Whether the District of Columbia's Clean Air Compliance Fee May Be Collected From the Federal Government

Whether the District of Columbia’s Clean Air Compliance Fee

May Be Collected From the Federal Government

The D istrict o f Colum bia’s Clean Air Compliance Fee is a tax and may not be imposed on the federal

government, because the D.C. Council lacks authority to impose taxes on the property o f the United

States.

January 23, 1996

M e m o r a n d u m O p in io n f o r t h e G e n e r a l C o u n s e l

G e n e r a l S e r v ic e s A d m in is t r a t io n

This memorandum responds to your request for our opinion on whether the

District of Columbia (“ District” ) may collect from the General Services Adminis­

tration the Clean Air Compliance Fee (“ Clean Air Fee” or “ Fee” ) established

by a District of Columbia statute, the Clean Air Compliance Fee Act of 1994

(“ A ct” ), D.C. Act 10-387, reprinted in 42 D.C. Reg. 86 (1995).1 As discussed

below, we conclude that the District may not collect the Fee with respect to prop­

erty owned by the United States. The Fee is a tax on such property, and such

taxes are beyond the authority of the Council of the District of Columbia (“ D.C.

Council” ) under the District of Columbia Self-Government and Governmental Re­

organization Act, D.C. Code Ann. §§ 1-201 to 1-299.7 (1992) (“ Self-Government

Act” ).

I.

The following finding in the Act sets forth the D.C. Council’s statement of

the Act’s purpose:

By requiring payment from employment parking that is not subject

to the parking sales and use tax and by allocating the revenues to

the transit component of the [District’s] Clean Air Regulatory Pro­

gram the [District] will simultaneously discourage the use of single­

occupancy vehicles for home-to-work travel while encouraging the

use of car pools and transit, thereby reducing air pollution in com­

pliance with requirements under the Clean Air Act.

Act §2(5). In its operative provisions, the Act requires owners of real property

in the District containing parking spaces that are used for commuting more than

1 In considering this question, we have received the assistance o f the Tax and Environment and Natural Resources

Divisions o f the Department o f Justice and w e have carefully considered the views submitted by the O ffice of

the C orporation Counsel o f the Government o f the District o f Columbia. See Letter for W alter Dellinger, Assistant

Attorney General, O ffice o f Legal Counsel, from Garland Pinkston, Jr., Acting Corporation Counsel, Office o f the

Corporation Counsel (June 19, 1995) ( “ Corporation Counsel Letter” ).

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Whether the District o f Columbia’s Clean Air Compliance Fee May Be Collected From the Federal

Government

two days per week and for which the District’s parking sales and use tax is not

collected to register the spaces and pay a Clean Air Fee calculated at a rate of

$20 per month per space. Id. §§3-5. Penalties are prescribed for failure by prop­

erty owners to register employment parking spaces or to pay the Fee. Id. § 10.

Property owners may seek reimbursement of the Fee from users of the parking

spaces. Id. § 4(b).

The Act provides that revenues from the Fee “ shall be used to defray the cost

of the transit component of the [District’s] Clean Air Regulatory Program.” Id.

§11. The Act’s legislative history makes it clear that the D.C. Council intended

that the proceeds of the Fee would be used exclusively to subsidize mass transit:

“ The Committee [of the Whole of the D.C. Council] directs that the revenue

collected from this fee be used to fund the District’s payment to [the Washington

Metropolitan Area Transit Authority (“ WMATA” )] as part of a mass transpor­

tation subsidy . . . .” Report to All Councilmembers, from David A. Clarke,

Chairman, Re: Bill 10-610, the “ Clean A ir Com pliance Fee Act o f 1994” at 10

(July 5, 1994) (“ Council Report” ).

