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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. City of St. Mary's v. St. Mary's Native Corporation (9/29/00) sp-5315

City of St. Mary's v. St. Mary's Native Corporation (9/29/00) sp-5315

     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.



             THE SUPREME COURT OF THE STATE OF ALASKA
                                 

CITY OF ST. MARY'S,           )
                              )    Supreme Court No. S-8963
             Appellant,       )
                              )    Superior Court No.
     v.                       )    4BE-95-281 CI
                              )
ST. MARY'S NATIVE             )    O P I N I O N
CORPORATION and ALASKA        )
COMMERCIAL COMPANY,           )    [No. 5315 - September 29, 2000]
                              )
             Appellees.       )
______________________________)




          Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Bethel,
                      Dale O. Curda, Judge.


          Appearances: Katherine C. Tank, Perkins Coie,
          LLP, Anchorage, for Appellant.  David S. Case,
P.C., Copeland, Landye, Bennett & Wolf, LLP, Anchorage, for
Appellee St. Mary's Native Corporation.  Gregory A. Miller and
Colleen J. Moore, Birch, Horton, Bittner & Cherot, Anchorage, for
Appellee Alaska Commercial Company.


          Before:  Matthews, Chief Justice, Eastaugh,
          Fabe, Bryner, and Carpeneti, Justices.  


          FABE, Justice.


I.   INTRODUCTION
          In 1986 the voters in St. Mary's approved a three percent
sales tax.  In implementing the voter-approved tax, the city
council exempted transactions exceeding $1,000.  In May 1994 the
St. Mary's city council repealed that exemption.  Because the
voters had already approved the three percent tax in 1986, the city
council believed that further voter ratification was unnecessary. 
Alaska Commercial Company and St. Mary's Native Corporation contend
that repeal of the exemption was invalid because it was not the
subject of a public vote and that notice of the public hearing on
the tax was insufficient.  Based on these arguments, the superior
court invalidated the ordinance repealing the exemption.  Because
we conclude that a public vote was not required to ratify the
repeal of the exemption and that a genuine issue of material fact
exists as to whether public notice was sufficient, we reverse.
II.  FACTS AND PROCEEDINGS
          The citizens of the City of St. Mary's voted in November
1986 to approve this ballot measure:  "Shall the City of St. Mary's
levy a 3% sales tax?"  The ballot measure passed, receiving over
sixty percent of the votes.  One month later the St. Mary's city
council passed Ordinance 86-3, which implemented the voter-approved
sales tax.  Ordinance 86-3 was more detailed than the original
ballot measure and provided for many exemptions.  Notably, the
ordinance limited application of the three percent tax to the first
$1,000 of each sales transaction.
          St. Mary's introduced proposed Ordinance 94-4 in April
1994 to eliminate the exemption for sales in excess of $1,000.  The
council scheduled a public hearing on the ordinance for May 3,
1994.  Representatives of Alaska Commercial Company (ACC) and St.
Mary's Native Corporation (SMNC) attended the meeting at which the
city council set the May 3 hearing.  The representatives voiced
their opposition to the passage of the proposed ordinance.
          St. Mary's took steps to give the public notice of the
hearing.  In accordance with St. Mary's publication procedures,
City Manager Walton Smith directed the police to post copies of
proposed Ordinance 94-4 and an agenda for the May 3 hearing at the
city offices, post office, school, and two local stores, including
ACC's store.  An officer posted these documents as directed.  Smith
also faxed copies of proposed Ordinance 94-4 and the meeting agenda
to ACC's attorney before the May 3 meeting.  The city did not
publish the proposed ordinance or notice of the meeting in any
newspaper.
          The St. Mary's city council held the May 3 meeting as
scheduled.  The members present passed Ordinance 94-4 unanimously.
St. Mary's did not hold a popular vote to ratify the ordinance.  
          SMNC leased to ACC two commercial properties subject to
the St. Mary's sales tax.  The leases exceeded $1,000 per month,
but SMNC and ACC refused to pay the sales tax on either lease.  The
city commenced an action in October 1995 to collect back taxes.  It
also sought a declaratory judgment that Ordinance 94-4 was lawful.
          SMNC and ACC moved for partial summary judgment in May
1996.  They first argued that Ordinance 94-4 was invalid because it
had not been ratified by the voters pursuant to AS 29.45.670.  That
provision requires that a majority of voters ratify an ordinance
enacting "a new sales and use tax or an increase in the rate of
levy of a sales tax." [Fn. 1]  Alternatively, they contended that
St. Mary's failed to publish notice of the hearing for Ordinance
94-4 in the newspaper of general circulation in St. Mary's, the
Tundra Drums, as required by AS 29.25.020(b)(3). [Fn. 2]  St.
Mary's responded by arguing that its tax was not "new" and that it
did not "increase the rate of levy" and therefore the ordinance did
not require voter approval.  It also claimed to have complied with
the notice requirements.  Finally, St. Mary's argued that SMNC and
ACC lacked standing to challenge Ordinance 94-4 on notice grounds
because they had actual notice of the hearing.
          The superior court granted summary judgment to ACC and
SMNC.  The court reasoned that Ordinance 94-4 was either a new tax
or an increase in the rate of levy of a tax that required voter
ratification.  The superior court reasoned alternatively that St.
Mary's failed to satisfy AS 29.25.020(b)(3)'s publication
requirement.  The court concluded that St. Mary's failed to produce
admissible evidence to prove that it properly posted the notices of
the ordinance and hearing date.  The court also concluded as a
matter of law that the Tundra Drums was a newspaper of general
circulation in St. Mary's, thus requiring St. Mary's to publish a
summary of Ordinance 94-4 in it. The court entered judgment, and
St. Mary's appeals.
III. STANDARD OF REVIEW
          We review a grant of summary judgment de novo. [Fn. 3] 
We will uphold a grant of summary judgment when the record presents
no genuine issue of material fact and one party is entitled to
judgment as a matter of law. [Fn. 4]  In making this determination,
we draw all reasonable inferences of fact in favor of the non-
moving party. [Fn. 5]  We review a lower court's resolution of
statutory interpretation issues de novo. [Fn. 6]
IV.  DISCUSSION
     A.   Alaska Statute 29.45.670 Did Not Require the Voters of
St. Mary's to Ratify Ordinance 94-4.

