01/28/2020 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB50 | |
| SB76 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 50 | TELECONFERENCED | |
| *+ | SB 76 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
January 28, 2020
1:30 p.m.
MEMBERS PRESENT
Senator Click Bishop, Chair
Senator Gary Stevens, Vice Chair
Senator Mia Costello
Senator Joshua Revak
Senator Elvi Gray-Jackson
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Senator Lora Reinbold
COMMITTEE CALENDAR
SENATE BILL NO. 50
"An Act imposing an annual educational facilities maintenance
and construction tax on net earnings from self-employment and
wages; relating to the administration and enforcement of the
educational facilities maintenance and construction tax; and
providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 76
"An Act repealing the Workers' Compensation Appeals Commission;
relating to decisions and orders of the Workers' Compensation
Appeals Commission; relating to superior court jurisdiction over
appeals from Alaska Workers' Compensation Board decisions;
repealing Rules 201.1, 401.1, and 501.1, Alaska Rules of
Appellate Procedure, and amending Rules 202(a), 204(a) - (c),
210(e), 601(b), 602(c) and (h), and 603(a), Alaska Rules of
Appellate Procedure; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 50
SHORT TITLE: EMPLOYMENT TAX FOR EDUCATION FACILITIES
SPONSOR(s): SENATOR(s) BISHOP
02/11/19 (S) READ THE FIRST TIME - REFERRALS
02/11/19 (S) L&C, FIN
04/16/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/16/19 (S) Heard & Held
04/16/19 (S) MINUTE(L&C)
01/28/20 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 76
SHORT TITLE: REPEAL WORKERS' COMP APPEALS COMMISSION
SPONSOR(s): SENATOR(s) WIELECHOWSKI
03/06/19 (S) READ THE FIRST TIME - REFERRALS
03/06/19 (S) L&C, JUD, FIN
01/28/20 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
DARWIN PETERSON, Staff
Senator Click Bishop
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Reviewed the changes in the committee
substitute (CS) for SB 50, Version S, on behalf of the sponsor.
TOM KLAAMEYER, President
Anchorage Education Association
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of the 13,000 members of
AEA in support of SB 50.
WILLIAM HARRINGTON, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 50 because it
disproportionately affects lower income workers.
BETH SHORT-RHOADS, representing self
Sitka, Alaska
POSITION STATEMENT: Testified in support of SB 50.
SCOTT MACMANUS, Superintendent
Alaska Gateway School District
Tok, Alaska
POSITION STATEMENT: Testified in support of SB 50.
LISA PARADY, Executive Director
Alaska Council of School Administrators (ACSA)
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 50.
CLAY WALKER, Mayor
Denali Borough
Healy, Alaska
POSITION STATEMENT: Testified in support of SB 50.
NILS ANDREASSEN, Executive Director
Alaska Municipal League (AML)
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 50.
SENATOR BILL WIELECHOWSKI
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As sponsor, introduced SB 76.
DAVID DUNSMORE, Staff
Senator Bill Wielechowski
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Reviewed changes in the committee substitute
(CS) for SB 76, Version M.
CHANCY CROFT, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified with concerns about the
effectiveness of the commission during the discussion on SB 76.
ACTION NARRATIVE
1:30:13 PM
CHAIR CLICK BISHOP called the Senate Labor and Commerce Standing
Committee meeting to order at 1:30 p.m. Present at the call to
order were Senators Costello, Stevens, Gray-Jackson, Revak, and
Chair Bishop.
SB 50-EMPLOYMENT TAX FOR EDUCATION FACILITIES
1:32:20 PM
CHAIR BISHOP announced the consideration of SENATE BILL NO. 50,
"An Act imposing an annual educational facilities maintenance
and construction tax on net earnings from self-employment and
wages; relating to the administration and enforcement of the
educational facilities maintenance and construction tax; and
providing for an effective date."
CHAIR BISHOP noted that the bill was heard last year and there
was a new committee substitute.
1:32:31 PM
SENATOR STEVENS moved to adopt the work draft committee
substitute (CS) for SB 50, work order 31-LS0383\S, as the
working document.
CHAIR BISHOP objected for discussion purposes.
