Legislature(2003 - 2004)
02/06/2004 08:00 AM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 203-OFFICE OF ADMINISTRATIVE HEARINGS
CHAIR SEEKINS called the meeting back to order and announced SB
203 to be before the committee.
SENATOR GENE THERRIAULT, sponsor of SB 203, told members that
the committee substitute (CS) [version B] addresses the many
concerns of the state agencies. The purpose of SB 203 is to
implement a new system for adjudications and hearing officers to
make them consistent across statutes as much as possible. He
noted this bill is not a perfect fit to all areas of state
government. However, knowing that people resist change, the bill
has been scaled back so that it now establishes a pilot project.
He said the common goal, in working with the Murkowski
Administration, is to achieve a seamless transition.
TAPE 04-2, SIDE B
SENATOR THERRIAULT said those existing administrative hearing
jurisdictions that do not fit well at this time were removed
from version B. Those jurisdictions may, over time, be brought
into the new system by future legislative action. He explained
that the main source of tension involved whether the existing
rules and regulations would apply under the central panel
reform, or whether new regulations yet to be developed by the
chief hearing officer will control the process. He said to
address the concerns about agency expertise, version B allows
agency representatives to participate at hearings under
conditions set by the chief hearing officer. To address the
concern about maintaining agency power over policy, version B
keeps the central panel decisions as non-binding within certain
timelines and conditions. In areas of conflict with federal law,
version B authorizes the administration to follow federal
guidelines where required. In addition, at the request of the
administration, the definition of a hearing officer was removed
and replaced with a more broad description of a quasi-judicial
hearing function.
SENATOR THERRIAULT told members that the length of the bill has
decreased from about 50 to 39 pages. He asked that Mr. Stancliff
explain the details.
SENATOR THERRIAULT moved to adopt, as the working document
before the committee, the proposed committee substitute to SB
203, version B, dated 2/4/04.
CHAIR SEEKINS announced that without objection, the motion
carried.
MR. DAVE STANCLIFF, staff to the Administrative Regulation
Review Committee (ARRC) and to Senator Therriault, said the good
news is that the fundamental applications and structure in
version B are unchanged. The major changes made in the CS were
requested by the administration and several concerned
commissioners who like the existing process or are in the
process of making reforms to their hearing processes and want
the opportunity to implement them. Therefore, 12 of the
jurisdictions listed in the Senate State Affairs CS were removed
from version B. In addition, the Department of Environmental
Conservation's (DEC) emergency authority and emergency statutes
that are time sensitive and deal with environmental hazards were
exempted and the general DEC hearing functions will not fall
under the central panel for a grace period of two years. After
two years, if DEC's in-house reforms are working well, it could
make a case to the legislature for a permanent exemption.
MR. STANCLIFF said the Department of Natural Resources' (DNR)
concerns were addressed by removing DNR from the bill. Version B
is a highly polished model; one that will not be too costly to
implement. It has a very liberal transition period, requested by
the administration. The tension that Senator Therriault referred
to, between the Administrative Procedures Act (APA) and the
model, is not new. That tension exists simply because not every
agency conducts its hearings in the same way and not every
agency conducts its hearings under the APA. Those tensions are
inherent in any process that is not consistent from top to
bottom. He said the premise of this legislation was to build a
model that over time would provide top to bottom consistency,
but not to force the consistency in a way that would be too
costly or would "train wreck" legitimate, ongoing hearing
functions.
MR. STANCLIFF pointed out that a panel of five experts from
different states that assembled on February 3 was impressed with
the provision in the bill that will make the hearing officer an
administrative employee who will be appointed by the
administration. That hearing officer will write regulations and
expedite the necessary hearing process transformations. The five
experts were a bit reluctant to give high accolades for the fact
that final decision-making authority was not given to the
central panel. The experts did note that even though the panel
will not have final decision-making authority, the legislation
requires the commissioner to meet a fairly high bar to reverse a
decision. The reversal must be in writing so that if the case
advances to court, a written record will be available. He
pointed out the experts from the five states were very impressed
with the fact that the model in version B is a culmination of
all the best features of about 25 models adopted by other
states.
MR. STANCLIFF introduced Mr. Andy Hemenway, a hearing officer
with the Department of Administration (DOA) and said the two
would address the specific changes made in the CS.
9:20 a.m.
