| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
|
You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Harrod v. State, Dept. of Revenue (7/22/2011) sp-6582
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
IAN and PEGGY HARROD, )
) Supreme Court No. S-13586
Appellants, )
) Superior Court No. 4FA-07-01224 CI
v. )
) O P I N I O N
STATE OF ALASKA, )
DEPARTMENT OF REVENUE, ) No. 6582 - July 22, 2011
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska,
Fourth Judicial District, Fairbanks, Michael A. MacDonald,
Judge.
Appearances: Ian and Peggy Harrod, pro se, Fairbanks,
Appellants. Stuart W. Goering, Assistant Attorney General,
Anchorage, Michele Kane, Assistant Attorney General, and
Daniel S. Sullivan, Attorney General, Juneau, for Appellee.
Before: Carpeneti, Chief Justice, Fabe, Winfree, Christen,
and Stowers, Justices.
CHRISTEN, Justice.
I. INTRODUCTION
In 2005 the Department of Revenue denied Permanent Fund Dividends to
Ian and Peggy Harrod and their children. The Harrods appealed to the superior court
where they argued that the Department lacked the authority to adopt residency
requirements for the dividend program, that the denial of their applications violated both
----------------------- Page 2-----------------------
the United States and Alaska Constitutions, that their 2002 and 2003 Permanent Fund
Dividend applications were wrongfully denied, and that the Administrative Law Judge
who heard this administrative appeal abused his discretion by failing to provide a second
hearing. The superior court affirmed the denial of the dividends. Having reviewed the
parties' arguments and the record on appeal, we affirm the superior court's decision.
II. FACTS AND PROCEEDINGS
In 1967 large oil reserves were discovered on state-owned land in Prudhoe
Bay, resulting in a substantial increase in state revenue.1 It was decided that a portion
of income from oil reserves and other natural resources should be invested to maximize
long-term revenue from the state's natural resources,2 and in 1976 the Alaska
Constitution was amended to establish the Alaska Permanent Fund.3 The amendment
requires 25% of the state's mineral income to be deposited into the Permanent Fund.4
In 1980, the legislature enacted a program to annually distribute a portion
of the Permanent Fund's earnings directly to Alaska residents who meet certain
eligibility requirements.5 These earnings are distributed in the form of dividends (PFDs).
The Department of Revenue (DOR) administers the dividend program.6
Ian and Peggy Harrod moved to Adak in 1987 in conjunction with Ian's
military service. In 1992 Ian was reassigned to a location outside of Alaska but the
1 Zobel v. Williams, 457 U.S. 55, 56 (1982).
2 Id. at 57.
3
Alaska Const. art. IX, § 15.
4 Id.
5 AS 43.23.005(a); Zobel, 457 U.S. at 57.
6 AS 37.13.040.
-2- 6582
----------------------- Page 3-----------------------
Harrods continued receiving PFDs for the years 1993 through 1996 pursuant to the
active duty "allowable absence" provision of AS 43.23.008(a)(3). This statute permits
active duty members of the military, and their families, to receive PFDs while stationed
out of state as long as other conditions are met.
From 1997 through 2000, the Harrods continued to reside outside of Alaska
and they did not apply for PFDs. In 2001, the Harrods applied for PFDs but their
applications were denied. Because the Harrods had been absent from Alaska for more
than five years, a presumption arose under 15 Alaska Administrative Code (AAC)
23.163(f) (2010) that the Harrods did not intend to return to Alaska and remain here.
DOR applied this presumption, determined the evidence the Harrods offered did not
rebut it, and denied their 2001 PFD applications. The Harrods pursued an informal
appeal and DOR changed course. After a hearing, DOR decided that the Harrods did
have the requisite intent to return to Alaska and it distributed PFDs to them for 2001.
The Harrods applied for PFDs in 2002 and 2003 but their applications were
denied because DOR determined they failed to rebut the presumption that they did not
intend to return to Alaska and remain in the state indefinitely. In arriving at this
determination, DOR relied on evidence showing the Harrods had not moved back to
Alaska since leaving in 1992 and that they made only infrequent and short return trips
here in the five previous years. The Harrods pursued an informal administrative appeal
of the 2002 denial under 15 AAC 05.010(b)(5) (2010) but DOR upheld its decision. The
Harrods did not seek further review of the 2002 denial, did not appeal the 2003
administrative denial, and did not apply for PFDs in 2004.
