giuchici's  comment and                                                               
questions  about  the commission  being  too  political, DOL  had                                                               
extensive discussions  with labor representatives on  that issue.                                                               
The reality  is that the  commission members will be  selected in                                                               
an  identical  way to  which  the  current workers'  compensation                                                               
board is selected. He said people  that come to the current board                                                               
actually  work for  labor or  as risk  managers for  industry. He                                                               
thought  it  is  disingenuous  to suggest  that  using  the  same                                                               
process   with  the   same  criteria   would  create   a  slanted                                                               
CHAIR SEEKINS  said he would not  consent, either in the  bill or                                                               
during  confirmation  hearings,  to   a  selection  process  that                                                               
creates an imbalanced board or commission.                                                                                      
MR. GIUCHICI had no further comments at this time.                                                                              
MR.  STEVE CONSTANTINO  told members  he served  on the  workers'                                                               
compensation board as a hearing  officer and currently represents                                                               
claimants before that board. He  stated opposition to the de novo                                                               
review  by the  appellate commission  provision in  the bill.  He                                                               
said he has not heard any  discussion on the pragmatic effects of                                                               
that provision and said by  allowing a second administrative body                                                               
to reweigh the evidence, every  non-prevailing party will have an                                                               
incentive to  take "a second  bite of the  apple." If one  of his                                                               
clients did  not prevail  in front  of the  board, he  would have                                                               
every  incentive  to  appeal since  the  appeals  commission  can                                                               
reweigh  the evidence  and  come to  a  different conclusion.  He                                                               
cautioned that will  result in a dramatic increase  in the number                                                               
of appeals.  He said in 1982,  the legislature, at the  urging of                                                               
business, wanted finality  at the hearing level.  The current law                                                               
makes the findings  of fact and the weight to  be ascribed at the                                                               
hearing level conclusive.  The courts are only  allowed to review                                                               
board decisions  on the substantial evidence  standard; in effect                                                               
that  is a  determination of  whether the  board made  a rational                                                               
MR.  CONSTANTINO  said   what  concerns  him  most   is  that  he                                                               
represents  people whose  workers'  compensation  benefits are  a                                                               
matter of  health and economic survival.  The insurance companies                                                               
have  substantially  greater  resources  than  his  clients  and,                                                               
unlike  clients, typically  benefit  from  delay. He  anticipates                                                               
that every claim  he wins in a contested matter  before a hearing                                                               
officer  will be  appealed to  the  new commission  and that  his                                                               
clients  will be  "starved out"  because they  will be  unable to                                                               
last the  additional 6 to  9 months  awaiting a decision.  If his                                                               
clients prevail  in front  of the  board, he  fears they  will be                                                               
forced  into disadvantageous  settlement agreements  because they                                                               
simply  cannot  wait any  longer  to  get  a final  decision.  He                                                               
expressed concern  that he  has not heard  any discussion  on the                                                               
committee's  part about  the pragmatic  effects that  the "second                                                               
bite  of the  apple" will  have on  the justice  of the  workers'                                                               
compensation   setting.   In   addition,   the   legislature   is                                                               
contemplating  revising  a system  that  has  served Alaska  well                                                               
since Statehood.                                                                                                                
MS.  CONSTANCE  LUCIE  (ph),  told   members  she  has  practiced                                                               
workers'  compensation  law in  Alaska  for  16 years,  primarily                                                               
representing employers.  Regarding a previous comment  made about                                                               
the function  and role of  the appeals commission, she  urged the                                                               
committee to not allow the  function of the appeals commission to                                                               
be reduced  to a powerless  rubber stamp. She believes  this body                                                               
will  be composed  of people  with  significant expertise.  Their                                                               
ability  to  weigh  the  evidence on  review  is  important.  She                                                               
disagreed with Mr. Constantino that the  de novo review will be a                                                               
"second bite of the apple." She  believes that would occur if the                                                               
parties  were  able  to  introduce   new  evidence.  The  appeals                                                               
commission  will have  the ability  to look  again at  the record                                                               
already  made. She  said  the  credibility determinations  should                                                               
never  be  disturbed  because  the   hearing  panel  applies  the                                                               
"eyeball" test  to the witnesses.  However, weighing  evidence is                                                               
entirely  different and  means looking  at the  range of  medical                                                               
opinions,  for example,  and deciding  that some  credentials are                                                               
superior to others.  She urged members to move the  CS for SB 311                                                               
as it  stands from committee and  to not gut the  function of the                                                               
appeals commission.                                                                                                             
CHAIR  SEEKINS asked  whether there  is  any time  limit for  the                                                               
decision once the appeal is taken to the commission.                                                                            
MS. KNUDSEN said  the outside range of time is  90 days, which is                                                               
half of  the time allowed  to the  Superior Court right  now. She                                                               
said one  benefit of the  new system is  that it will  reduce the                                                               
cost of preparation of records.                                                                                                 
TAPE 04-40, SIDE B                                                                                                            
MR.  CHANCY CROFT,  representing himself,  told members  that the                                                               
previous CS  adopted by  the committee  [version 23-G2]  says, in                                                               
Sec.  23.30.120(a),  commission  proceedings  must  be  completed                                                               
within  90 days  after  the  written briefing  on  the appeal  is                                                               
completed or  the oral  argument is  held but  there are  no time                                                               
limits on  when the  commission must  have the  record completed,                                                               
transcripts  prepared, notification,  or the  time lapse  between                                                               
when the appeal  is filed and briefs are due.  He emphasized that                                                               
there is not  a timeframe, as exists now, for  how quickly a case                                                               
can be heard by the commission so it is wide open for delay.                                                                    
MS.  KNUDSEN responded  that DOL  anticipates  the commission  to                                                               
establish timeframes  through its  own regulations. She  said she                                                               
was  speaking to  a  reduction  in the  amount  of time  required                                                               
because copying the entire record will be necessary.                                                                            
CHAIR SEEKINS  said he was concerned  because he did not  see any                                                               
timeframes  other than  after  a written  briefing  on appeal  is                                                               
completed or oral  arguments are heard, whichever  is later. That                                                               
could take  up to  90 days, and  then reconsideration  could take                                                               
another 30  days so the  process could  be dragged out  for quite                                                               
some time.                                                                                                                      
MR. NORDSTRAND  said the timeframes  that Mr. Croft  is referring                                                               
to, in  terms of appeals to  the Superior Court, are  governed by                                                               
the  appellate rules.  The commission  is charged  with preparing                                                               
its  own rules  of business,  just as  the court  has established                                                               
such  rules for  Superior Court.  He thought  the committee  will                                                               
have  to have  faith, to  some degree,  that the  commission will                                                               
