Legislature(2019 - 2020)BUTROVICH 205

03/10/2020 03:30 PM STATE AFFAIRS

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Moved CSSB 133(STA) Out of Committee
            SB 88-OFFICE OF ADMINISTRATIVE HEARINGS                                                                         
3:34:17 PM                                                                                                                    
CHAIR   REVAK   reconvened   the  meeting   and   announced   the                                                               
consideration  of SENATE  BILL NO.  88, "An  Act relating  to the                                                               
office  of  administrative hearings;  relating  to  the types  of                                                               
proceedings  handled by  the office  of administrative  hearings;                                                               
relating to the entities that may  use the services of the office                                                               
of administrative hearings;  relating to the duties  of the chief                                                               
administrative   law  judge,   including   the   power  to   hire                                                               
professional staff; relating to  the qualifications and powers of                                                               
administrative law judges, including  subpoena power; relating to                                                               
the compensation of the chief  administrative law judge; relating                                                               
to  complaints  against  administrative law  judges  and  hearing                                                               
officers;  relating to  reimbursement for  costs incurred  by the                                                               
office  of administrative  hearings; relating  to procedures  for                                                               
requesting   and  conducting   proceedings  of   the  office   of                                                               
administrative hearings; and providing for an effective date."                                                                  
3:34:52 PM                                                                                                                    
MICHAEL WILLIS, Intern, Senator Peter Micciche, Alaska State                                                                    
Legislature, Juneau, Alaska, on behalf of the sponsor,                                                                          
introduced SB 88, speaking to the following sponsor statement:                                                                  
     Senate Bill 88  is a "good government"  bill to improve                                                                    
     the  process  for  hearing  administrative  appeals  in                                                                    
     Alaska. This bill updates  the Office of Administrative                                                                    
     Hearings   (OAH)  statutes   to  address   due  process                                                                    
     concerns,  procedural  confusion,  and  inefficiencies,                                                                    
     all  with an  eye  towards improving  OAH's ability  to                                                                    
     provide   timely,   cost-effective,  and   high-quality                                                                    
     administrative adjudication services.                                                                                      
     In  2004, under  the leadership  of Governor  Murkowski                                                                    
     and  Senator Therriault,  the  legislature created  the                                                                    
     Office of  Administrative Hearings (OAH)  to centralize                                                                    
     the state administrative  adjudication process. The new                                                                    
     system has  worked well to reduce  cost, improve public                                                                    
     confidence, and  provide a speedier process  to resolve                                                                    
     disputes.  However, the  statutory  framework needs  an                                                                    
     update   to  correct   drafting   anomalies  and   take                                                                    
     advantage  of  the lessons  learned  from  14 years  of                                                                    
     "test  driving"  the original  innovative  legislation.                                                                    
     Some of  the corrections  and improvements  included in                                                                    
     SB 88:                                                                                                                     
        • Reduce procedural confusion over OAH's subpoena                                                                       
          authority by  replacing a patchwork system  with a                                                                    
          uniform  provision. It  eliminates gaps  that made                                                                    
          it impossible,  for example, for a  parent accused                                                                    
          of child  abuse to subpoena  a key witness  to the                                                                    
          alleged event.                                                                                                        
        • Rationalize the system of deadlines that was                                                                          
          created  to speed  the process.  For example,  one                                                                    
          final  decision  deadline   applicable  to  agency                                                                    
          heads, though  wise in  concept, has  been counted                                                                    
          from   the   wrong    event,   sometimes   leaving                                                                    
          commissioners with  virtually no time  to consider                                                                    
          far-reaching  decisions. At  the same  time, these                                                                    
          final decisionmakers  have had no deadline  at all                                                                    
          to  act  on  revised proposed  decisions  after  a                                                                    
          remand,  which  can  lead   to  long  delays  that                                                                    
          frustrate the parties.                                                                                                
        • Make it possible for parties to respond to one                                                                        
          another's  objections to  a proposed  decision, in                                                                    
          appropriate cases. The lack of  a way to allow for                                                                    
          responses  has led  to  due  process concerns  and                                                                    
          delays. The  bill also permits  the administrative                                                                    
          law  judge (ALJ)  to  revise  a proposed  decision                                                                    
          based on errors pointed  out by the parties, again                                                                    
          cutting down on inefficiency and delay.                                                                               
        • Permit the Chief Administrative Law Judge to                                                                          
          employ  low-cost  junior  professionals  for  some                                                                    
          work,  correcting an  inadvertent omission  in the                                                                    
          original    legislation.    This    will    create                                                                    
          opportunities for savings.                                                                                            
        • Allow OAH to count experience gained in other                                                                         
          jurisdictions toward the  minimums needed to serve                                                                    
          as a  tax qualified ALJ.  This is critical  in the                                                                    
          tax docket, where OAH  has had serious recruitment                                                                    
          problems and needs to broaden  the pool of skilled                                                                    
          practitioners it can recruit from.                                                                                    
        • Give OAH a means of reopening decisions that were                                                                     
