Legislature(1997 - 1998)
01/26/1998 01:09 PM House JUD
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
January 26, 1998
1:09 p.m.
MEMBERS PRESENT
Representative Joe Green, Chairman
Representative Con Bunde, Vice Chairman
Representative Brian Porter
Representative Norman Rokeberg
Representative Jeannette James
Representative Eric Croft
Representative Ethan Berkowitz
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 232
"An Act establishing the independent division of administrative
hearings in the Department of Administration in order to provide a
source of independent administrative hearing officers to preside in
contested cases; relating to administrative hearing officers;
relating to contested case proceedings; and providing for an
effective date."
- HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE
* HOUSE BILL NO. 272
"An Act to permit a court to order a defendant who receives a
sentence of imprisonment for a misdemeanor to serve the sentence by
electronic monitoring; and relating to the crime of unlawful
evasion."
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 232
SHORT TITLE: INDEPENDENT DIV. OF ADMIN. HEARINGS
SPONSOR(S): REPRESENTATIVES(S) OGAN, Kohring, Hodgins, Ryan,
Sanders, Dyson, Kott, Mulder, Vezey
Jrn-Date Jrn-Page Action
04/04/97 990 (H) READ THE FIRST TIME - REFERRAL(S)
04/04/97 990 (H) JUDICIARY, FINANCE
04/18/97 1189 (H) COSPONSOR(S): VEZEY
04/28/97 (H) JUD AT 1:45 PM CAPITOL 120
04/28/97 (H) MINUTE(JUD)
04/28/97 (H) MINUTE(JUD)
05/02/97 (H) JUD AT 1:00 PM CAPITOL 120
05/02/97 (H) MINUTE(JUD)
05/06/97 (H) JUD AT 2:15 PM CAPITOL 120
05/06/97 (H) MINUTE(JUD)
01/26/98 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
REPRESENTATIVE SCOTT OGAN
Alaska State Legislature
Capitol Building, Room 126
Juneau, Alaska 99801
Telephone: (907) 465-3878
POSITION STATEMENT: Sponsor of HB 232.
TERESA WILLIAMS, Assistant Attorney General
Fair Business Practices Section
Civil Division (Anchorage)
Department of Law
1031 West 4th Avenue, Suite 200
Anchorage, Alaska 99501-1994
Telephone: (907) 269-5100
POSITION STATEMENT: Provided department's position and answered
questions regarding HB 232.
EDWARD H. HEIN
3000 Blueberry Hills Road
Juneau, Alaska 99801
Telephone: (907) 586-7261
POSITION STATEMENT: Answered questions and testified on HB 232.
DALE ANDERSON
9040 Glacier Highway
Juneau, Alaska 99801
Telephone: (907) 789-1965
POSITION STATEMENT: Testified in support of concept of HB 232;
suggested amendments.
PAM LaBOLLE, President
Alaska State Chamber of Commerce
217 2nd Street, Suite 201
Juneau, Alaska 99801
Telephone: (907) 586-2323
POSITION STATEMENT: Testified in support of HB 232, with fine-
tuning by subcommittee.
CATHERINE REARDON, Director
Division of Occupational Licensing
Department of Commerce and Economic Development
P.O. Box 110806
Juneau, Alaska 99811-0806
Telephone: (907) 465-2534
POSITION STATEMENT: Presented department's position and answered
questions regarding HB 232.
ACTION NARRATIVE
TAPE 98-3, SIDE A
Number 0001
CHAIRMAN JOE GREEN called the House Judiciary Standing Committee
meeting to order at 1:09 p.m. Members present at the call to order
were Representatives Green, Porter, Croft and Berkowitz.
Representative Rokeberg arrived at 1:11 p.m., and Representatives
James and Bunde arrived at 1:18 p.m.
HB 232 - INDEPENDENT DIV. OF ADMIN. HEARINGS
Number 0024
CHAIRMAN GREEN announced the committee would hear HB 232, "An Act
establishing the independent division of administrative hearings in
the Department of Administration in order to provide a source of
independent administrative hearing officers to preside in contested
cases; relating to administrative hearing officers; relating to
contested case proceedings; and providing for an effective date."
CHAIRMAN GREEN reminded members the committee first heard HB 232 on
April 28, 1997, prior to which they had been advised by the Office
of the Attorney General. Chairman Green noted that Teresa Williams
of that office would be on teleconference soon; he mentioned that
in her letter of April 25, 1997, Ms. Williams had called this
concept "intriguing." Chairman Green indicated the committee would
hear an update on what had been done during the interim and would
take testimony.
REPRESENTATIVE SCOTT OGAN, prime sponsor, said he would not recap
the previous hearing but would answer questions afterwards. He
noted that HB 232 will affect a relatively small number of
government hearing officers operating under the Administrative
Procedure Act (APA); he had included a list of those.
Number 0252
REPRESENTATIVE OGAN advised members he had considered an all-
inclusive bill that would cover all administrative hearing officer
functions in the state. He said if HB 232 is passed and properly
implemented, they should not need such an exhaustive, broad-brush
approach. Agencies can voluntarily avail themselves of the new
independent hearing officer system under HB 232.
REPRESENTATIVE OGAN said in the interests of time, with the
cooperation of the Knowles Administration, he is willing at this
time to stay with this more conservative, incremental, APA-based
approach to establishing an office of independent hearings. He
expressed hope that the positive results achieved by this new,
unbiased, and more efficient office will encourage other agencies
to avail themselves of its services without being forced to do so
by the legislature; this bill provides that option.
REPRESENTATIVE OGAN said it is his desire to work with the
Administration to put in place a complete, separate, independent
hearing office in Alaska. However, if the Knowles Administration
delays action on House Bill 232 with fiscal maneuvering or
suggesting they will lose expertise by insisting on independent
hearings, he said he had told the commissioner and the Governor's
office that he will proceed in another direction. Representative
Ogan said he doesn't believe the Administration would be well-
served by defending the present hearing process throughout the
state. "We should get on with the changes through House Bill 232
and turn our attention towards serving the public and not the
bureaucracy," he added.
Number 0343
REPRESENTATIVE OGAN discussed the bureaucracy as a fourth branch of
government, saying it has all three of the other functions under
one roof. He said with hearing officers, there is a potential for
bias. If an administrative hearing officer works in the agency
that helps write the regulation, or maybe the policeman who finds
the infraction is also the hearing officer that adjudicates it,
there is not a separation of powers or lack of bias.
Number 0447
REPRESENTATIVE OGAN mentioned a saying of Winston Churchill: When
there is a lack of separation between the administration and the
judiciary, there is a formula for tyranny. He then advised members
that Edward Hein, a federal administrative law judge, was present
as an expert witness to answer questions; Judge Hein had provided
a sectional analysis of the bill, included in members' packets.
Number 0511
REPRESENTATIVE ERIC CROFT asked Representative Ogan what work had
been done in the interim and what changes were made to the draft.
REPRESENTATIVE OGAN said they had not changed anything in members'
packets. They had had the Division of Legal and Research Services,
Legislative Affairs Agency, do an exhaustive search on all of the
administrative hearing officers throughout state government, and
they had looked closely at whether or not they wanted to include
everyone. Representative Ogan said they have decided at this time
to do it on more of an incremental basis and stick with those
officers under the Administrative Procedure Act. If this runs as
well as he believes it will, he said, some of those other agencies
may want to pony up and have their administrative hearings through
the independent panel.
REPRESENTATIVE OGAN said a lot of those people are on a contract
basis. Noting that attorney rates are at least $100 or $125 per
hour, he said he would argue that there will be some serious cost
savings there. Representative Ogan said he believes the House
Finance Standing Committee needs to take an in-depth look at the
true costs of the present system in Alaska. Committee packets
contain a memo wherein he requested that the subcommittee chairmen
in the House Finance Standing Committee ask for a specific break-
out of the administrative hearing costs; the co-chairs of that
committee are aware of the request, which Representative Ogan
believes will be accommodated.
Number 0636
CHAIRMAN GREEN asked whether it is Representative Ogan's
understanding that the information would be made available fairly
soon.
REPRESENTATIVE OGAN said he would ask the subcommittee chairmen
whether they've been given instructions by the committee chairman
to try to provide that information as quickly as possible.
