      Notice: This opinion is subject to correction before publication in the P ACIFIC R EPORTER .
      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@akcourts.us.



               THE SUPREME COURT OF THE STATE OF ALASKA

STATE OF ALASKA,                               )
DEPARTMENT OF HEALTH AND                       )        Supreme Court No. S-15339
SOCIAL SERVICES, DIVISION OF                   )
PUBLIC ASSISTANCE,                             )        Superior Court No. 3AN-12-09838 CI
                                               )
                      Petitioner,              )        OPINION
                                               )
              v.                               )        No. 7001 – April 24, 2015
                                               )
LESTER GROSS,                                  )
                                               )
                      Respondent.              )
                                               )

              Petition for Review from the Superior Court of the State of
              Alaska, Third Judicial District, Anchorage, Erin B. Marston,
              Judge.

              Appearances: Kathryn R. Vogel, Assistant Attorney General,
              Anchorage, and Michael C. Geraghty, Attorney General,
              Juneau, for Petitioner. Mark Regan, Disability Law Center
              of Alaska, Anchorage, for Respondent.

              Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
              Bolger, Justices.

              MAASSEN, Justice.

I.    INTRODUCTION
              An applicant for federal disability benefits applied for state benefits that are
intended to provide basic assistance while the federal application is pending. The
Division of Public Assistance — the division of the Alaska Department of Health and
Social Services that administers the state program1 — denied these interim benefits,
relying on a subset of the criteria that the Social Security Administration uses to
determine eligibility for federal benefits. The superior court reversed this decision,
holding that Alaska law required the Department to apply the same federal substantive
criteria and procedural requirements to its determination of eligibility for state interim
benefits. The Department petitioned for review, and we granted the petition.
              We conclude that, while state law does not require the Department to track
the federal analysis exactly when it assesses eligibility for state interim benefits, the
Department’s application of the law erroneously excludes a category of applicants who
will be found to be disabled for purposes of federal benefits and who therefore should
be entitled to interim assistance. We therefore affirm the superior court’s decision in
part, reverse it in part, and remand for further proceedings.
II.    FACTS AND PROCEEDINGS
       A.     Facts
              Certain persons who are disabled and unable to work are entitled to federal
Supplemental Security Income (SSI) benefits administered by the United States Social
Security Administration.2 In determining whether an applicant is “disabled” and
therefore entitled to SSI benefits, the Social Security Administration uses a five-step




       1
             See 7 Alaska Administrative Code (AAC) 40.040 (2015) (“Assistance
under this chapter will be granted only upon application to the division.”); 7 AAC
40.900(4) (2015) (“In this chapter, . . . ‘division’ means the division of public assistance
of the Department of Health and Social Services.”).
       2
              See 42 U.S.C. § 1381 (2012); 20 C.F.R. § 416.110 (2014).

                                           -2-                                        7001

process outlined in federal regulations.3       Steps one and two are satisfied if the
Administration finds first that the applicant is not currently engaged in “substantial
gainful activity”4 and second that the applicant has a “determinable physical or mental
impairment” lasting at least one year or likely to result in death, significantly limiting the
applicant’s “physical or mental ability to do basic work activities.”5 If these first two
steps are satisfied, an individual may qualify for SSI benefits at step three, where the
Administration considers whether the medical severity of the applicant’s impairment
“meets or equals” a disability listed in federal regulations.6
              Individuals who satisfy the first two steps but do not qualify for SSI
benefits at step three may nonetheless qualify through steps four and five. At step four,
the Social Security Administration considers whether the applicant, despite his or her
impairment, can perform work he or she has done in the past; if so, the applicant is not
disabled and not entitled to SSI benefits.7 If the applicant cannot perform past work,
however, the analysis proceeds to step five.
              At step five the Social Security Administration considers the applicant’s
ability to do other work in the national economy;8 if the applicant can perform other
work, he or she is not disabled and not entitled to SSI benefits. The burden shifts at this


       3
          See 20 C.F.R. § 416.920(a)(4) (describing five-step process in general);
FRANK BLOCH , BLOCH ON SOCIAL SECURITY § 3:7 (2015 ed.).
       4
              20 C.F.R. §§ 416.920(a)(4)(ii), 416.920(b).
       5
              Id. §§ 416.920(c), 416.909.
       6
             Id. § 416.920(d). The qualifying impairments are listed at id. § 404, subpart
P, appendix 1. Id. § 416.920(a)(4)(iii).
       7
              Id. §§ 416.920(f), 416.920(h), 416.960(b).
       8
              Id. §§ 416.920(g), 416.920(h), 416.960(c).

