Appeal
from the Superior Court No. 3AN-16-08636 CI of the State of
Alaska, Third Judicial District, Anchorage, Charles W. Ray,
Jr., Judge.
Appearances: Mario L. Bird, Ross, Miner & Bird, P.C.,
Anchorage, for Appellants.
Jonathan P. Clement, Assistant Attorney General, Anchorage,
and Jahna Lindemuth, Attorney General, Juneau, for Appellee.
Before: Bolger, Chief Justice, Winfree, Stowers, Maassen, and
Carney, Justices.
OPINION
CARNEY, JUSTICE.
I.
INTRODUCTION
A
husband and wife appeal denials of their Permanent Fund
Dividends (PFDs) for 2014 and 2015. The husband's 2014
PFD application was denied because he had been absent from
the state for more than five years, creating a presumption of
nonresidence that he was unable to rebut. The wife's
application was denied because her PFD eligibility as an
accompanying military spouse depended on her husband's.
After the denials were affirmed by an Administrative Law
Judge (ALJ), the couple appealed to the superior court.
While
this appeal was pending they both applied for 2015 PFDs and
were again denied. The husband's 2015 application was
denied because his residency for PFD purposes was severed in
the 2014 PFD proceedings and he had not reestablished it. The
wife's application was again denied because of her
accompanying-spouse status. They appealed the 2015 denials as
well; the superior court consolidated the 2014 and 2015 cases
and affirmed both denials.
The
husband and wife appeal. They argue that the requirement that
they be physically present in Alaska for 30 days in the five
years preceding their application, pursuant to AS
43.23.008(d)(1), is unconstitutional. They also argue that we
should interpret the relevant statutes and regulations in the
light most favorable to them, which they claim would entitle
them to both 2014 and 2015 PFDs. Finally, they argue that
even if we uphold the statute as constitutional, we should
nevertheless award them 2014 and 2015 PFDs through our
"equitable powers."
Because
neither spouse meets the residency requirements to qualify
for either a 2014 or a 2015 PFD under the plain language of
the statute, and because we find that the statute is
constitutional, we affirm the ALJs' decisions. As our
equitable powers do not extend to ignoring a valid and
unambiguous statute duly enacted by the legislature, we
decline to award PFDs on this ground.
II.
FACTS AND PROCEEDINGS
A.
Facts
Donald
Jones first came to Alaska in 1998 when he was stationed at
Elmendorf Air Force Base. In 2000 he married Annette
Gwalthney-Jones, a long-time Alaska resident. Jones was
transferred out of the state in 2001; despite numerous
requests he was never reassigned to Alaska. The Joneses
nonetheless maintained significant ties to the state: they
registered their vehicles in Alaska, held Alaska driver's
licenses, owned real property in Anchorage, and cast absentee
ballots in Alaska elections. There is no dispute that since
Jones's 2001 transfer both he and his wife "have
intended to return to the state and to remain
indefinitely." They returned permanently on November 29,
2014, shortly before Jones retired from the Air Force.
Jones
was eligible for and received a PFD from 2001 to 2013.
Gwalthney-Jones was eligible for and received a PFD from 1982
to 2013. Despite being largely absent from 2001 until their
return to Alaska in 2014, they remained eligible for PFDs
until 2013 because their absences were allowed by a special
exception for military service members and their spouses
under AS 43.23.008(a)(3).[1] Following their return, they both
applied for and received 2016 PFDs.
B.
Proceedings
1.
2014 PFD applications and administrative proceedings
In
March 2014 Jones and Gwalthney-Jones applied for 2014 PFDs.
