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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Southeast Alaska Conservation Council v. State (03/13/2009) sp-6344

Southeast Alaska Conservation Council v. State (03/13/2009) sp-6344, 202 P3d 1162

     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

SOUTHEAST ALASKA )
CONSERVATION COUNCIL and ) Supreme Court No. S- 13159
TONGASS CONSERVATION)
SOCIETY, ) Superior Court No. 1JU-07- 558 CI
)
Appellants, ) O P I N I O N
)
v. ) No. 6344 March 13, 2009
)
STATE OF ALASKA and)
UNIVERSITY OF ALASKA,)
)
Appellees.)
)
          Appeal  from the Superior Court of the  State
          of  Alaska, First Judicial District,  Juneau,
          Philip M. Pallenberg, Judge.

          Appearances:  Katharine S. Glover, Thomas  S.
          Waldo,  EARTHJUSTICE, Juneau, for Appellants.
          J.  Anne  Nelson, Assistant Attorney General,
          Anchorage,   Talis   J.   Colberg,   Attorney
          General,   Juneau,  for  Appellee  State   of
          Alaska.   James  D.  Linxwiler,  Michael   S.
          McLaughlin, Guess & Rudd P.C., Anchorage, for
          Appellee University of Alaska.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, and Carpeneti, Justices.  [Winfree,
          Justice, not participating.]

          MATTHEWS, Justice.


I.   INTRODUCTION
In   2000   and   2005   the   legislature   passed   two   bills
(collectively, the act) conveying approximately 250,000 acres  of
land to the University of Alaska.  The act directed that the  net
proceeds  from  the Universitys sale or use of  the  property  be
deposited  in the Universitys endowment trust fund,  an  existing
fund  from  which  only earnings may be spent.  Southeast  Alaska
Conservation  Council  and Tongass Conservation  Society  brought
suit  challenging the act, alleging that it violates article  IX,
section  7  of  the Alaska Constitution by improperly  dedicating
state funds.  The superior court granted summary judgment to  the
State  and University, holding that the transfer of land and  net
proceeds  from land under the act does not violate the  dedicated
funds  clause  and,  in the alternative, that the  University  is
exempt  from  that  constitutional provision.   The  conservation
groups  appealed.   We  hold that (1) the  sections  of  the  act
committing proceeds from the granted lands to the endowment trust
fund  are  unconstitutional under the dedicated funds clause  and
(2)  those sections are not severable from the remainder  of  the
act, with the exception of provisions creating a research forest.
II.  FACTS AND PROCEEDINGS
          In  March  2000 the legislature passed Senate Bill  7,1
which  allowed  the  University of Alaska to  select  250,000  to
260,000  acres of land over which it would take title.2  All  net
income  derived from the sale, lease, or management of  the  land
selected  by and conveyed to the University of Alaska was  to  be
placed  and held in the Universitys endowment trust fund  (ETF).3
State  law  mandates that the principal of the  ETF  be  held  in
perpetuity4 and that [t]he total return from the [ETF]  shall  be
used exclusively for the University of Alaska.5
          The  following month, Governor Tony Knowles vetoed S.B.
7.6   The  legislature voted to override the  veto  by  a  margin
normally sufficient to do so but below the three-fourths majority
required  to override vetoes of appropriation bills.7   We  ruled
that the bills provisions did not constitute appropriations, thus
allowing  the  bill to become law; in so doing, we decline[d]  to
address   the   question  of  whether   S.B.   7   violates   the
constitutional prohibition on dedications because the matter  was
not  fully  litigated  below.8  On  remand,  the  superior  court
refused  to  permit conservation groups to intervene to  litigate
the dedication issue.
          In  2005 the legislature passed House Bill 130.9   That
bill  amended S.B. 7, rescinding the Universitys right to  choose
the land it would receive and instead conveying by quitclaim deed
land identified by the University of Alaska Land Grant List 2005.10
H.B. 130 retained the requirement that net proceeds from the land
be  placed  in the ETF.11  The bill also established a University
Research  Forest on certain parcels of conveyed land to  be  used
for  advancing research into forest practices, ecology,  wildlife
management, and recreation.12
          Southeast  Alaska  Conservation  Council  and   Tongass
Conservation Society (collectively SEACC) filed suit against  the
State  of  Alaska  and the University of Alaska in  the  superior
court  in April 2007.  SEACC argued that the act violates article
IX,  section  7  of the Alaska Constitution, which mandates  that
          [t]he proceeds of any state tax or license shall not be dedicated
to any special purpose.13
          Ruling  on  cross-motions  for  summary  judgment,  the
superior court upheld the act.  The court first addressed whether
the  proceeds  from  state land are the  proceeds  of  a  tax  or
licence,  and  ruled  they  are  not.   Despite  the  substantial
persuasive  weight  of  precedent from this  court  suggesting  a
contrary  conclusion, the superior court held that  the  language
and  history of the dedicated funds clause do not support a broad
reading  of  the  text.   The court next considered  whether  the
conveyance  of  revenue  producing land to  the  University,  and
placement of the income from such land in an endowment trust fund
for  the  University,  can be considered a  dedication  of  state
revenues,  and concluded, as an alternative reason for  upholding
the  act,  that  it  is  not.  The superior court  reasoned  that
because  the University is constitutionally chartered as  a  body
corporate  and explicitly permitted by the constitution  to  hold
title  to  its  lands,14  it would be  illogical  to  assume  the
constitution was intended . . . to divorce management of the land
from the ability to receive financial benefits from the land.
          The   State  moved  to  reconsider,  arguing  that  the
superior court need not have ruled on the meaning of state tax or
license  and  should  have  based  its  decision  solely  on  the
alternative  ground.   The  State  contended  that   the   courts
narrowing of the scope of the dedicated funds clause was  legally
incorrect  and,  as  a practical matter, would  have  a  profound
impact on the finances of Alaska.  The superior court denied  the
motion,  noting  that its original decision  expressly  does  not
apply  to  oil  or  gas  royalties and so would  not  have  great
significance for the state budget.
          SEACC  filed an emergency motion for injunction pending
appeal  to  this court.  A single justice granted that motion  on
June 27, 2008, enjoining the State from conveying property to the
University pursuant to the act and enjoining the University  from
disposing  of property it had already received.  Both  the  State
and  the  University challenged the order, and, in  response,  we
vacated  the  injunction  prohibiting the  State  from  conveying
property  to  the  University but left in  place  the  injunction
against  the  University.   We also ordered  that  SEACCs  appeal
proceed on an expedited schedule.
III. STANDARD OF REVIEW
          We  review decisions granting summary judgment de  novo
and will affirm them when there are no genuine issues of material
fact and the prevailing party is entitled to judgment as a matter
of law.15
          Questions     of    constitutional    and     statutory
interpretation, including analysis of the constitutionality of  a
statute,  are questions of law to which we apply our  independent
judgment.16  We will adopt the rule of law that is most persuasive
in light of precedent, reason, and policy.17  We presume statutes
to be constitutional, and the party challenging the statute bears
the burden of showing otherwise.18
IV.  DISCUSSION
     A.   Article  IX,  Section  7 Prohibits  the  Dedication  of
     Income  Derived  from  Land Conveyed to  the  University  of
          Alaska.
          
