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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Wielechowski v. State (8/25/2017) sp-7194

Wielechowski v. State (8/25/2017) sp-7194

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

           Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  

                                                                                                                        

           303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                                                          

           corrections@akcourts.us.  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                      



BILL  WIELECHOWSKI,  RICK                                            )  

HALFORD,  and  CLEM  TILLION,                                        )     Supreme  Court  No.  S-16558  

                                                                     )  

                                Appellants,                                                                                           

                                                                     )     Superior Court No. 3AN-16-08940 CI  

                                                                     )  

           v.                                                                                   

                                                                     )     O P I N I O N  

                                                                     )  

                                             

STATE OF ALASKA and ALASKA                                                                                        

                                                                     )     No. 7194 - August 25, 2017  

                                       

PERMANENT FUND CORPORATION, )
  

                                                                     )
  

                                Appellees.                           )
  

                                                                     )
  



                                                                                                              

                     Appeal from the Superior Court of the State of Alaska, Third  

                                                                                                    

                     Judicial District, Anchorage, William F. Morse, Judge.  



                                                                                                                

                     Appearances:   Bill Wielechowski, pro  se, Anchorage,  and  

                                                                                                                   

                      Sonja N. Kawasaki, Fairbanks, for Appellants.  Kathryn R.  

                                                                                                       

                     Vogel,  Margaret  Paton-Walsh,  and  Bill  Milks,  Assistant  

                                                                                                  

                     Attorneys   General,   Anchorage,   and   Jahna   Lindemuth,  

                                                                                                         

                     Attorney General, Juneau, for Appellees.  Jack B. McGee,  

                                                                                                           

                     Law  Office  of  Jack  B.  McGee,  Juneau,  for  Amici  Curiae  

                                                                                            

                      Greg Capito, Jack Gitchell, and Vicki Van Fleet.  



                                                                                                          

                     Before:  Stowers, Chief Justice, Winfree, Maassen, Bolger,  

                                           

                     and Carney, Justices.  



                                          

                     WINFREE, Justice.  



I.         INTRODUCTION  



                                                                                                                                       

                     This appeal provides another opportunity to remind Alaskans that, of the  



                                                                                                                

three  branches  of  our  state government,  we  are  entrusted with  the  "constitutionally  


----------------------- Page 2-----------------------

                                                                                                                                              1  

mandated duty to ensure compliance with the provisions of the Alaska Constitution."                                                               



                                                                                                                                   

This sometimes requires us to answer constitutional questions surrounded by political  



                       2  

                                                                                                                                  

disagreement.               Today we address a constitutional question arising from a political  



                                                                                                                          

dispute about the legislatively enacted Alaska Permanent Fund dividend program.  



                                                                                                                                              

                      In  the  course  of  the  2016  budgetary  process,  in  accordance  with  a  



                                                                                                                            

statutorilyprescribed formulainplacefor overthreedecades, thelegislatureappropriated  



                                                                                                                                             

a sum of money for dividend distributions.  But the governor then vetoed about half of  



                                                                                                                                          

the appropriation, and the legislature did not override the veto.  One current and two  



                                                                              

former legislators later sued to effectively set aside the governor's veto.  The thrust of  



                                                                                                                                    

their  argument  was  that  the  1976  constitutional  amendment  creating  the  Alaska  



                                                                                                                                           

Permanent Fund gave the legislature constitutional authority to pass laws dedicating use  



                                                                                                                                           

of Permanent Fund income without need for annual appropriations and, therefore, not  



                                                                                                                          

subject  to  annual  gubernatorial  veto.                          The  legislators  argued  that  the  longstanding  



                                                                                                        

dividend program was a law exempt from the anti-dedication clause.  



                                                                                                                                            

                      The superior court ruled against the legislators, concluding that even if the  



                                                                                                                               

 1976 constitutional amendment gave the legislature dedication powers over Permanent  



                                                                                                                                    

Fund income, the legislature's actual use of the income remained subject to normal  



                                                                                                                                        

appropriation and veto budgetary processes.  The legislators appeal, making the same  



           1          Malone   v.   Meekins ,  650   P.2d   351,   356   (Alaska   1982)   (citing   State   v.  



A.L.I.V.E.   Voluntary, 606 P.2d 769 (Alaska                                  1980);   Plumley v. Hale                , 594 P.2d 497       

(Alaska 1979);            K & L Distribs., Inc. v. Murkowski                        , 486 P.2d 351, 357 (Alaska 1971)).             



           2          State v. Planned Parenthood of Alaska, 171 P.3d 577, 579 (Alaska 2007).  

                                                                                                                                                  

We reiterate that "[w]e are not  legislators,  policy  makers,  or  pundits charged  with  

                                                                                                                                        

making law or assessing the wisdom of legislative enactments."  Id.  We are concerned  

                                                                                                                               

only with upholding the Alaska Constitution, which "takes precedence over the politics  

                                                                                                                                    

of the day and our own personal preferences."  Planned Parenthood of the Great Nw v.  

                                                                                                                                              

State, 375 P.3d 1122, 1133 (Alaska 2016) (citing Alaska Const. art. XII,  5; Malone,  

                                                                                                                                   

650 P.2d at 356).  

                     



                                                                      -2-                                                              7194
  


----------------------- Page 3-----------------------

arguments to us that they made to the superior court and emphasizing what they contend                                                                                                                                                                                                                 



is the sound public policy behind Alaska's nearly 40-year-old dividend program.                                                                                                                                                                                                                                     



                                                    The narrow question before us is whether the 1976 amendment to the                                                                                                                                                                                                   



Alaska Constitution exempted the legislature's use of Permanent Fund income from the                                                                                                                                                                                                                                      



Constitution's anti-dedication clause.                                                                                                           The answer cannot be found by weighing the                                                                                                                             



merits of the dividend program or by examining the statutory dividend formula.                                                                                                                                                                                                                                     The  



answer is found only in the language of the Alaska Constitution.                                                                                                                                                                                        And, as we explain   



below, the answer is no - the 1976 amendment did not exempt the legislature's use of                                                                                                                                                                                                                                         



Permanent Fund income from the Constitution's anti-dedication clause.  Although the  



superior court did not reach this question, the court's ultimate conclusion nonetheless is                                                                                                                                                                                                                                     



correct:     The   legislature's   use   of   Permanent   Fund   income   is   subject   to  normal  



appropriation and veto budgetary processes. We affirm the superior court's decision on                                                                                                                                                                                                                                      



this alternative ground.                                  



II.                      FACTS AND PROCEEDINGS                                   



                         A.                       Facts  



                                                  In 1976 voters approved an amendment to the Alaska Constitution creating                                                                                                                                                                             



the   Alaska   Permanent   Fund   (Permanent   Fund)   and   dedicating   to   it   certain   state  

                                    3      To permit the revenue dedication, article IX, section 7 - an anti-dedication  

revenues.                                                                                                                                                                                                                                                                   



clause providing that "[t]he proceeds of any state tax or license shall not be dedicated to  

                                                                                                                                                                                                                                                                                                                              



any special purpose" - was modified to add an exception "as provided in section 15 of  

                                                                                                                                                                                                                                                                                                                             

this article."4                                      And article IX, section 15 was added, as follows:  

                                                                                                                                                                                                                



                                                  At  least  twenty-five  per  cent  of  all  mineral  lease  rentals,  

                                                                                                                                                                                                                                                      

                                                  royalties,  royalty  sale  proceeds,  federal  mineral  revenue  

                                                                                                                                                                                                                                                   



                         3                        See  1976 House Joint Resolution No. 39 (S.C.S. C.S.S.S. H.J.R. Res am S                                                                                                                                                                                                      



39);  see also                                   Alaska Const. art. IX,  7, 15.                                                                           



                         4                        Alaska Const. art. IX,  7.  

                                                                                                                                         



                                                                                                                                                              -3-                                                                                                                                                  7194
  


----------------------- Page 4-----------------------

                               sharing payments and bonuses received by the State shall be                                                                            

                               placed in a permanent fund, the principal of which shall be                                                                            

                               used             only            for         those              income-producing                                investments  

                               specifically designated by law as eligible for permanent fund                                                                     

                               investments.   All income from the permanent fund shall be                                                                             

                               deposited in the general fund unless otherwise provided by                                                                             

                                         [  ]  

                               law. 5 



The new section's last sentence - regarding Permanent Fund income - is the primary  

                                                                                                                                                                                         



focus of this decision.  

