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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alaska Legislative Council v. Knowles (01/09/2004) sp-5768

Alaska Legislative Council v. Knowles (01/09/2004) sp-5768

     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,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


THE ALASKA LEGISLATIVE                  )    Supreme Court No. S-
                                   10344
COUNCIL, on behalf of the Alaska   )
State Legislature,                                 )     Superior
                                   Court No.
                              )    1JU-00-1237 CI
             Appellant,                 )
                              )    O P I N I O N
     v.                       )
                              )    [No. 5768 - January 9, 2004]
HONORABLE TONY KNOWLES,       )
in his official capacity as Governor    )
of the State of Alaska,                 )
                              )
             Appellee.                  )
________________________________)

          Appeal  from the Superior Court of the  State
          of  Alaska, First Judicial District,  Juneau,
          Patricia A. Collins, Judge.

          Appearances:  James P. Crawford, Division  of
          Legal   and  Research  Services,  Legislative
          Affairs   Agency,  Juneau,   for   Appellant.
          Joanne  M. Grace, Assistant Attorney General,
          Anchorage,  and  Bruce M.  Botelho,  Attorney
          General,  Juneau,  for Appellee.   Thomas  S.
          Waldo, Earthjustice, Juneau, for Amici Curiae
          Alaska  Center for the Environment,  Northern
          Alaska  Environmental Center,  and  Southeast
          Alaska Conservation Council.

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

          CARPENETI, Justice.




I.   INTRODUCTION

          The  Alaska  Legislative Council appeals  the  superior

courts  denial of its challenge to former Governor Tony  Knowless

veto of, and refusal to implement, Senate Bill 7, which transfers

land  and the income derived from that land to the University  of

Alaska.   The legislative council argues that the superior  court

erred in holding that S.B. 7 constitutes an appropriation subject

to  the  governors enhanced veto power requiring a  three-fourths

vote  by  the  legislature in order to override  the  veto  under

article  II, section 16 of the Alaska Constitution.  Because  the

superior   court  erred  in  concluding  that  S.B.   7   is   an

appropriation  to  the  University  of  Alaska,  we  reverse  the

superior courts grant of summary judgment to the governor.

II.  FACTS AND PROCEEDINGS

     A.   Facts

          The Alaska Legislature passed S.B. 7 on March 30, 2000.

Senate Bill 7 enacted AS 14.40.365, which entitles the University

of  Alaska to select between 250,000 and 260,000 acres  of  state

lands.1   The  bill  provides that selected land  would  then  be

conveyed to and managed by the university under amendments to  AS

14.40.170(a)2  and AS 14.40.291.3  Senate Bill  7  also  provides

that  the  income  from  the transferred land  will  be  held  in

perpetual trust for the benefit of the university.4

          Governor  Knowles vetoed the bill on  April  17,  2000,

stating that  earmarking state lands for dedicated projects  will

complicate state land management, contribute to significant  land

use conflicts, and likely lead to years of litigation.   On April

21,  2000 the legislature voted to override the veto by a  margin

of  forty-one to nineteen, a margin representing more  than  two-

thirds  but less than three-fourths of the legislature voting  to

override the veto.  Governor Knowles rejected the override  vote,

asserting  that  the legislature did not reach the  three-fourths

override  vote  required to override a veto of an  appropriations

bill.

     B.   Proceedings

          A.   The legislative council brought suit to force Governor

Knowles  to  implement  S.B.  7, asserting  that  it  is  not  an

          appropriations  bill subject to the governors  enhanced

appropriations  veto.   The  conservation  amici5  attempted   to

intervene   in   that   action  in   order   to   challenge   the

constitutionality of S.B. 7, but the superior court denied  their

motion  to intervene because that court decided only the question

whether  S.B.  7  was  an  appropriations  bill  subject  to  the

governors enhanced veto.  The superior court held that S.B. 7 was

an  appropriations bill, thereby upholding the governors veto  of

S.B. 7.  The legislative council appeals.6

III. STANDARD OF REVIEW

          We  review  constitutional  issues  de  novo,  as  they

present questions of law.7  In reviewing such questions we  adopt

the  rule  of law that is most persuasive in light of  precedent,

reason, and policy.8

IV.  DISCUSSION

     A.   Non-Monetary Asset Transfers Are Not Appropriations Subject
          to the Governors Enhanced Veto Under Article II of the Alaska
          Constitution.
          
