No. 90-416 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

THE MONTANA DEPARTMENT 

OF REVENUE, 

Petitioner, 

PATRICIA C. BARRON, and 

the STATE TAX APPEAL BOARD, 

Respondents. 

ORIGINAL PROCEEDING: 

COUNSEL OF RECORD: 

For Petitioner: 

David W. Woodgerd, Chief Legal Counsel, Geralyn 

Driscoll, Tax Counsel, Department of Revenue, 

Helena, Montana 

For Respondents: 

J. Vaughn Barron, Great Falls, Montana; State 

Tax Appeal Board, Helena, Montana; Charles A. 

Smith, Attorney for STAB, Helena, Montana; 

Filed: 

submitted: September 7, 1990 

Decided: October 12, 1990 
Justice John C. Sheehy delivered the Opinion of the Court. 

On September 11, 1990, this Court in this cause handed down 

a temporary order declaring that the application by the Department 

of Revenue of the stratified sales assessment ratio study in Area 

2.1 (Great Falls Downtown) to the valuation of Patricia C. Barron's 

property was invalid for reasons to be later explained; we ordered 

that for all other properties in the state to which the 

Department's stratified sales assessment ratio studies for tax year 

1990 had been applied, except for those instances now pending on 

appeal or properly appealed by the property owners, the effective 

date and application of our temporary order was prospectively 

continued until December 31, 1990; and we reserved for future 

decision the proper valuation of the property of Patricia C. 

Barron. 

The effect of the prospective stay in the Order of September 

11, 1990, is that as to all property affected by the stratified 

sales assessment ratio studies except for those stated in the 

Order, the appraised values for property tax purposes for the tax 

year 1990 shall be those found and applied by the Montana 

Department of Revenue (DOR) under said studies. 

Under our state constitutional duty to pronounce our decisions 

in writing (Art. VII, 5 3, 1972 Mont. Const.), as an aid to the 

legislature in its future enactments and by way of explanation to 

affected Montana taxpayers, we come now to make permanent the 

provisions of our temporary order and to set out the facts and 

conclusions which form the basis for the temporary order. 

2 
This is an original proceeding in this Court brought by the 

DOR which petitioned for a writ of review, a writ of supervisory 

control, or other appropriate emergency writ for relief from an 

order of STAB dated August 3, 1990. In that order, STAB had 

concluded, upon the protest of Patricia C. Barron, that the DORIS 

implementation of 55 15-7-111(4)(8), MCA, was unconstitutional. 

(STAB contended here that it did not find the implementation 

unconstitutional, but only that a court would find it 

unconstitutional.) DORIS petition pointed to imminent statutory 

deadlines in the property tax collection process which created an 

emergency situation and said that a prompt ruling from this Court 

was necessary to end the uncertainty. DOR contended that no other 

adequate remedy existed that was speedy enough and that irreparable 

harm to taxpayers and governmental entities would occur if the 

controversy was not resewed well in advance of the issuance of tax 

notices that had to be mailed by October 25, 1990. 

On receipt of DORIS application, we ordered that we would 

treat the proceedings as one for declaratory relief under Ch. 8, 

Title 27, MCA, obtain a response from the respondents, and set an 

oral argument date. Responses were filed and served, oral argument 

was had, and thereafter, on consideration, we issued a temporary 

order to which we have above adverted. 

OVERVIEW 

The Montana Constitution provides that the state shall 

appraise, assess, and equalize the valuation of all property which 

is to be taxed in a manner provided by law (Art. VIII, § 3). The 
state must establish the assessed valuations (Art. VIII, 5 4) and 

the legislature must provide independent appeal procedures for 

taxpayer grievances, appraisals, assessments, equalization and 

taxes, with a review procedure at the local government unit level 

(Art. VIII, 5 7). 

To implement the constitutional provisions, the legislature 

provided for property appraisals in Ch. 7, Title 15, MCA. In 1975, 

a scheme was adopted whereby the state would evaluate under a 

comprehensive reappraisal plan all taxable property in the state 

at least every five years. The DOR was required to adopt a plan 

so that all property in each county was revalued at least every 

five years or that no less than 20% of the property in each county 

was revalued each year. Section 15-7-111, MCA (1987). 

The current five-year cycle for reappraisal began in 1986. 

