Az Free Enterprise Club v. Katie Hobbs

IN THE
SUPREME COURT OF THE STATE OF ARIZONA
ARIZONA FREE ENTERPRISE CLUB, ET AL.,
Plaintiffs/Appellants,
v.
KATIE HOBBS, IN HER CAPACITY AS THE
SECRETARY OF STATE OF ARIZONA, ET AL.
Defendant/Appellee,
and
INVEST IN ARIZONA (SPONSORED BY AEA AND STAND FOR CHILDREN),
A POLITICAL COMMITTEE,
Real Party in Interest/Appellee.
No. CV-21-0304-AP/EL
Filed August 19, 2022
Appeal from the Superior Court in Maricopa County
The Honorable Katherine M. Cooper, Judge
No. CV2021-011491
CV2021-016143
(Consolidated)
REVERSED AND REMANDED
COUNSEL:
Kory Langhofer (argued), Thomas Basile, Statecraft PLLC, Phoenix,
Attorneys for Arizona Free Enterprise Club, Scot Mussi, and Diane Schafer
Spencer Scharff, Scharff PLC, Phoenix, Attorney for Katie Hobbs
Roopali H. Desai, D. Andrew Gaona (argued), Kristen Yost, Coppersmith
Brockelman PLC, Phoenix, Attorneys for Invest in Arizona (Sponsored by
AEA and Stand for Children)
ARIZONA FREE ENTERPRISE CLUB, ET AL. V. HOBBS, ET AL.
Opinion of the Court
Timothy Sandefur, Scharf-Norton Center for Constitutional Litigation at
the Goldwater Institute, Phoenix, Attorneys for Amicus Curiae Goldwater
Institute
Daniel J. Adelman, Samuel Schnarch, Arizona Center for Law in the Public
Interest, Phoenix; and Erin Adele Scharff, Phoenix, Attorneys for Amicus
Curiae Arizona Center for Law in the Public Interest
Mark Brnovich, Arizona Attorney General, Joseph A. Kanefield, Chief
Deputy and Chief of Staff, Brunn (Beau) Roysden, III, Solicitor General,
Michael Catlett, Deputy Solicitor General, Jillian Francis, Assistant
Attorney General, Phoenix, Attorneys for Amicus Curiae Arizona Attorney
General Mark Brnovich
JUSTICE LOPEZ authored the Opinion of the Court, in which CHIEF
JUSTICE BRUTINEL, VICE CHIEF JUSTICE TIMMER, and JUSTICES
BOLICK and KING joined. JUSTICE MONTGOMERY, joined by JUSTICE
BEENE, concurred in part and dissented in part.
JUSTICE LOPEZ, Opinion of the Court:
¶1 We explain today the reasons for our prior decision order
disqualifying Real Party in Interest Invest in Arizona’s (“IIA”) referendum
petition seeking to refer Senate Bill 1828—sections 13 and 15—(“SB 1828”)
to the ballot in the November 8, 2022 General Election. We conclude the
exemption from the referendum power for laws “for the support and
maintenance of the departments of the state government and state
institutions,” Ariz. Const. art. 4, pt. 1, § 1(3), applies to tax revenue
measures. A revenue measure is exempt from referendum, regardless of
the increase or decrease in revenue, provided it is for the support and
maintenance of existing departments of the state government and state
institutions.
BACKGROUND
¶2 SB 1828 was passed during the First Regular Session of the
Fifty-Fifth Arizona Legislature and signed by the Governor as a tax bill for
the 2022 fiscal year. SB 1828 imposes a “flat” tax of 2.5% on taxable income
but becomes effective only if the state General Fund revenues reach
specified targets. SB 1828 was enacted in response to the Invest in
2
ARIZONA FREE ENTERPRISE CLUB, ET AL. V. HOBBS, ET AL.
Opinion of the Court
Education Act (“Prop 208”), which would have imposed an income tax
surcharge of 3.5% on taxable income over $250,000 for single filers or filers
who are married but filing separately, and $500,000 for married and head
of household filers. 1 The parties agree that SB 1828’s immediate effect likely
would be to reduce the state’s income tax revenue by reducing income tax
liability to households subject to Prop 208.
¶3 IIA sought to prevent implementation of the flat tax by
referring SB 1828 to the ballot in the November 8, 2022 General Election.
On July 21, 2021, Appellants Arizona Free Enterprise Club, et al. (“Free
Enterprise”) filed a motion for preliminary injunction in Maricopa County
Superior Court seeking to enjoin the Secretary of State from accepting or
certifying any petition filed in support of a referendum of SB 1828,
including IIA’s petition. Free Enterprise challenged the referendum on two
grounds: the Arizona Constitution exempts SB 1828 from referendum, and
the petition sheets and signatures are statutorily deficient. IIA moved to
dismiss Free Enterprise’s challenge.
¶4 On December 20, 2021, the trial court ruled that SB 1828 is
referable and, thus, may be submitted to the voters in the November 8, 2022
General Election. The court reasoned that it did not qualify as a “support
and maintenance” measure under the Arizona Constitution because it did
not appropriate state funds or generate necessary revenue. See Ariz. Const.
art. 4, pt. 1, § 1(3). The court denied Free Enterprise’s preliminary
injunction request and granted IIA’s motion to dismiss in part, leaving the
challenge based on petition deficiencies in place.
¶5 Free Enterprise directly appealed the trial court’s ruling to
this Court pursuant to Arizona Rules of Civil Appellate Procedure 10(d)(1).
Under Rule 10, a party may take a direct appeal “if the judgment involves
a statewide initiative or referendum, the issue on appeal is of substantial
statewide importance, and the issue otherwise would become moot before
Supreme Court review.” This case requires us to interpret article 4, part 1,
section 1(3) of the Arizona Constitution (“section 1(3)”) and the referendum
power, both issues of statewide importance that would become moot if this
Court’s review were delayed until after the November 8, 2022 General
1 The Maricopa County Superior Court invalidated Prop 208 in March
2022, following remand from this Court in Fann v. State, 251 Ariz. 425, 443
¶ 65 (2021).
3
ARIZONA FREE ENTERPRISE CLUB, ET AL. V. HOBBS, ET AL.
Opinion of the Court
Election. On April 21, 2022, following oral argument, we issued a decision
order reversing the trial court’s order with a more detailed opinion to
follow. This is that opinion. We have jurisdiction pursuant to article 6,
section 5(3) of the Arizona Constitution.
DISCUSSION
¶6 The three branches of government in Arizona share an equal
duty in applying and upholding our state constitution, but “our courts bear
ultimate responsibility for interpreting its provisions.” Forty-Seventh
Legislature v. Napolitano, 213 Ariz. 482, 485 ¶ 8 (2006); see also Kimel v. Fla. Bd.
of Regents, 528 U.S. 62, 81 (2000) (“The ultimate interpretation and
determination of the [Constitution’s] substantive meaning remains the
province of the Judicial Branch.”). The task before us is to interpret the text
of section 1(3) to determine its meaning and the scope of the exemption of
laws from the referendum power. See Ariz. Sch. Bds. Ass’n v. State, 252 Ariz.
219, 229 ¶ 45 (2022) (noting that this Court’s constitutional duty is to
interpret and apply the constitution).
I.
A.
¶7 The Arizona Constitution reserves the powers of initiative
and referendum to the people. Ariz. Const. art 4, pt. 1, § 1(1). The initiative
power allows qualified electors to propose legislation. Id. § 1(2). The
referendum power has two forms—the first permits the legislature to refer
a legislative enactment to a popular vote, and the second permits qualified
electors to circulate petitions, and refer to a popular vote, legislation that
has been enacted by the elected representatives. Id. § 1(3). Arizona’s public
policy strongly favors the initiative and referendum processes, W. Devcor,
Inc. v. City of Scottsdale, 168 Ariz. 426, 428 (1991), which compels broad
construction of the constitutional right to referendum. This public policy,
however, is tempered by the nature of the referendum power. “Because the
referendum is an ‘extraordinary’ power that permits a ‘minority to hold up
the effective date of legislation which may well represent the wishes of the
majority,’ we require referendum proponents to comply strictly with
applicable constitutional and statutory provisions.” Id. at 429 (internal
citation omitted) (first quoting Direct Sellers Ass’n v. McBrayer, 109 Ariz. 3, 5
(1972); and then quoting Cottonwood Dev. v. Foothills Area Coal., 134 Ariz. 46,
4
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Opinion of the Court
49 (1982)); see also A.R.S. § 19-101.01 (“[T]he constitutional and statutory
requirements for the referendum [must] be strictly construed . . . .”).
¶8 Section 1(3), which establishes the referendum power, is a
dense provision that has befuddled our courts since its inception. See Clark
v. Boyce, 20 Ariz. 544, 546 (1919) (remarking that “we must admit that it has
cost us no little trouble to arrive at a conclusion” concerning the
interpretation of section 1(3)). Section 1(3) provides:
The second of these reserved powers is the referendum.
