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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Myers v. Alaska Housing Finance Corp. (4/18/2003) sp-5682

Myers v. Alaska Housing Finance Corp. (4/18/2003) sp-5682

     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,
     email corrections@appellate.courts.state.ak.us.

            THE SUPREME COURT OF THE STATE OF ALASKA

ERIC F. MYERS, a taxpayer and )
resident of the State of Alaska, both   )
individually and as a representative of )
other Alaska residents and taxpayers,   )
                              )    Supreme Court No. S-9941
                                      Appellant,            )
                              )    Superior Court No.
     v.                       )    3AN-00-11118 CI
                              )
ALASKA HOUSING FINANCE             )    O P I N I O N
CORPORATION; and NORTHERN     )
TOBACCO SECURITIZATION             )     [No.  5682 -  April  18,
                                   2003]
CORPORATION,                                 )
                              )
                                      Appellees.            )
________________________________)

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Dan A. Hensley, Judge.

          Appearances:   Peter  J.  Maassen,  Ingaldson
          Maassen,    P.C.,   Anchorage,   and    Peter
          Gruenstein,  Gruenstein & Hickey,  Anchorage,
          for    Appellants.    Douglas   D.   Gardner,
          Assistant Attorney General, Juneau, Joseph H.
          McKinnon,    Assistant   Attorney    General,
          Anchorage,   Bruce   M.   Botelho,   Attorney
          General,   Juneau,  and  Robert  M.  Johnson,
          Wohlforth,   Vassar,   Johnson   &    Brecht,
          Anchorage, for Appellees.

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

          CARPENETI, Justice.
           BRYNER, Justice, with whom FABE, Chief Justice, joins,
dissenting.


I.   INTRODUCTION

          Alaska Constitution article IX, section 7 prohibits the

legislature  from  dedicating future  revenues  directly  to  any

special purpose.  But can the legislature sell the state's  right

to  a  future revenue stream that is based on a settlement  of  a

lawsuit  and  then  immediately  appropriate  the  proceeds?   We

conclude  that selling the right to receive future  revenue  from

the  tobacco lawsuit settlement involved in the present  case  is

constitutional   for   three  reasons:    (1)   the   legislative

appropriation power includes the power to sell state assets,  (2)

lawsuit  settlements  are  not  traditional  sources  of   public

revenue, and (3) the legislature has the responsibility to manage

the state's risk.

II.  FACTS AND PROCEEDINGS

           In  1998 Alaska, along with numerous other states  and

territories, settled its past and present smoking-related claims,

and  provided  a  continuing  release of  future  smoking-related

claims,  against  the  four largest tobacco  manufacturers.   The

Master   Settlement   Agreement   provided   that   the   tobacco

manufacturers would make annual payments to a fund from which the

state  would  receive  a  portion in perpetuity.   The  state  is

projected to receive between $16 million and $36 million annually

through 2031.

           Eric  Myers, a director of the Alaska Division of  the

American   Cancer   Society  and  proponent  of   tobacco-control

programs, lobbied the legislature to spend a significant  portion

of  the  tobacco  settlement  on anti-tobacco  initiatives.   The

legislature  appropriated  only $1.4  million  from  the  state's

general  fund  to such initiatives, substantially less  than  the

$8.2  million  requested.  Funding for rural school upgrades  and

construction was a competing priority, in part because a superior

court  had  recently  concluded that the then-existing  education

funding  scheme violated the state constitution and  the  federal

Civil Rights Act of 1964.1

            To   fund  the  extensive  school  improvements,  the

legislature  could  have  appropriated  funds  from  the  state's

general  fund  or could have proposed a bond measure  that  would

have  required voter approval.  Instead, the legislature, viewing

the  state's right to future payments from the tobacco settlement

as  an  asset, sought to sell it for a lump sum representing  the

present  value of the future revenue stream from the  settlement.

The proceeds from the sale could then immediately be appropriated

to finance the rural school improvements.

           The  legislature  devised chapter  130,  SLA  2000  to

accomplish   this  objective  without  offending   constitutional

principles.  Chapter 130, SLA 2000 authorized the commissioner of

revenue to sell the right to receive forty percent of the  annual

revenue  from  the  settlement  to  the  Alaska  Housing  Finance

Corporation  (AHFC),  "anticipated to be at least  $93,000,000."2

The  legislature  also  authorized AHFC to  create  a  subsidiary

corporation  and  issue revenue bonds secured  by  the  right  to

receive   forty   percent  of  the  tobacco   settlement.3    The

legislature  then appropriated $164,876,000 from the  anticipated

proceeds  of the bonds for school, university, port,  and  harbor

construction, renovation, and improvement.4

           AHFC  created a subsidiary corporation,  the  Northern

Tobacco Securitization Corporation (NTSC).  The NTSC held  public

hearings  to discuss the proposed sale of the tobacco  settlement

revenue  stream.   In  early  October  2000  the  NTSC  board  of

directors  authorized the issuance of the bonds.  At  nearly  the

same  time, Myers filed this suit seeking a declaratory  judgment

that  chapter  130,  SLA  2000 violated the  prohibition  on  the

dedication of funds found in article IX, section 7 of the  Alaska

Constitution.  Myers later amended his complaint to request  that

the superior court enjoin the NTSC bond sale.

            Following  oral  argument  on  Myers's  request   for

declaratory  judgment, Superior Court Judge Dan A. Hensley  ruled

that chapter 130, SLA 2000 was constitutional.  Although he noted

that  the  anti-dedication clause applied to all  state  revenue,

which  included  money  from lawsuit settlements,  Judge  Hensley

concluded  that  reducing the settlement  to  present  value  and

selling  it  for  a lump sum did not violate the  anti-dedication

clause.   He  reasoned that the settlement was  an  asset  unlike

traditional  types  of revenue used for annual  state  government

funding;  that  the  form of the settlement as periodic  payments

instead  of  a  lump  sum was a mere fortuity;  that  settlements

providing  for  periodic  payments were fungible  with  lump  sum

settlements;  and  that  because the  continued  payment  of  the

settlement  was not guaranteed, the legislature must be  able  to

manage the state's assets to avoid risk.  Because of the slippery

slope  argument  that  the legislature  could  reduce  any  asset

consisting of a future revenue stream to present value, sell  it,

and   appropriate   the  proceeds  immediately,   Judge   Hensley

emphasized that his ruling was limited to lawsuit settlements  as

a particular type of revenue.  Myers appeals this decision.

           After  Judge Hensley's decision, the NTSC issued  $116

million  of  revenue bonds secured by the right to receive  forty

percent of the future revenues from the tobacco settlement.   The

NTSC  received $93 million and the remainder was used to pay  the

costs of issuance.  The $93 million is now apparently being  used

for  school  and harbor construction projects as appropriated  by

chapter 131, SLA 2000.

III. STANDARD OF REVIEW

           This  case  requires us to decide if the enactment  of

chapter  130,  SLA  2000 violates article IX, section  7  of  the

Alaska  Constitution.  We use our independent judgment to  decide

constitutional issues.5

IV.  DISCUSSION

           The sole issue presented in this appeal is whether the

sale  of  the  future revenue stream from the tobacco  settlement

violates  the  constitutional prohibition  against  dedicating  a

source of state revenue to any special purpose.  We first discuss

the anti-dedication clause and its interpretation, then determine

that directly dedicating the tobacco settlement revenues would be

unconstitutional,  and finally conclude  that  the  sale  of  the

tobacco  settlement revenue stream reduced to  present  value  is

constitutional.