The legislature extended that cycle period in 1989 for an 

additional two years, to end December 31, 1992, and postponed the 

commencement of another five year revaluation cycle until January 

1, 1993. Section 15-7-133, MCA. The DOR was given an additional 

two years to complete the current revaluation cycle. Section 15- 

7-132, MCA. 

In the last two legislative sessions, however, the legislature 

substantially amended the revaluation cycle. Ch. 613, Laws of 

Montana (1987) ; Ch. 636, Laws of Montana (1989). While keeping 

the five-year provision in effect, it provided in amended 5 15-7- 

111, MCA, that for every taxable year beginning January 1, 1990, 

and each taxable year thereafter, the DOR is to conduct a 
"stratified sales assessment ratio studyff of all residential land 

and improvements (and other property not pertinent here). Under 

the amendment, the DOR was to partition the State into as many as 

100 areas of residential property, and as many as 20 of commercial 

property. The areas in each are to be separately studied. Under 

the study, the actual sales prices of real property parcels sold 

for three taxable years prior to the study were compared with their 

appraised values then in effect, and a ratio determined. If the 

average appraised values of the properties in the study, compared 

to the average of the actual sales amounts were less than 95% or 

more than 105%, the assessments for each stratum within each area 

were to be rescaled to bring all ratios to common value 1. 

The criteria for establishing the residential areas were that 

they should contain statistically sufficient numbers of sales and 

be as economically and demographically homogenous as practicable. 

Section 15-7-111(6), MCA. For tax year 1990, the DOR established 

47 residential areas in the state, of which Area 2.1 (Great Falls 

Downtown) was one. 

Criteria for obtaining statistically valid samples of sales 

in each area were also set out in the 1989 amendment. It is enough 

to say that only armfs-length sales were to be considered in the 

ratio study. The sales of remodeled residences were not to be 

considered and sales which showed assessment ratios of less than 

50% or greater than 200% were to be excluded. 

If the result of the study in each area produced sales 

assessment ratios of less than minus 5% of common value 1, or 
greater than plus 5% of common value 1, then all of the assessments 

in the area were to be adjusted to bring the ratios to common value 

1. Section 15-7-111 (8) (a) , MCA. If the ratio for any area was 

within plus or minus 5% of the common value 1, then the assessments 

in the area were considered equalized and no rescaling was 

necessary. Section 15-7-111(8)(c), MCA. 

The legislature required the sales assessment ratio studies 

to commence for the taxable years beginning January 1, 1990, and 

for every taxable year thereafter and further provided that the 

ratio so determined vtmust be used to determine appraisals for the 

immediately succeeding tax year." Section 15-7-111(4), MCA. 

FACTS 

Patricia C. Barron is the owner of a residence in Great Falls, 

Cascade County, Montana. Her property is in an area designated by 

the DOR as Area 2.1. Prior to 1990, the Barron property was 

appraised by the DOR at a total value of $28,019 for land and 

improvements. The DOR conducted a "stratified sales assessment 

ratio studyu in that area for taxable year 1990. It used a sample 

of 243 actual sales. It found therefrom an average sales price 

of $39,545 and an average appraised value of $29,310. The DOR 

determined that the weighed mean ratio of the figures was 0.7412, 

which required an adjustment factor of plus 30% The appraised 

value of Patricia C. Barronts residence was therefore fixed at a 

total of $40,325. 

Barron appealed to the County Tax Appeal Board on these 

grounds : 
Through H.B. 703, an arbitrary 30% increase was imposed 

on my house. Such an arbitrary increase does not address 

the mandate of Art. VIII, 5 3 of the Constitution that 

the State equalize the valuation of all property and is 

therefore unconstitutional. 

The appeal was denied by the County Tax Appeal Board for the 

reason that I1The Board was informed that an error was found and 

that the necessary adjustment would be made by the DOR of Revenue." 

Patricia C. Barron appealed to STAB, again on the same 

grounds. 

STAB made findings of fact and conclusions of law on August 

3, 1990, relating to the appeal. Pertinent to the findings are 

these: 

The testimony indicatedthat approximately 1,000 of these 

sales were chosen for Cascade County and that 243 sales 

were analyzed and used to determine that the properties 

located in Area 2.1 were underappraised by 30 percent. 

The pertinent conclusion of law with respect to this case made 

by STAB is found in paragraph 1. It includes: 

It is the opinion of this Board that the taxpayer did not 

satisfactorily challenge the DORIS constitutional 

authority to appraise, assess, or equalize property 

values. The DOR clearly has that authority and is 

affirmed by the Montana Supreme Court in DOR of Revenue 

v. Countrvside Villase, 205 Mont. 51 (1983) ; Hanley v. 

