Montana Attorney General Opinion 17-111

Opinion No. 111. Cities and Towns-Taxation-In- terest-Special Improvement Assessments. HELD: Under Section 5245 R. C. M. 1935 and Chapter 51, Laws of 1937, a city may not charge interest on in- terest delinquent on special improve- ment assessments. Mr. F. C. Fluent City Attorney Butte, Montana Dear Sir: June 11, 1937. You have submitted to this office the following statement of facts and ask for my opinion as to the law upon the same. It appears that the City of Butte has, for some years past, been collecting interest on special improvement taxes at the rate of six per cent per annum, 122 OPINIONS OF THE ATTORNSY GENERAL and that when any installment is past due the interest due upon said in- stallment has been added to the prin- cipal and six per cent interest col- lected on the whole amount. It fur- ther appears that this procedure has been followed by virtue of such au- thority of law as is vested in the city under Section 5245, of Chapter 398, of the Revised Codes of Montana, 1935, which reads as follows: "Upon all special assessments and taxes, levied and assessed in accord- ance with any of the provisions of this act, simple interest shall be charged at the rate of six per cent. per annum, and the treasurer, in col- lecting such special assessment taxes, if the same are payable in one in- stallment, shall collect such interest as may be shown to be due thereon by the resolution levying such as- sessments; and if such assessment be payable in installments the treasurer shall, at the time of collecting the first installment, collect such in- terest as may be shown to be due on such assessment by the resolution levying such assessment, and there- after he shall collect with each sub- sequent installment interest on the whole amount rema:nin~ unpaid." The section above referred to has been amended by Chapter 51 of the 1937 Session Laws, which is as fol- lows: "Upon all special assessments and taxes, levied and assessed in accord- ance with any of the provisions of this act, simple interest shall be charged at a rate not to exceed six per cent (6%) per annum, and the treasurer, in collecting such special assessment taxes, if the same are payable in. one installment, shall col- lect such II1terest as may be shown to be due thereon by the resolution levying such assessments; and if such assessment be payable in in- stallments the treasurer shall, at the time of collecting the first install- ment, collect such interest as may be shown to be due on such assess- ment by the resolution levying such assessment, and thereafter he shall collect with each subsequent install- ment interest on the whole amount remaining unpaid." While these tax assessments and the computation of interest were made under authority of Section 5245 of Chapter 398 of the Revised Codes of Montana, 1935, and while sections 2169.2, 2169.3, and all of Chapter 199 of the Revised Codes of Montana, 1935, have no relation to Chapter 398, supra, yet certainly by inference and implication it appears that special im- provement taxes shall not, in reference to compound interest at least, be treated differently than delinquent taxes due the county, and the county is prohibited from charging compound interest upon delinquent taxes. How- ever, it is not necessary to determine whether or not any other provisions of the law are in conflict with Section 5245 of the Revised Codes of Mon- tana, because Chapter 51 of the 1937 Session Laws is the last legislative enactment upon the subject, and in the event of any conflict Chapter 51 would supercede all other former statutes. (It is our opinion that there is no conflict.) It has been the policy of the legis- lature, through the extension of time for payments and otherwise, to liberal- ize the law in reference to the im- position of tax collections, and to make the burden just as light as possible upon the taxpayer. The legislature has recognized the economic conditions that have confronted the lot of the overburdened taxpayer. and has en- deavored to lighten that burden as much as possible. Under Chapter 51 of the 1937 Ses- sion Laws, the legislature has estab- lished a maximum rate of interest, not to exceed six per cent, that may be collected upon these special assess- ment taxes. Chapter 51 does not seek to establish a minimum rate. Under section 5245 the city council was compelled to charge six per cent simple interest and not less. That sec- tion fixed not only a maximum, but also a minimum. Under the amend- ment only a maximum rate was fixed, and the city council may, by resolu- tion, designate a lesser rate of interest than six per cent. and may even re- fuse to fix any rate of interest, and in that manner conceivably create more or less of a moratorium. H'ow- ever, the rate of interest shall be fixed at the time of the levying of such assessment, and the council can not decrease the rate for improvement dis- OPINIONS OF THE ATTORNEY GENERAL 123 tricts already created. Both section 5245 and Chapter 51 specifically pro- vide that the interest charged shall be simple interest. The language posi- tively forbids the compounding of in- terest. When the statute provides that there shall be collected with each sub- sequent installment interest on the whole amount due remaining unpaid, the language has reference to the fix- ing of a date on which interest can be computed, rather than authorizing the charging of interest on interest. (See Glacier County v. Halvorson Mercantile Co., 93 Mont. 521.) Therefore, it is my opinion that the City of Butte is without power or authority to charge interest upon in- terest, or to compound the interest. The City of Butte is entitled to charge only simple interest upon such unpaid special improvement assessments, and it is my view that it has acted errone- ously and without authority in law in charging compound interest upon these unpaid special improvement assess- ments. This office cannot agree or concur in the opinion that you have rendered the city treasurer wherein you state that the city has the au- thority to compute the amount due the City of Butte by computing interest upon interest.