The threshold, and ultimately dispositive, question presented here is whether

the Clean Air Fee, to the extent it applies to property owned by the United States,

is a “ tax” or a “ fee.” This question would necessarily arise in connection with

any fee imposed on the federal government by a state or local government, be­

cause the federal government is immune from state and local taxation. See

McCulloch v. M aryland, 17 U.S. (4 Wheat.) 316, 436 (1819) (“ [T]he states have

no power, by taxation or otherwise, to retard, impede, burden, or in any manner

control the operations of the constitutional laws enacted by Congress to carry into

execution the powers vested in the general government.” ). It has long been estab­

lished that a state or local government cannot impose a tax upon the United States,

its agencies, or its instrumentalities “ without a clear congressional mandate.”

Kem-Limerick, Inc. v. Scurlock, 347 U.S. 110, 122 (1954).

The “ tax or fee” question arises in a unique context here because the federal

government has divided the legislative authority for the District between Congress

and the D.C. Council. As the District of Columbia Court of Appeals has summa­

rized:

The United States Constitution vests Congress with the exclusive

legislative authority for the District of Columbia. U.S. Const, art.

I, §8, cl. 17. In 1973, Congress passed the Self-Government Act

to “ relieve Congress of the burden of legislating upon essentially

local District matters.” D.C. Code 1981, §l-201(a). Subject to its

retention of the ultimate legislative authority over the District of

Columbia, Congress delegated certain specific legislative powers to

the District of Columbia government. Id. . . . In addition [to “ ex­

pressly reserv[ing] its right ‘to exercise its constitutional authority

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Opinions o f the Office o f Legal Counsel in Volume 20

as legislature for the District, by enacting legislation for the District

on any subject’ Congress placed several explicit limitations on

the Council’s legislative authority.

D istrict o f Colum bia v. Greater Washington Cent. Labor Council, 442 A.2d 110,

113 (1982) (quoting Self-Government Act, § 1-206), cert, denied, 460 U.S. 1016

(1983).2

As in the cited District of Columbia Court of Appeals case, “ [t]he specific

limitation[ ] which [is] pertinent to the issue before us [is] enumerated in § 1-

233.” Id. Subsection (a)(1) of §1-233 provides that “ [t]he Council shall have

no authority to . . . [ijmpose any tax on property of the United States or any

of the several states.” Thus, if the Clean Air Fee is a “ tax on property of the

United States,” then the D.C. Council lacked the authority to impose it.3

II.

A tax is an “ enforced contribution to provide for the support of government.”

United States v. LaFranca, 282 U.S. 568, 572 (1931). In distinguishing between

government taxes and fees, courts have identified two different types of fees:

“ user or service fees” and “regulatory fees.” The D.C. Council imposed the

Clean Air Fee on owners of parking spaces in the District and directed that reve­

nues from the Fee be used exclusively to subsidize the mass transit system. For

the reasons set forth below, we conclude that the Fee does not qualify as either

a “ user or service fee” or a “ regulatory fee” but is instead an “ enforced con­

tribution to provide for the support o f government.” Id . 4

2 This O ffice has consistently expressed the sam e understanding o f the limitations on the D.C. Council’s authority.

For exam ple, in 1976 we opined that the legislative power o f the D.C. Council

is subject to careful reservations by the Congress o f its ow n constitutional powers and to specific limitations

included in title V I o f the Home Rule Act. Indeed, the very grant o f pow er in section 404(a) begins with

the words, “ (sjubject to the limitations specified in title V I o f this Act, . . Thus there are real limits

on the C ouncil’s authority to act.

The most specific o f those title VI limitations are set forth in Section 602 [D.C. Code 1981, § 1-233]

o f the Home Rule Act.

Memorandum for H ugh M. D urham, Legislative Counsel, Office o f Legislative Affairs, from Mary C. Lawton, Deputy

Assistant Attorney G eneral, Office o f Legal C ounsel, Re: District o f Columbia Enrolled Bill B -l-137, the District

o f Columbia Shop-Book Rule Act at 2 (Feb. 18, 1976).

