Montana Attorney General Opinion 17-149

Opinion No. 149. Taxation-Valuation-Assessed Valua- tion-Taxable Valuation. HELD: The levy under Section 4465.12, R. C. M., 1935, is to be used on the taxable valuation of the property of the county and not the assessed cal- culation. September I, 1937. Mr. Ernest E. Fenton County Attorney Hysham, Montana Dear Mr. Fenton: The question submitted to us, by you, is: "Will you kindly give me your opinion on the question of whether the sixteen mill levy limitation for county purposes, prescribed by Sec- tion 4465.12, R. C. M., 1935, should be construed to mean sixteen mills on each dollar of assessed valuation or sixteen mills on each dollar of tax- able valuation." Replying to your inquiry, and thank- ing you for the consideration you have given this office in preparing a brief on this question, we are answering as follows: In State ex reI. Tillman v. District Court, 101 Mont. at page 181, the court gives us the purpose of taxa- tion in the following language: "The purpose of taxation is to raise the necessary revenue for the support of the government and the consequent security of the people in the posses- sion of their property (Cruse v. Fischl, 55 Mont. 258, 175 Pac. 878). A tax is an enforced contribution from the people for this purpose, in accordance with some reasonable rule of apportionment equalizing the bur- dens upon the people benefited (State ex reI. Pierce v. Cowdy, 62 Mont. 119, 203 Pac. 1115)." In theory, the burden of taxation ought to be borne by everyone in pro- portion to the value of his property. In practice it is not always so. Prior to the enactment of the classification act of 1919, we were at the mercy of the assessor, who would assess valua- tions of property at such figures as he might feel were justified. This led to much misrepresentation and dishonesty. This law continued in force from 1895 to the passing of the classification act. The classification act was then passed by our state legislature as a remedy (Chapter 51 of the Session Laws of 1919). No change has ever been made in what is now Section 4465.12, this particular section having been enacted in 1895. To an intents and purposes it reads the same today as it did in 1895, and we quote it as follows: "4465.12. Taxation. The board of county commissioners has jurisdic- tion and power under such limitations and restrictions as are prescribed by law: To levy such tax annually, on the taxable property of the county for county purposes as may be neces- sary to defray the current expenses therefor, including the salaries other- wise unprovided for, not exceeding sixteen (16) mills on each dollar of the assessed valuation for anyone (1) year; and to levy such taxes as are required to be levied by special or local statutes." With the enactment of the classifica- tion act, it became necessary for our courts to put a construction upon 4465.12 as to what was meant by assessed valuation and taxable valua- tion as used in that particular section. You have called our attention to the case of Wibaux Improvement Co. v. Breitenfeldt, 67 Mont. 206. We read this case in a little different light than do you, and feel that the court did practically state that the basis of com- OPINIONS OF THE ATTORNEY GENERAL 169 putation should be upon the taxable value of the property: "Section 5194 was enacted many years ago, and from the date of its enactment until 1919 there was but one standard by which the assess- ment and taxation of property could be measured. All taxes were com- puted upon the assessed value of property, which was presumed to be the full cash value, though in fact it was not. It was notorious that prop- erty generally was assessed at much less than its full cash value' but not- withstanding this fact the' assessed value as determined by the assessors 0 and boards of equalization became the value fixed by law as the basis upon which taxes were to be computed. The disparity in the valuation of dif- ferent classes of property or of the s~me class in different counties gave nse to a demand for a new system under which a more equitable distri- bution of the burden of taxation might be had, and in response to that de- mand the legislature enacted Chapter 51, Laws of 1919 (Secs. 1999, 2000, Rev. Codes 1921). The purpose of that legislation was 'to remove the temptation to dishonesty in returning property for assessments; to shift the burden of taxes from property, as such, to productivity, or in other words, to impose the burde~s of gov- ernment . upon property in propor- tl~~ to. Its use, its productivity, its utIlIty, Its general setting in the eco- nomic organization of society so that e,:ery one will be called upon'to con- trIbute according to his ability to bear the burdens, or as nearly so as may be, and to relieve administrative officers from the apparent necessity of continuing the legal friction of full valuation in the face of contrary facts.' (Hilger v. Moore, 56 Mont. 146, 182 Pac. 477.) In order to reach the desired end, all taxable property was divided into seven classes and property in every class was mad~ sub- ject to taxation upon a fixed per- centage of its assessed value. Under Section 