)
)
)
)
Appellant,
)
)
vs.
)
)
RIP COMMERCE TAX INC. PAC, a
)
Nevada political action committee; and )
THE HONORABLE BARBARA K.
)
CEGAVSKE, in her official capacity as )
Secretary of State of the State of Nevada, )
)
Respondents.
)
)
MATTHEW M. GRIFFIN
The Griffin Company
Nevada Bar No. 8097
401 S. Curry Street
Carson City, NV 89703
(775) 882-4002
matt@g3nv.com
KEVIN BENSON
White Hart Law
Nevada Bar No. 9970
2310 S. Carson Street #6
Carson City, Nevada 89701
100 North Carson Street
Carson City, Nevada 89701-4717
(775) 461-3780
kbenson@whitehartlaw.com
TABLE OF CONTENTS
NRAP 26.1 DISCLOSURE ........................................................................................... i
TABLE OF CONTENTS................................................................................................ ii
TABLE OF AUTHORITIES.......................................................................................... iv
JURISDICTIONAL STATEMENT ................................................................................. vi
ROUTING STATEMENT ............................................................................................. vi
ISSUES PRESENTED FOR REVIEW ........................................................................... vii
STATEMENT OF THE CASE .........................................................................................1
STATEMENT OF FACTS ...............................................................................................3
SUMMARY OF THE ARGUMENT ..................................................................................4
STANDARD OF REVIEW ..............................................................................................7
ARGUMENT ................................................................................................................7
I. The Petition is Invalid because it is a Referendum on a Senate Bill, not
on a Statute, Which Causes the Petition to be Confusing and Misleading. ....7
A. The Petition is invalid because it is a referendum on a senate bill, not a
statute, and therefore it fails to strictly comply with Nevadas constitutional
requirements. .......................................................................................................8
B. The Petition is invalid because it includes an Explanation that is
confusing, misleading and inapplicable to a referendum. ................................12
C. This Petition is invalid because it contains the enacting clause for
initiative petitions, even though referenda petitions cannot enact law. ............16
II. The Petition is Invalid Because it Includes Administrative Details and
Therefore Exceeds the Petition Power..............................................................19
A. The district court erred when it refused to apply the long-standing test
used to determine whether provisions in a petition are administrative or
legislative. .........................................................................................................20
B. The reasons for prohibiting administrative provisions in initiative
petitions apply even more strongly to referendum petitions. ...........................24
C. The Petition is invalid because it contains numerous administrative
matters. ..............................................................................................................27
III. The Petition is Invalid because it Violates Nev. Const. Article 9,
Section 2. ..............................................................................................................30
ii
iii
TABLE OF AUTHORITIES
Cases
Caine v. Robbins, 61 Nev. 416, 131 P.2d 516, 517 (1942) .......................................................... 18
Campen v. Greiner, 15 Cal. App. 3d 836, 839, 843, 93 Cal. Rptr. 525 (Ct. App. 1971) ............. 35
Citizens for Train Trench Vote v. Reno, 117 Nev. 169, 177, 18 P.3d 1034, 1039 (2001) 20, 21, 28
City of N. Las Vegas v. Cluff, 85 Nev. 200, 201, 452 P.2d 461, 462 (1969) ................................ 30
Costa v. Superior Court, 128 P.3d 675, 706 (Cal. 2006) (Kennard, J., dissenting) ....................... 9
Educ. Init. v. Comm. to Protect Nev. Jobs, 129 Nev. Adv. Op. 5, 293 P.3d 874, 879 (Nev. 2013)
............................................................................................................................................. 37, 38
Forman v. Eagle Thrifty Drugs & Markets, Inc., 89 Nev. 533, 537, 516 P.2d 1234, 1236 (1973)
................................................................................................................................. 16, 20, 21, 24
Garvin v. Ninth Judicial Dist. Court ex rel. Cnty. of Douglas, 118 Nev. 749, 59 P.3d 1180 (2002)
............................................................................................................................................ passim
Herbring v. Brown, 180 P. 328, 330 (Or. 1919) ........................................................................... 11
Herbst Gaming, Inc. v. Heller, 122 Nev. 877, 141 P.3d 1224 (2006) ................................ 8, 18, 31
In re T.R., 119 Nev. 646, 651, 80 P.3d 1276, 1279 (2003)........................................................... 32
Myers v. City Council of City of Pismo Beach, 241 Cal. App. 2d 237, 243, 50 Cal. Rptr. 402 (Ct.