          This  case calls on us to consider once again the scope
of  article  IX,  section  7  of the Alaska  Constitution,  which
prohibits   the  earmarking  of  state  funds  for  predetermined
purposes.  The dedicated funds clause reads:
               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.[19]
          
          We have discussed the origin and purpose of this clause
at some length in our case law.  In State v. Alex20 we observed:
               The origin of  section 7s prohibition of
          earmarking  can  be traced back  through  the
          constitutional  convention  records  to   the
          Alaska  Statehood Commissions  studies  which
          were prepared for the use of the delegates at
          the  convention.   One of the  studies  noted
          that  [t]he most severe obstacle to the scope
          and flexibility of budgeting results from the
          earmarking  or dedication of certain  revenue
          for  specified  purposes or funds.  3  Alaska
          Statehood Commission, Constitutional  Studies
          pt.  IX, at 27 (1955).  The study stated that
          one of the key reasons for the popularity  of
          dedicated   taxes  was  that   they   reduced
          taxpayer resistance by guaranteeing that  the
          tax  would be used to benefit those who  paid
          it.  Id.
          
               The  study  then  noted that  earmarking
          curtailed the exercise of budgetary  controls
          and  simply  amounted  to  an  abdication  of
          legislative responsibility.  Id. at 29-30.[21]
          
In  Sonneman  v.  Hickel22  we  reiterated  the  preservation  of
legislative control rationale of the dedicated funds  clause  and
quoted extensively from the constitutional debates:
               The  constitutional convention committee
          which   drafted   the  prohibition   on   the
          dedication of funds commented that the reason
          for the prohibition is to preserve control of
          and  responsibility for state spending in the
          legislature and the governor.
          
               Even  those  persons   or
               interests  who  seek  the
               dedication  of   revenues
               for  their  own  projects
               will   admit   that   the
               earmarking  of  taxes  or
               fees  for other interests
               is a fiscal evil.  But if
               allocation  is  permitted
               for   one  interest   the
               denial  of it to  another
               is   difficult,  and  the
               more  special  funds  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.   In  one
               Rocky Mountain state  the
               legislature  is  free  to
               appropriate only  17  per
               cent    of    the     tax
               collections;   the   rest
               are dedicated.  In Alaska
               at  present, 27 per  cent
               of  territorial funds are
               earmarked, primarily  for
               school  construction  and
               roads.
               
          6  Proceedings  of the Alaska  Constitutional
          Convention (PACC) Appendix V at 111 (Dec. 16,
          1955).
          
               Without     earmarked     funds,     the
          constitutional  framers  believed  that   the
          legislature  would  be  required  to   decide
          funding priorities annually on the merits  of
          the  various  proposals presented.   Delegate
          Barrie White, the spokesman for the committee
          which  drafted  section  7,  stated  in   the
          convention debates:
          
               [t]he   Committee   feels
               that  if  you accept  the
               principle     of      not
               earmarking,    it    puts
               everyone   in  the   same
               position  and  that   the
               legislature will then  be
               in   the  position  being
               able  to decide each case
               on its merits.  If you go
               the other route and allow
               for  earmarking or  start
               drawing   up   all    the
               exceptions that everybody
               would  want to have drawn
               up, you are then back  to
               the  situation that  most
               states      now      find
               themselves in,  where  an
               ever-increasing
               percentage    of    their
               revenues   are  earmarked
               for  special purposes and
               an ever-decreasing amount
               is   available   to   the
               general fund.
               
          4  PACC 2364 (Jan. 17, 1956).  Delegate White
          was  then  engaged  in a colloquy  about  the
          appropriation  of  funds  collected   through
          licenses  to  agencies  which  had  collected
          them:
          
               Delegate Gray:  It doesnt
               earmark   it   but    the
               talking point that  these
               organizations  have   for
               the  use  of  this  money
               that     is    rightfully
               theirs, why, they  havent
               been precluded, they just
               have    to   sell   their
               viewpoint     to      the
               legislature and  if  they
               need  the money, why they
               probably could get it  if
               they could talk them into
               it.
               
               Delegate   White:    They
               have    to   sell   their
               viewpoint   along    with
               everybody else.
               
          Id. at 2367.[23]
          
          With this background in mind, we consider first whether
proceeds  from land sales and leases are revenues  to  which  the
dedicated funds clause applies, and second whether the University
is exempt from the clause.
          1.   Proceeds  from  land are within the definition  of
               proceeds  of any state tax or licence for purposes
               of the dedicated funds clause.
               
