Opinion ID: 2570810
Heading Depth: 3
Heading Rank: 3

Heading: The Alaska Seafood Marketing Institute Appropriations

Text: The legislature enacted three appropriations for ASMI. [14] Each contained identical language which made the appropriation [c]ontingent on [ASMI] having no employees who are located outside Alaska whose positions are classified at more than Range 21 on the state salary schedule under AS 39.27.011 .... [15] The governor struck this language from the three ASMI appropriations. Although it held that the governor adequately explained his objections, the superior court held that the attempt to veto the contingency language in the ASMI appropriations was illegal and of no effect, reasoning that the item veto power encompasses only the power to reduce or strike sums of money. It nonetheless struck the disputed language because its inclusion violated the confinement clause. The council argues that these vetoes are invalid, because the vetoed language was not an item within the meaning of the Alaska Constitution, and also because the governor failed to adequately state his objections to the vetoed language, contrary to the constitution. The governor responds that the vetoes were valid and that, in any event, the vetoed language is invalid because its inclusion in appropriation bills violated the confinement clause.
Article II, section 15 of the Alaska Constitution gives the governor power to exercise two different types of vetoes. Its first sentence confers the general power to veto a bill. [16] Its second sentence confers the power, by veto, [to] strike or reduce items in appropriation bills. [17] At issue here is this power to strike or reduce items by exercising the item veto while approving other parts of the same bill. The question is whether the item veto power permits the governor to strike from an appropriation bill descriptive language that does not specify the amount appropriated. The superior court held that it does not. It held that the item veto power encompasses only the power to reduce or strike sums of money. [18] We agree. Our analysis focuses on the meaning of item. We have never addressed what item means in context of the item veto power. Our constitution does not define the term. Based on the language of our constitution, the historical purposes of the item veto, and the pertinent public policy considerations, we now define item as a sum of money dedicated to a particular purpose. [19] Our analysis begins with the Alaska Constitution. It gives the legislature the power to legislate [20] and appropriate. [21] It gives the governor the power to influence the state's budget by requiring him or her to submit a proposed budget and general appropriation bill to the legislature [22] and by striking or reducing items appropriated by the legislature. [23] The governor's item veto power is thus one of limitation. The governor can delete and take away, but the constitution does not give the governor power to add to or divert for other purposes the appropriations enacted by the legislature. This approach is consistent with our earlier discussion of the governor's budgetary power. In Thomas v. Rosen we noted that Alaska's constitutional convention delegates intended to create a strong executive branch with `a strong control on the purse strings' of the state. [24] But this control gives the governor no appropriation power. The item veto permits the governor only to tighten or close the state's purse strings, not to loosen them or to divert funds for a use the legislature did not approve. The governor's power to control the purse strings is fully realized by recognizing the governor's constitutionally defined  and limited  role in the appropriations process. The council argues that the governor's item veto power is negative. [25] We agree. True, striking out language might be characterized as an act of positive creation to some extent; in the broadest sense a new bill results. But such characterizations are semantic. Our constitution does not give the governor the power to rewrite appropriation bills except by striking or reducing items, and if the constitutional delegates had intended to give the governor the power to add or divert, they easily could have done so. [26] The council also argues that the item veto power is an executive exercise of legislative power, and therefore should be strictly construed. Professor Briffault reasons that such arguments fail to recognize the difference between the item veto and the traditional veto. [27] However the item veto power is characterized, we conclude that it was intended only to limit the legislature's appropriation power, not to grant the executive a quasi-legislative appropriation power permitting appropriations the legislature never enacted. [28] The definition we adopt here also seems most consistent with the words of our constitution. First, the power expressly applies to items in appropriation bills. [29] The word item conveys a notion of unity between two essential elements of an appropriation: the amount and the purpose. [30] Altering the purpose of the appropriation by striking descriptive words interferes with that unity because the result is no longer the item the legislature enacted. In comparison, striking the amount is the equivalent of a complete veto of a particular appropriation. And reducing the amount is a result the constitution expressly permits. [31] Second, the governor may either strike or reduce an item. Reduction implies diminution. This