Sierra Club v. State ex rel. Okla. Tax Comm'n, Case Number: 116269

• Citation: 405 P.3d 691
• Decision Date: 24 October 2017
• Docket Number: Case Number: 116269
• Parties: SIERRA CLUB, a California not-for-profit corporation, Oklahoma Chapter, Petitioner, v. STATE of Oklahoma EX REL. OKLAHOMA TAX COMMISSION, the Honorable Mary Fallin, Governor, in her official capacity, The Honorable Senator Mike Schultz, Senate President pro tempore, in his official capacity, The Honorable Representative Charles Mccall, Speaker of the House of Representatives, in his official capacity, Respondents.
• Court: Supreme Court of Oklahoma

405 P.3d 691

SIERRA CLUB, a California not-for-profit corporation, Oklahoma Chapter, Petitioner,
v.
STATE of Oklahoma EX REL. OKLAHOMA TAX COMMISSION, the Honorable Mary Fallin, Governor, in her official capacity, The Honorable Senator Mike Schultz, Senate President pro tempore, in his official capacity, The Honorable Representative Charles Mccall, Speaker of the House of Representatives, in his official capacity, Respondents.

Case Number: 116269

Supreme Court of Oklahoma.

Decided: October 24, 2017

James A. Roth, Catherine L. Campbell, and Heather L. Hintz, Phillips Murrah P.C., Oklahoma City, Oklahoma, for Petitioner.

Mithun Mansinghani, Solicitor General, Office of the Oklahoma Attorney General, Oklahoma City, Oklahoma, for Respondents.

WATT, J.:

¶ 1 The question presented is whether H.B. 1449¹ is a revenue bill and thus in violation of Article V, Section 33 of the Oklahoma Constitution. We answer in the affirmative.

I. FACTUAL AND PROCEDURAL HISTORY

¶ 2 H.B. 1449 creates the Motor Fuels Tax Fee for electric-drive and hybrid-drive vehicles, of $100 and $30 per year respectively, and directs that the money from the fees be deposited to the State Highway Construction and Maintenance Fund. The House passed H.B. 1449 on May 22, 2017 and the Senate passed it on May 25, 2017. H.B. 1449 passed with more than 51%, but less than 75%, of the vote in both chambers. It takes effect November 1, 2017.

¶ 3 On August 7, 2017, Petitioner filed an application to assume original jurisdiction, in this Court, to challenge H.B. 1449 as an unconstitutional revenue bill under Article V, Section 33 of the Oklahoma Constitution and to request a writ of prohibition or mandamus. Respondents argue that H.B. 1449 is not a revenue bill, therefore it does not violate Article V, Section 33.

II. ASSUMPTION OF JURISDICTION

¶ 4 This Court has discretion to assume original jurisdiction in a controversy where both this Court and the district courts have concurrent jurisdiction. Edmondson v. Pearce, 2004 OK 23, ¶10, 91 P.3d 605, 613. This Court will usually only assume original jurisdiction over a controversy when the matter concerns the public interest and there is some urgency or pressing need for an early decision. Id.¶11, 91 P.3d at 613. As H.B. 1449 involves a question of constitutionality and will have a statewide effect, there is little question it meets the first criteria. Further, H.B. 1449 has an imminent effect, as it will go into effect in less than two weeks, and ergo meets the second criteria. Accordingly, we now assume original jurisdiction.

¶ 5 Petitioner requests that this Court grant a writ of prohibition or a writ of mandamus; however, neither are the appropriate remedy here. Nonetheless, this Court looks to substance, not form, when a party to an original action requests an improper writ. Stewart v. Judge of 15th Judicial District, 1975 OK 156, ¶7, 542 P.2d 945. Therefore, Petitioner's petition for writ of prohibition or mandamus is transformed into a request for declaratory relief concerning the constitutionality of H.B. 1449. Campbell v. White, 1993 OK 89, ¶6 n.5, 856 P.2d 255, n.5.

III. STANDARDS OF REVIEW

¶ 6 In considering a statute's constitutionality, a heavy burden is cast on those challenging the legislative enactment to show its unconstitutionality. Fent v. Okla. Capitol Improvement Auth., 1999 OK 64, ¶3, 984 P.2d 200, 204. Every presumption is to be indulged in favor of the constitutionality of a statute. Id. If there are two possible interpretations of a statute, only one of which renders it unconstitutional, this Court must give the statute the interpretation that renders it constitutional, unless the constitutional infirmity is shown beyond a reasonable doubt. Calvey v. Daxon, 2000 OK 17, ¶24, 997 P.2d 164, 170.