          SEACC   argues  that  revenue  derived  from  land   is
encompassed  by article IX, section 7s reference to  proceeds  of
any  state tax or licence.  SEACC relies on our opinion in  State
v. Alex, quoting our statement that those who wrote the provision
          intended it to prohibit not only the dedication of taxes, but
also such revenue as the proceeds from the sale of state lands.24
The University disagrees with that reading of the clause, arguing
that  revenue  from  land  is not, according  to  the  dictionary
definitions of tax or license, within its scope.
          We  reaffirm  the reasoning and language of  Alex.   In
Alex,   we   struck   down  a  statute  authorizing   aquaculture
associations  to  collect  assessments  from  commercial   salmon
fishermen because it violated the dedicated funds clause.25   Our
opinion considered the meaning of the word tax and concluded that
the  sense in which tax is used in article IX, section 7  of  the
constitution  must be determined from its context,  both  in  the
text  and  according  to  the discussion  at  the  constitutional
convention  which  adopted  the wording.26   We  then  turned  to
constitutional  history,  noting  that  the  studies   on   which
Constitutional Convention delegates relied encouraged adopting  a
prohibition  on  earmarking  because  the  dedication  of   funds
curtailed the exercise of budgetary controls and simply  amounted
to  an  abdication  of  legislative  responsibility.27   We  also
remarked  that  the commissions studies used the terms  revenues,
funds, and taxes interchangeably in discussing this issue.28   We
interpreted an amendment to the proposed provision that  inserted
proceeds of any state tax or licence in the place of all revenues
as  an  effort  to  allow for the setting up of  certain  special
funds,  such as sinking funds for the repayment of bonds,  rather
than  to  exempt  some sources of revenue from the prohibition.29
Thus,   we  held  that  since  the  constitution  prohibits   the
dedication of any source of revenue, the assessments in  question
could not be earmarked.30
          We  see no reason to hold differently now.  In addition
to  the  history described in Alex, the amendment to article  IX,
section 7 creating an exception for the Permanent Fund31 indicates
that  the prohibition is meant to apply broadly.  If only revenue
collected  as  taxes or license fees were included,  there  would
have  been no need to expressly exempt all mineral lease rentals,
royalties, royalty sale proceeds, federal mineral revenue sharing
payments  and  bonuses  received by the State32  to  ensure  that
placing those revenues in the Permanent Fund did not violate  the
constitution.33
          The  State  argues that the grant of land and  proceeds
from  it does not violate the dedicated funds clause because  the
grant  of  land and proceeds is not a dedication of  revenue  but
rather  an  asset conveyance.  The State asks us not to  rely  on
State  v. Alex but to rule that this case should follow  what  it
contends  is  the  reasoning of Myers v. Alaska  Housing  Finance
Corp.34   In Myers, we upheld the states sale of future  proceeds
from settlements with tobacco companies against a challenge under
the dedicated funds clause.35  The State argues that the situation
here   conveying  real property and dedicating the  proceeds  the
property  will generate  is an analogous situation and thus  does
not violate the constitution.36
          We  disagree.   In Myers, we explicitly accepted  Alexs
reasoning  in determining that revenue from the settlement  of  a
lawsuit  was  within the scope of the dedicated  funds  clause.37
          The legislature had authorized the sale of the right to future
proceeds from the settlement for a lump-sum amount based  on  the
present   value  of  the  future  proceeds.38   The   legislature
appropriated the lump sum in a single year for various purposes.39
No  dedicated fund was created nor were revenues placed in a pre-
existing   dedicated  fund.   Accordingly,  we   concluded   that
[b]ecause  the legislature sold the tobacco settlement  and  then
appropriated  the  resulting income, it did not directly  violate
the anti-dedication clause.40  Nonetheless, we were concerned that
the  transaction might be contrary to the spirit of  the  clause;
ultimately, however, we found no constitutional violation.41
          Thus Myers neither holds nor suggests that revenue from
state  property can be placed in a dedicated fund.  Likewise,  it
does  not imply that there is an exception to the dedicated funds
clause applicable to revenue from state property.  Instead, Myers
suggests  that the reach of the dedicated funds clause  might  be
extended  to  statutes  that, while not  directly  violating  the
clause  by  dedicating revenues, in some other way  undercut  the
policies underlying the clause.
          2.   The  University  is not exempt  from  article  IX,
               section 7.
          The  State  would  prefer that we affirm  the  superior
courts  holding  on the alternative ground that  the  Universitys
special status means that revenues generated by its lands may  be
dedicated.   The  State  and University argue,  in  effect,  that
article  VII,  section  2 of the Alaska Constitution  creates  an
implied  exception to the dedicated funds clause  by  authorizing
the  University  to  hold title to real property.   Because,  the
appellees   reason,  University  lands  are  not   state   lands,
University  land revenues are not state revenues,  and  therefore
University  land  revenues  can be  dedicated.   In  addition  to
drawing  this  conclusion  from  the  constitutional  text,   the
appellees emphasize that the Universitys lands are distinct  from
state lands under certain statutes, such as the Alaska Land Act42
and laws regarding public domain land.43
          SEACC believes interpreting article VII, section  2  to
permit  ownership  but deny control of proceeds  harmonizes  that
provision  with  the  dedicated funds clause  without  improperly
reading  an exception into the dedicated funds clause.   Further,
SEACC  argues  that the University is an instrumentality  of  the
state for relevant purposes44 and points out that the legislature
controls  the  Universitys funding. Therefore,  SEACC  concludes,
University revenues are subject to article IX, section 7.
          Our  case  law  establishes that University  lands  are
state  lands.  Article VII, section 2 establishes the University,
declares it a body corporate,  provides that the University shall
have title to all real and personal property now or hereafter set
aside for or conveyed to it, and states that [i]ts property shall
be administered and disposed of according to law.45  We considered
the  meaning of article VII, section 2 in State v. University  of
Alaska.46   There, we held that the state could  take  land  that
Congress had granted to the University to be held in trust for it
under  the federal 1929 act, but that the state had to compensate
the  University  with  monetary damages or equivalently  valuable
          land.47  Our opinion emphasized article VII, section 2s command
that property shall be administered and disposed of according  to
law,48  and  noted  that   according  to  law  refer[s]  to   the
legislatures power to make laws.49  Thus, even when the University
has  title  to land, only the legislature can make laws effecting
the  disposal  of land, not the Board of Regents.50   We  further
observed  that  [t]he  natural resources article  of  the  Alaska
Constitution  grants  extensive  powers  to  the  legislature  to
control  lands,  which  makes clear that  [the  University  lands
received  under  the  1929  act]  belong  to  the  state.51   The
conclusion  we  reached in State v. University  of  Alaska,  that
University land is state land, applies even more readily  to  the
present  case because the University land involved  here  is  not
shielded  by  a  federal  trust obligation.   Statutory  language
treating University lands differently from other state land  does
not overcome this constitutionally based conclusion.
          Because  University  land is state land,  revenue  from
University  land is state revenue for purposes of  the  dedicated
funds clause.52  This conclusion receives additional support from
two historical sources.  Governor William Egan, who had served as
President  of the Constitutional Convention, vetoed a  1959  bill
that  would  have  given  one  million  acres  of  land  to   the
University.53  He wrote:
               I am vetoing [the bill], a bill intended
          to  reserve  lands  for the  support  of  the
          University  of Alaska, because I  believe  it
          wrong   in   principle,   inconsistent   with
          constitutional concepts and not in the public
          interest.   In so saying, I may  add  that  I
          would act similarly on any bill which sought,
          as  this does, to make special disposition of
          the  proceeds of public lands in aid  of  one
          public function to the exclusion of others.
          
               . . . .
          
               To return now, by the enactment of [this
          bill], to a proposal whereby lands are  given
          piecemeal   earmarking  for   various   state
          functions would be a distinct step backward.
          
               If  we  are  to  return to the  internal
          improvement   concept  of  earmarking   state
          lands,  can we in good conscience  limit  the
          practice  to the University? . . . Certainly,
          this bill invites similar treatment for other
          state  responsibilities.  By  this  bill  the
          door   would   be  opened  to  an   unplanned
          disposition, or dissipation, of the  resource
          without  regard to relative need and  without
          regard   to  the  clear  constitutional   and
          congressional intent.[54]
          
Five  years  later, Senator Bob Bartlett, who  had  been  Alaskas
delegate to Congress during Alaskas statehood campaign, wrote  to
Governor  Egan,  explaining that the policies that  underlie  the
dedicated  funds  clause  impelled him  to  prevent  the  federal
government  from granting to the new state land that was  already
reserved for certain purposes:
          [A]t  many times during the consideration  of
          the  statehood bill, efforts were made to set
          aside  this amount of land or that amount  of
          land  for  the common schools and  for  other
          educational  uses.  I always  resisted  these
          and,  as  it  turned out,  successfully.   My
          conviction wasand isthat notwithstanding  the
          possible  need for such reservations  in  the
          early  statehood bills, the reasons for  such
          have  long  since  evaporated.  .  .  .  [I]f
          dedication is made for one institution or one
          purpose, what argument could be made  against
          expanding?  None, of course.[55]
          
     B.   The  Land Grant Provisions of the Act Are Not Severable
          from  the  Dedication of Proceeds Provisions,  but  the
          Research Forest Provisions Are Severable.
          
