Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/16/2020 01:30 PM Senate JUDICIARY

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 76 REPEAL WORKERS' COMP APPEALS COMMISSION TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SJR 13 CONST. AM: PROHIBIT ABORTION/FUNDING TELECONFERENCED
Heard & Held
-- Public Testimony --
+= SB 8 ACCESS TO MARIJUANA CONVICTION RECORDS TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
         SB 76-REPEAL WORKERS' COMP APPEALS COMMISSION                                                                      
                                                                                                                              
1:32:59 PM                                                                                                                    
CHAIR COGHILL  announced that the  first 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." [CSSB 76(L&C) was before the committee].                                                                    
                                                                                                                                
1:34:01 PM                                                                                                                    
SENATOR WIELECHOWSKI,  Alaska State Legislature,  Juneau, Alaska,                                                               
speaking  as sponsor,  stated that  SB  76 would  save the  state                                                               
$425,000 per  year. He explained that  if a worker in  this state                                                               
is injured on  the job, the person files  a workers' compensation                                                               
claim. He said the number of  claims has diminished over time. In                                                               
2018,  there  were  17,694  reports  of  injury  or  occupational                                                               
illness as  compared to  2008 when there  were 23,000  reports of                                                               
injury.  Disputes come  before  the  Workers' Compensation  Board                                                               
("Board")  which  consists of  a  hearing  officer, typically  an                                                               
attorney, and  two representatives, one from  organized labor and                                                               
one from management.  Those members are selected  by the governor                                                               
and confirmed by  the legislature. Of the 17,694  claims in 2018,                                                               
the board held 231 hearings. An  appeal of a Board decision would                                                               
go    to   the    Workers'   Compensation    Appeals   Commission                                                               
("Commission"). The Board's  hearings are down from  255 in 2017,                                                               
he said.                                                                                                                        
                                                                                                                                
He  reviewed  statistics  for  the  number  of  cases  that  were                                                               
appealed  to the  Commission:  in  2019, 19  cases;  in 2018,  14                                                               
cases; in 2017, 10 cases; which is  part of the reason to seek to                                                               
abolish the  Commission. It  costs $425,000  annually to  pay for                                                               
the 10-19  cases the Commission  hears. He offered his  view that                                                               
these cases can  be absorbed by the superior  court. Before 2005,                                                               
the superior  court handled  workers' compensation  appeals. This                                                               
bill  would  send  any Workers'  Compensation  Board  appeals  to                                                               
superior court. Decisions  by the Commission are  not appealed to                                                               
superior court, which is an uncommon situation, he said.                                                                        
                                                                                                                                
SENATOR WIELECHOWSKI said the argument  for creating the Workers'                                                               
Compensation  Appeals  Commission  was   that  the  public  would                                                               
benefit  from  having a  commission  with  specific expertise  in                                                               
workers' compensation.  He argued  that these  cases are  no more                                                               
complex than  family law,  mental health  issues, or  other legal                                                               
issues that the superior court  regularly handles. He opined that                                                               
the specific  expertise claim has  not borne out  because roughly                                                               
50 percent  of the  Commission's cases that  are appealed  to the                                                               
Alaska  Supreme Court  are reversed.  In  2005, at  the time  the                                                               
Commission  was  created,  testimony   indicated  that  about  25                                                               
percent  of  the  workers'  compensation  cases  decided  by  the                                                               
superior  court were  appealed to  the Alaska  Supreme Court.  He                                                               
reviewed   the  percentages   of  Commission   cases  that   were                                                               
ultimately appealed  to the Alaska  Supreme Court: 79  percent in                                                               
2018,  80  percent in  2017,  and  50  percent in  2016.  Another                                                               
argument in  favor of creating the  Workers' Compensation Appeals                                                               
Commission was that cases would  be decided more quickly. Per the                                                               
legislative minutes, a  typical case in 2005 took 8  to 18 months                                                               
to  be resolved  in  superior court.  In  2018, the  Commission's                                                               
report indicated that  the average case was taking  a little over                                                               
one year.                                                                                                                       
                                                                                                                                
