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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Premera Blue Cross v. State, Dept. of Commerce, Community & Economic Development, Division of Insurance (11/09/2007) sp-6191

Premera Blue Cross v. State, Dept. of Commerce, Community & Economic Development, Division of Insurance (11/09/2007) sp-6191, 171 P3d 1110

     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,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


PREMERA BLUE CROSS, a )
Washington non-profit corporation, ) Supreme Court Nos. S-11486/11785
)
Appellant, ) Superior Court No. 3AN-99-03436 CI
) Superior Court No. 3AN-99-12217 CI
v. )
) O P I N I O N
STATE OF ALASKA, )
DEPARTMENT OF COMMERCE, ) No. 6191 November 9, 2007
COMMUNITY & ECONOMIC )
DEVELOPMENT, DIVISION OF )
INSURANCE, )
)
Appellee. )
)


          Appeal  from the Superior Court of the  State
          of    Alaska,   Third    Judicial   District,
          Anchorage, John Reese, Judge.

          Appearances:  Stephan H. Williams, Law Office
          of    Stephan   Williams,   Anchorage,    for
          Appellant.   Signe  P.  Andersen,   Assistant
          Attorney  General, Anchorage,  and  David  W.
          M rquez,   Attorney  General,   Juneau,   for
          Appellee.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Fabe,  and  Carpeneti, Justices.   [Eastaugh,
          Justice, not participating.]

          FABE, Justice.

I.   INTRODUCTION
          These  consolidated appeals concern Alaskas retaliatory
tax  statute as applied to Premera Blue Cross, a Washington  non-
profit  corporation registered as a hospital and medical services
corporation  in  Alaska.  By stipulation  and  by  engaging  Blue
Crosss  refund request on the merits, the Division  of  Insurance
waived  its  right to argue that Blue Cross should  be  precluded
from  seeking a refund because it did not pay its 1995  and  1996
taxes  under  formal protest.  We therefore reach the  merits  of
this case, concluding that retaliatory taxes apply to Blue Cross.
We  conclude  that the Division acted reasonably in  implementing
the  retaliatory  tax  statute, and  specifically,  in  excluding
payments that Blue Cross made to the Alaska Comprehensive  Health
Insurance  Association  and  the Alaska  Small  Employers  Health
Reinsurance  Association.   The retaliatory  tax  statutes  plain
language, the policies underlying that statute, and deference  to
agency  expertise  and  its  established  interpretation  of  the
statute,  all support this outcome.  Accordingly, we  affirm  the
ruling  made  by the Director of the Division of  Insurance.   We
also  agree  with the superior court that AS 21.09.270  does  not
conflict  with  Alaskas  equal  protection  and  substantive  due
process clauses.
II.  FACTS AND PROCEEDINGS
          Retaliatory  tax  statutes in  effect,  substitute  the
general  tax  laws  of the foreign insurers home  state  for  the
general  tax  laws of the state applying the retaliatory  statute
whenever the general tax laws of the foreign insurers home  state
are  more  burdensome  than the general tax  laws  of  the  state
applying the regulatory statute.1  Their principal purpose . .  .
is  to  promote the interstate business of domestic  insurers  by
deterring  other States from enacting discriminatory or excessive
taxes.2
          Blue   Cross  is  a  Washington  nonprofit  corporation
registered  as a hospital and medical services corporation  under
chapter  21.87 of the Alaska Statutes.3  The Alaska  Division  of
Insurance  (the Division) is the agency principally charged  with
regulating  insurers  conducting business  in  Alaska,  including
hospital and medical services corporations.  The Division is also
charged with administering and collecting both premium taxes  and
retaliatory taxes.  To calculate retaliatory taxes, the  Division
has  used the same forms and instructions since at least 1986 and
takes the position, which Blue Cross disputes, that the forms and
instructions  reflect  an administrative  interpretation  of  the
retaliatory tax statute.
          Blue  Cross  is  a  member of the Alaska  Comprehensive
Health  Insurance  Association (ACHIA) and  the  Small  Employers
Health Reinsurance Association (SEHRA).  Membership in both ACHIA
and SEHRA is a condition of doing business in Alaska.
          ACHIA  make[s]  available to  residents  who  are  high
risk[,] eligible for and covered by Medicare, 65 years of age  or
older, and eligible . . . one Medicare supplement plan that meets
.  .  .  minimum policy standards and minimum benefit standards.4
In  order  to fund the plan, members share in pro rata expenses.5
If  a  member  fails to pay its pro rata share, the director  may
have the members certificate of authority revoked.6
          SEHRA was enacted to promote the availability of health
insurance coverage to small employers regardless of their  health
status  or claims experience.7  As with ACHIA, payments are  made
by members to cover the costs of the association in proportion to
each  reinsuring insurers share of total premiums.8  The statutes
creating SEHRA have recently been repealed.  But for the purposes
of this litigation, the parties stipulated that failure to pay  a
SEHRA  charge  was  grounds for revocation of  a  certificate  of
authority to do business in Alaska under AS 21.09.150(a).
          The State of Washington has a program similar to ACHIA,
the Washington Health Insurance Pool (WHIP), which makes adequate
levels of insurance available to residents of Washington who  are
otherwise considered uninsurable or who are underinsured.9
          In  1995 and 1996 Blue Cross made payments to ACHIA  in
the  amount of $1,502,224 and payments to SEHRA in the amount  of
$43,918.   Blue  Cross accounted for ninety-five percent  of  its
ACHIA  payments  and 100 percent of its SEHRA  payments  as  paid
claims  on  its  premium tax statement.  Five  percent  of  these
payments were recorded on its books as payments of administrative
expenses  and were not incorporated into the premium  tax.   Blue
Cross  paid these taxes and fees in 1995 and 1996 without  formal
protest.
          In  1997  Blue  Cross  sent a letter  to  the  Division
requesting a refund of excess retaliatory taxes it paid  in  1995
and 1996 because it did not include the 1995 and 1996 payments it
made  to  ACHIA  in  its  calculations  of  its  retaliatory  tax
obligation.   On  June 30, 1999, the Director of  the  Division10
issued an order denying Blue Crosss refund request on its merits.
For  its  findings  of  fact,  the  Director  adopted  the  facts
stipulated   to   by  the  parties.   When  drawing   its   legal
conclusions,   the  Director  considered  the  language   of   AS
21.09.270.
          Alaska Statute 21.09.270(a) provides, in part:
          If,  under  the  laws  of  another  state  or
          foreign  country, taxes, licenses, and  other
          fees, in the aggregate, and fines, penalties,
          deposit   requirements,  or  other   material
          obligations,  prohibitions,  or  restrictions
          are  or would be imposed upon Alaska insurers
          .  .  .  that  are in excess  of  the  taxes,
          licenses,  and other fees, in the  aggregate,
          or   that   are  in  excess  of  the   fines,
          penalties,  deposit  requirements,  or  other
          obligations,  prohibitions,  or  restrictions
          directly imposed upon similar insurers . .  .
          of   another  state  or  country  under   the
          statutes of this state . . . the same  taxes,
          licenses,  and other fees, in the  aggregate,
          or  fines, penalties, or deposit requirements
          or  other material obligations, prohibitions,
          or  restrictions of whatever kinds  shall  be
          imposed  by  the director upon  the  insurers
          .  .  .  of the other state or country  doing
          business  or seeking to do business  in  this
          state.
          