The Harrods were absent from Alaska for 358 days in 2004, but they
applied for PFDs in March 2005. They again claimed eligibility under the military and
accompanying spouse "allowable absence provision" of AS 43.23.008(a)(3). DOR
denied the Harrods' 2005 applications relying on the following facts: (1) the Harrods
-3- 6582
----------------------- Page 4-----------------------
were denied PFDs in 2002 and 2003 because they failed to overcome the presumption
that they no longer intended to return to and remain in Alaska; (2) the Harrods had not
returned to Alaska to establish residency after their 2002 and 2003 applications were
administratively denied; and (3) the Harrods had only spent a total of 14 days in Alaska
over two visits in the five years prior to 2005. DOR cited these facts as support for its
conclusion that the Harrods were not Alaska residents for PFD eligibility purposes
because they did not have the requisite intent to return to Alaska and remain in the state.
The Harrods filed an informal administrative appeal of the 2005 denial. To
rebut the presumption in 15 AAC 23.163(f), they claimed they maintained "paper ties"
to Alaska during their absence and that DOR had previously awarded them dividends
under similar circumstances. DOR considered the Harrods' arguments, but it upheld its
denial of the 2005 applications, concluding the Harrods severed their residency in Alaska
prior to the qualifying year (2004) and failed to reestablish their residency for PFD
eligibility purposes. DOR's decision was based on: (1) the 2002 and 2003 denials of the
Harrods' PFD applications; (2) the Harrods' extended absence from Alaska for more
than five years; (3) the failure to rebut the presumption that, after a five-year absence,
they did not intend to return to and remain in Alaska; and (4) the failure to file
applications for PFDs in 2004. DOR observed that even if the Harrods had applied for
dividends in 2004, their applications likely would have been denied.
The Harrods appealed to the Office of Administrative Hearings, where an
Administrative Law Judge (ALJ) affirmed DOR's decision.7 The ALJ reasoned that
DOR's denial of the Harrods' 2002 PFD applications established that they were not
Alaska residents for PFD purposes after 2001 and that they had not reestablished Alaska
7 The ALJ granted a hearing on the appeal, but the Harrods later requested
a second hearing to question DOR's representative. The request for a second hearing
was denied.
-4- 6582
----------------------- Page 5-----------------------
residency since that time. The ALJ relied on the doctrine of collateral estoppel to
establish the Harrods' ineligibility for PFDs in 2002 and 2003, without relitigation of that
issue. The ALJ ruled that the Harrods would have had to reestablish residency to obtain
PFDs after that time. The Commissioner of DOR adopted the ALJ's decision and order
in January 2007 and the superior court affirmed the Commissioner's decision in
March 2009. In doing so, the superior court only reached the ALJ's rulings that the 2002
and 2003 denials were binding, the Harrods had not reestablished residency, and the
denial of the Harrods' request for a second administrative hearing before the ALJ. The
superior court decided the Harrods' challenges to DOR's authority to establish PFD
eligibility requirements and to the constitutionality of the residency requirements were
"not germane" to the issues raised in the Harrods' appeal.
The Harrods now appeal to our court, arguing that the previous denials of
their 2005 applications were in error. Having considered the Harrods' arguments, we
affirm the denial of the Harrods' 2005 PFD applications.
III. STANDARD OF REVIEW
We do not defer to the superior court's decision when it sits as an
intermediate appellate court.8 Issues of statutory interpretation ordinarily raise questions
of law that do not involve agency expertise; under these circumstances we apply an
independent judgment standard of review seeking to adopt the rule of law that is most
8 State, Pub. Emps.' Ret. Bd. v. Morton, 123 P.3d 986, 988 (Alaska 2005)
(citing State, Dep't of Natural Res. v. Greenpeace, Inc., 96 P.3d 1056, 1061 (Alaska
2004)); Anderson v. State, Dep't of Revenue, 26 P.3d 1106, 1108-09 (Alaska 2001).
-5- 6582
----------------------- Page 6-----------------------
persuasive in light of precedent, reason, and policy.9 Constitutional issues are questions
of law subject to independent review.10
IV. DISCUSSION
The program for distributing PFDs has specific rules for: (1) applying for
PFDs;11 (2) establishing and maintaining residency for PFD purposes;12 and
(3) maintaining residency for PFD purposes while on allowable absences from Alaska.13
At the administrative level, the Harrods contested the basis for DOR's decision that they
failed to establish residency for PFD purposes. But on appeal to our court, their brief
included arguments that DOR lacked the authority to establish residency requirements
for PFD eligibility and that their constitutional rights were violated by DOR. It appears
the ALJ may have heard these arguments, but he did not reach them. The arguments
were definitely presented to the superior court, but the superior court expressly declined
to reach them. Because it appears from the record that the Harrods' constitutional
challenges and challenges to the authority of DOR may have been raised at the
administrative level, and because these arguments were certainly raised at the superior
court level, we consider each of the Harrods' arguments in the decision we enter today.14
