Legislature(2005 - 2006)
2005-04-12 Senate Journal
Full Journal pdf2005-04-12 Senate Journal Page 0903 SB 130 SENATE BILL NO. 130 "An Act relating to a special deposit for workers' compensation and employers' liability insurers; relating to assigned risk pools; relating to workers' compensation insurers; stating the intent of the legislature, and setting out limitations, concerning the interpretation, construction, and implementation of workers' compensation laws; relating to the Alaska Workers' Compensation Board; assigning certain Alaska Workers' Compensation Board functions to the division of workers' compensation in the Department of Labor and Workforce Development and to that department, and authorizing the board to delegate administrative and enforcement 2005-04-12 Senate Journal Page 0904 duties to the division; establishing a Workers' Compensation Appeals Commission; providing for workers' compensation hearing officers in workers' compensation proceedings; relating to workers' compensation medical benefits and to charges for and payment of fees for the medical benefits; relating to agreements that discharge workers' compensation liability; relating to workers' compensation awards; relating to reemployment benefits and job dislocation benefits; relating to coordination of workers' compensation and certain disability benefits; relating to division of workers' compensation records; relating to release of treatment records; relating to an employer's failure to insure and keep insured or provide security; providing for appeals from compensation orders; relating to workers' compensation proceedings; providing for supreme court jurisdiction of appeals from the Workers' Compensation Appeals Commission; providing for a maximum amount for the cost-of-living adjustment for workers' compensation benefits; relating to attorney fees; providing for the department to enter into contracts with nonprofit organizations to provide information services and legal representation to injured employees; providing for administrative penalties for employers uninsured or without adequate security for workers' compensation; relating to fraudulent acts or false or misleading statements in workers' compensation and penalties for the acts or statements; providing for members of a limited liability company to be included as an employee for purposes of workers' compensation; establishing a workers' compensation benefits guaranty fund; relating to the second injury fund; making conforming amendments; providing for a study and report by the medical services review committee; and providing for an effective date" was read the second time. Senator Green, Cochair, moved and asked unanimous consent for the adoption of the Finance Committee Substitute offered on page 873. Senator Ellis objected, then withdrew his objection. There being no further objection, CS FOR SENATE BILL NO. 130(FIN) "An Act relating to a special deposit for workers' compensation and employers' liability insurers; relating to assigned risk pools; relating to workers' compensation insurers; stating the intent of the legislature, and setting out limitations, concerning the interpretation, construction, and implementation of workers' compensation laws; relating to the Alaska Workers' Compensation Board; assigning certain Alaska Workers' Compensation Board functions to the division of workers' 2005-04-12 Senate Journal Page 0905 compensation in the Department of Labor and Workforce Development and to that department, and authorizing the board to delegate administrative and enforcement duties to the division; providing for workers' compensation hearing officers in workers' compensation proceedings; relating to workers' compensation medical benefits and to charges for and payment of fees for the medical benefits; relating to agreements that discharge workers' compensation liability; relating to workers' compensation awards; relating to reemployment benefits and job dislocation benefits; relating to coordination of workers' compensation and certain disability benefits; relating to division of workers' compensation records; relating to release of treatment records; relating to an employer's failure to insure and keep insured or provide security; relating to workers' compensation proceedings; providing for a maximum amount for the cost-of-living adjustment for workers' compensation benefits; relating to attorney fees with respect to workers' compensation; providing for the department to enter into contracts with nonprofit organizations to provide information services and legal representation to injured employees; providing for administrative penalties for employers uninsured or without adequate security for workers' compensation; relating to fraudulent acts or false or misleading statements in workers' compensation and penalties for the acts or statements; providing for members of a limited liability company to be included as an employee for purposes of workers' compensation; establishing a workers' compensation benefits guaranty fund; making conforming amendments; providing for a study and report by the medical services review committee; establishing the Task Force on Workers' Compensation; and providing for an effective date" was adopted. Senator Bunde offered Amendment No. 1 : Page 