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Mallott v. Stand for Salmon

Supreme Court of Alaska

August 8, 2018

BYRON MALLOTT, LIEUTENANT GOVERNOR OF THE STATE OF ALASKA, and STATE OF ALASKA, DIVISION OF ELECTIONS, Appellants,
v.
STAND FOR SALMON, Appellee.

          Appeal from the Superior Court No. 3 AN- 17-09 183 CI of the State of Alaska, Third Judicial District, Anchorage, Mark Rindner, Judge.

          Joanne Grace, Elizabeth Bakalar, and Katherine Demarest, Assistant Attorneys General, Anchorage, and Jahna Lindemuth, Attorney General, Juneau, for Appellants. Katherine Strong and Valerie Brown, Trustees for Alaska, Anchorage, for Appellee.

          James E. Torgerson and Tina M. Grovier, Stoel Rives LLP, Anchorage, and Ryan P. Steen, Stoel Rives LLP, Seattle, Washington, for Amici Curiae Alaska Oil and Gas Association and Resource Development Council for Alaska, Inc. Matthew Singer and Lee C. Baxter, Holland & Knight LLP, Anchorage, for Amicus Curiae ANCSA Regional Association. Geoffrey Y. Parker, Law Office of Geoffrey Y. Parker, Anchorage, for Amici Curiae Bristol Bay Fishermen's Association and Ekwok Village Council. Eric B. Fjelstad, James N. Leik, and Elena M. Romerdahl, Perkins Coie LLP, Anchorage, for Amicus Curiae Council of Alaska Producers.

          Before: Stowers, Chief Justice, Winfree, Maassen, Bolger, and Carney, Justices.

          OPINION

          PER CURIAM

         I. INTRODUCTION

         The Lieutenant Governor declined to certify a proposed ballot initiative that would establish a permitting requirement for activities that could harm anadromous fish habitat, reasoning that the initiative effected an appropriation of state assets in violation of article XI, section 7 of the Alaska Constitution. The initiative sponsors filed suit, and the superior court approved the initiative, concluding that the proposal would not impermissibly restrict legislative discretion. We conclude that the initiative would encroach on the discretion over allocation decisions delegated to the Alaska Department of Fish and Game by the legislature, and that the initiative as written therefore effects an unconstitutional appropriation. But we conclude that the problematic sections may be severed from the remainder of the initiative. Accordingly, we reverse the judgment of the superior court and remand for the superior court to direct the Lieutenant Governor to sever the offending provisions but place the remainder of the initiative on the ballot.

         II. BACKGROUND

         A. Facts

         In May 2017 the directors of the Alaska-based nonprofit organization Stand for Salmon (the Sponsors) submitted an application for an initiative entitled "An Act providing for protection of wild salmon and fish and wildlife habitat," which the Division of Elections denominated "17FSHB." After reviewing 17FSHB, the

          Department of Law concluded that the initiative effected an appropriation in violation of article XI, section 7 of the Alaska Constitution.[1] The Department found that the initiative would restrict the legislature's ability to allocate anadromous[2] fish habitat among competing uses by "outright prohibit[ing] the use of anadromous waters for certain development purposes." The Department thus informed the Sponsors that it intended to recommend that the Lieutenant Governor deny certification of 17FSHB.

         Upon receiving the Department of Law's analysis, the Sponsors withdrew 17FSHB and filed a revised version of the initiative in July, which the Division of Elections denominated "17FHS2." Like its precursor, 17FSH2 proposes a bill that would "amend, repeal, and reenact" provisions of AS 16.05, which requires persons seeking to engage in activities that could damage certain state waters to first secure a permit from the Department of Fish and Game (ADFG).[3] The initiative would expand this permit requirement to cover all activities that "may use, divert, obstruct, pollute, disturb or otherwise alter anadromous fish habitat."[4] Under the proposed permitting system, "major" permits would be required for activities with "the potential to cause significant adverse effects" to fish habitat, while "minor" permits could be issued for projects that would have little impact on such habitat.[5]

         The initiative enumerates requirements that would have to be satisfied prior to issuance of a permit and establishes civil and criminal penalties for anyone who "violates or permits a violation of' the permitting scheme. Additionally, Section 2 of the initiative would add the following new section to AS 16.05:

See. 16.05.867. Fish and wildlife habitat protection standards.
(a) The commissioner shall ensure the proper protection of fish and wildlife, including protecting anadromous fish habitat from significant adverse effects.
(b) When issuing a permit under AS 16.05.867-16.05.901, the commissioner shall ensure the proper protection of anadromous fish habitat by maintaining:
(1) water quality and water temperature necessary to support anadromous fish habitat;
(2) instream flows, the duration of flows, and natural and seasonal flow regimes;
(3) safe, timely and efficient upstream and downstream passage of anadromous and native resident fish species to spawning, rearing, migration, and overwintering habitat;
(4) habitat-dependent connections between anadromous fish habitat including surface-groundwater connections;
(5) stream, river and lake bank and bed stability;
(6) aquatic habitat diversity, productivity, stability and function;
(7) riparian areas that support adjacent fish and wildlife habitat; and
(8) any additional criteria, consistent with the requirements of AS 16.05.867-AS 16.05.901, adopted by the commissioner by regulation.
(c) The commissioner is authorized, in accordance with AS 44.62, to adopt regulations consistent with AS 16.05.867-16.05.901. All regulations, administrative actions and other duties carried out under this chapter shall be consistent with and in furtherance of the standards set out in this section.

         The initiative also enumerates certain circumstances in which a permit "may not be granted." Section 7 of the initiative would add a new section to AS 16.05 that reads in part:

See. 16.05.887. Permit conditions and mitigation measures.
(a) The commissioner shall prevent or minimize significant adverse effects to anadromous fish habitat. . . . [A]n anadromous fish habitat permit may not be granted for an activity that will:
(1) cause substantial damage[6] to anadromous fish habitat under AS 16.05.877(b);
(2) fail to ensure the proper protection of fish and wildlife;
(3) store or dispose of mining waste, including overburden, waste rock, and tailings in a way that could result in the release or discharge of sulfuric acid, other acids, dissolved metals, toxic pollutants, or other compounds that will adversely affect, directly or indirectly, anadromous fish habitat, fish, or wildlife species that depend on anadromous fish habitat;
(4) replace or supplement, in full or in part, a wild fish population with a hatchery-dependent fish population;
(5) withdraw water from anadromous fish habitat in an amount that will adversely affect anadromous fish habitat, fish, or wildlife species; or
(6) dewater and relocate a stream or river if the relocation does not provide for fish passage or will adversely affect anadromous fish habitat, fish, or wildlife species.

         Mirroring the first subsection quoted above, the major permitting scheme outlined in Section 6 of the initiative includes the following provision:

See. 16.05.885. Major anadromous fish habitat permit.
(e) The commissioner may issue a major permit to an applicant only if:
(3) the activity, as authorized by the written permit determination, will not cause substantial damage[7] to anadromous fish habitat under AS 16.05.877(b)....

Section 5 of the initiative (proposed AS 16.05.877(b)) would require ADFG when evaluating a proposed activity to find that it will cause "substantial damage" to anadromous fish habitat - thus precluding that activity from receiving a permit - when:

[D]espite the application of scientifically proven, peer reviewed and accepted mitigation measures under AS 16.05.887, the anadromous fish habitat will be adversely affected such that it will not likely recover or be restored within a reasonable period to a level that sustains the water body's, or portion of the water body's, anadromous fish, other fish, and wildlife that depend on the health and productivity of that anadromous fish habitat.

         The Department of Law reviewed the revised initiative and again concluded that it would effect an appropriation. It found that like 17FSHB, 17FSH2 would "effectively preclude some uses [of anadromous fish habitat] altogether," therefore "leaving insufficient discretion to the legislature to determine how to allocate those state assets." The Department thus recommended that the Lieutenant Governor decline to certify the application. Relying on the Department's analysis, the Lieutenant Governor declined to certify 17FSH2 in September 2017.

         B. Procedural History

         The Sponsors filed suit that same month challenging the Lieutenant Governor's conclusion and seeking a preliminary injunction to allow immediate circulation of the initiative for voter signatures. At the parties' request, the superior court converted the preliminary injunction motion into cross motions for summary judgment.

         The Sponsors argued that "an initiative may regulate activities - even to the point where the activities may be prohibited - so long as the Legislature retains discretion in implementing the initiative's provisions." They further argued that 17FSH2 is a "permissible regulatory initiative" because "its manifest intent is to protect and preserve fish and wildlife habitat, it does not target any one use, and it retains discretion in the Legislature." The Lieutenant Governor and the Division of Elections (collectively, the State) contended that 17FSH2 would "preclude[] the use of even a single waterway for a major development project," unconstitutionally "depriv[ing] the legislature of authority to allocate fish streams among competing uses." The State recognized that the initiative does not expressly prohibit "the alteration of streams for major development projects," but argued that a restriction of legislative discretion "need not be express to render it unconstitutional."

