*1 and filed Carter, J., specially concurred ATCHISON, opinion. AND SANTA TOPEKA COMPANY; Burlington FE RAILWAY J., opin- filed McCormick, dissented Chicago Company; Northern Railroad JJ., Wolle, Harris, ion, in which Larson Transportation Western North joined. Company; Railroad Illinois Central Gulf Company; Western Rail Norfolk and Ogilvie,
way Company; Trus B. Richard Chicago, Property Milwau
tee
kee, Railroad Com St. Paul and Pacific Debtor;
pany, Rail Pacific Union Company, Appellants,
road BAIR, of Revenue of D. Director
Gerald Revenue; Department of Iowa
the Iowa Railway Revenue;
Department of Iowa Baring Authority; Maurice E.
Finance
er, and Custodian Treasurer Iowa Fund; Facility Special Railroad
Raymond Kassel, L. Director of Trans Department
portation of the State Transportation
Transportation; Department of
Commission of the State Department
Transportation; and State Transportation, Appellees. Company, Shippers Railroad
Iowa
Intervenor. 69397.
No. Iowa.
Supreme Court of
Sept.
Rehearing 13, 1983. Denied Oct. *3 Webster, Davis, Jr., A. Frank W.
Bennett Gamble, Burt, Riepe, Brent B. Green and Davis, Moines, and Webster & Des Sheldon Barker, Fink, I. William T. Maureen & of Sonnenschein Carlin Nath Ro- Martin senthal, Ill., Chicago, appellants. Gen., Miller, Harry Atty. Thomas J. M. Gen., Asst. and Lester Griger, Sp. Atty. A. Paff, Gen., Wine, A. Atty. Asst. and Donald Roberts, W. W. and David Dunn of Stephen Wine, Koehn, Davis, Hockenberg, Brown & Moines, for appellees. Des Moines, Kelly, for interve- E. Kevin Des nor.
UHLENHOPP, Justice. us to consider the appeal requires
This validity challenged of an Iowa tax which railroads, of which are inter- by plaintiff all subject state carriers jurisdiction (ICC). Commerce the Interstate Commission salutory claims the tax is a effort railroad require industry the entire Iowa support the rehabilitation of its help who are in financial trouble. Un- members problem simple, is not fortunately, act of Congress because of an primarily discriminatory taxation rail- prohibiting roads. most American
The financial condition of a number of deteriorated over railroads problem over-capac- Part of the was years. “too much expert, in the words of one ity, chasing too little traffic.” first track was enact- response by Congress significant Regional Reorganization ment of the Rail which, alia, (3-R inter Act) Act of established Services Office Planning urban, rural, a Rail serving agricultural and in the ICC. industrial communities of the state. 4. There exists a problem serious The finances railroads continued regarding ability agricul- however, deteriorate, next Congress producers tural to transport economically enacted the Railroad Revitalization farm products to traditional markets be- Act), Act of Regulatory (4-R Reform cause of the possible abandonment and which declared national “foster policy abandonment of facilities railway within all competition among carriers the state. of transportation.” other modes 5. These making conditions are it 801(b)(1) (1982 Supp.). U.S.C. The act more and more difficult for farmers and made a commitment of fi major federal farm related businesses to survive in im nancing for railroad rehabilitation and present economy state of the thus threat- provement *4 “according to selected railroads very the heart of ening blood Iowa. to degree the which are to they to essential major 6. cause this One of condition the rail transportation system.” 45 U.S.C. shortages has recurrent of been funds in 823(b)(1) (1982 Supp). The act resulted § channels private high and the interest in capaci “corridors of ascertaining excess borrowing. cost of ty,” procedures and it eased for abandon 7. shortages These have contributed ment of uneconomic railroad In fos lines. in to reductions construction of new rail- tering competition among the mod several facilities, sale, made way and have the es of transportation, the act also contained and purchase repair existing railway of what is now section 11503of title Unit facilities a virtual in impossibility many ed (1983 States Supp.), pro Code which parts of the state. scribes state of rail taxation 8. Iowa faces the possible conse- roads. of quences bankruptcies two railroad and The most condition of railroads continued further reductions in service other worsen, to Congress and eventually enacted deteriorating railroads due to rail facili- the Staggers Act of sub- Rail which of ties. The loss rail service on three stantially reduced of rail regulatory control be the ninety may thousand miles imme- rates, regulate limited state to authority consequence bankruptcies, diate of the rates, in-state rail and further aban- eased transporta- with a resultant in increase procedures. donment accompanied tion This will be aby costs. the Assembly Iowa General en- in Any pro- reduction Iowa farm income. acted a special excise tax on meas- railroads loss of service on the essential longed ured the of amount fuel consumed to portions of these rail facilities means the propel railway vehicles in the state. 