A.             The Anti-Dedication Clause and Its Interpretation

           Section 7 of article IX provides in relevant part that

"[t]he  proceeds  of  any  state tax  or  license  shall  not  be

dedicated  to any special purpose."6  The drafters of  the  anti-

dedication  clause  adopted  it  to  preserve  control   of   and

responsibility  for  state spending in the  legislature  and  the

governor.  " `[T]he more special funds [that] are set up the more

difficult  it becomes to deny other requests until the  point  is

reached  where neither the governor nor the legislature  has  any

real  control  over  the finances of the state.'  "7   The  anti-

dedication clause helps preserve the state's annual appropriation

model  and  ensures  that governmental departments  will  not  be

restricted in requesting funds from all sources.8

           We  have  twice  considered whether  an  appropriation

violated the anti-dedication clause, but neither case presented a

question similar to the one presented here.  In State v. Alex, we

decided   that   an  act  purporting  to  dedicate   a   "special

assessment,"  rather than a tax or license,  violated  the  anti-

dedication  clause because the clause applied to  any  source  of

public  revenue.9   In Sonneman v. Hickel, we held  that  an  act

violated  the  anti-dedication  clause  because  it  limited  the

ability  of  one  state agency to request funding  from  revenues

produced  by  the  Marine Highway System.10  In both  cases,  the

unconstitutional  acts dealt clearly with  future  allocation  of

future  revenues;  neither case involved a reduction  to  present

value and outright sale of a future revenue stream.  Accordingly,

neither  Alex  nor  Sonneman directly resolves the  more  complex

question in the present case.

           The  Alaska  anti-dedication clause is  almost  unique

among state constitutions.  Only Georgia has a similar provision,

which  indirectly was the source of the Alaska provision.11   The

relevant  portion of the Georgia anti-dedication clause provides:

"[N]o appropriation shall allocate to any object the proceeds  of

any particular tax or fund or a part or percentage thereof."12

           The  Georgia Supreme Court has interpreted  its  anti-

dedication  provision  only once.  In State  Ports  Authority  v.

Arnall,  the Georgia legislature passed a bill appropriating  all

of  the  rentals received from a lease of the Western &  Atlantic

Railroad  to the State Ports Authority for the purpose of  paying

bond   debt.13    The  Georgia  Supreme  Court  held   that   the

appropriation  was unconstitutional for two independent  reasons:

because  it  violated the provision concerning  the  creation  of

state debt and because it violated the provision prohibiting  the

dedication of funds.14

           Arnall,  however, is of limited use in  resolving  the

present  case.   Like our earlier cases, Arnall  dealt  with  the

appropriation of future revenues and did not decide  whether  the

sale  of a future income stream reduced to present value violated

the anti-dedication clause.

           The  state argues that Arnall "favorably" cited Wright

v. Hardwick15 and that this supports the constitutionality of the

sale  of a stream of revenue.  In Wright, the Georgia legislature

made  an "outright sale of rentals to be received from the  lease

of the Western & Atlantic Railroad."16  The Georgia Supreme Court

approved  of  the sale because the " `legislative act  [did]  not

seek to authorize the creation of debt.' "17

            The  state's  argument  is  unconvincing  because  it

misconstrues  Arnall and overstates the scope of Wright.   First,

Arnall  did  not  favorably  cite Wright.   Arnall  distinguished

Wright  in  its creation-of-debt analysis and made no mention  of

Wright in its anti-dedication analysis.18  Second, Wright did not

support the contention that the sale of rentals from the railroad

lease   was   constitutional   under  Georgia's   anti-dedication

provision, for Wright was decided before Georgia adopted its anti-

dedication provision.19  Wright was decided in 1921, well  before

the  anti-dedication  provision first  appeared  in  the  Georgia

Constitution of 1945.20  In fact, the appellant in Wright  argued

that  the  sale of the right to future rents violated the  annual

appropriation  model of the Georgia constitution, but  the  court

stated, "No scheme or fiscal policy for the state appears in  any

direct  or  express  language of the  Constitution  limiting  all

expenditures for the state in any one year to the revenues of the

state  derived  from all sources during that year, and  declaring

that the revenues shall not be anticipated."21  Thus, Wright  did

not,  and  could  not, support the validity of a sale  of  future

lease   revenues   with  respect  to  Georgia's   anti-dedication

provision.

           In sum, neither the text of our anti-dedication clause

nor  the  relevant  case  law provides a  direct  answer  to  the

question before us.

B.              The Tobacco Settlement Revenue Is Subject to  the

          Anti-Dedication Clause.

           The  superior  court  ruled that  the  anti-dedication

clause  generally  applied  to  the tobacco  settlement  revenue:

"[A]lthough  the Constitution speaks in terms of tax or  license,

the  Alaska  Supreme  Court, in State v. Alex,  interpreted  that

phrase  to include all state revenues, which would include  money

from  lawsuit  settlements."  This conclusion is consistent  with

existing case law.

           In State v. Alex, we held in the context of a tax-like

assessment  on  the  sale  of  fish  on  behalf  of  a   regional

aquaculture  association,  that "the constitution  prohibits  the

dedication of any source of revenue."22  We expressly agreed with

an Alaska Attorney General's opinion that states:

          Section   7  of  Article  IX  of  the   state
          Constitution can be given its intended effect
          and  serve  its repeatedly expressed  purpose
          only  if  the words "proceeds of any  tax  or
          license"  are interpreted to mean what  their
          framers  clearly intended, i.e., the  sources
          of any public revenues.
                Accordingly, it is our conclusion  that
          the   dedication  of  any  source  of  public
          revenue:   tax,   license,   rental,    sale,
          bonus_royalty,   royalty,  or   whatever   is
          limited  by the state Constitution  to  those
          existing  when the Constitution was  ratified
          or  required  for  participation  in  federal
          programs.[23]
          
A   more   recent  informal  opinion  of  the  attorney   general

specifically  stated that the constitution prohibited  dedication

of   money   from   civil   settlements:  "[T]he   constitutional

prohibition  against dedicated funds applies  to  money  received

from fines, penalties and civil settlements . . . ."24

           The conclusion that the anti-dedication clause applies

to  the  tobacco settlement means only that a current legislature

is  prohibited  from dedicating future settlement revenues  to  a

particular  purpose.   Thus,  the  anti-dedication  clause  would

prohibit   the   legislature  from  appropriating   the   tobacco

settlement   revenue  stream  for  more  than   the   immediately

forthcoming fiscal year directly to secure a bond issue.  But the

legislature did not do this.  Instead, the legislature  sold  the

settlement  reduced to present value.  The question then  becomes

whether  the  sale  of the tobacco settlement is unconstitutional

because  its  effect is the same as a dedication  of  the  future

tobacco settlement revenue to repay the bond issue.

C.              The  Sale  of  the  Right to  the  Future  Annual
          Payments  from  the  Tobacco  Settlement  Is   Not   an
          Impermissible Dedication.
          
           Determining  the outcome of this case requires  us  to

choose  between competing constitutional values: the  prohibition

on  dedicated  funds  and the legislative  power  to  manage  and

appropriate  the state's assets.  Myers argues that allowing  the

state to sell the future revenues from the settlement defeats the

purpose of the anti-dedication clause.  The state argues that the

tobacco  settlement  is a state asset, which the  legislature  is

free to sell; upon the sale, the legislature may appropriate  the

proceeds.  The superior court distinguished between the  sale  of

the  tobacco settlement and other "traditional kinds of revenues"

and  concluded that the transaction was constitutional.  We agree

with the superior court.

          Myers interprets the prohibition of the anti-dedication

clause  broadly  and  concludes that chapter  130,  SLA  2000  is

unconstitutional  because  its effect is  inconsistent  with  the

purposes  of the anti-dedication clause.  Myers argues  that  the

sale   of  the  tobacco  settlement  conflicts  with  the  annual

appropriation  model  and effectively reduces  the  legislature's

control of state assets because those anticipated future revenues

become unavailable.  He also argues that we should not allow  the

legislature to accomplish indirectly what it cannot do  directly.

