Legislature(2017 - 2018)BARNES 124
02/06/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB69 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 69 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 69-REPEAL WORKERS' COMP APPEALS COMMISSION
3:23:41 PM
CHAIR KITO announced that the only order of business would be
HOUSE BILL NO. 69, "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), and 603(a), Alaska Rules
of Appellate Procedure; and providing for an effective date."
3:24:45 PM
HEIDI DRYGAS, Commissioner, Department of Labor & Workforce
Development (DOLWD), presented HB 69 on behalf of the governor.
She remarked:
HB 69, which is before you, would repeal the Workers'
Compensation Appeals Commission and return the appeals
process from the Workers' Compensation Board to the
courts. The commission was created to streamline the
appeals process from the Workers' [Compensation] Board
and provide expertise in handling workers'
[compensation] cases. Since its creation in 2005,
however, 50 percent of the commission's decisions have
been reversed by the Alaska Supreme Court. The high
reversal rate underscores the fact that the commission
is ineffective. The commission is essentially an
appellate court just like the [Alaska] Superior Court,
and almost every appellate court in the country is
composed of a panel a lawyers. Yet the commission's
lay commissioners have no legal training and
contribute very little in the way of legal analysis to
the issues being decided by the commission. It falls
to the commission's chair alone, who is an attorney,
to resolve the legal issues with minimal input from
lay commissioners. Further, the chair also writes the
decisions. Therefore, the commission's decisions are
the work of one person, and not the work of a panel
with legal expertise in workers' compensation - a
further departure from the original intent of the
legislation. By eliminating the Workers' Compensation
Appeals Commission, the department anticipates a cost
savings of $220,400 for the remainder of Fiscal Year
18, due to the transition provisions in the
legislation, and ... a savings of $440,800 ... in
subsequent years. The impact on the public will be
minimal. By repealing the commission, the appeals
process will revert back to the [Alaska] Superior
Court which was the process in state from statehood
until 2005. The court system would see an increase of
approximately 20-30 cases per year. This volume can
easily be absorbed by the court system.
3:27:27 PM
DEBBIE BANASZAK, Legislative Liaison, Office of the
Commissioner, Department of Labor & Workforce Development
(DOLWD), gave an overview of the sectional analysis for HB 69.
She noted that "board" refers to the Workers' Compensation
Board, and "commission" refers to the Workers' Compensation
Appeals Commission. She said HB 69 would repeal the commission.
She stated that some technical changes are being made with
[consultation from] the Department of Law and will be available
shortly. She paraphrased from the sectional analysis, which
read as follows [original punctuation provided]:
Section 1 amends AS 23.30.005, by adding a new
subsection, clarifying that unless reversed or
modified by a court, decisions of the former
commission have the force of legal precedent.
Section 2 amends AS 23.30.107(b), by removing
reference to the commission.
Section 3 amends AS 23.30.108(d), by removing
reference to the commission.
Section 4 amends AS 23.30.108(e), by removing
reference to the commission.
Section 5 amends AS 23.30, by adding a new section,
clarifying when a board order becomes effective and is
final, when it may be stayed, and clarifying when the
board's findings are conclusive and binding on a
reviewing court, and when the director may intervene
in an appeal or petition for review.
Section 6 amends AS 23.30.155, by adding a new
subsection changing a statutory reference from the
commission to the superior court.
Section 7 amends AS 39.50.200(b)(31), by removing
reference to the commission.
Section 8 amends the uncodified law of the State of
Alaska, by amending Rule 204(c)(2) Alaska Rules of
Appellate Procedure, to address bonds for appeal
purposes.
Section 9 repeals Rules 201.1, 401.1, and 501.1,
Alaska Rules of Appellate Procedure.
3:30:11 PM
MS. BANASZAK stated paraphrasing again from the sectional
analysis at section 10, which read as follows [original
punctuation provided]:
Section 10 repeals AS 23.20.007, 23.30.008, 23.30.009,
23.30.009, 23.30.125, 23.30.127, 23.30.128, 23.30.129,
23.30.155(f), 23.30.395(10); AS 39.25.110(40); AS
44.64.020(a)(12), and 44.64.020(a)(13).
Section 11 amends the uncodified law of the State of
Alaska, by adding a new section relating to indirect
court rule amendments.
Section 12 amends the uncodified law of the State of
Alaska, by adding conditional effect language that the
Act takes effect only if secs. 8, 9 and 11 receive the
two-thirds majority vote of each house required by
art. IV, sec. 15 of the Alaska Constitution.
Section 13 amends the uncodified law of the State of
Alaska, by adding a new section relating to
applicability of amendments to proceedings pending
before the Commission.
