May 30, 2006
Mr. Chris Nelson
Secretary of State
500 east Capitol Avenue
Pierre, SD 57501-5070
Official Opinion No. 06-05
Re: Initiated Measures
Dear Secretary Nelson:
You have requested an opinion from this Office concerning the following factual situation:
FACTS:
A statutory initiative petition to repeal the gross receipts tax on wireless telecommunications services was filed with my office pursuant to SDCL 2-1-6.2. A statutory initiative petition to repeal video lottery was also filed with my office. Following the signature validation process, both petitions were found to contain at least 16,728 signatures, which is the number required for placement of an initiative on the general election ballot.
In 1995 the South Dakota Supreme Court in Christensen v. Carson, 533 N.W.2d 712 (S.D. 1995) determined that the initiative process could not be used to repeal a municipal ordinance or resolution. Since both of these initiated measures would repeal existing statutory schemes, a question has arisen on whether Christensen v. Carson or the “support of state government” prohibition in Article III, §1 of the state constitution prevents the placement of either of these measures on the ballot.
As has been the practice of past Secretaries of State in similar circumstances, I will look to your legal analysis for guidance in determining whether these measures meet the constitutional requirements for inclusion on the ballot.
Based on these facts you have asked the following questions.
QUESTIONS:
1. May the initiated measure seeking repeal of the statutory authorization for video lottery be placed on the ballot?
2. May the initiated measure seeking repeal of the statutory authorization for the four percent gross receipts tax imposed upon wireless telecommunications services be placed on the ballot?
IN RE QUESTIONS:
Article III, Section 1 of the South Dakota Constitution provides:
The legislative power of the state shall be vested in a Legislature which shall consist of a senate and house of representatives. However, the people expressly reserve to themselves the right to propose measures, which shall be submitted to a vote of the electors of the state, and also the right to require that any laws which the Legislature may have enacted shall be submitted to a vote of the electors of the state before going into effect, except such laws as may be necessary for the immediate preservation of the public peace, health or safety, support of the state government and its existing public institutions. Not more than five percent of the qualified electors of the state shall be required to invoke either the initiative or the referendum.
This section shall not be construed so as to deprive the Legislature or any member thereof of the right to propose any measure. The veto power of the Executive shall not be exercised as to measures referred to a vote of the people. This section shall apply to municipalities. The enacting clause of all laws approved by vote of the electors of the state shall be: "Be it enacted by the people of South Dakota." The Legislature shall make suitable provisions for carrying into effect the provisions of this section.
In South Dakota the people have constitutionally reserved to themselves the right to “propose bills and laws and to enact them at the polls” by way of initiated measure, and the right to decide by a public vote whether an act passed by the Legislature should be approved or rejected by way of referendum. Byre v. City of Chamberlain, 362 N.W.2d 69, 79 (S.D. 1985).
In 1898, South Dakota enacted an amendment to art. III, § 1 permitting initiative and referendum at the state and municipal levels. Chip J. Lowe, Restrictions on Initiative And Referendum Powers in South Dakota, 28 S.D. L.Rev. 53-54 (1982). In so doing, South Dakota became the first state to reserve legislative powers to the people. Id. at 53. State statutes have since extended this “legislative prerogative of the electorate” to counties, conservation districts, and school districts. Id. at 54 (citing SDCL ch. 7-18A; SDCL 38-8A-12; SDCL 13-6-41 to 49). Other statutes allow particular issues to be submitted to a public vote. Id. at 54 (citing SDCL 38-27-18; SDCL 11-2-22; SDCL Ch. 35-3; SDCL 9-4-4.9). As one author observed: “Voter approval is nothing new in South Dakota government.” Id.
Christensen v. Carson, 533 N.W.2d 712, 714, fn.1 (S.D. 1995).
The powers reserved to the people, however, are not unfettered. Under Article III the power of referendum is specifically subject to two exceptions. Laws adopted by the Legislature that are necessary for the immediate preservation of the public peace, health or safety, or which are necessary for the support of the state government and its existing public institutions may not be referred to a public vote. See, Byre, 362 N.W.2d at 79; Christensen, 533 N.W.2d at 715; Gravning v. Zellmer, 291 N.W.2d 751, 757 (S.D. 1980); State ex rel. Kornman v. Larson, 81 S.D. 540, 544, 138 N.W.2d 1, 3 (1965).
