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,
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THE SUPREME COURT OF THE STATE OF ALASKA
JAMES PRICE, )
) Supreme Court No. S-14713
Appellant, )
) Superior Court No. 3KN-11-00404 CI
v. )
) OPINION
KENAI PENINSULA BOROUGH and )
JOHNI BLANKENSHIP, CLERK, ) No. 6934 – August 8, 2014
)
Appellees. )
_________________________________ )
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Kenai, Charles T. Huguelet, Judge.
Appearances: Kenneth P. Jacobus, Kenneth P. Jacobus, P.C.,
Anchorage, for Appellant. Colette G. Thompson and Holly
B. Montague, Soldotna, for Appellees.
Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
Bolger, Justices.
STOWERS, Justice.
I. INTRODUCTION
James Price challenges the superior court’s order affirming the Kenai
Peninsula Borough (“Borough”) Clerk’s rejection of his ballot referendum application.
The proposed referendum would repeal Borough Ordinance 2008-28, which authorizes
the general law cities within the Borough to tax nonprepared food items on a year-round
basis. The Borough Clerk and the superior court rejected the application on the ground
that it violated AS 29.26.100’s prohibition on local or special legislation. We conclude
that the referendum does not violate the prohibition on local or special legislation and
would be enforceable if passed. Accordingly, we reverse.
II. FACTS AND PROCEEDINGS
The Kenai Peninsula Borough imposes a consumer sales tax on all retail
sales, rents, and services made or rendered within the Borough.1 In the 2008 regular
election, Borough voters approved an initiative providing for a nine-month exemption
from the Borough sales tax on nonprepared food items.2 In anticipation of this initiative,
the Borough Assembly adopted Ordinance 2008-28, which allows general law cities in
the Borough to continue taxing nonprepared food items on a year-round basis.
There are six cities within the Borough: Kachemak, Homer, Soldotna, and
Seldovia, which are general law cities, and Kenai and Seward, which are home rule
cities.3 Alaska Statute 29.45.700(a) provides that a general law city in a borough may
only levy and collect sales taxes “in the manner provided for boroughs” unless the
borough assembly “by ordinance authorize[s] a city to levy and collect sales and use
taxes on other sources.” Home rule cities are not subject to this provision.4 Kachemak
1
Kenai Peninsula Borough Code (KPB) 05.18.100.
2
KPB 05.18.200(A)(15)(d).
3
A general law city has legislative powers conferred by law, whereas a home
rule city has all legislative powers not prohibited by law or charter. AS 29.04.020;
AS 29.04.010.
4
See AS 29.04.010.
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does not currently impose a sales tax.5 Thus, only Homer, Soldotna, and Seldovia are
presently affected by Ordinance 2008-28.6
On May 3, 2010, Price filed an application for a referendum petition with
the Borough Clerk entitled “Referendum to Repeal Kenai Peninsula Borough Ordinance
2008-28.” The proposed referendum, which was assigned number 2010-01 by the
Clerk’s Office (hereinafter “Referendum 2010-01”), would “end[] the Borough’s
authorization for the cities of Soldotna, Homer, and Seldovia to collect sales tax for
nonprepared food items.”
On May 14, 2010, the Borough Clerk rejected Price’s application on two
grounds: (1) the proposed referendum constituted local or special legislation in violation
of AS 29.26.100 because it would allow all Borough voters to vote on an issue that only
concerns Homer, Soldotna, and Seldovia; and (2) the proposed referendum was
unenforceable as a matter of law because it circumvented AS 29.45.700(a), which
provides that only the “assembly” may authorize a city to tax sources that the Borough
does not.
Price filed suit against the Borough in superior court and sought an
injunction requiring the Clerk to prepare the referendum petition so that signatures could
be gathered for placement on the 2011 Borough municipal ballot. Both parties moved
for summary judgment. The superior court granted the Borough’s motion, concluding
5
We recognize that someday, should it elect to impose a sales tax, the
general law city of Kachemak could be directly affected by Ordinance 2008-28. But on
the facts before us, Kachemak is not directly affected by the ordinance and would not be
affected by the proposed referendum.
