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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Ross v. State, Dept. of Revenue (9/28/2012) sp-6712

Ross v. State, Dept. of Revenue (9/28/2012) sp-6712

        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 

        corrections@appellate.courts.state.ak.us. 



                THE SUPREME COURT OF THE STATE OF ALASKA 



BRIAN A. ROSS, and                             ) 

ANDREW, MATTHEW, and                           )       Supreme Court No. S-14362 

EMILY ROSS (minor children),                   ) 

                                               )       Superior Court No. 3AN-10-07051 CI 

                        Appellants,            ) 

                                               )       O P I N I O N 

        v.                                     ) 

                                               )       No. 6712 - September 28, 2012 

STATE OF ALASKA,                               ) 

DEPARTMENT OF REVENUE,                         )
 

                                               )
 

                        Appellee.              )
 

                                               )
 



                Appeal from the Superior Court of the State of Alaska,  Third 

                Judicial District, Anchorage, Andrew Guidi, Judge. 



                Appearances: Wayne Anthony Ross,   Ross & Miner, P.C., 

                Anchorage,   for   Appellants.     Michael   J.   Barber,   Assistant 

                Attorney General, and Richard Svobodny, Acting Attorney 

                General, Juneau, for Appellee. 



                Before:     Carpeneti,     Chief    Justice,  Fabe,    Winfree,    and 

                Stowers, Justices. 



                FABE, Justice. 



I.      INTRODUCTION 



                Brian Ross has been absent from the State of Alaska since 1990, first as a 



student at the United States Naval Academy and later as a career Marine Corps officer. 


----------------------- Page 2-----------------------

Despite his absence, Ross maintained Alaska residency and received a permanent fund 



dividend each year. In 1998 the Alaska Legislature amended the dividend qualifications 



to provide that anyone who was allowably absent for ten consecutive years would no 



longer be eligible for dividends. This ten-year rule, however, does not apply to members 



of the United States Congress, their staffs, or the families of either.   In 2009 Ross and his 



children applied for dividends but were denied because Ross had then been absent for 



ten consecutive years from the enactment of the ten-year rule.   They appealed the denial, 



but the denial was upheld at an informal agency appeal, a formal agency appeal, and by 



the superior court. 



               Ross now appeals to this court, arguing that the ten-year rule violates his 



equal protection and substantive due process rights.           But because the ten-year rule and 



congressional exception are fairly and substantially related to the legitimate state interests 



of limiting dividends to permanent Alaska residents and preventing fraud, and because 



the   ten-year   rule  is  rationally  related  to  the  legitimate   state  purpose   of  reducing 



administrative burdens, we affirm the superior court as to these claims. Ross also argues 



that the ten-year rule is unconstitutionally retroactive. But because the rule does not give 



his pre-enactment conduct a different legal effect, we affirm the superior court on this 



point as well. 



II.     FACTS AND PROCEEDINGS 



               Brian Ross was born and raised in Alaska.            In 1990 he left the state to 



attend the United States Naval Academy.            Following his graduation from the Naval 



Academy, Ross pursued a career in the Marine Corps that has prevented him from living 



in the State of Alaska for the past 18 years.       Despite his absence, Ross has maintained 



his Alaska residency. 



                Alaska Statute 43.23.008 provides that absent individuals may still remain 



eligible for the dividend if their absences are for secondary education or active duty in 



                                                 -2-                                          6712
 


----------------------- Page 3-----------------------

the   military,   among   other   reasons.    Accordingly,   Ross   received   a   permanent   fund 



dividend every year since the first one was issued in 1982.  Starting in 1996, after he had 



been    absent    five  years,   Ross   was   required    to  provide    documentation       every   year 



demonstrating to the Department of Revenue's satisfaction that at all times during his 



absence he had intended to return to Alaska to remain permanently.  From 1996 to 2008, 



he did this every year, detailing his nearly annual visits to Alaska, his ownership of real 



property in Alaska, his maintenance of Alaska residency, his titling of vehicles in Alaska, 



his consistent voting in Alaska elections, his purchase of resident hunting and fishing 



licenses, and his familial ties to Alaska. 



