Legislature(2017 - 2018)BELTZ 105 (TSBldg)

03/29/2017 01:30 PM JUDICIARY

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01:33:26 PM Start
01:34:27 PM SB5
01:48:55 PM Confirmation Hearings
02:14:07 PM SB29
02:46:58 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearings: TELECONFERENCED
Melanie Bahnke - Commission on Judicial Conduct
Jeannine Jabaay - Commission on Judicial Conduct
Donald McClintock III - Commission on Judicial
Conduct
+= SB 15 E-CIGS: SALE TO AND POSSESSION BY MINOR TELECONFERENCED
<Bill Hearing Canceled>
*+ SB 29 REPEAL WORKERS' COMP APPEALS COMMISSION TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 5 POLITICAL CONTRIBUTION LIMITS/PROHIBITION TELECONFERENCED
Moved CSSB 5(JUD) Out of Committee
         SB  29-REPEAL WORKERS' COMP APPEALS COMMISSION                                                                     
                                                                                                                                
2:14:07 PM                                                                                                                    
CHAIR COGHILL announced  the consideration of SB  29. He welcomed                                                               
Commissioner Drygas and Director Marx.                                                                                          
                                                                                                                                
HEIDI  DRYGAS, Commissioner,  Department of  Labor and  Workforce                                                               
Development  (DOLWD),  Juneau, Alaska,  stated  that  SB 29  will                                                               
repeal the  Workers' Compensation  Appeals Commission  and return                                                               
the  appeals  process  to  the courts.  She  explained  that  the                                                               
commission  was created  to streamline  the  appeals process  and                                                               
provide  expertise  in   handling  workers'  compensation  cases.                                                               
However, since the commission was  created in 2005, 50 percent of                                                               
its  decisions on  the merits  have been  reversed by  the Alaska                                                               
Supreme Court. This  high reversal rate emphasizes  the fact that                                                               
the commission  is ineffective. The commission  is essentially an                                                               
appellate court,  but it is not  composed of a panel  of lawyers.                                                               
Rather,  the lay  commissioners  have no  legal  training, so  it                                                               
falls to the  commission's chair to resolve the  legal issues and                                                               
write  the commission's  decisions.  Therefore, the  commission's                                                               
decisions are  the work  of just  one person, not  the work  of a                                                               
panel with  legal expertise in  workers' compensation. This  is a                                                               
further departure  from the intent  of the  original legislation.                                                               
Also, the chair is either a  former member of the plaintiff's bar                                                               
or  the defense  bar, which  raises  concerns of  bias from  both                                                               
sides.                                                                                                                          
                                                                                                                                
COMMISSIONER  DRYGAS  reported   that  eliminating  the  Workers'                                                               
Compensation  Appeals  Commission  is  anticipated  to  save  the                                                               
department  over $220,000  for the  remainder of  FY18, and  over                                                               
$440,000 in subsequent  years. She emphasized that  the impact on                                                               
the public  will be  minimal. The  Court System,  which regularly                                                               
hears administrative appeals,  will see an increase  of about 20-                                                               
30  cases a  year.  She  understands that  the  Court System  can                                                               
absorb the  volume, which is  reflected in the zero  fiscal note.                                                               
She concluded, "The commission is  a specialty tribunal we can no                                                               
longer afford in this state's fiscal climate."                                                                                  
                                                                                                                                
2:17:46 PM                                                                                                                    
MARIE MARX, Director,  Workers' Compensation Division, Department                                                               
of  Labor  and  Workforce  Development  (DOLWD)  Juneau,  Alaska,                                                               
reviewed the following sectional analysis for SB 29:                                                                            
                                                                                                                                
     Section  1  amends  AS  23.30.005,   by  adding  a  new                                                                  
     subsection,   clarifying   that  unless   reversed   or                                                                    
     modified   by  a   court,  decisions   of  the   former                                                                    
     commission have  the force of legal  precedent. It also                                                                    
     specifies that the Workers'  Compensation Board will be                                                                    
     the entity responsible for  making sure those decisions                                                                    
     are available to the public.                                                                                               
                                                                                                                                
     Section   2  amends   AS   23.30.107(b),  by   removing                                                                  
     reference  to   the  appeals  commission   in  existing                                                                    
     statutes.                                                                                                                  
                                                                                                                                
     Section   3  amends   AS   23.30.108(d),  by   removing                                                                  
     reference  to   the  appeals  commission   in  existing                                                                    
     statutes.                                                                                                                  
                                                                                                                                