6
Each of these cities imposes a sales tax on certain items. See Homer City
Code (HCC) 09.16.010; Soldotna Municipal Code (SMC) 03.08.010; Seldovia City Code
(SCC) 03.08.010. Homer provides its own seasonal exemption for sales of nonprepared
food items from September through May. HCC 09.16.100.
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that the referendum constituted local or special legislation in violation of AS 29.26.100.
In light of this ruling, the superior court did not address whether the application was also
unenforceable as a matter of law. Price appeals.
III. STANDARD OF REVIEW
“We review grants of summary judgment de novo, exercising our
independent judgment to determine whether the parties genuinely dispute any material
facts and, if not, whether the undisputed facts entitle the moving party to judgment as a
matter of law.”7 We generally do not review an initiative or referendum unless and until
it is approved by the voters.8 However, exceptions to this rule exist where the proposed
legislation is challenged on the basis that it does not comply with the constitutional and
statutory provisions regulating initiatives and referendums, or where it is challenged as
clearly unconstitutional or unlawful.9 Whether a ballot initiative or referendum complies
with constitutional and statutory requirements is a question of law, which we review
using our independent judgment, “adopting the rule of law that is most persuasive in
light of precedent, reason, and policy.”10 “In matters of initiative and referendum, we
7
Kodiak Island Borough v. Mahoney, 71 P.3d 896, 897 (Alaska 2003)
(quoting State, Dep’t of Health & Soc. Servs. v. Planned Parenthood of Alaska, Inc., 28
P.3d 904, 908 (Alaska 2001)) (internal quotation marks omitted).
8
Alaskans for Efficient Gov’t, Inc. v. State, 153 P.3d 296, 298 (Alaska 2007).
9
Carmony v. McKechnie, 217 P.3d 818, 819-20 (Alaska 2009) (citing
Alaskans for Efficient Gov’t, Inc., 153 P.3d at 298). Because Referendum 2010-01 was
rejected by the Borough Clerk on the grounds that (1) it was unlawful local or special
legislation and (2) that it would impermissibly conflict with power granted exclusively
to the Borough Assembly, its lawfulness and compliance with statutory provisions
regulating initiatives and referendums has been challenged.
10
Anchorage Citizens for Taxi Reform v. Municipality of Anchorage, 151 P.3d
418, 422 (Alaska 2006) (citing Pullen v. Ulmer, 923 P.2d 54, 58 (Alaska 1996)).
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have previously recognized that the people are exercising a power reserved to them by
the constitution and the laws of the state, and that the constitutional and statutory
provisions under which they proceed should be liberally construed.”11
IV. DISCUSSION
A. Referendum 2010-01 Does Not Violate AS 29.26.100’s Prohibition On
Local Or Special Legislation.
Article XI, section 1 of the Alaska Constitution grants to the people the
power to enact or change state laws through initiatives and referendums, and
AS 29.26.100 reserves to the residents of municipalities the power to use initiatives and
referendums to enact or change municipal ordinances.12 The constitution restricts the
initiative and referendum powers by providing that “[t]he initiative shall not be used
to . . . enact local or special legislation” and “[t]he referendum shall not be applied . . . to
local or special legislation.”13 Alaska Statute 29.26.100 extends these restrictions to
municipal initiatives and referendums.
Both the Borough Clerk and the superior court rejected Price’s referendum
application because they concluded that the proposed referendum constituted local or
11
Municipality of Anchorage v. Frohne, 568 P.2d 3, 8 (Alaska 1977)
(footnotes omitted) (citing Alaska Const. art. XI, § 1; Boucher v. Engstrom, 528 P.2d
456, 462 (Alaska 1974)); see also Kodiak Island Borough v. Mahoney, 71 P.3d 896, 898
(Alaska 2003) (“We liberally construe constitutional and statutory provisions that apply
to the initiative process.” (citing Brooks v. Wright, 971 P.2d 1025, 1027 (Alaska 1999);
Interior Taxpayers Ass’n v. Fairbanks N. Star Borough, 742 P.2d 781, 782 (Alaska
1987))).