have an interest  in having this process expedited  as quickly as                                                               
the Superior Court does now.  He reminded members that other than                                                               
moving  the  record  from  the hearing  panel's  purview  to  the                                                               
commission, the  other things that need  to be done are  not done                                                               
by   the   commissioners,   i.e.,  writing   briefs,   requesting                                                               
extensions, etc.,  therefore lawyers could cause  delays, not the                                                               
CHAIR  SEEKINS  said  he understands  that  but  was  questioning                                                               
whether the [panel]  is mandated by statute to  complete the pre-                                                               
hearing briefings.                                                                                                              
MR. NORDSTRAND said it is not.                                                                                                  
SENATOR OGAN  expressed concern about the  legislature putting an                                                               
arbitrary time  limit on the  process. He then  suggested putting                                                               
in a provision so that commissioners  do not get paid if too many                                                               
delays occur, similar to withholding judges' pay.                                                                               
SENATOR  FRENCH  offered  that  once  a  judge  has  all  of  the                                                               
information,  s/he has  to make  a  decision in  six months.  Mr.                                                               
Croft's point  was that nothing  forces the commissioners  to get                                                               
to that decision point in a reasonable amount of time.                                                                          
CHAIR SEEKINS felt that is a good point.                                                                                        
MR.  NORDSTRAND countered  that nothing  forces a  Superior Court                                                               
judge to do it either.                                                                                                          
CHAIR SEEKINS  said he was looking  for a way to  prevent a delay                                                               
from unnecessarily hurting someone with a legitimate appeal.                                                                    
SENATOR OGAN  said the committee  has heard  conflicting opinions                                                               
about  the   unintended  consequences   of  this   procedure  and                                                               
suggested including a  sunset provision in the  bill or requiring                                                               
a report to the legislature for the purpose of review.                                                                          
6:45 p.m.                                                                                                                       
CHAIR SEEKINS  said he is also  concerned about how this  will go                                                               
into effect.                                                                                                                    
MS. KNUDSEN told  members that version D contains  a provision on                                                               
page 11 that  requires the chair of the commission  to prepare an                                                               
annual   report  that   includes  data   on  time   periods.  DOL                                                               
anticipated concerns  from legislators  and the public  about the                                                               
effectiveness of this new system.                                                                                               
SENATOR OGAN replied:                                                                                                           
     With  all  due respect,  we've  got  more reports  than                                                                    
     Carters has pills  and I want to meet the  person - the                                                                    
     [Senate]  President might  be the  only one  that reads                                                                    
     most  of the  stuff that  goes over  his desk,  I'm not                                                                    
     sure,  because  I know  him  by  reputation, he's  very                                                                    
     diligent about that  but I don't think  he's Superman -                                                                    
     he can  read it all.  I know I'm not.  So I would  be a                                                                    
     little  more  comfortable   with  something  besides  a                                                                    
     report...that's why we put sunsets  in some laws, so we                                                                    
     have to bring that law  before us so that commission or                                                                    
     that board  or that whatever  and say yea,  things seem                                                                    
     to  be working  fine, move  it on.  Or, two  years from                                                                    
     now, you know what? Maybe we  need to put it in the ALJ                                                                    
     panel if  that's law, or  maybe this thing had  a bunch                                                                    
     of unintended  consequences and we  need to go  back to                                                                    
     the old system. At least it puts it at the fore.                                                                           
MS.  PAM  LABOLLE,  President  of the  Alaska  State  Chamber  of                                                               
Commerce [the Chamber], stated support  for the CS and opposition                                                               
to Amendment  4b. She  expressed concern  that Amendment  4b will                                                               
dramatically limit  the review of  the hearing panel  decision by                                                               
the appeals commission.  Amendment 4b would make  the entire bill                                                               
worthless,  therefore, if  Amendment 4b  is adopted,  the Chamber                                                               
would  oppose the  entire bill.  On behalf  of Thyes  Schaub, who                                                               
represents  the Associated  General Contractors  (AGC), she  said                                                               
the  AGC's board  voted yesterday  to support  the CS  and oppose                                                               
Amendment 4b.                                                                                                                   
SENATOR  FRENCH  moved  to  adopt Amendment  5,  which  reads  as                                                               
                      A M E N D M E N T  5                                                                                  
OFFERED IN THE SENATE                         BY SENATOR FRENCH                                                                 
     TO:  CSSB 311(JUD), Draft Version "D"                                                                                      
Page 1, lines 9 - 10:                                                                                                           
     Delete "Workers' Compensation Appeals Commission"                                                                        
     Insert "workers' compensation hearings office"                                                                           
Page 1, line 11:                                                                                                                
     Delete "Workers' Compensation Appeals Commission"                                                                        
     Insert "workers' compensation hearings office"                                                                           
Page 2, lines 4 - 5:                                                                                                            
     Delete "providing for supreme court jurisdiction of appeals                                                              
from the Workers' Compensation Appeals Commission;"                                                                           
Page 4, line 27:                                                                                                                
     Delete "Workers' Compensation Appeals Commission"                                                                      
     Insert "workers' compensation hearings office"                                                                         
Page 4, lines 29 - 30:                                                                                                          
     Delete "Workers' Compensation Appeals Commission"                                                                      
     Insert "workers' compensation hearings office"                                                                         
Page 5, line 6:                                                                                                                 
     Delete "Workers' Compensation Appeals Commission"                                                                      
     Insert "workers' compensation hearings office"                                                                         
Page 6, lines 20 - 21:                                                                                                          
     Delete "Workers' Compensation Appeals Commission"                                                                          
     Insert "workers' compensation hearings office"                                                                             
Page 7, line 14:                                                                                                                
     Delete "chair of the commission"                                                                                           
     Insert "chief hearing officer"                                                                                             
Page 8, line 16, through page 11, line 30:                                                                                      
     Delete all material and insert:                                                                                            
          "Sec.   23.30.007.   Workers'   compensation   hearings                                                           
     office.   (a)  There  is established  in  the Department  of                                                             
     Labor  and  Workforce  Development a  workers'  compensation                                                               
     hearings office.   The hearing examiners  and hearing panels                                                               
     hear original  petitions when  a claim  is filed  under this                                                               
     chapter  and   have  jurisdiction   to  hear   appeals  from                                                               
     decisions and orders of the director.                                                                                      
          (b) The commissioner shall appoint a chief hearing                                                                    
     officer and hearing examiners.                                                                                             
          (c) The chief hearing officer may                                                                                     
               (1) employ and supervise hearing office staff,                                                                   