28, line 8, following "licensed": Insert "advanced" Page 28, line 8, following "practitioner": Delete "acting under the supervision of a licensed medical doctor or doctor of osteopathy" 2005-04-12 Senate Journal Page 0906 Senator Bunde moved for the adoption of Amendment No. 1. Senator Ellis objected, then withdrew his objection. There being no further objection, Amendment No. 1 was adopted. Senators Seekins, Cowdery, Ben Stevens, Wilken, Green, Stedman, Gary Stevens, Dyson, Huggins, Therriault, Bunde offered Amendment No. 2 : Page 1, line 10, following "proceedings;": Insert "establishing a Workers' Compensation Appeals Commission;" Page 2, line 4, following "security;": Insert "providing for appeals from compensation orders;" Page 2, line 5, following "proceedings;" Insert "providing for supreme court jurisdiction of appeals from the Workers' Compensation Appeals Commission;" Page 5, following line 19: Insert a new bill section to read: "* Sec. 9. AS 23.30 is amended by adding new sections to read: Sec. 23.30.007. Workers' Compensation Appeals Commission. (a) There is established in the Department of Labor and Workforce Development the Workers' Compensation Appeals Commission. The commission has jurisdiction to hear appeals from final decisions and orders of the board under this chapter. Jurisdiction of the commission is limited to administrative appeals arising under this chapter. (b) The commission consists of five members appointed by the governor and confirmed by a majority of the members of the legislature in joint session. The members shall be appointed as follows: (1) a member appointed as chair who meets the requirements of (c)(2) of this section; (2) two members who, because of their employment or affiliations, may be classified as a representative of employees covered by this chapter; 2005-04-12 Senate Journal Page 0907 (3) two members who, because of their employment or affiliations, may be classified as a representative of employers covered by this chapter. (c) To be eligible for appointment under this section (1) the member must (A) be a citizen of the United States; (B) be a resident of the state for the five years preceding the appointment; and (C) have not been convicted of either a (i) felony; or (ii) misdemeanor related to workers' compensation; (2) the chair must (A) meet the criteria specified in (1) of this subsection; (B) be licensed to practice law in this state and be a member in good standing with the Alaska Bar Association; and (C) have engaged in the active practice of law for at least five years with experience in workers' compensation in this state. (d) A member may act and receive compensation under this section from the date of appointment until confirmation or rejection by the legislature. (e) The term of service on the commission is five years. A member may be reappointed so long as the reappointment complies with the provisions of this section. (f) The chair of the commission is in the exempt service under AS 39.25.110 and shall receive a monthly salary that is not less than Step A nor more than Step F of Range 27 of the salary schedule in AS 39.27.011(a) for Anchorage, Alaska. (g) A vacancy arising in the commission shall be filled by appointment by the governor and confirmed by a majority of the members of the legislature in joint session. Except as provided in AS 39.05.080(4), an appointee selected to fill a vacancy shall hold office for the unexpired term of the member whose vacancy is filled. A vacancy in the 2005-04-12 Senate Journal Page 0908 commission does not impair the authority of a quorum of members to exercise all the powers and perform all the duties of the commission. (h) An appeal to the commission shall be heard and decided by a three-member panel of the commission. An appeal panel shall consist of the chair of the commission and two members of the commission assigned by the chair, one member classified as representing employees, and one member classified as representing employers. At other meetings to conduct commission business, the number of commission members classified as representing employees must equal the number of commission members classified as representing employers. The chair of the commission and two representative members of the commission, one classified as representing employees and one classified as representing employers, constitutes a quorum. (i) A member of the commission may be removed from office by the governor for good cause. To be removed for cause, a member of the commission shall be given a copy of the charges and afforded an opportunity to be heard in person or by counsel in the member's own defense upon not less than 10 days' notice. If the member is removed for cause, the governor shall file with the lieutenant governor a complete statement of all charges made against the member, the governor's findings on the charges, and the record of any proceedings. In this subsection, "good cause" includes (1) misconduct in office or violation of AS 39.52; (2) conviction of a felony; (3) conviction of a misdemeanor related to workers' compensation; (4) inability to serve, neglect of duty, incompetence, unjustified failure to handle the caseload assigned, or similar nonfeasance of office; and (5) failure to continue to meet the requirements of this