HUBER v GROFF

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No. 13552 I N THE SUPREME C U T O THE STATE O MONTANA OR F F CHARLES W. HUBER, P l a i n t i f f and Appellant, WILLIAM A. GROFF , V I R G I N I A JELT,ISON , PAUL A. JOHNSON, JAMES J L A Y , DAN ER K. MIZNER, PAUL E. POLZIN, WARREN F. VAUGHAN, a s members of and c o n s t i t u t i n g t h e Bonrd of Housing of t h e S t a t e of Montana, . Defendants and Respondents. ORIGINAL PROCEEDING: Counsel of Record: For Appellant : P a t r i c k F. Hooks argued, Townsend, Montana For Respondents: Moulton, Bellingham, Longo and Mather, B i l l i n g s , Montana F r e d r i c D. Moulton argued, B i l l i n g s , Montana Walter S. Murf i t t appeared, S p e c i a l A s s i s t a n t Attorney General, Helena, Montana Submitted : October 25, 1976 Decided Filed :mc 2 8 f2T7 BE6 2 9 3976 M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e Court. T h i s i s an o r i g i n a l proceeding brought by Charles W. Huber, p l a i n t i f f , a g a i n s t t h e members of t h e Board of Housing of t h e s t a t e of Montana seeking a d e c l a r a t o r y judgment pursuant t o Chapter 89, T i t l e 93, Revised Codes of Montana 1947. The Court accepted o r i g i n a l j u r i s d i c t i o n pursuant t o Rule 1 7 ( a ) , M.R.App.Civ. P. because t h e s h o r t n e s s of time b e f o r e t h e n e x t meeting of t h e l e g i s l a t u r e made "due c o n s i d e r a t i o n i n t h e t r i a l c o u r t and due a p p e a l t o t h i s Court a n inadequate remedy." The p l a i n t i f f seeks t o have t h e "Housing Act of 1975" which was passed a s Chapter 461, Laws of 1975, by t h e F o r t y - f o u r t h L e g i s l a t u r e d e c l a r e d u n c o n s t i t u t i o n a l on s e v e r a l grounds: F i r s t , p l a i n t i f f a l l e g e s t h e Act does n o t s e r v e a p u b l i c purpose a s r e q u i r e d by A r t . V I I I , S e c t i o n 1, 1972 Montana C o n s t i t u tion. Second, p l a i n t i f f a l l e g e s t h e bonds t h e Housing Board i n t e n d s t o s e l l a r e s t a t e d e b t and v i o l a t e t h e requirements of A r t . V I I I , S e c t i o n 8 , 1972 Montana C o n s t i t u t i o n . T h i r d , p l a i n t i f f a l l e g e s t h a t even i f t h e bonds a r e n o t s t a t e d e b t , s e c t i o n 35-517, R.C.M., v i o l a t e s t h e s e p a r a t i o n of powers s e c t i o n of t h e 1972 Montana C o n s t i t u t i o n and impinges on t h e powers of t h e e x e c u t i v e v i o l a t i n g A r t . 111, S e c t i o n 1 and A r t . V I , S e c t i o n 9. F o u r t h , p l a i n t i f f a l l e g e s t h e e n t i r e A c t , and e s p e c i a l l y s e c t i o n 35-517, v i o l a t e s A r t . V , S e c t i o n l l ( 5 ) . F i f t h , p l a i n t i f f a l l e g e s t h e Act e n t a i l s an u n c o n s t i t u t i o n a l d e l e g a t i o n of t h e l e g i s l a t i v e power. Sixth, plaintiff alleges the statutory flow of funds violates 4 Art. VIII, Section 12, Section 13 and Section 1 . Seventh, plaintiff requests the Court resolve the statutory conflict between section 5-1037, R.C.M. 1947, and the Housing Act A brief look at the function of the proposed programs of the Housing Board is necessary as background. The Housing Board intends to issue what are basically revenue bonds. The legislature granted these bonds tax exempt status and this status, along with the fact that the bonds are issued by a carefully supervised. governmental body, should reduce the risk factor resulting in a significantly lower interest rate. The Housing Board's plan is to take this low interest money and inject it into the state's mortgage money market to make mortgage money available to "persons and families of lower income." The Housing Board currently plans to use only two of the statute's programs, the loan to lender program and the mortgage repurchase program. in a similar manner. Both programs operate The first program loans money to lending institutions on the condition they loan that money within a specified time period to "persons or families of lower income". The second program provides for the purchase of mortgages on the condition that the money be lent to "persons or families of lower income.'' Both programs have financial incentives which encourage lending institutions to participate . Before beginning discussion of plaintiff's specific allegations we note the adoption of the 1972 Montana Constitution resulted in a significant change in the constitutional framework in the revenue and finance provisions. That change was the result of the deletion of the 11889 Constitution's Art. XIII, Section 1 which prohibited the lending of credit of the state to individuals and corporations. This prohibition serves as the background for many of the older cases in Montana and most cases in other states even today. First. Plaintiff