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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State, Dept. of Health & Social Services, Division of Public Assistance v. Gross (4/24/2015) sp-7001

State, Dept. of Health & Social Services, Division of Public Assistance v. Gross (4/24/2015) sp-7001

         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  



STATE OF ALASKA,                                       )  

DEPARTMENT OF HEALTH AND                               )        Supreme Court No. S-15339  

SOCIAL SERVICES, DIVISION OF                           )  

PUBLIC ASSISTANCE,                                     )        Superior Court No. 3AN-12-09838 CI  


                           Petitioner,                 )        O P I N I O N  


                  v.                                   )        No. 7001 - April 24, 2015  


LESTER GROSS,                                          )  


                           Respondent.                 )  


                  Petition for Review from the Superior Court of the State of  


                  Alaska, Third Judicial District, Anchorage, Erin B. Marston,  



                  Appearances:  Kathryn R. Vogel, Assistant Attorney General,  

                  Anchorage,  and  Michael  C.  Geraghty,  Attorney  General,  

                  Juneau, for Petitioner.  Mark Regan, Disability Law Center  


                  of Alaska, Anchorage, for Respondent.  

                  Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  


                  Bolger, Justices.   

                  MAASSEN, Justice.  


                  An applicant for federal disability benefits applied for state benefits that are  


intended  to  provide  basic  assistance  while  the  federal  application  is  pending.    The  

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Division of Public Assistance - the division of the Alaska Department of Health and  



Social Services that administers the state program                             - denied  these interim benefits,  


relying  on  a  subset  of  the  criteria  that  the  Social  Security  Administration  uses  to  


determine eligibility for federal benefits.   The superior court reversed this  decision,  


holding that Alaska law required the Department to apply the same federal substantive  


criteria and procedural requirements to its determination of eligibility for state interim  

benefits.  The Department petitioned for review, and we granted the petition.  


                    We conclude that, while state law does not require the Department to  track  

the federal analysis exactly when it assesses eligibility for state interim benefits, the  


Department's application of the law erroneously excludes a category of applicants who  

will be found to be disabled for purposes of federal benefits and who therefore should  


be entitled to interim assistance.  We therefore affirm the superior court's decision in  

part, reverse it in part, and remand for further proceedings.  


          A.        Facts  

                    Certain persons who are disabled and unable to work are entitled to federal  


Supplemental Security Income  (SSI) benefits administered by the United States Social  



Security  Administration.                  In  determining  whether  an  applicant  is  "disabled"  and  

therefore entitled to SSI benefits, the Social Security Administration uses a five-step  

          1         See  7  Alaska  Administrative  Code  (AAC)  40.040  (2015)  ("Assistance  

under  this  chapter  will be  granted  only  upon  application  to  the  division.");  7  AAC  


40.900(4) (2015) ("In this chapter, . . . 'division' means the division of public assistance  


of the Department of Health and Social Services.").  

          2         See 42 U.S.C.  1381 (2012); 20 C.F.R.  416.110 (2014).  

                                                              - 2 -                                                        7001

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process  outlined  in  federal  regulations.                            Steps  one  and  two  are  satisfied  if  the  


Administration  finds  first  that  the  applicant  is  not  currently  engaged  in  "substantial  


gainful activity"  and second that the applicant has a "determinable physical or mental 


impairment" lasting at least one year or likely to result in death, significantly limiting the  



applicant's "physical or mental ability to do basic work activities."   If these first two  


steps are satisfied, an individual may qualify for SSI benefits at step three, where the  


Administration considers whether the medical severity of the applicant's impairment  


"meets or equals" a disability listed in federal regulations.   

                     Individuals  who  satisfy  the  first  two  steps  but  do  not  qualify  for  SSI  


benefits at step three may nonetheless qualify through steps four and five.  At step four,  


the Social Security Administration considers whether the applicant, despite his or her  


impairment, can perform work he or she has done in the past; if so, the applicant is not  


                                                                      If the applicant cannot perform past work,  

disabled and not entitled to SSI benefits. 

however, the analysis proceeds to step five.  


                     At step five the Social Security Administration considers the applicant's  


ability to do other work in the national economy;  if the applicant can perform other 


work, he or she is not disabled and not entitled to SSI benefits.  The burden shifts at this  

           3         See 20 C.F.R.  416.920(a)(4) (describing five-step process in general);   


           4         20 C.F.R.  416.920(a)(4)(ii), 416.920(b).  

           5         Id.  416.920(c), 416.909.  

           6         Id.    416.920(d).  The  qualifying  impairments are listed at id.   404, subpart  

P, appendix 1.  Id.  416.920(a)(4)(iii).  

