Is § 16a,
On July 21, 1980, plaintiff, Southeastern Michigan Transportation Authority (SEMTA), filed an original complaint for mandamus with the Court of Appeals, requesting a temporary restraining order against suspension of collection of said taxes
*394
pending determination of the constitutional question.
1
On July 30, 1980, this Court issued an
ex parte
restraining order requiring defendant, Secretary of State, to collect the taxes pursuant to
Plaintiff SEMTA was created in 1967 by the Metropolitan Transportation Authorities Act,
"All specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel motor vehicles upon highways and on registered motor vehicles shall, after payment of necessary collection expenses, be used exclusively for highway purposes as defined by law. ” (Emphasis supplied.)
In 1976, the Legislature substantially broadened the definition of highway purposes by enacting
However, two years later, in the fall of 1978, the Legislature approved House Joint Resolution F which amended Const 1963, art 9, § 9, to read:
"All specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel motor vehicles upon highways and to propel aircraft and on registered motor vehicles and aircraft shall, after the payment of necessary collection expenses, be used exclusively for transportation purposes as set forth in this section.
"Not less than 90 percent of the specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel motor vehicles upon highways and on registered motor vehicles shall, after the payment of necessary collection expenses, be used exclusively for the transportation purposes of planning, administering, constructing, reconstructing, financing, and maintaining state, county, city, and village roads, streets, and *396 bridges designed primarily for the use of motor vehicles using tires, and reasonable appurtenances to those state, county, city, and village roads, streets and bridges.
"The balance, if any, of the specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel motor vehicles upon highways and on registered motor vehicles, after the payment of necessary collection expenses; 100 percent of the specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel aircraft and on registered aircraft, after the payment of necessary collection expenses; and not more than 25 percent of the general sales taxes, imposed directly or indirectly on fuels sold to propel motor vehicles upon highways, on the sale of motor vehicles, and on the sale of the parts and accessories of motor vehicles, after the payment of necessary collection expenses; shall be used exclusively for the transportation purposes of comprehensive transportation purposes as defíned by law. ” (Emphasis supplied.)
The above section was approved by the voters in the November 1978 election and is the present mandatory language of article 9, § 9.
In 1979, § 16a was amended to provide that the taxing authority previously conferred would expire on April 15, 1980, unless the transportation system of the City of Detroit had been merged with SEMTA by April 15, 1980. On April 14, 1980, just one day before the expiration date of § 16a as provided in
That statute amended § 16a to read in relevant part:
«(2) * * *.
"(a) A use tax of $2.50 on each vehicle for which a *397 registration fee is collected by the secretary of state
"(b) A use tax of $6.00 upon the transfer of the title of a motor vehicle when the application for a certificate of title, except a salvage certificate of title, is submitted in a county which is part of a transportation district.
"(3) The revenue from the taxes shall be deposited in a separate account in the state treasury and all of the revenue except that used for the necessary expenses incurred in collecting the taxes shall be returned on a quarterly basis to the authority in which a transportation district has been created.” (Emphasis supplied.)
The amendment also added a new provision to the effect that 20% of the revenues so collected would be credited to cities, villages, and townships within the district to meet the requirements of
OAG 1980, No 5737 (July 11, 1980) held that § 16a was unconstitutional on two grounds: (1) the taxes imposed were not "use taxes” falling within the exception contained in Const 1963, art 9, § 9, and (2) there was an absence of any requirement that the revenue from the taxes imposed be used in accordance with the limitations of Const 1963, art 9, § 9.
"Accordingly, changing the name of the taxes in question to 'use taxes’ does not remove the revenue collected from the expenditure restrictions contained in Const 1963, art 9, § 9, supra. To the extent the specific taxes fall upon motor vehicles, the taxes come within the designated operation and restricted uses of Const 1963, art 9, § 9, and not within the types of specific taxes, i.e., general sales and use taxes or regulatory fees, categorically excepted therefrom. 2 OAG, 1960, No 3481, p 1 (January 2, 1960).
*398 "Const 1963, art 9, §9, supra, requires that not less than 90 percent of all the specific taxes in question, after payment of necessary collection expenses, be used exclusively for the six transportation purposes set forth in Const 1963, art 9, § 9, supra, with the balance of the specific taxes to be used for the comprehensive transportation purposes, as defined by law.