Because  the  state admits that the legislature  cannot  dedicate

forty percent of the tobacco settlement to secure bonds directly,

Myers  argues  that  the  legislature  should  not  be  able   to

accomplish the same effect by the simple expedient of selling the

right to future revenues from the tobacco settlement.

            But  Myers  apparently  does  not  dispute  that  the

legislature has the power to sell a state asset like a  building,

and  selling  an  income-producing  asset  could  be  viewed   as

inconsistent with the anti-dedication clause in the same ways  as

the  sale of the tobacco settlement revenue stream.  If the state

owns  a  real property asset on which it collects rents,  selling

the  property  outright and appropriating the  money  effectively

eliminates the rents as a source of revenue previously  available

to future legislatures.  Likewise, if the state has loaned money,

selling  the  state's interest in the repayment of the  loan  and

appropriating  the income eliminates the stream of  revenue  from

future loan payments.  The same considerations would apply if the

state  sold state property on an installment basis.  Clearly  the

legislature  has some power to manage the state's assets  and  to

appropriate those proceeds in the year received even though  such

actions  may  conflict with the purposes of  the  anti-dedication

clause.

            The   state  interprets  the  anti-dedication  clause

narrowly  and concludes that the tobacco settlement is simply  an

asset  - a property, thing in action, or chose in action -  which

the  legislature can sell and appropriate without  violating  the

anti-dedication  clause.  If this proposition is accepted,  there

is  no dedicated funds problem because the legislature has simply

sold  an asset and appropriated the revenue generated.  No future

revenues  are impacted because the tobacco settlement  no  longer

exists  as a state asset that will produce future revenues.   The

state  supports  its  interpretations with  the  opinion  of  the

attorney    general   that   the   legislature's    action    was

constitutional.25

           The superior court expressly limited its ruling to the

issue  in this case - the sale of the tobacco settlement  revenue

stream.  The superior court reasoned that the sale of the tobacco

settlement   was  constitutional  because  of  four  distinctions

between the tobacco settlement revenues and traditional kinds  of

state  revenues: (1) lawsuit settlements are discrete and have  a

non-recurring  nature; (2) the form of the lawsuit settlement  as

periodic  payments instead of a lump sum is a matter of fortuity;

(3)  lawsuit  settlements are more closely  comparable  to  state

assets  than  to  taxes  or other traditional  sources  of  state

revenue;  and (4) the tobacco settlement entails some  risk  that

the  legislature  must  be able to manage.   We  agree  with  the

superior court.

           First, lawsuits and corresponding settlements  have  a

non-recurring nature unlike other sources of state revenue relied

upon   in   Alaska's   annual  appropriation  process.    Lawsuit

settlements  are  not  traditional sources of  significant  state

revenue.26

          Second, the form of the settlement as periodic payments

instead of a lump sum is a matter of fortuity.  Clearly,  if  the

settlement had been a lump sum arrangement, the legislature would

be  free to immediately appropriate the settlement proceeds,  and

there would be no anti-dedication clause problem.  Although Myers

argues that the state could have negotiated for a lump sum, there

is  no reason to conclude it would have been successful.  Indeed,

the   omnibus  nature  and  the  significant  complexity  of  the

settlement  provided incentive to accept the  settlement  in  the

form  offered.   In any event, the form of the settlement  should

not   dictate   the   constitutionality  of   the   legislature's

disposition of it.

            Third,  lawsuit  settlements,  even  those  involving

periodic payments over time, are commonly considered to be assets

or  property  as distinct from taxes or licenses.27   Settlements

involving  payments  over  time  are  comparable  with  lump  sum

settlements by simply reducing them to present value.

          Fourth, the legislature must be allowed to manage state

assets  so as to control risk.  Myers does not appear to  dispute

that  the  legislature has the authority to  manage  the  state's

affairs in accordance with its judgment on risk avoidance, but he

argues  that  there is little risk associated  with  the  tobacco

settlement revenue stream as evidenced by the bonds' ratings.  To

the  extent that Myers asks us to decide the financial  soundness

of the sale (whether the tobacco settlement is sufficiently risky

to warrant liquidation), we decline.  That is a policy choice for

the legislature.28

           Myers argues that the state's narrow interpretation of

the  anti-dedication clause is a slippery slope: If the state can

reduce  the tobacco settlement revenue stream to a present value,

sell   it,   and   immediately  appropriate  the  proceeds,   the

legislature could perform the same maneuver on almost any revenue

stream,  provided  the  existence of an  interested  buyer.   For

example,  the legislature might sell the state's right to  future

oil  and  gas royalties and appropriate the proceeds immediately.

Myers  argues  that  no distinction exists  between  the  tobacco

settlement  and  oil  and gas lease royalties  as  state  assets.

Myers's  argument is beyond the scope of this case.  Because  the

validity  of selling future oil and gas royalty revenues  reduced

to present value is not posed by this case, we express no opinion

on  the constitutionality of that sort of transaction.29      The

fifth  factor  - whether the sale is what it purports  to  be,  a

conveyance of the state's right to the revenue - does not help in

determining  whether the revenue stream is an  asset.   Moreover,

the  dissent's  application of the factor rests  on  its  earlier

incorrect  conclusion that Part XVIII(p) of the master settlement

agreement prevents the state from assigning its interest  in  the

settlement  proceeds.   Because the master  settlement  agreement

does  not prohibit the state from assigning its interest  in  the

settlement  proceeds, it is irrelevant why the legislature  chose

the mechanism that it did.

D.             The NTSC's Issuance of Bonds Is Constitutional.

           Assuming  that the sale of the tobacco settlement  was

constitutional, the state  argues that the NTSC's bond issue  was

constitutional.  Although Myers asserts in one sentence that  the

legislature's act effectively circumvented article IX, section 8,

which  requires voter consent for a general bond issue,  he  does

not  develop  the  point.  Accordingly,  we  consider  the  issue

waived.30

          Even if Myers had not waived the argument, the state is

correct that the NTSC issued the bonds within the requirements of

the  constitution.  Although article IX, section 8, provides that

the  state can contract debt only with ratification by a majority

of the voters,31 article IX, section 11, provides an exception for

a  state  agency  to  issue revenue bonds  secured  only  by  the

agency's revenues.32  Because the NTSC bonds were secured  solely

by  the  tobacco  settlement revenues, the  bonds  are  expressly

permitted under article IX, section 11.

V.   CONCLUSION

          Because the legislature sold the tobacco settlement and

then  appropriated  the resulting income,  it  did  not  directly

violate the anti-dedication clause.  Although selling the tobacco

settlement  revenue stream is an indirect method of producing  an

effect  very similar to the prohibited dedication of those future

revenues,   the   anti-dedication   clause   clashes   with   the

legislature's appropriation power.  We conclude that the sale  of

the  tobacco settlement is constitutional because the legislative

appropriation  power  includes the power to  sell  state  assets,

lawsuit  settlements  are  not  traditional  sources  of   public

revenue, and the legislature has the responsibility to manage the

state's  risk.   Accordingly,  we  AFFIRM  the  superior  court's

ruling.

BRYNER,   Justice,   with  whom  FABE,  Chief   Justice,   joins,

dissenting.

           I agree with the opinion's initial conclusion that the

tobacco  settlement  revenue qualifies  as  a  source  of  public

revenue  covered  by  the  Alaska Constitution's  anti-dedication

clause.33   But  I  have serious doubts about  the  court's  main

conclusion that chapter 130, SLA 2000, sells this revenue without

violating the anti-dedication clause.  Because the superior court

did  not  address the issues that give rise to my doubts and  the

record contains insufficient information to resolve them, I would

vacate  the  summary judgment order and remand  to  the  superior

court for further proceedings.