           7         Id.  416.920(f), 416.920(h), 416.960(b).  

           8         Id .  416.920(g), 416.920(h), 416.960(c).  

                                                                  - 3 -                                                            7001

----------------------- Page 4-----------------------


step  of  the  federal  analysis,  and  the  Administration,  rather  than  the  applicant,  is  

"responsible  for  providing  evidence  that  demonstrates  that  other  work  exists  in  


significant  numbers  in  the  national  economy  that  [the  applicant]  can  do,  given  [the  


applicant's]  residual  functional  capacity  and  vocational  factors."     Burden-shifting  


requires that the Administration present the testimony of a vocational expert when other  


methods of proof are insufficient.     If the Administration fails to carry its burden, the  

applicant is considered disabled and entitled to SSI benefits.11  


                   Determining eligibility for SSI can be a time-consuming process, lasting  

many  months.    To  help  alleviate  hardship  during  the  long  application  period,  state  

interim       assistance        programs         pay     "assistance        financed        from      State      or    local  


funds . . . furnished for meeting basic needs" of SSI applicants while their eligibility for  



federal benefits is being determined.                    The federal government reimburses Alaska for  


the interim assistance payments the State makes to individuals who are ultimately found  



to be entitled to SSI,           but the State is responsible for determining the parameters of its  

interim assistance program, including the requirements for eligibility.14  

          9        Id.  416.960(c)(2).  

          10       Id.  416.966(e); see also BLOCH ,  supra note 3,  3:36.  

          11       See Bowen v. Yuckert, 482 U.S. 137, 146  n.5 (1987); Erickson v. Shalala ,  

9 F.3d 813, 816-17 (9th Cir. 1993).  

          12       42 U.S.C.  1383(g)(3) (2012).  

          13       See  id.  1383(g)(3)-(4); 20 C.F.R.  416.1901(a).  

          14       See, e.g., Kraft v. Comm'r of Pub. Welfare, 496 N.E.2d 1379, 1383-86  

(Mass. 1986) (discussing the relationship of federal and state law  in interim assistance  

and stating that the f   ederal statute and regulations "evince an intent to delegate to the  

States the power to determine the amount of such  assistance  and eligibility guidelines . . .  


                                                            - 4 -                                                      7001

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                   Alaska's interim assistance program is governed by AS 47.25.455, which  

provides:  "The department shall pay at least $280 a month to a person eligible for  


assistance under this chapter while the eligibility of the person for benefits under [the SSI  


Program]  is  being  determined."                   A  regulation,  7  AAC  40.180,  provides  that  the  

Department will determine whether an applicant is eligible for interim assistance based  


on  "whether  the  applicant  is  likely  to  be  found  disabled  by  the  Social  Security  

Administration, including whether the applicant's impairment meets . . . [the] Social  


Security Administration disability criteria for the listings of impairments described in  


                                                             The regulation further specifies that, "[i]n  

20 C.F.R. 404, subpart P, appendix  1." 

determining whether an applicant's disability meets [these] criteria," the Department will  


consider, among other things, whether the "impairment affects the applicant's activities  


of  daily  living"  and  whether  "the  applicant  can  perform  any  other  work,  including  


sedentary work."            


[and] authorize the States to determine the appropriate methodology for calculating the  


amount of reimbursement due.").  

         15        AS 47.25.455(a).  

         16        7   AAC   40.180(b)(1)(B)   (2015).                  The   regulation   also   requires   the  

Department  to  examine  "the  SSI  program's  presumptive  disability  criteria  under  

20 C.F.R. 416.934," 7 AAC 40.180(b)(1)(A), but Gross has not alleged eligibility under  

those criteria.  

                   While 7 AAC 40.180 has been amended since the events in question in this  

case, that amendment simply updated references to the Code of Federal Regulations  

without  changing  the  substance  or  structure  of  the  regulation.    Compare  former  

7 AAC 40.180 (am. 1/11/06), with 7 AAC 40.180 (am. 12/7/13).  We therefore refer to  

the regulation's most recent published version here.  

         17        7 AAC 40.180(c)(3), (4).  

                                                          - 5 -                                                   7001

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          B.        Proceedings  

                    Lester Gross applied for federal SSI benefits and state interim assistance  

benefits in December 2011.  He claimed eligibility for both based on a serious mental  


disorder.  The Department denied Gross's application for interim assistance.  Based on  


information that Gross provided and using the five-step SSI analysis, the Department's  


disability  adjudicator  determined  at  step  five  that  Gross  was  not  likely  to  be  found  

eligible for SSI because there was "other work in the national economy" that he could  

perform, and that he was therefore not eligible for interim assistance.  

