ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 14, 2017
1:34 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Shelley Hughes, Vice Chair
Senator Kevin Meyer
Senator Gary Stevens
Senator Berta Gardner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 15
"An Act relating to possession of an electronic smoking product
or a product containing nicotine by a minor and to selling or
giving an electronic smoking product to a minor; relating to
business license endorsements to sell cigarettes, cigars,
tobacco, products containing tobacco, electronic smoking
products, or products containing nicotine; and relating to
citations for certain offenses concerning tobacco or nicotine
products."
- HEARD & HELD
SENATE BILL NO. 29
"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), and 603(a), Alaska Rules of Appellate Procedure;
and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 40
"An Act relating to workers' compensation; repealing the second
injury fund upon satisfaction of claims; relating to service
fees and civil penalties for the workers' safety programs and
the workers' compensation program; relating to the liability of
specified officers and members of specified business entities
for payment of workers' compensation benefits and civil
penalties; relating to civil penalties for underinsuring or
failing to insure or provide security for workers' compensation
liability; relating to preauthorization and timely payment for
medical treatment and services provided to injured employees;
relating to incorporation of reference materials in workers'
compensation regulations; relating to proceedings before the
Workers' Compensation Board; providing for methods of payment
for workers' compensation benefits; relating to the workers'
compensation benefits guaranty fund authority to claim a lien;
excluding independent contractors from workers' compensation
coverage; establishing the circumstances under which certain
nonemployee executive corporate officers and members of limited
liability companies may obtain workers' compensation coverage;
relating to the duties of injured employees to report income or
work; relating to misclassification of employees and deceptive
leasing; defining 'employee'; relating to the Workers'
Compensation Board's approval of attorney fees in a settlement
agreement; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 15
SHORT TITLE: E-CIGS: SALE TO AND POSSESSION BY MINOR
SPONSOR(s): STEVENS
01/13/17 (S) PREFILE RELEASED 1/13/17
01/18/17 (S) READ THE FIRST TIME - REFERRALS
01/18/17 (S) L&C, JUD
02/14/17 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 29
SHORT TITLE: REPEAL WORKERS' COMP APPEALS COMMISSION
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/20/17 (S) READ THE FIRST TIME - REFERRALS
01/20/17 (S) L&C, JUD, FIN
02/14/17 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
TIM LAMKIN, Staff
Senator Gary Stevens
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 15 on behalf of the sponsor.
ELIZA MUSE, Public Health Specialist II
Division of Public Health
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Responded to questions related to SB 15.
JOE DARNELL, Investigator IV
Division of Behavioral Health
Tobacco Youth Education & Enforcement Program
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Responded to questions related to SB 15.
ALYSSA KEILL, representing herself
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 15.
KATIE STEFFENS, representing herself
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 15.
MARGE STONEKING, Executive Director
American Lung Association of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 15.
LARRY TAYLOR
American Lung Association of Alaska
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of SB 15.
HEIDI DRYGAS, Commissioner
Department of Labor and Workforce Development (DOLWD)
Juneau, Alaska
POSITION STATEMENT: Introduced SB 29 on behalf of the
administration.
MARIE MARX, Director
Workers Compensation Division
Department of Labor and Workforce Development (DOLWD)
POSITION STATEMENT: Delivered a sectional analysis for SB 29.
NANCY MEADE, General Council
Administrative Staff
Alaska Court System
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to SB 29.
ANDREW HEMENWAY, former commissioner
Workers' Compensation Appeals Commission
Anchorage, Alaska
POSITION STATEMENT: Testified on SB 29.
ACTION NARRATIVE
1:34:35 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:34 p.m. Present at the call to
order were Senators Gardner, Meyer, Stevens, Hughes, and Chair
Costello.
SB 15-E-CIGS: SALE TO AND POSSESSION BY MINOR
1:35:39 PM
CHAIR COSTELLO announced the consideration of SB 15, and noted
that the committee heard similar legislation last year.
