Larson v. Seattle Popular Monorail Auth.

Citation156 Wn.2d 752,131 P.3d 892
CourtUnited States State Supreme Court of Washington
Decision Date30 March 2006
PartiesA.H. LARSON; Terrance Scott Wean; Lisa G. Olsen; John Speirs; Kenneth H. Torp; Arthur L. Wahl; B.L. Fox and Peter H. Nickerson, and on behalf of all others similarly situated, Appellants, v. SEATTLE POPULAR MONORAIL AUTHORITY; Washington State Department of Licensing; and Fred Stephens, its director, Respondents.

Henry M. Aronson, Norman J. Bruns, Attorneys at Law, Camden Michael Hall, Camden Hall, PLLC, William Colwell Severson, William C. Severson, PLLC, Seattle, WA, for Appellants.

Laura Kristine Clinton, Mark Gerard Jackson, Paul J. Lawrence, Preston Gates & Ellis LLP, Seattle, WA, Jerald R. Anderson, Linda Marie Moran, Attorneys at Law, Donald F. Cofer, Cameron Gordon Comfort, Atty Generals Ofc/Revenue Division, Olympia, WA, for Respondents.

MADSEN, J.

¶ 1 Appellants, each a resident and motor vehicle owner in Seattle, challenge the trial court's order on summary judgment dismissing all of their claims relating to the creation of the Seattle Popular Monorail Authority (SMP) and SMP's imposition of a motor vehicle excise tax (MVET), as collected by the Department of Licensing. Appellants claim that taxing authority was improperly delegated to SMP under the state constitution; that the MVET is an excise tax; that SMP lacked jurisdiction to impose the MVET; and that the MVET is improperly imposed.

¶ 2 This court has recently addressed several of the Appellants' arguments in Sheehan v. Central Puget Sound Regional Transit Authority, 155 Wash.2d 790, 123 P.3d 88 (2005).1 Consistent with our decision in Sheehan, we hold that the MVET is an excise tax and that local taxing authority was properly delegated to SMP. Additionally, we hold that the MVET is imposed consistent with the petition approved by the voters and chapter 35.95A RCW. We affirm the trial court.

FACTS

¶ 3 SMP was formed in 2002, pursuant to chapter 35.95A RCW, to perform a public monorail transportation function within the city of Seattle. As required by chapter 35.95A RCW, a majority of voters in Seattle approved the creation of SMP and authorized SMP to levy and collect the MVET to help pay for the cost of acquiring, designing, constructing, equipping, maintaining, and operating the monorail.

¶ 4 As provided in RCW 35.95A.020, SMP is a "city transportation authority," which is a "municipal corporation." Under RCW 35.95A.080, SMP has the power to levy and collect an MVET not exceeding 2.5 percent on the value of motor vehicles owned and licensed by residents of Seattle. However, pursuant to Seattle Citizen Petition No. 1 (approved by Seattle voters November 2002), SMP, without further voter approval, may only impose the MVET on up to 1.4 percent on the value of such vehicles.

¶ 5 Pursuant to RCW 35.95A.030, Seattle voters also approved of the selection process for the governing body of SMP. As set forth in Seattle Citizen Petition No. 1, SMP's governing body, a permanent board, consists of both elected and appointed board members. During the initial start-up year, SMP's board authorized the MVET to be levied and collected at a rate of 0.85 percent on a vehicle's assessed value. The full voter-approved rate of 1.4 percent was imposed in June 2004.

¶ 6 Appellants are eight motor vehicle owners who reside in Seattle. In October 2004, Appellants filed a complaint in King County Superior Court, alleging that the MVET was invalid on multiple constitutional and statutory grounds. Appellants filed this action as a class action, but apparently never sought class certification. Br. of Resp't SMP at 13. In December 2004, Respondents, SMP and the Department of Licensing, filed a motion for summary judgment dismissing all of Appellants' claims. On March 3, 2005, Appellants filed a cross-motion for summary judgment declaring the MVET illegal. On March 22, 2005, Appellants filed a motion for a preliminary injunction to restrain the Department of Licensing from remitting MVET payments to SMP. In April 2005, after a hearing on the motions, the trial court granted the Respondents' summary judgment motion and dismissed all of Appellants' claims and denied Appellants' motion for a preliminary injunction.

ANALYSIS

¶ 7 Appellants' first contend that there was an impermissible delegation of local taxing authority under the Washington Constitution because some of SMP's board members are appointed rather than elected. Appellants contend that it is unconstitutional for unelected board members to be delegated legislative taxing authority. Pursuant to RCW 35.95A.030,2 Seattle voters approved the size and selection process for the governing body of SMP, a board, which included having some board members appointed to their positions.