Eligibility for 2014 PFDs depended upon their qualifying as
residents during 2013.[2] In June 2013 the Alaska Legislature
revised the PFD eligibility statutes and adopted AS
43.23.008(d), which states:
After an individual has been absent from the state for more
than 180 days in each of the five preceding qualifying years,
the department shall presume that the individual is no longer
a state resident. The individual may rebut this presumption
by providing clear and convincing evidence to the department
that
(1) the individual was physically present in the state for at
least 30 cumulative days during the past five years; and
(2) the individual is a state resident as defined in AS
43.23.295.[3]
The
legislature made this statute retroactive to January 1,
2013.[4]
Alaska
Statute 43.23.008(d) codified a Division regulation that had
been in place since 1999, 15 Alaska Administrative Code (AAC)
23.163, with one key difference.[5] The regulation had imposed
the same 30 days/5 years requirement to rebut a presumption
of nonresidence, but it had allowed an exception if an
individual could show "that unavoidable circumstances
prevented that individual from returning" for the
required 30 cumulative days.[6] The 2013 statute does not contain
the "unavoidable circumstances"
exception.[7]
The
Division, reading AS 43.23.008(d)(1) to eliminate any
exception from the 30 days/5 years rule, denied Jones's
2014 PFD application. It is undisputed that Jones had been
absent from the state for more than 180 days in each of the
previous five qualifying years for the 2014 PFD, i.e.,
2009-2013. It is also undisputed that he had not been
physically present in Alaska for at least 30 cumulative days
during the same five-year period. The Division also denied
Gwalthney-Jones's 2014 application, finding that her
eligibility depended on her husband remaining
eligible.[8]
The
Joneses requested informal appeals of their 2014 PFD denials.
They argued that their ties to Alaska proved their intent to
remain Alaska residents, but they did not address the 30
days/5 years statutory language. The Division denied
Jones's appeal, stating that "the current law
clearly states [that] an individual who is not back for 30
days is no longer a state resident for PFD purposes."
The Division also denied Gwalthney-Jones's informal
appeal, finding "no provision in law" that would
entitle her to a 2014 PFD when she had been "absent from
Alaska for more than 180 days during 2013 accompanying an
individual ineligible to receive the 2014 PFD."
The
Joneses then requested formal hearings, at which they had the
burden to prove that the Division had erred in denying their
applications.[9] They again emphasized their ties to
Alaska; they also argued for the first time that the 30
days/5 years rule was an ex post facto law and that it
conflicted with another provision in the PFD
statutes.[10] The Division argued that the 2013
statute's wording precluded it from considering "why
an individual failed to meet the 30 day return requirement,
as it could do [previously] under [the] regulation."
Following
a hearing the ALJ issued a decision and order (2014 PFD
Decision), which was adopted by the Commissioner of Revenue
in March 2016. The ALJ concluded that in enacting AS
43.23.008, the legislature had "clarified its intent to
make the 30-day requirement inflexible" by
"striking" the unavoidable-circumstances exception.
The ALJ found that the statute was thus not ambiguous and did
not "allow for other factors to mitigate the 30-day
requirement." Since it was uncontested that Jones did
not satisfy the 30 days/5 years rule, the ALJ found that he
had not rebutted the nonresidence presumption and was no
longer a state resident for PFD purposes. The 2014 PFD
Decision also affirmed the denial of Gwalthney-Jones's
2014 PFD application because, as an accompanying spouse, she
was only eligible if Jones was.[11] The ALJ rejected the
Joneses' ex post facto challenge and found no conflict in
the applicable statutes. The Joneses appealed to the superior
court.
2.
2015 PFD applications and administrative proceedings
In
March 2015 both spouses applied for 2015 PFDs. The Division
denied Jones's 2015 application, reasoning that his
"Alaska residency for PFD purposes was previously
severed" when he could not rebut the presumption of
nonresidence for his 2014 application. The Division, citing
AS 43.23.005(a)[12] and 15 AAC 23.143(b), [13]stated that
Jones "did not return to Alaska to remain indefinitely
and re-establish his residency for PFD purposes until
November 29, 2014, too late to qualify for the 2015
dividend." The Division also denied
Gwalthney-Jones's application, as she had exceeded the
allowable absences by being absent for 197 days in 2014 to
accompany a spouse who was not eligible for a
PFD.[14]
The
Joneses requested informal appeals of the 2015 PFD denials.