App. 1966) ............................................................................................................................... 35
Nevadans for Nevada v. Beers, 122 Nev. 930, 942, 142 P.3d 339, 347 (2006) .................... passim
Nevadans for Nevada v. Beers, 122 Nev. 930, 949, 142 P.3d 339, 351 (2006) ....................... 8, 39
Nevadans for the Protection of Property Rights, Inc. v. Heller, 122 Nev. 894, 141 P.3d 1235
(2006) ................................................................................................................................. passim
Personhood Nevada v. Bristol, 126 Nev. 599, 602, 245 P.3d 572, 574 (2010) ............................ 31
Prior v. Noland, 68 Colo. 263, 268, 188 P. 729, 731 (1920)........................................................ 10
Rossi v. Brown, 9 Cal. 4th 688, 889 P.2d 557 (1995) ............................................................. 35, 36
Stumpf v. Lau, 108 Nev. 826, 833, 839 P.2d 120, 124 (1992) .................................................. 8, 18
Tesoriere v. Second Judicial Dist. Court in & for Washoe Cnty., 50 Nev. 302, 258 P. 291, 293
(1927) .................................................................................................................................. 15, 16
Whittemore v. Terral, 140 Ark. 493, 215 S.W. 686, 687 (1919) .................................................. 10
Statutes
1957 Statutes of Nevada, Ch. 2 ..................................................................................................... 11
2015 Statutes of Nevada, Ch. 487 ................................................................................................... 3
NRS 220.085 ................................................................................................................................. 27
NRS 220.120 ................................................................................................................................. 27
NRS 295.009 ................................................................................................................. 1, 37, 38, 40
NRS 295.055(4) ........................................................................................................................... 39
NRS 295.061 ............................................................................................................................... 1, 4
Other Authorities
Senate Bill No. 483 .......................................................................................... passim
Regulations
NAC 295.050 ............................................................................................................................... 39
iv
Constitutional Provisions
Nev. Const. Art. 10, 1 ................................................................................................................ 35
Nev. Const. Art. 19, 1 ......................................................................................................... passim
Nev. Const. Art. 19, 2 ................................................................................................................ 25
Nev. Const. Art. 19, 4 ................................................................................................................ 23
Nev. Const. Art. 4, 22 ................................................................................................................ 34
Nev. Const. Art. 4, 23 ................................................................................................................ 10
Nev. Const. Art. 9, 2 ........................................................................................................... passim
Nev. Const. Article 19, 3 ........................................................................................................... 17
JURISDICTIONAL STATEMENT
This Court has jurisdiction over this appeal pursuant to NRAP 3A(b)(1) and
3A(b)(3). This is an appeal from a final order resolving all claims presented to the
district court. NRAP 3A(b)(1). It is also an appeal from an order refusing to grant
an injunction. NRAP 3A(b)(3).
The final order was entered on December 17, 2015. Notice of entry of the
order was served on December 18, 2015. The notice of appeal was filed on
December 30, 2015. This appeal is timely because it was filed less than 30 days
after the entry of the final judgment, as required by NRAP 4(a)(1).
ROUTING STATEMENT
This is case is presumptively retained by the Supreme Court pursuant to
NRAP 17(a)(3) because it is a case involving a ballot or election issue, more
specifically: whether the Secretary of State should be enjoined from placing a
referendum petition entitled Referendum on Provisions Related to the Commerce
Tax From Senate Bill No. 483 of the 2015 Legislative Session on the 2016
general election ballot.
vi
vii
5. Is this referendum Petition valid, even though its Description of Effect fails
to mention that the Legislature must replace the Commerce Tax, or eliminate
some expenditures, under Article 9 section 2 of the Nevada Constitution?
viii
First, the district court held that the Petition was valid, regardless of whether
it contained administrative provisions. (JA 206) Instead of applying the Nevada
Supreme Courts test for determining whether any of the provisions were
administrative in nature, the district court held that a referendum petition can be
run on any provision passed by the Legislature, even if it contains provisions that
are plainly administrative. Id.
Second, the district court held that the Petition was valid, even though it
would unbalance the budget passed by the 2015 Nevada Legislature by repealing a
tax that is necessary to pay for the States expenditures in its current budget year.
(JA 206) The district court held that Nev. Const. Art. 9, 2(1) only imposes a duty
upon the Legislature to balance the budget, and the people have no similar
constraints under Article 19. Id.
Third, the district court held that the Constitutions requirement that the
people propose a statute in a referenda petition is satisfied by referring a senate
bill because the bill was passed by the Legislature and approved by the Governor.
(JA 206-07)
Fourth, the district court held that the explanation included as part of the
petition did not render the petition invalid. (JA 207) The court stated that it found
no legal authority that requires the explanation to be accurate or not confusing, and
since this explanation is similar to that used when the Legislature considered the
entirety of SB 483, it is permissible. Id.
Finally, the district court held that the Description of Effect is adequate,
even though it fails to inform potential signers that the Legislature must enact new
taxes, or cut existing expenditures, if the Commerce Tax is disapproved. (JA 208)
STATEMENT OF FACTS
In 2015, the Legislature created a budget based on the Executive Budget
submitted by the Governor, estimates from the Economic Forum, and reports from
the Legislative Counsel Bureaus Fiscal Division. The budget provides for
expenditures for state agencies and programs, and also provides for taxes, fees, and
other revenue sufficient to fund those expenditures in each of the next two years.
