A.H. Larson et al., Appellants, v. The Seattle Popular Monorail Authority et al., Respondents, 156 Wash. 2d 752

f 1 Appellants, each a resident and motor vehicle owner in Seattle, challenge the trial court’s order on

summary judgment dismissing all of their claims relating to the creation of the Seattle Popular Monorail Authority (SMP) and SMP’s imposition of a motor vehicle excise tax (MVET), as collected by the Department of Licensing. Appellants claim that taxing authority was improperly delegated to SMP under the state constitution, that the MVET is an excise tax, that SMP lacked jurisdiction to impose the MVET, and that the MVET is improperly imposed. Madsen, J. ¶2 This court has recently addressed several of the Appellants’ arguments in Sheehan v.

Central Puget Sound Regional Transit Authority, 155 Wn.2d 790, 123 P.3d 88 (2005). Consistent with our decision in Sheehan, we hold that the MVET is an excise tax and that local taxing authority was properly delegated to SMP. Additionally, we hold that the MVET is imposed consistent with the petition approved by the voters and

chapter 35.95ARCW. We affirm the trial court. FACTS ¶3 SMP was formed in 2002, pursuant to

chapter 35.95A RCW, to perform a public monorail transportation function within the city of Seattle. As required by

chapter 35.95A RCW, a majority of voters in Seattle approved the creation of SMP and authorized SMP to levy and collect the MVET to help pay for the cost of acquiring, designing, constructing, equipping, maintaining, and operating the monorail. ¶4 As provided in RCW 35.95A.020, SMP is a “city transportation authority,” which is a “municipal corporation.” Under RCW 35.95A.080, SMP has the power to levy and collect an MVET not exceeding 2.5 percent on the value of motor vehicles owned and licensed by residents of Seattle.

However, pursuant to Seattle Citizen Petition No. 1 (approved by Seattle voters November 2002), SMP, without further voter approval, may impose the MVET on up to only 1.4 percent on the value of such vehicles. ¶5 Pursuant to RCW 35.95A.030, Seattle voters also approved of the selection process for the governing body of SMP. As set forth in Seattle Citizen Petition No. 1, SMP’s governing body, a permanent board, consists of both elected and appointed board members. During the initial start-up year, SMP’s board authorized the MVET to be levied and collected at a rate of 0.85 percent on a vehicle’s assessed value.

The full voter-approved rate of 1.4 percent was imposed in June 2004. ¶6 Appellants are eight motor vehicle owners who reside in Seattle. In October 2004, Appellants filed a complaint in King County Superior Court, alleging that the MVET was invalid on multiple constitutional and statutory grounds. Appellants filed this action as a class action, but apparently never sought class certification. Br. of Resp’t SMP at 13. In December 2004, Respondents, SMP and the Department of Licensing, filed a motion for

summary judgment dismissing all of Appellants’ claims. On March 3, 2005, Appellants filed a cross-motion for

summary judgment declaring the MVET illegal. On March 22, 2005, Appellants filed a motion for a preliminary injunction to restrain the Department of Licensing from remitting MVET payments to SMP. In April 2005, after a hearing on the motions, the trial court granted the Respondents’

summary judgment motion and dismissed all of Appellants’ claims and denied Appellants’ motion for a preliminary injunction. ANALYSIS ¶7 Appellants’ first contend that there was an impermissible delegation of local taxing authority under the Washington Constitution because some of SMP’s board members are appointed rather than elected. Appellants contend that it is unconstitutional for unelected board members to be delegated legislative taxing authority.

Pursuant to RCW 35.95A.030, Seattle voters approved the size and selection process for the governing body of SMP, a board, which included having some board members appointed to their positions. ¶8 The Washington Constitution contains two provisions regarding local taxation.

Article XI,

section 12 of the Washington Constitution, entitled “Assessment and Collection of Taxes in Municipalities,” states: The legislature shall have no power to impose taxes upon counties, cities, towns or other municipal corporations, or upon the inhabitants or property thereof, for county, city, town, or other municipal purposes, but may by general laws, vest in the corporate authorities thereof, the power to assess and collect taxes for such purposes.® Similarly,

article VII,

section 9, entitled “Special Assessments or Taxation for Local Improvements,” states: The legislature may vest the corporate authorities of cities, towns and villages with power to make local improvements by special assessment, or by special taxation of property benefited.