          A.   This appeal requires us to decide whether S.B. 7 constitutes

an  appropriation  under article II, section  16  of  the  Alaska

Constitution.   Under  article II, section 15,  the  governor  is

empowered  to veto bills passed by the legislature  and  may,  by

veto,  strike  or  reduce  items in  appropriation  bills.9   The

legislatures power to override the Governors veto depends on  the

type of bill that has been vetoed.  Under article II, section 16,

[b]ills  to  raise  revenue  and appropriation  bills  or  items,

although  vetoed, become law by affirmative vote of three-fourths

of  the membership of the legislature.  Other vetoed bills become

law  by  affirmative vote of two-thirds of the membership of  the

legislature.10  Accordingly, if S.B. 7 was an appropriation bill,

the  legislature failed to override the governors veto; if it was

not  an  appropriation bill, the affirmative  vote  of  forty-one

members  of the legislature was sufficient to enact it into  law.

For  the  reasons that follow, we hold that S.B.  7  was  not  an

appropriation  and  that  the legislature therefore  successfully

          overrode the governors veto.

          The   governor  argues  that  our  previous   decisions

allowing  non-monetary  asset  transfers  to  be  classified   as

appropriations  under  article  XI,  section  7  of  the   Alaska

Constitution  should  be  extended to  govern  the  scope  of  an

appropriations veto under article II.  But these decisions  arose

in  the  context of article XI of the Alaska Constitution,  which

grants  Alaskas citizens the right to propose and enact  laws  by

the initiative, and approve or reject acts of the legislature  by

the  referendum.11   This right is limited, and  initiatives  and

referenda cannot be used to make or repeal appropriations.12   We

previously  held  that  by the term appropriations,  article  XI,

section  7  prohibits an initiative whose primary  object  is  to

require  the outflow of state assets in the form of land as  well

as   money.13    More  recently,  we  expanded  the  non-monetary

definition   of  appropriations  under  article  XI  to   include

initiatives  prioritizing  the  right  to  harvest  salmon14  and

designating  University of Alaska land for use by  the  Community

College  System  of Alaska.15  These decisions struck  down  non-

monetary asset transfers as unconstitutional appropriations under

article XI, section 7 of the Alaska Constitution.

          In  the  present  case, the superior  court  held  that

article  II, section 16 of the Alaska Constitution shares article

XI,  section 7s broad definition of an appropriation, and that  a

bill  [that]  results in removing or dedicating assets  from  the

treasury  that  would  otherwise  be  available  to  fund   state

government  is therefore an appropriations bill.16  While  it  is

appealing  to  interpret  the  Alaska  Constitution  to  have   a

consistent definition of appropriations throughout the  document,

articles   II   and  XI  require  different  interpretations   of

appropriations  because they serve vastly  different  purposes.17

Article XI provides citizens with a limited power to enact  laws.

The  limitations  concerning  appropriations  have  two  parallel

purposes   preventing  the  dissipation  of  state  resources  by

          popular vote and vindicating legislative control over the

allocation of state assets.  As we stated in City of Fairbanks v.

Fairbanks Convention and Visitors Bureau:

               Our  prior  cases defining appropriation
          in  the context of article XI, section 7 have
          concentrated on the two parallel purposes for
          preventing   the   making  of  appropriations
          through   the  initiative  process.    First,
          initiatives should not be used to enact give-
          away programs, which have an inherent popular
          appeal,   that  would  endanger   the   state
          treasury.   Thomas v. Bailey, 595 P.2d  1,  7
          (Alaska 1979).  This is because [i]nitiatives
          for  the  purpose of requiring appropriations
          were  thought  to  pose a special  danger  of
          rash,   discriminatory,   and   irresponsible
          acts.    Id.  (quoting  V.  Fischer,  Alaskas
          Constitutional Convention 80-81 (1975)).  The
          second  reason for prohibiting appropriations
          by   initiative   is  to  ensure   that   the
          legislature,   and   only  the   legislature,
          retains control over the allocation of  state
          assets  among competing needs.   McAlpine  v.
          Univ.  of  Alaska, 762 P.2d  81,  88  (Alaska
          1988).[18]
          
Accordingly,   in   cases  involving  making  appropriations   by

initiative,  we  have carried out the framers design  to  prevent

popular give-away programs and maintain legislative control  over

the  allocation of state assets by broadly interpreting the scope

of appropriations under article XI of the Alaska Constitution.

