American Trucking Associations, Inc. v. Scheiner

• Decision Date: 06 May 1986
• Citation: 510 Pa. 430,509 A.2d 838
• Parties: AMERICAN TRUCKING ASSOCIATIONS, INC., et al., Appellees, v. James I. SCHEINER, Secretary of the Department of Revenue, et al., Appellants. (Two Cases) AMERICAN TRUCKING ASSOCIATIONS, INC., et al., Appellants, v. James I. SCHEINER, Secretary of the Department of Revenue, et al., Appellees.
• Court: Pennsylvania Supreme Court

Page 838

509 A.2d 838

510 Pa. 430

AMERICAN TRUCKING ASSOCIATIONS, INC., et al., Appellees,

v.

James I. SCHEINER, Secretary of the Department of Revenue,

et al., Appellants. (Two Cases)

AMERICAN TRUCKING ASSOCIATIONS, INC., et al., Appellants,

v.

James I. SCHEINER, Secretary of the Department of Revenue,

et al., Appellees.

Supreme Court of Pennsylvania.

Argued Sept. 17, 1985.

Decided May 6, 1986.

Maura A. Johnston, Andrew S. Gordon, Allen C. Warshaw, Office of Atty. Gen., Harrisburg, for appellants.

Arthur Littleton, Hoyle, Morris & Kerr, Philadelphia, Mark P. Pazuhanich, Hanna, Young & Upright, Stroudsburg, for appellees.

Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON, ZAPPALA and PAPADAKOS, JJ.

OPINION OF THE COURT

LARSEN, Justice. ^*

On September 17, 1985, this Court heard oral argument in these three related appeals which arise from class action suits

challenging the constitutionality of certain highway user fees and taxes imposed by the Commonwealth of Pennsylvania upon interstate motor carriers whose vehicles travel upon Pennsylvania roads, highways and bridges. To place these constitutional challenges in proper perspective, it is necessary and beneficial to first provide an overview of the salient provisions of our Vehicle Code, 75 Pa.C.S.A. §§ 101-9910 and taxing statutes.

I PENNSYLVANIA HIGHWAY USER FEES

A. OVERVIEW

Our General Assembly has enacted a comprehensive and highly complex system of highway user fees, charges and taxes (hereinafter referred to as "highway user fees") designed to partially reimburse the Commonwealth of Pennsylvania for expenditures made for maintenance, construction and restoration of our extensive system of interstate highways, roads and bridges, and for expenditures made for the administration and enforcement of our Vehicle Code which governs all aspects of the use of our highways (e.g., safety, vehicle characteristics, registration and licensing, regulations concerning the operation of motor vehicles, etc.). Given that the Commonwealth of Pennsylvania is a major thruway for interstate commerce along the northeast corridor, and given its hilly terrain and frequently severe weather conditions which accelerate roadway and bridge deterioration in combination with heavy use by large tractors and trailers engaged in interstate commerce, these expenditures are, of course, enormous.

Pennsylvania's highway user fees include the following:

(a) truck and truck-tractor registration fees;

(b) trailer registration fees;

(c) truck and truck-tractor title fees;

(d) trailer title fees;

(e) registration transfer fees;

(f) special handling permit fees;

(g) special trip permit fees;

(h) Fuel Use Tax;

(i) Motor Carriers Road Tax;

(j) Oil Company Franchise Tax;

(k) Gross Receipts Tax (on vehicles traveling interstate);

(l) Liquid Fuels Tax;

(m) farm truck registration fees. ¹

As will be explained more fully, certain of these highway user fees (such as registration fees and titles) are "fixed" while others (such as the Liquid Fuels Tax, the Fuel Use Tax and the Motor Carriers Road Tax, see note 1, supra ) are related to and dependent upon a motor carrier vehicle's actual use of Pennsylvania highways. All of the various highway user fees are "credited to the Motor License Fund and expended exclusively for road-related purposes." Joint Stipulation of Facts (hereinafter "JSF") at No. 315 C.D.1982, No. 11 M.D.Appeal Docket 1985, para. 64.

Owners of motor vehicles that are based in Pennsylvania must register those vehicles with the Department of Transportation and must pay the registration fee applicable to the particular type of vehicle. 75 Pa.C.S.A. Chapter 13 (Registration) and Chapter 19 B (Registration Fees). These registration fees are paid by owners of Pennsylvania-registered vehicles in addition to the other various highway user fees outlined above.

