No. 13201 INTHE SUPREME COURT OF THE STATE OF MONTANA 1975

STATE OF MONTANA ex re1THOMAS L. JUDGE, Governor of the Stateof Montana, Plaintiff,

THE LEGISTATIVE FINANCE COMMITTEEAND ITS MEMBERS, Francis Bardanouve, Chairman, David Aageson, Glenn Jacobsen, Orin P. Kendall, Arthur E. Lund, William

### L. Mathers, Jack K. Moore, William J. Norman, Ann K. Regan, Miles Romney, Ed B. Smith, and Stan Stephens, Defendants.

ORIGINAL PROCEEDING: Counsel of Record: For Plaintiff: Larry Elison argued and PatrickMelby argued,

Helena, Montana For Defendants: JohnNorthey argued, Helena, Montana

Submitted: December 

### 6, 1975

-7-7 Decided: 7p 1, <2

### i314,~ 

# -L II a. ?$ L /L <,5 Filed: T~,E;: i:,;:j;;jJY L. -!'.<;, G.3Mr. JusticeWesley Castles delivered the Opinion of the Court.

This is an original proceeding brought by plaintiff Governor of Montana for declaratory relief pursuant to section 93-8901 et seq., R.C.M. 1947, involving the constitutionality of several legislative enactments establishing and empowering defendant Legislative Finance Committee and its office of Legislative FiscalAnalyst. This cause is a companion case to No. 13069, Board of Regents v. Thomas L. Judge,decided today. Plaintiff (hereinaftercalled Governor) commenced this action October 29, 1975,with an application for leave to file a complaint stating that substantial questions of the constitutionality of these enactments existed and that the remedy available through trial in the district court was inadequate because the operation of these lawswould impair and do irreparableharm to state government functionsduring the delay before final resolution of thematter by this Court. After an ex parte hearing

on October 29, 1975, this Court granted the application and ordered that defendant (hereinafter called Finance Committee) answer the complaint,briefs be filed,and set thematter for an adversary hearing. Hearing was had. Specifically this challenge involves three enactments of the Forty-fourthLegislature. (1) Senate Bill No. 333, Chapter 448,Laws of Montana, 1975--The Legislative FinanceAct--provides for the creation of the interim legislative finance committeewhosemembership is made up of fourmembers of the senate finance committee, two members from the senateat large, fourmembers of the house appropriation committee,and twomembers from the house at large. The act also creates the office of legislative fiscal analyst and specifies the duties of both the analyst and the committee. (2) Senate Bill 

### No. 401,Chapter 51, Laws of Montana,1975, as set forth in the companion case, grants the legislative finance committeereviewand approval authority over budget amendments which are therein defined as expenditures by state agencies in excess of their appropriations. (3) House Bill No. 1 (SpecialSession), Laws of Montana, 1975, specifically appropriates funds from sources other than the general fund which were not available for consideration by the legislature and modifies each of the appropriation bills of the forty-fourth legislature to insure that such funds are approved by the legislative finance committee in the form of a budget amendment before they are made available to the state agency for expenditure. The Governor challenges the budget amendment authority in S.B. 401and H.B. 1 (Special Session) of the Finance Committee by asserting in the alternative that either it is an unconstitutional delegation of legislative authority because it gives the Finance Committee authority to permit expenditures of money from the public treasury without an appropriationmade by law,



### or an infringement on the doctrine of separation of powers because it allows the Finance Committee to exercise discretion exclusively reserved to the executive branch. Additionally, the Governor argues if the Finance Committee is exercising administrativepower, the legislature has conferred civil appointments upon members of the legislature who are ineligible for such appointment under Article 

