State ex rel. Woodahl v. Straub

• Decision Date: 24 April 1974
• Docket Number: No. 12651,12651
• Citation: 164 Mont. 141,520 P.2d 776
• Parties: STATE ex rel. Robert L. WOODAHL, Attorney General of the State of Montana, and the Montana Department of Revenue, Relators, v. Herbert F. STRAUB et al., Respondents.
• Court: Montana Supreme Court

Page 776

520 P.2d 776

164 Mont. 141

STATE ex rel. Robert L. WOODAHL, Attorney General of the State of Montana, and the Montana Department of Revenue, Relators, v. Herbert F. STRAUB et al., Respondents.

No. 12651.

Supreme Court of Montana.

Submitted Jan. 14, 1974.

Decided Feb. 6, 1974.

Rehearing Denied April 24, 1974.

Robert L. Woodahl, Atty. Gen., Dennis Lind argued, Asst. Atty. Gen., George Losleben, Asst. Atty. Gen., appeared, R. Bruce McGinnis argued, Helena, for relators.

A. W. Scribner argued, Helena, Denzil Young, County Atty., argued, Baker, Sandall, Moses and Cavan, Charles F. Moses argued and Ralph S. Wright argued, Billings, for respondents.

Robert Brooks, County Atty., argued, Broadus, Carroll Blend argued, Helena, for intervenors.

Richard J. Conklin, County Atty., argued, White Sulphur Springs, Ralph Herriott, County Atty., argued, Hysham, for amici curiae.

CASTLES, Justice.

This is an original proceeding brought by the Attorney General and the Montana Department of Revenue. The petition requested assumption of jurisdiction by this Court of a complaint which seeks a declaratory judgment under Title 93, Chapter 89, Revised Codes of Montana, 1947. The named defendants are the county commissioners and the county treasurer of Fallon County. On ex parte presentation the Court accepted jurisdiction; allowed the filing of the complaint; and provided for service upon the Superintendent of Public Instruction and the Clerk and Recorder of each county as the clerk of the Board of County Commissioners of each county. The Court invited participation of those interested in the outcome of this proceeding.

The essential allegations of the complaint filed by the plaintiffs are:

1. Art. X. Montana Constitution, 1972, requires the legislature to provide a system of schools.

2. Chapter 355, Laws of Montana, 1973, amends Chapter 69 of Title 75, Revised Codes of Montana, by providing a new taxing system in part for the support of public schools.

3. The tax system contained in Chapter 355 requires each county to levy a basic 40 mill tax (for both primary and secondary schools) on property in the county and if the funds raised by this tax exceed the amount needed to fund the 'foundation program' in that county the excess is to be remitted to the state for deposit in the 'earmarked revenue fund, state equalization aid account'.

4. This surplus is to be used in combination with other funds deposited in the account to fully fund the 'foundation program' in those counties not fully funded by the basic levy.

5. Chapter 355 authorizes the adoption of budgets in excess of the minimum required by the foundation program and provides that if this budget cannot be fully funded by the imposition of specified additional county levies the director of the Montana Department of Revenue is to impose a statewide property tax at such a millage as will result in full funding of these deficiencies in the various school districts.

6. On August 6, 1973 in accordance with this authorization, the Department of Revenue ordered all counties to impose an additional mill levy of 12 mills.

7. On August 16, 1973, an action was commenced in Powder River County seeking to have Chapter 355 declared void.

8. In October 1973, defendant Fallon County Commissioners directed defendant Fallon County Treasurer to hold all monies collected under authority of Chapter 355 until such time as the constitutionality of that chapter was determined by the courts.

9. Pursuant to this direction the Fallon County Treasurer has refused to pay over the monies, thus creating an actual controversy.

10. This is an emergency situation since the first payment of these monies was scheduled for January 31, 1974, and normal process of law will not provide for speedy determination.

11. That only questions of law are involved.

12. That other counties have now begun to impound funds collected under authority of the Act, further aggravating the situation.

In this Court's order accepting jurisdiction, the matter pending in Powder River County was stayed.

Fallon County appeared by answer, which we shall discuss further. Powder River County, Choteau County, Toole County, Meagher County and the Superintendent of Public Instruction appeared in various ways-intervention, amicus curiae and otherwise. This Court has been liberal in considering all matters but, as will appear hereinafter, the procedural problems and certain other policy and substantive problems alluded to in various ways by brief, motion and otherwise will not need be considered herein.