Number 0700
REPRESENTATIVE OGAN referred to a memorandum dated April 25, 1997,
from Paul Brandt and Patricia Young, legislative analysts for
Legislative Research Services, and to a table in the memorandum
titled, "Expenditures for Administrative Adjudications, Fiscal
Years 1994-1996." Representative Ogan explained that for 1996,
they could identify about $6 million on these hearings. He noted
that the state of Colorado does four to five times as many
hearings, on a $2-to-$3 million budget, with this type of panel.
Number 0760
CHAIRMAN GREEN asked Ms. Williams to address her objections.
Number 0786
TERESA WILLIAMS, Assistant Attorney General, Fair Business
Practices Section, Civil Division (Anchorage), Department of Law,
testified via teleconference from Anchorage. She inquired about a
letter she had sent that morning.
CHAIRMAN GREEN called an at-ease at 1:21 p.m. to make copies for
members, and he called the meeting back to order at 1:24 p.m. He
then called a second at-ease at 1:25 p.m. so that members could
peruse the letter, and he called the meeting back to order again at
1:26 p.m.
Number 0855
MS. WILLIAMS explained that the APA sets out hearing procedures for
agencies that are named. The bill would create a subset of
procedures that would apply in APA proceedings. However, that
subset subsumes the whole. There are no agencies that are not
under the APA which have procedures under the APA. As a result, a
number of statutes in the APA are not amended; they retain the
authority of the agency, for example, to determine the time and
place of hearing, to issue subpoenas, and to handle evidentiary
questions, depositions and so forth. They are inconsistent with HB
232, and they would create a conflict if the bill were enacted.
They need to deal with the APA as a whole and not create subsets
that are inconsistent.
Number 0942
MS. WILLIAMS said the bill would apply to certain boards and
commissions that only provide an adjudicatory function and have no
other function. It would apply to boards and commissions that
currently have licensing and discipline functions, such as all the
occupational licensing boards, (indisc.) council, and the Alcohol
Beverage Control Board, so that a hearing officer, rather than the
board, would determine whether a license should be issued, whether
a conduct is a misconduct, and what the sanctions should be for
that misconduct.
MS. WILLIAMS pointed out that HB 232 gives final decision-making
authority to the administrative hearing officer in all issues, not
just factual issues, and that would include policy issues and legal
issues. This would be a broad grant of executive power to a single
person, which is problematic. Ms. Williams stated, "The agency
itself, because it becomes merely a party to the proceeding, would
have appeal rights in superior court which -- we had a question of
additional litigation. There is a question, of course, about
agency expertise; I address that at some length in the memo, and I
don't think I need to go through that here."
MS. WILLIAMS continued, "In terms of questions in the bill about
the way it's drafted, the chief administrative hearing officer
protects and ensures the decisional independence of each hearing
officer. And the question there is: Does that preclude the chief
hearing officer from promoting consistency in decision making? And
does that inhibit the supervisory powers of the chief?"
Number 1067
MS. WILLIAMS advised members that the power to accept money,
grants, bequests and services may be at conflict with the Executive
Budget Act or the prohibition on dedicated funds. It certainly
should be phrased to make it clear that this money goes to the
division and not to that person personally. Again, there also
needs to be a resolution of whether or not interested parties can
pay money to the division.
MS. WILLIAMS further advised members that there needs to be broader
statement of precluded outside employment; right now, the
prohibition is just on paid outside employment. The question would
arise if a person on a pro bono case had just heard a case
involving the state, either as a decision maker or an adversary in
some matter.
MS. WILLIAMS next discussed the question of placement of
administrative hearing officers in the classified service. That is
particularly a problem for the Alaska Labor Relations Agency, which
was moved, in fact, under the Department of Administration to take
away one conflict; then placing those people in a bargaining unit
would create a new problem as far as impartiality. She said they
also don't know in this bill whether the chief would be in the
classified service or the partially exempt service.
MS. WILLIAMS concluded by saying those are just a few of the issues
they had noted, and she had not had a chance to work on this over
the interim, nor had her office been asked to do so. She said she
would be thrilled to work on it, with the idea that this really has
some problems that need to be fixed.
Number 1173
CHAIRMAN GREEN asked whether the sponsor had a response to the many
points that had been brought up. He asked whether Ms. Williams had
other issues that she believed should be brought up.
MS. WILLIAMS replied that issues come up; the more she works on it,
the more these matters come to light. She specified that while
there are certainly policy issues, her office is not speaking to
policy issues, which would be handled by someone else, not by her
office. She concluded by saying in terms of general areas, this
pretty much covers what they have seen so far.
Number 1223
REPRESENTATIVE OGAN asked Ms. Williams what she likes about the
bill.
MS. WILLIAMS replied that the idea of having independent hearing
officers is a good one. "I don't think that this bill, as written,
gets us where we want to be," she added.
Number 1243
REPRESENTATIVE OGAN noted that they had received Ms. Williams'
analysis two hours before this hearing. He expressed regret that
Ms. Williams hadn't had the time or direction to work with the
sponsors over the interim.
MS. WILLIAMS responded that she had had a few conversations, and
for the most part she was told that "they were waiting for
Representative Green to convene a meeting or that the particular
staff person I needed to speak with was not working during the
interim." She said she had faxed some material at least two weeks
ago but didn't get a response.
CHAIRMAN GREEN asked whether Ms. Williams had been expecting this
committee to do something.
MS. WILLIAMS replied, "I was told that Representative Ogan's office
was waiting for Representative Green's committee to do something."
Number 1301
REPRESENTATIVE OGAN noted that Dave Stancliff, who has been working
on this primarily, has been in his employ throughout the interim.
"And we've had no contact at all," he stated. "They haven't raised
one question."
Number 1324
REPRESENTATIVE CROFT said to the extent he understood the concerns,
most of them were drafting concerns. It is not a policy difference
but a question of whether there is an APA coverage issue where it
conflicts with other statutes, including whether they want to
decide whether the chief is classified or partially exempt.
Representative Croft suggested those kinds of consistency changes
could be worked out fairly quickly. He stated support for the idea
of this bill but said he wants to make sure the "T"s are crossed
and the "I"s are dotted.
Number 1356
CHAIRMAN GREEN concurred, noting Ms. Williams' opening comments
about "the inconsistencies with some groups within APA." He
suggested the rest seem to be housecleaning measures. He asked
whether that was the sponsor's call on it.
REPRESENTATIVE OGAN indicated he had just received Ms. Williams'
memo and had not had time to do an in-depth analysis. He said he
didn't know whether Judge Hein could shed any light on it.
CHAIRMAN GREEN asked Judge Hein to first respond and then to give
his testimony.
Number 1392
EDWARD H. HEIN provided some background. He is Chief Appeals
Officer for the National Marine Fisheries Service (NMFS) in Juneau,
and this is his fourth year in that position. From 1981 to 1988,
he had worked as a bill drafter for the legislative legal services
office. He is currently a member of the Alaska Bar Association and
the National Association of Administrative Law Judges (NAALJ); the
latter had drafted the original Model Act on which this was based.
However, Judge Hein was on this occasion representing himself and
the NAALJ.
JUDGE HEIN advised members he first saw this memorandum from Ms.
Williams just before he got into the hearing room, and he had
reviewed it quickly. He specified that he would defer to the
drafting attorney who worked on this version of the bill to address
any specific drafting problems.
Number 1451
JUDGE HEIN told members he had noted two points in the memorandum
with which he disagrees, both on page 2. The first is in the
section titled "Final Decision-Making Authority," at the bottom of
the second paragraph. The paragraph talks about the courts'
generally deferring to expertise-based decisions that agencies
make, including in their administrative decisions. Judge Hein
said, "And the attorney general states that this expertise is lost
if final decision-making power is placed with an administrative
hearing officer. I would disagree with that, and I can address
further the issue of expertise later in my testimony, but I'll just
note that as a point of disagreement."
JUDGE HEIN said that second, at the very bottom of page 2 there is
a statement that the hearing officers in the central panel, as well
as the chief hearing officer, would be precluded from engaging in
the practice of law except in pro bono cases. Judge Hein said
while that is technically true, it is also true that the bill would
require that persons employed as administrative hearing officers
with this panel would devote full time to their positions; the only
exception would be if someone were hired on a part-time basis.
JUDGE HEIN noted that while those were the only two points that had
struck him, he may have further comments. He offered to answer
questions.
Number 1554
REPRESENTATIVE ETHAN BERKOWITZ said it seems the sponsor and Ms.
