Published United States Court of Appeals For The Fourth Circuit
Published United States Court of Appeals For The Fourth Circuit
The revenue collected from the charge described above is deposited into the "Closure Cost Assistance Fund" which is dedicated to
West Virginia's Landfill Closure Assistance Program. See W. Va.
Code 22-16-1 and 22-16-12. This Program provides funding for
landfills that do not meet certain environmental criteria set out by the
Environmental Protection Agency ("EPA"). The EPA, in promulgating its environmental criteria for the regulation of landfills, was concerned with remedying those instances where landfills would
contribute to serious groundwater contamination.
The scheme enacted by West Virginia to combat contaminated
landfills was constructed to address the problem concerning those
landfill facilities whose owners were not able to pay the costs of
upgrade or closure. Because of the combined necessities of complying
with the EPA regulations and cleaning up contamination which created an enormous potential health hazard, the West Virginia legislature deemed that the charge at issue here would be funneled towards
the landfill closure/upgrade costs for those facilities unable to afford
such expenses. The West Virginia legislature stressed that this was
necessary because a large percentage of citizens within the state rely
on groundwater as their sole source of water.
Once the funds are collected, they are deposited under the rubric
of the Landfill Closure Assistance Fund which is designated as a special revenue fund. Nevertheless, this fund is part of the general state
fund within the state treasury and under the control of the State Treasurer. As such, any refund ordered by that account would come
directly from the state treasury in accordance with state law which
states that all money collected under the acts of the legislature
becomes part of the state treasury. See W. Va. Code 12-2-2.
Appellants challenged the constitutionality of the charge assessed
under 22-16-4(a). They claim that 22-16-4(a) violates interstate
commerce rights protected under the dormant Commerce Clause and
also violates substantive due process rights. Appellees countered with
the claim that the TIA divests the district court of jurisdiction on the
basis that the charge imposed by 22-16-4(a) is a "tax" and not a
"fee." The district court agreed with appellees' argument and construing appellees' motion to dismiss for lack of subject matter jurisdiction
as a motion for summary judgment, granted summary judgment for
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imposes the charge; (2) what population is subject to the charge; and
(3) what purposes are served by the use of the monies obtained by the
charge. See San Juan Cellular Telephone Co. v. Public Service
Comm'n, 967 F.2d 683, 685 (1st Cir. 1992); see also Bidart Bros. v.
California Apple Comm'n, 73 F.3d 925, 931 (9th Cir. 1996).
In San Juan Cellular, the court set out the precise confines of a
"classic tax" versus a "classic fee." The "classic tax" is imposed by
the legislature upon a large segment of society, and is spent to benefit
the community at large. See San Juan Cellular , 976 F.2d at 685. The
"classic fee" is imposed by an administrative agency upon only those
persons, or entities, subject to its regulation for regulatory purposes,
or to raise "money placed in a special fund to defray the agency's
regulation-related expenses." Id. The San Juan Cellular court noted
that most charges will not fall neatly into either extremity and the
characteristics of the charge will tend to place it somewhere in the
middle. See id.
When the three-part inquiry yields a result that places the charge
somewhere in the middle of the San Juan Cellular descriptions, the
most important factor becomes the purpose behind the statute, or regulation, which imposes the charge. See South Carolina v. Block, 717
F.2d 874, 887 (4th Cir. 1983). In those circumstances if the ultimate
use of the revenue benefits the general public then the charge will
qualify as a "tax," while if the benefits are more narrowly circumscribed then the charge will more likely qualify as a "fee." See San
Juan Cellular, 967 F.2d at 685.
The first two steps of the inquiry indicate that the charge imposed
by W. Va. Code 22-16-4(a) is a "tax." First, the charge was imposed
by the West Virginia legislature and not any administrative agency.
Second, the charge is imposed on the persons disposing of the waste
into the landfill and thus is paid by those citizens and businesses who
pay a collection service fee to have their waste picked up. See W. Va.
Code 22-16-4(c). This subsection ensures that the cost of the charge
is passed from the transporter of the waste to the generators of the
waste, so to spread the cost to a significantly wider proportion of the
population.
The last part of the test also yields to the conclusion that the charge
is a "tax" because the benefits of the charge touch a large segment of
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was substantially different than the one at issue here in that it applied
only to out-of-state waste deposited in West Virginia landfills with
the stated purpose of discouraging such conduct. This rationale is not
applicable to 22-16-4(a). Therefore, appellants' attempts to create a
link to these prior cases are unavailing.
CONCLUSION
For the foregoing reasons, we affirm the district court's opinion
declaring W. Va. Code 22-16-4(a) to be a"tax." The district court
was correct to declare itself without jurisdiction to entertain Valero's
claim pursuant to the TIA.
AFFIRMED
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