         The superior court held oral argument on October 3, 2017. On October 9, the court issued an order granting the Sponsors' motion for summary judgment and denying the State's cross-motion. The court characterized the "central disagreement" between the parties as concerning "whether 17FSH2 is a permissible regulation or an allocation of public assets that impermissibly limits legislative discretion." Rejecting the State's argument, the court likened 17FSH2 to the initiative we upheld in Pebble Ltd. Partnership v. Parnell, [8] and concluded that the initiative "leaves the legislature discretion in its implementation through the use of a plethora of undefined terms." Because the court concluded that 17FSH2 is constitutionally permissible, it ordered the Lieutenant Governor to print petition booklets as required by statute.

         The State appeals. Amicus briefs supporting the State's position were submitted by the Alaska Oil and Gas Association and Resource Development Council for Alaska, Inc.; by the ANCSA Regional Association; by the Bristol Bay Fishermen's Association and the Ekwok Village Council; and by the Council of Alaska Producers.[9]

         III. STANDARD OF REVIEW

         We review questions of law, including the constitutionality of a ballot initiative and the meaning of the constitutional term "appropriation," using our independent judgment, adopting the rule of law that is most persuasive in light of precedent, reason, and policy.[10] "When reviewing initiatives, we 'construe voter initiatives broadly so as to preserve them whenever possible. However, initiatives touching upon the allocation of public revenues and assets require careful consideration because the constitutional right of direct legislation is limited by the Alaska Constitution.'[11]

         IV. DISCUSSION

         A. The Alaska Constitution Prohibits The Use Of An Initiative To Usurp Or Encroach On The Legislature's Sole Authority To Allocate State Resources.

         For more than two centuries, Alaska's economy has been centered around the development and harnessing of its natural resources, from the fur trade of the 18th and 19th Centuries and the gold rushes of the 1890s, to the growth of copper mining and commercial fishing in the early 20th Century and the oil discoveries of the 1950s and 1960s. The need for responsible management of Alaska's natural resources to promote economic self-sufficiency in light of competing interests is reflected in article VIII, section 1 of the Alaska Constitution, which states that "[i]t is the policy of the State to encourage the settlement of its land and the development of its resources by making them available for maximum use consistent with the public interest."

          The Alaska Constitution also grants Alaskans a broad right to self-government through the use of the ballot initiative to "propose and enact laws."[12]However, article XI, section 7 contains several express limitations on the power of the ballot initiative, including that "[t]he initiative shall not be used to . . . make or repeal appropriations."[13] The Alaska Constitution does not provide any definition of the term "appropriation," so it has been the duty of this court to distinguish between initiatives that permissibly regulate and those that impermissibly appropriate.

         In some cases, that task has been a simple one. In Thomas v. Bailey, we concluded that an initiative that would transfer 3 0 million acres of state land to individual residents was an unconstitutional appropriation because it was exactly the type of"give-away" program the delegates at the constitutional convention wanted to prohibit.[14] We later applied the same reasoning to invalidate a ballot initiative that would require the Municipality of Anchorage to sell a municipally-owned utility worth nearly $33 million to a private non-profit organization for one dollar.[15]

         But not all appropriation cases have involved this kind of blatant giveaway. In McAlpine v. University of Alaska, we noted that "the more typical appropriation involves committing certain public assets to a particular purpose."[16] "The reason for prohibiting appropriations by initiative," we explained, was "to ensure that the legislature, and only the legislature, retains control over the allocation of state assets among competing needs."[17] On that basis, we concluded that an initiative that would establish a separate community college system and require the University of Alaska to transfer a particular amount of property to the new system was an impermissible appropriation.[18] By contrast, in City of Fairbanks v. Fairbanks Convention & Visitors Bureau, we upheld an initiative that repealed a dedication of municipal bed tax revenues and set the revenues aside for the city's discretionary fund because it "[did] not reduce the [city] council's control over the appropriations process," but rather "allow[ed] the council greater discretion in appropriating funds than [did] the current law."[19]

