01/30/2020 01:30 PM Senate LABOR & COMMERCE

         SB 76-REPEAL WORKERS' COMP APPEALS COMMISSION                                                                      
                                                                                                                                
1:43:32 PM                                                                                                                    
CHAIR   BISHOP  reconvened   the   meeting   and  announced   the                                                               
consideration  of  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."                                                                                               
                                                                                                                                
He  stated that  this is  the second  hearing on  SB 76  [and the                                                               
committee  previously adopted  a committee  substitute (CS)].  He                                                               
invited Ms. Meade  to give the Alaska  Court System's perspective                                                               
of SB 76.                                                                                                                       
                                                                                                                                
1:44:22 PM                                                                                                                    
NANCY MEADE, General Council,  Administrative Staff, Alaska Court                                                               
System (ACS), Juneau,  Alaska, stated that passage of  SB 76 will                                                               
increase the case load for  superior court judges, but the policy                                                               
decision of  where cases are  best handled is within  the purview                                                               
of the  legislature. Superior  court will  handle any  cases that                                                               
are assigned, but additional cases  will impact the ACS. She said                                                               
she anticipated  30-40 additional  appeals per year,  although it                                                               
is  difficult  to predict.  Prior  to  2005, the  superior  court                                                               
handled these cases,  so the court system has  experience in this                                                               
area.  Although limited  in number,  these are  some of  the most                                                               
challenging and  time-consuming cases  and can  take up  to 12-18                                                               
months.  The  reason  is because  workers'  compensation  law  is                                                               
unique,   large,  and   somewhat   arcane.   The  cases   contain                                                               
significant  documentation, including  medical records.  It would                                                               
seem each superior  court judge would have just one  or two extra                                                               
cases  a year.  However, since  most of  the cases  occur in  the                                                               
population centers, it  is more likely that  judges in Anchorage,                                                               
Juneau, and Fairbanks would handle most of the cases.                                                                           
                                                                                                                                
She  said that  workers'  compensation appeals  cases were  taken                                                               
from  the  court in  2005  because  decisions  took so  long  and                                                               
because the  decisions lacked consistency  since the  judges were                                                               
not  subject matter  experts in  workers' compensation.  She said                                                               
she cannot  promise this would  change if the policy  decision is                                                               
to  return these  cases to  the superior  court. The  ACS handles                                                               
other agency  appeals and  these would be  handled the  same way.                                                               
The  change to  superior court  would  not require  any new  rule                                                               
types  or forms.  She related  that  when this  bill was  brought                                                               
forward  by  a previous  legislature,  she  worked with  workers'                                                               
compensation  on the  language so  the  wording is  this bill  is                                                               
acceptable.                                                                                                                     
                                                                                                                                
1:49:38 PM                                                                                                                    
SENATOR  GRAY-JACKSON reiterated  that prior  to creation  of the                                                               
WCAC, parties were not satisfied with the way cases were handed.                                                                
                                                                                                                                
MS. MEADE agreed.                                                                                                               
                                                                                                                                
SENATOR   GRAY-JACKSON  asked   whether   there   had  been   any                                                               
dissatisfaction with the commission.                                                                                            
                                                                                                                                
MS. MEADE replied that was not her area of expertise.                                                                           
                                                                                                                                
SENATOR GRAY-JACKSON  asked whether she could  estimate the extra                                                               
cost to the ACS.                                                                                                                
                                                                                                                                
MS. MEADE explained that the  Alaska Court System (ACS) submitted                                                               
a  zero  fiscal  note  because an  increased  workload  does  not                                                               
necessarily  increase cost  unless  it is  something new.  Judges                                                               
receive the same salary regardless  of the workload, even if they                                                               
work on  weekends. A bill  that anticipates  30 new cases  a year                                                               
would  not  require  a  new  judge  and  would  use  the  current                                                               
infrastructure.                                                                                                                 
                                                                                                                                
1:51:32 PM                                                                                                                    
SENATOR   STEVENS   asked   if  Workers'   Compensation   Appeals                                                               
Commission (WCAC)  cases that are  appealed would be  referred to                                                               
the superior court, not the Alaska Supreme Court.                                                                               
                                                                                                                                
MS. MEADE replied the workers'  compensation cases start with the                                                               
Workers' Compensation Board (WCB), then  go to the WCAC, and then                                                               
the Alaska Supreme Court. If this  bill passes, the cases will go                                                               
to the WCB then to superior  court if appealed and finally to the                                                               
Alaska Supreme Court if the lower court decision is appealed.                                                                   
                                                                                                                                