9 Temple v. Denali Princess Lodge, 21 P.3d 813, 815 (Alaska 2001).
10 Eagle v. State, Dep't of Revenue, 153 P.3d 976, 978 (Alaska 2007) (citing
Laidlaw Transit, Inc. v. Anchorage Sch. Dist., 118 P.3d 1018, 1023 (Alaska 2005)).
11 See, e.g., 15 AAC 23.103 (2010) (application generally); 15 AAC 23.113
(2010) (application on behalf of a child); 15 AAC 23.123 (2010) (application on behalf
of a disabled, incompetent, or other adult).
12 15 AAC 23.143 (2010).
13 15 AAC 23.163.
14 See DeNardo v. Calista Corp., 111 P.3d 326, 330 (Alaska 2005) (quoting
(continued...)
-6- 6582
----------------------- Page 7-----------------------
A. The Alaska Department Of Revenue Has Authority To Determine
Residency For Purposes Of Permanent Fund Dividend Eligibility.
1. PFD eligibility does not depend on an applicant's domicile or
citizenship.
The Harrods' brief on appeal first argues that the right to establish
citizenship in the United States or any of the 50 states or territories of the United States
rests solely with the individual. The Harrods maintain that only individuals can change
political associations and that neither the national government nor any local government
has the power to sever its ties with them. To support this position, the Harrods rely on
two United States Supreme Court cases, but neither of them is applicable to this case.
The Harrods cite Afroyim v. Rusk15 for the proposition that individuals, and
not states, possess the right to determine citizenship in "any of the 50 states or various
territories." Afroyim was a Polish immigrant who obtained United States citizenship and
then voted in an election for Israel's Knesset.16 The Department of State denied
Afroyim's application to renew his passport, claiming that he lost his citizenship by
voting in a foreign election.17 The United States Supreme Court reversed, reasoning:
[T]he Fourteenth Amendment was designed to, and does,
protect every citizen of this Nation against a congressional
forcible destruction of his citizenship, whatever his creed,
color, or race. Our holding does no more than to give to this
14(...continued)
Breck v. Ulmer, 745 P.2d 66, 75 (Alaska 1987)) ("We have held that 'the pleadings of
pro se litigants should be held to less stringent standards than those of lawyers.' This
proposition reflects a policy against finding unintended waiver of claims in technically
defective pleadings filed by pro se litigants.").
15 387 U.S. 253 (1967).
16 Id. at 254.
17 Id.
-7- 6582
----------------------- Page 8-----------------------
citizen that which is his own, a constitutional right to remain
a citizen in a free country unless he voluntarily relinquishes
that citizenship.18
The Court's holding in Afroyim pertains to issues of United States
citizenship, not state residency. When DOR determined that the Harrods were not
residents of Alaska for purposes of PFD eligibility, it did not deprive the Harrods of their
United States citizenship in violation of the Fourteenth Amendment.
The Harrods also cite Mitchell v. United States19 in support of their
argument that individuals, not states, have the power to sever residency. Mitchell
addressed contracts made during the United States Civil War and specifically addressed
whether the plaintiff in that case was domiciled in the United States or the Confederate
States.20 The primary question was not the state in which Mitchell was a resident but
rather the country in which he was domiciled. The decision denying the Harrods' PFD
applications was based entirely on the conclusion that they were not residents of the State
of Alaska for dividend eligibility purposes under the definitions adopted by the
legislature. Thus, Mitchell is not helpful to the Harrods' position.
2. The Alaska Department of Revenue has the authority to create
eligibility requirements for PFDs that exceed those in
AS 01.10.055.
The Harrods next argue that DOR lacks authority "to create eligibility
requirements for Alaska residency exceeding those set by AS 01.10.055."
Alaska Statute 01.10.055 establishes the requirements for Alaska residency,
but this statute allows the DOR to establish through regulation a longer minimum period
18 Id. at 268.
19 88 U.S. 350 (1874).