DOR of Revenue, 207 Mont. 302 (1983). However, along 

with that authority goes the duty, and the requirement, 

to equalize property values throughout an area, county 

to county, and statewide. It is clear to this Board from 

the evidence and testimony provided that, for Area 2.1 

at least, this has not been achieved. (Emphasis in 

original.) 

STAB then went on to examine the results of the application 

of the 30% adjustment. Whereas before the adjustment, 40 of the 

243 properties were overappraised and 203 were underappraised, 
after the adjustment, 102 properties were overappraised in 

comparison with their sales price, and 141 underappraised. STAB 

pointed to the Barron property, saying that even after the 30% 

correction was applied, the appellant's property was still 

appraised at only 51% of its purchase price which was $75,000. 

STAB then went on to analyze the results and eventually 

decided that Patricia C. Barronls property should be assessed at 

$75,000. It determined that DOR had failed to perform its 

constitutional mandate of equalization within Area 2.1 under the 

implementation of H.B. 703 and further concluded that based on the 

evidence presented, "the Board believes that the District Court 

would very likely rule that the implementation of H.B. 703 is 

unconstitutional, only for the reason stated above, that 

equalization within a specified area, has not been achieved." (H.B. 

703 became Ch. 636, Laws of Montana (1989).) 

Based on the determination made by STAB in Patricia C. 

Barronls case, the DOR commenced the original proceeding in this 

Court. 

DISCUSSION 

We have no issue of whether we should accept jurisdiction, 

since we have decided to treat the matter as an original 

proceeding for declaratory judgment. 

The issue for us to decide is the constitutionality of the 

appraisal method as applied to this case. 

The DOR supports the constitutionality of the amendments to 

5 15-7-111, MCA, which provides for the stratified sales assessment 
ratio study. It contends that the purposes of the amendments were 

to adjust current appraised values rather than to reappraise 

property; to achieve equalization between areas in the state; to 

change appraisal values during the 5-year cycle; and pursuant to 

the amendments to 5 15-7-111, to adopt administrative rules 

establishing the areas, and the methods of achieving the ratios, 

subject to administrative and judicial review. The DOR argues the 

taxpayer here is not in a position now to object to the adjustment 

to her appraisal. 

The DOR further contends that STAB has no power to declare an 

administrative rule or a statute unconstitutional. 

Patricia C. Barron contends that STAB was correct in 

determining that the implementation of H.B. 703 was 

unconstitutional as applied to her property but that STAB further 

erred in appraising her property at $75,000, as her right to 

constitutional equalization has thereby been violated. She argues 

that equalization is not achieved by the DORIS method of 

revaluation in breaking the county down into neighborhoods and 

applying different adjustments to different neighborhoods. She 

contends that the method of appraisal used in the five-year cycle 

is the only proper one to be used and that the method used by the 

DOR in fixing her 1990 appraised value does not achieve 

equalization. 

STAB has responded that it did not declare that the method 

used by the DOR was unconstitutional, but merely said that it 

believed that a district court would find the implementation of 
the appraisal unconstitutional. Since STAB'S findings of fact were 

not disputed by the DOR, its findings must be considered agreed to 

and not subject to further argument. STAB contends that the net 

result to the DOR1s adjustment to Area 2.1 is that there are now 

more properties overappraised and fewer underappraised than before 

the adjustment. u his means that 100% of the 243 properties are 

still not appraised at market value after the application of the 

implementation. 

STAB attacks the methodology used by the DOR in reaching the 

ratio. Cascade County has 40,699 improvements to real property; 

the DOR found 1,057 acceptable sales in the County or 2.6% of the 

total improvements in the County. There is no indication that this 

is a representative sample relating to age, condition, size, 

design, construction materials, location, utilities, city or county 

services, or other factors that determine value. STAB further 

contends that the appraisal values are not closer to market value 

as a result of the implementation and there is no evidence that the 

study brings the appraised property within the range of equality 

and market value. 

As an additional issue, STAB points out that the amendment to 

9 15-7-102 (6), MCA, now provides that a property owner may not 

appeal the yearly adjustments specified in 5 15-7-111, MCA, that 

may be made as a result of the sales assessment ratio studies. 