1981 in Iowa jobs loss of and a loss state Iowa Acts (codified ch. Code at Iowa § economy. seq. et (1981)). 324A.1 Revenue from §§ supply adequate 9. A stable of funds the placed special tax is in a facili- railroad financing for of facilities is re- railway fund, 324A.9, ty for use in out carrying § to of quired encourage construction rail- the Iowa functions of the Finance Railway facilities, of way the rehabilitation exist- Authority (Authority). and the abandon- ing prevent facilities Creation of Authority the in orderly ment of others in an and sus- appears 307B.5 to be the result of reduced the prob- tained manner and to reduce rail service in years in Iowa recent due to lems in this section. described increasing railroads’ financial difficul- It is a railway 10. to create necessary Legislative ties. findings on which creation authority encourage finance the in- were Authority predicated include: of and private capital vestment stimulate shortage construction, repair There will exist a serious and rehabilitation
[3.] of viable rail railway prevent lines and facilities of facilities and railway use through purchase of others was allowed to eventually
abandonment western fi- it. financing, assisted public publicly of of assist-
nancing public forms go was to into special The excise tax ance. Iowa effect on October 1981. Code railroads, however, 324A.3. Plaintiff 307B.3 Iowa Code § petition on November equity filed Au- created the Assembly The General 1981, asking that collection of the tax be for purpose “providing for thority enjoined. temporarily Ship- Iowa Railroad enhancing railway facilities and financing of on the side of the pers Company intervened railway continuing operation injunction A temporary railroads. was 307B.5. facilities ....”§ “[d]eclaration on December and trial of granted Authority purpose” necessity was January the action held in in section 307B.2: part states railroads the tax on vari- challenged grounds, upheld ous trial court transporta- adequate railway Access to the railroads In this appealed. court the economic facilities essential to tion their attack to three narrowed the state. welfare of One They first contend the tax dis- grounds. for the preserve provide is to chapter contrary criminates rail carriers services railway of Iowa those citizens section 11503 title United States in existence or needed in the now Next, they claim the tax violates the Code. have a viable future but which which *5 VI, 2, Clause in Article Section Supremacy reasons variety legal a of economic and They of the United States Constitution. pro- if does not not exist the state may while argue Congress that has streamlined financing other mechanisms vide the or the railroad to the lines which industry can in this It is the chapter. referred to and has survive forbidden chapter any public the that intent of lines, taxation in order to assist the viable facili- railway of ownership control Assembly the has burdened those General for in be trans- provided chapter ties this with a tax of helping lines for the promptly as private ownership ferred to to the railroads be abandoned. this the to fi- economically practicable subject as implicat- a policies railroads see conflict of in- It is further nancing requirements. Finally, the ing Supremacy Clause. the in this authority that created tended urge that the tax contravenes the to en- powers vested with all chapter be I, Clause in Article Section of Commerce accomplish of this purposes able it to because it is the United States Constitution chapter. unrelated to services the state furnishes the Complete Auto Transit railroads. Inc. con- Authority The record indicates the 274, 277-78, Brady, 430 U.S. 97 S.Ct. special using money from templated (1977). They as- ex- fund, part derived in the railroad from that the the tax sert revenue from will not question, purchase cise tax in various them and in instances benefit some will be lines, the north-south especially abandoned compete against them. used line” of the Island Railroad “spine Rock we note that Prefatorially, state aban- running through Iowa which was carry presumption validity. of City taxes Rock bank- doned after the Island entered Pittsburgh Parking Corp., v. Aleo of either The State would then lease ruptcy. 2291, 2295, 41 94 L.Ed.2d competitors lines the abandoned to railroad (1974); rel. Bishop ex State the rail- eventually or sell them back to Travis, (Iowa 1981). 