And AS 21.09.270(b) contains exceptions:

          This  section  does  not  apply  to  personal
          income taxes, to ad valorem taxes on real  or
          personal  property,  or  to  special  purpose
          obligations or assessments imposed by another
          state in connection with particular kinds  of
          insurance other than property insurance.
          
          The   Director   drew  a  distinction  between   taxes,
licenses,  and fees under AS 21.09.270(a), which were  calculated
in the aggregate, and other obligations, which were compared only
on an item-by-item basis.
          As  a  matter  of  law,  the  Director  interpreted  AS
21.09.270(a)   as   requiring  a  comparison  of   an   aggregate
calculation  of  taxes,  licenses, and fees  between  Alaska  and
foreign   insurers.   The  Director  also  determined  that   the
Divisions retaliatory tax schedules direct taxpayers to use  this
aggregate  calculation  under  AS  21.09.270(a).   The   Director
further concluded as a matter of law that ACHIA and SEHRA charges
are  not  a  tax,  license, or fee and therefore  should  not  be
included  in  the aggregate calculation of taxes,  licenses,  and
fees  under AS 21.09.270(a).  The Director also noted  that  [t]o
the  extent  that  the  ACHIA  and SEHRA  assessments  are  other
material   obligations  under  the  statute,  they  are  compared
separately  with  like  items  imposed  by  a  foreign   insurers
domiciliary  state.   The assessment of the Washington  Insurance
Pool is a similar assessment or obligation to ACHIA.
           The Director decided that, to the extent ACHIA, SEHRA,
and  WHIP  were  special purpose obligations or assessments,  the
exception  in  AS  21.09.270(b)  operated  only  to  exclude  the
Washington  charge  from  any  comparison  with  similar  charges
imposed in Alaska and the exception did not result in any further
retaliation  under  AS  21.09.270 for  those  kinds  of  charges.
Finally,  the  Director  concluded  that  the  exception  in   AS
21.09.270(b) did not apply to reduce Blue Crosss retaliation  fee
because  none of the aggregated taxes, licenses, and fees  listed
on   their   Retaliatory   Schedule  included   special   purpose
obligations imposed by another state.
          Following  the  Directors denial of Blue Crosss  refund
request,  Blue Cross appealed the determination to  the  superior
court.   Blue  Cross  also filed a separate complaint  seeking  a
declaratory  judgment  that Blue Cross was  not  subject  to  the
retaliatory tax imposed by AS 21.09.270; that even if it were, it
did  not  owe  any  such tax for the 1998 tax  year  because  the
statutory payments it was required to make under ACHIA and  SEHRA
should  have  been included on the Alaska side of the retaliatory
tax  calculation, thereby reducing or eliminating any retaliatory
tax it owed; and that the retaliatory tax imposed by AS 21.09.270
was  unconstitutional under the equal protection, substantive due
process, and special privileges and immunities provisions of  the
Alaska  Constitution.  Blue Cross also sought  injunctive  relief
prohibiting the collection of retaliatory tax against it.
          The  Division answered and filed a counterclaim seeking
$925,592 it claimed Blue Cross owed because it included the ACHIA
and  SEHRA  charges  on the Alaska side of its  1998  retaliatory
schedule as a tax, license, and fee, thereby reducing its premium
tax  and retaliatory tax obligation.  The Division further sought
a  judgment  that  AS 21.09.270 applies to Blue  Cross  and  that
payments  made  to  ACHIA  and SEHRA  are  not  included  in  the
aggregate  calculation  of taxes, licenses,  and  fees  under  AS
21.09.270.
          The  superior court considered summary judgment motions
from  both parties and affirmed the decision of the Division  and
denied  Blue  Cross summary judgment on its equal protection  and
substantive  due process claims.  Blue Cross appeals.   Below  we
consider:  (1) whether Blue Cross waived its right  to  a  refund
when it failed to make its 1995 and 1996 retaliatory tax payments
under  protest;  (2) whether as a hospital and  medical  services
corporation  Blue  Cross  is subject to  retaliatory  taxes;  (3)
whether  the Division properly excluded the payments  Blue  Cross
made  to  ACHIA and SEHRA under the retaliatory tax statute;  and
(4)  whether  the retaliatory statute as applied  to  Blue  Cross
violates  Alaskas  equal protection and substantive  due  process
clauses.
III. DISCUSSION
     A.   Standard of Review
          When  the superior court acts as an intermediate  court
of  appeal  in administrative cases, we review the administrative
agencys  decision directly.11  In questions of law  involving  an
agencys  expertise  or  where an agency has  made  a  fundamental
policy  decision,  a rational basis standard is  applied  and  we
defer  to an agencys determination so long as it is reasonable.12
For  questions  of law that do not involve agency  expertise,  we
substitute  our own judgment, adopting the rule of  law  that  is
most persuasive in light of precedent, reason, and policy.13
          When  interpreting a statute, courts look to the  plain
meaning  of the statute, the legislative purpose, and the  intent
of   the  statute.14   Statutes  should  be  construed,  wherever
possible,  so  as to conform to the constitutions of  the  United
States  and  Alaska.15  The constitutionality of  a  statute  and
matters   of  constitutional  or  statutory  interpretation   are
questions  of  law  to  which we apply our independent  judgment,
adopting  the  rule of law that is most persuasive  in  light  of
precedent, reason, and policy.16
          A grant of summary judgment is reviewed de novo, and we
will  affirm if the record contains no genuine issue of  material
fact and the moving party is entitled to judgment as a matter  of
law.17
     B.   The Division Waived Its Right To Argue that Blue Crosss
          Claim  Is  Barred  Because of Failure  To  Protest  Its
          Retaliatory Fees in 1995 and 1996.
          
