No. 13201
I N THE SUPREME C U T O THE STATE OF M N A A
OR F OTN
1975
STATE O M N A A ex r e 1 T O A L. J U D G E ,
F OTN HMS
Governor of t h e S t a t e of Montana,
Plaintiff,
THE LEGISTATIVE FINANCE COMMITTEE AND ITS
MEMBERS, F r a n c i s Bardanouve, Chairman,
David Aageson, Glenn Jacobsen, Orin P. Kendall,
Arthur E. Lund, William L. Mathers, Jack K. Moore,
William J. Norman, Ann K. Regan, Miles Romney,
E B. Smith, and S t a n Stephens,
d
Defendants.
ORIGINAL PROCEEDING:
Counsel of Record :
For P l a i n t i f f :
Larry E l i s o n argued and P a t r i c k Melby argued,
Helena, Montana
For Defendants :
John Northey argued, Helena, Montana
Submitted : December 6 , 1975
Decided : -p
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Mr. Justice Wesley Castles delivered the Opinion of the Court.
This is an original proceeding brought by plaintiff
Governor of Montana for declaratory relief pursuant to section
93-8901 et seq., R.C.M. 1947, involving the constitutionality
of several legislative enactments establishing and empowering
defendant Legislative Finance Committee and its office of Legis-
lative Fiscal Analyst. This cause is a companion case to No.
13069, Board of Regents v. Thomas L. Judge, decided today.
Plaintiff (hereinafter called Governor) commenced this
action October 29, 1975, with an application for leave to file
a complaint stating that substantial questions of the constitu-
tionality of these enactments existed and that the remedy avail-
able through trial in the district court was inadequate because
the operation of these laws would impair and do irreparable harm
to state government functions during the delay before final reso-
lution of the matter by this Court. After an ex parte hearing
on October 29, 1975, this Court granted the application and ordered
that defendant (hereinafter called Finance Committee) answer the
complaint, briefs be filed, and set the matter for an adversary
hearing. Hearing was had.
Specifically this challenge involves three enactments of
the Forty-fourth Legislature.
(1) Senate Bill No. 333, Chapter 448, Laws of Montana,
1975--The Legislative Finance Act--provides for the creation of
the interim legislative finance committee whose membership is
made up of four members of the senate finance committee, two
members from the senate at large, four members of the house ap-
propriation committee, and two members from the house at large.
The act also creates the office of legislative fiscal analyst
and specifies the duties of both the analyst and the committee.
(2) Senate Bill No. 401, Chapter 51, Laws of Montana,
1975, as set forth in the companion case, grants the legislative
finance committee review and approval authority over budget
amendments which are therein defined as expenditures by state
agencies in excess of their appropriations.
(3) House Bill No. 1 (Special Session), Laws of Montana,
1975, specifically appropriates funds from sources other than
the general fund which were not available for consideration by
the legislature and modifies each of the appropriation bills of
the forty-fourth legislature to insure that such funds are ap-
proved by the legislative finance committee in the form of a
budget amendment before they are made available to the state
agency for expenditure.
The Governor challenges the budget amendment authority
in S.B. 401 and H.B. 1 (Special Session) of the Finance Committee
by asserting in the alternative that either it is an unconsti-
tutional delegation of legislative authority because it gives
the Finance Committee authority to permit expenditures of money
from the public treasury without an appropriation made by law,
or an infringement on the doctrine of separation of powers be-
cause it allows the Finance Committee to exercise discretion ex-
clusively reserved to the executive branch.
Additionally, the Governor argues if the Finance Committee
is exercising administrative power, the legislature has conferred
civil appointments upon members of the legislature who are in-
eligible for such appointment under Article V, Section 9, 1972
Montana Constitution. Section 7, S.B. 333 is void, argues the
Governor, because it is an interference with the governor's con-
stitutional duty to prepare and submit a budget to the legis-
lature in Article VI, Section 9, 1972 Montana Constitution. The
Governor also seeks to enjoin the Finance committee from acting
under the remainder of S.B. 333 to the extent duplication or
interference with the Governor's constitutional budget duties
result.