MR. STANCLIFF described the following changes to version B:
· page 5, line 31 and page 6, line 1 - language states that
this act does not create a right to a hearing that
otherwise does not exist in law
· page 6, lines 7-9 - language states that full-time hearing
officers will be subject to AS 39.25.150 personnel rules -
these positions will be partially exempt with the same
protections under the personnel rules listed in paragraphs
(7), (15) and (16)
· page 6, lines 29-30, language says a person who enters into
a contract to work as a hearing officer with the central
panel will be subject to the same rules of ethics as a
state hearing officer
SENATOR FRENCH asked how hearing officers are currently
classified in state service.
MR. STANCLIFF said it varies but for the most part, they are
fully protected employees if they are not under contract. He
noted there might be some exceptions in which an appointed
person, such as a director, would hold hearings. He deferred to
Mr. Hemenway for further information.
MR. HEMENWAY told members that most hearing officers are
partially exempt. He and a few others are classified.
SENATOR FRENCH asked if version B will maintain the status quo.
MR. HEMENWAY said that is correct.
CHAIR SEEKINS asked why a hearing officer would be under
contract.
MR. HEMENWAY referred to the list of agencies on page 4 and
explained that those agencies are statutorily required to hold
hearings if a decision is appealed, but they have no hearing
officers. When a hearing has to be conducted, a division
employee conducts the hearing or the department might contract
with an attorney for professional services to act as the hearing
officer.
CHAIR SEEKINS asked if this bill would reduce the requirement
for contract hearing officers.
MR. HEMENWAY said that is the intent but the bill creates one
additional position, the chief hearing officer. The expectation
is that the consolidation should create some efficiency and free
up time for the existing hearing officers to do some of the
currently contracted functions.
SENATOR THERRIAULT said that even with a centralized panel pool,
there may be times when outside contractors will have to perform
that function.
CHAIR SEEKINS agreed that the number of contracts will be
reduced, not eliminated.
MR. STANCLIFF continued:
· Page 7, lines 24-27 - Sec. 44.21.555 contains a
reimbursement agreement
· Page 7, beginning on line 8 - Sec. 44.21.560 was rewritten
to clarify how a resolution would occur when there is a
conflict between regulations and existing statute and
regulations adopted by the chief hearing officer
MR. STANCLIFF pointed out that the administration will appoint a
high quality person to work with the agencies and develop and
carry out regulations in a compatible manner. However, no matter
how well the system works, there will occasionally be a "rub"
between the jurisdictions as the transition goes forward. That
section is designed to address such a problem. He continued:
· Page 8, lines 13-14, address the confidentiality rule when
case information and materials are shifted to the central
panel
· Page 8, lines 16-21, allow, if an agency makes a case for
expertise, the chief hearing officer to determine what
level of participation is necessary
· Page 9, lines 22-23, subsection (f) provides a 30 day time
period for the commissioner to overturn a decision, and
says if no action is taken, the decision becomes final
· Page 10, lines 14-15, addresses any legitimate ongoing
action within an agency and prevents the central panel from
arbitrarily holding in abeyance what otherwise would be
good public policy
· Page 10, lines 24-25, say when federal requirements exist,
they prevail
· Page 10, line 28, contains a shorter definition of
administrative hearing officer at the suggestion of the
attorney general
· Page 29, lines 7-12, reinstates the requirement that the
attorney general approve contract services
· Page 34 contains the provision that puts DEC back in after
its two-year grace period - line 18 contains an exception
for the DEC functions that are extremely time sensitive and
are rarely used
· Page 39, line 29, Section 71, contains the DEC 2-year
exemption
MR. STANCLIFF told members that the transition period was
designed so that the administration can appoint a hearing
officer and start "getting the house" in order within a liberal
time period.
MR. HEMENWAY noted the start-up date is July of 2005, when the
chief hearing officer could be hired.
MR. STANCLIFF pointed out that version B addresses 85 to 90
percent of the administration's concerns. Addressing any of the
remaining concerns would have diluted the reform to the point
where it would not work as efficiently as needed. He said he
hopes the committee supports this balanced approach.
9:32 a.m.
SENATOR THERRIAULT said resistance is a natural reaction to any
system change. He noted that DEC resisted fee changes several
years ago but favored the changes after they were in effect for
a year. He said he will continue to be sensitive to agency
concerns but, hopefully, they will find that most of their
concerns have been dealt with. He asked members to consider
passing the CS from committee today so that the Finance
Committee can address the fiscal aspects of the bill.