           Today's  opinion  approves the  state's  sale  of  its

tobacco  settlement  rights  based on  their  discrete  and  non-

recurring  nature,  on  the fortuity of the  settlement's  future

payout  provisions,  and  on the fact  that  lawsuit  settlements

generally  are  viewed as assets.  But it seems to  me  that  the

opinion  too quickly accepts at face value the state's assurances

that  the purchase and sale agreement actually sells the  state's

current  right  to  its  tobacco  settlement  revenues;  and   in

approving this sale, the opinion gives too much emphasis  to  the

settlement's unusual and fortuitous nature.

           The  qualities relied on by today's opinion may indeed

suggest  that  the  sale's future revenues are capable  of  being

treated  as  a  present  asset.   But  almost  anything  can   be

conceptualized  as an asset: virtually all future  events  having

any  potential  impact  on state revenue could  be  expressed  in

estimated economic values, labeled as assets, reduced to  present

value,  and "securitized."  And surely a future revenue  stream's

unusual  nature or unanticipated appearance on the  horizon  does

not,  standing  alone,  justify  calling  the  revenue  stream  a

presently  salable  asset; nor is there any  reason  to  suppose,

assuming that the revenue stream is in fact an asset, that  every

sale  purporting to dispose of it at present value would actually

comply  with  the anti-dedication clause.  While the presence  of

these  factors may provide an appropriate embarkation  point  for

constitutional inquiry, their presence cannot eliminate the  need

for a hard look at all other relevant circumstances.

           In  my  view,  we  must examine the character  of  the

particular  revenue  stream at issue and  the  mechanics  of  its

proposed   disposition   to  ensure  the  sale's   constitutional

integrity: that is, to ensure both that a marketable asset exists

and that the proposed sale would actually market it in a way that

the  anti-dedication clause allows.  At least five  factors  seem

relevant in examining these issues:

<                    The source and nature of the future revenues  and

          how the law traditionally views similar revenues.

<                    Whether  the state's right to the future revenues

          is fully vested at the time of the sale.

<                    Whether  any law, rule, or contractual  provision

          prohibits  the state from selling its current right  to  the

          revenue or prevents the buyer from stepping into the state's

          shoes.

<                     Whether  the  revenue's  future  value  can   be

          rationally predicted and whether the sale obliges the  state

          to  perform contractual duties that might conflict with  its

          basic governmental duties.

<                    Whether the sale conveys the state's right to the

          revenue or a right to receive the revenue from the state.

           I believe that, when examined with an eye toward these

factors,   the  master  settlement  agreement,  the   legislation

implementing  the state's sale of its settlement revenues,34  and

the state's purchase and sale agreement with AHFC and NTSC reveal

serious potential flaws in the state's constitutional theory.

     1.   The source and nature of the revenue stream

           Today's  opinion  focuses almost exclusively  on  this

factor.  The revenue stream at issue here is established  by  the

tobacco  settlement  agreement; the opinion notes  that  the  law

traditionally treats legal settlements as assets.   These  points

suggest to the court that the state's current interest in  future

revenues under the agreement can be regarded as an asset.  But  a

note  of  caution  seems necessary: the law does  not  invariably

treat  legal settlement agreements as transferrable property;  it

deems  some  settlement agreements non-transferrable because  the

transfer  contemplated  by  the agreement  would  violate  public

interest.  Settlements compromising future child support  rights,

for  instance, are generally barred.  Moreover, other  settlement

agreements  are  non-transferrable  by  their  own  terms.    For

example,  a  lease agreement containing an express non-assignment

clause  could  render the lease interest not freely transferrable

to  a  third party.  In this case, as discussed below, there  may

exist   both   contractual  and  policy  reasons   for   limiting

transferability of the state's present settlement rights.

     2.   Whether the state's right is vested

           The  state's  right to share in the master  settlement

agreement's  settlement funds appears to be fully  vested.   This

factor  poses  no apparent obstacle to treating the  right  as  a

current, marketable asset.

     3.    Whether the law or the settlement agreement  bars  the

     transfer

          No state law bars the state from transferring its right

to  receive  revenues  under the settlement  agreement,  and  the

parties  point  to  no  federal law forbidding  or  limiting  the

transfer.    But  the  settlement  agreement  itself  imposes   a

limitation.   The  state fails to discuss this  restriction,  and

neither  the  superior court nor this court's  opinion  gives  it

serious attention.  Yet in my view it is potentially critical.

           Part  XVIII(p)  of  the  master  settlement  agreement

explicitly limits the intended benefits of the agreement  to  the

settling  states that joined in the agreement; and this provision

expressly   prohibits  settling  states  from   assigning   their

enforcement rights under the settlement agreement:

               (p)  Intended Beneficiaries.  No portion
          of  this  Agreement shall provide any  rights
          to,  or  be  enforceable by,  any  person  or
          entity  that  is not a Settling  State  or  a
          Released Party.  No Settling State may assign
          or  otherwise convey any right to enforce any
          provision of this Agreement.
          
           On its face, this language appears to require that all

settlement  funds destined for Alaska be collectible  exclusively

by  the  state of Alaska; the language further seems to  preclude

the  state from assigning to a third party like NTSC the  state's

right  to  demand payment, or any other benefit of the agreement,

directly  from  the  master settlement agreement's  (MSA)  escrow

agent.   Although  this paragraph might not bar  the  state  from

selling  to  NTSC  the  state's present right  to  retain  future

settlement funds upon their receipt by the state, it does seem to

say  that  the  state cannot put a third party in  its  shoes  by

assigning  the  state's right to collect directly  from  the  MSA

escrow  agent.   The provision would appear to allow  a  settling

state  to  sell  only  the right to acquire  settlement  payments

through   the  state.   As  discussed  more  fully  below,   this

distinction  could  have critical constitutional  implications.35

Relatedly, the court notes that Myers does not specifically raise

any  argument based on Section XVIII(p) and has therefore  failed

to adequately brief the issue.  Opinion at 15, n.29.  But Section

XVIII(p)  raises unresolved uncertainties concerning the  broader

constitutional  point  that  Myers  has  unquestionably   argued:

whether  the  state's  sale  of  its  future  tobacco  settlement

revenues   violates  the  Alaska  Constitution's  anti-dedication

clause.   The  superior court granted summary  judgment  on  this

point,  declaring the sale to be constitutional.   Since  summary

judgment  would  be permissible only if the record  resolved  all

material   issues   in  the  state's  favor   and   affirmatively

established  its  right to judgment as a matter of  law,  Myers's

failure to frame his constitutional argument in a particular  way

does not relieve this court of its duty to review the record  for

unresolved   issues  of  fact  that  bear  directly  on   Myers's

constitutional  claim.  See Alaska R. Civ. P.  56;  cf.  American

Restaurant  Group  v.  Clark, 889 P.2d  595,  598  (Alaska  1995)

(holding  that  party's  failure to call particular  evidence  to

court's  attention  "did not relieve the superior  court  of  its

obligation  to  examine  the record before  determining  that  no

genuine issue of material fact existed").

          4.    Predictability of value and dependency on state's
          performance of governmental functions
          
          This factor recognizes that constitutional policies can

sometimes   preclude  legislation  from  treating  future   state

revenues as marketable assets: for example, the revenue's  future

value  might  be so speculative as to defy meaningful prediction,

thereby precluding statutory "assetization" of the revenue, since

the  legislation  would amount to arbitrary and irrational  state

action;  alternatively, a legislative directive to sell  not-yet-

realized  revenues at present value might impermissibly constrain

the  executive  branch's prerogatives by foreclosing  its  future

ability   to   perform   essential,   constitutionally   mandated

governmental duties.