The following sections of S.B. 333 indicate a possible
duplication of function or interference with the executive:
"Section 6. There is a new R.C.M. section numbered
43-1114 that reads as follows:
"43-1114. Legislative fiscal analyst's duties.
The legislative fiscal analyst shall: (1) provide
for fiscal analysis of state government and accumu-
late, compile, analyze, and furnish such information
bearing upon the financial matters of the state that
is relevant to issues of policy and questions of
statewide importance, includinq, but not limited to,
--
investigation and study of the possibilities of
effectinq economy and efficiency in state qovernment;
"(2) Estimate revenue from existing and proposed
taxes ;
"(3) Analyze the executive budget and budget
requests of selected state agencies and institutions,
including proposals for the construction of capital
improvements;
"(4) Make the reports and recommendations he
deems desirable to the leqislature and make reports
and recommendations as requested by the legislative
finance committee and the legislature; and
"(5) Assist committees of the legislature, and
individual legislators, in compiling and analyzing
financial information.
"Section 7. There is a new R.C.M. section numbered
43-1115 that reads as follows:
"43-1115. Fiscal analysis information from state
agencies. The legislative fiscal analyst has the
authority to investigate and examine into the costs
of state government activities and may examine the
records, books, and files of any state agency, in-
cluding confidential records of executive branch
agencies. Every state agency shall furnish the legis-
lative fiscal analyst with copies of all budget
requests, at the time of submission to the budget
director as provided by law, and if requested, all
underlying and supporting documentation. In the
year preceding each legislative session, the budget
director shall furnish the legislative fiscal analyst
on a confidential basis:
"(1) by December 1, a copy of the documents which
reflect the anticipated receipts and other means of
financing the budget for each fiscal year of the
ensuing biennium;
"(2) by December 1, a preliminary budget which
shall meet the statutory requirements for submission
of the budget to the legislature; and
"(3) by December 15, all amendments to the pre-
liminary budget." (Emphasis supplied.)
The Finance Committee's answer raises four defenses
which are the subject of a motion to dismiss. First, that the
complaint fails to state a claim upon which relief can be granted.
Second, the Finance Committee asserts that this Court should
not invoke its original jurisdiction under Rule 17, Montana Rules
of Appellate Civil Procedure, because no emergency situation exists.
Third, there are factual matters in dispute requiring an eviden-
tiary hearing in district court. Fourth, defendant Finance Com-
mittee asserts that plaintiff Governor should be estopped from
challenging the acts in question because he signed them and sub-
sequently did not legally challenge them when he had an opportunity
to do so.
On the merits of the Governor's challenge the Finance
Committee states that the establishment of the interim committee
was a valid exercise of legislative power and the members of the
committee serve in their capacity as legislators, not civil offi-
cers. It argues the interim committee performs an incidental
legislative function by altering expenditure limitations estab-
lished by the legislature during its biennial sessions. The
legislature in H.B. 1 (Special Session) established a contingency
according to the Finance Committee, which becomes effective when
the Finance Committee determines the contingency has been met.
The Finance Committee argues such contingent appropriations ap-
proved by the legislative finance committee under S.B. 401 con-
stitute a valid delegation of authority.
With regard to the Governor's challenge to the fiscal
analysis powers in S.B. 333, these duties do not violate the sep-
aration of powers clause of Article 111, Section 1, 1972 Montana
Constitution, according to the Finance Committee. Specifically
it argues Article VI, Section 9, 1972 Montana Constitution, con-
fers a duty on the governor to submit - budget to the legislature,
a
but this does not preclude the legislature from rejecting all or
part of that budget and substituting one of its own. The Finance
Committee submits that the information obtained by the powers
given in S.B. 333 is merely ancillary to the legislature's duty
to make an independent and responsible decision concerning appro-
priations.
Initially we consider the Finance Committee's motion to
dismiss. The Governor opposes the motion on the basis that only
legal issues are involved and during oral argument the Governor's
counsel stated he was willing to concede any factual matters in
question. We note at this point that because of the lack of facts
presented, our opinion here is necessarily limited. The Governor
maintains that each enactment is unconstitutional on its face.
On the basis of the Governor's concession of factual issues and
the fact that the answers required by this case will have such a
significant impact on the operation of state government, (for ex-
ample, this Court's decision in Board of Regents v. Thomas L.