          In  contrast, article IIs definition is not governed by

the overriding goal of preventing initiatives from wasting public

assets  or encroaching on protected legislative powers.  Instead,

article II, sections 15 and 16 of the Alaska Constitution  govern

the  balance  of  power  between the  legislative  and  executive

branches of Alaskas government.  Because articles II and XI serve

different  purposes, we reject the governors  argument  that  the

expansive  scope given appropriations in article  XI  as  to  the

making  of appropriations should be extended to article  II.   We

determine  the scope of appropriations as used in article  II  by

examining  the minutes of the Constitutional Convention  and  the

Alaska Constitution itself.

            We  have previously treated article II appropriations

as   being   limited  to  monetary  appropriations.   In   Alaska

Legislative Council v. Knowles,19 (Knowles II) we determined  the

scope  of  the  governors power to veto individual  items  in  an

appropriations bill under article II, section 15  of  the  Alaska

Constitution.20   We assumed that items in appropriations  bills,

and  therefore  bills  composed of  individual  items,  can  only

appropriate monetary assets:

          Reducing an item lessens its amount; striking
          it  lessens  its  amount  to  nothing.   This
          implies  that an item must include a  sum  of
          money.   Likewise, a passage  that  does  not
          include  a  sum  of  money  dedicated  to   a
          particular purpose is not an item  which  the
          governor can strike or reduce.  Therefore,  a
          veto  that  does  not delete  or  reduce  the
          amount  of money appropriated is not a  valid
          exercise of the power article II, section  15
          grants.21
          
Though  Knowles  II  involved  the  governors  veto  of  language

restricting a monetary appropriation under the item veto power,22

rather  than the veto of a non-monetary appropriation  under  the

general  power to veto an entire bill as presented by this  case,

its  understanding of article II appropriations  is  instructive.

We   now   explicitly  adopt  Knowles  IIs  exclusively  monetary

characterization of article II appropriations items and hold that

the  governors  appropriations  veto  applies  only  to  monetary

appropriations.23

          This  conclusion finds ample support in the minutes  of

the  Alaska Constitutional Convention, which demonstrate that the

framers   of  the  Alaska  Constitution  intended  the  governors

appropriations veto under article II, sections 15 and 16 to apply

only to monetary appropriations.  The framers repeatedly referred

to  appropriations  in  monetary terms during  the  debates  over

article  II, section 15.  Delegate Sundborg understood  that  the

enhanced, three-fourths veto override requirement would apply  to

any bill dealing with taxation or any bill affecting payments  of

money  under existing statutes or an item or items in the general

          appropriations bill.24  Delegate McCutcheon, a member of the

committee  that drafted that section, understood the  section  to

provide  that  a  greater  number [of  votes  were]  required  to

override the veto on money matters.25  Delegate V. Rivers  stated

that  this section was a provision in regard to the appropriation

and  spending of money which would allow somewhat more  power  to

lie in the strong executive.26  If the delegates had intended the

governors  appropriation  veto  to encompass  non-monetary  asset

transfers, we would expect to see in the minutes and the  section

proposals some indication of that intention.  Instead the minutes

indicate that the delegates never intended the governors  article

II  appropriations  veto power to apply to  anything  other  than

monetary appropriations.

