02/11/2020 01:30 PM Senate LABOR & COMMERCE

         SB  76-REPEAL WORKERS' COMP APPEALS COMMISSION                                                                     
                                                                                                                                
1:55:51 PM                                                                                                                    
CHAIR BISHOP 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  recapped  that this  was  the  third hearing.  The  committee                                                               
adopted Version M committee substitute  on January 28, the fiscal                                                               
note was discussed, and public testimony was open.                                                                              
                                                                                                                                
He invited Mr. Hemenway to provide testimony.                                                                                   
                                                                                                                                
1:56:17 PM                                                                                                                    
ANDY HEMENWAY,  representing self,  Juneau, Alaska,  advised that                                                               
he  retired  as  Chair  of   the  Workers'  Compensation  Appeals                                                               
Commission  ("appeals commission")  in 2016,  but was  testifying                                                               
today on  his own  behalf to address  matters raised  at previous                                                               
hearings. This  included the policy  issues related to  the force                                                               
of legal  precedent and  the significance  that has  by retaining                                                               
the  appeals  commission;  the  benefit  the  appeals  commission                                                               
provides to help self-represented  claimants through the process;                                                               
and  the timeliness  of decisions  by  the Workers'  Compensation                                                               
Appeals Commission as compared to  ones issued by superior court.                                                               
He said  these matters have  elicited testimony this year  and in                                                               
prior iterations of the bill.                                                                                                   
                                                                                                                                
MR. HEMENWAY  said he would  talk about the financial  aspects in                                                               
terms of absolute dollars and  the suggestion that the commission                                                               
is not  providing as much  bang for  the buck as  the legislature                                                               
would  like. He  said previous  testimony  that the  cost of  the                                                               
appeals commission is about $0.5  million annually is not exactly                                                               
accurate.  The  appropriation  for   the  appeals  commission  is                                                               
$400,000,  but  the actual  cost  is  approximately $323,000  per                                                               
year. He explained  that the appeals commission is  funded from a                                                               
$9  million  fund  entirely  derived   from  fees  and  insurance                                                               
premiums   from   the   employer  community.   He   offered   his                                                               
understanding  that if  the  appeals  commission were  disbanded,                                                               
those funds  would be used  by the department for  other programs                                                               
within the  purview of that  fund. Thus, eliminating  the appeals                                                               
commission may  not result in  any real reduction of  the overall                                                               
budget.  He  offered  his  view  that $323,000  was  not  a  very                                                               
significant amount of the total $9 million fund.                                                                                
                                                                                                                                
1:58:45 PM                                                                                                                    
MR.  HEMENWAY  said the  suggestion  has  been that  the  appeals                                                               
commission doesn't provide  a lot of bang for  the buck. However,                                                               
when comparing  the caseload  and number  of decisions  issued by                                                               
the appeals commission  with ones issued by  the appellate courts                                                               
in the Alaska Court System,  the costs are fairly comparable. The                                                               
appellate  courts  line item  appropriation  is  $7.1 million  as                                                               
opposed  to  $320,000  for  the   appeals  commission.  For  $7.1                                                               
million,  the superior  court covers  664  cases per  year, on  a                                                               
five-year  average.  For  comparison he  multiplied  the  appeals                                                               
commission budget appropriation of  $323,000 by 22 (323,000 times                                                               
22 equals  approximately 7.1  million). The  result would  be 550                                                               
cases,  which he  described  as  not all  that  significant on  a                                                               
dollar per case comparison.                                                                                                     
                                                                                                                                