Since there is no savings clause in Ch. 636, Laws of Montana 

(1989) , H. B. 703, if the appeal provision is unconstitutional, STAB 

says that the whole of the legislation should fail. 
Like the policeman in the Pirates Of Penzance, taking one 

consideration with another, the DORIS lot in property tax appraisal 

is not a happy one. Hampered by inadequate staff and funds, its 

task of individual appraisal of properties is almost impossible in 

any annual revision. The legislature itself is strapped in 

providing staff and additional funds. Yet, if our conclusions here 

are properly drawn and if we have a truly representative sample, 

property tax appraisals in Area 2.1 are seriously out of whack. 

We are working, of course, with a fore-shortened record. We 

have before us 243 actual sales which fall within the parameters 

set up by the legislature. Other sales in that area are excluded. 

We are not told how many residential properties in total are to be 

found in Area 2.1. We assume, therefore, that because the 

legislature required it (5 15-7-111 (5) (b) , MCA) , and because it was 

not contested before STAB, that the 243 sales are a statistically 

valid sample, and that they truly represent the status of all tax 

appraisals in Area 2.1, before and after the application of the 

adjustment of 30% under the study conducted by the DOR. 

One of the exhibits in the record before STAB was the DOR 

report containing the results of all stratified sales assessment 

ratio studies done in Area 2.1, required to be published by the 

DOR under 5 15-7-111(7)(b), MCA. That report includes all of the 

243 sales relied on by the DOR. Shown on the report are the 

appraised values as of 1989, the sales price for the individual 

properties and the ratio, for each sale, of the sales price over 

the 1989 appraised value. It was by averaging all of the appraised 
values for the 243 parcels and averaging all of the sales prices 

for the same parcels, that the DOR determined that a 30% adjustment 

upward to the appraised values in Area 2.1 was necessary. Based 

on this determination, every residential property in Area 2.1, 

including those in the 243 sales, were raised by that percentage. 

STAB produced for us the effect of the 30% increase on each 

of the 243 sales. The following are some samples taken from that 

exhibit: 
Samples of effect on residential appraised 

values used in Area 2.1 Analysis 

1989 Sale 

Appraised Value Price 

1990 

Adjusted 

Ratio A~praised Value 

(The first three samples were at the top of the overappraised 

scale; the middle three samples were appraised approximately at 

their sales value; the last three samples are at the bottom of the 

underappraised scale.) 

It may be demonstrated by the above samples that equalization 

is not achieved by the application of the 30% factor but rather 

that any inequality of appraisal is exacerbated by the factor. 

For example, the first property, which sold for $24,000 in 1989 but 

was appraised for $46,497 is now assessed after the application of 

the factor, at $61,346. That same property was overappraised in 

relation to its sales price at 193% before the application of the 

factor, but is overappraised 255% after its application. 

Examples of unfairness are demonstrated by those properties 

which were in 1989 appraised at or near their actual sales value. 

The property whose sales price was $100,000 but was appraised at 

$101,947 was 100.9% overappraised in 1989, but will be 132% 

overappraised in 1990. 
Strangely, the underappraised properties fare better in 

comparison to others when the 30% factor is applied. The last 

property, whose sales price was $42,600, was appraised at $21,386, 

or at 50% of its value. After the application of the 30% factor, 

the increase in its appraised value results only in the figure of 

65% of its actual sales price. 

We determine, therefore, from the record that the methodology 

prescribed by the legislature and implemented by the DOR for yearly 

equalization between areas unfairly discriminates against property 

taxpayers in Area 2.1 whose properties in 1989 were appraised at 

or above their market values. 

If, as we are led to believe, the area study is statistically 

sound, the remainder of residential properties in Area 2.1 beyond 

the 243 parcels here studied must have the same resulting 

unfairness in the same proportions. Therefore, all residential 

properties in Area 2.1 which in 1989 were assessed or appraised at 

or above their true market values are unfairly discriminated 

against by the application of the 30% factor to the 1989 appraised 

values. 

Discriminatory unfairness is countermanded by state 

constitutional and statutory provisions. The state is required to 

appraise property for tax purposes and to equalize the valuations 

of all property to be taxed. (Art. VIII, 5 3). All taxable 

property in the state is to be assessed at 100% of its market 

value. Section 15-8-111(1), MCA. The DOR is required to adjust 

and equalize the valuations of taxable property among the several 
counties and the different classes of taxable property in any 

county and in the several counties between individual taxpayers. 