They again listed their ties to Alaska and emphasized that
they had returned permanently to the state in November 2014
upon Jones's retirement.[15] The Division, citing AS
01.10.055, [16] AS 43.23.005(a), [17] and former AS
43.23.095(7), [18] denied the informal appeals. It found
that Jones "did not return to Alaska prior to January 1,
2OI4[, ] to reestablish [his] residency and eligibility"
under the PFD statutes.[19] As to Gwalthney-Jones, the Division
found that her 197 days' absence to accompany Jones was
"not allowable" because he "was determined not
eligible for the 2015 PFD."[20]
The
Joneses then requested formal hearings. Jones argued that he
had returned to Alaska for a total of 47 days in the five
years prior to his 2015 application and thus satisfied the 30
days/5 years rule. The Division countered that he "had
previously severed his Alaska residency for PFD
purposes," had only reestablished it in November 2014,
and was thus not" 'a state resident during the
entire qualifying year' when applying for the 2015
PFD."[21]
Following
a hearing the ALJ issued a decision and order affirming the
denials of the Joneses' 2015 PFDs (2015 PFD Decision).
The Commissioner of Revenue adopted the order in August 2016.
The 2015 PFD Decision stated that the 2014 PFD Decision had
"severed Mr. Jones's residency for PFD purposes
prior to January 1, 2014." The ALJ concluded that the
parties were bound by the outcome of the 2014 appeal pursuant
to the doctrine of collateral estoppel (issue preclusion) and
could not relitigate the question of Jones's residency.
The ALJ therefore found both spouses ineligible for 2015
PFDs. The Joneses appealed to the superior court.
3.
Superior court proceedings
The
superior court consolidated the 2014 and 2015 PFD appeals.
The Joneses, who by this point had obtained counsel, argued
that AS 43.23.008(d) violates the due process, privileges and
immunities, and equal protection clauses of the Fourteenth
Amendment.[22] They also argued that it violates
article I, section 1 of the Alaska Constitution[23] and that it
is an unconstitutional ex post facto law.[24] Finally they
asserted that even if the court found AS 43.23.008(d)
constitutional, it could award them 2014 and 2015 PFDs
through its equitable powers.
The
superior court rejected the Joneses' constitutional
arguments and declined to exercise its equitable powers to
award them PFDs. The court found the Joneses ineligible for
2014 PFDs under a plain reading of the amended statute. It
held that the statute did not create an irrebuttable
presumption that would violate due process under Vlandis
v. Kline, [25] and that the 30 days/5 years rule was
not an "unconstitutional durational residency
requirement" under Saenz v. Roe.[26]The court held
that the Joneses were not denied equal protection under the
Alaska or United States Constitutions and that the statute
furthers legitimate state interests. Finally the court found
that the statute was not an unconstitutional ex post facto
law under Underwood v. State.[27]
The
Joneses appeal. They raise constitutional arguments almost
identical to those raised before the superior court. They
further argue that the statutes and regulations should be
interpreted in the light most favorable to them. Finally they
request that we use our equitable powers to award them their
PFDs even if we find AS 43.23.008(d) constitutional.
III.
STANDARD OF REVIEW
"When
the superior court acts as an intermediate appellate court,
we independently review the merits of the underlying
administrative decision."[28] Under de novo review,
"[w]e adopt the rule of law that is most persuasive in
light of precedent, reason, and policy."[29] When an
administrative decision raises an issue of "statutory
interpretation involving legislative intent rather than
agency expertise, we review that question independently,
applying the substitution-of-judgment
standard"[30] and adopting "the rule of law that
is most persuasive in light of precedent, reason, and
policy."[31]"However, even under the independent
judgment standard [we have] noted that the court should give
weight to what the agency has done, especially where the
agency interpretation is longstanding."[32]
"Constitutional interpretation presents questions of law
that are subject to independent review under the de novo
standard."[33]
IV.