          In my view, a policy concern of this latter kind arises

under  the  purchase  and  sale agreement  and  deserves  serious

attention.  Although the superior court and the opinion  describe

the  tobacco settlement's payout provisions as "fortuitous," this

description  hardly  seems accurate.  The settlement  agreement's

opening recitals make it clear that the settlement is founded  on

and  carefully structured to address the settling states'  strong

and  continuing interests in promoting public health and reducing

youth  smoking.  Reflecting these ongoing concerns and interests,

the  settlement  agreement establishes a theoretically  perpetual

stream  of  future payments whose size will depend  inversely  on

each  state's  ability to curb future smoking:  the  greater  the

success  a  state achieves, the lower will be its future  payment

stream.

           From  a  settling  state's perspective,  this  inverse

relationship  makes  sense  as long as the  tobacco  settlement's

benefits   inure   exclusively  to  the  settling   parties,   as

Part   XVIII(p)   of  the  settlement  agreement   itself   (non-

fortuitously) seems to require.  The state stands to receive less

if  it  succeeds in curbing smoking, but its loss  of  settlement

revenues  through decreased smoking will presumably be more  than

offset  by the economic and public health benefits gained through

the  successful state regulatory efforts that caused the decrease

in  smoking.  As long as the future revenues belong to the state,

then,  there is no possibility of irreconcilable tension  between

the  state's two theoretically conflicting interests - maximizing

its  settlement  revenues, on the one hand,  and  protecting  the

health  and safety of its citizens, on the other.  The settlement

thus offers settling states a "win-win" situation.

           But  a sharp disparity of interests potentially arises

when,  as  here,  the  state divorces its interest  in  receiving

future  settlement  revenues from its vital interests  in  public

health  and  safety by transferring its current right  to  future

revenues  to a group of third-party investors.  As we have  seen,

under  the  terms of the master settlement agreement itself,  the

state's rights to receive benefits under the agreement cannot  be

assigned  directly to a third party like NTSC; those  rights  can

only  be  assigned  vicariously, since the  settlement  agreement

precludes  their  direct enforcement by  anyone  but  a  settling

state.   For  this  reason, the terms of  the  master  settlement

agreement  apparently led the AHFC and NTSC to oblige the  state,

in the purchase and sale agreement, to pledge to make all efforts

within  its  lawful  powers  to maximize  the  investors'  future

revenue  stream  -  presumably, even if this  means  placing  the

investors'  financial interests ahead of the state's governmental

duty to protect the health and safety of its citizens.

           The  court  dismisses the potential for this  kind  of

conflict  as  "illusory,"  concluding  that  "[n]othing  .  .   .

obligates the state to take steps to maximize the income  stream.

The  state is obligated only not to interfere with AHFC's receipt

of  the  income stream."36  But the express terms of the purchase

and  sale  agreement  belie this conclusion.   Specifically,  the

agreement  strives to enhance investor confidence  by  explicitly

requiring the state to promise, among other things, (1) to  "take

all  actions  as  may  be  required by  law  fully  to  preserve,

maintain,  defend,  protect  and  confirm  [AHFC's  and   NTSC's]

interest[s]";  (2) "not [to] take any action that will  adversely

affect  [their] legal right to receive the Tobacco  Assets";  (3)

not  to "impair the rights and remedies of Bondholders" until the

bonds  "are  fully paid and discharged"; (4) "not [to]  take  any

action and [to] use its best reasonable efforts not to permit any

action  to  be  taken by others that . . . would  result  in  the

amendment,   hypothecation,   subordination,   termination,    or

discharge of, or impair the validity or effectiveness of, the MSA

or  the  Consent  Decree"; (5) to "immediately pay  over  to  the

Trustee the proceeds of any Tobacco Assets received by the  State

in  error"; and (6) to "exercise each and every right and  remedy

under the MSA."

           Given the inverse relationship between the size  of  a

settling  state's  future  settlement payments  and  the  state's

future  success  in curbing the public dangers of smoking,  these

promises  may  well  create  an  intolerable  and  irreconcilable

tension  between the state's contractual obligation  to  maximize

revenues for bondholders and its non-delegable governmental  duty

to protect the public health and safety of its citizens.  At some

point,  our  constitution  necessarily circumscribes  legislative

authority  to approve private contractual arrangements that  have

the  effect of preempting the executive's constitutionally  based

prerogatives;37 so too, there are constitutional  lines  that  no

branch  of government is authorized to cross by contracting  away

its own core governmental powers and duties.38  Hence, even if the

state's  right  to receive future settlement payments  under  the

master  settlement agreement might otherwise  be  regarded  as  a

marketable  asset,  concerns of this  nature  may  well  preclude

"securitizing" these future revenues.

           Because  the  parties and the superior court  did  not

develop  or  meaningfully address this issue, I believe  that  it

warrants further consideration on remand.

     5.   Whether the sale mechanism does what it purports to do

           Not every transaction is what it purports to be.   And

the  constitutionality  of the transaction  at  issue  here  must

ultimately be judged by what it does, not what it purports to do.

I  therefore believe that it is crucial to examine the  mechanics

of  the  state's  sale  of revenue rights to  NTSC  in  order  to

determine if the sale actually and immediately conveyed  what  it

purported to convey: "all right, title and interest of the  State

.  .  .  in and to" "forty percent of the revenue . . . that  the

State  has  a right to receive from time to time under the  MSA."

There is reason to doubt that it did.39

           As  already mentioned, the master settlement agreement

appears  to preclude the state from assigning to NTSC the state's

right  to receive the tobacco settlement funds directly from  the

MSA  escrow agent; the agreement seems to require that the  funds

be  held  for  the benefit of the state by the MSA  escrow  agent

until  payment is due, and that they then be "transferred to  the

appropriate State-Specified Account for such Settling State."

          The purchase and sale agreement seems to recognize this

restriction  but evidently attempts to skirt it by requiring  the

state to create a trust within its "State-Specified Account"  and

by having the state pledge its settlement payments to the account

trustee  upon their deposit.  As currently presented, the details

of   this  arrangement  are  sketchy.   The  arrangement  is  not

precisely  described in the parties' briefing or in the  superior

court's  decision, and the trust agreement itself apparently  has

not  been included in the appellate record.  But the most  likely

scenario  seems  to  be  that as soon as the  state's  settlement

payment   is  deposited  in  the  state-specified  account,   the

account's  trustee  (the bank in which the funds  are  deposited)

divides the funds according to the terms of the purchase and sale

agreement, disbursing forty percent to NTSC and sixty percent  to

the state general fund.

           The  preliminary prospectus describing NTSC's  tobacco

settlement   asset-backed   bonds   appears   to   confirm   this

interpretation, emphasizing that "[t]he State may not convey  and

has not conveyed to NTSC or the Series 2000 Bondholders any right

to  enforce  the  terms of the MSA" and declaring  that  the  MSA

escrow  agent  "will  disburse  the  [settlement]  funds  to  the

Settling States."40

          The prospectus includes a flow chart that lends further

support  to this reading.  This chart depicts settlement payments

flowing  from  the MSA escrow agent to the Alaska state-specified

account,  where  the  payments appear to  be  received  as  state

revenue.   According  to the chart, after receipt  in  the  state

account, the money is divided into two separate funds, with forty

percent  flowing  to  NTSC  and sixty  percent  to  the  state  -

presumably  to the general fund.  The chart labels  NTSC's  forty

percent payment as "pledged revenues," suggesting that NTSC  does

not   acquire  these  monies  by  direct  payment  from  the  MSA

settlement,   but   instead  as  payment  from   state   revenues

representing NTSC's forty percent share of the total received  by

the state.

