Montana Attorney General Opinion 15-4

Opinion No. 4 Appropliations-Constitutional Law- "Specific Appropl'iation" Defined -.State Institutions. HELD: Insofar as section 1W, R. C. ;\1., 11:)21, assumes to appropriate money beyond a period of two years, it con- flicts with :,-ection 12, Article XII of the Constitution. However, applying the maxim "that is certain which is capable of being made certnin," the legislati\-e assembly may, in an appro- priation bill, set apart the proceeds of a tax, inc,{)1l1e derived from some public source, or fees paid into a state depart- ment for a specific public purpose with- OPI~IO;>\S OF 'rHE AT'rOH;>\EY GB:\EHAL 21 out definitely naming the amount, and such bill does not conflict with section 10, Article XII of the Constitution, January 11, 1933, On .January 6 this office gave you an opinion relative to the constitutionality of section 194, Revised Codes of ~lon­ tana of 1921, and the constitutionality of a clause in an appropriation bill setting apart incomes or fees for a spe- cific department without naming a defi- nite sum. In that opinion we stated that an aplll'Opriation in order to be valid must definitely fix the alllount set apart. 'Ve have continued to im'estigate the mattcr and while in the main arrh'e at the same conclusion expressed in that opin- iun we find that the opinion must be modified by going further into the defi- nition of what constitutes a "specific appropriation." Therefore, in conformity with high- est judicial precedent we withdraw the opinion of January G and substitute therefor the following: Section 12, Article XII, of the Con- stitution, pro,-ides, nmong other things, thnt "no appropriation of tmhlic mon- e~'s shall be made for a longer term than two years." Section 1!H, He\'ised Codes of Mon- tana, 1921, reads in part ns follows: "For the support nnd endowment of ench and every of the state institutions of the state of Montana now existing or hereafteL' to iJe creatcd there is an- lIually and perpetually appL'opL'iated re- spl.'<:ti vely : "l. The income fL'om all permanent funds and endowments, and from nil land grants as pt'ovided by law; "2. All fees and earnings of each and every of such state institutions, from whatsoe\'er SOUL'ce they may be de- L'ived; "3. All such contL'iiJutions as may be deL'ived fl'om public 01' pL'ivate bounty." 'l'his statute, in so faL' as it assumes to appropriate moncy beyond a term of t\\'o yea rs, conflicts with said section 12 of the Constitution. Our Supreme Court has held, how- ever, in the case of Hill v. Hae, 52 ~iont. 37S, that Section l2, forbidding appropriations for a longer term than two years, operates as an automatic limit, so that the appropl"iation, if otherwise valid, would expire nt the end of that time, rather than he void fL''Om the beginning. It is pL'ohable, therefoL'e, that Section 194. quoted above, became inoperative on February 26, 1923, two years and a day afteL' its passage and approval, or at the latest. on .July 1, 1923, the first day of the fiscal year 1923-l924. The legislati\'e as:;,emblies appeal' not to have relied upon the al)()\'e section in view of the fact that at each session since that time they have placed a clause in each appropl;ation bill mak- ing the apPl'Opl;ation of income for the next hiennial. The validity of the war- rants drawn against such income does not depend therefore on the \'alidity of section 194 hut depends upon the val- idity of the clauses in the various ap- propriation bills passed by each session. We come therefore to the questJion whether or not these clauses are valid. Tn our previous opinion we stated that the appropriations must be specific and have a definite amount: We still be- lieve this to be correct but what con- stitutes a "specific appropriation" and what constitutes a "definite amount" must be considered and added to the former opinion. In defining these terms 've find that the courts ha\·e applied the maxim "that is certain which is capable of being made certain." Seetion 34, Article V, and section lO. Article XII, of the Constitution, are as follows: "~o mone~' shall be vaid out of the treasury except upon appt'opriations made by la\\', and on warrant drawn hy the l)rOper officer in pursuance thereof. except interest on the public debt." Section lO: "All taxes le\·ied for state purposes shall be paid into the state treasury, ali(I 110 money shall be d ra \vn from the tt'easur)' but in pursuance of spe- cific appropriations made by law." The Supreme Court of this State, in considering these sections, has held that their pro\·.isions are mandatory and that in the absence of an approprilftion made 22 OPINIONS OI!' THE ATTOH~EY GENERAL by the legislature for the purpose nei- ther the state auditor nor any other state officer has authority to draw his warrant on the treasury for the pay- ment of any claim or demand whatso- ever. (In re Pomeroy, 51 Mont. 119; First Nat. Bank v. Sanders County, 85 Mont. 450). Nebraska has a constitutional pro- vision substantially the same as our section 10. The Supreme Court of that state has ruled tha:t the term "specific appropriation," as used therein, means a particular, definite, a limited, a pre- cise appropriation. (State Y. Moore. 