20 Id. at 352-53.
-8- 6582
----------------------- Page 9-----------------------
for "maintaining a principal place of abode in the state" or require "other proof" to
demonstrate "the intent to remain in the state indefinitely and to make a home in the
state."21 Alaska Statute 43.23.015(a) requires DOR to adopt regulations "for determining
the eligibility of individuals for permanent fund dividends." We have repeatedly held
that "the residency requirement for PFD eligibility may differ from other residency
requirements"22 and that "[t]he legislature has given broad discretion to the commissioner
21 AS 01.10.055 provides:
(a) A person establishes residency in the state by being
physically present in the state with the intent to remain in the
state indefinitely and to make a home in the state.
(b) A person demonstrates the intent required under (a) of
this section
(1) by maintaining a principal place of abode in
the state for at least 30 days or for a longer
period if a longer period is required by law or
regulation; and
(2) by providing other proof of intent as may be
required by law or regulation, which may
include proof that the person is not claiming
residency outside the state or obtaining benefits
under a claim of residency outside the state.
(c) A person who establishes residency in the state remains a
resident during an absence from the state unless during the
absence the person establishes or claims residency in another
state, territory, or country, or performs other acts or is absent
under circumstances that are inconsistent with the intent
required under (a) of this section to remain a resident of this
state. (Emphasis added).
22 Eagle v. State, Dep't of Revenue, 153 P.3d 976, 980 (Alaska 2007) (quoting
State, Dep't of Revenue v. Andrade, 23 P.3d 58, 71-72 (Alaska 2001)) (internal quotation
(continued...)
-9- 6582
----------------------- Page 10-----------------------
to determine the factors which define a permanent resident."23 The Harrods' argument
that DOR lacks the authority to establish PFD eligibility requirements that are more
stringent than the residency requirements in AS 01.10.055 is incorrect.
B. It Was Not Error To Decide The Harrods Did Not Qualify For PFDs
In 2005.
In their administrative appeal, the Harrods argued that DOR erred when it
decided that they were not eligible for PFDs in 2005. In reaching this decision, DOR
first considered that the Harrods' 2002 and 2003 applications had been denied, and then
considered whether the Harrods had reestablished eligibility since that time.
Alaska Statute 43.23.095(7) defines "state resident" for PFD eligibility
purposes:
[A]n individual who is physically present in the state with the
intent to remain indefinitely in the state under the
requirements of AS 01.10.055 or, if the individual is not
physically present in the state, intends to return to the state
and remain indefinitely in the state under the requirements of
AS 01.10.055.
Generally, applicants for PFDs must attest that they were present in the
State of Alaska during a qualifying year,24 but the legislature has directed that PFDs shall
22(...continued)
marks omitted); see also Schikora v. State, Dep't of Revenue, 7 P.3d 938, 941-42 (Alaska
2000); Brodigan v. State, Dep't of Revenue, 900 P.2d 728, 733 n.12 (Alaska 1995).
23 Andrade, 23 P.3d at 72 (quoting Church v. State, Dep't of Revenue, 973
P.2d 1125, 1129 (Alaska 1999)) (internal quotation marks omitted); see also State, Dep't
of Revenue v. Cosio, 858 P.2d 621, 625 (Alaska 1993).
24 AS 43.23.005 requires DOR to determine whether a PFD applicant was a
resident of Alaska for PFD eligibility purposes on the date of the dividend application
and during the qualifying year.
-10- 6582
----------------------- Page 11-----------------------
be distributed to people who are absent from Alaska for certain allowable reasons.25
Allowable absences include military service, absence due to status as the spouse or
dependent of a military service member who is stationed out of state, and absence due
to service as a member of the United States Congress.26
1. 15 AAC 23.163(f) establishes a rebuttable presumption that the
Harrods were ineligible for PFDs five years after they left
Alaska.
The Harrods argue that their absence from Alaska was due to Ian's service
in the United States military and that this is an "allowable absence" for purposes of PFD
eligibility.27 We agree that military service is an "allowable absence" for purposes of
PFD eligibility under AS 43.23.008(a)(3), but the grace period afforded by this exception
is not without limitation. Because the Harrods' argument overlooks an important part
of the PFD statutory and regulatory scheme, it ultimately fails.