suggests that an item reduction must have a quantitative effect, implying that reduction must affect the appropriation's amount. It seems unlikely that the constitutional drafters intended the word item to have two widely divergent meanings, one incorporating the essential element of amount and the other not, depending on whether a governor chooses to reduce or strike. [32] We therefore think that item was intended to include the element of amount. Third, the phrase strike or reduce also implies a greater/lesser relationship between these two forms of exercising the item veto power. Reducing an item appears to be a lesser form of striking an item. This implies that these two forms are qualitatively similar and have equivalent effects, i.e., they diminish the amount appropriated. Reducing an item lessens its amount; striking it lessens its amount to nothing. This implies that an item must include a sum of money. Likewise, a passage that does not include a sum of money dedicated to a particular purpose is not an item which the governor can strike or reduce. Therefore, a veto that does not delete or reduce the amount of money appropriated is not a valid exercise of the power article II, section 15 grants. The historical purposes of the item, or partial, veto also support our analysis. It originated as a reform measure to prevent legislators from logrolling when they enact appropriation bills which necessarily address many subjects and need not be confined to a single subject, and to give governors some ability to limit state expenditures. [33] These purposes seem most directed at the amount of an appropriation. Permitting a governor to strike descriptive language would not limit expenditures or help balance a budget. And, although striking language that is only descriptive might reduce logrolling, doing so would only alter purpose, not amount. For reasons discussed below, this could result in an appropriation at odds with what the legislature passed. Finally, public policy disfavors a reading of item that would permit the executive branch to substantively alter the legislature's appropriation bills, effectively resulting in appropriations passed without the protections our constitution contemplates. [34] Other states with the item veto have announced a range of judicial definitions. [35] Professor Richard Briffault considers these definitions to reflect three general approaches, which he describes as (1) favoring the legislature, (2) balancing legislative and executive prerogatives, or (3) favoring the executive. [36] The governor urges us to adopt an approach favoring the executive; the council asks us to adopt an approach favoring the legislature. The superior court adopted an approach generally favoring the legislature. As Professor Briffault recognizes, however, item veto decisions resist easy classification, and his three-approach categorization risks enormous oversimplification. [37] This case does not require us to adopt any of these approaches. Many courts have defined item in a way that makes the amount of an appropriation an essential part of the item. [38] They reason that the item veto power is a negative power, limiting the governor's authority to create new legislation through the creative use of item vetoes. As one court held: The power of partial veto is the power to disapprove. This is a negative power, or a power to delete or destroy a part or item, and is not a positive power, or a power to alter, enlarge or increase the effect of the remaining parts or items .... Thus, a partial veto must be so exercised that it eliminates or destroys the whole of an item or part and does not distort the legislative intent, and in effect create legislation inconsistent with that enacted by the Legislature, by the careful striking of words, phrases, clauses or sentences. [39] A few states define item as something less than a coupling of a sum and a purpose. An example is found in State ex rel. Wisconsin Senate v. Thompson. [40] The Wisconsin Supreme Court there held that the governor may, in the exercise of his partial veto authority over appropriation bills, veto individual words, letters and digits ... as long as what remains after veto is a complete, entire, and workable law. [41] No other state seems to have followed Wisconsin's lead, although the Washington Supreme Court held in Washington State Legislature v. Lowry that [t]he Governor's line item veto should extend to nondollar provisos in appropriations bills. [42] A few courts prefer to focus on the circumstances of the particular appropriation provision at issue. As in Colorado General Assembly v. Lamm, [43] these courts determine that whether there is an item subject to the item veto power is best accomplished on a case-by-case basis. [44] Each general approach has benefits and drawbacks. An approach more favorable to the executive would certainly advance the item veto's historic purposes. But our definition of item  a sum of money dedicated to a particular purpose  does not prevent the governor from using the item veto for those purposes. We are therefore not persuaded by Professor Briffault's suggestion that this result may erode the item veto's anti-logrolling function. [45] Courts upholding gubernatorial item vetoes have sometimes done so by invoking confinement clause policies in defining an item. [46] Doing so seems problematic. First, it allows the governor to exercise the item veto not because the struck passage is an item of appropriation, but because it