          Whether AS 29.45.670 required the voters to ratify
Ordinance 94-4's repeal of the exemption for transactions over
$1,000 is a question of statutory construction.  Alaska Statute
29.45.670 provides:  "A new sales and use tax or an increase in the
rate of levy of a sales tax approved by ordinance does not take
effect until ratified by a majority of the voters at an election." 
Therefore, if removing the exemption for transactions exceeding
$1,000 can be considered either a "new" sales tax or "an increase
in the rate of levy of a sales tax," St. Mary's would have been
required to submit the ordinance to a vote, and failure to do so
would invalidate Ordinance 94-4.
          1.   Ordinance 94-4 did not increase the "rate of levy."
          The "rate of levy" is the fraction that, when multiplied
by the value of the transaction or property subject to the tax,
determines the amount of tax to be assessed. [Fn. 7]  The
classification and valuation of property and transactions to be
taxed are determinations independent of quantifying the "rate of
levy." [Fn. 8]  Alaska Statute 29.45.650(a) permits municipalities
to grant tax exemptions by ordinance without voter ratification and
to decide which transactions may be taxed. [Fn. 9]  Accordingly,
repealing the exemption on the second $1,000 of a $2,000
transaction is not an increase in the rate of levy, but an
application of the same rate of levy to a portion of a transaction
previously immune.  Because Ordinance 94-4 simply subjected
previously exempt portions of transactions to the original three
percent sales tax, the ordinance did not increase the rate of levy
of the tax.
          ACC and SMNC argue that the term "levy" implies an
assessment or collection of tax dollars and not just prescription
of the percentage rate at which assets or transactions will be
taxed.  According to ACC and SMNC, because Ordinance 94-4 applies
a three percent tax to the entire transaction, the amount of the
tax has jumped, resulting in an increase in the "rate of levy."
          ACC and SMNC rely on cases that refer to "rate" as the
process of the classification, valuation, and assessment of tax on
property or income. [Fn. 10]  But these cases fail to define
specifically the term "rate of levy." [Fn. 11]  ACC and SMNC then
define the term "levy" as "[t]o assess; raise; execute; exact; tax;
collect; gather; take up; seize." [Fn. 12]  ACC and SMNC cobble
these definitions of "rate" and "levy" together to conclude that
the "'rate of levy of a sales tax' must refer to the entire method
of determining the amount of tax due."
          This interpretation of the phrase "rate of levy,"
however, is erroneous.  As explained above, the "rate of levy" is
the percentage that, when multiplied by the value of the taxable
transaction or property, determines the amount of tax owed. [Fn.
13]  Accordingly, St. Mary's elimination of its exemption by
ordinance simply subjected transactions exceeding $1,000 to the
existing "rate of levy" of three percent.
          The Arkansas Supreme Court's resolution of a similar
issue is persuasive.  In Morley v. Remmel, [Fn. 14] the Arkansas
Supreme Court considered whether an act of the legislature
eliminating a tax deduction violated a provision of the Arkansas
constitution. [Fn. 15]  That provision states that "[n]one of the
rates for property, excise, privilege or personal taxes, now levied
shall be increased" without either voter approval or approval by a
three-fourths majority of the legislature. [Fn. 16]  In upholding
the legislature's repeal of the deduction, the court differentiated
between the rate of taxes and the valuation of the property or
transaction to be taxed.  The court concluded that the elimination
of the deduction did not increase the rate of taxation but simply
subjected more income to the same rate of taxation, an act that was
within the legislature's power. [Fn. 17]  Moreover, the court
reasoned that equating the rate of taxation with the amount of
taxation was erroneous and unreasonably tied the hands of the
legislature. [Fn. 18]
          The Morley decision supports St. Mary's contention that
there is a distinction between increasing the rate of levy and
repealing a specifically granted exemption.  Because repealing the
exemption for transactions over $1,000 did not increase the rate of
levy, voter ratification of Ordinance 94-4 was not required unless
it could be considered a "new" tax. 
          2.   Ordinance 94-4 is not a "new" tax.
          In the alternative, ACC argues that applying the sales
tax to a previously exempt transaction constitutes a "new" tax
requiring voter approval.  But Ordinance 94-4 did not create a new
tax; the city simply exercised its statutory authority to remove an
exemption to the tax previously approved by the voters. [Fn. 19] 
ACC and SMNC argue, however, that AS 29.45.650(a) only grants local
governments the power to reduce taxes without voter approval, not
increase them.  We reject this contention.
        Alaska Statute 29.45.650(a) grants a municipality the power
to grant an exemption to a sales tax by ordinance without voter
approval.  We conclude that this grant of power implies the power
to repeal such an exemption by ordinance.  As one commentator has
observed:
          Specific grant of power to repeal ordinances,
however, ordinarily is not necessary since it is the general rule
that power to enact ordinances implies power, unless otherwise
provided in the grant, to repeal them.  It is patently obvious that
the effectiveness of any legislative body would be entirely
destroyed if the power to amend or repeal its legislative acts were
taken away from it.[ [Fn. 20]] 