The Harrods left Alaska in 1992 because Ian was assigned by the military
to a location outside the state. They remained eligible for PFDs for several years
thereafter because of the "allowable absence" provision in AS 43.23.008(a)(3) for
military service members. But Alaska law only permits military service members who
leave Alaska to continue claiming Alaska residency for PFD eligibility purposes for five
25 AS 43.23.008.
26 AS 43.23.008(a)(3) and (9).
27 The Harrods' brief does not expressly include the argument that DOR erred
when it determined they were ineligible during the 2004 qualifying year. We
nevertheless consider this argument because: (1) it was the focus of the Harrods'
arguments to the ALJ and in the superior court; (2) it was the focus of Ian's oral
argument to our court; (3) the State did not argue that it was waived; and (4) pro per
litigants are held to a less strict standard. See Gilbert v. Nina Plaza Condo Ass'n, 64
P.3d 126, 129 (Alaska 2003) ("It is well settled that in cases involving a pro [per] litigant
the . . . court must relax procedural requirements to a reasonable extent.").
-11- 6582
----------------------- Page 12-----------------------
years. After that, 15 AAC 23.163(f) creates a rebuttable presumption that service
members who have not returned to Alaska are no longer residents for PFD purposes -
they are presumed not to have the intention to return to Alaska and remain in the state
indefinitely.28
We find no error in the ALJ's decision to rely on the doctrine of collateral
estoppel to avoid relitigation of whether the Harrods were ineligible for PFDs in 2002
and 2003. 15 AAC 23.163(f) established a rebuttable presumption that the Harrods were
ineligible for PFDs and it was undisputed that the Harrods did not return to Alaska
during the 2004 qualifying year or otherwise reestablish their residency. The ALJ did
not err by affirming the denial of the Harrods' 2005 PFD applications.
2. The Harrods' PFD applications for 2002 and 2003 were denied.
The Harrods' 2001 PFD applications were denied because they had been
absent from Alaska for more than five years. The Harrods pursued an informal appeal
of that decision, supplying evidence of the "paper ties" they had with Alaska such as
maintaining a bank account and voter registration status here, and holding Alaska fishing
28 15 AAC 23.163(f) provides:
An individual whose absence or combination of absences,
under a provision of AS 43.23.008 other than
AS 43.23.008(a)(9)-(10) and (13), . . . totals more than five
consecutive years is presumed not to have the intent to return
to Alaska and remain indefinitely in Alaska. In such a case,
the individual is not eligible for a dividend payment unless
the individual provides . . . documentation that demonstrates
to the department's satisfaction an intent at all times during
the absence or absences to return to Alaska and remain
indefinitely in Alaska.
15 AAC 23.163(g) and (h) specify the factors DOR shall consider, and the weight to be
given to the factors, when deciding whether an individual who has been absent from
Alaska for more than five years has rebutted this presumption.
-12- 6582
----------------------- Page 13-----------------------
and driver's licenses. Ian argued that unavoidable circumstances had prevented the
Harrods from returning to Alaska for at least 30 days in the previous five years,29 and he
was successful in convincing a DOR hearing officer that they intended to return to
Alaska and remain here indefinitely. The hearing officer awarded six PFDs to the
Harrod family for the year 2001.
In this appeal, the Harrods argue that the same evidence they relied upon
to overcome the rebuttable presumption in 2001 must also be sufficient to overcome the
presumption for 2005. We disagree; the ALJ's decision to affirm the denial of the
Harrods' 2005 applications did not rely on findings regarding the sufficiency of the
Harrods' "paper ties" to Alaska. Instead, the ALJ decided the Harrods were not eligible
for 2005 dividends because they were determined to lack residency status in 2002 and
2003, they did not appeal those decisions, and they did not reestablish residency in
subsequent years.30
The Harrods' 2002 and 2003 PFD applications were denied due to the
rebuttable presumption found in 15 AAC 23.163(f). The Harrods pursued an informal
appeal for 2002, but DOR denied it. DOR's written notice of denial included notification
that the Harrods had 30 days to file a Request for Formal Hearing appeal. A form for
requesting such a hearing was enclosed with the DOR's written decision. It gave notice
29 The presumption in 15 AAC 23.163(f) is usually deemed unrebutted if
applicants have not returned to Alaska for at least 30 days within the previous five years.
See 15 AAC 23.163(h). The hearing officer who considered the Harrod's 2001
administrative appeal found that they were "23 days shy of the 30-day benchmark."
30 The argument that it was an abuse of discretion for DOR to determine that
the Harrods' "paper ties" to Alaska did not overcome the presumption in 15 AAC
23.163(f) also fails. The regulatory scheme adopted by DOR makes clear that the burden
to overcome this presumption rested with the Harrods. The Harrods have not shown that
DOR considered factors other than those specified in 15 AAC 23.163(g) or that DOR
improperly weighed the factors specified by regulation.