1:36:05 PM
TIM LAMKIN, Staff, Senator Gary Stevens, introduced SB 15 on
behalf of the sponsor. He gave a slide to show the origins of e-
cigarettes as well as the styles, brands, flavorings, and
components. He said the bill is about protecting youth from the
burgeoning fad of smoking electronic cigarettes, also called
vaping. There are over 500 varieties of this product on the
market in the U.S. and they are replacing traditional
cigarettes. They are sleek, clean, discrete, and generally not
expensive. Because this industry is relatively new, there is
little conclusive evidence as to their long-term effect on
health. However, he said, it shouldn't take a scientific study
to imagine that regularly inhaling a chemical substance would
not be good for a young person's mind and body. He acknowledged
that some people have found e-cigarettes to be a Godsend in
helping them quit smoking traditional cigarettes.
MR. LAMKIN said some people maintain that e-cigarettes do not
contain nicotine. While that may or may not be true, the Food
and Drug Administration (FDA) has said these products should be
treated as a tobacco product. He concluded that SB 15 will close
a loophole and prohibit possession and sale of electronic
smoking devices, including component liquid or vapor products to
minors, whether they contain tobacco or nicotine or not. He
noted that the sponsor is working on a committee substitute
(CS).
1:42:33 PM
CHAIR COSTELLO asked Mr. Lamkin to walk through the sectional
analysis.
MR. LAMKIN read the following sectional analysis for SB 15:
Section 1: AS 11.76.105(a) Adds to existing law that,
as with prohibiting minors from possessing cigarettes
or tobacco, to also prohibit possession of electronic
cigarettes and any component thereof.
Section 2: AS 11.76.105(c) Extends an existing
exception for possession by minor of a tobacco
product, to include e-cigarettes possession, provided
the minor is using an e-cigarette for an approved
medical purpose, such as smoking cessation, and is
provided by a parent or prescribed by a doctor.
Section 3: AS ll.76.106(a) Adds to existing law that,
as with controlling access to and sale of tobacco
products to minors (that is, behind the counter), that
e-cigarettes access also be controlled and restricted
in a like manner.
Section 4: AS ll.76.l06(b) Extends an existing
exception to clerk, controlled access to tobacco or e-
cigarette products sold through a vending machine,
which are covered in the next section.
Section 5: AS ll.76.107(a) Adds to existing law that,
as with tobacco product vending machines, vending
machines dispensing electronic cigarette or nicotine
products must also be supervised.
Section 6: AS 11.76.109(a) Adds to existing law
prohibiting the sale of nicotine products and
electronic cigarettes, or any related component
thereof, to a minor under 19 years old.
Section 7: AS ll.76.109(b) Extends an existing
exception for minor possession of a nicotine product,
to include e-cigarettes possession, provided the
minor is using an e cigarette for an approved medical
purpose, such as smoking cessation, and is provided by
a parent or prescribed by a doctor.
Section 8: AS 11.76.109(e) Extends the existing fine of
at least $300 for selling nicotine products to minors,
to include selling e-cigarette products having the
same fine.
Section 9: AS 11.76.109(f) adds a new subsection that
is consistent with existing law regarding placement
of vending machines dispensing tobacco products; that
the same requirements are applied to vending machines
dispensing e-cigarette or nicotine products.
Section 10: AS ll.81.900(b) Establishes a definition
for electronic smoking product," summarized as follows:
(67) (a) a device designed to aerosolize and
inhale nicotine, a synthetic of nicotine, or
another substance that "may have an adverse
effect" on the person inhaling from the
device; [basically, the hardware] and
(b) the accompanying compounds, oils, vapor
fluids, chemicals, or agents intended to be
aerosolized and inhaled in conjunction with the
device.
Section 11: AS 43.50.070(a) Adds enforcement provision
for the state to suspend, revoke, or refuse to renew a
business for violating provisions relating to selling
e-cigarette products to minors.
Section 12: AS 43.50.105(b) is amended for conformity,
changing "tobacco" endorsement to "business license"
endorsement, for purposes of shipping or transport of
cigarettes. It also sets up conformity for the
following Section 8 of the bill, relating to a required
business license endorsement for selling e-cigarette
or nicotine products.
Section 13: AS 43.70.075(a) amends existing law
requiring a special business license endorsement in
order to lawfully sell tobacco products, by including
the same license endorsement requirements for lawfully
selling e-cigarette or nicotine products.
Section 14: AS 43.70.07S(d) amends existing law
relating to selling tobacco to minors, by adding the
same penalty provisions, including graduated fines,
for selling e-cigarette or nicotine products to
minors.