1:33:33 PM
DARWIN PETERSON, Staff, Senator Click Bishop, Alaska State
Legislature, Juneau, Alaska, introduced himself.
CHAIR BISHOP, speaking as sponsor, provided context for the
bill. He related that this was the third time he tried to get
the bill passed, after many others worked to reinstate the
school head tax. He reviewed the history of the school head tax,
which was in effect from territorial days until 1980 when it was
repealed. Initially the head tax was $10, and adjusted for
inflation it would be $30 today, which would generate about $13
million per year. He reviewed the backlog in deferred
maintenance for facilities and reported that maintenance and
capital maintenance costs have risen to $149 million, and $142
million, respectively, for facilities throughout the state. He
offered his belief that it was time to address deferred
maintenance in schools.
MR. PETERSON stated that the only change in Version S was the
new effective date, which is now January 1, 2021.
1:36:26 PM
CHAIR BISHOP found no objection and Version S was adopted. [The
Chair treated it as though he had removed his objection.]
MR. PETERSON paraphrased from the sponsor statement:
From 1919-1980, Alaska had an annual employment head
tax for the purpose of collecting revenues to fund
schools. The tax went through numerous
transformations, but it always charged an equal amount
to each employed individual. When it was repealed in
1980, the tax was $10 per person which has the
equivalent value of $30 today.
SB 50 proposes to revive the repealed head tax on
employed individuals, both resident and nonresident,
with income from a source in Alaska. The "Alaska
Education Facilities, Maintenance, and Construction
Tax" would collect $30 from each person employed in
the state. The tax would be withheld from an
employee's first paycheck each year while self-
employed individuals would be required to remit
payment to the Alaska Department of Revenue. The tax
would be deductible on an individual's federal income
tax return.
According to the most recent statistics from the
Alaska Department of Labor and Workforce Development
and the U.S. Census Bureau, there are approximately
441,596 employed individuals in Alaska. Roughly 20
[percent] of those workers who earn their living in
Alaska do not reside here resulting in $2.5 billion in
nonresident income that leaves Alaska's economy each
year and, in most cases, gets taxed by a nonresident's
home state.
It is estimated that this tax would generate $13
million each year. The revenue collected would be
deposited into the state's general fund and accounted
for separately to pay for the growing maintenance and
construction needs of Alaska's schools.
MR. PETERSON added that self-employed individuals would have to
self-report. Of the 441,596 individuals affected by the tax,
407,255 are firm figures, including 85,000 non-residents. The
number of self-employed individuals is more difficult to
determine, he said. The fiscal note estimated 28,000 self-
employed individuals. The most recent U.S. Census Bureau,
American Community Survey data shows 34,314 self-employed
workers in 2017. If so, this would add an additional $190,000 in
additional revenues. The fiscal note reflects over $13 million
per year in revenue that would be deposited into the general
fund, accounted for separately, to pay for the growing
maintenance and construction needs in Alaska's schools.
According to the Department of Education and Early Development
(DEED), the state's share for the FY 2021 major school
maintenance list totals $149 million and the FY 2021 school
construction totals $142 million for an overall total of just
under $300 million. He listed the supporting resolutions in
members' packets from the Yukon-Koyukuk School District, the
Denali Borough, the Denali Borough School District, Southeast
Island School District, Fairbanks North Star Borough, the Alaska
Board of Education, the City of Fairbanks, Tanana City School
District, the Nenana City School District, and the Iditarod Area
School District. He reported letters of support from the
National Education Association of Alaska, the Alaska
Superintendents Association, and the Alaska Municipal League in
members' packets.
1:40:07 PM
SENATOR GRAY-JACKSON asked why there wasn't support from the
Anchorage School District (ASD).
MR. PETERSON answered that he didn't know.
SENATOR GRAY-JACKSON said she would follow up and make a call to
the ASD.
SENATOR STEVENS stated support for receiving help from out-of-
state workers. He noted this means that nonresident self-
employed fishermen will pay this tax. He asked how it would work
since these individuals do not receive a salary.
MR. PETERSON replied the bill requires self-employed individuals
who are nonresidents who earn income in Alaska to self-report
the $30 per year.