                                            -3-                                         7001

step of the federal analysis, and the Administration, rather than the applicant, is
“responsible for providing evidence that demonstrates that other work exists in
significant numbers in the national economy that [the applicant] can do, given [the
applicant’s] residual functional capacity and vocational factors.”9 Burden-shifting
requires that the Administration present the testimony of a vocational expert when other
methods of proof are insufficient.10 If the Administration fails to carry its burden, the
applicant is considered disabled and entitled to SSI benefits.11
              Determining eligibility for SSI can be a time-consuming process, lasting
many months. To help alleviate hardship during the long application period, state
interim assistance programs pay “assistance financed from State or local
funds . . . furnished for meeting basic needs” of SSI applicants while their eligibility for
federal benefits is being determined.12 The federal government reimburses Alaska for
the interim assistance payments the State makes to individuals who are ultimately found
to be entitled to SSI,13 but the State is responsible for determining the parameters of its
interim assistance program, including the requirements for eligibility.14


       9
              Id. § 416.960(c)(2).
       10
              Id. § 416.966(e); see also BLOCH , supra note 3, § 3:36.
       11
             See Bowen v. Yuckert, 482 U.S. 137, 146 n.5 (1987); Erickson v. Shalala,
9 F.3d 813, 816-17 (9th Cir. 1993).
       12
              42 U.S.C. § 1383(g)(3) (2012).
       13
              See id. §§ 1383(g)(3)-(4); 20 C.F.R. § 416.1901(a).
       14
              See, e.g., Kraft v. Comm’r of Pub. Welfare, 496 N.E.2d 1379, 1383-86
(Mass. 1986) (discussing the relationship of federal and state law in interim assistance
and stating that the federal statute and regulations “evince an intent to delegate to the
States the power to determine the amount of such assistance and eligibility guidelines . . .
                                                                            (continued...)

                                           -4-                                        7001

              Alaska’s interim assistance program is governed by AS 47.25.455, which
provides: “The department shall pay at least $280 a month to a person eligible for
assistance under this chapter while the eligibility of the person for benefits under [the SSI
Program] is being determined.”15 A regulation, 7 AAC 40.180, provides that the
Department will determine whether an applicant is eligible for interim assistance based
on “whether the applicant is likely to be found disabled by the Social Security
Administration, including whether the applicant’s impairment meets . . . [the] Social
Security Administration disability criteria for the listings of impairments described in
20 C.F.R. 404, subpart P, appendix 1.”16 The regulation further specifies that, “[i]n
determining whether an applicant’s disability meets [these] criteria,” the Department will
consider, among other things, whether the “impairment affects the applicant’s activities
of daily living” and whether “the applicant can perform any other work, including
sedentary work.”17



       14
        (...continued)
[and] authorize the States to determine the appropriate methodology for calculating the
amount of reimbursement due.”).
       15
              AS 47.25.455(a).
       16
               7 AAC 40.180(b)(1)(B) (2015). The regulation also requires the
Department to examine “the SSI program’s presumptive disability criteria under
20 C.F.R. 416.934,” 7 AAC 40.180(b)(1)(A), but Gross has not alleged eligibility under
those criteria.
              While 7 AAC 40.180 has been amended since the events in question in this
case, that amendment simply updated references to the Code of Federal Regulations
without changing the substance or structure of the regulation. Compare former
7 AAC 40.180 (am. 1/11/06), with 7 AAC 40.180 (am. 12/7/13). We therefore refer to
the regulation’s most recent published version here.
       17
              7 AAC 40.180(c)(3), (4).