                In 1998 the Alaska Legislature amended AS 43.23.008 to provide that "[a]n 



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."1                The revised statute, which 



became effective in 1999, created a ten-year rule whereby, starting in 2009, individuals 



who had been allowably absent from the state for ten straight years would no longer 



receive dividends until they returned to the state. 



                Because of the rule, the State denied Ross a dividend for the first time 



in 2009.    Because Ross was not eligible to receive a dividend, his three minor children 

were   also   denied   dividends.2    On   behalf   of   himself   and   his   children,   Ross   filed   an 



        1       AS 43.23.008(c). 



        2       See 15 Alaska Administrative Code (AAC) 23.113(b)(1) and (e) (2012): 



                (b)     A child who otherwise qualifies is eligible to receive 

                a dividend if the child is 



                        (1)	    in the lawful and physical custody of a sponsor 

                                                                                         (continued...) 



                                                   -3-	                                            6712
 


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

informal agency appeal, arguing that the ten-year rule did not apply to him, that he was 



a deserving Alaska resident, and that the ten-year rule required him to forgo either his 



dividend or his career.  The appeal was denied.   A subsequent formal agency appeal was 



also denied.   He then appealed in the superior court.   In the superior court Ross argued: 



(1) that the ten-year rule violated the equal protection clauses of the Alaska and federal 



constitutions because it applied to military members but not to members of Congress and 



their staffs and because it unconstitutionally distinguished between residents absent for 



                                           3 

ten years and those who were not;  (2) that the ten-year rule violated Ross's substantive 



due process rights; (3) that the ten-year rule was unconstitutionally retroactive because 



it provided new consequences to a decision - attending the U.S. Naval Academy - that 



        2(...continued) 



                         who      is  eligible   for  a  dividend,     would    have    been 

                         eligible for a dividend had the sponsor filed timely, 

                         was      only     ineligible     due    to    AS     43.23.005(d) 

                          [ineligibility   due   to   conviction   or   incarceration],   or 

                          forfeited    dividends     under    AS    43.23.035(a)      or   (c) 

                          [ineligibility    due    to  fraud   or   aiding    an  ineligible 

                         collection of a dividend], and who is 



                                  (A)     an adult relative in a   full, half, or step 

                                  relationship, or is a legal guardian; 



                 . . . . 



                 (e)     An application for a dividend may be filed on behalf 

                 of a child only by the adult resident through whom the child 

                 claims residency, or by another authorized representative. 



        3        AS 43.23.008(c) ("This subsection does not apply to an absence under 



(a)(9) or (10) of this section [creating allowable absences for members of the United 

States Congress and their staff members] or to an absence under (a)(13) of this section 

[creating allowable absences for spouses and dependents of allowably absent individuals] 

if the absence is to accompany an individual who is absent under (a)(9) or (10) of this 

section."). 



                                                     -4-                                                6712
 


----------------------- Page 5-----------------------

Ross had made   before the rule was created; and (4) that having provided Ross with 



certain   statutory   eligibility   requirements   in   1990,   the   State   was   now   estopped   from 



changing      his  eligibility  requirements.    The    superior   court   rejected   each  of  these 



arguments, upholding the agency's denial of dividends to Ross and his children.  The 



superior   court   subsequently   denied   Ross's   motion   for     reconsideration.    Ross   now 



appeals. 



III.    STANDARD OF REVIEW 



                When the superior court sits as an intermediate appellate court reviewing 

an agency decision, we "do not defer to the superior court's decision."4           "Constitutional 



issues are questions of law subject to independent review."5            Whether estoppel applies 



is a legal question to which we apply our independent judgment.6 



IV.     DISCUSSION 



                On appeal, Ross raises essentially the same four arguments that he did in 



his appeal before the superior court. He also adds a fifth argument that the superior court 



erred by relying on an unpublished memorandum opinion of this court and that its ruling 



should therefore be reversed.        Because none of Ross's arguments merit reversal, we 



affirm the superior court decision upholding the Department of Revenue's denial of 



dividends to Ross and his children. 



        4       Harrod v. State, Dep't of Revenue , 255 P.3d 991, 995 (Alaska 2011). 



        5       Id. (citing Eagle v. State, Dep't of Revenue , 153 P.3d 976, 978 (Alaska 



2007)). 