                    Gross requested a hearing, which was held in March 2012.  The Department  


presented testimony from its disability adjudicator but not from a vocational expert.  The  


hearing  officer,  interpreting  7  AAC  40.180  as  incorporating  all  substantive  and  


procedural aspects of the SSI analysis, concluded that Gross had failed to prove disability  

at step three.  Proceeding to the remaining steps, however, the hearing officer concluded  


that under step five "the burden of proof shifts from the applicant to the agency" and that  

the Department had failed to meet its burden because it did not provide evidence that the  


jobs  it  identified  for  Gross  actually  existed  in  significant  numbers  in  the  national  

economy, nor had it provided the testimony of a vocational expert that Gross could  


perform  those  jobs.    The  hearing  officer  therefore  found  Gross  eligible  for  interim  


                    After both Gross and the Department filed proposals for agency action,18  


the   Department's   deputy   commissioner   issued   a   final   decision.                                   The   deputy  


          18        A proposal for action states a party's position as to whether the agency  

should  adopt,  reverse,  modify,  or  take  other  action  on  a  hearing  officer's  proposed  

decision.  See AS 44.64.060(e).  

          19        See  AS 44.64.060(e)(5) (stating that the agency may, "in writing, reject,  


                                                            - 6 -                                                      7001

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commissioner ruled that "7 AAC 40.180 incorporates only . . . steps 1, 2, and 3 of the SSI  

disability analysis" for determinations of eligibility for interim assistance, and that the  


regulation "does not require the Department to follow the analyses used in steps 4 and 5  


of the SSI analysis."             "In particular," the deputy commissioner concluded,  

                   7 AAC 40.180 does not require the Department to present  


                   evidence through a vocational expert, and does not place any  


                   burden on the Department to prove[] (as SSA is required to  

                   do at step 5 of its analysis)[] that there is particular work in  

                   the national economy that the applicant is able to perform.  

Accordingly, because the hearing officer had determined that Gross was not likely to be  


found disabled at step three of the SSI analysis - finding him disabled only at step five  


- the deputy commissioner determined that Gross was not eligible for state interim  




                   Gross appealed the deputy commissioner's decision to the superior court,  

which reversed it.  Based on our decisions in Moore v. Beirne21  

                                                                                             and State, Department  


                                                                   the  superior  court  concluded  that  the  

of  Health  &  Social  Services  v.  Okuley, 


Department, when determining eligibility for the state interim assistance program, must  

follow all five steps of the SSI analysis.  


                   The Department petitioned for review. It argued that neither AS 47.25.455  

nor 7 AAC 40.180 requires it to undertake the full five-step federal analysis in evaluating  


modify, or amend an interpretation or application in the proposed decision of a statute  

or regulation directly governing the agency's actions by specifying the reasons for the  


rejection, modification, or amendment, and issue a final agency decision").  

          20       Both emphases in original.  

          21       714 P.2d 1284 (Alaska 1986).  

          22       214 P.3d 247 (Alaska 2009).  

                                                            - 7 -                                                     7001

----------------------- Page 8-----------------------


eligibility for state interim assistance, and that its interpretation of the statute is otherwise  


permissible.  The Department asked that we reverse the superior court's decision and  

reinstate the decision of the deputy commissioner.  

                      We granted the petition.  


                      "When  a  superior  court  acts  as  an  intermediate  appellate  court  in  an  


administrative matter, we review the merits of the agency's decision."                                                


                      The agency's decision in this case is based on its application of a regulation.  


When examining regulations that were properly promulgated, "[w]e limit our review to  

 'whether the regulations are consistent with and reasonably necessary to carry out the  


purposes of the statutory provisions and whether the regulations are reasonable and not  


arbitrary.'  "             "In  making  the  consistency  determination,  we  use  our  independent  

judgment unless the 'issue involves agency expertise or the determination of fundamental  


                                                                                                 "But the specific form our  

policy questions on subjects committed to an agency.' " 


independent  review  takes  is  distinct  from  pure  de  novo  review.                                             We  apply  the  


substitution-of-judgment standard," by which we "adopt the rule of law  that is most  


                      State, Dep't of Commerce, Cmty. & Econ. Dev., Div. of Ins. v. Alyeska                     

Pipeline Serv. Co. , 262 P.3d 593, 596 (Alaska 2011).  

           24         Lakosh v. Alaska Dep't of Envtl. Conservation , 49 P.3d 1111, 1114 (Alaska  


2002) (alterations omitted) (quoting Kelly v. Zamarello , 486 P.2d 906, 911 (Alaska  

 1971));  accord   Grunert   v.   State,   109   P.3d   924,   929   (Alaska   2005);  see   also  


AS 44.62.030.  