Under this power the legislature, or five per centum of the
qualified electors, may order the submission to the people at the
polls of any measure, or item, section, or part of any measure,
enacted by the legislature, except laws immediately necessary
for the preservation of the public peace, health, or safety, or
for the support and maintenance of the departments of the state
government and state institutions; but to allow opportunity for
referendum petitions, no act passed by the legislature shall be
operative for ninety days after the close of the session of the
legislature enacting such measure, except such as require
earlier operation to preserve the public peace, health, or
safety, or to provide appropriations for the support and
maintenance of the departments of the state and of state institutions;
provided, that no such emergency measure shall be
considered passed by the legislature unless it shall state in a
separate section why it is necessary that it shall become
immediately operative, and shall be approved by the
affirmative votes of two-thirds of the members elected to each
house of the legislature, taken by roll call of ayes and nays,
and also approved by the governor; and should such measure
be vetoed by the governor, it shall not become a law unless it
shall be approved by the votes of three-fourths of the
members elected to each house of the legislature, taken by roll
call of ayes and nays.
(Emphasis added.)
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Opinion of the Court
B.
¶9 We first consider whether revenue laws “for the support and
maintenance of the departments of the state government and state
institutions” are exempt from referendum under section 1(3). The trial
court, citing Garvey v. Trew, 64 Ariz. 342, 353 (1946), ruled that SB 1828 did
not qualify for exemption as an appropriation measure. In other words, the
court reasoned, and IIA contends, that only appropriation measures, rather
than support and maintenance revenue provisions, are exempt from the
referendum process. We disagree.
¶10 “When interpreting a constitutional provision, ‘we begin with
the text,’ because it is ‘the best and most reliable index of a [provision’s]
meaning.’” Fann v. State, 251 Ariz. 425, 441 ¶ 59 (2021) (alteration in
original) (quoting State v. Christian, 205 Ariz. 64, 66 ¶ 6 (2003)). In
discerning the text’s meaning, the most objective criterion available is the
accepted meaning of the words, in context, when the provision was
adopted. See Antonin Scalia & Brian A. Garner, Reading Law: The
Interpretation of Legal Texts 16, 78 (2012). If the text is unambiguous, we
apply its express terms without applying secondary methods of
construction. Arizonans for Second Chances, Rehab., & Pub. Safety v. Hobbs,
249 Ariz. 396, 406 ¶ 28 (2020). We also afford meaning to “each word,
phrase, and sentence . . . so that no part will be void, inert, redundant, or
trivial.” Id. (alteration in original) (quoting City of Phoenix v. Yates,
69 Ariz. 68, 72 (1949)). “An absurd construction of a constitutional
provision should be avoided.” Ruth v. Indus. Comm’n, 107 Ariz. 572, 576
(1971). We may examine our constitution’s history to determine the
framers’ intent. Boswell v. Phx. Newspapers, Inc., 152 Ariz. 9, 12 (1986).
¶11 In determining whether support and maintenance laws are
exempt under the Arizona Constitution, it is beneficial to analyze
section 1(3) as containing two separate clauses. The first clause provides:
Under this power the legislature, or five per centum of the
qualified electors, may order the submission to the people at the
polls of any measure, or item, section, or part of any measure,
enacted by the legislature, except laws immediately necessary for
the preservation of the public peace, health, or safety, or for
the support and maintenance of the departments of the state
government and state institutions.
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Opinion of the Court
Ariz. Const. art. 4, pt. 1, § 1(3) (emphasis added). Thus, under the first
clause, laws “immediately necessary for the preservation of the public
peace, health, or safety, or for the support and maintenance of the departments
of the state government and state institutions” are exempt from
referendum. Id. (emphasis added).
¶12 The second clause provides that:
to allow opportunity for referendum petitions, no act passed by
the legislature shall be operative for ninety days after the close of
the session of the legislature enacting such measure, except
such as require earlier operation to preserve the public peace,
health, or safety, or to provide appropriations for the support and
maintenance of the departments of the state and of state institutions.
Id. (emphasis added). Thus, under the second clause, laws exempt from the
ninety-day operative delay are confined to those necessary “to preserve the
public peace, health, or safety, or to provide appropriations for the support and
maintenance of the departments of the state and state institutions.” Id.
(emphasis added).
¶13 The original draft of section 1(3)’s first clause permitted
exercise of the referendum power “except as to the laws necessary for the
immediate preservation of the public peace, health, or safety, and
appropriations for the support and maintenance of the Departments of State
and State institutions.” The Records of the Arizona Constitutional Convention
of 1910, at 1020–21 (John S. Goff ed., 1991) (emphasis added). In other
words, the original language in the first clause mirrored that of the second
clause in that it limited the class of exempt support and maintenance laws
to “appropriations.” The version of section 1(3) that was ratified in 1912,
however, omitted reference to “appropriations” in the first clause and,
instead, exempted from referendum “laws . . . for the support and
maintenance of the departments of the State Government and State
institutions.” Ariz. Const. art. 4, pt. 1, § 1(3) (emphasis added). The
constitutional convention records do not definitively elucidate the
founders’ reasoning in modifying this language in section 1(3). We are
loath, however, to discount the founders’ decision to excise
“appropriations” from the first clause of section 1(3) in favor of the ratified
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Opinion of the Court
iteration as a drafter’s error or other inadvertence. We must give
section 1(3)’s text meaning as ratified. See Arizonans for Second Chances,
Rehab., & Pub. Safety, 249 Ariz. at 406 ¶ 28; see also Brousseau v. Fitzgerald, 138
Ariz. 453, 455 (1984) (noting that when the legislature changes the language
of a statute, the presumption is an intent to make a change in the law).
¶14 Section 1(3)’s first clause enumerates the types of measures
exempt from the referendum power: (1) “laws immediately necessary for
the preservation of the public peace, health, or safety”; and (2) laws for the
support and maintenance of state departments and state institutions. The
first clause’s reference to laws “for the support and maintenance,” in
context, necessarily entails a broader meaning than the second clause’s use
of “appropriations.” An appropriation is “the setting aside from the public
revenue of a certain sum of money for a specified object, in such manner
that the executive officers of the government are authorized to use that
money, and no more, for that object, and no other.” League of Ariz. Cities &
Towns v. Martin, 219 Ariz. 556, 560 ¶ 15 (2009) (quoting Hunt v. Callaghan,
32 Ariz. 235, 239 (1927)). Support is defined as “a broader term embracing
both the acquisition and allocation of funds.” Wade v. Greenlee County,
173 Ariz. 462, 463 (App. 1992). These definitions align with the common
meaning of these familiar terms.
¶15 We reject the notion that section 1(3)’s reference to “support
and maintenance” is synonymous with “appropriations.” Measures that
provide “support and maintenance” include laws that raise or disburse
revenue, while “appropriations” merely disburse revenue generated
through laws for support and maintenance. See Wade, 173 Ariz. at 463(“Appropriations . . . are only part of support, the act of allocating
independent of how the money was acquired.”). Thus, an appropriation is
a subset of measures that provide support and maintenance for state
government. This broader interpretation of section 1(3) harmonizes its two
clauses, which involve different types of inherently related laws: the first
clause exempts laws that raise or disburse revenue for the support and
maintenance of identified state governmental entities and the second clause
solely concerns appropriations that disburse funds from already-generated
revenue.
¶16 Our jurisprudence harmonizes with our interpretation of
section 1(3). Contrary to the trial court’s and IIA’s claim, we have never
expressly limited exempt measures under section 1(3) to appropriations. In
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Opinion of the Court
Warner v. White, 39 Ariz. 203, 214 (1931), we held that “it was the undoubted
purpose of the framers of the Constitution to provide that every act passed
by the Legislature should be referable unless it be a safety or support
measure requiring immediate, or earlier operation than ninety days.”
Although Warner erroneously engrafted the first clause’s “immediately
necessary” requirement onto the support and maintenance provision, we
did not expressly limit the referendum exemption to appropriations.
¶17 Fifteen years later, we disavowed Warner to the extent it read
the words “immediately necessary” to apply to the “support and
maintenance” referendum exemption. Garvey, 64 Ariz. at 352–53. It is
debatable whether Warner or Garvey offers the best interpretation of
section 1(3)’s “immediately necessary” requirement. But “[w]e are mindful
of the importance of stare decisis,” Sell v. Gama, 231 Ariz. 323, 329 ¶ 30
(2013), and “do not lightly overrule precedent and do so only for
compelling reasons,” Lowing v. Allstate Ins., 176 Ariz. 101, 107 (1993)
(quoting Wiley v. Indus. Comm’n, 174 Ariz. 94, 103 (1993)). Garvey has been
the prevailing interpretation and application of “immediately necessary”
for over seventy-five years, and it is not clearly erroneous. Thus, we find
no compelling reason to overrule Garvey on this point and we adhere to its
reasoning. See id. (“[T]he degree of adherence demanded by a prior judicial
decision depends upon its merits, and it may be abandoned if the reasons
for it have ceased to exist or if it was clearly erroneous or manifestly
wrong.”).