### V, Section 9, 1972 Montana Constitution. Section 7, S.B. 333 isvoid, argues the Governor,because it is an interferencewith the governor's constitutionalduty to prepare and submit a budget to the legislature inArticle VI, Section 9, 1972Montana Constitution. The Governor also seeks to enjoin the Finance committee from acting under the remainder of S.B. 333 to the extentduplication orinterference with the Governor's constitutional budget duties result. The following sections of S.B. 333 indicate a possible duplication of function or interferencewith the executive: "Section 6. There is a new R.C.M. section numbered 43-1114 that reads as follows: "43-1114. Legislative fiscal analyst's duties. The legislative fiscal analyst shall: (1)provide for fiscal analysisof state government and accumulate, compile, analyze,and furnish such information bearing upon the financialmatters of the state that is relevant to issues of policy and questions of statewide importance, includinq,but not limited to, 

### -- investigationand study of the possibilities of effectinq economy and efficiency in state qovernment; "(2) Estimate revenue from existing and proposed taxes; "(3) Analyze the executive budget and budget requestsof selected state agencies and institutions, including proposals for the construction of capital improvements; "(4) Make the reports and recommendationshe deems desirable to the leqislature and make reports and recommendations as requested by the legislative finance committeeand the legislature;and "(5) Assist committeesof the legislature,and individual legislators, in compiling and analyzing financial information.

"Section

### 7. There is a new R.C.M. sectionnumbered 43-1115 that reads as follows: "43-1115. Fiscal analysis information from state agencies. The legislative fiscal analyst has the authority to investigate and examine into the costs of state government activitiesand may examine the records, books, and filesof any state agency, including confidential records of executive branch agencies. Every state agency shall furnish the legislative fiscal analyst with copies of all budget requests,at the time of submission to the budget director asprovided by law, and if requested, all underlying and supporting documentation. In the year preceding each legislative session, the budget director shall furnish the legislative fiscal analyst on a confidential basis: "(1) by December 1,a copy of the documents which reflect the anticipated receiptsand other means of financing the budget for each fiscal year of the ensuing biennium; "(2) by December 1,a preliminary budget whichshall meet the statutoryrequirements for submission of the budget to the legislature;and "(3) by December 15,all amendments to the preliminarybudget." (Emphasissupplied.) The Finance Committee's answer raises four defenses which are the subject of a motion to dismiss. First, that the complaint fails to state a claim upon which relief canbe granted. Second, the Finance Committee asserts that this Court should not invoke its original jurisdiction under Rule 17,Montana Rules of Appellate Civil Procedure,because no emergency situation exists. Third, there are factual matters in dispute requiring an evidentiary hearing in district court. Fourth,defendant Finance Committee asserts that plaintiff Governor should be estopped from challenging the acts in question because he signed them and subsequentlydid not legally challenge them when he had an opportunity to do so. On themerits of the Governor's challenge the Finance Committee states that the establishment of the interim committee

was a valid exercise of legislativepower and themembers of the committee serve in their capacity as legislators,not civil officers. It argues the interim committee performs an incidental legislative function by altering expenditure limitations established by the legislature during its biennial sessions. The legislature in H.B. 1 (Special Session) established a contingency according to the Finance Committee, which becomes effectivewhen the Finance Committee determines the contingencyhas been met. The Finance Committee argues such contingent appropriationsapproved by the legislative finance committee under S.B. 401 constitute a valid delegationof authority. With regard to the Governor's challenge to the fiscal analysispowers in S.B. 333, these duties do notviolate the separation of powers clause of Article 111, Section 1, 1972MontanaConstitution, according to the Finance Committee. Specifically it arguesArticle VI, Section 9,1972Montana Constitution, confers a duty on the governor to submit

### - a budget to the legislature, but this does not preclude the legislature from rejecting all or part of that budget and substitutingone of its own. The Finance Committee submits that the information obtained by the powers given in S.B. 333 ismerely ancillary to the legislature's duty to make an independent and responsible decision concerning appropriations. Initiallywe consider the Finance Committee'smotion to dismiss. The Governor opposes themotion on the basis that only legal issues are involved and during oral argument the Governor's counsel stated he was willing to concede any factualmatters in question. We note at this point that because of the lack of facts presented, our opinion here is necessarily limited. The Governor maintains that each enactment is unconstitutional on its face. On the basis of the Governor's concession of factual issues and the fact that the answers required by this casewill have such a significant impact on the operation of state government, (forexample, this Court'sdecision in Board of Regents v. Thomas L. Judge, Cause No. 13069,also decided today) we deem this Court's original jurisdiction proper under Rule 17,Montana Rules of Appellate Civil Procedure. We also find that a declaratory judgment concerning the legislative acts in question provides a proper resolution of this controversy. Board of Regents v. Thomas L. Judge, supra. Finally,