        6       Hidden Heights Assisted Living, Inc. v. State, Dep't of Health & Soc. Servs., 



Div. of Health Care Servs. , 222 P.3d  258, 268 (Alaska 2009) (citing State, Dep't of 

Commerce & Econ. Dev., Div. of Ins. v. Schnell, 8 P.3d 351, 355 (Alaska 2000)). 



                                                 -5-                                           6712
 


----------------------- Page 6-----------------------

        A.       The Ten-Year Rule Does Not Violate Equal Protection. 



                 Ross first argues that AS 43.23.008(c) violates the equal protection clauses 



of   the   Alaska   and   federal   constitutions   for   two   reasons:    First,   it   unconstitutionally 



distinguishes between residents absent for ten years and those absent for fewer (or not 



at   all);   and   second,   because   it   unconstitutionally   distinguishes   between   members   of 



Congress (and their staffs) and those who are absent for other reasons. 



                 1.      Equal protection standards of review 



                 We     have   heard    state  equal    protection    challenges     to  permanent      fund 



dividend eligibility requirements several times before. Most recently, in Harrod v. State, 



Department of Revenue , we set out the analytical basis for our decisions in this area: 



                         We   have   adopted   a   flexible   "sliding   scale"   test   for 

                 reviewing equal protection claims.  First, we determine what 

                 weight should be afforded the constitutional interest impaired 

                 by the challenged enactment. The nature of this interest is the 

                 most   important   variable   in   fixing   the   appropriate   level   of 

                 review.     Second,      we   examine     the   purposes    served    by   a 

                 challenged      statute.    Depending        on   the  level   of   review 

                 determined, the state may be required to show only that its 

                 objectives were legitimate, at the low end of the continuum, 

                 or,   at   the   high   end   of   the   scale,   that   the   legislation   was 

                 motivated by a compelling state interest. Third, an evaluation 

                 of the state's interest in   the particular means employed   to 

                 further its goals must be undertaken. 



                         We     have    previously    held   that   PFDs   are   not   basic 

                 necessities or a fundamental right.          Instead, a PFD is merely 

                 an    economic      interest   and    therefore    is  entitled   only    to 

                 minimum   protection   under   our   equal   protection   analysis. 

                 Restrictions on economic interests are reviewed at the low 

                 end of the sliding scale.       Our review is therefore limited to 

                 considering whether this regulation was designed to achieve 

                 a legitimate governmental objective and whether it bears a 

                 fair   and    substantial     relationship     to  accomplishing        that 

                 objective.     At   this   level   of   review,   we   do   not   determine 



                                                     -6-                                               6712
 


----------------------- Page 7-----------------------

                whether a regulation is perfectly fair to every individual to 

                whom it is applied.[7] 



                We have similarly applied the lowest level of scrutiny when reviewing 



equal    protection    challenges    to  dividend    eligibility   requirements     under    the  federal 



constitution.    In State, Department of Revenue, Permanent Fund Dividend Division v. 



Cosio, we emphasized that "a dividend is a matter of grace, a governmental 'benefit' 



indistinguishable from other forms of social welfare, which the [U.S. Supreme] Court 



suggested   merits   mere   rational   basis   review.   Thus,   the   State's   dividend   eligibility 

requirement only warrants rational basis review."8            Therefore, the ten-year rule and the 



congressional exception pass federal constitutional muster if they are "rationally related 

to a legitimate state interest."9 



                2.	     The     ten-year     rule   does    not   unconstitutionally        distinguish 

                        between       Alaska    residents    absent    for   ten  years    and   Alaska 

                        residents absent for fewer than ten years. 



                Ross argues that the ten-year rule violates the federal Equal Protection 



Clause   because   it   serves   none   of   the   State's   three   explicit   purposes   in   enacting   the 



permanent fund dividend, as described by the United States Supreme Court in Zobel v. 



Williams: 



                (1) to provide a mechanism for equitable distribution to the 

                people of Alaska of at least a portion of the state's energy 

                wealth derived from the development and production of the 

                natural    resources    belonging     to  them   as  Alaskans;     (2)  to 

                encourage persons to maintain their residence in Alaska and 



        7       255 P.3d 991, 1001 (Alaska 2011) (citations and internal quotation marks 



omitted). 



        8       858   P.2d   621,   627    (Alaska   1993)   (internal   quotation   marks   omitted) 



(quoting Plyler v. Doe , 457 U.S. 202, 221 (1982)). 



