State v. Vote Yes for Alaska's Fair Share, 010821 AKSC, S-17818

Docket NºS-17818
Opinion JudgeWINFREE, JUSTICE.
Party NameSTATE OF ALASKA, OFFICE OF LIEUTENANT GOVERNOR, DIVISION OF ELECTIONS, and KEVIN MEYER, in an official capacity. Appellants, v. VOTE YES FOR ALASKA'S FAIR SHARE, Appellee.
AttorneyJessica M. Alloway, Assistant Attorney General, Anchorage, and Kevin G. Clarkson, Attorney General, Juneau, for Appellants. Robin O. Brena and Jack S. Wakeland, Brena, Bell & Walker, P.C., Anchorage, for Appellee.
Judge PanelBefore: Bolger, Chief Justice, Winfree, Maassen, and Carney, Justices, and Eastaugh, Senior Justice. [Borghesan, Justice, not participating.]
Case DateJanuary 08, 2021
CourtSupreme Court of Alaska

STATE OF ALASKA, OFFICE OF LIEUTENANT GOVERNOR, DIVISION OF ELECTIONS, and KEVIN MEYER, in an official capacity. Appellants,

v.

VOTE YES FOR ALASKA'S FAIR SHARE, Appellee.

No. S-17818

Supreme Court of Alaska

January 8, 2021

Appeal from the Superior Court of the State of Alaska No. 3AN-19-11106 CI, Third Judicial District, Anchorage, William F. Morse, Judge.

Jessica M. Alloway, Assistant Attorney General, Anchorage, and Kevin G. Clarkson, Attorney General, Juneau, for Appellants.

Robin O. Brena and Jack S. Wakeland, Brena, Bell & Walker, P.C., Anchorage, for Appellee.

Before: Bolger, Chief Justice, Winfree, Maassen, and Carney, Justices, and Eastaugh, Senior Justice. [*] [Borghesan, Justice, not participating.]

OPINION

WINFREE, JUSTICE.

I.

INTRODUCTION

When a law is proposed by initiative the lieutenant governor has a duty to prepare a true and impartial ballot summary to assist voters in making informed and intelligent decisions whether to approve the initiative. Sponsors of an initiative that would revise taxation for a defined set of oil producers filed a superior court complaint seeking declaratory judgment that the lieutenant governor's initiative ballot summary was not true and impartial. The superior court held that one ballot summary sentence included "partisan suasion" by weighing in on a disputed initiative provision's meaning, and the court ordered that sentence deleted. The lieutenant governor appealed, arguing that the disputed sentence was fair and impartial, but requesting that, if we affirmed the court's decision, we allow the lieutenant governor to insert a proposed replacement sentence. After expedited briefing and oral arguments, we issued a brief order affirming the court's ruling and judgment but allowing, at the lieutenant governor's discretion, the portion of the proposed replacement sentence to which the sponsors had no objection. We stated that "[a]n opinion explaining the reasoning for this order will follow at a later date." This opinion sets forth the reasons for our earlier order.

II.

FACTS AND PROCEEDINGS

A. Initiative

In August 2019 an initiative sponsor group, Vote Yes For Alaska's Fair Share, submitted to Lieutenant Governor Kevin Meyer a proposed initiative entitled "An Act relating to the oil and gas production tax, tax payments, and tax credits."1 Section 1 states: "Notwithstanding Any Other Statutory Provisions to the Contrary, the Oil and Gas Production Tax in AS 43.55 Shall be Amended as Follows." The initiative would revise Alaska's taxation scheme for a defined set of oil producers. Three of the initiative's nine sections have been central to this dispute, although this appeal's focus is on only the seventh section.

Section 2 institutes a new oil production tax, described in Sections 3 and 4, that will: only apply to oil produced from fields, units, and nonunitized reservoirs north of 68 degrees north latitude that have produced in excess of 40, 000 barrels of oil per day in the previous calendar year and in excess of 400, 000, 000 barrels of total cumulative oil production. For other oil production, the tax shall be unchanged by this Act.

Section 4(b) provides that for Section 2's defined oil production: An additional production tax shall be paid for each month for which the producer's average monthly Production Tax Value of taxable oil is equal to or more than $50. The additional tax shall be the difference between the average monthly Production Tax Value of a barrel of oil and $50, multiplied by the volume of taxable oil produced by the producer for the month, multiplied by 15 percent.

Lastly, Section 7, entitled "Public Records," provides: All filings and supporting information provided by each producer to the Department2 relating to the calculation and payment of the taxes set forth in Sections 3 and 4 shall be a matter of public record.