contends the Housing Act of 1975, sections 35-501 through 35-526, R.C.M.1947, does not serve a public purpose. Art. VIII, Section 1, Montana Constitution requires:. "Tax purposes. Taxes shall be levied by general laws for public purposes .It This Court in Mills v. Stewart, 76 Mont. 429, 438, 247 P. 332, held : "The power to appropriate public funds and the power to levy and collect taxes are identical. (Panchot v. Leet, 50 Mont. 314, 146 Pac. 927; Gem Irrigation District v. Van Deusen, 31 Ida. 779, 176 Pac.. 887; College v. Hager, 121 Ky. 1, 87 S.W. 1125; 1 Cooley on Taxation 4th ed. sec. 177.)" The question is twofold: (1) Is the purpose of the legislation a public purpose? (2) Are the means selected reasonably likely to accomplish that public purpose? The purpose of the Housing Act of 1 9 7 5 . i ~ set out in section 35-502: "The legislature finds and declares that there is a shortage in Montana of decent, safe, and sanitary housing which is w d r n the financial capabilities of i.t lower income persons and families. In order to alleviate the high cost of housing for these persons, the legislature believes that it is essential that additional public moneys be made available, through the issuance of revenue bonds, to assist both private enterprise and governmental agencies in meeting critical housing needs .It The basic means to be used to accomplish this purpose are set out in section 35-505: " 1 The board may: (a) make loans to lending institutions () under terms and conditions adopted by the board requiring the proceeds to be used by the lending institution for the making of mortgage loans for housing developments in the state for persons and families of lower income; "(b) invest in, purchase or make commitments to purchase, and take assignments from lending institutions, of notes, mortgages and other securities evidencing loans for the construction, rehabilitation, purchase, leasing or refinancing of housing developments for persons and families of lower income in this state, under terms and conditions adopted by the board; "(c) make, undertake commitments to make, and participate in the making of mortgage loans, including federally insured mortgage loans, and to make temporary loans and advances in anticipation of permanent mortgage loans to housing sponsors to finance the construction or rehabilitation of housing developments designed and planned for occupancy by persons and families of lower income in this state, under terms and conditions adopted by the board; ' "d () make, undertake commitments to make, and participate in the making of loans to persons and families of lower income for housing development, including without limitation persons and families of lower income who are eligible or potentially eligible for federally insured loans, federal mortgages or other federal housing assistance, when the board determines that mortgage loans are not otherwise available, wholly or in part, from private lenders upon reasonably equivalent terms and conditions, and under terms and conditions adopted by the board. * * *" The Housing Board has taken necessary administrative steps to activate subsections (a) and ( ) section 35-505 and these prob, grams are ready to begin. As this Court pointed out in Cottingham v, State Board of Examiners, 134 Mont. 1, 10, 11, 328 P.2d 907: "The constitutionality of a legislative act is presumed, and this presumption must be overcome beyond a reasonable doubt before this court may overturn an expression of legislative will. ** * "'As we have observed hitherto, the Constitution must receive a broad and liberal interpretation consistent with the purpose of the framers and the people in adopting it, that it may serve the needs of a growing state; "the proper interpretation of any constitutional provision requires us to remember that it is a part of the organic law---organic not only in the sense that it is fundamental, but also in the sense that it is a living thing designed to meet the needs of a progressive society, amid all the detail changes to which a progressive society is subject."'" In Willett v. State Board of Examiners, 112 Mont. 317, 322, 115 P.2d 287, the Court said: * What i s a ' p u b l i c purpose' i s a question primarily f o r l e g i s l a t i v e determination, with which we w i l l not i n t e r f e r e unless t h e r e had been a c l e a r *" abuse of power. * 'I* * A g r e a t majority of o t h e r s t 8 t e s which have considered n e a r l y i d e n t i c a l l e g i s l a t i o n found housing t o be f o r a p u b l i c purpose. N.W.2d S t a t e ex r e l . Warren v. Nusbaum, 59 Wisc.2d 391, 208 780; Minnesota Housing Finance Agency v. H a t f i e l d , 297 Minn. 155, 210 N.W.2d 298; Vermont Home Mortgage Credit Agency v. Montpelier National Bank, 128 V t , 272, 262 A.2d 445; N w J e r s e y e Mortgage Finance Agency v. McCrane, 56 N . J . 