we think the doctrine of estoppel is inapplicable here in view of the Governor's duty to uphold the Montana Constitution. The Finance Committee's motion to dismiss is denied. Moving to themerits of the controversy,we first consider the budget amendment authority given the Finance Committee under(Special Session) S.B. 401 and H.B. 1/! Initiallywe find that the legislature in H.B. 1 (SpecialSession), Laws of Montana, 1975,did intend and did accomplish the appropriationofmonies received from sources other than the general fund which were not available for consideration by the legislature. What remains is a categorization and constitutionalevaluation of the function of that committee. There can be no doubt that the legislature, sitting in session,could determinewhether or not to releasemoney already a appropriated from/source other than the general fund and not available for considerationby an earlier session of that same legislature. Such a determination is an integral part of the final appropriationdecision. The power to appropriate is a long established,well-recognized power of the legislature. State

ex rel. Haynes v. District Court, 106Mont. 470, 476, 78 P.2d 937 and cases cited therein. Further, these nongeneral fund monies are public operating funds of state government subject to the appropriationprocess. See companion opinion Board of Regents

v. Thomas L. Judge, supra. Alternatively the legislaturemight, as it has often done in other areas,make a policy determination and delegate to an executive agency or officer the duty to later implement the legislature'spolicy determination. The legislaturehas thepower to establish interim committees to gather information upon which the legislaturecan evaluate past actions or use as a basis for futuredecisions. ArticleV, Section 10, 1972Montana Constitution; State ex rel. James

v. Aronson, 132Mont. 120, 314 P.2d 849;Transcript of Proceedings, Montana Constitutional Convention, (1972),pp. 1950, 1951. But, the 1975Montana ILegislature in its enactment of S.B. 401 and H.B. 1 (Special session) empowering the Finance Committee to approve budget amendmentsdelegated a power properlyexercisableonly by either the entire legislatureor an executive officer or agency, to one of its interm committees. Such

a hybrid delegation does not pass constitutionalmuster. The power in question here resides in either the entire legislative body while in session or, if properly delegated, in an executive agency. Clearly the action of the Finance Committeedoes not constitute the action of the entire legislature. Article V, Section 11, 1972Montana Constitution. Just as clear is the fact that ArticleV, Section 9, 1972Montana Constitution,would disqualify these legislators frommembership on the Finance Committee if itwere an executive agency. Therefore those sections of S.B. 401 and H.B. 1 (Special Session) empowering the Finance Committee to approve budget amendments are declared invalid as unconstitutional delegations of legislativepower. This determination that S.B. 401,Chapter 510, Laws of Montana, 1975, is unconstitutional necessarily denies the Finance Committee any power over those requests enumerated in section 1 (3),H.B. 271, before us in the companion caseBoard of Regents

v. Thomas L. Judge, supra. Since we have found the appropriation to have been made by the legislature, which both parties concede, the discretion regarding the disposition of these nongeneral fund unanticipated revenues resides within the executivebranch. Next we consider S.B. 333, which the Governor alleges to be an infringement on the executivebranch and therefore violative of the separation of powers clause of Article 111, Section 1, 1972Montana Constitution. This description from Statev. Johnson, 75Mont. 240, 249, 243 P. 1073, is the accepted discussion of separation of powers by this Court: "In theory, this section [Section1,Article IV, 1889Montana Constitution almost identical to Section 1,Article 111, 1972Montana Constitution]

## * * * effects an absolute separation of the three departments of our government, 'but, while such is the theory of American constitutional government, it is no longer an accepted canon among political scientists; it has never been entirely true in practice.' (12C.J. 803;Cooley on Constitutional Law, 44; Story on Constitution of the United States 525.)