           25         Lakosh , 49 P.3d at 1114 (quoting O'Callaghan v. Rue, 996 P.2d 88, 94  

(Alaska 2000)).  We have explained that " 'reasonable necessity is not a requirement  

separate from consistency' and the scope of review should center around consistency  


with the authorizing statute."  Bd. of Trade, Inc. v. State, Dep't of Labor, Wage & Hour  


Admin. , 968 P.2d 86, 89 (Alaska 1998) (quoting State, Bd. of Marine Pilots v. Renwick,  


936 P.2d 526, 531-32 (Alaska 1997)).  

                                                                   - 8 -                                                            7001

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persuasive  in  light  of  precedent,  reason,  and  policy,  but  in  doing  so  we  give  due  

deliberative  weight  'to  what  the  agency  has  done,  especially  where  the  agency  


interpretation is longstanding.' "                      In this case, the Department's interpretation is due  


little deference based on longevity;                        Gross's case appears to be the first in which the  

Department has adopted the interpretation at issue here, as the deputy commissioner  

noted in her decision.28  



                     The Department argues that AS 47.25.455 does not require use of the full  


five-step SSI analysis to determine eligibility for interim assistance and that 7 AAC  


40.180 - which the Department interprets as requiring only the first three steps - is  


therefore consistent with the statute.  But because this interpretation of the statute would  

exclude from the interim assistance program an entire category of applicants potentially  

eligible for SSI, we reject the Department's argument.  

           26         Heller v. State, Dep't of Revenue , 314 P.3d 69, 73 (Alaska 2013) (quoting  

Chugach Elec. Ass'n, Inc. v. Regulatory Comm'n of Alaska                                      , 49 P.3d 246, 250 (Alaska     




                     See, e.g., Totemoff v. State, 905 P.2d 954, 968 (Alaska 1995) (stating that  


"if agency interpretation is neither consistent nor longstanding, the degree of deference  


it deserves is substantially diminished" (citing Bowen v. Am. Hosp. Ass'n , 476 U.S. 610,  

646 n.34 (1986))); Underwater Constr., Inc. v. Shirley, 884 P.2d 150, 153 n.11 (Alaska  

1994) (refusing to give agency's inconsistent statutory interpretation any deference).  



                     While the Department suggests that it has advanced this argument in prior  

administrative proceedings, nothing in the record on appeal shows this to be the case.  

In  the  decision  on  Gross's  application,  the  deputy  commissioner  observed:  "The  


Department is mindful that the ALJ's proposed decision followed the interpretation of  


the Interim Assistance regulations previously applied by the Department's former Office  


of Hearings and Appeals, and the interpretation adopted by the Director of the Division  

of Public Assistance in the Director's Appeal decision issued on October 7, 2011 in  

OHA Case No. 11-FH-188."  

                                                                 - 9 -                                                          7001

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          A.       Why We Apply The Substitution Of Judgment Standard Of Review  

                   The Department argues that determining eligibility for interim assistance  

is "a policy decision and a judgment squarely within the agency's area of expertise,"  

which we should review only to determine whether it has a reasonable basis.  We use  


reasonable basis review "when the interpretation at issue implicates agency expertise or  

the determination of fundamental policies within the scope of the agency's statutory  


functions."           Because  the  question  in  this  case  is  one  of  statutory  interpretation  -  

requiring a determination of the legislature's intent in creating the interim assistance  


program  -  we  conclude  that  the  substitution  of  judgment  standard  of  review  is  

appropriate instead.  


                   In support of its argument for reasonable basis review, the Department cites  


                                              In  that  case  we  examined  whether  the  Department  of  

Marathon  Oil Co.  v.  State. 


Natural Resources had permissibly denied a lessee's request to apply retroactively a  

                                                                                    31   We found the governing  


specific methodology for calculating royalties on gas leases.  

statute ambiguous as to "whether retroactive contract pricing is permitted."32  We applied  


the  reasonable  basis  standard  of  review  because  of  our  recognition  that  "[a]llowing  


retroactivity  could  have  important  consequences  for  how  royalties  are  assessed  and  

          29       Marathon Oil Co. v. State, Dep't of Natural Res. , 254 P.3d 1078, 1082  

(Alaska 2011) (citing Matanuska-Susitna Borough v. Hammond , 726 P.2d 166, 175  

(Alaska 1986)).  

          30       254 P.3d 1078 (Alaska 2011).  

          31       See id. at 1081-82.  

          32       Id. at 1085.  

                                                         -  10 -                                                   7001

----------------------- Page 11-----------------------

paid," consequences the agency was more qualified than the courts to weigh.33                                           We  


observed that "[t]he state royalty and audit system is complicated, and DNR has expertise  


in deciding when retroactive application makes sense within that system."                                        We also  

noted   that   we   were   "especially   inclined   to   defer   when   the   agency's   statutory  


interpretation is long-standing," as it was in Marathon Oil .  