     hearing  examiners,   and  hearing  panels  and   appoint  a                                                               
     hearings office clerk;                                                                                                     
               (2) establish and implement a time management                                                                    
     system  for   the  hearings   office,  staff,   and  hearing                                                               
               (3) assign the work of the hearing examiners,                                                                    
     hearing panels, and  staff so that hearings  and appeals are                                                               
     resolved  as  expeditiously  and  competently  as  possible,                                                               
     including designating hearing  examiners to hear preliminary                                                               
     matters; and                                                                                                               
               (4) prepare an annual budget of the hearings                                                                     
     office and hearing panels.                                                                                                 
          (d) The hearings office, in its administrative                                                                        
     capacity,  shall maintain,  index,  and  make available  for                                                               
     public  inspection the  final  administrative decisions  and                                                               
     orders  of the  hearing examiners  and hearing  panels.   To                                                               
     promote  consistency among  legal determinations,  the chief                                                               
     hearing  officer may  review and  circulate among  the other                                                               
     hearing examiners the drafts  of formal decisions, decisions                                                               
     upon reconsideration, and other  legal opinions of the other                                                               
     hearing examiners  of the hearings  office.  The  drafts are                                                               
     confidential documents and are not subject to disclosure.                                                                  
          (e) The hearings office, in its administrative                                                                        
     capacity, may  adopt regulations implementing  its authority                                                               
     and duties under this chapter,  including rules of procedure                                                               
     and evidence  for proceedings  before hearing  examiners and                                                               
     hearing  panels in  workers' compensation  proceedings under                                                               
     AS 23.30.090 and  23.30.110 and for the  adjudication of all                                                               
     claims and petitions under this  chapter.  The provisions of                                                               
     AS 44.62  (Administrative   Procedure  Act)  apply   to  the                                                               
     adoption of regulations by the hearings office.                                                                            
          (f) The hearings office, in its administrative                                                                        
     capacity, may  adopt and alter  an official seal and  do all                                                               
     things necessary, convenient, or  desirable to carry out the                                                               
     powers  expressly granted  or  necessarily  implied in  this                                                               
Page 14, line 6:                                                                                                                
     Delete "with the office of the commission [BY"                                                                         
     Insert "by a hearing examiner or hearing panel ["                                                                      
Page 15, line 6:                                                                                                                
     Delete "commission"                                                                                                    
     Insert "hearings office"                                                                                               
Page 30, line 23:                                                                                                               
     Delete "commission"                                                                                                    
     Insert "hearings office"                                                                                               
Page 30, lines 25 - 26:                                                                                                         
     Delete "office of the commission"                                                                                      
     Insert "hearings office"                                                                                               
Page 31, line 1:                                                                                                                
     Delete ", hearing panel, or commission"                                                                                
     Insert "or hearing panel"                                                                                              
Page 31, line 13:                                                                                                               
     Delete "commission, and the commission clerk "                                                                     
     Insert "hearings office, and the hearings office"                                                                  
Page 32, line 3, following "defense.", through line 16:                                                                         
     Delete all material.                                                                                                       
     Insert "[IF A DISCOVERY DISPUTE COMES BEFORE THE BOARD FOR                                                                 
REVIEW OF A DETERMINATION BY  THE BOARD'S DESIGNEE, THE BOARD MAY                                                               
NOT CONSIDER ANY  EVIDENCE OR ARGUMENT THAT WAS  NOT PRESENTED TO                                                               
THE BOARD'S  DESIGNEE, BUT  SHALL DETERMINE  THE ISSUE  SOLELY ON                                                               
THE BASIS OF  THE WRITTEN RECORD. THE DECISION BY  THE BOARD ON A                                                               
DISCOVERY DISPUTE SHALL  BE MADE WITHIN 30 DAYS.  THE BOARD SHALL                                                               
UPHOLD   THE  DESIGNEE'S   DECISION  EXCEPT   WHEN  THE   BOARD'S                                                               
DESIGNEE'S DETERMINATION IS AN ABUSE OF DISCRETION.]"                                                                           
Page 32, line 31:                                                                                                               
     Delete "office of the commission"                                                                                      
     Insert "hearings office"                                                                                               
Page 33, line 9:                                                                                                                
     Delete "commission clerk"                                                                                              
     Insert "chief hearing officer"                                                                                         
Page 34, line 1:                                                                                                                
     Delete "commission"                                                                                                    
     Insert "director"                                                                                                      
Page 35, line 11:                                                                                                               
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 35, line 16:                                                                                                               
     Delete ", but is not a public employee for purposes of                                                                     
AS 23.40"                                                                                                                       
Page 36, line 3:                                                                                                                
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 36, line 10:                                                                                                               
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 37, lines 8 - 9:                                                                                                           
     Delete "the commission, a hearing panel, or a hearing                                                                  
examiner ["                                                                                                                 
     Insert "a hearing panel or hearing examiner [THE"                                                                      
Page 37, lines 14 - 15:                                                                                                         
     Delete "the commission, a hearing panel, or a hearing                                                                  
examiners ["                                                                                                                
     Insert "a hearing panel or hearing examiner [THE"                                                                      
Page 37, line 17:                                                                                                               
     Delete "commission clerk"                                                                                              
     Insert "chief hearing officer"                                                                                         
Page 37, line 19:                                                                                                               
     Delete "commission"                                                                                                    
     Insert "chief hearing officer"                                                                                         
Page 38, line 3:                                                                                                                
     Delete "office of the commission"                                                                                          
     Insert "hearings office"                                                                                                   
Page 38, line 6:                                                                                                                
     Delete "office of the commission"                                                                                          
     Insert "hearings office"                                                                                                   
Page 38, line 12:                                                                                                               
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 38, line 14, through page 43, line 3:                                                                                      
     Delete all material and insert:                                                                                            
   "* Sec. 63. AS 23.30.125(a) is amended to read:                                                                          