3 The foregoing discussion indicates that principles o f federal immunity from local taxation and limitations on

the D.C. C ouncil’s authority are both implicated by the “ tax o r fee” question. If the Clean Air Fee is a “ tax,”

then under either principle only Congress could authorize the imposition o f the tax on the United States. It is important

to recognize, how ever, that congressional authorization o f the D istrict’s tax w ould require tw o analytically distinct

steps, whereas congressional authorization o f o th e r state and local taxes requires only one. Congress may waive

federal immunity against a properly enacted state or local tax, acting solely in its capacity as legislature for the

United States. O n the other hand, for Congress to authorize the D istrict’s C lean Air Fee, it must both waive federal

immunity and either authorize the D.C. Council to impose the tax (acting as legislature for the United States) or

impose the tax directly itself (acting as legislature fo r the District).

4 In light o f this conclusion, there is no need to consider the argument that the Clean A ir Fee falls within the

scope o f the w aiver o f federal immunity against state and local taxation and regulation set forth in section 118

of the federal C lean A ir Act, 42 U.S.C. §7418. See Corporation Counsel Letter at 3-7. For even if the Fee satisfies

the terms o f that w aiver, it may not be imposed on the United States because its enactment was beyond the D.C.

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Whether the District o f Columbia’s Clean A ir Compliance Fee May Be Collected From the Federal

Government

A.

Central to the analysis of whether a government levy is a user or service fee

or instead a tax is whether it is imposed to collect payment for a benefit or service

provided by the government to the specific payor as a result of a voluntary act

by the payor, or whether instead the payment is viewed as a mandatory contribu­

tion for the general support of the government. The clearest Supreme Court guid­

ance on whether an exaction is a tax or a user or service fee is set forth in N ational

Cable Television A ss’n v. United States, 415 U.S. 336 (1974). In considering

whether a fee imposed by the Federal Communications Commission was a tax

and therefore beyond the FCC’s authority, the Court opined:

Taxation is a legislative function, and Congress, which is the sole

organ for levying taxes, may act arbitrarily and disregard benefits

bestowed by the Government on a taxpayer and go solely on ability

to pay, based on property or income. A fee, however, is incident

to a voluntary act, e.g., a request that a public agency permit an

applicant to practice law or medicine or construct a house or run

a broadcast station. The public agency performing those services

normally may exact a fee for a grant which, presumably, bestows

a benefit on the applicant, not shared by other members of soci­

ety. . . . A “ fee” connotes a “ benefit” . . . .

Id. at 340-41 (footnote omitted).

In United States v. City o f Huntington, W.Va., 999 F.2d 71 (4th Cir. 1993),

cert, denied, 510 U.S. 1109 (1994), the court applied a facts-and-circumstances

test to determine whether a so-called “ municipal service fee,” consisting of a

“ fire service fee” and a “ flood protection fee,” imposed upon property owners

in Huntington, West Virginia, including federal agencies, was a tax upon the

C ouncil’s authority under the Self-Government Act. W aivers o f immunity apply only to properly enacted state and

local measures.

Nor is there a need to ascertain the scope o f the Clean Air Act waiver o f federal immunity in order to conclude

that there is no basis for construing that w aiver as an implied repeal o f the Self-Government A ct’s limitation on

the authority of the D.C. Council. The District did not make this implied repeal argument in its submission to

this Office, see Corporation Counsel Letter, but the argument was analyzed in a Congressional Research Service

memorandum concerning the Clean Air Fee, see M emorandum by George Costello, American Law Division, Congres­

sional Research Service, Re: Application o f District o f Columbia " Clean Air Compliance Fee Act" to the Federal

Government at 6 -7 (Mar. 24, 1995). We believe the argument has no merit. It is a well-established principle o f

statutory construction that “ repeals by implication are strongly disfavored.” United Stales v. Fausto, 484 U.S. 439,

452 (1988). ‘‘[A] later statute will not be held to have implicitly repealed an earlier one unless there is a clear

repugnancy between the tw o.” Id. at 453 (citations omitted). There is no repugnancy between the Self-Government

Act and the subsequently enacted section 118 o f the Clean A ir Act. They address fundamentally different subjects:

the latter addresses federal immunity (i.e., the relationship between the federal government and state and local govern­

ments), while the former addresses D.C. Council legislative authority ( i.e„ the relationship between Congress and

the D.C. Council). Moreover, neither the text nor the legislative history o f Clean A ir Act section 118 contain the

slightest indication that during its deliberations on waiving federal immunity Congress gave any thought to the legisla­

tive authority of the D.C. Council.