MR. STANCLIFF told members that the five-state expert panel said
if the state wants to build a new model that garners respect,
and participant qualifications are raised, it is important to
change the title of hearing officer to administrative law judge.
He suggested that would be an easy conceptual amendment to make.
CHAIR SEEKINS asked the sponsor for his opinion of the
suggestion.
SENATOR THERRIAULT said he believes it has merit because it
would highlight that this panel will have uniform standards and
a heightened level of professionalism.
CHAIR SEEKINS asked Mr. Ingram to testify.
9:37 a.m.
MR. DAVID INGRAM told members he recently retired as a hearing
officer for 24 years with the State of Alaska. He also taught
administrative law and other legal courses at the University of
Alaska Southeast for the last 20 years and has been on the
executive committee of the administrative law section of the
Alaska Bar Association for 19 years. He thanked Senator
Therriault, Mr. Stancliff and Mr. Hemenway and all those
involved in SB 203; he is fully supportive of its general
thrust. He said anything that will help improve the level of
professionalism in administrative adjudications in Alaska is a
great idea. He has advocated for the creation of a central panel
for many years and looks forward to the day when all hearing
officers are removed from agency supervision and control. He
believes the idea of a pilot project is a good idea.
MR. INGRAM supported changing the title of hearing officer to
administrative law judge. He attended the meeting of the five
experts from other states and said that several of them noted a
discernible change in the level of professionalism when the
titles were changed in their states. He said that although it
may seem like window dressing, it would mean a lot to the
hearing officers to be referred to as administrative law judges.
In addition, many titles are now used throughout the state
agencies.
MR. INGRAM offered the following suggestions, which he believes
are very important. First, make all full-time hearing officers
employed by the state subject to the Alaska Code of Judicial
Conduct. The Supreme Court did a lot of work drafting and
adopting that code for the "black robed" judges in the state. He
said it does not contain anything unique to judges and would
apply in equal force to administrative law judges. Adopting that
code would eliminate the need to draft a new code, provide a
code of conduct at the inception of the panel, and provide an
instantaneous body of interpretive decisions to guide the
hearing officers in interpreting the code.
His second suggestion is to prohibit the practice of law by all
full-time hearing officers employed by the state. He believes
that as long as hearing officers are allowed to "moonlight," the
state will not have a professional corps of administrative
adjudicators. That activity has serious potential to conflict
with one's performance of duties. He repeated that is already
prohibited in the Alaska Code of Judicial Conduct.
9:42 a.m.
SENATOR OGAN asked if any conflicts surrounding private practice
work are regulated so that an attorney would recuse himself. He
said that the Alaska Bar Association holds attorneys to high
standards regarding conflicts.
MR. INGRAM said that is true but does not mean attorneys always
declare conflicts. The other difficulty is that the extra work
distracts them from their state duties.
CHAIR SEEKINS asked Mr. Ingram if he is suggesting that full-
time hearing officers be prohibited from moonlighting as a
lawyer but the prohibition would not apply to contract hearing
officers.
MR. INGRAM said that is correct.
SENATOR OGAN expressed concern that only the attorneys who can't
make a living on their own would apply.
MR. INGRAM said there are many applicants for any vacant hearing
officer position. His third suggestion was that all full-time
hearing officers be prohibited from acting as an advisor or
judge to another sovereign, such as another state, federal
government or Native group. He pointed out the Commercial
Fisheries Entry Commission (CFEC) allows one of its hearing
officers to be both a judge and an advisor to another sovereign.
Alaskans should be sure in the knowledge that their hearing
officers are not in a position to advise or sit on the court of
a sovereign with an interest potentially at odds with the State
of Alaska. He said, in his opinion, the CFEC situation is a
serious conflict of interest in light of potential disputes over
natural resources, fish and game, jurisdictional matters and the
Indian Child Welfare Act. He believes it is a terrible idea to
let a hearing officer engage in outside interests that may
affect the quality or integrity of his or her work for the
state.
MR. INGRAM informed members that he attached to his written
comments 4 pages of an extract from a decision he issued on
January 30, 2004 involving an application from a Ketchikan
resident. He suggested members read it to get some idea of what
is going on in the "real world" regarding professionalism and
integrity of the process.