section relating to qualification for office. (j) Representative members are entitled to compensation in the amount of $200 a day for each day spent in actual hearing of appeals or on authorized official business incidental to their duties, and to transportation and per diem as 2005-04-12 Senate Journal Page 0909 provided by law. Compensation shall be paid pro rata for each portion of a day spent in actual hearing of appeals or on authorized official business. (k) A member of the commission may not hear an appeal under this chapter if (1) a party is an employee or was, in the past seven years, an employee of the commission member or of a business that employs the commission member; this paragraph does not apply to the chair of the commission when the State of Alaska is or was the employer of a party; (2) a party is a member or was, in the past seven years, a member of the same union or employee association as the commission member; (3) a party has a contractual relationship with the commission member, a business that employs the commission member, or a union or employee association of which the commission member is a member; (4) the commission member is unable to be fair, impartial, and unbiased toward the appeal participants; or (5) participation in the appeal is a violation of AS 39.52. (l) If the chair of the commission is unable to hear an appeal for reasons of absence or illness in excess of 10 days, or for reasons set out in (k) of this section, the commissioner of the department shall appoint a person who meets the qualifications of this section to serve as chair to hear the appeal as chair pro tem. The person shall receive the compensation provided in (j) of this section. Appointment of a chair pro tem does not require legislative confirmation. (m) Each member of the commission, before entering upon the duties of office, shall take and subscribe to the oath prescribed for principal officers of the state. (n) The offices of the commission shall be physically separate from the offices of the division. Sec. 23.30.008. Powers and duties of the commission. (a) The commission shall be the exclusive and final authority for the hearing and determination of all questions of law and fact arising under this chapter in those matters that have been appealed to the commission, except for an appeal to the Alaska Supreme Court. The commission 2005-04-12 Senate Journal Page 0910 does not have jurisdiction in any case that does not arise under this chapter or in any criminal case. On any matter taken to the commission, the decision of the commission is final and conclusive, unless appealed to the Alaska Supreme Court, and shall stand in lieu of the order of the board from which the appeal was taken. Unless reversed by the Alaska Supreme Court, decisions of the commission have the force of legal precedent. (b) The commission, in its administrative capacity, shall maintain, index, and make available for public inspection the final administrative decisions and orders of the commission and of the board. The chair of the commission may review and circulate among the other members of the relevant commission appeal panel the drafts of the panel's formal decisions and decisions upon reconsideration. The drafts are confidential documents and are not subject to disclosure. (c) The chair of the commission shall draft and propose, and the commission in its administrative capacity may adopt, regulations implementing the commission's authority and duties under this chapter, including rules of procedure and evidence for proceedings before the commission under this chapter. The provisions of AS 44.62 (Administrative Procedure Act) apply to the adoption of regulations by the commission. (d) In an appeal, the commission shall award a successful party reasonable costs and, if the party is represented by an attorney, attorney fees that the commission determines to be fully compensatory and reasonable. However, the commission may not make an award of attorney fees against an injured worker unless the commission finds that the worker's position on appeal was frivolous or unreasonable or the appeal was taken in bad faith. (e) The commission, 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 chapter. Sec. 23.30.009. Powers and duties of the chair of the commission. (a) The chair of the commission shall exercise general supervision over the office of the 2005-04-12 Senate Journal Page 0911 commission and over appeals, and shall direct the administrative functions of the commission. The chair of the commission shall serve as the executive officer of the commission and shall have authority in all administrative matters relating to the members. The chair may (1) employ and supervise commission staff and appoint a commission clerk; (2) establish and implement a time management system for the commission members and staff and manage the calendar of appeals; (3) assign the work of the commission members and staff so that appeals are resolved as expeditiously and competently as possible; (4) advise and cooperate with the board to develop appropriate procedures for maintenance and transfer of hearing files and the preservation and transfer of records on appeal; and (5) prepare an annual budget of the commission. (b) The chair of the commission shall preside