5194 assessed value and tax- able value meant the same thing. "By enacting Chapter 51 above the legislature defined 'taxabl~ valu~' to mean that percentage of the assessed value indicated by the scale found in section 2000. It is a fundamental rule of statutory construction that the in- tention of the legislature must be given effect, if possible (Sec. 10520, Rev. Codes 1921; Bennett v. Meeker, 61 Mont. 307, 202 Pac. 203). There cannot be a doubt as to the intention of the legislature in enacting Chapter 51, above. In terms the meaning of which cannot be questioned. the law- makers substituted a new standard as the basis upon which taxes should be computed thereafter for the standard prescribed by prior statutes, including Section 5194, and this was accomp- lished by giving to the term 'taxable value' a definition different from that which it had borne theretofore." Likewise has the court given its con- struction to the term "assessed value" and "taxable value," in the case of Heckman v. Custer County, et aI., 70 Mont. 84. The court uses the follow- ing language: "As employed herein, 'assessed value' means the value fixed upon taxable property by the county asses- sor and equalized by the county and state boards of equalization. 'Taxable value' means that percentage of the assessed value which is made the b.asis of computation of taxes by Sec- tIOns 1999 and 2000, Revised Codes of 1921. * * * "By an Act approved February 20, 1923, the Eighteenth Legislative As- sembly amended Section 4614 by pro- viding that thereafter any new bonds to be issued, with the outstanding bonded indebtedness, shall not in the aggregate exceed 'five per centum of the per centum of the assessed value of the property upon which taxes are levied and paid within such county to be ascertained by the last assess~ ment for state and county taxes.' (Chap. 21, Laws 1923.) In other words, by this amendment the legis- lature undertook to substitute taxable value for assessed value as the basis for determining the limit of county bonded indebtedness and succeeded if the amended statute is a valid legis~ lative enactment." and concludes that the said Chapter 21 of the Laws of 1923, was constitutional' that it establishes effectually the tax: abl~ value o.f I?roperty as a basis upon whIch the lImIt of county bonded in- debtedness is to be computed. The court has again construed the question in State ex reI. Judd v. Cooney 170 OPINIONS OF THE ATTORNEY GENERAL et aI., 97 :Mont. 75, in the following language taken from Chapter 158 of the Laws of 1923: " "vVherever, by statute, rule, or law, it is or shall be provided that any tax shall or may be levied to the extent of a given number of mills on the property, within any County, or tax district or unit, or on the dollar, or on the value of such property, or on the taxable value or assessed value thereof, or similar expressions, or wherever it is or shall be provided, as aforesaid, that a tax may be levied not exceeding a given number of mills levied as aforesaid, or not exceeding a given percentage of the value, or taxable value, or assessed value of property, or similar expressions, the said expressions shall be taken to mean the value of the taxable prop- erty in such County, tax district, or tax-unit, as ascertained or determined by taking a percentage of the true and fu\1 value, provided, or to be provided, by law, rule, or practice, for the pur- poses of taxation, unless a meaning otherwise expressly and clearly ap- pears to be contrary.' (Section 1.)" You have called our attention to this case in your brief, and we take it that it is your opinion that because the court held that the funding bonds should be paid, having been issued as based upon the assessed value of the property, that the statute referred to should mean the assessed value of the property. We understand, however, that the reason of the decision of the'court was a matter of the state having entered into a con- tract on the original issue of these bonds; that the assessed value of the property should govern and the orig- inal bonds were issued prior to the passage of the classification law, Chap- ter 51 of the Laws of 1919. Vole quote the language of the court, as follows: "When the bonds which are to be refunded were issued and sold, the law provided for the levy and collec- tion of the tax upon the assessed value of all property in the state sub- ject to taxation for the payment thereof, and the duty to levy and col- lect such a tax became an obligation of the contract with the holders of the educational bonds. (State ex reI. Malott v. Board of County Com mrs., 89 Mont. 37. 296 Pac. I; Von Hoff- man v. Quincy, 4 Wall. 535. 18 L. Ed. 403; State ex reI. Tipton v. Erickson, 93 Mont. 466. 19 Pac. (2d) 227.) "The refunding bonds which the board of examiners have sold to the relator upon the condition that, when issued, they shall be payable from the levy and collection of taxes as pro- vided in Section 7 of Chapter 23 amount to a renewed recognition of a subsisting liability. They secure a portion of the same debt which the people authorized when they adopted the Initiative Measure, and continue to be a liability resting upon the state. (Hotchkiss v. Marion, 12 Mont. 218, 29 Pac. 821; Palmer v. City of Helena, 19 Mont. 61. 