306 N.W.2d Line and the Chi- roads. Soo Railroad Compa- cago Transportation Northwestern 11503? rail- I. Violation bankruptcy formal argue made bids to the state excise tax violates ny roads aban- Interstate portion trustee and court that of the Revised Com- purchase 11503(b)(4) North- Act as section spine Rock Island line. The merce codified doned (b) title United States Code. Subsection construed as making a substantive change provides: that section 306). in § (b) The following acts unreasonably Section 306 the 4-R perti- Act reads in burden against and discriminate inter- nent part: commerce, State, and a subdivision Section Part I of the Interstate State, of a authority acting or for a State (49 Commerce act et seq.), U.S.C. 1 as or may subdivision of a not do any Act, amended is further amended of them: by inserting therein a new section 28 as (1) assess rail transportation property follows: at a value that has a higher ratio to the (1) “Sec. 28. Notwithstanding true market value of transporta- the rail provisions 202(b), of section any action property tion than the ratio that the as- described in this subsection is declared to sessed value of other commercial and in- constitute an unjust unreasonable and dustrial in the property same assessment against, discrimination and an undue bur- jurisdiction has to the market true value on, den interstate It is commerce. un- of the other commercial and industrial State, lawful for a a political subdivision property. State, of a a governmental entity or (2) on levy or collect a tax an assess- person on acting behalf of such State or ment not under may be made clause subdivision to commit any of follow- (1) of this subsection. ing prohibited acts: (3) collect levy or an ad valorem prop- “(a) (but The assessment only rail erty transportation on property any portion extent of based exces- at a tax rate that exceeds tax rate sive as described), values hereinafter applicable to commercial and industrial of a purposes tax levied property in the same jurisdic- assessment district, any taxing tion. property at value which a high- bears (4) impose another tax that discrimi- er ratio to true market value of nates a rail carrier providing such than transportation property *6 subject transportation jurisdiction ratio the value which assessed of all of subchapter the Commission under I of other commercial and proper- industrial of chapter 105 this title. ty in jurisdiction the same assessment (Emphasis added.) bears to the true market value of all 10101 following Sections of the such other commercial and industrial Revised Interstate Commerce Act of 1978 property. recodified subtitle IV of title United “(b) levy or of tax any collection States Code. 49 seq. U.S.C. 10101 et §§ is an assessment which unlawful Section 11503 recodified 306 section of the (a). under subdivision Act, 4-R originally which was codified as “(c) levy any The or collection of ad section 26c of title United States Code valorem tax on property (1976). legislative The of the purpose Re a tax than property higher at rate vised Interstate Commerce Act of 1978 was tax rate to com- generally applicable form, comprehensive restate in with [t]o mercial in property and industrial out change, substantive the Interstate jurisdiction. same assessment restatement, Commerce Act.... In the “(d) imposition any of other tax simple has language been substituted for which in treat- results awkard and obsolete terms.... ment of a common carrier railroad 95-1395, H.R. reported No. in 1978 U.S. subject part.” to this Code Cong. (emphasis & Admin.News 3013 added). added.) (Emphasis We thus construe sec- See also Alabama Great Southern Eagerton, (11th B.R. v. 663 F.2d 1037 tion 11503 in of the in light language sec- Cir.1981) of cannot tion (language 11503 be
344 519, 528, Baltimore, 67 sub- Trainmen v. 331 U.S. not contain
Initially, section 306 did
(1947).
time
at that
L.Ed.
(d).
report
A Senate
S.Ct.
section
words
Congress’
was
are unable
read
section 306
We
purpose
stated the
proper-
“any
tax” to mean
“any other
burden on
longstanding
eliminate the
[t]o
tax”.
ty
from dis-
resulting
interstate commerce
local taxation of
criminatory State and
in Alabama
support
finds
Our conclusion
transporta-
and contract carrier
common
663 F.2d
Eagerton,
Southern R.R.
Great
Substantively
property....
tion
[this
held
Cir.1981). The court there
(11th
Interstate Com-
would amend the
section]
license
applies
to a business
section
unlawful,
un-
as an
Act to declare
merce
the section
against
argument
as
discrimination
unjust
reasonable
only to
taxes:
applies
property
inter-
upon
an
against and
undue burden
imagine statu-
be difficult to
It would
commerce,
rate,
or local
State
needful
be less
tory language that would
assessment,
trans-
upon
or
collection
lan-
“any other”
of construction than the
con-
a common or
portation
property
three sub-
Following
used here.
guage
upon
at a
level than
higher
tract carrier
with
(a), (b)
(c) dealing
paragraphs,
taxing
district.
in
same
property,”
of “transportation
taxation
remedy
it
Procedurally,
provide
would
imposi-
(d) then forbids “the
paragraph
common and
in the Federal courts for
in
which results
any
tion of
other tax
collection of
against
carriers
contract
a common
discriminatory treatment of
portion
any
excessive
tax based
invoking
by railroad.” Without
carrier
such unlawful assessment
rate.
upon
construction,
ordinary
rules
any
91-630,
Cong.,
Report No.