12
The parties and the superior court used the plural “referendums” and we do
likewise. The plural of “referendum” can either be “referenda” or “referendums.” B RIAN
A. G ARNER , G ARNER ’S D ICTIONARY OF LEGAL U SAGE 762 (3d ed. 2011) (noting that
“the English plural -dums seems to be on the rise”).
13
Alaska Const. art. XI, § 7.
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special legislation. But, while an initiative is unconstitutional if it enacts local or special
legislation, a referendum is unconstitutional only if it would approve or reject local or
special legislation.14 We must, therefore, consider whether Ordinance 2008-28 is local
or special legislation.
We have established a “two-stage analysis for determining
whether . . . legislation is ‘local or special legislation.’ ”15 The first stage requires us to
determine whether the legislation is of general — in this case
boroughwide — applicability.16 If the legislation is generally applicable it is not local
or special legislation, and no further inquiry is required.17 If the legislation is not
generally applicable, we proceed to the second stage and ask whether the legislation
“bears a ‘fair and substantial relationship’ to legitimate purposes.”18
Price argues that Referendum 2010-01 meets the first part of the two-part
“local or special legislation” test because “the effects of the referendum . . . are
borough-wide, and do not affect only certain area[s] of the Borough.”
In rejecting the application for the referendum petition, the Borough Clerk
concluded that Referendum 2010-01 lacked boroughwide applicability because the law
14
Id.; see also Walters v. Cease, 394 P.2d 670, 671 (Alaska 1964) (holding
that Secretary of State could not refer an act of the legislature for referendum by the
voters because the act was local or special legislation), abrogated on other grounds by
Boucher v. Engstrom, 528 P.2d 456 (Alaska 1974).
15
Pebble Ltd. P’ship ex rel. Pebble Mines Corp. v. Parnell, 215 P.3d 1064,
1078 (Alaska 2009) (citing Boucher, 528 P.2d at 461).
16
Id. (citing Boucher, 528 P.2d at 461).
17
Id.
18
Id. at 1079 (quoting State v. Lewis, 559 P.2d 630, 643 (Alaska 1977))
(internal quotation marks omitted).
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would impact the taxation schemes of only three of the Borough’s six cities. The clerk
reasoned:
[T]he voters outside the cit[ies], which far outnumber the
voters within the three general law cities, would be allowed
to vote on an issue that only concerns the three general law
cities. The voters outside [the] cities who shop and pay sales
tax within the cities may be quite motivated to vote in favor
of repealing a city source of taxation since the programs and
functions supported by that taxation are city functions and
programs, not areawide functions and programs. Since the
law will only impact the taxation scheme within the three
cities, which is not a boroughwide concern, it does not have
boroughwide applicability.
The superior court similarly concluded that the proposed referendum lacked general,
boroughwide applicability because “although anyone shopping for groceries in Soldotna,
Homer, or Seldovia would receive a benefit from the proposed referendum, the substance
and stated purpose of the referendum is to take the power to tax groceries away from the
residents of Soldotna, Homer, and Seldovia and subject it to a boroughwide vote.”
The parties, the Borough Clerk, and the superior court incorrectly focused
their analysis on whether Referendum 2010-01, rather than Ordinance 2008-28, was
local or special legislation, but the error has no determinative effect. Because the
ordinance in this case was passed by an assembly representing the entire Borough, the
same factors are relevant to determining whether either the referendum or the ordinance
was local or special legislation. Thus, for the purpose of our analysis, we will consider
the superior court’s analysis and the parties’ arguments as applied to Ordinance 2008-28.