47 Pac. 209; City of Los Angeles v. Teed, 112 Cal. 319, 44 Pac. 580; Opinion of Justices, 81 Me. 602, 18 Atl. 291.) "The indebtedness to be evidenced by the refunding bonds is the same indebtedness evidenced by the edu- cational bonds, and the levy of a tax upon each dollar of assessed value of all property subject to taxation in the state applies to and controls the levy of the tax for the payment of these refunding bonds, even without refer- ence to any provision in the statute authorizing the issuance of the same. (Hotchkiss v. Marion, supra; Blanton v. Board of Commrs., 101 N. C. 535, 8 S. E. 162.) "It is clear that the legislative as- sembly intended that the tax should be levied upon the assessed value and not upon the taxable value of the property. * * *" We might say further in reference to the case of State ex reI. Judd v. Cooney et aI., that this came about through the Initiative Act, and, of course, was the will of the people; that it was for a particular purpose and in conformity with Section 5612, R. C. M., 1921. You will note that this particular section has been omitted in our 1935 codification. which simply means that the particular section referred to a par- ticular purpose and such purpose has been served so there was no necessity of carrying on in the Codes of 1935. Section 5612. You call our attention to the con- struction of statutes amended and re- pealed. etc., and apparently are relying upon the case of State ex reI. Nagle v. The Leader Co. et aI., 97 Mont. 587 at page 59l. It is our opinion that this is OPINIONS OF THE ATTORNEY GENERAL 171 not the rule applicable in the con- struction of this particular statute. We might say that we agree with you per- fectly in the history of the statute, from 1895 to the last statement of our legislature, adopted as Chapter 100 of the Session Laws of 1931. To our minds the significant feature of this particular history is this, that through all of this period Section 4465.12 has undergone no particular change, and that while Chapter 100 of the Laws of 1931 is an amendment of Section 4465, and, we might say, the entire section of the Laws of 1921, as well as subse- quent amendments to the said section, that in the construction thereof Sec- tion 93 of our Codes is applicable. This section reads as follows: "Where a section or a part of a statute is amended, it is not to be considered as having been repealed and re-enacted in the amended form, but the portions which are not altered are to be considered as having been the law from the time when they were enacted, and the new provisions are to be considered as having been en- "acted at the time of the amendment." This merely means to say that since that portion of Section 4465 of the Laws of 1921. which is our present Section 4465.12, Laws of 1935, was not altered or changed and therefore must be construed to have been the law from the time of its original enactment in 1895, and whatever constructions have been placed upon this particular sec- tion by our Supreme Court would be just as effective today as they were prior to the passage of Chapter 100 of the Laws of 1931. In connection with this construction, the court said in the case of State v. Board of County Commissioners, 47 Mont. 531, 539, the following: "Section 119, Revised Codes, pro- vides: 'Where a section or a part of a statute is amended, it is not to be considered as having been repealed and re-enacted in the amended form, but the portions which are not al- tered are to be considered as having been the law from the time when they were enacted, and the new provisions are to be considered as having been enacted at the time of the amend- ment.' This merely states a general rule as it was recognized by the au- thorities at the time our Codes were adopted. (Black on Interpretations of the Laws. Sec. 133,36 eyc. 1083; Ely v. Holton, 15 N. Y. 595; Moore v. Mausert, 49 N. Y. 332.) In City of Helena v. Rogan, 27 Mont. 135, 69 Pac. 709, this court said: 'Where a provision is amended by an Act using the words 'to read as follows,' it must be the intention of the law- makers to make the amendment a substitute for the old provision, and to have it take its place exclusively.' The same rule is stated in 1 Lewis' Sutherland on Statutory Construc- tion, second edition, section 237, as follows: 'The amendment operates to repeal all of the section amended not embraced in the amended form. The portions of the amended sections which are merely copied without change are not to be considered as repealed and again amended, but to have been the law all along; and the new parts or the changed portions are not to be taken to have been the law at any time prior to the passage of the amended Act.''' This rule of construction was again adopted in the case of Continental Supply Co. v. Abell et aI., 95 Mont. 148, 164, in which case are many Mon- tan a citations. In conclusion, it is the opinion of this office that Section 4465.12 should be so read as to apply the tax levy upon the taxable valuation of the property within the county, and not upon the assessed valuation.