For all corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes and such taxes shall be uniform in respect to persons and property within the jurisdiction of the body levying the same.[] ¶9 A party challenging a statute’s constitutionality bears the heavy burden of establishing its unconstitutionality. Amalgamated Transit Union Local 587 v. State, 142 Wn.2d 183, 205, 11 P.3d 762 (2000); Hemphill v. Tax Comm’n, 65 Wn.2d 889, 891, 400 P.2d 297 (1965).

This standard is met if argument and research show that there is no reasonable doubt that the statute violates the constitution. Amalgamated Transit, 142 Wn.2d at 205. ¶10 Appellants do not point to any language in the Washington Constitution that supports their position that it is unconstitutional for unelected board members to be delegated legislative taxing authority.

The State contends that under Appellants’ claim, this court would be required to “engraft” language onto the constitution, an impermissible action. ¶11 As a general rule, when interpreting constitutional provisions, we look first to the plain language of the text and will accord it its reasonable

interpretation. Wash. Water Jet Workers Ass’n v. Yarbrough, 151 Wn.2d 470, 477, 90 P.3d 42 (2004). If the text is clear, then no construction or

interpretation is necessary. Wash. Water Jet Workers Ass’n v. Yarbrough, 148 Wn.2d 403, 431, 61 P.3d 309 (2003) (Bridge, J., dissenting). ¶12

Article XI,

section 12 clearly establishes that the state legislature may delegate to the corporate authorities of municipalities the power to tax such municipalities, their inhabitants, and property for local purposes. The legislature is expressly prohibited from direct taxation of municipalities and their inhabitants and property for local purposes. ¶13 In this case, it is undisputed that SMP is a municipal corporation.

In RCW 35.95A.020(1), the legislature provided in relevant part that “[a] city transportation authority .. . may be created in every city with a population greater than three hundred thousand to perform a public monorail transportation function. The authority shall embrace all the territory in the authority area. A city transportation authority is a municipal corporation.” It is also undisputed that SMP, a city transportation authority, was properly established pursuant to

chapter 35.95A RCW and that SMP is exercising its taxing authority for a local purpose: establishing a monorail within the city of Seattle.

Thus, under the plain language of the constitution, the legislature is not limited in its ability to delegate taxing authority to SMP, a municipal corporation. ¶14 Notwithstanding the lack of any limiting language in the relevant taxing provisions, Appellants maintain that it was unconstitutional, under case law, for the legislature to delegate local taxing authority to SMP because some of SMP’s board members are appointed. ¶15 Appellants rely primarily on one case, Amalgamated Transit Union Local 587 v. State, 142 Wn.2d 183.

Amalgamated Transit concerned the constitutionality of Initiative 695 which, among other requirements, required the legislature to submit future tax increases to the voters for approval. Id. at 192. This provision resulted in all such tax legislation being transformed into conditional legislation, requiring voter approval for finalization. Id. This court held that that provision of Initiative 695 was unconstitutional. Id. f 16 Under

article II,

section 1, the legislative authority of the State is vested in the legislature and it is unconstitutional for the legislature to abdicate or transfer its legislative function to others. Amalgamated Transit, 142 Wn.2d at 234 (citing Brower v. State, 137 Wn.2d 44, 54, 969 P.2d 42 (1998)).

Article II,

section 1 also provides for the initiative and referendum powers, which are the people’s legislative powers. The referendum power of the people has two forms. The people can petition for referendum of legislation that the legislature has passed. Const, art. II, § 1(b); Amalgamated Transit, 142 Wn.2d at 191. To do so, four percent of the voters must sign a petition. Alternatively, the legislature may refer a measure to the people. The court held that

section 2 of Initiative 695, which required voter approval of all future tax legislation passed by the legislature but did not require a petition of the voters as to the specific piece of legislation, nor referral by the legislature, established a referendum procedure that was not allowed under the state constitution. Amalgamated Transit, 142 Wn.2d at 191-92. Accordingly, this court held that Initiative 695 violated

article II,

section 1(b). Id. ¶17 Appellants contend that Amalgamated Transit controls this case. Specifically, Appellants claim that as in Amalgamated Transit, which concerned an unconstitutional delegation of legislative taxing authority to the people of this state, there is an unconstitutional delegation of legislative taxing authority to SMP’s nonelected board members. Appellants’ Replacement Br. at 16-17. ¶18 First, we cannot ignore Appellants’ misrepresentation of the holding in Amalgamated Transit upon which they rely.