          Blue  Cross  has stipulated that it paid its  1995  and
1996 taxes without formal protest.  In the same stipulation,  the
parties  also  agreed that Blue Crosss request for  a  refund  of
retaliatory taxes paid for the 1995 and 1996 tax years was timely
          and [was] in all other respects properly before the Director of
the  Division  . . . for a decision on its merits.  The  Division
claims,  though, that Blue Cross is not entitled to a  refund  of
retaliatory fees because of its failure to file a formal  protest
when  it  paid its 1995 and 1996 retaliatory taxes.  The Division
requests that we affirm the Directors order on this basis alone.
          As  an  initial  matter, we dispense with  the  parties
dispute  over  whether  a formal protest was  a  prerequisite  to
obtaining  a refund.  In Principal Mutual Life Insurance  Co.  v.
State,  we  ruled that even if there is no statutory  requirement
that  a  formal protest be made prior to the recovery  of  a  tax
refund,  a  taxpayer must formally protest  a  tax  in  order  to
maintain a common law action in assumpsit for a tax refund.18  In
Carlson  v. State, we reiterated Principals holding, noting  that
we  clearly  held [in Principal] that both under the statute  and
common law, the taxpayer must formally protest the payment of the
tax  at  the  time  of payment in order to subsequently  maintain
either a common law or statutory cause of action.19
          But  AS  21.09.210(k) allows for a  refund  even  if  a
payment   was   not  made  under  protest  when  a   mistake   or
misinterpretation has been made.  It provides:
          If, within three years after the date the tax
          under   this  section  was  due,  an  insurer
          discovers a mistake or misinterpretation that
          resulted in an overpayment of the tax  in  an
          amount  exceeding  $250 in any  one  calendar
          year,  the insurer may make a written request
          to the director for a refund. If the director
          determines     a     valid     mistake     or
          misinterpretation has occurred, the  director
          shall refund to the insurer the amount of the
          excess  tax  by  granting, at  the  directors
          discretion, a monetary refund or premium  tax
          credit.[20]
          
          Blue  Cross  claims its failure to include the  charges
was  a  mistake  or misinterpretation within the  meaning  of  AS
21.09.210(k),  while  the  Division claims  that  Blue  Cross  is
challenging  the  validity  of the Divisions  interpretation  and
application  of  the  retaliatory tax statute,  and  therefore  a
protest  was  required.   Blue Cross notes  that  it  invoked  AS
21.09.210(k) when it requested its refund.  Although  Blue  Cross
concedes  that AS 21.09.210(k) applies only to premium taxes,  it
argues  that the parties agreed through the stipulation that  the
Division  could also provide refunds for the similar  retaliatory
taxes,  and  like  under AS 21.09.210(k),  no  protest  would  be
required.   But  we  need not resolve the question  whether  Blue
Crosss  refund request more properly falls within AS 21.09.210(k)
and  requires no protest, or would require a payment with protest
as a challenge to the Divisions interpretation and application of
the  retaliatory tax statute.  Even if payment under protest were
required, the Division waived its right to raise the issue.
          Under  Principal,  we  indicated  that  waiver  of  the
payment  under  protest  requirement is possible.   At  issue  in
          Principal was whether Principal was entitled to a refund, and we
remanded  to the superior court the question whether through  its
interaction with Principal the Division waived the payment  under
protest requirement.21  Citing Principal, we noted in Carlson that
[t]he protest requirement may be waived by the taxing authority.22
          Blue  Cross  argues  that, even if  the  payment  under
protest  requirement would otherwise bar its claim,  the  express
agreement  under  the  stipulation that the  refund  request  was
timely and in all other respects properly before the Director . .
.  for  a  decision on the merits constituted  a  waiver  of  the
requirement by the Division.  It adds that the Director  actually
made a decision respecting the refund request on its merits,  and
this is further evidence of waiver.
          The  Division  counters that the  stipulation  did  not
result  in  waiver, and that the matter before the  Director  for
decision  was Blue Crosss entitlement to a refund.  It refers  to
paragraph  22  of the stipulation, which states in relevant  part
that the parties stipulate that the Director has the authority to
decide  whether and to what extent, Taxpayer is entitled  to  its
requested refund of retaliatory taxes paid for the 1995 and  1996
tax years.  Emphasizing the language whether, and to what extent,
it  argues  that  there  was no attempt  in  the  stipulation  to
foreclose  any  legal  arguments, including  its  formal  protest
argument.   Addressing a later sentence in  paragraph  22,  which
states  that Blue Cross further waives any right it may  have  to
request  a refund of those taxes under AS 43.10.210, the Division
argues  that  at most the paragraphs can be read  to  reflect  an
intent  to  proceed under the insurance code  and  not  under  AS
43.10.210, which addresses revenue and taxation.
          But  considering the plain language of the stipulation,
which states that the refund request was timely and [was] in  all
other respects properly before the Director of the Division . . .
for  a  decision  on  its  merits, and the  Divisions  subsequent
engagement of Blue Crosss refund request on its merits, we reject
the   Divisions  strained  interpretation  of  the   stipulations
language and conclude that the Division waived its right to argue
that  Blue Cross is not entitled to a refund because it  did  not
make  a formal protest when it paid its 1995 and 1996 retaliatory
taxes.
     C.   Blue  Cross  Is Subject to Retaliatory Taxes  Under  AS
          21.09.270.
          Blue  Cross  argues that because it is a  hospital  and
medical  services corporation, it should not even be  subject  to
retaliatory  taxes.   Under AS 21.87.260,  [e]very  hospital  and
medical  service  corporation doing business under  this  chapter
shall  be  taxed  as  provided in AS 21.09.210,  which  addresses
premium taxes and not retaliatory taxes.  Blue Cross argues  that
because no reference is made in AS 21.87.260 to retaliatory taxes
under  AS  21.09.270, AS 21.87.260 should be understood to  state
the  clear  legislative intention that Blue  Cross,  as  an  HMSC
[hospital  and medical service corporation], is subject  only  to
premium  taxes  under  AS 21.09.210 and not also  to  retaliatory
taxes under AS 21.09.270.
          Blue  Cross also relies on AS 21.87.030, which provides
          that this title [Title 21-Insurance] does not apply to a health
care  service corporation unless contained or referred to in this
chapter.   It  also cites, among other similar opinions,  a  1979
opinion of the Attorney General which states that AS 21.87 is the
exclusive frame of reference for addressing any problems relating
to  the  regulation  of health care service corporations  in  the
state.23
          In  response,  the Division contends that AS  21.87.260
was  only  intended  to clarify that HMSCs are  not  exempt  from
taxation despite being non-profits, as in some other states  they
are exempt.  Therefore, the Division argues, AS 21.87.260 was not
intended  as  a limit on the Divisions authority.   The  Division
further  argues that failure to reference a retaliatory  statute,
different in nature than a tax statute, is unexceptional  and  no
inference  can be drawn that the legislature intended to  exclude
it.
          The  Division  also counters that AS 21.87.340  renders
the HMSCs subject to retaliatory taxes.  Alaska Statute 21.87.340
provides in relevant part:
          In  addition  to the provisions contained  or
          referred  to previously in this chapter,  the
          following  chapters  and provisions  of  this
          title  also  apply  with respect  to  service
          corporations to the extent applicable and not
          in  conflict  with the express provisions  of
          this  chapter and the reasonable implications
          of  the  express  provisions,  and,  for  the
          purposes of the application, the corporations
          shall be considered to be mutual insurers:  .
          . . (4) AS 21.09, except AS 21.09.090.
          