¶18 In Garvey, we considered whether a specific appropriation bill
was exempt from a referendum challenge under section 1(3) and held that
“the test of whether the appropriation is for the support and maintenance
is not the earmarking for a specific pupose [sic], but rather [whether] the
funds [are] appropriated for use in carrying out the objects and functions of
the department.” 64 Ariz. at 347. There, the subject bill directed $50,000 to
the Arizona Corporation Commission to ascertain a fair market value of all
property of public service corporations providing gas or electric utilities in
order to create utility rates. Id. at 345. We concluded that the Secretary of
State correctly refused to file the referendum petitions because the
appropriation was for the support and maintenance of the existing
functions of the Corporation Commission and thus exempt from
referendum challenge under section 1(3). Id. at 346–47, 355.
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Opinion of the Court
¶19 Although Garvey established that the specific appropriation
measure at issue was exempt from referendum, it did not limit the type of
exempt measures to appropriations. See id. at 346–48. Rather, because the
bill itself was an appropriation, we merely defined that bill as an exempt
appropriation under section 1(3). See id. Thus, we did not cabin
section 1(3)’s referendum exemption to appropriations and emergency
measures for the preservation of the public peace, health, or safety.
¶20 Our holding that revenue laws “for the support and
maintenance” of state departments and institutions are exempt from the
referendum power under section 1(3) does not foreclose a challenge to
every law that raises state revenue. A revenue law is exempt from
referendum only if it supports existing state departments or state
institutions. See id. at 348 (“Here the only effect or new features of the
measure sought to be referred is the appropriation itself, the commission
being already vested with the power and the duty to perform the acts
mentioned in the law.”). We announced this principle in Warner, affirmed
it in Garvey, and reaffirm it now. Id. (“In the Warner case it was very
properly held that the measure was not one for the support and
maintenance of a state department, but for the creation of a new
department, and, not being passed with the emergency, it was referable.”).
Thus, the people retain the right to challenge a law creating a new
department of the state even if it also raises revenue to support the newly
minted department. Warner, 39 Ariz. at 215 (“[T]he people could not be
deprived of their right to approve or reject a law creating a department of
the state government and prescribing its functions merely because it
provides in addition the funds for the purpose of carrying out its terms in
case it should finally come into being.”). Additionally, unlike the
Washington Constitution which exempts laws for the “support of the state
government,” Wash. Const. art. 2, § 1(b), Arizona’s support and
maintenance exemption is tethered to funding existing state departments
and state institutions, Ariz. Const. art. 4, pt. 1, § 1(3). Consequently, a
revenue measure in Arizona that merely supports state objectives, such as
increasing unemployment benefits, would be subject to referendum. See
Wash. Const. art 2, § 1(b) (providing that the referendum power does not
apply to “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” (emphasis added)).
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Opinion of the Court
C.
¶21 We next address the differential treatment of “support and
maintenance” measures and appropriations under section 1(3)’s second
clause, which exempts certain laws from the ninety-day operative delay
under its “earlier operation” provision.
¶22 The second clause provides that laws “requir[ing] earlier
operation to preserve the public peace, health, or safety” must go into effect
immediately, given the urgency of protecting the public, see Ariz. Const.
art. 4, pt. 1, § 1(3); Garvey, 64 Ariz. at 353–54, and that exempt
appropriations, i.e., those that are intended to fund existing state
government operations, are effective immediately, Garvey, 64 Ariz. at354–55. Under our interpretation of section 1(3), which affords meaning to
every word of the provision and implements what the text commands,
exempt non-appropriation “support and maintenance” revenue measures,
like SB 1828, are subject to the ninety-day referendum period before they
become effective “to allow opportunity for referendum petitions.” Ariz.
Const. art. 4, pt. 1, § 1(3).
¶23 The parties dispute whether a logical purpose exists for the
founders to exempt “support and maintenance” revenue laws from the
referendum process in the first clause but simultaneously exclude them
from the “earlier operation” provision in the second clause. We may
consider the text’s purpose but only to decide which textually permissible
meaning to adopt. See Scalia & Garner, supra, at 57 (“[E]xcept in the rare
case of an obvious scrivener’s error, purpose—even purpose as most
narrowly defined—cannot be used to contradict text or to supplement it.
Purpose sheds light only on deciding which of various textually permissible
meanings should be adopted.”).
¶24 We conclude section 1(3)’s text yields a logical structure, and
we consider its purpose only to ascertain which textually permissible
interpretation to adopt. To that end, we note its first and second clauses
relate to different types of exempt laws—one that generates revenue and
appropriates funds for the support and maintenance of the state and
another that disburses existing revenue without delay.
¶25 We presume the disparate procedural treatment of these laws
in the second clause serves a purpose consistent with its textual design for
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Opinion of the Court
several reasons. First, the first clause exempts revenue and appropriation
laws from referendum to ensure that existing state departments and
institutions continue to function without disruption in the new fiscal year.
See Wade, 173 Ariz. at 464 (“The functioning of government can be as
effectively damaged by the inability to acquire funds as by the inability to
spend them.”). Second, the exercise of police powers and appropriation of
funds to operate the government entail an immediacy for implementation
that distinguishes such measures from general revenue provisions. Third,
although “appropriations” are readily identifiable and more often will
qualify for exemption as in Garvey, whether revenue laws qualify as
measures for “support and maintenance” of existing departments and
institutions may present a more nuanced inquiry. The ninety-day period
allows citizens an opportunity to evaluate and challenge whether the
measure is truly for the “support and maintenance” of the existing state
departments and state institutions, as some revenue measures may not fall
into this category. Supra ¶ 20. Wade and this case illustrate that point.
Finally, this period also gives the public time to learn of additional
obligations of the new laws—here, assessing potential tax liability or relief
from taxation. See John D. Leshy, The Arizona State Constitution 126 (2013).
¶26 These purposes are consistent with our textually permissible
interpretation of section 1(3) and refute any notion that its text must trace
to a drafter’s error or that we have settled on an absurd construction.
Indeed, a contrary reading that provides exemption from referral only for
appropriation measures voids all independent meaning from the framers’
deliberate decision to substantively vary the provisions of the two clauses.
D.
¶27 Our holding that revenue measures for the support and
maintenance of existing state departments and institutions are exempt from
the referendum process under section 1(3) is hardly a novel interpretation
of our constitution. In Wade, the court of appeals considered a new one-half
cent sales tax to fund existing county programs and affirmed the trial
court’s ruling that the measure was exempt from the referendum process.
173 Ariz. at 463. Wade established a persuasive analytical template for the
referendum exception’s arguable internal inconsistencies, noting that
“[s]upport is a broader term embracing both the acquisition and allocation
of funds. Support cannot occur without money. Appropriations, however,
are only part of support, the act of allocating independent of how the money
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Opinion of the Court
was acquired.” Id. Adopting “the broader interpretation of what is
excluded from referendum,” the court examined the records of the
convention and concluded that the removal of “appropriations” in
section 1(3)’s first clause suggested a purposeful effort to broaden the
concept of “support” to cover more than simply appropriations. Wade, 173
Ariz. at 464. Through this lens, the court concluded the challenged sales tax
qualified under the referendum exception as a support measure because the
sales tax was used “as part of total revenues necessary to meet the annual
county budget.” 2 Id.¶28 We also note that the most recent Attorney General opinion
interpreting section 1(3) accords with our holding. 3 See Op. Ariz. Att’y Gen.
I97-007, 1997 WL 566650, at *2 & n.3 (1997) (concluding that neither tax nor
appropriation measures are referable under the Arizona Constitution).
There, the Attorney General analyzed section 1(3) as we do here: the
constitution exempts from referendum laws immediately necessary to
preserve peace, health, or safety; laws “for the support and maintenance”;
and laws that “provide appropriations for the support and maintenance of
the [d]epartments of the [s]tate and of [s]tate institutions.” Id. at *2 (quoting
Ariz. Const. art. 4, pt. 1, § 1(3)). Because the bill at issue was not a peace,
health, or safety measure passed with an emergency clause or a tax
measure, the bill was not excluded from referendum on those bases and
could be exempt from referendum only if it was an appropriation that
provided for the support and maintenance of departments of the state or
state institutions. Id. Thus, the Attorney General recognized the textual
difference between the clauses in section 1(3) and differentiated between
measures that provide support and specific appropriation measures. In
issuing the opinion, the Attorney General disavowed an earlier opinion
2 We note Wade’s questionable application of section 1(3) to a county
tax because this constitutional provision applies only to revenue measures
that are “for the support and maintenance of the departments of the state
government and state institutions.” Ariz. Const. art. 4, pt. 1, § 1(3)
(emphasis added). Although we do not decide the issue today, we clarify
that our embrace of Wade’s interpretation of section 1(3) does not extend to
its applicability to a county tax.