414, 267 A.2d 24; Maine S t a t e Housing Authority v. Depositors T r u s t Co., 278 A.2d 699; Opinion t o t h e Governor, 112 R . I . (Maine 1971), 139, 308 A.2d 802; Johnson v. Penn. Housing Finance Agency, 453 Pa. 329, 309 A.2d 528; Massachusetts Housing Finance Agency v. N w England Merchant's e National Bank, 356 Mass. 202, 249 N.E.2d 599 (overruling advisory opinion Opinion of t h e J u s t i c e s , 251Mass. 716, 219 N.E.2d 18); Walker v. Alaska S t a t e Mortgage Association (Alaska 1966), 416 P.2d 245; Gibson v. Smith, -r. O App. -9 Matter of t h e C o n s t i t u t i o n a l i t y of O.R.S. 531 P.2d 724; I n t h e 456.720, -r. O 537 P.2d 542; C a l i f o r n i a Housing Finance Agency v. E l l i o t , tipre. ,!!T 3 555 P.2d &9; , Cal. S t a t e ex r e l . West Virginia Housing Development Fund v. Copenhaver, 153 W.Va 636, 171 S.E.2d 545; Rich v. Georgia, - . Ga , 227 S.E.2d 761; West v. Tennessee Housing Development Agency, (Tenn. 1974), 512 S.W.2d 275. The lone s t a t e t h a t found t h i s l e g i s l a t i o n i s n o t f o r a p u b l i c purpose i s Michigan where i n I n r e Advisory Opinion, 380 Mich. 554, 158 N.W. 2d 416, t h e Supreme Court of t h a t s t a t e found t h e a c t was f o r a public purpose except a s i t r e l a t e d t o a unique s t a t e c o n s t i t u t i o n provision which r e l a t e s t o c o n s t r u c t i o n of i n t e r n a l improvements and which prohibited the state from being a party to such improvements. The Michigan court ruled the state was not a party to the improvements. The housing statute was not found to violate any other provision and was for a public purpose for all other constitutional provisions. This Court in Rutherford v. City of Great Falls, 107 Mont. 512, 86 P.2d 656, found a housing authority statute that allowed the city to begin slum clearance projects was for public purpose. The only difference between Rutherford and the instant case is the means chosen to accomplish that end. In Minnesota Housing Finance Agency v. Hatfield, 297 Minn. 155, 210 N.W.2d 298, 307, it was pointed out: "An interest subsidy mechanism is perhaps the most unobtrusive method for the government to subsidize housing costs and housing so subsidized is less likely to be stigmatized with the tarnished image often associated with public housing operated by housingredwklopment authorities." It is commendable the Montana legislature and the Housing Board chose the interest subsidy means to assist persons in attaining safe, sanitary and hedthful housing because it involves very little direct government interference with the individual's choice of the type of housing he wishes to live in. Because this means is different from that chosen in Rutherford in no way alters the fact the legislation was enacted to accomplish a public purpose and is reasonably structured to accomplish this end. For this reason the legislation does not violate Art. VIII, Section 1, 1972 Montana Constitution. Second. Plaintiff questions whether the bonds the Housing Board proposes to sell are state debt and therefore subject to the provisions of Art. VIII, Section 8, 1972 Montana Constitution which states : "No s t a t e debt s h a l l be c r e a t e d u n l e s s authorized by a two-thirds v o t e of t h e members of each house of t h e l e g i s l a t u r e o r a majority of t h e e l e c t o r s voting thereon. N s t a t e debt s h a l l be c r e a t e d t o o cover d e f i c i t s incurred because a p p r o p r i a t i o n s exceeded a n t i c i p a t e d revenue ." The l e g i s l a t u r e passed t h e Housing Act of 1975 by a twot h i r d s v o t e of t h e members of each house, but it i s c l e a r t h a t t h e means taken by t h e sponsors of t h i s l e g i s l a t i o n t o avoid a c o n f l i c t with t h e provisions of A r t . V I I I , Section 8 was t o have t h e Housing Board finance i t s p r o j e c t s by revenue bonds, which a r e n o t s t a t e debt; I f t h e l e g i s l a t i o n was intended t o c r e a t e s t a t e debt t h a t i n t e n t would be c l e a r l y expressed i n t h e b i l l ' s t i t l e , o r it would run c o n t r a r y t o A r t . V , Section l l ( 3 ) which r e q u i r e s : "Each b i l l , except general a p p r o p r i a t i o n b i l l s and b i l l s f o r t h e c o d i f i c a t i o n and g e n e r a l r e v i s i o n of t h e laws, s h a l l contain only one s u b j e c t , c l e a r l y expressed i n i t s t i t l e , I f any s u b j e c t i s embraced i n any a c t and i s n o t expressed i n t h e t i t l e , only s o much of t h e a c t n o t so expressed i s void." The t i t l e of t h e b i l l i n question reads: "AN ACT TO BE KNOWN A THE HOUSING ACT O 1975; S F CREATING A BOARD O HOUSING AND PROVIDING F R ITS F O P W R AND DUTIES RELATING TO FINANCING TO ASSIST O ES PRIVATE ENTERPRISE AND GOVERNMENTAL AGENCIES TO MEET HOUSING NEEDS," [Chapter 461, Laws