          entered in error,  such as when a  party failed to                                                                    
          appear  but  the failure  later  turns  out to  be                                                                    
          because  the party  was incapacitated,  or because                                                                    
          the agency  sent the notice  to the  wrong person.                                                                    
          SB  88  corrects  this omission  in  the  original                                                                    
          legislation. The  public will be better  served by                                                                    
          the  corrections and  streamlining in  the process                                                                    
          for administrative adjudication  as provided by SB
          88. I respectfully request support for this bill.                                                                     
3:36:38 PM                                                                                                                    
ANDREW HEMENWAY, representing himself, Juneau, Alaska, read the                                                                 
following prepared remarks:                                                                                                     
     Good  afternoon.   My name  is  Andy Hemenway.   I  was                                                                    
     employed by  the Office  of Administrative  Hearings as                                                                    
     an  administrative  law  judge  from the  time  it  was                                                                    
     created  in 2004  until  2015.   I  retired from  state                                                                    
     service in  2016, and  I am appearing  before you  in a                                                                    
     personal   capacity.     With   your  permission,   Mr.                                                                    
     Chairman,  I'd  like  to provide  the  members  of  the                                                                    
     committee  with some  background information  regarding                                                                    
     the Office of Administrative  Hearings, in order to put                                                                    
     into  perspective what  the agency  does  and why  this                                                                    
     legislation is needed.                                                                                                     
     The Office  of Administrative  Hearings is,  in effect,                                                                    
     the  executive branch's  judicial branch.   The  agency                                                                    
     (OAH)  conducts  adjudicative  hearings  for  executive                                                                    
     branch agencies.   These  hearings provide  due process                                                                    
     of law for a member of  the public who has the right to                                                                    
     appeal from an agency  decision regarding that person's                                                                    
     state benefit, obligation, program or license.                                                                             
3:37:32 PM                                                                                                                    
     Before  OAH  was  established, each  individual  agency                                                                    
     conducted these  kinds of adjudicative  hearings, using                                                                    
     a  hearing   officer  employed  by  the   agency  whose                                                                    
     decision  was  being  appealed.   Understandably,  this                                                                    
     system resulted  in a perception among  many people who                                                                    
     appealed that the proceeding  was stacked against them,                                                                    
     because the agency  controlled the adjudicative process                                                                    
     and employed the hearing officer.                                                                                          
     In 2004,  the Alaska Legislature created  the Office of                                                                    
     Administrative Hearings as an  independent agency.  The                                                                    
     purpose  of  the  legislation   was  to  eliminate  the                                                                    
     perception  of unfairness  in the  adjudicative process                                                                    
     and   to  separate   the   adjudicatory  functions   of                                                                    
     executive   branch   agencies  from   those   agencies'                                                                    
     investigative,    prosecutorial,   and    policy-making                                                                    
     OAH's jurisdiction is  set out in AS  44.64.030.  Since                                                                    
     OAH   was  established,   the  legislature   has  added                                                                    
     additional  case categories  to the  list of  agencies,                                                                    
     boards  and commissions  whose cases  must be  heard by                                                                    
     OAH.    In  addition,  a  number  of  executive  branch                                                                    
     agencies   and   other   public   entities,   such   as                                                                    
     municipalities  and school  districts, whose  cases are                                                                    
     not  listed  in AS  44.64.030,  have  decided to  refer                                                                    
     their cases to  OAH in order to take  advantage of what                                                                    
     has  come to  be seen  as a  professional, experienced,                                                                    
     fair and  cost-effective method of  resolving contested                                                                    
     Today,   OAH  handles   cases  from   approximately  80                                                                    
     different areas  of law.  Administrative  law judges at                                                                    
     OAH have dealt with matters  involving as little as $40                                                                    
     to  as much  as $800  million, as  well as  cases where                                                                    
     money   is  not   the  issue,   such  as   professional                                                                    
     licensing,  ethics,   and  procurement.     Some  cases                                                                    
     involve teams of attorneys on  both sides, while others                                                                    
     involve  a  non-attorney  agency representative  and  a                                                                    
     self-represented litigant.                                                                                                 
3:39:29 PM                                                                                                                    
     In order to  provide some context for  the specifics of                                                                    
     SB 88,  I'll briefly describe the  adjudicative process                                                                    
     as it  occurs in the Office  of Administrative Hearings                                                                    
     Let's say  a person  disagrees with an  agency decision                                                                    
     regarding  a   matter  such   as  child   support,  PFD                                                                    
     eligibility,  revocation or  denial  of a  professional                                                                    
     license, or  entitlement to a  welfare benefit.   Under                                                                    
     our  constitution,  that  person   is  entitled  to  an                                                                    
     adjudicative hearing to  contest the agency's decision.                                                                    
     The person  files an appeal  with the agency,  which is                                                                    
     required to forward the appeal  to OAH within ten days.                                                                    
     From then on,  OAH has control of  the hearing process.                                                                    