Moreover, Alaska's constitution and our prior case law require us
to interpret AS 29.45.650(a) in favor of the broad power of
municipal governments.  We have concluded that article X, section
1 of the Alaska Constitution [Fn. 21] restrains us from implying
limitations "on the taxing authority of a municipality where none
are expressed." [Fn. 22]  We therefore conclude that when a local
government grants an exemption by ordinance and the exemption is
not subjected to a public vote, it may repeal that exemption by
ordinance without a public vote.
          Moreover, we conclude that an ordinance repealing a sales
tax exemption is not a "new" sales tax requiring voter
ratification.  Because Ordinance 94-4 did not create the St. Mary's
sales tax, but simply modified it, it was not "new" within the
meaning of AS 29.45.670.  ACC and SMNC argue that because Ordinance
94-4 caused a change in the tax schedule, this change must be
considered "new."  But ACC's and SMNC's interpretation is too
broad.  If we were to accept ACC's and SMNC's definition, any
alteration of the sales tax would require voter ratification.  Not
only would this procedure make the refinement of municipal tax
schemes cumbersome, but it would also render the phrase "increase
in the rate of levy" in AS 29.45.670 superfluous.  We construe a
statute "so that no part will be inoperative or superfluous, void
or insignificant." [Fn. 23]  We conclude that when a municipality
repeals a sales tax exemption it does not create a "new" tax for
the purposes of AS 29.45.670.
          Because Ordinance 94-4 neither increased "the rate of
levy" of a sales tax nor created a "new" sales tax, voter
ratification of the ordinance was not required.  Moreover, no
genuine issue of material fact remains with respect to whether a
public vote is required. [Fn. 24]  We therefore direct the superior
court to enter summary judgment in favor of the City of St. Mary's
with respect to the voter ratification requirement.
     B.   A Genuine Issue of Material Fact Exists as to Whether St.
Mary's Complied with the Public Notice Requirements.

