Appeal from the Superior Court of the State of Alaska, Third Judicial District, Kenai, Charles T. Huguelet, Judge. Superior Court No. 3KN-11-00404 CI.
Kenneth P. Jacobus, Kenneth P. Jacobus, P.C., Anchorage, for Appellant.
Colette G. Thompson and Holly B. Montague, Soldotna, for Appellees.
Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.
James Price challenges the superior court's order affirming the Kenai Peninsula Borough (" Borough" ) Clerk's rejection of his ballot referendum application. The proposed referendum would repeal Borough Ordinance 2008-28, which authorizes the general law
cities within the Borough to tax nonprepared food items on a year-round basis. The Borough Clerk and the superior court rejected the application on the ground that it violated AS 29.26.100's prohibition on local or special legislation. We conclude that the referendum does not violate the prohibition on local or special legislation and would be enforceable if passed. Accordingly, we reverse.
II. FACTS AND PROCEEDINGS
The Kenai Peninsula Borough imposes a consumer sales tax on all retail sales, rents, and services made or rendered within the Borough. In the 2008 regular election, Borough voters approved an initiative providing for a nine-month exemption from the Borough sales tax on nonprepared food items. In anticipation of this initiative, the Borough Assembly adopted Ordinance 2008-28, which allows general law cities in the Borough to continue taxing nonprepared food items on a year-round basis.
There are six cities within the Borough: Kachemak, Homer, Soldotna, and Seldovia, which are general law cities, and Kenai and Seward, which are home rule cities. Alaska Statute 29.45.700(a) provides that a general law city in a borough may only levy and collect sales taxes " in the manner provided for boroughs" unless the borough assembly " by ordinance authorize[s] a city to levy and collect sales and use taxes on other sources." Home rule cities are not subject to this provision. Kachemak does not currently impose a sales tax. Thus, only Homer, Soldotna, and Seldovia are presently affected by Ordinance 2008-28.
On May 3, 2010, Price filed an application for a referendum petition with the Borough Clerk entitled " Referendum to Repeal Kenai Peninsula Borough Ordinance 2008-28." The proposed referendum, which was assigned number 2010-01 by the Clerk's Office (hereinafter " Referendum 2010-01" ), would " end the Borough's authorization for the cities of Soldotna, Homer, and Seldovia to collect sales tax for nonprepared food items."
On May 14, 2010, the Borough Clerk rejected Price's application on two grounds: (1) the proposed referendum constituted local or special legislation in violation of AS 29.26.100 because it would allow all Borough voters to vote on an issue that only concerns Homer, Soldotna, and Seldovia; and (2) the proposed referendum was unenforceable as a matter of law because it circumvented AS 29.45.700(a), which provides that only the " assembly" may authorize a city to tax sources that the Borough does not.
Price filed suit against the Borough in superior court and sought an injunction requiring the Clerk to prepare the referendum petition so that signatures could be gathered for placement on the 2011 Borough municipal ballot. Both parties moved for summary judgment. The superior court granted the Borough's motion, concluding that the referendum constituted local or special legislation in violation of AS 29.26.100. In light of this ruling, ...