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O pinions o f the Office o f Legal Counsel in Volume 20

United States or was instead a fee for services rendered. The court stated that

“ [u]ser fees are payments given in return for a government-provided benefit.

Taxes, on the other hand, are ‘enforced contribution[s] for the support of govern­

ment.’ ” Id. at 74 (quoting U nited States v. LaFranca, 282 U.S. at 572). The

court held that the municipal service fee was “ a thinly disguised tax” because

the federal agencies’ liability for the fee “ arises from [their] status as property

owners and not from their use of a City service.” Id.

In U nited States v. C ity of Columbia, Mo., 914 F.2d 151 (8th Cir. 1990), the

court considered whether a levy charged by a city as part of the price of water

and electricity was a tax or a fee. Even though the levy was described in the

applicable city ordinance as being in lieu of a tax, the court held that the levy

was part of the utility rate and was unlike a tax in many significant respects:

it was not contained in a section dealing with the city’s taxing power; it was

charged to the customer as part o f the price of electricity and water; and failure

to pay the levy would result in termination of services rather than subject the

customer to penalties. As for the levy’s application to the federal government,

the court said that

[t]he United States’ obligation to pay the [levy arose] only from

its consensual purchase of the City’s [water and electricity]; it d[id]

not arise automatically, as does tax liability, from the United States’

status as a property owner, resident, or income earner. When the

United States purchases water, electricity, and related services, and

then pays the utility bill, it does so as a vendee pursuant to its

voluntary, contractual relationship with the City. The City imposes

the charge not in its capacity as a sovereign, but as a vendor of

goods and services.

Id. at 155-56 (citing National C able Television, 415 U.S. at 340-41).

The results in Columbia and Huntington represent straightforward applications

of the Supreme Court’s approach in National Cable Television. In Columbia, the

levy was held not to be a tax because the federal agency voluntarily used certain

amounts of electricity and water and the levy was for the service actually provided

to the agency. In contrast, in Huntington the assessment was not based on actual

fire and flood services that had been provided on request, but rather represented

a charge to property owners for fire and flood protection available to all inhab­

itants of the city; thus, it was a tax — a mandatory contribution for the support

of government services provided to the entire public.

The Clean Air Fee cannot qualify as a user or service fee because the revenue

from the Fee is used to provide an undifferentiated benefit to the entire public.

The Fee is indistinguishable for present purposes from the assessment to support

community-wide services that was held to be a tax in Huntington. It is not a

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Whether the District o f Columbia’s Clean A ir Compliance Fee May Be Collected From the Federal

Government

charge for any identifiable District services provided specifically to the owners

of parking spaces upon their request. Rather, it is a charge to support the mass

transit services the District provides to all inhabitants (permanent and temporary)

of the District. Such services, as was the case with the “ [f]ire and flood protection

and street maintenance [services at issue in Huntington ,] are core government serv­

ices” available to all inhabitants of the city. Huntington, 999 F.2d at 73.

The court’s rationale in Huntington is fully applicable here: If the argument

that the Clean Air Fee is a user fee rather than a tax were to be accepted, then

“ 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.’ ” Id. at 74. Taxes imposed on property

owners are traditionally used to support government services for the whole com­

munity, and the Clean Air Fee is no different.

Moreover, in contrast to the levy held to be a fee in Columbia, the United

States’ obligation to pay the Clean Air Fee does not arise from any consensual

purchase of a good or service from the District, but rather arises automatically

from its status as a property owner. See Columbia, 914 F.2d at 155. The United

States is in no respect acting “ as a vendee pursuant to its voluntary, contractual

relationship with the [District].” Id. at 156. In short, the District has “ impose[d]

the charge . . . in its capacity as a sovereign, [not] as a vendor of goods and

services.” Id. Also in contrast to the Columbia fee, the District will enforce the

Fee through civil penalties, not the denial of any supposed benefit that the Fee

makes possible.

B.