Nev. Const. Art. 9, 2.
Senate Bill No. 483 provides for a new tax called the Commerce Tax. It was
passed by the Legislature and signed by the Governor on June 9, 2015. 2015
Statutes of Nevada, Ch. 487. The Commerce Tax is part of the overall tax and
revenue package passed by the Legislature in 2015 to fund the expenditures that
were also passed by the Legislature in 2015.
Defendant RIP Commerce Tax, Inc. PAC is a registered Nevada political
action committee. (JA 72)
On October 8, 2015, defendant RIP Commerce Tax filed its Petition for
Referendum on Provisions Related to the Commerce Tax from Senate Bill No. 483
of the 2015 Legislative Session with the Secretary of State. (JA 11)
Plaintiff Coalition for Nevadas Future timely challenged the Petition under
NRS 295.061 when it initiated this case on October 29, 2015. (JA 1)
SUMMARY OF THE ARGUMENT
The Nevada Constitution, Article 19, 1(1) permits a referendum petition
asking the voters to approve or disapprove a statute, or part thereof. Petitions must
strictly comply with this constitutional requirement. In this case, the Petition
attempts a referendum on a senate bill, not a statute. This results in a Petition
which contains confusing and misleading language, such as asking voters to
approve or disapprove of language that is not even current law. Additionally, the
Petitions explanation of its text fails to accurately inform voters what the effect of
voting yes or no on the petition will be. Finally, the Petition contains the
enacting clause used for initiative petitions. Because of these errors, the Petition
fails to strictly comply with Article 19, 1(1), is confusing and misleading, and is
therefore invalid.
The petition power is limited to legislation; it does not extend to dictating
administrative details. This limitation applies to referenda as well as initiative
petitions. If a statute is approved by referendum, its provisions can never be
4
petition power is coequal, coextensive, and concurrent with the power of the
Legislature. As a result, the people likewise cannot repeal a tax that is part of the
Legislatures 2015 annual budget. This Petition therefore exceeds the petition
power and is invalid.
The Petitions Description of Effect is inadequate because it fails to inform
voters about the actual consequences of repealing a tax that is part of the current
budget: that the result is that either new taxes must be raised or expenditures must
be cut. The district court erred in holding that the Petitions Description of Effect is
sufficient, even though it makes no mention of this effect, and therefore gives the
impression that there are no consequences to repealing a current source of State
revenue. The purpose of the description of effect is to promote informed decisionmaking. The Petition does not exist in a vacuum and voters must be told of this
effect of the Petition in order to decide whether to sign the Petition.
STANDARD OF REVIEW
When, as here, the district courts decision denying relief on a challenge to a
ballot question is made in the absence of any factual dispute, this Court reviews the
district courts order de novo. Nevadans for Nevada v. Beers, 122 Nev. 930, 942,
142 P.3d 339, 347 (2006).
ARGUMENT
I.
1(1) because it proposes a referendum on part of a bill, not on a statute. This causes
confusion and misleads voters. For example, the Petition attempts to refer language
that is not in current law and contains a confusing explanation of the language.
The RIP PAC also asserts that, if Senate Bill 483 is disapproved, the Petition
would re-enact language which is not currently in the law. Finally, to make matters
worse, RIP PAC includes an enactment clause stating that the petition enacts law,
which misleads voters as to the fundamental nature and purpose of the Petition.
Strict compliance with the Constitution is required because such compliance
is easy to achieve and avoids exactly this kind of confusion. This Petition fails to
comply with the requirements of Article 19, 1. The district court therefore erred
7
when it held that the Petition refers a statute and that it is not misleading or
confusing.
A. The Petition is invalid because it is a referendum on a senate bill, not a
statute, and therefore it fails to strictly comply with Nevadas
constitutional requirements.
All petitions for referendum or initiative must strictly comply with the
requirements of the Nevada Constitution. Nevadans for Nevada v. Beers, 122 Nev.
930, 949, 142 P.3d 339, 351 (2006). The power to change the law through petition
is a powerful one, [b]ut that power exists within the current constitutions
boundaries. Id., 122 Nev. at 947, 142 P.3d at 350. Petitions outside those
boundaries may not proceed to the ballot. See e.g., id. (petition was void where the
circulated version was not the version which was filed with the Secretary of State,
as required by the Nevada Constitution); Stumpf v. Lau, 108 Nev. 826, 833, 839
P.2d 120, 124 (1992) (petition void for failing to indicate whether it would amend
a statute or the constitution) (overruled on other grounds by Herbst Gaming, Inc. v.
Heller, 122 Nev. 877, 141 P.3d 1224 (2006)).
The holding in Beers was grounded on the policy that Nevadas Constitution
provides important safeguards to protect the petition process and prevent voter
confusion. Beers, 122 Nev. at 949, 142 P.3d at 351-52. It also recognized that
there is no good reason put courts in the position to decide whether the
discrepancy was so insignificant that it satisfies a substantial compliance
8
10
enacted by bill); Herbring v. Brown, 180 P. 328, 330 (Or. 1919) (recognizing that a
bill is a mere draft of a law, which may never be enacted and is therefore distinct
from a law).
