No. 86-270 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

BUTTE-SILVER ROW LOCAL GOVERNMENT, 

Petitioner, 

-vsTHE STATE OF MONTANA; TREASURER OF 

THE STATE OF MONTANA, DEPARTMENT OF 

REVENUE OF THE STATE OF MONTANA, 

Respondents. 

ORIGINAL PROCEEDING: 

COUNSEL OF RECORD: 

For Petitioner: 

James H. Goetz argued; Goetz, Madden & Dunn, Rozeman, 

Montana 

For Respondent : 

Hon. Mike Greely, Attorney General, Helena, Montana 

Clay R. Smith argued, Asst. Atty. General, Helena 

Eric J. Fehlig, Dept. of Revenue, Helena, Montana 

Donald MacIntyre, Dept. of Natural Resources, Helena, 

Bontana 

3 - ' 

-- * . " 

Filed: .+ +- 

Submitted: December 2, 1358 

Decided: January 19, 1989 

ED SMITH 

Clerk 
Mr. Justice L. C. Gulbrandson delivered the Opinion of the 

Court. 

This case involves a petition for assumption of 

original jurisdiction filed pursuant to Rule 17, M.R.App.P. 

Petitioners seek a declaratorv judgment declaring the Montana 

Resource Indemnity Trust Act (1973), (the Act), 

unconstitutional, insofar as it authorizes the expenditure of 

Resource Indemnity Trust (Trust) funds for purposes other 

than the reclamation of lands disturbed by the takinq of 

natural resources. Petitioners also challenge the 

constitutionality of respondents1 acts in appropriating and 

expending Trust funds for purposes other than reclamation of 

lands and contend such acts are a breach of respondents1 

fiduciary duties as trustees of the Trust under 

5 15-38-203 (2), MCA. We accept the case on original 

jurisdiction, but find the Act is constitutional and that 

respondents1 expenditures of Trust funds were authorized 

under the Act. 

The Butte-Silver Bow Local Government (Butte-Silver 

Bow) filed its "Petition for Declaratory Judgment on Original 

Jurisdiction1' with the Montana Supreme Court on June 13, 

1986. The petition relies on Art. IX, sec. 2 as the 

constitutional basis for its claim. On July 30, 1986, 

petitioners Butte-Silver Bow sought leave to amend its 

petition to include several individuals who would "suffer 

serious adverse impacts in their environmental and aesthetic 

well-being and quality of life if proper reclamation is not 

undertaken in the City of Butte." Robert J. Pavlovich, Fritz 

Daily, and Don R. Peoples were added "in their individual 

capacities as citizens, residents, electors, and taxpayers of 

Butte-Silver Bow Local Government." 
After review of the briefs submitted, this Court 

remanded the action to Montana's First Judicial District 

Court, Lewis and Clark County, for determination of factual 

issues. Particularly, this Court requested the District 

Court to prepare findings of fact "as to the use and 

expenditures made of monies derived from the Resource 

Indemnity Trust Fund, through its interest earnings by the 

various governmental agencies under the appropriations of the 

T,egislature." The case is back before this Court upon the 

agreed findings of fact of the parties adopted bv the 

District Court. 

Petitioners raise the following issues to this Court: 

1. Do the petitioners have standj-ng and should this 

Court assume original jurisdiction' 

2. Is the Montana Resource Indemnity Trust Act, 

S 15-38-101, et seq., MCA, unconstitutional for authorizing 

the appropriation and expenditure of Trust funds for purposes 

other than reclamation of lands? 

3. Have respondents violated their fiduciary duties as 

trustees by using Trust funds for purposes other than the 

reclamation of lands? 

4. Have respondents used Trust funds for general 

agency operating expenses in violation of S 15-38-203(2), 

MCA? 

5. Are petitioners entitled to attorney's fees under 

the common fund theory? 

I. 

Should original jurisdiction be granted? 

Petitioners' standing to bring this action is essential 

to the question of our acceptance of original jurisdiction. 

This Court has previously held a registered voter has 

standing where a constitutional provision is clearly intended 

to benefit the public and the electorate, and by contending 
the provision "has been the victim of legislative 

strangulation." Committee for an Effective Judiciary v. 

State (1984), 209 Mont. 105, 108, 679 P.2d 1223, 1225. 

Further, a taxpayer will have standing to question the 

validity of a tax, or the expenditure of the tax monies, 

provided the issue (s) presented directly affect the 

constitutional validity to collect or use the proceeds of the 

tax by the state or a local government entity. Grossman v. 