of 1975.1 A two-thirds v o t e of t h e l e g i s l a t u r e i s an a l t e r n a t i v e t o a vote a t a g e n e r a l e l e c t i o n and t h i s Court w i l l n o t f i n d t h e l e g i s l a t u r e has approved t h e c r e a t i o n of a s t a t e debt u n l e s s i t i s apparent t h a t was t h e obvious i n t e n t of t h e l e g i s l a t u r e . That i n t e n t i s n o t present i n t h i s case. W examine t h e Act t o s e e i f a s t a t e debt was c r e a t e d . e The Housing Act of 1975 a t s e c t i o n 35-520 reads: "Credit of s t a t e not pledged. Obligations i s s u e d under t h e provisions of t h i s a c t do n o t c o n s t i t u t e a debt o r l i a b i l i t y o r o b l i g a t i o n o r a pledge of t h e f a i t h and c r e d i t of t h e s t a t e b u t a r e payable s o l e l y from t h e revenues o r a s s e t s of t h e board. A o b l i g a t i o n issued under t h i s a c t n s h a l l contain on t h e face thereof a statement t o t h e e f f e c t t h a t t h e s t a t e of Montana i s n o t l i a b l e on t h e o b l i g a t i o n and t h e o b l i g a t i o n i s n o t a debt of t h e s t a t e and n e i t h e r t h e f a i t h and c r e d i t nor t h e taxing power of t h e s t a t e i s pledged t o t h e payment of t h e p r i n c i p a l o f , o r t h e i n t e r e s t on, t h e obligation." I n Fickes v. Missoula County, 155 Mont. 258, 264, 470 P.2d 287, t h e Court held t h a t financing p r o j e c t s by t h e use of revenue bonds d i d n o t c r e a t e . a debt which would be s u b j e c t t o t h e requirements of t h e predecessor of A r t . V I I I , Section 8 , 1972 Montana Constitution. A f t e r c i t i n g a s e r i e s of revenue bond cases t h i s Court, i n Fickes, pbinted out: "The common q u a l i t y of a l l t h e s e p r o j e c t s i s t h a t i n each t h e r e i s e x p l i c i t provision t h a t t h e p u b l i c body i s s u i n g t h e bonds does n o t o b l i g a t e i t s taxing power t o pay f o r them. The same exact provision i s w r i t t e n i n t o t h e law and t h e bonds involved i n t h i s c a s e , so t h a t t h e same d e c i s i o n must n e c e s s a r i l y be made i n t h i s case." That exact language would be a p p l i c a b l e h e r e , except t h e Housing Act of 1975 contains an a d d i t i o n a l s e c t i o n , s e c t i o n 35-517, which i s r e f e r r e d t o a s a "moral make-up clause" and reads : "Maintenance of c a p i t a l reserve account. (1) I n o r d e r t o a s s u r e t h e maintenance of t h e c a p i t a l r e s e r v e account, t h e chairman of t h e board s h a l l on o r before September 1 i n t h e year preceding t h e convening of t h e l e g i s l a t u r e , d e l i v e r t o t h e governor a c e r t i f i c a t e s t a t i n g t h e sum, i f any, required t o r e s t o r e t h e c a p i t a l r e s e r v e account t o t h e minimum c a p i t a l reserve requirement. The governor s h a l l include i n t h e executive budget submitted t o t h e l e g i s l a t u r e , t h e sum required t o r e s t o r e t h e c a p i t a l r e s e r v e account t o t h e sum of minimum c a p i t a l reserve requirements. A l l sums appropriated by t h e l e g i s l a t u r e s h a l l be deposited i n t h e c a p i t a l reserve account. "(2) A l l amounts appropriated t o t h e board by t h e l e g i s l a t u r e under t h i s s e c t i o n c o n s t i t u t e advances t o t h e board and, s u b j e c t t o t h e r i g h t s of t h e holders of any bonds o r notes of t h e board, s h a l l be repaid t o t h e s t a t e ' s g e n e r a l fund without i n t e r e s t from a v a i l a b l e operating revenues of t h e board i n excess of amounts r e quired f o r t h e payment of bonds, notes o r o t h e r o b l i g a t i o n s of t h e board, f o r maintenance of t h e c a p i t a l r e s e r v e account and f o r operating expenses." A11 the objections to section 35-517 assume the very worst combination of events will happen---that the mortgages invested in will not provide enough revenue to pay off the bonds; that the governor recommended and the legislature approved the loan provided for and the land that secures the mortgages has lost value and, the sale of the land would not cover the amount secured by the mortgage. This is extremely unlikely because land values have generally gone up and mortgagors have generally paid a portion of the underlying debt before default and the land covers the full amount of the debt remaining. There is little likelihood of resort to the provisions of section 35-517 but nonetheless its provisions must meet constitutional muster. An Oregon court of appeals case, Gibson v. Smith, O~-APP- ,531 P.2d 724, 728, reviews the difficulties the courts in various jurisdictions have had with this provision in its various forms : I ''We have considered the opinions and conclusions