          (a) A compensation order becomes effective when filed                                                                 
     with the director [IN THE OFFICE OF THE BOARD] as provided                                                             
     in AS 23.30.110,  and, unless proceedings  to suspend  it or                                                           
     set  it aside  are instituted  as  provided in  (c) of  this                                                               
     section,  it becomes  final  on  the 31st  day  after it  is                                                               
   * Sec. 64.  AS 23.30.125(c) is amended to read:                                                                            
          (c) If not in accordance with law, a compensation                                                                     
     order  filed  by a  hearing  examiner  or hearing  panel  as                                                           
     provided  in (a)  of this  section may  be suspended  or set                                                           
     aside, in  whole or in part,  through injunction proceedings                                                               
     in  the  superior  court  brought by  a  party  in  interest                                                               
     against the  division [BOARD] and  all other parties  to the                                                           
     proceedings [BEFORE THE BOARD].   The payment of the amounts                                                               
     required  by  an  award  may not  be  stayed  pending  final                                                               
     decision in  the proceeding unless  upon application  for an                                                               
     interlocutory  injunction the  court on  hearing, after  not                                                               
     less than three days' notice  to the parties in interest and                                                               
     the director [BOARD],  allows the stay of  payment, in whole                                                           
     or in  part, where irreparable damage  would otherwise ensue                                                               
     to the  employer.  The  order of  the court allowing  a stay                                                               
     must  [SHALL]   contain  a  specific  finding,   based  upon                                                           
     evidence submitted to the court  and identified by reference                                                               
     to  it,   that  irreparable  damage  would   result  to  the                                                               
     employer, and specifying the nature of the damage.                                                                         
   * Sec. 65.  AS 23.30.125(d) is amended to read:                                                                            
          (d)  If an employer fails to comply with a                                                                            
     compensation order making an award  that has become final, a                                                               
     beneficiary of the  award or the director  [BOARD] may apply                                                           
     for the enforcement of the order  to the superior court.  If                                                               
     the court determines  that the order was made  and served in                                                               
     accordance with law,  and that the employer  or the officers                                                               
     or agents  of the  employer have failed  to comply  with it,                                                               
     the court  shall enforce obedience  to the order by  writ of                                                               
     injunction or  by other  proper process  to enjoin  upon the                                                               
     employer  and  the  officers  and  agents  of  the  employer                                                               
     compliance with the order.                                                                                                 
   * Sec. 66.  AS 23.30.125(f) is amended to read:                                                                            
          (f) Subject to an employer's or employee's burden of                                                                  
     proof, a  finding of  fact made by  the hearing  examiner or                                                           
     hearing panel [BOARD]  as a part of a  compensation order is                                                           
     conclusive  unless  the  court  specifically  finds  that  a                                                               
     reasonable  person could  not  have  reached the  conclusion                                                               
    made by the hearing examiner or hearing panel [BOARD]."                                                                 
Renumber the following bill sections accordingly.                                                                               
Page 47, lines 15 - 22:                                                                                                         
     Delete all material.                                                                                                       
Renumber the following bill sections accordingly.                                                                               
Page 57, line 4:                                                                                                                
     Delete ", the commission,"                                                                                             
Page 57, lines 22 - 23:                                                                                                         
     Delete all material.                                                                                                       
Renumber the following paragraphs accordingly.                                                                                  
Page 58, lines 10 - 11:                                                                                                         
     Delete " Appeals Commission (AS 23.30.007) and Workers'                                                                
Page 58, line 19:                                                                                                               
     Delete "sec. 85"                                                                                                           
     Insert "sec. 86"                                                                                                           
Page 58, line 20:                                                                                                               
     Delete "sec. 85"                                                                                                           
     Insert "sec. 86"                                                                                                           
Page 59, lines 26 - 27:                                                                                                         
     Delete: "WORKERS' COMPENSATION APPEALS COMMISSION AND"                                                                     
Page 59, line 28, following "BOARD.", through page 60, line 1,                                                                  
following the first occurrence of "(b)":                                                                                        
     Delete all material.                                                                                                       
Page 60, line 18:                                                                                                               
     Delete "chair of the commission"                                                                                           
     Insert "chief hearing officer"                                                                                             
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 60, line 19:                                                                                                               
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 60, line 20:                                                                                                               
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 60, lines 28 - 29:                                                                                                         
     Delete all material.                                                                                                       
Renumber the following paragraphs accordingly.                                                                                  
Page 61, line 19:                                                                                                               
     Delete "sec. 108"                                                                                                          
     Insert "sec. 109"                                                                                                          
Page 61, line 31:                                                                                                               
     Delete "Workers' Compensation Appeals Commission"                                                                          
     Insert "workers' compensation hearings office"                                                                             
Page 62, lines 1 - 2:                                                                                                           
     Delete "under AS 23.30.008, enacted by sec. 10 of this Act"                                                                
Page 62, line 4:                                                                                                                
     Delete "Section 113(a)"                                                                                                    
     Insert "Section 114(a)"                                                                                                    
Page 62, line 5:                                                                                                                
     Delete "sec. 114"                                                                                                          
     Insert "sec. 115"                                                                                                          
SENATOR THERRIAULT objected for the purpose of discussion.                                                                      
SENATOR  FRENCH explained  that Amendment  5 essentially  removes                                                               
the appeals  commission and leaves  in place the  hearing office,                                                               
as set forth in the CS.  Under Amendment 5, the essential reforms                                                               
of  the bill  would be  retained but  appeals would  be taken  to                                                               
Superior Court.  He believes the appeals  commission is oversized                                                               
for the number  of appeals it will  hear and he has  not seen any                                                               
hard  evidence of  inconsistent decisions  being issued  from the                                                               
existing  hearing  office.  He   pointed  out  that  the  appeals                                                               
commission  will consist  of three  individuals earning  combined                                                               
salaries of about  $300,000 per year hearing on  average 36 cases                                                               
per year and  at most 60 cases.  He noted that 60  cases equal 10                                                               
percent of  the caseload of  any single Superior Court  judge. He                                                               
then announced  a conflict because  if Amendment 5 fails,  he may                                                               
consider applying for a job with the appeals commission.                                                                        
