457 U.S. 55 (1982)
Alaska received a windfall after discovering large oil reserves on state land. As a result, the state devised a plan to pay state residents a portion of the funds received. The state residents challenged the distinctions made within the class of persons who were residents when the dividend scheme was enacted. The state residents argued that the distinctions violated the Equal Protection Clause of the Fourteenth Amendment. The state officials argued that the program's distinctions created a financial incentive for individuals to establish and maintain state residence, encouraged prudent management of the fund, and apportioned benefits in recognition of undefined tangible and intangible contributions made by the citizens during their years of residency.
- On review, the Court held that:
- (1) the first two state objectives were not rationally related to the distinctions the state sought to make between newer residents and those who had been in the state since 1959;
- (2) the past contributions argument had been rejected by the Court before and opened up the possibility state citizens being treated different for many benefits; and
- (3) per the statutory language the entire plan was invalid.
The Court reversed the judgment from the state supreme court, which upheld the validity of the state dividend distribution plan, and remanded the case for further proceedings.
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