          The framers intention to limit the scope of article  II

appropriations  to  money  bills is  made  clear  by  the  entire

constitutional framework, as extending the scope  of  article  II

appropriations  to encompass non-monetary asset  transfers  would

create  a host of problems in interpreting other articles of  the

Alaska   Constitution.    For  example,  if  non-monetary   asset

transfers were deemed appropriations, application of article  II,

section   13    confining  bills  for  appropriations   only   to

appropriations27  would become problematic.  Knowles II adopted a

five-part  test  for  determining whether a bill  satisfies  that

sections   clause   confining  appropriations   bills   only   to

appropriations, stating that

          to   satisfy  the  confinement  clause,   the
          qualifying  language  must  be  the   minimum
          necessary to explain the Legislatures  intent
          regarding how the money appropriated is to be
          spent.  It must not administer the program of
          expenditures.  It must not enact law or amend
          existing law.  It must not extend beyond  the
          life  of  the  appropriation.   Finally   the
          language   must   be   germane,    that    is
          appropriate, to an appropriations bill.28
          
As  evidenced by S.B. 7, which governs both the transfer of  land

to  the  university  and  the management  of  that  land  by  the

university, the separation of bills concerning appropriations and

substantive law mandated by article II, section 13 of the  Alaska

Constitutions confinement clause would be virtually impossible to

maintain   if   non-monetary  asset  transfers  were   considered

appropriations under article II.29  As difficult as it is for the

legislature   to  maintain  the  line  between  making   monetary

appropriations and creating substantive law, it would be far more

difficult   for  the  legislature  to  make  non-monetary   asset

transfers  without straying into substantive  law.   Adopting  an

exclusively monetary concept of appropriations under  article  II

of   the   Alaska   Constitution  comports   with   the   overall

constitutional intent to avoid such confusion.

           Article  IX of the Alaska Constitution, which  governs

finance  and  taxation, also supports limiting the scope  of  the

governors  article II, section 15 appropriations  veto  power  to

monetary  bills.  Article IX requires the governor  to  submit  a

budget  to the  legislature at a fixed time each year; the budget

must  set[]  forth  all  proposed  expenditures  and  anticipated

income.30   At the same time, the governor must submit a  general

appropriation bill to authorize the proposed expenditures.31  This

strictly monetary concept of appropriations suggested by  article

IX,  section 12 of the Alaska Constitution is instructive in this

case.   If  non-monetary  asset  transfers  were  deemed  to   be

appropriations,  article IX, section 12 would presumably  require

such  asset transfers to be included in the several appropriation

bills submitted by the governor.

          Additionally,  viewing non-monetary land  transfers  as

appropriations would not comport with article IX, section  16  of

the Alaska Constitution,32 which establishes a $2.5 billion limit

on  annual  legislative appropriations (adjusted for  inflation).

Treating  non-monetary asset transfers as appropriations  is  not

only  inconsistent with the language of article IX,  section  16,

but it poses the further problem of how to calculate the value of

such  asset  transfers  to  ensure  that  they  fall  within  the

appropriations  limits  imposed by the Alaska  Constitution.   In

          expressing the limit in dollars, article IX, section 16 reflects

a  constitutional structure that treats appropriations as dealing

exclusively  with money transfers.  Because article IX  does  not

include   non-monetary  asset  transfers  within  the  scope   of

appropriations, it provides further proof that non-monetary asset

transfers  are  not subject to the governors appropriations  veto

under article II of the Alaska Constitution.

          That the governors appropriations veto under article II

is  limited  to  money bills is also suggested by  article  VIII,

which grants broad powers over land to the legislature.  A number

of sections of article VIII grant the legislature a land-disposal

power  that  is  not consistent with the enhanced  appropriations

veto  power  claimed by the governor.  Article  VIII,  section  2

establishes the legislatures general power to manage and  control

Alaskas  land, stating that [t]he legislature shall  provide  for

the  utilization, development, and conservation  of  all  natural

resources belonging to the State, including land and waters,  for

the  maximum benefit of its people.33  Section 9 establishes  the

legislatures  power to provide for the sale  or  grant  of  state

lands,  or  interests therein, and establish sales  procedures.34

Section  12   provides  that the legislature  can  transfer  non-

monetary  state  assets by law through the  creation  of  mineral

leases  and permits.35  These sections of article VIII  establish

the  legislatures power to dispose of and manage state  land  and

the  minerals contained within that land.  The existence of  this

power  is  inconsistent  with  the governors  argument  that  the

disposal  of state lands is subject to the enhanced veto reserved

for  appropriations.  Article VIII in its entirety suggests  that

the framers intended to provide the legislature with control over

state lands subject only to the governors less restrictive,  non-

appropriations veto.