     The chief administrative law judge  assigns the case to                                                                    
     an  administrative  law  judge,  who  is  charged  with                                                                    
     issuing  a  proposed decision  within  120  days.   The                                                                    
     assigned judge  will review the  case file,  and either                                                                    
     schedule a hearing or, in  more complex cases, schedule                                                                    
     a   prehearing  conference.      There   may  be   some                                                                    
     preliminary  issues to  deal with,  in  which case  the                                                                    
     parties   will  be   given  an   opportunity  to   file                                                                    
     prehearing motions.                                                                                                        
     In  many  cases,  the  administrative  law  judge  will                                                                    
     conclude that the  issues that have been  raised may be                                                                    
     capable  of  resolution   without  a  hearing,  through                                                                    
     alternative dispute  resolution.   In those  cases, the                                                                    
     chief administrative law judge  will assign a different                                                                    
     judge to contact the parties  and to conduct mediation,                                                                    
     which is  an informal,  voluntary process in  which the                                                                    
     judge  attempts  to find  a  workable  solution to  the                                                                    
     issues raised  that satisfies  both the  individual and                                                                    
     the agency.   This  has been a  particularly beneficial                                                                    
     part of the OAH docket,  which has saved agencies money                                                                    
     by  reducing  the  cost of  administrative  litigation,                                                                    
     while at  the same  time providing  a fair  outcome for                                                                    
     all concerned.                                                                                                             
     Assuming  that   the  case  is  not   resolved  through                                                                    
     alternative  dispute  resolution,   or  otherwise,  the                                                                    
     administrative law judge presides  over the hearing, at                                                                    
     which,  just  as in  a  court  case, witnesses  testify                                                                    
     under oath  and are  cross-examined, and  documents are                                                                    
     submitted  into  evidence.    After  the  hearing,  the                                                                    
     administrative  law  judge  issues a  written  proposed                                                                    
     decision, and  the parties are given  an opportunity to                                                                    
     request changes by  filing a proposal for  action.  The                                                                    
     administrative  law judge's  decision is  generally not                                                                    
     the final  decision, although  in some  instances, such                                                                    
     as in tax appeals, it  is.  Assuming the administrative                                                                    
     law judge's decision  is not given effect  as the final                                                                    
     decision, the  administrative law judge's  decision and                                                                    
     any  proposals  for  action  are   sent  to  the  final                                                                    
     decision   maker,   which   in  most   cases   is   the                                                                    
     commissioner of  whatever department the agency  is in,                                                                    
     or, in cases involving  professional licensing or other                                                                    
     boards   or  commissions,   the  board   or  commission                                                                    
     involved.   The final  decision maker can  either adopt                                                                    
     the administrative law judge's  decision, modify it, or                                                                    
     send  it  back  to  the administrative  law  judge  for                                                                    
     additional  proceedings.    In most  cases,  the  final                                                                    
     decision  maker adopts  the administrative  law judge's                                                                    
     decision  in the  form it  was issued.   In  any event,                                                                    
     once the final  decision is issued, the  parties to the                                                                    
     case may appeal that decision to the superior court.                                                                       
     That, in a nutshell, is  how cases generally proceed in                                                                    
     OAH.   Over the  course of years  since the  agency was                                                                    
     created, however,  it has  identified a  few provisions                                                                    
     of  its  enabling statute  that  could  be improved  in                                                                    
     order  to streamline  the adjudicative  process and  to                                                                    
     clarify the  agency's powers.   SB 88 was  drafted with                                                                    
     the  direct  and  close  involvement  of  OAH  and  the                                                                    
     Department of Law.                                                                                                         
     Mr.  Chairman,  thank  you for  providing  me  with  an                                                                    
     opportunity   to  testify   in   support   of  SB   88.                                                                    
     Administrative  Law Judge  Chris Kennedy,  who was  the                                                                    
     primary OAH contact in the  bill drafting process, will                                                                    
     take  the committee  through the  bill's provisions  in                                                                    
     detail, but in the meantime  if there are any questions                                                                    
     for me, I am happy to address them.                                                                                        
3:43:03 PM                                                                                                                    
SENATOR KAWASAKI asked if a person who appears before OAH                                                                       
typically will have counsel.                                                                                                    
MR.  HEMENWAY  answered that  defendants  typically  do not  have                                                               
counsel  for cases  involving child  support, the  permanent fund                                                               
dividend, and  welfare benefits. However,  if enough is  at stake                                                               
in  dollars  or in  principle,  the  person typically  will  have                                                               
counsel. Counsel may  also appear if the principle  will apply to                                                               
a  lot  of Alaskans,  even  if  the  dollar  amount is  not  very                                                               
significant, so it varies based on the type of case.                                                                            
3:44:24 PM                                                                                                                    
SENATOR KAWASAKI  asked how  many OAH cases  are settled  and how                                                               
many are appealed to superior court.                                                                                            
MR. HEMENWAY  said he did not  have the information on  hand, but                                                               
it is  in the  annual report. He  deferred to  Administrative Law                                                               