Section 15: AS 43.70.075(f) amends existing law
requiring signage when selling tobacco products, to
also require signage for selling E-cigarette or
nicotine products. The signage must read. The sale
of electronic smoking products or products
containing nicotine to a person under the age of 19
without a prescription is illegal."
Section 16: AS 43.70.075(i) amends existing
enforcement provisions that, as with tobacco sales,
to allow the State to seize and destroy a vendor's
inventory of e-cigarettes or nicotine products in
the event violating the law prohibiting sales of
those products to minors.
Section 17: AS 43.70.075(l) is amended for
conformity that, as with tobacco sales, to allow
one business license endorsement to serve as an
umbrella if a vendor has multiple locations they
are selling E-cigarette or nicotine products, and
to shut down only the offending vending machine or
outlet location in the event of a violation.
Sections 18-23: AS 43.70.075(m), (r), (t), (v), (w),
and (x) are amended for conformity that, as with
tobacco sales, to allow an evidentiary and
administrative hearing, appeal process, and
penalties in the event of violations of these
statutes, involving the sale of e-cigarette or
nicotine products to minors.
Section 24: AS 43.70.075(y) is added for conformity,
linking the definitions of "electronic smoking
products," and distinguishing between traditional
cigarette (tobacco) products and other modem
nicotine alternatives.
Section 25: AS 43.70.105(b) is amended for conformity
that, as with tobacco products, a vendor must have
the appropriate business license endorsement in
order to lawfully sell E-cigarette or nicotine
products.
Section 26: AS 44.29.092 is amended for conformity
that, as with tobacco sales, providing the Dept. of
Health and Social Services the authority to issue
citations for violating state law regarding minors
buying, selling or possessing E-cigarette or
nicotine products.
Section 27: Is the applicability and effective date,
applying to offenses committed only after the
effective date of the bill, which would be 90 days
after the bill is enacted.
1:48:39 PM
CHAIR COSTELLO asked if the Department of Health and Social
Services' (DHSS) Youth Behavioral Risk Survey has a question
about youth use of e-cigarettes.
ELIZA MUSE, Public Health Specialist II, Division of Public
Health, Department of Health and Social Services (DHSS), advised
that the Youth Behavioral Risk Survey has been asking about the
use of electronic cigarettes since 2015. Results from that
survey indicate that 36 percent of Alaska high school students
have tried electronic cigarettes and 18 percent currently use
them.
SENATOR MEYER questioned the statement that "not all of these
products contain nicotine."
MR. LAMKIN replied many vendors honestly believe their product
does not contain nicotine, even though that has not been proven.
"Labeling is not regulated or not thoroughly regulated and there
are perhaps some questionable practices going on as to that
labeling and marketing," he said.
SENATOR MEYER asked how many states have passed similar
legislation.
MR. LAMKIN said he didn't know the number but a substantial
number of states have severely limited access to these products,
typically related to nicotine content. He noted that the state
of Kentucky was the first to impose such a ban.
SENATOR MEYER asked why the e-cigarette bill didn't pass last
year.
MR. LAMKIN replied it was held up in the Senate Judiciary
Committee for some reason.
1:52:44 PM
SENATOR GARDNER highlighted the American Lung Association report
that said cigarettes contain 600 ingredients that convert to
7,000 different chemicals when burned, 69 of which are deemed
carcinogenic and others poisonous. She asked if nicotine is the
concern or the fact that it is addictive.
MR. LAMKIN replied it is probably a matter of opinion but
regardless, they are not good for youth.
SENATOR GARDNER asked under what conditions a physician might
write a prescription for e-cigarettes, and if the prohibition
against possession applies if the product is provided by a
parent. If a parent gives it to their minor child does he/she
have to keep it at home?
MR. LAMKIN replied the bill provides an option for parents to
give the product to their minor child.
SENATOR GARDNER asked why a physician might prescribe e-
cigarettes.
MR. LAMKIN surmised that it might be used for someone who had
become addicted to nicotine at a young age.
1:56:13 PM
SENATOR HUGHES asked what the U.S. surgeon general is doing to
obtain hard data on these products, what the plan is to correct
inaccurate labeling, and if there is a difference in definition
between tobacco and nicotine.