                   The question in this case is whether the Department may, consistent with  

the interim assistance statute, definitionally exclude persons who are eligible for SSI  

from  eligibility  for  state  interim  assistance.    Unlike  Marathon  Oil ,  answering  that  

question  does  not  require  the  "resolution  of  policy  questions  which  lie  within  the  

agency's  expertise  and  are  inseparable  from  the  facts  underlying  the  agency's  



decision."         Rather, the answer depends on the legislature's intent in creating the interim  


assistance program.  "The question whether [the Department] properly interpreted the  


legislature's mandate . . . is answerable through 'statutory interpretation or other analysis  

of legal relationships about which courts have specialized knowledge and experience.'  

Because this preliminary legal question resides within the traditional province of judicial  

          33       Id. at 1082.  

          34       Id.  

          35       Id. at 1085.  

          36       Id. (quoting Earth Res. Co.  v.  State,  Dep't of Revenue , 665 P.2d 960, 964  

(Alaska 1983)).  

                                                           -  11 -                                                    7001

----------------------- Page 12-----------------------



review and involves no technical expertise,"                                 we employ the substitution of judgment  




                      The Department also urges us to defer to its interpretation because the adult  


public  assistance  statutes  -  of  which  the  interim  assistance  program  is  a  part  -  

generally grant it the authority to "adopt regulations, not inconsistent with law, defining  


need, [and] prescribing the conditions of eligibility for assistance."                                              But the grant of  


regulatory authority in this case is unlike the broad grants of authority at issue in cases  



in which we have deferred to an agency decision.                                      Instead, because the issue is one of  


statutory interpretation, we apply  the  substitution of judgment standard, giving little  


deference to the agency's new interpretation of the law, as explained above.                                                      

           37         Lakosh v. Dep't of Envtl. Conservation                          , 49 P.3d 1111, 1117 (Alaska 2002)     

(quoting Kelly v. Zamarello , 486 P.2d 906, 916 (Alaska 1971)).  

           38         Heller v. State, Dep't of Revenue , 314 P.3d 69, 73 (Alaska 2013) ("Because  


the  interpretation  involves  legislative  intent  rather  than  agency  expertise,  we  apply  


independent review here.").  

           39         AS 47.05.010(9).  



                      Cf. Kenai Peninsula Fisherman's Coop. Ass'n v. State, 628 P.2d 897, 903  


(Alaska  1981)  (reasoning  that  a  statute  allowing  the  Board  of  Fisheries  to  "make  

regulations it considers advisable" indicated "that the legislature intended to give the  

Board discretion to decide methods of regulation"); Kelly v. Zamarello , 486 P.2d 906,  


912 (Alaska 1971) (reasoning that a statute for competitive oil and gas leasing describing  


"such  bonus as may be accepted by the Commissioner" of DNR indicated "that the  


legislature intended to give the Commissioner broad authority to determine the kind of  


bonus he will accept").  



                      See Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896,  


902-04  (Alaska  1987)  ("Tesoro  argues  that  we  should  apply  the  'reasonable  basis'  

standard  because  the  issues  raised  in  these  cases  involve  agency  expertise  and  

fundamental policy considerations in an area where the administrative agency has been  


                                                                   -  12 -                                                             7001

----------------------- Page 13-----------------------

                    Finally, in deciding this appeal we do not need to address whether the  

Department's decision of Gross's case has a reasonable basis in the regulation.42                                          For  


purposes of our decision we assume that the Department's application of 7 AAC 40.180  


was based on a reasonable interpretation of it, leaving for our independent review only  


the question whether the regulation as so interpreted is consistent with the statute it was  

intended to implement.  


          B.	       A Failure To Consider Steps Four And Five Of The SSI Analysis In  

                    Determining Eligibility For Interim Assistance Is Inconsistent With  

                    AS 47.25.455.  


                    The Department argues that nothing in AS 47.25.455 mandates use of the  

complete five-step federal SSI analysis to assess eligibility for state interim assistance,  


and that its interpretation of 7 AAC 40.180 as incorporating only the first three steps is  

therefore consistent with the statute.  In particular, the Department argues that it is not  


required, as it would be at step five of the SSI analysis, to carry the burden of proving  

the existence of other work in the national economy that the applicant can perform, or  


to present expert testimony on that subject.  We agree that the Department is not required  


to exactly replicate all procedural aspects of the five-step analysis; however, to the extent  


the Department's interpretation excludes from interim assistance an entire category of  


granted  broad  regulatory  authority.  .  .  .                 [But  b]ecause  this  case  involves  statutory  


interpretation, we conclude that the independent judgment test is the appropriate standard  

of review."); supra notes 27-28 & accompanying text.  