91st
1st
(d)
Senate
is
appear
paragraph
would
it
Ogilvie
State
See also
Sess.
provision
indeed intended as a catchall
Dakota,
Equalization
of North
Board
of a rail-
discriminatory taxation
prevent
(8th Cir.1981),
denied,
cert.
F.2d
This view
by any
carrier
means.
road
1086, 102
644,
The that the the it must have become State contends end of prohibition lative its that a mere history supports plain Congress of section 11503 to taxes Congress prohibit against discriminatory property view that intended to effect if a state were to only discriminatory property taxes. We would be without discrimi- any have examined the material the cites. to enact other permitted State be however, tax, proper- it not a Congress, long Acts of must be inter so as was natory us light appellees in of the in would have preted spirit they ty which tax. 346 they compar- do the railroads. subparagraph (d) dustry, because For relevant
ignore it thus who Congress taxpayers not understand added isons we must look to why cannot employ propulsion transportation. “almost as an We fuel in afterthought.” the field in the comparison, such cavalier treatment to a formal This narrows of give main, other modes: Congress, transportation of of it that seems to three part act a trucks, Drawing and on barges, within the and intend- aircraft. clearly taxes, present of the analogy property ment of the law. be com- nondiscriminatory excise tax must at 1041. 663 F.2d with fuel taxes of these other pared any on to holding applies In section 11503 competitive so as to avoid a disad- modes taxes, we note excise that United States vantage. for District of District Court the Southern Iowa, faced with the and is parties same making with comparison In sues, Atchison, Fe Topeka so held. & Santa fuels three of burned the other taxation Bair, (S.D.Iowa R.R. v. 535 68 F.Supp. modes, must be observed. two limitations 1982). Proceedings that case have been in First, tax we do not consider the whole pending disposition present stayed Atchison, of the state. v. Arizona structure also the anti-dis litigation. We note that S.F.R.R., 398, (9th 404 Cir. 656 F.2d T. & trucks is in applicable crimination section R.R. v. Ea 1981); Alabama Great Southern taxes; it contains property fact limited F.Supp. (M.D.Ala. 541 1086 gerton, (1), (2), (3), para but not paragraphs 1982); Ogilvie Equaliza v. State Board of (4) relating Compare taxes. graph other Dakota, 446, 455 F.Supp. tion of North 492 (1983 11503a, 11503 with 49 U.S.C. § aff’d, (D.N.D.1980), (8th F.2d 204 Cir. 657 Supp.). Second, 1981). is a because section 11503 taxation prohibition discriminatory state on approach ques- B. We thus the central railroads, on compare of we Iowa fuel taxes regarding section does the Iowa tion 11503: modes; not transportation we do the several excise tax discriminate railroads? Ari equation. taxation to the add federal problem question The first involved in Snead, 441 Public Co. v. zona Service what and tax- taxpayers is this: with 1629, 1634, 99 S.Ct. compare es do we railroad fuel tax? 113 corpo Because individuals and mak- step thus turn to the actual of We in business have usually property rations comparison, possible the extent made ing enterprises, property their tax on railroad only the record before us. property with state on compared is taxes fuel is regarding exacts railroad which Iowa gener taxpayers commercial and industrial burning on of fuel one present R.R. v. Ea ally. Alabama Great Southern state, at cents the rate of three within (M.D.Ala. gerton, F.Supp. per cents originally eight per gallon 1982); see Trailer Board Train Co. State July gallon since Dakota, 710 F.2d Equalization North (8th Cir.1983); Ogilvie freight for Competition Trucks. Dakota, of Equalization Board of North intense; railroads and trucks between (8th Cir.1981). Property F.2d taxes traffic. have taken much of that trucks when nondiscriminatory of railroads must be regarding the Iowa excise tax general, compared with taxes of each state, fuel, is thirteen burned truck other class of and indus every commercial per cents gallon gasoline, for ten per cents Atchison, Tope taxpayer. trial Arizona v. one-half fifteen and gasohol, gallon R.R., (9th Fe F.2d ka & Santa Iowa Code per gallon diesel. cents Cir.1981); at 455. Ogilvie, F.Supp. 324.3, .34, .52, .54. §§ however, than the is not trucks rather particular Superficially This dis- competitive on to be at a property. burning propul appear It is major in- as to fuel taxes. But part advantage sion fuel in
347
must made in
adjustment
Dodgen Industries,
be
order to com-
Inc. v. Iowa State Tax
pare
Comm’n,
railroad-fuel with
289,
truck-fuel
taxes:
(Iowa
160 N.W.2d
294
1968).
