                                    No. 1-3075

            LN T?IE SUPKPiMli dOUKT OF THE STATE d l MONTANA

                                        1975



ART LONNICK, .IKT W O S a n d
                   OD
iHRIS GARDNER, a s t h e Board
o f County Commissioners o f
LE3JIS AND CLARK COUNTY, S t a t e
o f Montana,




T H O U S L. J U D G E , Governor af      he S t a t e
o f Montana,




Counsel o f Record:

      For P l a i n t i f f s :

              Thomas F. Dowling, GourlCy . I c r u r n e y , H e l e n a , Montra Lid
              L e i f B. E r i c k s o n , Deputy County A t t o r n e y , a r g u e d ,
               Helena, Montana
              Louis F o r s e l l a r g u e d , Helena, Montana

      %or    Defendants :

              Hon. R o b e r t L. Woodahl, A t t o r n e y G e n e r a l , Helena,
               Montana
              % t r i c k E. Melby a r g u e d , Helena, Montana
              Yarry L. H j o r t , Helena, Montana



                                            Submitted:       July    s, 1975
                                               Decided :    J r 8 3 agpj
                                                             ki
5iLed:       LA-
               3 j      k,,k,
PER CURIAM:

           T h i s i s an o r i g i n a l p r o c e e d i n g w h e r e i n p l a i n t i f f c o u n t y
commissioners of Lewis and C l a r k County s e e k a d e c l a r a t o r y
judgment a s t o whether t h e Montana F o r t y - F o u r t h L e g i s l a t i v e
Assembly l e v i e d a p r o p e r t y t a x f o r t h e y e a r s 1975 and 1976 f o r
t h e s u p p o r t of t h e U n i v e r s i t y System.          T h i s Court p e r m i t t e d t h e
f i l i n g o f t h e c o m p l a i n t and o r d e r e d s e r v i c e on t h e Governor,
S t a t e A u d i t o r , S u p e r i n t e n d e n t of P u b l i c I n s t r u c t i o n and t h e
Board of Regents.
           The Governor f i l e d an answer.                    The S t a t e A u d i t o r a p p e a r e d
by b r i e f .       The i s s u e r a i s e d i s whether t h e F o r t y - F o u r t h L e g i s l a -
t i v e Assembly l e v i e d a p r o p e r t y t a x f o r t h e y e a r s 1975 and
1976 t o s u p p l y t h e fund from which a p p r o p r i a t i o n s have been
made.      Does t h e a c t of a p p r o p r i a t i n g money from a s p e c i f i c fund
a c t a s a levy of a t a x t o c r e a t e t h a t fund?
           The F o r t y - F o u r t h L e g i s l a t u r e i n House B i l l s No. 269 and
No. 2 7 1 , Laws o f Montana 1975, a p p r o p r i a t e d v a r i o u s sums from
t h e fund c r e a t e d f o r d e p o s i t of t h e monies c o l l e c t e d by t h e l e v y
a u t h o r i z e d under s e c t i o n 84-3804, R.C.M.              1947, by name and
a c c o u n t number a s i l l u s t r a t e d by t h e f o l l o w i n g e x c e r p t from
House B i l l No. 271:
           " S e c t i o n 11. The f o l l o w i n g moneys a r e a p p r o p r i a t e d
           t o t h e b o a r d of r e g e n t s f o r t h e r e s p e c t i v e u n i v e r s i t y
           system u n i t s f o r t h e biennium e n d i n g June 30, 1977:
                                                 For F i s c a l Year             For F i s c a l Year
                                                 Ending 6130176                   Ending 6/30/77
           'I*   9
                 :    ;'c

