Samis Land Co. v. City of Soap Lake
| Decision Date | 24 May 2001 |
| Docket Number | No. 68520-7.,68520-7. |
| Citation | 23 P.3d 477,143 Wash.2d 798,143 Wn.2d 798 |
| Parties | SAMIS LAND CO., The Estate of Samuel Israel, and the Samuel Israel Living Trust, Respondents, v. CITY OF SOAP LAKE, Petitioner. |
| Court | Washington Supreme Court |
Foster, Pepper & Shefelman, Peter Stephen DiJulio, Grover E. Cleveland, Hugh Davidson Spitzer, Seattle, amicus curiae on behalf of Association of Wash. Cities and City of Ocean Shores.
Greg Overstreet, Olympia, amicus curiae on behalf of Building Industry Association.
Garvey, Schubert & Barer, William Colwell Severson, Seattle, amicus curiae on behalf of Ocean Shores Property Owners.
City of Soap Lake, Soap Lake, Moe & Allan, Wallace Edward Allan, Ephrata, for Petitioner.
Perkins, Coie, Scott M. Edwards, Seattle, for Respondent.
The issue here is whether a "standby charge" imposed by the City of Soap Lake upon vacant, unimproved, uninhabited lots that abut but are unconnected to its water and sewer lines is a regulatory fee or a property tax. We find that the charge is a property tax and that, because it is not assessed uniformly according to the respective values of the properties within the class, it violates article VII, section 1 of the Washington Constitution. We therefore affirm.
Over the past three decades, respondents Samis Land Company, The Samuel Israel Living Trust, and the Estate of Samuel Israel (hereinafter, collectively, "Samis") have acquired approximately 200 platted, vacant lots in the City of Soap Lake ("City") and held the lots without significant development. In 1989, the City enacted Soap Lake Municipal Code (SLMC) 13.08.175, imposing a flat-rate $60 annual charge on any "vacant, unimproved land which shall abut a line providing water service or sewer service but have no connection thereto." Since 1990, Samis has paid the City more than $46,000 in standby charges.
In February 1996, Samis stopped paying such charges in the wake of our decision in Covell v. City of Seattle,1 and in July 1996, Samis filed suit for a full refund of all charges previously paid as well as equitable relief permanently enjoining the City from collecting any more standby charges. Samis then moved for a partial summary judgment that the charge was a property tax that violated the tax uniformity requirement of Wash. Const. art. VII, § 1. The Grant County Superior Court denied the motion, ruling that the charge was not a tax, but rather simply a fee for benefits received, and thus, article VII, section 1 did not apply. The Court of Appeals accepted discretionary review and reversed, concluding that the charge was in fact an unconstitutional property tax under the tests articulated in Covell.2 We granted review.
The parties agree that the sole issue before us is whether the trial court erred in rejecting Samis' motion for a partial summary judgment that SLMC 13.08.175 levies an unconstitutional property tax.3 We review summary judgment rulings de novo, viewing all facts and reasonable inferences in a light most favorable to the nonmoving party.4 Summary judgment is authorized under CR 56(c) only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. "A material fact is one upon which the outcome of the litigation depends in whole or in part."5
The Soap Lake ordinances at issue here are codified at SLMC 13.08.175:
Municipal ordinances, like state statutes, are presumed constitutional, except where a suspect class or fundamental right is implicated.6 To rebut that presumption, it must be clear that the legislation cannot reasonably be construed in a manner that comports with constitutional imperatives.7
Soap Lake argues that its standby charge is merely a fee collected in exchange for public benefits conferred upon Samis, namely, the nearby installation of city water and sewer lines.8 Local governments have authority under their general article XI, section 11 police powers to require payment of fees that are "`akin to charges for services rendered'"9 in that they are deposited into a segregated fund directly related either to the provision of a service received by the entities paying the fees or to the alleviation of a burden to which they contribute.10 Such charges, which this court has collectively referred to as "regulatory fees,"11 include a wide assortment of utility customer fees, utility connection fees, garbage collection fees, local storm water facility fees, user fees, permit fees, parking fees, registration fees, filing fees, and license fees.
