HB 214-REPEAL WORKERS' COMP APPEALS COMMISSION  3:23:31 PM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 214, "An Act repealing the Workers' Compensation Appeals Commission; relating to decisions and orders of the Alaska Workers' Compensation Board; relating to superior court jurisdiction over appeals from Alaska Workers' Compensation Board decisions and orders; repealing Rules 201.1, 401.1, and 501.1, Alaska Rules of Appellate Procedure, and amending Rules 202(a), 204(a) - (c), 210(e), 508(g), 601(b), 602, and 603, Alaska Rules of Appellate Procedure; and providing for an effective date." 3:24:09 PM4 LAURA STIDOLPH, staff to Representative Kurt Olson, Alaska State Legislature, speaking on behalf of Representative Olson, sponsor of HB 214, introduced the proposed committee substitute for HB 214, [labeled 29-LS0854\P], noting that the bill is at the request of the commissioner of the Department of Labor & Workforce Development. At the previous hearing on 3/14/16, the Alaska Court System requested changes bringing back the original language from the Workers' Compensation Act - enacted prior to the establishment of the Worker's Compensation Appeals Commission in 2005 - and adding language related to the transfer of files to the Alaska Court System. 3:25:06 PM REPRESENTATIVE HUGHES moved to adopt the proposed committee substitute (CS) for HB 214, labeled 29-LS0854\P, Wallace, 3/21/16, as the working document. 3:25:21 PM CHAIR OLSON objected for discussion purposes. MS. STIDOLPH paraphrased the following summary of changes for HB 214, page 3, lines 6-31, and page 4, lines 1-11 [original punctuation provided]: Section 5. AS 23.30 Page 3, Lines 6-31 and Page 4, Lines 1-11 Delete all the material and insert original language from the Workers' Compensation Act (AS 23.30.125) from 2004 prior to the establishment of the WCAC. MS. STIDOLPH said the proposed change to Section 5 was at the request of the Alaska Court System to return power back to the superior court. She continued to page 5, lines 24-26, and paraphrased from the following summary of changes [original punctuation provided]: Section 12. Transitional Provisions Page 5, Lines 24-26 (a) Delete all material after "shall" and insert "be transferred to the superior court in the judicial district where the original claim was filed, under AS 22.10.020 and Rules 604(b) and 609, Alaska Rules of Appellate Procedure. Page 5, Line 30 After "June 1, 2016" insert "within 30 days after the date that the board decision becomes final." Page 6, Lines 1-17 Delete all material in (c) and (d) and replace with new language. REPRESENTATIVE COLVER asked for the time period available for a party to appeal after a decision is made. MS. STIDOLPH said on or [before December 1, 2016], a party seeking review may file an appeal or petition for review with the supreme court as stated in [Section 12, subsection (c)]. 3:29:40 PM REPRESENTATIVE COLVER asked for clarification that an appeal of a decision by the Workers' Compensation Board (board) would be filed within 30 days. 3:29:52 PM MS. STIDOLPH said, "It's ... thirty days after the date that the board decision becomes final." She continued to page 6, line 22, and paraphrased the summary of changes, as follows: [original punctuation provided] Section 13. Terms of Commissioners Page 6, Line 22 Remove "February 20, 2017" and insert "December 31, 2016." Section 14. Conditional Effect Page 6, Line 25 Insert "CONDITIONAL EFFECT. This Act takes effect only if secs. 8 and 10 of this Act receive the two-thirds majority vote of each house required by art. IV, sec. 15, Constitution of the State of Alaska. REPRESENTATIVE LEDOUX questioned whether HB 214 exactly returns legislation to the language before changes were made in 2005. MS. STIDOLPH said yes. 3:31:13 PM CHAIR OLSON removed his objection. There being no further objection, Version P was before the committee. REPRESENTATIVE HUGHES asked why the act takes effect June 1, 2016. MS. STIDOLPH was unsure. 3:32:08 PM NANCY MEADE, General Counsel, Administrative Staff, Office of the Administrative Director, Alaska Court System, informed the committee the bill reverts the appeals procedure to that in 2005, and the Alaska Court System sought the same wording as existed in 2005, so that all case precedents would remain applicable, and to streamline case decision-making. In addition, the transitional provisions ensure that the files transferred from the Department of Labor & Workforce Development (DLWD) are in the proper format. 3:34:05 PM ANNA LATHAM, Legislative Liaison, Office of the Commissioner, DLWD, in response to Representative Hughes' question, responded that DLWD requested the effective date to be June 1, 2016, so that the Workers' Compensation Appeals Commission (commission) would have until November 1, to finalize cases. REPRESENTATIVE JOSEPHSON questioned whether an aggrieved party would have until November to file an appeal to the commission, or if they could wait and appeal to the superior court. MS. MEADE stated that after June 1, an appeal of a final decision of the commission would be submitted to the superior court; furthermore, anything pending with the commission in November will be transferred to the court. In response to an earlier question from Representative Colver, she pointed out that proposed Section 5, page 3, lines 6-10, clarifies that the decision of the commission becomes final on its 31st day, after which an appeal can be accepted. In response to Representative Josephson, she said the commission will not accept new appeals after June 1. REPRESENTATIVE COLVER assumed filed decisions are written orders. MS. MEADE said yes. REPRESENTATIVE COLVER suggested that during the 31 days there is an opportunity for a party to ask for partial reconsideration before the order is final. 