is not, [47] i.e., because the struck language violates the requirement that appropriation bills be confined to appropriations. [48] Second, allowing the governor to veto language because the governor thinks it violates the confinement clause would confer on the chief executive an amendatory power Alaska's constitution does not grant. We are therefore unpersuaded by cases relying on this rationale. Lowry, on which the governor bases much of his argument, is among these cases. [49] An assertion that a bill violates the confinement clause should be resolved by debate squarely focusing on that issue, rather than by allowing the confinement clause to be used to enhance a gubernatorial power having different historical origins. Applying the item definition here, we conclude that the language struck from the ASMI appropriations is not an item. It does not appropriate a sum of money dedicated to a stated purpose. By striking this language, the governor was not vetoing by striking or reducing, but rather editing the ASMI appropriations. Upholding these vetoes would give the governor the power to spend appropriated monies without observing limitations enacted by the legislature. This would permit a de facto re-appropriation. Granting that power here would not advance the anti-logrolling and budget-balancing purposes underlying the item veto, because these vetoes did not reduce the amount of the ASMI appropriations. Our conclusion in Part III.C.3  that these passages cannot constitutionally be part of appropriation bills  does not alter our analysis of the item issue. Even if these passages did not violate the confinement clause, they would not be items subject to the item veto. We therefore hold that the governor did not validly exercise the item veto power when he struck this language from the three ASMI appropriations.
The governor must return any vetoed bill, with a statement of his objections, to the house of origin. [50] We have never decided what the governor must do to satisfy the statement of objections requirement. The three ASMI appropriations became parts of chapters 98 [51] and 100. [52] The veto message concerning what became chapter 98 stated: In taking final action on the FY98 operating budget, I followed a long-standing gubernatorial tradition of vetoing intent language because it is not appropriate in an appropriations bill. [53] That message also stated: I also vetoed language which purported to make the appropriation for ASMI conditional on having no upper level employees located outside the state because it violates the constitutional limits placed on appropriation bills. To prevent any unnecessary impediment to marketing efforts Outside during the current salmon crisis, fish processors, fishers, and the ASMI board urged me to veto this as a prudent exception to the general rule of having state jobs located in Alaska. [54] The governor's veto message concerning what became the chapter 100 ASMI appropriations contained the same general intent objection first quoted above, but did not include a separate explanation of the sort set out in the quotation indented above. [55] The council argues that although the governor adequately stated his objections to the language he struck from the ASMI appropriation in chapter 98, his objection to the identical language in the two ASMI appropriations in chapter 100 was inadequate, invalidating those vetoes. The superior court held that the legislature had adequate notice of the reasons for the governor's chapter 100 ASMI vetoes because it received both the governor's chapter 100 objection and the more complete chapter 98 objections at literally the same minute. The council objects to this adequate notice theory. It argues that the governor should be required to give the legislature specific notice of the objections to each bill to avoid constant questions about the sufficiency of notice. The council also argues that a governor might provide unclear objections for purposes of delay and making untimely any attempt to override the veto. [56] The governor asserts that the legislature's argument elevates form over substance, because the vetoes in this case were submitted at the same minute. The requirement that the governor explain the reasons for a veto serves at least two principal functions. It allows the legislature to determine what it must do to avoid incurring another veto. [57] And it forces the governor to reveal his or her reasoning, so that both the Legislature and the people might know whether or not he was motivated by conscientious convictions in recording his disapproval. [58] We need not decide whether receipt of the explanation for the chapter 98 veto gave adequate notice of the governor's objections to chapter 100, because we hold that the governor's intent objection for chapter 100 was itself sufficient. We accept for discussion's sake the council's argument that the governor's chapter 100 intent objection would have been clearer if it had disclosed whether the governor would also consider language which validly conditioned an appropriation to be invalid intent language. But in our view such a detailed disclosure is not necessary. And attempting to distinguish between an objection which asserts a facially valid ground for veto, and an identical objection which arguably mischaracterizes the struck appropriation language, would create complex and case-by-case interpretive disputes. Subjecting the substantive adequacy of each objection to judicial scrutiny would be