While those two exceptions do not directly apply to the power of initiative, Byre, 362 N.W.2d at 79, the South Dakota Supreme Court has held that power of initiative is not unlimited. Fixing the scope of the power of initiative is a matter of determining the meaning of the language found in Article III, §1. That is a matter peculiarly within the province of the courts.
It is the duty of the Supreme Court...to determine the meaning of constitutional terms....
In determining the meaning of a constitutional provision, courts are guided by applicable rules of construction. First and foremost, the object of construing a constitution is to give effect to the intent of the framers of the organic law and of the people adopting it. The Supreme Court has the right to construe a constitutional provision in accordance with what it perceives to be its plain meaning. When words in a constitutional provision are clear and unambiguous, they are to be given their natural, usual meaning and are to be understood in the sense in which they are popularly employed. If the meaning of a term is unclear, the Court may look to the intent of the drafting body.
Poppen v. Walker, 520 N.W.2d 238, 241-242 (S.D. 1994) (Citations omitted).
The Court in Christensen considered whether it was permissible under Article III, §1 to use an initiated measure to repeal a City’s existing plan to construct a municipal airport. At the crux of the Court’s reasoning was the Byre case where the Court had carefully distinguished between the constitutionally reserved powers of initiative and referendum.
The purpose of the initiative is not to curtail or limit legislative power to enact laws, but rather to compel enactment of measures desired by the people, and to empower the people, in the event the legislature fails to act, to enact such measures themselves. The purpose of referendum is to suspend or annul laws which are not yet effective in order to provide the people a means of expressing their desire regarding a legislative proposition. . . . When the referendum is triggered, the people must approve a legislative proposition before it becomes operative as a law.
Christensen, 533 N.W.2d at 714, (citing Byre, 362 N.W.2d at 79 (citing 82 C.J.S. Statutes § 115 (1953)) (emphasis in original).
Christensen relied on that distinction and rejected the use of an initiated measure to overturn actions already implemented by the City. “Initiative, then, refers to a proposal which originates with the people, while a referendum is a reaction to measures initiated by the government. Christensen’s petition was a reaction to City’s plan to establish an airport and, therefore, constituted a referendum rather than an initiative.” Christensen, 533 N.W.2d at 714.
The Court concluded it was not permissible to use an initiated measure to repeal the City’s existing plan to establish an airport.
...Christensen confuses the powers of initiative and referendum and mistakenly assumes that an initiative may be used, like a referendum, to repeal or amend previously passed legislation. Settled South Dakota law does not permit this result. The South Dakota Constitution, the South Dakota Code, and settled South Dakota case law clearly distinguish between initiative and referendum measures.
Christensen, 533 N.W.2d at 714.
The Court’s reason for guarding the constitutional distinction between an initiative and referendum is compelling.
While the constitution reserves both initiative and referendum powers to the people, it excepts from the referendum process any laws which were enacted “for the immediate preservation of the public peace, health or safety, support of the state government and its existing public institutions.” SD Const. art. III, § 1. This exception does not apply to the initiative process, id.; Byre, 362 N.W.2d at 79, presumably because initiatives are not intended to affect existing laws. If we were to allow the distinction between initiative and referendum to be blurred, as Christensen seems to suggest, voters could avoid the restrictions on the referendum power by simply fashioning their petition in the form of an initiative. We refuse to endorse this result, because doing so would effectively nullify a constitutional provision.
Christensen, 533 N.W.2d at 715.
The legislative history of the wireless telecommunications gross receipts tax confirms that the Court’s reasoning applies here. The gross receipts tax in its current form was imposed by the Legislature in 2005 in response to Dakota Systems, Inc. v. Viken, 2005 S.D. 27, 694 N.W.2d 23. That case found the appropriations in the 2003 enactment of the gross receipts tax unconstitutional. See S.L. 2003, ch. 58. The 2005 Legislature responded by appropriating the proceeds of the gross receipts tax and making the legislation retroactive. S.L. 2005, ch. 65. The Legislature also attached an emergency clause to the legislation declaring the Act was “necessary for the support of the state government and its existing public institutions.” S.L. 2005, ch. 65, § 6. It is difficult to argue with that proposition. The Department of Revenue informed me that for state fiscal year 2005 the tax brought in $4,927,150.11 to the property tax reduction fund and $3,284,766.74 to the county telecommunications gross receipts fund.