          The  act  does not contain a severability  clause,  but
AS  01.10.030  inserts  one  into every  statute  passed  by  the
legislature.56   We  have stated that this  general  severability
provision   creates  only  a  weak  presumption   in   favor   of
severability.57  In Lynden Transport, Inc. v. State,58 we described
the   two-part   test   for   determining   whether,   after   an
unconstitutional  portion  of a statute  has  been  severed,  the
remainder of the law can stand: the remainder may not stand alone
unless it appears both that, standing alone, legal effect can  be
given  to  it and that the legislature intended the provision  to
stand,  in  case others included in the act and held  bad  should
fall.59
          In arguing that the act should be entirely invalidated,
excepting  the  research forest provision, SEACC focuses  on  the
second  part  of the Lynden Transport test.  It argues  that  the
central and critical intent behind the enactment of SB 7  and  HB
130  was the creation of a permanent endowment trust fund for the
University.  Because this objective cannot be accomplished, SEACC
argues  that  allowing the land grant provisions of  the  act  to
stand  would  result in an entirely different  statute  than  the
legislature  enacted.  SEACC notes that under the  sections  that
would  remain if we permitted severance, the University would  be
the  owner and manager of the granted lands but the proceeds from
the sale or use of the land would not be placed in trust under AS
14.40.365(j)  and  AS  14.40.400(a)(2) and (c).60   Instead,  the
proceeds would by default be deposited in the University receipts
fund,  which  is  a non-dedicated account subject to  legislative
appropriation.61  Though the source of the funds might  give  the
University  a  hope  or  expectation  that  the  funds  would  be
appropriated for the University, SEACC argues that this would  be
a  mere  talking point,62 and the legislature would  be  able  to
appropriate the funds for any agency and any purpose.  SEACC also
          points out that the entire proceeds from the sale or lease of the
lands would be subject to appropriation each year.  SEACC reasons
that  making all proceeds available to spend would conflict  with
the  legislative intent that all net proceeds be capitalized  and
preserved in perpetuity in the ETF.
          The  State argues that the land grant provisions of the
act  are  severable  and could be given legal  effect.   The  net
proceeds  from  the  land, the State argues,  would  have  to  be
accounted for with the other university receipts instead of  with
the  endowment  trust  proceeds.  The  State  contends  that  the
university  still  would  benefit  financially  from  having  the
talking point of increased receipts when making its annual budget
request.   The State also argues that the University still  would
be required to use the land for development purposes and that use
would  contribute to Alaskas economy, even if  the  land  is  not
managed  as  part  of the endowment trust.  The  State  does  not
address  SEACCs  argument  that the land,  or  the  net  proceeds
derived from the land, would not be preserved in perpetuity.
          The Universitys argument regarding severance is similar
to  that  made by the State, but the University addresses  SEACCs
argument  that  net  proceeds would be spent  under  the  severed
remainder rather than capitalized and preserved in the  ETF.   It
contends  that the legislature could still achieve  its  original
purpose of preserving net proceeds by simply appropriat[ing] some
of  the  University  receipts, equivalent to the  amount  of  the
annual  proceeds from the HB 130 Lands, into the Endowment  Trust
Fund.
          The  central question before us, then, is the one posed
by  the  second prong of the Lynden Transport test:  whether  the
legislature would have passed the act without requiring that  net
proceeds derived from the lands be placed and held in the  ETF.63
In  other  words, we consider whether the legislature would  have
granted  the 250,000 acres of land to the University had  it  not
believed  it was able to dedicate the net proceeds from the  land
to the ETF.
          One  way  to determine legislative intent is to  decide
whether the valid provisions would still further the main purpose
of  the  act.64  If the purpose is stated broadly  as  simply  to
improve the Universitys financial status, it would be possible to
conclude  that allowing the land grant provisions of the  act  to
stand  would  serve this purpose.  Under the severed  provisions,
net proceeds from the sale or use of the lands would be deposited
in  a  non-dedicated fund, from which the legislature could  make
appropriations to any agency.  But given that the source  of  the
proceeds would be University lands, the University would  have  a
talking point, that is, a possible advantage over other agencies,
when seeking the funds from the legislature.
          But  the  main legislative purpose underlying  the  act
cannot accurately be described as to provide a talking point   or
indeed even to provide more funding  to the University.  Instead,
the  acts  main  purpose is to enhance the Universitys  permanent
endowment  so  that the enhanced endowment will  provide  ongoing
additional  income  to  the University.  The  difference  between
granting land to provide additional funding and granting land  to
          enhance an endowment to provide additional funding is not merely
semantic.  The difference is between providing support both  from
capital  and income on the one hand, and on the other, preserving
capital and providing support only from income.
          The  acts  findings and purpose section indicates  that
the  legislature believed that the University, as  a  land  grant
college, was underfunded in terms of its original land grant from
Congress.65   The land grant made under the act was  designed  to
remedy  this  deficit.  As with respect to the lands  granted  by
Congress,  all net proceeds derived from the sale or use  of  the
land  granted by the act were required to be placed in the ETF.66
Only net earnings of the ETF could be spent.67  In this way,  the
legislature  sought to contribute to a financially  secure  state
university  system, as a cornerstone to the long-term development
of  a stable population and to a healthy, diverse economy in  the
state.68
          The legislative findings show that the main purpose  of
the  act was to make a land grant that would operate in a  manner
similar  to the way that the Universitys federal land  grant  has
operated  since  before  statehood: the University  is  partially
supported  by net earnings from the ETF, which in turn is  funded
by  net  proceeds from revenues derived from the sale or  use  of
land grant lands.69  Under the act as passed, the University would
continue  to  receive only net earnings from the  ETF.   Proceeds
from the sale or use of the granted land would be capitalized and
placed  in the ETF.  The capital would not be spent.  This  long-
term  goal is reiterated in statements by S.B. 7s primary sponsor
in committee meetings and floor debates.70
          The  land  grant provisions of the act, if  allowed  to
stand  alone, would not enhance the Universitys endowment.   With
only the land grant provisions, the legislature would appropriate
on  an annual basis the net proceeds gained from the sale or  use
of  the land.  The appropriation could be directed in whole or in
part  to the University or any agency.  The appropriated proceeds
would  be  available  for  immediate  use.   They  would  not  be
capitalized  and preserved.  If the University were to  sell  the
land,  which  would  be  likely given the  legislatures  goal  of
encouraging development, the land could be substantially disposed
of  within a few decades.  Because the net proceeds from the land
would  be  spent rather than saved, the benefits  from  the  land
grant, far from lasting in perpetuity, could be dissipated  in  a
relatively short period of time.
          As  noted,  though  the  State  does  not  address  the
impermanency  of  the grant that would result if  severance  were
permitted,  the  University does.  It  argues  that  a  permanent
benefit from the lands could be achieved if the legislature  were
to  appropriate an amount equivalent to the annual  net  proceeds
from the granted lands and place the amount in the ETF.  We think
this argument fails for two reasons.
          First,  there is a substantial question as  to  whether
appropriating  unrestricted funds into the ETF  would  in  itself
violate  the  dedicated funds clause.  While the dedicated  funds
clause  is  not,  of course, violated merely by the  fact  of  an
appropriation for a specific purpose, it would be of concern that
          the income generated by the appropriation would be dedicated.  We
think  that there is sufficient doubt as to the constitutionality
of  an appropriation made for the purpose of generating dedicated
income  that the Universitys suggestion that this might  be  done
cannot justify severance.71
          Second,  under  the Universitys proposed solution,  the
legislature would have to decide each year whether to appropriate
net  proceeds  into  the ETF.  This decision  would  be  made  in
competition  with  the  demands of other  agencies  for  funding.
Whether  in  fact  the  legislature  would  appropriate  the  net
proceeds  into the ETF in any given year could not be  predicted.
Depending  on annual discretionary appropriation decisions  would
be a poor substitute for the capital preservation system mandated
by  the  act.   Unlike the severable provisions in Sonneman,  the
trust provisions in this case are not a minor part of the overall
act.72
          In summary, we conclude that the land grant provisions,
if  severed from the provisions requiring proceeds to  be  placed
and  held  in the ETF, would not serve the acts main purpose  and
would  operate strikingly differently from the original act.   In
Alaskans for a Common Language, Inc. v. Kritz73 we observed  that
the  risk  involved  in severing a statute is that  an  erroneous
judicial  reading of the intent of those who enacted the  statute
will  result in a statute that no one wanted.74  In light of  the
considerations we have discussed above, we believe that there  is
a  distinct risk that allowing the land grant provisions to stand
without the strict protections the legislature imposed to  ensure
that  the  grant would last in perpetuity would result in  a  law
that the legislature would not have wanted.
          But  the  provisions  of the act  creating  a  research
forest  stand on a different footing.  They are directly  related
to the core education and research function of the University and
not to the objective of enhancing the Universitys endowment.  The
section   of   the   act   establishing  the   research   forest,
AS  14.40.461(a), starts with its own statement of  purpose:  For
the purpose of advancing research into forest practices, ecology,
wildlife management, and recreation, a university research forest
is  established.75   Although if the research  forest  provisions
stand,  they  will  not  advance the  main  purpose  of  the  act
enhancing the Universitys endowment  that would be the case  even
if  the  whole act were upheld as constitutional.   None  of  the
parties  argues  that  the research forest provisions  should  be
stricken.  We agree because the research forest provisions are so
separate  in  purpose  from the rest of the  act  as  to  be  sui
generis.76  And since the main purpose of the research forest  is
not  the generation of proceeds for the University endowment, the
provisions  creating it will function when severed  primarily  as
they  would  have  functioned if the rest of the  act  were  held
constitutional  and  allowed  to stand.   For  these  reasons  we
conclude that the research forest provisions are severable.
V.   CONCLUSION
          As  this  case  illustrates,  dedicating  funds  for  a
deserving purpose or a worthy institution is an attractive  idea.
Our  constitutional  founders were aware  of  the  power  of  the
dedication  impulse.  They decided that the good that might  come
from  the  dedication  of  funds for  a  particular  purpose  was
outweighed  by  the long-term harm to state finances  that  would
result  from a broad application of the practice.  In  accordance
with  this belief, they promulgated article IX, section 7 of  the
Alaska  Constitution, barring the dedication of state funds.   We
enforce the considered judgment of the founders in this case.  We
do  so  with  full awareness that the University is an  important
state  institution  and that it would benefit from  the  enhanced
endowment that the legislature intended to bestow.
          We conclude that University lands are state lands, that
proceeds  from University lands are state funds that are  subject
to  the  dedicated  funds  clause, and  therefore  that  the  act
violates the dedicated funds clause.  With the exception  of  the
land  for the research forest, the land grant provisions  of  the
act  are not severable from the dedication of proceeds provisions
because  without the dedication provisions the proceeds from  the
granted  lands  would  not  be  capitalized  and   preserved   in
perpetuity as a source of income for the University.  Instead,  a
grant that was intended to last forever could be dissipated  over
time  by  the consumption of both capital and income.  We decline
to  order severance because this result differs greatly from  the
acts intended operation.
          For these reasons the judgment of the superior court is
REVERSED.   This  case  is REMANDED to the  superior  court  with
instructions (1) to order reconveyance to the State of  the  land
transferred  under the act, (2) to order the return  of  any  net
proceeds  received  from the land, and (3) to enter  judgment  in
favor of the appellants in accordance with the views expressed in
this opinion.77
_______________________________
     1    21st Leg., 2d Sess. (2000).  The act, which consists of
Senate  Bill  7, passed by the 2000 legislature,  as  amended  by
House  Bill  130, passed by the 2005 legislature, see 24th  Leg.,
1st  Spec.  Sess.  (2005), is codified  in  significant  part  as
AS  14.40.365, 14.40.366, and 14.40.400(a)(2).  We set  out  here
the sections of the act that are relevant to this opinion.