                               



                               A constitutional amendment was required to create and dedicate revenues  

                                                                                                                                                                                      



to the new Permanent Fund because Alaska's constitutional convention delegates, the  

                                                                                                                                                                                                    



original framers of the Alaska Constitution, believed that "the dedication of revenues"  

                                                                                                                                                                                   

was "a fiscal evil,"6 largely because it failed "to preserve control of and responsibility for  

                                                                                                                                                                                                     

                                                                                                                    7  The 1976 amendment's framers and  

state spending in the legislature and the governor."                                                                                                                                               

                                                                                            



voters  chose  to  make  an  exception  to  this  general  prohibition  by  dedicating  

                                                                                                                                                                                



constitutionally enumerated revenues to the principal of the new Permanent Fund.  The  

                                                                                                                                                                                                  



twin goals behind this exception to the anti-dedication clause were:  (1) saving for the  

                                                                                                                                                                                                    



future and (2) preventing wasteful spending of the oil and mineral revenue then expected  

                                                                                                                                                                                      

to "flood" the state.8  

                                  



                5              Alaska Const. art. IX,  15.                            



                6              State v. Alex                , 646 P.2d 203, 209 (Alaska 1982) (quoting 6 Proceedings of                                                                               



the Alaska Constitutional Convention (PACC) App. V at 111 (Dec. 16, 1955)).                                                                                              



                7              Sonneman v. Hickel, 836 P.2d 936, 938 (Alaska 1992).  

                                                                                                                                                  



                8               1976  House Journal 39-40; see Williams  v.  Zobel,  619  P.2d  448,  453  

                                                                                                                                                                                                 

(Alaska 1980), rev'd on other grounds, Zobel v. Williams, 457 U.S. 55 (1982).  

                                                                                                                                                                        



                                                                                                  -4-                                                                                          7194
  


----------------------- Page 5-----------------------

                          The Permanent Fund's principal is a dedicated fund that cannot beaccessed                                                    



                                                                                               9  

without further amending the Alaska Constitution.                                                                                                    

                                                                                                  The principal is devoted to "income- 



                                                                                                                                               

producing  investments"  now  managed  by  the  Alaska  Permanent  Fund  Corporation  

                 10    It appears that before 1982 a percentage of Permanent Fund income was  

(APFC).                                                                                                                                                        

deposited into the general fund, with some money set aside for a dividend program;11  

                                                                                                                                                  



since 1982 Permanent Fund income has been deposited in what now is known as the  

                                                                                                                                                                 



earnings  reserve  account  (earnings  reserve),  a  separate  Permanent  Fund  account  

                                                                                                                                                       

managed by APFC.12  

                         



                          In 1980 the legislature decided to use Permanent Fund income to pay each  

                                                                                                                                                              

eligible Alaskan  a dividend  based  on  length  of residency.13                                                           But the  United  States  

                                                                                                                                                           



Supreme  Court  ruled  that  this  dividend  plan  violated  federal  constitutional  equal  

                                                                                                                                                           



             9            See  Alaska Const. art. IX,  15 ("[T]he principal . . . shall be used only for                                                        



. . . income-producing investments . . . .").                              



             10           Alaska Const. art. IX,  15; AS 37.13.040 (establishing APFC "to manage  

                                                                                                                                                        

and invest the assets of the [P]ermanent [F]und and other funds designated by law").  

                                                                                                                                                        



             11           Alaska Const. art. IX,  15 ("All income from the permanent fund shall be  

                                                                                                                                                                   

deposited in the general fund unless otherwise provided by law."); ALASKA  DEP 'T OF   

                                                                                                                                   

REVENUE, REVENUE SOURCES FY 1984-1987: QUARTERLY UPDATE SEPTEMBER, 1984,  

                                                                                                                                                            

                           

at 10 (1984).  



             12           AS37.13.145(a) ("Theearnings reserveaccountis established asaseparate  

                                                                                                                                                       

account in the [Permanent F]und. Income from the [Permanent F]und shall be deposited  

                                                                                                                                                     

by [APFC] into the account as soon as it is received.  Money in the account shall be  

                                                                                                                                                       

invested in investments authorized under AS 37.13.120.").   From 1982 to 1986 the  

                                                                                                                                                                

income went into a Permanent Fund "undistributed income account."  Ch. 81,  9, SLA  

                                                                                                                                                              

 1982.  

             



             13           Ch. 21,  2, SLA 1980.  

                                                            



                                                                                 -5-                                                                         7194
  


----------------------- Page 6-----------------------

                                14  

protection rights,                  and so the first Permanent Fund dividends of $1,000 each were not                                                      



                                         15  

distributed until 1982.                       



                         The general structure for Permanent Fund dividends is largely the same  

                                                                                                                                                       



today as it is was 35 years ago; dividends are paid to eligible Alaska residents following  

                                                                                                                                               



a  statutorily  structured  three-step  formula.                                       First,  APFC  calculates  the  "[i]ncome  

                                                                                                                                             



available for distribution," defined as 21% of the net income of both the Permanent Fund  

                                                                                                                                                        

and the earnings reserve "for the last five fiscal years."16                                               Second, 50% of the "income  

                                                                                                                                                 



available for distribution" is transferred by APFCfromthe earnings reserve to a dividend  

                                                                                                                                                



fund, a separate state treasury account administered by the Department of Revenue  

                                                                                                                                                

(DOR).17  Finally, DOR"determine[s] the value ofeach permanent fund dividend for that  

                                                                                                                                                           



year  by"  dividing  the  amount  available  in  the  dividend  fund  by  "the  number  of  

                                                                                                                                                            

individuals eligible to receive a dividend payment."18  

                                                                              



                         But since the dividend program's inception there has been uncertainty in  

                                                                                                                             



the executive and legislative branches about the limits of the statement in the second  

                                                                                                                                                    



sentence of article IX, section 15 that Permanent Fund income "shall be deposited in the  

                                                                                                                                                           



             14          Zobel v. Williams                 , 457 U.S. 55, 65 (1982) ("We hold that                                          the Alaska   



dividend distribution plan violates the guarantees of the Equal Protection Clause of the                                                                   

Fourteenth Amendment.").   



             15          Ch. 102,  19, SLA 1982.  

                                                               



             16          AS 37.13.140.  This amount also "may not exceed net income of the fund  

                                                                                                                                                         

for the fiscal year just ended plus the balance in the earnings reserve" to avoid depleting  

                                                                                                                                                

the earnings reserve.  Id.  

                                         



             17          AS 37.13.145(b); see also AS 43.23.045(a) (establishing "[t]he dividend  

                                                                                                                                                 

fund . . . as a separate fund in the state treasury").  

                                                                         



             18          AS 43.23.025(a)(1)-(3); see AS 43.23.005 (generally defining as eligible  

                                                                                                                                                   

all Alaskans who have been "a state resident during the entire qualifying year," with  

                                                                                                                                                        

certain exceptions).  

               



                                                                              -6-                                                                      7194
  


----------------------- Page 7-----------------------

                                                                                                                                                                                              19  

general fund                                       unless otherwise provided by law                                                                                                    ."             Specifically, the uncertainty has                                                                                 



concerned whether, in conjunction with the 1976 exemption to the article IX, section 7                                                                                                                                                                                                                                           



anti-dedication clause, that phrase permits considering the dividend's statutory scheme                                                                                                                                                                                                                   



a constitutionally permissible dedication of revenues not requiring annual legislative                                                                                                                                                                                                        

                                                       20   for transfers from the earnings reserve to the dividend fund.21                                                                                                                                                                                             The  

appropriations                                                                                                                                                                                                                                                                                                      



legislature has made an appropriation for the transfer from the APFC earnings reserve  

                                                                                                                                                                            



                          19                      Alaska Const. art. IX,  15 (emphasis added).                                                                                                   



                         20  

                                                                                                                                                                                                                                                                                                                          

                                                  See Alaska Const. art. IX,  13 ("No money shall be withdrawn from the  

treasury except in accordance with appropriations made by law.").                                                                                                                                                                



                         21                       See, e.g., STATE OF                                                       ALASKA, D                                   EP 'T OF                     LAW, I   NFORMAL  OP. A                                                                 TT'Y  GEN.,  



                                                                                                                                                                                                                                                                                             

 1983 WL42491(Mar.10,1983)("The[P]ermanent [F]und['s]dividend fund established  

                                                                                                                                                                                                                                                                                                                   

under AS 43.23.045 would arguably involve an unconstitutional dedication of state  