The  Division then notes that had the legislature intended  HMSCs
to  be  exempted from retaliatory taxes, it could have  expressly
excluded  them  under AS 21.87.270, as it did with AS  21.09.090.
We  are persuaded by the Divisions argument.  Had the legislature
intended to exclude HMSCs from paying retaliatory taxes, it could
have  simply included AS 21.09.270 along with AS 21.09.090 as  an
exception.
          We   are   also   persuaded  by  the  superior   courts
conclusion:
          The  retaliatory tax statute,  AS  21.87.270,
          and  the provision governing the taxation  of
          HMSCs,  AS  21.87.260, are  not  in  conflict
          because  they serve different purposes.   The
          purpose  of  AS  21.87.260  is  to  impose  a
          standard  tax  that raises  revenue  for  the
          State.   To  the  contrary,  the  purpose  of
          section .270 is not to raise revenues, but to
          create  a  fair playing field among  insurers
          from different domiciles.
          
Therefore,  under AS 21.87.340, which provides that  chapter  21,
including  the retaliatory tax statute AS 21.09.270,  applies  to
the  extent  applicable  and  not in conflict  with  the  express
provisions of this chapter and the reasonable implications of the
express provisions, retaliatory taxes should apply to Blue Cross.
          The  1979 opinion of the Attorney General cited by Blue
Cross for the proposition that AS 21.87 is the exclusive frame of
reference  for addressing any problems relating to the regulation
of  health care service corporations in the state24 lends further
support  to  a  finding that AS 21.87.260  was  not  intended  to
exclude  retaliatory  taxes.  The Attorney General  addressed  an
inquiry  from Blue Cross about whether, as a foreign  HMSC,  Blue
Cross  was required to comply with certain deposit and investment
provisions of AS 21.87.  The Attorney General noted:
          [O]n  its  face  AS  21.87  allows  for   the
          creation  and  recognition of  only  domestic
          health  care service corporations.  There  is
          no  provision  in  AS 21.87  which  would  be
          analogous  to AS 10.05.597 et seq  pertaining
          to  foreign business corporations which would
          provide  for the issuance of certificates  of
          authority  to  foreign  health  care  service
          corporations.   Thus, it is  clear  that  the
          legislature   intended   to   prohibit    the
          operation    of   foreign   health    service
          corporations in the state with one exception.
          AS  21.87.350  states: A health care  service
          contractor registered to do business in  this
          state  on  July  1, 1966 is  entitled  to  be
          registered under this chapter, whether or not
          it  meets  the requirements of this  chapter.
          This  provision  was  specifically  added  to
          grandfather  in foreign service  corporations
          operating  in  the state at the  time.  [Blue
          Cross] was the only such corporation and thus
          the  grandfather clause was designed for  the
          exclusive benefit of that corporation.[25]
          
The  Attorney  General also noted that [i]t  is  our  view  that,
although  the  question is not without some ambiguity,  AS  21.87
does  apply  to foreign hospital and medical service corporations
to  the  extent  that its requirements do not conflict  with  the
inherent characteristics of Blue Cross as a foreign corporation.26
Since AS 21.87 was intended to apply only to domestic HMSCs  with
the  sole  exception of Blue Cross, and retaliatory  taxes  would
only  be  applicable  because of the inherent characteristics  of
Blue  Cross as a foreign corporation, the inference can be  drawn
that  retaliatory  taxes  were  not  even  contemplated  by   the
legislature  when  it enacted AS 21.87.  Therefore,  Blue  Crosss
argument  that  AS 21.87.260 should be understood  to  state  the
clear  legislative  intention that Blue Cross,  as  an  HMSC,  is
subject only to premium taxes under AS 21.09.210 and not also  to
retaliatory taxes under AS 21.09.270 is unpersuasive.
     D.   The Division Properly Excluded Blue Crosss Payments  to
          ACHIA   and   SEHRA  from  Its  Assessment  under   the
          Retaliatory Tax Statute.
          