Williams both have some valid points. He suggested it would be
unfortunate if the efficiencies which this bill seeks to promote
are lost because the details of the bill cannot be reconciled, as
those seem to be solvable problems. Representative Berkowitz
offered to work with the sponsor and Ms. Williams, if necessary, to
iron out those details.
Number 1590
REPRESENTATIVE JEANNETTE JAMES said having been down that road of
trying to make a change to the APA, it is necessary to go through
the Act and find out who these different agencies or commissions
are, for example. If they are talking about any group in the state
with authority to make regulations under which there might be an
appeal and a need to have a hearing officer, there are different
structures to these committees and commissions that need to be
looked at individually; she didn't know whether the drafter had
done that. She said she is very supportive of this procedure and
this legislation, but she wants to be sure there are no little
snafus. She offered to help look that up, too, perhaps before the
next hearing or whenever it could be meaningfully done.
Number 1662
REPRESENTATIVE OGAN advised members that the drafter would be there
as soon as possible. He brought to members' attention a memorandum
from Terri Lauterbach, Legislative Counsel for the Division of
Legal and Research Services, dated April 26, 1997. He began to
read from paragraph 2 of that memorandum.
CHAIRMAN GREEN asked whether Representative Ogan was citing that in
response to Ms. Williams' questions or as additional input.
REPRESENTATIVE OGAN said it was additional input.
CHAIRMAN GREEN suggested they should cover all the questions first.
Number 1705
REPRESENTATIVE NORMAN ROKEBERG asked Ms. Williams to point out in
the bill where, for example, such groups as the Alcohol Beverage
Control Board and the Alaska Real Estate Commission might be
brought under this and have their ability to make determinations
about licensure "within the purview of this bill, as opposed to
those bodies."
Number 1754
MS. WILLIAMS explained that the bill would change the procedure for
all agencies that are under the APA. All of the occupational
licensing boards, the state medical board and the real estate
commission are under the APA, as is the Alcohol Beverage Control
Board. Whenever there was a dispute over whether, for example, a
bar should be licensed or should have its license revoked, or
whether a doctor should be licensed or should have the license
revoked, that final decision would be made by a hearing officer,
and the board or commission would have no authority to make the
final decision in those matters.
Number 1788
REPRESENTATIVE OGAN advised members that before he was in the
legislature, he'd served on one of those licensing boards, what was
then the big game commercial services board, also known as "the
guide board." One reason he became interested in this issue was
because he was uncomfortable passing judgment as a board member
about someone's license, including possibly putting a person out of
business or fining someone up to $5,000, with no ex parte
communication. They had been disallowed any opportunity to
interview the accused; rather, they simply received the hearing
officer's report and had to rely on the competency and impartiality
of the hearing officer. In addition, they had not been allowed to
ask the witness any questions.
REPRESENTATIVE OGAN stated, "And we were getting ready to put this
guy out of business. And that always bothered me a great deal. I
thought he was not getting due process. And ... to my
recollection, we only overturned one hearing officer
recommendation. But ... we couldn't ask the hearing officer
questions. I mean, we read the report, and we either rubber-
stamped it or we 'thumbed down.'" Representative Ogan stated his
belief that in spirit at least, if not in law, that violates
people's due process rights.
Number 1847
CHAIRMAN GREEN noted that a couple of years ago, because of that
lack of de novo review, he himself had sponsored a bill on tax
appeal that embodied the same concept; it is now law. But that
also required a significant amount of interchange and searching to
be sure that they dotted the "I"s and crossed the "T"s. Chairman
Green said that is a good point and Representative Ogan is on the
right track.
Number 1872
REPRESENTATIVE JAMES asked how this would work differently,
suggesting they may be talking about apples and oranges. When a
board acts as a hearing officer in a case, as opposed to having a
separate hearing officer, someone could appeal the board's decision
to a hearing officer, perhaps, or to a court.
Number 1912
REPRESENTATIVE OGAN replied that that is a very good point. When
a regulation writer also adjudicates regulations, Representative
Ogan believes there is an inherent bias, which is what they are
trying to get at here: The boards can still write regulations, but
they won't be able to adjudicate them. He suggested if a police
chief wrote the law, enforced it and adjudicated it, there would be
more overcrowding in our jails.
Number 1945
REPRESENTATIVE JAMES said she agrees with that concept. However,
some boards are strictly there for the purpose of adjudicating
decisions made somewhere else; those boards would have to be sorted
out and treated a little differently.
Number 1960
REPRESENTATIVE CROFT agreed, adding that he can see how this bill
solves a lot of problems, but not necessarily the ex parte
communication issue. Instead of the board having a "reject or
rubber-stamp option," there wouldn't even be that option. There
may be a more impartial judge, but without the review by the board
anymore. He asked whether he was reading that right.
Number 1981
REPRESENTATIVE OGAN replied that he believes that is correct. He
noted that Judge Hein was nodding his head.
JUDGE HEIN responded, "That may be true in some instances, and you
may need to look at that. If you have agencies under the APA whose
sole function is to decide administrative cases, then yes, ... this
would have an effect on their authority. It would shift that to
the central panel, as now written. And you may need to look at
specific commissions, boards, agencies to determine whether in fact
that is their sole function and, if so, whether, as a legislative
choice, you would want to have those particular agencies be the
decision maker or, in fact, transfer this to a central agency."
JUDGE HEIN continued, "It seems to me that the primary purpose of
administrative adjudications is to have what is hopefully an
independent decision maker who offers parties who have to deal with
executive agencies an opportunity to have their so-called day in
court without having to go to a judicial court, with all the time
and expense that that involves. And the only way that I think you
can fairly assure that is if you have a decision maker in the
hearings who does not represent, or appear to represent, the
agency's policy and is not under the agency's direct supervision.
... But specifically, the answer to your question: If there are
such agencies, then that becomes a policy question as to whether
you want those particular agencies to continue that function and
carve them out from the list - you can do it ... by drafting - or
whether you wish to fold those agencies and fold it all into the
central panel, in which case you'd need some different kinds of
amendments."
Number 2068
REPRESENTATIVE BRIAN PORTER asked whether he was correct that there
are some agencies which, under the APA, would have an
administrative hearing, the results of which would be advisory to
the board, while for others, the administrative hearing decision
would be compulsory, only appealable to the superior court.
JUDGE HEIN deferred to Ms. Williams to answer. He added that yes,
under the APA as it is currently written, these would be primarily
proposed decisions, but he doesn't know to what extent they are
currently allowed to be final decisions.
Number 2111
MS. WILLIAMS responded, "Yes, the decisions of the hearing officers
are proposed decisions made to the final decision maker. The final
decision maker has several options, what to do with that proposed
decision. If the person wants to - or the board or commission
wants to - increase the sanctions, they call for the entire record
and review it. They can remand it for further proceedings, or they
can accept the decision as written, or they can decrease the
penalties; those are the options that are currently under the APA."
Number 2138
JUDGE HEIN added that the bill, as currently drafted, would make
all decisions under article 8 of the APA final decisions, but it
would also provide for advisory or preliminary decisions for those
agencies that choose to use the services of the central panel.
REPRESENTATIVE PORTER asked whether currently, under the APA, there
are the three options mentioned by Ms. Williams for the results of
the hearing officer on all agencies that are within that procedure.
Number 2176
MS. WILLIAMS said yes, then explained that there are actually four
options. They can accept the decision as written. They can remand
the matter back to the hearing officer and request that there be
additional evidence taken or additional factors considered. They
can accept the decision and decrease the penalty. And fourth, they
can call for the record, review the entire record and make their
own decisions, based on that record.
REPRESENTATIVE PORTER suggested that is, in effect, a rejection.
MS. WILLIAMS replied that sometimes they call for the record and
then uphold the decision; at that time, they can take additional
evidence and so forth. She clarified that the hearing officer at
that time is available to the board; the hearing officer can go to
deliberations with the board and can talk about what the record is
all about and what the bases were for some of the proposals, for
example. While that is an option, apparently the hearing officer
didn't do that with the big game guiding board when Representative
Ogan was on it, which Ms. Williams said is unfortunate. That is
the general procedure, but some hearing officers don't understand
that, which is why they now have a hearing officer manual that
explains that those services should be available to boards and
commissions.
Number 2231
REPRESENTATIVE PORTER asked whether it would be fair to say this
bill wants to take the employment position of the hearing officers
out of the agencies and then create a separate agency, but
basically not interfere with the process as they have heard it
explained.