                                                                                                                                                                                                                                                                                                                    

revenue if money were transferred to that fund from income of the permanent fund  

                                                                                                                                               ORMAL   OP.   ATT'Y   GEN.   3,   at   8   ("Because   of  

without  an  appropriation.");  1980  F 

decisional   law   applying   constitutional   provisions   which   require   disclosure   of   the  

principal objects and effects of amendments, the effect of the words, 'unless otherwise                                                                                                                                                                                                          

provided   by   law'  may  be   quite   limited.     Our   reading   of   the   decisional   law   on  

constitutional amendments leads us to the conclusion here that the legislature probably                                                                                                                                                                                                             

can provide by law for income from the fund to be automatically deposited back into the                                                                                                                                                                                                                                    

fund or distributed as dividends.                                                                                          Both are part of the amendment's history and both are                                                                                                                                           

closely related to the fund itself.                                                                                         Use of the income without annual appropriations for   

other purposes, say for loan programs or guarantees, has no close relationship to the fund                                                                                                                                                                                                                           

itself and probably would not pass constitutional muster.                                                                                                                                                               Indeed, it is possible that the                                                                    

Alaska Supreme Court could find that an appropriation is required under article IX,                                                                                                                                                                                                                                      

 section 13, even for deposits to the fund and distributions of income.                                                                                                                                                                                                      We doubt this                              

would   occur,  but   it   is   possible.");   Letter   from   Attorney   Gen.   Avrum   M.   Gross   to  

Governor Jay S. Hammond (June 28, 1976) ("In the second section [of the proposed                                                                                                                                                                                                                  

 1976 constitutional amendment], the legislature also added a proviso allowing itself to                                                                                                                                                                                                                                      

provide by law that income from the fund may be deposited in other than the general                                                                                                                                                                                                                       

fund.  However, since the only exception to the dedicated-fund prohibition in sec. 7 is  

                                                                                                                                                                                                                                                                                                  

the new sec. 15, it would appear that the only other place the income may be deposited  

                                                                                                          

is in the permanent fund.").  



                                                                                                                                                              -7-                                                                                                                                                   7194
  


----------------------- Page 8-----------------------

to the DOR dividend fund every year since 1982, apparently to avoid potential conflicts                                                                                                         



with the Alaska Constitution's anti-dedication clause.                                                                                



                                 In May 2016 the legislature passed an appropriation bill that included an                                                          



estimated $1.362 billiontransfer fromAPFC's                                                                     earningsreserveto DOR's dividend fund,                                                  

                                                                                                                                           22      But in June Governor Bill  

consistent with prior practice and the statutory formula.                                                                                                                                                  



Walker exercised his line-item veto power and reduced the estimated $1.362 billion  

                                                                                                                                                                                                    

transfer to $695.65 million.23   The legislature met in July but did not vote to override the  

                                                                                                                                                                                                             

governor's veto.24   This resulted in 2016 Permanent Fund dividend payments of $1,022  

                                                                                                                                                                                                    



to  eligible  Alaskans,  about  half  of  what  had  been  expected  under  the  legislature's  

                                                                                                                                                                                      



appropriation.  

                                      



                B.               Proceedings  



                                 Acurrent statesenator, Bill Wielechowski,and two former statelegislators,  

                                                                                                                                                                                           



Rick Halford and Clem Tillion (collectively Wielechowski), brought suit against the  

                                                                                                                                                                                                             



State of Alaska and APFC (collectively the State).  Relying on the second sentence of  

                                                                                                                                                                                                                



the  Permanent  Fund  clause,  Wielechowski  sought  a  declaration  that  the  dividend  

                                                                                                                                                                                              



program                    statutes                contain                 a       constitutionally                            permissible                       revenue                  dedication  

                                                                                                                                                                                       



"automatically"  transferring  prescribed  revenues  from  the  earnings  reserve  to  the  

                                                                                                                                                                                                            



dividend  fund  without  need  for  legislative  appropriation  and  not  subject  to  the  

                                                                                                                                                                                                           



governor's veto.  The State opposed, arguing that the 1976 constitutional amendment  

                                                                                                                                                                                        



created an anti-dedication clause exemption only for revenues going into the Permanent  

                                                                                                                                                                                           



                22               Ch. 3,  10, 4SSLA 2016;                                         see  AS 37.13.145(b).   



                23               See  Alaska Const. art. II,  15 (providing the governor "may, by veto, strike                                                                                         



or reduce items in appropriation bills").                                        



                24               See Alaska Const. art. II,  16 ("[A]ppropriation bills . . . , although vetoed,  

                                                                                                                                                                                                   

become law by affirmative vote of three-fourths of the membership of the legislature.").  

                                                                                                                                                                                   



                                                                                                       -8-                                                                                              7194
  


----------------------- Page 9-----------------------

 Fund and not for revenues going out of the Permanent Fund.                                                                                                                                                                                                                               The State alternatively                            



 argued that even if the Alaska Constitution permits legislative dedication of Permanent                                                                                                                                                                                                                                                              



 Fund income, the statutory transfer from the earnings reserve to the dividend fund still                                                                                                                                                                                                                                                                                           



 must meet constitutional appropriation and veto requirements.                                                                                                                                                                                                                             



                                                             After  expedited   proceedings the superior court ruled                                                                                                                                                                                                  that the earnings                      



 reserve revenue transfer to the dividend fund requires an appropriation and must survive                                                                                                                                                                                                                                                                            



 a gubernatorial veto.                                                                         The court did not decide whether the revenue transfer would be a                                                                                                                                                                                                                                  



 "permissible dedication" under the Alaska Constitution.                                                                                                                                                                                                         Emphasizing the governor's                                                        



 strong veto control over spending provided by the Alaska Constitution, the court stated                                                                                                                                                                                                                                                                                   



 "[i]t   is unlikely that the proponents of the [P]ermanent [F]und would intend so drastic                                                                                                                                                                                                                                                                             



 a   change   in   the   governor's   role   over   the   budget   by   such   a   vague   vehicle"   as  the  



 concluding sentenceofthe1976                                                                                                                  constitutional amendmentcreating                                                                                                                           thePermanent                                                     Fund.   



 The court determined that "[w]hat makes the least sense is that the proponents of the                                                                                                                                                                                                                                                                                                 



 permanent fund clause would exempt the income of the [P]ermanent [F]und from the                                                                                                                                                                                                                                                                                                      



 threat of a gubernatorial veto without expressly stating that intention."                                                                                                                                                                                                                                                      



                                                             Wielechowski appeals. Three other "long-time Alaska residents who each                                                                                                                                                                                                                                               



 filed   for   a   2016   Permanent   Fund   [d]ividend"   filed   an   amicus   brief   supporting  



 Wielechowski.   



 III.                          STANDARD OF REVIEW                                                                 



                                                             "We review summary judgment rulings de novo and may affirm summary                                                                                                                                                                                                                             

                                                                                                                                                                                                                                  25             "Questions of constitutional and  

judgment on any basis appearing in the record."                                                                                                                                                                                                                                                                                                                                     



 statutory interpretation, including the constitutionality of a statute, are questions of law  

                                                                                                                                                                                                                                                                                                                                                                                     



                               25  

                                                                                                                                                                                                                                                                                                                                                  

                                                             Seybert v. Alsworth, 367 P.3d 32, 36 (Alaska 2016) (quoting Angleton v.  

                                                                                                                                                   

  Cox, 238 P.3d 610, 614 (Alaska 2010)).  



                                                                                                                                                                                              -9-                                                                                                                                                                               7194  


----------------------- Page 10-----------------------

to which we apply our independent judgment.                                           We adopt the 'rule of law that is most                        



                                                                                                  26  

persuasive in light of precedent, reason, and policy.' "                                               



IV.	        DISCUSSION  



                                                                                                                                               

            A.	         The Alaska Constitution Does Not Exempt Permanent Fund Income  

                                                                                                                    

                        From The Constraints Of The Anti-Dedication Clause.  



                                                                                                                  

                        1.	         Framework for interpreting the Alaska Constitution  



                                                                                                                                                  

                        Weprovidedaframework forinterpretingtheAlaskaConstitutionin Hickel  



                     27  

                                                                                                                                              

v.  Cowper.                "Our  analysis of a constitutional provision begins with,  and  remains  



                                                                                                                                 

grounded in, the words of the provision itself.  We are not vested with the authority to  



                                                                                                                                           

add missing terms or hypothesize differently worded provisions . . . to reach a particular  



             28 

                                                                                                                                                        

result."          We instead "look to the plain meaning and purpose of the provision and the  



                                        29  

                        

intent of the framers." 



                                                                                                                                                 

                        "Because of our concern for interpreting the constitution as the people  



                                                                                                                                                      

ratified it, we generally are reluctant to construe abstrusely any constitutional term that  



                                                      30  

                                                                                                                                          

hasaplain ordinary meaning."                              "Constitutional provisionsshould begiven areasonable  



                                                                                                                 31  

                                                                                                                                                    

and practical interpretation in accordance with common sense."                                                        "[A]bsent some signs  



            26            State v. Ketchikan Gateway Borough                                    , 366 P.3d 86, 90 (Alaska 2016)                   



(footnote  omitted)  (quoting  Se.  Alaska  Conservation  Council  v.  State,  202  P.3d   1162,  

 1167  (Alaska  2009))  (citing  State  v.  Schmidt,  323  P.3d  647,  655  (Alaska  2014)).  