1:39:49 PM                                                                                                                    
SENATOR  WIELECHOWSKI  reported  that  similar  bills  have  been                                                               
introduced, such  as the  bill that passed  the House  five years                                                               
ago, but did not pass the Senate.                                                                                               
                                                                                                                                
1:40:36 PM                                                                                                                    
SENATOR WIELECHOWSKI reviewed slide 2, Senate Bill 76.                                                                          
                                                                                                                                
        Repeals the Alaska Workers' Compensation Appeals                                                                        
     Commission.                                                                                                                
                                                                                                                                
     Returns jurisdiction over Workers' Compensation appeal                                                                     
     to the Superior Court.                                                                                                     
                                                                                                                                
     Saves $425,900 per year                                                                                                    
                                                                                                                                
      Helps fill the Workers' Compensation budget deficit                                                                       
       and make Alaska Workers' Compensation system more                                                                        
     solvent.                                                                                                                   
                                                                                                                                
1:40:58 PM                                                                                                                    
SENATOR  WIELECHOWSKI reviewed  slide 3,  a flowchart  describing                                                               
the process,  that a worker  files a workers'  compensation claim                                                               
to the Workers' Compensation Board  (Board), and the process when                                                               
a party  appeals the  Board's decision  under the  current system                                                               
and  under SB  76. Under  the current  system, Board  appeals are                                                               
heard   by   the   Workers'  Compensation   Appeals   Commission.                                                               
Previously,  Workers' Compensation  Board appeals  were heard  by                                                               
superior  court and  if either  party  appealed the  Commission's                                                               
decision, the case  would go before the Alaska  Supreme Court. SB
76 would revert to the prior system and abolish the Commission.                                                                 
                                                                                                                                
1:42:09 PM                                                                                                                    
SENATOR WIELECHOWSKI reviewed  slide 4, SB 76  Will Save $425,900                                                               
Per Year.                                                                                                                       
                                                                                                                                
     Currently the Commission has  2 full-time employees and                                                                    
     pays for commissioners' travel and per diem.                                                                               
                                                                                                                                
     The Court System has submitted a zero fiscal note.                                                                         
                                                                                                                                
He said  that the  court system  can absorb the  case load  at no                                                               
additional cost.                                                                                                                
                                                                                                                                
1:42:25 PM                                                                                                                    
SENATOR WIELECHOWSKI  reviewed slide 5, a  bar chart illustrating                                                               
the  number  of  cases  filed  and  published  decisions  of  the                                                               
Commission between 2005 and 2019.                                                                                               
                                                                                                                                
     The Workers'  Compensation Appeals  Commission Workload                                                                    
     has  declined  from 49  cases  filed  and 42  published                                                                    
     decisions in  2007 to 22  cases filed and  18 decisions                                                                    
     issued in 2019.                                                                                                            
                                                                                                                                
He said  the number of  Workers' Compensation  Appeals Commission                                                               
published  decisions have  ranged  between 10  and  20 cases  per                                                               
year.                                                                                                                           
                                                                                                                                
1:43:25 PM                                                                                                                    
SENATOR  WIELECHOWSKI  reviewed slide  6,  related  to the  House                                                               
Department   of   Labor   and   Workforce   Development   Finance                                                               
Subcommittee, February 25, 2015:                                                                                                
                                                                                                                                
     "The  Workers' 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.                                                                                   
                                                                                                                                
1:44:10 PM                                                                                                                    
SENATOR WIELECHOWSKI turned to 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.                                                                                             
                                                                                                                                
     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.                                                                                                              
                                                                                                                                
     Sources:   Testimony   of  Paul   Lisankie,   Director,                                                                    
     Division  of Workers'  Compensation,  Senate Labor  and                                                                    
     Commerce Committee, Marc 10, 2005.                                                                                         
                                                                                                                                
     Alaska Workers' Compensation  Appeals Commission Annual                                                                    
     Report for Calendar Year 2018, March 11, 2019                                                                              
                                                                                                                                