          Because  the  minutes of the Constitutional  Convention

and  articles VIII and IX of the Alaska Constitution  mandate  an

exclusively  monetary concept of  appropriations,  we  hold  that

          only monetary asset transfers constitute appropriations  under

article  II  of  the  Alaska Constitution.   Therefore,  S.B.  7s

transfer  of  land  to  the university  is  not  subject  to  the

governors enhanced appropriations veto.

     B.   Senate  Bill  7s Provisions Concerning the Income  from
          Transferred Land Do Not Provide the University  with  a
          Sufficiently  Definite Sum of Money  To  Constitute  an
          Appropriation.
          
          The  legislative council argues that the superior court

erred  in  holding  that the portions of S.B. 7 governing  income

produced  by  the transferred lands make S.B. 7 an appropriations

bill.   It  contends  that S.B. 7 does not  contain  any  of  the

elements  necessary to qualify as an appropriation under articles

II  and  IX of the Alaska Constitution.  The legislative  council

proposes  that  an  appropriation is defined by  three  essential

elements and argues that S.B. 7 meets none of them:  It does  not

authorize  a  government expenditure, it  does  not  sufficiently

state a purpose for the alleged expenditure, and it does not  set

aside a certain sum of money.  The governor responds that S.B.  7

must  be  considered an appropriation because  it  restricts  the

income  derived  from the transferred land to  the  university.36

Because we agree with the legislative council that appropriations

must  set  aside a certain sum of money and that S.B. 7 does  not

specifically   appropriate  a  certain  sum  of  money   to   the

university,  we  do  not consider the other two  prongs  of  this

proposed test.

          We  have  previously defined an appropriation  as   the

setting  aside from the public revenue of a certain sum of  money

for  a  specified  object,  in such  manner  that  the  executive

officers of the government are authorized to use that money,  and

no  more,  for  that object, and no other. 37   Subsequently,  in

Knowles II we defined an item in an appropriations bill as  a sum

of  money dedicated to a particular purpose. 38  While neither of

the   above  cases  specifically  dealt  with  the  sum   certain

requirement, they both recognized that an act must authorize  the

          expenditure of an ascertainable sum of money in order to qualify

as   an   appropriation.    The  governors   item   and   general

appropriation vetoes apply to items and bills that provide  state

officials with enough of a description to ascertain the  transfer

of  a specific amount of money at a specific point in time.39  In

this  case,  the  income that S.B. 7 seeks  to  provide  for  the

university  is  so  uncertain,  due  to  its  dependance  on  the

universitys  selection and management of the land,  that  it  may

never  materialize or it may take many years to do  so.   Because

the   provisions  of  S.B.  7  concerning  income  derived   from

transferred lands are so indefinite, we hold that those  portions

of  S.B.  7  are  not  appropriations subject  to  the  governors

enhanced appropriations veto.

     C.   We Decline To Address Whether S.B. 7 Is an Unconstitutional

          Dedication  Under Article IX, Section 7 of  the  Alaska

          Constitution.

          A.   The legislative council argues that the superior court

determined  that S.B. 7 was an unconstitutional dedication  under

article IX, section 7 of the Alaska Constitution.40  While  there

is  language  in  the  superior courts  decision  that  might  be

interpreted to address S.B. 7s constitutionality,41 the  superior

court  explicitly  declined to address  whether  S.B.  7  was  an

unconstitutional  dedication because the parties  only  contested

whether  S.B.  7  was an appropriation subject to  the  governors

enhanced  veto.  The conservation amici now argue that we  should

bear  in  mind  the  Dedicated Funds  Clause  and  the  important

policies  underlying  it.  They also claim that  they  should  be

allowed  to  renew  their  motion to  intervene  upon  remand  to

represent  the  position  that  S.B.  7  is  an  unconstitutional

dedication.  We agree.