          Having determined that Blue Cross is indeed subject  to
          the retaliatory tax statute, we turn now to Blue Crosss arguments
that  the  Divisions specific interpretation of that  statute  is
improper.   The calculation of a retaliatory tax involves  agency
discretion,27 and although we apply our independent  judgment  to
matters  of  statutory  interpretation,  we  will  defer   to   a
reasonable agency determination that implicates agency expertise.28
We will also apply a more deferential standard of review where an
agency  action  is  longstanding  and  continuous.29   Here,  the
Division  has  presented its longstanding interpretation,  albeit
implicitly, in the schedules, forms, and instructions it has made
available to taxpayers since 1986.
          Blue  Cross  advances more than one theory  challenging
the  Divisions application of AS 21.09.270.  First,  the  company
disputes  the Directors reading of subsection .270(a) to  provide
for  an  item-by-item  comparison of  fines,  penalties,  deposit
requirements, or other material obligations even when Alaska  law
imposes  an  obligation that lacks a counterpart  in  a  companys
state of domicile.  According to Blue Cross, this subsection must
be  read  instead  always to require that all of  the  enumerated
financial burdens in subsection .270(a) factor into the Divisions
calculation.   In  other words, Blue Cross  argues  that  charges
under  ACHIA  and  SEHRA, as well as all other fines,  penalties,
deposit requirements, [and] other obligations, should go  into  a
single  sum  that represents the cost of operating  under  Alaska
law.
          Alternatively, Blue Cross questions whether  the  ACHIA
and SEHRA charges qualify as other material obligations under  AS
21.09.270(a).  Blue Cross argues that such payments are  properly
classified  as taxes, licenses, or fees and therefore  should  be
treated in the aggregate under the statute.  Irrespective of  the
route  taken, however, Blue Cross argues that we must  invalidate
the  Divisions  application  of  the  statute  because  comparing
charges  like ACHIA and SEHRA separately with like items  imposed
by  an  out-of-state  insurers domiciliary  state  is  illogical,
produces irrational results, and has no support in the case law.
          Blue  Cross  further  takes issue  with  the  Directors
interpretation of subsection .270(b).  That section carves out an
exception for special purpose obligations or assessments  imposed
by  another state.  In its ruling, the Division found as a matter
of  law  that to the extent that the assessments of ACHIA, SEHRA,
and  the  Washington  Health Insurance Pool are  special  purpose
obligations  or  assessments, the exception  in  AS  21.09.270(b)
operates  only  to  exclude the Washington  assessment  from  any
comparison  with  similar  assessments  imposed  in   Alaska   to
determine  if retaliation is required.  Blue Cross contends  that
the  plain  language  of  subsection .270(b)  requires  that  the
Division  exclude only foreign state special purpose obligations.
Alaskas own special purpose obligations, according to Blue Cross,
fit  within the category of other obligations or even  of  taxes,
licenses,  and  fees  enumerated in  subsection  .270(a).   Taken
together, Blue Crosss arguments amount to a claim that ACHIA  and
SEHRA charges should be considered in the aggregate on the Alaska
side  of the retaliatory tax calculation, while Washingtons  WHIP
charges should be excluded from the Washington side.
          In  evaluating  this  argument we  turn  first  to  the
statutory text.  It states that tax will be imposed to the extent
that  the  taxes,  licenses, and fees, in the  aggregate  .  .  .
imposed  upon  Alaska insurers [out-of-state] exceed  the  taxes,
licenses, and fees, in the aggregate . . . under the statutes  of
this state.30  The statute also states that tax will be imposed to
the  extent  that the fines, penalties, deposit requirements,  or
other  material  obligations . . . imposed upon  Alaska  insurers
[out-of-state] exceed the fines, penalties, deposit requirements,
or  other  obligations . . . under the statutes  of  this  state.
Nowhere   does   the  phrase  in  the  aggregate   modify   other
obligations,  although  it  appears  three  times  after   taxes,
licenses,  and fees within the text of subsection .270(a).   This
language  reasonably permits the Directors conclusion that  other
obligations  under Alaska law only offset similar  foreign  state
obligations  and should not be considered in the  aggregate.   At
the  same  time,  the  language undermines Blue  Crosss  argument
insofar as the companys reading renders that phrase superfluous.
          Blue Cross contends that the fact that those categories
of  impositions  are required to be considered in  the  aggregate
does  not  lead  to the conclusion that other expressly  included
items,  such  as other obligations . . . can simply  be  excluded
from  a  retaliatory tax calculation if the foreign state imposes
no  similar  obligation.   The plain  language  of  the  statute,
however,  supports that conclusion.  The statute only  imposes  a
tax  on other obligations under a foreign states law that are  in
excess  of the fines, penalties, deposit requirements,  or  other
obligations . . . under the statutes of this state.31  Just as the
statute  provides  no subsidy to insurers from states  that  have
lower  aggregate taxes, licenses, and other fees, so too does  it
deny  an  offset  to  insurers  from  states  with  lower  fines,
penalties, deposit requirements, and other obligations.
           Nor  does the statute provide support for Blue  Crosss
argument  that  ACHIA  and  SEHRA charges  should  be  considered
tantamount  to  taxes,  licenses, or  fees.   While  most  taxes,
licenses,  and fees are imposed by, payable to, or  collected  by
the  State,  the ACHIA and SEHRA charges are levied by  specially
created  non-profit  institutions.   Moreover,  if  the  Division
excluded WHIP and similar charges under subsection .270(b), while
taking  the  Alaskan  counterparts of  these  charges  to  offset
foreign state taxes, licenses, and fees, retaliation would hardly
ever  occur.  Indeed, little excess would ever arise with  ACHIA,
SEHRA, and several other special purpose obligations32 driving up
the  Alaska  side  of  the tax equation while subsection  .270(b)
exempts their out-of-state counterparts on the other side of  the
ledger.   Adopting Blue Crosss interpretation hence  would  yield
the  absurd  result  of  rendering AS 21.90.270  a  nullity.   We
generally  disfavor  statutory constructions  that  reach  absurd
results.  Therefore, we look for another construction that avoids
the  absurdity and is consistent with a reasonable interpretation
of the terms of the statute.
          The  Directors interpretation satisfies those criteria.
In  contrast to Blue Crosss reading, the Director gives effect to
all  of  the  language  in  the statute.   And  contrary  to  the
          irrational results that Blue Cross predicts, the Directors
interpretation  follows  an  intuitive  logic.   Retaliatory  tax
statutes aim to universalize the tax and regulatory treatment  of
firms  across state lines.33  Applying a retaliatory tax  on  the
basis   of   another  states  unconventional  tributary  policies
involves   practical   difficulties.34    In   light   of   these
difficulties, the statutory language plausibly reflects an intent
to  steer  foreign  states  away from fines,  penalties,  deposit
requirements, or other obligations, and towards taxes,  licenses,
and  other fees, because the former obligations pose the  specter
of  hidden  taxes  and administrative hassle,  while  the  latter
charges  more  easily  lend  themselves  to  comparison  in   the
aggregate.
          Case law from outside of Alaska offers some support for
Blue  Crosss  reading of the statute, but we do  not  find  these
decisions  persuasive.   In  Executive  Life  Insurance  Co.   v.
Commissioner  of  Revenue, the Minnesota  tax  court  found  that
assessments  similar to ACHIA and SEHRA qualified as licenses  or
fees, and therefore should be aggregated with other licenses  and
fees  when calculating the Minnesota side of retaliatory taxes.35
But  the  Minnesota  statute contained language  that  materially
differed from subsection .270s terms.36  Other courts that   have
interpreted more similar statutory language have either failed to
address   the   policy  implications  of  adopting  Blue   Crosss
interpretation,37  or  relied on legislative  history  and  other
factors that lack a parallel in this case.38
          In  sum,  Blue  Cross  has not convinced  us  that  the
Divisions  application  of  the  law  departs  from  this   basic
statutory  scheme laid out in AS 21.09.270.  Nor  do  we  believe
that the Division otherwise abused its discretion in implementing
the  statute.   We therefore affirm the judgment of the  superior
court.
     E.   The  Retaliatory  Tax  Statute Does  Not  Violate  Blue
          Crosss Equal Protection or Due Process Rights.
          
          1.   Equal protection applies.
               
          Article   I,  section  1  of  the  Alaska  Constitution
provides  that  all persons are . . . entitled to  equal  rights,
opportunities,   and  protection  under  the  law.    The   equal
protection  clause  applies to protect those  similarly  situated
from disparate treatment.39  The Division makes the argument that
AS 21.09.270 does not create a discriminatory classification, and
therefore  Alaskas equal protection clause is inapplicable.   But
AS  21.09.270 clearly draws a distinction between insurers  doing
business  in Alaska, imposing retaliatory taxes only  on  foreign
insurers.  The statute additionally imposes retaliatory taxes  on
similarly  situated  foreign insurers doing  business  in  Alaska
based  on the tax policies of their domicile states or countries.
Because  AS  21.09.270 treats foreign insurers  differently  than
similarly  situated Alaskan insurers, and further  differentiates
among  foreign  insurers based on the policies of their  domicile
state or country, the equal protection clause applies.
          2.   The  retaliatory  tax statute implicates  economic
          interests   and   should  therefore  be  subjected   to
               minimal scrutiny.
               