1:44:35 PM                                                                                                                    
SENATOR WIELECHOWSKI reviewed slide 8, SB 76 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, 45 [percent]                                                                    
     of  its decisions  have been  appealed  to the  Supreme                                                                    
     Court.                                                                                                                     
                                                                                                                                
     Since  2011,  71%  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 19-175.                                                                               
                                                                                                                                
1:44:40 PM                                                                                                                    
SENATOR MICCICHE  pointed out one  slide showed the  average, but                                                               
it was  not "apples to  apples." He asked if  he had any  idea of                                                               
the average number of cases for superior court.                                                                                 
                                                                                                                                
SENATOR WIELECHOWSKI answered that  this reflects Doug Wooliver's                                                               
testimony but he could produce  the exact testimony. The superior                                                               
court was  taking 8 to 18  months, but Mr. Wooliver  did not give                                                               
an average.                                                                                                                     
                                                                                                                                
SENATOR MICCICHE  suggested that  it is  likely better  than 12.2                                                               
months.                                                                                                                         
                                                                                                                                
SENATOR WIELECHOWSKI  responded that the Commission's  average is                                                               
371 days per its report.                                                                                                        
                                                                                                                                
SENATOR  COGHILL observed  that 6  to 12  months is  still better                                                               
than the superior court's timeframe of 8 to 18 months.                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI agreed that the point was fair.                                                                            
                                                                                                                                
SENATOR MICCICHE  requested the figures since  the superior court                                                               
is likely more efficient.                                                                                                       
                                                                                                                                
SENATOR WIELECHOWSKI agreed to provide them.                                                                                    
                                                                                                                                
SENATOR  COGHILL said  helping workers  is important  and he  has                                                               
supported the  Commission through the years.  Nevertheless, he is                                                               
open to the discussion, especially if it will save money.                                                                       
                                                                                                                                
1:46:50 PM                                                                                                                    
SENATOR  WIELECHOWSKI compared  the number  of cases  appealed to                                                               
the Alaska Supreme Court. At  the time the Commission was created                                                               
in 2005,  about 25 percent  of the superior court  decisions were                                                               
appealed.  Since  the Commission  has  been  created, roughly  45                                                               
percent  of  its  cases  are  appealed.  Also,  that  number  has                                                               
increased to 70 percent since 2011.                                                                                             
                                                                                                                                
CHAIR COGHILL pointed out that it  is not possible to project the                                                               
actual number  of cases  that would be  appealed to  the superior                                                               
court. The Commission has been  effective because it has whittled                                                               
down to the smaller, tougher cases  that will get appealed to the                                                               
Alaska Supreme Court.                                                                                                           
                                                                                                                                
SENATOR  WIELECHOWSKI  offered  to  provide a  breakdown  of  the                                                               
number of cases appealed to the Alaska Supreme Court.                                                                           
                                                                                                                                
1:48:44 PM                                                                                                                    
SENATOR WIELECHOWSKI turned to slide  9, which consisted of a bar                                                               
graph   illustrating   Workers'   Compensation  Tax   Income   is                                                               
Declining:                                                                                                                      
                                                                                                                                
   • Alaska Workers' Compensation and Safety Program Faces                                                                      
     a Growing Budget Deficit - SB 76 Will Help Fill It                                                                         
                                                                                                                                
   • Workers' Compensation and Safety are funded by a tax                                                                       
     on Workers' Compensation payments                                                                                          
                                                                                                                                
   • These programs cost $9.1 million annually and are                                                                          
     projected to remain flat                                                                                                   
                                                                                                                                
   • Saving $425,900 will help close the growing budget                                                                         
     gap.                                                                                                                       
                                                                                                                                
     Sources: Legislative Finance Division                                                                                      
       Department of Revenue , Revenue sources Book, Fall                                                                       
     2019                                                                                                                       
                                                                                                                                
SENATOR WIELECHOWSKI  stated that  in FY  2019, the  program cost                                                               
$9.1  million   and  the  workers'  compensation   tax  that  was                                                               
collected to  fund the Workers'  Compensation Safety  program was                                                               
$8 million. The difference was made up by the general fund.                                                                     
                                                                                                                                