          We  decline to address the question of whether  S.B.  7

violates  the  constitutional prohibition on dedications  because

the  matter  was  not fully litigated below.  The superior  court

correctly  declined to decide the dedication  issue  because  the

          only question before the court was whether S.B. 7 is an

appropriations bill.  Because that is the only question presented

by this appeal, we decline to address the dedication issue.42

V.   CONCLUSION

          Because  we  hold that S.B. 7 was not an appropriation,
we   REVERSE  the  superior  courts  decision  holding  that  the
governors  enhanced appropriations veto applies to  S.B.  7.   We
REMAND  for  consideration of the issue  whether  S.B.  7  is  an
unconstitutional dedication.43
_______________________________
     1     Under  Committee Substitute for Senate Bill (C.S.S.B.)
7,  21st Leg. 2nd Sess. (2000), AS 14.40 is amended by adding  AS
14.40.365, which reads in relevant part:

          University  land  from  Statehood  Act   land
          selection conveyances.
          (a)  The University of Alaska may select  and
          is  entitled to receive the conveyance of not
          less  than 250,000 and not more than  260,000
          acres  of  land conveyed to the  state  under
          Sec.  6(b) of the Alaska Statehood Act  (P.L.
          85-508,  72 Stat. 339). The Board of  Regents
          of    the   University   of   Alaska    shall
          periodically  submit a list of selections  to
          the commissioner of natural resources and, if
          the  list of selections contains land  within
          the  boundaries of a municipality, the  Board
          of  Regents of the University of Alaska shall
          submit  the  list  to the municipality.   The
          Board  of  Regents  and the  commissioner  of
          natural  resources  shall  periodically   and
          jointly submit to the legislature, within  30
          days   of   the   beginning  of   a   regular
          legislative session, a list of the selections
          of  land proposed to be conveyed by the state
          to   the  University  of  Alaska  under  this
          section.   If  the  list  submitted  to   the
          legislature   contains   land   within    the
          boundaries  of a municipality, the  Board  of
          Regents   and  the  commissioner  of  natural
          resources shall provide a copy of the list to
          the municipality.  Each list must contain not
          more  than 25 percent of the total  acres  of
          land  to  which  the university  is  entitled
          after  subtracting previous conveyances under
          this  section, but not less than 25,000 acres
          or   the  remaining  entitlement  under   the
          section,  whichever  is  less.   A  list   of
          selections   submitted  shall  be  considered
          approved for conveyance to the University  of
          Alaska   unless  the  legislature   acts   to
          disapprove  the  list during the  legislative
          session  during which the list was submitted.
          If  the amount of land to be conveyed exceeds
          the  balance  due the university  under  this
          section,  the university shall  set  out  the
          land to be conveyed in priority order.
          
     2     C.S.S.B. 7 amends AS 14.40.170(a) to read in  relevant
part (underlined text is new):

          (a) The Board of Regents shall
               . . .
               (4)   have   the   care,  control,   and
          management of
                    (A)   all  the  real  and  personal
          property of the university; and
                    (B) land
                         (i)  conveyed to the Board  of
          Regents   by  the  commissioner  of   natural
          resources in the settlement of the  claim  of
          the  University of Alaska to land granted  to
          the state in accordance with the Act of March
          4,  1915 (38 Stat. 1214), as amended, and  in
          accordance with the Act of January  21,  1929
          (45 Stat. 1091), as amended; and
                         (ii) selected      by      the
                              University of Alaska  and
                              conveyed  to  it  by  the
                              commissioner  of  natural
                              resources    under     AS
                              14.40.365;
                              
     3    C.S.S.B. 7 amends AS 14.40.291 to read (underlined text
is new; bracketed text is deleted):

               (a)  Notwithstanding any other provision
          of    law,   university-grant   land,   state
          replacement  land  that  becomes  university-
          grant  land  on conveyance to the university,
          land   selected  by  and  conveyed   to   the
          University of Alaska under AS 14.40.365,  and
          any  other  land owned by the  University  of
          Alaska is not and may not be treated as state
          public  domain  land.  Land conveyed  to  the
          University of Alaska under AS 14.40.365 shall
          be managed under AS 14.40.365 - 14.40.368 and
          policies  of  the  Board of  Regents  of  the
          University of Alaska.
               (b)  Title  to or interest in [TO]  land
          described in (a) of this section may  not  be
          acquired by adverse possession, prescription,
          or  in  any other manner except by conveyance
          from   the   university.      (c)  The   land
          described  in (a) of this section is  subject
          to   condemnation  for  public   purpose   in
          accordance with law.
          
