No. 1-3075 

LN T?IE SUPKPiMli dOUKT OF THE STATE dl MONTANA 

1975 

ART LONNICK, .IKT WOODS and 

iHRIS GARDNER, as the Board 

of County Commissioners of 

LE3JIS AND CLARK COUNTY, State 

of Montana, 

THOUS L. JUDGE, Governor af he State 

of Montana, 

Counsel of Record: 

For Plaintiffs : 

Thomas F. Dowling, GourlCy .Icrurney, Helena, Montra Lid 

Leif B. Erickson, Deputy County Attorney, argued, 

Helena, Montana 

Louis Forsell argued, Helena, Montana 

%or Defendants : 

Hon. Robert L. Woodahl, Attorney General, Helena, 

Montana 

%trick E. Melby argued, Helena, Montana 

Yarry L. Hjort, Helena, Montana 

Submitted: July s, 1975 

Decided : Jkri 8 3 agpj 

5iLed: LA- 3 j k,,k, 
PER CURIAM: 

This is an original proceeding wherein plaintiff county 

commissioners of Lewis and Clark County seek a declaratory 

judgment as to whether the Montana Forty-Fourth Legislative 

Assembly levied a property tax for the years 1975 and 1976 for 

the support of the University System. This Court permitted the 

filing of the complaint and ordered service on the Governor, 

State Auditor, Superintendent of Public Instruction and the 

Board of Regents. 

The Governor filed an answer. The State Auditor appeared 

by brief. The issue raised is whether the Forty-Fourth Legislative Assembly levied a property tax for the years 1975 and 

1976 to supply the fund from which appropriations have been 

made. Does the act of appropriating money from a specific fund 

act as a levy of a tax to create that fund? 

The Forty-Fourth Legislature in House Bills No. 269 and 

No. 271, Laws of Montana 1975, appropriated various sums from 

the fund created for deposit of the monies collected by the levy 

authorized under section 84-3804, R.C.M. 1947, by name and 

account number as illustrated by the following excerpt from 

House Bill No. 271: 

"Section 11. The following moneys are appropriated 

to the board of regents for the respective university 

system units for the biennium ending June 30, 1977: 

For Fiscal Year For Fiscal Year 

Ending 6130176 Ending 6/30/77 'I* 9: ;'c 

"UNIVERSITY OF MONTANA "* 9: * I I From the earmarked revenue fund 

02106 University millage 

ERA [earmarked revenue account] 3,041,786 3,165,627". 

Funds in the total sum of $15,836,528 for fiscal years 

1976 and 1977 were appropriated from this fund for the support, 

maintenance, and operation of the University System. The University millage earmarked revenue account was originally established in 1949 as directed by the laws which preceded section 
84-3804, R.C.M. 1947. (See Chapter 217, Laws of Montana 1947, 

and Chapter 218, Laws of Montana 1957). It has been used exclusively for the deposit of tax receipts collected by the levy 

for the support of the University System. Those are the only 

monies ever deposited in the account and that is the only account 

in which those tax receipts have ever been deposited. 

The Governor, as defendant, argues the intent to levy the 

tax is clearly shown by the appropriation of money from the 

account created by the tax, and, ergo, the tax was levied. We 

do not agree. 

Article VIII, Section 1, 1972 Montana Constitution, states: 

"Ta.xes shall be levied by general laws for public 

purposes. I I 

Article VIII, Section 9, 1972 Montana Constitution states: 

"Appropriations by the legislature shall not exceed 

anticipated revenue. 1 I 

It is obvious then that specific levies of taxes shall be 

made. Merely appropriating funds does not constitute a levy of 

taxes. Otherwise, if appropriation bills were self-executing tax 

levies, there would be no purpose in Article VIII. 

Section 84-3804, R.C.M. 1947, provides: 

"Upon the approval of the electors of this state, 

to be determined by their vote at the general 

election to be held in November of 1968, the 

legislative assembly shall levy a property tax 

of not more than six (6) mills on the taxable 

value of all real and 'personal property each 

year for ten (10) years beginning with the 

year 1969. All revenue from this property tax 

levy shall be appropriated for the support, 

maintenance, and improvement of the Montana 

university sys tern. " (Emphasis supplied) . This section, together with the referendum approving it, 

authorizes the legislature to levy a property tax. It does not 

constitute a levy. The legislature under this section may fix 

the rate, not to exceed six mills. This rate can vary each year 

for a period of ten years. This authorization is a matter of 
continuing legislative judgment to be determined by each legislative assembly, as it deems necessary by means of a levy. The 

Forty-Fourth Legislative Assembly did not make a levy pursuant to 

this authority. 

Past legislative assemblies have construed and interpreted 

section 84-3804 as authorization to levy and furnish revenue to be 

appropriated for support of the University System. 

The Forty-First Legislative Assembly levied for these 

purposes for the years 1969 and 1970 (Ch. 321, Laws of Montana 

1969). The Forty-Second Legislative Assembly levied for the 

years 1971 and 1972 (Ch. 170, Laws of Montana 1971). The FortyThird Legislative Assembly levied for the years 1973 and 1974 

(Ch. 478, Laws of Montana 1973). 

Each of these enactments contained this language: 

"Section 1. The following tax levies for state 

purposes are hereby made upon all property in the 

state of Montana, subject to taxation * * *." 

Each enactment in determining the rate of levy provided: 

11 For the university millage fund, to provide funds 

for the support of the Montana university system, as 

provided in Referendum Measure No. 65 and passed by 

vote of the people at the general election held 

November 5, 1968, six (6) mills, or so much thereof 

as may be necessary to raise the amount appropriated 

by the legislative assembly from the university millage 

fund for support of the units of the Montana university 

system. I I 

Thus, it is evident that the three legislative assemblies 

preceding the Forty-Fourth regarded section 84-3804 as authorization to make and specify the levy for university system purposes. 

The fact that in each instance they decided upon a six 

mill levy or so much thereof as necessary to meet the appropriation, does not detract from the fact they acted under the authorization, made the levy, and specified the rate. Each of these 

assemblies based on the circumstances, could have specified the levy 

at 5 mills, 4 mills, 3 mills, or even 2 mills. The point is, each 

assembly did make the determination and did specify the rate 
authorized by the referendum and existing law. These enactments 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 restrictions 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 ~hstice 

1 fl 0 lM 

Justices.