Legislature(2017 - 2018)BELTZ 105 (TSBldg)

02/14/2017 01:30 PM LABOR & COMMERCE

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-- Public Testimony --
         SB  29-REPEAL WORKERS' COMP APPEALS COMMISSION                                                                     
2:24:34 PM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration  of SB  29. She  welcomed  Commissioner Drygas  and                                                               
Director Marx.                                                                                                                  
2:25:08 PM                                                                                                                    
HEIDI  DRYGAS, Commissioner,  Department of  Labor and  Workforce                                                               
Development (DOLWD), 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  have been reversed                                                               
by the  Alaska Supreme  Court. 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  chair to resolve  the legal  issues and                                                               
write  the commission's  decisions. This  means 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,                                                               
she said.                                                                                                                       
COMMISSIONER DRYGAS  informed the committee 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  would be minimal.  The Court System,  which regularly                                                               
hears administrative appeals, would see  an increase of about 20-                                                               
30  cases a  year.  She  understands that  the  Court System  can                                                               
absorb volume, which is reflected in the zero fiscal note.                                                                      
2:27:00 PM                                                                                                                    
MARIE MARX, Director,  Workers' Compensation Division, Department                                                               
of  Labor and  Workforce Development  (DOLWD) walked  through 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                                                                    
     Section   3  amends   AS   23.30.108(d),  by   removing                                                                  
     reference  to   the  appeals  commission   in  existing                                                                    
     Section   4  amends   AS   23.30.108(e),  by   removing                                                                  
     reference  to   the  appeals  commission   in  existing                                                                    
     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                                                                    
     Section  9  repeals  Rules  201.1,  401.1,  and  501.1,                                                                  
     Alaska Rules of Appellate Procedure.                                                                                       
     Section 10 repeals  AS 23.20.007, 23.30.008, 23.30.009,                                                                  
     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.                                                                          
2:30:16 PM                                                                                                                    
CHAIR COSTELLO  reminded the committee  that this  was introduced                                                               
on the Senate floor as an  amendment in a budget process and some                                                               
members felt it needed a full  vetting. She asked Ms. Marx if she                                                               
had any concern with the measure.                                                                                               
MS. MARX answered she has no  concerns. The idea in 2005 was that                                                               
the commission  would make  the appeals  process run  better, but                                                               
that has not been the case.                                                                                                     
2:31:27 PM                                                                                                                    
SENATOR STEVENS questioned whether this  would impose a burden on                                                               
the  Court System  and  potentially slow  the  progress of  these                                                               
cases. He  also asked  what these appeals  would look  like under                                                               
the Court  System. "We're not  talking about a jury  trial; we're                                                               
talking about a judgement by a  judge. Can you help me understand                                                               
CHAIR  COSTELLO  suggested  Nancy  Meade with  the  Court  System                                                               
respond to the question after  the committee finishes questioning                                                               
Director Marx and Commissioner Drygas.                                                                                          
MS. MARX  directed attention to  the document in the  packet that                                                               
explains the number  of cases appealed to the  commission and how                                                               
many are appealed  to the Alaska Supreme Court.  She also pointed                                                               
out that the  Court System was handling more  appeals cases prior                                                               
to the creation of the  commission. The average number of appeals                                                               
now  is about  33  and the  expectation is  that  those would  be                                                               
absorbed  by  the  Court  System  throughout  all  jurisdictions.                                                               
Addressing the  question about timeliness, she  said the proposal                                                               
is to return to the  court process because the appeals commission                                                               
process has not improved the appeals procedure.                                                                                 
2:34:02 PM                                                                                                                    
COMMISSIONER DRYGAS  added that  when a case  is appealed  from a                                                               
panel  of the  Workers'  Compensation  Board it  will  go to  the                                                               