Section 1:

               The  uncodified  law  of  the  State  of
          Alaska is amended by adding a new section  to
          read:
          
               FINDINGS  AND PURPOSE.  The  legislature
          finds that
          
               (1)        as the beneficiary under  the
          provisions  of the Acts of August  30,  1890,
          and  March  4, 1907, designating  the  Alaska
          Agricultural College and School of  Mines  as
          beneficiary, and of March 4, 1915,  38  Stat.
          1214,  transferring  certain  land  for   its
          location  and  support,  the  University   of
          Alaska is a land grant university;
          
               (2)        under  the Acts of  March  4,
          1915, 38 Stat. 1214, and January 21, 1929, 45
          Stat. 1091, the Congress of the United States
          granted  to  the Territory of Alaska  certain
          federal  land  to be held in  trust  for  the
          benefit  of the predecessor of the University
          of Alaska;
          
               (3)        the  Territory was unable  to
          receive most of the land conveyed by the  Act
          of  March 4, 1915, before repeal of that  Act
          by  Sec.  6(k)  of the Alaska  Statehood  Act
          (P.L. 85-508, 72 Stat. 339);
          
               (4)        the  Congress of  the  United
          States granted the State of Alaska the  right
          to  select 102,500,000 acres of federal  land
          under Sec. 6(b) of the Alaska Statehood Act;
          
               (5)         the  land  selection  rights
          embodied in the Alaska Statehood Act  reflect
          in  part  congressional recognition that  the
          state  would  need the land  to  support  its
          government  and  programs, and  the  Congress
          assumed  that  the State of Alaska  would  in
          turn  devote some of the land or  the  income
          from  it  for  the  use and  benefit  of  the
          University of Alaska;
          
               (6)        most  land grant colleges  in
          the  western  United States have  obtained  a
          larger land grant from the federal government
          than the University of Alaska has received;
          
               (7)        an  academically  strong  and
          financially secure state university system is
          a cornerstone to the long-term development of
          a stable population and to a healthy, diverse
          economy in the state;
          
               (8)       it is in the best interests of
          the  state and the University of Alaska  that
          the   university   take   ownership   of    a
          significant  and  substantial  portfolio   of
          income  producing  land in order  to  provide
          income  for  the  support  of  public  higher
          education in the state; and
          
               (9)       renewable resources should  be
          managed  on  a sustained yield basis,  taking
          into account the total land grant.
          