Judge Kennedy to respond further.                                                                                               
3:45:19 PM                                                                                                                    
CHRIS  KENNEDY,   Administrative  Law  Judge  (Tax),   Office  of                                                               
Administrative Hearings,  Department of Administration,  State of                                                               
Alaska,  Anchorage,  Alaska,  in response  to  Senator  Kawasaki,                                                               
stated  that less  than  one  percent of  cases  are appealed  to                                                               
superior  court.  He  offered  to follow  up  with  the  specific                                                               
CHAIR REVAK said the committee would appreciate the figure.                                                                     
MR. KENNEDY  said he  has worked  for the  agency since  2005. He                                                               
served  as  the  deputy  chief   until  2016.  He  presented  the                                                               
sectional analysis for SB 88:                                                                                                   
     Sec.  1: Amends  AS  18.80.120(b) and  is a  conforming                                                                    
     change to remove the statutory  reference that is being                                                                    
     repealed in  section 20 (AS  44.64.055). (Page  1, line                                                                    
     12  Page 2, line 6)                                                                                                        
     Sec. 2: Amends AS  39.25.120(c)(20) and is a conforming                                                                    
     change to align with the  proposed change in section 4.                                                                    
     It adds  "professional staff"  to the  partially exempt                                                                    
     service  in  the  Office  of  Administrative  Hearings.                                                                    
     (Page 2, lines 7-9)                                                                                                        
He explained  that Section 2  is one of  a pair of  sections that                                                               
address an  inadvertent problem created by  the original statute.                                                               
The statute did  not authorize hiring a  professional staff, such                                                               
as a staff attorney. Other panels  in other states have been able                                                               
to increase  productivity by having  junior attorneys do  some of                                                               
the more repetitive  tasks. If done right this can  be a means to                                                               
reduce overall cost.                                                                                                            
     Sec.  3:   Amends  AS   44.64.010(d)  to   correct  two                                                                    
     anomalies  in  the  chief  administrative  law  judge's                                                                    
     salary.  The chief  administrative law  judge would  be                                                                    
     paid at  step 27 according  to the personnel  rules and                                                                    
     the duty station where he  or she works. (Page 2, lines                                                                    
He  said  because of  the  applicability  clause, this  provision                                                               
would  not apply  to the  current chief.  The chief  currently is                                                               
paid  on  the Juneau  salary  schedule,  but  she is  located  in                                                               
Anchorage. This  provision would correct that  anomaly. Also, the                                                               
position is  capped at  step F,  which has  effectively prevented                                                               
governors   from  recruiting   from  senior   attorneys  at   the                                                               
Department  of  Law when  selecting  a  Chief Administrative  Law                                                               
Judge  because those  individuals would  lose too  many steps  by                                                               
transferring to OAH.                                                                                                            
     Sec.   4:  Amends   AS   44.64.020   to  provide   more                                                                    
     flexibility  in staffing  structure  of  the Office  of                                                                    
     Administrative  Hearings and  includes language  clean-                                                                    
     up. (Page 2, line 15  Page 4, line 12)                                                                                     
3:48:00 PM                                                                                                                    
MR. KENNEDY  said Section 4  is the other  part of the  change he                                                               
mentioned in  Section 2 to  use professional staff. It  also adds                                                               
language regarding  alternative dispute resolution, which  as Mr.                                                               
Hemenway mentioned has  become one of the core duties  of OAH. It                                                               
was not  fully foreseen in  2004, but  the agency has  found that                                                               
greatly  expanding   its  mediation   capabilities  has   been  a                                                               
tremendous cost-saving tool  for OAH. It has  twice permitted OAH                                                               
to downsize.  This section updates  the core duties and  has some                                                               
technical  cleanup  language   that  Legislative  Legal  Services                                                               
     Sec. 5:  Amends AS  44.64.030(b) to correct  an anomaly                                                                    
     in   statute,   whereby   municipalities   and   school                                                                    
     districts are expressly permitted  to contract with the                                                                    
     Office  of Administrative  Hearings for  services under                                                                    
     AS 44.64.055,  but are omitted  from the  provision for                                                                    
     referral  of   cases.  This  section   streamlines  the                                                                    
     statute  and  permits the  repeal  of  AS 44.64.055  in                                                                    
     section 20. (Page 4, lines 13-23)                                                                                          
     Amends  AS  44.64.030(b)   to  clarify  that  agencies,                                                                    
     municipalities,  and school  districts referring  cases                                                                    
     to  the Office  of  Administrative  Hearings may  agree                                                                    
     with  the office  that certain  procedures will  apply.                                                                    
     (Page 4, lines 20-21)                                                                                                      
He  explained   that  the  original   statute  did   not  include                                                               
municipalities  and  school  districts in  the  authorization  to                                                               
accept  case  referrals. The  OAH  has  accepted those  referrals                                                               
which has  been a significant  win-win for cost savings,  but OAH                                                               
would like to put it on a solid statutory footing.                                                                              
     Sec.  6:  Amends  AS  44.64.030(c)   to  add  the  word                                                                    
     "entity," which  makes it explicit that  a municipality                                                                    
     or  school  district  may   choose  to  delegate  final                                                                    
     decision authority to OAH. (Page 4, lines 24-29)                                                                           
     Sec. 7:  Amends AS 44.64.040(a) to  require the minimum                                                                    
     experience  for  all   classes  of  administrative  law                                                                    
