Legislature(2003 - 2004)

03/04/2004 01:32 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
        SB 311-INSURANCE & WORKERS' COMPENSATION SYSTEM                                                                     
CHAIR CON  BUNDE called  the Senate  Labor and  Commerce Standing                                                             
Committee meeting  to order  at 1:32  p.m. Present  were Senators                                                               
Gary Stevens, Ralph  Seekins, Hollis French and  Chair Con Bunde.                                                               
Senator Bettye Davis was excused.  The first order of business to                                                               
come before the committee was SB 311.                                                                                           
MR. DOUGLAS  L. SMITH, Arctic Slope  Regional Corporation, Energy                                                               
Services Division,  supported SB 311  as it is written.  "It does                                                               
not sway  the advantage  to either company  or employee,  but, in                                                               
fact,  favors both."  He  did not  have a  copy  of the  proposed                                                               
CHAIR BUNDE said a copy of the amendment was being faxed to him.                                                                
MR.   MIKE  JENSEN,   Anchorage  attorney   who  specializes   in                                                               
representing  injured  workers  in Alaska  workers'  compensation                                                               
claims,  said he  has 20  years of  experience in  this area  and                                                               
three  other attorneys,  Chancy Croft,  Joe Calamites  and Steven                                                               
Constantino  have extensive  experience  as well.  They have  all                                                               
looked at the proposed amendment and have some concerns.                                                                        
     We do not feel the  current system is broken and should                                                                    
     be  fixed,  especially  if  it  means  creating  a  new                                                                    
     bureaucracy  that is  estimated  to cost  in excess  of                                                                    
     $700,000 a year more than the current system.                                                                              
     The current  system does  provide for  a representative                                                                    
     of  industry  and  a  representative  of  labor.  These                                                                    
     proposed amendments would take that  away - so that the                                                                    
     decision  maker would  be solely  a hearing  officer at                                                                    
     the  initial   administrative  level  and   then  three                                                                    
     commissioned   members   who   are  selected   by   the                                                                    
     As far as the current  system and expediency, we do not                                                                    
     think  the  amendments would  add  anything  as far  as                                                                    
     expediency.   The  current   system  issues   over  300                                                                    
     opinions per year.  Of those, only 10  percent are ever                                                                    
     appealed to  the courts. Of  those 10 percent,  I would                                                                    
     say only a  third are ever reversed. In  other words of                                                                    
     the minority of  appeals that are taken  to the courts,                                                                    
     the vast  majority of those  appeals wind  up affirming                                                                    
     what the board has done.                                                                                                   
     As  far as  the time  concerns that  the administration                                                                    
     pointed  out, they  did cite  the case  of Bradbury  v.                                                                    
     Chugach  Electric.  That  was   the  case  in  which  I                                                                    
     represented Mr.  Bradbury whose wife died  at work. The                                                                    
     administration states  that the  time [indisc.]  as the                                                                    
     reason for making these proposed changes.                                                                                  
     I  should  point out  to  Mr.  Chairman and  the  other                                                                    
     members  of  the  committee...that decision,  first  of                                                                    
     all, it  wasn't 1,400 days. The  administration was off                                                                    
     by  about a  half  a year  and, of  that  time, over  a                                                                    
     third,  if not  more,  was spent  between the  Superior                                                                    
     Court  waiting  for  the Supreme  Court  to  issue  its                                                                    
     decision. As far  as the board was  concerned, it heard                                                                    
     the case within six to  nine months after the claim was                                                                    
     filed  and  we  don't   see  how  creating  an  appeals                                                                    
     commission would in any way speed that process up.                                                                         
     But, if the  appeals commission is a  good amendment to                                                                    
     adopt, we  feel it  could be improved  to make  it less                                                                    
     political  in  that  we would  urge  the  committee  to                                                                    
     require that  the appeals commission have  at least one                                                                    
     representative who has experience  with the practice of                                                                    
     law  representing  industry  and  then  let  the  other                                                                    
     representative  or  member  with  experience  represent                                                                    
     labor.  Then,  of course,  the  third  member could  be                                                                    
     either  way.  At least  that  way,  there would  be  an                                                                    
     assurance that  at least depending  upon who is  in the                                                                    
     administration, Democrat  or Republican, that  at least                                                                    
     one representative of industry  is always there as well                                                                    
     as one  representative of labor. It  would thereby take                                                                    
     out  what   I  feel  would  otherwise   politicize  the                                                                    
     In  addition,  we  would propose  that  the  commission                                                                    
     members  be given  terms of  up  to a  minimum of  five                                                                    
     years.   That,  again,   would  foster   the  idea   of                                                                    
     depoliticizing  the commission.  In addition,  it would                                                                    