         In Pullen v. Ulmer, we distilled from this case law "two core objectives of the constitutional prohibition on the use of initiatives to make appropriations": "First, the prohibition was meant to prevent an electoral majority from bestowing state assets on itself. Second, the prohibition was designed to preserve to the legislature the power to make decisions concerning the allocation of state assets.,, [20]

         These core objectives have been the foundation of our appropriation analysis.[21] But we have occasionally explained the test for evaluating those objectives in different terms depending on the context. In some cases we explained that an initiative effects an appropriation when it "would set aside a certain specified amount of money or property for a specific purpose or object in such a manner that it is executable, mandatory, and reasonably definite with no further legislative action."[22] In others we explained that the "primary question" is "whether the initiative narrows the legislature's range of freedom to make allocation decisions in a manner sufficient to render the initiative an appropriation."[23] In still others we explained that "the line between an unobjectionable initiative that deals with a public asset and one that is an impermissible appropriation is crossed 'where an initiative controls the use of public assets such that the voters essentially usurp the legislature's resource allocation role.' "[24] These stated tests have been useful in explaining why particular initiatives amounted to impermissible appropriations, but they also obscure and distract from a focus on the core objectives of the anti-appropriations clause.

         Our prior opinions repeatedly reaffirm the two core objectives by emphasizing the importance of preserving the legislature's authority over allocation decisions. In Pullen, we concluded that an initiative creating an allocation preference of salmon stock to non-commercial fishers was an appropriation both because those groups were "specifically targeted to receive state assets," and because "the initiative [would] significantly reduce[] the legislature's and Board of Fisheries' control of and discretion over allocation decisions."[25] In Staudenmaier v. Municipality of Anchorage, citing the "two parallel purposes" of the anti-appropriations clause, we found unconstitutional an initiative that would have forced the Municipality to sell a municipal electric utility within one year.[26] And in Alliance of Concerned Taxpayers, Inc. v. Kenai Peninsula Borough, we held that an initiative that required prior voter approval for all Borough capital projects with a total cost of more than one million dollars was an impermissible appropriation: we reasoned that "the voters' ability to veto a capital project, even prior to budget approval, infringes on the assembly's ability to allocate resources among competing uses because there is nothing that the assembly can do to appropriate money for that project."[27] Most recently, in Lieutenant Governor v. Alaska Fisheries Conservation Alliance, Inc., we held that a ballot initiative that would have banned commercial set net fishing in nonsubsistence areas was a prohibited appropriation.[28] We did so both because the initiative would be a "give-away program" benefitting all fisheries except commercial set netters and because it would "narrow the legislature's and Board of Fisheries' range of freedom in making allocation decisions" so that "neither the legislature nor the Board would be able to allocate any salmon stock to [commercial set netters]."[29]

         When determining whether an initiative effects an appropriation, the proper analysis should focus on the two core objectives we have identified. An initiative is an impermissible give-away program if it transfers state assets into private hands.[30] An initiative also effects an appropriation if it infringes on the legislature's ability to allocate resources among competing uses - that is, if it fails "to ensure that the legislature, and only the legislature, retains control over the allocation of state assets among competing needs"[31] - by forcing the legislature to make a particular allocation decision in the future[32] or by removing certain allocation decisions from the legislature's range of discretion.[33]

         B. 17FSH2 Makes An Impermissible Appropriation Because It Explicitly Bars ADFG From Making Certain Allocation Decisions.

         With our prior case law in mind, it is clear that 17FSH2 narrows the legislature's range of discretion to make decisions regarding how to allocate Alaska's lakes, streams, and rivers among competing needs. Under both the current law and the permitting scheme created by 17FSH2, the ADFG commissioner is charged with managing the responsible use of waterways and fish habitat. But 17FSH2 contains two provisions that explicitly restrict the commissioner's discretion to make allocation decisions.

         Proposed AS 16.05.885(e)(3) provides that the commissioner "may issue a major permit to an applicant only if... the activity, as authorized by the written permit determination, will not cause substantial damage to anadromous fish habitat." Proposed AS 16.05.877(b) also explicitly directs the commissioner to find that an activity does cause "substantial damage" if

despite the application of scientifically proven, peer reviewed and accepted mitigation measures ... the anadromous fish habitat will be adversely affected such that it will not likely recover or be restored within a reasonable period to a level that sustains the water body's, or portion of the water body's, anadromous fish, other fish, and wildlife that depend on the health and productivity of that anadromous fish habitat.