        9       City of New Orleans v. Dukes, 427 U.S. 297, 303 (1976). 



                                                   -7-	                                            6712
 


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

                to   reduce    population     turnover    in  the  state;  and    (3)  to 

                encourage      increased    awareness     and   involvement      by   the 

                residents of the state in the management and expenditure of 

                the Alaska permanent fund.[10] 



Ross does not argue that the ten-year rule violates the Equal Protection Clause of the 



Alaska Constitution. 



                As the State points out, "minimal scrutiny under the Alaska Constitution 



is more demanding than rational basis review under the U.S. Constitution"; thus, if the 



rule does not violate Alaska's Equal Protection Clause, it does not violate the federal 

Equal Protection Clause.11        The State proceeds to argue that the ten-year rule does not 



violate   the   Alaska   Equal   Protection   Clause   because   it   "bears   a   fair   and   substantial 



relationship     to  the  legitimate    governmental       objectives"    of  limiting   dividends     to 



permanent Alaska residents and preventing fraud - both of which the State claims are 



corollary to the three interests enumerated in Zobel .           The State also maintains that the 



ten-year rule bears a fair and substantial relationship to the legitimate state interest of 



easing the administrative burden of processing applications, an interest the State argues 



this court has accepted in its previous cases. 



                Ross argues that the United States Supreme Court in Zobel identified the 



legitimate state interests for any classification relating to the dividend:              (1) equitably 



distributing the State's energy wealth to the people of Alaska, (2) encouraging people 



        10      457 U.S. 55, 61 n.7 (1982) (quoting ch. 21,  1(b), SLA 1980). 



        11      See State v. Anthony, 810 P.2d 155, 157 (Alaska 1991) ("Our analysis 



focuses on the Alaska Constitution.  Alaska's equal protection clause is more protective 

of individual rights than the federal equal protection clause.") (internal citations omitted); 

see also Isakson v. Rickey, 550 P.2d 359, 362 n.14 (Alaska 1976) (noting that Alaska's 

equal protection standard raises "the level of the lower tier from virtual abdication to 

genuine judicial inquiry"), abrogated on other grounds by Commercial Fisheries Entry 

Comm'n v. Apokedak, 606 P.2d 1255 (Alaska 1980). 



                                                  -8-                                             6712
 


----------------------- Page 9-----------------------

to maintain residence in Alaska, and (3) encouraging awareness and involvement by 

residents in the fund's management.12          Ross argues that the ten-year rule is not rationally 



related to the first of these because it is patently inequitable to deny the dividend to a 



person who "has honorably served his state and his country" in the Marine Corps, whose 



"hands are immaculate," and who has shown "fifteen years of accumulated proofs of 



residency."    Ross argues that the ten-year rule is not rationally related to the second of 



these because the ten-year rule, by stripping Ross of a financial benefit of residency, 



encourages him to give up his Alaska residency and seek the benefits of residency in the 



state in which he lives. Finally, Ross argues that the ten-year rule is not rationally related 



to the third objective because denying Ross the dividend encourages him to take up 



residency and vote somewhere else. 



                The State proffers three justifications for the ten-year rule.            The first two, 



"[l]imiting PFDs to permanent Alaska residents and preventing fraud in the distribution 



of   PFDs,"   are,   the   State   argues,   "legitimate   governmental   objectives   given   that   the 



purposes of the PFD program are to equitably distribute a portion of the state's mineral 



wealth   to   Alaskans,   to   encourage   people   to   stay   in   Alaska,   and   to   increase   citizen 



involvement in the management of the permanent fund."                 The State relies on Church v. 

State, Department of Revenue for this argument.13               In that case, Church was denied a 



dividend in 1993 because he had spent 274 days in 1992 out of state caring for his dying 

mother,   which   at   the   time   was   not   an   allowable   absence.14  Church   argued   that   the 



        12      Zobel, 457 U.S. at 61 n.7. 



        13      973 P.2d 1125 (Alaska 1999). 