     enlarge the pool of  applicants that the administration                                                                    
     could  choose  from  in selecting  commission  members,                                                                    
     because  with five  years, it's  my understanding  that                                                                    
     the  commission  member would  be  vested  in the  PERS                                                                    
     system thereby  making it  more attractive  for members                                                                    
     to be found.                                                                                                               
     There are some other changes  that we would propose. As                                                                    
     far as  at the hearing  level, we would  recommend that                                                                    
     instead of having the decision  decided strictly by one                                                                    
     hearing  officer,  that these  cases  be  heard as  the                                                                    
     board  is currently  constituted with  a representative                                                                    
     of industry  again and a representative  of labor again                                                                    
     with  a  hearing  officer on  that  board.  That  would                                                                    
     insure, again, that this  process remains neutral, that                                                                    
     it   remains   fair  to   both   sides   and  that   it                                                                    
     depoliticizes the system.                                                                                                  
MR. JENSEN said  additional changes were stated in  a letter that                                                               
would  be sent  to the  Legislature as  soon as  the other  three                                                               
lawyers  had signed  off  on  it. It  asks  that intent  language                                                               
states that  nothing in  the amendment  changes the  substance of                                                               
law -  clarifying that the  changes are strictly  procedural and,                                                               
thereby, avoiding additional unnecessary litigation.                                                                            
     In addition, I  think that if attorney's  fees could be                                                                    
     limited  to $400  without obtaining  board or  director                                                                    
     approval of  fees, that would  allow a lot  of needless                                                                    
     litigation  in that  currently a  lot of  unrepresented                                                                    
     injured  workers are  unable to  get the  advice of  an                                                                    
     attorney and  then wind up  filing claims that  need to                                                                    
     be litigated by industry.  By allowing these workers to                                                                    
     at  least seek  the  advice of  competent counsel,  may                                                                    
     avoid filing any unnecessary  litigation that it caused                                                                    
     from misinformation and misunderstanding of the act.                                                                       
He  said  these changes  would  make  a  much fairer  system  and                                                               
protect   the  interests   of  both   industry   and  labor   and                                                               
depoliticize  the system.  He also  understands that  the ad  hoc                                                               
committee was not  involved in the proposed changes  and now that                                                               
they are involved he thought:                                                                                                   
     By creating a  permanent workers' compensation advisory                                                                    
     council...  with  two  members from  industry  and  two                                                                    
     members from  labor, as  well as  the members  from the                                                                    
     guaranty  association, the  public or  the Division  of                                                                    
     Insurance  might  assist  the  Legislature  in  getting                                                                    
     competent advice and proposals to act upon.                                                                                
MR.  DON  GRAY,  Claims   Administrator,  Arctic  Slope  Regional                                                               
Corporation,  supported  SB  311   as  written  and  without  the                                                               
amendment. [Indisc.]                                                                                                            
MR. DENNIS MELLINGER, Arctic Slope, supported SB 311.                                                                           
MS.  LAURA JACKSON,  Claims Manager,  University of  Alaska, said                                                               
she  is   also  a  member  of   the  Multidisciplinary  Insurance                                                               
Association of Alaska and past  president of the Alaska Adjusters                                                               
Association.  She  is currently  on  the  board of  the  Workers'                                                               
Compensation  Committee of  Alaska and  a  member of  the ad  hoc                                                               
committee. She  said she was  testifying on her own  behalf today                                                               
as a person  who has assisted people through  the Alaska Workers'                                                               
Compensation system for over 17 years.                                                                                          
     I am  here to tell  you that the  Workers' Compensation                                                                    
     system  in   Alaska  is   broken.  It   is  cumbersome,                                                                    
     confusing, slow-moving and not  user friendly to either                                                                    
     the employer  or the employee. The  recommended changes                                                                    
     will simplify  and clarify  the process.  Replacing the                                                                    
     delays  due  to  the  lengthy  Superior  Court  appeals                                                                    
     process with an appeals  commission comprised of people                                                                    
     knowledgeable about the act and  the process will speed                                                                    
     the resolution of the disputes.                                                                                            
     In   addition,   in   response  to   Senator   French's                                                                    
     amendment,  the decisions  that  come  out of  Superior                                                                    
     Court are inconsistent as have  been the decisions that                                                                    
     come  out of  the board,  itself, and  their panels.  I                                                                    
     believe  that people  specifically knowledgeable  about                                                                    
     the  act  and  the  act  as  it  was  intended  by  the                                                                    
     Legislature,  you  our  representatives,  when  it  was                                                                    