         The Sponsors argue that because this provision contains a number of undefined terms - such as "adverse effects," "likely," and "reasonable period" - it leaves ADFG and the legislature interpretive discretion and therefore discretion to make allocation decisions as they see fit. But where a project like a mine or hydroelectric dam would permanently, and perhaps irreversibly, displace fish habitat, there is no reasonable interpretation under which that habitat would not suffer "substantial damage" as the initiative defines it. If the habitat has been permanently displaced, it cannot be "likely" for that habitat to be restored within a "reasonable period," because it never will be restored.

         Similarly, proposed AS 16.05.887(a) provides in relevant part that "an anadromous fish habitat permit may not be granted" for activities that would affect fish habitats in various specific ways listed in six subsections. The parties dispute how to interpret particular subsections, but in each case, it is apparent that there will be some activities that cannot by any reasonable interpretation of the initiative's language be excluded from this prohibition.

         To be clear, these provisions are not problematic because they are too clearly defined; rather, they are problematic because-however they are interpreted- they bar the commissioner from granting a permit to a project that would "cause substantial damage" or have one of the listed effects, even if in the commissioner's - or the legislature's - considered judgment the public benefits of that particular project outweigh its effects on fish habitat. By doing so, the initiative "encroaches on the legislative branch's exclusive 'control over the allocation of state assets among competing needs' "[34] by removing certain allocation decisions from the legislature's range of discretion.

         Although 17FSH2 indeed contains a "plethora of undefined terms," as the superior court put it, that would give the legislature and ADFG some discretion in how to implement the initiative, this only goes so far. The undefined terms give the legislature the interpretive discretion to decide how much allocation discretion the initiative takes away, but under any reasonable interpretation, the initiative would place at least some projects outside the commissioner's discretion to permit. The legislature's discretion to interpret the initiative's provisions might affect the severity, but not the fact, of the initiative's infringement on the legislature's authority over allocation decisions.

         C. Our Appropriation Analysis In Pebble Ltd. Partnership v. Parnell Was Dictum And Is Neither Binding Precedent Nor Persuasive.

         We recognize that our decision in this case may seem at odds with our prior decision in Pebble Ltd. Partnership v. Parnell.[35] The initiative in that case would have prohibited any permits or authorizations for a "large scale metallic operation" that would release toxic pollutants in an amount that would "effect [sic] human health or welfare or any stage of the life cycle of salmon."[36] The case presented two questions: how to interpret the initiative, and whether the initiative would constitute an appropriation. The superior court construed the word "effect" as used in the initiative to mean "adversely affect" to avoid the implication that the initiative would also prohibit beneficial and neutral effects; we did the same.[37] We then concluded that although the Pebble initiative would have restricted the legislature from allowing projects that adversely affected public waters, [38] that did not constitute an appropriation because the initiative would "leave[] to the legislature, the Department of Environmental Conservation, and the Department of Natural Resources the discretion to determine what amounts of specific toxic pollutants may or may not be discharged."[39] But the entirety of our appropriations discussion in Pebble-beyond interpreting the initiative's language-was unnecessary because the parties to the case agreed that, as interpreted, the initiative would not constitute an appropriation.[40] In the absence of an actual dispute, our discussion was therefore dictum.[41] And though we may follow dicta when persuasive, Pebble's reasoning is anything but.

         The primary error in Pebble was the misapplication of Pullen v. Ulmer.[42] In Pullen we reasoned that an initiative directing the Board of Fisheries to "reserve a priority for the harvest needs of common consumptive uses for each salmon stock, to the extent that is technically possible," would be an unconstitutional appropriation because it would "call[] for an actual allocation, in the event of a shortage of a given salmon species in a given geographical region, to sport, personal use, and subsistence fisheries."[43] We reached this conclusion in part by comparing the initiative to a presumably constitutional hypothetical initiative that would "simply amend[] 'a series of general legislative criteria to add more specific ones to guide the Board of Fisheries in its future allocation decisions."[44] In Pebble we applied this reasoning to conclude that the initiative's prohibition on harm to public waters would not be an appropriation because it was merely adding new regulatory criteria.[45] But this conclusion does not follow from its premise. The whole point of Pullen's comparing the initiative to hypothetical criteria was that the hypothetical criteria would not restrict the legislature's ultimate resource allocation freedom.[46] We made it clear in Pullen that we could not interpret the initiative as permissible guiding criteria precisely because the initiative would "call[] for an actual allocation, in the event of a shortage of a given salmon species in a given geographical region, to sport, personal use, and subsistence fisheries."[47] But the Pebble initiative sought to do precisely that, in the inverse, by forbidding the legislature from allocating any assets to projects that "adversely affect[ed]" public waters.[48] By doing so, the Pebble initiative crossed the line from permissible guiding criteria, where ultimate discretion is retained by the legislature, to impermissible appropriation, where the legislature is forbidden from using specific public assets for specific purposes. It was therefore wrong to rely on Pullen to characterize a complete prohibition on certain uses of public assets as a permissible initiative.