Because such fees are not considered taxes, they are exempt from fundamental constitutional constraints on governmental taxation authority.12 There is thus an inherent danger that legislative bodies might circumvent constitutional constraints, such as the all-important tax uniformity requirement13 or the one percent ceiling,14 by levying charges that, while officially labeled "regulatory fees," in fact possess all the basic attributes of a tax. As we noted in Covell, unless sharp distinctions between fees and taxes are maintained in the law, "`virtually all of what now are considered "taxes" could be transmuted into "user fees" by the simple expedient of dividing what are generally accepted as taxes into constituent parts, e.g., a "police fee".'"15 Courts must therefore look beyond a charge's official designation and analyze its core nature by focusing on its purpose, design and function in the real world.16
Over the years, our caselaw has identified several attributes that distinguish fees from taxes. These attributes were consolidated into a three-part test in Covell, where we held that Seattle's residential street utility charge was in fact an unconstitutionally imposed property tax. First, one must consider whether the primary purpose of the legislation in question is to "regulate" the fee payers or to collect revenue to finance broad-based public improvements that cost money.17 Second, one must determine whether or not the money collected from the fees is segregated and allocated exclusively to "regulat[ing] the entity or activity being assessed."18 Third, one must ascertain whether a direct relationship exists between the rate charged and either a service received by the fee payers or a burden to which they contribute.19
We begin by examining the primary purpose behind the enactment of SLMC 13.08.175. If the fundamental legislative impetus was to "regulate" the fee payers—by providing them with a targeted service or alleviating a burden to which they contribute—that would suggest that the charge was an incidental "tool of regulation"20 rather than a tax in disguise.21
In Covell, we first sought to ascertain the central rationale for enactment of Seattle's street utility charges by focusing on the legislative language found in the ordinances themselves:
We concluded, "The primary concern of these enactments is with collecting money to pay for [public] improvements rather than with public health, safety, or welfare."23 Here, as Samis has shown, the "thrust" of the ordinances in question is even more "clearly on funding" than Seattle's ordinances in Covell since, not most, but all its provisions deal exclusively with revenue collection. As the City readily admitted, the "legislation, i.e., the municipal ordinance, imposing the standby charge makes no attempt to regulate the use of water or sewer services."24 Indeed, as the City unequivocally conceded early on in this litigation: "The primary purpose of the Soap Lake standby charge is to generate revenues."25
However, the fact that the ordinances themselves deal exclusively with fiscal matters does not necessarily conclude our inquiry. In Margola Assocs. v. City of Seattle,26 we wrote:
Under Hillis II, a court can look to the "overall plan" of regulation in construing the purpose of the challenged fee. Likewise, in Teter, this court looked beyond the legislation implementing the fee in order to determine the legislation's purpose. Even though the registration and fee ordinances themselves do not specifically refer to any "overall plan" of regulation or limit the use of revenues, the ordinances should not be viewed in isolation.27
The City argues that SLMC 13.08.175 was enacted as a small part of its overall effort to improve the regulation of its city-wide water-sewer system for the general protection of its citizens' health, welfare, and safety,28 as authorized under Wash. Const. art. XI, § 11 and various statutes.29 The City thus urges us to read SLMC 13.08.175 in its broader legislative context, namely, SLMC Title 13,...
To continue reading
Request your trial
-
In re Forcha-Williams
...issue it must be raised in either motion for discretionary review or answer (citing RAP 13.7(b) )); Samis Land Co. v. City of Soap Lake , 143 Wash.2d 798, 803 n.3, 23 P.3d 477 (2001) (declining to consider issue not raised in motion for discretionary review (citing RAP 13.7(b) )); see also ......
-
Burns v. City of Seattle
...a utility tax on their own municipal utilities. See RCW 35.21.870 (authorizing six percent utility tax); Samis Land Co. v. City of Soap Lake, 143 Wash.2d 798, 807, 23 P.3d 477 (2001) (tax revenues may be used for fund). Thus, a city's right to form its own utility is financially significant......
-
Killian v. Seattle Pub. Sch., Corp.
...We view the facts and all reasonable inferences in the light most favorable to the nonmoving party. Samis Land Co. v. City of Soap Lake , 143 Wash.2d 798, 803, 23 P.3d 477 (2001). ¶13 Washington's Public Employees' Collective Bargaining Act (PECBA), RCW 41.56.010 -.900, "provides a cause of......
-
Carrillo v. City of Ocean Shores
...judgment on February 5, 2001, but the trial court stayed proceedings pending the Supreme Court decision in Samis Land Co. v. City of Soap Lake, 143 Wash.2d 798, 23 P.3d 477 (2001), a case dealing with the legality of standby water and sewer charges imposed by that The issues before us are p......