State, Dept. Natural Resources (1984), 209 Mont. 427, 

438-439, 682 P.2d 1319, 1325. Individual petitioners meet 

the criteria necessary to establish standing both as 

registered voters and as affected taxpayers. Having found 

the individual petitioners have standing, we decline to 

address the question of petitioner Butte-Silver Row's 

standing. 

Once standing to bring the action is established, the 

question shifts to whether the action meets the necessary 

factors for this Court to accept original jurisdiction. This 

Court has found that an assumption of original jurisdiction 

is proper when: (1) constitutional issues of major state wide 

importance are involved; (2) the case involves pure legal 

questions of statutory and constitutional construction; and 

(3) urgency and emergency factors exist making the normal 

appeal process inadequate. State ex rel. Greely v. Water 

Court, State of Montana (1984), 214 Mont. 143, 691 P.2d 833; 

Rule 12, M.R.App.P. Moreover, this Court clearly stated the 

Court has original jurisdiction to accept declaratory 

judgment proceedings "where the issues have impact of major 

importance on a statewide basis, or upon a major segment of 

the state, and where the purpose of the declaratory judgment 

proceedings will serve the office of a writ provided by law 

. . ." Grossman v. State, Dept. of Natural Resources (1984), 

309 Mont. 427, 436, 682 P.?d 1319, 1324. 
This petition involves a constitutional issue of major 

statewide importance. Petitioners are seeking an 

interpretation by this Court of a section of the 

Constitution, of a major act passed by the Legislature and a 

determination of the existence or absence of conflicts 

between the two. A decision in the petitioners' favor 

clearly would have a major impact on the Legislature's 

funding of a variety of state programs. 

Additionally, this petition involves only legal 

questions. All factual questions involving the disposition 

of Trust monies, have been adequately addressed in the 

District Court's findings of fact. The Court must determine 

the legal question of the purposes for which trust funds may 

or may not be utilized, and then may examine whether the 

appropriations made by the Legislature were authorized. 

Regarding the question of whether or not this case 

presents sufficient urgency and emergency factors to require 

the Court to exercise original jurisdiction, this Court has 

stated: 

Resolution of the issues presented herein 

is necessary to eliminate or reduce a 

multiplicity of future litigation; . . . and to eliminate needless 

expenditure of public funds on procedures 

that otherwise might subsequently be 

declared illegal. One of the basic 

purposes of the Montana Declaratory 

Judgment Act is to provide for advance 

determination of such issues, thereby 

eliminating these otherwise detrimental 

results. 

Grossman, 682 P.2d at 1322, citing Forty-Second Legislative 

Assembly v. Lennon (1971), 156 Mont. 416, 420-422, 481 P.2d 

330, 332-333. In light of the fact that the Legislature 

convened on January 2, 1989, and it will undoubtedly fund 

programs from the trust income which may or may not be 
determined constitutional by this opinion, sufficient urgency 

and emergency exists for exercising original jurisdiction. 

Having found that petitioners have standing and that 

the petition satisfies the three required factors, we assume 

original jurisdiction. 

Petitioners' advance three arguments on the issue of 

whether or not the Montana Resource Indemnity Trust Act of 

1973 violates Art. IX, sec. 2 of the 1972 Montana 

Constitution. First, petitioners allege that the plain 

language of Art. IX, sec. 2, provides the Trust fund shal-1 

only be used for the reclamation of lands disturbed by the 

taking of natural resources. Second, by placing the 

amendments authorizing the Trust in Art. IX, sec. 2, the 

people of the state of Montana have shown their intent that 

use of the Trust funds be limited to reclamation of such 

disturbed lands. Third, the Legislative history shows an 

intent to limit Art. IX, sec. 2, to reclamation of lands 

disturbed by the removal of natural resources. 

When interpreting a constitutional provision, certain 

tenets must be observed. The same rules of construction 

which apply to determining the meaning of statutorv 

provisions apply to constitutional provisions. Keller v. 

Smith (1976) , 170 Mont. 399, 404, 553 P. 2d 1002, 1006. The 

intent of the framers of the provision is controlling. 