The case law concerning whether a government levy is a regulatory fee or a

tax was summarized by then-Chief Judge Breyer of the First Circuit Court of

Appeals in San Juan Cellular Telephone v. Public Serv. Comm’n, 967 F.2d 683

(1st Cir. 1992):

Courts have had to distinguish “ taxes” from regulatory “ fees”

in a variety of statutory contexts. . . . They have sketched a spec­

trum with a paradigmatic tax at one end and a paradigmatic fee

at the other. The classic “ tax” is imposed by a legislature upon

many, or all, citizens. It raises money, contributed to a general fund,

and spent for the benefit of the entire community. The classic “ reg­

ulatory fee” is imposed by an agency upon those subject to its

regulation. It may serve regulatory purposes directly by, for exam­

ple, deliberately discouraging particular conduct by making it more

expensive. Or, it may serve such purposes indirectly by, for exam-

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Opinions o f the Office o f Legal Counsel in Volume 20

pie, raising money placed in a special fund to help defray the agen­

cy’s regulation-related expenses.

Courts facing cases that lie near the middle of this spectrum have

tended . . . to emphasize the revenue’s ultimate use, asking wheth­

er it provides a general benefit to the public, of a sort often financed

by a general tax, or whether it provides more narrow benefits to

regulated companies or defrays the agency’s costs of regulation.

Id. at 685 (citations omitted).

We believe that the Clean Air Fee is considerably closer to being a paradigmatic

tax than a paradigmatic regulatory fee. In Judge Breyer’s terms, the Fee “ is im­

posed by a legislature [the Council] upon many, or all, citizens [all owners of

employment parking spaces]. It raises money, contributed to a general fund, and

spent for the benefit of the entire community [the account funding the District’s

subsidy for mass transit, which is a service available to the entire community].”

Id. In other words, the Fee is imposed by a legislative body on property owners

to raise revenue; it is not imposed by a “ [regulatory] agency upon those subject

to its regulation.” Id. Moreover, the fact that the Fee applies only if the District’s

sales and use tax has not been imposed already on the parking service for the

vehicle also suggests that the Fee is a tax, because it indicates that the Fee is

intended to complement the parking tax. Indeed, the D.C. Council indicated as

much in its report on the Act when it stated that “ [t]he fee will only be imposed

on persons who do not currently pay the District’s parking tax.” Council Report

at 10.

The District’s argument that the Clean Air Fee is a regulatory fee is as follows:

We conclude that the District is required by the Federal Clean

Air Act to reduce, eliminate and control sources of air pollution

and that the monetary exaction imposed by the Clean Air Compli­

ance Fee Act is designed to encourage the use of mass transit and

decrease air pollution associated with automobile traffic. Inasmuch

as the primary purpose of this exaction is the control and abatement

of air pollution, we conclude that this exaction is a “ fee” not a

“ tax.”

Corporation Counsel Letter at 3.

As a threshold matter, it is open to question whether it is correct to view the

Fee’s primary purpose as being to regulate air pollution by automobile traffic rath­

er than to raise revenue for mass transit that benefits the general public. The fact

that the proceeds of the Fee are to be allocated entirely to support the mass transit

system strongly suggests that the primary purpose of the Fee is to raise revenue

to support government operations. See Act §11; Council Report at 10. In addition,

although discouraging the use of automobiles for commuting no doubt does serve

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Whether the District o f Columbia’s Clean A ir Compliance Fee May Be Collected From the Federal

Government

air pollution regulatory purposes, the actual reduction in automobile commuting

that can be expected here, as a result of the imposition of the Fee, is indirect

and speculative compared to the direct and immediate revenue impact and support

for mass transit that will result.5

In any event, even assuming that the Clean Air Fee falls in the middle of the

fee-tax spectrum, following Judge Breyer’s focus on the revenue’s ultimate use

leads to the conclusion that this exaction is a tax. To accept the District’s charac­

terization would require that we conclude either that subsidizing mass transit is

a regulation-related cost of the District’s air pollution regulatory program or that

the assumed regulatory impact of the Fee on air pollution (as a result of reduced

