K. A. v. State, Department of Revenue, Permanent Fund Dividend Division, 022211 AKPFD, 3KN-10-44 CI

Docket Nº:3KN-10-44 CI
Opinion Judge:PETER G. ASHMAN Superior Court Judge pro tem
Case Date:February 22, 2011
Court:Superior Court of Alaska

K. A. and A. A., Plaintiffs,



No. 3KN-10-44 CI

Superior Court of Alaska, Third Judicial District, Kenai

February 22, 2011


PETER G. ASHMAN Superior Court Judge pro tem

K. and A. A. appeal the decision of the State of Alaska Department of Revenue ("Department") denying K. A. a permanent fund dividend ("PFD") for the 2008 and 2009 application years, and denying A. A. a PFD for the 2009 application year. For the reasons below, the Court REVERSES the Department's finding that K. and A. are ineligible to receive a PFD because they have not established the intent to remain indefinitely in Alaska.


K. A., a minor child, first applied to the Department for a PFD in 2008. K. is a United States citizen born in California; her parents, who have both legal and physical custody of K., are of Canadian and British citizenship. B. A., K.'s father, entered on a TN visa for professional workers and J. A., her mother, accompanied him on a related TD visa.1 Knowing he was ineligible for a PFD, Mr. A. executed a limited power of attorney to attorney Kenneth Florence so Mr. Florence could act as K.'s eligible sponsor for the PFD application. Mr. Florence timely applied on behalf of K. for the PFD. K. was denied a PFD because she lacked a proper sponsor and she did not meet the residence requirement to be eligible for the PFD. K. sought a ruling reviewing her denial.

K.'s younger sister A., a United States citizen born in Alaska, joined K.'s appeal after both children were denied PFDs for the 2009 application year. The applications were identical in form to K.'s 2008 application; attorney Mark Osterman was given the same limited power of attorney by Mr. A. that Mr. A. gave Mr. Florence to apply for K. in 2008. The administrative court consolidated both cases based on K.'s appeal to the Superior Court. In a final ruling, the administrative court ruled that a licensed attorney with a limited power of attorney was a proper sponsor under these circumstances. The court nevertheless denied PFDs to the children, finding them unable to meet the eligibility requirements because their parents lacked sufficient intent to reside indefinitely in Alaska for purposes of receiving a PFD. This appeal followed.


There are no disputed questions of fact in this case. Questions of statutory and regulatory interpretation are reviewed under the independent judgment standard. This standard is applied where the questions of law presented do not involve agency expertise or where the agency's specialized knowledge and experience would not be particularly probative as to the meaning of the statute.2 Application of this standard permits the reviewing court to substitute its own judgment for that of the agency, even if the agency's decision had a reasonable basis in law.3 The court reviews the interpretation of statutes de novo and adopts the rules of law that best reflect precedent, reason and policy.4

K. and A. also argue the Department's decision implicates the equal protection clauses of the United States and Alaska constitutions, and the Supremacy Clause of the United States Constitution. The reviewing court applies its independent judgment to questions of constitutional law, reviewing constitutional issues de novo.5


The Department conceded at oral argument that the attorney sponsoring the K. and A. was an eligible sponsor for the children. Therefore, the only remaining issue is the children's eligibility. K. and A. contend that they are eligible to form the intent to remain indefinitely in Alaska and also argue that to find them ineligible violates the equal protection clauses of the United States and Alaska constitutions and the supremacy clause of the United States Constitution. Each of these arguments will be addressed in turn.

I. The Statutory Residency and "Indefinite Intent" Requirement

To be eligible for a PFD, Alaska law requires that an applicant be a resident of the state of Alaska6. Alaska residency requires that the applicant be physically present in Alaska with the intent to remain indefinitely in Alaska and to make a home in Alaska.7The Department denied PFDs to K. and A., finding that the children did not meet all eligibility requirements as they were not able to form an intent to remain indefinitely in Alaska. In the 2008 denial of K.'s PFD, the department relied heavily on the Andrade decision as dispositive of the issue of whether K. and A. could form an intent to remain indefinitely.8 K. and A. argue that to base an evaluation of the children's intent entirely on their parents' immigration status effectively imputes a legal disability onto the children, rendering them unable to receive the PFD although they are United States citizens who have never left Alaska.