the costs of construction and maintenance
barges buy
If
none of their
Iowa,
diesel in
of the roads of the two modes must
they
be
have a competitive Iowa tax advan-
placed
operate
in the balance. Trucks
on
tage
eight
over railroads of
per gallon
cents
constructed
publicly
and maintained roads.
If they buy
diesel.
some or all of their
Iowa,
various taxes which the General As-
diesel in
their competitive advantage
sembly requires
pay
less,
the trucks to
into an
go
but it remains substantial. The rail-
construction,
earmarked fund for the
main-
competitive
roads thus have a
Iowa tax
tenance, supervision, and administration of
disadvantage
comparison with barges.
highways.
Iowa Const. Amend.- 18.
barges
At one time
in navigable
represent
Those taxes
the Assembly’s judg- waters were considered immune from ment as to the portion of the cost of the
taxation of
fuel
virtue of the Commerce
that the trucks
highways
should bear. But
Clause. Helson &
v.
Randolph
Common
construct, maintain,
acquire,
railroads
245, 251,
wealth of Kentucky, 279
49
on their
pay taxes
own roads. We thus
279, 281,
683,
(1929).
73 L.Ed.
We
providing
have the railroads
their own
believe Helson is no longer law as a result
roads
eight-cent
with the
fuel tax in addi-
Transit,
Complete
Auto
Brady,
Inc. v.
tion,
paying
legislative
and the trucks
274,
1076,
430 U.S.
97 S.Ct.
Barges.
Presently
(E.D.La.1947),
N.W.2d Mullen, 35 Iowa torts);
(1872) (crimes).
that
the railroad fuel tax
We conclude
comparison
on
with
violates section 11503
that
argues
also
The State
principal transporta-
of the three other
each
apportionment—the
part
third
question
tion modes.
be diffi-.
Complete
Auto test—would
Iowa,
hand, and
cult as between
on the one
Supremacy
Violations
II.
riv
surrounding
bordering
states on the
held
Clauses?
we have
Commerce
Since
ers,
would be
Apportionment
on the other.
the Iowa excise tax violates section
that
pose
and would
administrative
difficult
the railroads’ other two
we leave
do not think that a fair
problems, but we
repeat
We
our
undecided.
propositions
in a
drafted tax
approximation,
carefully
have
at the outset that we do not
statement
statute,
or that administrative
impossible
of whether the railroad
simple question
a
argu
insurmountable. An
difficulties are
salutory
is a
measure for Iowa
fuel
tax
made, if Helson is actually
ment can also be
as a whole. We must consider
fuel,
barge
still the law so Iowa cannot tax
statute and the
federal anti-discrimination
either,
fuel
that Iowa cannot tax railroad
it. Under
that
prompted
reasons which
barges
because
would otherwise have
de
the Iowa railroad excise tax
statute we hold
advantage
con
competitive
facto
is invalid.
of section 11503. We
trary
costs,
the clerk is directed
taxing
In
Ap
that
necessity
point.
find no
to decide
appendix
for
and briefs
expense
to tax the
Transit,
Auto
we hold that
plying Complete
exceeding
cost but not
four dollars
at actual
fuel is discrimina
Iowa taxation of railroad
per page.
taxation of
tory
compared
when
with Iowa
REVERSED.
fuel, contrary to section 11503.
barge
between railroads
Competition
Aircraft.
CARTER, J.,
except
Justices concur
All
freight
appear
and aircraft
does not
McCORMICK,
specially, and
who concurs
momentous,
of some tax
possibility
JJ.,
but the
HARRIS, LARSON,
WOLLE,
who
discrimination exists. Purchases in Iowa of
dissent.
subject
percent
fuel are
to the four
aircraft
CARTER,
(concurring specially).