The complexity of a state's scheme for imposition and collection of highway user fees is greatly compounded by the very It is the policy of this Commonwealth to promote and encourage the fullest possible use of its highway system by authorizing the making and execution of reciprocal agreements, arrangements and declarations with other states, provinces, territories and countries with respect to drivers, licensed and vehicles registered in this and other states, provinces, territories and countries, thus contributing to the economic and social development and growth of this Commonwealth.

nature of the interstate highway system and its use by motor vehicles registered in all of the United States and foreign countries with each jurisdiction generally having its own registration fees and other taxes applicable to those vehicles. In light of this multiplicity of sovereign interests, the General Assembly has declared:

75 Pa.C.S.A. § 6141, Declaration of policy. See 75 Pa.C.S.A. §§ 6141-6153, Chapter 61, subchapter C, (Reciprocity). The Secretary of the Department of Transportation is authorized to execute agreements or arrangements with other jurisdictions granting to "drivers or vehicles or owners of vehicles properly licensed or registered in those jurisdictions ... benefits, privileges and exemptions from the payment ... of any taxes, fees or other charges" imposed upon Pennsylvania drivers, vehicles and owners provided that "drivers or vehicles properly licensed or registered in this Commonwealth ... shall receive exemptions, benefits and privileges of a similar kind or to a similar degree as are extended to drivers or vehicles properly licensed or registered in ..." the other jurisdiction. 75 Pa.C.S.A. § 6143. It is further provided in that section that:

Each agreement or arrangement shall, in the judgment of the secretary, be in the best interest of this Commonwealth and the citizens thereof and shall be fair and equitable to this Commonwealth and the citizens thereof, and shall be determined on the basis and recognition of the benefits which accrue to the economy of this Commonwealth from the uninterrupted flow of commerce.

Prior to September, 1982, Pennsylvania had entered into bilateral Apportioned Registration Agreements with twenty-three states and provinces, which agreements were based upon the International Registration Plan (hereinafter the "IRP"). On September 15, 1982, Pennsylvania became a member jurisdiction of the IRP. Under both the former bilateral agreements and the IRP, registration fees for "apportionable vehicles" were/are determined: by dividing the in-jurisdiction miles by the total miles during the preceding year to produce a fraction; (2) by determining the total fee required under the laws of each jurisdiction for full registration of each vehicle; and (3) by multiplying the total fee for each state by the fraction of in-jurisdiction miles to total miles. JSF para. 102. ² No state which is contiguous to Pennsylvania was an IRP member at times relevant to these appeals.

B. THE MARKER DECAL FEE AND ACT 68

The Act of June 18, 1980, P.L. 229, No. 68 (hereinafter Act 68) amended the Vehicle Code by adding chapter 21, Motor Carriers Road Tax Identification Markers, which operated in conjunction with the Motor Carriers Road Tax Act. 75 Pa.C.S.A. § 2101-2105, as amended. The latter Act, part of the Fiscal Code, taxes liquid fuels purchased outside the Commonwealth but consumed while traveling within it. 72 P.S. *842s § 2617.1-2617.26. Act 68 requires every motor carrier vehicle ³ operating in Pennsylvania to display an identification marker to be issued by the Department of Revenue upon payment of a fee. Purchase of the identification marker decal notifies the Commonwealth that the motor carrier vehicle is subject to the Road Tax Act and triggers that Act's reporting, record-keeping and tax-paying requirements. Pennsylvania-registered motor carrier vehicles are not required to bear these marker decals because the act of registration notifies the Commonwealth that the vehicle is subject to the Road Tax Act and the Pennsylvania license plate provides the identification marker necessary to facilitate enforcement. § 2102(d)(1).

Act 68 further provided:

2102(b) Fee.--The fee for issuance of an identification marker shall be $25, except that for vehicles registered in this Commonwealth, the vehicle identification marker fee shall be deemed a part of and included in the vehicle registration fee.

This fee is a "tax for the privilege of using Pennsylvania roads." JSF para. 1. The administrative costs associated with the issuance of the marker decal are approximately $5.00; the balance of the marker fee is credited to the Motor License Fund and expended for road-related purposes such as highway maintenance, construction, state police operations and construction bond debt service. JSF paras. 4, 5 and 46.

Section 2 of Act 68 also simultaneously amended section 1916(a) of the Vehicle Code and increased registration fees for all Pennsylvania-registered motor carrier vehicles. The smallest registration fee increase was $45.00 (for Class 7 vehicles, or motor carrier vehicles with "gross or combination weight" of 17,000-21,000 pounds), graduating upward to $228.00 (for Class 20 vehicles, or motor carrier vehicles with "gross or combination weight" of 68,001-73,280 pounds). In every case, therefore, the registration fee increase exceeded the amount of the marker fee ($25.00).

Act 68 further provided that operation of a motor carrier vehicle in Pennsylvania without an identification marker was unlawful unless exempted by regulation or unless a five-day permit had been obtained for a $5.00 fee where enforcement of the identification marker decal provisions "would cause undue delay and hardship in the operation of such motor carrier vehicle or vehicles." 75 Pa.C.S.A. § 2102(d).

C. THE AXLE TAX AND ACT 234

The Act of December 8, 1982, P.L. 842, No. 234 (hereinafter "Act 234") added Chapter 99, Axle Tax for Highway Bridge Improvement, to the Vehicle Code. 75 Pa.C.S.A. § 9901-9910, as amended....