Legislature(1999 - 2000)
03/29/1999 01:38 PM Senate JUD
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE
March 29, 1999
1:38 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chairman
Senator Dave Donley
Senator John Torgerson
Senator Johnny Ellis
MEMBERS ABSENT
Senator Rick Halford, Vice-Chairman
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 87(L&C)
"An Act requiring a license to sell rental car insurance."
-MOVED CSSB 87(L&C) OUT OF COMMITTEE
SENATE BILL NO. 114
"An Act relating to impersonating a public servant."
-HEARD AND HELD
SENATE JOINT RESOLUTION NO. 19
Proposing amendments to the Constitution of the State of Alaska
relating to an office of administrative hearings.
-MOVED SJR 19 OUT OF COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
SB 87 - See Labor and Commerce minutes dated 3/23/99.
SB 114 - No previous action to report.
SJR 19 - No previous action to report.
WITNESS REGISTER
Ms. Sue Mossgrove
Staff to Senator Robin Taylor
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Presented SB 114
Mr. Charlie Miller
Republic Industries
PO Box 102286
Anchorage, AK 99510
POSITION STATEMENT: Supported SB 87
Mr. Howard Conklin
Florida
1-800-837-0032
POSITION STATEMENT: Supported SB 87
Officer Ken Jennings
Juneau Police Department
210 Admiral Way
Juneau, AK 99801
POSITION STATEMENT: Supported SB 114
Mr. Edward Hien, Attorney
National Association of Administrative Law Judges
PO Box 21668
Juneau, AK 99802-1668
POSITION STATEMENT: Supported SJR 19
Ms. Teresa Williams, Assistant Attorney General
Department of Law
1051 W. 4th
Anchorage, AK 99501
POSITION STATEMENT: Opposed SJR 19
Mr. Charles Griffin
PO Box 670
Palmer, AK 99645
POSITION STATEMENT: Supported SJR 19
Ms. Deborah Vogt, Deputy Commissioner
Department of Revenue
PO Box 110400
Juneau, AK 99811-0405
POSITION STATEMENT: Opposed SJR 19
Ms. Catherine Reardon, Director
Division of Occupational Licencing
Department of Commerce and Economic Development
PO Box 110806
Juneau, AK 99811-0806
POSITION STATEMENT: Opposed SJR 19
Mr. Paul Grossi, Director
Division of Workers' Compensation
Department of Labor
PO Box 25512
Juneau, AK 99802-5512
POSITION STATEMENT: Opposed SJR 19
ACTION NARRATIVE
TAPE 99-23, SIDE A
Number 001
CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to
order at 1:38 and announced SB 87 would be the first order of
business.
SB 87-RENTAL CAR INSURANCE
MR. CHARLIE MILLER, representing Republic Industries, said SB 87
allows for limited licencing of rental car agencies for the
incidental sale of insurance. The bill gives jurisdiction to the
Department of Commerce and Economic Development to issue these
licences and regulate sales. MR. MILLER explained the only change
in the proposed Labor and Commerce committee substitute is that
liability insurance and underinsured motorist coverage has been
"unbundled" and no longer have to be bought together. He explained
the reason behind the bill is litigation in other states due to
uncertainty in the statute which allows departmental oversight in
this area.
MR. MILLER stated the bill was brought forward at the request of
the Division of Insurance.
Number 048
CHAIRMAN TAYLOR stated he has never thought of a rental car agent
as an insurance agent but, in fact, they are and this bill will
allow some control over the sale of insurance by these agents. He
guessed the Department has probably been concerned by the sale of
insurance by unlicenced individuals.
SENATOR TORGERSON asked if there will be a fee charged to licence
these agents, and if there had been a fiscal note submitted by the
Division of Insurance. He thought he recalled a zero fiscal note
from them.
MR. MILLER explained there would be a designated representative
from each agency, at each location, that would be trained and
tested in insurance sales. Additionally, each company would be
responsible for the conduct of each of its employees.