Our case law establishes that a law does not cease to be general and become
local or special merely because it operates only in certain subdivisions of the state or in
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certain areas.19 Instead, we have emphasized that the critical question is whether there
are area-wide interests in the legislation: “General laws . . . are general . . . because their
subject matter is of common interest to the whole state.”20 We have also observed that
a law may not be generally applicable where it creates a permanently closed class.21
We have previously examined the intent of the delegates to the Alaska
Constitutional Convention to determine whether a law has areawide applicability.22 In
Boucher v. Engstrom, we noted that the Report of the Committee on Direct Legislation,
Amendment and Revision stated that special laws “are of interest to only one group of
19
Boucher, 528 P.2d at 461-62 (rejecting view expressed in Walters v. Cease,
394 P.2d 670, 672 (Alaska 1964), that legislation was local because it applied to “only
a limited number of geographical areas, rather than being widespread in its operation
throughout the state”), overruled on other grounds by McAlpine v. Univ. of Alaska, 762
P.2d 81, 85 (Alaska 1988); Abrams v. State, 534 P.2d 91, 94 (Alaska 1975) (citing
Boucher, 528 P.2d at 461-62).
20
Boucher, 528 P.2d at 461-62 (alterations in original) (quoting 2 C. D ALLAS
SANDS , STATUTES AND STATUTORY CONSTRUCTION § 40.02, at 139-40 (4th ed.1973)).
21
Bridges v. Banner Health, 201 P.3d 484, 494-95 (Alaska 2008) (citing 2
N ORMAN J. SINGER , STATUTES AND STATUTORY CONSTRUCTION § 40.1, at 212-13 (6th
ed. 2000)) (holding that the statutory definition of “health care facility” in AS 18.07.111
is not a special act because it does not create a permanently closed class); Pebble Ltd.
P’ship, 215 P.3d at 1080 (holding that proposed regulation that affected only two
proposed mines was generally applicable in part because it could apply to future mines);
but see id. at 1078 n.63 (clarifying that “creation of a ‘permanently closed class’ does not
necessarily constitute prohibited special legislation if the legislation bears a fair and
substantial relationship to legitimate public purposes”).
22
The local initiative power is statutory rather than constitutional in origin.
See Alliance of Concerned Taxpayers, Inc. v. Kenai Peninsula Borough, 273 P.3d 1128,
1139 (Alaska 2012). However, the delegates’ intent remains relevant because
AS 29.26.100 applies the constitutional ban on local or special legislation to the
municipalities.
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people or people in only one portion of the state.”23 And in Pebble Limited Partnership
ex rel. Pebble Mines Corporation v. Parnell, we observed that the constitutional
delegates expressed views that the intent of article XI, section 7’s ban on special
legislation “was to prevent the initiation of legislation affecting local areas wherein the
people of the state as a whole would be allowed to vote on issues which concerned only
one locality.”24
In both Boucher and Pebble Limited Partnership we held that initiatives
were generally applicable although the effects of the initiatives would likely not be
uniform statewide. In Boucher, we held that an initiative that sought to relocate the state
capital to a location other than Fairbanks or Anchorage was generally applicable.25 We
explained that “[w]hile the two areas that initially will be most significantly involved are
Juneau and the new capital site, the entire state will be affected on a long-term basis not
only in regard to accessibility, but additionally as to such factors as potentially increased
governmental efficiency flowing from a planned unified capital complex.”26 Similarly,
in Pebble Limited Partnership, we concluded that a proposed ballot initiative regulating
large scale metallic mining operations was generally applicable despite the fact that the
initiative’s definition of a “large scale metallic mining operation” would encompass only
23
528 P.2d at 461 n.17.
24
215 P.3d 1064, 1078 n.57 (Alaska 2009) (quoting 2 Proceedings of the
Alaska Constitutional Convention (PACC) 1132-34 (Dec. 19, 1955)) (internal quotation
marks omitted).
25
528 P.2d at 462-64.
26
Id. at 461.