-13- 6582
----------------------- Page 14-----------------------
that the Harrods had 30 days to request further review,31 but the Harrods did not
respond.32 The 2002 denial became a final decision 30 days later.33
3. It was not error to rely on the doctrine of collateral estoppel to
establish that the Harrods were ineligible for PFDs in 2002 and
2003.
The doctrine of collateral estoppel generally prevents the relitigation of an
issue previously adjudicated.34 In this case, the ALJ relied on the doctrine of collateral
estoppel to establish that the Harrods were ineligible for PFDs in 2002 and 2003. The
Harrods briefly objected to the application of the doctrine during oral argument, but we
find no error in the ALJ's decision to rely on it.
To determine the applicability of the doctrine of collateral estoppel, this
court engages in a three-part inquiry.35 First, collateral estoppel must be asserted against
31 15 AAC 05.030(a) (2010):
The department will hold a formal hearing if a request for a
formal hearing conforming to the requirements of 15 AAC
05.010(a) is filed. If a request for a formal hearing follows an
informal conference, it must be filed within 30 days after the
date the informal conference decision is issued, and must be
filed in accordance with the appeal form provided by the
department.
32 At the administrative hearing the Harrods claimed that they appealed the
2002 and 2003 denials. The ALJ gave the Harrods roughly 45 days to provide proof that
they filed appeals in those years, but the Harrods did not file proof of appeal.
33 Hikita v. Nichiro Gyogyo Kaisha, Ltd., 85 P.3d 458, 462 (Alaska 2004)
(citing Blue Hen Lines, Inc. v. Turbitt, 787 A.2d 74, 78 (Del. 2001)).
34 Latham v. Palin, 251 P.3d 341, 345 n.10 (Alaska 2011) (internal citations
omitted).
35 Id. at 344 n.4.
-14- 6582
----------------------- Page 15-----------------------
the party, or one in privity with the party, to the first action.36 The Harrods and DOR
were the parties to the 2002 administrative appeal and to the denial of the 2003
application; this satisfies the first prong of the three-part collateral estoppel inquiry.
Second, the issue to be precluded from re-litigation must be identical to that
decided in the first action.37 Here, the ALJ applied the doctrine to preclude relitigation
of the Harrods' PFD eligibility for the years 2002 and 2003. These are precisely the
same issues resolved by the Harrods' 2002 informal administrative appeal, and by the
denial of their 2003 applications. The identical nature of the issues satisfies the second
prong of the three-part collateral estoppel test.
Third, the doctrine of collateral estoppel requires that the issue to be
precluded from relitigation must have been resolved by a final judgment on the merits.38
This court has held that "[p]rinciples of finality may be applied to the decisions of
administrative agencies if, after case-specific review, a court finds that the administrative
decision resulted from a procedure that seems an adequate substitute for judicial
procedure and that it would be fair to accord preclusive effect to the administrative
decision."39 An informal appeal allows parties to present arguments and facts to contest
the denial and results in a written decision.40 This court has also held that collateral
estoppel may be applied to an administrative decision if the decision is one "rendered
36 Id.
37 Id.
38 Id.
39 Matanuska Elec. Ass'n v. Chugach Elec. Ass'n, Inc., 152 P.3d 460, 468
(Alaska 2007) (quoting State, Child Support Enforcement Div. v. Bromley, 987 P.2d 183,
192 (Alaska 1999)).
40 15 AAC 05.020 (a)-(b) (2010).
-15- 6582
----------------------- Page 16-----------------------
pursuant to an exercise of primary jurisdiction."41 DOR has primary jurisdiction to
adjudicate PFD appeals under AS 43.23.015(g), and our review of the record convinces
us that the doctrine of collateral estoppel is appropriately applied to the 2002 and 2003
denials. Because the doctrine of collateral estoppel allowed the ALJ to determine that
the Harrods were ineligible for PFDs in 2002 and 2003, the ALJ correctly concluded that
the Harrods must reestablish Alaska residency in order to be eligible to receive PFDs.
4. The Harrods did not return to Alaska during the 2004
qualifying year.
At oral argument before our court, the Harrods argued that a person who
establishes residency in Alaska is presumed to maintain that status during absences from
the state unless the person claims residency elsewhere (which the Harrods did not do) or
the person performs other acts or is absent under circumstances that are not consistent
with the intent required by AS 01.10.055 to remain a resident of Alaska. Five years after
their 1992 departure from Alaska, a rebuttable presumption arose that the Harrods did
not intend to return and remain here indefinitely.42 Because the Harrods did not establish
residency for PFD purposes in Alaska during the 2004 qualifying year and were not able
to show that their absence was for an allowable reason under the applicable statutory
scheme, DOR did not err when it denied the Harrods' 2005 PFDs.