Mr. Howard Conklin, testifying via teleconference from Florida on
behalf or Republic Industries, said SB 87 is a proactive measure to
find the appropriate licensure for this situation. It will benefit
travelers as well as Alaskans who might be involved in accidents
with people traveling by rental car.
Number 157
SENATOR DONLEY moved CSSB 87(L&C) from committee with individual
recommendations. Without objection, CSSB 87(L&C) moved from
committee with individual recommendations.
SB 114-IMPERSONATE POLICE/EMERGENCY VEHICLE
MS. SUE MOSSGROVE, staff to Senator Robin Taylor, presented SB 114.
The bill arose from public complaints about a decommissioned police
car driven by a man known to have a concealed carry permit and
presumed to carry a handgun. The car has been embellished with
official looking decals and an antenna which gives it the
appearance of an active duty police vehicle.
Ms. MOSSGROVE explained there is currently no law against this. If
SB 114 went into law, it would make impersonating a police or
emergency vehicle a class B misdemeanor.
Number 198
SENATOR TORGERSON asked about decommissioned police vehicles that
simply look like police cars. MS. MOSSGROVE explained this law
would apply only to vehicles re-adorned to look like police
vehicles.
SENATOR DONLEY noted that the city of Anchorage has community
patrols that drive cars with yellow decals and light bars. He
stated the intent of this bill is not to impact these patrols.
CHAIRMAN TAYLOR agreed and SENATOR ELLIS reiterated this important
point. CHAIRMAN TAYLOR suggested they could include the words,
"excepting community patrol vehicles" in the text of the bill.
Number 250
Officer Ken Jennings, of the Juneau Police Department, assured the
committee that community patrols are usually guided by their local
police department ands he does not foresee any problems with their
vehicles. He did not object to the bill being amended to
specifically exclude community patrol cars.
In response to Senator Torgerson's concern, OFFICER JENNINGS said
there is no problem with decommissioned black and white cars that
merely look like police cars; the problem arises when individuals
buy these cars and add decals and/or lights with a "police motif".
CHAIRMAN TAYLOR asked how far an individual would have to go before
they would be guilty of impersonating an officer. OFFICER JENNINGS
said a person would have to block traffic, yell "Freeze, police",
show a fake badge or something similar in order to be guilty of
that crime.
Number 307
SENATOR DONLEY suggested the committee ask the bill drafter for a
better definition. SENATOR ELLIS said he would be happy to do this.
CHAIRMAN TAYLOR said the committee would wait for a tighter
definition and then hear the bill again.
SJR 19-CONST. AM: ADMINISTRATIVE HEARINGS
CHAIRMAN TAYLOR explained SJR 19 proposes a constitutional
amendment to establish an autonomous Office of Administrative
Hearings (OAH) The office would house autonomous hearing officers,
independent from the Department and free from bias.
MS. MOSSGROVE explained the constitutional amendment, if approved
by voters, would establish a separate office of administrative
hearings. This independent office would achieve cost savings and
increase efficiency and fairness in the administrative adjudication
process. MS. MOSSGROVE said the autonomous office would decrease
litigation, create a more stable business environment and improve
public perception of the administrative hearing process.
MR. CHARLES GRIFFIN, a C.P.A. from Glennallen, testified in support
of SJR 19. MR. GRIFFIN said removing hearing officers from
departments will save money, increase efficiency, and streamline
the administrative hearing process.
MR. GRIFFIN proposed SJR 19 would force departments to review their
own regulations, decrease the chances of litigation and increase
the number of out-of-court settlements. The new office established
under SJR 19 will be free from the "institutional bias" now present
in the appeal process.
Number 388
MS. TERESA WILLIAMS, representing the Office of the Attorney
General, stated that the Office of Administrative Hearings proposed
in the bill is established by powerful language which covers all
dispute hearings. Low level agency hearings, written hearings and
hearings held by boards and commissions would all be included under
the current wording. The OAH would duplicate the function of boards
and commissions and remove from them the power to make final
decisions regarding suspension and revocation of licences. The bill
would entrust the Office of Administrative Hearings with hearings
on a broad range of state business including student loans, tax
issues, employee relations, safety regulations, procurement, and
more. The bill would also apply to agencies of the Legislature as
well as the Judicial branch.