        14      Id. at 1127. 



                                                   -9-                                                6712 


----------------------- Page 10-----------------------

regulations15  delineating allowable absences that denied him a dividend violated equal 



protection because he was not provided the same benefits as those whose absences were 

listed   as   excusable   absences.16     We   rejected   that   claim,   holding   that   "[c]utting   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."17 



                 This case presents a slightly different question than Church, because here 



Ross has been denied a dividend based not on the purpose of his absence, but rather on 



the duration of his absence.        Nonetheless, here, as in Church, cutting off discretionary 



review   of applications   after   a   ten-year   absence   is   a   way   of limiting   the   dividend   to 



permanent residents.  As Ross himself explained in his original agency appeal, the ten- 



year rule 



                 was no doubt intended to prevent an individual who might 

                 move to the State of Alaska, establish residency to qualify for 

                 a dividend, and then at some point, leave the state with no 

                 intention    of  returning,    and   yet   still  attempt   to  collect  a 

                 dividend while in the Lower 48.            The vast majority of US 

                 servicemen      and   women      who    get  stationed    in  Alaska    as 



        15       At the time Church was denied a dividend, AS 43.23.095(8), the statute 



defining allowable absences included seven categories of allowable absences, plus an 

eighth     subpart    "allow[ing]     for  excusable     absences     for   other   reasons    which    the 

[Department of Revenue] commissioner may establish by regulation."  Id. at 1127-28 

(citations     and    internal   quotation     marks     omitted).      Pursuant      to  this   catch-all, 

15 AAC 23.163(c) listed 16 separate categories of allowable absences, none of which 

covered Church. Id. at 1128.  Church was therefore arguing that it was a Department of 

Revenue regulation, and not a statute, that was constitutionally infirm.  Nonetheless, the 

constitutional analysis would be the same for a regulation or a statute. 



        16      Id. at 1130. 



        17      Id. at 1131. 



                                                   -10-                                              6712
 


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

                 members of the US Army and Air Force probably fit into this 

                 category.    The typical individual gets stationed in the State 

                 for   a  3-year   tour   during   which    they   establish    residency, 

                 collect   a   dividend   for   a   few   years,   and   then   get   military 

                 orders to another base or station.         He or she rarely or never 

                 returns     to   the    State,   probably      establishes     residency 

                 somewhere else at some point, and yet still attempts to collect 

                 their   precious   PFD   windfall.     While   the   individual   might 

                 make it past the 5-year absence rules and regulations, the ten 

                 year timeframe as per the statutes is surely made to be the 

                 ultimate disqualifier. 



                 Ross's argument illustrates that a rational person could conclude that the 



ten-year rule furthered the State's interest in preventing fraud and limiting the dividend 



to bona fide Alaska residents.   Even if application of the rule may seem harsh in the case 



of a lifelong Alaskan Marine who, the superior court noted, "strongly demonstrates [his] 



passion for retaining residency in Alaska," as we have observed in past cases, when 



reviewing dividend eligibility requirements under the Alaska Equal Protection Clause, 



"we do not determine whether a regulation 'is perfectly fair to every individual to whom 

it is applied.' "18  "[T]he possible exclusion of one deserving recipient does not make the 



regulation unreasonable."19 



                 The State also proffers a third justification for the law, arguing that "the ten- 



year   rule   helps   ease   the   burden   on   [Department   of   Revenue]   staff   of   determining 



residency and eligibility for each of the more than 600,000 people who apply for a PFD 



each   year."     As   the   State   points   out,   we   have   previously   noted   that   the   State   has   a 



legitimate interest in creating rules that ease the administrative burden of processing 



        18       Harrod  v. State, Dep't of Revenue, 255 P.3d 991, 1001 (Alaska 2011) 



(quoting Eldridge v. State, Dep't of Revenue, 988 P.2d 101, 104 (Alaska 1999)). 



        19       State, Dep't of Revenue, Permanent Fund Dividend Div. v. Bradley, 896 



P.2d 237, 240 (Alaska 1995). 



                                                   -11-                                                 6712 


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

dividend     applications.20    Ross     responds    that  "under   Zobel,    the  State   must   create 



mechanisms for  equitable distribution - not burden-free distribution." (Emphasis in 



original.) 



                But in this case, as in  Church, by eliminating the need for discretionary 



review of dividend applications for those who have been out of the state for ten straight 



years,   the   ten-year   rule   functions   as   an  "efficient   way  to  limit  PFD    eligibility  to 

permanent residents."21 



                3.	     The     congressional      exemption     to  the   ten-year    rule   does   not 

                        violate equal protection. 