Section 15-9-101(1), MCA. For purposes of taxation, assessed value 

is the same as appraised value, and with certain exceptions, 

property is assessed at 100% of its market value; market value is 

defined as the value at which property would change hands between 

a willing buyer and a willing seller, neither being under any 

compulsion to buy or sell and both having reasonable knowledge of 

relevant facts. Sections 15-8-111(1) (2) (a), and (4), MCA. The DOR 

and its agents may not adopt a lower or different standard of value 

from market value in making official assessments or appraisals of 

the value of property unless within certain exceptions set forth 

in 5 15-8-111 (3), MCA. 

In Patterson v. State DOR of Revenue (1976) , 171 Mont. 168, 

557 P.2d 798, this Court held valid the statutory plan for the 

five-year reappraisal cycle. The decision was based on features 

of the plan in that all like property was to be appraised by a 

uniform standard according to uniform valuation procedures set 

forth in the same designated appraisal manual. The appraisal 

rotation was fixed by a uniform rule requiring the property that 

had gone longest since appraisal and was deemed to be the most 

devious from current values to be appraised first. The Patterson 

decision was based on a plan which allowed counties to reappraise 

20% of the properties every year during the five-year cycle. That 

provision was eliminated by the legislature in its 1989 enactment 
and the yearly changes in individual valuations are now based on 

studies conducted under the stratified sales assessment ratio 

theory. 

However, in Patterson, it was held that the placing of 

revaluations on the tax rolls annually and sequentially as the 

reappraisals are completed, which resulted in temporary inequities, 

did not offend the constitutional equal protection and uniformity 

requirements in the absence of intentional and systematic 

discrimination, constructive fraud, or arbitrary action. 

Patterson, 

In Larson v. State and DOR of Revenue (1975), 166 Mont. 449, 

534 P.2d 854, we had a case where the DOR had assumed its new 

responsibilities under the 1973 legislative acts for statewide 

appraisal, but the DOR had determined to use a county-financed 

appraisal (called the Laird appraisal) for 1974 Lewis and Clark 

County assessments. The District Court had found that the real 

estate appraisals under the Laird procedure were not conducted as 

a part of a uniform plan for appraisal within the state of Montana, 

and that the appraisals were not equalized with other counties in 

the state. The ~istrict Court held that the use of the Laird 

appraisal was unconstitutional, and the case came to this Court on 

appeal. In upholding the decision of the ~istrict Court that the 

use of the Laird appraisal was unconstitutional, this Court stated: 

Accepting as facts the absence of a state-wide appraisal 

plan and the disproportionate appraisal made on Lewis and 

Clark property, we return to the legal questions 

presented. The district court concluded that the 

adoption of the Laird appraisal would require taxpayers 

to bear a disproportionate share of Montana's tax burden, 
in violation of the equal protection requirements of the 

Fourteenth Amendment to the United States Constitution 

and Article 11, 5 4, 1972 Montana Constitution. The use 

of the appraisal was also found to violate the due 

process requirements of the Fifth and Fourteenth 

Amendments to the United States Constitution and Article 

11, Sections 17 and 29, 1972 Montana Constitution. 

Finally, the district court found the appraisal violated 

the provisions of Title 84, Chapter 4, R. C.M. 1947, which 

require general and uniform appraisal, and assessment and 

equalization of all taxable property in the state. 

A "general and uniform method of appraising1' necessarily 

requires that each appraisal or reappraisal must be a 

part of a plan which provides that all similar properties 

will be valued in like manner. The plain meaning of the 

statutory language admits of no other interpretation. 

The absence of such a plan, as discussed earlier in this 

opinion, thus prevents lawful implication of the Laird 

appraisal. 

Larson, 534 P.2d at 857-58. 

The Larson court noted that there was an abundance of 

authority which finds no violation of constitutional or statutory 

mandates in the temporary inequalities which accompany a cyclical 

plan of reappraisal. Larson, 534 P.2d at 857. It also noted that 

violations of statutory uniformity requirements generally result 

in violations of equal protection requirements. 

