SUPREME COURT OF ARIZONA
En Banc
LEAGUE OF ARIZONA CITIES AND ) Arizona Supreme Court
TOWNS; ARIZONA PLANNING ) No. CV-06-0286-AP/EL
ASSOCIATION, a nonprofit )
corporation; JOSEPH C. DONALDSON, ) Maricopa County
a qualified elector; THOMAS J. ) Superior Court
HESSLER, a qualified elector; ) No. CV2006-011432
JOHN KEEGAN, a qualified elector; )
and LAWRENCE K. NELSON, a )
qualified elector, )
) O P I N I O N
Plaintiffs/Appellants, )
)
v. )
)
JANICE K. BREWER, in her )
official capacity as Secretary )
of State for the State of )
Arizona; and THE BOARDS OF )
SUPERVISORS OF APACHE, COCHISE, )
COCONINO, GILA, GRAHAM, GREENLEE, )
LA PAZ, MARICOPA, MOHAVE, )
NAVAJO, PIMA, PINAL, SANTA CRUZ, )
YAVAPAI, and YUMA COUNTIES, in )
their official capacities, )
)
Defendants/Appellees, )
and )
)
ARIZONA HOMEOWNERS PROTECTION )
EFFORT, an unincorporated )
association, )
)
Real Party in Interest. )
__________________________________)
Appeal from the Superior Court in Maricopa County
The Honorable Paul J. McMurdie, Judge
AFFIRMED IN PART; VACATED IN PART
________________________________________________________________
GAMMAGE & BURNHAM PLLC Phoenix
By Lisa T. Hauser
Grady Gammage, Jr.
Michella Abner
Attorneys for League of Arizona Cities and Towns,
Arizona Planning Association, Joseph C. Donaldson,
Thomas J. Hessler, John Keegan, and Lawrence K. Nelson
TERRI SKLADANY, ACTING ARIZONA ATTORNEY GENERAL Phoenix
By Emma L. Mamaluy, Assistant Attorney General
Diana L. Varela, Assistant Attorney General
Attorneys for Janice K. Brewer, Secretary of State
for the State of Arizona
MEAGHER & GEER PLLP Scottsdale
By Gary L. Lassen
James M. Marovich
Aaron S. Peterson
Attorneys for Arizona Homeowners Protection Effort
TERENCE C. HANCE, COCONINO COUNTY ATTORNEY Flagstaff
Attorney for Amicus Curiae County Supervisors
Association of Arizona
________________________________________________________________
B E R C H, Vice Chief Justice
¶1 Appellant League of Arizona Cities and Towns sued to
enjoin the Secretary of State from placing Proposition 207, the
Private Property Rights Protection Act, on the 2006 general
election ballot. The superior court held that pre-election
review of Proposition 207 by the courts is improper. On August
31, 2006, this Court issued an order affirming the superior
court’s judgment and allowing Proposition 207 to remain on the
ballot. This opinion explains our reasoning. We have
jurisdiction in this case pursuant to Article 6, Section 5(3) of
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the Arizona Constitution and Arizona Revised Statutes (“A.R.S.”)
section 19-122(C) (2002).
I. FACTS AND PROCEDURAL BACKGROUND
¶2 The Arizona Homeowners Protection Effort
(“Homeowners”) proposed the initiative known as the Private
Property Rights Protection Act to limit the use of eminent
domain and to expand the definition of regulatory takings.
Homeowners filed with the Secretary of State sufficient
initiative petition signatures to qualify Proposition 207 for
the ballot.
¶3 On July 31, 2006, the League challenged Proposition
207 in the superior court pursuant to A.R.S. § 19-122(C) and
(D). The League asserted that Proposition 207 violates the
Arizona Constitution’s “Revenue Source Rule” by failing to state
the source of revenue to pay the “immediate and future costs of
the proposal,” rendering the initiative legally insufficient and
warranting pre-election review by the courts and removal of the
initiative from the ballot. See Ariz. Const. art. 9, § 23
(“Revenue Source Rule” or “§ 23”).