                    Cf. Davis Wright Tremaine LLP v. State, Dep't of Admin., 324 P.3d 294,  


301 (Alaska 2014) ("Assuming a regulation is valid, we review whether an agency's  


interpretation of its regulation is plainly erroneous and inconsistent with the regulation  

- i.e., whether it has a reasonable basis." (citation omitted) (internal quotation marks  


                                                            -  13 -	                                                     7001

----------------------- Page 14-----------------------


disabled applicants - those who are entitled to federal benefits only because of step five  

- it is inconsistent with the statute.  

                    Alaska Statute 47.25.455(a) provides that "[t]he department shall pay at  


least  $280  a  month  to  a  person  eligible  for  assistance  under  this  chapter  while  the  


eligibility of the person for benefits under [the SSI program] is being determined."  The  

Department contends that, because the statute requires that interim assistance be provided  


"while the eligibility of the person" for SSI is being determined, the legislature could not  

have intended that the Department apply the same analysis as that used by the federal  


government to determine SSI eligibility.  It argues that the structure of the adult public  

assistance statutes in general supports its interpretation.43  


                    "[W]e interpret [a] statute according to reason, practicality, and common  


sense, considering the meaning of the statute's language, its legislative history, and its  


purpose."          The language and structure of the relevant statutes do not directly answer  


the question whether the test for state interim assistance must be the same as that for SSI,  


but they do suggest that the two should closely track. Alaska Statute 47.25.455 specifies  


that benefits are to be paid "to a person eligible for assistance under this chapter while  

          43        The  Department  also  argues  that  the  "policy  and  purpose"  of  Alaska  

Statutes Chapter 47 generally is "to cooperate and coordinate with the United States  


government in administering public assistance," a purpose which is fulfilled through the  


reimbursement agreement between the state and federal governments, rather than through  

an  identical  definition  of  disability.    The  provisions  allowing  for  reimbursement  of  

interim assistance payments from the federal government, however, were not part of the  


initial  interim  assistance  program,  ch.  138,    18,  SLA  1982,  and  their  subsequent  


addition, ch. 29,  6, SLA 1993, did not imply a change in the overall purpose of or  


conditions  of  eligibility  for  the  program.    See,  e.g.,  1993  House  Journal  87-88  

(Governor's transmittal letter); Testimony of Jan Hansen, Div. of Pub. Assistance, at  

33:30-34:45, Hearing on H.B. 67 Before the House Judiciary Comm., 18th Leg., 1st  

Sess. (Mar. 15, 1993) (discussing interim assistance).  



                    Louie v. BP Exploration (Alaska), Inc. , 327 P.3d 204, 206 (Alaska 2014).  

                                                              -  14 -                                                      7001

----------------------- Page 15-----------------------


the  eligibility  of  the  person  for  benefits  under  [the  federal  SSI  program]  is  being  

determined"; the adult public assistance chapter specifies that a person is eligible if he  

or she is disabled, and it defines "disabled" in the same way the federal SSI program  


defines it.    The Department is correct, however, that the text of AS 47.25.455, which  


requires interim assistance payments "while the eligibility of the person for benefits  


under [SSI] is being determined" and therefore contemplates a more expedited decision,  


does not necessarily require that the test for interim assistance be exactly the same as the  

test for SSI.  

                    We  directly  addressed  the  interim  assistance  statute  once  before.46                                 In  


Moore v. Beirne , we held that AS 47.25.455 did not permit the Department to terminate  


interim assistance benefits based on the federal authorities' preliminary denial of SSI  


benefits, but instead that interim assistance benefits must continue until the applicant's  

          45        Compare AS 47.25.615(5) (defining "disabled" as "being unable to engage                           

in substantial gainful activity by reason of a medically determinable physical or mental                              

impairment that can be expected to result in death or that has lasted or can be expected  

to  last  for  a  continuous  period  of  not  less  than  12  months"),  with  42  U.S.C.  

 1382c(a)(3)(A) (2012) (stating that "an individual shall be considered to be disabled  

for purposes of [the SSI program] if he is unable to engage in any substantial gainful  

activity by reason of any medically determinable physical or mental impairment which  


can be expected to result in death or which has lasted or can be expected to last for a  


continuous period of not less than twelve months"); see also 7 AAC 40.030 (stating that,  

to  be  eligible  for  adult  public  assistance,  "[a]n  applicant  must  meet  the  eligibility  

requirements of the SSI program . . . and the eligibility requirements set forth in [the  


Adult Public Assistance] chapter").  

