Opinion ID: 2639620
Heading Depth: 4
Heading Rank: 2

Heading: The cost statement

Text: The superior court concluded that the cost statement for 07WTR3 is impartial and accurate to enable voters to make an informed decision. The court explained that although new regulations probably will be promulgated to implement [the initiative], these regulations may be little different than current water quality standards, and [t]his suggests that the state would incur few additional costs to implement the program and mining companies would be able to obtain the necessary permits to operate. The Council argues that the cost statement for 07WTR3 is defective because it fails to consider the cost of developing and adopting regulations that will be necessary to implement the measure. The Council also asserts that [t]here is ... likely to be substantial cost to the State in defending, in court, any regulations which it adopts. The sponsors respond that the Council waived its arguments about the cost statement because it did not make the same specific arguments when challenging the accuracy of the cost statement in the superior court. The sponsors also argue that the cost statement is valid because even if state employees do need to review existing regulations and develop and implement some new ones, DNR's estimate of `no significant fiscal impact' is wholly reasonable. Finally, the sponsors assert that [j]udicial review of the Lieutenant Governor's cost estimate should be extremely deferential. Alaska Statute 15.45.090(a)(4) states that each petition must contain an estimate of the cost to the state of implementing the proposed law. Although there is no Alaska case law interpreting the cost statement provision, other state courts have held that review of an initiative or referendum's cost statement should be deferential. [90] The Alaska Department of Natural Resources (DNR) prepared the following cost statement for 07WTR3: This initiative appears to propose language that does not differ significantly from existing water quality standards. Therefore, the department does not foresee any significant impact on the department or on activities on state-owned land. As a result, there will not be significant fiscal impact either revenues or costsas a result of this initiative. The sponsors are correct that the Council waived its argument about the cost of promulgating regulations because the Council failed to make this argument to the superior court. [91] In its motion for summary judgment, the Council merely argued that the cost statement was inadequate because it failed to estimate the cost of [defending against] takings claims and failed to recognize the potential loss in State revenues that would result from the implementation of the measure. The potential loss in revenues referred to the speculative loss of revenues if the initiative ended all LSMM mining. Because the initiative would not end all LSMM mining and the cost of defending takings claims is a purely speculative cost that assumes future lawsuits, the superior court was correct to conclude that the cost statement was valid. The new argument made by the Council in its appellate brief that the DNR misstated the cost of adopting new regulations is waived because the Council failed to raise the argument in the court below. [92] Even if the Council had not waived its argument that the cost statement is inadequate because it omits the cost of adopting new regulations, that argument would still be without merit. The cost statement statute merely requires an estimate of the cost of implementing the proposed law. Thus, the cost statement need not document every conceivable cost associated with the implementation of the law. In addition, the DNR has substantially more knowledge about the relative costs of developing necessary regulations than the parties or this court, particularly in this instance, where there is no evidence before us of the costs of implementing the regulations that would be required by 07WTR3. Thus, we defer to the DNR's expertise in this area and uphold its reasonable conclusion that there will not be any substantial fiscal impact as a result of the initiative. The Council did not waive its second argument challenging the cost statement that the cost statement omits costs associated with legal challenges to regulations that the initiative will requirebecause it made a similar argument at the superior court level. Nonetheless, this argument is without merit. Although it is possible that companies planning to begin new mining operations may bring legal challenges against the state based on the initiative, those potential lawsuits and the costs associated with them are purely speculative. There is no authority for the assertion that the estimated costs of defending potential lawsuits involving the initiative must be described in the cost statement. Because such costs are purely speculative, it would be impracticable to provide an estimate of how much they would be. Therefore, the superior court reasonably concluded that the cost statement is not inaccurate on this ground. In sum, the cost statement provides an accurate estimate of the likely insignificant costs associated with implementation of the initiative. Thus, we affirm the superior court's determination that the cost statement is not defective.