Section 2:

                The  uncodified  law of  the  State  of
          Alaska is amended by adding a new section  to
          read:
          
               LEGISLATIVE INTENT.  It is the intent of
          the legislature that the University of Alaska
          
               (1)       receive land under this Act in
          an expeditious fashion; and
          
               (2)        encourage the development  of
          in-state   value-added  industries   to   the
          maximum extent feasible when developing  land
          conveyed under AS 14.40.365.
          
AS 14.40.365:

               (a)        Except as provided in (b)  of
          this  section,  before  July  1,  2008,   the
          commissioner   of  natural  resources   shall
          convey  to the Board of Regents in trust  for
          the  University of Alaska, by quitclaim deed,
          the  state land identified for conveyance  to
          the  university and described in the document
          titled  University of Alaska Land Grant  List
          2005, dated January 12, 2005.
          
               (b)        As soon as practicable  after
          June  30,  2055, the commissioner of  natural
          resources  shall  convey  to  the  Board   of
          Regents  in  trust  for  the  University   of
          Alaska,  by  quitclaim deed, the  state  land
          described  as the University Research  Forest
          and   identified   for  conveyance   to   the
          university  in the document titled University
          of Alaska Land Grant List 2005, dated January
          12, 2005.
          
               . . . .
          
               (i)        The  responsibility  for  the
          management of land conveyed to the  Board  of
          Regents in trust for the University of Alaska
          under  this section vests with the  Board  of
          Regents in trust for the University of Alaska
          on the date of recording of that conveyance.
          
               (j)        The Board of Regents  of  the
          University  of Alaska is entitled to  receive
          any  income derived from land conveyed to the
          Board  of Regents in trust for the University
          of  Alaska under this section accruing  after
          the  date of conveyance, including any income
          accruing  from  an existing  lease,  license,
          contract,  prospecting  site  sale,   permit,
          right-of-way, easement, or trespass claim.
          
AS 14.40.366:

               (a)        Before the conveyance or  the
          disposal  of  an interest in the  land  to  a
          third  party, land conveyed to the  Board  of
          Regents in trust for the University of Alaska
          under  AS  14.40.365 shall be  managed  in  a
          manner   that,  to  the  extent  practicable,
          permits  reasonable activities of the public,
          including  historic recent public uses,  that
          do  not  interfere with the use or management
          of the land by the university.
          
               (b)       For land conveyed to the Board
          of  Regents  in  trust for the University  of
          Alaska  under  AS  14.40.365,  the  Board  of
          Regents shall
          
               (1)         seek   public   comment   on
          proposals for land development, exchange,  or
          sale;  and
          
               (2)        adopt  policies that  require
          the preparation of land development plans and
          land disposal plans.
          
               (c)       Before the Board of Regents of
          the  University of Alaska offers a parcel  of
          land  for sale under this section, the  board
          shall  offer  first refusal  to  the  closest
          municipality.
          
               (d)        The  Board  of Regents  shall
          adopt policies requiring public notice before
          approval  of land development plans and  land
          disposal  plans.  The policies  must  require
          that the notice be provided not less than  30
          days before the proposed action and that  the
          notice be
          
               (1)        sent  to  local  legislators,
          municipalities,  and legislative  information
          offices in the vicinity of the action and  at
          other   locations  as  the   university   may
          designate;
          
               (2)        published  in  newspapers  of
          general  circulation in the vicinity  of  the
          proposed  action at least once each week  for
          two consecutive weeks;  and
          
               (3)         published   on   state   and
          university public notice Internet websites.
          
               (e)        In this section, development,
          exchange, or sale does not include the  grant
          of   an  easement  or  right-of-way  or   the
          development of a campus facility.
          
AS 14.40.400:

               (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  Board  of
          Regents in trust for the University of Alaska
          under  AS  14.40.365;   however,  the  amount
          deposited  in the endowment trust fund  under
          this  paragraph resulting from mineral  lease
          royalties and royalty sales proceeds may  not
          be  less  than 25 percent of all such mineral
          lease  royalties and royalty  sales  proceeds
          received by the university;  and
          
               (3)          [ALL]    monetary    gifts,
          bequests,   or   endowments   made   to   the
          University of Alaska for the purpose  of  the
          fund.
          
               . . . .
          
               (c)       The total return from the fund
          shall  be used exclusively for the University
          of   Alaska,  as  the  successor   under   AS
          14.40.030  of  the Agricultural  College  and
          School of Mines.
          
               . . . .
          
               (f)       In this section,
          
               (1)         fund   means  the   separate
          endowment trust fund established under (a) of
          this section;
          
               (2)        total return means the  total
          earning of the fund, including current yield,
          gains,  and  capital appreciation,  less  all
          costs,    expenses,   losses,   and   capital
          depreciation.
          
(Additions  made  by  the act are underlined  and  deletions  are
capitalized and bracketed.)

AS 14.40.461(a):

               For  the  purpose of advancing  research
          into   forest  practices,  ecology,  wildlife
          management,  and  recreation,  a   university
          research  forest  is  established   on   land
          described  as the University Research  Forest
          and identified for conveyance to the Board of
          Regents in trust for the University of Alaska
          in  the  document titled University of Alaska
          Land Grant List 2005, dated January 12, 2005.
          
     2    S.B. 7  3, 5.

     3     Id.  6.  The ETF already receives income from land the
University    holds    under   a   1929    Act    of    Congress.
AS  14.40.400(a)(1).  [M]onetary gifts, bequests,  or  endowments
made to the University of Alaska for the purpose of the fund  are
also deposited into the ETF.  AS 14.40.400(a)(3).

     4    See AS 14.40.400(a).

     5    AS 14.40.400(c).

     6    Alaska Legislative Council v. Knowles, 86 P.3d 891, 893
(Alaska 2004).

     7    Id.

     8    Id. at 899.

     9    24th Leg., 1st Spec. Sess. (2005).

     10    Id.  1-3.

     11    Id.  5.

     12     Id.  6 (codified at AS 14.40.461).  H.B. 130 contains
other changes to S.B. 7 not significant to the issues before us.

     13    Alaska Const. art. IX,  7.

     14     See  id.  art. VII,  2 (The University of  Alaska  is
hereby established as the state university and constituted a body
corporate.  It shall have title to all real and personal property
now  or  hereafter set aside for or conveyed to it.  Its property
shall be administered and disposed of according to law.).

     15    Alaska Pub. Interest Research Group v. State, 167 P.3d
27, 34 (Alaska 2007).

     16    Premera Blue Cross v. State, Dept of Commerce, Cmty. &
Econ. Dev., Div. of Ins., 171 P.3d 1110, 1115 (Alaska 2007).

     17     Id. (citing State Commercial Fisheries Entry Commn v.
Carlson, 65 P.3d 851, 858 (Alaska 2003)).

     18    Alaska Pub. Interest Research Group, 167 P.3d at 34.

     19    Alaska Const. art. IX,  7.

     20    646 P.2d 203 (Alaska 1982).