Number 435
CHAIRMAN TAYLOR said this was true if the bill was interpreted as
broadly as possible so that every department of state government
was affected by it. However, every other state that has adopted
this system has limited the scope of agencies that would draw
hearing officers from the pool. He asserted that the bill only
gives the Legislature the authority to create the OAH, it doesn't
mandate the creation of an independent hearing officer for each
agency.
MS. WILLIAMS disagreed, saying the Legislature currently has the
power to create this office by statute. SJR 19 would place a
constitutional mandate, superior to the power of the Legislature,
behind this office.
MS. WILLIAMS said the language in SJR 19 "jurisdiction of the
office shall be prescribed by law" is not explicit and does not
"expressly authorize the Legislature to exempt agencies or . . .
certain levels of proceedings from the constitutional mandate." MS.
WILLIAMS said this language is identical to language in other bills
that have been found unconstitutional. CHAIRMAN TAYLOR disagreed
with MS. WILLIAMS' interpretation. He said this Administrative
Hearing Office will not be a "fourth branch of government", and the
Legislature has always had the power to create quasi-judicial
tribunals.
CHAIRMAN TAYLOR said following MS. WILLIAMS' interpretation, "The
existing constitution, as you're reading it, would mandate the
Legislature has to pass laws creating quasi-judicial offices in
every one of these things." MS. WILLIAMS countered that this is a
re-structuring of state government through a constitutional
amendment.
MS. WILLIAMS said the final agency decision would be moved out of
the control of the department, the Legislature, or the Judicial
Branch. The Governor's power over the decision maker would be the
same as the power he holds over a judicial branch employee, and so
it is a re-structuring of state government.
Number 484
CHAIRMAN TAYLOR asked if she was implying the decisions issued by
this office would not be subject to appeal. MS. WILLIAMS replied,
"On this fourth branch of government, there would be a check of
having the judicial branch . . .review to determine if there was a
violation of due process by this office, but it would not be a
decision made by the Executive branch."
CHAIRMAN TAYLOR stated that hearing officers are not supposed to be
under the direction of the executive branch, that is the "evil
we're trying to overcome here." MS. WILLIAMS said the "evil" would
be hearing officers making decisions based on their own ideas of
state policy, rather than abiding by the actual policies set out by
departments responsible for making the ultimate decisions on
licensure and other issues. CHAIRMAN TAYLOR agreed that any
decision of a hearing officer not in compliance with the law would
be overturned.
Number 524
MS. WILLIAMS said departments would have to come up with various
detailed predictions of behavior in order to be sure hearing
officers followed department policy in different situations.
CHAIRMAN TAYLOR asked why MS. WILLIAMS is worried that independent
hearing officers will be worse for the department. MS. WILLIAMS
replied that boards and commissions with expert members are
currently set up to make these decisions. She said she would trust
that an agency would have the public in mind, not be influenced by
a personal belief system. She said she had no problem with the idea
of centralizing hearing officers; the problem is with giving them
final decision making ability. CHAIRMAN TAYLOR responded, "Yeah,
especially one you don't pay."
Number 555
MS. WILLIAMS repeated she has no objection to centralizing hearing
officers. She informed the committee that decisions made by boards
and commissions and commissioners are reviewed by the Superior
Court. She argued there is already a remedy for a person unhappy
with the (in)action of an agency: a person can petition the
Superior Court to order an agency to take action.
MS. WILLIAMS also noted the naming of a Chief Administrative Law
Judge would be a different, more formal approach to the hearing
process than has historically been taken.
CHAIRMAN TAYLOR observed that 25 other states have already done
this. MS. WILLIAMS maintained that no state has done this by
constitutional amendment, and no other state allows centralized
hearing officers to make the final decisions in cases which are
"rather insignificant." MS. WILLIAMS concluded she would be
willing to explore cost savings through consolidation or
centralization of hearing officers.
TAPE 99-23, Side B
Number 591
MS. DEBORAH VOGT, Deputy Commissioner of the Department of Revenue,
agreed that a centralized panel of hearing officers is a good idea.
She stated a mandatory office to hear all administrative disputes
in the state would be "a disaster, it would be a train wreak that
this Legislature would find itself powerless to correct."
MS. VOGT proposed that the controversy surrounding SJR 19 is over
whether this legislation would create a mandatory panel or a
discretionary panel. She asserted if the panel is not meant to be
mandatory, there is no need for a constitutional amendment since
the Legislature already has the power to create and assign duties
to any type of panel it chooses. MS. VOGT suggested if the intent
is truly to create a discretionary panel, that is not clear by the
wording of the bill.
Number 555
MS. VOGT said the Department of Revenue (DOR) handles a variety of
administrative disputes, ranging from Permanent Fund dividend
appeals to child support enforcement appeals. There is a huge
variation in the matters that come before the DOR hearing officers
and she stated, "one size does not fit all."
MS. VOGT explained that three years ago, tax appeals were removed
from DOR when the Office of Tax Appeals was created and placed in
the Department of Administration. That hearing officer is
independent from DOR, and makes final administrative decisions.
However, the Department can look closely at cases before they go to
the Administrative Law Judge. This allows the Department to review
matters and ensure the approaches taken are consistent with
statutes and regulations. Under SJR 19, the commissioner and the
department would not be able to review the final decision before it
was issued.
MS. VOGT noted that very few cases actually come to a formal
hearing, as most are settled during informal conferences.
Currently, any funds awarded to the State as a result of an
administrative hearing are deposited into the Constitutional Budget
Reserve Fund, according to MS. VOGT.
MS. VOGT said she would be reluctant to lose management of
administrative appeal cases, as this may result in a backlog of
cases.
MS. VOGT concluded that, though the state likes the idea of a
centralized panel of hearing officers, it is "downright terrifying"
to see this idea take the form of a constitutional amendment. She
suggested if the intent of SJR 19 is not an absolute mandate, the
legislation should be amended.
Number 497
MS. CATHERINE REARDON, Director of the Division of Occupational
Licencing, opposed the legislation. MS. REARDON said she speaks
against the legislation for three reasons, none of which involve
her, as an individual, trying to retain power.
First, MS. REARDON said SJR 19 would decrease public involvement,
through boards and commissions, in the administrative adjudication
process. Second, there would be a decrease in the expertise of
hearing officers. Third, costs would increase.
MS. REARDON said currently 21 licensure boards staffed by expert
members make decisions regarding their peers. These boards use
their knowledge and experience as well as input from public members
to make their decisions.
Number 445
CHAIRMAN TAYLOR said it appears MS. REARDON is assuming the
Legislature, in enacting the enabling legislation, would "blanket
every single entity with a hearing officer . . .and preclude any
of these people and agencies from exercising the discretion that
every Legislature so far has wanted them to exercise." MS. REARDON
said this assumption came from testimony in the other body.
CHAIRMAN TAYLOR replied that question will be a debate within the
Legislature when the bill has passed.
SENATOR DONLEY noted the bill states, "Jurisdiction of the office
will be prescribed by law." CHAIRMAN TAYLOR added that if the
Legislature did not allow any discretion on the part of state
departments, "that would be a complete reversal of about 35 years
of policy. . ." He said the key to the issue is that the hearing
officers, whether they have final decision making authority or not,
will be independent from the departments.
Number 417
SENATOR DONLEY noted the bill is consistent with the provisions of
the U.S. Constitution, and is "hardly a radical concept."
MS. REARDON proposed that SJR 19 will require many policy decisions
for its implementation. She expressed a desire to have these
decisions made up front, "So we know what we are buying."
MS. REARDON expounded on the financial concerns of her "paying
agency." She said the new OAH system is likely to be like using the
services of the Department of Law. Now, she knows the most she will
pay a hearing officer now is their entire salary. Under the new
system, she will be required to pay billable hours, which is likely
to be more.