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two proposed mines.27 We observed that “[a]lthough the Pebble and Donlin Creek mines
may be the only proposed mines currently affected by [the initiative], the language of the
initiative is sufficiently broad that it would apply to any new [large scale metallic
mines].”28
In Baxley v. State, by contrast, we reached the second part of the two-part
analysis after concluding that a statute authorizing the amendment of four state oil and
gas leases in the Northstar Oil Field focused on only one locality.29 And in Abrams v.
State, we held that a statute pertaining to the organization of the Eagle River-Chugiak
Borough was “peculiar to the locality where it is applicable,” noting that “[t]he subject
matter can hardly be said to be of statewide interest or impact.”30
Turning to Ordinance 2008-28, we conclude that the ordinance is more akin
to legislation that we have previously held to be generally applicable. Borough residents
who do not live in the general law cities have an interest in Ordinance 2008-28 and
Referendum 2010-01 because they may shop and use other services in the general law
cities. It is not dispositive that some residents may have a lesser interest in particular
legislation, or that they stand to benefit from a referendum rejecting that legislation; most
laws have a greater effect on some groups or some locations than others. The intent of
the constitutional ban on local and special legislation was to prevent the state as a whole
from voting “on issues which concern[] only one locality.”31 This same reasoning
27
215 P.3d at 1080-81.
28
Id. at 1080.
29
958 P.2d 422, 424, 430-31 (Alaska 1998).
30
534 P.2d 91, 92, 94 (Alaska 1975).
31
Pebble Ltd. P’ship, 215 P.3d at 1078 n.57 (quoting 2 PACC 1132-34 (Dec.
(continued...)
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applies to borough ordinances and referendums. Certainly Ordinance 2008-28 is of
greater concern to the residents of the general law cities, but given that it applies to three
of the Borough’s six cities (and it could apply to a fourth), and it affects all Borough
residents who shop in the general law cities, it is of general concern to the residents of
the entire Borough. We also observe that the general law cities in the Kenai Peninsula
Borough do not constitute a closed class. The ordinance does not just apply to the four
extant cities; it applies to a class of cities that could theoretically grow in the future.
Because Ordinance 2008-28 is of boroughwide interest and does not apply
to a permanently closed class, it is generally applicable and does not violate
AS 29.26.100’s prohibition on local or special legislation. Consequently, we need not
consider whether the ordinance bears a fair and substantial relationship to legitimate
Borough purposes. Because Ordinance 2008-28 is not local or special legislation,
Referendum 2010-01 does not violate AS 29.26.100’s prohibitions on applying
referendums to local or special legislation.
B. Referendum 2010-01 Is Not Unenforceable As A Matter Of Law.
Alaska Statute 29.45.700 grants power to the Borough Assembly to
authorize a general law city to collect sales taxes on sources the Borough does not tax.
The Borough argues that because the power to authorize taxation is exclusive to the
Assembly, allowing a referendum to negate the authorization would unlawfully delegate
power to the voters that was intended to be held only by the Assembly. The superior
court did not address this argument, finding it unnecessary to do so in light of its ruling
that Referendum 2010-01 constitutes local or special legislation. Price also does not
address this issue on appeal. But because we hold that Referendum 2010-01 does not
31
(...continued)
19, 1955)) (internal quotation marks omitted).
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violate the prohibition on local or special legislation, we consider the Borough’s
alternative argument that the referendum would be unenforceable as a matter of law.32
We conclude that the referendum would be enforceable.
The Borough Clerk concluded that Referendum 2010-01 was unenforceable
as a matter of law because it was in “direct conflict” with AS 29.45.700(a), which
provides that “the assembly may by ordinance authorize a city to levy and collect sales
and use taxes on other sources.” The Clerk reasoned that “it is the ‘assembly’ which
authorizes the city to tax sources that the borough does not,” and “[s]uch a direct
delegation to the assembly cannot be circumvented through the referendum process.”