of other courts which have discussed the constitutionality of housing acts with provisions similar to those questioned at bar. All of them consider provisions like those in ORS 456.720(5) to be ineffectual for their purported purpose, but several leave them extant as expressions of what the legislatures hope future legislatures will do. Some strike such provisions because they are nullities. In all cases, the crucial questions are decided on the basis of the particular state's constitutional provisions. In no case we have found have such acts been totally struck down, and all hold they bear a public purpose. Walker v. Alaska State Mortgage Association, supra; Maine State Housing Auth. v. Depositors Trust Ca, 278 A.2d 699 (Me. 1971) (which held that the attempt to bind future legislatures is ineffective, but that the attempt would be interpreted so that the word 'shall' means 'may' in order to give it the effect of expressing a 'hope' or 'aspiration' that future legislatures would appropriate from general funds in the event of revenue deficits); Massachusetts Housing Finance Agency v, N.E. Merchants National Bank, 356 Mass. 202, 249 N.E.2d 599 (1969)(where the court interpreted the questioned provision much as did the Maine court in Maine State Housing Auth, v. Depositors Trust Co., supra); Constitutionality, PA 1966, No. 346, 380 Mich. 554, 158 N.W. 2d 416 (1968) (in which the court held invalid a provision like that involved at bar); Minnesota Housing Finance Agency v. Hatfield, 297 Minn. 155, 210 N. W.2d 298 (1973); New Jersey Mortgage Finance Agency v. McCrane, 56 N.J. 414, 267 A.2d 24 (1970); Martin v. Housing Corp., 277 N.C. 29, 175 S.E.2d 665 (1970); Johnson v. Pennsylvania Housing Finance Agency, 453 Pa. 329, 309 A.2d 528 (1973); Vt. Home Mort. Cr. Agcy. v. Mont. Nat. Bank, 128 Vt. 272, 262 A.2d 445 (1970); State ex rel. v. Copenhaver, 153 W. Va. 636, 171 S.E.2d 545 (1969); and State ex rel. Warren v. Musbaum, 59 Wis.2d 391, 208 N.W.2d 780 (1973) (where the questioned provision included the sentence about the governor including a deficit in the reserve fund in a future budget, not the sentence requiring an appropriation by a future legislature. It did require a bill to pay the same to be introduced in future legislatures, which the court said was a nullity. Nevertheless, on the theory that the included provision was a legislative attempt to invade executive authority, the provision was held to be unconstitutional and a nullity)." In Gibson the Oregon court found the equivalent section to section 35-517 in the Oregon statute to be unconstitutional as a violation of that state's constitutional provision equivalent to Art. VIII, Section 8, 1972 Montana Constitution. The Oregon Supreme Court in an original proceeding, In the Matter of the Constitutionality of O.R.S. 456.720, (Ore.1975), 537 P.2d 542, 545, found that the section, after an amendment which removed the mandatory direction to the legislature to appropriate funds and replaced it with permissive language, was constitutional. It pointed out: "Intervenors regard the presence of a make-up provision as a pledge of the state credit because a bond dealer or vendor of certificates would point to the statute as an assurance to potential buyers of the certificates of indebtedness, that if the source of payment of the certificates should prove insufficient, a future legislature would come to the rescue with an appropriation of state funds to prevent or overcome a default. Certainly the purchasers of the bonds cannot predicate such an expectation upon any legal obligation of the state because the bonds themselves are required to contain a statement to the contrary. If there is a pledge, then, it is at most based upon a moral obligation which the members of future legislatures might feel to meet the deficiency. We do not interpret Article XI, $7 as prohibiting such a moral * *" and therefore unenforceable pledge. * Montana's version of this section is permissive in its direction to the legislature and it is clear the Forty-fourth Legislature did not bind a future legislature Third appropriate money. Section 35-517 presents a second difficulty due to the mandatory language in its direction that the governor include the Housing Board's appropriation request in his budget . In State ex rel. Warren v. Nusbaum, 59 Wis.2d 391, 208 N.W.2d 780, the Wisconsin Supreme Court found such a mandatory direction violated that state's constitutional provision which said the governor "shall communicate to the legislature, at every session, the the condition oflstate, and recommend such matters to them for The their consideration as he may deem expedient." /equivalent section the 1972 Montana Constitution, Art. VI, Section 9, provides : "Budget and messages. The governor shall at the beginning of each legislative session, and may at other times, give the legislature information