superior court that will act as  the appellate court, just as the                                                               
appeals commission currently acts as  the appellate court for the                                                               
Workers' Compensation Board.                                                                                                    
SENATOR HUGHES  asked if the  only reason the  appeals commission                                                               
didn't  work  is  because  the   commissioners  didn't  have  the                                                               
necessary legal expertise.                                                                                                      
COMMISSIONER  DRYGAS replied  it was  a multiple  system failure,                                                               
but the  biggest problem is  that the appeals commission  is made                                                               
up of lay  commissioners rather than a panel  of attorneys, which                                                               
is  the typical  makeup for  the appellate  process. Because  the                                                               
appeals  commission  doesn't have  a  panel  of attorneys,  there                                                               
hasn't  been enough  vetting of  the  facts in  these cases.  The                                                               
result is that  the Alaska Supreme Court has  overturned about 50                                                               
percent of the decisions the appeals commission has made.                                                                       
The  other problem  with  the current  system is  that  it has  a                                                               
double  administrative  layer.  The  departmental  administrative                                                               
process made  up of a  panel of three  works well, she  said, but                                                               
after  that the  litigant  should have  the  opportunity to  have                                                               
their  case  heard   in  court  rather  than   going  to  another                                                               
administrative  level. "It's  clunky and  didn't work  the way  I                                                               
think it was intended to work," she said.                                                                                       
2:37:37 PM                                                                                                                    
SENATOR GARDNER  asked if it  would have worked better,  but been                                                               
more  expensive,  if  all the  appeals  commission  members  were                                                               
COMMISSIONER  DRYGAS said  possibly, but  only so  many attorneys                                                               
practice workers'  compensation in  Alaska and  it would  be very                                                               
difficult to seat a panel that didn't have conflicts.                                                                           
SENATOR MEYER asked  if two positions would be  eliminated if the                                                               
bill were to pass.                                                                                                              
COMMISSIONER DRYGAS answered yes.                                                                                               
CHAIR COSTELLO  asked Ms.  Meade to  respond to  Senator Steven's                                                               
question about how this proposal would impact the Court System.                                                                 
2:39:16 PM                                                                                                                    
NANCY MEADE, General Council,  Administrative Staff, Alaska Court                                                               
System, stated that  the Court System will be able  to absorb the                                                               
impact of  SB 29,  but she appreciates  the question  because the                                                               
court is  doing more now with  less. She said the  average number                                                               
of cases  over the past 10  years appears to be  about 33. Should                                                               
the bill  become law, the cases  that went from the  board to the                                                               
commission would go  from the board to the  superior court. Those                                                               
cases  will  be  divided  among the  42  superior  court  judges,                                                               
depending on the  venue of the injured  worker. Because Anchorage                                                               
is the population  center, most of the cases will  be filed there                                                               
and  divided  among  the  11 civil  superior  court  judges  that                                                               
preside in the municipality.                                                                                                    
She  described workers'  compensation cases  as difficult,  time-                                                               
consuming,  and  fact laden.  Oftentimes  the  litigant is  self-                                                               
represented, which  is difficult and more  time-consuming for the                                                               
Court System.  That is some of  the reason that these  cases went                                                               
from the court to the appeals  commission in 2005, as well as the                                                               
argument that  some of  the superior  court judge  decisions were                                                               
inconsistent. Nevertheless, since the  appeals commission has not                                                               
improved on  the time to  get cases  resolved or accuracy  of the                                                               
decisions, the Court System is  prepared to take these cases back                                                               
without  any   additional  funding   to  handle   the  additional                                                               
2:42:07 PM                                                                                                                    
SENATOR STEVENS  asked if the  $220,000 savings reflected  in the                                                               
Department of  Labor and Workforce  Development fiscal  note will                                                               