3:38:31 PM MARIE MARKS, Director, Central Office, Division of Workers' Compensation, DLWD, answered that a decision by the Workers' Compensation Board is issued in a written format and becomes effective when signed and served on all parties. At that time, a prospective appellant has 14 days to ask the board for reconsideration, and 30 days to appeal its decision to a higher power. If the board takes no action, the power to reconsider ends, and she opined that in the proposed version, "if you don't reach that 30-day window by June first, you need to go ahead and seek appeal with the superior court. So, it's June first, and you have to reach your 30-day window before June first, that's my understanding of the working draft." REPRESENTATIVE COLVER questioned if a party asked for reconsideration within the 14-day period, whether that would stay the 30-day period for appeal. MS. MARKS said no, the periods proceed at the same time. In further response to Representative Colver, she said the board must take action on reconsideration within the 14-day period by contacting the parties, and if no action is taken, that is a denial of reconsideration. REPRESENTATIVE COLVER observed that the board process is unchanged, except that the appeal would go to the superior court. MS. MARKS agreed. She added that every decision issued informs the parties of their right to ask for reconsideration or modification; the only change made by the proposed legislation is that the appeal would go to the superior court rather than the commission. 3:42:56 PM REPRESENTATIVE LEDOUX inquired as to how many cases would be caught in the transition brought about by the legislation. MS. MEADE was assured there would be about six cases or less pending before the commission, but not resolved. REPRESENTATIVE LEDOUX posited if a case is not resolved, the parties must submit new briefs. MS. MEADE acknowledged there may be some delay during the transition process; however, parties would not have to re-brief because the commission will provide documents in the proper form. She said she anticipates working with DLWD to minimize delay. REPRESENTATIVE COLVER inquired as to whether there still is a hearing officer who hears the initial request for benefits or compensation. MS. MARKS explained that a board decision is made by a board panel consisting of two or three members: one chair, who is a staff attorney; one labor representative; and one industry representative. 3:46:52 PM REPRESENTATIVE COLVER related his experience that attorney fees were a time-consuming issue. MS. MARKS said the fees awarded at the board level follow a statute that provides for actual attorney fees when restrictions are met. MS. MEADE directed attention to the bill on page 4, lines 9-11, which read: (g) A court may not make an award of costs and attorney fees against an injured worker unless the court finds that the worker's position on judicial review was frivolous or unreasonable or the judicial review was sought in bad faith MS. MEADE said subsection (g) is the statutory guidance given to the courts on how to award attorney fees. Generally on appeal, the court has different provisions than at the board level. MS. MARKS restated that with exceptions, at the board level attorney fees are full, actual, and reasonable. MS. MEADE recalled there was much litigation about attorney fees in workers' compensation cases at the superior court level, and prior case decisions will be effective. REPRESENTATIVE COLVER stated that subsection (g) was also a protection for the worker. MS. MEADE indicated yes. REPRESENTATIVE COLVER gave an example of a case in which the injured worker prevailed and asked, "and then the insurance company, the workers' comp carrier, then would be liable to cover the injured worker's fees, right?" MS. MARKS advised that the board will award reasonable fees to be paid to the employee's attorney on the issue(s) on which they prevail, and those fees are a compensation benefit, so the entity that pays compensation benefits would be responsible. REPRESENTATIVE COLVER asked for an indication of whether attorney fees are a big issue. 3:51:36 PM ANDY HEMENWAY, Chair, Workers' Compensation Appeals Commission, Anchorage Office, Division of Workers' Compensation, DLWD, advised that for cases that were appealed from the commission to the supreme court, attorney fees are a common - but not the most common - subject for litigation beyond the appeals commission. The experience at the appeals commission is that it is not a major subject in terms of the amount of fees. REPRESENTATIVE LEDOUX asked whether attorneys are granted full reasonable fees before the appeals commission. MR. HEMENWAY said the same standards apply before the commission, as apply before the board. REPRESENTATIVE LEDOUX asked about attorney fees garnered for cases before the superior court. MS. MEADE will provide an answer to the committee. CHAIR OLSON said the issue can be addressed in the next committee of referral, the House Judiciary Standing Committee. REPRESENTATIVE HUGHES asked what differs between the language in HB 214, and the related statute prior to the changes made in 2005. MS. MEADE said Section 5, subsection (a) provides timelines that are slightly different, but clearer. On page 3, lines 11-31 are copied from the 2005 law; on page 4, lines 5-11 are subsections which did not appear in the 2005 law, and that were added by DLWD. 3:57:51 PM CHAIR OLSON opened public testimony on HB 214; after ascertaining no one wished to testify, public testimony was closed. 3:58:42 PM REPRESENTATIVE HUGHES moved to report the committee substitute (CS) for HB 214, Version 29-LS0854\P, Wallace, 3/21/16, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 214(L&C) was reported out of the House Labor and Commerce Standing Committee.