The two appellate courts that  have the force of precedence issue                                                               
18 decisions  per justice  per year in  the Alaska  Supreme Court                                                               
and 14 decisions  per judge per year in the  Court of Appeals, as                                                               
compared to  9 decisions per  year by the appeals  commission. He                                                               
acknowledged  that there  is a  difference but  pointed out  that                                                               
each Court  of Appeals judge has  two law clerks and  each Alaska                                                               
Supreme  Court judge  has  three law  clerks.  These clerks  help                                                               
prepare the  record, set up  the legal arguments for  the judges'                                                               
consideration,  and   help  draft  the  decisions.   The  appeals                                                               
commission  has  no clerks  but  has  two lay  commissioners  who                                                               
provide  insight and  perspective in  terms of  industry and  the                                                               
employees.  The  chair  of the  there-member  appeals  commission                                                               
operates as  a solo unit  without any other legal  assistance. He                                                               
related  that in  his experience  it would  have been  helpful to                                                               
have  law  clerks  or  other attorneys  to  prepare  the  record,                                                               
consider the legal  arguments, and help draft  decisions in these                                                               
complex  cases.  He said  he  appreciates  the concern  that  the                                                               
commission doesn't always get it  right, but a lot more resources                                                               
are  directed at  these cases  at  the Supreme  Court level  than                                                               
there can be at the appeals commission                                                                                          
                                                                                                                                
MR.  HEMENWAY reviewed  the reversal  rate. He  said the  appeals                                                               
commission was reversed  in the first five appeals  to the Alaska                                                               
Supreme  Court. But  over the  last ten  years, their  affirmance                                                               
rate  has been  about  60  percent, reversal  rate  less than  30                                                               
percent, and  about 15 percent  were a split decision.  He opined                                                               
that  in the  past ten  years, the  appeals commission  record is                                                               
substantially equivalent to the  superior court record on appeals                                                               
to the Alaska Supreme Court.                                                                                                    
                                                                                                                                
MR.  HEMENWAY referenced  the testimony  that  the percentage  of                                                               
cases  appealed to  the  Alaska  Supreme Court  has  gone up.  He                                                               
pointed out that the number  of appeals commission cases appealed                                                               
to  the ASC  is almost  identical  to what  it was  prior to  the                                                               
creation of the appeals commission.  Currently, about 9 cases per                                                               
year are appealed  to the Alaska Supreme Court.  According to the                                                               
testimony at the  time the appeals commission  was created, about                                                               
8  cases  were appealed  per  year.  This  is not  a  significant                                                               
difference, he said. Finally, he  said that the argument that the                                                               
appeals commission doesn't give value  for the money is mistaken.                                                               
The three-member appeals commission gives  good value for a small                                                               
amount of money. He said he  hopes that members keep this in mind                                                               
as the bill progresses through the legislature.                                                                                 
                                                                                                                                
2:03:57 PM                                                                                                                    
SENATOR STEVENS thanked him for  his service. He recalled that in                                                               
2019,  there were  7  decisions appealed  to  the Alaska  Supreme                                                               
Court; 2 were  confirmed and 5 were reversed. He  said that seems                                                               
like a substantial number of reversals.                                                                                         
                                                                                                                                
MR.  HEMENWAY  replied  he  also heard  that  testimony,  but  he                                                               
questioned it  because the data  doesn't support  that assertion.                                                               
First, none  of the cases  that were  appealed in 2019  have been                                                               
decided  so  those data  points  aren't  available. Further,  the                                                               
chart in members' packets that  shows outcomes of cases that were                                                               
appealed  to  the  appeals  commission   does  not  support  that                                                               
testimony. That  chart shows  that in  2018, 6  of 11  cases that                                                               
were  appealed are  still pending,  2  were affirmed,  and 1  was                                                               
reversed.  In 2017,  the appeals  commission decided  6 cases;  4                                                               
were  affirmed,  and  2  were  reverse. In  2016,  2  cases  were                                                               
affirmed, and  one was reversed.  He said he  was not aware  of a                                                               
particular  timeframe in  which 5  of 7  cases were  reversed. He                                                               
offered  to  research  the  cases because  that  isn't  what  the                                                               
information in members' packets indicates.                                                                                      
                                                                                                                                
2:06:29 PM                                                                                                                    
CHAIR BISHOP  closed public  testimony, noted  that the  bill had                                                               
two more committees of referral, and solicited a motion.                                                                        
                                                                                                                                
2:06:44 PM                                                                                                                    
SENATOR STEVENS moved to report the  CS for SB 76, work order LS-                                                               
310493\M,  from  committee  with individual  recommendations  and                                                               
attached fiscal note(s).                                                                                                        
                                                                                                                                
There  being no  objection  CSSB 76(L&C)  was  reported from  the                                                               
Senate Labor and Commerce Standing Committee.