3 We recognize that, although opinions of the Attorney General are
advisory, “the reasoned opinion of a state attorney general should be
accorded respectful consideration.” Ruiz v. Hull, 191 Ariz. 441, 449 ¶ 28
(1998).
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concluding that the public’s right of referendum extended to non-
appropriation tax measures. Id. at *2 n.3; see Op. Ariz. Att’y Gen. I90-068,
1990 WL 484076, at *5 (1990).
E.
¶29 We next consider whether a tax measure must increase
revenue to qualify for exemption from the referendum process under
section 1(3). The trial court, citing Wade, ruled that even if the support and
maintenance exemption applies to revenue measures, it is limited to laws
that increase revenue. Here, because the trial court concluded that SB 1828
would at least initially decrease tax revenue, it ruled, and IIA contends, that
SB 1828 is subject to referendum. We disagree.
¶30 The constitution provides that “laws . . . for the support and
maintenance of the departments of the state government and state
institutions” are exempt from referendum. Ariz. Const. art. 4, pt. 1, § 1(3).
The text is devoid of any reference to a requirement that “support and
maintenance” measures increase revenue. All measures that generate
revenue, whether they increase or decrease revenue from one fiscal year to
the next, provide support and maintenance. Wade does not diverge from
this logic. There, the court of appeals defined the term “support” as
“embracing both the acquisition and allocation of funds,” which cannot
occur without raising revenue. Wade, 173 Ariz. at 463. The fact that the tax
measure at issue in Wade increased revenue does not support the
proposition that a revenue measure must do so to be exempt. Therefore,
even if the amount of “support” decreases from the prior fiscal year because
of a revenue-decreasing measure, it will qualify for exemption under
section 1(3) if it generates funds and they are appropriately allocated for the
support and maintenance of existing state departments and institutions.
¶31 The absence of any textual support in the constitution for the
proposition that only tax measures that immediately increase revenue are
exempt from the referendum process perhaps reflects the founders’
wisdom. Conditioning the referendum exemption on the revenue effect of
a support and maintenance measure is a fool’s errand that raises myriad
questions concerning the temporal scope of the inquiry and rests on the
vagaries of economic projections. Cf. Armstrong v. United States, 759 F.2d
1378, 1381 (9th Cir. 1985) (holding that, under the origination clause of the
Constitution, “[t]he term ‘Bills for raising Revenue’ does not refer only to
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Opinion of the Court
laws increasing taxes, but instead refers in general to all laws relating to
taxes”). The net revenue impact of a bill in the short term may invariably
differ from its long-term effect. Thus, all revenue measures that support
and maintain existing state departments and institutions, including those
that decrease net revenue, are exempt from referendum. 4
II.
¶32 The dissent effectively contends that the majority interprets
section 1(3) to provide “categorical exemptions from the referendum” and
fails to “give operative effect to every provision within section 1(3)
consistent with the framers’ intent.” Infra ¶ 60. We disagree. Our
interpretation does not categorically exempt tax revenue measures, but
rather limits the exemption to such measures for the support and
maintenance of existing state government departments and institutions,
supra ¶ 20, and gives meaning and purpose to every provision of
section 1(3).
¶33 We embrace the dissent’s recounting of the history of the
referendum power, which is not in dispute. Infra ¶¶ 43–46. But the
dissent’s citations to the constitutional convention record fail to delineate
the precise scope of section 1(3)’s referendum exemption. Instead, the
dissent relies heavily on the First Legislature’s treatment of section 1(3) in
its passage of legislation. Infra ¶¶ 47–49. Although the examples may “give
credence to an interpretation” of section 1(3) that every exemption requires
an emergency measure, infra ¶ 49, conduct of a subsequent legislature does
not fill the void in the constitutional convention record, and we are
reluctant to rely on legislative understanding of a constitutional provision
as a primary source of authority for our own interpretation, cf. Napolitano,
213 Ariz. at 485 ¶ 8 (“Although each branch of government must apply and
uphold the constitution, our courts bear ultimate responsibility for
interpreting its provisions.”). Similarly, we acknowledge that our earlier
cases interpreted section 1(3) differently, infra ¶ 50–54, but our holding
today aligns with this Court’s most recent consideration of the issue, supra
¶¶ 17–20. Because we conclude that Garvey’s reasoning is not clearly
4 We do not decide today whether a law that entirely eliminates an
existing tax qualifies as a measure for the support and maintenance of the
state departments and institutions.
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Opinion of the Court
erroneous, supra ¶ 17, we do not share the dissent’s view that stare decisis
principles warrant its reversal, infra ¶¶ 60–73.
¶34 We next address the dissent’s textual interpretation of
section 1(3), which undergirds its assertion that our interpretation fails to
“give operative effect to every provision within section 1(3) consistent with
the framers’ intent,” infra ¶ 60, namely the section’s “emergency measure”
(which the dissent styles the “last clause”), infra ¶ 84–85. The dissent
suggests that we fail to give the last clause its due because our
interpretation does not recognize an emergency measure as a prerequisite
for exemption of any law under section 1(3). We are unpersuaded.
¶35 Section 1(3)’s last clause prescribes the procedural
requirements for implementing “emergency measures” contemplated in
the first and second clauses and reads, in part,
provided, that no such emergency measure shall be considered
passed by the legislature unless it shall state in a separate
section why it is necessary that it shall become immediately
operative, and shall be approved by the affirmative votes of
two-thirds of the members elected to each house of the
legislature.
Ariz. Const. art. 4, pt. 1, § 1(3) (emphasis added). To give the term “such”
meaning, there must be a reference before this clause. The prior (and only)
“emergency measure” referenced is one that “require[s] earlier operation to
preserve the public peace, health, or safety” in the second clause. The last
clause thus clarifies which laws “require” earlier operation—those passed
by a two-thirds vote with an immediate effective date—and are thus non-
referable because they are laws, as described in the first clause,
“immediately necessary for the preservation of the public peace, health, or
safety.” See Garvey, 64 Ariz. at 354 (concluding that the emergency
provision of section 1(3) “refers strictly to emergency measures, to-wit,
those pertaining to public peace, health[,] or safety, and [does] not include
appropriation measures”).
¶36 The dissent concludes that referendum exemptions are
limited to “laws immediately necessary for the preservation of the public
peace, health, or safety,” and laws that “provide appropriations,”
infra ¶¶ 75, 79, and that an “emergency measure” is a prerequisite for
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Opinion of the Court
exemption of any law, including appropriations for the support and
maintenance of state departments and institutions, infra ¶¶ 84–86. Aside
from the fact that this interpretation disregards the framers’ striking of
“appropriation” in the first clause, supra ¶ 13, the dissent’s premise is
incongruous with its earlier conclusion that the first clause’s “immediately
necessary” and the second clause’s “earlier operation” provisions do not
apply to support and maintenance measures, infra ¶¶ 76, 79–80. If the
“immediately necessary” and “earlier operation” qualifiers do not apply to
support and maintenance measures in the first and second clauses, the last
clause’s reference to “such emergency measure[s]” most reasonably refers
only to “public peace, health, or safety” laws and necessarily excludes
support and maintenance measures. Our interpretation, as with Garvey’s,
does not fail to give operative effect to the last clause; rather, consistent with
section 1(3)’s text, our analysis limits the last clause’s emergency measure
requirement to laws to preserve the public peace, health, or safety. 64 Ariz.
at 354. Thus, contrary to the dissent’s claim, our interpretation merely
implements section 1(3)’s exemption and does not infringe the referendum
power under section 1(1). Infra ¶¶ 66–69.
III.
¶37 IIA requests attorney fees and costs under the private
attorney general doctrine and A.R.S. §§ 12-341 and -342. The private
attorney general doctrine is an equitable rule that allows a court to award
fees to “a party who has vindicated a right that (1) benefits a large number
of people, (2) requires private enforcement, and (3) is of societal
importance.” Ansley v. Banner Health Network, 248 Ariz. 143, 153 ¶ 39 (2020).
IIA has not vindicated any right and therefore is not entitled to fees. We
also deny IIA’s request for costs under §§ 12-341 and -342 because it is not
the prevailing party.
CONCLUSION
¶38 Our interpretation of section 1(3) implements the founders’
original plain meaning, as expressed in the text, concerning the meaning
and scope of the referendum power to challenge tax laws. We interpret
constitutional and statutory provisions as they are written, and we are
constrained from rewriting the law under the guise of interpreting it even
if we divine a more desirable intended outcome than the text allows. Cf.
Silver v. Pueblo Del Sol Water Co., 244 Ariz. 553, 566 ¶ 44 (2018) (“We decline
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Opinion of the Court
to recast the statute’s meaning under the guise of interpreting it.”). Thus,
even Arizona’s strong public policy favoring the constitutional right to
referendum does not supplant our duty to interpret and apply the
constitution as it is written. Cf. Ariz. Sch. Bds. Ass’n, 252 Ariz. at 229 ¶ 45
(“[Our] constitutional duty to interpret and apply the constitution requires
us to invalidate a law if it infringes the constitution.”).