To receive a PFD, the applicant has the burden of proving both physical presence and the intent to remain indefinitely in Alaska; both requirements must be met before a PFD can be awarded.9 K. and A. have proven physical presence; all that is at issue is the requirement of an intent to remain indefinitely in Alaska. Generally a minor's intent to create, keep or abandon a residence follows the intention of the child's parents or legal guardians.10 The minority of the child "leads to the conclusion that '. . . where intention or purpose is relevant . . . the intention or purpose which has to be taken into account is that of the person or persons entitled to fix the place of the child's residence.'"11 Since the applicants are both minors, Mr. and Ms. A.' intent to remain in Alaska is relevant to the determination of the minors' intent as they are the persons with legal and physical custody of the children. Because of their immigration status, Mr. and Ms. A. cannot establish their intent to remain and are ineligible to apply for PFDs.12 Mr. A. testified at the administrative hearing that in the event Mr. and Ms. A.' visas were not renewed, they would leave Alaska and the children would accompany them.

The facts of this case present an issue of first impression in Alaska: whether a minor whose parents are statutorily barred from intending to remain indefinitely in Alaska can nevertheless intend to remain indefinitely for purposes of PFD eligibility. Case law provides guidance on the eligibility of lawfully admitted aliens for a permanent fund dividend. Examination of immigration status is rationally related to the determination of the intent to remain a resident because immigration laws necessarily affect one's ability to effectuate such intent.13 In Andrade14, the court examined the "intent to remain" issue as it related to immigration status, finding that "not all aliens are able to form that intent because of the restrictions of their immigrant status; depending on an alien's immigrant status, federal immigration law can place restrictions on an alien's ability to intend to remain." The court found that some categories of lawfully admitted aliens could not form the required intent to remain in Alaska without jeopardizing their federal legal alien status.15

Mr. and Ms. A. fall into the category of lawfully admitted aliens who are ineligible for the PFD.16 Aliens may not seek PFDs if their admission to the United States is expressly conditioned on an intent not to abandon a foreign residence or (by implication) on an intent not to seek domicile in the United States.17 Andrade notes such conditions are not required for all nonimmigrant statuses.18 Mr. A.' status is TN and Ms. A.' is TD, which are expressly classified by federal regulations as temporary nonimmigrant statuses.19 Temporary nonimmigrant status can only be granted "without the intent to establish permanent residence, " and the alien "must satisfy the inspecting immigration officer that the proposed stay is temporary . . . [having] a reasonable, finite end that does not equate to permanent residence."20 A PFD cannot be granted to those persons who keep their residence and benefits in another country as such persons would not be able to legally establish an Alaska residency.21

This case differs factually from past decisions examining the "intent to remain" issue because Mr. and Ms. A. did not sponsor K. and A.; in Andrade, alien parents of citizen children were also the children's sponsors.22 This factual difference is important here because the Andrade court never reached the issue of the citizen children's eligibility, but only the issue of the eligibility of their parents; the court found the lawful permanent resident parents were eligible sponsors and once the parents were found eligible, the children were found eligible.23

Given the fact that the children are United States citizens, and have an eligible sponsor, the court finds that the immigration status of Mr. and Ms. A. is merely one factor to be weighed in the determination of whether K. and A. have formed the intent to remain indefinitely. When determining residency for PFD purposes, the Department must consider the guidelines established by 15 AAC 23.143:

(a) An individual's intent to establish residency, remain indefinitely in Alaska, or to return to Alaska and remain indefinitely is demonstrated through the establishment and maintenance of customary ties indicative of Alaska residency and the absence of those ties elsewhere. Acts that are required by law or contract or are routinely performed by temporary residents of Alaska are not by themselves evidence of residency. In evaluating whether an individual claiming Alaska residency has demonstrated an intent to remain indefinitely in Alaska, the department will consider whether or not an individual has:

(1) taken steps to establish Alaska residency and...

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