CHAIR  SEEKINS asked  Senator  French  if he  has  five years  of                                                               
experience in workers' compensation law.                                                                                        
SENATOR  FRENCH clarified  the bill  requires five  years of  bar                                                               
membership  and  experience  in  workers'  compensation  law.  He                                                               
jested  that  he would  cite  these  hearings as  experience.  He                                                               
maintained  that  frankly,  he   believes  the  proposed  appeals                                                               
commission is  too expensive and too  big of an idea  for a small                                                               
With  no  further  discussion,  a   roll  call  vote  was  taken.                                                               
Amendment 5  failed with Senators  French and Ellis in  favor and                                                               
Senators Ogan, Therriault and Seekins opposed.                                                                                  
SENATOR FRENCH offered Amendment 6, which reads as follows.                                                                     
                      A M E N D M E N T  6                                                                                  
OFFERED IN THE SENATE                   BY Senator Hollis French                                                              
     TO:  CS SB 311 (JUD), Draft Version "D"                                                                                  
Page 8, line 21:                                                                                                                
     Following "governor":                                                                                                      
          Insert "from among two or more persons nominated as                                                                   
     most qualified by the Alaska Judicial Council"                                                                             
SENATOR FRENCH told members the purpose  of Amendment 6 is to put                                                               
into the law the idea that  the members of the appeals commission                                                               
have highly important  jobs with enormous oversight  and would be                                                               
nominated using the  same method as judges and  tax court masters                                                               
are,  that being  by  the Alaska  Judicial  Council. The  council                                                               
would do  a poll  and select three  nominees from  the candidates                                                               
who score  highest on the  poll. The  governor can then  select a                                                               
candidate from the three names or reject all of the names.                                                                      
SENATOR THERRIAULT asked for a response from the administration.                                                                
CHAIR SEEKINS  said he  does not  understand Amendment  6 because                                                               
the governor  would have  three names from  which to  choose, yet                                                               
the  Alaska Judicial  Council would  only be  required to  submit                                                               
SENATOR  OGAN clarified  that the  Alaska  Judicial Council  will                                                               
nominate at least two candidates for each of the three seats.                                                                   
SENATOR FRENCH agreed that is the intent of Amendment 6.                                                                        
CHAIR SEEKINS  asked if the  Alaska Judicial Council  is required                                                               
to submit more than two names for each position.                                                                                
SENATOR FRENCH said  it must submit at least two  and that is how                                                               
judicial appointments are made now.                                                                                             
SENATOR  THERRIAULT asked  Senator French  how he  would envision                                                               
the balance between employer and employee through this process.                                                                 
SENATOR FRENCH replied:                                                                                                         
     It would be as the  bill imagines. You would be looking                                                                    
     for either the  at-large - or the chair, who  is not of                                                                    
     either  [indisc.- coughing]  or the  two other  members                                                                    
     and you would  select, you'd be - when you  put out the                                                                    
     request or the nomination  advertisement, which they do                                                                    
     right  now, they  advertise a  new seat  in, you  know,                                                                    
     Palmer  Superior  Court  or Ketchikan  Superior  Court,                                                                    
     that's kind of  the idea. They'll put  out a nomination                                                                    
     and  say,  hey,  we  need an  employer  member  of  the                                                                    
     appeals commission and so all  you people who think you                                                                    
     fit into that category apply  and then there will be an                                                                    
     interview process  at the Judicial Council  and they'll                                                                    
     talk  to  all  those   folks  who  consider  themselves                                                                    
     candidates  and  they'll pick  the  two  or three  that                                                                    
     should go up to the governor for selection.                                                                                
SENATOR  THERRIAULT  asked  who  makes the  determination  as  to                                                               
whether the  application is the  "round peg fitting in  the round                                                               
SENATOR  FRENCH   said  the   decision,  regarding   whether  the                                                               
applicant fits  the "employer" description for  the employer seat                                                               
if the person qualified for both  seats, would be a dual one. The                                                               
Judicial Council would  vet that and the governor  would have the                                                               
ultimate say.                                                                                                                   
CHAIR  SEEKINS  expressed  concern   that  the  current  Judicial                                                               
Council  process is  a popularity  contest,  even when  selecting                                                               
judges. He questioned how that could be prevented.                                                                              
SENATOR  FRENCH said  the  current process  is  not a  popularity                                                               
contest  and noted  that Susan  Parkes got  the highest  bar poll                                                               
results but  was not nominated  by the Judicial Council.  He said                                                               
Alaska's system of selecting judges  is recognized as amongst the                                                               
best in the nation.                                                                                                             
CHAIR SEEKINS wondered how bad  the selection process is in other                                                               
Several people responded "Terrible."                                                                                            
SENATOR OGAN said he would feel  better if the nominees had to be                                                               
confirmed by the legislature.                                                                                                   
CHAIR SEEKINS affirmed  they would be, according to  section b on                                                               
page 8.                                                                                                                         
SENATOR OGAN said legislative confirmation  will act as a circuit                                                               
breaker, whereas that does not  occur with judicial appointments.                                                               
He noted  if no  legislative confirmation  was required  he would                                                               
have supported Amendment 6.                                                                                                     
CHAIR  SEEKINS asked  if Amendment  6  is intended,  in part,  to                                                               
address the rumor that three seats have already been selected.                                                                  
SENATOR FRENCH said it  is not. He believes it is  a good idea in                                                               
general. He  added if he were  working for a living  in the legal                                                               
profession, he  would seriously  consider applying  because these                                                               
will be high paying jobs with low caseloads.                                                                                    
SENATOR THERRIAULT  clarified that  unless directly spoken  to in                                                               
the  constitution,  the  legislative power  to  confirm  attaches                                                               
itself to those positions that  are quasi-judicial or regulatory.                                                               
He added:                                                                                                                       
     It's about the power issue  where the function that the                                                                    
     individual is  playing is  not just  administrative but                                                                    
     bleeds   over  into   a   semi-judicial   and  so   the                                                                    
     legislature does  have the power to  confirm and that's                                                                    
     what these people  would be doing and so  that's why we                                                                    
     do have  confirmation powers here. Getting  back to the                                                                    
     previous  bill,  the  trustees of  the  permanent  fund                                                                    
     exercise  none of  those powers  and  that's why  we're                                                                    
     barred from having confirmation hearings.                                                                                  
With no further  discussion on Amendment 6, the  roll was called.                                                               
Amendment 6 failed  with Senators Ellis and French  in favor, and                                                               
Senators Therriault, Ogan and Seekins opposed.                                                                                  
