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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Eldridge v. State, Dept. of Revenue (9/24/99) sp-5182

Eldridge v. State, Dept. of Revenue (9/24/99) sp-5182

     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.


ELDRIDGE, husband and wife,   )
and for their children,       )
and BRYANT ELDRIDGE,          )
                              )    Supreme Court No. S-8697
             Appellants,      )
                              )    Superior Court No.
     v.                       )    4FA-97-40 CI
OF REVENUE,                   )    O P I N I O N
             Appellee.        )    [No. 5182 - September 24, 1999]

          Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
                  Niesje J. Steinkruger, Judge.

          Appearances: Douglas L. Blankenship,
Fairbanks, for Appellants.  Linda T. McKinney, Assistant Attorney
General, Fairbanks, and Bruce M. Botelho, Attorney General, Juneau,
for Appellee.

          Before: Matthews, Chief Justice, Eastaugh,
          Fabe, Bryner, and Carpeneti, Justices.

          CARPENETI, Justice.

          The Department of Revenue denied Steve and Lisa Eldridge
and their four children 1995 Permanent Fund dividends (PFDs)
because the family was absent from the state for 328 days during
1994.  The superior court upheld this denial.  We affirm.
          Steve and Lisa Eldridge have both lived in Alaska for
many years. They have owned their home in North Pole since 1986.
All four of their minor children were born in Alaska.  Steve, a
journeyman plumber, has worked for Slayden Plumbing in Fairbanks
since 1983.  Steve was selected to supervise two contracts awarded
to Slayden Plumbing to help construct prefabricated homes for
various Alaska villages; these homes were to be constructed in
Anacortes, Washington.  In January 1994, the Eldridges temporarily
moved to Anacortes for a total period of 328 days.  They did not
rent out their North Pole home.  Steve and Lisa maintained their
Alaska driver's licences, their vehicles remained registered in
Alaska, and they did not pay Washington taxes.  A North Pole
neighbor looked after the family pet.  In short, the Eldridges were
Alaskans living in Washington.
          In March 1995, the Eldridges applied for their 1994 PFDs. 
Unfortunately for the Eldridges, they were absent from Alaska for
most of 1994, as discussed above.  Since this absence exceeded 180
days and was not of the type specifically allowed under either AS
43.23.095(8)(A)-(G) [Fn. 1] or 15 AAC 23.163(c), [Fn. 2] the Alaska
Department of Revenue declared the Eldridges ineligible to receive
1995 PFDs. 
          The Eldridges appealed and requested an informal
administrative hearing.  The hearing officer upheld the
Department's decision. 
          Next, the Eldridges requested a formal administrative
hearing.  The request for the hearing was denied and a summary
adjudication was issued denying their claim. 
          The Eldridges appealed this decision to the superior
court.  They argued, among other things, that the "allowable
absences"provision violates the equal protection clause of the
Alaska Constitution because it treats Alaskans employed by Alaska
companies working outside the state differently than state
employees working outside the state.   The superior court held
          The right to a permanent fund dividend is
subject only to minimal scrutiny, and therefore the challenged
exclusion must be designed to achieve a legitimate governmental
objective and must bear a fair and substantial relationship to the
statute's objectives.  This court finds that the distinction drawn
between state employees and private employees bears a fair and
substantial relationship to the permanent fund dividend program's
legitimate objectives. 

          This appeal followed.
     A.   Standard of Review
          There are no disputed factual findings. We review
administrative determinations of law independently and substitute
our judgment for that of the agency. [Fn. 3]
     B.   The Eldridges Were Not Denied Equal Protection.
          The Eldridges filed their appeal to this court on
September 11, 1998.  On February 11, 1999 we issued our decision in
Church v. State, in which we held that neither AS 43.23.095(8) nor
15 AAC 23.163(c) violates the equal protection clause of the Alaska
Constitution. [Fn. 4]  Church largely controls this case.
          In Church, we held that (1) PFDs are an economic interest
and, accordingly, PFD eligibility regulations are subject to
minimum scrutiny review to determine if they violate the equal
protection clause of the Alaska Constitution; [Fn. 5] and (2) AS
43.23.095(8) and 15 AAC 23.163(c) survive minimum scrutiny review
because they bear a fair and substantial relationship to a
legitimate government objective. [Fn. 6]  
          While Church did not specifically address the Eldridges'
argument that 15 AAC 23.163(c) impermissibly discriminates between
Alaskans who work out of state for the State of Alaska and those
who work out of state for an Alaskan private employer, we find that
this private/public employment distinction does not violate the
Eldridges' equal protection rights.
          We are sympathetic to the Eldridges' particular
circumstances; there is strong evidence that they intended to
return to Alaska after the Anacortes assignment.  However, under a
minimum scrutiny analysis, we do not determine if a regulation is
perfectly fair to every individual to whom it is applied, but
rather, as previously noted, we must decide only if the regulation
bears a fair and substantial relationship to a legitimate
government objective. [Fn. 7]  The regulation here precludes
receipt of a dividend by the Eldridges, but would have allowed it
if Steve Eldridge had been employed by the State.  While the
regulation as applied under the facts of this case may seem harsh,
there is a fair and substantial relationship generally between the
regulation and the State's legitimate interests in promoting Alaska
residency, preventing fraud in the distribution of PFDs, [Fn. 8]
and simplifying its adjudication procedures.  There is not a
perfect fit between means and ends, as this case probably
demonstrates, but there need not be a perfect fit for the
regulation to pass the relatively low constitutional test applied
when the individual's interest is economic. [Fn. 9]
          The Eldridges further argue that Church should be
modified to allow "all absent applicants an opportunity to prove
Alaska residency intent." The Eldridges correctly point out that
the challenged statute and regulation give different treatment to
different classes of absent applicants by allowing some applicants,
but not all, an opportunity to prove their intent to remain Alaska
residents and thus be eligible to receive a PFD.  However, the
Eldridges erroneously argue that Church did not address this claim
of disparate treatment. 
          We held in Church that the legitimate governmental
objective of the challenged statutes was to ensure that only
permanent residents receive a PFD. [Fn. 10]  We further held:
"Cutting off discretionary review of applicants who do not fit into
an excusable absence category and who have been outside the state
more than 180 days in a year is a reasonable and efficient way to
limit PFD eligibility to permanent residents."[Fn. 11]  Since the
Eldridges were absent from Alaska for more than 180 days in 1994
for an "inexcusable"reason, they are not eligible for a 1995 PFD.
          C.   The Eldridges Are Not Public Interest Litigants.  