"However,1967 PA 204 , § 16a, supra, does not require that revenue from the specific taxes will be used in accordance with the requirements of Const 1963, art 9, § 9, supra. Instead, § 16a, supra, of said act requires only that the revenue from the taxes be deposited in a separate account in the state treasury, with all the revenue being returned to the metropolitan transportation authority on a quarterly basis, with the exception of necessary collection expenses.”
According to the Attorney General, the constitutional language "not less than 90 percent of the specific taxes” means not less than 90 percent of each specific tax must be allocated for conventional highway purposes and, accordingly, since § 16a allocates 100 percent of the designated taxes for public transportation purposes, the section, on its very face, violates the limitations imposed by Const 1963, art 9, § 9. In rebuttal, plaintiff contends that the 90%-10% language refers to the aggregate or total of all constitutionally earmarked taxes and that as long as the total of the taxes collected under § 16a does not exceed 10% of the aggregate of all specific taxes constitutionally earmarked, no constitutional violation occurs. A third ground for the unconstitutionality of § 16a surfaced upon receipt of the brief from intervening defendant County Road Commissioners of Oakland County, viz.: that because there is not and cannot be any statutory mechanism to identify and control the amount of § 16a taxes collected and disbursed the collections at times will be mathemati *399 cally within the 90%-10% constitutional limitation and at other times will be mathematically in excess of the constitutional limitation. Lastly, the Attorney General asserts that even if the 90%-10% split required by the constitution applies in the aggregate, as contended by plaintiff, statistical data now available discloses that less than 90% of the aggregate is available for conventional highway purposes. The four grounds for voiding § 16a are examined seriatim.
I
Plaintiff argues that because the taxes authorized by § 16a are taxes for the
use
of a vehicle and because the Legislature in enacting
The designation given by the Legislature to a tax is not controlling, although entitled to be given great weight.
Banner Laundering Co v State Board of Tax Administration,
"The use tax was enacted for the purpose of levying *400 and collecting a specific tax for the privilege of using, storing or consuming tangible personal property. Goebel Brewing Co v State Board of Tax Administration,306 Mich 222 . It is complementary to the sales tax (Act No 167, Pub Acts 1933, as amended [Comp Laws Supp 1940, § 3663-1, Stat Ann § 7.521 et seq.]). * * * This act is designed to impose an excise tax on the use, storage or consumption of tangible personal property brought into the State in interstate commerce, after it has come to rest in this State.” Western Electric Co v Dep’t of Revenue,312 Mich 582 , 596;20 NW2d 734 (1945).
The term "use tax” is similarly described in 68 Am Jur 2d, Sales and Use Taxes, § 175, pp 240-241, and Anno:
Constitutionality, construction, and application of general use tax or other compensating tax designed to complement state sales tax,
"The provisions of this section shall not apply to the general sales tax, the use tax, the fees and taxes collected under the auto theft and operators’ and chauffeurs’ license laws * * *.”
From the foregoing history of the constitutional amendment pertaining to taxes on gasoline and motor vehicles and from the virtually unanimous
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agreement in other jurisdictions that a use tax is a tax complementary to the sales tax, we are convinced that the words "general sales and use taxes” appearing in Const 1963, art 9, § 9, did not encompass any tax on the use of an article or product but instead were limited to taxes which are complementary to the sales tax. We also observe that delegates to a constitutional convention are presumed to use words in the sense in which they previously have been used or judicially interpreted.
Hall v Ira Twp,
II
Because § 16a(3) distributes 100% of the taxes levied under § 16a(2)(a) and (b) for mass transportation purposes, defendants claim that § 16a(3) facially violates Const 1963, art 9, § 9, which provides that not more than 10% of such taxes may be used for mass transportation purposes.
"(3) The revenue from the taxes shall be deposited in a separate account in the state treasury and all of the revenue except that used for the necessary expenses incurred in collecting the taxes shall be returned on a quarterly basis to the authority in which a transportation district has been created.” MCL 124.416a(3); MSA 5.3475(116a)(3)._
*402 Defendants further contend that once the distribution section (subsection [3]) is found invalid the two subsections which impose the tax of $2.50 and $6 are invalidated because they are so inextricably related and closely bound together that invalidity of the distribution formula will destroy all of § 16a.