Nor is a law synonymous with statute. The term statute refers only to
the Nevada Revised Statutes or the Statutes of Nevada. Nev. Const. Article 19,
1(1) requires that a referendum petition be on a statute or part thereof. This
language was changed in 1962. See Question 2, 1962.1 Previously, Article 19,
1(1) stated that a referendum must be on a law or resolution. Id. It was changed
in 1962 to state a statute or resolution, or part thereof. Id. Tellingly, the Nevada
Revised Statutes had only fairly recently been adopted in 1957. 1957 Statutes of
Nevada, Ch. 2. Accordingly, the difference between a law and a statute was
very recently at the forefront and well-understood. The fact that the Constitution
was changed to refer specifically to a statute instead of a law shows that the
referendum power extends only to the Nevada Revised Statutes and the Statutes of
Nevada.
Accordingly, although S.B. 483 may be a law, it is not a statute, and as a
result the Petition fails to comply with Article 19, 1(1). The district court held
that the Petition was valid, despite the fact that it does not refer a statute. By doing
Available at:
https://leg.state.nv.us/Division/Research/VoteNV/BallotQuestions/1962.pdf
11
so, the district court essentially applied substantial compliance instead of strict
compliance. As explained below, attempting to refer a bill to the voters makes the
petition confusing and misleading. For example, this Petition attempts to refer
language that is not existing law, and also attempts to re-enact other language that
has been repealed. These are only two of the numerous problems caused by
attempting a referendum on a bill instead of a statute.
As the Nevada Supreme Court discussed in Beers, strict compliance with the
Nevada Constitution is required, and it is a simple matter to comply with the
requirement that a referendum be proposed on a statute. See Beers, 122 Nev. at
949, 142 P.3d at 351-52. Because the Petition does not request a referendum upon
any statute or part thereof, it does not comply with Article 19, Section 1, and is
therefore invalid.
B. The Petition is invalid because it includes an Explanation that is
confusing, misleading and inapplicable to a referendum.
The Petition is also invalid because the format of the text of the measure and
the explanation of the measure is confusing and misleading. At the top of the first
page, the Petition provides:
REFERENDUM ON PROVISIONS RELATED TO THE COMMERCE TAX
FROM
SENATE BILL NO. 483 OF THE 2015 LEGISLATIVE SESSION
12
would be repealed, and the [omitted material] would be re-enacted into law. (JA
96) The district court did not make a finding on this argument, but did hold that the
Explanation was similar to the explanation found in Senate Bill 483 and
therefore the Explanation is not misleading. (JA 207) This was error for two
reasons: first, it contradicts the Explanation itself; and second, a petition which
enacts language that does not currently exist in the law is an initiative, not a
referendum.
With respect to the district courts holding, the explanation found in Senate
Bill 483 is, in fact, significantly different from the Explanation on the Petition.
Senate Bill 483s explanation provides: EXPLANATION Matter in bolded
italics is new; matter between brackets [omitted material] is material to be
omitted. This explanation makes clear that bold, italic language is treated
differently from [omitted material]. By contrast, the Explanation in the Petition
states that they are treated exactly the same: both will be either approved or
repealed. This makes the Petition confusing. For example, what does it mean to
approve the [omitted material]? Does that mean that the voter wants the omitted
material reenacted into law, as RIP PAC contends? Or does that mean the voter
approves of the fact that Senate Bill 483 repealed that language? From this Petition
and this Explanation, there is no way to tell, and voters may interpret it differently.
14
That is why a referendum must be on a statute, and cannot ask voters, as this
Petition does, to approve or disapprove language that is not even existing law.
Second, according to the RIP PAC, if voters disapprove of Senate Bill 483,
the [omitted material] would be added back into the law. RIP PAC conceded as
much before the district court. (JA 95) However, this interpretation conflicts with
the literal words of the Explanation, which says nothing of reenacting the omitted
material. Additionally, the [omitted material] is not existing law, thus, according
to RIP PAC, the Petition would be adding language to the statutes that does not
currently exist. That is, by definition, an initiative petition, not a referendum.
Tesoriere v. Second Judicial Dist. Court in & for Washoe Cnty., 50 Nev. 302, 258
P. 291, 293 (1927).
Allowing this kind of confusion is senseless, and just as the court pointed
out in Beers, it is easily fixed. Also, it demonstrates how substantial compliance
can lead to confusing and misleading voters, and why the court in Beers held that
strict compliance is required. 122 Nev. at 946, 142 P.3d at 349. These problems
can be easily avoided by strictly adhering to the requirement in Article 19, 1 that
a referendum petition be on a statute, not a bill. See e.g., Beers, 122 Nev. at 943,
142 P.3d at 347 (strict compliance with constitutional provisions is required
because it promotes informed decision-making and avoids confusion).