IV. ANALYSIS

¶ 7 Article V, Section 33 of the Oklahoma Constitution requires that revenue bills

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must originate in the House of Representatives, must be passed by a three-fourths (3/4) vote of each house of the Legislature or be submitted to a vote of the people, are not subject to the emergency measure provision, and may not be passed within the last five days of session. Okla. Const. art. V, 33 (2011). This Court has customarily stated that (1) " ‘[r]evenue laws' are those laws only whose principal object is the raising of revenue, and not those under which revenue may incidentally arise," and (2) " ‘[r]evenue bills' are those that levy taxes in the strict sense of the word, and are not bills for other purposes which may incidentally create revenue" Leveridge v. Okla. Tax Comm'n, 1956 OK 77, ¶8, 294 P.2d 809, 811 ; see also Naifeh v. State ex rel.Okla.Tax Comm'n, 2017 OK 63, ¶17, 400 P.3d 759. "[W]hether a measure is ‘intended to raise revenue,’ must be the overarching consideration in determining whether a measure is a ‘revenue bill.’ " Naifeh, 2017 OK 63, ¶42, 400 P.3d 759 (emphasis added). This is so because the answer to whether a measure ‘levies a tax in the strict sense’ is in part determined by our answer to whether the measure's primary purpose is to raise revenue; since a key difference between a tax and fee is the purpose behind the assessment. Naifeh, 2017 OK 63, ¶43, 400 P.3d 759.Thus, while we ask both whether the measure is intended to raise revenue and if it is a levy of taxes in the strict sense of the word, the first question is the overarching consideration in determining whether a measure is a revenue bill. Naifeh, 2017 OK 63, ¶42, 400 P.3d 759.

¶ 8 Here, H.B. 1449 did not follow the requirements of Article V, Section 33, as it was passed in the last five days of session with less than a three-fourths (3/4) majority vote; making it unconstitutional if it is a revenue bill subject to Section 33. Therefore the question to be determined is whether H.B. 1449 is the type of measure "intended to raise revenue" that the people mandated be enacted only through a legislative super-majority or popular vote.² Whether H.B. 1449 is subject to the strictures of Article V, Section 33 depends on whether its "principal object is the raising of revenue" and whether it "lev[ies] taxes in the strict sense of the word. Leveridge, 1956 OK 77, ¶8, 294 P.2d at 811.

¶ 9 Respondents contend that there is a growing segment of electric-drive and hybrid-drive vehicles using the road while paying little or no fuel tax to contribute to road maintenance. Respondents argue that drivers of gasoline-powered vehicles are therefore effectively subsidizing the electric-drive and hybrid-drive vehicle drivers' use of the State's roads. Respondents state that the $100 electric-drive vehicle registration fee is proportionate with the amount of taxes gasoline-vehicle drivers generally pay. Respondents assert that the lesser registration fee for hybrid-drive vehicles takes into account the fact that hybrid-drive vehicles use some gasoline and thus hybrid-drive vehicle drivers pay some gasoline taxes. Respondents thus argue that H.B. 1449 is not a revenue bill because (1) it imposes a "prototypical user fee" rather than levying a tax, and (2) it does so for the purpose of equalizing the financial burden of maintaining the State's transportation infrastructure. We address these arguments in reverse in order to follow the test laid out by this Court.

A. Principal Object

¶ 10 First, and most important, we must determine whether the principal object of H.B. 1449 is the raising of revenue or if it is a bill under which revenue incidentally arises. Naifeh, 2017 OK 63, ¶42, 400 P.3d 759. In evaluating a measure's object or purpose, we must look to its actual operation and effect, not simply to what the Legislature says it is accomplishing. Torres v. Seaboard Foods, LLC, 2016 OK 20, ¶21, 373 P.3d 1057, 1068. The title of H.B. 1449 states it is:

[a]n Act relating to motor vehicle registrations; creating the Motor Fuels Tax Fee; establishing fee as a registration fee for certain types of vehicles; providing fee amount; clarifying circumstances and manner in which fee should be paid; making

405 P.3d 696

fee a prerequisite to licensing and registration; apportioning fee revenue; defining terms; amending 69 O.S.2011, Section 1501 which relates to the State Highway Construction and Maintenance Fund; allowing fund to receive certain expenditures; providing for codification; and providing an effective date.

2017 Okla. Sess. Laws at 1292 (emphasis added). H.B. 1449 contains three sections. The first section is a codification of new law. It states:

A. In addition to other vehicle registration fees specified by law, for the year beginning January 1, 2018, and for each year thereafter, there is hereby levied and there shall be paid to the Oklahoma Tax Commission a Motor Fuels Tax Fee of:

1. One Hundred Dollars ($100.00) upon every electric-drive motor vehicle to be registered; and

2. Thirty Dollars ($30.00) upon every hybrid-drive motor vehicle to be registered. The fee shall accrue and shall be collectible upon each electric-drive motor vehicle and hybrid-drive motor vehicle under the same circumstances and shall be payable in the same manner and times as apply to vehicle registrations under the provisions of the Oklahoma Vehicle License and

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