County of Saginaw v. John Sexton Corp. of Michigan

• Decision Date: 16 October 1998
• Docket Number: Docket Nos. 199519,199520
• Citation: 232 Mich.App. 202,591 N.W.2d 52,1998 WL 723881
• Parties: COUNTY OF SAGINAW, Plaintiff/Counterdefendant-Appellee, v. JOHN SEXTON CORPORATION OF MICHIGAN,Defendant/Counterplaintiff-Appellant. County of Saginaw, Plaintiff/Counterdefendant-Appellee, v. People's Garbage Disposal, Inc., Defendant/Counterplaintiff-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 52

591 N.W.2d 52

232 Mich.App. 202

COUNTY OF SAGINAW, Plaintiff/Counterdefendant-Appellee, v. JOHN SEXTON CORPORATION OF

MICHIGAN,Defendant/Counterplaintiff-Appellant.

County of Saginaw, Plaintiff/Counterdefendant-Appellee, v. People's Garbage Disposal, Inc., Defendant/Counterplaintiff-Appellant.

Docket Nos. 199519, 199520.

Court of Appeals of Michigan.

Submitted July 1, 1998, at Lansing.

Decided Oct. 16, 1998, at 9:05 a.m.

Released for Publication Jan. 15, 1999.

Jensen, Gilbert, Smith & Borello, P.C. (by Peter C. Jensen), Saginaw, for the plaintiff.

Thomas M. Fallucca, Detroit, for the defendants.

Before: MURPHY, P.J., and GRIBBS and GAGE, JJ.

GAGE, J.

Defendants appeal as of right the trial court's partial denial of their motion for summary disposition. We affirm.

This case involves a dispute regarding the enforceability of § 280 of the Saginaw County Solid Waste Ordinance. In 1984, plaintiff's solid waste management plan, by which it accepted responsibility for countywide planning and management of solid waste disposal, was approved by the Department of Natural Resources (DNR). In 1993, the DNR approved plaintiff's update to the plan. Paragraph eight of the update provided that plaintiff's board of commissioners would pursue and explore all feasible means of financing countywide solid waste management, including tax levies, state and federal grants, bond issues, and licensing fees. Pursuant to the update, the board of commissioners also intended to establish an enforcement agency to carry out the provisions of the plan. The board envisioned enforcement agency funding from "surcharges, tipping fees and/or other appropriate means of financing."

In November 1990, Saginaw County voters approved a millage increase for the purpose of establishing and operating plaintiff's recycling and other waste management programs. However, in 1993 plaintiff elected not to collect this millage because of plaintiff's concern that it would exceed its millage cap. Also in 1993, the Governor withdrew all state funding of county health departments.

In August 1993, plaintiff's board of commissioners adopted a solid waste ordinance, § 280 of which imposed a fifty-cent surcharge on every cubic yard of solid waste disposed of in county landfills. Subsection 280.2 mandated that all surcharge payments be paid quarterly to the county treasurer, but failed to identify the intended payor. Defendants admitted that they had collected the surcharge from those dumping waste in their landfills, but did not remit any of the collected money to the county treasurer. Plaintiff initially filed separate complaints in January and February 1994 against defendant landfill operators alleging their nonpayment of the disposal surcharge. Defendants counterclaimed that the ordinance was invalid and unenforceable because it was preempted by state waste disposal statutes and regulations, and that the surcharge constituted an illegal tax and was unconstitutionally vague. A September 1994 amendment of subsection 280.2 stated explicitly that landfill owners and operators were to collect the surcharge and remit quarterly surcharge payments to the county treasurer.

In May 1995, defendants moved for summary disposition. The trial court agreed that state statutes had preempted most of the ordinance, and concluded that the surcharge provision as originally enacted was unconstitutionally vague. Because plaintiff had brought its claims pursuant to this vague preamendment § 280, the trial court dismissed plaintiff's complaint. However, the trial court found that the September 1994 amendment of § 280 cured its vagueness problem and that the surcharge was severable and would remain in effect.

I

First, defendants contend that the trial court erred in upholding the validity of postamendment § 280. They argue that this section improperly delegates governmental authority to private parties by requiring that defendants perform tax collection duties. We disagree.