Justice
price.
Dodgen
sales tax on the
Indus
See
rea-
the court’s
Although
accept
I cannot
tries,
Comm’n,
Tax
Inc. v. Iowa State
the railroad fuel tax is
soning
why
as to
Q.
B
(Iowa 1968); Chicago,
&
N.W.2d
11503(b)(4), I
section
violative of 49 U.S.C.
Comm’n,
Tax
259 Iowa
R.R. v. Iowa State
in the
it is.
I therefore concur
agree
addition,
ject to refund. Iowa Code § legislative pur- one of the may have been fuel. no other excise taxes on aircraft pay statute, com- the enactment of the poses for disadvantage practical Iowa is not petitive The result is that the most to determine whether a are four standard which pay that aircraft do in fact taxes variables discriminatory. many Too This constitutes a tax is percent price. on the comparisons make such over the are involved to advantage competitive substantial meaningful. railroad fuel con- eight-cent per gallon I it would be un- possible growing, do not believe timber devoted to a commercial or *11 use by majority subject der the test laid down the to industrial and a property to tax levy.” Property whose taxes on railroads any sustain tax burden falls on inter- thus must be when nondiscriminatory compared state rail if the incident taxation carriers with property taxes on the businesses in the taxing employed differs from that in other group. generally defined See Arizona v. I taxpayers. commercial do not believe it Atchison, Topeka R.R., & Santa Fe 656 F.2d of Congress spe- was the intent prohibit to (9th 403-06 Cir.1981). cial tax carriers treatment interstate rail 11503(b)(4) under section if the tax is tied a comparison Before group for to benefits are inter- which conferred on present defined, tax can be it is necessary Where, however, state rail carriers. a tai- compared. decide what is to be This lored tax on the activities of rail not inquiry solely interstate is answered by identify- separate ing carriers is in a to be the taxable placed precise fund event. The taxable event here is the expended purposes, consumption for carriers of diesel fuel specific within Iowa for the propulsion railway of a protected 11503(b)(4) section must re- If inquiry there, vehicle. stopped ceive from that fund benefits which are comparison only group would seem to be proportionate to the tax In the imposed. other operate businesses than railroads that present case, while some individual carriers vehicles. no railway Certainly discrimina- may benefit from the use made Iowa’s tion has been shown on basis. that It is tax, any flowing railroad fuel benefits that Congress doubtful have would intend- interstate carriers as a are too rail class comparison ed the so group to be limited. I off tenuous to stave the carrier’s section separate believe the treatment of property 11503(b)(4) challenge. 11503(b) that proves taxes under the char- the tax provides upon acter of basis McCORMICK, Justice (dissenting). comparison which is to group be identi- For me determinative is question fied. The state has the tax a privi- labeled tax a challenged imposes whether the bur- lege (1981). tax. See Iowa 324A.3 Code § den on that is uniformly not taxes are therefore the taxes that Privilege placed similarly on and situated commercial compared. Privilege are to be taxes are industrial enterprises Iowa. Before the explained distinguished from other tax- tax can be held violate 49 U.S.C. Complete Transit, es in Auto Inc. v. Brady, 11503(b)(4), must is dis- plaintiffs prove it believe criminatory on this basis. Because I (1977). they prove did not discrimination and have terms, statute, by The federal its deline- any ground failed to establish other for Congress that ates acts has determined will tax, invalidating the I would affirm the “unreasonably burden and discriminate trial court. ” interstate commerce .... does not Discrimination occur unless 11503(b). A violation of the statute thus § equals unequally. problem are treated One turns the character the tax as burden- showing the railroads therefore have is in upon some and interstate who their are in the commu- equals business It impact upon commerce. is the of the tax nity for statute. purposes federal relative in interstate taxpayer’s position Congress comparison defined the for group that In significant. commerce subsec- determining property whether vio- (2), (3), has (1), Congress tions effec- identify lates the statute but did not requiring the issue abso- tively decided comparison for tax- group evaluating other In property lute tax rates. sub- parity es. tax- comparison group property however, (4), bars “an- section the statute es is property,” “commercial industrial against a other tax that discriminates rail ” 11503(a)(4) defined in as “property, (4) subsection carrier .... test under land than not one of but of dis- parity is therefore Great agricultural criminatory impact. used Alabama primarily purposes See event, transportation. any 663 F.2d of extent Eagerton, R.R. Co. v. Southern Cir.1981). I contact with the state is minimal. (11th Consequently barge to show a violation of section Trucks do have activities