SENATOR STEVENS asked for confirmation that fishermen are
included in the $190,000 as well as North Slope workers or
anyone who works in the state.
MR. PETERSON answered yes. He added that residents who earn
income in Alaska or outside of Alaska would be required to pay
the $30 head tax.
1:42:03 PM
SENATOR COSTELLO asked how the maintenance list is prioritized.
MR. PETERSON replied DEED prepares the list annually according
to specific criteria. He referred to the list in members'
packets for FY 2021, which was just released yesterday. Each
project is ranked, but the list is typically fairly static. It
has not changed much from last year.
SENATOR COSTELLO asked if there is accommodation for regional
equity.
MR. PETERSON asked if her question related to how the funds are
spent.
SENATOR COSTELLO said her question relates to which communities
receive the funds.
MR. PETERSON replied nothing in the bill provides for
disbursement. The legislature will decide on appropriations.
1:43:28 PM
SENATOR STEVENS noted that first on the [FY 2021 Capital
Improvement Projects (CIP)] list is a $10 million request [by
the Southeast Island School District] for "Hollis, [K-12 School
Replacement."] The second request [is from the Lower Kuskokwim
School District] for $60 million [for the "Anna Tobeluk Memorial
K-12 School."] He commented that putting $13 million in won't
solve the problem but it will help.
1:43:52 PM
At ease
1:44:10 PM
CHAIR BISHOP reconvened the meeting and opened public testimony
on SB 50.
1:44:25 PM
TOM KLAAMEYER, President, Anchorage Education Association,
Anchorage, Alaska, stated that he was asked to testify on behalf
of the 13,000 members in support of SB 50. He related that the
National Education Association (NEA) president, Tim Parker, also
sends regrets that he was not able to attend today to speak in
support of SB 50.
MR. KLAAMEYER said investing this revenue in maintenance and
construction for public education facilities is a practical way
of supporting education while maintaining structures. Hundreds
of public school facilities were built prior to 1980 and many of
them need maintenance and repairs to address public health and
life safety issues. He concluded that the state faces many
budget and fiscal challenges, but SB 50 is a simple,
straightforward, and modest way to engage Alaskans and non-
Alaskans who earn their living in the state to support a system
of high quality public schools.
1:46:16 PM
WILLIAM HARRINGTON, representing self, Anchorage, Alaska, spoke
in opposition to SB 50 because it will disproportionately affect
those in the lower income class. He suggested a sliding scale
that would charge higher income wage earners three times more
than low-income individuals. He further suggested exemptions for
seniors and the poor be included.
SENATOR STEVENS asked staff to respond to the question about
whether retirees would pay.
MR. PETERSON said no; it would just apply to net income for the
self-employed or those earning wages and salaries.
1:48:51 PM
BETH SHORT-RHOADS, representing self, Sitka, Alaska, spoke in
support of SB 50 saying this is a modest amount for employed
people to pay.
1:49:30 PM
SCOTT MACMANUS, Superintendent, Alaska Gateway School District,
Tok, Alaska, spoke in support of SB 50. He noted that the school
board passed a supporting resolution, which he read:
WHEREAS, the current budget deficit of the State of
Alaska constrains the state's ability to address
deferred maintenance and school construction needs;
and
WHEREAS, from 1919 to 1980, Alaska, as a Territory and
a State, imposed an annual employment head tax for the
purpose of funding schools; and
WHEREAS, when repealed in 1980, the tax was $10 per
person, which has the equivalent value of $30 today,
when adjusted; and
WHEREAS, SB 50, support proposed by Senator Bishop
revives the employment head tax imposed on both
residents and nonresidents; and
WHEREAS, this tax is expected to raise $13 million
annually; and
WHEREAS, these new funds will be accounted for
separately and used to pay for the growing
maintenance, construction, and deferred maintenance
needs of Alaska's schools.
THEREFORE, BE IT RESOLVED that the Board of the Alaska
Gateway School District strongly supports Senator
Bishop's efforts in promoting SB 50 to address the
capital needs of Alaska's schools and encourages the
legislature as a whole to also support SB 50.
