In re Petition to Transfer Territory

• Decision Date: 19 December 2000
• Docket Number: No. 99-045., No. 98-236
• Citation: 15 P.3d 447,2000 MT 342,303 Mont. 204
• Parties: In the PETITION TO TRANSFER TERRITORY FROM HIGH SCHOOL DISTRICT NO. 6, LAME DEER, ROSEBUD COUNTY, Montana, TO HIGH SCHOOL DISTRICT NO. 1, HARDIN, BIG HORN COUNTY, Montana. Marilyn S. Hayes, Arthur F. Hayes, Jr., et al., consisting of the signators of the Petitions for Transfer of Territory from Lame Deer High School District to Colstrip High School District, Petitioners/Respondents, v. Lame Deer High School District and Nancy Keenan, in her capacity as Montana Superintendent of Public Instruction, Respondents/ Appellants.
• Court: Montana Supreme Court

15 P.3d 447

2000 MT 342

303 Mont. 204

In the PETITION TO TRANSFER TERRITORY FROM HIGH SCHOOL DISTRICT NO. 6, LAME DEER, ROSEBUD COUNTY, Montana, TO HIGH SCHOOL DISTRICT NO. 1, HARDIN, BIG HORN COUNTY, Montana.

Marilyn S. Hayes, Arthur F. Hayes, Jr., et al., consisting of the signators of the Petitions for Transfer of Territory from Lame Deer High School District to Colstrip High School District, Petitioners/Respondents, v. Lame Deer High School District and Nancy Keenan, in her capacity as Montana Superintendent of Public Instruction, Respondents/ Appellants.

Nos. 98-236, 99-045.

Supreme Court of Montana.

Heard January 25, 2000.

Submitted February 15, 2000.

Decided December 19, 2000.

Richard J. Dolan, Goetz, Gallik, Baldwin & Dolan, Bozeman, MT, For Appellants.

Laurence R. Martin, Felt, Martin, Grazier, Jacobs & Rapkoch, Billings, MT, (98-236); George W. Huss, Brown & Huss, Miles City, MT, (99-045), For Respondents.

Justice WILLIAM E. HUNT, Sr. delivered the Opinion of the Court.

¶ 1 Lame Deer High School District appeals the decisions of the Thirteenth Judicial District Court, Big Horn County, and the Sixteenth Judicial District Court, Rosebud County, which reversed the decisions of the State Superintendent and affirmed the County Superintendents' decisions to grant a transfer of territory from Lame Deer High School District. We reverse the decisions of the District Courts.

¶ 2 The appellants raise several issues, but we find the dispositive issue on appeal to be whether the school territory transfer statute, § 20-6-320, MCA, is an unconstitutional delegation of legislative power.

FACTUAL BACKGROUND

¶ 3 Lame Deer High School District (LDHSD) was created in 1993 after extensive hearings and testimony. In February of 1991, after petitions were filed to create the new district, the County Superintendents of Schools of both Big Horn and Rosebud Counties held hearings. After both County Superintendents denied the petitions to create LDHSD, the State Superintendent of Public Instruction issued a notice of hearing, consolidated the appeals, and an independent hearing examiner conducted further hearings on the matter. The hearing examiner issued an order; the parties were allowed to file exceptions and present oral arguments. On November 9, 1993, after consideration of this record, the State Superintendent issued her order creating LDHSD.

¶ 4 The non-voted mill levy assessed in LDHSD is currently about 34 mills, which is close to the statewide average, and which is less than predicted by the State Superintendent when she created the new district. The assessed taxable valuation of the territory belonging in LDHSD is approximately $2,111,689. The transfer sought to be made here will remove approximately $1.6 million through the Rosebud County territory transfer and approximately $325,000 will be removed by the Big Horn County territory transfer.

¶ 5 LDHSD includes land from the Colstrip and Hardin High School Districts in both Rosebud and Big Horn Counties, including lands within and outside of the borders of the Northern Cheyenne Reservation. The territories proposed for transfer in this consolidated case border the Northern Cheyenne Indian Reservation on three sides. Transferring both the Rosebud and Big Horn territories from LDHSD would leave the district with only $161,000 in taxable valuation, all within the Northern Cheyenne Indian Reservation.

¶ 6 In 1994, individuals residing in both Rosebud and Big Horn Counties, but outside of the Northern Cheyenne Indian Reservation (collectively "Respondents"), petitioned their respective County Superintendents of Schools requesting a territory transfer from LDHSD back to the Colstrip and Hardin High School Districts. Both County Superintendents of Schools held hearings, and both granted the Respondents' requests to transfer territory from LDHSD pursuant to § 20-6-320, MCA (1993).

¶ 7 LDHSD appealed these decisions to the State Superintendent of Public Instruction, who reversed the County Superintendents' decisions. From that determination, Respondents appealed to their respective District Courts. Both District Courts reversed the State Superintendent's decisions. LDHSD now appeals from the District Courts' decisions. In February of 1999, we consolidated the cases.

DISCUSSION

¶ 8 The dispositive issue on appeal is whether § 20-6-320, MCA, which gives authority to county superintendents of schools to grant or deny petitions to transfer territory among school districts, is an unconstitutional delegation of legislative power.