In this case, we have no way of knowing whether the inequities 

in valuations in Area 2.1 are temporary or not. Presumably, the 

DOR will annually make ratio studies and apply factors to increase 

or reduce the valuations in Area 2.1 if the average valuations are 

outside the 5% parameters. It might be hoped that any valuation 

inequities resulting from the ratio studies might be rectified by 

the values found at the end of the current revaluation cycle; yet, 

those values under the law may not be placed on the tax rolls until 
one year following the completion of the revaluation cycle, 5 15- 

7-111 (2) , MCA, which, if not again extended, would occur in tax 

year 1994. Under the record here, the DOR itself will make no move 

to rectify inequities because of its interpretation that it is 

bound by law not to do so. Section 15-7-111, MCA. The legislative 

provisions for the application of the ratio studies include no plan 

for rectifying appraisal inequities which may fall upon individual 

property holders through application of the factors derived through 

the ratio. 

We therefore determine in accord with Larson that the use of 

the 1990 tax values derived from the ratio studies and the 

application of the 30% factor to residential properties in Area 2.1 

require certain taxpayers therein to bear a disproportionate share 

of Montana's tax burden in violation of the Equal Protection 

requirements of the Fourteenth Amendment of the United States 

Constitution, and Art. 11, § 4, 1972 Montana Constitution, and the 

Due Process requirements of the Fifth and Fourteenth Amendments of 

the United States Constitution and Art. 11, §§ 17 and 29 of the 

1972 Montana Constitution. This also violates the appraisal 

provisions of our statutes which require general and uniform 

appraisal, assessment and equalization of all taxable property in 

this state. 

This is not to say that the legislature does not have the 

power to change appraisal values during the appraisal cycle. In 

Hanley v. DOR of Revenue (1983), 207 Mont. 302, 309, 673 P.2d 

1257, 1260, this Court said: 
There can be no doubt that the power to equalize includes 

the power to alter an appraisal cycle . . . We therefore 

hold that DOR has the authority, when acting under its 

power to equalize, to change the taxable value of 

property in this state within an appraisal cycle to 

comply with its constitutional mandate to tax on a 

uniform basis. 

It behooves the Court to note that the result of the DOR 

report relating to actual sales and appraised values in Area 2.1 

should make clear to the DOR, and now to the legislature, that 

there is a wide disparity in appraised values of residential 

properties in that area when compared to actual sales values. In 

that situation, the indiscriminate application of an across-theboard 30% factor would necessarily exacerbate the values of those 

properties which are already assessed at or near market value or 

in excess thereof. Such a method may achieve equalization as 

between areas, but not between individual properties in the areas, 

where appraisal inequities already exist. Certainly the ratio 

study indicates that Area 2.1 should be targeted for a complete 

reappraisal even before the end of the valuation cycle. 

~qualization between areas will automatically result when all the 

valuations in the individual areas are at or near market value. 

THE POWER OF STAB AND THE RIGHT OF APPEAL 

The DOR contends two issues arise in this case relating to 

STAB. The DOR contends that STAB has no power to ignore the 

administrative rules which are adopted in accordance with 5 15-7- 

111, MCA, nor to declare a statute is unconstitutional. However, 

the record shows that STAB skirted the constitutional issue by 

declaring its belief that a court, if asked, would determine the 
assessment ratio studies and the application thereof 

unconstitutional. As to the administrative rules, 5 15-2-301(4), 

MCA, provides that "the state tax appeal board must give an 

administrative rule full effect unless the board finds any such 

rule arbitrary, capricious or otherwise unlawful." 

STAB in its response contended that this Court should throw 

out the amendments adopted by the legislature in 1987 and 1989 

because of the provision in § 15-7-102(6), MCA, to the effect that 

"the property owner may not appeal the yearly percentage 

adjustments that are specified in 15-7-111, and that may be made 

as a result of the sales assessment ratio study, the stratum, or 

area designations as specified in 15-7-111." 

Article VIII, 5 7, of the Montana Constitution, provides: 

Tax appeals. The legislature shall provide independent 

appeal procedures for taxpayer grievances about 

appraisals, assessments, equalization, and taxes. The 

legislature shall include a review procedure at the local 

government unit level. 

Section 15-7-111(4), MCA, provides: 

(4) For the taxable year beginning January 1, 1990, and 

for every taxable year thereafter, the department shall 

conduct a stratified sales assessment ratio study of all 

residential land and improvements, agricultural 1-acre 

homesites and improvements, and commercial land and 

improvements. The sales assessment ratio based on 

property sales finalized and recorded by no later than 

November 1 must be used to determine appraisals for the 

immediately succeeding tax year. 