Section 14 amends the uncodified law of the State of
Alaska, by adding transitional language clarifying
proceedings seeking review of a board decision and
order that have not yet been filed before the
Commission, must be filed in the superior court on or
after June 1, 2017 Any appeals not completed by the
Commission on or before December 1, 2017 will be
transferred to the superior court on December 2, 2017,
and clarifying procedures for requests for
reconsideration during the transition period.
Section 15 amends the uncodified law of the State of
Alaska, by adding transitional language.
Section 16 clarifies when the Act takes effect.
MS. BANASZAK added that statutes relating to the commission
would remain in existence until December 2, [2017], even though
the bill would be enacted on June 1, [2017]. This would give
time for the commission to finish its pending cases and transfer
files before the terms of the commissioners expire on December
31, 2017. The commission would not take any new cases after May
31, [2017], and would have six months to wind up its pending
cases by December 1, [2017]. She stated that the proposed bill
would essentially put into place the procedures that existed
before the commission was created.
3:34:06 PM
REPRESENTATIVE JOSEPHSON asked Ms. Drygas what the impact would
be of moving 20-30 cases to the Alaska Superior Court. He asked
how the court would adapt, and if the money saved by the
department would be transferred to the court.
3:34:39 PM
MS. DRYGAS stated that the department would see the savings.
She mentioned that last year a similar bill was drafted and had
a zero fiscal note. She stated that the number of cases
[potentially shifted to the Alaska Superior Court] is a small
fraction of the court's work. She noted that since the
commission's inception, the number of appeals filed has been
dropping: in 2007 there were 49, but in 2016 there were only 20
appeals. The figure of 20-30 cases per year was pulled from
this information.
REPRESENTATIVE JOSEPHSON asked whether the department considered
using the Office of Administrative Hearings (OAH) to act as the
first "trier of fact" and the Alaska Superior Court to act as an
intermediate appellate court or something similar. He stated
that the OAH is used to dealing with appeals.
MS. DRYGAS answered yes, it was considered. She stated that
after hearing from practitioners, she learned that the process
prior to 2005 had worked. She stated her concern regarding the
current practice of having two layers of administrative hearings
- going from the board to the OAH - before getting a case heard
in court at either the Alaska Superior Court or the Alaska
Supreme Court. She stated that a litigant is entitled to a
review of his/her case in court.
3:37:55 PM
REPRESENTATIVE BIRCH asked for clarification on the appeal
process for an injured employee.
3:39:38 PM
MARIE MARX, Director, Division of Workers' Compensation,
Department of Labor & Workforce Development (DOLWD), summarized
the process of reporting an injury. She stated that if an
employee is injured, the employer must report the injury to the
division and immediately begin paying benefits. Most of the
time, benefits are provided seamlessly to an injured worker, and
the board doesn't need to intervene. If a dispute arises about
whether or not benefits are owed, then the dispute resolution
process begins. She reviewed that the employee would file a
workers' compensation claim with the Alaska Workers'
Compensation Board. Both parties engage in discovery and the
employer can either admit or deny the claim. After discovery is
complete, the parties can either settle or request a hearing
before the board. She explained that the board has 18 members,
but only a three-member panel hears each case. The panel
consist of: one member from [the portion of the board
affiliated with] labor, one member from [the portion of the
board affiliated with] industry - both of whom are lay members
of the community who serve on the board - and one full-time
hearing officer, who is a full-time staff member and chairs the
hearing. She stated that the hearing panel takes evidence;
listens to opinions from the treating doctor, the employer's
medical evaluator, and sometimes doctors from the board's list
of recommended doctors; decides which opinion to believe the
most; and issues a decision within 30 days of the hearing.
Afterwards, either party may appeal the board's decision to the
Workers' Compensation Appeals Commission, which makes a
determination on the appeal request. From there, either party
may appeal to the Alaska Supreme Court, which is briefed by both
parties and issues a decision.
3:42:02 PM
REPRESENTATIVE BIRCH noted that the commission dismissed 56
cases, and he asked whether the dismissals were in favor of the
employee or employer.
MS. MARX stated the cases can be dismissed for a variety of
reasons, which include time deadlines, requirements of the
appeal, and briefing timeframes.
REPRESENTATIVE BIRCH asked for the total number of cases that
end up before the Workers' Compensation Board.
MS. MARX answered that approximately 1,200 reports of injuries
are filed each year and, of those, about 250 claims end up
before the board. She explained that about 10 percent of the
cases before the board go further in the dispute process.
3:44:23 PM
REPRESENTATIVE STUTES asked how many commissioners there are.
MS. MARX responded that each case before the [Workers'
Compensation Appeals] Commission is heard by a three-member
panel. The three-member panel is selected from two labor
members, two industry members, and one full-time appeals
commissioner.
