Court Opinion

ID: 9542045
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:30:51.491192+00
Date Added: 2024-06-11T15:06:00.374398
License: Public Domain

RABINOWITZ, Justice,
dissenting in part.
I disagree with the court’s conclusion that the tax provided for in Bristol Bay Borough Ordinance No. 32 is a sales tax. As I analyze the ordinance, it calls for a severance tax on the harvesting of fish within the boundaries of the Bristol Bay Borough.
A severance tax is a tax levied on the severance of natural resources from the soil or water. Phillips Petroleum Co. v. Heath, 254 Ark. 847, 497 S.W.2d 30 (1973). A taxing entity is incapable of levying a severance tax on resources which have been severed outside of its boundaries. Gulf Refining Co. of Louisiana v. McFarland, 154 La. 251, 97 So. 433, 435 (1923), aff’d per curiam, 264 U.S. 573, 44 S.Ct. 402, 68 L.Ed. 856 (1924). On the other hand, it is in the power of the taxing entity to levy a sales tax upon all items sold within its jurisdiction, regardless of where the severance of the resource occurred.1
Here the tax provided for is bottomed on the prerequisite that the taxable resource, raw fish, be harvested within the borough’s boundaries. If, in fact, the fish were caught outside the borough’s boundaries but sold within its borders, then the sale would elude the ordinance’s reach. Thus, I would hold that the contested tax is a severance tax and would in turn address the question of whether the imposition of a severance tax by the borough is prohibited by the provisions of Article VIII of the Alaska Constitution pertaining to the ownership, use and management of natural resources.
In my opinion, the severance tax imposed by Bristol Bay Borough does violate the provisions of Article VIII of the Alaska Constitution which reserve the benefits from, and control over management of the fisheries resource to all the people of the state.2 The effect of the borough’s ordinance is to exclusively appropriate to its own benefit, and that of its residents, the use of a natural resource which is reserved to all of the people of the state for their common use. Article VIII, Section 2 of the Alaska Constitution reserved to the legislature, not the borough, the authority to act as to this resource. Absent a delegation by the legislature to the borough, I conclude that the ordinance contravenes Alaska’s *1125Constitution. This disposition makes it unnecessary for me to reach the further question of whether municipal taxation of raw fish has been preempted by existing state legislation or regulations.

. It is clear that a severance tax can be measured by the sales price or market value of the resource involved.

. Article VIII of the Alaska Constitution provides, in part:
Section 2. General Authority. The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.
Section 3. Common Use. Wherever occurring in their natural state, fish, wildlife, and waters are reserved to the people for common use.
Section 4. Sustained Yield. Fish, forests, wildlife, grasslands, and all other replenisha-ble resources belonging to the State shall be utilized, developed, and maintained on the sustained yield principle, subject to preferences among beneficial uses.
Section 5. Facilities and Improvements. The legislature may provide for facilities, improvements, and services to assure greater utilization, development, reclamation, and settlement of lands, and to assure fuller utilization and development of the fisheries, wildlife, and waters.
Section 15. No Exclusive Right of Fishery. No exclusive right or special privilege of fishery shall be created or authorized in the natural waters of the State. This section does not restrict the power of the State to limit entry into any fishery for purposes of resource conservation, to prevent economic distress among fishermen and those dependent upon them for a livelihood and to promote the efficient development of aquaculture in the State.
Section 17. Uniform Application. Laws and regulations governing the use or disposal of natural resources shall apply equally to all persons similarly situated with reference to the subject matter and purpose to be served by the law or regulation.