            27          874 P.2d 922, 926-28 (Alaska 1994).  

                                                                                 



            28          Id. at 927-28.  

                                   



            29          Id. at 926 (quoting ARCO Alaska, Inc. v. State, 824 P.2d 708, 710 (Alaska  

                                                                                                                                               

 1992)) (citing Kochutin v. State, 739 P.2d 170, 171 (Alaska 1987)).  

                                                                                                              



            30          Id.  



            31          Id. (quoting ARCO Alaska , 824 P.2d at 710) (citing Kochutin, 739 P.2d at  

                                                                                                                                                          

                                                                                                                                    (continued...)  



                                                                           -10-	                                                                   7194
  


----------------------- Page 11-----------------------

that the term at issue has acquired a peculiar meaning by statutory definition or judicial                                                                                              



construction, we defer to the meaning the people themselves probably placed on the                                                                                                               



                         32  

                                                                                                                                                                       

provision"                    without "add[ing] 'missing terms' to the Constitution or . . . interpret[ing]  



                                                                                                                                                                                                     33  

                                                                                                                                                                                                           

                                                                                                                                                                                  

existing  constitutional  language  more  broadly  than  intended  by  .  .  .  the  voters." 



"Legislative history and the historical context, including events preceding ratification,  



                                                                   34  

                                    

help define the constitution." 



                                                                                                 

                               2.              The anti-dedication clause  



                                                                                                                                                                                          

                               Prior  to  the  1976  constitutional  amendment  the  anti-dedication  clause  



                                                                                                                                                                                         

stated:  "The proceeds of any state tax or license shall not be dedicated to any special  



                                35  

                                                                                                                                                                                  

purpose . . . ."                      Although a plain reading of "state tax or license" might have suggested  



                                                                                                                                                                                              

otherwise, a contemporaneous attorney general opinion gave the 1976 legislature good  



                                                                                                                                                            36  

                                                                                                                                                                  And in 1982 we  

reason to believe that "state tax or license" meant all state revenue. 



                31             (...continued)  



 171).  



                32             Id.  



                33             Id.  at 927.   



                34             Statev. Ketchikan GatewayBorough                                                   ,366P.3d 86,90                        (Alaska2016) (citing              



State v. Alex, 646 P.2d 203, 208 (Alaska 1982);                                                                 Hootch v. Alaska State-Operated Sch.   

Sys., 536 P.2d 793, 800, 804 (Alaska 1975)).  

                                                                                        



                35             Alaska Const. art. IX,  7 (amended 1976).  

                                                                                                                     



                36             See 1975 FORMAL  OP. A                                   TT'Y  GEN. 9, at 24 ("[I]t is our conclusion that the                                                     

                                                      

dedication of  any source of public revenue                                                             . . . is limited by the state Constitution to                                               

those existing when the Constitution was ratified or required for participation in federal                                                                                               

programs." (emphasis added)),                                            quoted in Alex                    , 646 P.2d at 210.             



                                                                                                -11-                                                                                         7194
  


----------------------- Page 12-----------------------

confirmed in                   State v. Alex                that the anti-dedication clause "prohibits the dedication of any                                                                       

source of revenue."                           37  



                               We  first  explained  in  Alex  how  convention  delegates  considered  "the  

                                                                                                                                                                                                

                                                                                                    38  We later expressed in Sonneman v. Hickel  

dedication of revenues" to be "a fiscal evil."                                                                                                                                              

                                                                                         



"that  the  reason  for  the  prohibition  [on  dedications]  is  to  preserve  control  of  and  

                                                                                                                                                                                                 

responsibility  for  state  spending  in  the  legislature  and  the  governor."39                                                                                                   "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."40                    And we explained more recently in State v. Ketchikan Gateway Borough  

                                                                                                                                                                                      



that the anti-dedication clause helps "govern the legislature's and the governor's 'joint  

                                                                                                                                                                                              

responsibility . . . to determine the State's spending priorities on an annual basis.' "41  

                                                                                                                                                                                                 



                37             646 P.2d at 210;                        see also Se. Alaska Conservation Council v. State                                                                       , 202   



P.3d 1162, 1170 (Alaska 2009) ("[T]he prohibition [on dedications] 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 State'                                                                                                        

to  ensure   that   placing   those   revenues   in   the   Permanent   Fund   did   not   violate   the  

constitution." (footnote omitted) (quoting Alaska Const. art. IX,  15) (citing Alaska                                                                                                    

Const. art. IX,  7)).                



                38             646 P.2d at 209 (quoting 6 PACC App. V at 111 (Dec. 16, 1955)).  

                                                                                                                                                                           



                39              836 P.2d 936, 938 (Alaska 1992).  

                                                                                                



                40             Id. at 938-39; see also id. at 939 ("They have to sell their viewpoint along  

                                                                                                                                                                                              

with everybody else." (quoting 4 PACC 2367 (Jan. 17, 1956) (comments of Delegate  

                                                                                                                                                                                      

Barrie White))).  

                 



                41             366 P.3d 86, 101 (Alaska 2016) (alteration in original) (quoting Simpson  

                                                                                                                                                                                       

v. Murkowski, 129 P.3d 435, 447 (Alaska 2006)); see also id. ("Through the dedicated  

                                                                                                                                                                                    

funds clause, the delegates sought to avoid the evils of earmarking, which the delegates  

                                                                                                                                                                                     

feared would 'curtail[] the exercise of budgetary controls and simply [would] amount[]  

                                                                                                                                                                                      

                                                                                                                                                                           (continued...)  



                                                                                                 -12-                                                                                          7194
  


----------------------- Page 13-----------------------

                      We   repeat  our   prior   statements,   and   those   from   the   constitutional  



convention, to emphasize the significance of the anti-dedication clause to the state's                                                



budgetary framework.                     No party suggests that Permanent Fund income is not state                                       

              42   Our starting point must therefore be that the anti-dedication clause prohibits  

revenue.                                                                                                                           



the dedication of Permanent Fund income unless the 1976 constitutional amendment  

                                                                                                                              



exempted not only the dedication of enumerated revenues into the Permanent Fund, but  

                                                                                                                                            



also  -  as  Wielechowski  argues  -  the  legislature's  potential  future,  unspecified  

                                                                                                                             



dedication of revenues out of the Permanent Fund.  

                                                                            



                      3.         Wielechowski's arguments  

                                                               



                      Wielechowski contends that the 1976 constitutional amendment creating  

                                                                                                                                    



and dedicating revenues to the Permanent Fund also created legislative authority to  

                                                                                                                                              



dedicate Permanent Fund income. He first contends that the entire article IX, section 15  

                                                                                                                                             



clause, including the second sentence, is explicitly exempt from the anti-dedication  

                                                                                                                        

clause of article IX, section 7.43  He then relies on the second sentence's language that  

                                                                                                                           



"income from the [P]ermanent [F]und shall be deposited in the general fund  unless  

                                                                                                                                      

                                              44  He argues that the legislature is constitutionally permitted  

otherwise provided by law." 

                                                                                                                                  



           41         (...continued)  



                                                                                                                                         

to an abdication of legislative responsibility.' " (alterations in original) (quoting Alex ,  

                                 

646 P.2d at 209)).  



           42         See Alaska Const. art. IX,  15 ("All income from the [P]ermanent [F]und  

                                                                                                                                      

shall be deposited in the general fund unless otherwise provided by law.").  

                                                                                                                   



           43         Alaska Const. art. IX,  7 ("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  

                                                                                                                                       

. . . ." (emphasis added)).  