     promulgated, that  it would be  a more  consistent fair                                                                    
     and  expeditious  process  being heard  by  people  who                                                                    
     understand and know  the act and are  familiar with it.                                                                    
     It is my belief that in  short order we will all find a                                                                    
     workers' compensation  system that will indeed  be more                                                                    
     efficient and predictable.  Therefore, it will decrease                                                                    
     the cost to  employers and the time  delay to employees                                                                    
     and  more  importantly  result  in  fair  and  adequate                                                                    
     compensation to our injured workers.                                                                                       
MS. JACKSON  "put on her  ad hoc hat" to  read a letter  into the                                                               
record  from the  Alaska  Labor Management  Ad  Hoc Committee  on                                                               
Workers' Compensation, dated March  4, 2004, addressed to Speaker                                                               
of the House, Pete Kott, and Senate President, Gene Therriault.                                                                 
     The    Ad   Hoc    Committee,    which   consists    of                                                                    
     representatives  from industry  and labor  historically                                                                    
     has  met periodically  to  address  issues that  affect                                                                    
     substantive  changes, issues  that  affect benefits  in                                                                    
     the Workers'  Compensation Act. In  January, management                                                                    
     and labor  decided that time  had come to  address such                                                                    
     issues  again.  In  the  meantime,  the  administration                                                                    
     proposed SB 311 and HB  450, which deal with procedural                                                                    
     issues, issues  regarding the makeup and  management of                                                                    
     the  board. Although  the Ad  Hoc  Committee had  never                                                                    
     dealt  with such  issues previously,  labor recommended                                                                    
     the Ad  Hoc Committee consider the  bill. The committee                                                                    
     reached agreement  on sections  of the bill  that refer                                                                    
     to  the Guaranty  Fund,  capping out-of-state  workers'                                                                    
     compensation at  what the  employees would  have earned                                                                    
     in-state,   placing   administrative   responsibilities                                                                    
     formerly  rested   in  the  board  with   the  Workers'                                                                    
     Compensation  Division  director,  uninsured  penalties                                                                    
     and  replace   the  Superior  Court  with   an  appeals                                                                    
     commission.  The  committee  has scheduled  no  further                                                                    
     meetings  on  the  issue. We  do,  however,  anticipate                                                                    
     meeting in the future  on substantive issues of concern                                                                    
     to both management and labor.                                                                                              
     Judith A. Peterson, President, WCCA                                                                                        
     Kevin Dougherty, Alaska Laborers                                                                                           
     Members of the Ad Hoc Committee                                                                                            
MR. KEVIN DOUGHERTY, Co-Chair, Ad Hoc Committee, said he is                                                                     
attorney for the Alaska District Council of Laborers and that                                                                   
they did reach agreement on the Guaranty Fund and the non-                                                                      
resident cost  of living  adjustment and  agreed to  preserve the                                                               
board  as it  is,  but  have an  appeals  commission replace  the                                                               
Superior Court and  added some uninsured employer  penalties of a                                                               
civil nature.  They hadn't agreed  on a  number of issues  and he                                                               
suggested that those items not move forward.                                                                                    
     I would  like to  point out that  the Ad  Hoc Committee                                                                    
     has   been  in   place  for   about  23   years.  After                                                                    
     legislation  that we  have worked  on jointly  with the                                                                    
     employer, the  decreases in premiums  have added  up to                                                                    
     over  40  percent  decrease in  premiums.  During  that                                                                    
     time, our  goal has been  to retain benefits and  we go                                                                    
     at it  in the same sphere  as here. So, it  is critical                                                                    
     that the  administration's bill does nothing  to impact                                                                    
     benefits. That's,  of course, why my  organization, the                                                                    
     Alaska Laborers, are  opposed to section 9  of the bill                                                                    
     and  opposed to  section 10  of the  bill, which  would                                                                    
     have wiped out the bill.  But, fortunately, we have the                                                                    
     news to report to you, as Ms. Jackson said, that we do                                                                     
     have agreement on five solid issues which we hope will                                                                     
     help the act overall.                                                                                                      
CHAIR BUNDE asked if anyone else wanted to testify on SB 311.                                                                   
Seeing no one, he closed public testimony.                                                                                      
SENATOR FRENCH moved amendment 1.                                                                                               
                      A M E N D M E N T  1                                                                                  
OFFERED IN THE SENATE                         BY SENATOR FRENCH                                                                 
     TO:  SB 311                                                                                                                
Page 1, lines 10 - 11:                                                                                                          
     Delete "Workers' Compensation Appeals Commission"                                                                        
     Insert "workers' compensation hearings office"                                                                           
Page 1, line 12:                                                                                                                