     4     C.S.S.B.  7 amends AS 14.40.400(a) to read (underlined
text is new; bracketed text is deleted):

               (a) The Board of Regents shall establish
          a  separate  endowment trust  fund  in  which
          shall be held in trust in perpetuity all
                    (1)  [ALL] net income derived  from
          the  sale or lease of the land granted  under
          the  Act  of  Congress approved  January  21,
          1929, as amended; [AND]
                    (2)  net  income derived  from  the
          sale,  lease,  or  management  of  the   land
          selected by and conveyed to the University of
          Alaska under AS 14.40.365; and
                    (3) [All] monetary gifts, bequests,
          or  endowments  made  to  the  University  of
          Alaska for the purpose of the fund.
          
     5     The  Alaska  Center for the Environment, the  Northern
Alaska   Environmental   Center,   and   the   Southeast   Alaska
Conservation  Council  are  collectively  referred  to   as   the
conservation amici.

     6     Conservation amici seek to intervene if we decide this
case  on  the  basis  of the constitutional  prohibition  against
dedicated funds.  If we decline to reach that issue but determine
that S.B. 7 is not an appropriations bill, the conservation amici
ask that the case be remanded so that they may renew their motion
to intervene.

     7    State v. Malloy, 46 P.3d 949, 951 (Alaska 2002).

     8    Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).

     9    Alaska Const. art. II,  15.

     10    Alaska Const. art. II,  16.

     11    Alaska Const. art. XI,  1.

     12    Alaska Const. art. XI,  7.

     13     Thomas v. Bailey, 595 P.2d 1, 7 (Alaska 1979) (ballot
initiative granting state land to certain Alaska residents was an
unconstitutional appropriation by initiative).

     14    Pullen v. Ulmer, 923 P.2d 54, 59 (Alaska 1996).

     15     McAlpine v. University of Alaska, 762 P.2d 81,  87-89
(Alaska 1988).

     16     Legislative  Council v. Knowles, No.  1JU-00-1237  CI
(Alaska Super., August 17, 2001).

     17     We  have held that even within the context of article
XI,  section  7,  the  word  appropriations  may  have  different
meanings depending on whether the challenged initiative seeks  to
make  an  appropriation  or repeal one.   City  of  Fairbanks  v.
Fairbanks Convention and Visitors Bureau, 818 P.2d 1153,  1156-57
(Alaska  1991).   A  broad construction is used  to  prevent  the
enactment  by initiative of state asset give-away programs.   Id.
at  1156.   But as this reason does not apply when an  initiative
merely seeks to repeal an appropriation, a narrow construction is
used in repeal cases.  In repeal cases the term appropriations is
construed  to  refer only to annual spending decisions.   Id.  at
1157.

     18    818 P.2d 1153, 1156 (Alaska 1991).

     19    21 P.3d 367 (Alaska 2001).

     20    In addition to providing the governor with the power to
veto  entire  bills, the  issue presented by  this  case,  Alaska
Constitution article II,  15 also grants the governor  the  power
to veto, strike, or reduce items in appropriations bills.

     21    Knowles II, 21 P.3d at 373.

     22    Id. at 370-71.

     23     We gave a similarly narrow construction to the use of
the term appropriations in article XI, section 7 with respect  to
the prohibition on repealing appropriations by initiative in City
of  Fairbanks  v. Fairbanks Convention and Visitors  Bureau,  818
P.2d 1153, 1157 (Alaska 1991).

     24     3 Proceedings of the Alaska Constitutional Convention
(PACC) 1739 (January 11, 1956).

     25    Id. at 1740.

     26    Id. at 1741.

     27     Alaska Const. art. II,  13 provides in relevant  part
that  [e]very bill shall be confined to one subject unless it  is
an  appropriation bill or one codifying, revising, or rearranging
existing  laws.   Bills for appropriations shall be  confined  to
appropriations.

