SB 76-REPEAL WORKERS' COMP APPEALS COMMISSION  1:55:51 PM CHAIR BISHOP announced the consideration of SENATE BILL NO. 76, "An Act repealing the Workers' Compensation Appeals Commission; relating to decisions and orders of the Workers' Compensation Appeals Commission; relating to superior court jurisdiction over appeals from Alaska Workers' Compensation Board decisions; repealing Rules 201.1, 401.1, and 501.1, Alaska Rules of Appellate Procedure, and amending Rules 202(a), 204(a) - (c), 210(e), 601(b), 602(c) and (h), and 603(a), Alaska Rules of Appellate Procedure; and providing for an effective date." He recapped that this was the third hearing. The committee adopted Version M committee substitute on January 28, the fiscal note was discussed, and public testimony was open. He invited Mr. Hemenway to provide testimony. 1:56:17 PM ANDY HEMENWAY, representing self, Juneau, Alaska, advised that he retired as Chair of the Workers' Compensation Appeals Commission ("appeals commission") in 2016, but was testifying today on his own behalf to address matters raised at previous hearings. This included the policy issues related to the force of legal precedent and the significance that has by retaining the appeals commission; the benefit the appeals commission provides to help self-represented claimants through the process; and the timeliness of decisions by the Workers' Compensation Appeals Commission as compared to ones issued by superior court. He said these matters have elicited testimony this year and in prior iterations of the bill. MR. HEMENWAY said he would talk about the financial aspects in terms of absolute dollars and the suggestion that the commission is not providing as much bang for the buck as the legislature would like. He said previous testimony that the cost of the appeals commission is about $0.5 million annually is not exactly accurate. The appropriation for the appeals commission is $400,000, but the actual cost is approximately $323,000 per year. He explained that the appeals commission is funded from a $9 million fund entirely derived from fees and insurance premiums from the employer community. He offered his understanding that if the appeals commission were disbanded, those funds would be used by the department for other programs within the purview of that fund. Thus, eliminating the appeals commission may not result in any real reduction of the overall budget. He offered his view that $323,000 was not a very significant amount of the total $9 million fund. 1:58:45 PM MR. HEMENWAY said the suggestion has been that the appeals commission doesn't provide a lot of bang for the buck. However, when comparing the caseload and number of decisions issued by the appeals commission with ones issued by the appellate courts in the Alaska Court System, the costs are fairly comparable. The appellate courts line item appropriation is $7.1 million as opposed to $320,000 for the appeals commission. For $7.1 million, the superior court covers 664 cases per year, on a five-year average. For comparison he multiplied the appeals commission budget appropriation of $323,000 by 22 (323,000 times 22 equals approximately 7.1 million). The result would be 550 cases, which he described as not all that significant on a dollar per case comparison. The two appellate courts that have the force of precedence issue 18 decisions per justice per year in the Alaska Supreme Court and 14 decisions per judge per year in the Court of Appeals, as compared to 9 decisions per year by the appeals commission. He acknowledged that there is a difference but pointed out that each Court of Appeals judge has two law clerks and each Alaska Supreme Court judge has three law clerks. These clerks help prepare the record, set up the legal arguments for the judges' consideration, and help draft the decisions. The appeals commission has no clerks but has two lay commissioners who provide insight and perspective in terms of industry and the employees. The chair of the there-member appeals commission operates as a solo unit without any other legal assistance. He related that in his experience it would have been helpful to have law clerks or other attorneys to prepare the record, consider the legal arguments, and help draft decisions in these complex cases. He said he appreciates the concern that the commission doesn't always get it right, but a lot more resources are directed at these cases at the Supreme Court level than there can be at the appeals commission MR. HEMENWAY reviewed the reversal rate. He said the appeals commission was reversed in the first five appeals to the Alaska Supreme Court. But over the last ten years, their affirmance rate has been about 60 percent, reversal rate less than 30 percent, and about 15 percent were a split decision. He opined that in the past ten years, the appeals commission record is substantially equivalent to the superior court record on appeals to the Alaska Supreme Court. MR. HEMENWAY referenced the testimony that the percentage of cases appealed to the Alaska Supreme Court has gone up. He pointed out that the number of appeals commission cases appealed to the ASC is almost identical to what it was prior to the creation of the appeals commission. Currently, about 9 cases per year are appealed to the Alaska Supreme Court. According to the testimony at the time the appeals commission was created, about 8 cases were appealed per year. This is not a significant difference, he said. Finally, he said that the argument that the appeals commission doesn't give value for the money is mistaken. The three-member appeals commission gives good value for a small amount of money. He said he hopes that members keep this in mind as the bill progresses through the legislature. 2:03:57 PM SENATOR STEVENS thanked him for his service. He recalled that in 2019, there were 7 decisions appealed to the Alaska Supreme Court; 2 were confirmed and 5 were reversed. He said that seems like a substantial number of reversals. MR. HEMENWAY replied he also heard that testimony, but he questioned it because the data doesn't support that assertion. First, none of the cases that were appealed in 2019 have been decided so those data points aren't available. Further, the chart in members' packets that shows outcomes of cases that were appealed to the appeals commission does not support that testimony. That chart shows that in 2018, 6 of 11 cases that were appealed are still pending, 2 were affirmed, and 1 was reversed. In 2017, the appeals commission decided 6 cases; 4 were affirmed, and 2 were reverse. In 2016, 2 cases were affirmed, and one was reversed. He said he was not aware of a particular timeframe in which 5 of 7 cases were reversed. He offered to research the cases because that isn't what the information in members' packets indicates. 2:06:29 PM CHAIR BISHOP closed public testimony, noted that the bill had two more committees of referral, and solicited a motion. 2:06:44 PM SENATOR STEVENS moved to report the CS for SB 76, work order LS- 310493\M, from committee with individual recommendations and attached fiscal note(s). There being no objection CSSB 76(L&C) was reported from the Senate Labor and Commerce Standing Committee.