The resolution was signed by board president Peter Talus
and copies were in the bill packets.
MR. MCMANUS said he personally supports the legislation.
1:51:46 PM
LISA PARADY, Executive Director, Alaska Council of School
Administrators (ACSA), Juneau, Alaska, spoke in support of SB
50. She explained that ACSA members work annually on joint
position statements that prioritize important educational
issues. One consistent issue is the critical importance of the
state developing a long-term sustainable fiscal plan with a
diversified revenue stream. The ACSA is pleased that the
proposed head tax would increase revenue by about $13 million.
Importantly, it would capture a portion of the $2.5 billion of
nonresident income that currently leaves the state from the 20
percent of workers who work here, but do not reside in Alaska.
She echoed the previous comments about aging infrastructure. The
ACSA is working in partnership with the Alaska Municipal League
to quantify the overarching needs and work with the legislature
to prioritize how to address the state's aging infrastructure,
she said.
1:55:10 PM
CLAY WALKER, Mayor, Denali Borough, Healy, Alaska, thanked the
chair for his leadership in addressing this critical statewide
issue. He said the Denali Borough has three schools that are
over 40 years old with aging infrastructure and increasing major
maintenance needs. He noted that the district works to address
its needs, but the state is needed to partner with the district.
He referred to supporting resolutions from the Denali Borough
Assembly, Resolution 1908 and from the Denali Borough School
District in the packets. He urged members to address this
statewide need.
CHAIR BISHOP noted that Senator Reinbold had joined the meeting.
1:56:33 PM
NILS ANDREASSEN, Executive Director, Alaska Municipal League
(AML), Juneau, Alaska, spoke in support of SB 50. He highlighted
that in November the AML members voted in support of SB 50 and
anything that will address infrastructure needs, especially for
school facilities statewide. Since 2001, the state has paid an
average of 16 percent of the $4 billion deficit for school
construction and major maintenance grant funding, he said. He
directed attention to DEED's six-year plan. He offered his
belief that the $1.6 billion deficit shown is probably closer to
$2.3 billion. Further, the FY 2021 proposed budget does not
provide any funding for the $400 million in projects identified
by DEED.
1:58:21 PM
CHAIR BISHOP closed public testimony on SB 50.
SENATOR COSTELLO referred to page 4, line 21, and asked for the
definition of "employee" since it reflects federal statutes. She
also asked how part-time employees are affected.
1:59:20 PM
MR. PETERSON responded that the legislation references 26 U.S.C.
3401 and the definition of "employee" reads:
The term employee includes an officer, employee, or
elected official of the United States, a state, or any
political subdivision thereof, or the District of
Columbia or any agency or instrumentality of any one
or more of the foregoing. The term employee also
includes an officer of a corporation.
He added that part-time employees also have the $30 tax taken
from their first paycheck.
SENATOR STEVENS said he would like an explanation of the fiscal
note from the Department of Revenue regarding projected revenue
and costs because the Department of Labor said collecting the
taxes would be expensive.
CHAIR BISHOP said he would have someone from the Department of
Revenue available at the next meeting.
2:01:46 PM
CHAIR BISHOP found no further question and held SB 50 in
committee.
SB 76-REPEAL WORKERS' COMP APPEALS COMMISSION
2:01:59 PM
CHAIR BISHOP announced that the final order of business would be
SENATE BILL NO. 76, "An Act repealing the Workers' Compensation
Appeals Commission; relating to decisions and orders of the
Workers' Compensation Appeals Commission; relating to superior
court jurisdiction over appeals from Alaska Workers'
Compensation Board decisions; repealing Rules 201.1, 401.1, and
501.1, Alaska Rules of Appellate Procedure, and amending Rules
202(a), 204(a) - (c), 210(e), 601(b), 602(c) and (h), and
603(a), Alaska Rules of Appellate Procedure; and providing for
an effective date."
CHAIR BISHOP noted that this was the first hearing, there was a
committee substitute to consider, and only invited testimony
would be heard.
2:02:29 PM
SENATOR STEVENS moved to adopt the committee substitute (CS) for
SB 76, work order 31-LS0493\M, as the working document.