15
1. Just before the full text of the measure, the Petition states: The People of the
State of Nevada do hereby enact as follows: Id.
The plain language of Nev. Const. Article 19, 3(1) repeatedly addresses
both referenda and initiatives, except for the last sentence, which intentionally
excludes referenda and applies the enacting clause requirement only to initiatives.
Nev. Const. Article 19 3(1) states, in full:
Each referendum petition and initiative petition shall
include the full text of the measure proposed. Each signer
shall affix thereto his or her signature, residence address
and the name of the county in which he or she is a
registered voter. The petition may consist of more than one
document, but each document shall have affixed thereto an
affidavit made by one of the signers of such document to
the effect that all of the signatures are genuine and that each
individual who signed such document was at the time of
signing a registered voter in the county of his or her
residence. The affidavit shall be executed before a person
authorized by law to administer oaths in the State of
Nevada. The enacting clause of all statutes or amendments
proposed by initiative petition shall be: The People of the
State of Nevada do enact as follows:.
(Emphasis added.)
This demonstrates that the enacting clause is only permitted in an initiative
petition. This makes sense because of course only initiative petitions propose new
law. Yet this Petition, a referendum, states: The People of the State of Nevada do
enact as follows:. Immediately following that enacting clause is the full-text of the
measure, which is all of the language from Senate Bill 483, including text
17
presented in bold, italic and [bracketed, strikethrough]. This will mislead voters
into believing that a yes vote will amend the law to add the bold, italic language
rather than approve existing law. This might at first appear to be an insignificant
issue, but as discussed below, the consequence of a yes vote is that the language
can never be repealed or amended again, except by another direct vote of the
people.
Failure to include an enacting clause in an initiative is, on its own, a fatal
defect that renders the initiative void. Caine v. Robbins, 61 Nev. 416, 131 P.2d
516, 517 (1942). That is because initiative petitions create new law, and the
enacting clause sets forth the authority by which it is enacted. This case presents
the logical inverse of Caine, and therefore the referendum Petition in this case is
also void. Because a referendum petition, by definition, cannot enact a law,
inclusion of the initiative petition enacting clause renders the Petition void.
Moreover, inclusion of the initiative petition enacting clause fundamentally
confuses voters and misrepresents what is being proposed. This is very similar to
Stumpf v. Lau, where this Court held that the failure of an initiative petition to state
whether it was proposing an amendment to a statute or to the constitution rendered
the petition void. 108 Nev. 826, 832, 839 P.2d 120, 124 (1992) (overruled on other
grounds by Herbst Gaming, Inc. v. Heller, 122 Nev. 877, 141 P.3d 1224 (2006)).
The court in Stumpf reasoned: This failure to specify the nature and purpose
18
the test set forth in Forman v. Eagle Thrifty Drugs and Markets, Inc., 89 Nev. 533,
537 (1973) and its progeny to determine whether provisions of a petition are
legislative or administrative. This was error for three reasons. First, the prohibition
on including administrative details in petitions applies to all types of petitions:
initiatives, referenda, local, statewide, constitutional, or statutory. Second, the
public policy reasons for prohibiting administrative details apply with even greater
force to referenda than to initiatives. Third, the Petition contains numerous
administrative provisions and is therefore invalid.
A. The district court erred when it refused to apply the long-standing test
used to determine whether provisions in a petition are administrative or
legislative.
This Court has a long line of cases recognizing that the petition power
reserved to the people under Article 19 of the Nevada Constitution does not extend
to dictating the administrative details of implementing the measure. See e.g.,
Nevadans for the Protection of Property Rights, Inc. v. Heller, 122 Nev. 894, 141
P.3d 1235 (2006); Citizens for Train Trench Vote v. Reno, 117 Nev. 169, 177, 18
P.3d 1034, 1039 (2001); Garvin v. District Court, 118 Nev. 749, 751, 59 P.3d
1180, 1181 (2002).
In Garvin v. District Court, the Supreme Court reaffirmed that Nevada's
initiative and referendum powers are still limited by the Constitution to
legislation. Garvin, 118 Nev. at 764, 59 P.3d at 1190 (emphasis added). In Train
20
Trench, this Court held that regardless whether an initiative proposes enactment
of a new statute or ordinance, or a new provision in the constitution or city charter,
or an amendment to any of these types of laws, it must propose policyit may not
dictate administrative details. Train Trench, 118 Nev. at 583, 18 P.3d at 1039.