and recommend measures he considers necessary. The governor shall submit to the legislature at a time fixed by law, a budget for the ensuing fiscal period setting forth in detail for all operating funds the proposed expenditures and estimated revenue of the state." The Constitutional Convention Notes point out that the difference between this section and the corresponding section in the 1889 is Montana Constitution' that: "Makes it mandatory that Governor send budget to legislature. Otherwise no change except in grammar. II This Court in State ex rel. Normile v. Cooney, 100 Mont. 391, 403, 47 P.2d 637, stated: "'The separation of the government into three great departments does not mean that there shall be "no common link of connection, or dependence, the one upon the other in the slightest degree1''(&8tory'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. ' " 12 - - Budgeting is one-of those common links. The executive depends on the legislature for funding and because the legislature must set the state's budget in a ninety day session every other year, and because this is a period when there are numerous other matters to attend to, the legislature must also rely on the executive to provide the information it needs to budget intelligently. By statute, section 79-1015, R.C.M. 1947, the governor is required to submit the budget in a certain form with specified contents. The governor is prohibited from altering any legislative appropriation request by section 79-1013, R.C.M.1947. It is this difference, the mandatory budget requirement, that creates the difference between Montana and Wisconsin. There was no constitutionally prohibited invasion of the executive's power when the legislature required in section 35-517 that the governor include the Housing Board's request in his budget. Fourth Difficulty presented by section 35-517 is also whether an appropriation made pursuant to that section would violate Art. V, Section 11(5), 1972 Montana Constitution which reads : "No appropriation shall be made for religious, charitable, industrial, educational, or benevolent purposes to any private individual, private association, or private corporation not under control of the state." This is one of the sections of the 1972 Constitution directed to the legislature. Art. V, Section ll(6) allows challenge on the ground of noncompliance with the section only within two years of a statute's effective date. This challenge is within that time period. The predecessor section in the 1889 Constitution was Art. V, Sec. 35, which read: "No a p p r o p r i a t i o n s h a l l be made f o r c h a r i t a b l e , i n d u s t r i a l , educational o r benevolent purposes t o any person, corporation o r community not under t h e a b s o l u t e c o n t r o l of t h e s t a t e , nor t o any denominat i o n a l o r s e c t a r i a n i n s t i t u t i o n o r a s s o c i a t i o n . I1 The Convention Notes i n d i c a t e t h e r e was no change between t h e new and t h e o l d provision except a s t o grammar. I t m u s t ' t h e n be assumed t h e 1972 Montana C o n s t i t u t i o n expresses t h e i n t e n t of t h e framers more p r e c i s e l y . This i s s i g n i f i c a n t because t h e r e a r e d i f f e r e n c e s i n t h e wording of t h e 1889 and 1972 s e c t i o n s . The 1889 s e c t i o n had t h e word " a b ~ o l u t e 'before t h e word "control1' ~ and t h e 1972 s e c t i o n adds t h e word "private" before person, I n Veterans1 Welfare Comm'n v. a s s o c i a t i o n , and corporation. V.F.W. & D.A.V., 141 Mont. 500, 510, 379 P.2d 107, t h i s Court i n d i s c u s s i n g t h e d i f f e r e n c e between a l i n e item a p p r o p r i a t i o n t o t h e p r i v a t e v e t e r a n s ' organizations and a p p r o p r i a t i o n s t o t h e housing a u t h o r i t y i n Rutherford and t o t h e Montana Armory Board, i n Geboski v. Montana Armory Board, 110 Mont. 487, 103 P.2d 679, said: 11 1 However, t h e d i s t i n c t i o n between those cases and t h e c a s e a t b a r i s t h e d i s t i n c t i o n between a p r i v a t e corporation and a public c o r p o r a t i o n , t h e f u n c t i o n s of t h e l a t t e r of t h e two being under t h e c o n t r o l of t h e s t a t e . I n a l l t h r e e of t h e cases above r e f e r r e d t o t h e c o u r t was c a r e f u l i n pointing out t h a t t h e agency was a p u b l i c corporation under t h e c o n t r o l of t h e s t a t e and i n t h e n a t u r e of a municipal corporation. ' I 1 The Montana Housing Board i s n o t a p r i v a t e corporation, i t i s a public corporation. I t received a l l of i t s powers d i r e c t l y from t h e l e g i s l a t u r e and i t s d u t i e s and r e s p o n s i b i l i t i e s a r e s e t out c l e a r l y by t h e s t a t u t e which c r e a t e d i t . A r t . V , Section 1 1 ( 5 ) , 1972 Montana