CHAIR  COGHILL recalled  that  the funds  would  not actually  be                                                               
saved but would be turned over to the safety program.                                                                           
                                                                                                                                
SENATOR WIELECHOWSKI responded that the  tax that is collected on                                                               
workers' compensation  policies helps  to fund the  whole system.                                                               
If there isn't enough money in the  system, the gap is made up of                                                               
general  funds.  Saving  $425,900  would help  close  the  amount                                                               
needed from the general fund.                                                                                                   
                                                                                                                                
CHAIR COGHILL asked if the goal  was to save money for the safety                                                               
program rather than making the  system more efficient. He related                                                               
his understanding  that the safety  program needed money,  but he                                                               
did not know that the bill would save any money.                                                                                
                                                                                                                                
SENATOR WIELECHOWSKI said  the projected cost in FY  2021 is flat                                                               
at $9.1 million and it has  been flat for several years. However,                                                               
the income  is less because of  fewer cases and the  state has to                                                               
make up  the $2.5 million gap.  If the system costs  are $425,900                                                               
less,  it reduces  the amount  of general  fund dollars  that are                                                               
needed.                                                                                                                         
                                                                                                                                
1:50:56 PM                                                                                                                    
SENATOR  MICCICHE summarized  the explanation  and asked  if this                                                               
would fill the gap or create a surplus.                                                                                         
                                                                                                                                
SENATOR  WIELECHOWSKI  explained  that  there would  still  be  a                                                               
deficit, but it  would be less if $425,900 was  deducted from the                                                               
overall $9.1  million program cost.  He said the state  must make                                                               
up the  difference somehow and one  option would be to  raise the                                                               
employer tax.                                                                                                                   
                                                                                                                                
1:51:54 PM                                                                                                                    
SENATOR WIELECHOWSKI reviewed slide 10, Bottom Line:                                                                            
                                                                                                                                
     SB 76 saves $425,900 annually                                                                                              
                                                                                                                                
     Preserves parties'  right to have their  cases heard in                                                                    
     a timely manner                                                                                                            
                                                                                                                                
     Will reduce appeals to the Supreme Court                                                                                   
                                                                                                                                
     Makes Alaska Workers' Compensation system more solvent                                                                     
                                                                                                                                
1:52:27 PM                                                                                                                    
NATE  GRAHAM,  Staff,  Senator Bill  Wielechowski,  Alaska  State                                                               
Legislature,  Juneau, Alaska,  presented  the sectional  analysis                                                               
for SB 76 on behalf of the sponsor. He read:                                                                                    
                                                                                                                                
     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.                                                                                                                    
                                                                                                                                
1:53:57 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.                                                                                                
                                                                                                                                
1:55:10 PM                                                                                                                    
     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.                                                                                                      
                                                                                                                                
     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.                                                                                                                      
                                                                                                                                
1:56:12 PM                                                                                                                    
     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.                                                                         
                                                                                                                                
1:56:35 PM                                                                                                                    
SENATOR MICCICHE said the question of whether or not this bill                                                                  
would save money should be settled. He calculated program costs                                                                 
of  $9.1  million and  subtracting  $425,000  results in  program                                                               
costs of $8.675 million. Since  the state currently takes in $6.4                                                               
million, there  is actually a  savings since $425,000  less would                                                               
be needed from the general fund to fill the gap.                                                                                
                                                                                                                                
SENATOR WIELECHOWSKI agreed and acknowledged  that there may be a                                                               
separate account where  that money is kept. He  offered to follow                                                               
up with more specifics on where that money comes from.                                                                          
                                                                                                                                