                The ten-year rule applies to all otherwise excusably absent residents except 



for those "serving as a member of the United States Congress," "serving on the staff of 



a member from this state of the United States Congress," and accompanying, as a spouse 

or a dependent, a member of Congress or congressional staffer.22               Ross argues that this 



congressional exception, by exempting legislators and   their staffs and families from 



consequences of being absent, violates the equal protection clauses of both the federal 



and Alaska constitutions.       Ross's federal equal protection challenge is again based on 



Zobel. He argues that the congressional exception is not rationally related to a legitimate 



state purpose because:  (1) it is inequitable to "den[y] a PFD to a lifelong Alaskan in 



harm's way" while awarding dividends to members of Congress "who voted to send 



[Ross] to Iraq"; (2) "[g]iving politicians money to remain in the Lower 48 does not 



encourage       them   .  .  .  to  reside   permanently      in  Alaska";     and   (3)   the   alleged 



        20      See Harrod, 255 P.3d at 1001 ("The state processes more than 600,000 



PFD   applications   each   year.     Reducing   the   burden   of   individually   examining   PFD 

applications is a legitimate governmental objective . . . .") (footnote omitted). 



        21      Church, 973 P.2d at 1131. 



        22      AS 43.23.008(a)(9), (10), & (13). 



                                                  -12-	                                           6712
 


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

"[s]kullduggery"   by   which   the   congressional   exception   was   adopted   -   through   a 



technical amendment to the ten-year rule - discourages voters from participating in 



Alaska politics.  Ross recognizes that in Harrod we upheld a rule "allowing people who 



are serving in Congress . . . to establish residency by proof of their employment" rather 

than having to individually prove their subjective intent to return.23                In that case, we 



concluded that the rule eased the State's administrative burden in determining eligibility 



because it allowed Department of Revenue   workers to make summary decisions on 



eligibility for members of Congress and their staffs, rather than requiring the Department 



to sift through documentation to determine whether each member of Congress and each 

congressional staffer had the subjective intent required to receive a dividend.24 



                The State argues that "the exception recognizes that prolonged absences by 



members of Congress and their staff are distinct from (i.e., not similarly situated to) other 



allowable absences," because "members of Congress and their staff must spend much of 



their time in the nation's capital" while "maintain[ing] significant ties to Alaska."  The 



State argues that the legislature could reasonably conclude that the "unique nature" of 



absences for members of Congress and their staffs "is consistent with an intent to return 



to Alaska."    Here the legislature apparently concluded that the ties that bind a member 



of   Congress   or   a   congressional   staffer   to   Alaska   are   strong   enough   to   indicate   an 



intention to return to Alaska indefinitely to reside, thus vitiating concerns of fraud and 



dividends being paid to non-Alaskans.               Just as in Harrod the status of serving as a 



member of Congress or congressional staffer served as a proxy for proving subjective 



intent to remain, so the congressional exception bears a fair and substantial relationship 



        23      255 P.3d at 1001. 



        24      Id. 



                                                  -13-                                                6712 


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

to   the   goals   of   limiting   the   dividend   to   permanent   Alaska   residents   and   preventing 



dividend fraud. 



        B.       The Ten-Year Rule Does Not Deny Ross Substantive Due Process. 



                 Ross next argues that the ten-year rule denies him substantive due process 



because it "denie[d] a PFD to a lifelong Alaskan Marine, while providing an exception 



for the Congressman who sent him to war, shock[ing] the universal sense of justice." 



Although      he   notes   that   in Church   v.   State,   Department   of   Revenue,   we   held   that 



"dividend   eligibility   requirements   do   not   reach   the   level   of   unfairness   necessary   to 



support a due process violation" but "are a reasonable way to ensure that only legitimate 

permanent residents receive PFDs,"25 Ross nonetheless argues that the ten-year rule is 



different from the requirement in Church because the rule does not apply to members of 



Congress. 