     judges be four years, but  in the case of tax qualified                                                                    
     ALJs  it   would  remove   the  requirement   that  the                                                                    
     experience be  in Alaska.  (Page 4, line  29    Page 5,                                                                    
     line 11)                                                                                                                   
3:49:37 PM                                                                                                                    
MR.  KENNEDY said  Section 7  is  surprisingly important  because                                                               
some  of the  most  important work  OAH  does is  to  act as  the                                                               
state's tax court.  The way the statute is  currently worded, OAH                                                               
cannot hire  tax judges unless  they have been practicing  law in                                                               
Alaska  for  two  years  even though  Alaska  experience  is  not                                                               
necessary for  tax work. He  offered his  view that it  is almost                                                               
impossible  to find  a good  tax attorney  in Alaska  who is  not                                                               
making  a lot  more  money  than the  state  can pay.  Advertised                                                               
positions have gone  unfilled for over a year at  a time. He said                                                               
he  is   the  last  employed  tax   judge  at  OAH,  and   he  is                                                               
transitioning into retirement so  the organization would like the                                                               
option to recruit outside Alaska, if necessary.                                                                                 
     Sec.  8:   Amends  AS  44.64.040(b)  to   clarify  that                                                                    
     delegation  of   a  referring  agency's   or  entities'                                                                    
     procedural powers applies to  any proceeding the agency                                                                    
     or entity  has referred.  By adding the  term "entity,"                                                                    
     this  includes cases  accepted from  municipalities and                                                                    
     school districts. (Page 5, lines 12-27)                                                                                    
He said Section  8 corrects imprecise drafting in  the 2004 bill.                                                               
This makes  it clear that OAH  would have the agency  or entity's                                                               
power for cases referred to it.                                                                                                 
     Sec.  9: Amends  AS  44.64.040(c) to  make a  technical                                                                    
     change  regarding  judges  that serve  part-time  in  a                                                                    
     position  that is  authorized  as  full-time. (Page  5,                                                                    
     line 28  Page 6, line 2)                                                                                                   
3:50:55 PM                                                                                                                    
MR.  KENNEDY said  the  current language  seems  to require  even                                                               
part-time judges  to devote full-time  to the office if  they are                                                               
serving  in  a  position  that   is  authorized  as  a  full-time                                                               
position. As a  cost-savings measure, OAH needs to be  able to do                                                               
partial fills  of full-time positions  when case demand  is down.                                                               
This change will make it clear that OAH can do so.                                                                              
     Sec. 10:  Amends AS  44.64.050(c) to  put a  statute of                                                                    
     limitations   on  complaints   for   code  of   conduct                                                                    
     violations.  The  section  creates a  dual  limitations                                                                    
     period. First,  any person can bring  a complaint about                                                                    
     conduct  that  occurred  less  than  three  years  ago.                                                                    
     Second, any person can bring  a complaint about conduct                                                                    
     that occurred during a proceeding  that ended less than                                                                    
     two  years ago  (even if  the conduct  itself was  more                                                                    
     than three years ago). (Page 6, lines 3-20)                                                                                
He explained that Section 10  relates to the Chief Administrative                                                               
Law Judge's  duty to  review code  of conduct  complaints against                                                               
hearing officers  throughout the  state system.  He said  most of                                                               
the code of  conduct complaints that OAH reviews  come from other                                                               
tribunals,   not  OAH.   Currently,  there   is  no   statute  of                                                               
limitations on  those complaints and disgruntled  people can come                                                               
in  and complain  about things  that happened  many years  in the                                                               
past. This  provision would limit  the look-back period  to three                                                               
years, except  for long  running proceedings,  in which  it would                                                               
allow for complaints two years  after the proceeding ends to file                                                               
a complaint. He said stale complaints have been a problem.                                                                      
     Sec. 11:  Amends AS 44.64.060(a)  to clarify that  if a                                                                    
     municipality   sends   a   case  to   the   Office   of                                                                    
     Administrative Hearings,  its ordinances  apply. Aligns                                                                    
     this  section   with  AS  44.64.030(b)  by   making  it                                                                    
     explicit that  preemption by  OAH regulations  does not                                                                    
     apply to  voluntarily referred cases. (Page  6, line 21                                                                    
       Page 7, line 2)                                                                                                          
MR. KENNEDY  said the  current preemption  provision is  a little                                                               
too strong.  It could be  read to  mean that when  a municipality                                                               
voluntarily  refers a  case to  OAH, the  OAH's regulations  will                                                               
preempt the  municipality's ordinances.  This makes  the language                                                               
more precise and ensures that  municipalities can refer cases and                                                               
not cause an override of their own rules.                                                                                       
     Sec.  12:  Amends  AS  44.64.060(b)  to  require  basic                                                                    
     information  be submitted  when a  case is  referred to                                                                    
     the OAH.  In addition, this section  changes the appeal                                                                    
     process  of  a denial  of  referral  from the  Superior                                                                    
     Court to the  OAH. Also, in this  section, the timeline                                                                    
     for compiling  a full agency record  is modified. (Page                                                                    
     7, lines 3-19)                                                                                                             
3:52:52 PM                                                                                                                    
MR. KENNEDY explained  that Section 12 gives agencies  a few more                                                               