automobile commuting and increased use of mass transit) is sufficient by itself

to render it a regulatory fee notwithstanding the remaining aspects of the Fee

that all suggest it is a tax. With respect to the first of these alternatives, while

we do not doubt that encouraging the use of mass transit can have a beneficial

effect on air pollution, the costs of a separate, non-regulatory government program

that benefits the public as a whole are not the kind of costs that courts have

viewed as defrayable by regulatory fees. See supra pp. 17-19. The subsidization

of mass transit is not a regulatory cost, but rather a general government expense

typically defrayed by taxes: subsidization of mass transit “ provides a general ben­

efit to the public, of a sort often financed by a general tax.” San Juan Cellular

Telephone, 967 F.2d at 685.

As for the second alternative, the simple response is that ascribing a regulatory

purpose to a tax does not mean that it is not a tax. Taxes often have a significant

regulatory purpose: “ [A] tax is a powerful regulatory device; a legislature can

discourage or eliminate a particular activity that is within its regulatory jurisdiction

simply by imposing a heavy tax on its exercise.” Massachusetts v. United States,

435 U.S. 444, 455-56 (1978). See also National Cable Television A ss’n v. United

States, 415 U.S. 336, 341 (1974) (“ The lawmaker may, in light of the ‘public

policy or interest served,’ make the assessment heavy if the lawmaker wants to

discourage the activity; or it may make the levy slight if a bounty is to be be­

stowed . . . . Such assessments are in the nature of ‘taxes’ . . . .” ). Thus, the

fact that discouraging automobile commuting is one of the stated reasons for the

Clean Air Fee does not convert it from a tax into a regulatory fee when its rev­

enue-raising purpose in support of separate, non-regulatory government operations

is so direct and substantial. The foregoing analysis is supported by the decision

s See, e.g., Statement o f Art Lawson, Administrator, Office o f Mass Transit, Department of Public Works, Before

the Council o f the District o f Columbia Committee o f the Whole at 1 -2 (May 18, 1994). ( “ A lthough these measures

will not on their own result in measurable reductions o f automobile use within the District o f Columbia it is the

direction setting that is most important here. Additionally, these measures are important because they will generate

desperately needed revenues to help fund the District’s FY 1994 and 1995 W MATA operating budget. . . . [T]he

District’s subsidy to support WMATA was reduced by $7.2 million in the current budget year. This reduction left

WMATA underfunded by approximately $7 million. The Committee on Regional Authorities proposed to m ake up

the $7 million by implementing a series o f transfer charges and fare increases on District Metrobus service. . . .

[Councilwoman Mason] has proposed that the revenue from these bills be used to fund the W MATA deficits thereby

making the fare and transfer charge proposals unnecessary. ’ ’). See also id. at 6.

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Opinions of the Office o f Legal Counsel in Volume 20

in San Juan C ellular Telephone and the cases cited in Judge Breyer’s opinion

in that case. In San Juan, the court held that a three percent of gross revenues

charge imposed on a telephone company by the Puerto Rico Public Service Com­

mission as a condition of the company’s authorization to provide cellular tele­

phone service was a regulatory fee. Judge Breyer stressed that the fee was assessed

by a regulatory agency, was placed in a special fund, and was not to be used

for a general purpose but rather to defray specific costs of regulation (investigative

expenses, hiring of services, and acquisition of equipment). 967 F.2d at 686. His

opinion distinguished the case before the court, as well as other cited examples

of regulatory fees,6 from those cases that had held charges to be taxes because

the proceeds from the charges were used for general purposes or to raise general

revenue.7

Schneider Transport, Inc. v. Cattanach is particularly instructive for our pur­

poses. In that case, it was argued that truck registration fees imposed on trucking

companies were “ regulatory licensing fees.” The Seventh Circuit rejected this

argument, finding that “ [although not denominated as such, the registration fees

are imposed for revenue-raising purposes, a characteristic of any tax . . . [, and]

[t]he fees are deposited in a segregated fund, the state transportation fund, for

transportation purposes, including highway construction.” 657 F.2d at 132 (cita­

tions omitted). Thus, as with the Clean Air Fee, the charge went beyond regulatory

purposes and raised revenue to support a separate, non-regulatory government pro­

gram.