1:53:10 PM                                                                                                                    
DEIRDRE  FORD,   Chair,  Alaska  Workers'   Compensation  Appeals                                                               
Commission  (WCAC), Anchorage,  Alaska,  introduced herself.  She                                                               
said  that she  was  available  for questions  but  could make  a                                                               
statement if the Chair would like her to do so.                                                                                 
                                                                                                                                
CHAIR BISHOP asked for the commission's opinion of SB 76.                                                                       
                                                                                                                                
MS. FORD  began by  saying she practiced  as an  employer defense                                                               
attorney   before    the   Workers'   Compensation    Board   for                                                               
approximately 20  years. She represented employers  and insurers.                                                               
She  subsequently served  as a  hearing officer  for three  and a                                                               
half years holding hearings before  the WCB and then retired. She                                                               
was appointed chair in October  2016 and was recently reappointed                                                               
by Governor Dunleavy. She had  experience with appeals before the                                                               
superior court, but  she did not have experience  with appeals to                                                               
the commission.                                                                                                                 
                                                                                                                                
MS. FORD  said she  has three  concerns with  SB 76,  which would                                                               
bring  the  cases  before  the  superior  court  instead  of  the                                                               
Commission. First, WCAC decisions  have precedential value, which                                                               
gives some  finite parameters  to employees  and employers  as to                                                               
how the  board should handle  disputes. As Ms. Meade  said, there                                                               
were  often inconsistencies  with the  superior court  decisions.                                                               
Since  these cases  did not  set precedence,  the issue  could be                                                               
argued  again before  the Workers'  Compensation Board  (WCB) and                                                               
the superior court.                                                                                                             
                                                                                                                                
When  the  Workers'  Compensation  Appeals  Commission  issues  a                                                               
decision on a  particular issue, the decision applies  to the WCB                                                               
and  other  WCAC  decisions,  unless  the  Alaska  Supreme  Court                                                               
decides otherwise.                                                                                                              
                                                                                                                                
MS.  FORD said  the commission  is required  to issue  a decision                                                               
within 90 days from the  completion of briefing or oral argument,                                                               
whichever  is  later.  She related  her  understanding  that  the                                                               
superior court judges  have six months from that date  to issue a                                                               
decision.                                                                                                                       
                                                                                                                                
She highlighted her third concern,  which is how self-represented                                                               
litigants  would  be  handled.  She  commended  the  commission's                                                               
clerk, who does an outstanding  job working with self-represented                                                               
litigants.  She  helps ensure  their  forms  are completed,  that                                                               
their briefing is  done, and shows them how to  file an appeal to                                                               
the commission. She  said she has no way of  knowing, but she did                                                               
not believe  the superior court  would provide the  same hands-on                                                               
assistance that the WCAC or WCB provides.                                                                                       
                                                                                                                                
1:58:12 PM                                                                                                                    
CHAIR BISHOP thanked  Ms. Ford and opened public  testimony on SB
.                                                                                                                             
                                                                                                                                
1:58:34 PM                                                                                                                    
ERIC  CROFT,  Attorney,  representing  self,  Anchorage,  Alaska,                                                               
offered  to send  the material  he compiled  this morning  on the                                                               
decisions  by   the  commission.  He   said  he  served   in  the                                                               
legislature at the time the WCAC  was created and was an opponent                                                               
of the  change. In the  first seven  years, the WCAC  averaged 25                                                               
published decisions  per year,  but in the  last seven  years the                                                               
number has decreased to approximately  14 published decisions per                                                               
year.  He  acknowledged that  Chair  Ford  does  a good  job  but                                                               
maintained that there  was not the burden of work  to justify the                                                               
cost of the  commission. He compared it to the  Criminal Court of                                                               
Appeals, which  is a three-member  commission that  handles about                                                               
220 cases per year.                                                                                                             
                                                                                                                                
CHAIR BISHOP  asked Ms. Lager  to discuss the  designated general                                                               
fund list in the fiscal note.                                                                                                   
                                                                                                                                
2:02:29 PM                                                                                                                    
HANNA  LAGER, Director,  Administrative Services  Division, Labor                                                               
and  Workforce  Development,  Juneau,  Alaska,  stated  that  the                                                               
current FY 2021 governor's request  is for $425,900 for the WCAC.                                                               
The  change in  FY 2021  would  be half  of that  because of  the                                                               
December 31, 2020  sunset date for the appeals  commission. In FY                                                               
2022  and forward,  the full  amount  would be  removed from  the                                                               
budget.  That includes  deleting  two  positions associated  with                                                               
this component  and the associated  funding necessary  to operate                                                               
the WCAC.                                                                                                                       
                                                                                                                                
CHAIR BISHOP asked for the source of the funds.                                                                                 
                                                                                                                                