Section 15-7-102(6), MCA, provides: 

(6) . . . The property owner may not appeal the yearly 

percentage adjustments that are specified in 15-7-ill and 

that may be made as a result of the sales assessment 

ratio study, the stratum, or area designations as 

specified in 15-7-111. 
Clearly, Art. VIII, 5 7, Montana ~onstitution, guarantees the 

constitutional right of appeal procedures for a taxpayer concerning 

appraisals and assessments. 

It is also equally clear that 5 15-7-111(4), MCA, required the 

DOR to conduct an annual stratified sales assessment ratio study 

beginning January 1, 1990, and for every taxable year thereafter 

and that the sales assessment ratio derived therefrom must be used 

to determine appraisals for the immediate succeeding tax year, and 

5 15-7-102 (6) provides that the property owner may not appeal as 

a result of the sales assessment ratio study. 

Therefore, the provision of 5 15-7-102 (6) , providing It [tlhe 

property owner may not appeal the yearly percentage adjustments 

that are specified in 15-7-111 and that may be made as a result of 

the sales assessment ratio study, the stratum, or area designations 

as specified in 15-7-111,1t is unconstitutional as a violation of 

Art. VIII, 5 7, of the Montana Constitution. 

Notwithstanding that the non-appeal provision of 5 15-7- 

102(6), MCA, may not be essential to our decision in this case, we 

believe it is important that the DOR and the legislature be made 

fully aware of the requirements of Art. VIII, 5 7, with regard to 

any future legislation or rule-making. 

THE CASE OF PATRICIA C. BARRON 

This whole case was brought about by the appeal of Patricia 

C. Barron to the County Tax Appeal Board, and then to STAB itself 

regarding the constitutionality of the increased adjustment to her 

residential property valuation for tax purposes. 
STAB, in determining that the application of the ratio studies 

to Area 2.1 was improper, did not restore Patricia C. Barron to the 

1989 appraisal of her residential property. Instead, it determined 

that because the purchase price of the home in which she lives was 

$75,000, it should be appraised at $75,000 as a reflection of its 

market value. 

In DOR of Revenue v. State Tax Appeal Board (1980), 188 Mont. 

244, 249, 613 P.2d 691, 694, we quoted the United States Supreme 

Court saying: 

This Court holds that the right of the taxpayer whose 

property alone is taxed at 100 percent of its true value 

is to have his assessment reduced to the percentage of 

that value which others are taxed even though this is a 

departure from the requirement of statute. This 

conclusion is based on the principle that where it is 

impossible to secure both a standard and true value, and 

the uniformity and equality required by law, the latter 

requirement is to be preferred as the just and ultimate 

purpose of the law. 

While the valuation of the Barron property at its market value is 

at 100% of its true value, it cannot be said that the application 

of that valuation reaches the uniformity and equality required by 

our laws. If anything, the study of Area 2.1 reveals that there 

is very little equality or uniformity in the valuation of the 243 

properties studied. Because Patricia C. Barron undertook to appeal 

the application of the 30% adjustment to her residential property, 

and bore the burden of litigation to bring the DOR and this 

Court the problems arising out of the ratio studies, she is 

entitled to the beneficial fruits of her litigation. We therefore 

reverse the valuation of her residential property fixed at $75,000, 

and direct that the valuation of that residence for tax purposes 
shall be the valuation which obtained in 1989. Nothing herein 

prevents a proper revaluation of her residential property in 

accordance with statutory and constitutional principles in 

subsequent years. 

CONCLUSION 

The power of supervisory control given to this Court does not 

apply in this case because STAB is not a court in the contemplation 

of Art. VII, 5 2(2) of the State Constitution. 

We find and determine, however, in this original proceeding 

proper grounds to award the following declaratory and affirmative 

relief: 

1. The provisions of 5 15-7-111, MCA, relating to 

stratified sales assessment ratio studies of the 

residential property situated in Area 2.1 (Great Falls 

Downtown) as conducted and applied by the DOR are invalid 

because they violate state constitutional and statutory 

provisions which require general and uniform appraisal, 

assessment and equalization of all taxable property in 

the state; and further because the applications thereof 

require certain taxpayers in Area 2.1 to bear a 

disproportionate share of Montana's tax burden, in 

violation of the Equal Protection requirements of the 

Fourteenth Amendment to the United States Constitution 

and Art. 11, 5 4, 1972 Montana Constitution; and because 

the application of the stratified sales assessment ratio 

study to Area 2.1 violates the Due Process requirements 

of the Fifth and Fourteenth Amendments of the United 

States Constitution and Art. 11, 17 and 29, 1972 

Montana Constitution. 