                 In Church, we noted that "[t]he standard for establishing a substantive due 



process violation is rigorous.       A due process claim will only stand if the state's actions 



'are so irrational or arbitrary, or so lacking in fairness, as to shock the universal sense of 

justice.' " 26  As the administrative law judge suggested, the ten-year rule may seem to 



"disparage the value and honor of those who serve the nation and the sacrifices made by 



their families."    But because the ten-year rule "did not violate equal protection . . . and 



because a statute that meets the higher equal protection standard will always satisfy the 



        25       973 P.2d at 1130. 



        26      Id.   (quoting  Application   of   Obermeyer ,   717   P.2d   382,   386-87   (Alaska 



 1986)). 



                                                   -14-                                               6712 


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

demands   of   substantive   due   process,"27      we   cannot   conclude   that   Ross   was   denied 



substantive due process by the ten-year rule.28 



        C.      The Ten-Year Rule Is Not Illegal Retrospective Legislation. 



                Ross next argues that the ten-year rule is "illegal[] retrospective legislation 



because it gives [Ross's] pre-enactment conduct [of choosing to pursue a career in the 



Marine Corps] a different legal effect from that which it would have had without the 



passage of the statute."     Ross contends that he could not now comply with the ten-year 



rule unless he were to go AWOL or to resign from the Marine Corps. 



                The   State   responds   that   the   ten-year   rule   is   not   retroactive   because   it 



"affects whether [Ross's] absence in calendar year 2008 is allowable for purposes of 



qualifying for a 2009 PFD," and not "whether [Ross's] pre-enactment absences were 



allowable." 



                In Pfeifer v. State, Department of Health & Social Services, Division of 



Public Assistance , we described the meaning of retroactivity: 



                A statute will be considered retroactive insofar as it gives to 

                pre-enactment       conduct    a  different   legal  effect  from    that 

                which it would have had without passage of the statute.               A 

                statute creates this different legal effect if it would impair 

                rights a party had when he acted, increase a party's liability 



        27      Pfeifer v. State, Dep't of Health & Soc. Servs., Div. of Pub. Assistance , 260 



P.3d 1072, 1083 (Alaska 2011) (internal quotation marks omitted). 



        28      Ross     also  suggests    briefly   that  the  congressional     exception     violates 



substantive due process because it "was proposed under dubious circumstances that 

frustrated the original intent and sponsor of" the house bill that ultimately became the 

statutory amendment including the ten-year rule and congressional exception. But as the 

State points out, "[a]mending a bill in a way that the bill's sponsor does not support is 

a typical result of the legislative process and does not offend due process." 



                                                  -15-                                            6712
 


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

                for   past   conduct,    or  impose    new    duties   with  respect    to 

                transactions already completed.[29] 



                The ten-year rule is not retroactive because it did not change the legal effect 



of Ross's eight years of absences occurring before the rule's enactment.  It only affects 



whether his absence in 2008 was allowable, and only considers the absences for the ten 

years following the rule's enactment.           The ten-year rule was enacted in 199930 and did 



not affect Ross's dividend eligibility until the 2009 dividend.  Although Ross's absences 



for the ten years following the enactment of the rule may have had their genesis in his 



pre-enactment decision to attend the Naval Academy, it was his continuing absence for 



ten years following the rule's enactment, and not his choice of school or career, that 



ultimately affected his eligibility for the dividend. The rule was therefore not retroactive. 



        D.	     The State Is Not Estopped From Denying Ross A Permanent Fund 

                Dividend. 



                Ross also argues that the State is estopped from denying him a dividend 



after it "asserted" eligibility requirements in 1990 on which he "reasonably relied" in 



choosing a military career. 



                Although the parties address the elements of equitable estoppel, promissory 



estoppel     is  the  appropriate    doctrine    to  be  analyzed    in  this  case.   In  Simpson      v. 



Murkowski ,   we   heard   a   claim,   brought   as   an   action   in   equitable   estoppel,   against 

Governor   Frank   Murkowski's   elimination   of   longevity   bonuses   for   seniors.31           We 



explained that 



                the   primary   difference   between   promissory   and   equitable 

                estoppels is that the former is offensive, and can be used for 



        29      260 P.3d 1072, 1079-80 (Alaska 2011). 



        30      Ch. 44,  5, SLA 1998. 



        31       129 P.3d 435 (Alaska 2006). 