In Whitson v. Anchorage, we invalidated an initiative requiring that any
new tax or tax-rate increase in Anchorage be ratified by a majority of voters on the basis
that it conflicted with state law that specifically mandated that municipal taxes must be
levied by general ordinance of the assembly.33 Similarly, in Municipality of Anchorage
v. Frohne, we held that an initiative that would have allowed voters to choose a
municipal assembly district apportionment plan conflicted with the statutory scheme
governing the adoption of local government charters.34 And in Griswold v. City of
Homer, we held that zoning by initiative is invalid because Alaska statutes provide for
the establishment of a planning commission and related procedures that must be
32
“We may affirm the grant of summary judgment on any grounds discerned
from the record, even grounds not asserted by the trial court or parties.” Kuretich v.
Alaska Trustee, LLC, 287 P.3d 87, 88 (Alaska 2012) (citing Kiernan v. Creech, 266 P.3d
312, 319 (Alaska 2012); Moore v. Allstate Ins. Co., 995 P.2d 231, 233 (Alaska 2000)).
33
608 P.2d 759, 760-61 (Alaska 1980).
34
568 P.2d 3, 7-9 (Alaska 1977).
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followed, and zoning by initiative would bypass these statutory mandates and “exceed[]
the scope of the legislative power granted by the legislature to the city council.”35
Referendum 2010-01 presents none of the enforceability concerns that
existed in Whitson, Frohne, or Griswold, because Referendum 2010-01 does not conflict
with existing state law. Alaska Statute 29.45.700(a) provides that the borough assembly
“may by ordinance authorize a city to levy and collect sales and use taxes on other
sources.” The Borough argues that under AS 29.45.700(a) “only the assembly may
authorize the cities to tax different sources than the borough.” But we need not consider
whether voters could by direct legislation authorize general law cities to tax different
sources than the Borough. Referendum 2010-01 does not authorize the general law cities
to do anything; rather, if passed it would repeal an authorization previously made by the
Borough Assembly. Nothing in AS 29.45.700 prohibits repealing by referendum an
ordinance authorizing city taxation, so referendum 2010-01 does not directly conflict
with this statute.
The Borough also argues that the referendum is “in direct conflict with the
assembly’s exclusive authority to determine whether cities may tax sources not taxed by
the borough.” This argument suggests a broader prohibition on repeal by referendum of
enactments made in areas of the assembly’s “exclusive authority.”
We recently considered a similar issue in Municipality of Anchorage v.
Holleman.36 In that case, the municipality contended that the language of the municipal
charter, which required the “assembly” to adopt a personnel policy and a personnel
35
186 P.3d 558, 563 (Alaska 2008).
36
321 P.3d 378, 383 (Alaska 2014).
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classification system, granted exclusive authority to the assembly.37 We concluded that
these provisions were not intended to be exclusive: “while these provisions require the
Assembly to enact labor-relations ordinances, they do not purport to grant the Assembly
all authority in the area, to the exclusion of direct citizen legislation through initiative
and referendum.”38 We recognized that “given the importance of the right of initiative
and referendum, we will not readily imply such a broad addition to the subjects that
cannot be addressed through the exercise of those rights.”39
The Borough’s position, if adopted here, would impermissibly limit the
referendum power. The Alaska Constitution expressly empowers voters to nullify the
exercise of legislative power by rejecting legislative acts.40 And the legislature has no
authority to restrict the referendum power.41 Alaska Statute 29.26.100 extends the
referendum power to the acts of local governments and similarly does not authorize local
legislative authorities to restrict that power. Because many statutes delegate authority
specifically to an “assembly” or other governing body, holding that enactments pursuant
to such authority are not subject to referendum would impose a significant and
unwarranted restriction on the referendum power.
Because Referendum 2010-01 does not conflict with or exceed the scope
of the power granted to the Borough Assembly by AS 29.45.700(a) to authorize general
37
Id.
38
Id.
39
Id.
40
See Alaska Const. art. XI, § 1 (“The people may . . . reject acts of the
legislature by the referendum.”).
41
Id.
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law cities to collect certain taxes, we conclude that Referendum 2010-01 would not be
unenforceable as a matter of law.
V. CONCLUSION
For the reasons discussed, we REVERSE the superior court’s judgment.
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