C. The Allowable Absence For Members Of Congress And Their Staff Is
Not A Violation Of The Equal Protection Clause Of The Alaska
Constitution.
The Harrods argue that 15 AAC 23.163(f) violates the Alaska
Constitution's equal protection clause. This regulation, in conjunction with the
41 Holmberg v. State, Div. of Risk Mgmt., 796 P.2d 823, 825 (Alaska 1990)
(citing Jeffries v. Glacier State Tel. Co., 604 P.2d 4, 9 n.15 (Alaska 1979)).
42 15 AAC 23.163(f).
-16- 6582
----------------------- Page 17-----------------------
"allowable absence" provisions in AS 43.23.008(9)-(10), allows members of Congress and
their staff to qualify for PFDs even though they may be physically absent from the state
for more than 180 days, and even though their "allowable absence" may extend for more
than five years. The Harrods claim that any individual with any absence for any reason
should be treated the same for permanent fund eligibility purposes.
We have held "[a] party raising a constitutional challenge to a statute bears
the burden of demonstrating the constitutional violation. A presumption of
constitutionality applies, and doubts are resolved in favor of constitutionality."43
We have adopted a "flexible 'sliding scale' test" for reviewing equal
protection claims.44 First, we determine "what weight should be afforded the
constitutional interest impaired by the challenged enactment. The nature of this interest
is the most important variable in fixing the appropriate level of review."45 Second, we
examine "the purposes served by a challenged statute. Depending on the level of review
determined, the state may be required to show only that its objectives were legitimate,
at the low end of the continuum, or, at the high end of the scale, that the legislation was
motivated by a compelling state interest."46 Third, "an evaluation of the state's interest
in the particular means employed to further its goals must be undertaken."47
43 State, Dep't of Revenue v. Andrade, 23 P.3d 58, 71 (Alaska 2001) (quoting
Baxley v. State, 958 P.2d 422, 428 (Alaska 1998)).
44 State v. Anthony, 810 P.2d 155, 157 (Alaska 1991) (citing State v. Erickson,
574 P.2d 1, 11-12 (Alaska 1978)).
45 Id. (quoting Alaska Pac. Assurance Co. v. Brown , 687 P.2d 264, 269
(Alaska 1984)).
46 Id. (quoting Brown, 687 P.2d at 269).
47 Id.
-17- 6582
----------------------- Page 18-----------------------
We have previously held that PFDs are not "basic necessities" or a
"fundamental right."48 Instead, "[a PFD] is merely an economic interest and therefore
is entitled only to minimum protection under our equal protection analysis."49
Restrictions on economic interests are reviewed at the "low end of the sliding scale."50
Our review is therefore limited to considering whether this regulation was designed to
achieve a legitimate governmental objective and whether it bears a fair and substantial
relationship to accomplishing that objective.51 At this level of review, we do not
determine whether a regulation "is perfectly fair to every individual to whom it is
applied."52 We have reviewed and upheld the purpose and means served by PFD
eligibility schemes in numerous cases.53
Here, DOR argues that the goal of 15 AAC 23.163(f) is to ease the
administrative burden of processing PFD applications by decreasing paperwork of
applicants whose jobs require proof of Alaska residency or where proof can be obtained
through other means. The state processes more than 600,000 PFD applications each
48 Id. at 158 (internal citations omitted).
49 Id. (citing Wilson v. Municipality of Anchorage,669 P.2d 569, 572 (Alaska
1983)).
50 Id.
51 See Schikora v. State, Dep't of Revenue, 7 P.3d 938, 944-45 (Alaska 2000);
Underwood v. State, 881 P.2d 322, 325 (Alaska 1994) (citing State, Dep't of Revenue,
Permanent Fund Dividend Div. v. Cosio, 858 P.2d 621, 629 (Alaska 1993)).
52 Eldridge v. State, Dep't of Revenue, 988 P.2d 101, 104 (Alaska 1999).
53 See, e.g., Schikora, 7 P.3d at 944-45; Church v. State, Dep't of Revenue,
973 P.2d 1125, 1130-31 (Alaska 1999); Brodigan v. State, Dep't of Revenue, 900 P.2d
728, 734 n.13 (Alaska 1995).