          When reviewing the constitutionality of a statute under
the equal protection clause, we use a sliding scale analysis, set
forth as follows:
          First,  it  must be determined at the  outset
          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. . . .
          Depending  upon the primacy of  the  interest
          involved,  the state will have a  greater  or
          lesser burden in justifying its legislation.
          
               Second,    an   examination   must    be
          undertaken  of  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  states
          interest in the particular means employed  to
          further  its  goals must be undertaken.  Once
          again,  the  states  burden  will  differ  in
          accordance  with  the  determination  of  the
          level  of  scrutiny under the first stage  of
          analysis.   At  the low end  of  the  sliding
          scale,   we  have  held  that  a  substantial
          relationship  between  means  and   ends   is
          constitutionally adequate.  At the higher end
          of  the scale, the fit between means and ends
          must  be much closer. If the purpose  can  be
          accomplished    by    a   less    restrictive
          alternative,  the  classification   will   be
          invalidated.[40]
          
          The parties dispute the nature of the interest impaired
by  the  retaliatory tax statute.  The Division  argues  that  AS
21.09.270 affects purely an economic interest, and therefore only
the lowest level of scrutiny applies.41  Blue Cross, on the other
hand, asks that a higher level of scrutiny be applied because the
retaliatory tax statute makes classifications based on residency.
We  agree  with the United States Supreme Court that  retaliatory
statues   such  as  AS  21.09.270  are  not  imposed  on  foreign
corporations qua foreign corporations.42  They are only imposed on
foreign  insurers  whose  home states  would  impose  burdens  on
insurers  from the retaliating state greater than the retaliating
state  would  otherwise impose on that states insurers.   We  are
therefore  persuaded  that  AS 21.09.270  does  not  discriminate
          against foreign insurers based solely on their domicile.  Alaska
Statute 21.09.270 thus implicates only an economic interest,  the
right  to  be  free from disparate taxation.  We have  held  that
freedom  from  disparate taxation[] lies at the low  end  of  the
continuum of interests protected by the equal protection clause.43
When  assessing AS 21.09.270, we therefore apply minimum scrutiny
and  ask whether the states ends are legitimate and whether  they
bear  a fair and substantial relationship to the purposes of  the
statute.44
          3.   The  retaliatory  tax statute  bears  a  fair  and
               substantial relationship to its purpose.
          Washington   taxes  non-profit  health  care   services
contractors  on  two percent of all premiums and prepayments  for
health care services, similar to the manner in which it taxes for-
profit  health care service contractors.45  This tax rate applies
equally to foreign and domestic health care service contractors,46
and  would  therefore  apply if an Alaskan health  care  services
contractor  were  to  offer health care services  in  Washington.
HMSCs in Alaska are taxed at a rate of six percent of their gross
premiums less claims paid, a more favorable rate when compared to
both Washington health care services contractors and all domestic
and  foreign insurers in Alaska except for HMSCs, which are taxed
at a rate of 2.7 percent.47  Since retaliatory statutes substitute
the  general tax laws of the foreign insurers home state for  the
general  tax  laws of the state applying the retaliatory  statute
whenever the general tax laws of the foreign insurers home  state
are  more  burdensome  than the general tax  laws  of  the  state
applying  the  retaliatory  statute,48  Alaskas  retaliatory  tax
statute has been applied to Blue Cross.
          Blue Cross claims that the Divisions application of  AS
21.09.270  violates equal protection when applied to Blue  Cross:
(1)  because it is illegitimate to retaliat[e] against Blue Cross
and  the  State  of  Washington for the  Washington  Legislatures
policy  decision  to impose a non-discriminatory  tax  on  health
service contractors . . . similar to the premium taxes imposed on
for-profit  insurers; and (2) because even if the purpose  of  AS
21.09.270 were legitimate, the imposition of retaliatory taxes on
Blue  Cross  does  not  fairly  and  substantially  advance  that
purpose.  We address each argument in turn.
          Blue   Cross  argues  that  Alaska  has  no  legitimate
interest  in  attempting to coerce changes  in  Washingtons  non-
discriminatory HMSC tax policies, which would tax a  hypothetical
Alaskan  HMSC doing business there in precisely the same  manner,
at  the  same  rate, as Blue Cross is taxed.   But  the  coercive
nature of retaliatory taxation that Blue Cross deems illegitimate
is  precisely that sanctioned by the United States Supreme  Court
in  Western  &  Southern Life Insurance Co.  v.  State  Board  of
Equalization of California.49  In Western & Southern, the  United
States  Supreme  Court  upheld  Californias  retaliatory  tax  as
constitutional under the federal Equal Protection  Clause.50   In
upholding  the statute, the Supreme Court reasoned that promotion
of domestic industry by deterring barriers to interstate business
is  a  legitimate state purpose and the mere fact that California
was  trying to promote its insurance industry by influencing  the
          policies of other states through retaliatory taxation did not
render the purpose illegitimate.51  It further concluded that  it
was  reasonable  for California to suppose that  its  retaliatory
taxes  would  induce  other  states  to  lower  the  burdens   on
California insurers in order to spare their domestic insurers the
cost of the retaliatory tax in California.52
          Here, Blue Cross acknowledges that in Alaska we tax non-
profit  HMSCs in a different manner and at a lower effective  tax
rate  than  for-profit insurers. Washington, however, chooses  to
tax  its  non-profit  health  care  services  corporations  at  a
relatively  higher  rate, similar to its  for-profit  insurers.53
Applying  the retaliatory tax statute to a Washington  non-profit
when  Washington  would impose higher taxes if  an  Alaskan  non-
profit  health care services corporation were to conduct business
in  Washington  is thus fully consonant with the well-established
and  constitutionally  permissible  purpose  of  retaliatory  tax
statutes,  even  if the intent of Alaska is to coerce  Washington
into  lowering  its  taxes  on non-profit  health  care  services
corporations.
          While  the  record  with respect  to  the  presence  of
Alaskan insurers in Washington or other foreign jurisdictions  is
sparse,  according  to Couch on Insurance 3d, [i]t  is  generally
held  that the fact that there is no local company doing business
in  the  foreign  state  does not prevent the  operation  of  the
retaliatory  statute.54  That the retaliatory statute  serves  to
protect  both  established  insurers conducting  business  across
state  lines and those desirous of entering foreign jurisdictions
is  underscored by the legislative history of AS 21.09.270, which
states  that the statute was enacted for the protection of Alaska
insurers  transacting or desiring to transact business  in  other
states.  We therefore reject Blue Crosss claim that AS  21.09.270
was  applied  to  Blue  Cross  for the  illegitimate  purpose  of
influencing Washingtons tax policy.
          We  next  assess whether AS 21.09.270 bears a fair  and
substantial   relationship  to  its  legitimate   purpose.    The
retaliatory tax statute was adopted in Alaska in connection  with
a  comprehensive revision of Alaskas insurance laws.  Its  stated
purpose was to protect the domestic insurance company insofar  as
getting  equal treatment when it entered foreign jurisdictions.55
Blue Cross argues that because an Alaskan company would get equal
treatment  in Washington when compared to Washington health  care
services  corporations,  the retaliatory  tax  statute  does  not
advance  the purpose of AS 21.09.270 of equalizing the  treatment
of   hypothetical   Alaskan  companies  when   they   enter   the
jurisdiction.   But  Blue Crosss narrow reading  of  the  purpose
clause  suggests that retaliatory statutes are only  intended  to
equalize  the  treatment  of insurers  within,  and  not  across,
jurisdictions.   Historically, their  purpose  has  not  been  so
limited.   As  the  United States Supreme Court  has  noted,  the
principal  purpose  of retaliatory tax laws  is  to  promote  the
interstate  business  of  domestic insurers  by  deterring  other
States  from  enacting discriminatory or excessive  taxes.56   We
therefore agree with the Division and the superior court that the
purpose  clause  of AS 21.09.270 should be read in  harmony  with
          typical retaliatory statutes as intending to equalize and lower
taxes  on  domestic insurers across states and  not  just  within
states, and assess the means-to-end fit with this broader purpose
in mind.
          The  United  States  Supreme Court  upheld  Californias
retaliatory  tax statute in Western & Southern under the  federal
Equal  Protection  Clause,  applying the  relatively  deferential
federal rational basis test, which requires only that legislation
bear a rational relation to a legitimate state purpose.57  In the
wake  of Western & Southern, state courts have upheld retaliatory
statutes  in  the  face  of  equal  protection  challenges  under
similarly  deferential rational basis review.  For  example,  the
Supreme  Court of Florida upheld Floridas retaliatory tax,  which
was  similar in structure to the retaliatory tax that was  upheld
against  similar  challenges in Western & Southern  Life.58   The
Supreme Court of Florida noted:
          Western & Southern Life also made clear  that
          retaliatory taxes, which have been  a  common
          feature  of  insurance taxation  for  over  a
          century, are rationally related to the states
          legitimate   interest   in   promoting    the
          interstate  business of domestic insurers  by
          deterring   other   States   from    enacting
          discriminatory  or excessive taxes.   Because
          it  is  at  least fairly debatable  that  the
          Florida  legislature enacted section  624.429
          with  this well recognized purpose  in  mind,
          the  Equal  Protection challenge .  .  .  was
          properly rejected.[59]
          
