Legislature(2023 - 2024)SENATE FINANCE 532
04/09/2024 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB60 | |
| SB182 | |
| SJR15 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 60 | TELECONFERENCED | |
| + | SB 182 | TELECONFERENCED | |
| + | SJR 15 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 60
"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."
9:03:37 AM
SENATOR BILL WIELECHOWSKI, SPONSOR, introduced the
legislation. He referred to the Sponsor Statement (copy on
file):
Senate Bill 60 would save $482,400 per year, remove an
unnecessary bureaucracy, and make Alaska's Workers'
Compensation program more sustainable by repealing the
Alaska Workers' Compensation Appeals Commission.
Passing SB 60 will return jurisdiction over appeals of
Workers' Compensation Board decisions to the Superior
Court. Currently the Appeals Commission handles these
cases and their decisions can be appealed to the
Supreme Court.
For decades, the Superior Court had handled these
cases. Operating the Appeals Commission costs $482,400
annually and it currently has two fulltime employees,
while the Court System has testified that they can
handle these cases with their current budget and
staffing levels. The Appeals Commission's workload has
decreased considerably since it was created in 2005.
In 2007, they had 49 new cases filed and published 42
decisions but by 2022 they only had 14 new cases and
published only 5 decisions.
In 2015, the House Labor and Workforce Finance
Subcommittee found the Appeals Commission to be "an
ineffective division" and that "their closure rate and
average time for closure is not demonstrably better
than the process was before the establishment of the
commission."
This bill would create a transition period between
June 1 and December 1, 2024 when new cases would be
filed with the Superior Court, but the Appeals
Commission would continue to handle the cases that
were already pending. On December 2, all pending cases
would be transferred to the Superior Court and the
Appeals Commission will be fully repealed on December
31.
Alaska's Workers' Compensation regulation is funded by
service fees collected from insurance providers and
self-insurers. In Fiscal Year 2021 the state collected
$6.3 million in fees and the Department of Revenue
projects this will fall to $5.8 million in FY 2024 and
$5.6 million in FY 2025. Given Alaska's budget deficit
and this declining revenue, we simply cannot afford to
spend $482,400 to operate a separate commission when
the courts are well equipped to handle these cases.
Co-Chair Olson noted that the superior court was not a
court of appeals, but rather a trial court.
Senator Wielechowski replied that the cases would be heard
by the Worker Compensation hearing officer, and an appeal
would be heard by the superior court.
9:06:36 AM
DAVID DUNSMORE, STAFF, SENATOR WIELECHOWSKI, discussed the
presentation, "Senate Bill 60, Repeal Workers' Compensation
Appeals Commission" (copy on file). He pointed to slide 2,
"Senate Bill 60":
Repeals the Alaska Workers' Compensation Appeals
Commission
Returns jurisdiction over Workers' Compensation
appeals to the Superior Court
Saves $482,400 per year
Helps fill the Workers' Compensation budget deficit
and make Alaska's Workers' Compensation system more
solvent
Mr. Dunsmore addressed slide 4, " SB 60 Will Save $482,400
Per Year":
Currently the Commission has 2
full-time employees and pays for
commissioners' travel and per
diem
Previously, the Court System has
testified that they can absorb
these cases with a zero fiscal
note
Mr. Dunsmore pointed to slide 5, " WCAC Workload has Fallen
Dramatically":
The Workers' Compensation Appeals Commission workload
has declined from 49 cases filed and 42 published
decisions in 2007 to 4 cases filed and 5 decisions
issued in 2023.
Mr. Dunsmore highlighted slide 6:
"The Worker's Compensation Appeals Commission is an
ineffective division? The Commission during the
calendar year of 2013 closed 30 cases for a closure
rate of 67 percent with an average time from filing to
closure of seven months. This closure rate and average
time for closure is not demonstrably better than the
process was before the establishment of the
commission."
House Department of Labor and Workforce Development
Finance Subcommittee, February 25, 2015
Mr. Dunsmore looked at slide 7, " The Workers' Compensation
Appeals Commission Has Not Closed Cases Faster than the
Courts":
The Superior Court took "8 to 18 months" to
decide Workers' Compensation Appeals.
When it was created, it was estimated that the
Commission could decide cases in 6 months.