¶4 The superior court dismissed the League’s challenge,
holding that Revenue Source Rule violations cannot be reviewed
before a proposition is enacted into law. The League timely
appealed pursuant to A.R.S. § 19-122(C).
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II. DISCUSSION
¶5 Proposition 207 seeks to prohibit the use of eminent
domain by the state and its political subdivisions to acquire
land for non-public uses. See Ariz. Sec’y of State, 2006
General Election Ballot Measures, Proposition 207, § 12-1131,
available at http://www.azsos.gov/election/2006/general/ballot
measures.htm (follow “Ballot Number 207” hyperlink). It also
proposes to expand the definition of regulatory takings; if
passed, it would require the state to pay just compensation to
landowners for decreases in private property values caused by
state land use laws. See id. § 12-1134(A). 1 The proposition
defines the compensation that must be paid as “the sum of money
that is equal to the reduction in fair market value of the
property resulting from the enactment of the land use law.” Id.
§ 12-1136(2).
¶6 The League argues that Proposition 207’s failure to
specify how the state will pay any required compensation
1
Proposition 207, § 12-1134(A), provides as follows:
If the existing rights to use, divide, sell or possess
private real property are reduced by the enactment or
applicability of any land use law enacted after the
date the property is transferred to the owner and such
action reduces the fair market value of the property
the owner is entitled to just compensation from this
state or the political subdivision of this state that
enacted the land use law.
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violates the Revenue Source Rule, Ariz. Const. art. 9, § 23, 2 and
that we therefore should remove the initiative from the ballot.
Section (A) of the Revenue Source Rule requires an initiative
that proposes a mandatory expenditure of state revenues to
identify an independent source of revenue that will cover the
immediate and future costs of the initiative. Id. If the
identified revenue source cannot sufficiently fund an initiative
in any fiscal year, the legislature may limit the funding of the
initiative to the identified revenue source. Id. § 23(B). The
Revenue Source Rule ensures that state general fund revenues are
2
The Revenue Source Rule states:
A. An initiative or referendum measure that proposes
a mandatory expenditure of state revenues for any
purpose, establishes a fund for any specific
purpose or allocates funding for any specific
purpose must also provide for an increased source
of revenues sufficient to cover the entire
immediate and future costs of the proposal. The
increased revenues may not be derived from the
state general fund or reduce or cause a reduction
in general fund revenues.
B. If the identified revenue source provided
pursuant to subsection [A] in any fiscal year
fails to fund the entire mandated expenditure for
that fiscal year, the legislature may reduce the
expenditure of state revenues for that purpose in
that fiscal year to the amount of funding
supplied by the identified revenue source.
Ariz. Const. art. 9, § 23. The Revenue Source Rule applies only
to expenditures from the general fund required by state land use
laws. It does not apply to expenditures required by local land
use laws.
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not used to fund ballot initiatives that require state
expenditures.
¶7 The question before us is whether a violation of the
Revenue Source Rule renders an initiative legally insufficient,
thereby allowing pre-election review and removal of the
proposition from the ballot, or whether such a challenge must
await passage of the proposition. This issue poses a question
of law that we review de novo. See Clean Elections Inst., Inc.
v. Brewer, 209 Ariz. 241, 243, ¶ 2, 99 P.3d 570, 572 (2004).
A. Pre-election Review
1. Separation of Powers
¶8 The courts are reluctant to intrude on the prerogative
of the people or the legislature to proffer legislation. The
Separation of Powers Clause of the Arizona Constitution
expressly prohibits one branch of government from intruding into
or “exercis[ing] the powers properly belonging to” another
branch. Ariz. Const. art. 3. We have consistently interpreted
this clause to require the judiciary to refrain from interfering
with the legislative process. See Winkle v. City of Tucson, 190
Ariz. 413, 415, 949 P.2d 502, 504 (1997); Adams v. Bolin, 74
Ariz. 269, 285, 247 P.2d 617, 628 (1952); State v. Osborn, 16
Ariz. 247, 249-52, 143 P. 117, 118-19 (1914).