                                                  -16-                                               6712 


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

                affirmative enforcement of a promise, whereas the latter is 

                defensive, and can be used only for preventing the opposing 

                party from raising a particular claim or defense.             Because 

                Simpson seeks to enforce an alleged promise, the four-part 

                test for promissory  estoppel set forth by this court in Zeman 

                [v.   Lufthansa    German      Airlines,   699   P.2d   1274    (Alaska 

                1985)] is the appropriate test.[32] 



                In this case, Ross is seeking to enforce an alleged promise - namely the 



State's supposed promise to pay him a dividend - and not to prevent the State from 



raising a defense   to paying a dividend.         Therefore, the promissory estoppel analysis 



controls this case. 



                In order to prove promissory estoppel, Ross must establish: 



                (1)     The action induced amounts to a substantial change of 

                position; 



                (2)     it   was     either   actually    foreseen     or   reasonably 

                foreseeable by the promisor; 



                (3)     an   actual   promise   was   made   and   itself   induced   the 

                action or forbearance in reliance thereon; and 

                (4)     enforcement is necessary in the interest of justice.[33] 



                "To make out a claim for promissory estoppel, one must show that 'an 

actual promise was made.' "34        In this case, Ross fails to meet the third prong because the 



eligibility requirements in existence in 1990 did not amount to an enforceable promise 



that those eligibility requirements would never be amended.                As the State puts it, "the 



        32      Id. at 440 n.18 (citations and internal quotation marks omitted). 



        33      Id. at 440 (citing Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 



1284 (Alaska 1985)). 



        34      Id. at 442 (quoting  Brady v. State , 965 P.2d 1, 10 & n.20 (Alaska 1998)); 



James v. State , 815 P.2d 352, 357 (Alaska 1991) (quoting Zeman, 699 P.2d at 1284). 



                                                  -17-                                            6712
 


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

passage of a statute is not an assertion by one legislature that a subsequent legislature 



will not later amend the statute."      As a matter of law, Ross cannot rely on an extant law 



as a promise that that law will continue to have the same effect in perpetuity.               Because 



Ross   has   not   proven   an   enforceable   promise   by   the   State,   his   claim   for   promissory 



estoppel fails. 



        E.	     The   Superior   Court's   Citation   Of   An   Unpublished   Memorandum 

                Opinion Was Not Reversible Error. 



                Ross finally argues that the superior court's decision ought to be reversed 



because that court erroneously relied on an unpublished memorandum opinion of this 



court.    But   because     we   review   the  superior    court's  ruling   using   our  independent 

judgment, 35 such reliance would be of no consequence. 



        F.	     Because Ross Is Not Eligible To Receive A Dividend, His Children Are 

                Not Eligible. 



                Under 15 AAC 23.113(b), 



                [a]  child   who   otherwise   qualifies   is   eligible   to   receive   a 

                dividend if the child is . . .  in the lawful and physical custody 

                of a sponsor who is eligible for a dividend, would have been 

                eligible for a dividend had the sponsor filed timely, was only 

                ineligible    due   to   AS   43.23.005(d)      [ineligibility   due   to 

                conviction   or   incarceration],   or   forfeited   dividends   under 

                AS 43.23.035(a) or (c) [ineligibility due to fraud or aiding an 

                ineligible collection of a dividend]. 



Because Ross is not eligible for a dividend, his sponsored children are not eligible for 



dividends. 



V.	     CONCLUSION 



                As the administrative law judge in Ross's agency appeal noted, "Ross raises 



questions about the means selected by the legislature to determine who should remain 



        35      See Harrod v. State, Dep't of Revenue, 255 P.3d 991, 995 (Alaska 2011). 



                                                  -18-                                              6712 


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

eligible to receive a PFD."  And as we have observed in the past, "[i]t is not a court's role 



to decide whether a particular statute or ordinance is a wise one; the choice between 



competing   notions   of   public   policy   is   to   be   made   by   elected   representatives   of   the 

people."36    Our role in this case is to determine only whether the policy chosen by the 



legislature   complies   with   the   Alaska   and   federal   constitutions.        For   the   foregoing 



reasons, we conclude that it does, and we therefore AFFIRM the superior court. 



        36       Benavides v. State , 151 P.3d 332, 336 (Alaska 2006) (internal quotation 



omitted). 



                                                   -19-                                                 6712 

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