          Even if AS 29.45.650 and .670 did not require St. Mary's
to submit Ordinance 94-4 to a public vote, the city was
nevertheless required to provide adequate notice of the public
hearing regarding adoption of the ordinance that repealed the
exemption for transactions exceeding $1,000.  Underlying our
analysis of whether St. Mary's provided adequate notice is the
presumption that the proceedings of a local government are valid.
[Fn. 25]  Accordingly, ACC and SMNC have the burden of establishing
that St. Mary's did not provide adequate notice. 
          Alaska Statute 29.25.020(b)(3) requires notice of a
hearing before the adoption of a new ordinance:  "At least five
days before the public hearing a summary of the ordinance shall be
published together with a notice of the time and place for the
hearing."  Alaska Statute 29.71.800(18) defines "published" as
"appearing at least once in a newspaper of general circulation
distributed in the municipality, or if there is no newspaper of
general circulation distributed in the municipality, posting in
three public places for at least five days. . . ."  Accordingly,
ACC and SMNC can overcome the presumption by demonstrating that a
newspaper of general circulation exists in St. Mary's and that St.
Mary's failed to publish notice in that newspaper.  St. Mary's
concedes that it did not publish notice in any newspaper, including
the Tundra Drums.  ACC and SMNC contend that the Tundra Drums is a
newspaper of general circulation in St. Mary's and that by failing
to publish notice in it the city failed to comply with AS
29.25.020(b)(3).
          1.   ACC and SMNC have standing to argue that St. Mary's
did not comply with the notice requirements despite having actual
notice of the public hearing.

          As a threshold matter, we must ascertain whether ACC and
SMNC have standing to raise the argument that notice of the public
hearing on Ordinance 94-4 was insufficient.  St. Mary's contends
that because ACC and SMNC had actual notice of the May 3, 1994
hearing, they lack standing to contest the alleged lack of proper
notice.
          But St. Mary's argument rests on the assertion that the
challenged notice procedure did not injure ACC and SMNC because
they had actual notice.  This argument oversimplifies Alaska's
"interest-injury" test for standing. [Fn. 26]  "[A] party asserting
standing must demonstrate a sufficient personal stake in the
outcome of the controversy to ensure the requisite adversity." [Fn.
27]  If the ordinance is valid, ACC and SMNC's taxes will rise
substantially.  This possibility is a sufficient personal stake in
the outcome to provide ACC and SMNC with standing.
          Moreover, ACC and SMNC have standing under Alaska's
"taxpayer-citizen" test. [Fn. 28]  "Taxpayer-citizen status is a
sufficient basis to challenge allegedly illegal governmental
conduct when the issues raised are of significant public concern
and when the taxpayer-plaintiff is a suitable advocate of the
issues involved in the lawsuit." [Fn. 29]  ACC and SMNC are
certainly interested taxpayers.  Although a court may properly deny
standing to a taxpayer-plaintiff where "there is a plaintiff more
directly affected by the challenged conduct in question" [Fn. 30]
who is a more likely litigant, St. Mary's does not indicate an
appropriate alternative plaintiff who had no notice of the hearing. 
We conclude that ACC and SMNC's actual notice of the May 3, 1994
hearing does not preclude them from having standing in this case.
          2.   Publication in a newspaper of general circulation
is mandatory. 