            Seemingly,   then,  because  the  master   settlement

agreement  prohibits  the  state  from  assigning  its  right  to

directly  collect  settlement revenues  and  requires  settlement

payments  to  be deposited to a state-specified account  for  its

benefit,  settlement payments necessarily arrive  at  the  state-

specified  account  as  state  revenues.   The  fact   that   the

settlement payments are deposited into a state-specified  account

rather than into the state's general fund certainly would not, by

itself,  change  their  basic character  upon  deposit  as  state

revenue; nor is it clear how the state could contractually  alter

the future payments' basic character as state revenue at the time

of  their  receipt  by creating a trust within its  account  that

divides them after their deposit.  For if the funds must be  paid

to  the  state for its exclusive benefit and received in a state-

specified  account, it would appear that the state's decision  to

dedicate  this  account to one or more specific  purposes  merely

serves  to make it a dedicated fund.  This is precisely what  the

dedication  clause prohibits.  After all, if the  anti-dedication

clause   could  be  circumvented  by  the  simple  expedient   of

depositing  state  revenues  into  prerestricted  trust  accounts

instead  of  the  general fund, then compliance with  the  clause

would be reduced to a minor accounting inconvenience.

           Notably,  Tamara Brandt Cook, Director of  Legislative

Services  for the Legislative Affairs Agency, foresaw and  warned

of  precisely  this  danger in her September 20,  2000,  memo  to

Representative  John Coghill.  Addressing the problem  under  the

appropriations  clause  rather than the  anti-dedication  clause,

Cook  commented that, "because the `Tobacco Settlement' money  is

to  flow  to  AHFC  upon  receipt without an  appropriation,  the

arrangement may be vulnerable under Art. IX, sec. 13 of the state

constitution."41

          This subtle transactional wrinkle - that the settlement

payments  must be routed through the state instead of being  paid

by  the  MSA  escrow  agent directly to  NTSC  -  appears  to  be

dictated  by  the settlement's express non-assignment  provision;

and as Cook aptly notes, the wrinkle has a crucial bearing on the

sale's   constitutionality.   For  although  the  anti-dedication

clause  might  permit  an advance sale of the  state's  right  to

collect directly from the MSA escrow agent, it squarely prohibits

the  state  from  selling to NTSC the right to receive  from  the

state the future revenues that the state itself will receive from

the MSA escrow agent.

            That   the  master  settlement  agreement  does   not

explicitly  preclude  states  from  transferring  their   present

interests in future settlement funds and instead speaks  only  of

restricting  a  settling state's right to  "assign  or  otherwise

convey  any  right to enforce" the agreement's provisions  hardly

rescues  a  present transfer of future revenues  from  the  anti-

dedication  clause's  proscriptions.  The anti-dedication  clause

looks  to the character of the conveyance as well as its  timing.

Because the master settlement agreement requires settlement funds

to  be  held  for  the exclusive benefit of the  settling  state,

requires those funds to be paid into the state-specified account,

and  precludes the state from transferring any right  to  enforce

the agreement's provisions, it appears that neither  NTSC nor the

state,  acting on NTSC's behalf, could ever compel a distribution

of  settlement  funds directly to NTSC; instead, the  funds  must

seemingly  pass  to NTSC through the state.  Yet if  the  present

transaction  merely  conveys  the  right  to  receive  settlement

revenues through the state when it eventually receives them, then

the  state's presently conveyed property interest is not what the

state  claims it to be: it is not an immediate conveyance of  the

state's  title  to the revenue stream itself but only  a  present

pledge to hand over the state's future revenues when they accrue,

through  an  airtight mechanism structured  to  ensure  that  the

pledge will be honored.

           This  form of sale -  a dedication of proceeds from  a

source  of future state revenue - would be impermissible  whether

characterized as a current sale at present value or as a  promise

to  sell  in  the  future.42    It may  be  true  that  immediate

"assetization" and sale of the state's settlement rights makes it

possible  for the state to "receive all of the tobacco settlement

payments  now,  rather  than  over  a  period  of  years."    But

constitutionally  speaking, the salient fact is  that  the  state

receives  its immediate payment not in exchange for its right  to

receive  settlement revenues directly from the MSA escrow  agent,

but  in exchange for irrevocably pledging to hand over its future

settlement revenues as soon as the state receives them.  AHFC and

NTSC  thus  appear to be buying the fruit of the state's  revenue

tree,  not  the  tree itself, years in advance;43 yet  the  anti-

dedication clause requires this fruit to be sold one  year  at  a

time, as it ripens.

          The point seems worth stressing again: an assignment of

the  right to receive the state's future revenues from the  state

is  paradigmatically a dedication of state revenues; it makes  no

constitutional  difference that the purchase and  sale  agreement

conveys  a present interest in the state's future revenue  stream

if  that  stream flows through the state's hands before  reaching

NTSC's banks.

          While the state goes to considerable lengths to justify

the   transaction  by  relying  on  opinions  of  various  former

attorneys general, these opinions lack persuasive force  for  the

same  reason that both the superior court's decision and  today's

opinion  are  unconvincing.  The attorney  general  opinions  all

address  the  conceptual question of whether a state's  right  to

receive future settlement revenues can be valued and sold  as  an

asset.   But  in considering this point, they simply  assume,  or

accept  on  faith, that the state's proposed sale  actually  will

convey  a  share  of the state's right to receive the  settlement

payment.  None of the attorney general opinions take stock of the

master   settlement  agreement's  anti-assignment  provision   or

discuss  the  agreement's apparent nullification of  the  state's

ability to sell its direct rights to collect the revenue.

           Former  Attorney  General  Charles  Cole's  letter  to

Senator   Torgerson  exemplifies  the  omission:   it   expressly

acknowledges  that "once money is received by the  State,  it  is

`public  revenue'  which  may  not be  dedicated  for  a  special

purpose";    but   the   letter   then   accepts   the    state's

characterization  of  the  transaction  at  face  value,  assumes

without examining the point that the settlement money will not be

received by the state, and thus concludes that the sale  will  be

valid.44     Conceptually,   the   letter's   observations    are

unassailable.   Yet  they incorrectly assume  the  truth  of  the

state's  unexplained and potentially unwarranted  assertion  that

the  "chose in action" - the thing that is to be sold here  -  is

the state's right to receive the settlement.45  Because the master

settlement  agreement appears to require that the  state  receive

the MSA settlement first - before anyone else does - the chose in

action may not be a share of the settlement proceeds as such, but

merely a share of the state's settlement share.

           Creating  and freely trading in the present  value  of

this  kind  of chose in action might be commonplace and  entirely

proper  in  the world of private finance.  But in the  sphere  of

state   government,  article  IX,  section  7   of   the   Alaska

Constitution  would strictly forbid it.  For as Attorney  General

Cole's memorandum emphasizes, "upon receipt by the State, but not

before,  the  `proceeds' of the settlement  are  subject  to  the

Section  7  constitutional restriction";  and  "[o]nce  money  is

received  by the State, it is `public revenue' which may  not  be

dedicated for a special purpose."

           In  summary,  the state's brief portrays the  disputed

transaction as a sale of the state's right to receive a stream of

tobacco  settlement  funds.   The superior  court  accepted  this

characterization of the disputed asset without serious  question,

and  so  has the court in its opinion.  Yet it appears that  this

characterization may not reflect reality and may be barred by the

express   terms   of  the  master  settlement   agreement.    The

transaction might more accurately be described as a sale  of  the

right  to receive from the state a portion of the state's  future

settlement  revenues  as soon as the state receives  them.   This

distinction  is  critical  for purposes  of  the  anti-dedication

clause.   Moreover, it seems possible that other policy  concerns

might  independently preclude recognizing the  state's  right  to

future settlement payments as a currently marketable asset:  sale

of  that  asset  could  potentially pit the  state's  contractual

obligations  to  NTSC  and its bondholders  against  the  state's

fundamental  governmental  duty  to  ensure  public  safety   and

welfare.

           Neither the appellate record nor the record before the

superior  court provides sufficient information to resolve  these

concerns  definitively.  As matters currently  stand,  I  do  not

believe  that  the record can support a declaratory  judgment  in

favor  of  either party.  I would therefore vacate  the  superior

court's judgment and remand for further proceedings.