                                            -5-                                        7001

       B.     Proceedings
              Lester Gross applied for federal SSI benefits and state interim assistance
benefits in December 2011. He claimed eligibility for both based on a serious mental
disorder. The Department denied Gross’s application for interim assistance. Based on
information that Gross provided and using the five-step SSI analysis, the Department’s
disability adjudicator determined at step five that Gross was not likely to be found
eligible for SSI because there was “other work in the national economy” that he could
perform, and that he was therefore not eligible for interim assistance.
              Gross requested a hearing, which was held in March 2012. The Department
presented testimony from its disability adjudicator but not from a vocational expert. The
hearing officer, interpreting 7 AAC 40.180 as incorporating all substantive and
procedural aspects of the SSI analysis, concluded that Gross had failed to prove disability
at step three. Proceeding to the remaining steps, however, the hearing officer concluded
that under step five “the burden of proof shifts from the applicant to the agency” and that
the Department had failed to meet its burden because it did not provide evidence that the
jobs it identified for Gross actually existed in significant numbers in the national
economy, nor had it provided the testimony of a vocational expert that Gross could
perform those jobs. The hearing officer therefore found Gross eligible for interim
assistance.
              After both Gross and the Department filed proposals for agency action,18
the Department’s deputy commissioner issued a final decision.19               The deputy


       18
             A proposal for action states a party’s position as to whether the agency
should adopt, reverse, modify, or take other action on a hearing officer’s proposed
decision. See AS 44.64.060(e).
       19
              See AS 44.64.060(e)(5) (stating that the agency may, “in writing, reject,
                                                                        (continued...)

                                           -6-                                       7001

commissioner ruled that “7 AAC 40.180 incorporates only . . . steps 1, 2, and 3 of the SSI
disability analysis” for determinations of eligibility for interim assistance, and that the
regulation “does not require the Department to follow the analyses used in steps 4 and 5
of the SSI analysis.”20 “In particular,” the deputy commissioner concluded,
              7 AAC 40.180 does not require the Department to present
              evidence through a vocational expert, and does not place any
              burden on the Department to prove[] (as SSA is required to
              do at step 5 of its analysis)[] that there is particular work in
              the national economy that the applicant is able to perform.
Accordingly, because the hearing officer had determined that Gross was not likely to be
found disabled at step three of the SSI analysis — finding him disabled only at step five
— the deputy commissioner determined that Gross was not eligible for state interim
assistance.
              Gross appealed the deputy commissioner’s decision to the superior court,
which reversed it. Based on our decisions in Moore v. Beirne21 and State, Department
of Health & Social Services v. Okuley,22 the superior court concluded that the
Department, when determining eligibility for the state interim assistance program, must
follow all five steps of the SSI analysis.
              The Department petitioned for review. It argued that neither AS 47.25.455
nor 7 AAC 40.180 requires it to undertake the full five-step federal analysis in evaluating


       19
         (...continued)
modify, or amend an interpretation or application in the proposed decision of a statute
or regulation directly governing the agency’s actions by specifying the reasons for the
rejection, modification, or amendment, and issue a final agency decision”).
       20
              Both emphases in original.
       21
              714 P.2d 1284 (Alaska 1986).
       22
              214 P.3d 247 (Alaska 2009).

                                             -7-                                     7001

eligibility for state interim assistance, and that its interpretation of the statute is otherwise
permissible. The Department asked that we reverse the superior court’s decision and
reinstate the decision of the deputy commissioner.
              We granted the petition.
III.   STANDARDS OF REVIEW
              “When a superior court acts as an intermediate appellate court in an
administrative matter, we review the merits of the agency’s decision.”23
              The agency’s decision in this case is based on its application of a regulation.
When examining regulations that were properly promulgated, “[w]e limit our review to
‘whether the regulations are consistent with and reasonably necessary to carry out the
purposes of the statutory provisions and whether the regulations are reasonable and not
arbitrary.’ ”24 “In making the consistency determination, we use our independent
judgment unless the ‘issue involves agency expertise or the determination of fundamental
policy questions on subjects committed to an agency.’ ”25 “But the specific form our
independent review takes is distinct from pure de novo review.                  We apply the
substitution-of-judgment standard,” by which we “adopt the rule of law that is most