Apparently believing that this court is unfamiliar with its own cases, Appellants inaccurately quote from the case. Appellants state that this court said: There is no question that under Art. XI, § 12 the Legislature cannot delegate its legislative authority. As noted, “It is unconstitutional for the legislature to abdicate or transfer to others its legislative function.” Appellants’ Replacement Br. at 17 (emphasis added) (claiming to quote Amalgamated Transit, 142 Wn.2d at 237-41). However, the correct quotation is: There is no question that under

article II,

section 1 the Legislature cannot delegate its legislative authority. As noted, “ ‘[I]t is unconstitutional for the legislature to abdicate or transfer to others its legislative function.’ ” Amalgamated Transit, 142 Wn.2d at 237-38 (emphasis added) (alteration in original) (quoting King County v. Taxpayers of King County, 133 Wn.2d 584, 604, 949 P.2d 1260 (1997) (quoting Keeting v. Pub. Util. Dist. No. 1 of Clallam County, 49 Wn.2d 761, 767, 306 P.2d 762 (1957))). This error is alarming and misleading. At best, Appellants’ error represents sloppiness. As discussed above, the relevant holding in that case involved the

interpretation of

article II,

section 1, not

article XI,

section 12. ¶19 Appellants cannot make a square peg fit into a round hole by misquoting a case and by failing to explain its holding, and we are greatly disturbed by the attempt. The pertinent part of Amalgamated Transit involved delegation of taxing authority in violation of the referendum powers contained in

article II,

section 1, not the legislature’s ability to delegate local taxing power as provided in

article XI,

section 12. As discussed by SMP, when the people of Washington State adopted the constitution, they vested legislative power with the legislature. Br. of Resp’t SMP at 16 (citing Amalgamated Transit, 142 Wn.2d at 238). Although the people later reserved initiative and referendum powers, those powers may only “be exercised in conformity with the constitutionally mandated procedures.” Id. (citing Amalgamated Transit, 142 Wn.2d at 242). This court held that Initiative 695 violated the referendum procedures and therefore was a delegation to the voters of legislative taxing authority that was unconstitutional.

Amalgamated Transit, 142 Wn.2d at 191. In contrast, under the relevant constitutional provisions in this case,

article XI,

section 12, and

article VII,

section 9, the constitution expressly provides that the legislature may delegate local taxing authority to municipalities. ¶20 Appellants contend that delegation of legislative taxing power to a nonrepresentative entity is never allowed, maintaining that only ministerial functions may be delegated. Appellants repeatedly claim that the procedural safeguards that are provided in this case are irrelevant and that to the extent that Granite Falls Library Capital Facility Area v.

Taxpayers of Granite Falls Library Capital Facility Area, 134 Wn.2d 825, 953 P.2d 1150 (1998) (and any other case), holds otherwise, Amalgamated Transit overrules it. See, e.g., Appellants’ Replacement Br. at 23, 25-26. As discussed above, Appellants’ reliance on Amalgamated Transit is fatuous. f21 On the other hand, Granite Falls is instructive, particularly in the dissent.

As Justice Sanders stated in his dissent and contrary to Appellants’ claim, delegation of taxing power is permitted when “the Legislature clearly defines the purpose of the delegation and creates procedural safeguards to control arbitrary administrative action.” Granite Falls, 134 Wn.2d at 845 (Sanders, J., dissenting) (citing Barry & Barry, Inc. v. Dep’t of Motor Vehicles, 81 Wn.2d 155, 159, 500 P.2d 540 (1972)). ¶22 In Barry & Barry, the court provided a two-part test to determine when legislative authority is properly delegated to nonrepresentative entities or officials. Barry & Barry, 81 Wn.2d at 159.