     28    Knowles II, 21 P.3d at 377 (quoting No. 1JU-80-1163 CI
(Alaska Super., May 25, 1983)).

     29    C.S.S.B. 7.

     30    Alaska Const. art IX,  12.

     31    Alaska Const. art. IX,  12 provides:

          The governor shall submit to the legislature,
          at a time fixed by law, a budget for the next
          fiscal   year  setting  forth  all   proposed
          expenditures  and anticipated income  of  all
          departments,  offices, and  agencies  of  the
          State. The governor, at the same time,  shall
          submit   a  general  appropriation  bill   to
          authorize  the proposed expenditures,  and  a
          bill or bills covering recommendations in the
          budget for new or additional revenues.
          
     32     Alaska Const. art. IX,  16 provides in relevant  part
that:

          Except    for   appropriations   for   Alaska
          permanent  fund dividends, appropriations  of
          revenue    bond    proceeds,   appropriations
          required to pay the principal and interest on
          general  obligation bonds, and appropriations
          of  money received from a non-State source in
          trust   for  a  specific  purpose,  including
          revenues  of  a public enterprise  or  public
          corporation of the State that issues  revenue
          bonds, appropriations from the treasury  made
          for   a   fiscal   year  shall   not   exceed
          $2,500,000,000  by more than  the  cumulative
          change,  derived  from  federal  indices   as
          prescribed   by   law,  in   population   and
          inflation since July 1, 1981.
          
     33    Alaska Const. art. VIII,  2.

     34    Alaska Const. art. VIII,  9.

     35    Alaska Const. art. VIII, 12 provides, in relevant part:
                Leases and permits giving the exclusive
          right  of exploration for these minerals  for
          specific  periods and areas  .  .  .  may  be
          authorized by law.
          
     36     C.S.S.B. 7 amends AS 14.40.400(a) to read (underlined
text is new):

          The  Board  of  Regents  shall  establish   a
          separate endowment trust fund in which  shall
          be held in trust in perpetuity all
          . . . .
               (2)  net  income derived from the  sale,
          lease, or management of the land selected  by
          and  conveyed  to  the University  of  Alaska
          under AS 14.40.365[.] . . .
          
     37     Thomas  v.  Rosen, 569 P.2d 793,  796  (Alaska  1977)
(quoting  State ex rel. Finnegan v. Dammann, 264  N.W.  622,  624
(Wis. 1936)).

     38    21 P.3d at 373.

     39     The  requirement  that  the legislature  sufficiently
describe  monetary asset transfers exists so that the legislature
cannot  purposefully fail to include a sum certain  in  order  to
avoid  the  governors appropriations veto.   But  the  degree  of
specificity   required   is   only  that   necessary   to   allow
identification  of  the monies involved.  For  example,  we  have
previously treated as an appropriation a bill containing language
stating  that  an amount equal to the unexpended and  unobligated
balance  on  June 30, 1997, of the fiscal year 1997 general  fund
receipts  from the salmon marketing tax (AS 43.76.110), from  the
seafood marketing assessment (AS 16.51.120), and from the fishery
resource  landing  tax  (AS 43.77.011) is appropriated  from  the
general fund to the Alaska Seafood Marketing Institute.   Id.  at
386, app. A.

     40    Alaska Const. art. IX,  7 states:  The proceeds of any
state  tax  or  license  shall not be dedicated  to  any  special
purpose, except as provided in section 15 of this article or when
required  by  the  federal government for state participation  in
federal   programs.   This  provision  shall  not  prohibit   the
continuance of any dedication for special purposes existing  upon
the date of ratification of this section by the people of Alaska.

     41     The superior court stated that S.B. 7 is not . . .  a
simple  land transfer bill.  Rather, the bill explicitly  removes
land  from the public domain and dedicates income from that  land
exclusively  to the University in perpetuity.  It further  stated
that  Senate  Bill 7 results in a sum of money, income  from  the
land grant, being dedicated to a particular purpose, funding  for
the  University[.]  Legislative Council v. Knowles,  No.  1JU-00-
1237 CI (Alaska Super., August 17, 2001).

     42     Earth  Movers of Fairbanks, Inc. v.  State,  Dept  of
Transp. and Pub. Facilities, 824 P.2d 715, 718 (Alaska 1992).

     43    On remand, the superior court should first rule on the
motion of the conservation amici to intervene.