       23
             State, Dep’t of Commerce, Cmty. & Econ. Dev., Div. of Ins. v. Alyeska
Pipeline Serv. Co., 262 P.3d 593, 596 (Alaska 2011).
       24
             Lakosh v. Alaska Dep’t of Envtl. Conservation, 49 P.3d 1111, 1114 (Alaska
2002) (alterations omitted) (quoting Kelly v. Zamarello, 486 P.2d 906, 911 (Alaska
1971)); accord Grunert v. State, 109 P.3d 924, 929 (Alaska 2005); see also
AS 44.62.030.
       25
             Lakosh, 49 P.3d at 1114 (quoting O’Callaghan v. Rue, 996 P.2d 88, 94
(Alaska 2000)). We have explained that “ ‘reasonable necessity is not a requirement
separate from consistency’ and the scope of review should center around consistency
with the authorizing statute.” Bd. of Trade, Inc. v. State, Dep’t of Labor, Wage & Hour
Admin., 968 P.2d 86, 89 (Alaska 1998) (quoting State, Bd. of Marine Pilots v. Renwick,
936 P.2d 526, 531-32 (Alaska 1997)).

                                              -8-                                          7001

persuasive in light of precedent, reason, and policy, but in doing so we give due
deliberative weight ‘to what the agency has done, especially where the agency
interpretation is longstanding.’ ”26 In this case, the Department’s interpretation is due
little deference based on longevity;27 Gross’s case appears to be the first in which the
Department has adopted the interpretation at issue here, as the deputy commissioner
noted in her decision.28
IV.    DISCUSSION
              The Department argues that AS 47.25.455 does not require use of the full
five-step SSI analysis to determine eligibility for interim assistance and that 7 AAC
40.180 — which the Department interprets as requiring only the first three steps — is
therefore consistent with the statute. But because this interpretation of the statute would
exclude from the interim assistance program an entire category of applicants potentially
eligible for SSI, we reject the Department’s argument.


       26
            Heller v. State, Dep’t of Revenue, 314 P.3d 69, 73 (Alaska 2013) (quoting
Chugach Elec. Ass’n, Inc. v. Regulatory Comm’n of Alaska, 49 P.3d 246, 250 (Alaska
2002)).
      27
               See, e.g., Totemoff v. State, 905 P.2d 954, 968 (Alaska 1995) (stating that
“if agency interpretation is neither consistent nor longstanding, the degree of deference
it deserves is substantially diminished” (citing Bowen v. Am. Hosp. Ass’n, 476 U.S. 610,
646 n.34 (1986))); Underwater Constr., Inc. v. Shirley, 884 P.2d 150, 153 n.11 (Alaska
1994) (refusing to give agency’s inconsistent statutory interpretation any deference).
      28
             While the Department suggests that it has advanced this argument in prior
administrative proceedings, nothing in the record on appeal shows this to be the case.
In the decision on Gross’s application, the deputy commissioner observed: “The
Department is mindful that the ALJ’s proposed decision followed the interpretation of
the Interim Assistance regulations previously applied by the Department’s former Office
of Hearings and Appeals, and the interpretation adopted by the Director of the Division
of Public Assistance in the Director’s Appeal decision issued on October 7, 2011 in
OHA Case No. 11-FH-188.”

                                           -9-                                       7001

      A.     Why We Apply The Substitution Of Judgment Standard Of Review
             The Department argues that determining eligibility for interim assistance
is “a policy decision and a judgment squarely within the agency’s area of expertise,”
which we should review only to determine whether it has a reasonable basis. We use
reasonable basis review “when the interpretation at issue implicates agency expertise or
the determination of fundamental policies within the scope of the agency’s statutory
functions.”29 Because the question in this case is one of statutory interpretation —
requiring a determination of the legislature’s intent in creating the interim assistance
program — we conclude that the substitution of judgment standard of review is
appropriate instead.
             In support of its argument for reasonable basis review, the Department cites
Marathon Oil Co. v. State.30 In that case we examined whether the Department of
Natural Resources had permissibly denied a lessee’s request to apply retroactively a
specific methodology for calculating royalties on gas leases.31 We found the governing
statute ambiguous as to “whether retroactive contract pricing is permitted.”32 We applied
the reasonable basis standard of review because of our recognition that “[a]llowing
retroactivity could have important consequences for how royalties are assessed and




      29
            Marathon Oil Co. v. State, Dep’t of Natural Res., 254 P.3d 1078, 1082
(Alaska 2011) (citing Matanuska-Susitna Borough v. Hammond, 726 P.2d 166, 175
(Alaska 1986)).
      30
             254 P.3d 1078 (Alaska 2011).
      31
             See id. at 1081-82.
      32
             Id. at 1085.