The Legislature likewise enacted emergency clauses when it dealt with the Poppen v. Walker decision’s impact on the video lottery in its first and second special sessions in 1994. The Legislature declared those acts adopted which dealt with the video lottery to be either necessary for the immediate preservation of the public peace, health or safety, or necessary for the support of the state government and its existing public institutions. See S.L. 1995 (1994 First Special Session), chapters 2, 3, 4, and 5; S.L. 1995 (1994 Second Special Session), chapters 1 through 16, inclusive. Again, it is difficult to argue with that legislative determination. The Bureau of Finance and Management projected that the state will receive $113,137,000 from the video lottery in state fiscal year 2007 which will be used to fund state aid to education. Therefore, if an act is declared necessary for the immediate preservation of the public peace, health or safety, or necessary for the support of the state government and its existing public institutions, that act is not subject to referendum. The Court has often opined on the various aspects of whether a particular measure falls within either exception, and thus is not referable. See, e.g., Breck v. Janklow, 2001 S.D. 28, 623 N.W.2d 449; Gravning v. Zellmer; State ex rel. Kornman v. Larson; State ex rel. Botkin v. Morrison, 61 S.D. 344, 249 N.W. 563 (1933); State ex rel. Shade v. Coyne, 58 S.D. 493, 237 N.W. 733 (1931); State ex rel. Wegner v. Pyle, 55 S.D. 269, 226 N.W. 280 (1929).
Assuming the validity of the emergency clauses attached to the pertinent legislation dealing with wireless telecommunications gross receipts tax and video lottery, those acts would not have been subject to referendum under Article III. Indeed no referendum petitions were filed. Further, those opposing the wireless telecommunications gross receipts tax or the video lottery could have challenged the validity of the emergency clauses and subjected each legislative measure to referendum at that time. Having failed to timely challenge the legislation directly, they now seek to refer those measures indirectly by use of an initiated measure. In so doing, they avoid having to convince the courts that $4,927,150.11 of the wireless telecommunications gross receipts taxes, and a projected $113,137,000 of video lottery revenues are not necessary for the support of state government and its existing institutions. As the Court pointed out
[I]f we were to allow the distinction between initiative and referendum to be blurred, as Christensen seems to suggest, voters could avoid the restrictions on the referendum power by simply fashioning their petition in the form of an initiative. We refuse to endorse this result, because doing so would effectively nullify a constitutional provision.
Christensen, 533 N.W.2d at 715.
While Christensen dealt with an attempt to repeal an existing municipal plan by initiated measure, its reasoning applies with equal force to the questions raised here. Indeed Article III, § 1 specifically provides that the reserved powers of initiative and referendum apply to municipalities. Any limitation on the reach of the constitutionally reserved powers applies with equal force whether legislation is being proposed at either the state or the municipal level.
Because of the import of the questions you pose, legal representatives of the proponents and the opponents of the two initiated measures were invited to submit their views on these questions. I have considered those views and have the following observations.
It is suggested that if Christensen is applied literally, nothing could be passed by initiated measure. The argument is based on the language in the opinion that says an initiative, unlike a referendum, cannot be used to “repeal or amend previously passed legislation.” Christensen, 533 N.W.2d at 714. The argument is that because virtually every initiated measure will have some impact on existing legislation the Christensen case cannot mean what it says with regard to amending previously passed legislation. I disagree.
First, I point out that it is the exclusive province of the Court to determine the meaning of constitutional provisions and they have done so in Christensen. Second, the factual setting in Christensen involved a repeal, not an amendment of existing legislation, and to that extent the “amendment” language is dicta. Third, it is not necessary to determine the efficacy of the Court’s reference to amending previously passed legislation in this situation because both initiated measures here involve repeal of existing statutory schemes, not amendments.