Fallon County's answer to the complaint denies all of the legal conclusions of the complaint and then sets up these affirmative defenses:

a) That Chapter 355 will require Fallon County to remit substantial sums to the state for the support of school districts located in other counties.

b) That over all Chapter 355 will require 39 counties to remit taxes which will be distributed to 17 counties.

c) That Chapter 355 violates Art. X, Sec. 1, Montana Constitution 1972, which requires the legislature to fully fund the school system.

d) That Chapter 355 represents an unlawful delegation of legislative authority.

e) That the tax levied discriminates against the taxpayers of Fallon County by requiring them to pay more than is required for the support of its local schools, violating both Article XIII, Sec. 1, Montana Constitution 1972, and the Fourteenth Amendment to the United States Constitution.

f) That Chapter 355 fails to set forth any reasonable standard justifying property taxation in Fallon County for support of schools in other counties.

g) That factual issues exist which require this Court to decline jurisdiction.

Even though, as respondents point out, factual issues do exist this is no bar to a consideration of the validity of Chapter 355 on its face.

Plaintiffs in the Powder River County suit raise by intervention a preliminary issue in this action. Essentially intervenors assert that prior to July 1, 1973, the legislature was operating under the authority of the 1889 Montana Constitution and accordingly its acts, to be valid, must conform to the limitations contained therein even though the acts are not to take effect until after the date the new Constitution replaces the old.

While this Court has not heretofore considered this question, we have no hesitation in rejecting intervenors' proposition. While it is true that a statute, unconstitutional when it takes effect, is not resurrected by a subsequent constitutional change, State ex rel. Woodahl v. District Court, Mont., 511 P.2d 318, the instant situation differs in that the statute was passed in anticipation of an already approved constitutional change and was of no force or effect until after the new Constitution took effect.

The Georgia Supreme Court in Henson v. Georgia Industrial Realty Co., 220 Ga. 857, 142 S.E.2d 219, 223, 224, observed:

'It is the general rule in this country that a legislature has power to enact a statute not authorized by the existing constitution of that State when the statute is passed in anticipation of an amendment to its constitution authorizing it * * *.'

The rule is based on the theory that the constitutionality of the statute is to be tested at the time the statute takes effect and not at the time of passage. Neisel v. Moran, 80 Fla. 98, 85 So. 346; State v. Hecker,109 Or. 520, 221 P. 808; Alabam's Freight Co. v. Hunt, 29 Ariz. 419, 242 P. 658. We agree with this view and hold that the test of a statute's constitutionality is to be made at the time it takes effect and is to be made against the constitution as it exists at the time the statute takes effect, not at the time the statute was passed by the legislature. See: Druggan v. Anderson, 269 U.S. 36, 46 S.Ct. 14, 70 L.Ed. 151; In re Opinions of the Justices, 227 Ala. 291, 149 So. 776; State v. Smith, 335 Mo. 840, 74 S.W.2d 27; Busch v. Turner, 26 Cal.2d 817, 161 P.2d 456; Galveston Ry. Co. v. Gross, 47 Tex. 428. All of these cases approved statutes passed by the legislature in anticipation of constitutional change.

Holding that the 1973 legislature could enact prospective or anticipatory legislation to become effective July 1, 1973, under the terms of the Montana Constitution 1972, we consider the constitutionality of Chapter 355 under the Montana Constitution 1972.

Respondents' memorandum of authorities considers the issues raised by its answer under three general headings:

(1) Chapter 355 violates Article X, Sec. 1 of the Montana Constitution 1972.

(2) Chapter 355 discriminates against the taxpayers of Fallon County by attempting to tax them for the exclusive use and benefit of others.

(3) That factual issues exist which would justify this Court in declining to accept jurisdiction.

Because of the view the Court takes in this case, these issues can best be considered against the background of a general consideration of the state's power to levy a general property tax for educational purposes.

It is clear that the taxes imposed by Chapter 355 are state rather than local taxes. Provision is made in Chapter 355 for three distinct levies. First is the basic 40 mill levy for support of the foundation program. The language of that levy is mandatory 'It shall be the duty of the county commissioners of each county to levy', with the clear effect that all property within the state is levied on at the rate of 40 mills for the support of the foundation program. The other two levies-the additional levy for deficiency in foundation program funding and the permissive levy-are even more clear in their uniform statewide applicability, with the director of the Department of Revenue ordered to impose the levies on all the property in the state. It is clear that a tax imposed by state law and levied uniformly on all property within a state is a state rather than a local tax.

Once it is established that Chapter 355 is a state rather than a local tax, there remains the...