                                         - 10 -                                    7001

paid,” consequences the agency was more qualified than the courts to weigh.33 We
observed that “[t]he state royalty and audit system is complicated, and DNR has expertise
in deciding when retroactive application makes sense within that system.”34 We also
noted that we were “especially inclined to defer when the agency’s statutory
interpretation is long-standing,” as it was in Marathon Oil.35
              The question in this case is whether the Department may, consistent with
the interim assistance statute, definitionally exclude persons who are eligible for SSI
from eligibility for state interim assistance. Unlike Marathon Oil, answering that
question does not require the “resolution of policy questions which lie within the
agency’s expertise and are inseparable from the facts underlying the agency’s
decision.”36 Rather, the answer depends on the legislature’s intent in creating the interim
assistance program. “The question whether [the Department] properly interpreted the
legislature’s mandate . . . is answerable through ‘statutory interpretation or other analysis
of legal relationships about which courts have specialized knowledge and experience.’
Because this preliminary legal question resides within the traditional province of judicial




       33
              Id. at 1082.
       34
              Id.
       35
              Id. at 1085.
       36
            Id. (quoting Earth Res. Co. v. State, Dep’t of Revenue, 665 P.2d 960, 964
(Alaska 1983)).

                                           - 11 -                                      7001

review and involves no technical expertise,”37 we employ the substitution of judgment
standard.38
              The Department also urges us to defer to its interpretation because the adult
public assistance statutes — of which the interim assistance program is a part —
generally grant it the authority to “adopt regulations, not inconsistent with law, defining
need, [and] prescribing the conditions of eligibility for assistance.”39 But the grant of
regulatory authority in this case is unlike the broad grants of authority at issue in cases
in which we have deferred to an agency decision.40 Instead, because the issue is one of
statutory interpretation, we apply the substitution of judgment standard, giving little
deference to the agency’s new interpretation of the law, as explained above.41


      37
             Lakosh v. Dep’t of Envtl. Conservation, 49 P.3d 1111, 1117 (Alaska 2002)
(quoting Kelly v. Zamarello, 486 P.2d 906, 916 (Alaska 1971)).
       38
              Heller v. State, Dep’t of Revenue, 314 P.3d 69, 73 (Alaska 2013) (“Because
the interpretation involves legislative intent rather than agency expertise, we apply
independent review here.”).
       39
              AS 47.05.010(9).
      40
              Cf. Kenai Peninsula Fisherman’s Coop. Ass’n v. State, 628 P.2d 897, 903
(Alaska 1981) (reasoning that a statute allowing the Board of Fisheries to “make
regulations it considers advisable” indicated “that the legislature intended to give the
Board discretion to decide methods of regulation”); Kelly v. Zamarello, 486 P.2d 906,
912 (Alaska 1971) (reasoning that a statute for competitive oil and gas leasing describing
“such bonus as may be accepted by the Commissioner” of DNR indicated “that the
legislature intended to give the Commissioner broad authority to determine the kind of
bonus he will accept”).
       41
            See Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896,
902-04 (Alaska 1987) (“Tesoro argues that we should apply the ‘reasonable basis’
standard because the issues raised in these cases involve agency expertise and
fundamental policy considerations in an area where the administrative agency has been
                                                                        (continued...)

                                          - 12 -                                     7001

              Finally, in deciding this appeal we do not need to address whether the
Department’s decision of Gross’s case has a reasonable basis in the regulation.42 For
purposes of our decision we assume that the Department’s application of 7 AAC 40.180
was based on a reasonable interpretation of it, leaving for our independent review only
the question whether the regulation as so interpreted is consistent with the statute it was
intended to implement.
       B.	    A Failure To Consider Steps Four And Five Of The SSI Analysis In
              Determining Eligibility For Interim Assistance Is Inconsistent With
              AS 47.25.455.
              The Department argues that nothing in AS 47.25.455 mandates use of the
complete five-step federal SSI analysis to assess eligibility for state interim assistance,
and that its interpretation of 7 AAC 40.180 as incorporating only the first three steps is
therefore consistent with the statute. In particular, the Department argues that it is not
required, as it would be at step five of the SSI analysis, to carry the burden of proving
the existence of other work in the national economy that the applicant can perform, or
to present expert testimony on that subject. We agree that the Department is not required
to exactly replicate all procedural aspects of the five-step analysis; however, to the extent
the Department’s interpretation excludes from interim assistance an entire category of