MS. REARDON concluded she is not sure hearing officers being
controlled by departments is a big problem. Hearing officers rule
against her division often and moderate the agency's decisions, if
they did not the Division would revoke more licences. She repeated
that she, as a political appointee, probably won't have to deal
with the consequences of this bill, but she fears "a
superbureaucrat, reportable to no elected official, making some
decision."
Number 355
MR. PAUL GROSSI, Director of the Division of Workers' Compensation
(DWC), expressed concern that his department would be negatively
affected by SJR 19. He is concerned the bill would decrease the
expertise of hearing officers available to the division. He is also
concerned the administrative adjudication process will suffer from
a less balanced approach, and undermine the compact that exists now
between labor and industry. MR. GROSSI concluded that the present
system works and there is no need to fix it.
Number 288
MR. EDWARD HIEN, an employee of the Office of Administrative
Appeals for the National Marine Fisheries Service, and a member of
the National Association of Administrative Law Judges, testified in
support of SJR 18.
MR. HIEN said this is not a new idea, and half of the states in the
country already have central panels. He agrees no other state has
done this by constitutional amendment, but gave three reasons it
should be done this way. First, centralizing administrative
adjudication will change the structure of the Administrative branch
and thus is an issue of "constitutional dimension." Second, the
public would get a direct voice in the issue not subject to a
Governor's veto. Third, the approval of a constitutional amendment
by the voters would provide a clear mandate for the Legislature and
the Administration to take action.
MR. HIEN suggested there be no argument over the petty details and
the central question should be addressed. He said much of the
testimony by division directors and department heads is premature
as the scope of the proposed central power will not be determined
until the Legislature considers the implementing legislation.
MR. HIEN explained what the resolution does. First, it centralizes
the administrative adjudication functions within one agency.
Second, it creates a core of independent, professional hearing
officers that will provide the public with the reality and the
appearance of fair, impartial administrative hearings. Third, it
eliminates costly, inefficient duplication of hearing officers and
support staff within the Executive branch. Last, it provides a
uniform adjudication process and uniform rules for everyone who has
to participate in the adjudication process.
Number 200
MR. HIEN then explained what the resolution does not do. First, it
is not intended to limit legislative power to create new quasi-
judicial agencies, nor is it intended to impinge on the power of
existing quasi-judicial agencies, unless that is decided by the
Legislature. Second, the resolution is not intended to create a
fourth branch of government. Finally, the head of this proposed
agency would be appointed by the Governor, and the resolution does
not intend for the office to interfere with the ability of the
Administration and state agencies to perform their function. In
fact it might relieve some of the political pressure currently put
on state agencies, according to MR. HIEN.
Under SJR 18, the Legislature would determine the jurisdiction of
the Office of Administrative Hearings (OAH) and would exempt any
agencies or types of matters it decided. The Legislature would also
decide what type of jurisdiction the OAH had (mandatory or
discretionary) over different departments. MR. HIEN added that all
decisions, regardless of their origin, would be appealable to the
Superior Court.
MR. HIEN said that the OAH could hire, educate and train expert
hearing officers. Also, agency personnel could still provide expert
testimony if it was required. He concluded the bill does not
infringe on the authority of the Supreme Court and is, therefore,
not unconstitutional.
Number 180
CHAIRMAN TAYLOR noted the National Federation of Independent
Business (NFIB) also support the legislation.
Number 155
SENATOR TORGERSON moved SJR 19 from committee with individual
recommendations. SENATOR ELLIS objected.
SENATOR ELLIS said he thought more work was needed on the bill for
the committee to understand exactly what its impact would be. He
also noted that at this time of budget shortfall, he believes the
public would be surprised that the Legislature would propose to
create a new government structure. SENATOR TORGERSON interjected
that the fiscal note reflects a cost of $1,500.
Number 145
SENATOR ELLIS maintained his objection and the roll was called.
Voting in favor of moving the bill from committee were Senator
Donley, Senator Torgerson and Chairman Taylor. Senator Ellis was
opposed. So, SJR 19 moved from committee with individual
recommendations.
With no further business to come before the committee, CHAIRMAN
TAYLOR adjourned the meeting at 3:05 p.m.
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