          The Eldridges also argue that they qualify as public
interest litigants and therefore are not subject to the prevailing
party attorney's fees rule.  To qualify as "public interest
litigants,"they must show, among other things, that they lack "a
sufficient economic incentive to file suit."[Fn. 12]  Since the
PFD for 1995 was $990 [Fn. 13] and there are six family members,
the Eldridges had a sufficient economic incentive to pursue this
litigation.  Accordingly, they cannot be considered public interest
          Because the Eldridges were not denied equal protection
when their application for their 1995 PFD was turned down, and
because they are not public interest litigants, we AFFIRM the
actions of the superior court.                                 


Footnote 1:

     At the time the Department denied the Eldridges their PFDs, AS
43.23.095(8) provided as follows:

          "state resident"means an individual who is
physically present in the state with the intent to remain
permanently 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 permanently in the state under
the requirements of AS 01.10.055, and is absent only for any of the
following reasons: 
               (A) vocational, professional, or other
specific education for which a comparable program was not
reasonably available in the state; 
               (B) secondary or postsecondary education; 
               (C) military service; 
               (D) medical treatment; 
               (E) service in Congress; 
               (F) other reasons which the commissioner
may establish by regulation; or 
               (G) service in the Peace Corps[.]  

Footnote 2:

     At the time of the Eldridges' denial, 15 AAC 23.163 provided
for the following "allowable absences":

               (c) An individual who otherwise
qualifies, but who was not physically present in Alaska for the
entire qualifying year, may be eligible for a dividend if the
individual was absent primarily for one of the following reasons:
               (1) receiving full-time technical
training . . . [;]
               (2) attending, on a full-time basis, an
academic institution, seminar, or other recognized course or
program for continuing professional educational development . . .;
               (3) receiving other special education
               (4) receiving full-time education in any
of the seventh through twelfth grades;
               (5) enrollment and attendance in good
standing as a full-time student at a college, university, or junior
or community college . . .[;]
               (6) serving on active duty as a member of
the armed forces of the United States;
               (7) receiving continuous medical
treatment if the treatment is on the advice of a licensed
               (8) accompanying a minor child who is
absent for medical reasons as listed in (7) of this subsection;
               (9) serving in the United States Congress
as a representative or senator for the State of Alaska;
               (10) serving on the staff of a
representative or senator from Alaska in the United States
               (11) serving as a full-time volunteer
under the Peace Corps Act;
               (12) serving as an employee of the State
of Alaska, including employment in a field office;
               (13) repealed 10/8/94;
               (14) actively participating on a United
States national athletic team . . .[;]
               (15) accompanying an eligible individual
as the minor dependent or disabled dependent of the eligible
individual; or
               (16) any other reason or reasons
consistent with the individual's intent to remain a resident
provided the absence or cumulative absences do not exceed
               (A) 180 days if the individual is not
claiming any of the absences listed in (1) through (15) of this
subsection provided that the individual
               (i) established the individual's
principal home in Alaska before leaving Alaska;
               (ii) has taken no action inconsistent
with an intent to maintain the individual's principal home in
               (iii) has taken no action to establish or
maintain a principal home outside of Alaska; and
               (iv) returned to the individual's
principal home in Alaska at the conclusion of the absence;
               (B) the greater of 120 days, one school
          semester during which the individual was
enrolled, or one school quarter during which the individual was
enrolled, in addition to any absence or cumulative absences under
(1) or (5) of this subsection if the individual is not claiming any
absence under (2)-(4) or (6)-(15) of this subsection; or
               (C) 45 days in addition to any absence or
cumulative absences under (1)-(15) of this subsection.

Footnote 3:

     See Church v. State, 973 P.2d 1125, 1127 (Alaska 1999).

Footnote 4:

     See id. at 1130-31.

Footnote 5:

     See id. at 1130.

Footnote 6:

     See id. at 1130-31.

Footnote 7:

     See State v. Anthony, 810 P.2d 155, 159 (Alaska 1991) ("fair
and substantial relationship test does not require a perfect fit
between a legislative classification and the government objective
it is intended to further"); Wilson v. Municipality of Anchorage,
669 P.2d 569, 572 (Alaska 1983) ("less than perfect fit between the
means and ends will be tolerated"where only economic interests at

Footnote 8:

     There is substantial uncertainty and potential for abuse
inherent in cases where employees are transferred by private
employers to positions outside Alaska.  These problems do not
exist, at least on the same scale, with regard to state employees.

Footnote 9:

     See id. 

Footnote 10:

     See Church v. State, 973 P.2d 1130.

Footnote 11:

     Id. at 1131.

Footnote 12:

     Anchorage Daily News v. Anchorage Sch. Dist., 803 P.2d 402,
404 (Alaska 1990).

Footnote 13:

     See Alaska Department of Revenue, Yearly Dividend Amounts
(last modified May 6, 1999)