Finally, we observe that our conclusion that the Clean Air Fee is not a regulatory

fee does not conflict with Judge Breyer’s statement that a regulatory fee “ may

serve regulatory purposes [by] deliberately discouraging particular conduct by

making it more expensive.” 967 F.2d at 685. The fact that some bona fide regu­

latory fees serve regulatory purposes in this way does not mean, of course, that

every charge with a regulatory purpose that raises revenue beyond what would

defray regulatory costs must be viewed as a fee rather than a tax. As discussed

above, supra p. 19, taxes often have regulatory purposes. See Massachusetts v.

United States, 435 U.S. at 455—56; N ational Cable Television A ss’n v. United

States, 415 U.S. at 341.

Judge Breyer cited only one case involving this type of regulatory fee. 967

F.2d at 685 (citing South Carolina ex rel. Tindal v. Block, 717 F.2d 874 (4th

Cir. 1983), cert, denied, 465 U.S. 1080 (1984)). Block concerned a charge imposed

6 See, e.g., Union Pac. R.R. v. Public Util. Comm’n, 899 F.2d 854, 856 (9th Cir. 1990) (assessment helped defray

utility com m ission's “ cost o f performing [its] regulatory duties'*); Mississippi Power & Light Co. v. United States

Nuclear Regulatory Comm’n , 601 F.2d 223 (5th C ir. 1979), cert, denied, 444 U .S. 1102 (1980) (NRC charge helped

pay costs o f environm ental reviews, hearings, and administrative and technical support).

7 See id. at 685 (citing Schneider Transport, Inc. v. Cattanach , 657 F.2d 128 (7th Cir. 1981) (charge on truck-

owners used to pay for highw ay construction), cert, denied, 455 U.S. 909 (1982); Keleher v. New England Tel.

& Tel. Co., 947 F.2d 547 (2d Cir. 1991) (public utility com panies using city streets charged fee tied to utility’s

gross revenues and not cost o f regulating utility’s use o f city streets), Robinson Protective Alarm Co. v. City o f

Philadelphia, 581 F.2d 371, 376 (3d Cir. 1978) (charges on central aJarm companies based on gross revenues and

“ added to the public fisc, rather than applied exclusively to contractual services o w ed" to the companies)).

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Whether the District o f Columbia's Clean A ir Compliance Fee May Be Collected From the Federal

Government

by the Secretary of Agriculture on the proceeds of all milk sold commercially.

The charge was remitted to the Commodity Credit Corporation (“ CCC” ) as part

of a milk price support program administered for the Secretary by the CCC. The

purposes of the charge were “ to encourage dairy farmers to reduce milk produc­

tion and to offset a portion of the cost of the milk price support program.” 717

F.2d at 876. Although Block principally concerned Administrative Procedure Act

challenges to the Secretary’s imposition of the charge on milk sales, the court’s

opinion also briefly discussed the allegation that the Secretary’s charge was a

tax and therefore was unconstitutional for two reasons: it did not originate in the

House of Representatives, and Congress cannot delegate its authority to tax. The

court easily concluded that the charge was not a tax because it was authorized

by Congress pursuant to its commerce power rather than taxing power, citing

Wickard v. F ilbum , 317 U.S. I l l (1942), for the proposition that “ [t]he imposi­

tion of assessments have long been held to be a legitimate means of regulating

commerce.” 717 F.2d at 887.8

Block does not support the position that the Clean Air Fee is a regulatory fee,

because the charge addressed in that case differed from the Fee in two funda­

mental respects: it was imposed on regulated parties, not property owners, and,

most significantly, the revenue raised from the charge was used only for the spe­

cific regulatory program of which it was a part, and to which the regulated parties

were subject, not to support government operations in a separate, non-regulatory

program that benefits the public generally.

C.