       41
         (...continued)
granted broad regulatory authority. . . . [But b]ecause this case involves statutory
interpretation, we conclude that the independent judgment test is the appropriate standard
of review.”); supra notes 27-28 & accompanying text.
       42
              Cf. Davis Wright Tremaine LLP v. State, Dep’t of Admin., 324 P.3d 294,
301 (Alaska 2014) (“Assuming a regulation is valid, we review whether an agency’s
interpretation of its regulation is plainly erroneous and inconsistent with the regulation
— i.e., whether it has a reasonable basis.” (citation omitted) (internal quotation marks
omitted)).

                                           - 13 -	                                     7001

disabled applicants — those who are entitled to federal benefits only because of step five
— it is inconsistent with the statute.
              Alaska Statute 47.25.455(a) provides that “[t]he department shall pay at
least $280 a month to a person eligible for assistance under this chapter while the
eligibility of the person for benefits under [the SSI program] is being determined.” The
Department contends that, because the statute requires that interim assistance be provided
“while the eligibility of the person” for SSI is being determined, the legislature could not
have intended that the Department apply the same analysis as that used by the federal
government to determine SSI eligibility. It argues that the structure of the adult public
assistance statutes in general supports its interpretation.43
              “[W]e interpret [a] statute according to reason, practicality, and common
sense, considering the meaning of the statute’s language, its legislative history, and its
purpose.”44 The language and structure of the relevant statutes do not directly answer
the question whether the test for state interim assistance must be the same as that for SSI,
but they do suggest that the two should closely track. Alaska Statute 47.25.455 specifies
that benefits are to be paid “to a person eligible for assistance under this chapter while

       43
               The Department also argues that the “policy and purpose” of Alaska
Statutes Chapter 47 generally is “to cooperate and coordinate with the United States
government in administering public assistance,” a purpose which is fulfilled through the
reimbursement agreement between the state and federal governments, rather than through
an identical definition of disability. The provisions allowing for reimbursement of
interim assistance payments from the federal government, however, were not part of the
initial interim assistance program, ch. 138, § 18, SLA 1982, and their subsequent
addition, ch. 29, § 6, SLA 1993, did not imply a change in the overall purpose of or
conditions of eligibility for the program. See, e.g., 1993 House Journal 87-88
(Governor’s transmittal letter); Testimony of Jan Hansen, Div. of Pub. Assistance, at
33:30–34:45, Hearing on H.B. 67 Before the House Judiciary Comm., 18th Leg., 1st
Sess. (Mar. 15, 1993) (discussing interim assistance).
       44
              Louie v. BP Exploration (Alaska), Inc., 327 P.3d 204, 206 (Alaska 2014).

                                           - 14 -                                     7001

the eligibility of the person for benefits under [the federal SSI program] is being
determined”; the adult public assistance chapter specifies that a person is eligible if he
or she is disabled, and it defines “disabled” in the same way the federal SSI program
defines it.45 The Department is correct, however, that the text of AS 47.25.455, which
requires interim assistance payments “while the eligibility of the person for benefits
under [SSI] is being determined” and therefore contemplates a more expedited decision,
does not necessarily require that the test for interim assistance be exactly the same as the
test for SSI.
                We directly addressed the interim assistance statute once before.46 In
Moore v. Beirne, we held that AS 47.25.455 did not permit the Department to terminate
interim assistance benefits based on the federal authorities’ preliminary denial of SSI
benefits, but instead that interim assistance benefits must continue until the applicant’s