days to assemble the full agency  record. This change is based on                                                               
practical experience of what is  possible and not possible at the                                                               
beginning of  a case.  It would  also provide  that if  an agency                                                               
denies a hearing  and refuses to refer a case  to OAH, the person                                                               
requesting the hearing  can appeal that issue to  OAH rather than                                                               
going  to   superior  court.  This   approach  is   used  through                                                               
regulations in  half of the  OAH hearing  dockets. It has  been a                                                               
quick and  efficient way to  resolve front-end disputes,  such as                                                               
whether the hearing request was timely.                                                                                         
     Sec. 13: Amends AS  44.64.060(d) to adjust the deadline                                                                    
     for stayed  cases, allowing the 120-day  deadline for a                                                                    
     proposed  decision to  be  suspended  while a  parallel                                                                    
     case is moving forward. (Page 7, lines 20-29)                                                                              
He offered his view that the  timeline has been a tremendous tool                                                               
in keeping OAH  as a faster, better, cheaper way  to resolve many                                                               
cases,  but there  are times  when it  is necessary  to stop  the                                                               
clock  completely to  allow  a parallel  criminal  case or  other                                                               
court  litigation  to  go first.  Currently,  both  parties  must                                                               
concur, and it can be cumbersome to get that agreement, he said.                                                                
     Sec. 14: Amends AS 44.64.060(e)  to make changes to the                                                                    
     decision-making process in the majority of OAH cases.                                                                      
     Page 7, line  31: This change brings  the language into                                                                    
     line with current  drafting standards, without changing                                                                    
     Page 8, lines 5-6: Permits  extension of the period for                                                                    
     parties  to  comment  on a  proposed  decision  if  all                                                                    
     parties agree.                                                                                                             
     Page 8, line  8: Ensures that proposals  for action are                                                                    
     filed with  the Office  of Administrative  Hearings for                                                                    
     forwarding to the final decision-maker.                                                                                    
     Page  8, lines  9-14:  Permits  the administrative  law                                                                    
     judge  to  allow  parties to  reply  to  one  another's                                                                    
     proposals  for action,  establishes  a  time limit  for                                                                    
     transmittal of  the proposed decision and  the parties'                                                                    
     briefs,  and permits  the administrative  law judge  to                                                                    
     return  a  proposed  decision   to  make  revisions  in                                                                    
     response to a proposal for action.                                                                                         
     Page 8,  lines 15-19: Changes  the date from  which the                                                                    
     final  decision-maker's action  deadline is  calculated                                                                    
     to the date on  which the final-decision-maker receives                                                                    
     the proposed decision.                                                                                                     
     Page 8, lines 26-27:  Permits a final decision-maker to                                                                    
     set the  length of time  in which a remanded  case must                                                                    
     be processed.                                                                                                              
MR. KENNEDY said  Section 14 is the most  complicated section. As                                                               
Mr. Hemenway stated, OAH has  a proposal for action process after                                                               
the  proposed decision  is circulated,  and  the current  statute                                                               
sets a hard  30-day timeline on these objections  that OAH cannot                                                               
extend it  even if  both sides agree.  This provision  will allow                                                               
OAH to  manage the deadline  like any other  litigation deadline.                                                               
There is  also a problem  with the proposal for  action structure                                                               
being a little  too rigid. Often one of the  best features of the                                                               
process is  that when  parties read  the proposed  decision, they                                                               
finally  realize the  key issues  of the  case and  tend to  make                                                               
their  best arguments  in the  proposal for  action. However,  in                                                               
order to  consider those  arguments and  still give  due process,                                                               
OAH must be  able to let the other party  respond. This provision                                                               
allows OAH  to do  so. It  also allows OAH  to revise  a proposed                                                               
decision to  correct any  errors before the  decision is  sent to                                                               
the final decision maker.                                                                                                       
He said  both changes will  allow OAH to  transmit a case  to the                                                               
final  decision  maker that  is  truly  ready for  final  action,                                                               
rather than  to ask  that person  to remand the  case to  OAH for                                                               
more work.                                                                                                                      
3:55:46 PM                                                                                                                    
MR. KENNEDY  said Section 14  also addresses a  major frustration                                                               
that commissioners have  expressed to the OAH, which  is that the                                                               
deadline for  final decision makers to  act is tied to  the wrong                                                               
trigger. Currently it  is counted 45 days from the  day OAH mails                                                               
the decision to the parties and not  when it is sent to the final                                                               
decision maker. When parties take  the full time to execute their                                                               
proposals for action, the commissioners  are often left with only                                                               
a few days  to act. This is problematic in  complex cases because                                                               
when  the  deadline  for  action  is missed,  it  can  usurp  the                                                               
commissioner's decision. This  provision would more appropriately                                                               
start  the 45  days on  the  date the  commissioner receives  the                                                               
case, consistent with how other deadlines are counted.                                                                          
3:56:57 PM                                                                                                                    
     Sec.  15:  Amends  AS   44.64.060(f)  to  conform  with                                                                    
     language in section 14. (Page 9, lines 8-12)                                                                               