The test for determining whether a provision is legislative or administrative
was first adopted in 1973. Forman v. Eagle Thrifty Drugs and Markets, Inc., 89
Nev. 533, 537 (1973) (overruled on other grounds by Garvin, 118 Nev. at 765). A
legislative provision originates or enacts a permanent law or lays down a rule of
conduct or course of policy for the guidance of the citizens or their officers,
whereas impermissible administrative matters simply put into execution
previously-declared policies or previously-enacted laws or direct a decision that
has been delegated to [a governmental body with that authority]. Property Rights,
122 Nev. at 915, 141 P.3d at 1249 (internal quotations omitted).
However, the district court refused to apply this test and did not make any
determinations as to whether any of the provisions in the Petition are
administrative. Instead, the district court held:
The administrative details objected to by Plaintiff are contained in Senate
Bill (SB) 483 which was enacted by the Nevada Legislature, a purely
legislative body. Even if the Nevada Legislature enacts a statute that
includes provisions which dictate administrative details related to the
implementation of the legislation, the people do not lose their Article 19
Section 1 Constitutional right to submit the entire statute to a vote of the
people.
21
(JA 206)
22
being in excess of the peoples constitutional power to petition. 122 Nev. at 916,
141 P.3d at 1249-50.
Nev. Const. Art. 19, 4 explicitly limits local initiative and referendum
petitions to legislation. The petitioners in Property Rights argued that the
statewide initiative power was broader than the local power because of the absence
of similar language explicitly limiting the statewide petition power to legislation.
Id., 122 Nev. at 914, 141 P.3d at 1247. The court acknowledged that the
administrative / legislative distinction has its origins in local petitions, but
nevertheless rejected that argument. Id. It held that Article 19 did not need to
contain such explicit limiting language because:
The people's initiative power is coequal, coextensive, and concurrent
with that of the Legislature; thus, the people have power that is legislative
in nature. That the people have only legislative power, by definition,
explains why Article 19, Section 2 does not include any legislation
languageit would be redundant.
Property Rights, 122 Nev. at 913. (Emphasis added).
The court further explained: Unlike the Legislature, which performs strictly
legislative functions, a local government body performs administrative functions as
well. Id., 122 Nev. at 914, 141 P.3d at 1248 (emphasis added). But in this case,
the district court erred because it took the phrase strictly legislative out of
context.
23
initiative, simply qualifying a referendum for the ballot changes the status quo.2
The danger of including administrative provisions in a referendum petition is
that, if the law is approved, then technical, bureaucratic processes will be enshrined
in the law such that the Legislature can never change those provisions. Nev. Const.
Art. 19, 1(3). See, e.g., the Sales and Use Tax Act of 1956. In this case, take for
example Section 21 of the Petition. That section sets forth a records retention
schedule for businesses, and other details related to record keeping. If the voters
vote yes on this Petition, the Legislature will never be able to change such minor
details as how long a business must keep those records. The people will have to
directly vote on it again, essentially putting the voters in the seat of an
administrative agency.
As this Court has repeatedly reaffirmed, the petition power is limited to
legislation. See e.g., Garvin, 118 Nev. at 751, 59 P.3d at 1181. The role of a
lawmaker is to set forth policy, not to oversee the execution or administration of
that policy. Those functions belong of course to the executive branch. Id. The
absurdity of requiring a statewide vote every time something like the records
retention schedule needs updated is why referendum petitions, even more so than
See NRS 220.120 and NRS 220.085 (granting authority to the legislative counsel
bureau and the legislative commission to remove obsolete provisions and correct
clerical errors, etc.).
27
policy. See Garvin, 118 Nev. at 766, 59 P.3d at 1191 (holding initiative that
proposed to establish[] a general building cap on residential units to regulate
growth was policy-driven, and . . . legislative in nature, but that [e]xecuting
this new policy will be an administrative matter). Indeed, the balance of the
Petition is almost exclusively concerned with administrative details related to
execution of the Commerce Tax.
In this matter, Respondent did not dispute that the Petition includes
administrative matters. (See JA 87, ll. 1-7) Instead, it merely asserted, and the
district court held, that the provisions of the Petition are irrelevant because the
mere fact that the Legislature enacted the provisions is determinative of the issue.
The district courts decision ignores this Courts decision in Property Rights that
the inclusion of these administrative details violates the Nevada Constitutions
policy-only rule. Nevadans for Prop. Rights, 122 Nev. at 898, 141 P.3d at 1238;
Train Trench, 118 Nev. at 585, 53 P.3d at 393-94. Thus, in the absence of any
findings by the district court, this Court must either apply the Foreman test itself,
or remand the matter to the district court to apply the test and make the necessary
findings.
A proper application of the Foreman test will show that the Petition contains
numerous administrative provisions. For example, the following sections of the
Petition are just a few of the provisions geared toward merely executing the
28
commerce tax and which do not establish permanent policy for the State. These
provisions, among others, were identified by the Legislative Counsel Bureau as
being administrative in another version of this petition which was furnished by
LCB to the RIP PAC.