Defendants cite two Michigan cases addressing delegations of legislative authority. Blue Cross & Blue Shield of Michigan v. Governor, 422 Mich. 1, 367 N.W.2d 1 (1985); Penn School Dist. No. 7 v. Lewis-Cass Intermediate School Dist. Bd. of Ed., 14 Mich.App. 109, 165 N.W.2d 464 (1968). The Supreme Court in Blue Cross & Blue Shield, supra, explained that "[c]hallenges of unconstitutional delegation of legislative power are generally framed in terms of the adequacy of the standards fashioned by the Legislature to channel the agency's or individual's exercise of the delegated power." Id. at 51, 367 N.W.2d 1. Legislative delegations of power are reviewed in terms of the adequacy of the standards provided to guide the exercise of the power whether the Legislature has delegated power to an administrative agency, the judiciary, or a private group or person. Dukesherer Farms, Inc. v. Director of the Dep't of Agriculture, 405 Mich. 1, 25, n. 4, 273 N.W.2d 877 (1979). The Supreme Court concluded in Blue Cross & Blue Shield, supra, that the Legislature had impermissibly conferred standardless discretion on the Insurance Commissioner to review risk factors proposed by a statutorily created actuary panel. Id. at 52-55, 367 N.W.2d 1. In Penn School Dist, supra, this Court recognized that legislative authority generally may not be delegated to private persons or associations, but concluded that the committees authorized to determine school district boundaries did not qualify as private entities because they had been created by statute, and also that these committees possessed sufficient statutory guidance regarding the exercise of their powers. Id. at 121-124, 165 N.W.2d 464.

However, the instant case does not involve a delegation of legislative authority similar to those involved in the cases cited by defendants. The ordinance at issue merely imposes a ministerial duty on landfill owners and operators to collect fees payable by those who deposit waste in the landfills. Plaintiff's ordinance does not provide landfill operators with any discretion in setting the landfill disposal surcharge amounts or in deciding from whom it will collect the surcharge. Under the ordinance, defendants must simply collect fifty cents a cubic foot of waste deposited in their landfills and remit its collections quarterly to the county treasurer. The solid waste management act, M.C.L. § 324.11501 et seq.; MSA 13A.11501 et seq., also imposes on landfill owners and operators a nearly identical quarterly surcharge collection requirement of municipality-imposed impact fees. MCL 324.11532(4); MSA 13A.11532(4). We conclude that both plaintiff and the Legislature may constitutionally impose these ministerial functions on private landfill owners and operators. See Whatcom Co. v. Taxpayers of the Whatcom Co. Solid Waste Disposal Dist., 66 Wash.App. 284, 293-294, 831 P.2d 1140 (1992) (upholding ordinance's delegation of collection of garbage disposal excise tax, a ministerial function, to private garbage collectors). Therefore, because the instant ordinance does not vest defendants with the authority to exercise any legislative discretion, defendants' reliance on the Blue Cross & Blue Shield, supra, and Penn School Dist, supra, cases involving delegations of legislative authority is misplaced.

Defendants also failed to cite authority to support their argument that it is illegal for a governmental entity to impose a fee or tax collection requirement on any private entity unless the private entity itself has an obligation to pay the tax or fee. The Uniform City Utility Users Tax Ordinance (Utility Tax Ordinance), M.C.L. § 141.1161 et seq.; MSA 5.3188(261) et seq., contradicts defendants' argument. While § 3 of the Utility Tax Ordinance imposes a tax on utility users, § 4 imposes on the utility service providers the ministerial task of billing utility customers for the tax. The utility service providers' billing duty is analogous to the landfill operators' duty to collect surcharges from landfill depositors. Therefore, defendants' argument that the duty of tax or fee collection may be validly imposed only on a private party who itself has an obligation to pay the charge is without merit.

II

Second, defendants argue that the landfill surcharge constitutes an illegal tax that violates the Headlee Amendment. Section 31 of the Headlee Amendment prohibits local governments

from levying any tax not authorized by law or charter when this section is ratified or from increasing the rate of an existing tax above that rate authorized by law or charter when this section is ratified, without the approval of a majority of the qualified electors of that unit of Local Government voting thereon. [Const. 1963, art. 9, § 31.]

Plaintiff did not submit the landfill surcharge issue to the electorate. Therefore, should the surcharge provision impose a tax, it is illegal and unenforceable.

Whether the instant landfill surcharge represents a valid user fee or unconstitutional tax is a question of law that we review de novo. Gorney v. Madison Heights, 211 Mich.App. 265, 267, 535 N.W.2d 263 (1995). Although no bright-line test exists for distinguishing one from the other, a fee generally is exchanged for a service rendered or a benefit conferred, and some reasonable relationship exists between the amount of the fee and the value of the service or benefit. Bolt v. Lansing, 221 Mich.App. 79, 86, 561 N.W.2d 423 (1997), lv gtd 456 Mich. 946, 576 N.W.2d 169 (1998); Northgate Towers Associates v. Royal Oak Charter Twp., 214 Mich.App. 501, 503, 543 N.W.2d 351 (1995), modified on other grounds 453 Mich. 962, 557 N.W.2d 312 (1996). A regulatory fee will be construed as an illegal tax when the revenue generated by the regulation exceeds the cost of the regulation. Rouge Parkway Associates v. City of Wayne, 423 Mich. 411, 419, 377 N.W.2d 748 (1985). The Supreme Court examined the regulatory fee/tax distinction in Merrelli v. St. Clair Shores, 355 Mich. 575, 96 N.W.2d 144 (1...