The $2.50 fee and $6 fee imposed under subsections 2(a) and 2(b) yield approximately $13.4 million per year. See infra. All constitutionally earmarked taxes on automobiles and fuel (including the SEMTA taxes) yield approximately $703 million dollars per year. Thus, § 16a does not come close to exceeding the 10% constitutional limitation unless Const 1963, art 9, § 9, is construed to require 90% of each specific tax, rather than 90% of the aggregate of the constitutionally earmarked taxes, to be earmarked for conventional highway purposes. This is precisely what defendants contend, viz.: that any statute which on its face distributes more than 10% of such taxes for comprehensive transportation purposes is unconstitutional.
Plaintiff disputes defendants’ interpretation claiming that it too narrowly interprets legislative intent. According to plaintiff, the 90%-10% constitutional limitation does not apply to each tax but applies to the aggregate or total of all of the constitutionally earmarked taxes on motor fuels and vehicles. Under this interpretation, only 90% of the aggregate must be used for conventional highway purposes. The aggregate 90% could be 100% of one tax and zero percent of another so long as the aggregate is not more than 10% for mass transportation purposes. In support of this interpretation, plaintiff relies, inter alia, on that portion of the language of article 9, § 9 emphasized *403 in footnote 3 below and argues that such language speaks in the plural and aggregate. 3
We do not find the emphasized words determinative. The word "all” can mean both aggregate or "each”. Black’s Law Dictionary (4th ed), p 98. The words "all” and "each” are generally synonymous. 3A CJS, p 244, 3 Words & Phrases, All, p 220, 14 Words & Phrases, Each, p 4. Where the meaning of a constitutional amendment is ambiguous or is subject to alternative interpretations, its proper meaning and intent may be gleaned from the circumstances under which the amendment was written and the purpose sought to be accomplished.
Traverse City School Dist v Attorney General,
By placing a ceiling on the total or aggregate amount of earmarked revenues which could be diverted to public transportation and similar purposes, the fears of the road building and automobile interests could be allayed. This is precisely what House Joint Resolution F did. It placed a top limit on the amount of money which could be diverted from conventional highway purposes to comprehensive highway purposes. The important point, for purposes of this case, is that the competing interests were concerned with total dollar amounts. They compromised their differences by placing limits in aggregate amounts. Based on the circumstances under which House Joint Resolution F was written and approved by the people, we conclude that article 9, § 9 imposes its limitations in the aggregate and that as long as the SEMTA taxes distributed under § 16a(3) do not exceed 10% of all of the constitutionally earmarked taxes on motor vehicles and motor fuels, § 16a(3) is not unconstitutional. In our opinion, Const 1963, art 9, § 9, as amended, does not require that 90% of each tax governed by that section be spent for conventional highway purposes.
Our interpretation of the statute is reinforced by another consideration. If, as claimed by the Attorney General, the distribution provision of each tax on motor vehicles or motor fuels must provide that 90% of the amounts collected be expended for road building purposes, the Legislature’s power to appropriate for public and mass transportation purposes is severely curtailed. It would mean, for example, that in order to obtain $2.50 and $6 for mass transportation, the tax imposed must be $25 *405 and $60 of which 10% would be available for mass transportation purposes. Such an interpretation is unrealistically restrictive on the Legislature and unfair to the three-county metropolitan district area which most needs public transportation facilities.
Ill
Intervening defendants assert that even if this Court accepts the aggregate theory § 16a still cannot pass constitutional muster. In order to clearly understand this claim, it is necessary to explain in some detail the various funding mechanisms. The SEMTA taxes authorized by
From the foregoing recitation of facts, two problems surface. First, the problem of uncertainty caused by the existence of two funds. Second, the fact that the total appropriations for comprehensive transportation purposes ($71,804,000) exceed the 10% constitutional limitation ($71,706,400) by $98,000. In terms of percentages for fiscal 1978-79, 89.98% was available for conventional highway purposes and 10.02% was available for comprehensive transportation purposes. Stated another way, the constitutional limitation was exceeded by a *407 mere .02%. We will discuss the problems separately.