     21    Id. at 209 (internal footnote omitted).

     22    836 P.2d 936 (Alaska 1992).

     23    Id. at 938-39.

     24     Alex,  646 P.2d at 210 (citing 3 Proceedings  of  the
Alaska Constitutional Convention (PACC) 2317-19).

     25    Id. at 204-05.

     26    Id. at 208.

     27     Id.  at  209  (citing 3 Alaska Statehood  Commission,
Constitutional Studies pt. IX, at 29-30 (1955)).

     28      Id.   (citing   3   Alaska   Statehood   Commission,
Constitutional Studies pt. IX, at 27-30 (1955)).

     29    Id. at 210.  We referred to a well-researched attorney
general   opinion  from  1975,  which  carefully   and   minutely
detail[ed]  the  debate of the constitutional convention  on  the
point  and  concluded that the clause applied to  any  source  of
public  revenue: tax, license, rental, sale, bonus-royalty,  [or]
royalty . . . .  Id. at 210 (citing 1975 Formal Op. Atty Gen.  9,
24  (May 2, 1975)).  That opinion quoted a document on which  the
convention  delegates  had  relied,  noting  that  the  amendment
removing  the words all revenues avoided having to make  explicit
necessary  exceptions  to the clause for  certain  moneys,  e.g.,
pension  contributions, proceeds from bond issues,  sinking  fund
receipts,  revolving  fund  receipts,  contributions  from  local
government  units for state-local cooperative programs,  and  tax
receipts  which  the  state  might collect  on  behalf  of  local
government units.  1975 Formal Op. Atty Gen. 9, 6-7 (May 2, 1975)
(quoting Mem. from Pub. Admin. Serv., Jan. 4, 1956).

     30    Alex, 646 P.2d at 210.

     31    Article IX, section 7 includes three exceptions: (1) as
provided in section 15 of this article, (2) when required by  the
federal  government for state participation in federal  programs,
and  (3)  any dedication for special purposes existing  upon  the
date  of  ratification of this section by the people  of  Alaska.
Article  IX,  section 15 creates the Permanent Fund.   The  other
exceptions are not applicable to this case.

     32    Alaska Const. art. IX,  15.

     33    Id. art IX,  7.

     34    68 P.3d 386 (Alaska 2003).

     35    Id. at 391-93.

     36     The  University makes a similar argument,  contending
that  Myers  creates an implied exception to the dedicated  funds
clause that encompasses the conveyance here.

     37    Myers, 68 P.3d at 390-91.

     38    Id. at 388.

     39    Id. at 387-88.

     40    Id. at 394.

     41    Id.  We stated:

          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  legislatures 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 states risk.
          
Id.

     42    See AS 38.05.965.

     43    See AS 14.40.291(a).

     44     SEACC provides several examples of other purposes for
which  we  have found that the University is part of  the  state,
citing  University of Alaska v. National Aircraft Leasing,  Ltd.,
536  P.2d  121,  123-25, 127-28 (Alaska 1975) (holding  that  the
University  is protected by sovereign immunity and  can  be  sued
under  statutes  subjecting the state  to  suit);  University  of
Alaska v. Geistauts, 666 P.2d 424, 427-28, 427 n.3 (Alaska  1983)
(holding  that meetings of a university committee are subject  to
the Public Meetings Act); Carter v. Alaska Public Employees Assn,
663  P.2d  916, 920-21 (Alaska 1983) (holding that the University
must comply with the requirements of the public records statute),
and  Ellingstad  v. State, Department of Natural  Resources,  979
P.2d  1000,  1007  (Alaska 1999) (holding  that  the  Universitys
treatment  as  a state entity under state law makes  transfer  of
contractual  rights  to it distinct from transfer  to  a  private
entity).

     45    Alaska Const. art. VII,  2.

     46    624 P.2d 807, 814 (Alaska 1981).

     47    Id. at 815-16.

     48    Id. at 814 (quoting Alaska Const art. VII,  2).

     49    Id. at 815 n.10.

     50    Id. at 815.

     51     Id.   The court was referring to and quoting  article
VIII,   section  2  of  the  constitution,  which   states:   The
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.
See id.

     52     Cf.  State v. Alex, 646 P.2d 203, 210 (Alaska  1982).
Our conclusion that revenues from University land are subject  to
the  dedicated  funds  clause does not, of course,  prohibit  the
dedication of revenues received from land grants under  the  1929
act  because  such revenues are excepted from the prohibition  by
the second sentence of article IX, section 7.  See supra note 30.

     53    1959 House Journal 1186, 1186-88; Terrence M. Cole,  A
Land  Grant College Without the Land: A History of the University
of  Alaskas  Federal Land Grant, A Report to  the  University  of
Alaska Statewide Office of Land Management 18-19 (1993).

     54    1959 House Journal 1186, 1186-87.

     55     Letter  from Bob Bartlett to William  Egan  (June  8,
1964), in Cole, supra note 53, at 17.

     56     See  AS  01.10.030 (Any law heretofore  or  hereafter
enacted  by  the  Alaska legislature which lacks  a  severability
clause  shall be construed as though it contained the  clause  in
the  following  language: If any provision of this  Act,  or  the
application  thereof  to  any  person  or  circumstance  is  held
invalid,  the remainder of this Act and the application to  other
persons or circumstances shall not be affected thereby. ).

     57     Sonneman  v. Hickel, 836 P.2d 936, 941 (Alaska  1992)
(citing  Lynden Transp., Inc. v. State, 532 P.2d 700, 712 (Alaska
1975)).   In  Lynden  we  considered  the  significance  of   the
legislatures  including a specific severability clause  within  a
statute  as  compared to its choosing not to  include  one.   See
Lynden  Transp.,  532  P.2d at 711-12.   We  suggested  that  the
soundest  interpretation  .  .  . is  that,  whereas  a  specific
severability  clause  creates a slight presumption  in  favor  of
severability,   a   general  clause  creates   an   even   weaker
presumption,   although   [f]or  all  practical   purposes,   the
difference  between the two is negligible.  Id. at 712-13.   More
recently  we  have concluded that a built-in severability  clause
creates  a stronger presumption of severability than the  general
savings  clause of AS 01.10.030.  Alaskans for a Common Language,
Inc. v. Kritz, 170 P.3d 183, 213 n.183 (Alaska 2007).

     58    532 P.2d 700 (Alaska 1975).

     59    Id. at 713 (quoting Dorchy v. Kansas, 264 U.S. 286, 290
(1924)) (internal quotation marks omitted).

     60    See supra note 1 (providing the text of these statutory
provisions).

     61     See AS 14.40.170(b)(4) (allowing the Board of Regents
to  receive  university  receipts  and  expend  them  subject  to
appropriation  by  the  legislature); AS 14.40.491(4)  (including
receipts from sales and rentals of university property within the
definition of university receipts).

     62     This  refers  to the talking point  colloquy  between
delegates  Gray  and White during the Constitutional  Convention.
See supra page 14.