C o n s t i t u t i o n , i s not a p p l i c a b l e t o a p p r o p r i a t i o n s under s e c t i o n 35-517, R.C.M. 1947. Fifth Plaintiff alleges the Housing Act of 1975 entails an unconstitutional delegation of legislative power violating Art. V, Section 1, 1972 Montana Constitution. The Court stated in Milk Control Board v. Rehberg, 141 Mont. 149, 161, 376 P.2d 508: "* * * Concerning adequate standards and guides in delegation of legislative power, this court has stated the rule as follows: If the legislature fails to prescribe with reasonable clarity the limits of power delegated to an administrative agency, or if those limits are too broad, its attempt to delegate is a nullity. "On the other hand a statute is complete and validly delegates administrative authority when nothing with respect to a determination of what is the law is left to the administrative agency, and its provisions are sufficiently clear, definite, and certain to enable the agency to know its rights and obligations." In this case, plaintiff argues the statute is too vague as to the term "persons ard families of lower income". The legislature set out its definition of this term in section 35- "'Persons and families of lower income' means persons and families, with insufficient personal or family income who require assistance under this act,' as determined by the board, taking into consideration: " a the amount of the total personal and family () income available for housing needs; (b) the size of the family; " " c the eligibility of persons and families under () federal housing assistance of any type based on lower income or a functional or physical disability; "d () the ability of persons and families to compete successfully in the normal housing market and to pay the amount at which private enterprise is providing decent, safe, and sanitary housing; " e the availability and cost of housing in () particular areas; and If(£) nkeds of particular'persons.or families due.to age ,or physical handicaps .I' A l l t h a t i s l e f t f o r t h e agency t o do t o place a f i g u r e on t h e income l i m i t f o r "persons and f a m i l i e s of lower income'' i s t o i n q u i r e i n t o the f a c t s a s t h e s t a t u t e d i r e c t s and make t h e determinations required by t h e s t a t u t e . The agency has heeded t h i s l e g i s l a t i v e d i r e c t i v e and adopted a program r u l e which s e t s o u t t h e s e same b a s i c c o n s i d e r a t i o n s i n g r e a t e r d e t a i l . (6) S1840. See: M.A.C. 22-3.18 Pursuant t o t h i s program r u l e t h e Housing Board adopted $16,000 a s t h e upper l i m i t . W note here e (1) t h i s Act i s aimed a t a s p e c i f i c category of persons, those whose income i s s t a b l e but because of t h e high p r i c e of money cannot a f f o r d t o buy a home. It i s obvious those with l i t t l e o r no income cannot a f f o r d t o purchase a home no matter how low t h e i n t e r e s t r a t e ; (2) t h e f a c t u a l bases of t h e determinations made by t h e Board c o n s t a n t l y change and t h e l e g i s l a t u r e meets only once every two years. The agency may meet a s o f t e n a s i s necessary and may change t h e income l e v e l a s t h e f a c t s which serve a s t h e b a s i s f o r i t s o r i g i n a l determination change. The delegation of t h i s power does n o t v i o l a t e any c o n s t i t u t i o n a l prohibitions. It i s a c l e a r , d e f i n i t e , and c e r t a i n d i r e c t i o n t o t h e agency which enables t h e agency t o know i t s r i g h t s and o b l i g a t i o n s . S i x t h P l a i n t i f f charges t h e flow of funds under t h e Act v i o l a t e s A r t . V I I I , Sections 12, 13, 14,1972 Montana C o n s t i t u t i o n . The Housing Act of 1975 provides f o r two methods of c r e a t i o n and issuance of i t s revenue bonds, by r e s o l u t i o n a s s e t out i n s e c t i o n 35-508(1), o r by t r u s t indenture a s s e t out i n s e c t i o n 35-513. The bonds issued under t h e f i r s t procedure ( s e c t i o n 35-508(1)) would follow a complex procedure f o r d e p o s i t with t h e s t a t e t r e a s u r e r i n t h e s t a t e fund with accounts i n various s t a t e fund accounts and p a r a l l e l a c t accounts.Bythe a l t e r n a t i v e provision ( s e c t i o n 35-513), t h e funds would be handled by much t h e same system b u t t h e proceeds from t h e bond s a l e would be handled by t h e t r u s t e e . R.C.M. Section 35-513, 1947, provides i n p e r t i n e n t p a r t : ** A t r u s t indenture may c o n t a i n provisions f o r p r o t e c t i n g and enforcing t h e r i g h t s and remedies of t h e bondholders a s a r e reasonable and proper and n o t i n v i o l a t i o n of law, including covenants s e t t i n g f o r t h e d u t i e s of t h e board i n r e l a t i o n t o t h e e x e r c i s e of i t s powers, t h e custody, safeguarding and a p p l i c a t i o n of a l l moneys. The board may provide by a t r u s t indenture f o r t h e payment of t h e proceeds of t h e bonds and t h e revenues of t h e t r u s t e e under t h e t r u s t indenture of another depository, and f o r t h e method of disbursement, with safeguards and r e s t r i c t i o n s a s i t determines. 