     Section   4  amends   AS   23.30.108(e),  by   removing                                                                  
     reference  to   the  appeals  commission   in  existing                                                                    
     statutes.                                                                                                                  
                                                                                                                                
     Section 5  amends AS  23.30, by  adding a  new section,                                                                  
     clarifying when a board order  becomes effective and is                                                                    
     final, when it  may be stayed, and  clarifying when the                                                                    
     board's  findings  are  conclusive  and  binding  on  a                                                                    
     reviewing court,  and when  the director  may intervene                                                                    
     in an appeal or petition for review.                                                                                       
                                                                                                                                
     Section  6  amends  AS  23.30.155,   by  adding  a  new                                                                  
     subsection  changing  a  statutory reference  from  the                                                                    
     appeals commission to the superior court.                                                                                  
                                                                                                                                
     Section  7  amends  AS  39.50.200(b)(31),  by  removing                                                                  
     reference to the appeals commission.                                                                                       
                                                                                                                                
     Section 8  amends the  uncodified law  of the  State of                                                                  
     Alaska,  by amending  Rule  204(c)(2)  Alaska Rules  of                                                                    
     Appellate  Procedure,  to   address  bonds  for  appeal                                                                    
     purposes.                                                                                                                  
                                                                                                                                
     Section  9  repeals  Rules  201.1,  401.1,  and  501.1,                                                                  
     Alaska Rules of Appellate Procedure.                                                                                       
                                                                                                                                
     Section   10   repeals   AS   [23.30.007,]   23.30.008,                                                                  
     23.30.009, 23.30.125,  23.30.127, 23.30.128, 23.30.129,                                                                    
     23.30.155(f),   23.30.395(10);  AS   39.25.110(40);  AS                                                                    
     44.64.020(a)(12),   and  44.64.020(a)(13).   These  are                                                                    
     statutes  that deal  with commission  proceedings, that                                                                    
     reference  the commission,  that  deal with  commission                                                                    
     appointments, and appeals to the commission.                                                                               
                                                                                                                                
     Section 11  amends the uncodified  law of the  State of                                                                  
     Alaska, by  adding a new  section relating  to indirect                                                                    
     court rule amendments.                                                                                                     
                                                                                                                                
     Section 12  amends the uncodified  law of the  State of                                                                  
     Alaska, by adding conditional  effect language that the                                                                    
     Act takes effect only if secs.  8, 9 and 11 receive the                                                                    
     two-thirds  majority vote  of  each  house required  by                                                                    
     art. IV, sec. 15 of the Alaska Constitution.                                                                               
                                                                                                                                
     Section 13  amends the uncodified  law of the  State of                                                                  
     Alaska,   by  adding   a   new   section  relating   to                                                                    
     applicability  of  amendments  to  proceedings  pending                                                                    
     before the Commission.                                                                                                     
                                                                                                                                
      Section 14 amends  the uncodified law of  the State of                                                                  
     Alaska,  by  adding  transitional  language  clarifying                                                                    
     proceedings  seeking review  of  a  board decision  and                                                                    
     order  that   have  not  yet  been   filed  before  the                                                                    
     Commission, must be  filed in the superior  court on or                                                                    
     after June  1, 2017  Any appeals  not completed  by the                                                                    
     appeals commission  on or before December  1, 2017 will                                                                    
     be  transferred to  the superior  court on  December 2,                                                                    
     2017,  and  clarifying   procedures  for  requests  for                                                                    
     reconsideration during the transition period.                                                                              
                                                                                                                                
     Section 15  amends the uncodified  law of the  State of                                                                  
     Alaska, by adding transitional language.                                                                                   
                                                                                                                                
     Section 16 clarifies when the Act takes effect.                                                                          
                                                                                                                                
2:21:31 PM                                                                                                                    
SENATOR COSTELLO  asked for  an explanation  of rules  602(c) and                                                               
(h), Alaska Rules  of Appellate Procedure. Those  are repealed in                                                               
the title of the House companion bill, but not in SB 29.                                                                        
                                                                                                                                
MS.  MARX  deferred  the  question to  Kimber  Rodgers  with  the                                                               
Department of Law.                                                                                                              
                                                                                                                                