MR.  KENNEDY  said Section  15  recognizes  that what  the  final                                                               
decision  maker   may  be  receiving  is   the  revised  proposed                                                               
     Sec.  16: Amends  AS 44.64.060  to add  new subsections                                                                    
     (g-h).  Subsection (g)  creates  uniform authority  for                                                                    
     the  issuance of  subpoenas in  some cases.  Subsection                                                                    
     (h) allows  for the final  decision maker in a  case to                                                                    
     reopen  the proceeding  for a  reason provided  in Rule                                                                    
     60(b) Alaska  Rules of Civil Procedure.  (Page 9, lines                                                                    
     13- 21)                                                                                                                    
He  said Section  16 solves  several practical  problems in  case                                                               
administration. First,  OAH currently  has subpoena  authority in                                                               
most of its  cases. However, this authority comes  from dozens of                                                               
sources  with quirky  variations.  This  provision would  provide                                                               
ordinary subpoena authority  across the board. The  main areas in                                                               
which it  has been lacking  have been in PERS  [Public Employees'                                                               
Retirement System]  and TRS [Teachers' Retirement  System], where                                                               
hundreds of  thousands of dollars  can be at issue.  He explained                                                               
that a  drafting error in the  enabling legislation inadvertently                                                               
omitted  subpoena authority  for those  types of  cases. It  also                                                               
affects  substantiation of  child abuse  where litigants  need to                                                               
have  the  ability  to  compel  testimony in  order  to  get  due                                                               
MR.  KENNEDY  outlined  a  second   issue,  which  has  been  the                                                               
inability of commissioners or boards  and commissions to reopen a                                                               
decision  that has  been issued  in  error. For  example, when  a                                                               
decision has  been entered by  default because a party  failed to                                                               
appear, and  later OAH discovers  that the party did  not receive                                                               
notice due  to an  address error. The  current remedy  is through                                                               
superior  court,  and  this provision  would  create  a  standard                                                               
system for reopening cases parallel to  the one used in the court                                                               
     Sec. 17: Amends AS  44.64.080(c) to clarify what agency                                                                    
     staff can do and what the  agency head can do, but does                                                                    
     not  change  how  this  section  has  been  interpreted                                                                    
     historically. (Page 9, lines 22-28)                                                                                        
     Sec. 18:  Amends AS 44.64.200(1) to  correct a drafting                                                                    
     oversight in  the original  legislation. (Page  9, line                                                                    
     29  Page 10, line 2)                                                                                                       
     Sec.  19:   Amends  AS  44.64.200  to   add  three  new                                                                    
     paragraphs  to   the  definition  section   (to  define                                                                    
     "entity,"  "other proceeding,"  and "school  district."                                                                    
     (Page 9, lines 3-9)                                                                                                        
     Sec. 20: Repealer  due to the function  of AS 44.64.055                                                                    
     being moved  into AS 44.64.030  in section 6.  (Page 9,                                                                    
     line 10)                                                                                                                   
He explained  that Section  20 repealed  the existing  statute on                                                               
municipal and school district referrals  because the provision is                                                               
folded into other sections of the bill.                                                                                         
     Sec.  21:   Applicability  clause.  Makes   changes  to                                                                    
     compensation  or  prior   bar  membership  requirements                                                                    
     applicable  to new  hires only.  Makes  the statute  of                                                                    
     limitations   in   section   10  applicable   only   to                                                                    
     complaints filed  after section 10 is  effective. (Page                                                                    
     9, lines 11-25)                                                                                                            
     Sec. 22: Delays  by one year the effective  date of the                                                                    
     statute  of limitations  in section  10. (Page  9, line                                                                    
MR.  KENNEDY said  the language  in Section  22 ensures  that the                                                               
statute of limitations is constitutional,  such that people would                                                               
have  notice  that  a  statute of  limitations  was  coming  into                                                               
4:00:42 PM                                                                                                                    
CHAIR  REVAK asked  for his  perspective on  the requirement  for                                                               
administrative law  judges to be  licensed in the state  for four                                                               
years instead of two years.                                                                                                     
MR. KENNEDY  acknowledged that  he did not  touch on  that issue.                                                               
The OAH found that it is  important for people to have experience                                                               
before becoming an  administrative law judge. In  fact, ten years                                                               
would be good,  so two years seemed  insufficient. That provision                                                               
was  meant to  be  a noncontroversial  recognition  of the  basic                                                               
experience necessary to  preside over the types of  cases the OAH                                                               
4:01:48 PM                                                                                                                    
SENATOR COGHILL  asked if  OAH has  struggled with  payments from                                                               
municipalities or just with the docket                                                                                          
MR. KENNEDY answered  that the 2004 enabling  legislation did not                                                               
address  that  area  sufficiently.  In the  last  few  years,  in                                                               
practice  it has  worked  very  well. He  offered  his view  that                                                               
smaller  municipalities have  found  tremendous  cost savings  by                                                               
sending  procurement or  tax cases  to  OAH since  the cases  are                                                               
heard quickly  and efficiently. He  said OAH has  not encountered                                                               
any difficulties in payments.                                                                                                   
SENATOR  COGHILL  asked  him to  elaborate  on  potential  school                                                               
district  cases  and  if  the cases  would  focus  on  retirement                                                               