¶ 9 Our review of issues involving constitutional law is plenary. State v. Bedwell, 1999 MT 206, ¶ 4, 295 Mont. 476, ¶ 4, 985 P.2d 150, ¶ 4. A statute, however, is presumed to be constitutionally valid. Ingraham v. Champion Intern. (1990), 243 Mont. 42, 46-47, 793 P.2d 769, 772. The party challenging the constitutionality of a statute has the burden of overcoming this presumption. McClanathan v. Smith (1980), 186 Mont. 56, 65, 606 P.2d 507, 512.

¶ 10 Respondents argue that this issue is not properly before this Court because it was not raised in the District Courts. LDHSD counters that while this issue is being raised for the first time on appeal both the law and the procedural posture of the case support their position that this Court should review the issue. LDHSD argues that broad public concerns are involved which effect the substantial rights of the litigants and that the only time this issue could have been raised in this case was on appeal.

¶ 11 In general, this Court does not consider issues raised for the first time on appeal. Reno v. Erickstein (1984), 209 Mont. 36, 41, 679 P.2d 1204, 1207; Day v. Payne (1996), 280 Mont. 273, 276, 929 P.2d 864, 866. It appears, however, that substantial rights of the litigants are at stake here. Their school district boundaries and tax burden have been affected by a potentially unconstitutional delegation of power to the County Superintendents. Further, the procedural posture of this case is unique. This matter began as an administrative case before the County Superintendent who did not consider any constitutional issues. On appeal, the State Superintendent refused to consider constitutional issues. Even if LDHSD had raised this issue in the District Courts, it still would have been raised for the first time on appeal.

¶ 12 LDHSD argues that the County Superintendent's change of the boundaries of LDHSD was an exercise of legislative power. We have previously held that the authority to alter school district boundaries is legislative in nature. The authority to make school district boundaries is entirely within the power of the legislature. Read v. Stephens (1948), 121 Mont. 508, 512, 193 P.2d 626, 628. Montana law on this issue is consistent with those of sister states. See, e.g., School District No. 46 v. City of Bellevue (1987), 224 Neb. 543, 400 N.W.2d 229, 235

; State ex rel. Dix v. Board of Education (1974), 215 Kan. 551, 527 P.2d 952, 955; Dunker v. Brown County Board of Education (1963), 80 S.D. 193, 121 N.W.2d 10, 13; Hazlet v. Gaunt (1952), 126 Colo. 385, 250 P.2d 188, 194; State v. Hines (1947), 163 Kan. 300, 182 P.2d 865, 868.

¶ 13 Section 20-6-320, MCA, grants local county superintendents the power to transfer territory from one school district to another. Section 20-6-320, MCA, gives the county superintendents the authority to alter the boundaries of school districts, constituting a delegation of legislative power. The legislature may constitutionally delegate its legislative functions to an administrative agency, but it must provide, with reasonable clarity, limitations upon the agency's discretion and provide the agency with policy guidance. City of Missoula v. Missoula County (1961), 139 Mont. 256, 259, 362 P.2d 539, 541.

¶ 14 Article III, Section 1, of the 1972 Montana Constitution (formerly Article IV, Section 1, 1889 Montana Constitution) provides:

Separation of powers. The power of the government of this state is divided into three distinct branches-legislative, executive, and judicial. No person or persons charged with the exercise of power properly belonging to one branch shall exercise any power properly belonging to either of the others, except as in this constitution expressly directed or permitted.

¶ 15 In Bacus v. Lake County (1960), 138 Mont. 69, 354 P.2d 1056, we set the standard for a delegation of legislative power. We stated the rule as follows:

The law-making power may not be granted to an administrative body to be exercised under the guise of administrative discretion. Accordingly, in delegating powers to an administrative body with respect to the administration of statutes, the legislature must ordinarily prescribe a policy, standard, or rule for their guidance and must not vest them with an arbitrary and uncontrolled discretion with regard thereto, and a statute or ordinance which is deficient in this respect is invalid.

Bacus, 138 Mont. at 78, 354 P.2d at 1061. A statute granting legislative power to an administrative agency will be held to be invalid if the legislature has failed to prescribe a policy, standard, or rule to guide the exercise of the delegated authority. If the legislature fails to prescribe with reasonable clarity the limits of power delegated to an administrative agency, or if those limits are too broad, the statute is invalid. See Matter of Application for Auth. to Conduct Sav. & Loan Act., Etc. (1979), 182 Mont. 361, 369-70, 597 P.2d 84, 89

; Douglas v. Judge (1977), 174 Mont. 32, 38, 568 P.2d 530, 534; Plath v. Hi-Ball Contractors, Inc. (1961), 139 Mont. 263, 272, 362 P.2d 1021, 1025; City of Missoula, 139 Mont. at 259,

362 P.2d at 540-41.

¶ 16 LDHSD argues that the statute's delegation of power is unconstitutional because it gives the county superintendents unfettered discretion in determining whether to transfer territory. Further, the statute's only directive is that the decision must be based on the effects of a transfer on...