1:58:03 PM                                                                                                                    
CHAIR COGHILL pointed  out that adding 232 cases  to the superior                                                               
court means that the time is  shifted. The question is what value                                                               
is received  and if there would  there be fewer appeals.  He said                                                               
what would  be left  is the precedent  the Commission  sets going                                                               
forward would be lost.                                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  said his fundamental  argument is  that the                                                               
10  to  20  cases  appealed to  the  Commission  were  previously                                                               
handled by  the superior court.  These cases could be  handled by                                                               
superior court  in a reasonable  amount of  time and result  in a                                                               
savings of $425,900.                                                                                                            
                                                                                                                                
2:00:13 PM                                                                                                                    
CHAIR COGHILL opened public testimony on SB 76.                                                                                 
                                                                                                                                
2:00:22 PM                                                                                                                    
MARTHA  TANSIK,   Attorney,  Barlow  Anderson,   LLC,  Anchorage,                                                               
Alaska,  said  most  of her  practice  is  workers'  compensation                                                               
defense. She  has been on  the receiving end of  recent precedent                                                               
changing decisions so she is not  under any illusion that this is                                                               
a perfect system. Still, she  said she was speaking in opposition                                                               
to  SB 76.  From her  perspective, the  concerns about  returning                                                               
first  layer appeals  to  the superior  court  relate to  subject                                                               
matter complexity, lack of superior  court resources, and failure                                                               
to meet  the intent  of the Workers'  Compensation Act.  She said                                                               
workers' compensation is  a nuanced and complex area  of law. The                                                               
statutes have  been modified extensively  by case law  over time,                                                               
especially since  2005 when the  legislature created  the current                                                               
system.  She  emphasized  the importance  of  having  individuals                                                               
familiar   with  the   Workers'   Compensation   Act  and   cases                                                               
adjudicating the appeal. That  familiarity ultimately reduces the                                                               
likelihood of  appeal to the  Alaska Supreme Court  and increases                                                               
the  likelihood  of  a  consistent  body  of  law.  Without  that                                                               
precedential  value,  there is  little  incentive  to accept  the                                                               
ruling of the  superior court. It is easier to  anticipate that a                                                               
change to  the superior court,  however excellent  the practicing                                                               
judges, would likely result in  increased litigation costs and an                                                               
overall lack of predictability  for practitioners, employers, and                                                               
employees.                                                                                                                      
                                                                                                                                
MS. TANSIK said that there is  no indication that any other court                                                               
or  judge will  be  correct  any more  than  the Commission.  She                                                               
offered her view  that the increased number of appeals  has to do                                                               
with a major  shift in the law that has  occurred since 2005. She                                                               
said it is like comparing  apples to oranges when considering the                                                               
pre and  post 2005 appeals  when navigating  the new set  of laws                                                               
and causation. She also pointed out  that the length of time that                                                               
cases  are open  is often  caused by  pro se  litigants who  want                                                               
extremely long  extensions, not the  inability of  the Commission                                                               
to move cases  forward. For example, in one case  an employee has                                                               
asked  for   nearly  a  year-long  extension,   which  skews  the                                                               
statistics.                                                                                                                     
                                                                                                                                
2:02:58 PM                                                                                                                    
MS. TANSIK  turned to the second  issue, which relates to  a lack                                                               
of resources at the superior  court. The court is stretched thin,                                                               
even more so than in 2017. Just  last week, she set two trials at                                                               
the superior  court and  both judges  were quite  concerned about                                                               
being  called to  cover  criminal  and children  in  need of  aid                                                               
(CINA) cases,  which both have constitutional  timeline mandates.                                                               
One judge  was scheduling four months  out and the other  had his                                                               
calendar from  January through March  2021 completely  booked for                                                               
civil cases. Those delays are  not beneficial for injured workers                                                               
seeking   relief,  nor   for  employers   and  insurers   seeking                                                               
resolution  in a  timely fashion.  She related  her understanding                                                               
that it takes significantly longer  for the superior court judges                                                               
to  issue their  decisions,  which she  believes  is six  months,                                                               
while  the   appeals  commission  has   30  days.  In   terms  of                                                               
efficiency, the  Commission is  much faster,  she said.  The only                                                               
likely  outcome is  delay. She  expressed  concern that  workers'                                                               
compensation cases would be pushed  down so superior court judges                                                               
could address criminal  trials. She opined that it is  a bit of a                                                               
fallacy to think that these  cases could be incorporated into the                                                               
court  system without  the need  for additional  funds since  the                                                               
system is short  staffed and would likely  need additional judges                                                               
to accommodate SB 76.                                                                                                           
                                                                                                                                