And  according  to  Couch on Insurance 3d,  [b]y  the  weight  of
authority,  a  state has the power to protect  its  own  domestic
insurance  companies doing business in other states  by  imposing
regulatory  requirements of equal stringency upon  the  insurance
companies  of those states.60  Blue Cross urges that  this  court
depart  from  this authority because a higher level  of  scrutiny
applies under the Alaska Constitution.  And Blue Cross is correct
that  under  Alaskas  equal  protection  clause,  we  do  subject
legislation  to  a more exacting inquiry than under  the  federal
rational   basis   test,61  requiring  that  classifications   be
reasonable,  not arbitrary, and . . . rest upon  some  ground  of
difference  having a fair and substantial relation to the  object
of  the legislation.62  We are persuaded, though, that even under
our  more  demanding  test,  AS 21.09.270  passes  constitutional
muster.   Since  AS  21.09.270 was applied  to  Blue  Cross  only
because   Washington  would  apply  more  onerous  taxes   on   a
hypothetical Alaskan non-profit health care services  corporation
operating in Washington, we find that the purpose of AS 21.09.270
of  equalizing  and lowering taxes across states  is  fairly  and
substantially furthered by imposition of the retaliatory  tax  on
Blue Cross.
          4.   Blue Crosss substantive due process challenge also
               fails.
          Substantive  due process is denied when  a  legislative
          enactment has no reasonable relationship to a legitimate
governmental  purpose.63   Blue Crosss  substantive  due  process
argument also fails because we have held that AS 21.09.270  meets
our   higher  equal  protection  standard,  bearing  a  fair  and
substantial relationship to its legitimate purpose.
IV.  CONCLUSION
          The  Division waived its right to argue that Blue Cross
is  precluded from seeking a refund of its retaliatory taxes.  We
therefore consider Blue Crosss claim and conclude that Blue Cross
is  subject  to  retaliatory taxes.  We also  conclude  that  the
Division  acted  reasonably in implementing the  retaliatory  tax
statute, and specifically, in excluding payments that Blue  Cross
made to the Alaska Comprehensive Health Insurance Association and
the  Alaska Small Employers Health Reinsurance Association.   The
retaliatory tax statutes plain language, the policies  underlying
that   statute,  and  deference  to  agency  expertise  and   its
established  interpretation  of the  statute,  all  support  this
outcome.   Accordingly, we AFFIRM the ruling made by the Director
of  the Division of Insurance.  Finally, because we conclude that
the retaliatory statute bears a fair and substantial relationship
to  its  legitimate purpose, we also AFFIRM the  superior  courts
determination  that AS 21.09.270 is constitutional under  Alaskas
equal protection and substantive due process clauses.
_______________________________
     1    Lee R. Russ, Annotation,  Construction, Application and
Operation of State Retaliatory Statutes Imposing Special Taxes or
Fees  on  Foreign Insurers Doing Business Within  the  State,  30
A.L.R.4th 873  1(a) (1984).

     2     Western  &  Southern Life Ins. Co.  v.  State  Bd.  of
Equalization of California, 451 U.S. 648, 668 (1981).

     3     The  facts  in  this  case are  not  in  dispute.   In
connection  with  Blue  Crosss  tax  refund  request  before  the
Director of the Division of Insurance, the parties entered into a
stipulation of facts with respect to that refund request and  any
related judicial appeals or proceedings.

     4    AS 21.55.100.

     5    AS 21.55.220(c).

     6    AS 21.55.220(d).

     7    Ch. 39,  1, SLA 1993.

     8    AS 21.56.050(d).

     9    Wash. Rev. Code  48.41.020.

     10     The  Division  of  Insurance,  as  a  party  to  this
proceeding, will be referred to as the Division.  When  referring
to the tax refund proceedings before the Director of the Division
of  Insurance  below, the terms Director of the Division  or  the
Director will be used.