unavoidably time-consuming. Judicial involvement would be unlikely to generate bright-line distinctions that would provide guidance useful in avoiding future disputes and litigation. And ultimately such disputes are inherently political because they implicate the appropriations and budgetary powers of the legislature and the executive, and the political relationship between those branches of government. The judiciary has no special competence to settle these types of inherently political disputes. We also think the purposes underlying the statement-of-objections requirement do not demand case-by-case judicial review. The legislature, through knowledge accumulated in dealing with the governor, is capable of interpreting the sufficiency of an objection, and is thus able to decide whether to enact an amended appropriation or to seek a veto override. It is no less able than the judiciary to compare the governor's words and the struck language to decide for itself whether the governor was motivated by conscientious convictions. And the ultimate arbiter of that question is the electorate. The best way to resolve such disputes is to apply the minimum of coherence standard when reviewing gubernatorial objections. The Colorado Supreme Court adopted this approach in Romer v. Colorado General Assembly, [59] and we adopt it here for Alaska. Under this approach, courts look to see whether the objection makes comprehensible reference to the provision being vetoed, and do not attempt to evaluate the reasoning underlying the objection. [60] In the words of the Colorado Supreme Court, [t]o disallow a veto for the complete absence of reasons is to establish an objective standard  one with which meddlesome courts cannot tamper. [61] The governor's chapter 100 intent objection meets the minimum-of-coherence standard. The language struck from chapter 100 can be fairly characterized as intent language, and the objection clearly refers to the vetoed passages. We therefore conclude that the objection is constitutionally adequate.
We next consider the governor's argument that the legislature violated the confinement clause by including the vetoed language in the three ASMI appropriations. Our constitution provides that [b]ills for appropriations shall be confined to appropriations. [62] We have never delineated the boundaries of this requirement. The confinement clause prevents the legislature from enacting substantive policy outside the public eye. The process for enacting substantive bills gives meaningful opportunity for public notice and comment. Article II, section 14 of the Alaska Constitution requires three readings of a substantive bill, on three separate days, `to ensure that the legislature knows what it is passing' and to ensure an opportunity for the expression of public opinion and due deliberation. [63] This opportunity may be stifled if substantive provisions are attached to appropriation bills in the form of conditions. Unlike other legislation, appropriations are not subject to the single  subject requirement of article II, section 13-a requirement meant to avoid logrolling. [64] Allowing substantive enactments in an appropriation bill may also be problematic because appropriation bills are frequently a product of a free conference committee and, as such, must be voted on in their entirety and cannot be amended on the floor. [65] Consequently, as the superior court noted, the confinement clause prevents a legislator seeking to advance unpopular legislation from burying it in a popular appropriation measure. Strict enforcement of constitutional limits helps ensure that the public will be fully informed of proposed legislation. The superior court here applied a confinement clause test first articulated in 1983 by the superior court, Judge Walter L. Carpeneti presiding, in Alaska State Legislature v. Hammond. [66] The superior court there addressed, among other issues, claims that eleven appropriations violated the confinement clause. The superior court wrote that to satisfy the confinement clause, the qualifying language must be the minimum necessary to explain the Legislature's intent regarding how the money appropriated is to be spent. It must not administer the program of expenditures. It must not enact law or amend existing law. It must not extend beyond the life of the appropriation. Finally, the language must be germane, that is appropriate, to an appropriations bill. [67] We find the authority the superior court cited in Hammond persuasive, [68] and we approve the five-part Hammond formulation as a non-exclusive test for deciding whether an appropriation violates the confinement clause. We further elaborate on this test before applying it. The council suggests that the minimum necessary language is best understood simply as a requirement that appropriation language explain how, when, or on what the money is to be spent. Therefore, this part of the test is better expressed as simply requiring the language to explain the legislature's purpose regarding the appropriation. We agree generally with the first of these propositions, but we believe that this factor is better stated in terms of what it permits rather than what it requires. This factor limits the legislature's ability to include in an appropriation bill legislation cloaked as a description. The council suggests that the Hammond formulation quoted above is deficient because an appropriation should be able to change existing law on the subject of appropriations. The council argues