She said  the third  point is  that nothing  in the  repeal truly                                                               
supports the  intent of the  Workers' Compensation Act,  which is                                                               
quick, efficient, fair and predictable  delivery of benefits at a                                                               
reasonable  cost.   She  related   her  understanding   that  one                                                               
compromise put  forth would  be to have  a subject  matter expert                                                               
designated  to the  Office of  Administrative  Hearings, one  who                                                               
could have precedential value. That  person might be able to hear                                                               
issues  in a  timely  fashion and  provide  decisions that  would                                                               
allow  for   the  parties   to  establish   predictable  delivery                                                               
benefits.  She related  her understanding  that it  would cost  a                                                               
quarter  to a  third  of  the budget,  which  might  free up  the                                                               
remainder of  the funds for  the other purposes  mentioned today.                                                               
She urged members  to leave the Commission in place,  but if that                                                               
could  not  occur,  to  consider  the  Office  of  Administrative                                                               
Hearings solution to more closely track the legislative intent.                                                                 
                                                                                                                                
2:05:36 PM                                                                                                                    
ANDY HEMENWAY, representing self,  Juneau, Alaska, stated that he                                                               
previously served as an administrative  law judge with the Office                                                               
of Administrative  Hearings. During 2015  and 2016, he  served as                                                               
chair of  the Workers' Compensation  Appeals Commission.  He said                                                               
there  has been  reference to  several policy  matters, including                                                               
the  importance of  having precedent-setting  decisions from  the                                                               
Commission  as compared  to decisions  from  the superior  court,                                                               
which are not binding except to  the parties of the case. He said                                                               
that is  one important value that  would be lost if  the cases go                                                               
to  the  superior  court.  He   noted  that  members  have  heard                                                               
testimony in prior  committees about the value  of the Commission                                                               
for self-represented  or pro se  litigants. The  commission staff                                                               
provides excellent help  to guide them through  the process. With                                                               
due respect,  he said that  he did  not believe the  court system                                                               
could  provide  the same  level  of  service to  self-represented                                                               
litigants.                                                                                                                      
                                                                                                                                
MR. HEMENWAY responded  to the timeliness issue.  He recalled Mr.                                                               
Wooliver's  testimony indicated  that  the court  takes  8 to  18                                                               
months  to issue  decisions, but  he did  not specifically  track                                                               
timeframes for  workers' compensation  cases. The  superior court                                                               
has other  cases to prioritize.  There may  be some need  to keep                                                               
the Commission  in terms of timeliness,  but it would be  hard to                                                               
quantify.                                                                                                                       
                                                                                                                                
2:07:59 PM                                                                                                                    
MR. HEMENWAY turned  to the cost of the  Commission. He suggested                                                               
using  the   actual  Commission  cost,  which   is  $323,000.  He                                                               
characterized it as a rather  small amount in actual dollars, but                                                               
also  as   a  percentage   of  the   funding  for   the  Workers'                                                               
Compensation  and  Safety program  budget.  Of  the $9.1  million                                                               
total cost of the system, just  $323,000 is being expended on the                                                               
Commission.                                                                                                                     
                                                                                                                                
He suggested  that the sponsor's  report of an 80  percent appeal                                                               
rate of  Commission decisions  to the Alaska  Supreme Court  is a                                                               
misconception because  it includes unpublished orders  related to                                                               
attorney  fees,   case  dismissals,   and  extensions   of  time.                                                               
Actually, in  the last five  years appeals to the  Alaska Supreme                                                               
Court of  published or final  Commission decisions has  been less                                                               
than 50 percent. Of those cases,  57 percent were affirmed by the                                                               
Alaska Supreme Court and 28 percent were reversed.                                                                              
                                                                                                                                