     Delete "Workers' Compensation Appeals Commission"                                                                        
     Insert "workers' compensation hearings office"                                                                           
Page 2, lines 5 - 6:                                                                                                            
     Delete "providing for supreme court jurisdiction of appeals                                                              
from the Workers' Compensation Appeals Commission;"                                                                           
Page 5, line 22:                                                                                                                
     Delete "Workers' Compensation Appeals Commission"                                                                      
     Insert "workers' compensation hearings office"                                                                         
Page 5, line 24:                                                                                                                
     Delete "Workers' Compensation Appeals Commission"                                                                      
     Insert "workers' compensation hearings office"                                                                         
Page 6, line 1:                                                                                                                 
     Delete "Workers' Compensation Appeals Commission"                                                                      
     Insert "workers' compensation hearings office"                                                                         
Page 7, lines 21 - 22:                                                                                                          
     Delete "Workers' Compensation Appeals Commission"                                                                          
     Insert "workers' compensation hearings office"                                                                             
Page 7, line 27, through page 11, line 2:                                                                                       
     Delete all material and insert:                                                                                            
   "* Sec. 11.  AS 23.30 is amended by adding a new section to                                                              
          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   hearings  office  hears  original                                                               
     petitions when a  claim is filed under this  chapter and has                                                               
     jurisdiction to  hear appeals from  decisions and  orders of                                                               
     the director.                                                                                                              
          (b)  The commissioner shall appoint a chief hearing                                                                   
     officer and assistant hearing officers.                                                                                    
          (c)  The chief hearing officer may                                                                                    
               (1)  employ and supervise office staff and                                                                       
     hearing officers 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 officers and                                                                 
     staff  so   that  hearings  and  appeals   are  resolved  as                                                               
     expeditiously   and  competently   as  possible,   including                                                               
     designating  hearing officers  to hear  preliminary matters;                                                               
               (4)  prepare an annual budget of the hearings                                                                    
          (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  officers.   To promote  consistency                                                               
     among legal  determinations, the  chief hearing  officer may                                                               
     review and  circulate among the  other hearing  officers the                                                               
     drafts of formal  decisions, decisions upon reconsideration,                                                               
     and other  legal opinions of  the other hearing  officers 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 officers  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 shall award a successful                                                                     
     party reasonable costs  and, if the party  is represented by                                                               
     an  attorney,   attorney  fees  that  the   hearings  office                                                               
     determines   to  be   fully  compensatory   and  reasonable.                                                               
     However,  the  hearings office  may  not  make an  award  of                                                               
     attorney fees against an injured  worker unless the hearings                                                               
     office  finds  that  the worker's  position  on  appeal  was                                                               
     frivolous or  unreasonable or  the appeal  was taken  in bad                                                               
          (g)  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 13, line 9:                                                                                                                
     Delete "with the office of the commission [BY"                                                                         
     Insert "by a hearing officer ["                                                                                        
Page 14, line 9:                                                                                                                
     Delete "commission"                                                                                                    
     Insert "hearings office"                                                                                               
Page 29, lines 27 - 28:                                                                                                         
     Delete "office of the commission"                                                                                      
     Insert "hearings office"                                                                                               
Page 30, line 3:                                                                                                                
     Delete "or commission"                                                                                                 
Page 30, line 14:                                                                                                               
     Delete  "office of  the commission,  and the  office of  the                                                       
commission "                                                                                                                
     Insert "hearings office, and the hearings office"                                                                  
Page 31, line 4, following "defense.", through line 17:                                                                         
     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 1:                                                                                                                
     Delete "office of the commission"                                                                                      
     Insert "hearings office"                                                                                               
Page 32, lines 8 - 9:                                                                                                           
     Delete "office of the commission"                                                                                      
     Insert "chief hearing officer"                                                                                         
Page 32, lines 27 - 28:                                                                                                         
     Delete "commission"                                                                                                    