MR. LAMKIN said this is a relatively new product in the U.S. so
there isn't much data available. It is also a rapidly growing
market with such a variety of products that regulators can't
keep up. He deferred to the state's chief medical officer to
discuss what is being done to study the long-term effects these
products may or may not have on the human body.
1:58:01 PM
At ease
1:58:23 PM
CHAIR COSTELLO reconvened the meeting.
SENATOR HUGHES asked if within a year there might be more
conclusive evidence as to what the best practices should be, and
if the FDA has approved a smoking cessation device that uses
electronic cigarettes.
MR. LAMKIN said the FDA stepped up last summer and defined
electronic products as tobacco products. He opined that the
primary reason for that is that they have at least a trace
amount of addictive nicotine. He said he wasn't speaking for the
FDA, but that agency is actively working on regulations and ways
to address this industry. He added that to his knowledge, the
FDA has not defined e-products as a cessation product.
2:01:02 PM
SENATOR HUGHES related that doctors in a medical clinic in her
district have reported watching teenagers regularly going to a
nearby tobacco/smoke shop. She asked if the sponsor had
considered banning minors from entering tobacco/smoke shops.
MR. LAMKIN replied they are working in that direction, but a
business may conduct more activity than is indicated on the
business license that is filed with the state. This makes it
difficult to enforce these laws. He directed attention to a memo
in the packets from DHSS Investigator Joe Darnell regarding
compliance checks. Minors were successful 26 percent of the time
when they attempted to buy electronic products, whereas they
were successful 9 percent of the time when they tried to buy
tobacco products. "In a nutshell, it's three times easier to get
the e-products than to get a tobacco product."
CHAIR COSTELLO asked Mr. Darnell to discuss the memo he sent.
2:03:45 PM
JOE DARNELL, Investigator IV, Division of Behavioral Health,
Tobacco Youth Education & Enforcement Program, Department of
Health and Social Services (DHSS), stated that the state is
required to enforce underage tobacco laws. Federal block grant
money for substance abuse is tied to that, and the state
anticipates that vaping and electronic nicotine delivery systems
(ENDS) will be added to the federal regulations. In preparation,
last summer DHSS checked vape shops, tobacco shops, and
convenience stores that sell e-cigarettes. The statewide sell
rates were 26 percent for vaping, 9 percent for e-cigarettes,
and 5.4 percent for traditional tobacco products. In Anchorage,
the sell rate of e-liquid to minors was 50 percent compared to a
2.3 percent sell rate for traditional tobacco products.
CHAIR COSTELLO asked what the bill contains regarding marketing
to youth.
MR. LAMKIN said the only marketing provision is conforming
language requiring a vendor who is selling e-products to post a
warning sign near the checkout counter.
2:07:24 PM
CHAIR COSTELLO opened public testimony on SB 15.
2:07:51 PM
ALYSSA KEILL, representing herself, Fairbanks, Alaska, testified
in support of SB 15. She is a youth swim coach who finds e-
products scary. Little is known about them, yet they are
marketed as safe and harmless. She pointed out that young brains
continue to develop into the 20s and the introduction of any
addictive drug will change the brain's wiring and potentially
affect other body systems. If poor air quality in a swimming
pool building can cause problems for kids' respiratory systems,
she can't imagine supporting easy access to a smoking device
that could keep youth from reaching their goals. She said these
products are marketed to youth and she believes that selling
them to youth even though they might not contain nicotine, would
still convey the message that smoking is acceptable.
2:10:31 PM
KATIE STEFFENS, representing herself, Anchorage, Alaska,
testified in support of SB 15. She said e-products are
increasingly popular and are being tailored to kids. She opined
that SB 15 will help decrease the use rates of teens in the
Anchorage community. She emphasized that more regulation is
needed. She maintained that the fact that 36 percent of Alaskan
youth have tried these products is reason enough to pass the
bill.
2:12:34 PM
MARGE STONEKING, Executive Director, American Lung Association
of Alaska, testified in support of SB 15. She said this bill and
the regulation of underage sales is an important component of
keeping tobacco and e-cigarettes out of the hands of kids. She
reported that the program that Joe Darnell runs on behalf of the
state has been one of the most effective nationwide in
regulating the use of tobacco by minors. Prior to having a
strong program, about 30 percent of tobacco retailers sold to
minors. Now the noncompliance rate is under 10 percent.