Because two separate funds are involved, each deriving their revenue from separate sources and each administered by different agencies, it is impossible to ascertain until the end of the fiscal year whether the constitutional limitation has been exceeded. As gasoline prices rise, driving declines, and smaller engines become more popular, the yield from gas and weight taxes deposited to the credit of the MTF will decrease. At the same time, the number of cars registered and titles transferred in the three-county area might increase. Given the vagaries of the market place and the lack of a single statutory mechanism covering both funds, it is altogether possible that in some years or quarter years the constitutional limitation will be exceeded and at other times it will not. The result, according to intervening defendants, is that
We agree that the existence of two funds results in a situation where the sums distributed therefrom will at times exceed the constitutional limitation and at other times will not exceed the limitation. We further agree that it would be far better if there were a single fund into which all motor vehicle and fuel taxes could be placed and from which disbursements not exceeding 10% of the total could be made for comprehensive transportation purposes. But we do not agree that because of the existing two-fund situation
*408
First, article 9, § 9, is not a limitation on the
amount
of taxes which may be collected. Instead, it is a limitation on the
use
of the revenues once they are collected. At the point at which the $2.50 registration fee and the $6 transfer fee are collected, there is no violation of the constitution. The violation, if any, occurs only when the distribution of SEMTA funds
combined with
the distribution of CTF funds, as prescribed by
"The Court will not declare as unconstitutional a statute constitutional by its terms yet unconstitutionally applied. Maladministration of a law does not make the law unconstitutional. Cummings v Merchants’ Nat Bank of Toledo,101 US 153 , 161,25 L Ed 903 (1880); Kortz v Ellingson,181 F Supp 857 (D Colo I960).” Fell v Armour,355 F Supp 1319 , 1334 (MD Tenn, 1972).
If distribution of funds is improper, the remedy is not to declare the statute under which the funds are collected unconstitutional but to prevent by some appropriate judicial means the improper distribution._
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Second, the SEMTA taxes do not exceed the constitutional limit of 10%. It is only when the $58.4 million of earmarked funds in the CTF are added to the $13.4 million SEMTA taxes that a violation occurs. Statutes must be presumed to be constitutional, and the party challenging a statute has the burden of overcoming that presumption.
Michigan Canners & Freezers Ass’n, Inc v Agricultural Marketing & Bargaining Board,
Third, the only statistics available are for fiscal 1978-79, a year in which distribution has been made. No statistics are available for fiscal 1979-80 which ended October 1, 1980, and is the year in which the Attorney General issued opinion OAG 1980, No 5737 (July 11, 1980). It was not until July 30, 1980, that SEMTA collections were placed in escrow. Thus we have the anomalous situation of being asked to declare
Accordingly, we find that
"During the interim period:
"1) the Legislature and the Commissioner of Insurance may take whatever action they deem necessary to remedy the due process deficiencies articulated supra * * Shavers v Attorney General,402 Mich 554 , 610;267 NW2d 72 (1978).
It is not the province of this Court to dictate to the Legislature what specific action to take. For example, the Legislature might amend
Writ of mandamus granted. No costs, a question of public interest being involved.
Notes
Prior to filing the action in the Court of Appeals, plaintiff filed a complaint for a writ of mandamus in the Circuit Court for Ingham County. Following a hearing on July 21, 1980, the circuit court dismissed the complaint on grounds that the court lacked jurisdiction to issue a writ of mandamus against a state official. See, however, MCL 600.4401; MSA 27A.4401. Instead of appealing the circuit court ruling, plaintiff commenced the instant action in the Court of Appeals.
Our decision in issue I makes it unnecessary to decide whether
"All speciñc taxes, * * * imposed directly or indirectly * * * on registered motor vehicles and aircraft shall * * * be used exclusively for transportation purposes as set forth in this section.
"Not less than 90 percent of the speciñc taxes * * * shall * * * be used exclusively for the transportation purposes of planning, administering, constructing, reconstructing, financing and maintaining state, county, city, and village roads, streets and bridges * * *.
"The balance, if any, of the speciñc taxes * * * shall be used exclusively for the transportation purposes of comprehensive transportation purposes as defined by law.”
Under § 10, 46.7% of the MTF is first appropriated to the Department of Transportation and placed in a state transportation department fund (STDF). Under § ll(l)(b), 17.78% of the STDF is distributed to the state treasury to be placed in the CTF. 17.78% of the 46.7% is 8.3%. Thus, 91.7% of the total MTF is appropriated for conventional highway purposes and 8.3% is appropriated for comprehensive transportation purposes. The $58,429,000 raised by SEMTA taxes are in addition to the $703,689,000 raised by all other constitutionally earmarked taxes on motor vehicles and motor fuels and placed in the MTF.
Since distribution of CTF funds has already been made for fiscal 1979-1980, which ended October 1, 1980, it is that portion of SEMTA funds now held in escrow for that year which would be in violation of the constitutional limitation. But for future fiscal years, commencing fiscal 1980-1981, any sums exceeding the 10% limitation could be withheld from either the SEMTA fund, or the CTF fund, or both.