          46        While the parties discuss our decision in  State, Dep't of Health & Soc.  


Servs. v. Okuley, 214 P.3d 247 (Alaska 2009), that case does not affect our analysis here.  

The  facts  underlying  Okuley  related  to  the  Department's  failure  to  comply  with  the  

Administrative Procedure Act in enacting a prior version of 7 AAC 40.180.  See id. at  

249-50 & 250 n.6.  The merits of the case, however, related to attorney's fees issues  

raised in subsequent class-action litigation, see id. at 252-58, and did not involve the  

interim assistance program itself.  

                                                              -  15 -                                                      7001

----------------------- Page 16-----------------------

SSI appeals had been exhausted and the Social Security Administration made a final  


                                                                     47   The Department argues that nothing in  

decision on her entitlement to federal benefits.  



Moore  requires it to use the full five-part SSI analysis, and that Moore supports its  


interpretation of the statute because we recognized in that case that applicants for interim  


assistance and SSI are not similarly situated for equal protection purposes.48  

                    The Department is partly correct.  As we noted in Moore , the legislature in  

creating the interim assistance program intended to codify the Department's past practice  


of paying state benefits to SSI applicants while their entitlement to federal benefits was  


                                At that time, eligibility for interim assistance was assessed simply  

being determined.                                                                                          

through the report of an accredited physician about the applicant's likely entitlement to  



federal benefits,           a process far less rigorous than the current one.  Nothing in Moore  

requires the Department to exactly replicate the SSI analysis when it assesses eligibility         

for interim assistance.  


                    However, as we noted in Moore , "[t]he purpose of interim assistance is to  

                                                                                                         51 and the history  

alleviate hardship on applicants for SSI during the application period," 

of the program confirms that the legislature intended benefits to be broadly available to  


meet this purpose.  It was recognized during development of the program that the waiting  


          47        714 P.2d 1284, 1287 (Alaska 1986).  

          48        See id. at 1287-88.  

          49        Id.  at  1286;  see  also  Testimony  of  Rod  Betit,  Director,  Div.  of  Pub.  

Assistance, at 48:30-51:30, Hearing on C.S.H.B. 357 (Rules) Before the Sen. Health,  

Educ. & Soc. Servs. Comm., 13th Leg., 1st Sess. (May 5, 1982).  

          50        Moore , 714 P.2d at 1           285  ("Interim assistance payments are granted after  

a preliminary examination of the applicant by a physician or psychiatrist." (citing prior  

version of 7 AAC 40.180)).  

          51        Id .  

                                                             -  16 -                                                       7001

----------------------- Page 17-----------------------


time  for  a  determination  of  SSI  eligibility  was  growing  longer,  and  that  assistance  



otherwise available to meet applicants' basic needs during this period was insufficient. 

Furthermore, when enacting the interim assistance program into law, the legislature  


eliminated the availability of other benefits pending a final SSI determination - benefits  


for  which  all  SSI  applicants  had  formerly  been  eligible  -  intending  that  interim  

assistance fill the gap.53  


                     And as already noted, the method of assessing eligibility at the time of the  

statute's passage involved a much less rigorous process; rather than satisfying the federal  


eligibility criteria, an applicant for interim assistance had merely to "demonstrate[] some  


                                                                                               As the legislature intended  

likelihood of meeting the statutory criteria for eligibility." 



to adopt the program currently in operation when it codified interim assistance, 

again  suggests  a  broadly  available  benefit.    The  interim  assistance  statute  has  been  

           52        See  Testimony   of  Rod  Betit,  Director,  Div.  of  Pub.  Assistance,  at  

48:30-51:00, Hearing on C.S.H.B. 357 (Rules) Before the Sen. Health, Educ. & Soc.                                   

Servs.  Comm.,  13th  Leg.,  1st  Sess.  (May  5,  1982)  (discussing  development  of  the  

program codified as interim assistance in AS 47.25.455).  



                     Medicaid coverage for the interim period was eliminated as part of the  


package of legislation that included AS 47.25.455.  Ch. 138,  13, SLA 1982 (codified  


as  amended  at  AS  47.07.020(e));  Testimony  of  Rod  Betit,  Director,  Div.  of  Pub.  

Assistance, at 48:20-51:00, Hearing on C.S.H.B. 357 (Rules) Before the Sen. Health,  

Educ. & Soc. Servs. Comm., 13th Leg., 1st Sess. (May 7, 1982) (discussing genesis of  


program  codified  as  Interim  Assistance);  Comments  of  Chairman  Charlie  Parr,  at  

06:30-11:00, 43:45-45:00, Hearing on C.S.H.B. 357 (Rules) Before the Sen. Health,  

Educ. & Soc. Servs. Comm., 13th Leg., 1st Sess. (May  7, 1982) (discussing cuts to  


Medicaid benefits granted to individuals prior to a full federal disability determination  


and proposal to increase amount of Interim Assistance granted to cover medical bills  

prior to final determination).  