     11    Alaska Trademark Shellfish, LLC v. State, 91 P.3d 953,
956 (Alaska 2004).

     12     Alyeska Pipeline Serv. Co. v. DeShong, 77 P.3d  1227,
1231 (Alaska 2003).

     13    Id.

     14     W.  Star Trucking v. Big Iron Equip., 101 P.3d  1047,
1050 (Alaska 2004).

     15     Alaska Transp. Commn v. Airpac, Inc., 685 P.2d  1248,
1253  (Alaska 1984) (citing McCracken v. State, 518 P.2d  85,  88
(Alaska 1974)).

     16     State Commercial Fisheries Entry Commn v. Carlson, 65
P.3d 851, 858 (Alaska 2003).

     17    Briggs v. Newton, 984 P.2d 1113, 1117 (Alaska 1999).

     18    780 P.2d 1023, 1030 (Alaska 1989).

     19     798  P.2d  1269, 1280 (Alaska 1990) (quotation  marks
omitted).

     20    AS 21.09.210(k).

     21    780 P.2d at 1029.

     22    798 P.2d at 1280.

     23     1979 Informal Op. Atty Gen. No. J-66-361-79, 1979  WL
22800, at *1 (Apr. 17, 1979).

     24    Id.  at *1.

     25    Id.  at *1-2.

     26    Id.

     27     See Metro. Life Ins. Co. v. Ins. Commr, Md., 473 A.2d
933,  942  (Md.  App.  1983) (upholding retaliatory  tax  statute
against  non-delegation  clause challenge  and  noting  that  the
complex  and  varying  fact patterns that justify  administrative
flexibility  in  implementing  regulatory  statutes  are  also  a
problem in the enforcement of tax laws).

     28     Alyeska Pipeline Serv. Co. v. DeShong, 77 P.3d  1227,
1231 (Alaska 2003).

     29    Bullock v. State, Dept of Cmty. & Regl Affairs, 19 P.3d
1200, 1210 (Alaska 2001).

     30    AS 21.09.270(a).

     31    Id.

     32     See AS 21.80.060 (assessments imposed on insurers  by
the  Alaska  Insurance  Guaranty  Association  for  property  and
casualty insurers); AS 21.79.070 (assessments imposed on insurers
by the Alaska Life and Health Insurance Guaranty Association); AS
23.30.040 (Second Injury Fund assessment).

     33     See Western & Southern Life Ins. Co. v. State Bd.  of
Equalization of California, 451 U.S. 648, 668 (1981) (noting that
some states consider only items of tax on premium income and fees
paid   and   disregard   other  burdens  because   of   practical
difficulties involved in computing and comparing exactions).

     34    State Farm Mut. Auto. Ins. Co. v. Long, 497 S.E.2d 451,
455 (N.C. App. 1998); see also Metro. Life Ins. Co., 473 A.2d  at
462-63 (enumerating the difficulties of retaliating against local
taxes imposed in a foreign state).

     35     No. 5460, 1991 WL 149137 (Minn. Tax. Ct. 1991).

     36    See id. at *7.

     37    See Fla. Dept of Revenue v. Liberty Natl Ins. Co., 667
So. 2d 445 (Fla. Dist. App. 1996).

     38     See Aetna Life Ins. Co. v. Dir., Div. of Taxation, 20
N.J. Tax 87  (N.J. Tax Ct. 2002).

     39     See, e.g., Fairbanks N. Star Borough Assessors Office
v. Golden Heart Utils., Inc., 13 P.3d 263 (Alaska 2000).
     40     Alaska Pac. Assur. Co. v. Brown, 687 P.2d 264, 269-70
(Alaska 1984).

     41     Eldridge v. State, Dept of Revenue, 988 P.2d 101, 103
(Alaska 1999).

     42    Western & Southern Life Ins. Co., 451 U.S. at 670 n.23.

     43     Atlantic  Richfield Co. v. State, 705 P.2d  418,  437
(Alaska 1985).

     44     Ranney v. Whitewater Engg, 122 P.3d 214, 223  (Alaska
2005).

     45    Wash. Rev. Code  48.14.0201(2).

     46    Id.

     47    AS 21.09.210(b).

     48    Russ, Construction, Application and Operation of State
Retaliatory Statutes, 30 A.L.R.4th 873  1(a).

     49    451 U.S. at 674.

     50    Id.

     51    Id. at 669-74.

     52    Id. at 672.

     53    Wash. Rev. Code  48.14.0201(2).

     54     1  Lee  R.   Russ  & Thomas F.   Segalla,   Couch  on
Insurance 3D  3.38, at 3-58 (1995).

     55    1966 House Journal Supp. 12, at 26 (Mar. 3, 1966).

     56     Western  & Southern Life Ins. Co., 451  U.S.  at  668
(emphasis added).

     57    Id.

     58    Gallagher v. Motors Ins. Corp., 605 So. 2d 62, 70 (Fla.
1992).

     59    Id. at 71 (quotation marks omitted); see also Mut. Life
Ins.  Co.  of N.Y. v. Washburn, 561 N.E.2d 29, 37-38 (Ill.  1990)
(relying  on  Western & Southern and noting that its  retaliatory
tax statute was rationally related to deterring other States from
enacting discriminatory or excessive taxes); Prudential Ins.  Co.
of  Am.  v. Commr of Revenue, 709 N.E.2d 1096, 1103 (Mass. 1999);
TIG  Ins.  Co.,  Inc. v. Dept of Treasury, 629  N.W.2d  402,  407
(Mich.  2001) (noting that Michigans equal protection clause  was
coextensive  with  the  federal  equal  protection  clause,   and
commenting,  [i]n  light  of  Western  &  Southern,  the  general
constitutionality of Michigans retaliatory tax is clear).

     60    1 Russ & Segalla, Couch on Insurance 3D  3:35, at 3-52.

     61     See,  e.g.,  Herricks Aero-Auto-Aqua Repair  Ser.  v.
State,  Dept  of Transp. & Pub. Facilities, 754 P.2d  1111,  1114
(Alaska 1988) ([T]he minimum burden that the state must meet when
defending  legislation  challenged on  equal  protection  grounds
under the Alaska constitution is greater than that required under
the United States Constitution.).

     62     State v. Planned Parenthood of Alaska, 35 P.3d 30, 44
(Alaska 2001) (citations omitted).

     63     Concerned  Citizens of S. Kenai  Peninsula  v.  Kenai
Peninsula Borough, 527 P.2d 447, 452 (Alaska 1974).

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