                             



           44         Alaska Const. art. IX,  15 (emphasis added).  

                                                                                       



                                                                     -13-                                                               7194
  


----------------------- Page 14-----------------------

to dedicate Permanent Fund income to the dividend fund by statute, because that would                                                                                                                             



be "provided by law."                                       



                                   Wielechowski   contends   that   the   framers   of   the   1976   constitutional  



amendment intended to provide future legislatures "maximum flexibility" in using the                                                                                                                                      

                                                                                                                                                                         45     Wielechowski also  

Permanent Fund's income, including the dedication of earnings.                                                                                                                                                          

contends that the ballot language46 and newspaper articles emphasizing future legislative  

                                                                                                                                                                                                        

flexibility bolster his position.47                                                  The State disagrees, arguing that the plain language of  

                                                                                                                                                                                                                             



article IX, section 15 dedicates only specific revenues into the Permanent Fund principal,  

                                                                                                                                                                                                          



and that no history concerning either the purpose of the amendment's framers or the  

                                                                                                                                                                                                                          



                  45               See   1976 House Journal 685 ("The purpose of the language in the last                                                                                                                



sentence of the resolution is to give future legislatures the maximum flexibility in using                                                                                                                          

the fund's earnings - ranging from adding to fund principal to paying out a dividend  

                                                                                                                                                                                                                          

to resident Alaskans."); see also Hearing on H.J.R. 39 Before the H. Fin. Comm., 9th  

                                                                                                                                                                                                             

Leg., 2d Sess. 02:53:30-02:54:37 (Feb. 21, 1976) (hereinafter Testimony of Sterling  

                                                                                                                                                         

Gallagher),http://www.akleg.gov/ftr/archives/1976/HFIN/H76R31-HFIN-760000.mp3  

                                                                                                                                                                                                                            

(testimony of Sterling Gallagher, Comm'r of Revenue) (discussing the possibility of  

                                                                                                                                                                                                                

using Permanent Fund income as "a pledge or dedication . . . for securities of the state");  

                                                                                                                                                                                 

Hearing on H.J.R. 39 Before the H. Fin. Comm., 9th Leg., 2d Sess. 00:02:41-00:03:56  

                                                                                                                                                              

(Feb.  21,  1976)  (hereinafter  Testimony  of  Jim  Rhode),  http://www.akleg.gov/ftr/  

                                                                                                                                                                                                      

archives/1976/HFIN/H76R32-HFIN-760000.mp3 (testimony ofJimRhode) (discussing  

                                                                                                                                                                                                              

how Permanent Fund income "could be pledged in the bond covenants for the security  

                                                                                                     

of state agencies or general obligation bonds").  



                  46               DIV.   OF   ELECTIONS, S                                  AMPLE   GENERAL   ELECTION  BALLOT   (1976) ("The   



income from the fund would be deposited in the State's General Fund and be available                                                                                                                       

for appropriation for the State                                                unless law provided otherwise                                                    ." (emphasis added)).                                    



                  47               See   Susan   Andrews,  Lawmakers   Would   Shape   Permanent   Fund,  

                                                                                                                                                                                                                

ANCHORAGE  TIMES, Oct. 24, 1976, at A3 ("There are a number of possibilities for use                                                                                                                                      

of the earnings - and the legislature will decide those uses.");                                                                                                   Permanent Fund Raises                         

 Use Issue               , A     NCHORAGE  DAILY  NEWS, Oct. 22, 1976 ("There have been many proposals                                                                                                   

for possible fund uses.").                                          



                                                                                                            -14-                                                                                                     7194
  


----------------------- Page 15-----------------------

information provided to the voters shows an intent to allow the legislature to dedicate                                                                                                                                              



Permanent Fund income.                                                      



                                       We   agree   with   the   State.     We   conclude   that   the   1976   constitutional  



amendment does not allow the dedication of Permanent Fund income.                                                                                                                                                  We reach this                   



conclusion based on the plain language of the anti-dedication and Permanent Fund                                                                                                                                                              



clauses of the Alaska Constitution; contrary to Wielechowski's arguments, our review                                                                                                                                                      



of the record concerning the framers' intent and voters' understanding only bolsters our                                                                                                                                                            



conclusion. We address the latter two issues first solely for historical perspective before                                                                                                                                                



addressing the plain language analysis.                                                  



                                                           a.                 Framers' intent   



                                       A permanent fund was proposed by then-Governor Jay Hammond to save                                                                                                                                        

for futuregenerations                                          apercentageofrevenuegenerated fromnonrenewableresources;                                                                                                                                  48  



                                                                                                                                                                                                                                                         49  

                                                                                                                                                                                                                                                               

he also sought to curb wasteful government spending of expected increased revenues. 



In the letter transmitting his proposal, Governor Hammond explained:  

                                                                                                                                                                                



                                                           I       have                introduced                           this             resolution                         proposing                           a  

                                                                                                                                                                                                                

                                       constitutional amendment because I believe strongly that the  

                                                                                                                                                                                                              

                                       revenues from our non-renewable resources belong to future  

                                                                                                                                                                                                      

                                       generations of Alaskans as well as ourselves.  A permanent  

                                                                                                                                                                               

                                        fund as I have proposed will set aside a modest portion of the  

                                                                                                                                                                                                              

                                       proceeds   from   the   exploitation   of   our   non-renewable  

                                                                                                                                                                        

                                       resources for investment in our futurewhileleaving sufficient  

                                                                                                                                                                                            

                                       revenues for our present needs.[50]  

                                                                                                                                            



                    48                  1976 House Journal 39-40.                                                        



                    49                 See Williams v. Zobel, 619 P.2d 448, 453 (Alaska 1980), rev'd on other  

                                                                                                                                                                                                                                              

grounds, Zobel v. Williams, 457 U.S. 55 (1982).  

                                                                                                                        



                    50                  1976 House Journal 40.  

                                                                                                    



                                                                                                                         -15-                                                                                                                  7194
  


----------------------- Page 16-----------------------

Although Governor Hammond's permanent fund language was subsequently modified                                                                                                                                                                                                                    



by   the   legislature,   the   overall   structure   of   his  proposed   amendment   to   the   Alaska  



Constitution   remained   the   same:     (1)   a   percentage   of   revenue   from   nonrenewable  



resources would be placed into a permanent fund; (2) the permanent fund principal could                                                                                                                                                                                                                       



be used only for income-producing investments; and (3) the legislature would have                                                                                                                                                                                                                              

access to the permanent fund income.                                                                                                         51  



                                                  The House amended the permanent fund clause's treatment of income to  

                                                                                                                                                                                                                                                                                                                           



include  an  alternative  to  mandatory  general  fund  deposits:                                                                                                                                                                            "All  income  from  the  

                                                                                                                                                                                                                                                                                                                     



permanent fund shall be deposited in the general fund  unless otherwise provided by  

                                                                                                                                                                                                                                                                                                                        

law."52                        Although there was some discussion about how the phrase "unless otherwise  

                                                                                                                                                                                                                                                              

provided by law" might allow income from the fund to be used as security for bonds,53  

                                                                                                                                                                                                                                                                                                   



                         51                       Compare  1976 HouseJoint                                                                             Resolution No.                                          39(S.S.H.J.R. 39) (substituting                                      



in H.J.R. 39 by request of the governor:                                                                                                                      "Ten per cent of all mineral lease rentals,                                                                                             

royalties,   royalty   sale   proceeds,   revenue   sharing   payments,   bonuses,   and   mineral  

production taxes received by the state shall be placed in a permanent fund, the principal                                                                                                                                                                                                        

of which shall be used only for income investments.                                                                                                                                                    The legislature may appropriate                                                 

additional amounts to the permanent fund which shall become a part of the principal of                                                                                                                                                                                                                                    

the fund.                          All income from the permanent fund shall be deposited in the general fund."),                                                                                                                                                                                     

with   Alaska Const. art. IX,  15 ("At least twenty-five per cent of all mineral lease                                                                                                                                                                                                                        

rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and                                                                                                                                                                                                                             

bonuses received by the State shall be placed in a permanent fund, the principal of which                                                                                                                                                                                                                   

 shall be used only for those income-producing investments specifically designated by                                                                                                                                                                                                                                    

law as eligible for permanent fund investments.                                                                                                                                      All income from the permanent fund                                                                                          

 shall be deposited in the general fund unless otherwise provided by law.").                                                                                                                                                                                 



                         52                        1976 House Joint Resolution No. 39 (C.S.S.S. H.J.R. am 39) (emphasis  

                                                                                                                                                                                                                                                                                           

added).  

                              



                         53                       See, e.g., Testimony of Sterling Gallagher, supra note 45 (discussing how  

                                                                                                                                                                                                                                                                                                                  

dedicating income from permanent fund "could be a great enhancement" as security for  

                                                                                                                                                                                                                                                                                                                       

"debt service"); Testimony of JimRhode, supra note 45 (opining that "the phrase 'unless  

                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                 (continued...)  