She agreed with earlier testimony that retailers are selling e-
cigarettes to youth at a 30-50 percent rate. She also made the
following points: e-vapor has many of the same nitrosamines that
are found in tobacco smoke; the particulates are potentially
more harmful than tobacco because they are finer; there is
little proof that electronic vapor products contain no nicotine;
the devices are potentially dangerous and may explode when the
batteries are changed; and the flavorings and base fluids are
not approved for inhalation.
MS. STONEKING said e-products were brought to the U.S. about 10
years ago and may have been created as a cessation device.
However, the tobacco industry fought to have e-products
regulated as a tobacco product rather than a cessation device
for medical purposes. That is how these products have been
regulated and the nicotine is derived from tobacco plants.
2:17:45 PM
LARRY TAYLOR, American Lung Association of Alaska, Ketchikan,
Alaska, testified in support of SB 15. He focused on the
substances in e-cigarettes other than tobacco or nicotine and
addressed earlier questions. Regarding use as a cessation
device, he said a U.S. Surgeon General report notes "that
experienced users learn to use e-cigarettes in a way that
increases their exposure to nicotine." Regarding the time before
results are available about the substances contained in e-
cigarettes, he advised that there were 500 brands and 700
flavors of e-cigarettes on the market at the time of the 2016
announcement allowing FDA oversight. Businesses have an
additional two years to apply to stay in the market, so the FDA
won't have a chance to examine all the chemicals until after
that two-year period.
CHAIR COSTELLO asked Mr. Taylor to submit his testimony in
writing.
MR. TAYLOR agreed. Addressing the question about non-nicotine
products in e-cigarettes, he said the organic solvents include
propylene glycol, benzene, and toluene. He related that he
studied organic compounds for 17 years when he worked for the
Municipality of Anchorage as the environmental engineer. He
explained that benzene and toluene, both of which are solvents,
can convert to other organic compounds when they are heated.
2:21:58 PM
CHAIR COSTELLO closed public testimony on SB 15 and held the
bill in committee awaiting a committee substitute.
2:22:30 PM
At ease.
SB 29-REPEAL WORKERS' COMP APPEALS COMMISSION
2:24:34 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SB 29. She welcomed Commissioner Drygas and
Director Marx.
2:25:08 PM
HEIDI DRYGAS, Commissioner, Department of Labor and Workforce
Development (DOLWD), stated that SB 29 will repeal the Workers'
Compensation Appeals Commission and return the appeals process
to the courts. She explained that the commission was created to
streamline the appeals process and provide expertise in handling
workers' compensation cases. However, since the commission was
created in 2005, 50 percent of its decisions have been reversed
by the Alaska Supreme Court. The commission is essentially an
appellate court, but it is not composed of a panel of lawyers.
Rather, the lay commissioners have no legal training, so it
falls to the commission chair to resolve the legal issues and
write the commission's decisions. This means the commission's
decisions are the work of just one person, not the work of a
panel with legal expertise in workers' compensation. This is a
further departure from the intent of the original legislation,
she said.
COMMISSIONER DRYGAS informed the committee that eliminating the
Workers' Compensation Appeals Commission is anticipated to save
the department over $220,000 for the remainder of FY18, and over
$440,000 in subsequent years. She emphasized that the impact on
the public would be minimal. The Court System, which regularly
hears administrative appeals, would see an increase of about 20-
30 cases a year. She understands that the Court System can
absorb volume, which is reflected in the zero fiscal note.
2:27:00 PM
MARIE MARX, Director, Workers' Compensation Division, Department
of Labor and Workforce Development (DOLWD) walked through the
following sectional analysis for SB 29:
Section 1 amends AS 23.30.005, by adding a new
subsection, clarifying that unless reversed or
modified by a court, decisions of the former
commission have the force of legal precedent. It also
specifies that the Workers' Compensation Board will be
the entity responsible for making sure those decisions
are available to the public.
Section 2 amends AS 23.30.107(b), by removing
reference to the appeals commission in existing
statutes.
Section 3 amends AS 23.30.108(d), by removing
reference to the appeals commission in existing
statutes.