           54        Moore , 714 P.2d at 1287.  

           55        See supra note 49.  

                                                                -  17 -                                                          7001

----------------------- Page 18-----------------------

amended  since  its  codification,  but  nothing  in  the  later  legislative  history  alters  its  

broadly inclusive purpose.  


                    Also aiding our analysis is the rule "that a remedial statute is to be liberally  


construed to effectuate its purposes."    Federal courts have recognized that the Social  


                                                                                                      We recognize the  

Security Act is remedial and must therefore be liberally construed.  

same remedial purposes in Alaska's interim assistance program, which - as part of  


Alaska's adult public assistance statutes - is intended "to furnish financial assistance  


as far as practicable to needy aged, blind, and disabled persons, and to help them attain  

self-support and or self-care."58  

                    The Department's interpretation of 7 AAC 40.180 to include only steps one,  


two, and three of the SSI analysis in determining eligibility for interim assistance would  


render an entire category of persons who are eligible for SSI - those deemed disabled  


at step five - ineligible for interim assistance.  While the Department asserts that "[n]o  

argument  or  findings  have  been  made  in  this  case  to  support  a  theory  that  [its]  


interpretation  of interim assistance actually results in an under-inclusive granting of  

          56        State ex rel. Smith v. Tyonek Timber, Inc.                    , 680 P.2d 1148, 1157 (Alaska  


          57        See Doran v. Schweiker, 681 F.2d 605, 607 (9th Cir. 1982) ("The Social  


Security Act is remedial, to be construed liberally."); Haberman v. Finch , 418 F.2d 664,  

667  (2d  Cir.  1969)  ("[T]he  Social  Security  Act  is  a  remedial  statute,  to  be  broadly  


construed and liberally applied."); see also Granberg v. Bowen , 716 F.Supp. 874, 878  


(W.D.Pa.  1989)  (stating  that  the  Supplemental  Security  Income  program  "is  to  be  

construed liberally to further its remedial purposes").  

          58        AS 47.25.590(b) (emphasis added).  

                                                            -  18 -                                                      7001

----------------------- Page 19-----------------------


interim assistance benefits to individuals later adjudicated disabled by SSI," such under- 

inclusion is an inevitable result of the Department's interpretation.59  


                    The Department is certainly correct that it is consistent with AS 47.25.455  


                                                                                                               by the Social  

to limit interim assistance benefits to those "likely to be found disabled" 


Security Administration for purposes of SSI and that, in doing so, it need not exactly  


replicate the entire set of procedures the Administration employs to determine eligibility  


for the federal program.  However, the Department may not exclude from eligibility for  


                                                                                                                     We leave  

interim assistance the entire category of persons eligible for SSI at step five. 


it  to  the  Department  to  decide  in  the  first  instance  how  it  will  satisfy  the  statutory  


          59        Counsel for the Department suggested at oral argument before us that its  

three-step application of 7 AAC 40.180 effectively incorporates the substance of steps  


four  and  five  because  subsection  (c)(4)  provides  that  "[i]n  determining  whether  an  

applicant's disability meets the criteria set out in (b)(1)(B) of this section" (which is  

essentially step three of the SSI analysis), "the department will consider whether . . . the  


applicant can perform any other work, including sedentary work."  But the SSI analysis  


explicitly excludes consideration of vocational factors, such as the ability to perform  


other work, at step three.  20 C.F.R.  416.920(d) (2014) ("If you have an impairment(s)  


which meets the duration requirement and is listed in appendix 1 or is equal to a listed  

impairment(s), we will find you disabled without considering your age, education, and  


work experience.") (emphasis added). Under the Department's interpretation, therefore,  


consideration of vocational factors could only serve to exclude from state benefits those  

who would be entitled to federal benefits at step three.  

          60        7 AAC 40.180.  



                    Gross also argues that, by deciding his case based on a new interpretation  


of  7  AAC  40.180  imposed  by  the  commissioner  after  the  hearing,  the  Department  

violated his due process rights.  Because we decide today that fuller consideration of  

Gross's case is required under AS 47.25.455, we do not reach his due process claim.  

                                                             -  19 -                                                       7001

----------------------- Page 20-----------------------

V.                          CONCLUSION  

                                                        We AFFIRM the superior court's decision in part, REVERSE it in part, and                                      

REMAND to the Department for proceedings consistent with this opinion.  

                                                                                                                                                                                           - 20 -                                                                                                                                                     7001

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