Legislature(2019 - 2020)BELTZ 105 (TSBldg)
01/28/2020 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB50 | |
| SB76 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 50 | TELECONFERENCED | |
| *+ | SB 76 | TELECONFERENCED | |
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.
| 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 |