SENATOR OGAN thanked Mr. Ingram for bringing his experience to
the committee.
MR. INGRAM said that he believes that all hearing officers would
love to be more independent and be part of a central panel.
SENATOR OGAN said when he introduced similar legislation 6 years
ago, a number of hearing officers privately gave him the "thumbs
up" for a central panel. He then said the term "administrative
law judge" is interesting because most people believe the
legislature writes law. However, the administration writes
regulations, which have the same force of law, and then enforce
them and deal with adjudications. Therefore, what is supposed to
be balanced by three branches is under one. He expressed concern
that hearing officers are pressured to rule with a little bit of
a bias toward the commissioner they work for.
MR. INGRAM said was never told how to decide a case. He suspects
he was given certain cases because he was likely to lean in a
particular way. He believes the main danger is that hearing
officers become friends with their co-workers and it is
difficult to criticize the performance of people one works with
and respects. He acknowledged that a good hearing officer can
step back.
SENATOR THERRIAULT said he clearly understands the reasons for
Mr. Ingram's first suggestion, to change the titles of the
hearing officers to administrative law judges. He asked if the
central panel adopted the Alaska Code of Judicial Conduct, Mr.
Ingram's other two suggestions, regarding outside employment,
would be addressed.
MR. INGRAM said it would take care of his suggestion to prohibit
moonlighting. However, he believes the committee should consider
amending the bill to specifically state that administrative law
judges should not act as an advisor or judge to another
sovereign because some people would argue that is not the
practice of law.
SENATOR THERRIAULT said if the legislature wants the efficiency
of a central pool, it would not want administrative law judges
with conflicts within the pool, other than life experiences,
such as being related to someone involved in a case.
CHAIR SEEKINS announced that he was closing public testimony and
asked for further comments from members.
SENATOR FRENCH thanked Mr. Ingram for his comments and said he
supports his first and fourth suggestions. He said his concern
about the second suggestion is based on a personal experience.
He noted that law clerks must be admitted to the Alaska Bar
Association to practice law and pay dues, but they cannot
practice law outside of being a law clerk. He said his problem
is with the ABA and believes it should establish a separate dues
rate for public interest lawyers.
TAPE 04-3, SIDE A
SENATOR FRENCH said he is still mulling over how Mr. Ingram's
second and third suggestions should be structured, but he
believes the bill is in good shape and appreciates the work that
has been done on it.
SENATOR THERRIAULT moved a conceptual amendment [Amendment 1] to
change the term "hearing officer" to "administrative law judge"
throughout the bill.
CHAIR SEEKINS announced that without objection, the motion
carried.
SENATOR THERRIAULT said he would prefer to get more information
on adopting the Alaska Code of Judicial Conduct before taking
action on that suggestion. He noted the next committee of
referral is the Finance Committee and, if adopting that code
will avoid having to write an entirely new code, he would
consider that as a way of handling the fiscal impact.
SENATOR THERRIAULT made a second conceptual amendment [Amendment
2] to preclude the administrative law judges from acting as an
advisor or a judge to any other sovereign.
SENATOR OGAN objected and asked what is meant by an advisor to
another sovereign. He questioned whether that would include
consulting.
SENATOR THERRIAULT said the amendment is conceptual so the
drafters will have to define that term.
CHAIR SEEKINS said he believes the intent is to address
situations in which the work is done for remuneration because
the law could not prohibit someone from giving free advice to
another.
SENATOR FRENCH read an excerpt from Mr. Ingram's letter that
cited the Alaska Code of Judicial Conduct, "A judge shall not
practice law. Notwithstanding this prohibition, a judge may act
pro se and may, without compensation, give legal advice to and
draft or review documents for a member of the judge's family."
CHAIR SEEKINS said that is how he interprets Amendment 2.
MR. STANCLIFF noted that a member of the administration felt the
term, "for remuneration or official purposes" should be used.
SENATOR FRENCH said that "official purposes" should probably be
parsed out a bit more.
SENATOR OGAN said he wanted to provide the drafter with some
discussion. He removed his objection; therefore Amendment 2 was
adopted.
SENATOR OGAN moved CSSB 203(JUD), Version B as amended, with its
attached fiscal notes from committee and asked for unanimous
consent.
CHAIR SEEKINS announced that without objection, the motion
carried. He then adjourned the meeting at 10:01 a.m.
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