                                                                                                                                                          -16-                                                                                                                                                  7194
  


----------------------- Page 17-----------------------

a joint report from the House Judiciary and Finance Committee chairs stated only that                                                                



"[t]he purpose of the language in the last sentence of the resolution is to give future                                                                                 



legislatures themaximumflexibilityin usingtheFund'searnings -ranging                                                                                       fromadding   

                                                                                                                                             54     After that joint  

to Fund principal to paying out a dividend to resident Alaskans."                                                                                                         



report,  language  was  added  in  the  Senate  State  Affairs  Committee  specifically  

                                                                                                                                                           

referencing dedications - to the fund's principal, but not of the fund's income55 - but  

                                                                                                                                                                              

the language was later removed in the next committee of referral.56  

                                                                                                                        



                            There was virtually no discussion by the 1976 constitutional amendment's  

                                                                                                                                                         



framers about dedicating Permanent Fund income, and they had reason to know that the  

                                                                                                                                                                              



fund's  income  would  be  state  revenue  subject  to  the  constitution's  anti-dedication  

                                                                                                                                                    

clause.57   The only relevant discussions were by non-legislators - primarily concerning  

                                                                                                                                                              



the possibility of using fund income as security for bonds - and Wielechowski points  

                                                                                                                                                                        



              53            (...continued)  



                                                                                                                                                                     

otherwise directed by the legislature' . . . would be a sufficient legal peg so that income  

                                                                                                                                                                           

from the permanent fund could be pledged in the bond covenants for the security of state  

                                                                 

agencies or general obligation bonds").  



              54            1976 House Journal 685.  

                                                                        



              55              1976 House Joint Resolution No. 39 (S.C.S. C.S.S.S.H.J.R. 39) ("The  

                                                                                                                                                                        

legislature may dedicate additional proceeds both as to source and percentage which  

                                                                                                                                                                       

shall become a part of the principal of the fund.   Any additional dedication may be  

                                                                                                                                                                               

revoked by the legislature, but revocation may not make the principal amount in the  

                                                                                                                                                                              

permanent fund subject to appropriation.  Other income from the permanent fund shall  

                                                                                                                                                                           

be deposited in the general fund." (emphasis added)).  

                                                                                                                 



              56             See 1976 House Joint Resolution No. 39 (S.C.S. C.S.S.S.H.J.R. Res. 39).  

                                                                                                                                                                                      



              57            See 1975 FORMAL  OP. A                             TT'Y  GEN. 9, at 24 ("[I]t is our conclusion that the                                          

                                                 

dedication of any source of public revenue . . . is limited by the state Constitution to                                                                                        

those existing when the Constitution was ratified or required for participation in federal                                                                            

programs.").  



                                                                                      -17-                                                                                7194
  


----------------------- Page 18-----------------------

to no statement by any legislator during any legislative hearing indicating an intent to                                                                                                                                                                                                       



give the legislature broad authority to dedicate Permanent Fund income. There was little                                                                                                                                                                                                                                                                                       



evident recognition, let alone the robust discussion that would be expected, for what                                                                                                                                                                                                                                                                                       



Wielechowski   now   posits   was   a   sweeping   constitutional   change   and  a   consequent  



 sweeping change to the state's budgetary framework.                                                                                                                                                                                          We conclude there is insufficient                                                                 



legislative history to suggest that the framers of the 1976 constitutional amendment                                                                                                                                                                                                                                                         



intended to allow dedication of Permanent Fund income.                                                                                                                                                                    



                                                                                          b.                           Voters' intent   



                                                            The   voters   approving    the   1976   constitutional   amendment   certainly  



understood it would restructure the Alaska Constitution to allow the diversion of state                                                                                                                                                                                                                              



revenues into the Permanent Fund, which then would generate income the legislature                                                                                                                                                                                                                                                                 



could use in future years.                                                                                           But looking to "any published arguments . . . to determine                                                                                                                                                                      

what meaning voters may have attached to the [proposed constitutional amendment],"                                                                                                                                                                                                                                                                                                           58  



we see no evidence that voters would have understood the amendment to also permit  

                                                                                                                                                                                                                                                                                                                                                                     



future legislative dedications of Permanent Fund income. The ballot initiative language  

                                                                                                                                                                                                                                                                                                                                                          

did not expressly say the fund's income could be dedicated.59                                                                                                                                                                                                                         A newspaper column by  

                                                                                                                                                                                                                                                                                                                                                                                        



                              58                            See Alaskans for a Common Language, Inc. v. Kritz                                                                                                                                                                                             , 170 P.3d 183, 193                                                    



(Alaska 2007) (citing                                                                             Falcon v. Alaska Pub. Offices Comm'n                                                                                                                                                  , 570 P.2d 469, 472 n.6                                                                     

(Alaska 1977));                                                        see also id.                                       at 192 ("While we often look to legislative intent to construe                                                                                                                                                                     

the   meaning   of   ambiguous   statutes,   we   take   a   slightly   different   approach   when  

interpreting initiatives enacted by the voters." (citing                                                                                                                                                                                      Falcon, 570 P.2d at 472 n.6)).                                                                                  



                              59                            SAMPLE GENERAL ELECTION  BALLOT,  supra  note 46 ("Thisproposal would                                                                                                                                                                                                                                       



amend Article IX, Section 7 (Dedicated Funds) and add a new section to Article IX,                                                                                                                                                                                                                                                                                                 

 Section 15 (Alaska Permanent Fund) of the Alaska Constitution.                                                                                                                                                                                                                                        It would establish a                                                                  

constitutional permanent fund into which at least 25 percent of all mineral lease rentals,                                                                                                                                                                                                                                                                        

royalties, royalty sale proceeds, federal mineral revenue sharing payment[s] and bonuses                                                                                                                                                                                                                                                                       

received by the State would be paid.                                                                                                                                 The principal of the fund would be used only for                                                                                                                                                                

income-producing investments permitted by law.                                                                                                                                                                                The income from the fund would be                                                                                                                         

                                                                                                                                                                                                                                                                                                                                        (continued...)  



                                                                                                                                                                                         -18-                                                                                                                                                                                7194
  


----------------------- Page 19-----------------------

Governor Hammond advocating for the amendment's passage days before the election                                                                                                                                                                            

gave no indication the fund's income could be dedicated.                                                                                                                                60  The sponsor statement for  



                                                                                                                                                                                                                         61        Published news  

                                                                                                                                                                                                                                                                    

                                                                                                                                                                                       

the amendment did not say the fund's income could be dedicated. 



articles did not say the fund's income could be dedicated, and often they suggested the  

                                                                                                                                                                                                                                                                           

opposite.62                            Wielechowski points to nothing explicitly asking voters to pass the 1976  

                                                                                                                                                                                                                                                                     



                      59                   (...continued)  



                                                                                                                                                                                                                                                                     

deposited in the State's General Fund and be available for appropriation for the State  

                                                                                                              

unless law provided otherwise.").  



                      60                   Jay  Hammond,  Opinion,  The  Governor's  Point  of  View,  ANCHORAGE  

                                                                                                                                                                                                                                           

TIMES, Oct. 27, 1976, at 6 ("[M]ake no mistake, it is for the people, not the governor, nor  

                                                                                                                                                                                                                                                                           

the legislature singly to determine how your savings are invested and the interest used.");  

                                                                                                                                                                                                                                                             

see  id.  ("The  income  from  the  Permanent  Fund  will  be  available  for  general  

                                                                                                                                                                                                                                                           

appropriation by the legislature, but the principal of the fund may not be touched.  It  

                                                                                                                                                                                                                                                                               

could only be removed from the fund by another constitutional amendment.").  

                                                                                                                                                                                                                                                              



                      61                   ALASKA    STATE   CHAMBER   OF   COMMERCE,   STATEMENT   IN   FAVOR  OF  



PROPOSITION NO. 2:  ALASKANS SHOULD STRONGLY SUPPORT THE ESTABLISHMENT OF  

                                                                                                                                                                                                                       

A "PERMANENT FUND" (1976) ("While it is to be hoped that such a fund may contribute                                                                                                                                                                  

                                                    

to cutting cost or, at least, holding the line on state spending, its major value would be                                               

that it would require our elected officials to pause, reflect and research any proposal                                                                                                                                                                  

beforeblindly                                 authorizing expenditureoftaxpayers'                                                                                    monies. Thiswould                                               provideneeded   

time for the press and the public to also be aware of the pending project and its merit,                                                                                                                                                                          

instead of being out of public view and hidden in the spending pattern of normal day-to-                                                                                                                                                                      

day operations. Projects invested in with sources from the 'Permanent Fund' could help                                                                                                                                                                                  

broaden Alaska's narrow based economy and bring more stability to our State.").                                                                                                                                                                                        



                      62                   See 2 Plans, 1 Fund, ANCHORAGE  DAILY  NEWS, Apr. 21, 1976 ("Exactly                                                                                                                                       

                                                                                                               

how the permanent fund is set up would be the job of future legislatures.                                                                                                                                                                    Our elected  

representatives, by law, would prescribe how the money is to be invested.                                                                                                                                                                           That may   

demand a different application of the fund from one year to the next, but flexibility to                                                                                                                                                                                       

meet changing demands is guaranteed by current legislation. Likewise,                                                                                                                                                           futurelegislators   

would be able to decide what to do with the considerable earnings of the fund.                                                                                                                                                                            Perhaps  

that extra dividend will be needed sometimes for general operating expense; at other                                                                                                                                                                                

times, perhaps the dividends could be simply reinvested in the fund itself.                                                                                                                                                                The freedom   

                                                                                                                                                                                                                                           (continued...)  