          We next consider St. Mary's argument that the publication
requirement is directory rather than mandatory.  If publication is
mandatory, then St. Mary's must strictly comply with the notice
provision. [Fn. 31]  If publication is directory, then the
ordinance is valid if St. Mary's substantially complied with the
publication requirement. [Fn. 32]  To make this determination, we
consider three primary factors: (1) whether the words of the
statute compel us to consider the requirement mandatory, (2)
whether the statute is "designed to protect taxpayers in their
dealings with the taxing authority" or was designed to serve as a
guideline "for the orderly conduct of public business," and (3)
whether "serious practical consequences will follow" from
characterizing the statutory guidelines as mandatory. [Fn. 33]
          First, we consider whether the statute contains "negative
words that signify that the acts shall not be done," which would
indicate that "non-compliance invalidates all subsequent attempts
at compliance." [Fn. 34]  If such words of limitation are present,
we are constrained to consider the provision mandatory. [Fn. 35] 
But the publication requirement contains no such words, stating
merely that "a summary of the ordinance shall be published." [Fn.
36]  Because the express words of limitation contemplated by the
court in City of Yakutat v. Ryman are absent, we must examine the
other factors.
          Second, we are likely to consider as mandatory those
"statutory requirements designed to protect taxpayers in their
dealings with the taxing authority." [Fn. 37]  While the
publication requirement applies to every ordinance, this case
involves a tax ordinance.  And our case law supports the
proposition that statutory notice provisions with respect to tax
liability "must be strictly construed." [Fn. 38]  On the other hand
"[s]tatutory requirements which are intended to serve primarily as
guidelines for the orderly conduct of public business are more
likely to be considered directory." [Fn. 39]  In this context, the
publication requirement is more like a statute requiring notice of
tax liability.  The publication requirement prescribes the method
municipalities must use for communicating with the public. 
Adequate public notice is the way that taxpayers learn of potential
changes in their tax liability.  Therefore, the publication
requirement is more than an administrative guideline; it is an
integral part of the relationship between a municipality and its
citizens.  
          Last, we consider the "serious practical consequences
[that] will follow from characterizing the statutory deadlines in
this case as mandatory." [Fn. 40]  Characterizing the requirements
of AS 29.25.020(b)(3)'s publication requirement as mandatory has
serious consequences.  Because St. Mary's has an established policy
of posting public notices, classifying the requirement as mandatory
could call into question the validity of other ordinances passed by
the City of St. Mary's since 1994.  Moreover, there is no evidence
in the record that other bush communities publish notice in the
Tundra Drums.
          But considering the publication requirement to be
directory has serious consequences as well.  Requiring publication
of ordinances serves important policy goals because it helps
facilitate the local government process.  As one commentator has
observed:
          [A] publication requirement operates to avoid
hasty or ill-considered action.  Although not an insurance against
local maladministration, action by ordinance is a reflective
process that affords an opportunity for expression of opinion; this
manifestly is the rationale of statutory requirements of
publication or notice of pendency of ordinances.  Other purposes of
a publication requirement may be to advise those interested that
the matter is up for consideration, or to inform them with
reference to any ordinance that has been adopted so that they may
regulate their actions and conduct accordingly.[ [Fn. 41]]

          Indeed, the publication requirement plays such an
important role in local government that many jurisdictions have
held that, when statutes require publication of ordinances in a
newspaper of general circulation and such a paper exists in a
community, publication of an ordinance in that newspaper is
mandatory. [Fn. 42]
          We conclude that the better approach is to declare the
publication requirement mandatory rather than directory.  In order
to satisfy the publication requirement of AS 29.45.670, local
governments must publish notice in a newspaper of general
circulation when such a newspaper exists in a community. [Fn. 43]
          3.   A genuine issue of fact exists as to whether the
               Tundra Drums is a newspaper of general circulation
in St. Mary's.

