Proposition 207, the Private Property Rights Protection Act (“Prop. 207”), is a ballot initiative designed to limit the use of eminent domain and expand the definition of regulatory takings. Among other things, it would require the State to pay landowners compensation equal to the decline in market value caused by its enactment of land use laws. The League of Arizona Cities and Towns (“League”) challenged Prop. 207 in Superior Court, charging that it violated the Arizona Constitution’s “Revenue Source Rule” by failing to identify the source of revenue to pay the “immediate and future costs of the proposal” (Ariz. Const. art. 9, § 23) and asking that it be removed from the ballot. The Superior Court dismissed, holding that Revenue Source Rule violations cannot be reviewed before a proposition is enacted into law. The League appealed directly to the Supreme Court pursuant to A.R.S. § 19-122(C). On August 31, 2006, the Court issued an order permitting Prop. 207 to remain on the ballot. The Court later issued its decision explaining its reasoning. The Court first noted that separation of powers principles require it to refrain from interfering with the legislative process. The Court observed that A.R.S. § 19-122(C) authorizes it to enjoin the placement of an initiative on the ballot if it is “not legally sufficient,” but added that this phrase has been construed to refer only to defects in form, lack of the requisite number of valid signatures, and failure to follow prescribed procedures. The Court declined to expand its pre-election review authority to include Revenue Source Rule violations, noting that such violations do not bear directly on the integrity of the election process. The Court also cited “prudential” concerns for eschewing pre-election review, including avoidance of advisory opinions, the necessity of constricted briefing, the potential need to invalidate the entire proposition, rather than only a portion, and a reluctance to chill the people’s fundamental right to legislate.
Justice Berch authored the opinion for the unanimous Court.