¶9 A fundamental component of the legislative process in
Arizona is the right of the people to offer legislation through
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the initiative. See Ariz. Const. art. 4, pt. 1, § 1; Allen v.
State, 14 Ariz. 458, 467, 130 P. 1114, 1118 (1913). This
“legislative power of the people is as great as that of the
legislature.” Tilson v. Mofford, 153 Ariz. 468, 470, 737 P.2d
1367, 1369 (1987) (citing Article 22, Section 14 of the Arizona
Constitution). When the people exercise their right to
legislate by initiative, they therefore enjoy the same
protection from judicial interference the legislature is
afforded. Queen Creek Land & Cattle Corp. v. Yavapai County Bd.
of Supers., 108 Ariz. 449, 451, 501 P.2d 391, 393 (1972).
¶10 Before a bill passes, the courts generally may not
interfere with the legislative process. See Osborn, 16 Ariz. at
249, 143 P. at 118. The legislature may thus introduce,
consider, and pass any measure. And just as the courts may not
predetermine the substantive validity of the legislature’s
measures, so too must they refrain from predetermining the
substantive validity of the people’s initiatives, even if the
“legislation might conflict with the Arizona Constitution or
state law.” Winkle, 190 Ariz. at 415, 949 P.2d at 504. Noting
the importance of preserving the parity between the
legislature’s and the people’s right to propose laws, this Court
has observed that
determining an initiative’s validity before the voters
had an opportunity to vote on it would “be tantamount
to claiming the power of life and death over every
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initiated measure by the people. It would limit the
right of the people to propose only valid laws,
whereas the other lawmaking body, the Legislature,
would go untrammeled as to the legal soundness of its
measures.”
Id. (quoting Osborn, 16 Ariz. at 249-50, 143 P. at 118); see
also Osborn, 16 Ariz. at 250, 143 P. at 118; cf. Ariz. Const.
art. 4, pt. 1, § 1(6) (protecting laws initiated by the people
from legislative repeal or amendment). Courts will thus review
the validity of an initiated measure only after the measure
becomes law. Osborn, 16 Ariz. at 251, 143 P. at 118-19.
¶11 We may, however, review an initiative before passage
if authorized by law to do so. See Adams, 74 Ariz. at 285, 247
P.2d at 628; Kerby v. Griffin, 48 Ariz. 434, 444, 62 P.2d 1131,
1135 (1936). Authorization has been expressly given to the
judiciary to enjoin the placement of an initiative petition on
the ballot if it is “not legally sufficient.” A.R.S. § 19-
122(C).
¶12 We first interpreted the term “legally sufficient”
almost a century ago, describing an initiative as legally
sufficient if it complies with form and signature requirements
and is not fraudulent. Osborn, 16 Ariz. at 250, 143 P. at 118.
A court may therefore enjoin an initiative as legally
insufficient only if it is defective in form, does not receive
the number of valid signatures required by the constitution, or
fails to follow the prescribed procedures. Williams v. Parrack,
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83 Ariz. 227, 231, 319 P.2d 989, 991 (1957); see also Iman v.
Bolin, 98 Ariz. 358, 365, 404 P.2d 705, 709 (1965).
¶13 In Winkle, we reiterated these holdings and concluded
that only two kinds of procedural defects in form generally
warrant pre-election review under A.R.S. § 19-122(C). 190 Ariz.
at 416, 949 P.2d at 505. 3 First, we will conduct a pre-election
review to determine whether an initiative complies with the
structural requirements of A.R.S. §§ 19-101 to -143 (2002 &
Supp. 2005), such as the publication or signature requirements.
See, e.g., Kerby, 48 Ariz. at 444-46, 62 P.2d at 1135-36.
Second, we will review to determine whether an initiative in
fact constitutes legislation. Saggio v. Connelly, 147 Ariz.