          We next address whether there was a newspaper of general
circulation in St. Mary's in 1994.  The superior court agreed with
ACC and SMNC that the Tundra Drums was, as a matter of law, a
newspaper of general circulation in St. Mary's.  The superior court
reasoned that the city's failure to place a notice in the Tundra
Drums resulted in inadequate notice of the public hearing.
          In Moore v. State, [Fn. 44] we determined that a
newspaper is one of "general circulation" in a community when it
"contains news of general interest to the community and reaches a
diverse readership." [Fn. 45]
          In support of its contention that the Tundra Drums
satisfies the "general interest" prong of the Moore test, ACC and
SMNC offered the affidavit of Bonnie Jack, the circulation manager
for the Tundra Drums.  Jack stated that "[t]he Tundra Drums
contains news on a variety of subjects of general interest
including, but not limited to, public notices, news articles
regarding events in various village communities including St.
Mary's, a calendar of events in various villages, listings of
employment opportunities, and various news articles concerning
relevant political events."
          ACC and SMNC also offered the affidavits of St. Mary's
residents Raphael Mike, a member of the SMNC Board of Directors,
and Lawrence Mike, the President of SMNC.  Both asserted that the
paper contains news of general interest to the people of St.
Mary's.
          The evidence offered in support of the second, "diverse
readership" prong of the Moore test is less clear.  Jack's
affidavit states that in one week in April 1996, almost two years
after the May 3, 1994 hearing on Ordinance 94-4, just over 100
copies of the Tundra Drums were sent to St. Mary's for sale. 
Twenty-one of those copies were returned.  In March and July 1994,
approximately 100 copies were sent to St. Mary's, with no report of
how many were returned. [Fn. 46]
          Although ACC and SMNC's evidence generates a genuine
issue of material fact as to whether the Tundra Drums was a
newspaper of general circulation in St. Mary's in 1994, it is not
sufficient to support the trial court's conclusion that the
newspaper is one of general circulation as a matter of law.  The
affidavits do not establish that the distribution was widespread at
the time of the public hearing, and there was no evidence that
anyone in St. Mary's subscribes to the Tundra Drums.  And a St.
Mary's ordinance specifies that the city shall publish notice by
posting in public places, which may reflect the council's view that
there is not a newspaper of general circulation in St. Mary's.  The
Tundra Drums is delivered only to St. Mary's two stores and the
post office. [Fn. 47]  Also, there is no evidence in the record
that other bush communities publish their ordinances in the Tundra
Drums.  As noted, AS 29.71.800(18) contemplates that there may be
no newspaper of general circulation distributed in particular
municipalities.  Under such circumstances, the statute calls for
posting in three public places.  In our view, in cases where it is
fairly and reasonably debatable as to whether there is a newspaper
of general circulation distributed in a community, the presumption
of government regularity requires deference be afforded to that
position which upholds the ordinance. [Fn. 48]
          Finally, our case law on publication requirements
reflects deference to the government's decision whether a newspaper
is one of "general circulation." [Fn. 49]  In Moore, we concluded
that the Division of Lands satisfied a publication requirement when
it decided to publish notice in the Anchorage Times for a land sale
in the Kachemak Bay area. [Fn. 50]  In that case we relied on
evidence that 130 of Homer's 3,500 residents subscribed to the
Anchorage Times to conclude that it was a paper of general
circulation in Homer. [Fn. 51]  But Moore should not be interpreted
as setting a threshold ratio of the number of papers to the number
of residents required to establish that a newspaper is one of
general circulation.  Instead, Moore stands for the principle that
courts should defer to a government's judgment regarding whether a
newspaper is one of general circulation.  In Moore, we concluded
that the Anchorage Times was a newspaper of general circulation
despite the fact that a relatively small percentage of Homer
residents subscribed to it. [Fn. 52]  Nothing in Moore suggests
that if the Division of Lands had decided that the circulation of
the Anchorage Times in Homer was insufficient to make it a
newspaper of general circulation, such a determination would not
also have been upheld. [Fn. 53]
          In this case, St. Mary's decision not to publish the
notice in the Tundra Drums does not appear to be an attempt to
frustrate public notice.  Instead, St. Mary's acted according to
its established publication procedures, which require posting at
three locations, including the city offices, for at least five
days.  Here, the police posted copies of the ordinance and the
agenda for the May 3 hearing at the city offices, the post office,
the school, and two local stores, including ACC.
          Because courts should defer to the judgment of local
government as to what constitutes a "newspaper of general
circulation" in the community, and because a genuine issue of fact
exists as to whether the Tundra Drums was a newspaper of general
circulation in St. Mary's, we conclude that the superior court
erred in deciding this issue as a matter of law. 
          4.   If St. Mary's need not have placed a public notice
in the Tundra Drums, public notice was otherwise proper. 

          If St. Mary's was not required to publish notice in the
Tundra Drums, it would have been required by statute to post
notices "in three public places for at least five days." [Fn. 54] 
The superior court found that St. Mary's failed to produce
admissible evidence of actual postings and thus ruled that the
notice provided was ineffective and in violation of the statutory
posting requirement.  We disagree.
          Although ACC and SMNC had the burden to overcome the
presumption that the proceedings of this municipal government were
conducted in accordance with the law, [Fn. 55] St. Mary's did
produce evidence supporting the validity of its notice.  City
manager Smith stated in an affidavit that he directed police
officer James Webb to post the notices.  The minutes of the May 3,
1994 meeting also indicate that the notices were posted and re-
posted after having been torn down at the post office and the ACC
store.  Given this evidence, and the fact that ACC and SMNC never
made a prima facie showing that the posting of notice was
inadequate, the superior court erred in concluding that St. Mary's
failed to post adequate notice as an alternative basis for granting
ACC and SMNC summary judgment.
V.   CONCLUSION
          Because St. Mary's neither created a new sales tax nor
increased the rate of levy of its sales tax, AS 29.45.670 did not
require a public vote ratifying Ordinance 94-4.  As a result, the
superior court erred when it invalidated Ordinance 94-4 on this
basis.  We also disagree with the superior court's conclusion in
the alternative that no genuine issue of material fact existed as
to whether St. Mary's provided adequate public notice of the
hearing on Ordinance 94-4.  A genuine issue of material fact exists
as to whether the Tundra Drums was a newspaper of general
circulation in St. Mary's in 1994.  We therefore REVERSE the grant
of summary judgment and REMAND for further proceedings consistent
with this opinion.