Keller, 553 P.2d at 1006. However, 

[Sluch intent shall first he determined 

from the plain meaning of the words used, 

if possible, and if the intent can be so 

determined, the courts may go no further 

and apply any other means of 

interpretation. (Citations omitted. ) 
Keller, 553 P.2d at 1006. We therefore must decide whether 

the plain language of Art. IX, sec. 2 clearly provides the 

trust fund shall only be used for the reclamation of lands 

disturbed by the taking of natural resources, or whether the 

provision is ambiguous and in need of additional 

interpretation. If the State Constitution does not provide 

an express limitation on the legislative appropriation power 

of the State, that power shall reside in the Legislature. 

Board of Regents of Higher Education IT. Judge (19751, 168 

Mont. 433, 446, 543 P.2d 1323, 1331. 

The plain language of Art. IX, sec. 2 (1) , which is the 

reclamation section within the larger Environment and Natural 

Resources Article, states: 

All lands disturbed by the taking of 

natural resources shall be reclaimed. 

The legislature shall provide effective 

requirements and standards for the 

reclamation of lands disturbed. 

Subsection (1) is a statement by the framers of the 

Constitution that "[all1 lands disturbed by the taking of 

natural resources shall be reclaimed" and that the 

Legislature is directed to provide regulations and standards 

for that reclamation. This subsection does not mention the 

Trust or place any limitation upon use of Trust funds. 

Additional subsections were added to sec. 2 by 

Constitutional amendment in 1974 (following the 1973 

legislative enactment of the Montana Resources Indemnity 

Trust Act). Subsections (2) and (3) were passed to assure 

the constitutional protection of this Trust and to preserve 

the Trust for its intended purpose. They state: 

(2) The legislature shall provide for a 

fund, to be known as the resource 

indemnity trust of the state of Montana, 

to be funded by such taxes on the 

extraction of natural resources as the 
legislature may from time to time impose 

for that purpose. 

(3) The principal of the resource 

indemnity trust shall forever remain 

inviolate in an amount of one hundred 

million dollars ($100,000,000) , guaranteed by the state against loss or 

diversion. 

We do not find a limitation in subsection (2) which 

would restrict the use of Trust funds to reclamation of 

lands. The subsection creates the Trust, titles the Trust 

and pro~rides a source of funding for the Trust. We note that 

the Trust is not titled the Reclamation of Lands Indemnity 

Trust nor the Mining Lands Indemnity Trust, but the Resource 

Indemni-ty Trust. As words must be given their natural and 

popular meaning in applying statutory construction, we note 

that Websters 3rd New International Dictionary defines 

resource as "a new or a reserve source of supply or support: 

a fresh or additional stock or store available at need: 

something in reserve or ready if needed." This definition is 

very broad and indicates an intent on the part of the framers 

of the provision to have the Trust indemnify the people of 

the state for the taking or using of - any resource. 

Examining subsection (3), we find a limitation upon the 

use of the Trust in clear and unambiguous words. However, 

this limitation merely protects the principal of the Trust 

from future invasion by the Legislature. This provision may 

not be construed as a limitation on the use of Trust income, 

nor of the use of Trust principal over and above the 

$100,000,000 protected by subsection (3). 

Appellants claim that the inclusion of subsections (2) 

and (3) in sec. 2 shows an intent to use the Trust strictly 

for the purpose of reclamation of lands disturbed by the 

takinq of natural resources as provided in subsection (1). 
They contend the use of the words "for that purpose" in 

subsection (2) refers back to subsection (1) and the purpose 

stated therein of reclamation of lands disturbed. 

Respondents correctly point out that petitioners' argument 

ignores a basic rule of grammatical construction: "[tlhe 

ordinary rule of construction is that the exception is 

confined to the last antecedent." (Emphasis added.) State 

ex rel. Hinz v. Moody (1924), 71 Mont. 473, 484, 230 P. 575, 

579. The last antecedent phrase in subsection (2) is the 

funding of the Trust, not the reclamation of disturbed lands 

found in subsection (1) . Further, the Constitution as a whole does not support a 

finding of a Trust fund limitation in Art. IX, sec. 2 of the 

1972 Montana Constitution. At no other place in the 

Constitution is a limitation placed upon the appropriation of 

the funds of this Trust. Where a limitation on certain, 

specific revenues is intended in other sections in the 

Constitution, that limitation is clearly spelled out. See, 

e.g., Art. IX, sec. 5 (relating to the coal severance tax 

trust fund) ; and Art. VIII, sec. 6 (relating to the 

non-diversion of highway revenues). 