REPRESENTATIVE OGAN agreed it is a fair assessment. He added that
the boards cannot take testimony from the witnesses during that
process, which is the part that really bothered him. He said while
he didn't want to impugn the character of any hearing officer, they
work for a commissioner and have somewhat of a potential for a
bias.
CHAIRMAN GREEN suggested it is a perceived bias.
REPRESENTATIVE OGAN concurred.
Number 2274
REPRESENTATIVE CROFT said if that is true, he'd misunderstood how
this works. It seems a positive development to take the hearing
officers out of their individual areas and mass them together, to
have less perceived institutionalized bias. "But I thought that we
also, then, made that the final determination, rather than giving
the 'perceived bias' board again a final call," he said. "And so,
I guess I wanted a clarification on that. Under the new proposal,
would the board still have the option of rejecting, taking or
modifying ... the decision of the now-perceived-impartial
administrative law judge?"
Number 2304
JUDGE HEIN said no; he had addressed that on page 7 of his
memorandum to the committee dated January 26, 1998, comparing this
version of the bill to the Model Act adopted by the American Bar
Association and drafted by his organization.
JUDGE HEIN explained that the bill currently provides two things
that are new, with respect to this issue. First, it removes the
hearing officers who are currently doing APA-type hearings from the
agencies and puts them in a central panel agency, under the
Department of Administration. Second, it makes all of their
decisions final decisions, for those agencies under the APA. It
also provides that other agencies which are currently not under the
APA can, by agreement with the central panel, make use of the
services of the central panel hearing officers, and they would have
a choice as to whether they wanted to allow those decisions to be
final decisions or not; that would be part of the agreement they
worked out on a case-by-case basis with the central panel.
Number 2361
REPRESENTATIVE PORTER asked for which other agencies it would be
voluntary.
JUDGE HEIN cited as examples the Commercial Fisheries Entry
Commission and many functions of the Department of Revenue and the
Department of Labor. To the extent departments are not fully
covered by the APA, those kinds of decisions excluded under AS
44.62.330 would also be subject to this voluntary option. Judge
Hein stated, "For example, if you look at any of these departments
here, ... other than the boards and commissioner, most of which are
professional licensing boards, the department hearings tend to be
limited coverage under APA, just for certain subject areas, and
others are left out."
JUDGE HEIN stated his understanding that for the Department of
Transportation and Public Facilities, for example, only hearings
and decisions relating to aeronautics and communications are
covered, and it presumably would not cover contracts and other
disputes within the department. He asked Ms. Williams to correct
him if he was wrong.
Number 2408
CHAIRMAN GREEN said, "But in each case, whether they volunteered to
be bound or came under APA, they would be the appellate process."
JUDGE HEIN concurred.
Number 2416
REPRESENTATIVE BERKOWITZ said it seems they are striving to balance
efficiency against fairness in dispute resolution. He stated his
understanding that there are essentially two classes of APA
resolution, with either advisory opinions or final opinions. He
asked whether there are broad groupings of agencies that tend to
make advisory opinions, as opposed to those that make final
opinions. He also asked what the rationale is for that
distinction.
Number 2446
MS. WILLIAMS replied, "All of the decisions made by hearing
officers under the APA are advisory."
REPRESENTATIVE PORTER asked, "And this would make them ...?"
MS. WILLIAMS said, "Final."
REPRESENTATIVE PORTER added, "Compulsory."
Number 2455
MS. WILLIAMS clarified that there are differences between this bill
and the Model Act put together by the administrative law judge
group. She mentioned a section on proposed decisions and orders
under the Model Act [ends mid-speech because of tape change].
TAPE 98-3, SIDE B
Number 0006
JUDGE HEIN stated, "Well, two things: One is that the bill, as
it's written, does make that provision for those cases which would
be voluntarily referred to the agency. Secondly, the memorandum
I've provided, pages 4 through 7, section by section, discusses
briefly the differences between the Model Act and this bill. So,
... it is addressed there."
Number 0028
REPRESENTATIVE JAMES said as she understands it, these
administrative law judges are to make decisions on regulations that
have been adopted and on whether the regulations are being aptly
applied. What they are trying to fix by this legislation is to
have a separate group, in a separate agency, that has no interest
in or exposure to the issue. It seems that the procedure is that
a person can bring a complaint to the agency and point out the
belief that the agency has made an error. "I'm talking about
regulations, now," she specified. If the agency disagrees, the
complainant can take it to the commissioner. Representative James
asked: If the commissioner agrees with the agency, is there
another step? Or is this hearing officer supposed to help the
commissioner make a decision?
REPRESENTATIVE JAMES said that is her issue, because it seems that
after the commissioner said, "No, I think we've done everything
correctly," they would have this step of the administrative hearing
officer, prior to going to state court. She stated, "But that
really would start a court action after the commissioner had said
that, no, this is the way this is going to be. So, it seems to me
like that when we're going up this step, and after we've once
passed the commissioner's decision, we go to the hearing officer,
that that decision ought to be final. In other words, an unbiased
person has taken all of the information, and this is the decision;
they either support the agency's decision or not. And if the
person who's still dissatisfied would then have to take his case on
to court."
REPRESENTATIVE JAMES continued, "Now, ... in laying that out, I see
absolutely no reason to have a hearing officer make an advisory
opinion, and here's why, is because one of the main issues we're
trying to address here is - whether it is real or perception - the
problem of the same people making these decisions or the same group
of people all along the way, and, in the case of boards and
commissions, those appointees are politically appointed. And so,
we're wanted to clean this thing up of any kind of influence by
anyone who either works in the agency or has helped write the
regulations or helped to implement the regulations or has ... made
any decision based on - as a board, as a political person with a
special interest, which they do have special interests - that that
is erased, and this person is to be given a ... clean reason or
answer to their situation, without any bias, with a person who is
qualified to do this."
REPRESENTATIVE JAMES continued, "Just to say, then, that one of the
biggest complaints that we hear on these kinds of issues is, 'Well,
this administrative officer doesn't have the expertise.' The
people in the agencies, the people in the commissions, really
believe they know these issues and therefore they can make the best
decisions. It is my personal opinion that administrative officers
are unbiased, and they don't need that expertise; and whatever they
need, they will have, because if they had it, they couldn't give an
unbiased opinion. So, you know, that's the way I understand it.
Correct me if I'm wrong and that's not the way it's working now and
the way that is intended to work."
CHAIRMAN GREEN suggested she was both right and wrong.
Number 0183
JUDGE HEIN responded, "Well, that was a lot. And I agree with you
in most of that. ... What the bill does, it seems to me, is it does
take the hearing officers out from under the control of the agency
itself. Currently, a hearing officer's decision is reviewable by
the commission or board that's over it, and then after that can
still be taken to court. And the question is really: ... What do
you want the relationship to be between the agency and the hearing
officer? There are issues of expertise, which I can address during
my regular testimony. But ... it is sort of changing the order of
things by taking the hearing officer out of the agency, to the
extent that the hearing officer's decision is a final decision.
The hearing officer is reviewing the commissioner or the board or
the agency. The agency makes its initial cut at it, and if it is
appealed, then you have a hearing officer that takes another look
at it, rather than just a process within layers ... of the agency."
JUDGE HEIN continued, "I could tell you that, for purposes of
making impartial decisions, it can be very difficult for a hearing
officer to have the courage to do what he or she thinks is the
right thing, when he knows it's going to overturn the agency's
view, and may feel that it's futile if it's just going to be
reversed again by the commissioner or by the governing board. And
so, that's a key provision of this whole concept of having a
central panel."
Number 0250
CHAIRMAN GREEN added that there is at least a "two-step" in most
large departments, which can be avoided by doing this. He stated,
"And the problem is, you go to the person that made the decision,
you appeal to that supervisor, to another, and then finally to the
commissioner, and then you appeal to court. And unfortunately, the
court reviews the record, and the record has all been by a biased
agency. And that's what they're trying to avoid. Two steps out
and ... an independent view of it."
Number 0269
JUDGE HEIN said he could add two other points. Within the
Administrative Procedure Act, there is a procedure for
reconsideration of a decision, and the agency would certainly have
as much right to seek reconsideration of a decision as would
another party. That is part of the point: He believes the bill
emphasizes and makes more clear that the agency is itself an
interested party in the outcome of the decision and should be
treated that way, and that there needs to be an impartial decision
maker. Judge Hein noted that the decision maker would be paid by
someone and has to be put somewhere in the scheme of government.