SENATOR  FRENCH  moved  to  adopt Amendment  7,  which  reads  as                                                               
                      A M E N D M E N T  7                                                                                  
OFFERED IN THE SENATE                   BY Senator Hollis French                                                              
     TO:  CSSB 311 (JUD), Draft Version "D"                                                                                   
Page 35, line 15                                                                                                                
Following: "AS 39.27.011(a)":                                                                                                   
     Delete ", but is not a public employee for purposes of                                                                     
     AS 23.40"                                                                                                                  
SENATOR THERRIAULT objected for the purpose of discussion.                                                                      
SENATOR FRENCH  referred to the language  on page 35, line  15 of                                                               
version  D, and  said it  pertains to  how hearing  examiners fit                                                               
into  state law  with  respect to  their  personnel status.  They                                                               
would  be classified  employees,  which means  they  can only  be                                                               
discharged for cause,  but they are not public  employees for the                                                               
purpose of AS  23.40, which means they have  no union protection.                                                               
Therefore, if  they are  involved in  a dispute  concerning their                                                               
job function,  they could be  fired. With union  protection, they                                                               
could engage in a grievance  process and arbitration. Amendment 7                                                               
would give  the hearing  officers more  protection in  their jobs                                                               
and more  flexible ways  to deal  with personnel  problems during                                                               
the course of their jobs. He  pointed out these employees will be                                                               
making high  dollar decisions,  some of which  may be  adverse to                                                               
the  state.   Therefore,  they  need  as   much  independence  as                                                               
7:05 p.m.                                                                                                                       
CHAIR SEEKINS asked if the  classification of these employees was                                                               
MR. NORDSTRAND said  this provision was discussed  at length with                                                               
representatives of  the AFL-CIO and their  affiliated unions. All                                                               
agreed these  employees should not  be subject to PERA.  The only                                                               
other hearing examiner in this  classification they could find is                                                               
a classified employee at the  Department of Revenue. Version D is                                                               
consistent  with the  current status.  He  said for  the sake  of                                                               
avoiding the  appearance of impropriety,  it is  inappropriate to                                                               
have members of the GGU hear cases of union employees.                                                                          
CHAIR  SEEKINS referred  to  the second  page  of the  comparison                                                               
chart  and noted  that all  parties agreed  that those  positions                                                               
should be  classified but excluded  from PERA. He then  asked Mr.                                                               
Nordstrand  if he  is  aware of  any  judicial or  quasi-judicial                                                               
positions that are included in PERA.                                                                                            
MR. NORDSTRAND was not.                                                                                                         
SENATOR THERRIAULT  maintained his  objection to the  adoption of                                                               
Amendment 7,  therefore a roll  call vote was taken.  Amendment 7                                                               
failed  with  Senators Ellis  and  French  voting in  favor,  and                                                               
Senators Ogan, Therriault and Seekins opposed.                                                                                  
SENATOR  FRENCH  moved  to  adopt Amendment  8,  which  reads  as                                                               
                      A M E N D M E N T  8                                                                                  
OFFERED IN THE SENATE                   BY Senator Hollis French                                                              
     TO:  CS SB 311 (JUD), Draft Version "D"                                                                                  
Page 35, line 1:                                                                                                                
     Following (j):                                                                                                             
          Insert:  "The hearing panel may order payment of                                                                      
     interim  compensation and  medical benefits  paid pending  a                                                               
     final   compensation   order   when   the   presumption   of                                                               
     compensability  in AS  23.30.120 has  not been  overcome and                                                               
     the claimant is otherwise entitled to compensation.                                                                        
          (k)  "                                                                                                                
SENATOR THERRIAULT objected for the purpose of discussion.                                                                      
SENATOR FRENCH explained  that Amendment 8 says  that inasmuch as                                                               
the sentences following (j) say  that the hearing panel can award                                                               
summary  judgment against  the claimant,  the  hearing panel  can                                                               
award summary judgment in favor  of the claimant. In other words,                                                               
if it appears the claimant  has an abnormally strong claim, there                                                               
is  no  reason to  hold  up  payment  while  the claim  is  being                                                               
adjudicated throughout the system.                                                                                              
SENATOR THERRIAULT questioned how the  money would be returned if                                                               
the claimant lost the case.                                                                                                     
SENATOR FRENCH said the payor could sue.                                                                                        
MS. KNUDSEN  said there would  be no way  to get the  money back.                                                               
The  Supreme Court,  in Cross  vs. Panalaska  (ph), decided  that                                                               
compensation  can  only  be recouped  from  future  payments  for                                                               
compensation on the same claim.  She then clarified that (j) says                                                               
that a party may petition for  summary decision on all or part of                                                               
a claim and,  if all reasonable discovery has been  done, a party                                                               
may obtain summary judgment, which  includes claimants so Senator                                                               
French's concern has already been addressed.                                                                                    
SENATOR FRENCH asked what happens if that award is appealed.                                                                    
MS. KNUDSEN said in the  current system, a Supreme Court decision                                                               
from  Olson Logging  vs. Larson  (ph), sets  out that  continuing                                                               
payments of compensation are treated  differently for the purpose                                                               
of  allowing continued  payment of  compensation, whereas  a lump                                                               
sum,  which  cannot  be  repaid,  is  treated  with  a  different                                                               
standard. Version D  would continue the Olson  Logging vs. Larson                                                               
standard so that  a person who receives a  continuing award would                                                               
still receive continuing payments  of compensation while the case                                                               
is under appeal.                                                                                                                
SENATOR  FRENCH  maintained  the  presumption  of  compensability                                                               
means a person  hurt while working is  due workers' compensation.                                                               
Amendment  8 will  allow the  payment of  benefits to  an injured                                                               
worker so  that worker does not  have to wait for  the process to                                                               
be completed.                                                                                                                   
SENATOR THERRIAULT said Ms. Knudsen  just said the current system                                                               
allows that worker to get some  money if he is receiving periodic                                                               
payments. However,  it prevents  lump sum payments  because there                                                               
is no way to recover those payments if the claimant loses.                                                                      
MR.  NORDSTRAND  explained that  summary  judgment  means that  a                                                               
person is  entitled to  a judgment. That  is very  different from                                                               
suggesting that prior  to a hearing and  presentation of evidence                                                               
or decision on  the merits, an employer is required  to pay. That                                                               
is way  outside of the  ballpark of what  is done now  and raises                                                               
issues of due process.                                                                                                          
CHAIR SEEKINS asked  if any time requirement  to publish findings                                                               
MS. KNUDSEN said  this kind of a petition is  treated in the same                                                               
manner as any other petition,  under section 110. A response must                                                               