Judge, Cause No. 13069, also decided today) we deem this Court's
original jurisdiction proper under Rule 17, Montana Rules of Ap-
pellate Civil Procedure.
We also find that a declaratory judgment concerning the
legislative acts in question provides a proper resolution of this
controversy. Board of Regents v. Thomas L. Judge, supra. Finally,
we think the doctrine of estoppel is inapplicable here in view
of the Governor's duty to uphold the Montana Constitution. The
Finance Committee's motion to dismiss is denied.
Moving to the merits of the controversy, we first consider
the budget amendment authority given the Finance Committee under
(Special Session)
S.B. 401 and H.B. 1 ! Initially we find that the legislature in
/
H.B. 1 (Special Session), Laws of Montana, 1975, did intend and
did accomplish the appropriation of monies received from sources
other than the general fund which were not available for consid-
eration by the legislature. What remains is a categorization
and constitutional evaluation of the function of that committee.
There can be no doubt that the legislature, sitting in
session, could determine whether or not to release money already
a
appropriated from/source other than the general fund and not
available for consideration by an earlier session of that same
legislature. Such a determination is an integral part of the
final appropriation decision. The power to appropriate is a
long established, well-recognized power of the legislature. State
ex rel. Haynes v. District Court, 106 Mont. 470, 476, 78 P.2d
937 and cases cited therein. Further, these nongeneral fund
monies are public operating funds of state government subject to
the appropriation process. See companion opinion Board of Regents
v. Thomas L. Judge, supra.
Alternatively the legislature might, as it has often done
in other areas, make a policy determination and delegate to an
executive agency or officer the duty to later implement the legis-
lature's policy determination.
The legislature has the power to establish interim com-
mittees to gather information upon which the legislature can eval-
uate past actions or use as a basis for future decisions. Art-
icle V, Section 10, 1972 Montana Constitution; State ex rel. James
v. Aronson, 132 Mont. 120, 314 P.2d 849; Transcript of Proceedings,
Montana Constitutional Convention, (1972), pp. 1950, 1951.
But, the 1975 Montana ILegislature in its enactment of
S.B. 401 and H.B. 1 (Special session) empowering the Finance Com-
mittee to approve budget amendments delegated a power properly
exercisable only by either the entire legislature or an execu-
tive officer or agency, to one of its interm committees. Such
a hybrid delegation does not pass constitutional muster. The
power in question here resides in either the entire legislative
body while in session or, if properly delegated, in an execu-
tive agency. Clearly the action of the Finance Committee does
not constitute the action of the entire legislature. Article
V, Section 11, 1972 Montana Constitution. Just as clear is the
fact that Article V, Section 9, 1972 Montana Constitution, would
disqualify these legislators from membership on the Finance
Committee if it were an executive agency. Therefore those sec-
tions of S.B. 401 and H.B. 1 (Special Session) empowering the
Finance Committee to approve budget amendments are declared in-
valid as unconstitutional delegations of legislative power.
This determination that S.B. 401, Chapter 510, Laws of
Montana, 1975, is unconstitutional necessarily denies the Finance
Committee any power over those requests enumerated in section
1 (3), H.B. 271, before us in the companion case Board of Regents
v. Thomas L. Judge, supra. Since we have found the appropriation
to have been made by the legislature, which both parties concede,
the discretion regarding the disposition of these nongeneral
fund unanticipated revenues resides within the executive branch.
Next we consider S.B. 333, which the Governor alleges
to be an infringement on the executive branch and therefore vio-
lative of the separation of powers clause of Article 111, Section
1, 1972 Montana Constitution.
This description from State v. Johnson, 75 Mont. 240, 249,
243 P. 1073, is the accepted discussion of separation of powers
by this Court:
"In theory, this section [Section 1, Article IV,
1889 Montana Constitution almost identical to
Section 1, Article 111, 1972 Montana Constitution]
* * * effects an absolute separation of the three
departments of our government, 'but, while such
is the theory of American constitutional govern-
ment, it is no longer an accepted canon among
political scientists; it has never been entirely
true in practice.' (12 C.J. 803; Cooley on Con-
stitutional Law, 44; Story on Constitution of the
United States 525.)