-18- 6582
----------------------- Page 19-----------------------
year.54 Reducing the burden of individually examining PFD applications is a legitimate
governmental objective, and allowing people who are serving in Congress - some of
whom are elected to terms exceeding five years55 - to establish residency by proof of
their employment, without having to individually determine whether each applicant has
a subjective intent to return to Alaska, bears a fair and substantial relationship to
accomplishing the objective of easing the burden of processing PFD applications. The
Harrods have not shown that the "allowable absence" provision for Alaska's
congressional delegation violates their right to equal protection.
D. The Harrods Do Not Have Standing To Challenge AS 43.23.005(a)(4).
In addition to being a state resident on the date of application,56 maintaining
state residency during the entire qualifying year,57 and meeting several other
requirements,58 Alaska law requires that applicants have "been physically present in the
state for at least 72 consecutive hours at some time during the prior two years before the
current dividend year"59 to qualify for a PFD. The Harrods argue that
AS 43.23.005(a)(4) places an unreasonable hardship solely on members of the Armed
Forces because they are often "assigned to duty stations far from Alaska" and are unable
to make it back to Alaska for 72 consecutive hours. This argument is unavailing because
the Harrods were not denied 2005 dividends on the grounds they failed to meet the
54 Dep't of Revenue, Overview of the 2009 Calculation, available at
http://www.pfd.state.ak.us/forms/2009Forms/2009DividendCalculation.pdf.
55 U.S. CONST. amend. XVII.
56 AS 43.23.005(a)(2).
57 AS 43.23.005(a)(3).
58 AS 43.23.005(a)(1)-(7).
59 AS 43.23.005(a)(4).
-19- 6582
----------------------- Page 20-----------------------
requirements of AS 43.23.005(a)(4). In fact, DOR never contested the Harrods' claim
that they met the requirements of AS 43.23.005(a)(4).
"Standing is a rule of judicial self-restraint based on the principle that courts
should not resolve abstract questions or issue advisory opinions."60 The basis for
determining whether a party has standing is "whether the litigant is a proper party to seek
adjudication of a particular issue."61 Although we give wide "access to judicial forums,
a basic requirement of standing is adversity of interests."62 Here, there is no adversity
of interest that requires us to consider the constitutionality of AS 43.23.005(a)(4) because
this statute was not the basis for denying the Harrods' PFD applications. The Harrods
do not have standing to challenge the constitutionality of AS 43.23.005(a)(4).
E. The Superior Court Correctly Rejected The Harrods' Attempt To
Broaden Their 2005 Appeal To Include The 2002 And 2003 Denials.
When the Harrods were denied PFDs in 2002 and 2003, they were informed
of their right to appeal those decisions and the time period for filing those appeals. No
evidence appears in the record indicating that the Harrods timely filed appeals for either
year. In deciding the Harrods' appeal concerning their 2005 applications, the superior
court properly denied the Harrods' arguments regarding their 2002 and 2003 applications
because "they should have . . . raised [those arguments] in an appeal of the denial of
those dividends."
60 Law Project for Psychiatric Rights, Inc. v. State, 239 P.3d 1252, 1255
(Alaska 2010) (quoting Keller v. French, 205 P.3d 299, 302 (Alaska 2009)) (internal
quotation marks omitted).
61 Id. (citing Trs. for Alaska v. State, 736 P.2d 324, 327 (Alaska 1987)).
62 Id. (citing Trs. for Alaska, 736 P.2d at 327).
-20- 6582
----------------------- Page 21-----------------------
F. The Office Of Administrative Hearings Did Not Abuse Its Discretion
By Not Allowing A Second Hearing.
The Harrods requested a second hearing to question DOR's representative
over issues already in the record. This request was denied because DOR's representative
participated in the administrative hearing to defend DOR's position, not to serve as a fact
witness. The Harrods claim that they were denied due process when the Office of
Administrative Hearings denied their request for a second hearing. But the record shows
that the Harrods received DOR's position statement prior to the first hearing and had the
opportunity to submit their own evidence and testimony to rebut any of the assertions
they believed to be inaccurate.63 The Harrods have not shown that they were denied
notice of the issues or an opportunity to be heard on the issues pertinent to the denial of
their 2005 PFD applications. It was not error to deny the Harrods a second
administrative hearing.
V. CONCLUSION
For the forgoing reasons we AFFIRM the superior court's decision
upholding the denial of the Harrods' 2005 PFD applications.
63 The State's position statement was submitted to OAH and the Harrods on
September 5, 2006. The hearing did not take place until September 18, 2006.
-21- 6582
 |
| Case Law Statutes, Regs & Rules Constitutions Miscellaneous |
|