"But, as much as possible, you want someone who does not from the
outset give the appearance - or the reality - of being on the side
of the agency necessarily," he concluded.
Number 0306
REPRESENTATIVE CROFT stated his understanding, from reviewing this
and from discussions with the sponsor, that the primary boards and
commissions to be included are the fish and game boards, plus
occupational licensing entities in various areas; excluded would be
things like workers' compensation, the Child Support Enforcement
Division (CSED), limited entry and "other political tough ones."
He asked whether that general impression is true.
Number 0331
JUDGE HEIN replied that that is essentially correct; there is a
specific list of the boards and agencies covered in AS 44.62.330.
"But your characterization is basically true," he added.
REPRESENTATIVE CROFT said it seems this is the "correct baby step,"
especially with the occupational licensing. He stated, "To the
extent they have expertise to say how dentistry should be run, or
what should be the standard is, fair enough; but to the extent
they're judging another dentist - or veterinarians, or whatever -
whether they lose their license, that becomes more problematic."
Number 0371
REPRESENTATIVE PORTER said he would think part of the idea is to
serve the public better and save time. The existing system doesn't
promulgate the notion that an agency needs to keep on top of the
time limits, for example. He mentioned "cognitive dissonance" and
said if an agency wrote a regulation, they will probably say it is
all right. If the complainant disagrees, what is the incentive for
the agency to try to straighten it out? They can say, "Okay, go
have a hearing, but I'll tell you, if they say they agree with you,
I don't have to take their advice." Representative Porter said it
could roll on and on and on.
REPRESENTATIVE PORTER said he likes this idea of its being the
final decision and not coming back as an "advisory thing." He
stated, "In the same theory, this particular process would be asked
periodically to say, 'Is this regulation consistent or not
consistent with statute, or does it actually even have any
statutory authority?' I wonder how many hearing officers that work
for the commissioner who wrote the regulations ever came up with
that decision?"
REPRESENTATIVE PORTER said with that in mind, he thinks everybody
is kind of on the same page. They just need to work with the
Department of Law in the conformity areas. He suggested perhaps
having a subcommittee or the sponsor do that.
Number 0452
REPRESENTATIVE OGAN responded that he would be more than happy to
work with the Office of the Attorney General. He noted that
Representative Berkowitz had offered his services, and that
Representative James was interested as well.
Number 0488
REPRESENTATIVE ROKEBERG said within the boards and commissions that
relate to occupational licensing, with which he is most familiar,
it seems there are a number of statutory requirements now that give
each particular board or commission a different level of power,
allowing them to do certain things but not others. At a certain
point, which he believes varies according to the board or
commission, a hearing officer would come into play, followed by the
rights of appeal.
REPRESENTATIVE ROKEBERG expressed concern about that line of
demarcation, suggesting it could be simpler and indicating his
desire to be consistent with the desires of the sponsor and the
committee, with which he agrees. He said he appreciates the
comments on finality. He stated, "But my questions and concerns
right now is: Don't the particular boards, commissions and
agencies have different particular points at which there would be
a -- to make a blanket statement and remove some powers? Isn't it
where they're inconsistent with statute, you'd have to go back and
rewrite the enabling statutes of every one of those boards and
commissions? To be able to make sure that they were consistent
with what is trying to be done here is a concern I have. And then,
additionally, I think everybody ... particularly needs to keep in
mind that in the occupational licensing area, that all of that
activity that's carried out within the purview of those areas is
paid for by the licensees that are covered by that. Therefore,
while we're trying to keep an impartial, fair area here, the level
of costs and so forth is intertwined budgetarily within those."
REPRESENTATIVE ROKEBERG mentioned tossing that ball at the House
Finance Standing Committee and said it needs to be kept in mind
when talking about a public policy decision. He asked Ms. Williams
whether his overview is correct, whether there is a particular
point that the hearing officer comes into play, and whether that
varies according to the agency or board.
Number 0600
MS. WILLIAMS said yes, there is a variation, depending on the
charge that is given to the agency. Representative Rokeberg is
also correct that for most - or, she believes, all - of the
occupational licensing boards, the enabling statutes give them
hearing powers and powers to make the final decisions. For
example, if a doctor were charged by the Division of Occupational
Licensing with sexually harassing a patient, the first the board
would know about that would be the filing of an accusation; if the
doctor protested that, it would automatically be assigned to a
hearing officer, who would conduct the hearing and issue proposed
findings of fact and conclusions of law and an order. If the
hearing officer said it was true that there was sexual harassment
over a four-year period, there may be a recommendation that the
doctor be directed to go to a class. The board, looking at that,
could say they don't feel that that is the appropriate outcome.
MS. WILLIAMS stated, "That's the kind of oversight we're getting
now from boards: 'We assume those facts to be true, but that isn't
where we wanted to go from there.' On a very rare occasion, there
is a factual error by the hearing officer that both sides agree is
a factual error. Those problems come up. Sometimes ... there's a
legal error. ... But for the most part, by having that review
process, those issues can be cleared up during the (indisc.) that
a board is entering the final decision."
Number 0698
REPRESENTATIVE ROKEBERG asked whether some boards and commissions
have the authority to remove a license but then have a hearing
officer as an appeal level from that.
MS. WILLIAMS replied no, the boards and commissions do not make the
initial decision on removing a license; those are handled at a
different level, so they don't make both that initial decision and
the final decision. She suggested that more comparable to what
Representative Rokeberg is talking about is a person with a
criminal conviction for theft who wants to be licensed as a
teacher. An initial decision denying the certificate would be
followed by a hearing before a hearing officer to determine what
happened, what the conviction was for, what other circumstances or
recommendations had been, and what should happen. Ms. Williams
then said she realized that isn't a good example because the
Professional Teaching Practices Commission sits as a group with the
hearing officer, as do some of the occupational boards and the
Alaska Labor Relations Agency.
Number 0766
REPRESENTATIVE ROKEBERG said as a result, once the hearing officer
is in play, the board comes back in and makes the final decision as
far as the board is concerned.
MS. WILLIAMS concurred, saying that is why the board has a more
well-developed record. She suggested that the board could then
understand why their preliminary decision shouldn't be the final
decision, or the board may disagree and say that the person should
not be allowed to have a license.
Number 0791
REPRESENTATIVE ROKEBERG asked whether that is where the issue of
expertise comes into play.
MS. WILLIAMS said that is correct.
REPRESENTATIVE ROKEBERG asked whether all APA decisions by boards
are appealable to the superior court.
MS. WILLIAMS replied, "Absolutely." She said in addition, the
court will have available the proposed decision, and certainly if
the proposed decision seems more fair than the final decision, that
will be accessible to the court.
Number 0816
REPRESENTATIVE OGAN advised members that something in Ms. Williams'
letter had been brought to his attention; he referred to page 2,
which states, "This is a broad grant of executive power to a non-
constitutional judicial officer." Then he referred to a memorandum
by Terri Lauterbach, Legislative Counsel, dated April 26, 1997,
which says, "HB 232 does not involve a shift of functions from one
branch of government to another ...." Representative Ogan said the
separation of powers doctrine isn't violated; they are essentially
transferring this authority from one agency within the
administration to a central agency within the same administration.
He said he would argue that it belongs in the judiciary, but he
thinks it would be even more problematic to attempt to do that. He
concluded, "So, I would say that her argument that it's non-
constitutional is not well-founded, with all due respect."
Number 0877
MS. WILLIAMS replied that she is not saying it is unconstitutional.
Specifying that was a term of art, she explained, "This, as a
judicial office, is not created under the state constitution."
Number 0906
JUDGE HEIN noted that they had touched on a number of things that
he was going to address anyway. He said one deals with the concept
of administrative adjudication and review by the judicial branch.
Courts currently review decisions that come from government
agencies, using a general standard of "arbitrary and capricious"
that is a very low standard for the government to meet. That means
a hearing officer must be way off-base, in many cases, or take a
very unusual reading of the law for a court to overturn it. Courts
defer to agency decisions generally on matters of fact-finding,
just as they do on trial court decisions of fact-finding. And they
also defer to agencies because agencies have particular expertise
in the areas in which they are deciding. Courts like to have
agencies make decisions that, in most cases, will end up being the
last decision, because the majority are not appealed to court. And
the courts generally require parties to exhaust procedures and
remedies available through an agency before going to court.