'I* * * *" This method i s consis t e n t with s e c t i o n 79-306(3), R.C.M. 1947, which s t a t e s : "Nothing i n t h i s chapter s h a l l impair o r otherwise a f f e c t any covenant entered i n t o pursuant t o law by any agency o r i n s t i t u t i o n r e s p e c t i n g t h e segregation, d e p o s i t , and investment of any revenues o r funds pledged f o r t h e payment and s e c u r i t y of bonds o r o t h e r o b l i g a t i o n s authorized t o be issued by such agency, and a l l such funds s h a l l be deposited and invested i n accordance with such covenants notwithstanding any provision of t h i s chapter." The chapter r e f e r r e d t o i s e n t i t l e d "Deposit and Investment of S t a t e Funds". The c o n s t i t u t i o n a l provisions which p l a i n t i f f argues t h e s e procedures v i o l a t e r e q u i r e t h a t t h e l e g i s l a t u r e s h a l l by law i n s u r e s t r i c t a c c o u n t a b i l i t y of a l l revenue received and money spent. The chapter provides f o r a u n i f i e d investment program and r e q u i r e s t h a t t h e r e be an a p p r o p r i a t i o n made by law, and a warrant drawn by t h e proper o f f i c e r before money be paid out of t h e t r e a s u r y . It i s c l e a r t h e l e g i s l a t u r e provided by law f o r s t r i c t a c c o u n t a b i l i t y of t h e funds. i s required and t h e r e a r e A proper t r u s t e e f o r t h e bond revenue provisions which a u t h o r i z e a l e g i s l a t i v e a u d i t a t any time of t h e Board's books and a y e a r l y a u d i t . The t r u s t indenture r e q u i r e s a monthly r e p o r t t o t h e s t a t e t r e a s u r e r a s t o a l l indenture funds and bonds of record and accounts must be kept and be open t o inspection by t h e s t a t e t r e a s u r e r , t h e t r u s t e e s and holders of more than f i v e percent of t h e outstanding bonds. The Constitution's provision for the unified investment fund does not require that all agencies participate regardless of the nature of the agency. Where, as here, the agency is not using state funds and is setting up what amounts to its own specialized investment fund with a particular purpose, it is reasonable to allow, as the legislature did, the agency to take care of its own funds in a manner appropriate to its function. The Constitution's provisions for payment out of the treasury only on a warrant and pursuant to an appropriation presents no problem, for the trust indenture funds are not deposited with the treasurer and the funds received from the sale of the resolution bonds are by statute deemed continuously appropriated. q1 Section 35-52 c , R.C.M. 1947. ) This Court discussed a similar provision in Geboski v. Montana Armory Board, 110 Mont. 487, 493, 103 P.2d 679, where it said: "Section 14 relates to the method of handling the deposits of (f) state monies. The money raised here by the sale of bonds becomes a special fund to be disbursed for the erection of proposed buildings. This money is not derived by taxation and consequently need not be handled in that manner." Seventh The last issue raised is the conflict between the Housing Act of 1975 and section 5-1037, R.C.M. 1947, which prohibits state banks from borrowing funds without prior approval of the department of business regulation. Here, recourse to the rule of statutory construction which provides that where a specific statute conflicts with a general statute the specific controls over the general to the extent of any repugnancy. Wood, Mont - , , 543 State ex rel. Browman v. P,2d 184, 32 St. Rep, 1136; Montana Ass'n of Tobacco and Candy Distributors v. State Board of Equalization, - 18 - 156 Mont. 1 0 8 , 476 P.2d 7 7 5 ; I n r e Stevenson's E s t a t e , 87 Mont. 4 8 6 , 289 P. 566. It i s c l e a r t h a t s t a t e banks may p a r t i c i p a t e i n t h e Housing Board's programs without t h e p r i o r approval of t h e department of business r e g u l a t i o n because t h e l e g i s l a t u r e by i t s d e f i n i t i o n of "lending i n s t i t u t i o n ' ' c l e a r l y intended t o cover s t a t e banks and thereby made t h e necessary determination t h a t s t a t e banks may p a r t i c i p a t e . A d e c l a r a t o r y judgment i s entered i n accordance w i t h t h e foregoing opinion. W, Concur: e n f I M r . J u s t i c e Frank I. Haswell, took no p a r t i n t h i s Opinion.

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