For the foregoing reasons we hold the plain language of 

Art. IX, sec. 2 does not place a limitation upon the 

appropriation of resource indemnity trust funds beyond the 

restriction contained in subsection (3). Having so 

determined we may not apply other means of statutory 

construction. Keller, 553 P.2d at 1006. 

As Art. IX, sec. 2 of the 1972 Montana Constitution 

does not restrict appropriation of Trust funds beyond the 

limitation contained in subsection (3), we now turn to 

petitioners' third and fourth issues. 
Petitioners first argue that respondents, as trustees 

of the Trust, have violated their fiduciarv duties as 

trustees by allocating Trust funds for projects unrelated to 

the reclamation of lands disturbed by the taking of natural 

resources. We held that the plain language of the 1972 

Montana Constitution does not so limit the appropriation or 

allocation of Trust funds, and we need only discuss whether 

the Montana Resource Indemnity Trust Act, Title 15, Chapter 

38, contains such a limitation on the use of funds. 

Our examination of the Act finds the appropriation or 

allocation of Trust funds is not limited to the reclamation 

of lands disturbed by the taking of natural resources. 

Rather, the Legislature has provided the funds "shall be used 

and expended to improve the total environment and rectifv 

damage thereto." Section 15-38-203 (1) , MCA. "Total 

environment" has been defined as "air, water, soil, flora and 

fauna and the social, economic, and cultural conditions that 

influence communities and individual citizens." Section 

15-38-103 (4), MCA. It is indisputable this purpose is very 

broad and allows the Legislature great discretion in 

determining the uses to which to apply Trust funds. The Act 

onlv limits appropriations to programs or uses which improve 

the total environment and rectify damage thereto, as total 

environment is defined in S 15-38-103(4), MCA. We find no 

express limitation contained within the Act which would limit 

appropriation or allocation of Trust funds solely for 

reclamation of lands disturbed by the taking of natural 

resources. 

Petitioners also contend past and present expenditures 

have been made of Trust funds for general operating expenses 

of state agencies in violation of the express limitations in 

5 15-38-203(2), MCA, and in breach of their fiduciary duties 

as trustees of the Trust. Section 15-38-203(2), MCA, states: 
It is the intent of the legislature that 

future appropriations from the resource 

indemnity trust interest account not be 

made to fund general operating expenses 

of state agencies. 

Initially we note that this subsection, added by the 1985 

Legislature, specifically applies to "future appropriations." 

For that reason we find there could not have been a breach of 

fiduciary duty prior to the effective date of the statute. 

Further, the Legislature generally cannot pass legislation 

which a future Legislature may not repeal. State v. State 

Highway Commission (1931), 89 Mont. 205, 215, 296 P. 1033, 

1036. 

Upon examination of the specific violations alleged by 

petitioners, we find a problem of semantics. Petitioners 

identify appropriations made to the Department of State 

Lands, (DSL) the Department of Livestock, and the Department 

of Natural Resources in the 1987 biennium, as having been 

made for general operating expenses. We find it ironic that 

one of the expenditures, alleged as having been for "general 

operations," was for the reclamation division of the DSL in 

1986. The funding for the reclamation division was provided 

in total by Trust funds and federal funds allocated for 

similar use. The division is responsible for regulating 

mining related disturbances in the state and enforcing the 

following acts: the Metal Mine Reclamation Act, the Open Cut 

Mining Act, the Montana Strip and Underground Mine 

Reclamation Act, and the Underground Mine Siting Act. The 

activities conducted by the division are admittedly 

administrative in nature, but are essential to ensuring that 

the total environment of the state is improved and damage 

thereto is rectified. The argument that Trust funds 

allocated toward operation of these programs is in violation 

of 5 15-38-203 (2), MCA, is without merit. In each case, the 
State has shown the funds were expended for the operation of 

programs related to improving the total environment or 

rectifying damage thereto. 

The allocation of Trust funds for these programs did 

not constitute an expenditure for general operating expenses 

of state agencies in violation of 5 15-38-203(2), MCA. 

Consequently, we hold the use of funds for programs related 

to improving the total environment does not violate 

respondents' fiduciary duty toward the Trust in allocating 

Trust funds. Having found petitioners are not entitled to 

relief, petitioners ' claim for attorney's fees must be, and 

hereby is denied. 

We concur: 

/' 

Justi e P 

Justices 
Mr. Justice John C. Sheehy, dissenting: 

This decision continues what has become a commonplace in 

the history of the state of Montana: the State gets the gold 

mine, Butte gets the shaft. 