240, 241, 709 P.2d 874, 875 (1985). In sum, we review before
3
We have also reviewed initiatives before an election in two
other special situations not applicable here. First, we have
conducted pre-election review to determine whether initiatives
violate the Separate Amendment Rule of Article 21, Section 1 of
the Arizona Constitution. See, e.g., Tilson, 153 Ariz. at 471,
737 P.2d at 1370. The Separate Amendment Rule concerns only
constitutional amendments, not ordinary legislation, thereby
reducing traditional separation of powers concerns.
Furthermore, Article 21, Section 1, sets forth the manner in
which proposed constitutional amendments “shall be submitted” to
the vote of the people, implying that pre-election review is
appropriate.
Second, we have reviewed initiatives to determine if they
legislate zoning. See Transamerica Title Ins. Co. v. City of
Tucson, 157 Ariz. 346, 348-49, 757 P.2d 1055, 1057-58 (1988);
City of Scottsdale v. Superior Court, 103 Ariz. 204, 207, 439
P.2d 290, 293 (1968). These cases “represent a historical
anomaly specific to zoning and designed to protect the due
process rights of private property owners.” Winkle, 190 Ariz.
at 417, 949 P.2d at 506.
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election only to see whether an initiative “belongs on the
ballot . . . , not whether, if adopted, it will be valid or
constitutional.” Winkle, 190 Ariz. at 417, 949 P.2d at 506.
¶14 Against this historical background, we must determine
whether a violation of the Revenue Source Rule is the type of
violation reviewable before election.
2. Revenue Source Rule Violations
¶15 The League does not allege that Proposition 207
violates the rules of form in A.R.S. §§ 19-101 to -143 that
traditionally have been subject to pre-election review or that,
if passed, the initiative will not constitute legislation.
Instead, the League asks this Court to expand the categories of
pre-election review by recognizing violations of the Revenue
Source Rule as a third type of defect that may be reviewed
before an election. We decline to do so.
¶16 The defects in form that this Court will review before
an election are those that involve bringing an initiative to the
ballot because those defects “bear directly on the integrity of
the election process.” Winkle, 190 Ariz. at 416, 949 P.2d at
505. When an initiative has been properly brought to the
ballot, we will not look into its substantive validity before
the people have approved it. Id. at 417, 949 P.2d at 506.
¶17 The Revenue Source Rule does not set forth a rule
regarding the form of ballot initiatives or the manner in which
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initiatives are brought to the ballot. See Kerby, 48 Ariz. at
444, 62 P.2d at 1135. Unlike the technical requirements in
A.R.S. §§ 19-101 to -143, the Revenue Source Rule does not
involve the circumstances under which the people are permitted
to vote. Instead, it governs the substantive issue of ballot
initiative funding by protecting the state general fund from
unfunded ballot initiative mandates.
¶18 The League nonetheless argues that the Revenue Source
Rule regulates form and therefore is subject to challenge before
election because it requires an initiative to include some
information regarding the initiative’s funding source. We
disagree that providing information to voters is the focus of
the rule or that any information provided is merely a matter of
form. The Revenue Source Rule was not intended simply to
provide voters with information no matter how potentially
inaccurate or misleading, but rather was designed to ensure a
source of funding to protect the state’s general fund. As such,
it constitutes a matter of substance rather than form.
¶19 The County Supervisors Association, writing as amicus
curiae, joins the League in suggesting that the language
“measure that proposes,” found in Article 9, Section 23(A),
suggests pre-election review. We are not persuaded. The phrase
describes the subject of the rule: proposed initiatives and
referenda. The constitutional language does not manifest an
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intent that courts conduct pre-election review of all
initiatives and referenda for compliance with the Revenue Source
Rule. To the contrary, Article 9, Section 23(B) expressly sets
forth a post-enactment remedy: The legislature may reduce the
expenditure of state revenues to fund the initiative for the
fiscal year to the amount produced by the funding source
identified in the initiative. This language suggests that pre-
election review was not intended.
¶20 In light of the strong language this Court has used to
interpret the Separation of Powers Clause, we must exercise
restraint in reviewing initiatives before election in order to
respect the legislative process. In cases such as this, in
which it is doubtful that pre-election review was intended,
restraint is particularly appropriate.