     63     See  Lynden  Transp., 532 P.2d at  713  (The  crucial
question, then, is what was the legislative intent.).

     64     See  State v. Alaska Civil Liberties Union, 978  P.2d
597,  633  (Alaska  1999) (upholding severance  and  noting  that
invalidating the unconstitutional sections did not undermine  the
structure  of the Act as a whole); Sonneman v. Hickel,  836  P.2d
936, 941 (Alaska 1992) (upholding severance and noting that after
deletion the remainder of the act still has the same meaning that
it  had with that subsection included); see also Alaska Airlines,
Inc.  v.  Brock,  480  U.S. 678, 685 (1987)  (The  more  relevant
inquiry  . . . is whether the statute will function in  a  manner
consistent with the intent of Congress.).

     65     In particular, see findings 3 and 6, S.B. 7  1, supra
note 1.

     66    AS 14.40.400(a)(1) & (2).

     67    AS 14.40.400(c) & (f)(2).

     68    See finding 7, S.B. 7  1, supra note 1.

     69     See Act of Jan. 21, 1929, ch. 92, 45 Stat. 1091, 1092
(1929) ([A] fund shall be established in the Territorial treasury
to  carry  out the purposes of this Act, and whenever  any  money
shall be in any manner derived from any of the land granted  same
shall be deposited in the Territorial treasury in the fund.   The
Territorial treasurer shall keep all such money invested in  safe
interest-bearing securities. . . .  The income from said fund may
and   shall  be  used  exclusively  for  the  purposes  of   such
Agricultural College and School of Mines.); AS 14.40.400(c)  (The
total  return  from  the fund shall be used exclusively  for  the
University of Alaska, as the successor under AS 14.40.030 of  the
Agricultural College and School of Mines.).

     70    See, e.g., Meeting of the House Finance Committee, 21st
Leg.,  2d Sess. (Mar. 21, 2000) (statement of sponsor Sen.  Robin
Taylor, S. Finance Comm.) ([U]nder the legislation the university
would  receive an endowment . . . which would provide an economic
base  and  greater  autonomy and reduce the states  general  fund
support.);  Meeting of the House Resources Committee, 21st  Leg.,
2d Sess. (Feb. 7, 2000) (statement of Jim Pound, legislative aide
to Sen. Robin Taylor, on behalf of Sen. Taylor) ([T]he purpose of
the bill is to give the University of Alaska the land grants that
it   was   promised   by   the  federal   government   prior   to
statehood.  .  . . [T]he money will go into a trust account  that
will  be drawn on primarily as an interest situation, similar  to
the  permanent fund, but it will be specifically designed for the
University of Alaska.); Floor Debate on Senate Bill 7, 21st Leg.,
2d  Sess.  (Mar.  30, 2000) (statement of Sen. Robin  Taylor,  S.
Finance Comm.) (I sincerely appreciate all the work that has been
put  in . . . to pass a bill on to the governor that will provide
for  an  endowment  for our university. . . .  What  a  wonderful
position  this legislature might find itself within in  the  next
10, 15 years if the university no longer has to be funded out  of
general  funds.); Floor Debate on Senate Bill 7,  21st  Leg.,  2d
Sess.  (May 3, 1999) (statement of Sen. Robin Taylor, S.  Finance
Comm.)  (I  cant think of a greater gift for this legislature  to
give future generations of Alaskan students than to provide their
university with a solid, stable, autonomous land base upon  which
they may develop and encourage and strengthen our university.).

     71     Our  cases  have  not specifically addressed  whether
income earned by an agency from appropriated funds is covered  by
the  dedicated  funds  clause.  A 1982 attorney  general  opinion
considered  this question and concluded that such  income  likely
would  be  covered.   The opinion discusses policy  reasons  that
would also apply to appropriating money to dedicated funds:

               A  difficulty that arises from the  view
          that  the dedicated funds prohibition is  not
          applicable  to interest or investment  income
          on separate funds is that it permits steadily
          increasing  amounts of money to  be  received
          and  used  by state departments and  agencies
          without   legislative  control  through   the
          annual budget process.  This is precisely the
          problem  posed by the dedication  of  revenue
          sources  which the drafters sought to  avoid.
          For  this  reason, while we are  not  certain
          about  the  likely outcome, we doubt  that  a
          blanket exception for derivative income would
          be approved by the courts.
          
               .   .   .   .   Although  not  expressly
          addressed by them, the framers were very much
          aware  of  the  boom-bust  cycle  of  Alaskas
          economy.   In  fact, a driving  force  behind
          statehood   was   the  desire   of   Alaskans
          themselves  to be able to manage  the  income
          derived from those brief periods . .  .  when
          the  state may receive enormous sums of money
          which  are  then  immediately  available  for
          expenditure  or  placement, by appropriation,
          into  a  variety  of funds and  accounts  for
          various  permissible purposes.  Depending  on
          the  number  and  size  of  those  funds  and
          accounts,  the interest earned on  the  money
          placed  in  them could itself be  substantial
          .  . . .  [T]he significance of that interest
          income in properly managing the states budget
          leads  us to the conclusion that our  framers
          would  have  considered it to be  within  the
          dedicated fund prohibition.
          
1982 Formal Op. Atty Gen. 13 at 16-17.

     72    See Sonneman v Hickel, 836 P.2d 936, 941 (Alaska 1992).

     73    170 P.3d 183 (Alaska 2007).

     74    Id. at 210.

     75    H.B. 130  6 (codified as AS 14.40.461(a)).

     76     The time of conveyance and interim management of  the
research  forest lands is also distinct.  The rest  of  the  land
under  the  act  was  to be conveyed by July  1,  2008,  but  the
research   forest  is  not  to  be  conveyed  until   2055.    AS
14.40.365(b).    Before  conveyance  to   the   University,   the
Department of Natural Resources will manage the property and  may
sell timber rights.  AS 14.40.461(c) & (d).

     77     The State argues that the doctrine of laches bars the
appellants  from  requesting that any  land  already  transferred
pursuant  to  the  act  be returned to  it.   We  disagree.   The
appellants  decision  to file suit only after  H.B.  130  revised
S.B.  7  was reasonable, and the State and University  have  been
aware  of  the  possibility that the bills would be  struck  down
since  this case was filed.  Furthermore, the public interest  in
compliance  with  the constitution is paramount  here.   We  have
previously held that public interest is a factor in considering a
laches  claim, see Jackson v. Kenai Peninsula Borough for  Use  &
Benefit of Kenai, 733 P.2d 1038, 1043-44 (Alaska 1987); Moore  v.
State,  553  P.2d 8, 19-20 (Alaska 1976), and thus constitutional
values  put  significant  weight on the  side  of  rejecting  the
defense,  cf.  Gwichin  Steering Comm. v. State,  Office  of  the
Governor,  10  P.3d 572, 585 (Alaska 2000) ([A] suit  brought  to
ensure compliance with statutory and constitutional policies that
concern   the  public  as  a  whole  effectuates  strong   public
policies.).

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