           "UNIVERSITY OF MONTANA
           "* 9: *
           II
            From t h e earmarked r e v e n u e fund
           02106 U n i v e r s i t y m i l l a g e
           ERA [earmarked r e v e n u e a c c o u n t ] 3,041,786                       3,165,627".
           Funds i n t h e t o t a l sum o f $15,836,528 f o r f i s c a l y e a r s
1976 and 1977 w e r e a p p r o p r i a t e d from t h i s fund f o r t h e s u p p o r t ,
maintenance, and o p e r a t i o n of t h e U n i v e r s i t y System.                    The Uni-
v e r s i t y m i l l a g e earmarked r e v e n u e a c c o u n t was o r i g i n a l l y e s t a b -
l i s h e d i n 1949 a s d i r e c t e d by t h e laws which preceded s e c t i o n
84-3804, R.C.M.          1947. (See Chapter 217, Laws of Montana 1947,
and Chapter 218, Laws of Montana 1957).                          It has been used ex-
c l u s i v e l y f o r t h e d e p o s i t of t a x r e c e i p t s c o l l e c t e d by t h e levy
f o r t h e support of t h e U n i v e r s i t y System.            Those a r e t h e only
monies e v e r d e p o s i t e d i n t h e account and t h a t i s t h e only account
i n which t h o s e t a x r e c e i p t s have e v e r been d e p o s i t e d .
           The Governor, a s defendant, argues t h e i n t e n t t o levy t h e
t a x i s c l e a r l y shown by t h e a p p r o p r i a t i o n of money from t h e
account c r e a t e d by t h e t a x , and, e r g o , t h e t a x was l e v i e d .            We
do n o t a g r e e .
           A r t i c l e V I I I , Section 1, 1972 Montana C o n s t i t u t i o n , s t a t e s :
           "Ta.xes s h a l l be l e v i e d by g e n e r a l laws f o r p u b l i c
           purposes. I I

           A r t i c l e V I I I , S e c t i o n 9, 1972 Montana C o n s t i t u t i o n s t a t e s :
           "Appropriations by t h e l e g i s l a t u r e s h a l l n o t exceed
            a n t i c i p a t e d revenue. 1 I
           I t i s obvious then t h a t s p e c i f i c l e v i e s of t a x e s s h a l l be
made.      Merely a p p r o p r i a t i n g funds does n o t c o n s t i t u t e a levy of
taxes.      Otherwise, i f a p p r o p r i a t i o n b i l l s were s e l f - e x e c u t i n g t a x
l e v i e s , t h e r e would be no purpose i n A r t i c l e V I I I .
           S e c t i o n 84-3804, R.C.M.         1947, provides:
          "Upon t h e approval of t h e e l e c t o r s of t h i s s t a t e ,
          t o be determined by t h e i r v o t e a t t h e g e n e r a l
          e l e c t i o n t o be h e l d i n November of 1968, t h e
          l e g i s l a t i v e assembly s h a l l levy a p r o p e r t y t a x
          of n o t more than s i x (6) m i l l s on t h e t a x a b l e
          v a l u e of a l l r e a l and ' p e r s o n a l p r o p e r t y each
          y e a r f o r t e n (10) y e a r s beginning w i t h t h e
          y e a r 1969. A l l revenue from t h i s p r o p e r t y t a x
          l e v y s h a l l be a p p r o p r i a t e d f o r t h e s u p p o r t ,
          maintenance, and improvement of t h e Montana
          u n i v e r s i t y s y s tern. " (Emphasis s u p p l i e d )    .
           This s e c t i o n , t o g e t h e r w i t h t h e referendum approving i t ,
a u t h o r i z e s t h e l e g i s l a t u r e t o levy a p r o p e r t y tax.   I t does n o t
c o n s t i t u t e a levy.    The l e g i s l a t u r e under t h i s s e c t i o n may f i x
t h e r a t e , n o t t o exceed s i x m i l l s .       This r a t e can vary each year
f o r a p e r i o d of t e n y e a r s .    This a u t h o r i z a t i o n i s a m a t t e r of
c o n t i n u i n g l e g i s l a t i v e judgment t o be determined by each l e g i s -
l a t i v e assembly, a s i t deems n e c e s s a r y by means of a levy.                         The
Forty-Fourth L e g i s l a t i v e Assembly d i d n o t make a l e v y pursuant t o
this authority.
           P a s t l e g i s l a t i v e assemblies have construed and i n t e r p r e t e d
s e c t i o n 84-3804 a s a u t h o r i z a t i o n t o levy and f u r n i s h revenue t o be
a p p r o p r i a t e d f o r support of t h e U n i v e r s i t y System.
           The F o r t y - F i r s t L e g i s l a t i v e Assembly l e v i e d f o r t h e s e
purposes f o r t h e y e a r s 1969 and 1970 (Ch. 321, Laws of Montana

