Ross v. State, Department of Revenue, 051311 AKPFD, 3AN-10-7051 CI

Docket Nº:3AN-10-7051 CI
Opinion Judge:ANDREW GUIDI Superior Court Judge
Party Name:BRIAN A. ROSS, and A., M. and E. ROSS (minor children), Appellants, v. STATE OF ALASKA, DEPARTMENT OF REVENUE, Appellee.
Case Date:May 13, 2011
Court:Superior Court of Alaska
 
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BRIAN A. ROSS, and A., M. and E. ROSS (minor children), Appellants,

v.

STATE OF ALASKA, DEPARTMENT OF REVENUE, Appellee.

No. 3AN-10-7051 CI

Superior Court of Alaska, Third Judicial District, Anchorage

May 13, 2011

ORDER ON APPEAL

ANDREW GUIDI Superior Court Judge

Lieutenant Colonel Brian Ross, appellant, applied for a 2009 Permanent Fund Dividend ("PFD"). He also sponsored the applications for his three children, A., M. and E. The PFD Division ("Division") denied Lt. Col. Ross' application pursuant to AS 43.23.008(c), and subsequently denied the applications of his minor children because they found Lt. Col Ross to not be an eligible sponsor. Lt. Col. Ross filed an informal appeal of the State's denial of his dividend and his children's dividend on September 10, 2009. After a dividend technician upheld the State's eligibility determination, Ross requested a formal hearing for all denials on December 26, 2010. The Alaska Office Of Administrative Hearings held a formal hearing on February 16, 2010. Administrative Law Judge Jeffrey Friedman upheld the denial of the Ross' dividends. The Commissioner of Revenue affirmed the ruling on April 1, 2010. Lt. Col. Ross appeals the Commission's decision and challenges the constitutionality of AS 43.23.008.

I. Factual Background

Lieutenant Colonel Brian Ross was born and raised in Alaska. After graduation from high school in Anchorage, he left the state in 1990 to attend the United States Naval Academy. Since graduating from the Naval Academy, Lt. Col. Ross actively serves in the United States Marine Corps. He completed two tours of combat duty in Iraq and teaches American Military History at his alma mater. Lt. Col. Ross has not lived in Alaska since his graduation.

In 1996, the State instructed Ross to "provide documentation that demonstrates to the department's satisfaction an intent at all times during your absence to return to Alaska and remain permanently in Alaska."1 At that time, Ross demonstrated that he maintained his legal residence in Alaska, possessed an Alaska's driver license, voted in Alaska elections, registered two vehicles in Alaska, and purchased resident hunting and fishing licenses during his return to trips to Alaska while on leave. Ross explained that he could not be transferred to Alaska as an active duty U.S. Marine officer because there is not a Marine Corps base in Alaska. From 1990 to 2008, Brian spent a total of 354 days in Alaska. He received a dividend from 1982 until 2009.

The State denied Lt. Col. Ross a permanent fund dividend in 2009, determining Ross was ineligible because he was absent from Alaska more than 180 days in qualifying year 2008. Because Lt. Col. Ross's minor children did not have an eligible sponsor, the State also determined the Ross children ineligible. Lt. Col. Ross qualified for the previous ten dividends under the military allowable absence.2 However, in 1998 the Alaska State Legislature amended the eligibility requirements for the dividend. The amended law provides that an otherwise eligible individual who has been eligible for the preceding 10 dividends despite being absent from the state for more than 180 days in each of those years is only eligible for the current year dividend if the individual was absent 180 days or less during the qualifying year.3 The law took effect January 1, 1999 and was codified in AS 43.23.008, making the 2009 PFD application period the first in which the ten year rule would be applied. In his decision affirming the denial of the Ross' dividends, ALJ Friedman stated that Lt. Col. Ross continues to be a resident of Alaska and "there is no question that he does intend to return to and remain indefinitely in Alaska when he retires."4

II. Standard of Review

The Court applies its independent judgment to administrative determinations.5 Ross, however, does not dispute any of the facts of the case in the administrative review of his application. Instead, Ross challenges the constitutionality of the statute governing permanent fund dividend eligibility requirements. The Court applies "the substitution of judgment standard to issues of law not involving agency expertise, such as statutory interpretation and constitutional claims."6

III. Legal Argument

Alaska Statute 43.23.095(7) defines "state resident" for PFD purposes as "an individual who is physically present in the state with the intent to remain indefinitely…or, if the individual is not physically present in the state, intends to return to the state and remain indefinitely in the state." An individual remains eligible for the PFD if he is a resident and is absent only for the reasons excused by the Legislature in AS 43.23.008. The list of allowable absences includes:

(1) receiving secondary or postsecondary education on a fulltime basis;

(3) serving on active duty as a member of the armed forces of the United States or accompanying, as that individual's spouse, minor dependent, or disabled dependent, an individual who is

(A) serving on active duty as a member of the armed forces of the United States; and

(B) eligible for a current year dividend; …

(9)serving as a member of the United States Congress;

(10) serving on the staff of a member from this state of the United States Congress;

AS 43.23.008(a). In 1998, the Legislature amended the allowable absences to add a limitation to the number of dividends an absent individual could receive. The amendment (hereby referred to as the "ten-year rule") was effective January 1, 1999 and first made applicable to the 2009 PFD. The ten-year rule, codified in AS 43.23.008(c) provides:

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 for 180 days or less during the qualifying year. This subsection does not apply to an absence under (a)(9) [serving as a member of Congress] or (10) [serving on the staff...

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