CHAIR BISHOP objected for an explanation of changes. He asked
the sponsor to give an overview of the bill before talking about
the changes in the CS.
2:02:57 PM
SENATOR BILL WIELECHOWSKI, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 76, stated that this bill repeals the
Workers' Compensation Appeals Commission, which would save the
state more than $425,000 a year. He explained that workers
injured on the job in Alaska file workers' compensation claims.
In 2018, 17,694 reports of injury or occupational illness were
filed, which was a 3.8 percent decrease from 2017. When disputes
arise, these claims are referred to the Alaska Workers'
Compensation Board (WCB) that is composed of a hearing officer
who is typically an attorney who works for the state, one
representative from labor, and one from management.
Under existing law, appeals of the Alaska Workers' Compensation
Board are referred to the Workers' Compensation Appeals
Commission (WCAC). Of the 17,694 injury reports, the WCB held
213 hearings. The Workers' Compensation Appeals Commission
issued 10 decisions in 2016, 10 decisions in 2017, and 14
decisions in 2018. Even though only a few cases are appealed to
the WCAP, the annual cost of the commission is $425,000. He said
his position is that these appeals could be absorbed by the
superior court. In fact, from statehood until 2005 when the
commission was created, the superior court heard workers'
compensation cases.
SENATOR WIELECHOWSKI offered his belief that this is the only
instance of an agency in the executive branch where the final
decision is not appealable to the superior court.
The argument for creating this commission was that the public
would benefit from having a commission that had a particular
expertise in workers' compensation. However, the workers'
compensation system is not more complex than mental health
issues, family legal issues, or other complex issues that the
superior court handles on a regular basis.
SENATOR WIELECHOWSKI said based on the numbers, shortened
timeframes have not materialized. Further, about 50 percent of
the Workers' Compensation Appeals Commission decisions appealed
to the Alaska Supreme Court (ASC) are reversed. In 2005, when
the WCAC was established, 25 percent of the cases were appealed
to the ASC. That has risen to 79 percent in recent years.
SENATOR WIELECHOWSKI said another argument in favor of creating
a commission was to have cases decided more quickly. However, at
the time the commission was established the superior court took
from 7-18 months to issue its decisions. In 2018, the WCAC's
Annual Report shows that it took an average of 12 months to
issue final decisions. He said the concept of abolishing the
commission has been around for a number of years. Five years ago
the House Finance budget subcommittee for the Department of
Labor and Workforce Development (DOLWD) recommended that the
WCAC be eliminated. The subcommittee noted the cost savings and
found that the closure rate was not demonstratively better than
the process prior to the establishment of the commission. He
noted that the report was in members' packets.
Subsequently, a bill was filed to abolish the WCAC and the House
voted 40-0 to appeal it. He said SB 76 is virtually identical to
the one that passed the House. He directed attention to the
fiscal note and said the savings would be half the amount
reflected in the fiscal note (FN) for 2020 due to the delay. He
offered his belief that this bill, which would abolish the WCAC,
would have very little impact on members' constituents.
2:09:55 PM
DAVID DUNSMORE, Staff, Senator Bill Wielechowski, Alaska State
Legislature, Juneau, Alaska, on behalf of the sponsor, said the
only change in the proposed committee substitute (CS) for SB 76
was to replace all instances of 2019 with 2020 since the bill
did not pass the legislature last session.
2:10:36 PM
CHAIR BISHOP removed his objection.
SENATOR COSTELLO asked if there was any opposition to SB 76.
SENATOR WIELECHOWSKI said no. There were two letters submitted
in the past expressing opposition. One was from an attorney who
represents employers and the other was from a group of employers
who had formed an organization.
SENATOR STEVENS asked for an explanation of appeals under both
processes.
2:11:36 PM
SENATOR WIELECHOWSKI explained that currently an injured worker
would file a claim with the Workers' Compensation Board (WCB).
An overwhelming majority of these cases are resolved by the
board, he said.
When cases are appealed, they are referred to the Workers'
Compensation Appeals Commission (WCAC). The WCAC is an agency
within the executive branch. Either party has the right to
appeal to the Alaska Supreme Court (ASC). The WCAC has averaged
19 published decisions per year and 10-14 published decisions
between 2016 and 2018.
