APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV-2011-961 Honorable Jeffrey M. Sherlock, Presiding Judge
The opinion of the court was delivered by: Chief Justice Mike McGrath
Submitted on briefs and decision rendered: August 10, 2012
Opinion, analysis and rationale issued: September 25, 2012
Chief Justice Mike McGrath delivered the Opinion of the Court.
¶1 Secretary of State Linda McCulloch appeals from the District Court's Opinion and Order granting summary judgment to the plaintiffs and declaring Legislative Referendum 123 (LR-123) unconstitutional. On August 10, 2012 this Court entered a summary order affirming the District Court, with an opinion to follow in due course.
¶2 McCulloch presents the following issues for review:
¶3 Issue One: Whether the challenge to LR-123 is ripe and justiciable.
¶4 Issue Two: Whether LR-123 is unconstitutional.
¶5 The plaintiffs, collectively referred to as the MEA-MFT, cross-appeal from the District Court's order dismissing Count 1 of the complaint. MEA-MFT contend in the cross-appeal that LR-123 was an unconstitutional appropriation.
PROCEDURAL AND FACTUAL BACKGROUND
¶6 LR-123 was enacted by the Montana Legislature in 2011 as Senate Bill 426. It proposed a vote in the November 2012 general election on whether to provide a tax credit and potential tax refund, or outright State payment, to individuals in years in which there is a certain level of projected surplus revenue. LR-123 provides that if the unaudited ending State general fund balance exceeds 125% of the projected fund balance and this excess balance over 125% is at least $5 million, then a taxpayer could claim the tax credit as to taxes owed for the current year, and could receive a payment from the State if the credit exceeds tax liability and even if the individual had no tax liability.
¶7 The dispute in this case arises from the calculations required to
determine whether the credit-refund threshold is reached. While LR-123
assigns various duties to the Department of Administration, the
primary dispute is over the role assigned to the Legislative Fiscal
Analyst. The Legislative Fiscal Analyst (LFA) is an individual
employed by the Legislative Finance Committee and serves at its
pleasure, § 5-12-205, MCA. The Finance Committee is a permanent joint
committee of the Montana Legislature, § 5-12-201, MCA. Section 1(7)(a)
of LR-123 requires the LFA to calculate a projected general fund
balance by August 1 for the end of the current fiscal year.*fn1
This calculation involves a projection to be determined by a
consideration of anticipated revenues and transfers, the impacts of
enacted legislation, anticipated supplemental appropriations and
anticipated reversions. The LFA is directed to calculate the projected
general fund balance by adding the unassigned fund balance from the
most recent completed fiscal year to the anticipated revenues and
transfers, less the level of appropriations and transfers,
supplemental appropriations and anticipated reversions for the most
recent completed fiscal year. The constitutional issue in this case
turns upon whether LR-123 impermissibly delegates legislative power to
an employee (the LFA) of one of the Legislature's committees (the
¶8 MEA-MFT filed a complaint seeking declaratory and other relief, contending that LR-123 was unconstitutional because it proposed an appropriation and because it unlawfully delegated legislative powers. McCulloch moved to dismiss and MEA-MFT moved for summary judgment. The District Court granted the motion to dismiss as to one count of the complaint, holding that LR-123 did not provide for an appropriation. The District Court subsequently granted summary judgment to MEA-MFT, holding that LR-123 unconstitutionally delegated legislative power to the LFA.
¶9 A critical component of LR-123 is the requirement that the LFA determine the amount of the budgeted general fund balance. An affidavit by the LFA presented in the District Court proceedings sets out in detail the numerous separate steps, some involving other sub-steps, required to make this calculation. The calculation requires the LFA to project and anticipate fund balances, revenues, transfers, appropriations and reversions to ...