     Insert "director"                                                                                                      
Page 34, line 7:                                                                                                                
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 34, line 11:                                                                                                               
     Delete "partially exempt service under AS 39.25.120"                                                                       
     Insert "classified service under AS 39.25.100"                                                                             
Page 34, lines 12 - 13:                                                                                                         
     Delete ", but is not a public employee for purposes of                                                                     
AS 23.40"                                                                                                                       
Page 34, line 31:                                                                                                               
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 35, line 5:                                                                                                                
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 35, lines 30 - 31:                                                                                                         
     Delete "commission or"                                                                                                 
Page 36, line 5:                                                                                                                
     Delete "commission or"                                                                                                 
Page 36, line 6:                                                                                                                
     Delete "The commission clerk"                                                                                          
     Insert "A hearing officer"                                                                                             
Page 36, line 9:                                                                                                                
     Delete "commission"                                                                                                    
     Insert "hearing officer"                                                                                               
Page 36, line 24:                                                                                                               
     Delete "office of the commission"                                                                                          
     Insert "hearings office"                                                                                                   
Page 36, line 27:                                                                                                               
     Delete "office of the commission"                                                                                          
     Insert "hearings office"                                                                                                   
Page 37, line 2:                                                                                                                
     Delete "commission"                                                                                                        
     Insert "hearings office"                                                                                                   
Page 37, line 4, through page 41, line 21:                                                                                      
     Delete all material and insert:                                                                                            
   "* Sec. 64. 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. 65.  AS 23.30.125(c) is amended to read:                                                                            
          (c)  If not in accordance with law, a compensation                                                                    
     order filed by a hearing officer  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. 66.  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. 67.  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  officer                                                           
     [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 officer [BOARD]."                                                                                              
Renumber the following bill sections accordingly.                                                                               
Page 46, lines 4 - 11:                                                                                                          
     Delete all material.                                                                                                       
Renumber the following bill sections accordingly.                                                                               
Page 55, line 24:                                                                                                               
     Delete ", the commission,"                                                                                             
Page 56, lines 3 - 9:                                                                                                           
     Delete all material and insert:                                                                                            
               "(35)  "director" means the director of the                                                                      
     division of workers' compensation;                                                                                         
               (36)  "division" means the division of workers'                                                                  
               (37)  "hearing officer" means a hearing officer                                                                  
     employed under AS 23.30.112 to hear workers' compensation                                                                  
     claims and petitions under this chapter;                                                                                   
               (38)  "hearings office" means the workers'                                                                       
     compensation hearings office established by AS 23.30.007."                                                                 
Page 56, lines 13 - 20:                                                                                                         
     Delete all material and insert:                                                                                            
   "* Sec. 103.  AS 39.25.120(c) is amended by adding a new                                                                 
paragraph to read:                                                                                                              
               (20)  the reemployment benefits administrator of                                                                 
     the division of workers' compensation in the Department of                                                                 
     Labor and Workforce Development."                                                                                          
Renumber the following bill sections accordingly.                                                                               
Page 56, line 25:                                                                                                               
     Delete "and"                                                                                                               
     Insert ";"                                                                                                                 
     Following "AS 23.30.395(3)":                                                                                               
          Insert "; and AS 39.50.200(b)(31)"                                                                                    
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     Delete all material.                                                                                                       
Renumber the following bill sections accordingly.                                                                               
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CHAIR BUNDE objected for discussion purposes.                                                                                   