be absorbed by the Court System.                                                                                                
MS. MEADE opined  that there wouldn't be  additional cost because                                                               
the additional work  would be spread around. For  example, if the                                                               
clerk's office  in Fairbanks gets 7-8  new administrative appeals                                                               
next  year, they  would  be able  to handle  that  in the  normal                                                               
course of business.                                                                                                             
SENATOR  STEVENS asked  if there  is a  way to  move these  cases                                                               
through the system more quickly.                                                                                                
MS.  MEADE said  she didn't  have an  answer, but  superior court                                                               
judges  do handle  administrative agency  appeals. A  process and                                                               
court  rules are  already in  place,  so a  superior court  judge                                                               
would be  the logical place  if these cases  were to come  to the                                                               
Court System.                                                                                                                   
2:44:45 PM                                                                                                                    
SENATOR  HUGHES asked  if  eliminating  one administrative  layer                                                               
make things easier for the court.                                                                                               
MS. MEADE replied it probably won't make much difference.                                                                       
2:46:54 PM                                                                                                                    
ANDREW HEMENWAY, former  appeals commissioner, Anchorage, Alaska,                                                               
said he was asked to be available for questions.                                                                                
CHAIR COSTELLO asked his view of the bill.                                                                                      
MR.  HEMENWAY  stated  that  when  he  was  leaving  the  appeals                                                               
commission he told  Commissioner Drygas that it  is difficult for                                                               
a single person to  deal with the legal issues that  come up in a                                                               
workers'  compensation appeal.  However,  going  to the  superior                                                               
court would also  be just one judge deciding the  cases, and that                                                               
judge   won't  have   any   particular   expertise  in   workers'                                                               
compensation  laws.  He  offered  his  personal  view  that  it's                                                               
difficult  for one  person, but  it's better  to have  one person                                                               
with expertise  in that area  of law  working on these  cases. He                                                               
said his personal  policy preference would be to use  a couple of                                                               
administrative  law  judges  from the  Office  of  Administrative                                                               
Hearings to work with the  chair of the appeals commission. There                                                               
would  be  three, legally-trained  people  looking  at each  case                                                               
which would  address the concern  he expressed about  having just                                                               
one  judge rule  on  these hotly  contested  and difficult  legal                                                               
issues.  He  noted that  a  concern  about using  superior  court                                                               
judges was that the decisions  could be inconsistent. As chair of                                                               
the  appeals  commission  he  didn't   hear  that  complaint.  He                                                               
concluded  that  there  are  policy arguments  pro  and  con  for                                                               
abolishing the appeals commission and  it's up to the legislature                                                               
to decide.                                                                                                                      
2:50:13 PM                                                                                                                    
CHAIR  COSTELLO closed  public testimony  on SB  29 and  held the                                                               
bill for further consideration.                                                                                                 

Document Name Date/Time Subjects
SB 29 - Sponsor Statement.pdf SL&C 2/14/2017 1:30:00 PM
SB 29
SB 29.pdf SL&C 2/14/2017 1:30:00 PM
SB 29
SB 40 - Background IRS.PDF SL&C 2/14/2017 1:30:00 PM
SB 40
SB 40 - Fiscal Note DOLWD-SIF.pdf SL&C 2/14/2017 1:30:00 PM
SB 40
SB 40 - Fiscal Note DOLWD-WC.pdf SL&C 2/14/2017 1:30:00 PM
SB 40
SB 40 - Opposition Letter - NFIB.PDF SL&C 2/14/2017 1:30:00 PM
SB 40
SB 40 - Sectional Analysis.pdf SL&C 2/14/2017 1:30:00 PM
SB 40
SB 40 - Sponsor Statement.pdf SL&C 2/14/2017 1:30:00 PM
SB 40
SB 40.pdf SL&C 2/14/2017 1:30:00 PM
SB 40
Slide Presentation for SB 40 02.14.17.pdf SL&C 2/14/2017 1:30:00 PM
SB 40
SB 15 - Background - E-Cig Fires.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 - Background - E-Cigarettes Poison the Airways.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 - Background - E-Cigs AAAS More Dangerous Than Tobacco.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 - Background - Ecigs DHSS Bulletin.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 - Background - E-cigs NCSL LegisBrief.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 - Background - E-Cigs Sales To AK Youth.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 - Fiscal Note DCCED.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 - Fiscal Note DHSS.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 - Fiscal Note DPS.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 - Fiscal Note LAW.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 Sectional Analysis.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15 Sponsor Statement.pdf SL&C 2/14/2017 1:30:00 PM
SB 15
SB 15.PDF SL&C 2/14/2017 1:30:00 PM
SB 15