¶39 Our holding that revenue laws like SB 1828 are exempt from
the referendum process as measures for the support and maintenance of
existing departments of the state government and state institutions does not
deprive our citizens of constitutional recourse to change our tax laws. Our
constitution affords myriad avenues to affect political and policy change,
including on the subject of taxes. Citizens may change such laws indirectly
through the ballot box by selecting their elected representatives to
implement their policy preferences or directly through the initiative
process. Ariz. Const. art. 4, pt. 1, § 1(2). This Court has no voice on the
choices our citizens make on the wisdom of tax policy, but we have a duty
to ensure that the mechanisms through which they exercise such choices
comport with our constitution.
¶40 For the reasons set forth above, we reverse the trial court’s
ruling and remand for entry of judgment consistent with this opinion.
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ARIZONA FREE ENTERPRISE CLUB, ET AL. V. HOBBS, ET AL.
JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
MONTGOMERY, J., joined by JUSTICE BEENE, concurred in part and
dissented in part:
¶41 We concur in the majority’s determination that tax revenue
measures are for “the support and maintenance of the departments of the
state government and state institutions.” Supra ¶ 1. However, we
respectfully dissent from our colleagues’ analysis and conclusion that
permits an exemption for tax revenue measures absent compliance with all
the requirements of article 4, part 1, section 1(3) of the Arizona Constitution.
Supra ¶¶ 25–28. Instead, we would return to the understanding of the
referendum power’s scope as reflected in the records of the constitutional
convention of 1910, the actions of the first legislature, and the earliest
decisions of this Court in Clark v. Boyce, 20 Ariz. 544 (1919), Orme v. Salt
River Valley Water Users’ Ass’n, 25 Ariz. 324 (1923), and Warner v. White, 39
Ariz. 203 (1931). Accordingly, no legislative act is exempt from the
referendum save specific categories of laws for specific reasons enacted in
a specified manner.
¶42 At the outset, we acknowledge the difficulty in interpreting
this provision of our constitution. We thus echo the state’s earliest justices
in confessing that the wording of article 4, part 1, section 1 “has cost us no
little trouble to arrive at a conclusion.” Clark, 20 Ariz. at 546. Nonetheless,
as noted there exists guidance among those who drafted, exercised, and
interpreted the exemption from the referendum power from which we can
faithfully discern an interpretation that obviates angst over the effect of the
phrases “immediately necessary” and “earlier operation,” avoids arbitrary
distinctions between new and existing departments of state government,
and renders distinctions between tax measures that ultimately raise or
lower revenue irrelevant.
I. HISTORICAL BACKGROUND
A. Constitutional Convention and the Referendum
¶43 The ability for the people to engage in direct democracy
through initiative and referendum was at the center of the process for
determining delegates to the constitutional convention. John D. Leshy, The
Making of the Arizona Constitution, 20 Ariz. St. L.J. 1, 32–33 (1988); see also
Gordon Morris Bakken, The Arizona Constitutional Convention of 1910, 1978
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
Ariz. St. L.J. 1, 10 (1978). Ultimately, thirty-nine of the fifty-two delegates
chosen “had pledged to support the initiative and referendum.” Leshy,
supra, at 32. And delegates reminded the convention of their pledge.
Delegate Wilfred Webb stated that “candidates to this convention from
Cochise county were pledged . . . to favor the Oregon plan of initiative and
referendum.” The Records of the Arizona Constitutional Convention of 1910, at
183 (John S. Goff ed., 1991) (“Goff”). 5 Delegate Charles Roberts declared, “I
came here standing on this progressive platform which assured the people
of every county, city and town the right to use the initiative and
referendum.” Id. at 184. And Delegate Andrew Parsons read directly from
the Cochise county platform, which declared:
Believing in the ability and discretion of the people and that
they are capable of self-government, and the closer the law-
making power is to the people, the better the results and safer
the government, we pledge our candidates for the
constitutional convention to use their utmost endeavor to
place in the constitution self-executing provisions for the
initiative and referendum on all laws . . . substantially
according to what is know [sic] as the ”Oregon plan.”
Id.
¶44 The subject of the people’s power to legislate through
initiative and referendum consumed the convention more than any other
subject. See id. at 1013–15 (indexing the various subjects addressed by
delegates in the records of the convention); see also Leshy, supra, at 46;
Bakken, supra, at 10. Discussion focused on issues concerning the extent of
5 Oregon voters amended their constitution in 1902 to include
Measure 1, which provided that: “the people reserve to themselves power
to propose laws and amendments to the Constitution and to enact or reject
the same at the polls, independent of the Legislative Assembly, and also
reserve power at their own option to approve or reject at the polls any act
of the Legislative Assembly.” Charles A. Beard and Birl E. Shultz,
Documents on the State-Wide Initiative, Referendum, and Recall 79–80 (1912).
The only limitation to the exercise of the power was for “except as to laws
necessary for the immediate preservation of the public peace, health, or
safety.” Id. at 80.
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
the power of initiative and referendum for cities, towns, counties, and
“other municipalit[ies],” Goff, supra, at 176–88; the percentage of voter
signatures required to place a measure on the ballot to ensure the power
could be fairly exercised, id. at 188–89, 195–97; whether providing for the
initiative and referendum violated the Enabling Act’s requirement that the
constitution provide for a republican form of government, id. at 198–208;
and whether including it in the constitution would impede achieving
statehood by evoking a rejection by Congress or the President, Leshy, supra,
at 104–06.
¶45 Regardless of the sometimes heatedly stated concerns, the
convention adopted a constitution providing:
[T]he people reserve the power to propose laws and
amendments to the constitution and to enact or reject such
laws and amendments at the polls, independently of the
legislature; and they also reserve, for use at their own option,
the power to approve or reject at the polls any act, or item,
section, or part of any act, of the legislature.
Ariz. Const. art. 4, pt. 1, § 1(1).
¶46 Voters ratified the constitution overwhelmingly on
February 9, 1911. Canvass of the Returns, Ariz. Republican, Feb. 28, 1911, at 1
(stating that 12,187 votes were cast in favor of ratification compared to the
3,822 cast against). However, due to a provision permitting the recall of
judicial officers, President Taft refused to approve the constitution as
drafted. William H. Taft, Special Message of the President of the United
States: Returning Without Approval House Joint Resolution No. 14, H.R.
Doc. No. 62-106, at 1 (1911). Voters then ratified an amendment to the
constitution eliminating the recall on December 12, 1911.6 Phillips Is Saved
from Political Disaster: Recall Amendment, Ariz. Republican, Dec. 13, 1911,
at 1.
6 Arizonans then amended the constitution at the very first general
election on November 5, 1912, and reinstated the recall of public officials,
including judges. 1913 Ariz. Sec’y of State, Ann. Rep. 23.
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
B. The First Legislature
¶47 In its first sessions, the Arizona legislature enacted numerous
tax measures. To ensure exemption from referral, the legislature repeatedly
complied with the provisions of section 1(3) and enacted these laws as
emergency measures. For example, in imposing a tax on telegraph and
telephone companies’ property, the legislature made clear that the tax
measure was a law “necessary for the support and maintenance of State
institutions and Departments of State.” 1912 Ariz. Sess. Laws ch. 22, § 3 (1st
Spec. Sess.). The act also deemed it “necessary that said amendment should
go into effect immediately,” declared an emergency existed, and provided
that the “Act shall be in full force and effect from and after its passage and
approval by the Governor, and is hereby exempt from the operation of the
Referendum provision of the State Constitution.” Id.
¶48 Another example from the same session concerns an act
imposing taxes on real and personal property. 1912 Ariz. Sess. Laws ch. 64
(1st Spec. Sess.). In section eight of the act, the legislature stated that the tax
measure was “necessary for the support and maintenance” of state
departments and institutions and declared an emergency, giving the act
immediate effect and exempting it from the referendum. Id. § 8; see also
1912 Ariz. Sess. Laws ch. 11, § 2 (Reg. Sess.) (repealing a mining tax in favor
of a new property tax regime, which the legislature determined necessary
to “provide funds for appropriations for the support and maintenance of
the departments of State and all State institutions, and to preserve the
public peace and safety,” and declaring an emergency so the law had
immediate effect); 1912 Ariz. Sess. Laws ch. 39, § 8 (Reg. Sess.) (invoking
the “public peace, health, [or] safety” as well as the “support and
maintenance” requirements to levy a new tax on private car companies,
which the legislature deemed necessary “for a more equal and uniform
system of assessment and apportionment of taxes, and for the efficient
collection of State taxes and revenue”); 1912 Ariz. Sess. Laws ch. 23, § 3 (1st
Spec. Sess.) (declaring an emergency in order that a law imposing taxes on
railroad corporations “to preserve the public peace, health and safety, and
for the support and maintenance of the Departments of State and State
institutions” would have immediate effect); 1913 Ariz. Sess. Laws ch. 73, § 8
(3d Spec. Sess.) (declaring law imposing an annual tax on real and personal
property to be “necessary for the support and maintenance of the
Departments of State and State Institutions”).