SENATOR WIELECHOWSKI explained that under the bill, it would
revert to the pre-2005 process. Appeals from the Workers'
Compensation Board decisions would be referred to superior
court. Parties could appeal the superior court's decisions to
the Alaska Supreme Court. This bill would essentially substitute
the superior court for the Workers' Compensation Appeals
Commission.
2:13:12 PM
MR. DUNSMORE read the following sectional analysis of SB 76:
Section 1 establishes that the Workers' Compensation
Board (Board) shall maintain records of the repealed
Workers' Compensation Appeals Commission (Commission).
It also establishes that Commission decisions remain
as legal precedent unless overturned or modified by
the courts.
Section 2 removes references to the Commission.
Section 3 removes a reference to the Commission.
Section 4 removes a reference to the Commission
Section 5 creates a new AS 23.30.126 governing appeals
of Workers' Compensation Board decisions.
Subsection (a) establishes that Board decisions and
orders become effective when filed, that these
decisions and orders can be modified or reconsidered,
and that a party may appeal a decision or order to the
superior court.
Subsection (b) establishes that Board decisions and
orders are not automatically stayed pending judicial
review and establishes the criteria for when a court
may issue a stay.
Subsection (c) establishes that factual findings made
by the Board shall be conclusive if supported by
substantial evidence and that AS 44.62.570 governing
administrative appeals shall apply to the appeals of
Board decisions.
Subsection (d) allows the director of the Division of
Workers' Compensation to intervene in appeals and to
file appeals if a party is not represented by an
attorney and the case presents an unsettled question
of law.
2:14:45 PM
Section 6 is a conforming amendment to reflect the
changes made by Section 5.
Section 7 removes a reference to the Commission.
Section 8 repeals the court rules related to the
Commission.
Section 9 repeals the statutes related to the
Commission.
Section 10 contains indirect court rule amendments to
reflect the changes made by Section 5.
Section 11 establishes which procedures apply to
appeals pending before the Commission between June 1
and December 1, 2020.
Subsection (a) establishes that the Commission shall
continue to handle cases through December 1, 2019 and
that the Commission shall continue all cases pending
on December 1, 2020.
Subsection (b) establishes that the new procedure in
Section 5 does not apply to cases before December 1,
2020.
Subsection (c) establishes that the old statutes apply
for appeals of final decisions made by the commission
and issued by December 1st.
Section 12 establishes transitional provisions.
Subsection (a) establishes that starting June 1, 2020
all new appeals of Board decisions shall be filed with
the Superior Court under Section 5.
Subsection (b) establishes that appeals of Commission
rulings issued by December 1, 2020 shall be filed with
the Supreme Court.
Subsection (c) ends the Commission's ability to order
reconsideration of cases on December 2, 2020. All
outstanding requests for reconsideration pending on
that date would be automatically rejected, and any
party whose request was denied may appeal their case
to the Supreme Court.
2:17:07 PM
CHAIR BISHOP asked what recourse someone has if they want to
appeal.
MR. DUNSMORE answered that any pending requests for
reconsideration at the commission level would be automatically
denied, and the person could file an appeal to the Alaska
Supreme Court.
MR. DUNSMORE continued the sectional analysis.
Subsection (d) requires the Commission to transfer the
files for all pending cases to the Superior Court on
December 2, 2020 and to provide the parties 30 days'
notice of the transfer of jurisdiction. If the court
finds that the records do not meet the requirements of
the Rules of Appellate Procedure, it may order the
Commission to make necessary changes and resubmit
them.
Section 13 ends the terms of all Commission members on
December 31, 2020.
Section 14 makes this act only take effect if the
court rule changes in Sections 8 and 10 are adopted.
Section 15 provides a June 1, 2020 effective date.
2:18:23 PM
SENATOR STEVENS asked who serves on the compensation board.