2:22:38 PM                                                                                                                    
KIMBER  RODGERS,  Assistant  Attorney  General,  Civil  Division,                                                               
Labor and  State Affairs Section,  Department of  Law, Anchorage,                                                               
Alaska, explained  that those  rules relate  to notice  of appeal                                                               
and the parties  to the appeal. She said they  realized they were                                                               
indirectly  amending those  rules  because the  bill permits  the                                                               
director  of the  Division of  Workers' Compensation  to file  an                                                               
appeal for  review in the  superior court  or to intervene  in an                                                               
appeal or petition for review in the superior court.                                                                            
                                                                                                                                
SENATOR  COSTELLO   summarized  that  the  Senate   29  does  not                                                               
reference  those rules  in the  title,  but it's  implied in  the                                                               
bill.                                                                                                                           
                                                                                                                                
MS. RODGERS  said that's correct; it's  in the bill so  it needed                                                               
to  be referenced  in the  title.  The House  version also  added                                                               
language explaining the indirect amendment.                                                                                     
                                                                                                                                
CHAIR COGHILL suggested Nancy Meade supplement the explanation.                                                                 
                                                                                                                                
COMMISSIONER DRYGAS said she understands  that the changes in the                                                               
House version were at the request of the Court System.                                                                          
                                                                                                                                
2:25:49 PM                                                                                                                    
CHAIR COGHILL asked if Section  1 establishes that past decisions                                                               
of  the  Workers'  Compensation  Appeals  Commission  have  legal                                                               
precedent.                                                                                                                      
                                                                                                                                
MS. MARX explained that  Workers' Compensation Appeals Commission                                                               
appeals currently  have the force  of legal precedent.  Section 1                                                               
ensures  that decisions  that have  occurred remain  precedential                                                               
and binding on the Alaska Workers' Compensation Board.                                                                          
                                                                                                                                
CHAIR COGHILL asked  if the decisions the court  makes would also                                                               
have the force of legal precedent.                                                                                              
                                                                                                                                
MS.  MARX  replied  superior  court   decisions  would  not  have                                                               
precedential  effect on  the Alaska  Workers' Compensation  Board                                                               
decisions.  She  deferred   to  Ms.  Meade  to   talk  about  the                                                               
precedential value of superior court decisions.                                                                                 
                                                                                                                                
CHAIR  COGHILL  asked  if  the  precedent  is  nullified  if  the                                                               
superior court overturns a decision of the commission.                                                                          
                                                                                                                                
MS. MARX  explained that the  appeals commission  decisions would                                                               
not be  appealed to the  superior court  so that court  would not                                                               
have  the  opportunity  to  reverse   decisions  of  the  appeals                                                               
commission.   Should  the   bill   pass,   appeals  of   Workers'                                                               
Compensation Board  decisions would  go directly to  the superior                                                               
court.                                                                                                                          
                                                                                                                                
COMMISSIONER  DRYGAS added  that if  the commission  is repealed,                                                               
board decisions that  are appealed would go  straight to superior                                                               
court and  those decisions would  not have precedential  value on                                                               
the board. If  a case is appealed from the  superior court to the                                                               
Alaska  Supreme  Court,  that decision  would  have  precedential                                                               
value.                                                                                                                          
                                                                                                                                
2:29:37 PM                                                                                                                    
SENATOR MEYER asked who might oppose the bill.                                                                                  
                                                                                                                                
COMMISSIONER DRYGAS said she anticipates  there will be testimony                                                               
from both sides.  However, the testimony in favor  of keeping the                                                               
commission won't address the cost  of keeping the commission. She                                                               
related that when  she started as commissioner two  years ago she                                                               
was  asked to  look at  the statutes  and identify  what was  not                                                               
working   that  the   legislature  could   undue.  The   Workers'                                                               
Compensation  Appeals  Commission   was  identified  during  that                                                               
process. "It didn't live up to its expectations."                                                                               
                                                                                                                                
SENATOR MEYER  observed that  this will not  only save  the state                                                               
money but also provide faster resolution of appeals.                                                                            
                                                                                                                                
COMMISSIONER DRYGAS replied  it may not be faster but  it will be                                                               
just as fair.  The people she has talked to  from the plaintiffs'                                                               
bar are  ready to take a  little delay in exchange  for returning                                                               
to the judicial  process. The current process with  the board and                                                               
the commission is a double  administrative layer. That has always                                                               
been somewhat a concern.                                                                                                        
                                                                                                                                
SENATOR MEYER  asked if she said  that a large percentage  of the                                                               
decisions were appealed to the Supreme Court.                                                                                   
                                                                                                                                