Further, in terms  of cost, the two appeals  courts were spending                                                               
$7 million as compared to  $323,000 that the Commission spends. A                                                               
case by  case comparison  shows there is  not much  difference in                                                               
cost. The  666 cases in the  Court of Appeals and  Alaska Supreme                                                               
Court cost about $10,000 per case,  whereas the cost per case for                                                               
the  Commission is  about  $13,000  per case.  That's  not a  big                                                               
difference. He  said the published  decisions per year  per judge                                                               
is 14  for the Court  of Appeals  and 18 published  decisions for                                                               
the   Alaska  Supreme   Court,   which  is   comparable  to   the                                                               
Commission's published decisions.                                                                                               
                                                                                                                                
2:12:34 PM                                                                                                                    
ERIC CROFT, Attorney, Croft Law  Firm, Anchorage, Alaska, said he                                                               
submitted written  testimony, but  would make  a few  comments in                                                               
support of  SB 76. He  offered his  view that the  Commission has                                                               
not  provided legal  clarity. He  cited  two cases  in which  the                                                               
Alaska Supreme  Court could  not figure  out what  the Commission                                                               
meant,  but  more importantly  the  Commission  in two  different                                                               
opinions  used two  completely different  standards  to grant  or                                                               
reject a stay, effectively contradicting itself.                                                                                
                                                                                                                                
MR.  CROFT said  it  is  not necessary  to  find  fault with  the                                                               
Commission to find  that the caseload does not  justify the level                                                               
of expenditure. As Mr. Hemenway  testified, the Commission issues                                                               
14 decisions  per year, which  is low compared to  criminal Court                                                               
of   Appeals.  He   said  the   caseload   doesn't  justify   the                                                               
expenditure.                                                                                                                    
                                                                                                                                
2:15:21 PM                                                                                                                    
CHAIR COGHILL encouraged members to  send in written testimony to                                                               
[email protected].                                                                                                     
                                                                                                                                
2:15:34 PM                                                                                                                    
MICHAEL   BUDZINSKI,   Attorney,   Meschke   Paddock   Budzinski,                                                               
Anchorage, Alaska, spoke  in opposition to SB 76. He  said he has                                                               
practiced workers' compensation  law, representing employers, for                                                               
36 years. He  agreed with Ms. Tansik's reasoning  to maintain the                                                               
Commission.                                                                                                                     
                                                                                                                                
MR. BUDZINSKI said  the Commission has the  most experience, with                                                               
its members having a combined  total of 60-80 years of experience                                                               
in  workers' compensation  matters. He  compared this  to current                                                               
superior  court judges,  which he  reviewed. He  noted that  none                                                               
have  practiced  in  workers'   compensation,  so  they  have  no                                                               
practical experience to bring to  the appeals. Even if the Alaska                                                               
Supreme Court  disagrees with the outcome,  the Commission offers                                                               
very rational, well-reasoned decisions.  He offered his view that                                                               
the Alaska  Supreme Court has  its own  policy agenda, but  it is                                                               
valuable to  see the rationale  that the Commission  provides. He                                                               
offered his view that no  superior court judge would be qualified                                                               
to do so. He  said that the superior court has  large gaps in its                                                               
knowledge  of  the  workers'  compensation  system.  In  his  own                                                               
experience, he  has found  in arguing  cases before  the superior                                                               
court,   attorneys   must    literally   explain   the   workers'                                                               
compensation system before  getting to the merits of  a case. The                                                               
Commission is  familiar with workers'  compensation terms  and is                                                               
efficient. It  is valuable  for the Commission  to have  a three-                                                               
member panel to discuss matters  and arrive at the best decision.                                                               
The superior court  judges cannot get that feedback  since no one                                                               
has  that experience.  He  said  he cannot  speak  to the  fiscal                                                               
concerns, but in terms of the  quality of the system, it does not                                                               
make sense to  substitute a panel with  substantial experience to                                                               
one that has none.                                                                                                              
                                                                                                                                