over hearings and arguments on appeals. The chair of the commission shall ensure that all functions of the commission are performed with due regard for the rights of all parties and consistent with the orderly and prompt resolution of appeals. The chair of the commission shall rule on questions of procedure and advise the representative members of the commission on matters of law. (c) The chair of the commission shall, not later than March 15 of each year, make available to the public and file with the lieutenant governor, a report regarding the commission, including data regarding time periods between initial receipt and final decisions on appeals. (d) The chair of the commission shall devote full time to the duties of the chair of the commission and may not engage in any other employment or business. The chair of the commission may not hold any other office or position under the United States, this state, any municipality or political subdivision of this state, or any tribal government or corporation. The chair of the commission may not hold office or position in a partisan political organization or party." 2005-04-12 Senate Journal Page 0912 Renumber the following bill sections accordingly. Page 20, following line 6: Insert new bill sections to read: "* Sec. 32. AS 23.30.125 is repealed and reenacted to read: Sec. 23.30.125. Administrative review of compensation order. (a) A compensation order becomes effective when filed with the office of the board as provided in AS 23.30.110, and, unless proceedings to reconsider, suspend, or set aside the order are instituted as provided in this chapter, the order becomes final on the 31st day after it is filed. (b) Notwithstanding other provisions of law, a decision or order of the board is subject to review by the commission as provided in this chapter. (c) If a compensation order is not in accordance with law or fact, the order may be suspended or set aside, in whole or in part, through proceedings in the commission brought by a party in interest against all other parties to the proceedings before the board. The payment of the amounts required by an award may not be stayed pending a final decision in the proceeding unless, upon application for a stay, the commission, on hearing, after not less than three days' notice to the parties in interest, allows the stay of payment, in whole or in part, where the party filing the application would otherwise suffer irreparable damage. Continuing future periodic compensation payments may not be stayed without a showing by the appellant of irreparable damage and the existence of the probability of the merits of the appeal being decided adversely to the recipient of the compensation payments. The order of the commission allowing a stay must contain a specific finding, based upon evidence submitted to the commission and identified by reference to the evidence, that irreparable damage would result to the party applying for a stay and specifying the nature of the damage. (d) Proceedings for reconsidering, suspending, setting aside, or enforcing a compensation order, whether rejecting a claim or making an award, may not be instituted, except as provided in this chapter. 2005-04-12 Senate Journal Page 0913 * Sec. 33. AS 23.30 is amended by adding new sections to read: Sec. 23.30.127. Appeals to commission. (a) A party in interest may appeal a compensation order issued by the board to the commission within 30 days after the compensation order is filed with the office of the board under AS 23.30.110. The director may intervene in an appeal. If a party in interest is not represented by counsel and the compensation order concerns an unsettled question of law, the director may file an appeal to obtain a ruling on the question by the commission. (b) An appeal is initiated by filing with the office of the commission (1) a signed notice of appeal specifying the compensation order appealed from; (2) a statement of the grounds upon which the appeal is taken; and (3) other material the commission may by regulation require. (c) A cross-appeal may be initiated by filing with the office of the commission a signed notice of cross-appeal within 30 days after the decision is filed or within 15 days after service of notice of an appeal, whichever is later. The notice of cross-appeal shall specify the compensation order appealed from and the grounds upon which the cross-appeal is taken. (d) The office of the commission may charge a fee, not to exceed $100, for filing appeals and cross-appeals, except that the office of the commission may not charge a fee if the appellant is the state or a political subdivision of the state. The commission may require an appellant to pay the costs of the transcript of hearing and the preparation of the record on appeal. The commission may require cross- appellants or intervenors to share in the costs. (e) If a request for reconsideration of a board decision was timely filed with the office of the board, the notice of appeal must be filed within 30 days after the reconsideration decision is mailed to the parties, or the date the request for reconsideration is considered denied in the absence of any action on the request, whichever is earlier. 