           For these reasons, I dissent from the court's decision
affirming the superior court's judgment.
_______________________________
1      Kasayulie  v.  State,  3AN-97-3782  Ci.  (Alaska   Super.,
September 1, 1999).
2    Ch. 130,  9, SLA 2000.
3    Ch. 130,  7, 10, SLA 2000.
4    Ch. 131, SLA 2000.
5     See  Halliburton Energy Servs. v. State, Dep't of Labor,  2
P.3d  41,  50  n.46 (Alaska 2000); Chiropractors for  Justice  v.
State, 895 P.2d 962, 966 (Alaska 1995).
6      The  remainder of section 7 of article IX  provides  three
exceptions  to  the dedicated funds prohibition -  the  Permanent
Fund,  certain federal programs, and programs existing  upon  the
date  of ratification of the section - but neither party to  this
appeal argues that any of these exceptions applies.
7    Sonneman v. Hickel, 836 P.2d 936, 938 (Alaska 1992) (quoting
6 Proceedings of the Alaska Constitutional Convention (PACC) App.
V at 111 (Dec. 16, 1955)).
8    See id. at 940.
9    646 P.2d 203, 210 (Alaska 1982).
10    836 P.2d at 940.
11    The idea for the anti-dedication clause apparently came from
the  Model  State Constitution, whose anti-dedication  clause  is
virtually  identical  to that of the Georgia  Constitution.   See
Victor  Fischer, Alaska's Constitutional Convention  142  (1975);
Model  State  Constitution art. VII,  7.03 in 1 Constitutions  of
the United States: National and State (Michael L. Shore & Abigail
O'Donnell eds. 2001).
12     Ga. Const. art. III,  IX, para. VI(a); Ga. Const. of  1945
art. VII,  IX, para. IV.
13    41 S.E.2d 246, 247 (Ga. 1947).
14    Id.
15    109 S.E. 903 (Ga. 1921).
16    Arnall, 41 S.E.2d at 254.
17    Id. (quoting Wright, 109 S.E. at 909).
18    Id. at 254.
19    See id. At 255.
20    Id. ("This [anti-dedication] provision was not contained in
any constitution of this State prior to 1945.").
21    See Wright, 109 S.E. at 909.
22    646 P.2d 203, 210 (Alaska 1982).
23    1975 Formal Op. Att'y Gen. 9 at 24.
24    1986 Informal Op. Att'y Gen. vol. 1, at 429.
25     In general, the attorney general's opinion is entitled  to
"great  weight,"  because the attorney general  is  "the  officer
charged  by  law  with  advising the officers  charged  with  the
enforcement  of  the law as to the meaning of  it."   Allison  v.
State, 583 P.2d 813, 816-17 n.15 (Alaska 1978) (quoting Smith  v.
Mun. Ct. of Glendale Jud. Dist., 334 P.2d 931, 935 (Cal. 1959)).
26     For  example, in Alaska's fiscal year 2000,  oil  revenue,
investment revenue, and restricted revenue (i.e., federal  funds,
trusts,  dedicated  funds,  and  statutorily  restricted   funds)
accounted   for  approximately  94%  of  total  state   revenues.
Unrestricted  revenues accounted for approximately  6%  of  total
revenues.   Of those unrestricted revenues, just over  two-thirds
were  from  taxes and licenses.  Other miscellaneous unrestricted
revenues,  the  only  category under which lawsuits  would  fall,
accounted  for  only 1.2% of total state revenues.   Spring  2001
Alaska Dep't of Revenue, Tax Division Revenue Sources Book 9.
27     E.g., Bandow v. Bandow, 794 P.2d 1346, 1349 (Alaska  1990)
(holding that a medical malpractice settlement consisting  of  an
annuity paid in monthly installments was "in fact `property' " in
deciding how to divide that property in a divorce action).
28     See Municipality of Anchorage v. Repasky, 34 P.3d 302, 315
(Alaska   2001)  (holding  that  court's  decision  appropriately
adheres  to  policy  choice the legislature  has  already  made);
Elliott  v. Settje, 27 P.3d 317, 324 (Alaska 2001) (holding  that
legislature  is  charged with general policy decision  concerning
preference  for joint physical custody; court's role is  only  to
apply  law).   See also Malone v. Meekins, 650 P.2d  351  (Alaska
1982) (political question doctrine).
29    The dissent proposes a five-factor test to determine whether
a  future  income  stream  and  the  mechanics  of  its  proposed
disposition   comport   with  the  Alaska  Constitution's   anti-
dedication clause.  Today's opinion considers the dissent's first
factor at length, and there is no question that the second factor
is  satisfied.   The remaining three factors  do  not  assist  in
answering  the  question  before the court:  whether  the  future
income  stream is an asset that may be sold consistent  with  the
constitution.
           The third factor - whether there is any limitation  on
the  transferability of the interest in question - does not  help
in  determining whether it is a constitutionally saleable  asset.
But  even  assuming  that  the factor  is  helpful,  the  dissent
incorrectly  applies it in this case.  Section  XVIII(p)  of  the
master settlement agreement (1) limits its benefits ("rights") to
the state only and (2) provides that the state may not assign its
right  to  enforce  the agreement.  It is  silent  on  whether  a
settling state may assign its right to receive settlement  funds.
We  note also that Myers has not advanced any argument related to
Section XVIII(p) of the master settlement agreement, a sufficient
reason  in itself not to reach the argument.  See Stosh's I/M  v.
Fairbanks  N.  Star Borough, 12 P.3d 1180, 1183  &  n.12  (Alaska
2000)  (When  "a point is given only a cursory statement  in  the
argument portion of a brief, the point will not be considered  on
appeal.") (quoting Adamson v. Univ. of Alaska, 819 P.2d 886,  889
n.3 (Alaska 1991)).
           The  fourth factor - whether the future value  of  the
income  stream can be rationally predicted and whether the  state
might  be  required to perform contractual duties  that  conflict
with  its  governmental  duties - does not  help  in  determining
whether the revenue stream is an asset.  Moreover, it is a truism
that assets fluctuate in value, and there is no reason to believe
that the statutory regime in this case did anything but give more
-  not less - certainty to the value of the right to receive  the
income.  Finally, as to the conflict the dissent sees between the
state's  contractual duties and its governmental  duties,  it  is
illusory:  Nothing  in the master settlement agreement  obligates
the state to take steps to maximize the income stream.  The state
is  obligated  only not to interfere with AHFC's receipt  of  the
income stream.
30    See Stosh's I/M, 12 P.3d at 1183 & n.12.
31    Alaska Const. art. IX,  8 provides, in part: "No state debt
shall   be  contracted  unless  authorized  by  law  for  capital
improvements  or unless authorized by law for housing  loans  for
veterans,  and ratified by a majority of the qualified voters  of
the State who vote on the question."
32     Alaska Const. art. IX,  11 provides in relevant part: "The
restrictions  on contracting debt do not apply to  debt  incurred
through  the issuance of revenue bonds by a public enterprise  or
public corporation of the State or a political subdivision,  when
the   only  security  is  the  revenues  of  the  enterprise   or
corporation."
33    Alaska Const. art. IX,  7; see State v. Alex, 646 P.2d 203,
210  (Alaska  1982)  (construing the  anti-dedication  clause  to
include "the sources of any public revenue").
34    Ch. 130, SLA 2000.
35     The  court's opinion asserts that it is irrelevant to  ask
whether there is any limitation on transferability of the state's
interest  in  the tobacco settlement revenues, since the  inquiry
"does  not  help  in  determining whether [that  interest]  is  a
constitutionally saleable asset."  Opinion at 14, n.29.  But  the
transferability  of  the  state's  rights  under  the  settlement
agreement  bears directly on the nature and scope of the  state's
current  "asset":  for example, a limit on transferability  might
altogether  preclude  any sale of future  revenues,  leaving  the
state  with  no currently salable asset at all; alternatively,  a
limitation might effectively preclude the state from selling  its
entire asset now, making the asset currently salable only  by  an
agreement  that  commits  the state  to  transfer  title  to  its
settlement revenues as they accrue - that is, by a dedication  of
future state revenues.  Hence, an inquiry into transferability is
relevant to the existence of a constitutionally salable asset.