Section 4 amends AS 23.30.108(e), by removing
reference to the appeals commission in existing
statutes.
Section 5 amends AS 23.30, by adding a new section,
clarifying when a board order becomes effective and is
final, when it may be stayed, and clarifying when the
board's findings are conclusive and binding on a
reviewing court, and when the director may intervene
in an appeal or petition for review.
Section 6 amends AS 23.30.155, by adding a new
subsection changing a statutory reference from the
appeals commission to the superior court.
Section 7 amends AS 39.50.200(b)(31), by removing
reference to the appeals commission.
Section 8 amends the uncodified law of the State of
Alaska, by amending Rule 204(c)(2) Alaska Rules of
Appellate Procedure, to address bonds for appeal
purposes.
Section 9 repeals Rules 201.1, 401.1, and 501.1,
Alaska Rules of Appellate Procedure.
Section 10 repeals AS 23.20.007, 23.30.008, 23.30.009,
23.30.009, 23.30.125, 23.30.127, 23.30.128, 23.30.129,
23.30.155(f), 23.30.395(10); AS 39.25.110(40); AS
44.64.020(a)(12), and 44.64.020(a)(13). These are
statutes that deal with commission proceedings, that
reference the commission, that deal with commission
appointments, and appeals to the commission.
Section 11 amends the uncodified law of the State of
Alaska, by adding a new section relating to indirect
court rule amendments.
Section 12 amends the uncodified law of the State of
Alaska, by adding conditional effect language that the
Act takes effect only if secs. 8, 9 and 11 receive the
two-thirds majority vote of each house required by
art. IV, sec. 15 of the Alaska Constitution.
Section 13 amends the uncodified law of the State of
Alaska, by adding a new section relating to
applicability of amendments to proceedings pending
before the Commission.
Section 14 amends the uncodified law of the State of
Alaska, by adding transitional language clarifying
proceedings seeking review of a board decision and
order that have not yet been filed before the
Commission, must be filed in the superior court on or
after June 1, 2017 Any appeals not completed by the
appeals commission on or before December 1, 2017 will
be transferred to the superior court on December 2,
2017, and clarifying procedures for requests for
reconsideration during the transition period.
Section 15 amends the uncodified law of the State of
Alaska, by adding transitional language.
Section 16 clarifies when the Act takes effect.
2:30:16 PM
CHAIR COSTELLO reminded the committee that this was introduced
on the Senate floor as an amendment in a budget process and some
members felt it needed a full vetting. She asked Ms. Marx if she
had any concern with the measure.
MS. MARX answered she has no concerns. The idea in 2005 was that
the commission would make the appeals process run better, but
that has not been the case.
2:31:27 PM
SENATOR STEVENS questioned whether this would impose a burden on
the Court System and potentially slow the progress of these
cases. He also asked what these appeals would look like under
the Court System. "We're not talking about a jury trial; we're
talking about a judgement by a judge. Can you help me understand
that?"
CHAIR COSTELLO suggested Nancy Meade with the Court System
respond to the question after the committee finishes questioning
Director Marx and Commissioner Drygas.
MS. MARX directed attention to the document in the packet that
explains the number of cases appealed to the commission and how
many are appealed to the Alaska Supreme Court. She also pointed
out that the Court System was handling more appeals cases prior
to the creation of the commission. The average number of appeals
now is about 33 and the expectation is that those would be
absorbed by the Court System throughout all jurisdictions.
Addressing the question about timeliness, she said the proposal
is to return to the court process because the appeals commission
process has not improved the appeals procedure.
2:34:02 PM
COMMISSIONER DRYGAS added that when a case is appealed from a
panel of the Workers' Compensation Board it will go to the
superior court that will act as the appellate court, just as the
appeals commission currently acts as the appellate court for the
Workers' Compensation Board.
SENATOR HUGHES asked if the only reason the appeals commission
didn't work is because the commissioners didn't have the
necessary legal expertise.
COMMISSIONER DRYGAS replied it was a multiple system failure,
but the biggest problem is that the appeals commission is made
up of lay commissioners rather than a panel of attorneys, which
is the typical makeup for the appellate process. Because the
appeals commission doesn't have a panel of attorneys, there
hasn't been enough vetting of the facts in these cases. The
result is that the Alaska Supreme Court has overturned about 50
percent of the decisions the appeals commission has made.