REPRESENTATIVE STUTES asked if the full-time commissioner is the
only person on the payroll.
MS. MARX stated her belief that there is one staff member who
assists the chair with administrative functions like maintaining
case files and providing notices to parties.
REPRESENTATIVE STUTES asked how many positions would be
eliminated or repositioned if the cases move to the court
system.
3:45:52 PM
MS. DRYGAS stated that two full-time positions are on the
payroll for the commission: one full-time chair position filled
by an attorney and one full-time support staff position to
assist the chair with getting decisions out and noticing
hearings.
REPRESENTATIVE STUTES asked if the positions would be eliminated
or repositioned.
MS. DRYGAS stated the positions would be eliminated.
3:46:40 PM
REPRESENTATIVE JOSEPHSON asked who finds the facts along the
procedural pathway and he asked if the commission revisits the
details of the injury.
3:47:03 PM
MS. MARX stated that generally the trial court - served by the
board in this capacity - is the fact-finding body. The
appellate level decides questions of law and whether the lower
court erred. She stated her understanding that the commission
is not fact-finding.
3:47:56 PM
ANDREW HEMENWAY answered questions about HB 69 and drew upon his
experience as the former chair of the Alaska Workers'
Compensation Appeals Commission. He responded to Representative
Birch's previous question about dismissals in the Alaska Supreme
Court. He stated that when dismissed from the Alaska Supreme
Court, the decision of the board is final. Whichever side
appealed would lose the dismissed case. He responded to
Representative Josephson's question and stated that the
appellate court has no fact-finding authority or role concerning
the merits of the case, except in matters where a request for a
stay is made. The commission can determine if there was
sufficient evidence to support the findings made by the board.
3:50:08 PM
REPRESENTATIVE BIRCH stated his interest in the outcome of the
process. He asked how often injured employees' claims are
upheld through the board, the commission, and the court.
MR. HEMENWAY stated that the spreadsheet [included in the
committee packet] shows the outcome from the Alaska Supreme
Court of decisions that were appealed from the commission. Of
those cases, 20 were affirmed, 15 were reversed, and a smaller
number were affirmed in part or reversed in part. He stated
that this is an indication of the commission's decisions in the
Alaska Supreme Court. He stated that he is not sure of the
numbers on appeals from the board to the commission. He offered
his belief that employees are often unsuccessful on appeal in
cases where the primary issue of the appeal is the board's
factual findings - when a party disputes that the worker had an
injury. Generally the board's fact findings are sustained,
although there may be a reversal if the commission determined
that the board applied an incorrect legal standard or considered
evidence inappropriately. He remarked that he couldn't venture
to say which parties tend to be more successful on appeal. He
stated that employees are less likely to succeed if they are not
represented by an attorney. He observed that when both parties
are represented by counsel and have legal issues on appeal, "You
win some, you lose some."
3:54:25 PM
MR. DRYGAS followed up with more information about funding. She
stated that when the board was created in 2005, no funding was
given to the department; the department had to use existing
funding from the Workers Safety and Compensation Administration
Account (WSCAA). She offered her opinion that it would be
unfair to give funding to the court system when the Division of
Workers' Compensation is already "pretty strapped" to function
as is, as a result of previous funding cuts.
3:55:36 PM
REPRESENTATIVE KNOPP noted that 100 appeals have gone to the
Alaska Supreme Court, of which only 15 have been reversed. He
asked if this shows ineffectiveness. He asked if a three-person
panel is the problem, and suggested that more members on a panel
might increase effectiveness.
3:56:43 PM
MS. MARX clarified that there are 18 board members, 1 appeals
commissioner, and 4 lay members who serve on the Workers'
Compensation Appeals Commission. She stated the appellate panel
is made up of five individuals.
REPRESENTATIVE KNOPP asked which level has one hearing officer
and two members.
MS. MARX responded that is at the Workers' Compensation Board
level - essentially the trial court level.
REPRESENTATIVE KNOPP again asked if 15 out of 100 cases being
reversed is a sign of inefficiency.
3:57:31 PM
MS. DRYGAS stated that 56 cases were dismissed, 20 were
affirmed, 15 were reversed, and 4 were affirmed in part and
reversed in part. She offered her interpretation that the
[Workers' Compensation] Appeals Commission is not getting it
right enough of the time. She mentioned that there are other
measures of ineffectiveness. She stated that she spoke with two
board chairs who told her they were essentially doing the work
of the commission - writing the decisions with little input from
commissioners - and she offered her concern of its effect on the
significant reversal rate. She stated that it is possible that
a difference could have been seen with a bigger panel, but it
would depend on how the panel was made up. The cases are
legally intensive, and the appellate level determines questions
of law. She stated that the members of the commission have
expertise on workers' compensation, but the commission's job is
to do an evaluative process of law. She opined that a lay
person is at a disadvantage to determine if the law and the
facts "measure up." She stated that this is likely part of the
problem with the structure of the commission. She noted that
this issue has been before the legislature in previous
iterations in 2015 and 2016, and at that time neither the
legislature nor the department heard from individuals' opinions
one way or the other. She offered her understanding that there
is a consensus that the current process is not working. She
stated that she does not see why the earlier process was a
problem - returning to the courts after going through one layer
of administrative review.