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
¶49 These historical examples give credence to an interpretation
that section 1(3) of the Arizona Constitution only exempts specific
legislative acts passed as emergency measures. It is readily evident that the
first legislature clearly understood that adhering to the requirements of
section 1(3) for passing emergency measures was necessary to exempt tax
revenue acts from the referendum. The state’s representatives, many of
whom served at the constitutional convention, and two of whom served on
the committee proposing the language of section 1(3), treated tax laws as
otherwise referable. See Clark, 20 Ariz. at 554–55 (giving “great weight” to
“a construction of the fundamental law by members of the Legislature who
were also members of the constitutional convention”). Thus, the first
legislature’s treatment of tax measures undermines a conclusion that
support and maintenance laws are ipso facto immune from the referendum.
C. Early Supreme Court Decisions
¶50 The first case to consider section 1(3) addressed the nature of
the governor’s approval to exempt an emergency act from the referendum.
Clark, 20 Ariz. at 545–46. The Court included a justice, Albert Baker, who
introduced the very provision in question at the constitutional convention.
See Goff, supra, at 44, 1387 (recording that Delegate Albert Cornelius Baker
introduced a proposition addressing the “Initiative and Referendum and
the Recall” and later served on the Arizona Supreme Court from 1893–1897
and again from 1919–1921). The Court characterized the case before it as a
“controversy . . . as to what construction shall be placed upon
sub[section] 3, § 1, of article 4.” Clark, 20 Ariz. at 546. Importantly, the
Court recognized that section 1(3)’s referral exemption applies only to
specific types of legislative acts passed as emergency measures:
This sub[section] of the Constitution recognizing the people
as the repository of all power has provided that all legislative
acts passed by the Legislature shall be subject to the
referendum except emergency measures. To give the people an
opportunity to invoke the referendum, if they so choose, laws
not emergent do not go into effect at once, but become
operative 90 days after the final adjournment of the
Legislature. Emergency laws when passed according to the
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
forms prescribed by the Constitution, become effective at once
and prevent a referendum.
Id. at 547 (emphasis added). And the Court underscored the importance of
the actions of the first legislature in interpreting section 1(3) stating:
If we had greater doubt of the correctness of the construction
that we have placed upon the constitutional provisions as
affecting the enactment of emergency laws, we would still feel
constrained, on account of the public and private interests
involved, to heed the unbroken course of conduct by the other
two departments. Many of the members of the constitutional
convention were members of the first and other sessions of
the Legislature. The president of the constitutional
convention was the Governor of the state during the sessions
of 1912 and 1915.
Id. at 554. The Court further noted it had “indorsed the rule that a
construction of the fundamental law by members of the Legislature who
were also members of the constitutional convention was entitled to great
weight.” Id. at 554–55. 7
¶51 This Court next considered section 1(3) in Orme. The Court
addressed the validity of a legislative act passed as an emergency measure
in resolving the issues presented in the case. 25 Ariz. at 344–45. The
language in question read:
Whereas, the provisions of this act are necessary for the
preservation of the public peace, health and safety, an
emergency is hereby declared to exist, and this act is hereby
exempted from the operation of the referendum provisions of
the state Constitution, and shall take effect and be in full force
and effect from and after its passage and its approval by the
Governor.
7 Justice Baker separately concurred in the opinion. See id. at 557–562.
This surely would have been the place to correct any error in understanding
the exemption of measures from the referendum.
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
Id. at 346. The Court acknowledged the reservation of the referendum
power by the people but nonetheless observed:
[t]his reserved power, however, does not apply to acts
requiring “earlier operation to preserve the public peace,
health or safety,” nor to those providing “appropriations for
the support and maintenance of the departments of state and
of state institutions.” Enactments of this character may be made
immediately effective and thus exempted from the referendum by the
Legislature’s stating in a separate section of the act why it is
necessary and declaring the existence of an emergency.
Id. at 346–47 (emphasis added). The Court ultimately found the language
of the act in question sufficient to exempt it from the referendum. Id. at
347–48.
¶52 In Warner, this Court affirmed Clark’s and Orme’s conclusion
that exceptions to the referendum power are limited to specific categories
of legislative acts that are explicitly identified as such and passed in a
specific manner. 39 Ariz. at 213. Warner also addressed a provision within
a larger act that appropriated monies “[t]o carry out the purposes of th[e]
act.” Id. at 207. Opponents to referral of select provisions of the act,
including the appropriations provision, argued that because the sections
sought to be referred included an appropriation to aid a statewide taxing
effort, it was for the support and maintenance of a department of state
government and therefore could not be subject to the referendum in light
of section 1(3). Id. at 208. Proponents for referral argued that the
appropriation was not for an existing department of state government but
was for a newly created department, therefore the emergency provisions
did not apply. Id. The proponents also argued, but did not press, that an
appropriation for an existing department would still be subject to the
referendum unless it was exempted as provided in section 1(3). Id.¶53 The Warner Court noted that “[t]he third clause of this
sub[section,] which sets forth the condition under which emergency
measures shall be considered passed by the Legislature[,] shows clearly that
no act is withdrawn from the referendum ipso facto under the Constitution
of this state.” Id. at 213. The Warner Court further stated:
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
While it is true these two classes of laws are excepted from the
referendum, it will be observed that they are not given this
status merely because of their nature or the need for their earlier
operation than ninety days but because, these things being
true, the Legislature, which is the judge of the question
whether they should become immediately operative,
recognizes this necessity, expresses it in a separate section of
the act and follows this with approval by a two-thirds vote of
each house; in other words, incorporates in the act the
emergency clause. In no other way may a law enacted by the
Legislature of this state, regardless of its nature or the urgency for
its early operation, be withdrawn from the referendum.
Id. (internal citation omitted) (emphasis added).
¶54 Reasoning that the phrases “immediately necessary” and
“require earlier operation” applied to each class of laws as referenced in the
first and second clauses, the Court further stated that “it was the undoubted
purpose of the framers of the Constitution to provide that every act passed
by the Legislature should be referable unless it be a safety or support
measure requiring immediate, or earlier operation than ninety days,”
rendering them emergency measures and eligible for exemption from the
referendum. Id. at 214.
¶55 Fifteen years later, this Court took up another appropriations
measure requiring the interpretation of section 1(3) in Garvey v. Trew,
64 Ariz. 342 (1946). The legislature passed the measure in question with a
two-thirds vote and the governor approved it; however, it did not have an
emergency clause. Id. at 345. The secretary of state refused to accept
petitions to refer the measure to the ballot, as advised by the attorney
general, on the basis that the act was for the support and maintenance of a
department of state government and not subject to referendum. Id. at
345–46.
¶56 The Garvey Court expressly found that the appropriation was
for the support and maintenance of a department of state government and
therefore covered by section 1(3) and further went on to consider whether
the emergency provisions applied. Id. at 347–48. In its analysis, the Court
distinguished Warner by finding the measure it addressed “wholly
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
dissimilar to that existing in the present case.” Id. at 348. Because Warner
concluded that the measure before it was not for the support and
maintenance of government, Garvey reasoned that the Warner Court had no
need to address the emergency provisions of section 1(3). Id. at 349. Garvey
therefore considered the Warner analysis of section 1(3) to be mere “obiter
dicta” and, pursuant to considerations of stare decisis, dismissed it given
the “grave doubt as to the correctness of the construction given to section
1(3).” Id. at 349–51.
¶57 Free to interpret section 1(3) anew, Garvey opined:
It is not logical to assume that the creators of these
departments and institutions set up for the purpose of
conducting government, intended that their functions might
be disrupted for long periods by a small minority. We cannot
believe that the framers of the constitution, or the voters who
adopted it, intended to make it possible for a small percentage
of the voters to stop the functions of the various departments
of government by cutting off their appropriations through the
operation of the referendum. This does not make sense.
Id. at 352.
¶58 This assessment followed the point that a distinction should
continue to be made between appropriations measures for new
departments versus existing departments:
We are satisfied that the framers of the constitution and the
people who voted for its adoption understood and intended
that appropriations for the support and maintenance of the
departments of the state government and state institutions
were not to be subject to the referendum. The departments of
the state and its various institutions come into existence only
through the majority vote of the people, or of the legislature.
Where a new department of state is set up, or a new
institution provided by the legislature, its creation is subject
to the will of the people under the referendum unless the law
is passed by a two-thirds vote, and is an emergency measure.
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Id. at 351. Garvey categorically rejected any notion that an appropriations
measure for an existing state department not passed with emergency
provisions could be subjected to the referendum because “[t]he will of the
majority would be defeated until such time as a vote could be taken at a
general election.” Id. at 352.
¶59 Garvey then considered section 1(3) as a whole and observed
that section 1(3) has “two separate and distinct classes of acts” that are
immune from referral: (1) “measures immediately necessary for the
preservation of the public peace, health or safety,” and (2) “measures for
the support and maintenance of governmental departments and
institutions.” Id. at 353. Contrary to Warner, the Court determined that the
“emergency measure” as used in § 1(3)’s second clause refers “only to the
police power acts of a character immediately necessary to preserve the
peace, etc.,” and that the phrase “immediately necessary” qualifies only
public health laws rather than support and maintenance laws. Id. Likewise,
the Court concluded that the phrase “earlier operation” qualifies only acts
involving the public peace, health, and safety. Id. at 353–54. It therefore
concluded that support and maintenance laws, or at least appropriations,
are categorically exempt from referral. 8 Id. at 354.
8 Nonetheless, the Garvey Court repeatedly stated that the support and
maintenance laws exempt from referral are appropriation measures. See id.
at 353 (“[M]easures for the support and maintenance of governmental
departments and institutions . . . relate[] wholly to appropriations for support
og [sic] government function.” (emphasis added)); id. at 351 (“We are
satisfied that the framers of the constitution and the people who voted for
its adoption understood and intended that appropriations for the support
and maintenance of the departments of the state government and state
institutions were not to be subject to the referendum.”); id. at 352 (“If an
appropriation is for the support and maintenance of a department or
institution, it is exempt.”); id. at 354 (“It is, therefore, our view that measures
to provide appropriations for support and maintenance are exempt from
the referendum.”); id. (“[O]nly appropriations for the support and
maintenance of state departments and institutions, and those only in
existence are exempt . . . .”).
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
II. OVERRULING GARVEY
¶60 Garvey’s holding that the term “emergency measures”
qualifies only public health laws is not the best interpretation of the text and
is undermined by the history of the constitutional convention, the practice
of the first legislature, and the earliest understanding of section 1(3). We
therefore reject Garvey’s interpretation of section 1(3) and its adoption of a
categorical exemption of laws from the referendum. Instead, we would
interpret section 1(3) consistent with Clark, Orme, and Warner to preclude
categorical exemptions from the referendum and give operative effect to
every provision within section 1(3) consistent with the framers’ intent.
¶61 Before engaging in an analysis of section 1(3) and applying it
as we propose, it is necessary to expressly overturn Garvey. Consistent with
the majority’s recognition of the value of stare decisis, supra ¶ 17, we
acknowledge that the doctrine cautions against overruling previous
decisions to promote “consistency, continuity, and predictability” in the
law. State ex rel. Brnovich v. Ariz. Bd. of Regents, 250 Ariz. 127, 132 ¶ 17 (2020);
see also Galloway v. Vanderpool, 205 Ariz. 252, 256 ¶ 16 (2003) (“[S]tare
decisis . . . seeks to promote reliability so that parties can plan activities
knowing what the law is.”). However, stare decisis is “a doctrine of
persuasion and not an iron chain of necessary conclusion,” White v.
Bateman, 89 Ariz. 110, 113 (1961) (quoting O’Neil v. Martin, 66 Ariz. 78, 84
(1947)), and “[t]he ease with which courts have abandoned precedent
corresponds to the subject matter of the case at issue,” State v. Hickman,
205 Ariz. 192, 201 ¶ 38 (2003).
¶62 Just as Garvey noted, “[w]here previous decisions involve
only questions of public interest and which do not affect private rights (the
case here) the doctrine of stare decisis is greatly relaxed. This court has not
hesitated to review its prior opinions upon questions of public interest and
to overrule the former holdings.” 64 Ariz. at 350 (internal citations
omitted). Nevertheless, “any departure from the doctrine of stare decisis
demands special justification.” Hickman, 205 Ariz. at 200 ¶ 37 (quoting
Arizona v. Rumsey, 467 U.S. 203, 212 (1984)). And, while this is a partial
dissent, the ultimate impact on the constitutional reservation of the power
of the referendum requires more than just an outline of an interpretive
disagreement with Garvey or the majority.
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
¶63 “Ultimately, the degree of adherence demanded by a prior
judicial decision depends upon its merits, and it may be abandoned if the
reasons for it have ceased to exist or if it was clearly erroneous or manifestly
wrong.” Lowing v. Allstate Ins., 176 Ariz. 101, 107 (1993). Compelling
reasons to overrule precedent include: (1) the language does not compel the
previous interpretation; (2) the previous interpretation did not advance the
intended policies; (3) the prior decision did not result from “clear analysis
or persuasive reasoning”; (4) overruling returns to a better supported and
reasoned decision; and (5) the facts of the case at hand demonstrate that the
previous interpretation was “imprudent and unjust.” Id. (quoting Wiley v.
Indus. Comm’n, 174 Ariz. 94, 103 (1993)). Each factor is present with Garvey.
¶64 First, Garvey’s categorical exemption of appropriations
measures from the referendum, even if limited to those for currently
existing state departments and institutions, Garvey, 64 Ariz. at 354, is not
compelled by the text of section 1(3). See infra ¶¶ 71–82. Garvey read section
1(3) to limit the application of the phrases “immediately necessary” and
“earlier operation” to laws regarding public peace, health, or safety.
64 Ariz. at 353–54. Therefore, Garvey reasoned that appropriations for
support and maintenance of existing state departments and institutions
could not be considered emergency measures because such
“appropriations are foreseen” and do not require immediate action. Id. at
354.
¶65 But even if you read the text in this way, which we agree you
should, see infra ¶¶ 76–79, it does not mean that support and maintenance
measures are categorically exempt. Instead, it simply means that there are
two distinct categories of laws that can be exempted from the referendum
and that there are two different bases on which they can be exempted: if
they require earlier operation to preserve the public peace, health, or safety,
or if they are appropriations for the support and maintenance of state
departments.
¶66 Equally problematic with the reasoning about emergency
measures is that it allowed Garvey to make a distinction between existing
and new state departments. See Garvey, 64 Ariz. at 346–48. If
appropriations are for an existing department, they cannot be emergent and
are therefore exempt. Id. at 354. However, if it is a new department, then
it could be subject to the referendum. Id. at 355. This makes no sense. An
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
appropriation for a new department would certainly be for the support and
maintenance of a state department, even if it was created in the same act.
Whether the legislature determined it should pass as an emergency
measure could fall under either justification of being required before the
ninety-day period expires because it is needed to, say, preserve public
health, or on the basis that it is an appropriation for an emergency as stated
in a separate section.
¶67 Second, such an interpretation does not advance a clear intent
of the framers to enshrine in the constitution the reserved power of the
referendum for the people “to approve or reject at the polls any act, or item,
section, or part of any act, of the legislature.” Ariz. Const. art. 4, pt. 1, § 1(1).
Garvey undermines Arizona’s strong and unequivocal public policy of
construing the referendum power in favor of the people, W. Devcor, Inc. v.
City of Scottsdale, 168 Ariz. 426, 428 (1991), and utterly fails to give meaning
to the entirety of section 1(3). A categorical exemption from the referendum
is a categorical limitation on a power reserved by the people in section 1(1)
that has no support in the historical record. See supra ¶¶ 41–46.
¶68 Third, the Garvey decision did not result from clear analysis
or persuasive reasoning. The Garvey Court failed to fully consider the
entirety of section 1(3) in the context of section 1(1). Instead, the Court
established its own logic, beliefs, and self-satisfying understanding of how
section 1(3) should work, supra ¶¶ 55–59, and wholly failed to address the
historical record reflecting the framers’ intent before analyzing the
language in question, see Whitman v. Moore, 59 Ariz. 211, 218 (1942)
(“Whether the attitude of the convention and the voters was wise is not for
this court to say . . . .”), overruled on other grounds by Renck v. Superior Court,
66 Ariz. 320 (1947).
¶69 Instead, the Court merely substituted its judgment for the
delegates who drafted the constitution, ran roughshod over the people who
ratified it, and bolstered its holding by observing with incredulity that
section 1(3) could be interpreted to give a minority such incredible power
over the legislature and delay legislation. Garvey, 64 Ariz. at 352.
¶70 The Court failed to address the difference between a measure
being subject to a referendum and the effort required to actually place one
on the ballot. This distinction was important to the convention delegates
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
who discussed the particulars for ensuring that the mechanics of referral
would not frustrate its exercise. See supra ¶¶ 43–44. It is also shortsighted
to assume that the people will reflexively place every measure without an
emergency clause on the ballot. Such a dismissive understanding of the
nature and role of the referendum as the framers sought to preserve it is not
entitled to continued reliance.
¶71 Fourth, overturning Garvey would return this Court to a
consistent understanding of the scope of measures exempt from the
referendum as discussed in Warner. Warner’s overall rationale gives effect
to each clause of section 1(3) and adheres to the legislative intent as
evidenced by the constitutional convention and first legislature’s
enactments. Rather than dismissing Warner’s analysis as “obiter dicta,” we
should embrace it with the exceptions discussed below. Infra ¶ 77; see
Garvey, 64 Ariz. at 350.
¶72 Fifth, the holding of Garvey as applied to the facts of this case
renders one more subset of measures, tax revenue measures, wholly
exempt from the referendum without the need to comply with the
emergency measures otherwise proscribed by section 1(3). Accordingly,
Garvey’s “interpretation . . . was ‘imprudent and unjust.’” Lowing, 176 Ariz.
at 107 (quoting Wiley, 174 Ariz. at 103).
¶73 Garvey is in error and should be overruled. Although this
Court has “a strong respect for precedent, this respect is a reasonable one
which balks at the perpetuation of error, and the doctrine of stare decisis
should not prevail when a departure therefrom is necessary to avoid the
perpetuation of pernicious error.” Garvey, 64 Ariz. at 350 (quoting State ex
rel. La Prade v. Cox, 43 Ariz. 174, 183 (1934)); see also Lowing, 176 Ariz. at 108(“[A]lthough we have a healthy respect for stare decisis, we will not be
bound by a rule with nothing more than precedent to recommend it.”).
III. ANALYSIS OF SECTION 1(3)
¶74 We now turn to a more appropriate interpretation of section
1(3) and its application to the measure before us. To facilitate the
application of the entirety of section 1(3), we view it as consisting of three
distinct clauses, each separated by a semicolon and working together to
address the what, why, and how of excluding specific legislative acts from
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Dissented in Part
the referendum. We can readily identify which legislative acts pass
constitutional muster for exemption from a referendum while faithfully
protecting the power of referendum retained by the people of Arizona by
considering the following questions: (1) what type of law has the legislature
passed? (2) why is it necessary for the law to go into immediate effect? and
(3) how was the law passed?
A. What can be exempted?
¶75 The first clause of section 1(3) begins by providing that
“[u]nder [the referendum] power . . . five per centum of the qualified
electors . . . may order the submission to the people at the polls . . . any
measure, or item, section, or part of any measure, enacted by the
legislature.” The rest of the clause then identifies two distinct categories of
laws that may not be subject to the people’s exercise of the referendum
power as exceptions: (1) “laws immediately necessary for the preservation of
the public peace, health, or safety, or” (2) “for the support and maintenance
of the departments of the state government and state institutions.”
(Emphasis added.).
¶76 At this point, Warner and Garvey struggled to understand the
effect of the phrase “immediately necessary” in discerning the nature of the
two categories of laws that could be exempt from the referendum and
engaged in differing interpretive methods. Warner, 39 Ariz. at 213–14;
Garvey, 64 Ariz. at 353. However, a plain reading of the first clause in
context of the entirety of section 1(3) obviates a need to discern whether
“immediately necessary” applies to support and maintenance measures.
See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal
Texts 167 (2012) (describing the whole-text canon and noting “[t]he entirety
of the document thus provides the context for each of its parts”).
¶77 When read in conjunction with the second clause, it is not
necessary to engage in further interpretation to discern the phrase’s
application to support and maintenance laws. It can, and should, be read
as only characteristic of laws for public peace, health, or safety. But this
does not mean that support and maintenance measures are categorically
exempt from the referendum.
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
B. Why may laws be exempt?
¶78 The second clause generally requires that legislative acts do
not become operative until ninety days after the close of the legislative
session to preserve the exercise of the referendum power with two
exceptions that otherwise permit laws to go into immediate effect. 9 Ariz.
Const. art. 4, pt. 1, § 1(3). Thus, the second clause logically follows the first
in providing a rationale for why specific categories of laws identified in the
first may be exempt from a referendum.
¶79 Reading the two clauses together for the first category of laws
provides that “laws immediately necessary for the preservation of the
public peace, health, or safety” may be exempt from the referendum because
they “require earlier operation to preserve the public peace, health, or
safety.” Similarly, reading the two clauses together for the second category
provides that laws “for the support and maintenance of the departments of
the state government and state institutions” may be exempt when they
“provide appropriations for the support and maintenance of the
departments of the state and of state institutions.”
¶80 Because we read the text as it is, we disavow Warner’s analysis
that concluded “immediately necessary” and “earlier operation” applied to
both categories of laws. Warner, 39 Ariz. at 211–12. It is not necessary to
apply either phrase to both categories of laws to give proper effect to section
1(3), though we agree with Warner’s conclusion concerning the import of
the second clause. Id. at 212 (“[T]he second clause permits the two classes
of measures the first clause exempts from the referendum to become
operative earlier than other laws, provided the preservation of the public
peace, health or safety or the financial needs of the state’s departments and
institutions require it.”); see also Orme, 25 Ariz. at 346 (“This reserved
power . . . does not apply to acts requiring ‘earlier operation to preserve the
9 The majority’s conclusion that the reason for the ninety-day waiting
period is to “allow[] citizens an opportunity to evaluate and challenge
whether the measure is truly for the ‘support and maintenance’ of the
existing departments of the state and state institutions, as some revenue
measures may not fall into this category,” supra ¶ 25, is true for citizens to
consider any act not exempted in order “to allow opportunity for
referendum petitions,” Ariz. Const. art. 4, pt. 1, § 1(3).
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public peace, health or safety,’ nor to those providing ‘appropriations for
the support and maintenance of the departments of state and of state
institutions.’ [E]nactments of this character may be made immediately
effective and thus exempted from the referendum . . . .”).
¶81 Importantly, though, there is nothing restrictive in the second
clause that would prevent its application to either category of laws. For
example, the legislature could enact a measure for the preservation of
public health that was immediately necessary and justify it as exempt
because it was an appropriation for the support and maintenance of the
Department of Health Services. Monies appropriated for pandemic
operations could be one such possibility.
¶82 Likewise, there is nothing that would prevent the legislature
from identifying a tax revenue measure for the support and maintenance of
a department of state that “require[d] earlier operation to preserve the
public peace, health, or safety.” In fact, the first legislature did just that with
an act imposing a tax to fund the State Tax Commission. 1912 Ariz. Sess.
Laws ch. 39, § 8 (Reg. Sess.). The justification set forth was that “the
provisions of th[e] Act are necessary to the public peace, health, safety, and
for the support and maintenance of the departments of State government
and State institutions . . . .” Id.
¶83 This interpretation of the first two clauses of section 1(3)
provides the means by which the legislature, and thereby state government,
may operate quickly when called for without unduly restricting the
people’s retained power of the referendum. It also serves to obviate the
need to parse the effects of “immediately necessary” and “earlier
operation,” and avoids the need to determine whether revenues are going
to go up or down if the measure is otherwise required for the preservation
of the public peace, health, or safety. Otherwise, “any act, or item, section,
or part of any act, of the legislature,” remains subject to the people’s exercise
of the power of the referendum subject to following the requirements of the
third clause. Ariz. Const. art. 4, pt. 1, § 1(1).
C. How may laws be exempted from a referendum?
¶84 The last clause of section 1(3) addresses the mechanics for
ensuring immediate effect of laws falling into one of the two categories in
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JUSTICE MONTGOMERY, joined by JUSTICE BEENE, Concurred in Part and
Dissented in Part
clause one, determined by clause two to necessitate early operation for
public peace, health, or safety, or which are an appropriation for the
support and maintenance of the departments of the state. To pass as an
emergency measure, such laws must receive a two-thirds approval in both
the House and Senate via a roll call vote, contain a separate section stating
the necessity of the law, and must receive the governor’s approval. Ariz.
Const. art. 4, pt. 1, § 1(3); see also Clark, 20 Ariz. at 547–48 (holding that
gubernatorial approval does not require a governor’s signature).
¶85 Thus, the limitations, exceptions, and extra steps necessary to
exempt a legislative act from the referendum pursuant to section 1(3) all
protect the people’s exercise of the referendum power. As this Court wrote
in Warner, “every act passed by the Legislature should be referable unless
it be a safety or support measure requiring immediate, or earlier operation,”
and even then, “only when the Legislature states this necessity in a separate
section and passes the measure by a two-thirds vote,” along with receiving
gubernatorial approval. 39 Ariz. at 214; see also id. (“[T]here is no such thing
under the Constitution of this state as an act being ipso facto withheld from
or in no event subject to the referendum.”).
IV. APPLICATION TO SB 1828
¶86 As a tax revenue measure, SB 1828 qualifies as a law for
support and maintenance of a state department or institution. See supra ¶ 1.
It is therefore eligible for exemption from the referendum if the legislature
has properly identified it as an emergency measure and enacted it
accordingly, which it did not. Although it received the governor’s
approval, it does not contain a separate section stating why such a law is
necessary and did not receive a two-thirds vote by roll call in either the
House or Senate. Fifty-Fifth Legislature – First Regular Session Bill Status
Inquiry: SB1828, Ariz. Legislature, https://apps.azleg.gov/BillStatus/Bi
llOverview/76142 (last visited Aug. 15, 2022) (documenting the bill’s
passage by a 16-14 vote in the Senate and a 31-29 vote in the House).
¶87 Therefore, we would affirm the trial court, though not due to
the nature of the measure but because the measure does not comply with
the requirements of section 1(3).
36