JUDGE HEIN explained, "And so, you want a system whereby the public
can come in and have a fair decision, both in appearance and in
actuality, without necessarily having to go to court for justice.
Many, many parties that come before agency hearing officers are not
represented by lawyers, and they're not required to be. ... The
system was designed to be simpler than court procedures, and
cheaper and faster. But it was also designed to give people a
meaningful decision. And if people perceive that it is futile to
try to get justice from an agency, and that they are only going
through the motions until they can get to court - because the court
requires them to do that - you are burdening the public. You are
adding another layer of hearing and time and expense before they
can get a real, independent hearing. So, there should be a strong
emphasis on the quality and the impartiality of the decisions that
come from agency hearing officers."
Number 1064
JUDGE HEIN said this bill provides for a panel of a professional
core of hearing officers, trained in the substantive area with
which they will deal, in administrative law and procedures, and in
ethics. Judge Hein noted that hearing officers will be subject to
a judicial code of conduct, which hearing officers in Alaska are
not currently subject to. This bill will provide a centralized
agency, "so that you will have professional people supervising
their own kind of people." There will be lawyers and hearing
officers who are experienced in this area, who understand the
pressures that hearing officers are under; they will be doing the
performance evaluations.
JUDGE HEIN told of hearing horror stories at national conferences
from other states' hearing officers, who can be evaluated on the
percentage of times they uphold or overturn agency decisions. It
puts hearing officers in a difficult, if not impossible, position
when they have to jeopardize their careers or promotions in order
to make what they feel is the right decision. It is also a burnout
factor for some who feel that if they buck the agency, their
decisions will just be reviewed again and reversed. Judge Hein
stated, "And they quickly get the message, 'Either go along or get
out.' I don't know to what extent this is common throughout
Alaska, but I know that it happens, and I know that it's a general
problem with hearing officers around the country."
Number 1140
JUDGE HEIN referred to the question of expertise, one of the points
he had noted in Ms. Williams' memorandum. He advised members that
25 states now have central panels; in every state where this type
of legislation has been introduced, the argument has been raised
that they will lose expertise. Judge Hein stated, "Now, I'm not
saying that there'll be absolutely no difference. But in many
cases, the very people who are now hearing cases within the
agencies, that have the expertise, would under this bill end up in
the central panel; they'd just change bosses." Judge Hein said in
addition, agencies themselves have expertise from other people and
can come before the hearing officer as witnesses, as parties,
providing documents, providing whatever they feel is necessary to
educate the hearing officer. And third, there is training
available.
Number 1202
JUDGE HEIN said he believes there is one other factor that isn't
often mentioned here, and he'd found this in his own work. When he
took his job four years ago, it was the first time they had a
hearing office within Alaska for the whole Alaska Region of the
National Marine Fisheries Service. Judge Hein came in after the
programs being appealed to him had been developed, and he was not
involved in the development of regulations.
JUDGE HEIN said first he looked at the regulations and read them,
all the way through. He then talked to people in the agency, who
would tell him what they believed something meant. Judge Hein
stated, "And I said, 'Well, you know, it doesn't seem to say that.'
And they said, 'Well, everybody knows that that's what it means,'
you know. There were times when I would start to write a decision,
and based on what I knew to be the practice and the way the agency
had interpreted its own regulations, I would start to say in a
sentence, in a decision, you know, 'This is the rule.' And then I
would look to the regulations to find the citation to put it in
there, and it wasn't there. And, my God, you know, all of a
sudden, the basic assumptions are being challenged."
JUDGE HEIN said he was able to do that because he had come in with
a fresh eye, without assumptions. He said he wasn't picking on
them for any problems with drafting or anything else. "But when
you work too close to a problem, even if you don't intend to be
biased, you don't see things," Judge Hein said. "And so, to the
extent that even some expertise might be lost, despite the fact
that people are trained, despite the fact that some of the same
people might be the hearing officers, despite the fact that the
agency can provide other expertise, you've gained something in
having a second opinion from an objective source, as objective as
we could make it, you know."
JUDGE HEIN told members it is hard enough to be a fair and
competent decision maker in oftentimes-very-complex cases - to read
the whole record, to listen to everybody's arguments, to be fair,
to give them full due process procedures - when everything is the
way it should be. Judge Hein stated, "But when on top of that you
have an agency which is looking over your shoulder, ... with one
hand there, waiting to get your decision back, and with the other
hand, they're handing you your evaluation, it makes it very
difficult. And I don't know how many other hearing officers do it.
I do what I can live with, what my conscience allows. But
sometimes I have to fight for it."
JUDGE HEIN recounted how when he was hired, he was supervised by
the person whose decisions he was reviewing. His boss would make
a decision and then it would be appealed to Judge Hein to say
whether his boss was right or wrong. The first time there was a
decision where Judge Hein disagreed, they butted heads. Judge Hein
stated, "And I made strenuous efforts and succeeded in getting my
office removed, the creation of a second office. We now have the
same boss. I am still within the agency, but I must say I've been
given a lot of autonomy. But I don't know how it is ... for many
other hearing officers out there. And that is the focus of this
bill: not only so it looks good, not only so that the public feels
good about it, but so that the hearing officers who are actually
deciding the cases are treated fairly and are not put in an
impossible position."
Number 1461
DALE ANDERSON came forward to testify, specifying that he was
speaking on his own behalf in support of the concept of HB 232. He
provided a thumbnail sketch of his background and how it relates to
the subject at hand. He had recently completed a term as a
commissioner on the Commercial Fisheries Entry Commission (CFEC),
where the primary portion of his job description was serving as an
administrative law judge, settling disputes over individuals'
rights to hold permits necessary to harvest Alaska's fisheries
resources. During his term, he had participated in the
adjudication process for more than 550 cases.
MR. ANDERSON advised members that over the four years he served, he
had also attended the National Judicial College at the University
of Nevada. The course of study he completed resulted in a
Certificate of Judicial Development in Administrative Law. During
one advanced administrative law course, there had been an in-depth
discussion about this nationwide movement establishing centralized
offices of administrative hearings as independent agencies within
the executive branches. Mr. Anderson said this discussion provided
a unique venue to discuss the pros and cons of such an agency and
the many varied methods, means and rules that several states
implemented while creating them.
MR. ANDERSON urged serious consideration and passage of this
legislation. First, it certainly appears to provide a more
independent administration of justice, by removing the adjudicatory
functions from the agencies who write, promulgate and then enforce
regulatory law. And second, it is definitely a step in the right
direction to create a smaller, more efficient state government.
Number 1581
MR. ANDERSON advised members, however, that before passage, he
would like to discuss with the sponsor, and the committee, some
alternative treatment on two points within the existing bill. The
first point deals with the appointment process of the chief
administrative law judge. On page 3 of the bill, line 5, it
proposes that the chief administrative officer of the agency be
"appointed by the commissioner of administration." Mr. Anderson
said in the present form, he sees an opportunity for the appearance
of political influence in this selection process. In our
organizational form of the executive branch, the governor has the
power to appoint the commissioner of Administration, who then
appoints the chief administration officer. Mr. Anderson said he'd
spoken at length with the chief administrative law judge in South
Carolina, Judge Steven Bates (ph), who in early days went through
this process with the legislature in South Carolina to develop this
program there. Mr. Anderson told members he had obtained the South
Carolina statutes, and he offered to make copies for the sponsor if
he wanted to peruse them for ideas during a subcommittee meeting.
MR. ANDERSON suggested that if a primary purpose of the bill is to
create independence from outside influence, they can complete the
task and ensure independence by considering paralleling the
appointment process of the state ombudsman, which involves the
legislative branch in the selection of this chief officer. He
said, "Judge Bates stated that the importance of involvement in
the legislature in the appointment process was not only the chief
officer but the six administrative law judges within his panel. He
questioned the importance of this at the outset of their program,
but over the course of years has seen the validity in the process.
In South Carolina, the appointments are made by the legislature
alone, and ... no approval is necessary by the executive branch."
Number 1724
MR. ANDERSON said his second point of discussion is in reference to
the set of requirements to be used to establish or register persons
as qualified to serve as administrative law judges under the chief
officer. He read from page 4, lines 20 through 22, which says that
"the requirements must include admission to the practice of law in
this state and the practice of law in this state for at least five
years preceding employment by the division". Mr. Anderson
commented, "If you interpret my discussion as somewhat self-
serving, you may be right; at this juncture, I have no concrete
plans to apply for this position, but you never know." He then
stated his opinion that having such tight restrictions on the basic
qualifications limits the scope of potential applicants capable of
conducting impartial, fair hearings that result in sound justice
and clear and concise decisions capable of withstanding the
scrutiny of an appellate court.
MR. ANDERSON explained that he is not "law-trained" but has the
experience and talent to adjudicate administrative law cases.
Simply being an attorney accepted by the bar does not automatically
create meaningful judicial qualities in a person, nor does being a
bad attorney - not being able to hack private practice - offer a
good qualifier, either. There are states that don't rely on the
restriction of this qualification.
MR. ANDERSON said there is no standard for a formal administrative
hearing, but it should have substantially the same formality,
dignity and order as a judicial proceeding; the traditional formal
administrative hearing resembles a trial before a judge sitting
without a jury. The goal is the development of a fair, accurate
and concise record. The hearing should move as rapidly as
possible, consistent with the fundamentals of fairness,
impartiality and thoroughness.
Number 1851
MR. ANDERSON stated, "As in my experience, it does not take a law-
trained attorney to be a fair and impartial judge. I would like
the committee or sponsor to consider removing the requirement on
line 20 and 22 and establish other criteria, or at least put in
some equivalencies, for example, the certification in judicial
development at a recognized college, possibly two years' experience
in adjudication process and administrative law, recognizing areas
of expertise that would be valuable in administrating justice
through sound decisions."
Number 1886
MR. ANDERSON referred to page 10 and said there is a transitional
clause in this bill, at the end, that says the state can hire those
working for the state on July 1, 1998. "Unfortunately, I'm not
working for the state at this point," he commented. "But it also
says 'that meets those requirements.'" He said it is unclear
whether they are going to require, even in that transitional
statement, a law degree. He offered to help research the
qualification standards used by other states, if the committee
desired that. He concluded by saying he supports the concept of
the central panel of administrative law judges, and he urged the
committee to work toward that end.
Number 1941
REPRESENTATIVE BERKOWITZ commented, "I've got to say that that
requirement is the nicest thing the sponsor has ever had to say
about attorneys. But I'd tend to agree. I don't think having a
law degree or having practiced law necessarily qualifies you to do
much besides practice law. And this is something entirely
different."
Number 1980
PAM LaBOLLE, President, Alaska State Chamber of Commerce, came
forward to testify, saying Mr. Hein had said it so well: This bill
does a lot to aid the public's perception of the fairness of the
administrative process, but it should also go farther than the
perception. Ms. LaBolle stated, "You can imagine that business has
a great interest in this, because it is a problem that if an agency
makes the rules and decides ... your case, you don't perhaps feel
that you've been able to get the full measure of justice. And then
the point that you have to go through the process, even if you
don't think it's fair, before you can even go to court, and then
the court will rely so much on the record of the administrative
hearing, it is fraught with unpleasant experience for business, too
often. We are completely in support of this legislation, and we
have confidence that the subcommittee will be able to work out the
fine-tuning of the legislation so that it is, in fact, fitting
within the requirements of the law."
Number 2093
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Commerce and Economic Development (DCED), came
forward to testify. Noting that she had arrived late, she asked to
be informed if she was going over ground already covered. She
stated, "I'm here because we do have one of what I believe are
three APA hearing officers in this state, working for the
Department of Commerce and Economic Development; and the 20
occupational licensing boards I work with are one of the primary
groups that would be affected by this legislation."
Number 2149
MS. REARDON referred to a question by Representative Rokeberg about
how the hearing officers are involved in the occupational licensing
process. She emphasized that the hearing officers are involved in
initial decision making, not just appeals; she said she didn't know
whether that had come across earlier. She stated that when
disciplinary decisions are being made - revoking and suspending
licenses - it is the hearing officer who is actually hearing the
evidence and making a recommendation for the initial action.
MS. REARDON said if the hearing officer moves into the role of
being the final decision maker, and if they want boards to make a
decision first, which is then appealed to the hearing officer, they
will still need someone to help them through that process.
Oftentimes, there is a one-week or two-week hearing before a
disciplinary decision is reached. A panel of dentists, for
example, will have difficulty setting aside two weeks for a
disciplinary hearing; even if they can, they need someone
knowledgeable about legal activities to help them hear the
evidence, hear the attorneys object and make evidence motions, and
so forth. Ms. Reardon commented, "It's too much for some people
like me, who aren't real familiar with that, to run hearings
without that type of assistance. So, we do need some kind of a
hearing officer to help with the initial decision making, not just
the appeals, I believe."
Number 2259
MS. REARDON said in license denial cases, similarly, the hearing
officer comes in at the appeal level. The board has denied the
license and now it is being appealed. The hearing officer is
hearing the information for the first time, then bringing it back
to the same board. She stated, "And I would say that if I
understood Representative James correctly, if the board - or, in
the absence of the board, the commissioner of Commerce - were to be
making the initial decision, that decision also may ... require
lengthy evidence-taking. For example, sometimes we're denying an
initial license because we believe the person proved themselves to
be incompetent in another state; and that takes expert witnesses
and things like that. And so, the commissioner of Commerce is
probably not going to have time to sit and think about and read
through all of the evidence before making an initial decision
that's then appealed to the hearing officer. ... The internal
review is a little bit more complicated than it might initially
seem, and it's been helpful to have hearing officers assisting with
that."
Number 2361
MS. REARDON said another concern she has is about paying two
different agencies to decide whether regulations are statutorily
well-founded. Right now, boards adopt regulations; however, those
regulations are sent to the Department of Law, which, reasonably,
is billing the agency to decide whether they are statutorily
authorized. Frequently, the Department of Law says no or amends
those regulations; therefore, it is not a rubber-stamping. An
outside agency decides whether regulations are well-founded. Ms.
Reardon stated, "So, we'll go through that and then we'll have a
hearing officer, possibly, who is going to strike down the regs and
say, 'Although you got legal advice from an outside source saying
that they were okay, they're not really okay.' And the cost of
that, with the bouncing back and forth, is something I have a
little bit of apprehension about. But perhaps I misunderstood, and
perhaps striking down regulations wasn't going to be one of the
authorities of the hearing officers. They could, of course, ...
tell us if we weren't complying with our own regulations; that's
very important. But whether they're actually going to say the
regulation is not a good regulation is another matter."
MS. REARDON said in general, she is a little curious because it
seems perhaps this legislation is focused on what is probably the
strongest and cleanest part of the appeal processes within the
state.
TAPE 98-4, SIDE A
Number 0006
MS. REARDON mentioned other hearings that are going on in less
structured APA settings. She again suggested they are focusing on
fixing up the part that is already the strongest, while maybe the
weaker parts are not being addressed.
MS. REARDON advised members that she hadn't discussed this
legislation with the occupational licensing boards. She wanted to
get it on the table that the boards may have strong opinions on the
topic and may view the ultimate disciplinary decision making as one
of their most important powers, to take away licenses. However,
they may be fine with this.
MS. REARDON said, "It's the legislature that created the licensing
boards to make initial licensing decisions and make disciplinary
decisions. And so, of course, if the legislature decides that they
don't want to have that role, you might want to think about whether
they still are playing a meaningful role - because what would be
... left to them was writing the regulations in the first place -
or whether you want to create another kind of role for them in the
process .... Perhaps the hearing officer would be deciding the
findings of fact and law, and the boards would get to decide what
punishment was appropriate, given that. I'm just throwing things
out, kind of off the top of my head, in a little risky procedure
here, but they might be able to decide whether a doctor should lose
a license if he did the following things, and if the law did read
the following way. Or perhaps boards could assist in deciding
which cases to pursue, more like a grand jury before they went to
the hearing."
Number 0142
MS. REARDON explained, "The division is kind of the prosecution; we
charge people. And usually the board's acting as the ... judicial
body, but perhaps they would act to say, 'No, division, you don't
have enough evidence,' or maybe, 'That's not a high-priority case,
we have other ones we'd rather have you pursue,' but somehow, you
might want to think about some role for the, because they would be
losing quite a bit, I think, in this process."
MS. REARDON said finally, she has some concerns about costs, which
may be more appropriately addressed by the subcommittee or the
House Finance Standing Committee. She stated, "One nice thing
about having one hearing officer in the department is that we know
that that's the most our hearing costs can be. And when it gets
separated into a different department, I would just have some
concerns that there won't be an incentive not to have hearings go
on at great length or in expensive ways, because the person
creating the cost and the person paying it are in two separate
budgets. And I'm just a little concerned because I do have to tax
to cover the costs."