The “ tax or fee” cases cited by the Office of the Corporation Counsel, see

Corporation Counsel Letter at 2, included both user or service fee cases and regu­

latory fee cases. The cited cases are consistent with our conclusion that the Clean

Air Fee is a tax and not a fee. For example, in Valandra v. Viedt, 259 N.W.2d

510 (S.D. 1977), the court held that a “ mobile home license fee” was principally

a tax because “ 85% of the fee collected [allocated to the county highway and

bridge fund] is for revenue purposes and bears no relationship to the cost of ad­

ministering the [mobile home] registration system,” and only the fifteen percent

allocated “ to defray costs of titling, registration and for unusual use of the high­

way” was arguably a fee. Id. at 512. Similarly, the Clean Air Fee is allocated

to support a mass transit system and is not tied to any governmental service or

8 The two cases cited in this regard by the Block court each held that administrative sanctions imposed against

farmers for exceeding marketing quotas were authorized under the commerce pow er and did not constitute taxes.

See United States v. Stangland, 242 F.2d 843, 848 (7th Cir. 1957); Rodgers v. United Stales, 138 F.2d 992, 994

(6th Cir. 1943). The central rationale o f the cases was that the charge in question “ [was] not a charge on property

for the purpose o f raising revenue. Revenue may incidentally arise therefrom, but that fact does not divest the regula­

tion of its commerce character and render it an exercise o f the taxing power.” Rodgers, 138 F.2d at 995. In contrast,

the Clean Air Fee’s production o f revenue to subsidize mass transit is anything but incidental: the Fee is a charge

on property for the purpose o f raising revenue.

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Opinions o f the O ffice o f Legal Counsel in Volume 20

benefit specifically provided to owners of parking spaces. See also Radio Common

Carriers v. State, 601 N.Y.S.2d 513, 516 (N.Y. 1993) (“ Section 1150 . . . is

in effect a tax. The monthly one dollar fee is not related to licensing or other

services performed for the [fee-payor] by the state . . . . The money collected

is added to the general state fisc . . . .” ).

Those of the cases cited by the Corporation Counsel that held that the charge

in question was a fee generally differ from the present case in the critical respect

that they involved payments to defray costs attributable to regulated parties. For

example, in holding that a ten dollar criminal history records check charge paid

by potential firearms buyers was a fee, the court in In re Shooters Emporium,

Inc., 135 B.R. 701 (Bnkr. S.D. Fla. 1992), stated that

the nature of the payment is voluntary. Payment is required only

if one desires to purchase a firearm. The purpose of the payment

is for private benefit. Only people who pay the fee may purchase

a firearm. Furthermore, this payment is clearly designed to recoup

the costs of regulation from the people regulated, rather than to

raise general revenues. This payment can not be reasonably con­

strued to be an involuntary exaction for a public purpose.

Id. at 702-03.9 In contrast to these cases, the Act makes clear that the Clean

Air Fee is allocated to support mass transit; it does not defray costs attributable

to parking space owners or any other regulated parties.

III.

For the reasons set forth above, we conclude that the Clean Air Fee is a tax.

To the extent that the Fee is imposed on property owned by the United States,

it is a “ tax on property of the United States” and therefore beyond the authority

of the D.C. Council under the Self-Government Act. The District may not collect

the Fee from the federal government.

TERESA WYNN ROSEBOROUGH

Deputy Assistant Attorney General

Office o f Legal Counsel

' 9 See also City o f Vanceburg, Ky. v. Federal Energy Regulatory Comm’n, 571 F.2d 630, 644 (D.C. Cir. 1977)

(dam-use charges are “ exacted against a licensee in exchange for a privilege which the licensee has requested or

applied for and from which the licensee derives a special benefit” ), cert, denied, 439 U.S. 818 (1978); Strater

v. Town o f York, 541 A.2d 938 (M e. 1988) (ten dollar charge for harbor usage); Memphis Retail Liquor Dealers’

Ass'n v. City o f Memphis, 547 S.W .2d 244 (Tenn. 1977) (emphasizing uniqueness of regulation o f alcoholic beverage

industry and com m on practice o f regulating that industry through license taxes, holding that five percent inspection

fee im posed on retailers was a fee even though it produced revenues that were 200 times the cost o f regulation).

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