                            FOOTNOTES


Footnote 1:

     AS 29.45.670.


Footnote 2:

     AS 29.25.020(b)(3) prescribes the requirements for a notice of
a hearing adopting a new ordinance: "[A]t least five days before
the public hearing a summary of the ordinance shall be published
together with a notice of the time and place for the hearing."  AS
29.71.800(18) defines "published" as "appearing at least once in a
newspaper of general circulation distributed in the municipality
or, if there is no newspaper of general circulation distributed in
the municipality, posting in three public places for at least five
days." 


Footnote 3:

     See Mount Juneau Enters., Inc. v. City & Borough of Juneau,
923 P.2d 768, 772-73 (Alaska 1996).


Footnote 4:

     See Semlek v. National Bank of Alaska, 458 P.2d 1003, 1005-06
(Alaska 1969).


Footnote 5:

     See Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 1280
(Alaska 1985).


Footnote 6:

     See Boone v. Gipson, 920 P.2d 746, 748 (Alaska 1996).


Footnote 7:

     See Dennehy v. Dep't of Revenue, 756 P.2d 13, 19-20 (Or.
1988).     


Footnote 8:

     See Trollwood Village Limited Partnership v. Cass County Bd.
of County Comm'rs, 557 N.W.2d 732, 734-35 (N.D. 1996) ("Section 57-
02-01(13), N.D.C.C., also defines 'taxable valuation' as 'the
valuation remaining after deducting exemptions and making other
reductions from the original assessed valuation, and is the
valuation upon which the rate of levy finally is computed and
against which the taxes finally are extended.'").


Footnote 9:

     "[A] borough may levy and collect a sales tax on sales, rents,
and on services provided in the borough.  The sales tax may apply
to any or all of these sources.  Exemptions may be granted by
ordinance."  AS 29.45.650(a).


Footnote 10:

     See Boyer v. Boyer, 113 U.S. 689, 695 (1885); General Elec.
Credit Corp. v. Oregon State Tax Comm'n, 373 P.2d 974, 980 (Or.
1962); State v. Wiley, 31 P.2d 539, 543 (Wash. 1934).


Footnote 11:

     See Boyer, 113 U.S. at 695; General Elec., 373 P.2d at 980;
Wiley, 31 P.2d at 543.


Footnote 12:

     Black's Law Dictionary 629 (abr. 6th ed. 1991).


Footnote 13:

     See Dennehy, 756 P.2d at 19-20; Trollwood, 557 N.W.2d at 734-
35.


Footnote 14:

     221 S.W.2d 51 (Ark. 1949).


Footnote 15:

     Id. at 52-53.


Footnote 16:

     Id. at 53.


Footnote 17:

     See id. at 54-55.


Footnote 18:

     See id. at 57.


Footnote 19:

     See AS 29.45.650(a) ("Exemptions may be granted by
ordinance.").


Footnote 20:

     6 Eugene McQuillin, The Law of Municipal Corporations sec.
21.10,
at 261 (rev. 3d ed. 1998) (footnotes omitted).


Footnote 21:

     "The purpose of this article is to provide for maximum local
self-government with a minimum of local government units, and to
prevent duplication of tax-levying jurisdictions.  A liberal
construction shall be given to the powers of local government
units."  Alaska Const. art. X, sec. 1.


Footnote 22:

     Liberati v. Bristol Bay Borough, 584 P.2d 1115, 1121 (Alaska
1978).


Footnote 23:

     Alascom, Inc. v. North Slope Borough, Bd. of Equalization, 659
P.2d 1175, 1178 n.5 (Alaska 1983) (citing 2A C. Sands, Statutes &
Statutory Construction sec. 46.06 (4th ed. 1973)).


Footnote 24:

     Although the parties dispute whether the inclusion of the
exemption in Ordinance 86-3 affected the voter approval of the
sales tax in 1986, this factual dispute is immaterial to the
resolution of this case.  The language the voters approved in the
ballot measure said nothing of the sales tax exemption, and asked
simply: "Shall the City of St. Mary's levy a 3% sales tax?"  It was
only after the voters approved the three percent tax levy that the
city council passed Ordinance 86-3 with its exemptions.  Once the
voters approved the three percent sales tax, the city council was
free to exempt certain transactions, and conversely repeal those
exemptions, by ordinance without a public vote.