2. The provision of § 15-7-102(6), MCA, that states: 

"The property owner may not appeal the yearly percentage 

adjustments that are specified in 15-7-111 and that may 

be made as a result of the sales assessment ratio study, 

the stratum, or area designations as specified in 15-7- 

111," is in violation of Article VIII, 5 7, of the 

Montana Constitution. 

3. The valuation for tax year 1990 of the residential 

property of Patricia C. Barron in Area 2.1 established 

by STAB should be and is hereby reversed, and STAB and 
all agents of the DOR shall fix the appraised value of 

the said residential property of Patricia C. Barron at 

the valuation which obtained in the tax year 1989. 

4. Because of the statewide effect of this decision, 

because of the short period of time remaining for state 

and county offices to perform their duties in connection 

with the collection of property taxes for the year 1990, 

and the extenuating exigencies which would otherwise be 

created by an immediate effect of this decision, we 

hereby delay the effective date of this decision, and 

make its effect prospective only to December 31, 1990, 

except for those cases now pending on appeal, or properly 

appealed by the property owners. (This means those cases 

heretofore appealed within the time provided for taxpayer 

appeals at the local or state level and now pending on 

the grounds of unconstitutionality found to exist in this 

proceeding, and includes those previously appealed on 

those grounds and denied at the county or state level; 

but, no other appeals on the grounds covered herein shall 

be recognized.) The effect of this prospective stay is 

that as to all property affected by the stratified sales 

assessment ratio studies, except those herein stated, the 

values for tax purposes for the tax year 1990 shall be 

those found and applied by the DOR under said studies. 

5. When copies hereof are served by ordinary mail by 

the Clerk of this Court upon counsel of record, this 

opinion shall have the effect of, and perf om the office 

of, a declaratory judgment granting affirmative relief 

without further documents or process from this Court. 

It shall be effective on the date of service. 

We grant the stay only to prevent the disruption of the state 

taxation process for the tax year 1990 and because the legislature 

will meet and may address these problems in a session beginning on 

the first Monday of January, 1991. 

prospective application of the effect of this Opinion past the 

1990 tax year as absolutely imperative should be at once apparent, 

but some question prospective delay when the underlying act is 

unconstitutional. How, it is argued, can a court allow to remain 

legal what it has declared to be illegal? The answer lies in the 

choice that must be made by the Court as to whether it will allow 
government to continue in an orderly fashion at the expense of 

some, or else permit virtual anarchy to exist. Were the illegality 

in this case declared to take effect immediately, it would mean 

that tax collections for the support of state, county, school 

district and municipal government dependent on property taxes would 

be thrown into immediate disfunction. There is lurking in this 

case a huge legislative and executive problem, and these branches 

must be given a chance to deal properly with that problem. Despite 

the unconstitutionality of the appraisal system here involved, the 

fashioning of a constitutional system is a proper duty of the 

legislative department, and not of this Court. 

This Court has not hesitated to delay the effect of its 

decision that an act is unconstitutional when the immediate effect 

of the decision would disrupt government, and the legislature can 

be given an opportunity to rectify the unconstitutionality. Lee 

v. State (1981), 195 Mont. 1, 11, 1635 P.2d 1282, 1287, cert.denied 

456 U.S. 1006, 102 S.Ct. 2295, 73 L.Ed.2d 1300; Helena Elementary 

School Dist. No. 1 v. State (Mont. 1990), 784 P. 2d 412, 413. Other 

state courts have done likewise. Edgewood Independent School 

District v. Kerby (Tex. 1989), 777 S.W.2d 391, 399; Horton v. 

Meskill (Conn. 1977), 376 A.2d 359, 376; Washakie County School 

Dist. v. Herschler (Wyo. 1980), 606 P.2d 310, cert.denied 449 U.S. 

824, 101 S.Ct. 86, 66 L.Ed.2d 28 (1980); Robinson v. Cahill (N.J. 

1973), 303 A.2d 273, 298, cert.denied 414 U.S. 976, 94 S.Ct. 292, 

38 L.Ed.2d 219. 
Costs of proceedings, but not attorneys fees, to Patricia C. 

Barron. 

6. 

Justice 

We concur: 

Chief Justice