be issued in 20 days and,  if there is no objection, the claimant                                                               
would go in front of the  hearing panel and the decision would be                                                               
made in 30 days.                                                                                                                
CHAIR SEEKINS asked  Senator French how he  envisions the hearing                                                               
panel would  presume compensability  without first  going through                                                               
that process.                                                                                                                   
SENATOR  FRENCH said  the presumption  attaches  in any  workers'                                                               
compensation claim at the moment  of the injury. He indicated the                                                               
bargain of  the workers' compensation  system is that  the worker                                                               
has  given  up  his  right  to  sue  in  court  in  exchange  for                                                               
presumption of compensability.                                                                                                  
CHAIR SEEKINS asked  if medical benefits would be due  on day one                                                               
unless the presumption is overcome.                                                                                             
SENATOR FRENCH said it must be upon order of a hearing panel.                                                                   
CHAIR SEEKINS felt  it would be risky to pay  up front before the                                                               
hearing panel has reviewed the case.                                                                                            
SENATOR  THERRIAULT asked  if this  would apply  to all  workers'                                                               
compensation  cases   and  the  percentage  of   cases  in  which                                                               
claimants are found to qualify.                                                                                                 
MS. KNUDSEN  estimated about 20,000  notices of injury  come into                                                               
the  system for  which  no litigation  occurs. Approximately  770                                                               
claims were filed last year.                                                                                                    
MR.  LISANKIE said  he could  not provide  those numbers  at this                                                               
time.  However, in  2002, almost  26,000 reports  of injury  were                                                               
filed.  Of that  number, only  1500 workers'  compensation claims                                                               
were filed.                                                                                                                     
SENATOR THERRIAULT  asked if some  of the 1500 claims  were filed                                                               
because those  injured workers did  not feel they  were receiving                                                               
enough compensation.                                                                                                            
MR. LISANKIE said  yes, but there are claims  that revolve around                                                               
whether the worker is entitled to any compensation.                                                                             
SENATOR THERRIAULT asked for estimated numbers.                                                                                 
MS. KNUDSEN said from her own  case list of 76 active cases, five                                                               
to ten  revolve around  whether the employee  is entitled  to any                                                               
compensation or  around the  range of  compensation. They  do not                                                               
revolve around whether the claim is compensable.                                                                                
TAPE 04-41, SIDE A                                                                                                            
MS.  KNUDSEN  said  in  her experience,  a  very  low  percentage                                                               
revolves around that  kind of an issue. She added  that given the                                                               
fact  that compensation  paid cannot  be recouped  except out  of                                                               
future payments,  it must be paid  at no more than  20 percent of                                                               
the  payment.  She  cautioned that  interim  compensation  awards                                                               
would  raise  serious  due process  concerns,  particularly  when                                                               
there is  a valid defense  because they require employers  to pay                                                               
compensation  and medical  benefits  without  the possibility  of                                                               
recouping those payments.                                                                                                       
CHAIR SEEKINS  said if he  was a workers'  compensation attorney,                                                               
he would automatically file a claim for interim compensation.                                                                   
SENATOR THERRIAULT  maintained his  objection to the  adoption of                                                               
Amendment 8,  therefore a roll  call vote was taken.  Amendment 8                                                               
failed  with Senators  French and  Ellis in  favor, and  Senators                                                               
Ogan, Therriault and Seekins opposed.                                                                                           
SENATOR  FRENCH  moved  to  adopt Amendment  9,  which  reads  as                                                               
                      A M E N D M E N T  9                                                                                  
OFFERED IN THE SENATE                   BY Senator Hollis French                                                              
     TO:  CS SB 311 (JUD), Draft Version "D"                                                                                    
Page 39, line 23:                                                                                                               
     Following "damage."                                                                                                        
          Insert:  "Requiring payment of an award of continuing                                                                 
     compensation or  medical benefits is not  per se irreparable                                                               
     damage.   The   commission   must   also   find   that   the                                                               
     defendant/carrier  likely will  prevail on  appeal before  a                                                               
     stay of continuing benefits may be granted."                                                                               
SENATOR THERRIAULT objected for the purpose of discussion.                                                                      
SENATOR  FRENCH  explained  that  Amendment  9  pertains  to  the                                                               
logging case  discussed today and  makes explicit  that requiring                                                               
payment  of  an  award  of  continuing  compensation  of  medical                                                               
benefits  is  not  per  se  reparable  damage.  Therefore,  if  a                                                               
claimant  has won  a case  at  the panel  level and  the case  is                                                               
appealed,   the  employer   must  pay   continuing  compensation.                                                               
Amendment 9  makes explicit the  Supreme Court's decision  in the                                                               
logging case.                                                                                                                   
MS. KNUDSEN responded that the  intent expressed earlier was that                                                               
the Olson  Logging vs.  Larson decision will  not be  impacted by                                                               
this bill. She continued:                                                                                                       
     The  intent was  that  this would  continue  to be  the                                                                    
     standard in Olson Logging that  would be applied by the                                                                    
     commission in  looking at appeals.  I would  point out,                                                                    
     however, that  the amendment  does not  precisely track                                                                    
     the Supreme  Court's statement in  Olson Logging  and I                                                                    
     think  goes  beyond  it.  So I  would  suggest  if  our                                                                    
     concern  here is  that Olson  Logging remain  in place,                                                                    
     that  the  statement  of  intent  here  is  appropriate                                                                    
     legislative  history to  be cited  but  that we  should                                                                    
     probably leave  the Supreme Court  to speak  for itself                                                                    
     in using its own words.                                                                                                    
MR.  NORDSTRAND  pointed out  that  the  language  in the  CS  is                                                               
essentially identical  to the language  from the  appellate rule,                                                               
which  is the  standard to  be applied  in workers'  compensation                                                               
cases  seeking a  stay.  DOL took  the very  same  rule that  the                                                               
Supreme  Court applied  in that  case  and plugged  it into  this                                                               
statute. DOL had no intention  of changing the Olson Logging case                                                               
decision. He  cautioned that if  the committee adds  language, it                                                               
could  inadvertently  change  the  result  of  Olson  Logging  by                                                               
changing the standard that was applied.                                                                                         
SENATOR THERRIAULT  asked Senator French  if his intent is  to go                                                               
beyond the findings in the Olson Logging case.                                                                                  
SENATOR FRENCH replied:                                                                                                         
     I read the case and, to  me, this is what the case says                                                                    
     is that  simply paying  continuing compensation  is not                                                                    
     irreparable  damage.   A  lump  sum  may   be  but  not                                                                    
     continuing  benefits  and  I'm   trying  to  avoid  the                                                                    