COMMISSIONER  DRYGAS  clarified that  just  a  limited number  of                                                               
cases are  appealed to  the Supreme Court  after they  go through                                                               
the  commission process.  She noted  that the  case records  show                                                               
that there has been a significant  decline in the number of cases                                                               
that have  been appealed  from the board  to the  commission. The                                                               
anecdotal  evidence is  that individuals  thought they  would not                                                               
get  a fair  shake, so  they settled  short of  appealing to  the                                                               
commission.                                                                                                                     
                                                                                                                                
SENATOR  MEYER  noted that  Ms.  Meade  indicated in  a  previous                                                               
committee that this change would not  have a fiscal impact on the                                                               
Court System.                                                                                                                   
                                                                                                                                
CHAIR COGHILL  asked if  switching to the  court wouldn't  have a                                                               
cost factor for the worker and employer.                                                                                        
                                                                                                                                
2:37:02 PM                                                                                                                    
COMMISSIONER DRYGAS replied there is  a cost of doing business in                                                               
the  Court System  that every  citizen faces  when they  appeal a                                                               
case.  Filing  fees  and  associated  costs  probably  would  not                                                               
prevent a litigant  from appealing a case and  she didn't believe                                                               
attorney fees under either process would differ significantly.                                                                  
                                                                                                                                
CHAIR  COGHILL  asked  Ms.  Meade to  discuss  the  Court  System                                                               
perspective.                                                                                                                    
                                                                                                                                
2:39:05 PM                                                                                                                    
NANCY MEADE, General Counsel  and Deputy Administrative Director,                                                               
Administrative Staff, Alaska Court  System, advised that there is                                                               
a  significant difference  between SB  29 and  the amended  House                                                               
bill. The  House committee substitute  reflects work she  and the                                                               
department did  to ensure that  the procedures would be  the most                                                               
effective and efficient possible.                                                                                               
                                                                                                                                
She said the  differences between the two bills  are primarily in                                                               
Section  5. They  are mostly  procedural and  probably completely                                                               
noncontroversial.  For example,  the amended  House bill  ensures                                                               
that the procedure in the statute  about when a decision is final                                                               
and can be appealed aligns with  the procedure in the court rules                                                               
for when cases can be  appealed from administrative agencies. The                                                               
House  committee  substitute  reflects procedural  and  technical                                                               
differences that  are important to  the Court System to  ensure a                                                               
smooth process.                                                                                                                 
                                                                                                                                
MS. MEADE  said the court  can absorb these cases  without hiring                                                               
another judge or  additional staff, if that is the  choice of the                                                               
legislature. She estimated that the  court would get about 33 new                                                               
cases a year  for the superior court judges  statewide to handle.                                                               
Most of  the cases would  occur in  Anchorage where there  are 11                                                               
superior  court judges.  She advised  that  the process  probably                                                               
would not be any faster. She  estimated that the average time for                                                               
the judge to issue a decision might be up to a year.                                                                            
                                                                                                                                
She  explained that  it  was  at her  suggestion  that the  House                                                               
committee substitute  amends Rules  602(c) and (h),  Alaska Rules                                                               
of  Appellate Procedure.  These were  overlooked in  the original                                                               
versions of  the bill.  "Those are  added back  in and  the Rules                                                               
attorney will  basically cross out appeals  commission every time                                                               
it appears in the appellate rules  because they were added to the                                                               
appellate rules in 2005 when the change occurred."                                                                              
                                                                                                                                
2:44:16 PM                                                                                                                    
CHAIR COGHILL asked if preemption  allows a litigant to request a                                                               
different  judge,  whereas that  option  doesn't  exist with  the                                                               
commission.                                                                                                                     
                                                                                                                                
MS. MEADE  said yes. She  explained that  in any court  case each                                                               
party  has one  chance to  bump the  assigned judge.  There is  a                                                               
five-day  time  limit  for  doing   so,  which  would  not  be  a                                                               
significant delay in the resolution of the case.                                                                                
                                                                                                                                
2:46:50 PM                                                                                                                    
CHAIR COGHILL held SB 29 in committee for further review.                                                                       

Document Name Date/Time Subjects
Bahnke - Judicial Conduct.pdf SJUD 3/29/2017 1:30:00 PM
Jabaay - Judicial Conduct.pdf SJUD 3/29/2017 1:30:00 PM
McClintock - Judicial Conduct.pdf SJUD 3/29/2017 1:30:00 PM
SB 29 - Sectional Analysis.pdf SJUD 3/29/2017 1:30:00 PM
SB 29
SB 29 - Sponsor Statement.pdf SJUD 3/29/2017 1:30:00 PM
SB 29