B. Attorney General Opinion

Lieutenant Governor Kevin Meyer referred the initiative application to Attorney General Kevin Clarkson for legal review.3 In October 2019 an Attorney General Opinion was issued regarding the proposed initiative bill.4 The Opinion asserted that "the language of the bill is difficult to interpret and raises a number of implementation and constitutional questions."5 The Opinion questioned several provisions, in particular noting that Section 7 "would establish that all filings and supporting information provided to the Department of Revenue relating to the tax calculations of sections 3 and 4 shall be a matter of public record."6 The Opinion explained that Section 7 "raise[s] concerns over the constitutional right to privacy" and that most relevant documents would "likely be protected from disclosure."7 The Opinion observed that "making the tax documents 'a matter of public record' simply means the Public Records Act applies" and that the "Department of Revenue would have to review all the requested records" for appropriate redactions.8 The Opinion further noted a "conflict with current law that actually makes it a crime to disclose confidential tax documents" and implementation difficulties for the Department of Revenue.[9]

The Opinion nonetheless concluded that "the proposed bill and application are in the proper form for an initiative and the application complies with the constitutional and statutory provisions governing the use of the initiative" and recommended that the lieutenant governor certify the initiative application.10 The Attorney General Opinion included a "ballot-ready petition title and summary."11

C. Initiative Sponsors' Complaint

A few days after the Attorney General Opinion issued, an initiative sponsor corresponded with the Department of Law about revising the proposed initiative summary. The Department of Law declined to consult with the sponsors, explaining that the Division of Elections "believe[d] the summary [met] the statutory requirements of neutrality and readability" and that "feedback on a summary before finalizing is in the context of ongoing litigation over certification."12

In November 2019 the sponsors filed a superior court complaint against the State of Alaska, the Office of the Lieutenant Governor, the Division of Elections, and Lieutenant Governor Kevin Meyer in an official capacity.13 The sponsors alleged that the initiative summary misrepresented: (1) Section 2 concerning the initiative's applicability; (2) Section 4(b) concerning an additional 15% tax on net production value at $50 per barrel or more; and (3) Section 7's tax information disclosure requirements.

The sponsors asserted in relevant part that Section 2 states that the initiative's provisions "apply to oil produced from fields, units, and nonunitized reservoirs north of 68 degrees north latitude that have produced in excess of 40, 000 barrels of oil per day in the previous calendar year and in excess of 400, 000, 000 barrels of total cumulative oil production" (sponsors' emphasis). But the lieutenant governor's summary included the following language: This act would change the oil and gas production tax for areas of the North Slope where the company produced more than 40, 000 barrels of oil per day in the prior year and/or more than 400 million barrels total. It is unclear whether the area has to meet both the 40, 000 and 400, 000 million thresholds or just one of them14 (Sponsors' emphasis.)

The sponsors also asserted that Section 1 of the initiative indicated "the Oil and Gas Production Tax in AS 43.55 shall be amended as follows" and that Section 4(b) described the initiative's tax on production tax value as an "additional production tax" to the existing 35% tax on production tax value.[15] (Emphasis in original.) But the lieutenant governor's summary stated: "[Section 4] does not designate what tax [it] is in addition to. The result is that this tax would likely always be less than" the existing 35% tax on production tax value. The sponsors alleged that the Section 4(b) summary suggests the initiative would impose only a single tax on production tax value, contrary to the initiative's actual terms imposing a tax in addition to the existing tax.

The sponsors further asserted that the summary misrepresented Section 7. They asserted that the Opinion correctly observed the initiative would supersede existing law by making certain defined producers' tax information "a matter of public record." Despite this observation, the summary stated: The Act would also make all tax documents relating to the calculation and payment of the new taxes a matter of public record. This would mean the documents would be reviewed under the normal Public Records Act process, and any information that needed to be withheld, for example for privacy or balance-of interests reasons, would be withheld. (Sponsors' emphasis.)

The sponsors alleged that "the Attorney General has interpreted this phrase to mean there would be no change to the status quo and the tax documents would continue to be confidential."

The sponsors began circulating the initiative petition for voter signatures with the disputed petition summary in place while seeking to correct the summary for use on a future general election ballot.16 They requested a declaratory judgment and an injunction requiring the State "to correct the prepared summary for the ballot with regard to the inaccuracies" detailed in the complaint without requiring recirculating the initiative petition.17

In March 2020 the lieutenant governor notified the sponsors that they had gathered sufficient petition signatures and that the initiative petition was properly filed.[18]The lieutenant governor scheduled the initiative to appear on the November general election ballot.19 The notice included a revised ballot summary, addressing the...

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