            The   opinion  further  asserts  that   the   dissent
"incorrectly applies" this factor because Section XVIII(p) of the
master settlement agreement only limits a transfer of enforcement
rights and "is silent on whether a settling state may assign  its
right to receive settlement funds." Opinion at 14-15, n.29.   But
this  assertion  assumes that a bar on conveyance of  enforcement
rights  has  no effect on the character of the state's  currently
salable  asset.   As explained more fully in  the  text  of  this
dissent,   Section  XVIII(p)  apparently  bars   a   state   from
transferring  its right to collect settlement revenues  directly,
consequently  requiring the revenues to pass  through  the  state
when  they  are eventually paid, even though they have ostensibly
already  been sold.  It hardly seems accurate, then, to say  that
Section XVIII(p) is completely silent on whether a settling state
may assign its right to receive settlement funds.

36    Opinion at 15, n.29.
37     Cf.  Pub. Defender Agency v. Superior Court, 534 P.2d  947
(Alaska  1975)  (holding  that  separation  of  powers  precludes
judiciary   from  ordering  the  attorney  general  to  prosecute
particular cases of contempt of court).
38     Cf.  State  v.  Alex, 646 P.2d 203, 211-13  (Alaska  1982)
(precluding  legislature  from delegating  its  taxing  power  to
private associations).
39     Although  the court accurately observes that this  inquiry
does  not  help in determining whether the revenue stream  is  an
asset,  Opinion at 15, n.29, the court's observation misconstrues
the  inquiry's  point,  which is not  to  determine  whether  the
revenue  stream  actually is an asset but to ascertain  precisely
what  that  asset  is  and  whether the specific  manner  of  its
conveyance violates the anti-dedication clause.  Nor is the court
correct   in   asserting  that,  because  the  master  settlement
agreement  does  not  forbid the state from selling  its  current
interest  in the future revenues, "it is irrelevant [to ask]  why
the  legislature chose the mechanism that it did." Opinion at 15,
n.29.   As  detailed in the text, although the master  settlement
agreement  may not preclude a present sale of the state's  future
revenues,  the  agreement's  terms appear  to  dictate  a  payout
mechanism  that  may be constitutionally problematic  because  it
channels  the future revenues through a dedicated state  fund  as
they are paid.
40     The  purchase  and  sale agreement contains  an  ambiguous
provision in which the state promises to "cause the Escrow  Agent
(as defined in the MSA) to deliver the Tobacco Assets directly to
the Trustee for the benefit of the Corporation."  Yet because the
MSA  itself  seems to require payment directly into  the  "State-
Specified Account," and because it also makes the state the  sole
beneficiary  of the payment, it seems likely that the  state  has
simply  designated  its bank as a trustee  and  empowered  it  to
divide  and  distribute  the MSA escrow  agent's  payments,  upon
deposit,  according  to the purchase and sale agreement's  terms.
It  is nevertheless possible that a different mechanism has  been
established.   Because the issue could be of  central  importance
and has not been addressed, I think that it needs to be developed
on remand.
41     (Emphasis  added.)  A more complete  rendition  of  Cook's
remarks is as follows:

               You have identified my main concern with
          respect to the financing mechanism used in HB
          281.   It seems to me that selling the  right
          to  receive future state revenues, regardless
          of  the  source of the revenue stream,  could
          raise   constitutional  issues  not   usually
          implicated  by  the sale of  other  types  of
          state  assets  simply because application  of
          the  constitutional appropriation requirement
          is  avoided.  It is generally recognized that
          money  received  by  the  state,  even  money
          received from the federal government or other
          sources for specific limited functions,  must
          be appropriated before it may be spent. . . .
          For  example,  when the state enters  into  a
          lease[,]  payment of the rent  each  year  is
          subject to appropriation.  Otherwise there is
          a  risk  that  the lease creates  an  invalid
          state  debt. . . . If the conveyed  right  to
          receive  revenue  is  also,  like  the  lease
          example, contingent upon appropriation of the
          revenue for that purpose once it is received,
          there  would  be  little  problem.   However,
          because the "Tobacco Settlement" money is  to
          flow   to   AHFC  upon  receipt  without   an
          appropriation,   the   arrangement   may   be
          vulnerable  under Art. IX,  sec.  13  of  the
          state  constitution.  It could  be  urged  in
          defense  that  the state never  receives  the
          "Tobacco  Settlement"  because  it  will   go
          directly  to  AHFC and, therefore,  it  never
          becomes   subject  to  appropriation.    This
          argument sounds too much like a shell game to
          be very reassuring to me.
          
42    See Alex, 646 P.2d at 210.
43    Cf. Eisner v. Macomber, 252 U.S. 189, 206 (1920) (using the
analogy  of  a  tree  and its fruit to illustrate  the  important
distinction  between a transfer involving capital,  that  is,  an
asset  that produces a benefit, and one involving income, or  the
benefit itself).
44     The pertinent text of Attorney General Cole's letter is as
follows:

                Article  IX, Section 7, of  the  Alaska
          Constitution  provides that the  proceeds  of
          any  state  tax  or  license  shall  not   be
          dedicated  to any special purpose.   Although
          this  provision  is limited  by  its  express
          terms  to  the  proceeds of a "state  tax  or
          license,"  and although the proceeds  of  the
          Tobacco settlement do not, strictly speaking,
          derive  from  the  proceeds  of  any  tax  or
          license,  in  State  v. Alex,  646  P.2d  203
          (Alaska  1982) the Alaska Supreme Court  held
          that the prohibition encompasses "the sources
          of  any public revenues."  Accordingly,  upon
          receipt  by  the State, but not  before,  the
          "proceeds"  of the settlement are subject  to
          the Section 7 constitutional restriction.
          
                However,  the  right to receive  future
          unpaid  installments under the settlement  is
          to  be  distinguished from the proceeds  upon
          their  receipt by the State.  Once  money  is
          received by the State, it is "public revenue"
          which  may  not  be dedicated for  a  special
          purpose.   On  the other hand, the  right  to
          receive  future installments  is  a  property
          right  owned by the State, the same as  other
          real  and  personal  property  owned  by  the
          State.  .  .  . At common law, the  right  to
          receive   future   installments   under   the
          settlement  is  a  "thing  in  action,"  more
          commonly referred to as a chose in action.  .
          .  .  Therefore under state law the right  to
          receive  future  proceeds under  the  Tobacco
          settlement  is state personal property  which
          may  be  sold  as  any other state  property.
          Furthermore,  the right to receive  a  future
          stream  of  payments under the settlement  is
          personal property which has a present  value,
          similar  in  value  to the right  to  receive
          future payments from the sale of other  state
          real  and  personal  property.   It  is  this
          property  right  of current value  which  the
          proposed legislation contemplates being  sold
          to  AHFC, and it is the proceeds of the  sale
          which  will  be  appropriated  for  a  public
          purpose,  not the stream of future  payments.
          These    features   remove    the    proposed
          legislation    from   the   dedicated    fund
          prohibition in Article IX, Section 7.
          
45     The  state's conclusory assertion that its future revenues
are  "a  chose in action" begs the question whether the mechanism
it  used to "sell" this "chose" effected an immediate transfer of
the  state's  right  to  receive the future  settlement  revenues
directly from the MSA escrow agent.  It is interesting to wonder,
in this regard, how the IRS might view the same sale mechanism in
a  transaction  between private parties: would  it  treat  NTSC's
income  as a receipt of tobacco settlement revenues, or would  it
tax the income as money NTSC received from the state?