2005-04-12 Senate Journal Page 0914 (f) The commission may require written briefs and make other rules and orders to facilitate the business of the commission and advance the prompt, fair, and just disposition of appeals. Sec. 23.30.128. Commission proceedings. (a) An appeal from a decision of the board under this chapter, and other proceedings under this section, shall be heard and decided by a three-member panel of the commission. An appeal panel of the commission must include the chair of the commission. The chair of the commission shall assign two members to each appeal, including one commission member classified as representing employees and one commission member classified as representing employers. Acts, decisions, and orders of the commission panel in the appeal or related proceeding shall be considered the acts, decisions, and orders of the full commission. The matter on appeal shall be decided on the record made before the board, a transcript or recording of the proceedings before the board, and oral argument and written briefs allowed by the commission. Except as provided in (c) of this section, new or additional evidence may not be received with respect to the appeal. (b) The commission may review discretionary actions, findings of fact, and conclusions of law by the board in hearing, determining, or otherwise acting on a compensation claim or petition. The board's findings regarding the credibility of testimony of a witness before the board are binding on the commission. The board's findings of fact shall be upheld by the commission if supported by substantial evidence in light of the whole record. In reviewing questions of law and procedure, the commission shall exercise its independent judgment. (c) The commission may hold hearings and receive evidence on applications for (1) stays under AS 23.30.125; (2) attorney fees and costs of appeal; (3) waiver of fees by indigent appellants; or (4) dismissal of appeals for failure to prosecute or upon settlement. The commission may rely on new or additional evidence presented during the hearing in making its decision on the application. 2005-04-12 Senate Journal Page 0915 (d) The commission may affirm, reverse, or modify a decision or order upon review and issue other orders as appropriate. The commission may remand matters it determines were improperly, incompletely, or otherwise insufficiently developed. The commission may remand for further proceedings and appropriate action with or without relinquishing the commission's jurisdiction of the appeal. The administrative adjudication procedures of AS 44.62 (Administrative Procedure Act) do not apply to the proceedings of the commission. (e) Within 90 days after written briefing on the appeal is completed or oral argument is held, whichever is later, the commission shall issue a decision in writing. The decision must contain a concise statement of reasons for the decision, including findings of fact, if required, and conclusions of law. The commission shall serve each party and the director with a copy of the decision. Appeals may be expedited for good cause by the commission. Unless reconsideration is ordered under (f) of this section, a decision under this subsection is the final commission decision. (f) A party or the director may request reconsideration of a decision issued under (e) of this section within 30 days after the date of service shown in the certificate of service of the decision. The request must state specific grounds for reconsideration. Reconsideration may be granted if, in reaching the decision, the commission (1) overlooked, misapplied, or failed to consider a statute, regulation, court or administrative decision, or legal principle directly controlling; (2) overlooked or misconceived a material fact; (3) misconceived a material question in the case; or (4) applied law in the ruling that has subsequently changed. The panel of the commission hearing the request for reconsideration shall consist of the same members of the panel that issued the decision. The commission may issue an order for reconsideration of all or part of the decision upon request of a party or the director. Reconsideration is based on the record, unless the commission allows additional argument. The power to order reconsideration expires 60 days after the date of service, as shown on the certificate of service, of a decision issued under (e) of this section. If the commission 2005-04-12 Senate Journal Page 0916 does not issue an order for reconsideration within the time allowed for ordering reconsideration, a request for reconsideration is considered denied. If reconsideration is ordered, the commission shall issue a decision within 30 days after the close of the record on reconsideration. The commission shall serve each party in the case with a copy of the decision upon reconsideration. The decision upon reconsideration is the final commission decision. (g) A decision of the commission becomes final on the (1) 31st day after the date of service of a decision if reconsideration is not requested; (2) 61st day after the date of service of a decision if reconsideration is requested but an order for reconsideration is not issued; or (3) date of service of the commission decision upon reconsideration under (f) of this section if reconsideration is requested and an order for reconsideration is issued. Sec. 23.30.129. Judicial