1969).      The Forty-Second L e g i s l a t i v e Assembly l e v i e d f o r t h e
y e a r s 1971 and 1972 (Ch. 170, Laws of Montana 1971).                             The Forty-
Third L e g i s l a t i v e Assembly l e v i e d f o r t h e y e a r s 1973 and 1974
(Ch. 478, Laws of Montana 1973).
           Each of t h e s e enactments contained t h i s language:
           "Section 1. The following t a x l e v i e s f o r s t a t e
           purposes a r e hereby made upon a l l p r o p e r t y i n t h e
           s t a t e of Montana, s u b j e c t t o t a x a t i o n     * * *."
           Each enactment i n determining t h e r a t e of l e v y provided:
           11
             For t h e u n i v e r s i t y m i l l a g e fund, t o provide funds
           f o r t h e support of t h e Montana u n i v e r s i t y system, a s
           provided i n Referendum Measure No. 65 and passed by
           v o t e of t h e people a t t h e g e n e r a l e l e c t i o n h e l d
           November 5 , 1968, s i x (6) m i l l s , o r so much t h e r e o f
           a s may be n e c e s s a r y t o r a i s e t h e amount a p p r o p r i a t e d
           by t h e l e g i s l a t i v e assembly from t h e u n i v e r s i t y m i l l a g e
           fund f o r support of t h e u n i t s of t h e Montana u n i v e r s i t y
           system. I I
           Thus, i t i s e v i d e n t t h a t t h e t h r e e l e g i s l a t i v e assemblies
preceding t h e Forty-Fourth regarded s e c t i o n 84-3804 a s a u t h o r i z a -
t i o n t o make and s p e c i f y t h e levy f o r u n i v e r s i t y system purposes.
           The f a c t t h a t i n each i n s t a n c e t h e y decided upon a s i x
m i l l levy o r s o much t h e r e o f a s n e c e s s a r y t o m e e t t h e appropria-
t i o n , does n o t d e t r a c t from t h e f a c t t h e y a c t e d under t h e a u t h o r -
i z a t i o n , made t h e l e v y , and s p e c i f i e d t h e r a t e .    Each of t h e s e
assemblies based on t h e circumstances, could have s p e c i f i e d t h e l e v y
a t 5 m i l l s , 4 m i l l s , 3 m i l l s , o r even 2 m i l l s .         The p o i n t i s , each
assembly d i d make t h e determination and d i d s p e c i f y t h e r a t e
authorized by the referendum and existing law. These enact-
ments were not ritualistic, were not idle gestures.
       The enactments manifest the legislative construction and
interpretation of section 84-3804 and Referendum No. 65 that
this section and referendum are not self-executing, but rather
constitute authorization to make the designated levy.
       In Swartz v. Berg, 147 Mont. 178, 181, 411 P.2d 736, this
Court said:
      "It is a basic premise of the law of taxation that
      the foundation for levying and assessing a tax
      depends upon the existence of a valid legislative
      act specifically designating the imposition of the
      tax. Nothing is taxable unless clearly authorized
      by statute. State ex rel. Tillman v. District Court,
      101 Mont. 176, 53 P.2d 107, 103 A.L.R. 376."
       There are valid reasons for requiring formality and
specific designation of the imposition of a tax.   Under the
1889 Montana Constitution,and its Article XII, many restric-
tions were placed upon the power of the legislature as to
taxation.   Those restrictions were set out in 1896 in State
v. Camp Sing, 18 Mont. 128, 139, 140, 44 P. 516.   The 1972
Montana Constitution does not expressly set out the same
restrictions in its Article VIII, but does set out many of them.
If an appropriation bill could be construed as a levy of
taxes, these safeguards would be lost.
      To sum it up, the Legislature simply failed to make a
levy as authorized by section 84-3804 and thus, the appropriation
is not valid since no revenue was provided.   This Opinion shall
constitute a declaratory judgment.
'   Chief ~ h s t i c e
1       fl    0           lM




    Justices.