                                                                                                                                    -19-                                                                                                                              7194
  


----------------------- Page 20-----------------------

constitutionalamendmentbecausetheamendment would permit,                                                                       even in part, legislative   



dedication of the fund's income.                 



                           We are not persuaded that newspaper language Wielechowski points to                                                                          



shows voters understood the 1976 constitutional amendment would give the legislature                                                                   

                                                                                               63  nothing in that language necessarily  

the ability to dedicate Permanent Fund income;                                                                                                        



points to dedication of revenues rather than appropriation in the normal course.  And as  

                                                                                                                                                                        



with his argument about the framers' intent, Wielechowski's ballot summary argument  

                                                                                                                                                         



is  based  on  implicit  suggestion  and  inferred  intent,  gleaned  here  from  the  ballot  

                                                                                                                                                               



summary's statement that Permanent Fund income would be deposited in the general  

                                                                                                                                                             

fund and "available for appropriation . . . unless law provided otherwise."64                                                                            It is a far  

                                                                                                                                                                      



leap to conclude voters understood and intended that phrase to give the legislature broad  

                                                                                                                                                                 



power to dedicate Permanent Fund income for any purpose and any duration with little  

                                                                                                                                                                   



restriction.  Surely there would have been some public discourse about a grant of such  

                                                                                                                                                                   



             62            (...continued)  



                                                                                                                                                                   

to choose must be built into the fund."); Permanent Fund Raises Use Issue, supra note  

                                                                                                                                                         

47 ("A frequent argument against the fund comes from opponents who say dedicated  

                                                                                                                                                     

funds are insensitive to future, unpredictable needs.  What if there is some unexpected  

                                                                                                                                                                     

need in the future, they ask, and much of the state's assets are locked up in the fund and  

                                                                                                                                                         

can't be reached for solutions? To that complaint, proponents answer that the flexibility  

                                                                                                                                                                     

of allowing future legislatures to decide on precise uses will prevent the 'locked up'  

                                   

circumstance.").  



             63           See Andrews, supra note 47, at A3 ("There are a number of possibilities for  

                                                                                                                                                                      

use of the earnings - and the legislature will decide those uses."); Hammond, supra  

                                                                                                                                                                

note  60,  at  6  ("[M]ake  no  mistake,  it  is  for  the  people,  not  the  governor,  nor  the  

                                                                                                                                                                     

legislature singly to determine how your savings are invested and the interest used.");  

                                                                                                                                                            

Permanent Fund Raises Use Issue, supra note 47 ("There have been many proposals for  

                                                                                                                                                                      

possible fund uses.  They range from paying direct dividends to Alaskans to using the  

                                                                                                                                                                      

money to underwrite such vast projects as hydroelectric dams.").  

                                                                                                                 



             64            SAMPLE  GENERAL  ELECTION  BALLOT,  supra  note 46.                                                        



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----------------------- Page 21-----------------------

 sweeping legislative authority; its absence, like the absence of discussion in the 1976                                                                                                                 



legislature, is telling.           



                                                  c.              Plain meaning   



                                 The second sentence of article IX, section 15 states:                                                                           "All income from the                         



permanent fund shall be deposited in the general fund unless otherwise provided by                                                                                                                             



              65  

law."                                                                                                                                                                                                        

                      The phrase "unless otherwise provided by law" does not plainly allow the  



                                                                                                                                                                                                                

legislature to dedicate Permanent Fund income; the phrase appears to simply provide an  



                                                                                                                                                                                                               

alternative to depositing the income into the general fund. And this is precisely what the  



                                                                                                                                                                                                  

legislature has done by creating the unique earnings reserve:  (1) an account existing  



                                                                                                                                                                                                     

outside of the general fund; (2) appropriable by the legislature; (3) managed by APFC;  



                                                                                                                                                                                            

(4) invested in income-producing assets; and (5) as the State argues, treated differently  

                                                                                                                                            66     The second sentence of the  

                                                                                                                                                                                                              

                                                                                                            

than other state revenues because of public expectations. 



                 65              Alaska Const. art. IX,  15.                               



                 66              See  AS 37.13.145(a);                                 Hickel v. Cowper                           , 874 P.2d 922, 934 (Alaska 1994)                                    



(explaining how earnings reserve works).  

                                                                                     



                                 In  Hickel  we considered, on an expedited basis, what funds were "available                                                                                

for   appropriation"   within   the   meaning   of   article   IX,   section   17(b)   of   the   Alaska  

Constitution, concerning the Constitutional Budget Reserve.                                                                                         Hickel, 874 P.2d                         at 925-26.                 

By defining and identifying appropriable state funds we helped determine when the  

                                                                                                                                                                                              

legislature could "withdraw from the budget reserve fund by a simple majority vote."                                                                                                                                    

Id. at 923.  And we held that the balance of the earnings reserve contains appropriable                      

funds within the meaning of article IX, section 17 "because appropriations may be made  

                                                                                                                                                                                                         

from it and it is not subject to expenditure without legislative action."  Id. at 935.  

                                                                                                                                                                                             



                                 In deciding that the balance of the earnings reserve was "available for                                                                                                      

appropriation"   we   also   looked   at   the   dividend   transfer   provisions.     See   id.   at   934  

(discussing AS 37.13.145(b)).  Apparently looking solely to the transfer statute and not  

                                                                                                                                                                                                              

appreciating that the legislature had been appropriating transfers throughout the years,  

                                                                                                                                                                                                       

we stated that the transfers from the earnings reserve to the dividend fund occurred  

                                                                                                                                                                                  

                                                                                                                                                                                     (continued...)  



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----------------------- Page 22-----------------------

Permanent Fund clause permits the creation and use of the earnings reserve for deposit                                                                                      



of the fund's income pending appropriation; it does not give the legislature the authority                                                                              



to dedicate that income.           



                             Nor can the plain meaning of the exception added to the anti-dedication                                                       



clausebeunderstood                           to grant thelegislature                         such broad authority. It     exempts dedications  

                                                                                                                                          67     "Provided" here is  

"as  provided in                     section 15," not as                        permitted by                   that section.                                                           

synonymous with "supply, furnish."68                                                  A dedication is quite explicitly supplied in the  

                                                                                                                                                                                     



first sentence of article IX, section 15:  "At least twenty-five per cent of all [specific  

                                                                                                                                                                        

mineral revenues] . . .  shall be placed  in a [P]ermanent [F]und."69                                                                                     Even the most  

                                                                                                                                                                                



expansivereadingoftheclause'ssecond sentence -"unless otherwiseprovided by law"  

                                                                                                                                                                                  



- could be understood only to permit  further dedications, not to provide  them.  

                                                                                                                                                                



                             Interpreting the 1976 constitutional amendment to allow dedications of  

                                                                                                                                                                                      



Permanent Fund income would create an anti-dedication clause exception that would  

                                                                                                                                                                             



swallow the rule.  We remain "unwilling to add 'missing terms' to the Constitution or  

                                                                                                



to interpret existing constitutional language more broadly than intended by . . . the  

                                                                                                                                                                                



               66            (...continued)  



                                                                                                                                                                                   

"automatically."   Id.  ("A percentage of the money in the [earnings] reserve . . . is  

                                                                                                                                                                             

automatically transferred to the dividend fund at the end of each fiscal year." (citing  

                                                                                                                                                                                        

AS  37.13.145(b))).                            But  we  were  not  asked  to  decide  whether  the  transfer  was  a  

                                                                                                                                                                        

constitutionally permissible dedication of Permanent Fund income, and our previous  

                                                                                                                                                                                

characterization of the action as "automatic[]" does not control here. Our decision today  

                                                                                                                                                                                             

reinforces our holdingin Hickel that the earnings reserve "is availablefor appropriation."  

Id. ;  see  also  id.  at  935.  



               67            Alaska Const. art. IX,  7 (emphasis added).  

                                                                                                             



               68            WEBSTER 'S  THIRD  NEW  INTERNATIONAL  DICTIONARY   1827  (1966).  



               69            Alaska  Const.  art.  IX,     15  (emphasis  added).  



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----------------------- Page 23-----------------------

             70  

voters."           Without   an   explicit   exception   to   the   anti-dedication   clause,   we   will   not  



                                                                                                                                         71  

"abstrusely"interpret the Permanent Fund clauseto permit the dedication of its income.                                                        



Whether any prior legislature or administration treated the dividend programas if it were  

                                                                                                                                     



a dedication has no bearing on our analysis; what matters is what the Alaska Constitution  

                                                                                                                         



        72  

says.       



