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, MontraLid 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 :

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5iLed: 

### LA- 3 j k,,k,PER CURIAM: This isan original proceeding wherein plaintiff county commissioners of Lewis and Clark County seek a declaratory judgment as towhether 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 filingof the complaint and ordered service on the Governor, StateAuditor, Superintendent of Public Instruction and the Board of Regents. The Governor filed an answer. The StateAuditor appeared by brief. The issueraised iswhether the Forty-Fourth LegislativeAssembly 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 tocreate that fund? The Forty-Fourth Legislature inHouse BillsNo. 269 and No. 271, Laws of Montana 1975, appropriated various sums from the fund created for deposit of the monies collectedby the levy authorized under section 84-3804, R.C.M. 1947, by name and account number as illustratedby the following excerpt from House BillNo. 271: "Section 11. The following moneys are appropriated to the board of regents for the respective university systemunits for thebiennium ending June 

### 30, 1977: For Fiscal Year For Fiscal Year Ending 6130176 Ending 6/30/77 'I* 9: ;'c "UNIVERSITY OF MONTANA 

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IIFrom 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 fiscalyears 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 directedby the laws which preceded section84-3804, 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 collectedby the levy for the support of the University System. Those are the only monies ever deposited in the account and that isthe only account inwhich those taxreceipts have ever been deposited. The Governor, as defendant, argues the intent to levy the tax 

### isclearly shown by the appropriation of money from the account createdby the tax, and, ergo, the taxwas levied. We do not agree. Article VIII, Section 

### 1, 1972 Montana Constitution, states: "Ta.xes shallbe leviedby general laws for public purposes. II

Article VIII, Section 9, 1972 Montana Constitution states: "Appropriations by the legislature shallnot exceed

anticipated revenue. 1I It 

### is obvious then that specific levies of taxes shallbe made. Merely appropriating funds does not constitutea levy of taxes. Otherwise, if appropriation billswere self-executing tax levies, there would be no purpose inArticle VIII. Section 84-3804, R.C.M. 1947, provides: "Upon the approval of the electors of this state, tobe determined by their vote atthe general election tobe held inNovember of 1968, the legislative assembly shall levy a property tax of not more than six (6) millson the taxable value of allreal and'personal property each year for ten (10) years beginning with the year 1969. Allrevenue from this property tax levy shallbe appropriated for the support, maintenance, and improvement of theMontana 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 legislatureunder this section may fix the rate, not toexceed sixmills. This rate can vary each year for a period of ten years. This authorization 

### isa matter ofcontinuing legislativejudgment tobe determined by each legislative assembly, as it deems necessaryby means of a levy. The Forty-Fourth LegislativeAssembly 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 tobe appropriated for support of the University System. The Forty-First LegislativeAssembly levied for these purposes for the years 1969 and 1970 (Ch. 321, Laws of Montana 1969). The Forty-Second LegislativeAssembly levied for the years 1971and 1972 (Ch. 170, Laws of Montana 1971). The FortyThird LegislativeAssembly 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 arehereby made upon allproperty in the state of Montana, subject totaxation

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# *." Each enactment in determining the rate of levy provided:

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For the university millage fund, to provide funds for the support of the Montana university system, as provided inReferendum Measure No. 65 and passed by vote of the people atthe general election held November 5, 1968, six (6) mills, or so much thereof asmay be necessary toraise the amount appropriated by the legislative assembly from the university millage fund for support of the units of theMontana university system. II 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 foruniversity system purposes. The fact that in each instance they decided upon a six milllevy or somuch thereof asnecessary tomeet 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 at5mills, 4 mills, 3mills, or even 

### 2 mills. The point 

### is, each assembly did make the determination and did specify the rate

### authorized by the referendumand existing law. These enactments were not ritualistic,were not idle gestures. The enactmentsmanifest the legislative construction and interpretation of section 84-3804and ReferendumNo. 65 that this section and referendum are not self-executing, but rather constituteauthorization to make the designated levy. In Swartzv. Berg, 147Mont. 178, 181,411P.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, 101Mont. 176, 53 P.2d 107, 103A.L.R. 376." There are valid reasons for requiring formality and specific designation of the imposition of a tax. Under the 1889Montana Constitution, and its Article XII,many restrictionswere placed upon the power of the legislature as to taxation. Those restrictionswere 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 appropriationbill could be construed as a levy of taxes, these safeguardswould be lost. To sum it up, the Legislature simply failed to make a levy as authorizedby section 84-3804and thus, the appropriation is not valid sinceno revenuewas provided. This Opinion shall constitute a declaratory judgment.' Chief ~hstice 

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### Justices.