Section 15: Sets forth what shall be considered the taxable year;
Section 21: Imposes certain record keeping requirements on businesses, sets
the period of retention, and various other administrative details;
Section 23: Authorizes the Executive Director of the Department of Tax to
request information from other agencies, and provides the Executive Director with
the discretion to determine which records may be requested when administering
her duties;
Sections 50 61: These sections set forth accounting methods and
procedures, governs issues related to overpayments and refunds, sets forth the time
to file for a refund, interest on overpayments, anti-injunction provisions, judicial
review of denied / disallowed claims, the Departments ability to recover erroneous
refund or credit allowed in district court and the Nevada Attorney Generals Office
is to prosecute an action according to Nevada Rules of Civil Procedure, and sets
forth other remedies that are not excluded;
Sections 63-67: Adds reference to the commerce tax to existing provisions
dealing with interest, penalties, etc. on under payments or failure to pay, requires
the Department of Tax to determine the annual revenue of the Commerce Tax and,
in the circumstance where the revenue exceeds the projections by 4% annually, use
that calculation in determining the proper rate to meet the projections of the
Economic Forum.
Including these provisions in a referendum risks enshrining these
administrative matters into law. The district court therefore erred when it
determined that the Petition is valid, even if it includes administrative provisions.
But most importantly, there is absolutely no reason to do this, because the
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people of course still have the right to run a referendum on any and all policy
provisions of the statute. Accordingly, the decision of the district court must be
reversed, and the Petition declared invalid because it contains administrative
provisions.
III.
The district court held that the Petition is valid, despite the fact that it would
unbalance the States current budget by repealing a tax without replacing that
revenue or cutting expenditures. This was error because the coequal power of the
people and the Legislature means that the people, acting in their legislative
capacity through the petition process, are subject to Article 9, Section 2, just as the
Legislature is.
A. The challenge to the Petition based on its violation of Article 9, 2 is
ripe for pre-election review.
As an initial matter, the district court erred when it held both that the
Plaintiffs challenge to the Petition under Nev. Const. Art. 9, 2 was not ripe for a
pre-election challenge, and also ruled on the merits that referenda petitions need
not comply with Nev. Const. Art. 9, 2. (JA 206, 209) These holdings are
mutually exclusive. See City of N. Las Vegas v. Cluff, 85 Nev. 200, 201, 452 P.2d
461, 462 (1969) (if a case is not ripe, then a ruling on the merits would amount to
an impermissible advisory opinion); Personhood Nevada v. Bristol, 126 Nev. 599,
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602, 245 P.3d 572, 574 (2010) (courts duty is to resolve controversies and avoid
issuing advisory opinions).
This Court has identified three general types of challenges to petitions: (1)
the procedural requirements for placing a measure on the ballot were not met; (2)
the subject matter is not appropriate for direct legislation under constitutional or
statutory limits on the initiative power; and (3) the measure, if passed, would
violate substantive federal or state constitutional provisions. Herbst Gaming, Inc.
v. Heller, 122 Nev. 877, 882-83, 141 P.3d 1224, 1228 (2006).
The challenge that the Petition violates Nev. Const. Art. 9, 2(1) falls into
the second category because it is a challenge to the scope of the petition power.
Nev. Const. Art. 9, 2 prohibits a specific category of legislation: appropriations
or expenditures that exceed the annual revenue. Likewise, every petition that
attempts this type of legislation is categorically invalid, regardless of the
substantive provisions of that particular petition. Proposing or referring
administrative provisions is not within the peoples petition power and is ripe for
pre-election challenge because such provisions are always, categorically invalid.
See Herbst, 122 Nev. at 884, 141 P.3d at 1229. It is therefore a waste of public
resources to process the petition, validate signatures, prepare ballots, and so forth
in such cases. The same applies to the Article 9, 2 challenge.
This challenge also meets the two requirements for ripeness identified in In
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re T.R., 119 Nev. 646, 651, 80 P.3d 1276, 1279 (2003): (1) there is greater
hardship to the parties caused by withholding judicial review, and (2) the issues are
suitable for pre-election review. First, since this challenge is to the scope of the
petition power, it would cause greater hardship to the parties to withhold judicial
review until after the election. By that time, the parties will have committed
substantial resources to qualifying the petition and campaigning for or against it,
all of which would be wasted if the Court were to then rule the Petition invalid. A
ruling early in the process would avoid this hardship. Second, as evidenced by the
district courts ruling on the merits of this claim, the issue presented is a question
of law which is suitable for determination now. Especially since this is a
referendum, there is no uncertainty about how it would be interpreted or applied,
since referenda can only repeal existing law.
Accordingly, the district courts determination that this claim was not ripe
for review should be reversed, and the Court should proceed to the merits of the
claim.
B. The Petition is invalid because it would unbalance the budget passed by
the 2015 Nevada Legislature, in violation of Nev. Const. Art. 9, 2.
The peoples initiative power is coequal, coextensive, and concurrent with
that of the Legislature. Protection of Property Rights, 122 Nev. at 914, 141 P.3d
at 1248. The district court held that the Petition is valid, despite the fact that it
would unbalance the state budget. This was error because it means that the
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peoples petition power is in fact considerably greater than the power of the
Legislature, which is contrary to this Courts holding in Protection of Property
Rights.
Legislature. Cf. Nev. Const. Art. 10, 1(1), (9) (prohibiting personal income taxes
and requiring Legislature enact a uniform and equal rate of taxation).
In this case, Nev. Const. Art. 9, 2 prohibits the Legislature from repealing
a tax unless it also either raises some other revenue, or cuts programs to balance
the budget. But under the district courts decision, a tax can be cut through the
referendum process, irrespective of the consequences. The district court
determined that the Petition need not comply with Article 9, 2, and it would be
the Legislatures duty alone to address the resulting budget shortfall.
Compare this with the petition power in California. California courts
previously recognized that the petition power is limited to prevent interfering with
fundamental government functions, including the ability to fund the current
budget. For example, in Campen v. Greiner, 15 Cal. App. 3d 836, 839, 843, 93
Cal. Rptr. 525 (Ct. App. 1971) (abrogated by Rossi v. Brown, 9 Cal. 4th 688, 889
P.2d 557 (1995)), the California Appellate Court held that a petition which would
repeal the citys utility tax was invalid because the people lacked the authority to
repeal a source of revenue that was necessary to support spending in the current
budget. See also Myers v. City Council of City of Pismo Beach, 241 Cal. App. 2d
237, 243, 50 Cal. Rptr. 402 (Ct. App. 1966). However, these cases were abrogated
by the California Supreme Court in 1995, when it held that the petition power is
greater than the power of the Legislature. Rossi v. Brown, 9 Cal. 4th 688, 715, 889
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that the description of effect should not be subject to rigorous, statutoryconstruction type review. Id. at 883. The court pointed out that the sample ballots
would contain an official explanation of the measure written by the Secretary of
State, as well as arguments for and against passage. Id. at 878. These mechanisms,
the court reasoned, would allow sufficient opportunity to inform the voters of the
many more nuanced impacts of the petition, including reasons to vote for or
against it. Id. at 878, 881, 883.
NRS 295.009s description of effect requirement applies to both initiatives
and referenda. NRS 295.009(1)(a). Its purpose is largely the same in the context of
a referendum petition: to give voters an accurate and succinct description of the
petitions effect, at the time the voter is presented with the petition. However,
referendum petitions differ from initiatives in that simply qualifying a referendum
for the ballot guarantees that there will be a change in the status quo. Either the law
in question will be approved and forever placed beyond the power of the
Legislature to amend, or it will be rendered void. Nev. Const. Art. 19, 1(3).
Unlike with an initiative petition, once a referendum has qualified for the ballot,
there is nothing the voters can do to keep the status quo.
For this reason, the threshold decision of whether to even sign a referendum
petition is a critical one, and the description of effect is the primary, if not the only
material that voters use in making that decision. See Beers, 122 Nev. at 940, 142
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P.3d at 346 (this descriptive language is what appears directly above the signature
lines, as registered voters decide the threshold issue of whether they even want the
initiative placed on the ballot.). The Secretarys explanation and the arguments for
and against that appear in the sample ballot will come much too late to influence
the critical decision of whether to sign the petition.4 As a result, a referendums
description of effect must, standing alone, accurately inform a potential signer of
the major effects of the petition, so that the voter can make an informed decision
whether he or she even wants the petition to qualify.
The district court held that the Petitions Description of Effect is adequate
and non-misleading, even though it fails to inform voters that the Petition would
unbalance the State budget under Article 9 section 2. This ruling is in error because
it means that the Description of Effect can omit the single most important effect of
the petition. Voters have a right to know this information. Repealing taxes could
scarcely be a more popular subject, particularly when voters are unaware of the
inevitable legal and fiscal consequences. Voters must be informed of these
consequences in order to make an informed decision whether to sign the petition.
Unlike a person who signs an initiative petition, but then later decides to vote
against the measure, a voter who signs a referendum petition has much less
opportunity to try to maintain the status quo, and must take affirmative steps to do
so. The voter can request his or her name be removed from the petition, but only
before it is turned into the clerk for verification. NRS 295.055(4). The request must
be submitted in writing, with the voters original signature, which must match the
signature on file with the clerk. NAC 295.050.
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40
CONCLUSION
For the foregoing reasons, Appellant CNF respectfully requests that this
Court REVERSE the decision of the district court.
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CERTIFICATE OF COMPLIANCE
1.
I further certify that this brief complies with the page or type-volume
limitations of NRAP 32(a)(7) because, excluding the parts of the brief exempted by
NRAP 32(a)(7)(C), it does not exceed 10,296 words.
3.
Finally, I hereby certify that I have read this appellate brief, and to the
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.
THE GRIFFIN COMPANY, LLC
43
CERTIFICATE OF SERVICE
Pursuant to NRAP 25(d), I declare that I am an employee of The Griffin Company
and on this 25th day of January, 2016, I served a copy of the foregoing Appellant
Coalition for Nevadas Futures Opening Brief by Nevada Supreme Court
CM/ECF Electronic Filing to:
____/s/Tia Dietz_____________
An Employee of The Griffin Company