review of commission orders. (a) Notwithstanding the provisions of AS 44.62.560, orders of the commission may not be appealed to the superior court. Consistent with AS 22.05.010(b), final decisions of the commission may be appealed to the supreme court, and other orders may be reviewed by the supreme court as provided by the Alaska Rules of Appellate Procedure. (b) A finding by the commission concerning the weight to be accorded a witness's testimony, including medical testimony and reports, is conclusive even if the evidence is conflicting or susceptible to contrary conclusions. The commission's findings of fact may be reversed on appeal if not supported by substantial evidence in light of the whole record." Renumber the following bill sections accordingly. Page 28, following line 10: Insert the following new material: "(36) "commission" means the Workers' Compensation Appeals Commission;" 2005-04-12 Senate Journal Page 0917 Page 28, line 11: Delete "(36)" Insert "(37)" Page 28, line 13: Delete "(37)" Insert "(38)" Page 28, line 15: Delete "(38)" Insert "(39)" Page 28, line 17: Delete "(39)" Insert "(40)" Page 28, following line 20: Insert a new bill section to read: "* Sec. 47. AS 39.25.110 is amended by adding a new paragraph to read: (40) the chair of the Workers' Compensation Appeals Commission (AS 23.30.007)." Renumber the following bill sections accordingly. Page 28, following line 23: Insert a new bill section to read: "* Sec. 49. AS 39.50.200(b)(31) is amended to read: (31) Workers' Compensation Board (AS 23.30.005) and Workers' Compensation Appeals Commission (AS 23.30.007);" Renumber the following bill sections accordingly. Page 30, following line 5: Insert new bill sections to read: "* Sec. 53. The uncodified law of the State of Alaska is amended by adding a new section to read: TRANSITION: INITIAL TERMS OF MEMBERS OF WORKERS' COMPENSATION APPEALS COMMISSION. 2005-04-12 Senate Journal Page 0918 Notwithstanding AS 23.30.007(e), enacted by sec. 9 of this Act, the terms of the initially appointed representative members of the Workers' Compensation Appeals Commission, established by AS 23.30.007, enacted by sec. 9 of this Act, shall be set by the governor to achieve staggered terms in the manner provided in AS 39.05.055. * Sec. 54. The uncodified law of the State of Alaska is amended by adding a new section to read: TRANSITION: STAFF. (a) In order to ensure the smooth assumption of duties in the shortest possible time, for a period of six months after the effective date of this section, the director may, with the approval of the commissioner of labor and workforce development and the chair of the commission, temporarily assign division employees to the commission and the commission may reimburse the division for the temporarily assigned employees. Division employees temporarily assigned to the commission shall continue in the same position and rate of pay for the duration of the temporary assignment as the employees held at the division. (b) In this section, (1) "commission" means the Workers' Compensation Appeals Commission established by AS 23.30.007, enacted by sec. 9 of this Act; (2) "director" means the director of the division of workers' compensation in the Department of Labor and Workforce Development; (3) "division" means the division of workers' compensation in the Department of Labor and Workforce Development." Renumber the following bill sections accordingly. Page 30, line 20, following "REGULATIONS.": Insert "(a)" Page 30, following line 25: Insert the following new material: "(b) In order to provide for the procedures and other administrative matters necessary to ensure the on-going implementation of the state's workers' compensation laws to meet the urgent needs of injured workers, and thus ensure the preservation of 2005-04-12 Senate Journal Page 0919 the public peace, health, safety, or general welfare, the Workers' Compensation Appeals Commission established by AS 23.30.007, enacted by sec. 9 of this Act, may adopt under AS 23.30.008, enacted by sec. 9 of this Act, as emergency regulations, the regulations necessary to implement the changes made by this Act." Page 30, line 30: Delete "sec. 24" Insert "sec. 25" Page 31, line 5: Delete "Section 49" Insert "Section 56(a)" Page 31, line 6: Delete "31, and 50" Insert "34, and 57" Page 31, line 7: Delete "secs. 51 and 52" Insert "secs. 58 and 59" Senator Seekins moved for the adoption of Amendment No. 2. Senator Ellis objected. The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: CSSB 130(FIN) am Second Reading Amendment No. 2 YEAS: 11 NAYS: 9 EXCUSED: 0 ABSENT: 0 Yeas: Bunde, Cowdery, Dyson, Green, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wilken Nays: Davis, Ellis, Elton, French, Guess, Hoffman, Kookesh, Olson, Wagoner and so, Amendment No. 2 was adopted. 2005-04-12 Senate Journal Page 0920 Senators Dyson, Seekins offered Amendment No. 3 : Page 17, line 29, following "December 15, 2003": Insert "and after last day of 2007 session" Senator Dyson moved for the adoption of Amendment No. 3. Objections were heard. Senator Dyson moved and asked unanimous consent to withdraw Amendment No. 3. Without objection, Amendment No. 3 was withdrawn. President Stevens stated CS FOR SENATE BILL NO. 130(FIN) am will be on the April 13 calendar.