         It was also wrong in Pebble to rely on new legal standards for so-called "regulatory" initiatives. We stated in Pebble that "the legislative history of the drafting of the Alaska Constitution and the language of the constitution itself 'evidences the delegates' intent that natural resource issues would be subject to the initiative.' "[49] We quoted Brooks v. Wrighf[50] for this proposition, and then announced that "the prohibition against initiatives that appropriate public assets does not extend to prohibit initiatives that regulate public assets, so long as the regulations do not result in the allocation of an asset entirely to one group at the expense of another."[51] We applied this rule to conclude that the Pebble initiative would not be an appropriation because it would "prohibit[] harm to public assets while permitting the use of public assets and exhibiting no explicit preference among potential users."[52] The legal foundations of this analysis are shaky at best; there is little to no basis in our case law, and certainly none in the constitution, for distinguishing between "regulatory" initiatives and other initiatives. And the reasoning provided in defense of the distinction is not persuasive.

         First, in Brooks we were deciding only whether the initiative process was "clearly inapplicable" to natural resource issues, and we did not address whether the initiative in that case (which would have banned the use of snares for trapping wolves) was an appropriation.[53] And we recently have recognized that past initiatives that purported to "manage" natural resources - including the initiative at issue in Brooks - may in fact have effected or sought to effect unconstitutional appropriations.[54] Second, the rationale that a regulatory initiative is not an appropriation when it "prohibits harm to public assets" is wholly unpersuasive.[55] As this case shows, an initiative that does nothing but "prohibit harm" can result in the complete lock-up of a public resource for a minimum of two years.[56] Third, any initiative dealing with natural resources can plausibly be characterized as "regulating" them, so drawing a dividing line between regulatory initiatives and other types of initiatives seems not only difficult, but ultimately futile. We therefore were wrong in Pebble to say that the initiative would not be an appropriation simply because it regulated natural resources.

         We also were incorrect to reason that the Pebble initiative would not be an appropriation because it did not allocate public assets to or from a user group. We announced in Pebble that "the prohibition against initiatives that appropriate public assets does not extend to prohibit initiatives that regulate public assets, so long as the regulations do not result in the allocation of an asset entirely to one group at the expense of another."[57] We then had to clarify this rule in Lieutenant Governor v. Alaska Fisheries Conservation Alliance, Inc. by explaining that an initiative is not permissible merely because it redistributes assets from one user group to many diffuse users, as an "overly narrow and literal reading" of Pebble would suggest.[58] We instead stated a rule that "an initiative may constitute an appropriation if it results in the complete reallocation of an asset from a significant, distinct user group."[59] This "user group" analysis is untethered from the constitution and our analysis of the two core objectives. It focuses on identifying a "significant, distinct user group" and asking whether an initiative would allocate assets "completely" to or from that group. The framework thus improperly shifts our focus from evaluating the legislature's ability to allocate and manage public assets as it deems fit to defining relevant user groups and evaluating the legislature's ability to allocate public assets to these user groups. For instance, if an initiative completely eliminated the legislature's ability to allocate assets to large mining projects, but not to small mining projects, Pebble's constitutional analysis would turn on whether "mining projects" or "large mining projects" constitute the relevant user group. But either way the initiative would compromise the legislature's resource-allocation prerogative, so any such analysis is beside the point.[60]