Instead, in 2018 it averaged 371 days (12.2
months) to decide cases.
Even as their workload decreased, in 2021 they
still averaged 282 days (9.3 months) to decide
cases.
More Commission decisions are appealed to the
Supreme Court, adding months to years before
final resolution.
Sources: Testimony of Paul Lisankie,
Director, Division of Workers' Compensation,
Senate Labor and Commerce Committee, March
10, 2005.
Alaska Workers' Compensation Appeals
Commission Annual Report for Calendar Year
2021.
9:10:17 AM
Mr. Dunsmore discussed slide 8, "SB 60 Will Reduce Appeals
to the Supreme Court":
When the Superior Court handled appeals approximately
25 percent of their decisions were appealed to the
Supreme Court.
Since the Commission was created in 2005, 37 percent
of its decisions have been appealed to the Supreme
Court.
Since 2011, 50 percent of Commission decisions have
been appealed.
Sources: Testimony of Doug Wooliver,
administrative attorney, Alaska Court System,
Senate Labor and Commerce Committee, March 10,
2005.
Legislative Research Services Report 24.077.
Mr. Dunsmore looked at slide 9, "The Office of Management
and Budget has identified potential staff turnover as a key
component challenge":
"The WCAC is challenged to provide timely decisions
and orders. WCAC is supported by two staff. While no
immediate staff turnover is anticipated, any attrition
could result in less support for the commission,
making it more difficult to provide timely decisions
and orders."
Mr. Dunsmore addressed slide 10, "Alaska's Workers'
Compensation and Safety Program Faces a Growing Budget
Deficit- SB 60 Will Help Fill It":
Workers' Compensation and Safety are funded by a tax
on Workers' Compensation payments
Tax Revenue has fallen significantly and is expected
to continue to decline.
Saving $482,300 will help close the growing budget
gap.
Mr. Dunsmore looked at slide 11, "Bottom Line":
SB 60 saves $482,400 annually
Preserves parties' right to have their cases heard in
timely manner
Will reduce appeals to the Supreme Court
Makes Alaska's Workers' Compensation system more
solvent
Co-Chair Olson wondered whether there was opposition to the
legislation.
Mr. Dunsmore replied that there was some opposition in some
previous committees from the Workers Compensation Insurance
industry.
9:13:19 AM
CHARLES COLLINS, DIRECTOR, DIVISION OF WORKERS
COMPENSATION, DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT, introduced himself and stated that he could
answer questions.
Co-Chair Olson noted that the fiscal note showed a $236,000
decrease in FY 25, and then later a $473,000 decrease, and
wondered whether those were accurate numbers.
Mr. Collins replied in the affirmative.
Co-Chair Stedman wondered whether the appeals commission
would create a precedence, and whether the court would
uphold that precedence.
9:15:02 AM
Mr. Collins replied that the commission was a precedent-
setting panel, so those decisions guided the board panels.
The Supreme Court, however, could overturn those decisions.
Co-Chair Stedman surmised that the Department of Labor and
Workforce Development (DLWD) would be neutral on the bill,
and whether the bill did any harm.
Mr. Collins replied that he felt that the commission was
effective.
Senator Bishop wondered whether there was disagreement on
the data on the presentation.
Mr. Collins responded that he had some issues with the
timing. He expressed concern about the court absorbing the
cost, especially when there was a controversial claim.
Co-Chair Olson asked whether the commission had not had the
decisions rendered within six months.
Mr. Collins replied there were many factors that
contributed to the decisions.
Co-Chair Olson wondered whether a judge was involved in the
decision.
Mr. Collins responded that the commissioner was an
administrative law judge.
9:20:34 AM
Co-Chair Olson OPENED public testimony.
9:21:00 AM
HEIDI DRYGAS, SELF, JUNEAU (via teleconference), spoke in
support of the bill.
Co-Chair Olson queried a percentage of the reversed
appeals.
Ms. Drygas did not have those specific numbers, but
recalled that in 2017, it was more than 50 percent.
Senator Wielechowski stated that he did not have anything
to add.
SB 60 was HEARD and HELD in committee for further
consideration.
9:27:37 AM
AT EASE
9:31:23 AM
RECONVENED