4:01:02 PM
NANCY MEADE, General Counsel, Office of the Administrative
Director, Alaska Court System, stated that the court system is
neutral on the proposed legislation and had submitted a fiscal
note showing zero impact to the Alaska Court System.
4:01:29 PM
REPRESENTATIVE STUTES asked how a zero fiscal note is possible
with additional work for the Alaska Court System.
MS. MEADE stated that the Alaska Court System tries to absorb
changes, to the extent it can, without a fiscal impact. She
emphasized the Alaska Court System aims to be extremely honest
when producing fiscal notes. She stated that Alaska Superior
Court judges would have more work, and she acknowledged that
workers' compensation cases are sometimes difficult.
Notwithstanding that, she said it's not the sort of impact that
would require hiring a new judge or clerk. She stated that the
20-30 new cases per year would be spread among 40 Alaska
Superior Court judges. She stated that individual judges may
get one to three more administrative appeals per year. She
stated that the court system already handles between 160-170
administrative appeals per year, so adding 30 to 33 appeals
would be an impact, but not such an impact to require additional
resources to handle it.
4:03:12 PM
CHAIR KITO related the impact to a pick-up truck with four
wheels carrying a load: At a certain point, the wheels will
pop, but, "I think what Ms. Meade is saying is the wheels aren't
quite ready to pop yet."
4:03:28 PM
REPRESENTATIVE JOSEPHSON stated his sense that although these
appeals come with relatively short hearings, in order to do a
good job, the judges would likely be working weekends to
research cases and write opinions, which are often 20-30 pages.
He asked for confirmation that this is intensive academic work.
4:04:26 PM
MS. MEADE responded, "That is not inaccurate." She stated that
appeals cases are difficult and the court's mission is to
resolve controversies. She agreed that administrative appeals
are different from trials and often involve: more desk time and
studious time, a hearing, and longer decisions. Administrative
appeals are often not as urgent as other matters judges handle,
such as children's matters or scheduled hearings. She mentioned
that the appeals can take longer than the public expects; the
Alaska Court System has lost positions with budget cuts, and
some things are taking more time. She remarked, "On the other
hand, we need to do this sort of work. So, if ... the
legislature passes a bill that says we will get 30 more cases,
we will do 30 more cases. Our judges will handle these in the
course of their work, and perhaps they'll be coming in on a
Saturday to do it, or maybe they'll squeeze it in."
MS. MEADE related that DOLWD has been very receptive of her
proposed language changes or additions which would clarify
statute and make it easier for the courts to take the cases.
She stated her belief that through working with DOLWD, some
revisions will be suggested to make it work better for
everybody, including the injured workers and employers.
4:07:17 PM
CHAIR KITO opened public testimony on HB 69.
[HB 69 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB069 Supporting Document-WCAC cases 1.30.2017.pdf |
HJUD 2/27/2017 1:00:00 PM HJUD 3/10/2017 1:30:00 PM HJUD 3/20/2017 1:00:00 PM HL&C 2/6/2017 3:15:00 PM HL&C 2/10/2017 3:15:00 PM |
HB 69 |
| HB069 Transmittal Letter 1.30.2017.pdf |
HL&C 2/6/2017 3:15:00 PM HL&C 2/10/2017 3:15:00 PM |
HB 69 |
| HB069 ver A 1.30.2017.pdf |
HJUD 2/27/2017 1:00:00 PM HL&C 2/6/2017 3:15:00 PM |
|
| HB069 Fiscal Note DOLWD-WC 1.30.2017.pdf |
HL&C 2/6/2017 3:15:00 PM HL&C 2/10/2017 3:15:00 PM |
HB 69 |
| HB069 Sectional Analysis ver A 1.30.2017.pdf |
HJUD 2/27/2017 1:00:00 PM HJUD 3/10/2017 1:30:00 PM HJUD 3/20/2017 1:00:00 PM HL&C 2/6/2017 3:15:00 PM HL&C 2/10/2017 3:15:00 PM |
HB 69 |
| HB069 Fiscal Note JUD-ACS 2.6.17.pdf |
HL&C 2/6/2017 3:15:00 PM HL&C 2/10/2017 3:15:00 PM |
HB 69 |