The decision is about as farfetched a stretch of 

interpretation of a constitutional provision as can be 

imagined. The State Constitution requires that lands 

disturbed by the taking of natural resources shall he 

reclaimed. The Constitution further provides for a special 

fund to be created based solelv on the extraction of natural 

resources. Somehow, semantically, the majority find no nexus 

between the two provisions, all contained in the same 

constitutional article. 

The close tailoring of the tax on the extraction of 

natural resources to the constitutional mandate that all 

lands disturbed by the taking of natural resources be 

reclaimed is ignored. Somehow the obvious connection between 

the tax and the purpose of the tax escapes the facile 

interpretation of the majority. 

In their response to the petition, the state of Montana 

and its Treasurer admitted that the 1985 legislature 

"utilized a portion of the interest income from the Resource 

Indemnity Trust. fund to fund general operating expenses of 

state agencies." (Paragraph 11, response to amended 

petition.) Yet the majority see nothing inconsistent in 

permitting the State to fund its general operating expenses 

from a fund constitutionally entitled "Resource Indemnits 

Trust. " A trust by any other name remains a trust, and a 

breach of trust by the State should no more be countenanced 

b~r this Court than hy any prtvate trustee. 
The Resource Indemnity Trust was never intended to fund 

the general operations of the State. Other taxes levied upon 

extractors of natural resources amply provide for the general 

expenses of state government. The coal severance tax 

(Section 15-35-103, MCA) is partly credited to the general 

fund of the State. (Section 15-35-108 (3) (k) , MCA.) The oil 

and gas severance tax (Section 15-36-101, MCA) is allocated 

to county expenses and then to the general fund. Section 

15-36-112, MCA. The mining license taxes levied on 

metalliferous mines (Section 15-37-103, MCA) goes partly to 

the credit of the general fund of the State. Section 

15-37-117, MCA. The taxes on micaceous mineral mines all go 

to the general fund of the State. Section 15-37-207, MCA. 

The Resource Indemnity Trust Tax, as a special tax levied for 

land reclamation, cannot be justified if some of that tax is 

going to be siphoned off for the general operations of the 

State. To permit such extraneous use of the tax funds 

violates the legislative purpose given as the excuse for 

levying the tax. That legislative purpose follows: 

It is the policy of the state of Montana to 

indemnify its citizens for the loss of long term 

value resulting from the depletion of its mineral. 

resource base and for environmental damage caused 

by mineral development. This policy of 

indemnification is achieved by establishing a 

permanent Resource Indemnity Trust Fund from the 

proceeds of a tax levied on mineral extraction and 

by allocating spendable trust revenues: 

(1) To protect and restore the environment from 

damages resulting from mineral development; and 

(2) To support a variety of development programs 

that benefit the economy of the State and the lives 

of Montana citizens. 

How blatant will t.he extraneous use of Resource 

Indemni ty Trust taxes become? To begin with, 30 percent. of 
the interest income of the Resource Indemnity Trust Fund must 

now be allocated to the water development state special 

revenue account. Section 15-38-202 (2) (a), MCA. Out of that 

account, the taxes imposed on the extraction of natural 

resources will be used for the rehabilitation of State owned 

projects and parks, including the rehabilitation of spillways 

and State owned dams; the formulation of down stream 

emergency warning and evacuation plans for state-owned dams; 

the development of hydropower potential of state-owned dams; 

the promotion and development of off-stream or tributaries 

storage; and among others, administrative expenses, including 

but not limited to the salaries and expenses of personnel, 

equipment, office space and other necessities incurred in the 

administration of the water development program. Section 

85-1-604 (3) (b) , MCA. 

The preservation and proper use of water is necessary to 

the well-being of this dry western state, but the expense of 

such preservation should never be fohbed off on a tax levied 

solely on mines and oil and gas operations, a tax ostensib1.v 

levied for the purpose of land reclamation. 

1 take the position that since land reclamation is 

constitutionally demanded, and since the Constitution 

provides a method through the Resource Indemnity Trust Fund 

to pay for such reclamation, that monies raised from taxes on 

parties who extract the natural resources should be limited 

to the purposes of the tax. The legislature, by resorting to 

special tax funds to provide for general fund obligations is 

creating an unequal and unfair burden on these special 

taxpayers and we should not countenance it. 

T concur in the foregoing d's nt of Justice Sheehy. P