         Finally, in Pebble we should not have characterized legislative "discretion" as dependent on undefined terms. We centered our appropriations inquiry in Pebble on the extent to which the initiative would restrict legislative discretion, explaining: "The primary question before us, therefore, is whether the initiative narrows the legislature's range of freedom to make allocation decisions in a manner sufficient to render the initiative an appropriation."[61] We then said that the initiative would "leave[] to the legislature... the discretion to determine what amounts of specific toxic pollutants may or may not be discharged at a mining site."[62] This reasoning suggested that the legislature retained discretion because it could define "adversely affect" as it preferred. But the legislative "discretion" to define terms is not the discretion mandated by the constitution, which vests all appropriation power in the legislature.[63] The legislature does not truly retain control over public assets if the voters may forbid it from using those assets in a particular manner; such a restriction on the legislature's allocation freedom cannot be characterized as "simply amending 'a series of general legislative criteria to add more specific ones to guide the [legislature] in its future allocation decisions.' "[64] We were therefore wrong in Pebble to conclude that the legislature retained sufficient "discretion" simply because the initiative contained some undefined terms.

         To follow Pebble to its logical conclusion would be to allow any initiative regulating public assets to go before the voters so long as it would not wholly usurp the legislature's allocation function. But that is not where the delegates intended to draw the line between permissible regulation and impermissible appropriation. Instead, an initiative must leave to the legislature ultimate decision-making authority to use specific public assets for specific purposes. Because 17FSH2 would completely prevent the legislature from permitting projects that result in the permanent destruction of anadromous fish habitat, the initiative constitutes an unconstitutional appropriation as written.

         D. The Offending Provisions Of 17FSH2 Can Be Severed, Preserving the Remainder Of The Initiative To Go Before The Voters.

         Although we conclude that 17FSH2 as written is unconstitutional, that is not the end of the analysis. Rather than simply invalidating the entire initiative by reversing the superior court's decision and upholding that of the Lieutenant Governor, we must evaluate whether the offending provisions can be severed from the initiative.[65] We have held that impermissible portions of an initiative can be excised, and the remainder validated, where each of three factors are met:

(1) standing alone, the remainder of the proposed bill can be given legal effect; (2) deleting the impermissible portion would not substantially change the spirit of the measure; and (3) it is evident from the content of the measure and the circumstances surrounding its proposal that the sponsors and subscribers would prefer the measure to stand as altered, rather than to be invalidated in its entirety.[66]

         In this case, the offending provisions are proposed AS 16.05.885(e)(3)[67] and the third sentence of proposed AS 16.05.887(a) - from the word "Notwithstanding" to the end of subsection (a).[68] Without these provisions, the initiative no longer contains an explicit bar to granting permits with specific effects; it would still be within the commissioner's discretion to grant such permits where doing so is deemed appropriate, thus preserving the legislature's power to make decisions concerning the allocation of state assets.

         1. Only the provisions explicitly prohibiting certain permitting decisions need to be severed.

         The State asserts that even without the provisions explicitly barring the commissioner from granting permits to projects that would cause "substantial damage," other provisions of the initiative would still prohibit the same projects. For example, the State argues that the framework for mitigation conditions in proposed AS 16.05.8 87(b)[69]require that "at a minimum," the affected habitat be restored and that "of course, the affected fish habitat cannot be restored when an activity would permanently displace the habitat." The State also argues that the "habitat protection standards" of proposed AS 16.05.867[70] prohibit ADFG from permitting any project that fails to "maintain" those standards, and that this again acts as a complete bar to granting permits to projects that would permanently displace fish habitat.

         But unlike the offending provisions discussed above, which explicitly remove certain permitting decisions from the commissioner's discretion, these remaining provisions are open to reasonable interpretation. Although they might amount to an appropriation if we interpreted them in the light most favorable to concluding that they do, "[w]hen one construction of an initiative would involve serious constitutional difficulties, that construction should be rejected if an alternative interpretation would render the initiative constitutionally permissible."[71] Interpreting the initiative broadly so as to preserve it if possible, [72] it would not be unreasonable to conclude that even a project that permanently displaces habitat could "limit adverse affects of the activity on anadromous fish habitat by changing the siting, timing, procedure, or other manageable qualities of the activity," or "minimize the adverse effects of the activity by limiting the degree, magnitude, duration, or implementation of the activity, including implementing protective measures or control technologies."[73] And the habitat protection standards can reasonably be interpreted as a collective set of broad goals for the commissioner to strive for as a general matter, as opposed to discrete requirements to be strictly and individually enforced in every permitting decision.[74] But at this point, it is not necessary for us to analyze and interpret these provisions in detail, beyond noting that they are open to a range of reasonable and constitutionally permissible interpretations.

         We also note that proposed AS 16.05.887(c) could be read in a way that would amount to an impermissible ...


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