MS. LAGER  said the  workers' safety  compensation administration                                                               
account consists  of receipts  paid by  employers into  the fund,                                                               
based  on a  2.9 percent  premium. An  additional 2.5  percent is                                                               
paid  in on  insurance premiums  to the  Department of  Commerce,                                                               
Community   and  Economic   Development   (DCCED),  Division   of                                                               
Insurance, and is transferred to the fund every year.                                                                           
                                                                                                                                
CHAIR  BISHOP recalled  that  two years  ago  the multiplier  was                                                               
increased for the funds for the premiums.                                                                                       
                                                                                                                                
MS. LAGER said that predates her  time at the department, but she                                                               
believes  that is  correct. She  said the  department is  closely                                                               
monitoring  the  fund  sufficiency and  anticipates  some  issues                                                               
arising in a few years.                                                                                                         
                                                                                                                                
2:05:11 PM                                                                                                                    
CHAIR  BISHOP reiterated  that the  funding  comes from  premiums                                                               
paid in by the employers.                                                                                                       
                                                                                                                                
CHAIR BISHOP  stated that he  would leave public testimony  on SB
 open. He asked the sponsor and staff to come to the table.                                                                   
                                                                                                                                
2:05:56 PM                                                                                                                    
SENATOR WIELECHOWSKI,  Alaska State Legislature,  Juneau, Alaska,                                                               
introduced himself.                                                                                                             
                                                                                                                                
2:06:00 PM                                                                                                                    
DAVID DUNSMORE,  Staff, Senator  Bill Wielechowski,  Alaska State                                                               
Legislature, Juneau, Alaska, introduced himself.                                                                                
                                                                                                                                
SENATOR STEVENS  asked for the length  of time to go  through the                                                               
process  and   how  this  bill   would  save  time   in  workers'                                                               
compensation cases that are appealed.                                                                                           
                                                                                                                                
2:06:42 PM                                                                                                                    
SENATOR WIELECHOWSKI explained that if  the WCB issues a decision                                                               
and one  of the parties appeals  the decision, the case  would go                                                               
before  the  superior court.  He  then  referenced the  sheet  in                                                               
members' packets, "Cases Before  the Alaska Workers' Compensation                                                               
Appeals  Commission,  2005-2018." He  read  the  number of  cases                                                               
filed: in 2012  - 29, in 2013 - 26,  in 2014 - 30, 2015  - 31, in                                                               
2016  - 20,  in 2017  - 26,  and in  2018 -  26. The  most public                                                               
decisions  that  were  issued since  2010,  because  parties  may                                                               
settle the cases,  has been about 15. He  reviewed the timeframe:                                                               
a party files  and the appeals commission has 90  days, which Ms.                                                               
Ford  stated. Testimony  in 2005  was that  the average  time for                                                               
superior  court   cases  was  7-18  months.   The  WCAC's  report                                                               
indicates that the average time  is 371 days for public decisions                                                               
to be issued, or approximately  12 months. The ACS testified that                                                               
the average  length of time  for agency appeals is  12-18 months,                                                               
which he  did not  dispute. He reiterated  that his  figures were                                                               
from 2005.  He was unsure  if statistical records  were available                                                               
and surmised that this was likely based on an estimate.                                                                         
                                                                                                                                
2:09:48 PM                                                                                                                    
MR. DUNSMORE added  that the 2005 data showed just  25 percent of                                                               
cases were  appealed to the  Alaska Supreme Court, but  since its                                                               
inception,  50 percent  of the  WCAC's  published decisions  have                                                               
been appealed.  In recent years,  this figure has increased  so a                                                               
majority of  the WCAC's are  appealed. This indicates  more cases                                                               
would be resolved  by the superior court because  parties did not                                                               
appeal them to the Supreme Court.                                                                                               
                                                                                                                                
CHAIR BISHOP  remarked that that  is the reason the  committee is                                                               
discussing the bill.                                                                                                            
                                                                                                                                
2:11:12 PM                                                                                                                    
SENATOR WIELECHOWSKI agreed.  He said the chart  shows the number                                                               
of WCAC's published  decisions that were appealed  to the Supreme                                                               
Court. He  related that in  2011, all 13 published  opinions were                                                               
appealed, in  2012, 15 of  16 published decisions  were appealed,                                                               
in 2013, 11 of 17 decisions were  appealed, and in 2014, 12 of 15                                                               
published decisions were appealed. He  concluded that a very high                                                               
percentage have been appealed to  the Supreme Court. He said this                                                               
takes up  the Supreme  Court's resources  since its  five members                                                               
must prepare for  these cases and it adds to  the total length of                                                               
time it takes to resolve workers' compensation cases.                                                                           
                                                                                                                                
CHAIR BISHOP  thanked the sponsor  and stated that he  would hold                                                               
SB 76 in committee for further consideration.