"That section 1, Article IV, does not wholly prevent
the exercise of functions of a nature belonqinq to
one department by those administerinq the affairs
of another is recoqnized in State ex rel. Hillis v.
Sullivan, 45 Mont. 320, 137 Pac. 392, wherein Mr.
Justice Sanner, speaking for this court said: 'The
separation of the government into three great de-
partments does not mean that there shall be "no common
link of connection, or dependence, the one upon the
other in the slightest degree" (1 Story's Commentaries
on the Constitution, sec. 525); it means that the
powers properly belonging to one department shall not
be exercised by either of the others. (Const. Art.
IV, sec. 1.) There is no such thing as absolute
independence. ' He then cites numerous instances of
the exercise of powers by one department which, from
their nature, would seem to belong to another, but
which are incidents to the proper discharqe of the
powers vestinq in the department exercisinq them, or
are reposed in the particular department as a matter
of convenience in qovernmental affairs. " (Emphasis
supplied.)
Mr. Justice Brandeis in Myers v. United States, 272 U.S.
52, 47 S.Ct. 21, 71 L ed 160, 242, stated:
"The doctrine of the separation of powers was ad-
opted by the Convention of 1787 not to promote
efficiency but to preclude the exercise of arbi-
trary power. The purpose was not to avoid friction,
but, by means of the inevitable friction incident
to the distribution of the governmental powers
among three departments, to save the people from
autocracy." (Emphasis supplied.)
We also take noteof the language of Mr. Justice Holmes in Springer
v. Philippine Islands, 277 U.S. 189, 209, 48 S.Ct. 480, 72 L ed
"The great ordinances of the Constitution do not
establish and divide fields of black and white.
Even the more specific of them are found to termi-
nate in a penumbra shading gradually from one ex-
treme to the other. * * * " (Emphasis supplied. )
To what extent then does S.B. 333 violate the separation
of powers in view of the command of Article VI, Section 9, 1972
Montana Constitution, for the governor to "submit to the legis-
lature at a time fixed by law, a budget for the ensuing fiscal
period setting forth in detail for all operating funds the pro-
posed expenditures and estimated revenue of the state." Again,
our determination here is limited to a consideration of S.B.
3 3 3 on its face, due to the concession of factual issues by the
Governor.
Basic to the resolution of this issue is the fact that
the budget in Montana is a legislative budget not an executive
budget notwithstanding Article VI, Section 9. Article V and
Article VIII, 1972 Montana Constitution, vest the power to ap-
prove appropriation bills and a budget in the legislative branch.
Article V, Sections 1, 11; Article VIII, Sections 9, 12, 14, 1972
Montana Constitution. In other words the legislature has the
power to adjust and finalize the budget. Given-that power and
responsibility the legislature through an interim committee may
require such information from the other branches of government
as is reasonably necessary to form a rational basis for its budget
determinations.
The Governor's assertion that Section 7 of S.B. 3 3 3 in-
fringes on the executive branch because it requires a disclosure
of information held by state agencies, including a copy of the
preliminary budget, is of little substance. Indeed, should the
executive branch withhold from the legislature or one of its
interim committees any information reasonably necessary for budget
decisions, it in fact would be interferring with the legislature
to the extent of violating the separation of powers doctrine.
Once prepared the preliminary budget is arguably a public docu-
ment and should be available not only to the Finance Committee
but to the general public as well under Article 11, Section 9,
1972 Montana Constitution.
While an apparent unnecessary duplication of effort
in the preparation of two budgets and an apparent lack of cooper-
ation may exist between the executive and the legislature in this
matter, which results in a waste of taxpayers' money, these are
insufficient grounds upon which to find a legislative enactment
constitutionally invalid.
The rule that the constitutionality of an act of the
legislature must be presumed unless rebutted by proof beyond a
reasonable doubt is well established in Montana. State ex rel.
Mills v. Dixon, 66 Mont. 76, 84, 213 P. 227. This presumption
has not been overcome here; and thus we hold as to S.B. 3 3 3 ,
specifically as to Section 7, the legislature has acted properly.
This opinion, together with the opinion in the companion
case No. 13069, shall constitute a declaratory judgment.