SENATOR WIELECHOWSKI answered that the Workers' Compensation
Board consists of hearing officers. He offered to provide the
information but recalled that five hearing officers, who are
typically attorneys, are designated by the commissioner. There
are also appointees for labor and for management, appointed by
the governor and approved by the legislature. He said the WCAC
is similar, with an attorney serving as the chair and two
members appointed by the governor from labor and two from
management, approved by the legislature. He characterized these
as "very good people." He said he knows them all. He previously
served as a hearing officer. He said, "They are outstanding
public servants."
One of the concerns is that the commission is acting as an
appellate court and deciding issues of law, but some members
have little legal training. In deciding Workers' Compensation
Board decisions, that's a real benefit because it gives people a
perspective in the workplace. However, in deciding appellate law
issues like a superior court would, it is a little bit of a
detriment, he said.
2:20:23 PM
SENATOR GRAY-JACKSON asked why the commission was established in
2005.
SENATOR WIELECHOWSKI answered that it was intended to create
expertise in workers' compensation. He reiterated that since it
is structured as an appellate court, the commission members must
decide complex legal issues with very little legal training.
Another argument was cases would be decided quicker, but that
has not been the case. The cost does not justify the results, he
said.
SENATOR GRAY-JACKSON related her understanding that the WCAC has
not been cost-effective.
SENATOR WIELECHOWSKI said that has been an argument.
2:22:28 PM
CHANCY CROFT, representing self, Anchorage, Alaska, said he is a
retired attorney and retired legislator. He did not like the
creation of the Workers' Compensation Appeals Commission from
the beginning, he said. One issue that has not been discussed is
that the three members of the "appellate court" aren't always
available whereas a superior court judge can always make a
decision on a case.
MR. CROFT said compensation must be paid when it is ordered and
when it is not paid within 14 days of the order there is a
penalty. This compensation includes time loss benefits and
medical benefits. The commission often does not meet within 14
days, he said. The WCAC adopted a procedure, likely out of
necessity but it is still a substantial defect. This procedure
indicates the WCAC could later enter an order that said the case
is stayed so no penalty would be due. Because that would be
after the 14-day period, the penalty would already have been in
effect. The commission adopted a technique that is called "nunc
pro tunc" which means "now for then" The commission would grant
the stay months after the case had been filed. In an
overwhelming majority of cases, compensation wasn't paid, and
neither was the penalty. He said that has harmed injured workers
in terms of time loss benefits. He cited a 2019 case where time
loss and medical benefits were ordered. Both were affected by
that procedure, he said. He agreed with the sponsor that many
appeals have been reversed by the Alaska Supreme Court. In 2019,
six WCAC cases were appealed to the Supreme Court; two of those
decisions were affirmed and four were unanimously reversed. He
noted that the superior court heard a seventh workers'
compensation case, which was a fluke. He emphasized that the
appeals commission hasn't had as good a record as the superior
court had previously.
2:27:41 PM
CHAIR BISHOP stated that he would hold SB 76 for further
consideration.
2:28:28 PM
There being no further business to come before the committee,
Chair Bishop adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:28 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 50 ver. M.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM |
SB 50 |
| SB 50 Work Draft ver. S.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 Sponsor Statement ver. S.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 Sectional Analysis ver. S.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB050 DRAFT Fiscal Note DOR-TAX 1-24-2020.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB050 DRAFT Fiscal Note DOLWD-UI 04-12-19.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM |
|
| SB50 - Resolutions and Letters.pdf |
SL&C 1/28/2020 1:30:00 PM |
|
| SB 50 News-Miner Editorial.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 News-Miner opinion.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 - FY21 Major Maintenance Final List.pdf |
SFIN 2/28/2020 9:00:00 AM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 - FY21 School Construction Final List.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 - Nonresidents Working in Alaska 2017 Alaska Department of Labor and Workforce Development.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 76 Version A.pdf |
SL&C 1/28/2020 1:30:00 PM |
SB 76 |
| SB 76 Work Draft Ver. M.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Sponsor Statement ver. M.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Sectional Analysis Ver M.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Explanation of changes Ver A to M.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents 2015 DOL Subcommittee Narrative.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents Legislative Finance Fund Source Report.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents Legislative Research Report 19-175.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents Fall 2019 Revenue Sources Book Pages.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents OMB Component Summary.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |