Governor Dunleavy is right about the effective date issue with the budget

On Thursday, June 17, Governor Dunleavy held a press conference that touched off a flurry of comments among Alaska politicos and journalists on social media and elsewhere. Governor Dunleavy said that the state budget recently passed by the Alaska Legislature contained a fatal defect: it lacked an explicit “effective date.”  Because of this defect, Governor Dunleavy explained the budget would not become effective until 90 days after he signed it.

The problem? Ninety days from now is mid-September 2021, and there’s no funding for state government operations between July 1, the start of the fiscal year, and mid-September. Therefore, according to the Anchorage Daily News, roughly 15,000 state employees received notice that unless something changed they would be laid off as of July 1.

Some have accused the Governor of playing games, while others have said he is correct. What is your take based on the language of the specific budget bill and the provisions of the Alaska Constitution? To me, the Governor appears to be correct.

The budget bill is House Bill 69. Here is a link to its full text. Because the House failed to pass an effective date clause, the current version of the bill is effective 90 days from when it is signed into law. The effective date of an agreement, whether it be a lease contract between landlord and tenant or a bill passed in the Alaska Legislature, is the date that the agreement goes into force. Prior to the effective date, the agreement isn’t enforceable; after the effective date it is.

The provision of the Alaska Constitution at issue is Article II, Section 18. That provision states in full:

Section 18.  Effective Date

Laws passed by the legislature become effective ninety days after enactment. The legislature may, by concurrence of two-thirds of the membership of each house, provide for another effective date.

“Enactment” means the date the governor signs a bill passed by the Alaska Legislature. Article II, Section 18 has its roots in Section 14 of the Territorial Organic Act of 1912 (the law that changed Alaska from a “District” to a Territory”), which provided that if the territorial governor signed a bill into law “it shall become a law at the expiration of ninety days thereafter, unless sooner given effect by a two-thirds vote of said legislature.” Several other state constitutions include similar provisions.

The Alaska Supreme Court has explained that when reading provisions of the Alaska Constitution, one should interpret its provisions “according to reason, practicality, and common sense, taking into account the plain meaning and purpose of the law as well as the intent of the drafters.”

Plain language supports the Governor’s argument that HB 69’s lack of an explicit effective date means that Article II, Section 18’s 90-day gap-filler provision kicks in. Reason, practicality, and common sense would lead one to believe that this 90-day default was included in Alaska’s Constitution because the delegates to the constitutional convention and the Alaska voters who ratified the Constitution believed that, as a default, people should have 90 days to prepare for the implementation of new laws. The Alaska Supreme Court has weighed in on this provision and stated it believes “the framers envisaged that article II, section 18 would afford those affected an opportunity to react to the new legislation by challenging it either through the referendum process or through the courts, as occurred in [ARCO Alaska, Inc. v. State, 824 P.2d 708 (Alaska 1992)].”

ARCO Alaska involved the State’s passage of a new oil-production tax law. In the spring of 1989, the legislature was unable to garner the 2/3 vote of both the House and Senate to include an effective date clause in the bill, but it did include a provision making the tax hike retroactive to January 1, 1989, meaning that oil company production taxes would be calculated for all of 1989 and going forward under the new formula. Before the law became effective 90 days after the governor signed it, the oil companies sued the state arguing that the Legislature was circumventing the 90-day effective date provision by instead including a retroactive provision. The Alaska Supreme Court rejected this argument, explaining that the effective date of a bill and whether a bill is retroactive are completely different concepts.

The effective date of the bill “is the date on which the law goes into actual operation or produces a legal effect.” Before that effective date, that bill has no impact.

A law’s retroactive date reaches back in time and impacts things that have already occurred: “A retroactive law is one which gives to pre-enactment conduct a different legal effect from that which it would have had without passage of the statute.”

A silly example is helpful to understand the difference. Let’s say the Alaska Legislature was concerned with pet obesity and passed a bill (SB K9) to make giving your dog a treat before noon a misdemeanor, and the governor signed it into law on June 18, 2021.

  • The legislature tried to garner the votes to make SB K9’s effective date immediate upon the governor’s signing but fell short of the 2/3 needed in both chambers
  • The legislature included a retroactive provision in SB K9 stating: “This Act is retroactive to January 1, 2021.”

Setting aside the fatal constitutional problems SB K9 has by being a retroactive criminal law, what is the first day a State Trooper can issue a citation if she sees someone feeding their dog a treat before noon? The answer is the “effective date,” or 90 days from June 18: September 16, 2021.

Because the bill is retroactive, however, on or after September 16, 2021, the trooper could cite you for feeding your dog before noon on January 1, 2021. Because it’s retroactive, the state can reach back to early conduct and take action based on that pre-bill-passage conduct. (Again, there are fatal constitutional issues with this example but set those aside for the sake of this argument.)

Based on the plain meaning of the words in Article II, Section 18, and the difference between retroactivity and effective dates of laws, the Governor appears to be right: HB 69 cannot go into effect until 90 days after he signs it. The state can make its provisions retroactive, but not until the 90 days passes. Now that Dunleavy has called another special session beginning on June 23, the House could vote for an effective date clause of July 1, making all of the above moot.

Lee Baxter is a practicing Anchorage attorney. He provides periodic legal analysis for the Landmine in his spare time – when he is not fishing.

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Marlin Savage
1 year ago

Where was Lee Baxter when a new mayor wasn’t elected in a timely fashion after Berkowitz resigned?????

Lynn Willis
1 year ago

Another Dunleavy Pyric victory*. Just like his following Arduin’s advice on budget cutting.

* A Pyrrhic victory is a victory that inflicts such a devastating toll on the victor that it is tantamount to defeat. A Pyrrhic victory takes a heavy toll that negates any true sense of achievement or damages long-term progress. 

1 year ago

First time I can remember Dunleavy being correct on a legal issue.