"That section 1,Article IV,does notwholly prevent the exercise of functions of a nature belonqinq to one department by those administerinq the affairs of another is recoqnized in State ex rel. Hillis v. Sullivan, 45 Mont. 320, 137 Pac. 392,wherein Mr. Justice Sanner, speaking for this court said: 'The separation of the government into three great departments does not mean that there shall be "no common link of connection,or dependence, the one upon the other in the slightest degree" (1Story's Commentaries on the Constitution, sec. 525); itmeans that the powers properly belonging to one department shall not be exercised by either of the others. (Const.Art. IV, sec. 1.) There is no such thing as absolute independence.

### ' He then cites numerous instances of the exercise of powers by onedepartmentwhich, from their nature,would seem to belong to another,but which are incidents to the proper discharqe of the powers vestinq in the department exercisinq them,or are reposed in the particular department as a matter of convenience in qovernmental affairs.

### " (Emphasis supplied.) Mr. Justice Brandeis in Myers v. United States, 272 U.S. 52, 47 S.Ct. 21, 71 L ed 160, 242, stated: "Thedoctrine of the separation of powers was adopted by the Convention of 1787 not to promote efficiencybut to preclude the exercise of arbitrary power. The purpose was not to avoid friction, but, by means of the inevitable friction incident to the distribution of the governmental powers among three departments, to save the people from autocracy." (Emphasissupplied.) We also take noteof the language of Mr. JusticeHolmes in Springer



### v. Philippine Islands, 277 U.S. 189, 209, 48 S.Ct. 480, 72 L ed

"Thegreat ordinancesof the Constitution do not establish and divide fieldsof black and white. Even the more specific of them are found to terminate in a penumbra shading gradually from one extreme to the other. 

## * * *" (Emphasissupplied.) To what extent then does S.B. 333 violate the separation of powers in view of the command of Article VI, Section 9, 1972Montana Constitution, for the governor to "submit to the legislature at a time fixed by law, a budget for the ensuing fiscal period setting forth in detail for all operating funds the proposed expenditures and estimated revenue of the state." Again, our determination here is limited to a consideration of S.B. 333 on its face, due to the concession of factual issues by the Governor. Basic to the resolution of this issue is the fact that the budget inMontana is a legislative budget not an executive budget notwithstanding Article VI, Section 9. Article V and Article VIII, 1972Montana Constitution,vest the power to approve appropriation bills and a budget in the legislative branch. Article V, Sections 1, 11;Article VIII, Sections 9, 12, 14, 1972 Montana Constitution. In other words the legislature has the power to adjust and finalize the budget. Given-thatpower and responsibility the legislature through an interim committeemay require such information from the other branches of government

as is reasonably necessary to form a rational basis for its budget determinations. The Governor's assertion that Section 7 of S.B. 333 infringes on the executive branch because it requires a disclosure of informationheld by state agencies, including a copy of the preliminary budget, is of little substance. Indeed, should the executive branch withhold from the legislature or one of its interim committees any information reasonably necessary for budget decisions, it in factwould be interferring with the legislature to the extent of violating the separationof powers doctrine. Once prepared the preliminary budget is arguably a public document and should be available not only to the Finance Committee but to the general public aswell under Article 11, Section 9, 1972 Montana Constitution.While an apparent unnecessary duplication of effort in the preparation of two budgets and an apparent lack of cooperation may exist between the executive and the legislature in this matter, which results in a waste of taxpayers'money, these are insufficient grounds upon which to find a legislative enactment constitutionally invalid. The rule that the constitutionalityof an act of the legislature must be presumed unless rebutted by proof beyond a reasonable doubt iswell established in Montana. State ex rel. Mills v. Dixon, 66Mont. 76, 84, 213 P. 227. This presumption has not been overcome here; and thus we hold as to S.B. 333, specifically as to Section 7, the legislature has acted properly. This opinion, together with the opinion in the companion

case No. 13069, shall constitute a declaratory judgment.