The other problem with the current system is that it has a
double administrative layer. The departmental administrative
process made up of a panel of three works well, she said, but
after that the litigant should have the opportunity to have
their case heard in court rather than going to another
administrative level. "It's clunky and didn't work the way I
think it was intended to work," she said.
2:37:37 PM
SENATOR GARDNER asked if it would have worked better, but been
more expensive, if all the appeals commission members were
attorneys.
COMMISSIONER DRYGAS said possibly, but only so many attorneys
practice workers' compensation in Alaska and it would be very
difficult to seat a panel that didn't have conflicts.
SENATOR MEYER asked if two positions would be eliminated if the
bill were to pass.
COMMISSIONER DRYGAS answered yes.
CHAIR COSTELLO asked Ms. Meade to respond to Senator Steven's
question about how this proposal would impact the Court System.
2:39:16 PM
NANCY MEADE, General Council, Administrative Staff, Alaska Court
System, stated that the Court System will be able to absorb the
impact of SB 29, but she appreciates the question because the
court is doing more now with less. She said the average number
of cases over the past 10 years appears to be about 33. Should
the bill become law, the cases that went from the board to the
commission would go from the board to the superior court. Those
cases will be divided among the 42 superior court judges,
depending on the venue of the injured worker. Because Anchorage
is the population center, most of the cases will be filed there
and divided among the 11 civil superior court judges that
preside in the municipality.
She described workers' compensation cases as difficult, time-
consuming, and fact laden. Oftentimes the litigant is self-
represented, which is difficult and more time-consuming for the
Court System. That is some of the reason that these cases went
from the court to the appeals commission in 2005, as well as the
argument that some of the superior court judge decisions were
inconsistent. Nevertheless, since the appeals commission has not
improved on the time to get cases resolved or accuracy of the
decisions, the Court System is prepared to take these cases back
without any additional funding to handle the additional
workload.
2:42:07 PM
SENATOR STEVENS asked if the $220,000 savings reflected in the
Department of Labor and Workforce Development fiscal note will
be absorbed by the Court System.
MS. MEADE opined that there wouldn't be additional cost because
the additional work would be spread around. For example, if the
clerk's office in Fairbanks gets 7-8 new administrative appeals
next year, they would be able to handle that in the normal
course of business.
SENATOR STEVENS asked if there is a way to move these cases
through the system more quickly.
MS. MEADE said she didn't have an answer, but superior court
judges do handle administrative agency appeals. A process and
court rules are already in place, so a superior court judge
would be the logical place if these cases were to come to the
Court System.
2:44:45 PM
SENATOR HUGHES asked if eliminating one administrative layer
make things easier for the court.
MS. MEADE replied it probably won't make much difference.
2:46:54 PM
ANDREW HEMENWAY, former appeals commissioner, Anchorage, Alaska,
said he was asked to be available for questions.
CHAIR COSTELLO asked his view of the bill.
MR. HEMENWAY stated that when he was leaving the appeals
commission he told Commissioner Drygas that it is difficult for
a single person to deal with the legal issues that come up in a
workers' compensation appeal. However, going to the superior
court would also be just one judge deciding the cases, and that
judge won't have any particular expertise in workers'
compensation laws. He offered his personal view that it's
difficult for one person, but it's better to have one person
with expertise in that area of law working on these cases. He
said his personal policy preference would be to use a couple of
administrative law judges from the Office of Administrative
Hearings to work with the chair of the appeals commission. There
would be three, legally-trained people looking at each case
which would address the concern he expressed about having just
one judge rule on these hotly contested and difficult legal
issues. He noted that a concern about using superior court
judges was that the decisions could be inconsistent. As chair of
the appeals commission he didn't hear that complaint. He
concluded that there are policy arguments pro and con for
abolishing the appeals commission and it's up to the legislature
to decide.
2:50:13 PM
CHAIR COSTELLO closed public testimony on SB 29 and held the
bill for further consideration.
2:50:30 PM
At ease
2:50:35 PM
CHAIR COSTELLO reconvened the meeting and announced the
committee would not hear SB 40 today.
2:52:09 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:52 p.m.