in the state simi- believe that 11503(b)(4), prove They pay the railroads must lar to those of trains. also consump- substantially higher of the exact taxable tax on fuel regardless based, it is results in a Iowa Code event on which tion than do railroads. See I would not find economic burden on rail- 324.34 Therefore disproportionate consumption is privilege taxes on that the tax on diesel fuel compared roads when *12 compared com- when railroads are engaged other businesses in interstate trucking industry. merce. to the Moreover, I think the disposition therefore examine the relative do not I would is relevant. The railroad privilege similarly burden of taxes on situ- of the revenues Railway for use “competitive by rather than tax is earmarked ated businesses trucking fuel resulting Authority, from the tax. The Finance and the disadvantage” Iowa Const. art. I is consistent with Ari- tax is earmarked under approach advocate Snead, VII, Although highway purposes. Co. v. 8 for zona Public Service (1979), disadvantage” may vary, “competitive 60 L.Ed.2d S.Ct. industry is not different only because it involves consideration the burden on of the reve type merely earmarking burden from the of tax involved rather because general In each instance the tax is a impact upon particular than the a business nues. leg measure. In one instance the Compet- of the state’s entire tax structure. revenue use for the disadvantage particular itive cannot be determined islature has dictated a the other the have through inquiry. money, people limited and in requisite The earmarked particular dictated a use. Furthermore, attempting identify funds, however, as well have come might businesses, logical it is similarly situated consistent general from revenues. This is they modes because look at set out for tax approach with are to have similar characteris- likely most 11503(b), es under which includes no consid so, however, doing tics. In differences in eration of benefits received. particular the nexus between the state and relevant, taken into account. This If were taxpayer business must be benefits opinion wholly government is a factor the court’s omits the relative value of other fire police protection from consideration. Discrimination cannot services such as If benefits that are privilege be shown unless the tax burden on should be considered. relevant, situated is the tax are so similarly unequal paid by businesses for are it. In paid by when allowances are made for differences benefits that are not addition, should be made of in the activities of the businesses within the a determination of highway paid the state is entitled the actual share costs state. This is because such privilege accordance with the taxes as to measure the tax in truck trucks should be con- taxpayer’s paid by extent of the activities in the license fees sidered, should be made of Edison and a calculation state. See Commonwealth Co. Montana, group economicbenefit to railroads as any 453 U.S. funded projects Railway from to be Therefore, if ben- Authority. Finance even mode that has only transportation relevant, efits to the railroads were comparable, activities in Iowa to those wholly inadequate prove dis- record trucking industry. is the As the believe, I crimination on that basis. do not major are not acknowledges, airplanes court however, that benefits are relevant. addition, of trains. the ex- competitors relative burden of the the state is The issue is the tent of their activities within applied is the test that was unique, are and I tax. This Barge limited. routes Eager compe- R.R. Co. question barges whether constitute Alabama Great Southern (M.D.Ala.1982). In ton, complementary system F.Supp. tition as much as a license tax was com- that case a railroad It to other business license taxes.
pared gross on a computed percentage
was except while other businesses utili-
receipts
ties were taxed at a flat rate. result- was 350
ing burden on rail carrier times tax on any license Alabama commercial
or industrial other than utilities. taxpayer burden, comparing
After the relative
relying expert testimony concerning the
issue, the court held that the tax was dis-
criminatory. case, present
In the no evidence of dispro-
portionate If appears. anything, burden trucking carries a heavier bur- industry
den, perhaps good reason. Air and *13 modes of have
barge sub- less nexus with state.
stantially When
the differences in the extent of their con-
tacts with the state and those of railroads account,
are taken into it cannot be fairly
said that the tax on railroad fuels results in greater relative I burden. Therefore
would hold that the railroad tax has not
been shown to be discriminatory.
Because I would also hold that the rail- arguments constitutional
road’s are without
merit, I would affirm the trial court.
HARRIS, WOLLE, JJ., LARSON
join this dissent. re the MARRIAGE OF Marvin A. Betsy
WEIDNER and F. Weidner
Upon the Petition of Marvin A.
Weidner, Appellant, Weidner, concerning Betsy F.
Appellee.
No. 69526.
Supreme Court of Iowa.
Sept.