Opinion ID: 2598794
Heading Depth: 3
Heading Rank: 2

Heading: The Tobacco Settlement Revenue Is Subject to the Anti-Dedication Clause.

Text: The superior court ruled that the anti-dedication clause generally applied to the tobacco settlement revenue: [A]lthough the Constitution speaks in terms of tax or license, the Alaska Supreme Court, in State v. Alex , interpreted that phrase to include all state revenues, which would include money from lawsuit settlements. This conclusion is consistent with existing case law. In State v. Alex , we held in the context of a tax-like assessment on the sale of fish on behalf of a regional aquaculture association, that the constitution prohibits the dedication of any source of revenue. [22] We expressly agreed with an Alaska Attorney General's opinion that states: Section 7 of Article IX of the state Constitution can be given its intended effect and serve its repeatedly expressed purpose only if the words proceeds of any tax or license are interpreted to mean what their framers clearly intended, i.e., the sources of any public revenues. Accordingly, it is our conclusion that the dedication of any source of public revenue: tax, license, rental, sale, bonus-royalty, royalty, or whatever is limited by the state Constitution to those existing when the Constitution was ratified or required for participation in federal programs. [23] A more recent informal opinion of the attorney general specifically stated that the constitution prohibited dedication of money from civil settlements: [T]he constitutional prohibition against dedicated funds applies to money received from fines, penalties and civil settlements.... [24] The conclusion that the anti-dedication clause applies to the tobacco settlement means only that a current legislature is prohibited from dedicating future settlement revenues to a particular purpose. Thus, the anti-dedication clause would prohibit the legislature from appropriating the tobacco settlement revenue stream for more than the immediately forthcoming fiscal year directly to secure a bond issue. But the legislature did not do this. Instead, the legislature sold the settlement reduced to present value. The question then becomes whether the sale of the tobacco settlement is unconstitutional because its effect is the same as a dedication of the future tobacco settlement revenue to repay the bond issue.