MR. KENNEDY  replied OAH has  been receiving some  retirement and                                                               
teacher discipline cases  in the last year, but  they also handle                                                               
special education cases  from school districts. He  stated that a                                                               
variety of cases  come from small school districts  and using OAH                                                               
provides them an economy of scale.                                                                                              
SENATOR COGHILL asked about the  language change from "alternate"                                                               
dispute resolution to "alternative" dispute resolution.                                                                         
4:04:53 PM                                                                                                                    
MR. KENNEDY  related that the grammarians  said "alternate" means                                                               
switching back  and forth and "alternative"  provides a different                                                               
choice.   He  explained   two  ways   that  alternative   dispute                                                               
resolution  occurs. In  complex  cases, parties  may  ask OAH  to                                                               
appoint  a mediator,  who  is not  the  administrative law  judge                                                               
hearing the  case. This  administrative law judge  will act  as a                                                               
neutral mediator who meets with  the parties and tries to achieve                                                               
a solution. Since OAH is  a central panel, its administrative law                                                               
judges  have  a  multi-disciplinary  knowledge  base  to  achieve                                                               
complicated  solutions  acceptable  to  the  parties.  This  also                                                               
results in  cost savings  by avoiding  costly litigation  for the                                                               
parties.  Second,  in  the  public  benefits  area,  OAH  uses  a                                                               
technique that North Carolina uses,  which is that a professional                                                               
mediator conducts a one-hour mediation  before a hearing. Parties                                                               
are put on a mediation track,  and mediation is held from 10 days                                                               
to two  weeks after  an appeal  is filed. The  OAH has  found the                                                               
settlement  rate is  85 percent,  which dramatically  reduced the                                                               
public  benefits caseload.  In fact,  OAH laid  off an  employee,                                                               
which saved  costs for  OAH and Medicaid.  He commented  that the                                                               
feedback has been  positive, in part, because  the mediator helps                                                               
the parties understand how the  process works, so they understand                                                               
the outcome,  even if it is  not the result the  parties hoped to                                                               
4:08:21 PM                                                                                                                    
SENATOR  COGHILL asked  if he  could review  what is  new in  the                                                               
subpoena authority in Section 16.                                                                                               
MR. KENNEDY responded that the  enabling legislation gave OAH the                                                               
subpoena  powers of  the  referring agency.  He  said most  state                                                               
agencies  have   some  subpoena   authority.  For   example,  the                                                               
Department  of  Commerce,  Community and  Economic  Development's                                                               
authority  in  the professional  licensing  area  fall under  the                                                               
Administrative  Procedures  Act,  which  provides  full  subpoena                                                               
authority. However, some  of the authority is  phrased in strange                                                               
ways in the  agencies, which could lead to  litigation, such that                                                               
an  argument  could  be  made  about  the  transfer  of  subpoena                                                               
authority to  OAH. He  said the  most troublesome  one is  in the                                                               
PERS/TRS  area. The  OAH  was supposed  to  inherit the  subpoena                                                               
authority  from the  PERS/TRS board,  but the  provision was  not                                                               
transferred when  the 2004 enabling  legislation was  drafted and                                                               
it has  not been fixed.  OAH also  hears a significant  number of                                                               
Department of Health  and Social Services (DHSS)  child abuse and                                                               
neglect  hearings.  The  subpoena authority  is  necessary  since                                                               
those accused of those types of  crimes need to be able to compel                                                               
witnesses to testify on their  behalf. However, the DHSS statutes                                                               
do not  give OAH  the authority  to do  so. This  provision would                                                               
give OAH clear subpoena authority.                                                                                              
SENATOR COGHILL  said he thought  OAH already had  the authority,                                                               
so he appreciated the explanation.                                                                                              
4:12:07 PM                                                                                                                    
SENATOR KAWASAKI referred  to pages 4 and 5 of  the annual report                                                               
that provides  a list of  OAH's mandatory jurisdiction.  He asked                                                               
if every case  category would be included in  the final decision-                                                               
making authority.                                                                                                               
MR. KENNEDY said this bill  does not address that issue. Although                                                               
Chief Administrative  Law Judge Fredrick advocated  in the annual                                                               
report for  expanding its  authority, this  bill does  not expand                                                               
OAH's final  decision-making authority.  In some cases,  it would                                                               
mean  that  OAH's decisions  would  not  go to  commissioners  or                                                               
boards and commissions to make the final decision.                                                                              
4:13:52 PM                                                                                                                    
CHAIR REVAK opened  public testimony on SB 88. He  found none and                                                               
held public testimony  open on SB 88. He asked  members to submit                                                               
any amendments to his office prior to March 16, 2020.                                                                           
4:14:30 PM                                                                                                                    
CHAIR REVAK held SB 88 in committee.                                                                                            

Document Name Date/Time Subjects
SB 88 Sectional Analysis 3.6.20.pdf SSTA 3/10/2020 3:30:00 PM
SB 88
SB 88 Sponsor Statement 3.6.20.pdf SSTA 3/10/2020 3:30:00 PM
SB 88
SB 88 OAH-annual-report-2020.pdf SSTA 3/10/2020 3:30:00 PM
SB 88
SB 231 Draft VPSO Work Group Recommendations 1.23.2020.pdf SSTA 3/10/2020 3:30:00 PM
SB 231
SB 231 Sectional Analysis v.U 02.25.2020.pdf SSTA 3/10/2020 3:30:00 PM
SB 231
SB 231 Sponsor Statement 02.25.2020.pdf SSTA 3/10/2020 3:30:00 PM
SB 231
SB231 Relevant Administrative Codes.pdf SSTA 3/10/2020 3:30:00 PM
SB 231
SB 231 DPS analysis 3.9.20.pdf SSTA 3/10/2020 3:30:00 PM
SB 231
SB 231 Fiscal Notes 3.9.2020.pdf SSTA 3/10/2020 3:30:00 PM
SB 231
SB 210 Fiscal Note 3.9.2020.pdf SSTA 3/10/2020 3:30:00 PM
SB 210
SB 88 Fiscal Note 3.9.2020.pdf SSTA 3/10/2020 3:30:00 PM
SB 88
SB 97 Oppose Ak Arts and Culture Found 3.5.2020.pdf SSTA 3/10/2020 3:30:00 PM
SB 97