DISCUSSION
A.
The Joneses Are Not Eligible For 2014 And 2015 PFDs Based On
The Plain Language Of AS 43.23.008(d).
The
Joneses raise what seems to be a statutory interpretation
argument and assert that we should interpret the PFD statutes
and regulations "in the light most favorable" to
them. They do not dispute that Gwalthney-Jones's
eligibility depends on Jones's, but they argue that Jones
is entitled to 2014 and 2015 PFDs because the legislative
intent behind the 2013 statute "was to assist
Alaska's career military personnel in proving their
intent to remain Alaskans." The Department responds that
the Joneses are ineligible for 2014 and 2015 PFDs under the
plain language of amended AS 43.23.008.
We have
said that "[t]he objective of statutory construction is
to give effect to the intent of the legislature, with due
regard for the meaning that the statutory language conveys to
others."[34] We therefore read "unambiguous
statutory language" according to "its ordinary and
common meaning" but "look to legislative history as
a guide to construing a statute's
words."[35] We apply "a sliding scale approach
to statutory interpretation, in which 'the plainer the
statutory language is, the more convincing the evidence of
contrary legislative purpose or intent must be.'
"[36]
The
text of AS 43.23.008(d) reads:
After an individual has been absent from the state for more
than 180 days in each of the five preceding qualifying years,
the department shall presume that the individual is no
longer a state resident. The individual may rebut this
presumption by providing clear and convincing evidence to the
department that
(1) the individual was physically present in the state for at
least 30 cumulative days during the past five years;
and
(2) the individual is a state resident as defined in AS
43.23.295.[37]
The
text is clear: an allowably absent individual must be
physically present in the state for 30 days in the preceding
five qualifying years to be eligible for a PFD.[38] There is no
ambiguity about this requirement.
Because
the statute is plain and unambiguous, our sliding scale
approach places a high burden on the Joneses to show contrary
legislative intent to advance a different
meaning.[39] The Joneses seem to contend that the
2013 amendments' legislative history supports reading an
"unavoidable circumstances" exception into the
current statute. They imply that this exception would allow
them to qualify for 2014 and 2015 PFDs, just as they did
under the Division's pre-2013 regulation.[40]
The
legislative history does not support the Joneses'
proposed reading of the statute. As part of its 2013
amendments to the PFD statutes, the legislature repealed
former AS 43.23.008(c), which had established a cutoff from
PFDs after ten years of absences:
An otherwise eligible individual who has been eligible for
the immediately preceding 10 dividends despite being absent
from the state for more than 180 days in each of the related
10 qualifying years is only eligible for the current year
dividend if the individual was absent 180 days or less during
the qualifying year.[41]
The
legislature repealed this ten-year cutoff shortly after we
upheld its constitutionality in Ross v. State, Department
of Revenue.[42] During a hearing on the proposed repeal,
the bill's sponsor testified that removing the ten-year
cutoff would allow individuals to "pursue a military
career and continue to receive" a PFD.[43] But because
the State could not "single out a specific class of
people [such as career military members] to get... one
benefit or another," the sponsor said the proposed law
would verify PFD applicants' "intent to return...
after an allowable absence" by requiring them to rebut a
presumption of nonresidence after five years'
absence.[44] And by codifying parts of existing
regulations into statute, the bill would give "more
specific direction to [ALJs]."[45] The Joneses contend that
these statements and other hearing testimony demonstrate a
legislative intent contrary to the plain text of AS
43.23.008(d) as codified.