       45
              Compare AS 47.25.615(5) (defining “disabled” as “being unable to engage
in substantial gainful activity by reason of a medically determinable physical or mental
impairment that can be expected to result in death or that has lasted or can be expected
to last for a continuous period of not less than 12 months”), with 42 U.S.C.
§ 1382c(a)(3)(A) (2012) (stating that “an individual shall be considered to be disabled
for purposes of [the SSI program] if he is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which
can be expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve months”); see also 7 AAC 40.030 (stating that,
to be eligible for adult public assistance, “[a]n applicant must meet the eligibility
requirements of the SSI program . . . and the eligibility requirements set forth in [the
Adult Public Assistance] chapter”).
       46
              While the parties discuss our decision in State, Dep’t of Health & Soc.
Servs. v. Okuley, 214 P.3d 247 (Alaska 2009), that case does not affect our analysis here.
The facts underlying Okuley related to the Department’s failure to comply with the
Administrative Procedure Act in enacting a prior version of 7 AAC 40.180. See id. at
249-50 & 250 n.6. The merits of the case, however, related to attorney’s fees issues
raised in subsequent class-action litigation, see id. at 252-58, and did not involve the
interim assistance program itself.

                                           - 15 -                                     7001

SSI appeals had been exhausted and the Social Security Administration made a final
decision on her entitlement to federal benefits.47 The Department argues that nothing in
Moore requires it to use the full five-part SSI analysis, and that Moore supports its
interpretation of the statute because we recognized in that case that applicants for interim
assistance and SSI are not similarly situated for equal protection purposes.48
              The Department is partly correct. As we noted in Moore, the legislature in
creating the interim assistance program intended to codify the Department’s past practice
of paying state benefits to SSI applicants while their entitlement to federal benefits was
being determined.49 At that time, eligibility for interim assistance was assessed simply
through the report of an accredited physician about the applicant’s likely entitlement to
federal benefits,50 a process far less rigorous than the current one. Nothing in Moore
requires the Department to exactly replicate the SSI analysis when it assesses eligibility
for interim assistance.
              However, as we noted in Moore, “[t]he purpose of interim assistance is to
alleviate hardship on applicants for SSI during the application period,”51 and the history
of the program confirms that the legislature intended benefits to be broadly available to
meet this purpose. It was recognized during development of the program that the waiting


       47
              714 P.2d 1284, 1287 (Alaska 1986).
       48
              See id. at 1287-88.
       49
             Id. at 1286; see also Testimony of Rod Betit, Director, Div. of Pub.
Assistance, at 48:30–51:30, Hearing on C.S.H.B. 357 (Rules) Before the Sen. Health,
Educ. & Soc. Servs. Comm., 13th Leg., 1st Sess. (May 5, 1982).
       50
             Moore, 714 P.2d at 1 285 (“Interim assistance payments are granted after
a preliminary examination of the applicant by a physician or psychiatrist.” (citing prior
version of 7 AAC 40.180)).
       51
              Id.

                                           - 16 -                                     7001

time for a determination of SSI eligibility was growing longer, and that assistance
otherwise available to meet applicants’ basic needs during this period was insufficient.52
Furthermore, when enacting the interim assistance program into law, the legislature
eliminated the availability of other benefits pending a final SSI determination — benefits
for which all SSI applicants had formerly been eligible — intending that interim
assistance fill the gap.53
              And as already noted, the method of assessing eligibility at the time of the
statute’s passage involved a much less rigorous process; rather than satisfying the federal
eligibility criteria, an applicant for interim assistance had merely to “demonstrate[] some
likelihood of meeting the statutory criteria for eligibility.”54 As the legislature intended
to adopt the program currently in operation when it codified interim assistance,55 this
again suggests a broadly available benefit. The interim assistance statute has been


       52
            See Testimony of Rod Betit, Director, Div. of Pub. Assistance, at
48:30–51:00, Hearing on C.S.H.B. 357 (Rules) Before the Sen. Health, Educ. & Soc.
Servs. Comm., 13th Leg., 1st Sess. (May 5, 1982) (discussing development of the
program codified as interim assistance in AS 47.25.455).
       53
               Medicaid coverage for the interim period was eliminated as part of the
package of legislation that included AS 47.25.455. Ch. 138, § 13, SLA 1982 (codified
as amended at AS 47.07.020(e)); Testimony of Rod Betit, Director, Div. of Pub.
Assistance, at 48:20–51:00, Hearing on C.S.H.B. 357 (Rules) Before the Sen. Health,
Educ. & Soc. Servs. Comm., 13th Leg., 1st Sess. (May 7, 1982) (discussing genesis of
program codified as Interim Assistance); Comments of Chairman Charlie Parr, at
06:30–11:00, 43:45–45:00, Hearing on C.S.H.B. 357 (Rules) Before the Sen. Health,
Educ. & Soc. Servs. Comm., 13th Leg., 1st Sess. (May 7, 1982) (discussing cuts to
Medicaid benefits granted to individuals prior to a full federal disability determination
and proposal to increase amount of Interim Assistance granted to cover medical bills
prior to final determination).
       54
              Moore, 714 P.2d at 1287.
       55
              See supra note 49.