69 N. W. 373; Sta'te v. Wallichs, 11 N. W. 860). The term also occurs or occurred in the polibical code of California. The Supreme Court of that sta te said of it: "By specific appropliation we under- stand an act by which a namro sum of money has heen set apart in the treas- ury and devoted to the pa~'menrt of a particular claim or demand." (Stratton Y. Green, 45 Cal. 149). In 36 Cyc. 892 it is said that "a specific appropriation is an act by wMch a namro sum of money is set apart in the treasury and devotro to the payment of pal'ticular claims or demands. The appropriation must be specific as to the amount or fund appropriated and as to the object for which the appropriation is made." In the case of State ex reI. Toomey v. State Board of Examiners, 74 Mont. 1, our Supreme Court held that a law appropriating money (without defi- nitel~' fixing the sum appropriated) to the payment of treasury notes there- after to he issued in a certain amount, with interest at not to exceed 4 per cent per annum, sufficiently complied with said section 10 of the Constitu- tion. The legislature of Nehraska passed an act providing for the sale of lots and lands belonging to the state in the city of Lincoln and providing further "that the amount derived from the sale of said lots and lands is herehy appropri- ated out of the capitol building fund to aid in the completion and furnishing of said capitol building." The lots and lands were sold for $78,878, part in cash and the balance in notes due in one and two years. In State v. Bab- cock, 40 N. W. 316, the Supreme Court of that state held the act valid. To the same general effect are State v. :\Ioore, 69 X W. 373; State v. Searl!', 112 N. W. 380, and State v. Blian, 120 N. W. 916, all Nebraska cases. In Holmes v. Olcott, 189 Pac. 202, the Supreme Court of Oregon decided that an act which appropriated cel·tain mon- eys and license fees for the protection and propagation of game within the state, although no sum was specified, did not conflict with a constitutional provision somewhat similar to ours. The case of Edwards Y. Childers, 228 Pac. 472, im'oll'ed the appropriation of a tax on gasoline. The law WitS at- tacked hecause it did not "distincDly specify the sum appropriated," as re- quired by section 55. Article V, of the Oklahoma Constitution. The Suprenl!' Court. aJiter quoting from many au- thorities, said: "A legislabive act creat· ing a special fund, all of which is, b~' the terms of the act, appropriated and directed to be expended for a special purpose and in an express manner, amounts to an appropriation of the en- tire fund so created, and where the amount accruing to and paid into said fund is capable of being definitely as- certained, it is sufficiently definite and certain to comply with the provisions of Article 5, Section 55, of the Consti- tution." The Illinois legislature, under a con- stitutional prodsion similar to our own, appropl'iated the proceeds of a certain tax for a specific purpose. The act was attacked 011 the ground that the appropriation was not specific with- in 'ihe meaning of the Omstitutioll. The court said: "There is 110 force in the ohjection .tlta t the a PPI·opria·tion is for no certain amount. • • ,. It is not es- sential or "ital to an appropriation that it should be of an amount certainly ascertained plioI' to the appropriation." (People v. Miner, 46 Ill. 384). The latest case on the subject is Gamhle v. Verlarde, 13 Pac. (2nd) 559. Thel'e the Supreme Court of New Mex- ico held that a law provIding for DC- funds of excise taxes paid upon gaso, line not for use or us{'(] in operating "ehicles on highways, prescribing proof to be made by each claimant. and mak- ing available for refunds the special fund derived from such taxes, distinctly speCifies the sum appropriated within the meaning of section 30, Article 4, of the Constitution of that state. OPINIOXS OF THE ATTORNEY GENERAL 23 The position of the courts generally is summarized in 59 C. J. 250, as fol- lows: "Where a specification of the amount is required, it is not essential or vital to an appropriation that it should be for an amount definitelY as- certained prior to the appropriation; and an appropriation, the amount of which will be made certain by a mere mathema'tical computation, if the pro- \'isions of the act are carl'ied into ef- fect, sufficiently complies with this re- quirement. Where such a requirement is recognized, if there is no constitu- tional provision rcquiring the fixing of a maximum in dollars I\nd cents, an ap- propriation Illay be va Ii d when its amount is to be ascertained in the fu- ture from the collection of the revenue." It is our view, based on the foregOing and other authorities, that the legis- lative assembly may in an appropria- tion bill set apart the proceeds of a tax income derived from some public source or fees paid into a state department for a specific public purpose without <1efini,tely naming the amount. 'Vhether or not such method of mak- ing appropriations is sound legislative policy is a different question, and one which we are confident your committee will properly resolve. The Legislati\'e Assembly has on oc- casion apprOIH"iated definite amounts for certain departments and at the same t.ime provided that such amounts shall he paid from fees, earnings or income of such departments so far as sufficient hefore using the apportionment from the genera I fund. 'Ve see nothing wrong with the practice. See also: 59 C. J. Sec. 389, p. 249. Atkins v. State Highway Department, 201 S. W. 226 ('l'exas) ; Long v. Board of Trustees, 157 N. K 3~)5 (Ohio, 11)26) ; State ex reI. Spencer Lens Co. v. Searle, 100 N. W. 770 (Neb. In06); State ex reI. Davis v. Clausen, 295 Pac. 751, (Wash. In31) ; State ex reI. Shuff y. Clausen, 229 Pac. 5.