The
Joneses' argument ignores that the legislature was aware
of and chose to omit the previous regulation's
"unavoidable circumstances" exception to the 3 0
days/5 years rule.[46] One goal of the 2013 amendments to the
PFD statutes was clearly to enable military members to keep
receiving PFDs during allowable absences. But the
sponsor's statements suggest that the legislature was
also concerned with equal protection, providing clear
direction to ALJs in PFD appeals, and ensuring the
State's ability to limit PFD eligibility after long
periods of absence. The legislative history indicates a
balanced consideration of these concerns. As adopted, the 30
days/5 years rule imposes much less onerous demands than the
ten-year rule, while still placing limits on allowable
absences and providing clear guidance to ALJs.[47] Thus, the
legislative history does not support the Joneses'
proposed reading of the 30 days/5 years provision as a
flexible rather than bright-line rule. The Department
properly denied the Joneses' 2014 PFD applications on
this ground.
The
Joneses argue that there is also some statutory ambiguity as
to their residency status for the 2015 PFDs. They assert that
following the 2014 PFD proceedings, it was unclear
"where [they] fell in the taxonomy of resident,
nonresident, or PFD-ineligible resident." But as the ALJ
noted, the statute clearly establishes the presumption that
Jones was not a resident for PFD purposes if he could not
meet both the 30 days/5 years rule and the intent-to-remain
element; meeting only the intent-to-remain element was
insufficient to rebut the presumption.[48]
The
Joneses seem to claim that because of their ties to Alaska,
they counted as Alaska residents for PFD purposes and should
have had an opportunity to rebut the nonresidence presumption
for 2015. But this argument ignores that the legislature is
free to impose different residency requirements in different
contexts, [49] and that intent to remain is a necessary
but not sufficient condition for PFD
eligibility.[50] Under AS 43.23.008(d), once the
Joneses' residency was severed by the 2014 PFD Decision,
they were no longer residents for PFD purposes;
under AS 43.23.005(a), they were therefore not eligible for
PFDs regardless of whether they could establish residency for
other purposes.[51] They had to reestablish residency for
"the entire qualifying year" in order to become
eligible again.[52] But they did not return until November
29, 2014-too late to be eligible for 2015 dividends. The
Department correctly interpreted and applied the statute in
denying their 2015 applications.
B.
Alaska Statute 43.23.008(d) Does Not Create An Irrebuttable
Presumption Of Nonresidence That Violates Due
Process.
The
Joneses argue that AS 43.23.008(d) denies them due process
under the Fourteenth Amendment because it creates an
irrebuttable presumption of nonresidence. The Department
counters that the statute, rather than creating an invalid
irrebuttable presumption, establishes "merely... a
reasonable, easily administered bright-line rule."
The
Joneses rely on the 1973 United States Supreme Court case
Vlandis v. Kline[53] to argue that AS
43.23.008(d)(1) is unconstitutional. Vlandis dealt
with a Connecticut law that charged higher tuition at its
state university system for nonresident students than for
residents.[54] The statute defined residency for
tuition purposes either by a student's legal address
during the year prior to his or her application, if the
student was unmarried, or by legal address at the time of
application if the student was married.[55]This
determination was "permanent and irrebuttable for the
whole time that [a] student remain[ed] at the
university"; a student could not apply as a nonresident,
establish residency while enrolled, and then pay resident
tuition.[56]
The
Supreme Court invalidated the law, rejecting
Connecticut's proffered justifications for its residency
classifications.[57] The Supreme Court held that the
permanent irrebuttable presumption of nonresidence violated
due process "because it provide[d] no opportunity for
students who applied from out of [s]tate to demonstrate that
they have become bona fide Connecticut
residents."[58] But the Court noted that its decision
was not meant to deny states the right to impose a
"reasonable durational residency requirement" as
one element of bona fide residence, provided that students
could meet this requirement while they were still
students.[59]
Unlike
the statute in Vlandis, AS 43.23.008(d) explicitly
provides a way to rebut the presumption of nonresidence: a
PFD applicant can do so by meeting both the 30 days/5 years
requirement and the intent-to-remain
requirement.[60] The Joneses argue that it nevertheless
"applies a permanent and irrebuttable presumption of
nonresidency to those bona fide Alaska residents" who
both were absent for more than 180 days in each of the five
preceding years and are unable to fulfill the 30 days/5 years
rule. The Department responds that AS 43.23.008(d)'s
presumption of nonresidence is not permanent.