2:19:27 PM                                                                                                                    
SENATOR KIEHL asked if he said  that the Alaska Supreme Court has                                                               
an  agenda regardless  of the  hearing  on workers'  compensation                                                               
issues and, if so, what that might be.                                                                                          
                                                                                                                                
MR.  BUDZINSKI said  that in  his experience  the Alaska  Supreme                                                               
Court inserts  a policy aspect  to decisions. Some  cases present                                                               
matters  of policy  that must  be decided  when interpreting  the                                                               
law. The  Commission looks more closely  to the law to  apply the                                                               
rules that  it perceives. The  Alaska Supreme Court is  much more                                                               
open  to  base a  decision,  in  part, on  policy  considerations                                                               
compared to the Commission. He said  that could be the reason for                                                               
reversals.                                                                                                                      
                                                                                                                                
2:21:09 PM                                                                                                                    
LAURA BONNER, representing self,  Anchorage, Alaska, related that                                                               
her husband was injured on the  job in the 1980s and she supports                                                               
SB 76.  She cited  a document  on BASIS  that indicated  that the                                                               
Commission  was  found  to  be   "an  ineffective  division"  and                                                               
according to the fiscal note it  would save the state money to do                                                               
away with the Commission.                                                                                                       
                                                                                                                                
2:22:54 PM                                                                                                                    
CHAIR COGHILL closed public testimony on SB 76.                                                                                 
                                                                                                                                
2:23:13 PM                                                                                                                    
SENATOR  WIELECHOWSKI  disagreed  with  the  statement  that  the                                                               
Commission  costs $323,000  rather  than $425,900,  but it  would                                                               
still  be worth  saving  the  funds. The  Department  of Labor  &                                                               
Workforce  Development   fiscal  note  dated  January   24,  2020                                                               
indicates it  would save $425,900.  He also argued  that workers'                                                               
compensation cases are no more  complex than family, criminal, or                                                               
trust law.                                                                                                                      
                                                                                                                                
He  reviewed the  document in  members' packets  from Legislative                                                               
Research  Services  that  reviewed  Commission  cases  that  were                                                               
appealed to the  Alaska Supreme Court: in 2011,  all 13 published                                                               
decisions were  appealed; in 2012,  15 of sixteen  decisions were                                                               
appealed; in 2013, 11 of 17  cases were appealed; and in 2014, 12                                                               
of  15 decisions  were appealed.  He  reported that  in the  last                                                               
seven to  nine years, 71  percent of  the cases were  appealed to                                                               
the  Alaska Supreme  Court. He  argued that  it does  not provide                                                               
stability,  predictability,  timeliness  or  save  in  litigation                                                               
costs when 71 percent of its cases are appealed.                                                                                
                                                                                                                                
SENATOR  WIELECHOWSKI  said the  superior  court  handles pro  se                                                               
cases all the  time. He suggested that most cases  that go before                                                               
the Commission  are ones represented  by counsel. He  pointed out                                                               
that  litigation  is  expensive.  He  countered  the  comment  on                                                               
unpublished decisions  by stating that every  judge handles them.                                                               
According  to the  Legislative Research  Agency, between  2005 to                                                               
2108, 115 of 253 published  decisions were appealed to the Alaska                                                               
Supreme  Court. Further,  even 43  percent  would not  be a  good                                                               
reversal rate, he said. The  Commission functions as an appellate                                                               
court  and  the  members  are  good  people,  but  two  of  three                                                               
commissioners  have zero  legal training  whereas 100  percent of                                                               
superior court judges have legal training, he said.                                                                             
                                                                                                                                
SENATOR    WIELECHOWSKI    mentioned   that    this    commission                                                               
overwhelmingly  rules  in favor  of  insurance  companies at  the                                                               
expense of  injured workers, which  is documented in  Mr. Croft's                                                               
letter.                                                                                                                         
                                                                                                                                
2:30:13 PM                                                                                                                    
CHAIR COGHILL stated that he would hold SB 76 in committee.                                                                     

Document Name Date/Time Subjects