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amended since its codification, but nothing in the later legislative history alters its
broadly inclusive purpose.
              Also aiding our analysis is the rule “that a remedial statute is to be liberally
construed to effectuate its purposes.” 56 Federal courts have recognized that the Social
Security Act is remedial and must therefore be liberally construed.57 We recognize the
same remedial purposes in Alaska’s interim assistance program, which — as part of
Alaska’s adult public assistance statutes — is intended “to furnish financial assistance
as far as practicable to needy aged, blind, and disabled persons, and to help them attain
self-support and or self-care.”58
              The Department’s interpretation of 7 AAC 40.180 to include only steps one,
two, and three of the SSI analysis in determining eligibility for interim assistance would
render an entire category of persons who are eligible for SSI — those deemed disabled
at step five — ineligible for interim assistance. While the Department asserts that “[n]o
argument or findings have been made in this case to support a theory that [its]
interpretation of interim assistance actually results in an under-inclusive granting of




         56
              State ex rel. Smith v. Tyonek Timber, Inc., 680 P.2d 1148, 1157 (Alaska
1984).
         57
              See Doran v. Schweiker, 681 F.2d 605, 607 (9th Cir. 1982) (“The Social
Security Act is remedial, to be construed liberally.”); Haberman v. Finch, 418 F.2d 664,
667 (2d Cir. 1969) (“[T]he Social Security Act is a remedial statute, to be broadly
construed and liberally applied.”); see also Granberg v. Bowen, 716 F.Supp. 874, 878
(W.D.Pa. 1989) (stating that the Supplemental Security Income program “is to be
construed liberally to further its remedial purposes”).
         58
              AS 47.25.590(b) (emphasis added).

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interim assistance benefits to individuals later adjudicated disabled by SSI,” such under-
inclusion is an inevitable result of the Department’s interpretation.59
              The Department is certainly correct that it is consistent with AS 47.25.455
to limit interim assistance benefits to those “likely to be found disabled”60 by the Social
Security Administration for purposes of SSI and that, in doing so, it need not exactly
replicate the entire set of procedures the Administration employs to determine eligibility
for the federal program. However, the Department may not exclude from eligibility for
interim assistance the entire category of persons eligible for SSI at step five.61 We leave
it to the Department to decide in the first instance how it will satisfy the statutory
mandate.




       59
               Counsel for the Department suggested at oral argument before us that its
three-step application of 7 AAC 40.180 effectively incorporates the substance of steps
four and five because subsection (c)(4) provides that “[i]n determining whether an
applicant’s disability meets the criteria set out in (b)(1)(B) of this section” (which is
essentially step three of the SSI analysis), “the department will consider whether . . . the
applicant can perform any other work, including sedentary work.” But the SSI analysis
explicitly excludes consideration of vocational factors, such as the ability to perform
other work, at step three. 20 C.F.R. § 416.920(d) (2014) (“If you have an impairment(s)
which meets the duration requirement and is listed in appendix 1 or is equal to a listed
impairment(s), we will find you disabled without considering your age, education, and
work experience.”) (emphasis added). Under the Department’s interpretation, therefore,
consideration of vocational factors could only serve to exclude from state benefits those
who would be entitled to federal benefits at step three.
       60
              7 AAC 40.180.
       61
              Gross also argues that, by deciding his case based on a new interpretation
of 7 AAC 40.180 imposed by the commissioner after the hearing, the Department
violated his due process rights. Because we decide today that fuller consideration of
Gross’s case is required under AS 47.25.455, we do not reach his due process claim.

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V.    CONCLUSION
            We AFFIRM the superior court’s decision in part, REVERSE it in part, and
REMAND to the Department for proceedings consistent with this opinion.




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