Opinion ID: 2631179
Heading Depth: 3
Heading Rank: 2

Heading: The Dillingham Business License Ordinance Was Valid.

Text: Dillingham also brought a claim against McCormick for his failure to obtain and pay for the city business license. The city originally passed the license fee as Ordinance 92-07 in June 1992. McCormick argues that the city did not provide adequate notice of the hearing regarding the proposed business license fee. Dillingham, however, does not rely on Ordinance 92-07 when it asserts that it has a valid business license ordinance. Instead, it submits that it need not have complied with the public notice requirements in passing Ordinance 92-07 because it validly reenacted the business license when it passed Ordinance 92-13 in October 1992 as part of its effort to comply with the state statutory notice requirements. But McCormick argues that Dillingham's procedure in enacting Ordinance 92-13 was deficient as well. The city council first introduced Ordinance 92-13 on August 20, 1992. The council set a public hearing for September 3, 1992. As required by statute, [12] Dillingham published notice in the Bristol Bay Times and posted the notice around Dillingham. The published notice stated that the purpose of Ordinance 92-13 was [a]mending the Dillingham Business License Code. At the September 3 meeting, council members expressed concern that charitable endeavors were equally subject to the application fee. As a result, the council tabled the ordinance. The council modified Ordinance 92-13 to address the council's concerns and set another public hearing for October 15, 1992. The city posted notice of this public hearing and also published notice in the Bristol Bay Times. But the council did not hold a public hearing on October 15 because it did not have a quorum. The city clerk rescheduled the meeting for October 21, 1992. Because the Bristol Bay Times is a weekly newspaper, there was insufficient time to publish notice of this meeting. [13] But notice of the rescheduled meeting was posted around town and publicized on the radio. At the October 21 meeting, the council passed Ordinance 92-13, reenacting the business license ordinance. McCormick first argues that the city of Dillingham does not have the power to pass a business license ordinance because the state business license ordinance has preempted it. McCormick also claims that Ordinance 92-13 is invalid because no notice of the public hearing at which the ordinance passed appeared in a newspaper of general circulation. Finally, McCormick argues that Dillingham violated its own municipal code by passing Ordinance 92-13 at the October 21 meeting.
McCormick's argument that the state business license law preempted Dillingham's ability to pass a local business license fee ordinance is incorrect. Dillingham may exercise a power not otherwise prohibited by law. [14] Those powers include the power to levy a tax. [15] McCormick argues that because the state charges a fee for a business license [16] and regulates construction contractors, [17] Dillingham is prohibited from assessing a fee for a business license. But McCormick points to no language in state law prohibiting a municipality from charging a fee for a business license. In the absence of such a prohibition or interference with the function of a state statute, [18] Dillingham may properly charge the fee. Moreover, we have determined that [m]erely because the state has enacted legislation concerning a particular subject does not mean that all municipal power to act on the same subject is lost. [19] Absent an express legislative direction or a direct conflict with a statute, preemption exists only where an ordinance substantially interferes with the effective functioning of a state statute or regulation or its underlying purpose. [20] McCormick presents no reason why Dillingham's regulation of local businesses cannot coexist with the state's regulation.
McCormick argues that Dillingham has failed to comply with state and local notice requirements. Alaska Statute 29.25.020(b)(2) requires that an ordinance shall be set by the governing body for a public hearing. Alaska Statute 29.25.020(b)(3) requires that for a hearing to be properly noticed, [a]t least five days before the public hearing a summary of the ordinance shall be published together with a notice of the time and place for the hearing. Alaska Statute 29.71.800(18) defines published as appearing at least once in a newspaper of general circulation distributed in the municipality, or if there is no newspaper of general circulation distributed in the municipality, posting in three public places for at least three days. Dillingham has not contested that the Bristol Bay Times was a newspaper of general circulation in 1992. Moreover, we have determined that compliance with AS 29.25.020(b)(3)'s publication requirement is mandatory in the context of a revenue-enhancing ordinance. [21] But Dillingham complied with the state notice requirements. McCormick does not contest the fact that notice of the September 3 first public hearing regarding Ordinance 92-13 appeared in the Bristol Bay Times. [22] Alaska's public notice statutes require one public hearing regarding an ordinance. [23] And our prior cases establish that if an ordinance is amended after the initial public hearing, [o]nly those changes to an ordinance which are so substantial as to change its basic character require that the public hearing process be repeated. [24] Accordingly, if Dillingham properly provided notice of the first hearing, and the amendments did not alter the basic character of the original proposed ordinance, it was then unnecessary to hold a second public hearing. Thus, any deficiency in the notice provided for the second hearing would constitute harmless error. [25] The amendments considered at the second hearing regarding the ordinance, held on October 21, did not alter the basic character of the ordinance. The amendments merely exempted home businesses and non-profit organizations from the license fee. In Jefferson v. City of Anchorage, [26] we considered an ordinance setting the salary for the mayor of Anchorage. Although the original ordinance set the mayor's full-time salary, an amendment was presented at the meeting during which the ordinance was passed to set a lower salary for the mayor if he or she elected to work part-time. [27] We concluded that such an amendment did not require repeating the hearing process. [28] Accordingly, a second hearing on the business license ordinance was also not required. [29] Even though Dillingham complied with state notice requirements, however, we must still address whether it complied with local requirements. Specifically, McCormick argues that the Dillingham Municipal Code only allows an ordinance to be passed after a properly noticed hearing if it is without amendment. [30] Dillingham, however, contends that the language in Dillingham Municipal Code 02.12.050 is not an accurate codification of Dillingham's ordinances. At oral argument before this court, counsel for Dillingham asserted that due to a printing error, the Dillingham code provision was not published accurately and that the relevant code provision as passed provides: After the hearing, the council shall consider the proposed ordinance and may adopt it with or without amendment. [31] The record reveals that the city council amended the relevant ordinance in 1986 when it passed Ordinance 86-8, retaining the with or without language. And McCormick has not challenged the authenticity of that ordinance. We therefore accept Dillingham's representations with respect to the content of its city ordinances and conclude that Dillingham Municipal Code 02.12.050 should read with or without amendment. Because we conclude that Dillingham Municipal Code 02.12.050 should read with or without amendment, it follows that the city council complied with the ordinance. [32] According to the Dillingham Municipal Code, once the city council held one properly noticed public hearing with regard to Ordinance 92-13, it could subsequently adopt the ordinance even with amendments.