We
agree with the Department. Unlike the students in
Vlandis, the Joneses' eligibility for future
PFDs is not permanently determined. Each year, they, like
other Alaskans, can apply for a PFD; with each application,
their eligibility, like that of all Alaskans, is determined
anew.[61] Nothing prohibits the State from
imposing reasonable residency requirements on individuals
seeking to establish bona fide residence.[62] The Supreme
Court in Vlandis specifically distinguished
Connecticut's statute from a Minnesota law it had
previously upheld, which allowed students to qualify for
state-resident tuition after being "a bona fide
domiciliary of the State for at least a
year."[63] The PFD statutes are similar to the
Minnesota law: rather than leaving the Joneses "no
opportunity ... to demonstrate that they have become bona
fide [Alaska] residents, "[64]the statutes allow them to
regain eligibility after one year.[65] The Joneses have done
just that, reestablishing residency for the 2015 qualifying
year and receiving 2016 PFDs. Because AS 43.23.OO8(d)'s
presumption of nonresidence does not permanently bar
applicants from receiving PFDs, it does not create an invalid
irrebuttable presumption and does not violate due process.
C.
Alaska Statute 43.23.008(d) Does Not Violate The Right To
Travel Under The Privileges And Immunities Clause.
The
Joneses next argue that AS 43.23.008(d) impermissibly
restricts their constitutional right to travel as protected
by the Fourteenth Amendment's privileges and immunities
clause. Citing Saenz v. Roe[66] and Heller v. State,
Department of Revenue[67]they contend that AS
43.23.008(d) should be subject to strict scrutiny and that it
imposes an unconstitutional durational residency requirement.
The Department argues that rational basis review applies
under Heller[68] and that AS 43.23.008(d) is valid
because it directly advances the legitimate state interests
of ensuring only bona fide Alaska residents receive PFD
payments and preventing fraud.
Saenz
dealt with a California statute that capped welfare benefits
for any family that had resided in the state for less than 12
months at the amount payable by the family's previous
state of residence.[69] The Supreme Court found that this
implicated the right to travel - specifically, the right of
"travelers who elect to become permanent residents [of a
state]... to be treated like other citizens of that
[s]tate."[70] The Court held that heightened scrutiny
applied, rejected California's "entirely fiscal
justification" for the durational classification, and
invalidated the statute on the ground that the Fourteenth
Amendment "does not allow for[] degrees of citizenship
based on length of residence."[71]
But in
Heller we distinguished the PFD program from the
welfare benefits at stake in Saenz.[72]
Heller involved a constitutional challenge to
subsection (b) of AS 43.23.008, which requires PFD applicants
to reside in the state for six consecutive months before they
can claim an allowable absence.[73] Like the Joneses with the
30 days/5 years rule, Heller characterized the six-month rule
as an impermissible durational residency requirement
infringing on his right to travel.[74] But we noted that
"not all residency requirements are constitutionally
infirm."[75] The constitutionality of a residency
requirement turns on its purpose - that is, whether it
"was designed to establish the bona fides of a
person's intent to remain in the
state."[76] Thus, requirements aimed at
distinguishing residents from nonresidents will more likely
pass constitutional muster than those aimed at distinguishing
new residents from established ones.[77]
We held
that the six-month requirement in Heller was a bona
fide residency requirement.[78] It aims to prevent abuse of
the PFD program by people who do not intend to stay in Alaska
but who may be in the state for just long enough to establish
residency.[79] And while Saenz might seem to
subject all durational residency requirements to heightened
scrutiny, the Supreme Court in fact "carefully
distinguished cases... where the challenged statute is
designed to verify bona fide residency."[80]Saenz did not disturb the validity of ...