3. Prudential Concerns
¶21 Restraint is also appropriate for several prudential
reasons. First, pre-election review requires the courts to
issue what may in the end be advisory opinions. It therefore
may unnecessarily consume judicial resources. Winkle, 190 Ariz.
at 418, 949 P.2d at 507. This occurs because we are asked to
opine on the validity or constitutionality of laws that may
never be approved by the voters. Id. (noting that if the courts
offered advisory opinions routinely in election cases, “the
judiciary would be inundated with unnecessary preelection
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challenges”).
¶22 Second, pre-election review of ballot initiatives
necessarily occurs in an expedited manner, often with only
limited briefing by the parties and without a court of appeals
decision or a full record. These concerns are exacerbated in
cases such as this, in which the constitutional provision at
issue has never been the subject of judicial interpretation.
¶23 Third, pre-election review in this case would require
us to remove an entire initiative from the ballot, even though
only one provision of Proposition 207 has been challenged as
potentially violating the Revenue Source Rule. If the
legislature had passed a law similar to the Private Property
Rights Protection Act, we could consider severing only the
portion that violated the Revenue Source Rule.
¶24 Finally, because pre-election review may chill the
fundamental right of the people to legislate, it should be used
sparingly. As we observed in Winkle:
Grassroots democracy, exercised by initiative, is not
always an efficient process; however, there are clear
benefits to allowing the public to vote on an
initiative, even though its validity may be questioned
if it passes. In a democracy, the process itself is
often as valuable as the result. A vote to enact
legislation expresses more than a current whim of the
people; it expresses the voters’ preferred rule of
governance.
Id. When the people set forth the circumstances under which
they will exercise their vote, and those circumstances are met,
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we will not interfere with an initiative by examining its
substance before the measure passes.
B. Substantive Review
¶25 Although we do not now resolve this issue, we vacate
the superior court’s determination that Proposition 207 violates
the Revenue Source Rule. The court should not have addressed
the issue because doing so required a pre-election substantive
review of the legislation, violating the Separation of Powers
Clause of the Arizona Constitution.
¶26 Moreover, on this limited record we cannot say whether
Proposition 207 violates Article 9, Section 23 because the
initiative may not require “a mandatory expenditure of state
revenues,” the trigger for application of the Revenue Source
Rule. If Proposition 207 passes, § 12-1134 will have no
financial impact on the state general fund unless the
legislature enacts a land use law that results in a regulatory
taking. In the zoning arena, many if not most laws are passed
by cities and counties rather than by the state and thus would
affect local rather than state revenues. Any expenditure of
state general funds to pay just compensation thus depends on the
legislature’s actions.
¶27 We need not resolve these questions at this time
because “this court cannot undertake review of any substantive
legislation before an actual conflict exists.” Winkle, 190
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Ariz. at 417, 949 P.2d at 506. If Proposition 207 is approved
by the voters and the legislature enacts a land use law that
results in a regulatory taking under § 12-1134, we can then – on
a full record and in the context of concrete facts – ascertain
whether there has been a violation of the Revenue Source Rule.
III. CONCLUSION
¶28 The people have the right to approve or disapprove any
initiative that has been properly placed on the ballot. With
limited exceptions not applicable here, the judiciary may
interfere in the initiative process only if an initiative does
not comply with the formal requirements for bringing an
initiative to the ballot. The Revenue Source Rule does not set
forth any requirements for bringing a measure to the ballot, and
the League does not argue that Proposition 207 contains any of
the defects in form identified in Winkle as warranting pre-
election review.
¶29 We therefore affirm the superior court’s determination
that pre-election review of Proposition 207 is improper, but
vacate the superior court’s determination that Proposition 207
violates Article 9, Section 23 of the Arizona Constitution.
__________________________________
Rebecca White Berch,
Vice Chief Justice
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CONCURRING:
___________________________________
Ruth V. McGregor, Chief Justice
____________________________________
Michael D. Ryan, Justice
____________________________________
Andrew D. Hurwitz, Justice
____________________________________
W. Scott Bales, Justice
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