Footnote 25:

     See Liberati, 584 P.2d at 1118.  In Liberati we considered
whether a local government had held an appropriate public hearing
or was required to hold an additional hearing after amending a
proposed sales tax ordinance.  Id. at 1118.  We stated that
"[t]here is a presumption that proceedings of the governing body of
a municipality have been conducted in accordance with law."  Id. at
1118 (citing Antieau, Municipal Corporation Law sec. 4.19, at 4-38
(1978)).


Footnote 26:

     Kleven v. Yukon-Koyukuk Sch. Dist., 853 P.2d 518, 525 (Alaska
1993).


Footnote 27:

     Id. (quoting Hoblit v. Commissioner of Natural Resources, 678
P.2d 1337, 1340 (Alaska 1984) (internal punctuation omitted)). 


Footnote 28:

     Id.


Footnote 29:

          Id. at 526 (citing Trustees for Alaska v. State, Dep't of
Natural Resources, 736 P.2d 324, 329 (Alaska 1987); State v. Lewis,
559 P.2d 630, 635 (Alaska 1977), cert. denied, 432 U.S. 901
(1977)).


Footnote 30:

     Id.


Footnote 31:

     See City of Yakutat v. Ryman, 654 P.2d 785, 789-91 (Alaska
1982).


Footnote 32:

     See id.


Footnote 33:

     Id.


Footnote 34:

     Id. at 789.


Footnote 35:

     See id.


Footnote 36:

     AS 29.25.020(b)(3).


Footnote 37:

     Ryman, 654 P.2d at 790.


Footnote 38:

     Id.; see Stephens v. Rogers Constr. Co., 411 P.2d 205, 207
(Alaska 1966); Johnson v. Miller, 391 P.2d 437, 440-41 (Alaska
1964).   


Footnote 39:

     Ryman, 654 P.2d at 790.


Footnote 40:

     Id. at 791.


Footnote 41:

     5 Eugene McQuillin, Municipal Corporations sec. 16.76, at 372
(footnotes omitted).


Footnote 42:

     See Town of Beverly Shores Plan Comm'n v. Enright, 463 N.E.2d
246, 248 (Ind. 1984); Board of Zoning Appeals of Monroe County v.
Berndt, 502 N.E.2d 1349, 1352 (Ind. App. 1987); State v. Allen, 237
S.W.2d 489, 490 (Mo. 1951); Lower Gwynedd Township v. Gwynedd
Properties, Inc., 591 A.2d 285, 287-88 (Pa. 1991) ("The right of
the public to participate in the enactment of municipal ordinances
required that municipalities strictly follow the prescribed notice
procedures in order to validate any ensuing legislation."); Wilgus
v. City of Murfreesboro, 532 S.W.2d 50, 52 (Tenn. App. 1975); City
of Bells v. Greater Texoma Util. Auth., 790 S.W.2d 6, 13 (Tex. App.
1990). 


Footnote 43:

     See AS 29.71.800(18).


Footnote 44:

     553 P.2d 8 (Alaska 1976).


Footnote 45:

     Id. at 21.


Footnote 46:

     This evidence was not sufficient to satisfy the requirement
that the newspaper must "reach[] a diverse readership."  Moore, 553
P.2d at 21.  In Moore, copies of the Anchorage Times were delivered
to peoples' homes.  See id.  But here there was no evidence that a
diverse readership actually purchased the Tundra Drums; ACC and
SMNC only offered affidavits that the papers were delivered to St.
Mary's stores and comparatively few were returned.  Because the
trial court was required to view the evidence in light most
favorable to the non-moving party, see Zeman v. Lufthansa German
Airlines, 699 P.2d 1274, 1280 (Alaska 1985), it should not have
presumed that the papers reached a diverse St. Mary's readership.


Footnote 47:

     It is ironic that the Tundra Drums was only available in St.
Mary's at the ACC store, Yukon Traders, and the post office -- the
very places that St. Mary's claims to have posted its public
notices.  Accordingly, any person acquiring the Tundra Drums in the
days before the May 3, 1994 hearing would have had the opportunity
to see the notice of the meeting in these public places.


Footnote 48:

     See supra pp. 11-12.


Footnote 49:

     Moore, 553 P.2d at 21.


Footnote 50:

     Id.


Footnote 51:

     See id.


Footnote 52:

     See id.


Footnote 53:

     In Moore, we implied that The Kenai Cheechako News was also a
newspaper of general circulation in the vicinity.  Id. at 21.


Footnote 54:

     AS 29.71.800(18).


Footnote 55:

     See Liberati v. Bristol Bay Borough, 584 P.2d 1115, 1118
(Alaska 1978).