First, the legislature must provide standards or guidelines which define in general terms what is to be done and identifies the entity which is to accomplish it. Id. Second, procedural safeguards must exist to control arbitrary administrative action and any administrative abuse of discretionary power. Id. ¶23 Thus, it is clear that it is constitutionally permissible for nonrepresentative bodies, e.g., entities that are governed by nonelected board members or officials, to be delegated legislative authority, as long as certain standards or guidelines are provided and procedural safeguards exist. Id.

See also King County Water Dist. No. 54 v. King County Boundary Review Bd., 87 Wn.2d 536, 545, 554 P.2d 1060 (1976) (governmental entities with unelected officials may constitutionally be delegated authority, including the power to legislate, as long as there are safeguards to protect against injustice on account of unnecessary and uncontrolled discretionary power); King County v. Taxpayers of King County, 133 Wn.2d 584, 605-07, 949 P.2d 1260 (1997); Burba v. City of Vancouver, 113 Wn.2d 800, 805-06, 783 P.2d 1056 (1989); Robison v.

Dwyer, 58 Wn.2d 576, 583-84, 364 P.2d 521 (1961). f 24 In this case, the two-part test provided in Barry & Barry is satisfied. First, the legislature has provided the necessary guidelines defining in general terms what is to be done and has properly identified the entity which is to accomplish it. In RCW 35.95A.020, the legislature authorizes a newly created “city transportation authority” to perform a public monorail transportation function which may be created in every city with a population greater than 300,000.

This city transportation authority is to perform its public transportation function within the territory of its authority area. Id. The city transportation authority is authorized, after receiving voter approval, to levy taxes and issue bonds to pay for the public monorail. See, e.g., RCW 35.95A.020(2), .050, .070, .080. Thus, the legislature has defined in general terms what is to be done. ¶25 Second, multiple procedural safeguards exist to control arbitrary administrative action and administrative abuse of discretionary power.

For example, the legislature provided that the MVET could not exceed 2.5 percent on the value of every motor vehicle subject to the excise tax. RCW 35.95A.080. Seattle voters further limited that tax to 1.4 percent of the value of such vehicles. Clerk’s Papers (CP) at 535. All such taxes collected by the authority must be used solely for paying all or a part of the cost of acquiring, designing, constructing, equipping, maintaining, or operating public monorail transportation facilities, including contracting for services and paying or securing payment on any issued bonds. RCW 35.95A.110.

The authority is subject to all standard requirements of a governmental entity pursuant to RCW 35.21.759. RCW 35.95A.040. |26 Additional procedural safeguards provided in Seattle Citizen Petition No. 1 include: (1) without further voter approval, the authority will not be able to (

a) issue more than $1.5 billion in debt for an initial monorail line and second-line planning, (

b) continue to levy the MVET after all the initial phase debt has been paid, (

c) use the MVET after 2020 to pay for the noncapital costs of operating or maintaining the Green Line; (2) the requirement that public input must be sought before persons are nominated for possible appointment to the board and that all persons on the board must be legally registered voters of the authority area; and (3) the authority is prohibited from accumulating a surplus from the proceeds of the MVET beyond Phase 1 expenses that are required for prudent management. CP at 535-45.

Thus, given the guidelines and procedural safeguards in this case, we conclude that the delegation of legislative taxing authority to SMP is constitutionally permissible. ¶27 Moreover, Seattle voters expressly approved the creation of SMP, the imposition of the MVET, and the selection process of the governing board as required by RCW 35.95A.020(2), .030(1), and .080(5). Appellants claim that it is irrelevant that voters in Seattle approved the creation of SMP and the selection process for the board of SMP. As discussed above, Appellants again inappropriately rely on Amalgamated, Transit.

Long standing Washington case law and commentators agree that voter approval of a local board selection is an appropriate delegation of power to an appointed board of a municipal corporation. See, e.g., State ex rel. Tax Comm’n v. Redd, 166 Wash. 132, 140-41, 6 P.2d 619 (1932) (permissible corporate authorities of municipal corporations include municipal officers who are appointed in some mode to which local persons have given their assent); 1 Thomas M.

Cooley, The Law of Taxation 207 (4th ed. 1924) (“Of course, if the people of a local district have in any way consented to the delegation of the power to tax to a local [appointed] board, they cannot contest the validity of the delegation of power.”). ¶[28 Appellants’ next claim, that the MVET is an unlawful property tax, was recently addressed in Sheehan, 155 Wn.2d 790, where this court concluded that the MVET is an excise tax and not a property tax.