that the confinement clause is not violated when the legislature amends a prior appropriation in an appropriation act. We believe that this is an accurate statement of law. But the Hammond formulation would not seem to preclude this practice in any event, because the new appropriation bill would amend only a prior appropriation, not an existing law. The council proposes additional illumination of the prohibition on enacting or amending substantive law. The council characterizes case law from other states as generally dictating that an appropriation for a statutory program may not include provisions changing the requirements of that program, even temporarily for the purposes of that appropriation. [69] The council cites three Florida cases in support. Chiles v. Milligan considered appropriation language that would have taken money to be awarded under the statutory education funding formula and adjusted it according to the ratio of classroom salaries to total salaries. [70] The court struck this language as an enactment of new law. [71] In a subsequent but similarly named case, Chiles v. Milligan, the court struck down appropriation language that would have allowed education funds to be used for purposes other than those specified by statute. [72] But in Department of Education v. School Board of Collier County, the court upheld an appropriation provision that increased funds for all schools except those with a millage value per student of more than twenty percent of the statewide average; the court reasoned that the appropriated money was in addition to the standard education funding and therefore did not amend existing law. [73] We agree with the council's assertion that the differences between such cases reflect the tension between a desire to prevent legislatures from using appropriation bills to make programmatic changes (even for a year) and the realization that legislatures do not have to fund or fully fund any program (except, possibly, constitutionally mandated programs), and in fact may choose to fund programs that are subject to conditions or contingencies. With regard to the germaneness requirement, the council's brief usefully discusses cases from other jurisdictions concerning what their confinement clauses permit and prohibit. The council lists the following conditions and contingencies that state courts have upheld as sufficiently related or germane to the money appropriated: [74] (1) limits on amounts that could be spent at an individual facility; [75] (2) limits on the number of employees for which the money could be spent; [76] (3) a prohibition against using the money for new construction; [77] (4) a requirement related to federal funds; [78] (5) a provision making an appropriation for driver education contingent on the enactment of a tax on drivers' licenses; [79] and (6) a requirement that funds for contracted work be spent only if a state laboratory could not perform the work. [80] On the other hand, the council notes that courts have struck down these provisions because they were not sufficiently connected with the expenditures: (1) a requirement that the money not be spent for trade delegations unless there was nonpartisan executive council representation; [81] (2) a requirement that the inmate population at a specified facility be reduced; [82] (3) a provision conditioning a department of health appropriation on the department relinquishing federal money to a private family planning council; [83] (4) a requirement for giving notice of prisoners' escapes and transfers; [84] and (5) a prohibition against electioneering by district attorneys in a certain parish. [85] The council characterizes the differences between these cases as follows: In general it appears that courts will uphold conditions that could (albeit with some effort) be written as purposes, e.g., which facilities, which employee positions, which buildings or types of buildings, the money could be spent on. This would be true even if the conditions were written in the negative, e.g., money from this appropriation may not be used to fund employee contracts; money from this appropriation may not be used to fund new construction. See Welden v. Ray, 229 N.W.2d 706, 710 (Iowa 1975). It also appears that contingencies will be upheld if they relate to the receipt or nonreceipt of specific funds, e.g., federal funds, matching funds, the tax intended to fund the expenditure, or relate to the occurrence or nonoccurrence of something that would make the expenditure desirable .... However, contingencies that relate to things other than the need for or use of the money or the need for the activity, seem more vulnerable to being found insufficiently connected to the appropriation. We agree with the council's characterizations of the limits on the legislature's appropriation power. We do so not to predict the outcome of future disputes or to minimize the importance of the Hammond factors when analyzing a confinement clause dispute, but because the legislative council, speaking for the legislature, has usefully given examples of appropriation provisions which it regards as unconstitutional. In approaching confinement clause disputes, we assume that an act of the legislature is constitutional. [86] The burden of showing unconstitutionality is on the party challenging the enactment; doubtful cases should be resolved in favor of constitutionality. [87] With this background, we now apply the five Hammond factors to the vetoed language in the ASMI provisions.