                      The plain language of the 1976 constitutional amendment creating the  

                                                                                                                        



Permanent Fund does not exempt Permanent Fund income from the constraints of the  

                                                                                                                                       

anti-dedication  clause.                 We  affirm  the  superior  court  on  this  alternative  ground,73  

                                                                                                                             



although the conclusion that a revenue transfer from the earnings reserve to the dividend  

                                                                                                                               



fund requires an appropriation and must survive a gubernatorial veto flows naturally  

                                                                                                                              



from our decision.   Absent another constitutional amendment, the Permanent Fund  

                                                                                                                                    



dividend  program  must  compete  for  annual  legislative  funding  just  as  other  state  

                                                                                                                                    



                74  

programs. 



           70        Hickel,  874  P.2d  at  927.  



           71        Id.  at  926.  



           72         See  id.  at  925  &  n.7.  



           73         See   Seybert   v.  Alsworth ,   367  P.3d   32,   36   (Alaska   2016)   ("We   review  



summary  judgment  rulings  de  novo  and  may  affirm   summary judgment  on  any  basis  

appearing  in  the  record."  (quoting  Angleton  v.  Cox,  238  P.3d  610,  614  (Alaska  2010))).   

We  therefore  do  not  decide  and  express  no  opinion  on  the  specific  ground  ruled  upon  by  

the  superior  court.   



           74         See  Sonneman  v. Hickel,  836 P.2d  936,  938-39  (Alaska  1992) ("[T]he  

                                                                                                                                

constitutional framers believed that the legislature would be required to decide funding  

                                                                                                                                

priorities annually on the merits of the various proposals presented.").  

                                                                                             



                                                                   -23-                                                             7194
  


----------------------- Page 24-----------------------

                  B.	               The Governor Validly Exercised Veto Authority When Reducing The                                                                                                                           

                                    Amount Of Funds For Transfer.                                     



                                    Wielechowski   also   challenges   the   manner  in  which   Governor   Walker  



exercised his veto power, arguing                                                                that  he improperly "struck descriptive language,                                                           



resultingin                    an [unconstitutional]infringementon                                                                legislativepower." The                                         State contends  



that because Governor Walker did not alter the appropriation's purpose, he properly                                                                                                                             



exercised his veto authority.                     



                                    WeconcludethatGovernor Walker validly                                                                            exercisedhisconstitutionalveto                                           



authority when reducing the transfer amount from the earnings reserve to the dividend                                                                                                                           



fund.     After   the   governor's   veto   struck   existing   language   and   inserted  a   new  



appropriation amount, the legislature's transfer authorization stated:                                                                                               



                                    Theamount authorized under AS37.13.145(b) for transfer by  

                                                                                                                                                                                               

                                    the Alaska Permanent Fund Corporation on June 30, 2016,  

                                                                                                                                                                                                       

                                                                                                                                                                   

                                    estimated to be $ 1,362,000,000, 695,650,000 is appropriated  

                                                                                                                                                                                           

                                    from the  earnings  reserve  account  (AS  37.13.145)  to  the  

                                                                                                                                                                                            

                                    dividend   fund   (AS   43.23.045(a))   for   the   payment   of  

                                                                                                                                                                                        

                                    permanent   fund   dividends   and   for   administrative   and  

                                                                                                                                                                                              [75]  

                                                                                                                                                                                                       

                                    associated costs for the fiscal year ending June 30, 2017. 



                                    In Alaska Legislative Council v. Knowles we held that the governor has no  

                                                                                                                                                                                                                                  

authority to strike descriptive language in appropriation bills.76                                                                                                         Although the governor  

                                                                                                                                                                                                                

has authority to "strike or reduce" "a sum of money dedicated to a particular purpose,"77  

                                                                                                                                                                                                           



the governor does not have authority to "distort the legislative intent, and in effect create  

                                                                                                                                                                                                                         



legislation inconsistent with that enacted . . . by the careful striking of words, phrases,  

                                                                             



                  75                Ch. 3,  10, 4SSLA 2016 (as amended).                                          



                  76                21 P.3d 367, 371-75 (Alaska 2001).                                             



                  77               Id.  at 371;                 see  Alaska Const. art. II,  15.                                       



                                                                                                               -24-	                                                                                                       7194
  


----------------------- Page 25-----------------------

                                             78  

clauses or sentences."                            Stated differently, "[t]he governor can delete and take away, but                                                            



the constitution does not give the governor power to add to or divert                                                                         for other purposes     

the appropriations enacted by the legislature."                                                  79  



                                                                                                                                                                   

                            Governor Walker properly vetoed a portion of the transfer to the dividend  



                                                                                                                                                                       

fund by striking some language from the 2016 appropriations bill.  Unlike the Alaska  



                                                                                                                                                                               

Legislative Council  governor's attempt to veto language placing  restrictions on his  

                    80 Governor Walker struck only languageconcerningthelegislature'sestimated  

spending,                                                                                                                                                          



2016 transfer amount.   In doing so Governor Walker did not alter the legislature's  

                                                                                                                                                           



purpose; the appropriation bill still stated that the transfer was "for the payment of  

                                                                                                                                                                                 



permanent fund dividends and for administrative and associated costs for the fiscal year  

                                                                                                                                                                             

ending June 30, 2017."81  

                                                      



                            Wielechowski  argues  that  the  governor  had  no  authority  to  strike  the  

                                                                                                                                                                              



"descriptive" reference to AS 37.13.145(b) because he effectively vetoed a statute.  But  

                                                                                                                                                                              

                                                                                                                          82   In Simpson we concluded  

we addressed a similar argument in Simpson v. Murkowski.                                                                                                        

                                                                                                   



that the governor had constitutional authority to veto an appropriation for longevity  

                                                                                                                                                                 



              78            Alaska Legislative Council                               , 21 P.3d at 373 (quoting                            State ex rel. Sego v.                   



Kirkpatrick, 524 P.2d 975, 981 (N.M. 1974)) (citing                                                          Rush v. Ray              , 362 N.W.2d 479, 482                   

(Iowa 1985);                 Welden v. Ray                 , 229 N.W.2d 706, 713 (Iowa 1975)).                            



              79            Id. at 371 (emphasis added).  

                                                                         



              80            See   id.            at   370-71   (indicating   governor   struck   language   making  

                                                                                                                                                                   

appropriation contingent on a salary cap for "employees . . . located outside Alaska"  

                                                                                                                                                                    

(quoting ch. 98,  6, SLA 1997; ch. 100,  47, 70, SLA 1997)).  

                                                                                                                         



              81            Ch. 3,  10, 4SSLA 2016 (as amended).  

                                                                                          



              82             129 P.3d 435, 446-47 (Alaska 2006).  

                                                                                             



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----------------------- Page 26-----------------------

                                                                                                                                                                                                                                                                                                                                                                                  83  

bonus payments even though a statute mandated the payments.                                                                                                                                                                                                                                                                                                                                  Governor Walker   



likewise   validly   exercised   his   veto  authority   to   reduce   an   appropriation   despite   a  



 seemingly mandatory statute.                                                                                                  



                                                                            Because: (1) Governor Walker struck only language related to the amount                                                                                                                                                                                                                                                                                                            



 of funds to be transferred; (2) the language in the appropriation bill post-veto would                                                                                                                                                                                                                                                                                                                                                                             



make less sense if only the number had been struck and reduced; and (3) language about                                                                                                                                                                                                                                                                                                                                                                                    



the transfer's purpose remained, we conclude that Governor Walker properly exercised                                                                                                                                                                                                                                                                                                                                                               



his veto authority.                            



V.                                    CONCLUSION  



                                                                            Because the plain language of article IX, sections 7 and 15 does not permit                                                                                                                                                                                                                                                                                                             



the dedication of Permanent Fund income, and because Governor Walker                                                                                                                                                                                                                                                                                                                                                                                      properly  



 exercised his veto authority when reducing the legislatively authorized transfer from the                                                                                                                                                                                                                                                                                                                                                                                              



 earnings reserve to the dividend fund, we AFFIRM the superior court's decision in favor                                                                                                                                                                                                                                                                                                                                                                                   



 of the State of Alaska and the Alaska Permanent Fund Corporation.                                                                                                                                                                                                                                                    



                                      83                                   Id.  



                                                                                                                                                                                                                                          -26-                                                                                                                                                                                                                                7194  

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