We see no reason to revisit the issue. ¶29 Similarly, we have also addressed Appellants’ contention that SMP lacks jurisdiction to impose the MVET because it is not imposed on a proper taxable event in its taxing district. Appellants claim that the taxing event is not the registration of motor vehicles but the residence of the owners. Appellants are incorrect.

As this court recently held in Sheehan, the taxing event is the relicensing of a motor vehicle within the district. ¶30 A taxing entity has jurisdiction to impose a tax when the taxable event occurs within the territorial limits of the taxing entity and, as a matter of due process, that taxable incident forms a sufficient contact, or nexus, with the taxing entity. See, e.g., Dravo Corp. v.

City of Tacoma, 80 Wn.2d 590, 597-602, 496 P.2d 504 (1972) (holding that a tax levied on the gross receipts of a contract that was executed in Tacoma, the taxable event, but performed entirely in Lewis County complied with due process requirements because the city provided an environment of an orderly, civilized society in which Dravo was able to engage in the business transaction); Greyhound Lines, Inc. v.

City of Tacoma, 81 Wn.2d 525, 503 P.2d 117 (1972) (the taxable event, sale of bus tickets in Tacoma, was sufficient nexus or link with the city of Tacoma, even though some passengers and freight went to points outside Tacoma and that passengers and freight traveling through Tacoma were exempt from the tax). ¶31 In this case, as discussed in Sheehan, the taxing event is within SMP’s taxing district. Additionally, there is a sufficient nexus between the taxing event and SMP because Seattle residents are the primary beneficiaries of the city monorail.

Consistent with Dravo and Greyhound Lines, we hold that SMP has jurisdiction to impose the MVET. ¶32 Finally, Appellants claim that the imposition of the MVET is unlawful because it substantially departs from the petition approved by the voters. Appellants’ claim is without merit. ¶33 When voters approve taxes for a public project, major deviations to the project are not within the government’s lawful power. Sane Transit v. Sound Transit, 151 Wn.2d 60, 68, 85 P.3d 346 (2004). Minor deviations are permitted. Id.

Appellants take issue with two aspects of the MVET’s imposition: the fact that newly purchased vehicles are exempt from the tax and that the assessed value of vehicles is determined by a depreciation

schedule created by the Department of Licensing. In both of these cases, the MVET is imposed consistent with the petition and

chapter 35.95A RCW. ¶34 Contrary to Appellants’ assertion, the fact that newly purchased motor vehicles are exempt from the MVET does not conflict with the petition that provides in part that “[t]he authority can levy an annual special excise tax not to exceed 1.4 percent on the value of every motor vehicle owned by a Seattle resident.” CP at 535. In this case, the MVET is imposed on newly purchased motor vehicles beginning the first year each newly purchased vehicle is relicensed. The petition specifically refers to the enabling legislation,

chapter 35.95A RCW, which provides that “[t]he special excise tax imposed under RCW 35-.95A.080(1) will be collected at the same time and in the same manner as relicensing tab fees under RCW 46.16.0621 and 35.95A.090.” RCW 35.95A.130 (emphasis added). ¶35 Additionally, the use of the depreciation

schedule created by the Department of Licensing is appropriate. Neither the petition nor

chapter 35.95ARCW uses the term “fair market value” in the context of the MVET. As the trial court stated: To fund their monorail, Seattle voters took upon themselves an obligation to pay an MVET calculated at up to 1.4% of the “value” of their vehicles. The word “value” certainly connotes a value-laden concept and there can be reasonable dispute over what it means in different contexts.

However, this Court must conclude that Seattle voters approved an MVET calculation that was based upon the statutorily established valuation methodology rather than upon the expectation of a curbside appraisal of each individual Ford or Ferrari with its added dings and dents, woofers and tweeters. That such a tax bite could, in certain cases, result in an amount greater — or lower— than 1.4% of the vehicle’s current actual “fair market value” is of no moment. The voters approved a tax to be calculated according to an objective methodology required by law in effect at the time of their vote.