The vetoed language required ASMI to move upper level employees to locations in Alaska in order for ASMI to carry forward monies from appropriations in prior years. These three ASMI appropriations did not themselves appropriate monies for upper level staffing. Rather, they addressed the marketing [of] Alaska seafood products. [88] The vetoed language therefore expressed the legislature's intent about how other ASMI appropriations were to be spent, not its intent about how these appropriations were to be used. [89]
The vetoed language did not specify how these three appropriations were to be used, and instead addressed staffing funded under separate appropriations. This language effectively administered ASMI's program because it limited the executive's exercise of discretion in staffing and locating executive-branch offices whose operations were funded by separate appropriations. Because this language did not specify how these three appropriations were to be spent, we do not need to decide here whether, as the council argues, the appropriation power gives the legislature authority to decide where executive-branch personnel will be located. Likewise, we need not decide whether, as the governor asserts, the appointment of executive officers is an executive function, [90] and whether the geographic location of particular levels of state officials is the type of close supervision of state government that is essentially executive in character. [91]
The council argues that the vetoed language is germane to marketing seafood. The governor argues that it is not, because employee location does not relate to ASMI's statutory duties. We conclude that the vetoed language is not sufficiently germane because these three appropriations do not fund staffing at any location affected by the struck language. These appropriations were for purchasing contractual services, expenditures unrelated to encouraging local hire. The superior court correctly observed that separate appropriations funded state employee positions. The vetoed language therefore is not germane to these three appropriations. Given the absence of any direct relationship, it is insufficient that the language arguably has some general relationship  because it generally concerns ASMI and the performance of ASMI's duties  to the ASMI appropriations in chapters 98 and 100.
The superior court found the vetoed language objectionable because it addressed an issue of substantive law, local hire, that the legislature has repeatedly addressed with substantive legislation. We agree that this language has the effect of creating a mini-local hire law. According to the legislature's drafting manual, an appropriation bill may not contain substantive provisions. [92] Permitting it to enact substantive policy in one appropriation bill by imposing conditions on another appropriation bill would reduce the public scrutiny and debate which accompany policy making, and could encourage logrolling and free-riders to achieve results not politically attainable in non-appropriation bills. The council argues that the legislature could have accomplished the same result with line-item appropriations and that the legislature followed the equivalent of that process. But we think that the process followed here was not equivalent. Line-item appropriations would have been subject to item vetoes, and would have required the legislature to give individualized consideration to each ASMI budget item. The legislature did not follow that course. The vetoed language here substantively affected the use of other appropriations, and cannot be considered merely a condition attached to the chapter 98 and 100 appropriations. In reaching beyond these appropriations, the struck language created new substantive law.
These appropriations did not state whether the out-of-state staffing limitation expired with the fiscal year. And the vetoed language does not direct how these appropriations were to be spent. It was instead intended to limit other appropriations. It is therefore unclear whether the life of the staffing limitation actually extended beyond the duration of the ASMI appropriations in chapters 98 and 100.
Regardless of whether the vetoed language was to extend beyond the life of these three ASMI appropriations, it violates the other four Hammond factors. We therefore conclude that including the vetoed language in the chapter 98 and 100 ASMI appropriations violated the confinement clause. The superior court correctly reached the same conclusion.