Number 0244
REPRESENTATIVE ROKEBERG asked Ms. Reardon, with her knowledge of
occupational licensing laws and the establishment of boards,
whether it would be necessary to change each of those statutes to
be consistent with this law now, because of variances in the levels
of power granted to the various boards and the different
procedures.
MS. REARDON replied, "There aren't many differences. All of them
have basically the same powers. But I do agree that we'd probably
need to have a section in the back of the bill repealing or
amending a lot of the statutes, because they almost all do refer to
the board making disciplinary decisions, or the board making
licensing decisions. In fact, most of them don't really refer to
hearing officers at all. They were created anticipating that
boards themselves were sitting and hearing cases. And over time,
it evolved that we used hearing officers instead. So, I'd think
you would need to go in and amend a lot of those statutes. I don't
know if it would be very complex or not to do so."
Number 0332
REPRESENTATIVE ROKEBERG referred to mention of some of the weak
points of the APA and how it is administered. He asked whether Ms.
Reardon agrees that one of the weakest points right now in the
system is the inability of the Department of Law to react to the
agency's or board's request for assistance in pursuing these cases
before a hearing officer, resulting in a backlog.
MS. REARDON replied that within the Division of Occupational
Licensing, at this point most of the backlog is not at the hearing
stage; it is before the hearing stage. They definitely need more
legal services than they get, and more than they pay for. Ms.
Reardon explained, "We do have an increment in the budget to ask to
pay for more legal services, to get more. And I think probably the
Department of Law would agree ... that we need more legal services
than they are currently able to provide."
Number 0410
REPRESENTATIVE ROKEBERG asked where the investigators come from and
how they are paid.
MS. REARDON explained, "The Division of Occupational Licensing
investigators are employees of mine, employees of the division.
They do have regular beats, as it were. One ... does almost all
medical. One might do mental health professions and dentistry.
But they also switch around those roles, depending ... on case
load. They aren't hired for particular expertise in an area. And
that is also an area where backlog occurs, I'll be honest. We have
a backlog of investigations that haven't even made it to the
Department of Law stage."
REPRESENTATIVE JAMES commented that Representative Rokeberg had
asked the questions she had been concerned about.
Number 0475
REPRESENTATIVE PORTER said his were more comments than questions,
but to the extent he was off-track, he requested a response. He
stated, "I was anticipating the same thing that Representative
Rokeberg brought up, and that you had mentioned, that the role of
the boards would change. If it is that the intent of the
legislation is that the system be changed, and that the hearing
officer not issue an advisory but a compulsory opinion, then that
does take something out of the boards' authority. And all of them
would have to be looked at. And I don't know if that can be
universally or individually." He suggested that the subcommittee
would have some work to do in that regard, and he expressed the
hope that Ms. Reardon could be involved in that process.
REPRESENTATIVE PORTER stated, "I would think, in the interest of
saving the money that we all know that you have to save, that it
would be an important part of the exercise to make this a nice,
clean step. I think what we're hearing is the boards should create
the regulations and then not have much to do with adjudicating
them, you know. So, to the extent that they would be taking
evidence and all that stuff, I don't think so. I think that's what
the hearing is all about. ... It's been my experience, and I don't
know if it's yours, but some of the delays from legal were delays
because the procedure said that you had to get something from
legal, but whether you really need it or not is another thing. ...
If the agency could do the investigation that's necessary to say,
'We think that this license ought to be pulled,' pull it. And
that's what the hearing's all about, you know. It doesn't have to
go around five times before it comes out the other end."
Representative Porter said that would be his thought, for the
subcommittee to look at streamlining the whole process, rather than
just trying to "nickel and dime it" to get the appearance of
objectivity, when in fact the system needs to be looked at.
CHAIRMAN GREEN commented that this is what extended subcommittees
are built on.
Number 0633
REPRESENTATIVE JAMES agreed with Representative Porter's assessment
but said that is a whole different thought. She said from what
she'd heard Ms. Reardon testify, it sounds complicated and it
sounds as if the hearing officers do far more than just being
hearing officers, including research and other functions.
MS. REARDON responded, "The hearing officer is just the hearing
officer. All the evidence gathering is done by the two parties.
However, considering that evidence and making findings of law is a
pretty ambitious project. And so, all I was suggesting was that if
the hearing officer is going to be the last step, and if the idea
is that perhaps the commissioner of the department or a board is
going to first look through this evidence and try to make a
decision, that that's a hard thing for lay people to have the time
to do. And so, the commissioner of Commerce probably really isn't
going to be able to spend two or three days reviewing Catherine's
decision and looking at all of the evidence to decide -- to do kind
of the ... internal appeal, before it goes to the hearing officer.
I thought that what I was hearing was that first the agency might
reconsider and think about everything and maybe have its own kind
of appeal before it went to the hearing officer -- or own
reconsideration before it went to the hearing officer. And I just
wanted to suggest that that was a big project to be doing, to even
consider all of the evidence."
Number 0746
REPRESENTATIVE JAMES referred to earlier discussion and said it
appears there are some areas under the APA that don't meet the same
criteria as others. She suggested the purpose of this particular
legislation is really to get at those agencies that write
regulations and then have a hearing process, "more than it is the
licensing thing," although she thinks that needs some help, too.
Number 0811
REPRESENTATIVE ROKEBERG indicated they are all very interested in
this concept but there are structural issues to iron out. He said
it sounds as if they are venturing into almost rewriting the APA.
He said to Representative Ogan, "I'm not sure that's really what
you want to do. I think your intention is to set up independent
hearing officers."
REPRESENTATIVE ROKEBERG asked Representative Ogan whether he thinks
his bill would be damaged if these hearing officers were set up
independently but could still work within the structure of the APA.
He cited an example of a complaint issued to a board or agency that
would be turned over to the hearing officer, who would be
independent under this bill. The hearing officer would do the
findings of fact and send that back to the commission or board, as
it is done now under the APA. He said, "They'd make a ruling and
make that hearing officer the final -- make it appealable to him if
there was a problem. And, therefore, his decision would be final,
but after that, going to the courts, if there was a further appeal.
That way, we wouldn't have to rewrite everything in the statute
book and still maintain the independence of the hearing officer
without really changing the APA statutorily or destroying that and,
I think, creating a huge burden here that may not be able to be
overcome without a very long-range rewrite of the statute - or
something like that, anyway."
Number 0919
REPRESENTATIVE OGAN responded, "I guess, on first blush, what you
were saying, if I understand it correctly, it would almost be
duplicative, because we would keep in place the existing process
and then add another layer on top of it. And I'm not sure we would
gain the efficiency and impartiality." He suggested the
subcommittee may wish to pursue that issue.
Number 0967
REPRESENTATIVE CROFT said twice now, this idea of "adjudication
versus penalty" has come up. He asked the sponsor or Judge Hein
whether that division is ever done, where the independent hearing
officer decides guilt and then sends it to the board to decide the
proper consequence. He suggested there may be a policy element to
penalty that is not appropriate in adjudication of guilt.
Number 1005
JUDGE HEIN responded, "I can't tell you specifically if it's done,
how often it's done. Maybe Ms. Reardon or Ms. Williams could tell
you better than I. But it seems to me it's a question of what
questions, what issues, are put before the hearing officer. It's
certainly possible that you could have - particularly in
professional licensing cases - a determination in a hearing that
these were the facts, ... that the law should be applied to this
set of facts, and have the board or commission bound by those
findings and conclusions. Whether it would then take some
statutory amendments to then split that off and leave determination
of 'Now what?' to the board or the agency, you know, that's
something you could look at. But conceptually, ... I don't think
it's necessarily a problem, as long as the agency or board is bound
by the findings and conclusions of the hearing officer."
Number 1065
CHAIRMAN GREEN assigned HB 232 to a subcommittee consisting of
Representatives James, Berkowitz and Bunde, with Representative
Bunde as chairman. He encouraged participation by Representative
Ogan or his designee; Terri Lauterbach, the drafter; and Catherine
Reardon, who had brought up several points that he believed the
subcommittee should review. (HB 232 was held over.)
CHAIRMAN GREEN announced his intention of rescheduling HB 272 for
the following week.
ADJOURNMENT
Number 1139
CHAIRMAN GREEN adjourned the House Judiciary Standing Committee
meeting at 3:06 p.m.
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