     situation where  someone has been  injured on  the job,                                                                    
     has won his case in front  of the hearing panel, is due                                                                    
     his continuing  benefits, and  suddenly now  he's going                                                                    
     to  be  appealed  to  an  appeals  commission  and  the                                                                    
     employer's going to say, and  besides the fact that I'm                                                                    
     going to win here I  shouldn't have to pay this injured                                                                    
     worker  any money  because  that  could be  irreparable                                                                    
     damage, me  having to  pay out this  money that  we now                                                                    
     know you can't get back.  So I'm trying to make certain                                                                    
     that  you  can't  simply  argue   that  having  to  pay                                                                    
     benefits that you are due  under the workers' comp stat                                                                    
     that  you've been  deemed  to owe  under  a hearing  in                                                                    
     front of a  panel is not the only reason  that you stop                                                                    
     paying someone when you go to the appeals commission.                                                                      
7:30 p.m.                                                                                                                       
SENATOR THERRIAULT responded that  other testimony countered that                                                               
is the  outcome of  the court system's  application of  the Olson                                                               
Logging standard.                                                                                                               
MS. KNUDSEN said her concern  is the second sentence of Amendment                                                               
9  as it  is not  exactly what  the Supreme  Court said  in Olson                                                               
Logging. She said  the outcome from that case is  that it is very                                                               
difficult to obtain a stay of continuing benefits.                                                                              
CHAIR SEEKINS  asked Senator French if  he sees Amendment 9  as a                                                               
restatement of the Olson Logging decision.                                                                                      
SENATOR FRENCH said that is correct.                                                                                            
CHAIR  SEEKINS asked  Ms. Knudsen  if it  is her  contention that                                                               
Amendment 9 expands the Olson Logging decision.                                                                                 
MS. KNUDSEN said it is.                                                                                                         
CHAIR  SEEKINS  asked  if  the  Olson  Logging  decision  is  not                                                               
disturbed by  this legislation, Senator  French's intent  will be                                                               
carried out.                                                                                                                    
MS. KNUDSEN said it will.                                                                                                       
SENATOR FRENCH said  Amendment 9 cannot extend  the Olson Logging                                                               
decision. He asked members to  determine whether Amendment 9 is a                                                               
good idea, based on its own merits, and to consider:                                                                            
     ...whether it is or is not  a good idea to make certain                                                                    
     that an  employer cannot get  a stay on the  money that                                                                    
     he  owes  an injured  worker  under  the workers'  comp                                                                    
     statutes in a favorable decision  in front of a hearing                                                                    
     panel. And I  think we're all in  agreement that that's                                                                    
     not a  good idea,  that you want  to make  certain that                                                                    
     that employer begins  to pay the damages  and begins to                                                                    
     pay the  workers' comp  money that  he owes  an injured                                                                    
     worker. And furthermore, you want  to make certain that                                                                    
     before  a stay  is issued,  that someone  has said  hey                                                                    
     you've got a good chance  of winning before we're going                                                                    
     to give  you a stay. And  I think both of  those common                                                                    
     sense  ideas are  embodied in  this amendment  and that                                                                    
     they are worthy of passage.                                                                                                
SENATOR THERRIAULT said he would  feel much more comfortable with                                                               
the  amendment  if  it  was  drafted  by  Legislative  Legal  and                                                               
Research Services.                                                                                                              
SENATOR  FRENCH said  he would  be  happy to  run this  amendment                                                               
through Legislative  Legal and Research  Services, as well  as to                                                               
examine putting the  appeals commission on a tight  leash to make                                                               
sure it is rendering timely decisions.                                                                                          
SENATOR THERRIAULT  suggested, if  Senator French's intent  is to                                                               
make  sure  that Olson  Logging  is  not disturbed,  including  a                                                               
letter of intent instead of amending the bill.                                                                                  
MR. NORDSTRAND responded:                                                                                                       
     My opinion  is that  the nuances  involved here  are so                                                                    
     precise and that to try  to do something different than                                                                    
     say what the appellate rule  says, with regard to these                                                                    
     stays, could  run us into  trouble. All we did  was use                                                                    
     the standard  that Olson Logging used,  under their own                                                                    
     appellate rules, and plug it  into the statute word for                                                                    
     word. Doing more could create  folly. We do not intend,                                                                    
     and we'll  be happy to  tell anybody who wants  to hear                                                                    
     it, that Olson Logging remains  in effect and we're not                                                                    
     intending to change it in any way.                                                                                         
CHAIR SEEKINS said he agrees with  the concept of Amendment 9 but                                                               
he  is unsure  about  its construction.  He  then shared  Senator                                                               
French's concern about  the timeframe and those  people who could                                                               
be  adversely   affected  if  the   Olson  Logging   decision  is                                                               
subverted, but he does not think it is necessary to restate it.                                                                 
With  no  further discussion,  a  roll  call  vote was  taken  on                                                               
Amendment 9.  The amendment  failed to  be adopted  with Senators                                                               
Ogan, Therriault,  and Seekins opposed,  and Senators  French and                                                               
Ellis in favor.                                                                                                                 
MR.  MATTHEW MAXNER  (ph), representing  himself,  said his  main                                                               
concern  with this  legislation is  that no  new evidence  can be                                                               
introduced at  the appeals level.  He believes a party  should be                                                               
able to introduce  new evidence at that level  because a claimant                                                               
could get a  third or fourth medical opinion  that disputes prior                                                               
CHAIR SEEKINS recapped that Amendments  2, 4a and 4b were adopted                                                               
SENATOR OGAN stated  his intent to make an effort  to see how the                                                               
changes this  legislation will  make are  working in  the future,                                                               
specifically  to see  whether  the  workers' compensation  system                                                               
should  be  changed  to  an  independent  administrative  hearing                                                               
SENATOR  THERRIAULT  moved  CSSB 311(JUD)  and  its  accompanying                                                               
fiscal notes out of committee with individual recommendations.                                                                  
SENATORS ELLIS and FRENCH objected.                                                                                             
CHAIR   SEEKINS  commented   that  this   legislation  has   been                                                               
challenging and that he plans to  review Amendment 9. If he finds                                                               
it will do no  harm, he will propose it in  the next committee of                                                               
referral.  He  thought  all  members have  attempted  to  find  a                                                               
balance between fairness and efficiency and  to do no harm to the                                                               
injured  worker  with  a  legitimate   claim.  He  commended  all                                                               
participants for their hard work.                                                                                               
CHAIR SEEKINS  asked for  a roll  call vote.  The motion  to move                                                               
CSSB 311(JUD)  from committee  carried with  Senators Therriault,                                                               
Ogan  and  Seekins  in  favor,  and  Senators  French  and  Ellis                                                               

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