The Federal Communications Commission licensed two companies — a private firm and a government-owned firm — to provide cellular telephone service in San Juan, Puerto Rico. Puerto Rico law permits the government-ownеd company to begin service without further authorization; it requires the privately owned company to obtain a permit from the Commonwealth. See 27 L.P.R.A. §§ 401-404, 410, 1001-1111. The Puerto Rico Public Service Commission granted the private firm the necessary authorization, but it conditioned that authorization upon the company’s paying a 3% (of gross revenue) canon periódico, which is a “periodic rate,” 27 L.P.R.A. § 1111(b), or a “periodic fee,” Velazquez Spanish and English Dictionary 136, 510 (new rev. ed. 1985). The result was that the private firm hаd to pay a charge that its government-owned competitor did not have to pay.
The private firm, San Juan Cellular Telephone Company, brought this lawsuit, asking the federal district court to declare the 3% “periodic fee” unlawful. The federal court granted this declaratory relief, for, in its view, federal statutes, read together with FCC regulations, pre-empt the local government’s authority to impose such a discriminatory charge.
See
47 U.S.C. §§ 151-52;
Cellular Communications Systems,
The Commission raises only onе claim on this appeal. It says that the court lacked subject matter jurisdiction. The Commission points to the Butler Act, a statute similar to the better known Tax Injunction Act. The Butler Act forbids the federal district court from
restraining the assessment оr collection of any tax imposed by the laws of Puerto Rico,
48 U.S.C. § 872, unless no “plain, speedy and efficient” remedy is available in the Commonwealth’s courts, 28 U.S.C. § 1341 (Tax Injunction Act).
See Parker v. Agosto-Alicea,
Like the district court, we reject the Commission’s argument. For tax injunction purposes, the 3% “periodic fee” is not a “tax.” Rather, it is the kind of charge that courts oftеn have distinguished from a “tax” and have called, instead, a regulatory “fee.”
See, e.g.,
cases cited in
Butler v. Maine Supreme Judicial Court,
Courts have had to distinguish “taxes” from regulatory “fees” in a variety of statutory contexts. Yet, in doing so, they have analyzed the legal issues in similar ways. They have sketched a spectrum 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.
See, e.g., National Cable Television Ass’n. v. United States,
Courts facing cases that lie near the middle of this spectrum have tended (sometimes with minor differences reflecting the different statutes at issue) to emphasize the revenue’s ultimate use, asking whether 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. Thus, the Seventh Circuit has called a Wisconsin Department of Transportation сharge upon trucks a “tax,” because the charge was used to help pay for highway construction, a “general” type of public expenditure.
Schneider Transport, Inc. v. Cattanach,
On the other hand, the United States Supreme Court wrote, in 1884, that a statutory levy on shipowners of $.50 per passenger was not a tax because the revenue was used “ ‘to defray the expense of regulating immigration ... for the care of immigrants ... and for the general purposes and expense of carrying th[e immigration] act into effect.’”
Head Money Cases,
Given this precedent, the facts of this case indicate that the “periodic fee” is a regulatory “fee,” not a “tax.” A regulatory agency assesses the fee. 27 L.P.R.A. § 1111(b) (Commission “may ... demand a periodic rate ... and prescribe the manner and time that the payments shall be made.”). The agency places the money in a special fund. Id. (“Special Fund” distinct from other funds on “the books of the Secretary of the Treasury” and “separаte from any other funds received by the ... Commission”). The money is not used for a general purpose but rather to
defray[] the expenses generated in specialized investigations and studies, for the hiring of professional and expert services and the acquisition of the equipment needed for the operations provided by law for the Commission.
Id.
These three circumstances, taken together, place the 3% charge close to the “fee” end of the spectrum.
Compare Head Money Cases,
The Commission makes three arguments to the contrary. First, it says that the statute allows the Commission to use the money not just to cover expenses “due to cellular communications providers’ regulation,” but, rather, “to defray special non-recurrent expenses” of the Commission, specifically those “generated” in the activities described in the statutory language we have quoted. This, the Commission says, makes the “periodic fee” a tax under a line of сases following the Supreme Court’s decision in
National Cable.
The Commission may mean to rely on a statement, in
National Cable,
that a “fee,” unlike a “tax,” helps pay for “a benefit on the applicant, not shared by other members of society,” and that
“the measure of the authorized fee”
is
‘“value to the recipient.’” National Cable,
If that is the Commission’s argument, it is not convincing. For one thing, the
National Cable
case focused upon a particular statute not at issue hеre. That statute limited the FCC’s powers to assess fees to those fees that, in the statute’s words, provided “
‘value to the recipient.’
”
National Cable,
Here, however, we are dealing with a very different statute, a “tax injunction”
*687
statute, which has as its objective preventing a taxpayer from “throwpng]” state “tax administration ... into disarray” as the taxpayer tries to “escape ... ordinary procedural requirements” by going to federal court for an injunction, perhaps thereby “damag[ing]” the “State’s budget” and “shifting] to the State ... the risk of taxpayer insolvency.”
Rosewell v. La Salle National Bank,
For another thing, the courts have read the Supreme Court’s language in
National Cable
as limited to its specific statutory context. They have not viewed it as overruling the
Head Money Cases. See, e.g., Union Pacific Railroad,
Second, the Commission points to a provision of the statute that says:
The Commission shall submit to the Budget and Management Office a budget of expenses chargeable to said Special Fund, annually, which must be approved before the resources deposited therein are used.
27 L.P.R.A. § 1111(b). The Commission argues that this approval requirement means that the Commonwealth might use the money for general public purposes, rather than for specific regulatory ones. The short, conclusive answer to this claim is that the statute nowhere says the Budget and Management Office can approve an expenditure for anything other than the regulatory purposes described in the statute. The point оf the review, as far as the record reveals, is to make certain that the Commission spends the money as the statute directs and not in some other way.
Finally, the Commission points out that the statute says that, after five years, the “fees collected,” but not used for the special regulation-related statutory purposes, will be deposited in the “General Fund of the Commonwealth of Puerto Rico.” 27 L.P.R.A. § 1111(b). Perhaps this instruction would make a difference were there somе evidence in the record that large amounts of the revenue the Commission obtains would end up in that general fund.
American Trucking Ass’ns., Inc. v. O’Neill,
For these reasons, the judgment of the district court is
Affirmed.