¶ 8 The Washington Constitution contains two provisions regarding local taxation. Article XI, section 12 of the Washington Constitution, entitled, "Assessment and Collection of Taxes in Municipalities," states:

The legislature shall have no power to impose taxes upon counties, cities, towns or other municipal corporations, or upon the inhabitants or property thereof, for county, city, town, or other municipal purposes, but may, by general laws, vest in the corporate authorities thereof, the power to assess and collect taxes for such purposes.3

Similarly, article VII, section 9, entitled "Special Assessments or Taxation for Local Improvements," states:

The legislature may vest the corporate authorities of cities, towns and villages with power to make local improvements by special assessment, or by special taxation of property benefited. For all corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes and such taxes shall be uniform in respect to persons and property within the jurisdiction of the body levying the same.4

¶ 9 A party challenging a statute's constitutionality bears the heavy burden of establishing its unconstitutionality. Amalgamated Transit Union Local 587 v. State, 142 Wash.2d 183, 205, 11 P.3d 762 (2000); Hemphill v. Tax Comm'n, 65 Wash.2d 889, 891, 400 P.2d 297 (1965). This standard is met if argument and research show that there is no reasonable doubt that the statute violates the constitution. Amalgamated Transit, 142 Wash.2d at 205, 11 P.3d 762.

¶ 10 Appellants do not point to any language in the Washington Constitution that supports their position that it is unconstitutional for unelected board members to be delegated legislative taxing authority. The State contends that under Appellants' claim, this court would be required to "engraft" language onto the constitution, an impermissible action.

¶ 11 As a general rule, when interpreting constitutional provisions, we look first to the plain language of the text and will accord it its reasonable interpretation. Wash. Water Jet Workers Ass'n v. Yarbrough, 151 Wash.2d 470, 477, 90 P.3d 42 (2004). If the text is clear, then no construction or interpretation is necessary. Wash. Water Jet Workers Ass'n v. Yarbrough, 148 Wash.2d 403, 431, 61 P.3d 309 (2003) (Bridge, J., dissenting).

¶ 12 Article XI, section 12 clearly establishes that the state legislature may delegate to the corporate authorities of municipalities the power to tax such municipalities, their inhabitants, and property for local purposes. The legislature is expressly prohibited from direct taxation of municipalities and their inhabitants and property for local purposes.

¶ 13 In this case it is undisputed that SMP is a municipal corporation. In RCW 35.95A.020(1), the legislature provided in relevant part that "[a] city transportation authority... may be created in every city with a population greater than three hundred thousand to perform a public monorail transportation function. The authority shall embrace all the territory in the authority area. A city transportation authority is a municipal corporation." It is also undisputed that SMP, a city transportation authority, was properly established pursuant to chapter 35.95A RCW and that SMP is exercising its taxing authority for a local purpose, establishing a monorail within the city of Seattle. Thus, under the plain language of the constitution, the legislature is not limited in its ability to delegate taxing authority to SMP, a municipal corporation.

¶ 14 Notwithstanding the lack of any limiting language in the relevant taxing provisions, Appellants maintain that it was unconstitutional, under case law, for the legislature to delegate local taxing authority to SMP because some of SMP's board members are appointed.

¶ 15 Appellants rely primarily on one case, Amalgamated Transit Union Local 587 v. State, 142 Wash.2d 183, 11 P.3d 762. Amalgamated Transit concerned the constitutionality of Initiative 695 which, among other requirements, required the legislature to submit future tax increases to the voters for approval. Id. at 192, 11 P.3d 762. This provision resulted in all such tax legislation being transformed into conditional legislation, requiring voter approval for finalization. Id. This court held that that provision of Initiative 695 was unconstitutional. Id.

¶ 16 Under article II, section 1, the legislative authority of the State is vested in the legislature and it is unconstitutional for the legislature to abdicate or transfer its legislative function to others. Amalgamated Transit, 142 Wash.2d at 234, 11 P.3d 762 (citing Brower v. State, 137 Wash.2d 44, 54, 969 P.2d 42 (1998)). Article II, section 1 also provides for the initiative and referendum powers, which are the people's legislative powers. The referendum power of the people has two forms. The people can petition for referendum of legislation that the legislature has passed. CONST. art. II, § 1(b); Amalgamated Transit, 142 Wash.2d at 191, 11 P.3d 762. To do so, four percent of the voters must sign a petition. Alternatively the legislature may refer a measure to the people. The court held that section 2 of...

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