It has also been suggested that the Secretary of State lacks the authority to decide whether to place these two initiated measures on the ballot because your duty is only ministerial. I disagree. This office opined in similar circumstances that the Secretary of State has the discretion to refuse to certify ballot questions. AGR 88-31. The South Dakota Supreme Court cases cited in that opinion clearly demonstrate that the Secretary of State has discretion to determine whether to place measures on the ballot in appropriate circumstances. In State ex rel. Shade v. Coyne, the Court determined that the Secretary of State should keep a referred measure off the ballot. In State ex rel. Wegner v. Pyle, the Court ultimately determined that the referred measure should be placed on the ballot but did so for reasons of constitutional interpretation, not because the Secretary lacked discretion in the matter. In neither instance did the Court say the responsibility of the Secretary of State was ministerial.
Indeed the Christensen Court had the perfect opportunity to say that the City had a ministerial duty to place the purported initiated measure on the ballot. Instead the Court upheld the City’s decision to keep the measure off the ballot based on the Court’s determination that the attempted initiated measure was not an appropriate use of constitutionally reserved powers.
Furthermore, the question here is not whether a measure might be subject to constitutional challenge if passed by the voters. The courts have in the past refused to offer what amount to advisory opinions in those types of circumstances. See State ex rel. Evans v. Riff, 73 S.D. 348, 42 N.W.2d 887 (1950). Rather, here you are faced with a situation where our state’s highest court has ruled that an initiated measure may not be utilized to repeal existing law. Just as you have the discretion to “refuse to certify a ballot question when informed by the Attorney General that in his opinion the act sought to be referred is necessary for the support of state government and its existing public institutions” (AGR 88-31), so too do you have the discretion to refuse to certify a ballot measure when informed by the Attorney General that in his opinion an initiated measure may not be used to repeal existing state law.
The implication has been made that you are estopped from refusing to place these measures on the ballot because of the way you characterize initiatives on your web site, and because initiated measures have been placed on the ballot in the past which amend existing laws. Initially, that is a difficult argument to understand because I am aware that you advised the proponents of both of these measures in late March, at the beginning of their efforts in circulating petitions, that you had concerns based on the Christensen case.
As to the estoppel argument, I simply point out that:
“[E]stoppels against the public are little favored and should be used sparingly.” Sioux Valley Hosp. Assn’ v. Tripp County, 404 N.W.2d 519, 522 (S.D. 1987) (quoting City of Rapid City v. Hoogterp, 85 S.D. 176, 179, 179 N.W.2d 15, 17 (1970)). See Sioux Falls Constr. Co. v. City of Sioux Falls, 297 N.W.2d 454 (S.D. 1980); Northwestern, Pub. Serv. Co. v. City of Aberdeen, 90 S.D. 627, 244 N.W.2d 544 (1976); Rhodes v. City of Aberdeen, 74 S.D. 179, 150 N.W.2d 215 (1951); Griffis v. State, 69 S.D. 439, 11 N.W.2d 138 (1943). “[M]ere... acquiescence is not sufficient to permit an estoppel. Some affirmative action must have been taken upon which the other party acted in reliance and substantially changed his position.”
Moulton v. State, 412 N.W.2d 487, 491 (S.D. 1987) (emphasis in original). I do not find the statements on your web site concerning the definition of an initiative, nor your past practice concerning what initiated measures are placed on the ballot to be “exceptional circumstances” demanding the application of estoppel against the public to prevent “manifest injustice” as required by those cases. In re Stabio Ditch Water Right, 417 N.W.2d 391 (S.D. 1987). Frankly, none of those instances since the Christensen case in 1995 have involved the wholesale repeal of a statutory scheme.
It is my opinion that neither the initiated measure seeking repeal of the statutory authorization for video lottery, nor the initiated measure seeking repeal of the statutory authorization for the four percent gross receipts tax imposed upon wireless telecommunications services, may be placed on the ballot. Both seek to repeal existing state law and under the Christensen case are not permissible uses of the constitutional power of initiative. This is not a conclusion I reach lightly. The people’s reserved powers to initiate and refer legislation is of critical import in the history of this state. By the same token, even the exercise of constitutionally reserved powers must take place in compliance with the constitution and the law. Our Court has interpreted the state constitution to prohibit use of an initiated measure to repeal existing law. In my opinion the answer to both of your questions is No.
Respectfully submitted,
LARRY LONG
ATTORNEY GENERAL
500 East Capitol Avenue
Pierre, SD 57501-5070
LL:HHD:
