author: MATTHEWS, Justice. FABE, Chief Justice,

text:
    KETCHIKAN GATEWAY BOROUGH and Ketchikan Gateway Borough Board of Equalization, Appellants, v. KETCHIKAN INDIAN CORPORATION, Appellee.
    No. S-10332.
    Supreme Court of Alaska.
    Aug. 15, 2003.

      Seott A. Brandt-Erichsen, Borough Attorney, Ketchikan, for Appellants.
    Jahna M. Lindemuth, Dorsey & Whitney LLP, Anchorage, for Appellee.
    Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
   OPINION

MATTHEWS, Justice.

The superior court applied the implied federal preemption doctrine to exempt from borough taxes all space in a building that contains a tribally operated clinic that is subject to detailed oversight by the Indian Health Service. The narrow question presented here is whether space in the building that is not committed to use by the clinic should be exempt. We answer in the negative because such space is not necessarily part of a pervasively and comprehensively regulated federal program and the borough's interest in taxing the property is not inconsequential.

I. FACTS AND PROCEEDINGS

In 1997 the United States conveyed a three-quarter-acre parcel located in Ketehi-kan to the Ketchikan Indian Corporation (KIC). KIC began to construct a five-story building that, when completed, was intended primarily to contain a clinic run by KIC but funded by the Indian Health Service. As of the tax day, January 1, 2000, the building was more than half complete.

KIC requested a tax exemption for the property from the Ketchikan Gateway Borough. The borough assessor initially granted a ten percent charitable exemption. He determined that ten percent of the services offered by KIC were available to the community at large and not restricted to Alaska Natives. KIC appealed to the Borough Board of Equalization. At a hearing before the board the assessor modified his position. He continued to adhere to the theory that the building could have a ten percent charitable exemption, but added that another fifty percent could be exempt as space committed to clinic use. The sixty percent exemption, based on an appraised value of the land and partially completed building as of January 1, 2000, of $2,360,300, resulted in a taxable value of $944,100. The board accepted the assessor's position but made no specific findings.

The evidence presented to the board concerning the amount of space in the building that was not committed to clinic purposes was both sparse and conflicting. KIC's zoning permit application indicated that two floors would be used for the clinic, one floor would be used for offices, and two floors would be "lease space." The plans of the building indicate two floors of clinic space, one floor of office space, one floor of lease space, and one floor of daycare space. But it is unclear whether the zoning application or the plans reflected the intent of KIC as of January 1, 2000, regarding the use of the building. At the board hearing KIC's attorney argued that all of the floor space that "is being used, is being used for hospital purposes." But he acknowledged that there were unused spaces and that "[t]he intent of KIC for the unused space is still unknown," although "long-term plans and strategy includes expansion of their hospital functions into those unused spaces." KIC's general manager acknowledged that there is space in the building which might either be leased or used for other programs of KIC. He stated that KIC would be obligated to devote lease revenues to Indian Health Services programs, but later stated that lease revenues could be used to pay the debt service on the building.

KIC paid under protest the resulting taxes, $12,462.12, both appealing the board's decision and filing a separate suit seeking a tax refund. The borough cross-appealed the board's decision, arguing that the exemption should only have been ten percent rather than sixty percent, and filed a counterclaim seeking a declaration that the clinic is not a nonprofit hospital. solidated the cases. The superior court con-

Following briefing and argument, the superior court

(1) dismissed the cross-appeal on the grounds that the borough lacked standing and, alternatively, that the borough was precluded from appealing from a decision that adopted the assessor's position in its entirety;

(2) held that the property was entirely exempt because of implied federal preemption, based on Ramak Navajo School Board, Inc. v. Bureau of Revenue of New Mexico;

(3) awarded full fees of $62,694.70 and costs to KIC under AS 29.45.500(a); and

(4) ruled that its earlier decision dismissing the borough's cross-appeal in effect dismissed the borough's counterclaim.

On appeal, the borough challenges the superior court's decision on the merits only to the extent that it exempted portions of the building that were not committed for use as part of the clinic. The borough also challenges the award of full attorney's fees.

II. STANDARD OF REVIEW AND GENERAL PRINCIPLES RELEVANT TO TAX EXEMPTION CASES

The main question involved in this case is one of law in which "we apply our independent judgment and adopt the rule of law that is most persuasive in light of precedent, reason, and policy."

Taxpayer exemptions are strictly construed against the taxpayer and in favor of the taxing authority. The burden of proving eligibility for an exemption is on the taxpayer. The policy underlying the rule of strict construction and the burden of proof is:

All property is benefited by the security and protection furnished by the State, and it is only just and equitable that expenses incurred in the operation and maintenance of government should be fairly apportioned upon the property of all.[]

Notwithstanding the rule of strict construction, where the question is whether federal law requires the exemption of tribal interests from taxation, ambiguities in federal law should be resolved in favor of the tribe.

Boards of equalization may spatially apportion exempt from nonexempt uses of a building and tax the nonexempt space. In all contested cases boards of equalization are required to make findings of fact sufficient to explain the reasons for their decisions. Such findings are reviewed deferentially and will be affirmed if they are supported by substantial evidence.

III. DISCUSSION

A. Space in the Building that Has Not Been Committed for Use by the Clinic Is Not Exempt under the Implied Federal Preemption Doctrine.

The superior court concluded that the implied federal preemption doctrine as reflected in the 1982 decision of the United States Supreme Court in RamaH Navajo School Board, Inc. v. Bureau of Revenue of New Mexico applied to the property in question and resulted in its total exemption from borough taxation. Implied federal preemption in Indian tax cases is distinct from federal preemption in other areas of the law. The law of federal preemption generally requires that one "start with the assumption that the historic police powers of the States were not to be superseded by [a] Federal Act unless that was the clear and manifest purpose of Congress."

To determine whether Congress has preempted state action in a particular arena ... [glenerally, we apply a two-step analysis to preemption questions. First, we look to see whether Congress has overtly preempted the subject matter the state wishes to regulate, either explicitly, by declaring its intent to preempt all state authority, or implicitly, by occupying the entire field of regulation on the subject in question. See Webster, 621 P.2d at 897-98. Second, if neither kind of direct preemption is found, we look to whether federal and state law conflict in this particular instance. If state and federal regulations openly conflict or if state regulations obstruct the purpose of federal regulations, then the supremacy clause blocks the state regulation. See id. at 897, 900-01; Bald [v. RCA Alascom, 569 P.2d 1328, 1331 (Alaska 1977) []

In contrast, questions of implied federal preemption in Indian tax cases "are not resolved by reference to standards of preemption that have developed in other areas of the law" and are "not limited to cases in which Congress has expressly-as compared to impliedly-pre-empted the state activity."

Instead, we have applied a flexible preemption analysis sensitive to the particular facts and legislation involved. Each case "requires a particularized examination of the relevant state, federal, and tribal interests." - Ramah Navajo Sch. Bd., Inc. v. Bureau of Revenue of New Mexico, 458 U.S. 832, 838, 102 S.Ct. 3394, 73 LEd.2d 1174 (1982).[]

Ramah involved the application of New Mexico's gross receipts tax to receipts that a non-Indian construction firm received from a tribal school board for the construction of a school for Indian children on a reservation. The Supreme Court held that federal law impliedly preempted application of the tax, following a methodology established in White Mountain Apache Tribe v. Bracker, requiring "a particularized examination of the relevant state, federal, and tribal interests." The Court noted the federal policy of encouraging tribal control of education and explained in detail the "comprehensive and pervasive" regulatory system pertaining to the construction and financing of Indian schools. By contrast, the Ramah Court found that the state's interest in the tax was inconsequential, Noting the historical fact that the state had closed the only public school near the reservation, the Court stated:

[TJhe State does not seek to assess its tax in return for the governmental functions it provides to those who must bear the burden of paying this tax. Having declined to take any responsibility for the education of these Indian children, the State is preelud-ed from imposing an additional burden on the comprehensive federal scheme intended to provide this education-a scheme which has "left the State with no duties or responsibilities," []

The Court also observed that the "case would be different if the State were actively seeking tax revenues for the purpose of constructing, or assisting in the effort to provide, adequate educational facilities for Ramah Navajo children."

The other United States Supreme Court case finding an implied federal preemption is Bracker. It has in common with Ramah the twin factors of a comprehensive and pervasively regulated activity concerning tribal interests and an inconsequential state taxing interest. In Cotton Petroleum Corp. the United States Supreme Court summarized Bracker as follows:

In Bracker, we addressed the question whether Arizona could impose its motor carrier license and use fuel taxes on a nonmember logging company's use of roads located solely within an Indian reservation. Significantly, the roads at issue were "built, maintained, and policed exelu-sively by the Federal Government, the Tribe, and its contractors," 448 U.S. at 150 [100 S.Ct. 2578], and the State was "unable to identify any regulatory function or service [it] performed ... that would justify the assessment of taxes for activities on Bureau and tribal roads within the reservation," id., at 148-149 [100 S.Ct. 2578]. See also id., at 174 [100 S.Ct. 2599, 65 L.Ed.2d 684] (Powell, J., concurring) ("The State has no interest in raising revenues from the use of Indian roads that cost it nothing and over which it exercises no control."). Moreover, it was undisputed in Bracker that the economic burden of the taxes ultimately fell on the Tribe. Id., at 151 [100 S.Ct. 2578]. Based on these facts and on our conclusion that collection of the taxes would undermine federal policy "in a context in which the Federal Government has undertaken to regulate the most minute details" of the Tribe's timber operations, we held that the taxes were preempted. Id., at 149 [100 S.Ct. 2578],[]

In Board of Equalization for the Borough of Ketchikan v. Alaska Native Brotherhood & Sisterhood, Camp No. 14, we had occasion to rule on the application of the implied federal preemption doctrine to municipal real estate taxes. At issue was the taxability of a federally funded building built by KIC and held by it under a long-term lease. KIC conducted "various cultural, educational, vocational, health and community service programs" in the building. We observed that the tax revenues "will be used to provide police and fire protection to the premises, as well as to provide water, electrical and sewer services to the building.... Ketchikan has a strong interest in raising these revenues by taxing the property because they are for services that must be provided to the property." We concluded that the borough taxes were not preempted in light of the services that the borough was providing:

[We conclude that our analysis is in complete accordance with Ramah In that case, the Supreme Court struck down a state gross receipts tax imposed on a non-Indian subcontractor of a school building constructed for the Navajo tribe on their reservation. The Court held that the tax was implicitly preempted by the comprehensive federal regulatory scheme governing the construction of autonomous Indian educational facilities The Court noted that the tax served only to generate revenue for the state, which was not providing any correlative services to the tribe. The Court's opinion specifically indicates: "In this case, the State does not seek to assess its tax in return for the governmental functions it provides to those who must bear the burden of paying this tax." [458 U.S. at 843, 102 S.Ct. 3394.]
In the case before us, however, the taxes assessed by Ketchikan are in return for the governmental functions it provides to the property leased by KIC. Accordingly, the tax is not impermissible, nor is it preempted by federal regulations because it is apparent that when the "relevant state, federal, and tribal interests," Ramak, 458 U.S. at (838, 102 S.Ct. 8894], are examined and balanced, Ketchikan's assertion of taxing authority is reasonable.[]

In the present case, in our view the space in the building that is not used or committed to use as part of the clinic cannot be considered as exempted from borough taxation under the implied federal preemption doctrine. One essential feature of the doctrine is that the activities in question must be subject to comprehensive and pervasive federal oversight. While the operation of the clinic may well be subject to such oversight, the same cannot be said concerning the uncommitted space. Since as of the tax date it was uncertain how the uncommitted space would be used, the space cannot be considered to be part of any particular program, much less one which is pervasively regulated.

We also believe that the second element of the implied federal preemption cases-relatively inconsequential state interest-is missing in this case. Our observations in Board of Equalization concerning the substantial services that the borough afforded to the building and the tribe are as applicable now as they were in that case.

Accordingly, it seems clear that the uncommitted space is not entitled to a tax exemption. But there is much uncertainty in the record before us as to how much space was uncommitted as of January 1, 2000. The board made no findings on this or any other subject, and the parties' presentations on this point were vague and unfocused. A remand for a new hearing before the board will be necessary in order to determine an appropriate spatial apportionment. The board should make written findings supporting its determination.

B. Costs and Attorney's Fees.

Because we are remanding for a new hearing to determine the appropriate spatial apportionment between clinic and non-clinic use, it is no longer certain that KIC will prevail. We therefore vacate the superior court's grant to KIC of full reasonable costs and attorney's fees. If it prevails on remand, however, KIC will be entitled to full reasonable costs and attorney's fees under AS 29.45.500(a) and Ketchikan Gateway Borough Code § 45.13.1105.

IV. CONCLUSION

We REVERSE the superior court's holding that space in the building not committed to use by the clinic is exempt from borough taxes and REMAND to the board for a new hearing to determine the appropriate spatial apportionment between clinic and non-clinic areas. - In light of this remand, we VACATE the superior court's award of costs and attorney's fees to KIC.

FABE, Chief Justice, with whom CARPENETI, Justice, joins, dissenting.

FABE, Chief Justice,

with whom CARPENETI, Justice, joins, dissenting.

I disagree with the court's conclusion that the uncommitted space in KIC's building is not exempt from borough taxes. In my view, KIC has presented a sufficiently strong federal and tribal interest to allow extension of its tax exemption to temporarily unused spaces.

As the court's opinion recognizes, the United States Supreme Court held in Ramah that questions of implied federal preemption in Indian tax cases require "a particularized examination of the relevant state, federal, and tribal interests." Informing the preemption analysis are "the traditional notions of tribal sovereignty, and the recognition and encouragement of this sovereignty in congressional Acts promoting tribal independence and economic development{[.]" Relevant federal statutes, therefore, "must be examined in light of 'the broad policies that underlie them and the notions of sovereignty that have developed from historical traditions of tribal independence." "

Consideration of the federal and tribal interests is the first step of the balancing required by implied federal preemption analysis. The court's opinion concludes that there is no weight at all on this half of the scale because there is not a comprehensive and pervasive federal program dealing with unused spaces. But I believe that the court has unduly narrowed the scope of inquiry. The proper question is whether an Indian tribe that is operating a health care facility under the aegis of the Indian Self-Determination and Education Assistance Act (ISDEAA) can be granted reasonable flexibility in extending its tax exemption to temporarily unused spaces in the building-a situation not uncommon in such facilities.

Looking at this broader question, the federal and tribal interests are clear and strong. Provision of Indian health care services is comprehensively and pervasively regulated; this is manifest both in the ISDEAA and in the Indian Health Care Improvement Act (IHCIA). Congress expressed its intention in the ISDEAA that those operating under self-determination contracts receive the same amount of funding as would the federal government if one of its departments was still providing the services in question. In Ra-moh, the Court found that the burden imposed by the state's taxation impeded "the clearly expressed federal interest in promoting the 'quality and quantity' of educational opportunities for Indians by depleting the funds available for the construction of Indian schools." Local taxes on unused spaces could similarly impede the federal interest in promoting Indian health care by reducing the funds available to Indian tribes that have clinic buildings with unoccupied space.

KIC's counsel argued at the board hearing that "(tlhe intent of KIC for the unused space is still unknown, although there [are] long term plans and strateglies that] include[ ] expansion of their hospital functions into those unused spaces." Allowing KIC the flexibility to maintain tax-exempt open space for expansion or reorganization of health services comports with the federal policy of encouraging tribal sovereignty and promoting tribal independence and economic development.

The state interests constitute the other half of the balancing analysis. In Ramah, the state interest was merely the collection of revenue; the state provided no services to the school being constructed on the reservation. The Court determined that this was insufficient to justify the burdens imposed by the tax. Here, KGB is providing governmental functions to the KIC building. The opinion accurately compares this provision of services to those in Board of Equalization for the Borough of Ketchikan v. Alaska Native Brotherhood & Sisterhood, Camp No. 14, in which we upheld the Borough's taxing authority. The federal and tribal interests in that case, however, were different. There, we only examined whether KIC was exempt from ad valorem taxes under the Indian Reorganization Act, under a theory of tribal sovereignty, or under a theory of federal instrumentality. We concluded that none of these theories had merit, in part "because the Borough's interest in generating the revenue from the non-discriminatory tax to pay for services provided to the property exceeds KIC's interest in retaining the revenue to provide governmental programs to its members.

Here, in contrast, we are addressing clearer and stronger federal and tribal interests as expressed in the ISDEAA and IHCIA, as well as the explicit congressional desire for Indian tribes to have the same funding that the federal government would have to provide health services. Striking the balance between these competing interests is thus more difficult than in Board of Equalization. Given the congressional desire for Indian tribes to have equal funding, the obstacle to that goal that could be presented by allowing Borough taxation of unused spaces in a health care facility, and the policy expressed in Cotton Petroleum Corp. that ambiguities concerning the exemption of tribal interests from taxation should be resolved in favor of the tribe, I would conclude that the balance tips in favor of the federal and tribal interests-and thus exemption.

KIC should be granted the flexibility to maintain some unused space in its health services building without sacrificing its tax-exempt status for those spaces. According ly, I would affirm the superior court's decision. I therefore respectfully dissent from the court's opinion.

      . The assessor testified that the third and fourth floors and some common areas were for clinic use.

      . 458 U.S. 832, 102 S.Ct. 3394, 73 L.Ed.2d 1174 (1982).

      . State, Dep't of Transp. & Pub. Facilities v. Sanders, 944 P.2d 453, 456 (Alaska 1997).

      . Sisters of Providence in Washington, Inc. v. Mun. of Anchorage, 672 P.2d 446, 447 (Alaska 1983).

      . City of Nome v. Catholic Bishop of N. Alaska, 707 P.2d 870, 877 (Alaska 1985).

      . Id. at 879 (quoting Animal Rescue League v. Bourne's Assessors, 310 Mass. 330, 37 N.E.2d 1019, 1021 (1941))).

      . Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163, 177, 109 S.Ct. 1698, 104 LEd.2d 209 (1989).

      . City of Nome, 707 P.2d at 875.

      . Balough v. Fairbanks North Star Borough, 995 P.2d 245, 254 (Alaska 2000).

      . KIC contends that this appeal is untimely. We conclude to the contrary, because the notice of appeal was filed before the court ruled that the borough's counterclaim was dismissed. The counterclaim sought declaratory relief and thus was not subject to the year-specific procedural defenses on which the dismissal of the borough's cross-appeal was based. The prematurity of a notice of appeal may be ignored where no harm is done, and that is the case here. Garrison v. Dixon, 19 P.3d 1229, 1232 (Alaska 2001).

      . 458 U.S. 832, 102 S.Ct 3394, 73 LEd.2d 1174 (1982).

      . Webster v. Bechtel, Inc., 621 P.2d 890, 898 (Alaska 1980) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947)).

      . Tlingit-Haida Reg'l Elec. Auth. v. State, 15 P.3d 754, 766-67 (Alaska 2001).

      . Cotton Petroleum, 490 U.S. at 176-77, 109 S.Ct. 1698.

      . Id. at 176, 109 S.Ct. 1698.

      . 448 U.S. 136, 100 S.Ct. 2578, 65 LEd.2d 665 (1980).

      . Ramah, 458 U.S. at 838, 102 S.Ct. 3394.

      . Id. at 839-41, 102 S.Ct. 3394.

      . Id. at 843, 102 S.Ct. 3394 (quoting Warren Trading Post Co. v. Arizona Tax Comm'n, 380 U.S. 685, 691, 85 S.Ct. 1242, 14 L.Ed.2d 165 (1965).

      . - Id. at 844 n. 7, 102 S.Ct. 3394.

      . 448 U.S. 136, 100 S.Ct. 2578, 65 L.Ed.2d 665 (1980).

      . 490 U.S. at 184, 109 S.Ct. 1698. We note that the Ninth Circuit takes the position that the Bracker implied preemption doctrine does not apply outside of Indian country. Malabed v. North Slope Borough, 335 F.3d 864 (9th Cir.2003) ("[The Supreme Court has unmistakably held that nondiscriminatory state laws that apply to Native Americans outside of Indian country may be preempted only by an 'express federal law to the contrary,' not by a generalized federal policy. White Mtn. Apache Tribe v. Bracker, 448 U.S. 136, 144 n. 11, 100 S.Ct. 2578, 65 LEd.2d 665 (1980)."). 335 F.3d 864, 872. See also Blunk v. Arizona Dep't of Transp., 177 F.3d 879, 882-84 (9th Cir.1999) ("White Mountain balancing test" does not apply outside of Indian country).

      . 666 P.2d 1015, 1022 n. 5 (Alaska 1983).

      . Id. at 1017.

      . Id. at 1022.

      . Id. at 1022 n. 5.

      . In Dist. of Columbia v. Catholic Univ. of Am., 397 A.2d 915, 921-22 (D.C.1979); Our Savior Lutheran Church v. Dep't of Revenue, 204 Ill.App.3d 1055, 150 Ill.Dec. 395, 562 N.E.2d 1198, 1201 (1990); and United Way of the Midlands v. Douglas County Bd. of Equalization, 215 Neb. 1, 337 N.W.2d 103, 107 (1983), all cited in footnote 18 of the dissenting opinion, the unused space, when used, was intended to be used for tax-exempt purposes. By contrast, in the present case it is unknown how the unused space will be used, but it appears that at least for near-term purposes it will either be leased to others or used for other programs of KIC. See supra page 1044.

      . See Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163, 109 S.Ct 1698, 104 LEd.2d 209 (1989), where the Court declined to apply the Ramah/Bracker implied preemption approach to a state severance tax on oil produced by non-Indians on a reservation. One of the reasons given for this conclusion was that the state provided substantial services to the tribe and to the oil producer, whereas Ramah and Bracker "involved complete abdication or noninvolvement of the State in the on-reservation activity." Cotton Petroleum Corp., 490 U.S. at 185, 109 S.Ct. 1698.

      . Following a New Mexico Court of Appeals case, Ramah Navajo Sch. Bd., Inc. v. New Mexico Taxation & Revenue Dep't, 127 N.M. 101, 977 P.2d 1021 (N.M.App.1999), cert. denied, 127 N.M. 389, 981 P.2d 1207 (1999), cert. denied, 528 U.S. 928, 120 S.Ct. 322, 323, 145 LEd.2d 252 (1999), the superior court found that the borough taxes were also preempted under the "general preemption doctrine." However, as Congress has not overtly preempted the tax, and because state and federal laws do not conflict in this area, the borough is not barred by federal preemption from taxing the space in the building not dedicated to use by the clinic. See Tlingit-Haida Reg'l Elec. Auth. v. State, 15 P.3d 754, 766-67 (Alaska 2001).

      . See Kenai Peninsula Borough v. Port Graham Corp., 871 P.2d 1135 (Alaska 1994); Kenai Peninsula Borough v. Cook Inlet Region, Inc., 807 P.2d 487 (Alaska 1991).

      . Op. at 1046; Ramah Navajo Sch. Bd., Inc. v. Bureau of Revenue of N.M., 458 U.S. 832, 838, 102 S.Ct. 3394, 73 L.Ed.2d 1174 (1982).

      . Ramah, 458 U.S. at 838, 102 S.Ct. 3394.

      . Id. (quoting White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 144-45, 100 S.Ct. 2578, 65 L.Ed.2d 665 (1980)).

      . 25 U.S.C. §§ 450-458bbb-2 (2001).

      . 25 U.S.C. §§ 1601-1683 (2001).

      . 25 U.S.C. § 450j-1(a)(1) (2001); see also Ramah Navajo Sch. Bd., Inc. v. N.M. Taxation & Revenue Dep't, 127 N.M. 101, 977 P.2d 1021, 1033 (N.M.App.1999), cert. denied, 127 N.M. 389, 981 P.2d 1207 (1999), cert. denied, 528 U.S. 928, 120 S.Ct 322, 323, 145 L.Ed.2d 252 (1999) ("Congress has provided that Indian communities will not suffer financially by the transfer of services from the federal government to tribal agencies.... The Act's purpose of providing tribes with the same funding that the federal agency would receive for the same service is undercut if the State imposes a tax that makes performance of the service more expensive for the tribe than for the federal agency.").

      . Ramah, 458 U.S. at 842, 102 S.Ct. 3394.

      . - Imposing the tax in this case will result in KIC having $12,462.12 less to provide medical services. This effect does not seem compatible with Congress's intent, in enacting the ISDEAA, to see that those operating under self-determination contracts would receive the same amount of funding as would the federal government if one of its departments was still providing the services in question. In addition, imposing a tax on KIC for space that it could have decided to use in the future for clinic space may well foreclose that possibility by creating a present need to generate revenue from the space. This effect seems contrary to the federal interest, evident in the IH-CIA, in promoting Indian health care. See, e.g., 25 U.S.C. § 1601(b) (2001) ("A major national goal of the United States is to provide the quantity and quality of health services which will permit the health status of Indians to be raised to the highest possible level and to encourage the maximum participation of Indians in the planning and management of those services.").

      . Ramah, 458 U.S. at 843, 845, 102 S.Ct. 3394.

      . - Id. at 845, 102 S.Ct. 3394.

      . 666 P.2d 1015 (Alaska 1983).

      . 25 U.S.C. § 465 (2001); 666 P.2d at 1018.

      . 666 P.2d at 1019.

      . Id. at 1022.

      . Id. at 1023.

      . Id.

      . Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163, 177, 109 S.Ct. 1698, 104 LEd.2d 209 (1989).

      . Cf. Dist. of Columbia v. Catholic Univ. of Am., 397 A.2d 915, 921-22 (D.C.1979) ("A school the size of Catholic University must have some flexibility in its operation and its exempt status should not be disturbed merely because it elects, for a given period, not to use a given classroom, or portion of a dormitory, or other building. ..."); Our Savior Lutheran Church v. Dep't of Revenue, 204 Ill.App.3d 1055, 150 Ill.Dec. 395, 562 N.E.2d 1198, 1201 (1990) ("We do not think that mere temporary vacancy or lack of use of a portion of an otherwise exempt parcel of property renders that portion taxable. To hold that when a portion of a building otherwise used for an exempt purpose becomes temporarily vacant or unused it loses its exempt status is nonsensical and impractical of application."); United Way of the Midlands v. Douglas County Bd. of Equalization, 215 Neb. 1, 337 N.W.2d 103, 107 (1983) (''The facts here are similar to the not unusual situation of unused rooms in a charitable hospital or in the dormitory of an educational institution. Oftentimes a qualified organization acquires or maintains building space in reasonable anticipation of full occupancy for an exempt purpose but cannot do so because of economic conditions or other legitimate reasons.").


source: Caselaw Access Project

author: FABE, Chief Justice.

license: Public Domain

text:
    Thomas E. PRICE, Jr., Appellant, v. Mike EASTHAM, Veldon "Spud" Dillon, Lorraine Templeton, Bruce Turkington, Lee Krumm, La Velle Dillon, Bob Fenex, Carol Fenex, Bruce Willard, Linda Willard, Butch Bullard, Gordon Grebe, Diane Grebe, Eric Overson, Sam Matthews, Nancy Matthews, Ray Kranich, Eilene Wythe, Jack Alexander, Sue Alexander, Rick Alexander, Reed Alexander, Dave Sanders, Shirley Sanders, Greg McCullough, - Lloyd Moore, - Penny Moore, Tammy Hagan, Chuck Hagan, Kate Mitchell, Ben Mitchell, Ronnie Morrison, Barb Hrenchir, Mike Hrenchir, Gus Weber, Rita Weber, Bob Simcoe, Mark Jacobs, Barb Jacobs, Sharon Thompson, - Rick - Thompson, Fred Thompson, Connie Thompson, Mike Devaney, Rick Anderson, Dave Weber, Mark Robl, Terry Robl, Toras Fisk, Dave Boone, Marasha Boone, George Eschin, Jim Bills, Mike O'Malley, Joe O'Malley, Bill Markel, Gordon Berg, Floyd Newkirk, Karl Horst, Robert Pelky, Robert Plymire, Don Blackwell, Valda Ziemelis, Randy Whitehorn, Connie Whitehorn, Willie Bishop, Hans Albertson, Bill Sampson, Mike Arno, Allen Englebretson, - Rodney McLay, Jim Spencer, Jimmy Spencer, Joe Wright, Jason Kinnard, Amy Kinnard, Sam Wright, Paul Budge, Brian Bellamy, Rick Wise, Nathan Wise, John Wise, Jacob Wise, Marty Wise, Jake Ellyson, Carol Ellyson, Bill Sheldon, Leroy Cabana, Sr., Doris Cabana, Larry Cabana, Dawn Cabana, and Scott Connelly, Appellees.
    No. S-10418.
    Supreme Court of Alaska.
    Aug. 15, 2003.

      Thomas E. Meacham, Anchorage, for Appellant.
    Michael Hough, Homer, for Appellees.
    Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
   OPINION

FABE, Chief Justice.

I. INTRODUCTION

Mike Eastham and ninety-one plaintiffs claimed a right to a prescriptive easement over a portion of Thomas Price's land near Homer. The superior court found that a right-of-way existed under 48 U.S.C. § 932, Revised Statute (RS) 2477, commonly known as an RS 2477 right-of-way, over Price's property. The superior court held, alternatively, that a prescriptive easement existed over Price's property. Price appealed. Because the parties did not have an opportunity to address the RS 2477 issue at trial, we reverse the superior court's ruling on that ground. Although we affirm the superior court's finding of a prescriptive easement, we remand for a precise determination of the easement's seope.

IL - FACTS AND PROCEEDINGS

A. - Factual History

1. The trail

Snomads, Inc., a group of snowmachiners, originally filed this case against Thomas Price in May 1999, seeking a prescriptive easement over a trail located on Price's property. They alleged that they and others-dog team mushers, hunters, and campers-had used the trail since approximately 1956 to access recreational areas near Price's property. The trail bisects the southern boundary of Price's land and runs toward the northeasterly corner of his property. Although Price became aware of the trail in 1979 or 1980, he first attempted to prevent the public's use of the trail by posting "no trespassing" signs in November 1998. In January 1999 Price complained to the state troopers about the snowmachiners trespassing on his land. This was the first time he publicly complained about the trail's use.

2. Price's property

Price's parcel of land is located at the head of Kachemak Bay, near Homer, and is approximately 160 acres in size. The nature of Price's ownership interest in the land is significant to his arguments regarding the validity of the superior court's grant of an easement across his property. In July 1978 Price purchased the agricultural interest in the land from the state. The contract for the sale defined "agricultural interests" as the "surface estate in fee simple subject to the conditions subsequent and covenants relating to agricultural use and development set out in 11 AAC 67.162(b)." Under the contract, Price agreed to develop and use the land according to approved farm development and farm conservation plans. He paid $33,000 for the land, divided into ten yearly payments. The property that Price bought was subject to several preexisting interests including three easements and an oil and gas lease.

The state granted the surface estate in fee simple to Price, subject to certain restrictions, in a land patent dated January 1988. Specifically, the grant was subject to a condition subsequent limiting Price's use of the land: "[Ilf the property is used for purposes other than agricultural purposes, then the Grantor may enter the property and terminate the estate conveyed herein." The grant included a related covenant that Price would

use the property for agricultural purposes only, which may include personal residential use incidental to farm operations on the property, and [would] operate in accordance with a Farm Conservation Plan approved by Grantor and further agrees that these covenants shall run with the land and shall be binding upon the Grantee and all other persons and parties claiming through the Grantee.

On December 1, 1981, Price granted to Louise Crane an easement that allowed Crane access to her property. Price sent the easement agreement to the State Department of Natural Resources for approval on January 20, 1982. The easement was recorded in April 1982.

B. Procedural History

Snomads, Inc. filed suit against Price in May 1999, claiming that it had perfected a prescriptive easement over Price's property. Snomads alleged that the trail was established in approximately 1956 and that they and other recreational users had used the trail continuously since then. Price filed an answer, disputing the claim of entitlement to a prescriptive easement and asserting several counterclaims. Primarily, Price asked the court for injunctive relief to keep the plaintiffs off his land. Snomads denied all counterclaims.

Snomads as an entity did not survive this litigation. Because the recreational group only incorporated in 1992, and because it takes ten years of use to show a prescriptive easement, Snomads, Inc. was not a viable plaintiff in a 1999 action. - Consequently, Mike Eastham, a Snomads member, amended the complaint deleting Snomads as a party and substituting ninety-one individual plaintiffs. These plaintiffs are referred to as "Eastham."

The case went to trial in January 2000 before Superior Court Judge Harold M. Brown in Homer. Judge Brown concluded that the trail at issue was an RS 2477 right-of-way. Because the court found that an RS 2477 right-of-way existed, it declined to decide whether a public or private easement was created.

Price then moved for reconsideration of the trial court's order, arguing that an RS 2477 right-of-way could not have been created on his land. In denying Price's motion for reconsideration, the court supplemented its earlier ruling by determining that Eastham had established that a public prescriptive easement existed across Price's land, in addition to the RS 2477 right-of-way. Price filed a second motion for reconsideration of the prescriptive easement holding, which the court denied.

The court denied relief to Price on all of his counterclaims and entered judgment in October 2001. Costs and attorney's fees were awarded to Eastham. Price appeals the trial court's decision.

III. STANDARD OF REVIEW

A superior court's determination that an RS 2477 right-of-way exists is based upon factual findings about property use and legal conclusions about whether the use was sufficient to establish an RS 2477 right-of-way. We review factual findings under the clearly erroneous standard and will disturb those findings only when "we are left with a definite and firm conviction on the entire record that a mistake has been made, even though there may be evidence to support the finding." We review the application of law to facts de novo.

Price's arguments concerning whether a prescriptive easement can exist on his property raise a legal issue, rather than a factual one. "'The content of a particular legal doctrine, and what the facts of this case establish under such doctrine is [at] issue'" in the prescriptive easement claim. We are not bound by the lower court's view when deciding questions of law.

IV. DISCUSSION

A. The Trial Court Erred in Determining that Price's Property Is Subject to a Public Right-of-Way Under Former 48 U.S.C. § 982, Revised Statute (RS) 2477.

1. Background on RS 2477

The superior court held that a pub-lie right-of-way existed over Price's property under 48 U.S.C. § 982, Revised Statute (RS) 2477. Congress enacted this provision, commonly referred to as RS 2477, in 1866 as part of the Lode Mining Act. Under RS 2477, the federal government granted rights-of-way, providing: "[Thhe right of way for the construction of highways over public lands, not reserved for public uses, is hereby granted." The grant was self-executing, meaning that an RS 2477 right-of-way automatically came into existence "if a public highway was established across public land in accordance with the law of Alaska." Although Congress repealed RS 2477 in 1976, the statute governs this case because the claimed right-of-way would have existed before then.

We have noted that "[the operation of § 982 is not obvious from its terms." Indeed, the statute itself is simply an offer to dedicate land to public use. To effect the grant of a right-of-way, either the public or the appropriate state authorities must take positive action. Specifically, the public must use the land "for such a period of time and under such conditions as to prove that the grant has been accepted," or appropriate public authorities of the state must act in a way that clearly manifests their intention to accept the grant.

RS 2477 specified that it provided for the construction of highways over federal "public lands, not reserved for public uses." "Public lands" means lands open to settlement or other disposition under federal land laws. Therefore, a valid RS 2477 claim could only have been made on the land in question before December 29, 1959, when the State of Alaska filed a land selection application with the Bureau of Land Management for lands encompassing Price's land. As soon as the state filed its application, the lands it selected were "segregated from all applications and appropriations under the public land laws." We therefore must determine whether the trial court erred in holding that an RS 2477 right-of-way existed prior to 1959.

To determine whether sufficient public use exists to establish an RS 2477 right-of-way, courts usually consider two factors: evidence of use and evidence of the route's definite character. However, a preliminary issue in this case makes it unnecessary for us to reach the merits of the RS 2477 claim. Neither of the parties raised the issue of an RS 2477 right-of-way at the trial court level. Rather, the trial court-declining to rule upon the prescriptive easement claim East-ham presented-found on its own that an RS 2477 right-of-way existed over Price's land. This lack of notice raises serious due process concerns.

The Alaska Constitution provides that "[nJo person shall be deprived of life, liberty, or property, without due process of law." We have held repeatedly that "[pJrocedural due process under the Alaska Constitution requires notice and opportunity for hearing appropriate to the nature of the case." Parties must have notice of the subject of proceedings that concern them "so that they will have a reasonable opportunity to be heard." "A hearing is required in order to give the parties an opportunity to present the quantum of evidence needed [for the court] to make an informed and principled determination."

Because Price did not have notice that an RS 2477 right-of-way was at issue, his due process rights were violated. Here, Price did not have an opportunity to be heard on the RS 2477 matter; in fact, he reasonably believed that RS 2477 was not at issue. Accordingly, we hold that the trial court's failure to give Price notice and an opportunity to be heard and to present evidence on the RS 2477 issue at trial violated his due process rights, and we therefore reverse the superior court's finding of an RS 2477 right-of-way on Price's land.

B. A Prescriptive Easement Exists Across Price's Land.

Although Eastham claimed entitlement to a prescriptive easement in his complaint, the superior court initially declined to rule on that claim, finding instead that an RS 2477 right-of-way existed across Price's property. Later, however, in denying Price's motion for reconsideration on the RS 2477 ruling, the superior court held that a prescriptive easement existed over the land, finding that "the public at large has been using the trail in a continued and uninterrupted manner for at least the ten years prior to the filing of this suit." Price moved for reconsideration of the prescriptive easement ruling. The court denied his motion.

Price argues that the superior court erred in holding that a prescriptive easement exists over a corner of his property. His argument hinges upon AS 38.95.010 which provides:

No prescription or statute of limitations runs against the title or interest of the state to land under the jurisdiction of the state. No title or interest to land under the jurisdiction of the state may be acquired by adverse possession or prescription, or in any manner except by conveyance from the state.

Price asserts that because he only owned the agricultural interests in his land during the relevant time period and because the state retained all other interests, any claim of a prescriptive easement across his land violates AS 38.95.010.

Because a prescriptive easement may be obtained where the holder of the servient property does not own the property in fee simple, but rather holds a lesser interest in the property, Eastham's easement claim does not violate AS 38.95.010. A prescriptive easement may be claimed against an individual who holds less than a fee simple interest in the land, such as a leaseholder. The Superior Court of New Jersey addressed this issue in Ludwig v. Gosline. In Ludwig, the Gosline family claimed that they had acquired a prescriptive easement over a portion of their neighbors' property. Both the Goslines and their neighbors leased their properties. In holding that the easement existed, the court noted that the servient property holder need not own the fee. An easement by prescription may be obtained against the holder of a present interest subject to divestment if and when the property passes to the holder of a future interest."

Price, like the Goslines, did not own his land in fee simple; he only owned the agricultural interest in the land. The land patent that the state conveyed to Price in 1988 contained the condition subsequent that if Price used the property for non-agricultural purposes, the state could enter Price's property and terminate the estate it granted to him. Even though he did not own the land in fee simple, Ludwig shows that East-ham's prescriptive easement claim is valid, but only against Price's ownership interest. The trial court considered the limits of Price's ownership interest in its order denying reconsideration of the easement holding.

Judge Brown held that although the patent requires that the land be used for agricultural purposes, "the court sees no inconsistency between the requirement of agricultural use and the kind of recreational use at issue in this case." Whether the use of an easement is inconsistent with the servient owner's use of his land is a question of fact. Judge Brown's conclusion that recreational use of the trail is not inconsistent with Price's agricultural use of his land was not clearly erroneous.

The Supreme Court of Virginia addressed a similar issue in Preshlock v. Brenner. In Preshlock, Janet Brenner owned land subject to a municipal storm sewer easement. The Preshlocks owned the lot next to Brenner. A driveway ran from the street, over a corner of Brenner's property to the Preshlocks' property. The Preshlocks claimed a prescriptive easement over the portion of driveway on Brenner's land. One of Brenner's predecessors in title had conveyed to the city an easement for a storm sewer located under the part of Brenner's lot in which the Presh-locks claimed an easement. The trial court held as a matter of law that the Preshlocks could not acquire a prescriptive easement in the land because "no prescriptive right can be acquired in property affected with a public interest or dedicated to a public use." The Virginia court reversed this ruling, holding that the Preshlocks could acquire a prescriptive easement in the land, despite the presence of the city's easement. The court reasoned that Brenner could make any use of her property that did not unreasonably interfere with the city's easement and that she could grant this right to a third party. The court noted that the Preshlocks conceded that their prescriptive rights would be subject to the city's rights and could not interfere with the city's easement.

As with Brenner, Price owns land subject to government interests. Easthim, like the Preshlocks, does not claim a prescriptive casement against those government interests, but against Price. While Price must use his property for agricultural purposes, as long as he satisfies that condition of his patent he can presumably make any other use of his property. Price could grant an easement or alternatively have a prescriptive easement granted against him, that does not interfere with his mandate to use the land for agricultural purposes. Accordingly, we affirm the superior court's finding that a public prescriptive easement exists over Price's land.

Because the prescriptive easement was an alternative ruling for the trial court, it did not discuss the easement's scope. The scope of a prescriptive easement is defined narrowly to include only the "use that created the easement and closely related ancillary uses." "Because an easement directly affects ownership rights in the servient tenement, judicial delineation of the extent of an easement by prescription should be undertaken with great caution." According to the Restatement (Third) of Property, determining the extent of a prescriptive easement should focus on the servient estate owner's reasonable expectations: "The relevant inquiry is what a landowner in the position of the owner of the servient estate should reasonably have expected to lose by failing to interrupt the adverse use before the prescriptive period had run." Although the use made of a prescriptive easement may evolve beyond the original prescriptive uses, new uses cannot substantially increase the burden on the servient estate or change the nature and character of the easement's original use.

Courts have restricted the seope of prescriptive easements significantly to limit the burden on the servient estate. For example, courts have limited use of prescriptive easements to specific times of the year and have limited the width of prescriptive easements. In considering a prescriptive casement for recreational purposes, the Supreme Judicial Court of Maine limited the use of the easement to the "general recreational purposes for which the road was used during the period that the prescriptive easement was being created." The court reversed the trial court's restriction of the easement to travel for "recreational purposes" as overly broad, reasoning that vaguely defined "recreational purposes" could lead to excessive burdening of the servient estate. Therefore, the court remanded the case for a more specific delineation of permissible uses of the prescriptive easement.

Because the superior court did not define the extent of the prescriptive easement over Price's land, we remand for a determination of the scope of this easement. The court is free to impose restrictions upon the easement consistent with the Restatement (Third) and this decision, including, for example, limiting use to certain seasons, preserib-ing the width of the easement, and specifying the precise uses that may be made of the easement.

V. CONCLUSION

Because a prescriptive easement can be claimed against a land holder who owns less than a fee simple interest in the land, we AFFIRM the superior court's holding that a prescriptive easement exists over Price's property and REMAND for a determination of the easement's precise scope. Because the parties did not have an opportunity to address the RS 2477 issue at trial, it was error for the trial court to hold that an RS 2477 right-of-way existed. Accordingly, we REVERSE the trial court's RS 2477 ruling.

      . Fitzgerald v. Puddicombe, 918 P.2d 1017, 1019 (Alaska 1996).

      . Martens v. Metzgar, 591 P.2d 541, 544 (Alaska 1979).

      . Fitzgerald, 918 P.2d at 1019.

      . Walsh v. Emerick, 611 P.2d 28, 30 (Alaska 1980) (quoting Peters v. Juneau-Douglas Girl Scout Council, 519 P.2d 826, 833-34 (Alaska 1974)).

      . Id.

      . Leroy K. Latta, Jr., Public Access Over Alaska Public Lands as Granted by Section 8 of the Lode Mining Act of 1866, 28 Sawta Crara L.Rev. 811, 811 (1988).

      . Fitegerald, 918 P.2d at 1019 (quoting 43 U.S.C. § 932, repealed by Pub.L. No. 94-579, Title VII, § 706(a), 90 Stat. 2793 (1976), quoted in Hamerly v. Denton, 359 P.2d 121, 123 (Alaska 1961)).

      . Id.

      . See id. (citing Dillingham Commercial Co. v. City of Dillingham, 705 P.2d 410, 413 (Alaska 1985)).

      . Dillingham, 705 P.2d at 413.

      . Id.

      . Id. (citing Hamerly, 359 P.2d at 123).

      . Id. at 413-14.

      . Fitzgerald, 918 P.2d at 1019 (quoting 43 U.S.C. § 932, repealed by Pub.L. No. 94-579, Title VII, § 706(a), 90 Stat. 2793 (1976), quoted in Hamerly, 359 P.2d at 123); Humboldt County v. United States, 684 F.2d 1276, 1280 (9th Cir.1982).

      . Hamerly, 359 P.2d at 123.

      . Mitchell R. Olson, The RS 2477 Right of Way Dispute: Constructing a Solution, 27 Envl. L. 289, 301 (1997) (citing Hamerly, 359 P.2d at 123-25; Dillingham, 705 P.2d at 414-15).

      . Alaska Const. art. I, § 7.

      . Walker v. Walker, 960 P.2d 620, 622 (Alaska 1998) (internal quotations omitted); see also Lashbrook v. Lashbrook, 957 P.2d 326, 328 (Alaska 1998); Siekawitch v. Siekawitch, 956 P.2d 447, 449 (Alaska 1998).

      . Potter v. Potter, 55 P.3d 726, 728 (Alaska 2002) (citation omitted).

      . Walker, 960 P.2d at 622 (quoting Howlett v. Howlett, 890 P.2d 1125, 1127 (Alaska 1995)).

      . We recognize that a September 1998 land patent changed Price's ownership interest in the land and that he now owns the parcel in fee simple, subject to "a perpetual covenant for the benefit of all Alaskan residents [which] restricts the use of the land to agricultural purposes only as defined in AS 38.05.321."

      . Price does not dispute the trial court's findings on any of the elements to establish a prescriptive easement. Because they are not contested, we do not address them.

      . Ludwig v. Gosline, 191 N.J.Super., 188, 465 A.2d 946, 947 (1983).

      . Id.

      . Id. at 946.

      . Id. at 947.

      . Id.

      . Id.

      . Id.

      . Preshlock v. Brenner, 234 Va. 407, 362 S.E.2d 696, 698 (1987).

      . Id.

      . Id.

      . Id.

      . Id.

      . Id.

      . Thus, if the state has occasion to terminate the estate that it granted to Price, the prescriptive easement will also terminate.

      . Restatement (THigp) or Pror: Servitupes § 4.10 cmt. d (2000); see also Wright v. Horse Creek Ranches, 697 P.2d 384, 388-89 (Colo.1985); Benner v. Sherman, 371 A.2d 420, 422 (Me.1977); House v. Hager, 130 Or.App. 646, 883 P.2d 261, 265 (1994); Widell v. Tollefson, 158 Wis.2d 674, 462 N.W.2d 910, 914 (Wis.App.1990).

      . Wright, 697 P.2d at 388.

      . Restatement (THirp) or Pror: Servitupes § 4.1 cmt. h (2000).

      . House, 883 P.2d at 264-65; see Twin Peaks Land Co. v. Briggs, 130 Cal.App.3d 587, 595, 181 Cal.Rptr. 25 (Cal.App.1982) (reversing trial court's broad description of easement-'"[Easement] may be used all hours of the day and all times of the year, and for many purposes, including hunting, pasturing cattle and horses and maintaining cabins, maintaining the roadway, entertaining guests, cutting firewood and having picnics and barbeques"-and remanding for modification consistent with rule that subsequent use of easement must be reasonably related to use made during prescriptive period).

      . Block v. Sexton, 577 N.W.2d 521, 526 (Minn.App.1998) (holding trial court did not err in limiting scope of prescriptive easement to ingress and egress from May to October reasoning that "the extent of an easement depends upon the character and purpose of the use"). Cf. Widell, 462 N.W.2d at 914 (reversing trial court's decision to limit use of prescriptive easement to April to October and remanding for findings on whether winter use would unreasonably burden ser-vient estate).

      . Hash v. Sofinowski, 337 Pa.Super. 451, 487 A.2d 32, 36 (1985) (holding width of prescriptive easement limited to width of vehicles used to make easement); Johnson v. Roy, 279 S.W.2d 20, 21 (Ky.App.1955) (restricting easement width to fifteen feet where servient estate owner had no notice of any use beyond fifteen feet in width).

      . Benner v. Sherman, 371 A.2d 420, 423 (Me.1977).

      . Id. at 422-23.

      . Id. at 423.

      . Because we affirm the trial court's finding of a prescriptive easement, we decline to direct the trial court on remand to hold a new trial on the RS 2477 issue. The plaintiffs requested a prescriptive easement, and they neither pled nor presented evidence on whether an RS 2477 right-of-way existed. However, because the trial court raised sua sponte the RS 2477 issue in the first instance, we leave to the trial court's discretion whether to allow further development of evidence on this issue on remand. If the trial court elects to do so, it should first provide notice and an opportunity to be heard to the State of Alaska.


author: PER CURIAM. BRYNER, Justice,

text:
    Abigail FULLER and Kachemak Area Coalition, Inc., d/b/a Citizens Concerned About Annexation, Appellants, v. CITY OF HOMER, Appellee.
    No. S-10079.
    Supreme Court of Alaska.
    Aug. 15, 2003.

      Brooks W. Chandler, Hicks, Boyd, Chandler & Falconer, LLP, Anchorage, for Appellants.
    Gordon J. Tans, Perkins Coie, LLP, Anchorage, for Appellee.
    D. John McKay, Law Offices of D. John McKay, Anchorage, for Amicus Curiae Alaska Press Association.
    Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
   OPINION

PER CURIAM.

I. INTRODUCTION

We are asked here to consider whether the City of Homer's city manager could properly claim the deliberative process privilege to deny public access to staff documents that he used in preparing a petition for annexation that the city filed with the Alaska Local Boundary Commission. Because the record shows that the public's interest in having access to these documents outweighs the city's interest in confidentiality, we conclude that the privilege does not apply and that the Alaska Public Records Act requires their disclosure.

II. FACTS AND PROCEEDINGS

In December 1999 the Homer City Council passed a resolution directing its city manager, Ron Drathman, to prepare a time line and work plan for annexing certain areas adjoining the city that were benefiting from city services. In response to this directive, Drathman wrote to his department heads, notifying them of the proposed annexation's general scope and assigning each department certain tasks that would provide Drathman the basis for preparing his annexation proposal. - Drathman's memorandum warned against premature disclosure of the requested information: "To avoid confusion: This information should not be released to [the] public or Commissions until the Staff plan is complete. This is a Staff Work in progress" - After receiving responses from his staff, Drathman completed a proposed petition for annexation and submitted it to the city council. By a resolution passed on March 18, 2000, the city council approved Drathman's proposed petition, directed Drathman to file it with the Alaska Local Boundary Commission, and designated him as the city's representative in the annexation proceedings. Drathman filed the petition the following week.

Soon after the petition was filed, Homer resident Abigail Fuller wrote to the city clerk, asking to inspect various records relating to the petition; Fuller specified that her request was based on the Alaska Public Reeords Act and provisions of the Homer City Code that cover public release of records. Drathman made available some of the requested documents but withheld many others, invoking the deliberative process privilege. Fuller appealed to the city council, which upheld Drathman's claim of privilege without reviewing the requested records.

Fuller then appealed to the superior court. The court remanded the case to the council, directing it to review the requested documents and to reconsider its decision based on the review. After conducting the review as ordered, the council released the documents that had already been made public but reaffirmed its decision as to the remaining documents. The superior court ultimately upheld the council's decision.

Fuller appeals, claiming that the deliberative process privilege does not apply and that she is entitled to full disclosure.

III. DISCUSSION

A. - Standard of Review

In the present case, we review the city council's decision directly: "When a superior court acts as an intermediate court of appeal we give no deference to its decision." We apply our independent judgment in deciding the legal issues presented by the case.

B. Statutory Background

The claim of privilege in this case arises against the backdrop of Alaska's public records act and the Homer city code's public release of records ordinance. Alaska's public records act provides that specifically provided otherwise, the public records of all public agencies are open to inspection by the public under reasonable rules during regular office hours." The act applies to both state and local officials and departments. And it broadly defines "public record" to include a vast array of official documents:

books, papers, files, accounts, writings, including drafts and memorializations of conversations, and other items, regardless of format or physical characteristics, that are developed or received by a public agency, or by a private contractor for a public agency, and that are preserved for their informational value or as evidence of the organization or operation of the public agencyl[.]

The breadth of this definition reflects Alaska's strong commitment to ensuring broad public access to government records. We have repeatedly held that the act creates a presumption in favor of disclosure and that the act's implicit legislative policy of broad public access requires courts to narrowly construe exceptions to disclosure. The legislative findings to the 1990 amendments to the public records act explain that public access serves as an important "check and balance" that allows citizens to maintain "control of government." And our decisions have characterized public access to records as a "fundamental right."

In City of Kenai v. Kenai Peninsula Newspapers, Inc., we likened the policy supporting the act's right of public access to the philosophy underlying Alaska's open meetings act, which requires that all government agencies covered by the statute act "openly and that their deliberations be conducted openly." Moreover, we have emphasized that broad public access to government records is a vitally important part of our contemporary system of government:

The cornerstone of a democracy is the ability of its people to question, investigate and monitor the government. Free access to public records is a central building block of our constitutional framework enabling citizen participation in monitoring the machinations of the republic. Conversely, the hallmark of totalitarianism is secrecy and the foundation of tyranny is ignorance. It has been written that "[I}f a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be."

Fortifying the provisions of Alaska's public records act, the City of Homer's public records ordinance ensures even broader public access to city records. It declares the city's intent "to provide full and free access of the public to municipal records and information so that the people of the City may be well informed at all times as to municipal business." And it specifies that the types of records open to public inspection "shall include, but shall not be limited to," among other things, "[flinancial and operational cost information, including information as to revenues, expenditures, indebtedness, department budget requests, and formal departmental recommendations in regard to project priority; ... [and] [f leasi-bility, management, cost effectiveness and similar reports prepared by the municipality with municipal moneys." Moreover, Homer's ordinance emphasizes that this "policy of providing public access to public information shall be broadly and liberally construed."

C. - The Deliberative Process Privilege

With these legislative provisions and their broad underlying purposes in mind, we next consider the role of the deliberative process privilege. Alaska's public records act sets out a limited number of exceptions to its broad disclosure requirements; one of these exceptions is for "records required to be kept confidential by ... state law." On two prior occasions, we have recognized that at common law courts recognized a deliberative process privilege. And because Alaska's statutory definition of "state law" encompasses common law as well as positive law, we have held that the deliberative process privilege is "one of the judicially recognized 'state law' exceptions" to public access under the public records act. In so holding, we have explained that the deliberative process privilege is intended to "protect[] the mental processes of government decisionmakers from interference." And we have noted, generally, that "[plublic officials may assert this privilege and withhold documents when public disclosure would deter the open exchange of opinions and recommendations between governmental officials."

Our cases hold that to establish a prima facie claim to this privilege in any given case, the government must show that the document whose disclosure is sought is an internal communication or one that the government directly solicited and that the communication is both predecisional and deliberative. If the court reviews the document and finds that it meets these criteria, the privilege presumptively attaches, overriding the public records act's usual presumption of disclosure. The burden then shifts to the requesting party to demonstrate that the public's interest in disclosure outweighs the government's interest in confidentiality.

Whether a particular document supports a prima facie claim of privilege under this analysis is a question for case-by-case decision. We have upheld deliberative process privilege claims in only two prior cases, both of which involved important political or policy decisionmaking at the highest levels of government. In Capital Information Group v. State, Office of the Governor, we approved the governor's invocation of the privilege for documents concerning state legislative proposals, emphasizing that development of the governor's legislative package is "one of the most sensitive and important functions that the Governor performs while in office, and the need for frank discussion of policy matters among the Governor's advisors is perhaps greater here than in any other area." And in Gwich'in Steering Committee v. State, Office of the Governor, we approved the governor's reliance on the privilege to block disclosure of documents concerning lobbying for the Arctic National Wildlife Refuge, reasoning that the governor's national lobbying efforts on behalf of the state were as important as his formulation of a state legislative package."

These decisions do not preclude a broader reach for the privilege; instead, they leave the area open to development on a case-by-case basis. But here the question does not turn on whether the city established a prima facie deliberative process claim. For as we explain below, Fuller has met her burden of demonstrating that the public's interest in disclosure outweighs the city's interest in confidentiality.

D. Fuller's Interest in Public Disclosure Outweighs Any Legitimate Interest in Confidentiality the City Might Have.

We thus turn to Fuller's specific claim. Fuller, noting that we have never extended the deliberative process privilege to a municipal government, argues that the privilege does not extend to municipalities and that, in any event, it should not apply to the records at issue here. The city counters that municipal officials need the privilege as much as state officials and that there is no sound legal basis for declining to apply it in the municipal context. The city goes on to defend its reliance on the privilege to prevent disclosure of the records at issue here.

In our view, Fuller fails to articulate any convincing basis for declining to extend the deliberative process privilege to municipal governments. - We nevertheless conclude that Fuller's request for disclosure must be honored because, on the facts of this case, the public's interest in disclosure predominates over any legitimate interest in confidentiality that Drathman might have retained after the city council opted to file his proposed annexation petition.

While Drathman certainly might have had compelling reasons to protect internal staff discussions from outside intrusion while his staff was actually deliberating the issues, the legitimacy of the city's interest in stifling disclosure after discussion ended seems far less obvious. We recognize, of course, that a predecisional and deliberative communication does not automatically lose its privileged character after deliberation ceases and a decision is made. In this regard, we have held that each case must be considered on its own merits and that the time elapsed after deliberations is a relevant consideration. But the facts of this case weigh strongly in Fuller's favor.

Here, Fuller submitted her request for disclosure not only after Drathman's deliberative process had ended, but also after his recommendation had been submitted to and approved by the city council and after Drath-man had filed the city's petition for annexation with the Local Boundary Commission. Earlier, in requesting information from his staff, Drathman expressed concern about maintaining confidentiality while his proposal was being prepared but implied that the disputed information could be disclosed once the annexation plan was completed; his memorandum instructed his staff that "information should not be released to [the] public or Commissions until the Staff plan is complete." The council reviewed Drathman's report and elected to petition for annexation, using his report as its basis. In his affidavit supporting the annexation, Drathman expressly states that the revenues and expenses he presented to the commission reflect information developed by his various departments. The city council's decision affirming Drathman's invocation of the privilege mirrored his concerns, specifically describing the need to protect staff members from public scrutiny while their deliberations were in progress, but neglecting to specify any ongoing need for confidentiality after the deliberative process ended.

Given these circumstances, neither Drath-man nor members of his senior staff could reasonably have expected that any internal communications addressing the merits of the annexation process would remain sheltered from public disclosure under a claim of privilege after the council ultimately decided to file an annexation petition. In contrast to the city's attenuated interest in confidentiality, the public's interest in disclosure of all potentially relevant government records grew strong and specific once the council filed the annexation petition.

Our review of the disputed records confirms that the public's interest in their disclosure now clearly outweighs the city's initial interest in confidentiality, The documents are basically factual, dealing largely with issues of costs and the city's ability to extend its services. Moreover, these documents include important annexation cost information not readily available elsewhere. We find no tactical discussion that could be considered as "suggesting a strategy" for presenting the case either to the council or the local boundary commission. And we see no realistic danger that post-petition disclosure would have any appreciable chilling effect on the city's future deliberative process. Thus, regardless of whether the deliberative process privilege might have justified denying access to the documents at some earlier stage of the process, we conclude that the privilege was not available by the time the council denied Fuller's request for disclosure.

IV. CONCLUSION

Because we conclude that the deliberative process privilege did not apply in these circumstances, we REVERSE the superior court's order and REMAND with directions to grant Fuller's request for disclosure.

BRYNER, Justice,

concurring.

I join in the court's opinion but would emphasize that, in my view, the strong and specific terms of the Alaska Public Records Act raise serious doubts as to whether the kind of routine governmental records at issue here-responses to a city manager's request to staff members for background information concerning a proposed annexation petition-would qualify as either "predecisional" or "deliberative" communications for purposes of establishing a prima facie claim under Alaska's deliberative process privilege.

      . Co-appellants Citizens Concerned About Annexation separately submitted a similar request and received essentially the same response as Fuller; since our consideration of Fuller's claim disposes of all issues raised on appeal, we need not separately consider CCAA's claim.

      . Specifically, Fuller cited AS 09.25.110 and Homer City Code (HCC) 1.80.060. After Fuller submitted her request, Alaska's public records act-initially codified as AS 09.25.100-.124-was renumbered as AS 40.25.100-.124. Thus, the provision cited by Fuller, former AS 09.25.110, now appears as AS 40.25.110. See AS 40.25.110 Historical Notes, This opinion will cite the public records act as it is currently codified.

      . Gwich'in Steering Comm. v. State, Office of the Governor, 10 P.3d 572, 577 (Alaska 2000).

      . Id. at 577-78.

      . AS 40.25.110(a).

      . AS 40.25.220(2) (defining "public agency" as "a political subdivision, department, institution, board, commission, division, authority, public corporation, council, committee, or other instrumentality of the state or a municipality") (emphasis added); see also Municipality of Anchorage v. Anchorage Daily News, 794 P.2d 584, 589 (Alaska 1990) ("Alaska's public records statutes apply to municipalities([.]").

      . AS 40.25.220(3).

      . Gwich'in Steering Comm., 10 P.3d at 578; City of Kenai v. Kenai Peninsula Newspapers, Inc., 642 P.2d 1316, 1323 (Alaska 1982); see also Doe v. Alaska Superior Court, 721 P.2d 617, 625 (Alaska 1986) (involving request for documents in litigation discovery rather than a request under the public records act).

      . E.g., Anchorage Daily News, 794 P.2d at 589; Kenai Peninsula Newspapers, Inc., 642 P.2d at 1323.

      . Gwich'in Steering Comm., 10 P.3d at 578; Capital Info. Group v. State, Office of the Governor, 923 P.2d 29, 33 (Alaska 1996); Anchorage Daily News, 794 P.2d at 589; Doe, 721 P.2d at 622.

      . Ch. 200, § 1, SLA 1990.

      . Gwich'in Steering Comm., 10 P.3d at 578; Kenai Peninsula Newspapers, Inc., 642 P.2d at 1323 (quoting MacEwan v. Holm, 226 Or. 27, 359 P.2d 413, 421-22 (1961)).

      . 642 P.2d at 1324 (quoting AS 44.62.312(a)). More specifically, Kenai Peninsula Newspapers, Inc. states:
      There is a strong public interest in disclosure of the affairs of government generally, and in an open selection process for high public officials in particular. AS 44.62.312(a) powerfully expresses the philosophy underlying this [public interest]. ...
      In addition, [AS 40.25].110 and 120 articulate a broad policy of open records.
      Id. at 1323-24.

      . Jones v. Jennings, 788 P.2d 732, 735-36 (Alaska 1990) (citations omitted).

      . HCC 1.80.010 (1995).

      . HCC 1.80.030 (1983) (emphasis added).

      . Id.

      . AS 40.25.120(a)(4) ("Every person has a right to inspect a public record in the state, including public records in recorders' offices, except ... records required to be kept confidential by a federal law or regulation or by state law[.]"). The city's public records ordinance similarly recognizes an exception when state or federal law would prevent disclosure. HCC 1.80.030 (1983) (requiring all city records to be open to disclosure "[except as provided by Section 1.80.040, or by other provisions of municipal, state or federal law'").

      . Gwich'in Steering Comm. v. State, Office of the Governor, 10 P.3d 572, 578 (Alaska 2000); Capital Info. Group v. State, Office of the Governor, 923 P.2d 29, 34 (Alaska 1996).

      . Gwich'in Steering Comm., 10 P.3d at 578.

      . Id.

      . Id.

      . Id. at 579, 581; Capital Info. Group, 923 P.2d at 35-36. Gwich'in's description of these requirements can be summarized as follows. A document qualifies as predecisional if it was written before deliberations ended. 10 P.3d at 579. The government official claiming the privilege does not have to link the document to a specific decision because the privilege protects the process, "not final decisions." Id. at 581. A document satisfies the deliberative test if it includes policy discussions that have "opinions, recommendations, or advice about agency policies." Id. at 579. If a document contains just facts, then it is not deliberative unless the facts are enmeshed in the decisionmaking process or the process would be revealed by the document's release. Id. Documents that contain "opinions and interpretations" of a policy decision already made are not considered deliberative. Id.

      . Id.; see also City of Kenai v. Kenai Peninsula Newspapers, Inc., 642 P.2d 1316, 1323 (Alaska 1982) (discussing presumption in favor of disclosure and balancing test that applies in deciding whether exemption to public records act applies in absence of claim of privilege).

      . Gwich'in Steering Comm., 10 P.3d at 579; Capital Info. Group, 923 P.2d at 37.

      . 923 P.2d at 38.

      . 10 P.3d at 576, 584.

      . Id. at 583; Capital Info. Group, 923 P.2d at 36.

      . Capital Info. Group, 923 P.2d at 36.

      . - See Gwich'in Steering Comm., 10 P.3d at 583-84.

      . - We note that Drathman's request for information from his staff did not call for or generate any intrinsically sensitive or confidential deliberative communications. Had that been the case, the city would have been entitled to invoke applicable provisions from the public records act's extensive list of specific exemptions. See AS 40,25.120(a)(1)-(10).

      . On this issue, the council's decision upon remand from the superior court states:
      The precept that the public should have access to the raw exchange of ideas and proposals among the city departments and the City Manager prior to that information being properly evaluated, analyzed, and synthesized into a meaningful conclusion is destructive to the administration's decisionmaking process and damaging to the quality of its decisions. Putting public officials in the position of placing their every untested thought or recommendation on the table for public examination and reproach before it undergoes internal review to identify the best recommendations or conclusions is again harmful. It would lead not only to public overreaction and needless concern, but also to reluctance by the city staff to engage in internal expressions of ideas and recommendations. These are significant harms that the privilege is intended to protect against.
      (Emphasis added.)

      . See Gwich'in Steering Comm., 10 P.3d at 581.

      . Cf. City of Garland v. The Dallas Morning News, 22 S.W.3d 351, 364 (Tex.2000).