                             No.    90-505

          IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1991



JAMES PAUL SANDERS and KATHY SANDERS,
          Plaintiffs and Appellants,


SCRATCH GRAVEL LANDFILL DISTRICT
and DOES ONE THROUGH TEN.
                                                CLERK O F EjUPRENlE COUR?
                                                   STATE OF MBNYAPdA
          Defendants and Respondents.



APPEAL FROM:   District Court of the First Judicial District,
               In and for the County of Lewis and Clark,
               The Honorable Jeffrey M. Sherlock, Judge presiding.


COUNSEL OF RECORD:
          For Appellants:
               Carl A. Hatch; Small, Hatch, Doubek     &   Pyfer, Helena,
               Montana
          For Respondents:
               Mike McGrath, County Attorney, Lewis and Clark
               County, Helena, Montana


                                   Submitted on Briefs:     May 30, 1 9 9 1
                                              Decided:       July 15, 1991
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.


     James and Kathy Sanders appeal from an order of the District
Court of the First Judicial District, Lewis and Clark County,
Montana, granting the motion of Scratch Gravel Landfill District
to dismiss their suit. The District Court held that Scratch Gravel
Landfill District was immune from suit.    We reverse and remand to
the District Court.
      The issue is whether the District Court erred in determining
that, as an agent of a legislative body, Scratch Gravel Landfill
District was immune from suit.
     James and Kathy Sanders bought a home in Western Hills
Subdivision, a few miles north of Helena, Montana, in 1987.       In
1989 the couple learned that the aquifer from which they obtained

their water had become contaminated with toxic chemicals which they
alleged were leached from a nearby dump owned and operated by
Scratch Gravel Landfill District.     The Landfill District claimed
that the chemicals came from a different source, namely from
cleaning solvents dumped for years by laundry and dry cleaning
establishments into a mine shaft above the property owned by the
Landfill District.
     Because    of   the   contaminated water   supply, the   Sanders
eventually moved from their home, even though they were unable to
sell it.   The Sanders filed suit against the Landfill District
seeking to recover damages resulting from contamination of their
water supply.
     The Sanders learned of the water contamination when the
Landfill District called a meeting on January 24, 1989, to inform
local homeowners that the aquifer from which they obtained their
water had become contaminated with toxic chemicals.   The Landfill
District offered to provide bottled water for drinking and cooking
to those who were using contaminated water. The contaminated water
was said to be safe for bathing, washing dishes, and watering lawns
and gardens.
     The Landfill District held other meetings to keep property
owners informed and eventually offered a plan to the affected
landowners. In a written agreement signed by the Sanders and other
homeowners, the Landfill District agreed to provide a new water
source and delivery system.   In exchange, the homeowners agreed to
release the Landfill District from I1liability for inconvenience,
mental anguish and temporary loss of property values resulting from
alleged degradation of ground water."    The agreement allowed the
homeowners to retain all "rights to seek compensation for any long-
term or permanent loss of property value       . .   ."   except for
llpotentialpersonal injury claims for damages due to alleged
contamination of Homeowners1 ground water."
     Before the Landfill District could implement a new water
source and system, the Sanders decided in January 1990 to move from
their home claiming they wanted to escape further health risks.
According to the Sanders, realtors refused to list their home until
the new water supply was in operation. A realtor eventually agreed
to list their house with the understanding that full disclosure of
the toxic water problems be provided to potential buyers. When the
Sanders were unable to sell their house, they filed suit against
the Landfill District and "all unknown defendants Does One through
Ten" seeking damages for permanent or long-term loss of value to
the property.


     The issue is whether the District Court erred in determining
that Scratch Gravel Landfill District was immune from suit pursuant
to 5 2-9-111, MCA.
     The Landfill District argues that it is immune from suit
according to our holding in Burgess v. Lewis and Clark City-County
Board of Health (Mont. 1990), 796 P.2d 1079, 47 St.Rep. 1619.        In
Burqess, we held that an employee of the Scratch Gravel Landfill
District could not sue the Lewis and Clark City-County Board of
Health, which serves as the board of directors of the Landfill
District. The Board, as an agent of a legislative body, the Lewis
and Clark County Board of Commissioners, was immune from suit under
S   2-9-ll(2)      MCA,   extending   governmental   immunity   to   a
I1legislativebody or a member, officer, or agent thereof.I1
     For the past number of years this Court has been divided on
the question of legislative immunity granted by        2-9-111, MCA,
enacted in 1977.     Case after case has brought dissent.   See Love
v. Harlem Irrigation District (Mont. 1990), 802 P.2d 611, 47
St.Rep. 2190; Koch v. Yellowstone County (1990), 243 Mont. 447, 795
P.2d 454 (Judge Larry Moran, specially concurring); Eccleston v.
Third Judicial District Court (1989), 240 Mont. 44, 783 P.2d 363;
and Peterson v. Great Falls School District No. 1 and A (1989), 237
Mont. 376, 773 P.2d 316.
     District Court Judge Larry W. Moran, sitting with the Court
in Koch, noted in a concurring opinion:
        How beneficial it would be to see (or to write) an
     opinion on governmental immunity considering provisions
     of 5 2-9-111, MCA, simply concluding: "the act giving
     rise to the cause of action is clearly administrative or
     executive, not legislative. Hence, governmental immunity
     does not attach1'--or the reverse, in applicable
     situations.
That day has now arrived.   The 1991 legislature amended     §   2-9-
111, MCA, by SB 0154 to read:
         Immunity from suit for legislative        acts    and
    omissions.  (1) As used in this section:

       (a) the term I1governmental entityv1means only the
    state, counties, municipalities, school districts, and
    any other local government entity or local political
    subdivision vested with legislative power by statute;
       (b) the term lllegislativebody1' means only the
    legislature vested with legislative power by Article V
    of The Constitution of the State of Montana and that
    branch or portion of any other local governmental entity
    or local political subdivision empowered by law to
    consider and enact statutes, charters, ordinances,
    orders, rules, policies, resolutions, or resolves;
        (c) (i) the term lllegislative
                                     actv1means:
       (A) actions by a legislative body that result in
    creation of law or declaration of public policy;
       (B) other actions of the legislature authorized by
    Article V of The Constitution of the State of Montana;
    or

       (C) actions by a school board that result in adoption
    of school board policies pursuant to 20-3-323(1);
       (ii) the term legislative act does not include
    administrative actions undertaken in the execution of a
    law or public policy.

       (2) A governmental entity is immune from suit for a
    legislative act or omission by its legislative body, or
    any member or staff of the legislative body, engaged in
    legislative acts.
        (3)   Any member or staff of a legislative body is
    immune from suit for damages arising from the lawful
                                                                     a
-    1
i
         discharge of an officialduty~associated
                                               with legislative
         acts of the legislative body.
            (4) The acquisition of insurance coverage, including
         self-insurance or group self-insurance, by a governmental
         entity does not waive the immunity provided by this
         section.
            (5) The immunity provided for in this section does
         not extend to any tort committed by the use of a motor
         vehicle, aircraft, or other means of transportation.


            Section 3.       Effective date     -- retroactive
         applicability. [This act] is effective on passage and
         approval and applies retroactively, within the meaning
         of 1-2-109, to causes of action that have not been
         reduced to final judgment on or before [the effective
         date of this act].
    Section 2-9-111, MCA (1991).
         We conclude that Buraess is no longer controlling.    In view
    of the revisions in 3 2-9-111, MCA, as above set forth, including
    the effective date, this issue must be reconsidered by the District
    Court.
         We reverse the decision of the District Court and remand for
    reconsideration.




    We concur:



             Chief Justice