SENATOR  FRENCH  explained  that  amendment 1  would  remove  the                                                               
appeals  commission that  would replace  the appeals  function of                                                               
the Superior  Court. SB  311 calls for  the appointment  of three                                                               
appeals commissioners who would  be confirmed by the Legislature.                                                               
The  bill  calls   for  two  range  29   commissioners  with  the                                                               
commission chair set at range 30.                                                                                               
     Our  committee  heard  testimony... that  the  Superior                                                                    
     Court hears  some 36 workers'  comp appeals  each year.                                                                    
     Creating three new highly paid  state employees to hear                                                                    
     36  appeals per  year seems  extravagant. The  proposed                                                                    
     amendment  would  keep  the  appeals  function  in  the                                                                    
     Superior Court.                                                                                                            
     The  amendment  also  keeps  the  hearing  officers  in                                                                    
     classified  service.   SB  311   as  it   stands  would                                                                    
     reclassify the  hearing officers into  partially exempt                                                                    
     service.  Keeping the  hearing  officers in  classified                                                                    
     service gives  these decision makers  greater autonomy.                                                                    
     The proposed amendment does not  alter the basic thrust                                                                    
     of SB 311;  it merely streamlines the  reforms that the                                                                    
     bill  envisions. I'll  close by  saying that  I believe                                                                    
     the most  apolitical appeals panel available  is in the                                                                    
     Superior  Court. These  are  judges  appointed to  long                                                                    
     terms.  They are  mostly  isolated  from the  political                                                                    
     process. They  have all  the autonomy  in the  world to                                                                    
     hear these  appeals. From the  testimony we  heard from                                                                    
     Mr.  Wooliver  [Alaska  Court System],  they're  rarely                                                                    
     overturned  when  those  decisions go  to  the  Supreme                                                                    
     I also  took to heart  the part of his  testimony about                                                                    
     how  a  litigant  feels   facing  an  in-house  appeals                                                                    
     commission. I  can just speak  for myself - I'd  want a                                                                    
     guy  in  a black  robe  to  decide  my case.  I'd  want                                                                    
     someone  who  isn't a  state  employer  per se  in  the                                                                    
     Department  of Administration  to hear  my case.  And I                                                                    
     think  what we're  going to  do is  simply create  this                                                                    
     enormous pass-through of  decisions through the appeals                                                                    
     commission  on  to  the Supreme  Court  clogging  their                                                                    
     calendar more. So, I think  in these tough budget times                                                                    
     to create three new - two range  29s and a range 30 - a                                                                    
     range 30 is  over $100,000 per year. I  just think that                                                                    
     there  are school  districts all  over  the state  that                                                                    
     would love to  have some of these  employees that we're                                                                    
     thinking about creating here.                                                                                              
     For that reason and also  for the reason of keeping the                                                                    
     hearing officers  in classified  service, that's  a way                                                                    
     to  give  them  some  political  cover  for  the  tough                                                                    
     decisions they make every day.  Keep them in classified                                                                    
     service   and  let   them  go   about  their   business                                                                    
     unsupervised, really, by a state  supervisor who may be                                                                    
     putting pressure on them to go one way or the other.                                                                       
CHAIR BUNDE remarked that his concern about the cost resonates                                                                  
with him.                                                                                                                       
     I, at  this point, think  that maybe the total  cost to                                                                    
     the public  might be less avoiding  the Superior Court,                                                                    
     but again  those are areas that  I don't have a  lot of                                                                    
     personal experience.  I would  prefer to send  the bill                                                                    
     forward as  it is and  let Judiciary review  that issue                                                                    
     and continue my opposition to the amendment.                                                                               
A roll call vote was taken on amendment 1. Senators Gary Stevens                                                                
and Chair Bunde voted nay; Senator French voted yea. Amendment 1                                                                
was not adopted.                                                                                                                
1:58 - 2:04 - at ease                                                                                                           
CHAIR BUNDE said that SB 311 would be set aside for the moment.                                                                 
        SB 311-INSURANCE & WORKERS' COMPENSATION SYSTEM                                                                     
CHAIR CON BUNDE announced SB 311  to be back before the committee                                                               
and that  public testimony had  been closed. Amendments  had been                                                               
SENATOR RALPH  SEEKINS moved to  pass SB 311 from  committee with                                                               
individual  recommendations  and  attached fiscal  note.  SENATOR                                                               
FRENCH objected.  A roll call  vote was taken.  Senators Seekins,                                                               
Gary Stevens and Chair Bunde  voted yea; and Senator French voted                                                               
nay; and  SB 311 moved  from committee.  The chair noted  that he                                                               
would ask the Senate President for a Judiciary referral.                                                                        

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