Democratic values compel this conclusion. The administrative efficiencies realized through this valuation methodology (presumably, with some corresponding savings to the taxpayers) make this a reasonable approach that is neither arbitrary nor capricious. CP at 1064. The Appellants now concede that actual fair market value is inappropriate: “No one contends that Petition No. 1 requires a ‘curbside appraisal’ of every car. Obviously, the valuations must be made using mass appraisal methodologies for the tax to be practically administered.” Appellants’ Replacement Br. at 54.

However, Appellants point to no language in the petition or in

chapter 35.95A RCW that suggests that some new, never used, methodology would be created to provide for some “different” type of mass appraisal methodology. Accordingly, we hold that the MVET is imposed consistent with the petition and

chapter 35.95A RCW CONCLUSION ¶36 Consistent with Sheehan, we hold that the MVET is an excise tax and that SMP has jurisdiction to impose the MVET. We also hold that the local taxing authority was properly delegated to SMP and that the imposition of the MVET is lawful. ¶37 We affirm the trial court. Alexander, C.J., and C. Johnson, Bridge, Chambers, Owens, and Fairhurst, JJ., concur. Appellants filed an amicus brief in Sheehan.

RCW 35.95A.030(1) provides that in creating a city transportation authority, the ordinance or petition submitted to the voters in the relevant city must, among other requirements, “[pjropose the authority area and the size and method of selection of the governing body of the authority, which governing body may be appointed or elected.” The objective of

article XI,

section 12, frequently called the “home-rule provision,” restricting direct legislative action as to local taxing matters, was to bar the state legislators, whose members come from all parts of the state, from dictating local taxing policy and instead to allow municipalities to control local taxation for local purposes. See, e.g., Schneidmiller & Faires, Inc. v. Farr, 56 Wn.2d 891, 894-96, 355 P.2d 824 (1960); Alfred Harsch, The Washington Tax System — How it Grew, 39 Wash. L. Rev. 944, 950-51 (1964); Philip A. Trautman, Legislative Control of Municipal Corporations in Washington, 38 Wash. L. Rev. 743, 754-55 (1963) (under

article XI,

section 12, the state legislature is constitutionally precluded from acting in such instances as the imposition of taxes for building city halls, erecting and operating light plants or gas works, constructing sewers, and bringing water to a city; the legislature may authorize certain acts and then allow the municipality to decide whether or not to act and thus whether or not to tax; such cases include authorization of drainage districts and local improvement districts).

Article VII,

section 9, similar to

article XI,

section 12, allows the legislature to delegate taxing power to all municipal corporations (e.g., cities, towns, counties, special diking districts, and other local municipal corporations). See, e.g., Hansen v. Hammer, 15 Wash. 315, 46 P. 332 (1896). Furthermore, the MVET will be collected by the Department of Licensing, imposed at the same time and in the same manner as relicensing tab fees, with valuation consistent with

chapter 82.44 RCW. RCW 35.95A.180. The city transportation authority may be dissolved by the voters if the authority is faced with significant financial problems. RCW 35.95A.120. The authority is required to establish necessary and appropriate funds and accounts consistent with the uniform system of accounts developed pursuant to RCW 43.09.210. RCW 35-.95A.060. Before utilization of any excise tax money collected, the legislature requires the authority to adopt rules affording the public an opportunity for public hearings. RCW 35.95A.080.

The amount of the authority’s initial bond issue is limited to the amount of the project costs in the subsequent two years as documented by a certified engineer or by submitted bids, plus any reimbursable capital expenses already incurred at the time of the bond issue. RCW 35.95A.120. As discussed in Sheehan, a motor vehicle excise tax has been imposed since 1937. Prior to 1990, each year administrative staff of the Department of Licensing prepared and printed valuation schedules for motor vehicles based on motor vehicles’ model and year. See, e.g., CP at 76-80.

In 1990, the Department of Licensing adopted a statutory depreciation schedule. See, e.g., CP at 64. Under this schedule, the amount of the MVET levied is a function of the manufacturer’s suggested retail price, excluding optional equipment, based on the number of years the vehicle has been in service. See, e.g., CP at 64. This new

schedule requires less administrative staffing and cost and was revenue neutral when adopted in 1990. See, e.g., CP at 80. We recognize that a recent vote by the people may have ended Seattle’s monorail project. However, because vehicle owners may still be required to pay the MVET to retire the debt incurred by the project, the issues in this case remain relevant.